Kavanagh v Racing New South Wales

1. [1]

   HIS HONOUR: This is an application by the plaintiff, a licensed racehorse trainer, for judicial review of a decision of the Racing Appeals Tribunal. On 23 May 2018 the Tribunal found the plaintiff liable for a number of breaches of the Australian Rules of Racing (“Australian Rules” or “AR”) committed between September 2014 and June 2015. The breaches were alleged against the plaintiff by the first defendant, Racing NSW. They concerned administration to horses of prohibited substances, in most cases cobalt but in one instance caffeine. By way of penalty on 13 August 2018 the Tribunal disqualified the plaintiff from working as a trainer for an extended period. Both the liability decision and the penalty decision are said to be vitiated by error of law on the face of the record: s 69(3) and (4) of the Supreme Court Act 1970 (NSW).

2. [2]

   The Tribunal found that on 9 January 2015 the plaintiff breached AR 175(h)(i) by administering cobalt to a horse named Midsummer Sun for the purpose of affecting its performance in a race. This finding was made notwithstanding that the cobalt had been administered in a vitamin complex which the plaintiff gave to the horse by drip, unaware of the presence of the prohibited substance.

3. [3]

   The Tribunal also found proved three breaches of AR 177B(6), constituted by administering cobalt to three horses between September 2014 and January 2015 but without any purpose of affecting performance. A mandatory three-year disqualification applied to the breach of AR 175(h)(i) and a mandatory two years to each contravention of AR 177B(6), subject to reduction if “a special circumstance exists” (AR 196(5)). The Tribunal accepted that the plaintiff’s lack of awareness that the vitamin complex contained cobalt constituted a “special circumstance”, warranting reduction of the otherwise mandatory penalties. But in each case the Tribunal shortened the disqualification by only 11%.

4. [4]

   The sample from Midsummer Sun on 9 January 2015 contained caffeine as well as cobalt. The Tribunal found a breach of AR 178 for the presentation of the horse at Gosford Racecourse when the caffeine was detected. The charge under this rule did not involve an allegation that the plaintiff had a purpose of affecting the horse’s performance. For this breach the Tribunal imposed 10 months disqualification, cumulative upon the penalty for the breach of AR 175(h)(i) concerning cobalt. The accumulation was ordered without the Tribunal having heard the plaintiff as to whether this penalty should be wholly or partly cumulative or concurrent.

5. [5]

   The plaintiff claims the following orders:

6. [6]

   The following grounds are relied upon:

7. [7]

   In addition to all of the above grounds the plaintiff contends that the original decision of the stewards of Racing NSW to impose penalties upon him under AR 175 was void. The stewards’ decision was appealed to an Appeal Panel and the Panel’s decision was appealed to the Tribunal. The plaintiff seeks, in par 1A of the relief claimed in the summons, a declaration that the decisions at both levels of appeal were also void. This relief is sought on the basis of ground 6, as follows:

Racing NSW’s power to license trainers

1. [8]

   Under s 4 of the Thoroughbred Racing Act 1996 (NSW), Racing NSW is established as a body corporate. By s 13 it has the functions, amongst others, of controlling, supervising and regulating horseracing in New South Wales. By ss 14 and 14AA of the Act, Racing NSW is empowered to license or refuse to license, inter alia, horse trainers. It may cancel or suspend trainers’ licenses. Racing NSW also has power to make local rules of racing. It has made a body of Local Rules (“LR”) which provide, in LR 51 and 77-81A, for the licensing of horse trainers.

2. [9]

   The plaintiff has worked with racehorses from the age of 15. He graduated through the roles of stable hand, stable foreman and racehorse owner. He commenced as a licensed trainer at the age of 25. He was 28 when he committed the breaches of the Australian Rules which are the subject of the Tribunal decision under review.

3. [10]

   Pursuant to s 14(2) of the Thoroughbred Racing Act, Racing NSW may impose upon a person licensed by it a penalty for any contravention of the Rules of Racing. Those rules are comprised of the Australian Rules of Racing adopted by the Australian Conference of Principle Racing Clubs (of which Racing NSW is a member) and the Local Rules made by Racing NSW itself. The available penalties include disqualification with respect to a licence.

