Day v Sanders

The plaintiffs train horses for the purposes of harness racing. By letter dated 30 April 2014, signed by the first defendant, Reid Sanders, the second defendant, Harness Racing New South Wales (HRNSW) purported to suspend the licences of Neil Day and Dean McDowell, the first and second plaintiffs. The basis for the suspension was that each presented for racing a horse or horses, the urine of which contained a prohibited substance, namely cobalt in excess of the prescribed concentration. On 8 December 2014, the suspensions were set aside by the Court of Appeal on the grounds of a denial of natural justice as they had not been given an opportunity to be heard prior to the suspension: Day v Harness Racing New South Wales [2014] NSWCA 423 at [89] – [123] per Leeming JA, McColl and Macfarlan JJA agreeing.

On 15 December 2014 Mr Sanders again purported to suspend the plaintiffs’ licences, pending a Stewards Inquiry to determine whether each had presented a horse for racing with a prohibited substance, namely cobalt in excess of the prescribed concentration, and, if so, the appropriate penalty. The Stewards Inquiry was to take place on 22 December 2014. On that day, the plaintiffs applied for Mr Sanders, who was the chair of the panel of three Stewards, to recuse himself from sitting on the Inquiry on the grounds of reasonable apprehension of bias. The Inquiry was adjourned. On 12 January 2015, the Panel handed down its reasons for refusing the plaintiffs’ application and directed the plaintiffs to attend the Inquiry, which was to resume on 27 January 2015.

On 16 January 2015 the plaintiffs appealed to the NSW Racing Appeals Tribunal (the Tribunal), which determined on 22 January 2015 that it did not have jurisdiction to hear the appeal or entertain an application for a stay.

On 23 January 2015 the plaintiffs filed a summons in this Court in which they sought to have the suspensions of their licences quashed and an order restraining Mr Sanders from continuing to participate in the Inquiry on the ground that Mr Sanders’ involvement gives rise to a reasonable apprehension of bias.

Although the principal facts giving rise to the plaintiffs’ application for relief are set out above, it is necessary to set out in greater detail what preceded these proceedings, as well as the regulatory framework against which the events took place, in order to address the parties’ submissions.

Mr Day has been working as a trainer and driver in the harness racing industry since 1975. Since 2008 he has been the President of United Harness Racing Association which represents harness racing trainers and drivers in NSW. Mr McDowell has worked continuously as a horse racing trainer since 1992.

Concern arose that cobalt chloride was being used to enhance the performance of horses engaged in harness racing. Although cobalt chloride was not specifically identified at that stage in the applicable rules (which will be considered in more detail below), cobalt was, depending on the concentration, a prohibited substance because of its physical effect on horses. On 12 September 2013 HRNSW issued two press releases, the first of which stated:

The second press release stated in part:

On 16 December 2013 HRNSW published a new rule, Local Rule 188A(2), which deemed cobalt at a concentration of 200 micrograms per litre a prohibited substance.

By letters dated 30 April 2014 HRNSW notified the plaintiffs that their licences had been suspended as they had presented the following horses for racing with a prohibited substance, being cobalt in excess of the prescribed concentration of 200 micrograms per litre:

On 9 May 2014 the plaintiffs filed a summons in this Court to challenge their suspensions and stay the ensuing Stewards Inquiry. I heard the initial challenge to the suspension, which also involved a challenge to the validity of the relevant rule that made cobalt above a certain level a prohibited substance: Day v Harness Racing NSW [2014] NSWSC 1402 (the Original Proceedings). Mr Day swore, and Mr Sanders affirmed, affidavits which were served in the Original Proceedings. As referred to above, their suspensions were set aside by the Court of Appeal on the ground that they had not been given an opportunity to be heard.

Mr Day swore an affidavit on 8 May 2014 in the Original Proceedings in which he deposed to a conversation he had had with Mr Sanders at about the same time as the press releases set out above as follows:

Of these paragraphs only [40] was read in the Original Proceedings.

An affidavit of Mr Sanders affirmed on 21 August 2014 was served in the Original Proceedings. Parts of it were read in those proceedings. In [108] of his affidavit, Mr Sanders responded to [41] of Mr Day’s affidavit. Paragraph [108], which was not read in the Original Proceedings as [41] was not read, was as follows:

Mr Day filed an affidavit in reply after Mr Sanders’ affidavit had been served, which did not take issue or otherwise address Mr Sanders’ evidence of the conversation.

Mr Sanders was cross-examined in the Original Proceedings. He was not cross-examined about the conversation between him and Mr Day which was the subject of the paragraphs set out above.

