Meat in the sandwich ... News Ltd's plans to appoint independent commissioners to run game has been undermined by the role of the Storm's board in its failure to detect salary cap rorts. Photo: Jason South
THE four independent directors on the Melbourne Storm board would prefer a mediation process to put forward their case for regaining the two premierships stripped from the club for breaching the salary cap, but have not ruled out legal action over News Ltd's conflict of interest in the issue.
The quartet, chairman Rob Moodie, Petra Fawcett, Peter Maher and Gerry Ryan, met last night without the club's two News Ltd-appointed directors, Frank Stanton and Craig Watt, to consider legal advice from leading QC Allan Myers but delayed announcing whether they would act on his recommendations.
It is believed Myers's advice is similar to the view of barrister Ivan Brewer, reported in the Herald yesterday, that there was a lack of procedural fairness in the way those investigating the breaches were also involved in setting the punishment.
Questions have been raised about the role of News Ltd chief operating officer Peter Macourt and News Ltd legal affairs manager Ian Phillip.
News Ltd is a 50 per cent stakeholder in the NRL and owns the Storm, as well as being a major shareholder in the Brisbane Broncos and part-owner of Fox Sports, which has the NRL pay-TV rights.
Macourt had a number of phone conversations with NRL chief executive David Gallop before the decision was made, while Phillip was present when Moodie, Watt and former Storm chief executive Matt Hanson confessed to the salary cap rorts at NRL headquarters on April 22.
Despite Phillip's position with News Ltd, Storm officials maintain the club did not have legal representation when they met with the NRL.
Macourt and Phillip are also two of News Ltd's three representatives on the six-man NRL partnership committee.
News Ltd's conflict of interest in the case has already been acknowledged as the reason a meeting of the NRL board was not called to endorse the decision, which was made by Gallop in consultation with senior NRL management.
Gallop also obtained legal advice from Sydney SC John Marshall and NRL lawyer Tony O'Reilly before deciding to strip the Storm of the 2007 and 2009 premierships as well as three minor premierships, fine the club $500,000, order Melbourne to repay $1.1 million in prizemoney and play this season for no competition points.
The decision was initially accepted by Moodie and the other Storm directors, and Gallop said court proceedings may help to uncover more about the identity of those involved in the $1.85m breach.
''The NRL rejects completely the uninformed outbursts in the media today from certain lawyers regarding the process that led to the penalties imposed on the club,'' Gallop said in a statement. "The NRL acted at all times in accordance with the rules that govern the competition and the law. The club's practices could not be any more under the spotlight and if the threat of legal proceedings is an attempt to divert attention away from that issue then it may have the opposite effect.
"There is no doubt that any proceedings that take place could well help to identify if any Storm directors were aware of the club's salary cap deception. It may also explain how that deception could have taken place without the knowledge of directors and in a way that led the board's chairman, Dr Rob Moodie, lodging statutory declarations that proved to be false.''
News Limited chairman and chief executive John Hartigan said the company would not support such a challenge. ''News recognises that the penalties are unprecedented … But, we don't believe a legal challenge to the NRL's procedures is the answer,'' he said. ''On the contrary, it could further damage the Storm.''
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