Stewards’ imposition of penalties and appeal therefrom

1. [11]

   Australian Rule 8 requires that stewards be appointed by Principal Racing Authorities, including Racing NSW, to “inquire into and adjudicate upon the conduct of all … licensed persons” (AR 8(d)) and to “penalise any person committing a breach of the Rules” (AR 8(e)). Local Rule 8 provides for the Board of Racing NSW to appoint stewards to fulfil the functions required by AR 10. Racing NSW appointed stewards, who held office in 2015 and who inquired into the alleged breaches of Rules by the plaintiff. The stewards imposed penalties of disqualification in September 2015. I will defer to the end of these reasons consideration of the issue raised by the plaintiff’s ground 6 and by the declaration claimed at par 1A of the summons, namely, whether the stewards have power to impose penalties, either by delegation from Racing NSW or otherwise. The asserted of errors of law in the Tribunal’s finding of breach and in its determination of penalty will be considered first.

2. [12]

   Pursuant to s 42 of the Thoroughbred Racing Act a person aggrieved by a decision of a “racing authority” to disqualify the person or to revoke or suspend a license has a right of appeal against the decision to the Appeal Panel. The term “racing authority” includes the stewards of Racing NSW. Section 45 provides that Racing NSW is to appoint suitably qualified persons to be members of an Appeal Panel. The Appeal Panel is to proceed by way of a new hearing (s 43) and may dismiss the appeal, vary the decision appealed from, substitute a different decision, refer any matter back to the racing authority for rehearing or make any other order it thinks fit (s 44).

3. [13]

   A person aggrieved by a decision of the Appeal Panel may appeal to the Racing Appeals Tribunal constituted under s 5 of the Racing Appeals Tribunal Act 1983 (NSW). Section 15(1)(a) provides for an appeal from the Panel. The Tribunal is, like the Panel, required to conduct a new hearing in which fresh evidence may be given. It has powers similar to those of the Appeal Panel to dismiss the appeal, vary or replace the decision appealed from, refer back or make any other order (ss 16 and 17).

Ground 1 – liability for breach of AR 175(h)(i)

1. [14]

   In the decisions under review by the Tribunal considered 24 alleged breaches of Rules. Breach 1 was the charge under subpar (i) of AR 175(h) that the plaintiff administered cobalt to Midsummer Sun for the purpose of affecting the performance of the horse in race 6 at Gosford, the Gosford Gold Cup, on 9 January 2015. The plaintiff did not dispute that cobalt was detected in a sample taken from the horse after the race or that, at the level at which it was found, it was a prohibited substance within the meaning of AR 175(h).

2. [15]

   As in force from 1 June 2015, AR 175(h) was in these terms:

3. [16]

   The Court has not been provided with any reasons which may have been given by the stewards for their decision of 31 August 2015 that the plaintiff was liable for breach 1 or for the penalty they fixed on 21 September 2015. Nor does the Court have the reasons of the Appeal Panel for upholding the finding of breach (6 May 2016) or for its determination of penalty (17 June 2016). For the purposes of this judicial review it is only necessary to consider the facts found by the Tribunal, the reasoning upon which the Tribunal held that those facts amounted to breach and the Tribunal’s reasons for the penalty imposed.

4. [17]

   The Tribunal found these facts at [15] of its liability decision of 23 May 2018:

5. [18]

   At [16] the Tribunal recorded that the following matters were not in issue between Racing NSW (which prosecuted the breach) and the plaintiff:

6. [19]

   The parties accepted before the Tribunal that the decision in Racing Victoria Ltd v Kavanagh [2017] VSCA 334 was binding with respect to the interpretation of AR 175(h). The majority of the Victorian Court of Appeal in that case (McLeish JA and Cavanough AJA) held that the element of “causes to be administered” in AR 175(h) does not import a requirement of proof that the person charged with breach knew or believed that the physical item administered constituted or contained a prohibited substance. It was accepted before the Tribunal that in a case such as the present, where a trainer is charged with administering rather than causing to be administered, the position must be the same. Therefore the plaintiff conceded that as he had administered the vitamin complex supplied by Dr Brennan and as it contained cobalt, it had been proved that he administered a prohibited substance.

7. [20]

   However the plaintiff disputed the second element of the alleged breach of AR 175(h)(i). He submitted that in order to prove that the administration was “for the purpose of affecting the performance or behaviour of a horse etc” it had to be shown that he knew or believed he was administering a prohibited substance. The plaintiff did not contend that there had to be proved against him knowledge or belief as to precisely which prohibited substance was involved. But he argued that he could not have had the purpose specified in the rule unless he knew or believed that some prohibited substance was involved.