As referred to above, orders were made by the Court of Appeal on 8 December 2014 setting aside the suspensions of the plaintiffs’ licences. By letter dated 9 December 2014 to Mr Day, HRNSW invited him to make submissions as to why his licence ought not be suspended pending the commencement of the Stewards Inquiry on 22 December 2014. A letter in similar terms was sent to Mr McDowell inviting him to make submissions as to why his licence should be renewed.

The plaintiffs’ solicitors, by letter dated 11 December 2014 addressed to Mr Sanders, responded in part as follows:

By statement of claim filed on 15 December 2014 the plaintiffs commenced proceedings in this Court in the Defamation List against HRNSW (the Defamation Proceedings). They claimed damages for defamation, including aggravated damages, and damages for negligent misstatement. The pleading contains the following allegations:

The plaintiffs’ solicitors served the statement of claim in the Defamation Proceedings on HRNSW under cover of letter to its Chief Executive Officer, Mr Dumesny dated 15 December 2014. The letter said in part:

Mr Sanders wrote to the plaintiffs’ solicitors on 15 December 2014 and notified them of his determination to suspend each of the plaintiffs’ licences pursuant to Rule 183(d) and his determination under Rule 183(a) - (c) that neither of the plaintiffs was entitled to enter any horse trained by them to race, or to drive in any race or trial. Nor would any horse currently trained by either of the plaintiffs be permitted to be transferred to another trainer without HRNSW’s permission. The reasons given for these determinations appear in the letter, parts of which are extracted as follows:

At the commencement of the Stewards Inquiry on 22 December 2014, Mr Rayment of counsel, who appeared at the Inquiry on behalf of the plaintiffs, asked Mr Sanders to disqualify himself from the Panel of Stewards, that comprised Mr Sanders, as Chairman, Mr Prentice and Mr Clarke. The submission made by Mr Rayment on behalf of Mr Day is contained in the following extract from the transcript:

The submission made by Mr Rayment on behalf of Mr McDowell is contained in the following extract from the transcript of 22 December 2014:

I do not understand that there could be any dispute about the second press release being the relevant one which Mr Rayment referred to as being “the same statement” as had been made by Mr Sanders in conversation with Mr Day.

The Panel considered the application and reserved its decision. The Stewards refused the application, confirmed that the Inquiry Panel would remain as previously constituted and directed the plaintiffs to appear at the resumption of the Inquiry on 27 January 2015. Their written decision together with reasons was sent to the plaintiffs’ solicitors under cover of letter dated 12 January 2015. It is not necessary to reproduce the reasons in full. The following extracts are reproduced as they were specifically relied upon in these proceedings:

As referred to above, on 16 January 2015 the plaintiffs appealed to the Tribunal, which determined, on 22 January 2015, that it did not have jurisdiction to hear either an appeal against the Panel’s decision regarding Mr Sanders’ continued involvement in the Inquiry or to entertain an application for a stay.

The plaintiffs filed a summons in this Court on 23 January 2015 which was referred to Davies J, as the vacation Duty Judge. On the date of filing, the plaintiffs applied, ex parte, for an urgent interlocutory injunction restraining Mr Sanders from participating into the Stewards Inquiry into the plaintiffs. Mr Moses SC, who appeared with Mr Murphy for the plaintiffs, relied on an affidavit (which was at that stage unsworn but was sworn later that day) of Mr Berry, the plaintiffs’ solicitor, in which he set out, on information and belief, in [12] of his affidavit the terms of the conversation to which Mr Day had deposed in [41] of his affidavit of 8 May 2014. Paragraph [13] of Mr Berry’s affidavit read in part:

Mr Moses informed Davies J, on the basis of Mr Berry’s affidavit, that the conversation was denied by Mr Sanders and identified the conversation as the principal basis for the allegation of reasonable apprehension of bias. This statement was not accurate (although not intentionally so) in that the conversation, as appears above, was not denied, although Mr Sanders’ version contains further words which were not in Mr Day’s version.

On 28 January 2015 the defendants gave undertakings, without admissions, which have the effect of staying the Inquiry pending the determination of these proceedings.

Mr Day swore an affidavit in these proceedings on 12 February 2015 in which, in [21], [22] and [23], he effectively repeated the contents of [40], [41] and [42] of his affidavit sworn 8 May 2014 in the Original Proceedings. He also deposed:

The Act is, according to its long title, an Act to make provision with respect to the control and regulation of harness racing. The Act, by s 4, constituted HRNSW as a body corporate to consist of five members (s 6) appointed by the Minister. By s 9 of the Act its functions include to control, supervise and regulate harness racing (s 9(2)(a)), to register harness racing clubs, horses, owners, trainers and drivers (s 9(2)(b)).

HRNSW has, by s 10(1), power to do all things that may be necessary or convenient to be done for and in connection with the exercise of its functions. It also has specific powers listed in s 10(2) (which are expressed not to limit s 10(1)) which include the following:

Part 3 of the Act provides that HRNSW may register (and refuse to register) horses, owners, trainers, drivers or bookmakers but is not permitted to refuse to register horses or individuals “unless it is of the opinion that it would be in the best interests of the harness racing industry to do so”: s 18.

