May 28, 2026 — 6:47pmA Rugby Australia director privately advised against bailing out the Melbourne Rebels, telling a colleague they should simply “let them fall over”.The explosive text message, sent by Daniel Herbert months before the Victorian franchise collapsed into administration, was revealed during a tense examination of Rugby Australia chief executive Phil Waugh in the Federal Court in Melbourne on Thursday.Rugby Australia chief executive Phil Waugh (left) and Daniel Herbert, who became chairman in mid-November 2023.Justin McManusThe text forms a critical part of the Rebels’ case that Rugby Australia made the call to strip the now-defunct club of its licence at a time when the club’s directors were operating under the belief they had the ongoing support of the sport’s governing body.Former Rebels directors are suing Rugby Australia, alleging the club was treated unfairly when it lost its licence.The Rebels were stripped of the licence in 2024, months after the club entered administration under the weight of about $23 million in debt, including $11.5 million owing to the Tax Office and another $6 million owing to members of the club’s high-profile board.Rugby Australia has repeatedly denied knowing the extent of the Rebels’ debt until after the Tax Office sent the peak body a garnishee notice at the end of December 2023. It also argues there was a plan to support the team by merging the club with struggling New Zealand outfit Moana Pasifika.However, Waugh conceded that at a board meeting in early November 2023 the Rebels’ parlous financial position was discussed.According to meeting minutes, Rugby Australia financial officer Richard Gardham told the room that, in his view, voluntary administration was the only option for the Rebels.Herbert, who has since become Rugby Australia chairman, sent a text the next morning to an unknown party which read: “We shouldn’t take on Brumbies or Rebels debt, let them fall over.”The recipient responded with a thumbs-up emoji. However, Waugh told the court he could not recall if that person was him.Rebels counsel Bernard Quinn, KC, accused the Rugby Australia boss of knowing, but purposefully withholding, Rugby Australia’s decision to deny funding to the Rebels – an allegation Waugh denied.Phil WaughMax Mason-Hubers“I suggest to you on this very day, the 8th of November 2023, you held the view that you should simply let the Rebels fall into voluntary administration. Correct?”“No,” Waugh said.Rugby Australia has vigorously defended the claims against it, arguing it acted in the best interests of the league.On December 3, 2023, Rebels president Paul Docherty asked Rugby Australia for a $1 million loan to help fund the club’s mounting tax debt, during a meeting with Waugh and Herbert.Waugh said that during the meeting he did not have authority from the board to make a call, and he could not recall whether he ever went to the board to discuss the loan.“The reasons it was so important to inform the Rebels [of that decision] then and there was because of the risk of voluntary administration and the fact that they were incurring debts?” Quinn asked.“We weren’t sure of the urgency, but yes, it was important,” Waugh said.Waugh said that by December 26, the sport body had a “better understanding” of the Rebels’ balance sheet, but he repeatedly denied knowing the Rebels were insolvent, or the level of debt the club had amounted.The case continues.Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.From our partners