8. [21]

   The Tribunal rejected this contention. It was held that Racing NSW had proved breach 1 although the plaintiff neither knew nor believed that the vitamin complex he administered contained a prohibited substance of any description. The Tribunal’s reasons at [17]-[59] contain extensive references to Racing Victoria Ltd v Kavanagh. The Tribunal’s conclusion can only be fully understood and evaluated against the background of the Victorian Court of Appeal’s reasoning. I will therefore refer to the judgments in that decision before ruling upon the error of law which the plaintiff asserts.

9. [22]

   Racing Victoria Ltd v Kavanagh concerned an allegation against the plaintiff’s father and Mr O’Brien, both trainers, that they had breached AR 175(h)(i), AR 175(h)(ii) and AR 178 (presentation of a horse at a racecourse where cobalt was detected in a sample taken from it after the running of a race). The president of the Victorian Civil and Administrative Tribunal, Garde J, had found that both respondents authorised Dr Brennan to administer drips to horses that were under their control “as a substitute for the drench program”. Dr Brennan administered the drips, either himself or by direction to other veterinarians, but added a vitamin complex without the knowledge or approval of the respondents. The vitamin complex contained the prohibited substance cobalt. Administration of cobalt “was not something that [the respondents] ever wanted, expected or suspected”.

10. [23]

    The majority holding in the Victorian Court of Appeal, that “causes to be administered” in AR 175(h) does not require proof of knowledge or belief that that which was administered constituted or contained a prohibited substance was supported by McLeish JA at [118] and [120]-[121]:

11. [24]

    Cavanough AJA expressly adopted McLeish JA’s reasons for concluding that AR 175(h) is not to be construed as “in itself … imposing a requirement of knowledge as to the identity of the substance being administered” (at [144]-[145]). At [152] his Honour said (omitting citation):

12. [25]

    Maxwell P disagreed, holding that in the opening words of AR 175(h) both the expression “administers … any prohibited substance” and the alternative “causes to be administered” import a requirement of proof that the person charged with breach knew or believed that what was to be given to the horse was or included a prohibited substance. The learned President was influenced by the meaning of the word “administer” and its derivatives in ordinary usage, by the mischief to which AR 175(h) is apparently directed and by the substantial mandatory penalties of disqualification prescribed for breach of this rule (and for breach of other rules which concern administering of prohibited substances in a range of circumstances). His Honour said:

13. [26]

    On the facts as summarised at [22] above, McLeish JA considered that although it was not necessary for a breach of either subpar (i) or (ii) of AR 175(h) that the respondent should have known or believed a prohibited substance was in the drips which they authorised Dr Brennan to administer, they could not be found to have caused administration of the prohibited substance because they had not known or believed the vitamin complex (which contained the cobalt) would be added to the drips. His Honour said:

14. [27]

    With great respect I am not able to discern from his Honour’s judgment a reasoned or principled distinction between (a) authorising the drip to be administered, not knowing or believing that there would be added a vitamin complex (which contained cobalt) and (b) authorising a drip to be administered knowing that a vitamin complex would be added, but not knowing or believing that the complex would contain cobalt. In the first of these cases, on his Honour’s view, the trainer would not have caused the cobalt to be administered but in the second case he would. But in both cases the trainer has approved (and therefore caused, on his Honour’s reasoning) only the administration of products which so far as he is aware are innocuous. In one case the product believed to be innocuous is a drip only, in the other case it is a drip with added vitamin complex. In both cases the trainer is equally unaware of, and gives no approval for, inclusion of a prohibited substance.

15. [28]

    If, as his Honour concluded, there was no “[causing] to be administered” when the veterinarian “embarked upon his own course, neither authorised, nor directed or controlled by the respondents, in administering the prohibited substance”, this should turn upon the respondents’ knowledge or belief or lack thereof regarding the presence of a prohibited substance, not regarding the particular medium or means by which it was introduced. With respect I am not able to identify a reasoned basis upon which McLeish JA thought the trainer would have caused administration of the cobalt if, having authorised the innocuous drip, it was adulterated with the prohibited substance without his knowledge, whereas he had not caused the administration where the cobalt was introduced as an ingredient of an otherwise innocuous vitamin complex that was added without the trainer’s knowledge. Equally in both situations there appears to me to be a lack of knowledge or belief regarding the presence of a prohibited substance and therefore lack of approval and no “[causing] to be administered”.