Section 21(1) confers on HRNSW the power to cancel the registration of, or disqualify, permanently or temporarily, any owner, trainer, driver or bookmaker or prohibit any such person from participating in harness racing in any specified capacity. However, it may only take action under s 21 for disciplinary purposes or for the purposes of work health and safety: s 21(3).

HRNSW also has power to make rules not inconsistent with the Act or the regulations for or with respect to the control and regulation of harness racing: s 22(1). Section 22(2) provides that HRNSW may make rules for or with respect to the following:

By s 23(2) a rule may incorporate any publication in force.

Section 43 of the Act protects the stewards from personal liability for anything done in good faith for the purposes of the Act.

Section 47 expressly contemplates that the regulations may create offences.

It is common ground that the Australian Harness Racing Rules (the Rules), which were made by Harness Racing Australia Inc. (a body corporate incorporated in the Australian Capital Territory), have been adopted by HRNSW and apply in New South Wales. There are also Local Rules made by HRNSW.

By Local Rule 1, the Rules are incorporated into the Local Rules and apply to harness racing in NSW. HRNSW is the relevant “Controlling Body”.

Rule 14 provides for the appointment of “Stewards” and a “Chief Steward”, who is to be the “Chairman”. At any race meeting where there is more than one Steward present, one shall be the “Chief Steward”. At any meeting attended by more than one Steward, the Chief Steward has the casting vote. Rule 15 provides for the powers of Stewards which include such varied powers as the following: the power to direct or control any race meeting (rule 15(1)(a)); suspend or disqualify any person from participating in or being employed or engaged in or about the harness racing industry (rule 15(1)(e); make announcements or issue publications or notices (rule 15(1)(j)); provide reports and recommendations about or arising out of any inquiry, investigation or determination or upon any subject connected with the harness racing industry to, relevantly, HRNSW (rule 15(1)(l)) and take possession of a horse, alive or dead (rule 15(1)(x)).

Rule 20(1) provides that no Steward shall exercise any power conferred by the Rules in respect of any matter in which the Steward has a financial or family interest or which in any other way gives rise to a conflict of interest.

Rule 90 provides that HRNSW may by licence regulate any activity connected with the harness racing industry and may refuse an application for a licence without assigning a reason. Rule 90(6) provides that a licence may be cancelled or suspended for breach of a term or condition of the licence or where HRNSW is satisfied that the licensee is not a fit and proper person. Rule 91 prohibits the carrying out of an activity regulated by a licence if a person is not the current holder of a licence or the licence is suspended. Rule 90A provides for the various types of licences: drivers, trainers and stable hands.

Rule 181 empowers the Stewards, when directed by HRNSW, to conduct an inquiry “in such manner as they think fit” into “anything concerning the . . . enforcement of these rules”. Rule 182 provides for legal or other representation if the Stewards allow. It also provides that written and oral evidence, including expert evidence, may be given.

Rule 183 provides that the Stewards may suspend a licence pending the outcome of an inquiry, investigation or objection or where a person has been charged with an offence.

Rule 183A provides that on receipt of a certificate relevantly from an approved laboratory, which is prima facie evidence of the presence of a prohibited substance, the Stewards may determine that the horse not compete until the outcome of an inquiry or investigation.

Rule 184 provides for a rehearing by the Stewards on the application by anyone adversely affected by a decision of the Stewards. However, the stewards have no power to conduct a rehearing once an appeal to an Appeal Tribunal or a proceeding in a court is initiated: Rule 186.

Part 12 of the Rules deals with prohibited substances. Rule 188 provides that HRNSW may determine a substance to be a prohibited substance. Rule 188A(1) describes prohibited substances as substances having, or capable of having, a particular effect on a horse’s bodily systems. Rule 188A(2) relevantly provides that certain listed substances when present at or below the levels set out are excepted from Rule 188A(1).

On 16 December 2013 the Local Rules were amended to add to Rule 188A(2) the following:

The effect of the amendment was to deem cobalt, at a level above 200 micrograms per litre, a prohibited substance.

Rule 190 requires a horse to be presented for a race free of prohibited substances and, if not, the trainer of a horse (and if the horse is left in charge of another person, that person) is guilty of an offence. Rule 190(4) provides that an offence is relevantly committed “regardless of the circumstances in which the prohibited substance came to be present in or on the horse”.

