Former Free TV Australia chairman Harold Mitchell overstepped his duties as a director of Tennis Australia for passing on information to Seven Commercial Director Bruce McWilliam, a Federal Court has ruled.
But he was motivated by the best outcome for Tennis Australia, the court stated, and “his contraventions are far narrower in scope than ASIC would have it.”
Mitchell and former Tennis Australia president Steve Healy were accused by the Australian Securities and Investments Commission of several breaches of the Corporations Act over their decision to grant a five-year broadcast rights deal for the Australian Open, worth about $35m annually, in 2012 to Seven.
They were accused of withholding material from the Tennis Australia board and alleged interest from Network 10 and US group IMG.
“Mr Mitchell stepped over the line in his dealings with Mr McWilliam,” Justice Beach said.
He added, “There were some things that he communicated with Mr McWilliam that he ought not to have done particularly in the later part of 2012.
“None of this ultimately caused damaged to Tennis Australia and none of this was motivated by anything other than Mr Mitchell’s perception that it was in the interest of Tennis Australia that the deal with Seven was stitched up sooner and rather than later.”
Mitchell “was not a details man,” the judgement read.
“He did not think much of legal niceties and long-form agreements; as he would perceive it, mere matters of detail that had the tendency to produce unnecessary delay.
“But ASIC’s case that Mr Mitchell deliberately sought to prefer Seven’s interests over TA’s [Tennis Australia] interests fails. I am satisfied that, although some of his conduct could be criticised, nevertheless he acted in what he perceived to be TA’s interests.”
The decision means that Mitchell would not face disqualification as a company director but “any specific deterrence may well be best served by the making of a declaration and a moderate pecuniary penalty”.
The case against Steve Healy was thrown out with the watchdog to pay his legal costs.
Harold Mitchell resigned as Free TV Australia chair in 2018.