16. [29]

    In addition to adopting the reasoning of McLeish JA (at [145]), Cavanough AJA said (citation omitted):

17. [30]

    In application of this view to the facts Cavanough AJA did not consider that the respondents had “caused a prohibited substance to be administered” because they did not know or believe that the vitamin complex would be added to the drip. But if they had known or believed the vitamin complex would be added his Honour considered they would have caused the prohibited cobalt within it to be administered. The basis for holding the trainer liable in the second case appears to have been his Honour’s view that “the substance” caused to be administered should be regarded as any physical compound given to the horse. If the administration of a “substance” in this sense was approved then lack of knowledge or belief that it contained a prohibited substance as defined in the Rules would be a mere matter of not knowing the identity of the substance and would be irrelevant.

18. [31]

    With respect I do not find in his Honour’s reasons a compelling basis for this conclusion. The term “prohibited substance” is defined in AR 1 as:

19. [32]

    Consistently with the approach taken before the Tribunal, in deciding the plaintiff’s summons this Court is not asked to depart from the majority view in Racing Victoria Ltd v Kavanagh that the element “causes to be administered” in AR 175(h) (and, by necessary implication, the alternative element “administers”) can be satisfied without proof that the person charged knew or believed that that which was administered contained a prohibited substance. I could not depart from that view unless convinced that it is plainly wrong: Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15 at 492. Although it will be apparent that I strongly prefer the reasoning and conclusion of Maxwell P (which was to the same effect as that of Garde J), it is not necessary that I should adopt a position according to the stringent standard of “plainly wrong”.

20. [33]

    In Racing Victoria Ltd v Kavanagh the decision that AR 175(h)(i) had not been breached was unanimous, albeit on reasoning which varied as discussed above. Maxwell P thought it had to be proved that the trainers knew or believed a prohibited substance was being administered by Dr Brennan. McLeish JA and Cavanough AJA thought it only had to be proved that the trainers knew the vitamin complex was being added, without proof that they knew or believed it contained a prohibited substance. On either view breach was not established.

21. [34]

    With respect to the second element of AR 175(h)(i) Maxwell P said this:

22. [35]

    McLeish JA did not express any definitive view on whether the purpose element in subpar (i) would depend upon proof of knowledge or belief that the horse was receiving a prohibited substance. His Honour merely said (at [121]):

23. [36]

    Cavanough AJA made the following observations about the “purpose” limb of AR 175(h)(i):

24. [37]

    This view of the purpose element substantially accords with that of Maxwell P. However as Cavanough AJA found that there was no breach of either part of AR 175(h) because the trainers did not know the veterinarian would add vitamin complex to the drip, his Honour’s observations on this element were strictly obiter.

25. [38]

    The plaintiff having conceded that, because he administered the vitamin complex himself he must be taken to have administered the cobalt within it, liability for breach 1 turned upon the purpose element in subpar (i) of AR 175(h). The Tribunal concluded that the plaintiff had the proscribed purpose notwithstanding that he did not know or believe the vitamin complex he administered contained a prohibited substance.

26. [39]

    At [39]-[43] of the Tribunal’s reasons of 23 May 2018 some words and phrases were extracted from Racing Victoria Ltd v Kavanagh, followed by a conclusion that these dicta did not aid in construction or application of the relevant part of the rule. Apart from those paragraphs the Tribunal’s reasoning appears to be encapsulated in the following (emphasis added):

27. [40]

    In my view these reasons disclose an error of law. I respectfully agree with what I understand to be the view of Maxwell P and Cavanough AJA that if the trainer does not have any knowledge or belief that a prohibited substance is present in the product he administers, he could not have any purpose with respect to a prohibited substance. The two sentences at the end of [46] of the Tribunal’s reasons are in direct contradiction of the words of the rule. It is not correct that the vitamin complex rather than the prohibited substance, cobalt, is the “focus”. Breach of the rule cannot be made out by showing that the proscribed purpose of affecting a horse’s performance “attached” to a vitamin complex rather than to a prohibited substance.

28. [41]

    The Tribunal’s conclusion would lead to very surprising outcomes. The trainer might administer a lawful vitamin complex with the intention of improving the health of the horse, thereby to enhance its performance. Someone placing a bet on a competing horse might have adulterated the vitamins, without knowledge of the trainer, by adding a prohibited substance which would make the horse lethargic. On the Tribunal’s view of the operation of this rule, the trainer would be liable for breach on the basis that he administered a prohibited substance with the purpose of affecting the horse’s performance, notwithstanding that his purpose, which attached to the lawful vitamins, was diametrically opposed to the effect of the prohibited substance that the horse received without the trainer’s knowledge.