Rule 191(1) provides that a certificate from a laboratory approved by HRNSW is prima facie evidence of the matters certified. Rule 191(3) provides that if another approved laboratory also certifies the presence of a prohibited substance in the sample tested by the first, the two certificates are conclusive evidence of the prohibited substance. Rule 191(7) provides that notwithstanding the provisions of Rule 191(3), certificates do not possess evidentiary value nor establish an offence where it is proved that the certification procedures or any act or omission forming part of or relevant to the process resulting in the issue of a certificate was materially flawed.

Rule 193 prohibits the administration of medication to a horse on race day.

Part 15 of the Rules provides for penalties, including a fine, a suspension and a disqualification that may be imposed on persons found guilty of an offence under the Rules (rule 256). Rule 256(6) provides that although an offence is found proven a conviction need not necessarily be entered or a penalty imposed. Rule 256(7) provides that, before an offence is found proven, a hearing will be undertaken throughout which the Stewards who make the decision are required to be present and in which an accused person is afforded a reasonable opportunity to cross-examine witnesses, adduce evidence and make submissions.

Rule 309 provides as follows:

Rule 313 provides that the singular includes the plural except “where it is obvious from the context that either the singular form or the plural form solely applies”.

Section 15B of the Racing Appeals Tribunal Act provides that any person aggrieved by a decision of a Steward of HRNSW may appeal to the Tribunal. An appeal to the Tribunal is a hearing on the merits and additional evidence may be given: s 16(1). Such an appeal is held as in open court before the Tribunal: s 16(2). Regulation 9(1)(g) of the Racing Appeals Tribunal Regulations provides for an appeal against suspension of a licence.

The apprehension of bias principle is an aspect of procedural fairness which applies both to judicial and non-judicial decision-makers. Although there are important differences between judges and administrative decision-makers, there is a substantial overlap. The relevant test for apprehended bias is as stated in Re Refugee Tribunal; Ex Parte H [2001] HCA 28; 75 ALJR 982 at [28]:

Although this is the test, the starting point is the statutory context: McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504 at [6] per Spigelman CJ. It is necessary to determine the “kind or degree of neutrality (if any)” that is expected of the decision-maker: Minister for Immigration and Multicultural Affairs v Jia [2001] HCA 17; 205 CLR 507 at [187] per Hayne J. The statutory and administrative context is particularly important when the relevant decision maker is not a judge. As Gummow, Gaudron and Hayne JJ said in Hot Holdings Pty Ltd v Creasy (2002) 210 CLR 438 at 460:

Among the matters of which the hypothetical observer would be aware are the relevant statutory provisions, including that the Stewards are empowered to do the various things provided for in Rule 15, examples of which are set out above. The hypothetical observer would also be aware of the provisions of the Act and the Rules referred to above which have the effect of making Stewards, at times, investigators; inquisitors; and decision-makers.

In Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (Ebner), the High Court held that the question whether there is a reasonable apprehension of bias can only be determined after examining both the matter said to give rise to the apprehension and how the outcome of the matter to be decided might affect that interest. Gleeson CJ, McHugh, Gummow and Hayne JJ said at [8] that the application of the apprehension of bias principle requires the following two steps:

Although Ebner concerned judicial decision-making, the following statements of principle, which are expressed in terms of judges, apply also to other decision-makers. The plurality said:

In Ebner the plurality referred to Webb v The Queen [1994] HCA 30; 181 CLR 41 (Webb) at 74, where Deane J identified four distinct, though overlapping, categories of case where a reasonable apprehension of bias requiring disqualification had been found: interest; conduct; association; and extraneous information. Their Honours accepted the list as a “convenient frame of reference”, while cautioning that its utility may depend on the context in which it is employed. As will be seen from the discussion below where the plaintiffs’ arguments are addressed, the plaintiffs relied on the first and fourth categories: interest and extraneous information.

The plaintiffs relied not only on the apprehension of bias principle, but also on Rule 20, which prohibits a Steward from exercising any power conferred by the Rules in any way that gives rise to a conflict of interest. The plaintiffs have identified the relevant interest as Mr Sanders’ interest in his own reputation and credibility as a witness. I do not consider that Rule 20 has any greater application in the present case than the apprehension of bias principle. Accordingly I do not propose to address the effect of Rule 20 separately.

Mr Moses SC, who appeared with Mr Murphy and Ms Gall on behalf of the plaintiffs, submitted that Mr Sanders was a material witness in the Inquiry. He contended that the following matters (taken from the written submissions) might lead him to decide issues other than on the merits:

The first three matters, (a), (b) and (c) concern the characterisation of the offence under Rule 190 as being one of strict or absolute liability and are common to both plaintiffs. The fourth, (d), concerns the conversation between Mr Day and Mr Sanders, and relates only to the case brought by Mr Day (there being no evidence that Mr Sanders spoke with Mr McDowell or that Mr Day communicated the substance of his conversation with Mr Sanders to Mr McDowell). I shall address (d) first.

