Harold Mitchell receives $90K fine for tennis deal

Ad industry stalwart and former Tennis Australia Vice President Harold Mitchell has received a pecuniary penalty of A$90,000 for breaching his director’s duties.

Justice Beach of the Federal Court of Australia has imposed the penalty on Mitchell following a 2013 decision by the Tennis Australia Board to award the domestic television broadcast rights for the Australian Open tennis tournament to the Seven Network.

The Court found that Mitchell’s action to pass information to Seven West Media’s Bruce McWilliam contravened s180(1) of the Corporations Act on three occasions. Further allegations of breaches of s180(1), and alleged breaches of sections 182 and 183 of the Corporations Act, were dismissed.

Mitchell has been fined $90,000 for breaching his duties.

The Australian Securities and Investments Commission (ASIC) alleged Mitchell and Stephen Healy, the former Chairman and President of Tennis Australia, withheld information from the Tennis Australia board, did not report the value of the rights and failed to disclose the interest of other bidders, including Network Ten.

In issuing the penalty, Justice Beach noted that he was satisfied that each of the three contraventions by Mitchell was ‘serious’ within the meaning of the Corporations Act, in terms of the departure by Mitchell from the standard of care and diligence required of directors.

Justice Beach considered various factors relevant to imposing a penalty. These included the fact that Tennis Australia did not suffer any harm as a result of the contraventions and the need for general deterrence to ensure that directors do not go ‘off piste or off the reservation’ by acting contrary to the expectations placed upon them. In light of these and other factors, Mitchell has been ordered to pay pecuniary penalties of $50,000 for the first contravention and $20,000 each for contraventions two and three.

No costs orders were made by the Court. ASIC and Mitchell must each cover their own costs of the proceedings.

Mitchell was a director of Tennis Australia from October 2008 to October 2015 and was reappointed in December 2015. Between October 2010 and October 2015, and then again from December 2015 until his retirement in October 2018, Mitchell was Vice President of Tennis Australia.

The decision in 2013 to award the Australian Open tournament domestic broadcast rights to the Seven Network was for the period 2014 to 2019.

ASIC commenced civil penalty proceedings in the Federal Court of Australia against Mitchell and Healy in November 2018.


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