29. [42]

    The Tribunal’s view of the operation of the rule would not only lead to odd results but would achieve nothing. No “stringent [control] on administration of drugs to horses” would be provided by a rule that creates a penalty for a trainer on the basis that some other person has added a prohibited substance without the trainer’s knowledge or belief, for a purpose in which the trainer does not share because he is ignorant of the adulteration. This would not be strict or “draconian” but ineffectual and capricious. For a rule in this context to have such a meaning it would have to be conveyed in very clear terms. I find within AR 175(h)(i) no clear words which would dictate such a construction.

30. [43]

    The purpose element in par (i) of AR 175(h) requires proof that a trainer who is charged under the rule knew or believed that the product he administered or caused to be administered contained or consisted of a prohibited substance, without necessarily knowing which prohibited substance. To be liable for breach of the rule the trainer’s actions must be shown to have been undertaken with a purpose of affecting, by the prohibited substance which he knows or believes he is administering or causing to be administered, “the performance or behaviour of a horse in a race” (or a purpose of “preventing its starting in a race”).

31. [44]

    For these reasons the Tribunal’s finding that the plaintiff is liable for breach 1 and the imposition of a penalty of disqualification for that breach must be set aside.

Grounds 2 and 3 - reduction of penalty for breaches 1, 13, 14 and 15

1. [45]

   In addition to finding breach 1 proved under AR 175(h)(i), the Tribunal found that the plaintiff had committed breaches 13, 14 and 15 contrary to AR 177B(6). The facts of these latter breaches were that the plaintiff had administered the same vitamin complex to Midsummer Sun (breach 13), Centre Pivot (breach 14) and Spring Diamond (breach 15) between September 2014 and January 2015. AR 177B(6) is in these terms:

2. [46]

   AR 196(5) prescribes that for a breach of AR 175(h)(i) disqualification for not less than three years must be imposed “unless there is a finding that special circumstances exist whereupon the penalty may be reduced”. Subject to that same proviso AR 196(5) prescribes a mandatory penalty of disqualification for not less than two years for a breach of AR 177B(6).

3. [47]

   Local Rule 108 contains these provisions, extracted so far as relevant:

4. [48]

   The plaintiff did not plead guilty to breach 1 but contested the charge on the question of whether it was necessary for Racing NSW to prove that he knew or believed the vitamin complex he administered contained a prohibited substance. He pleaded guilty to the three charges under AR 177B(6), accepting that on the view of McLeish JA and Cavanough AJA in Racing Victoria Ltd v Kavanagh he would be regarded as having administered cobalt because he administered the vitamin complex containing it. Hence he could invoke only special circumstance (d) in relation to breach 1 (the purpose offence, contrary to AR 175(h)(i)) but he could invoke both of special circumstances (a) and (d) in relation to breaches 13, 14 and 15 (administration offences, contrary to AR 177B(6)).

5. [49]

   In the hearing on penalty Racing NSW conceded that the plaintiff did not know a prohibited substance was present. The Tribunal heard evidence and submissions concerning whether the plaintiff ought to have known of the presence of a prohibited substance and whether he would have known if he had made all reasonable enquiries. That meant that the first requirement of special circumstance LR 108(2)(d) was conceded and the second and third matters were contested.

6. [50]

   The vitamin complex bottle had “minimal labelling and no statement of who the manufacturer was, where it came from or its ingredients”. Dr Brennan did not tell the plaintiff where the complex was made or who made it. There was no evidence anyone had tested it. The plaintiff paid $1,000 for each of two bottles of the product, each bottle containing 20 doses ($50 per dose). These facts are recorded at [33] of the penalty reasons dated 13 August 2018.

7. [51]

   The Tribunal’s ultimate findings were as follows:

8. [52]

   Accordingly the Tribunal was satisfied that plaintiff had proved each of the three matters in LR 108(2)(d). The Tribunal considered that, but for the mandatory minimum three years disqualification under AR 196(5), a penalty of 21 months and 2 weeks would have been appropriate for the breach of AR 175(h)(i). This followed from the Tribunal’s adoption, for reasons not clearly explained, of a starting point of 3 years (at [88]) and a process of reduction for various factors. It appears that the Tribunal’s calculations at [82]-[90] were for the purpose of showing that the Tribunal was driven by AR 196(5) to adopt the mandatory minimum and did not think that any higher penalty was called for.