In order to highlight the difference between the two versions of the conversation I propose to set out an extract from Mr Sanders’ version and italicise the portion that is missing from Mr Day’s version:

Mr Moses submitted that the fact that both parties to the conversation gave different versions meant that Mr Sanders was, at least potentially, a witness in the Inquiry. He contended that, because HRNSW had foreshadowed (in its reasons of 12 January 2015) that the Stewards would be prepared to listen to submissions as to whether Rule 190 was an offence of absolute or strict liability, it was a real possibility that the conversation would become relevant to proof of the offence. In the alternative, he contended that, even were the Panel to be satisfied that the offence had been proved, it retained a discretion under Rule 256(6) not to enter a conviction or impose a penalty and that the terms of the conversation would be relevant to the exercise of the discretion.

Dr Bell SC, who appeared with Mr Dawson and Ms Forrester for the defendants, described Mr Moses’ reliance on the differences between versions of the conversation as a “valiant rear guard attempt” to save the plaintiffs’ case, which had originally been based on a premise - that Mr Sanders denied the conversation – which had been exposed as incorrect. Dr Bell accepted that if Mr Sanders had actually denied the conversation, the case for disqualification on the grounds of reasonable apprehension of bias would have been at least “respectable”, presumably on the ground that a question of credibility would be involved: Gleeson v The New South Wales Harness Racing Authority (Supreme Court of NSW, 20 August 1990, unreported, Young J).

Close attention must be given to the forensic circumstances in which the evidence of the conversation was given in order to determine not only whether it was truly in issue but also the significance to Mr Day of any differences between the respective versions. Unless this task is performed, it is not possible to determine whether there is a “logical connection”, as required by the second stage of the Ebner test.

Had the difference between the version of the conversation given in Mr Sanders’ affidavit and his own version been of significance to Mr Day, it could reasonably have been expected that Mr Day would have raised it, if not in his affidavit in reply in the Original Proceedings, then at least in his affidavit filed in these proceedings, rather than merely repeat the version he had given in his affidavit in chief in the Original Proceedings.

In order to apply the two-stage Ebner test, it is important to assess:

Although there is no direct evidence of either of these two matters, the verified allegation in the Defamation Proceedings that the plaintiffs had relied on the following statement in the second press release is significant since it closely corresponded with Mr Sanders’ version of what he said in the conversation with Mr Day:

It is also significant that, in the Defamation Proceedings, both plaintiffs verified the allegation that they administered supplements and pre-mix feeds “in accordance with the manufacturer’s guidelines”. In these circumstances, the differences in the versions given by Mr Sanders and Mr Day would not appear to be material, since it could not be said by Mr Day that, following the conversation with Mr Sanders, he proceeded on the basis that he could administer feed that contained cobalt, irrespective of the dosage.

This analysis is also supported both by the absence of any allegation in the statement of claim filed in the Defamation Proceedings that Mr Day had relied on what Mr Sanders said in the conversation as well as by Mr Moses’ concession (which restates the submission made by Mr Rayment in the Inquiry) that the cases of Messrs Day and McDowell were identical because both plaintiffs relied on the press release, of which Mr Sanders was the author, and which corresponded with what Mr Sanders told Mr Day in the conversation. In light of this concession, the issue raised before me about how Mr Sanders’ words ought be construed, and in particular whether “it” was consistently used to refer to cobalt or whether it was also used to refer to “feeds”, falls away.

The differences between the versions of the conversation have not been shown to be material and, indeed, in light of the allegations in the Defamation Proceedings and the concession made by Mr Moses, appear to be immaterial. The gist both of what Mr Sanders told Mr Day and what was contained in the second press release was, in substance, the same: namely, do not dabble directly in cobalt and do not overdose your horses with supplements containing cobalt. The only additional words in Mr Sanders’ version, namely that dosage was important, were contained in the press release which Mr Day had read.

Although the plaintiffs’ submissions did not differentiate between them, I consider there to be an important distinction between suspension and the subsequent Inquiry. The decision to suspend did not involve any determination that the plaintiffs had committed an offence under Rule 190. Rather the suspensions were, as Mr Sanders explained in the reasons, the result of his weighing up the damage to the harness racing industry if the plaintiffs were permitted to remain licensed pending the determination of the Inquiry against the prejudice to the plaintiffs occasioned by their being suspended for that period. Mr Sanders took into account, as he was entitled to do, the fact that there were two certificates from approved laboratories in respect of each plaintiff. The effect of this was that there was conclusive evidence of the presence of prohibited substances: Rule 191(3).