9. [53]

   At [111]-[116] the Tribunal proceeded to determine the reduction for special circumstances in relation to breach 1 as follows:

10. [54]

    The reference in [113] to “a discount of 20%” is from [88], where the Tribunal earlier determined what the penalty should be on general principles, absent the mandatory minimum three years disqualification. On that approach the Tribunal thought 20% should be allowed for a combination of the plaintiff’s subjective circumstances and “the knowledge issue”, meaning his lack of awareness that the prohibited substance was present.

11. [55]

    The Tribunal dealt with penalty for breaches 13, 14 and 15 (contrary to AR 175B(6)) commencing at [118]. At [119]-[142] the Tribunal considered the objective seriousness of these breaches, the plaintiff’s subjective circumstances, his lack of knowledge of the prohibited substance and his cooperation with the stewards. Before consideration of the mandatory minimum of two years, the Tribunal arrived at a notional penalty of 10 months for each infringement. This exercise again appears to have been directed only to establishing that, applying general principles, no period of disqualification longer than the mandatory minimum was required

12. [56]

    Then the Tribunal turned to the question of special circumstances and reduction of the minimum two years under AR 196(5) and LR 108(2)(d). The Tribunal held as follows:

13. [57]

    The plaintiff’s case for judicial review of the Tribunal’s penalty decisions on breaches 1, 13, 14 and 15 is that a mere 11% discount under LR 108(2)(d) was so manifestly inadequate and plainly unjust in the circumstances that the Tribunal must have erred in law and in principle. The ground proceeds on the basis that the error is latent and one cannot identify where or how it has arisen in the exercise of the discretion.

14. [58]

    The plaintiff thereby complains of error of the type referred to in the last two sentences of the following well known passage from the judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499; [1936] HCA 40 at 505:

15. [59]

    In Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 the test for applying this ground of review of a discretionary decision is expressed in the following way by Hayne, Kiefel and Bell JJ:

16. [60]

    I accept the plaintiff’s submission that the reduction of 11% is manifestly inadequate, unreasonable and plainly unjust. I consider that the adoption of this low level of discount lacks any evident or intelligible justification. The Tribunal’s findings of fact concerning the plaintiff’s state of mind, including those based upon Racing NSW’s concessions, are summarised at [49]-[51] above. For the purposes of deciding this ground of review I put to one side my conclusion that breach of AR 175(h)(i) is not made out in the absence of knowledge or belief regarding the presence of a prohibited substance. I also put aside my reservations concerning whether the plaintiff could be found to have administered a prohibited substance upon the Tribunal is findings, which affect the first element of AR 175(h)(i) and one of the elements of AR 177B(6).

17. [61]

    Assuming that the plaintiff committed breaches 1, 13, 14 and 15 his doing so was entirely inadvertent and blameless. He not only did not know of the prohibited substance that attracted the operation of these two Rules but, in the words of the Tribunal, “there were no other enquiries that [the plaintiff] could reasonably have been expected to undertake having regard to his then level of knowledge and reliance upon a well-known and well respected and very professional vet” and there was no evidence “to indicate what other type of knowledge he might have gained if he had made other enquiries”.

18. [62]

    In an appropriate case, special circumstances for the purposes of AR 196(5) could be of such significance as to warrant reduction of a mandatory minimum period of disqualification to nil. A reduction to nil was open in this case. It was open to the Tribunal to conclude that no rational purpose could be served by imposing a penalty of disqualification in the circumstances found. The Tribunal’s findings mean that Dr Brennan acted culpably and that the plaintiff was deceived by him, horses were administered prohibited substances but the plaintiff was not responsible.

19. [63]

    At [24], in considering the objective seriousness of breach 1 and (apparently) breaches 13, 14 and 15, the Tribunal found:

20. [64]

    That paragraph expresses conclusions or characterisations from the findings of fact. The words “misconduct”, “cheat” and “serious and sustained wrongdoing” necessarily involve that the plaintiff was conscious of a prohibited substance being administered or at least that he was recklessness as to this. That is directly contradicted by the Tribunal’s substantive findings at [85] and [108] (quoted at [51] above). The Tribunal’s use of the quoted words was insupportable and gravely unfair to the plaintiff.

21. [65]

    This egregious mischaracterisation of the objective seriousness of the plaintiff’s breaches would constitute a specific error in the exercise of the Tribunal’s discretion to discount the penalty under LR 108(2)(d). It amounts to mistaking the facts and allowing extraneous and irrelevant matters to guide the decision. In the face of the Tribunal’s finding that the plaintiff did not know, ought not to have known and would not have known had he made all reasonable inquiries, that the prohibited substance was in the vitamin complex which he administered, the characterisations of serious misconduct, cheating and sustained and serious wrongdoing are non-existent and therefore irrelevant matters. The plaintiff has not relied upon this as a specific error but it is indicative and supportive of the proposition that the 11% discount involves at least latent error and is unreasonable and plainly unjust.

22. [66]

    The Tribunal also found the following (emphasis added):

23. [67]

    The last sentence of this paragraph is, again, unsustainable. Specific deterrence of the plaintiff could have no possible relevance where the Tribunal’s findings of fact show that his breaches were inadvertent. Disincentive, by the spectre of punishment, cannot operate to deter unconscious infringements. With respect to general deterrence, there could be some purpose to imposing punishment on an inadvertent offender by way of discouragement to others who might commit the same offence with knowledge or belief that a prohibited substance was administered, or without having made reasonable inquiries. But as a matter of principle this consideration could not be taken into account in fixing penalty without qualifying it by regard to the potential unfairness of making an example to others out of a person who is himself without blame. This is the same qualification as applies when a sentencing judge treats an immature offender, or one with low cognitive function or severely disadvantaged background, as an unsuitable vehicle for general deterrence.

24. [68]

    Again, although the specific errors in [27] of the Tribunal’s reasons are not relied upon by the plaintiff independently, they reinforce the conclusion that the end result involves latent error. The 11% appears on the face of the reasons to be a figure selected arbitrarily, without “evident or intelligible justification” and bearing no proportion to the overwhelming mitigation of the plaintiff’s breaches arising from his innocent state of mind.

Ground 5 - procedural fairness

1. [69]

   The plaintiff’s procedural fairness ground, set out at [6], is conceded by Racing NSW. Breaches 1, 2 (an administration offence contrary to AR 175 (h)(ii)) and 3 (a presentation offence contrary to AR 178) were all found proved on the basis of cobalt having been detected in the sample taken from Midsummer Sun at Gosford on 9 January 2015. The Tribunal fixed disqualification periods of 32 months, 13 months and 10 months, respectively.

2. [70]

   The Tribunal also found the plaintiff liable for breach 5, a presentation offence (AR 178) particularised as bringing Midsummer Sun to Gosford racecourse to compete when another prohibited substance, caffeine, was detected in a sample from the horse. The Tribunal said with respect to the facts of this breach:

3. [71]

   All of breaches 1, 2, 3 and 5 had in common that they concerned prohibited substances in the same horse, which had competed. They were dealt with by the Tribunal as a group, described as “in competition breaches”. Racing NSW did not submit to the Tribunal that there should be any accumulation of penalty for these matters. Therefore the plaintiff had nothing to respond to on the subject. The Tribunal did not hear any submission from him concerning concurrence or accumulation, presumably because Racing NSW had not asked for accumulation.

4. [72]

   However The Tribunal said:

5. [73]

   At [194] the Tribunal determined that the 10 months disqualification for breach 5 should be cumulative on the three concurrent periods of disqualification for breaches 1, 2 and 3. Racing NSW's concession of procedural unfairness is properly made. In so far as the Tribunal decided that the 10 months disqualification for breach 5 should be cumulative on the concurrent 32 months for breaches 1, 2 and 3 the decision must be set aside and the matter remitted for redetermination according to law.

Ground 6 - authority of the stewards

1. [74]

   Ground 6 is reproduced at [7] above. The following parts of AR 175 are relevant to this ground (emphasis added):

2. [75]

   Breach 18 which is referred to in the plaintiff’s ground 6 was a contravention of AR 175(a) committed on 2 September 2014. The particulars of the charge were that the plaintiff entered and started a horse named The Sharpener in an official trial at Rosehill when he had administered or caused to be administered a substance for the purpose of affecting the horse’s performance. It was alleged that the prospects of the horse being purchased at a forthcoming sale in which it was listed were thereby improved.

3. [76]

   The plaintiff’s contention is that the stewards had no lawful authority to penalise him for breaches of any subparagraph of AR 175, in particular subpars (a), (h)(i) and (h)(ii), and that consequently the Appeal Panel on appeal from the stewards and the Tribunal on appeal from the Panel had no such power. When subpars (k) and (l) of AR 175 are considered it appears the effect of the words in parentheses in the opening line of the rule are applicable not just to breaches of the subrules of AR 175, such as (a) and (h), but that the stewards exercising delegated powers may penalise any breach of the Rules.