Further, no fair-minded observer (much less Mr Sanders himself) would, or could, have appreciated, at the time of the suspension, that there was any material issue about the minor differences between the versions given in the Original Proceedings of the conversation between Mr Day and Mr Sanders addressed above. These paragraphs had not been read in the Original Proceedings; there had been no cross-examination of Mr Sanders regarding the conversation; and there was no mention of the conversation in the statement of claim filed in the Defamation Proceedings filed on that day. Indeed a fair-minded observer would have understood that the reliance placed on the second press release in the Defamation Proceedings, to the exclusion of the telephone conversation, meant that the telephone conversation had no residual significance.

The plaintiffs have not made out their challenge to the suspension decisions on the ground of reasonable apprehension of bias.

The remaining matters relied on by the plaintiffs as giving rise to a reasonable apprehension of bias relate, in one way or another, to the characterisation of a Rule 190 offence as one of strict or absolute liability.

It is necessary to provide some background to the question whether an offence under Rule 190 is to be characterised as an offence of strict liability or absolute liability in order to understand the parties’ submissions, both in this Court and as raised in correspondence prior to the commencement of these proceedings.

The plaintiffs argued in the Original Proceedings that an offence under Rule 190 was an offence of strict, but not absolute, liability, and that, accordingly, the defence of honest or reasonable mistake of fact was available.

If the offence is one of absolute liability, there is no defence, as long as the certificates from the approved laboratories that establish the concentrations are not able to be impugned. Matters such as how and why the horse came to be presented to race with prohibited substances, are not relevant to proof of the offence. Their relevance, if any, is confined to whether a conviction is entered (there being a discretion under Rule 256(6)) and to what, if any, penalty is imposed.

However, if an offence under Rule 190 is properly, or even arguably, to be regarded as an offence of strict, as distinct from absolute, liability, matters such as how the horse came to be presented with prohibited substances may be relevant to proof of the offence. If the horse was, for example, fed with generally available feed, in reliance on the second press release in the honest but mistaken belief that this would not put the trainer at risk of falling foul of Local Rule 188A(2)(k), the trainer might have a defence of honest and reasonable mistake of fact and be entitled to be found not guilty of an offence under Rule 190 on that ground.

I decided in the Original Proceedings (principally on the basis of Harper v Racing Penalties Appeal Tribunal of Western Australia (1995) 12 WAR 337 (Harper)) that an offence under Rule 190 was one of absolute liability: Day v Harness Racing NSW [2014] NSWSC 1402 at [185] – [190]. In their appeal, the plaintiffs challenged this characterisation. However, as it was not necessary to decide the question to resolve the appeal, the Court of Appeal did not determine it: Day v Harness Racing NSW [2014] NSWCA 423 at [129]-[131] per Leeming JA, McColl and Macfarlan JJA agreeing.

In these proceedings, Mr Moses maintained the plaintiffs’ contention that my characterisation in the Original Proceedings was erroneous. He relied on Wonson v Greyhound and Harness Racing Regulatory Authority [2005] NSWSC 584 (Wonson), to which I had not been referred in the Original Proceedings, in which Bell J said at [12] that: “The offence created by r 190(2) is one of strict liability.” The differentiation between offences of strict liability and absolute liability did not arise for consideration in Wonson. In these circumstances, I do not consider her Honour ought be taken to have decided the question. I consider that Bell J was doing no more than noting that the offence did not require proof of fault, a proposition which was both uncontroverted and uncontroversial.

Mr Moses further contended that the inconsistency between the propositions that it was settled law that the offence was one of absolute liability and the expressed preparedness of the Stewards to “consider any alternative argument on the issue” meant that Mr Sanders ought recuse himself. I reject this argument. The Stewards are bound by authority, not only of Courts but also of the Tribunal (several decisions of which were referred to), to treat Rule 190 as creating an offence of absolute liability unless and until these decisions are overturned. The current state of the law makes irrelevant to proof of an offence under Rule 190 any conversation between Mr Day and Mr Sanders or any role Mr Sanders played with respect to the press releases.

Ultimately, Mr Moses submitted that it did not matter whether the offence was one of absolute liability, since matters such as honest and reasonable mistake of fact, if not relevant to proof of the offence, were relevant to whether a conviction ought be recorded and what penalty, if any, ought be imposed in the event of conviction.

Applying the first part of the Ebner test, the plaintiffs identified, the following as matters that might lead Mr Sanders to decide whether Mr Day or Mr McDowell had contravened Rule 190 by presenting a horse for race otherwise than free of prohibited substances other than on the legal and factual merits:

As to (1), Mr Sanders’ belief accorded with the current state of the law which bound him. Even with respect to judges, a ruling in earlier proceedings on the same point of law does not, without more, amount to a ground for disqualification: Justice Mason in Re JRL; Ex parte CJL (1986) 161 CLR 342 said at 352:

Matters (2), (3) and (4) above are uncontroversial. There was, however, no evidence of either (5) or (6) (on which (7) depends) since there was no evidence that this was the way in which the plaintiffs’ horses had been prepared for racing. Indeed the plaintiffs were coy about the way their horses had been prepared for race and how it could be that their horses’ urine showed cobalt in such high quantities.