4. [77]

   The words emphasised in bold in the portion of AR 175 set out above were inserted by resolution of the Directors of the Australian Racing Board on 10 April 2015. The amendment took effect from 1 June 2015. That was after the plaintiff’s breaches but before the stewards imposed their penalties on 21 September 2015. The Directors at the time of passing the amendment also resolved to advise Principal Racing Authorities (which included Racing NSW) “to expressly delegate to the stewards the powers to penalise set out in AR 175”.

5. [78]

   In accordance with that advice, on 21 April 2015 the Chief Executive Officer of Racing NSW issued to the Chairman of Stewards a form of delegation in these terms:

6. [79]

   The plaintiff submits that Racing NSW has no power to delegate to the stewards any of its functions. It is submitted the Chief Executive Officer likewise has no power to sub-delegate to the stewards any function which Racing NSW has delegated to him. This position is said to arise because the stewards are not an “authorised person or body” within the meaning of s 24(3) of the Thoroughbred Racing Act. That section is as follows:

7. [80]

   I understand the plaintiff’s submission to be that in the absence of a delegation to a person or body within subs (3) of s 24, Racing NSW’s functions must be discharged by its members (being the Chief Executive and seven other members appointed under s 6), who must meet and conduct business by majority decision in accordance with the procedures in ss 19 and 20.

8. [81]

   These submissions require consideration of what is the relevant “function” of Racing NSW. Its functions are prescribed in s 13, of which the following parts appear to be material for present purposes:

9. [82]

   Relevantly to the present case, functions have been conferred upon Racing NSW by the following parts of the Australian Rules Racing:

10. [83]

    In my view the effect of the above Australian Rules, in particular AR 8, is to confer upon Racing NSW the function of appointing stewards with the powers enumerated. In particular Racing NSW is given by AR 8(d) and (e) the function of appointing stewards with power to inquire into and adjudicate upon the conduct of licensed persons and to penalise any person committing a breach of the Rules. I consider that by appointing stewards with these powers, Racing NSW has discharged and executed the relevant conferred function. I do not consider that there arises any purported delegation to the stewards of functions otherwise conferred upon Racing NSW by the Thoroughbred Racing Act. The resolution of the Directors of the Australian Racing Board [77], the words in inserted by amendment in the opening lines of AR 175 (see [74]) and the communication from the CEO of Racing NSW to the stewards dated April 2015 (see [78]) all use the language of delegation. However I do not consider that those documents in provisions are concerned with or give rise to a delegation of function as referred to in s 24 of the Thoroughbred Racing Act.

11. [84]

    As envisaged by the Australian Rules, Racing NSW made the following relevant Local Rules:

12. [85]

    Racing NSW duly appointed stewards. My conclusion, that this appointment and the empowering of the stewards to determine breaches and impose penalties is, of itself, the discharge by Racing NSW of one of its functions “conferred or imposed … by or under the Australian Rules of Racing”, is consistent with and supported by s 42 of the Thoroughbred Racing Act. The relevant extracts of that section are as follows:

13. [86]

    By defining “racing authority” to include the stewards of Racing NSW this section gives statutory recognition to the lawful power of the stewards to make any of the decisions in subs (1)(a)-(e) of s 42. Those decisions include imposing disqualification penalties. By providing that Racing NSW has a right of appeal against decisions of a “racing authority”, including the stewards, s 42(1A) makes it still further apparent that the stewards are not in any sense delegates of Racing NSW. They clearly do not make decisions in its name in a manner which would depend upon them having statutory delegation of a function from Racing NSW in accordance with s 24 of the Thoroughbred Racing Act.

14. [87]

    Upon this analysis I do not consider that the power of the stewards to impose penalties depends upon s 24. Accordingly I reject the plaintiff’s ground 6. The relief sought upon the basis of that ground will be refused.

Orders

1. [88]

   To give effect to these reasons it will be necessary to make orders quashing the Tribunal’s determination that the plaintiff is liable for breach 1 and remitting the proceedings for redetermination of (a) penalty in relation to breaches 13, 14 and 15; and (b) concurrence or accumulation of the penalty for breach 5 relative to the penalties for breaches 2 and 3. Upon publication of these reasons, the plaintiff will be requested to bring in short minutes of the orders to be made. Subject to any further submissions I propose to order that Racing NSW pay the plaintiff’s costs of the proceedings in this Court.