It was common ground that the plaintiffs have not at any time specified what substances they gave to the relevant horses before they recorded the cobalt levels above 200 micrograms per litre or in what quantities and when. Although Mr Moses informed me from the bar table in the course of the hearing that the plaintiffs contended that the relevant readings of cobalt in their horses emanated from cobalt contained in lawfully available supplements, there was no direct evidence in Mr Day’s affidavit to this effect and Mr McDowell did not swear an affidavit in these proceedings. The only other matter to which reference should be made is [18] of the verified statement of claim in the Defamation Proceedings in which the plaintiffs verified that they had relied on the second press release in preparing their horses for racing.

The lack of evidence of these matters is no mere technicality. No obligation in the Rules or elsewhere has been identified which would require the plaintiffs disclose the basis, if any, on which they propose to defend their alleged breaches of Rule 190 in the Inquiry. In these circumstances they would be entitled to the privilege against self-incrimination: Petty v The Queen [1991] HCA; 173 CLR 95, at 99 per Mason CJ, Deane, Toohey and McHugh JJ. However, it does not follow that they can rely, in the absence of evidence, on any hypothesis consistent with innocence or any potential mitigating circumstances in support of their contention that Mr Sanders’ involvement gives rise to a reasonable apprehension of bias.

The requirement in Ebner that there be a logical connection is not fulfilled by the suggestion of a fanciful or hypothetical basis without evidentiary foundation. If this were the test, it would effectively put it in the hands of the plaintiffs to choose the composition of the Panel since it could reasonably be expected that at least Mr Day, as President of the United Harness Racing Association, would have had conversations at some time or other with the person selected to be the Chair of an Inquiry, particularly if that person were, as in the present case, the Chief Steward. Unlike other categories of decision-makers, Stewards are likely to have ongoing and repeated contact, in various capacities, over a period of years with the persons in respect of whom they make decisions: Hall v NSW Trotting Club Ltd [1977] 1 NSWLR 378 at 397-398: Builders Registration Board (Qld) v Rauber (1983) 47 ALR 55 at 57 per Murphy J.

The plaintiffs also submitted that there was a possibility that Mr Sanders, as a material witness, had knowledge of extraneous information (see the fourth category in Webb referred to above). The possibility of “extraneous information” was not developed further in submissions. In so far as Mr Sanders was involved in the investigation into the effects of cobalt chloride, he can be taken to be aware of “extraneous information”. However, it would be at odds with the role of Steward as provided for in the Act and the Rules to suppose that a Steward, whom the Act and the Rules contemplate will play several roles in the harness racing industry, would come to an Inquiry with a blank mind: see R v Brewer; ex parte Renzella [1973] VR 375 at 383 per Adam J.

As appears in the passage from Ebner set out above (to the effect that judges ought not be able to choose cases and litigants ought not be able to choose judges), it would be at odds with principle to permit the plaintiffs to be judged by a panel that did not include Mr Sanders simply because they would prefer that he not be involved, either because of the part he played in having cobalt above the prescribed concentration deemed a prohibited substance, because of his evident commitment to stop the unauthorised use of cobalt in harness racing, or for some other reason, which was not such as to give rise to any reasonable apprehension of bias.

I regard the plaintiffs’ objection to Mr Sanders’ participation in the Inquiry into whether they have committed offences under Rule 190 as insubstantial. There is, in my view, no logical connection between any of the matters raised in the first stage of the Ebner test and any matter for which there is any basis in the evidence that would tend to show that there was a basis for any fear that Mr Sanders would deviate from deciding the case on the merits.

Nor do I consider that any of the statements made by Mr Sanders in the correspondence set out above indicated that he was not open to persuasion, at least to the extent to which he had any discretion about the matter in question. That he was associated with the making of the relevant Local Rule that made cobalt above a certain concentration a prohibited substance does not indicate that he would not bring an impartial mind to bear on the inquiry into whether either of the plaintiffs had committed an offence under Rule 190. In so far as Mr Day is concerned, the hypothetical observer would be aware of what Mr Sanders said to Mr Day and realise that he was, as Mr Moses correctly conceded, making similar points to those he had made in the second press release.

Even if Mr Sanders had a firm preliminary view that a period of disqualification was called for if the offence was proved, the test for apprehended bias is not fulfilled. As Hayne J said in Minister for Immigration and Multicultural Affairs v Jia at [192]:

In my view, a fair-minded lay observer would not reasonably apprehend from any of the matters relied on by the plaintiffs, whether taken individually or cumulatively, that Mr Sanders, might not bring an impartial mind to its consideration whether either of the plaintiffs had committed an offence under Rule 190 of the Act or, at least in the case of Mr McDowell, what penalty is appropriate in the event that the offence was proved. The qualification in the case of Mr Day is considered further below.

The plaintiffs suggested that other members of the Panel would be improperly influenced by Mr Sanders. As this submission was not developed, it is not necessary to deal with it other than to say that no basis has been identified for any conclusion that the other Stewards on the Panel would be influenced by Mr Sanders’ experience, expertise and knowledge in any inappropriate way.

Dr Bell submitted that Mr Day’s application for relief in respect of Mr Sanders’ participation on the Inquiry Panel for any penalty hearing (including an order under Rule 256(6)) is premature since it is possible that the difference in the versions of the conversation might be revealed as significant at that stage, depending on what evidence is adduced at the hearing to determine whether the offence has been proved. He referred to the concluding passage of the Reasons given by the Stewards Panel on 12 January 2015 for not recusing Mr Sanders, in which the Panel adverted to its preparedness to hear submissions before any hearing on penalty as to why Mr Sanders ought recuse himself.

Accordingly, Dr Bell submitted that I ought determine the applications for relief regarding the suspensions and the aspect of the hearing relating to proof of the offence, but that I ought determine only Mr McDowell’s application in respect of penalty. Mr Moses did not make a submission to the contrary.

It is frequently convenient for the person who, or the panel which, determines whether an offence has been proved, also to determine the penalty to be imposed if the offence has been proved. However, Rule 181 empowers the Stewards, when directed by HRNSW, to conduct an inquiry “in such manner as they think fit”. Accordingly, it is for the Stewards and not for this Court to determine whether, if there be a risk that Mr Sanders might have to recuse himself on the ground of reasonable apprehension of bias at the penalty stage, it would be preferable for him not to participate in the Inquiry as to whether the offence under Rule 190 has been proved. This does not provide a ground for this Court to restrain his participation in the Inquiry into the allegation that Mr Day is guilty of an offence under Rule 190.

I am persuaded by Dr Bell’s submission that Mr Day’s application in respect of any penalty hearing is premature. Although Mr Moses, on behalf of Mr Day gave the Court from the bar table, without evidence, an explanation for the presence of the prohibited substance, Mr Day may well not advance that explanation before the Inquiry or may adduce further evidence which casts a different light on the conversation at that Inquiry. Accordingly these reasons ought not be taken as foreclosing any application Mr Day might make to Mr Sanders at a later time that he recuse himself from the Panel if the offence against him is found proved.

For these reasons, the plaintiffs have failed to establish a basis for any of the relief sought.

In light of the reasons set out above, I am not persuaded that there is a proper basis to grant relief. However, as evidence was adduced on the ground of necessity, I ought, for completeness, address the evidence and my conclusions arising from it.

Dr Bell contended that, if I were otherwise disposed to grant relief I ought refuse it on the grounds of necessity: Ebner. He relied on the evidence of Mr Dumesny, the CEO of Harness Racing NSW, who deposed to the number of Stewards in NSW and their availability to undertake Stewards Inquiries. He also deposed to his opinion that the only individual Steward whom he considered to have sufficient experience to chair an Inquiry Panel was Mr Sanders. He explained the reason for the lack of experience of Stewards, other than Mr Sanders, in conducting non-race day inquires. In August 2011 HRNSW became aware that its Stewards were engaging in corrupt practices. Mr Sanders, who had extensive experience in the thoroughbred racing industry, was appointed at around that time and was given the dual roles of Manager Integrity and Chief Steward because, according to Mr Dumesny, there was no other Steward available with sufficient experience.

Mr Sanders is the only Steward still employed by HRNSW who has chaired a non-race day inquiry since August 2011. Although part of the reason for that was to ensure consistency of approach, Mr Dumesny explained that it was also due to the fact that Mr Sanders was the only Steward with the requisite experience.

Mr Dumesny deposed to Mr Sanders’ expertise on the topic of cobalt chloride and its effects on harness racing horses, as well as to his involvement in the investigation which led to cobalt being deemed to be a prohibited substance under the Local Rules. Mr Dumesny also said that the inquiry into the plaintiffs was expected to be complex and demanding, not only because of the subject matter but also to deal with, and by implication not to be intimidated by, the prospect of other proceedings being brought arising from the inquiry.

When he was cross-examined, Mr Dumesny agreed that he considered Mr Locke, who is presently employed as Chief Steward of HRNSW, to be able to discharge his duties competently and independently, and who would be able to conduct any inquiry allocated to him.

Had the plaintiff’s otherwise established their claim for relief I would not have declined relief on the ground of necessity. I am not satisfied that it is necessary that Mr Sanders chair the Panel, in light of Mr Dumesny’s concessions in cross-examination as to Mr Locke’s competence and experience.

I make the following orders: