Racing NSW v Lewin

1. [1]

   BATHURST CJ: I have had the advantage of reading the judgment of Basten JA in draft. I agree with the orders proposed by his Honour and with his reasons.

2. [2]

   BASTEN JA: The immediate question raised by the present appeal is whether the first respondent, Mr Leo Lewin, has a right of appeal to the Racing Appeals Tribunal from a decision of the applicant, Racing New South Wales, to refuse him a bookmaker licence [1] for the current financial year. The answer to that question depends on the construction and validity of a regulation which, on its face, purports to exclude any appeal from a refusal to issue a licence.

Leave to appeal

1. [3]

   The appeal has been brought from a judgment of Rothman J in the Common Law Division delivered on 6 March 2018. [2] The substantive order made by the primary judge was a declaration that Mr Lewin had a right of appeal under s 15(1)(d) of the Racing Appeals Tribunal Act 1983 (NSW) (“the Tribunal Act”). The declaration was made on the basis that the effect of the decision was that Mr Lewin had been “disqualified” with the consequence that his right of appeal was preserved by cl 5(2)(a) of the Racing Appeals Tribunal Regulation 2015 (NSW) (“the Tribunal Regulation”).

2. [4]

   It was common ground on the appeal that none of the parties presented or supported submissions to that effect before the primary judge. Further, it was common ground, being correctly conceded by counsel for Mr Lewin, that the characterisation of the decision adopted by the primary judge could not be supported. In the result, Mr Lewin relied, by way of a notice of contention, upon the grounds which had been agitated below. These were twofold, namely (a) that the decision was, “in substance, a decision to revoke the licence held by [Mr Lewin]”, and (b) that cl 5(2) was invalid “because it undermines the statutory scheme for appellate review of decisions of the same substantive character.” It is convenient to address these grounds in the reverse order, dealing with validity first.

3. [5]

   The applicant accepts that it requires leave to appeal, given the absence of evidence to establish that the amount in issue is at least equal to $100,000; leave is therefore required pursuant to s 101(2)(r) of the Supreme Court Act 1970 (NSW). Given the circumstances set out above, leave is not opposed and should be granted.

Factual background

1. [6]

   The applicant is empowered by statute to register or licence persons engaged in various occupations and activities associated with thoroughbred racing. [3] Mr Lewin held a bookmaker licence granted by the applicant for the year ending 30 June 2017. All such licences are issued on an annual basis. On 6 July 2017 he applied for a new licence for the period from 1 July 2017 to 30 June 2018. Five days prior to his application, an article appeared in the Sydney Morning Herald describing Mr Lewin’s alleged association and dealings with a number of persons convicted of crimes involving violence. To grant a licence to an individual, the applicant must be satisfied that he or she is a fit a proper person to be so licensed. [4]

2. [7]

   Whilst carrying out enquiries in relation to the allegations which had appeared in the news media, the applicant extended Mr Lewin’s 2016/2017 licence until 11 August 2017. On 10 August 2017 the applicant determined that Mr Lewin was not a fit and proper person to hold a bookmaker licence and resolved not to issue a licence for the current financial year.

3. [8]

   There is an appeal panel established under the Thoroughbred Racing Act, s 45. Pursuant to s 42, persons aggrieved by a decision of a “racing authority” have a right of appeal to the appeal panel. The applicant, however, is not a “racing authority” for the purposes of that section. [5] Accordingly, Mr Lewin had no right of appeal to the appeal panel.

4. [9]

   On his case, Mr Lewin had a right of appeal to the Racing Appeals Tribunal, but did not seek to exercise it. Rather, on 7 September 2017, he commenced proceedings in the Common Law Division seeking a declaration that he had such a right.

Legislative scheme

1. [10]

   This appeal turns on three legislative provisions. Part 3 of the Tribunal Act provides for appeals to the Tribunal. Part 3 contains three divisions; Div 1 concerns appeals relating to thoroughbred racing. The only section in Div 1 is s 15. Subsection 15(1) is the first key provision and reads:

2. [11]

   Section 15(2) provides an appeal for Racing NSW, in similar terms to subs (1), but without par (d). Part 3, Div 2, provides in similar terms for appeals relating to greyhound racing and harness racing, and is not presently relevant. Division 3, “Procedure and regulations relating to appeals”, provides for the making of regulations, as foreshadowed in the chapeau to s 15(1).

3. [12]

   The second key provision is s 18, which reads as follows:

4. [13]

   Part 3, as enacted in 1983, contained only four provisions. Section 15 provided for appeals in similar form to the chapeau of the current provision, but with respect to decisions under an earlier structure of the thoroughbred racing industry. Section 16 stated that an appeal was to be by way of a new hearing and with the possibility of further evidence. Section 17 conferred powers on the Tribunal to be exercised in respect of any appeal. When enacted, Part 3 only provided for appeals with respect to thoroughbred racing. Although s 15 has been amended significantly since its enactment, s 18 has not changed.

5. [14]

   It is convenient to note in passing that there is a further provision with respect to regulations; s 23(1), in Pt 4 of the Tribunal Act, empowers the Governor to make regulations “not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.” The parties did not contend that this provision was significant in the determination of the appeal. That was because the regulation in question was undoubtedly made pursuant to s 18 and if valid and in accordance with s 18, could not be said to be inconsistent with the Act; in any event, it did not require the authority of s 23(1).

6. [15]

   The third key provision is the impugned regulation, cl 5 of which reads as follows:

7. [16]

   Two points should be identified with respect to cl 5. First, and purely as a matter of form, subcl (2) isolates appeals which may be made under s 15(1)(d) from those which may be made under the other three paragraphs of s 15(1), with the minor variations that a decision to suspend under par (b) need not extend for a period of three months, and the fine under par (d) need only be $200, not $2,000, where the decision is made by the applicant.

8. [17]

   Secondly, and more importantly, unless the refusal to issue a licence (described as the non-renewal of a licence) to Mr Lewin could be characterised as a decision to “disqualify” him, or to “revoke the licence” which had been issued to him, then the decision does not fall within the appellable decisions identified in cl 5(2). Disqualification may be put to one side; Mr Lewin argued that the decision was, in substance, a revocation of his earlier licence. It will be appropriate to return to that argument shortly.

Tribunal Regulation, cl 5 – invalidity

1. [18]

   Clause 5 of the Regulation must be understood in its statutory context. Section 15 deals, in effect, with two categories of decisions. The first covers decisions made by the appeal panel under the Thoroughbred Racing Act, and decisions of a “racing association” on an appeal under that Act. (A “racing association” is an association of clubs which conduct or control race meetings. [6] ) The second category covers decisions made by Racing NSW.

2. [19]

   Section 42 of the Thoroughbred Racing Act states that a person aggrieved “has a right of appeal” to the appeal panel. This language is in marked contrast to that of s 15 of the Tribunal Act, which speaks of decisions from which a person aggrieved “may, in accordance with the regulations, appeal” to the Tribunal. It is not uncommon for statutory provisions conferring a right of appeal to say that a person aggrieved “may appeal” against a particular decision. It is also not uncommon for a statute to provide that a right of appeal shall be exercised “in accordance with” specified rules or regulations. However, to say that a person “may, in accordance with the regulations, appeal” is most unusual. It indicates that the right itself depends on the regulations. [7]

3. [20]

   Section 15 is thus in terms coherent with s 18 of the Tribunal Act, which prescribes rights of appeal. As, when enacted, there were only two sections between them, one would expect them to be coherent. Section 18 is unusual for a regulation-making power. Section 18(1) states that the regulations “may make provision for … appeals to the Tribunal under this Act”. It also permits regulations “with respect to appeals … under this Act”. The two connecting terms are expressed disjunctively.

4. [21]

   It is true that the particular subject matters set out in the paragraphs of subs (1) do not envisage an appeal beyond those which might be provided for elsewhere in the Act. In some circumstances, the particulars might qualify the generality of the chapeau. However, that construction should not be adopted in circumstances where the generality of the chapeau is expressly recognised in subs (2). Subsection (2) states that the regulations may prescribe classes of matters in respect of which appeals may not be made under the Act; such regulations may even preclude appeals generally, subject to prescribed exceptions.

5. [22]

   Reading ss 15 and 18 together, it is clear that the all-encompassing breadth of s 15(1), with respect to the two categories of decisions noted above, does not confer an unqualified right of appeal from all such decisions. The classes of matter from which appeals may be brought are to be determined having regard to the regulations under s 18.

6. [23]

   Clause 5 of the Tribunal Regulation limits the decisions in respect of which appeals may be brought to particular categories. Each category involves decisions removing an extant right arising either under statute, or by way of contract in the case of a warning off. The earliest form of cl 5(1) of the current Regulation was cl 13 of the Racing Appeals Tribunal Regulation 1984 (NSW). The apparent purpose of the regulation is (and was in 1984) to limit appeals to decisions which involve significant penalties or affect the livelihood of participants in the industry. In the second reading speech introducing the Racing Appeals Tribunal Bill in September 1983, the Minister noted that the only right of appeal then available to persons aggrieved by decisions affecting their livelihoods lay to the committee of the Australian Jockey Club. He said that it was not in the interests of justice that “[t]he final right of appeal available to persons aggrieved by decisions of the stewards lies to the employers of those same stewards.” [8] The Minister continued:

7. [24]

   Although the form of the regulation has changed, and the scope of the powers of the applicant to revoke licences under the Rules of Racing has expanded, the underlying rationale remains the same. The validity of cl 5 of the Regulation must be assessed in this context.

8. [25]

   The test of validity of a regulation, subject to constitutional issues, turns squarely on the scope of the regulation-making power. In 1933, in Williams v Melbourne Corporation, Dixon J explained: [9]

9. [26]

   This approach was affirmed by the High Court in Attorney-General for the State of South Australia v Adelaide City Corporation. [10] However, the operation of the principle may vary significantly depending on the nature of the power. Thus in Williams v Melbourne Corporation the power conferred was a power to regulate traffic; the power conferred by the Tribunal Act, namely to “provide for … appeals”, is of a different nature. While it may well be the case that such a power cannot be exercised to deny all rights of appeal, [11] that is not what cl 5 of the Regulation purports to do.

10. [27]

    Counsel for Mr Lewin sought to characterise cl 5 as drawing capricious and arbitrary distinctions between decisions of a like kind. He submitted that had questions of impropriety arisen a week after the licence was granted, rather than a week before, the decision would have been to revoke an extant licence, rather than to refuse to renew an expired licence. The effect on the bookmaker, the submission continued, would be identical in practical terms in each case, yet cl 5 purported to allow an appeal with respect to a revocation, but not with respect to the refusal to renew the licence.

11. [28]

    That the regulation draws such a distinction (conceded for the purposes of the validity argument) is correct; however, the basis of the distinction is not capricious, nor arbitrary, nor irrational. A person who does not hold a licence, but requires one to undertake a particular activity, is not a person with an extant legal right to undertake the activity. There was no statutory basis to require that appeals be allowed whenever a person’s continued livelihood was at risk. Far from being arbitrary, the same basis for the grant of appeal rights was adopted by the Parliament in delimiting the jurisdiction of the appeal panel, under s 42(1) of the Thoroughbred Racing Act. There is, thus, a self-evidently rational connection to the statutory purpose of conferring rights of appeal with respect to some decisions, but not others.

12. [29]

    Although it is true that a person who has held a licence in the immediate past may be entitled to procedural fairness before a renewal is refused, [12] it does not follow that the person is entitled to a statutory right of appeal by way of rehearing, possibly on different evidence. Nor is there anything in the terms of s 18(2) which would preclude the identification of classes of matter by reference to the distinction between extant legal rights and mere expectations of the grant of a (further) legal right. Indeed, Parliament has made precisely the same distinction in conferring rights of appeal under s 42(1) of the Thoroughbred Racing Act, which adopts almost identical categories to those found in cl 5 of the Tribunal Regulation.

13. [30]

    For these reasons, cl 5 of the Tribunal Regulation is not invalid. It does not undermine the statutory scheme, but rather gives effect to it. It contravenes no statutory limit.

Construction of cl 5

1. [31]

   The second ground of Mr Lewin’s case was that, on the proper construction of cl 5 of the Regulation he had a right of appeal to the Tribunal, because the decision was, in substance, a revocation of his long-held bookmaker licence, and therefore fell within the terms of cl 5(2)(c).

2. [32]

   Accepting that there is a distinction between the initial grant of a licence and the revocation of an extant licence, Mr Lewin submitted, in effect, that the refusal to renew a licence, granted for a limited period, fell between the two, but is closer to a revocation than to an initial grant. In a practical sense, it is no doubt true that a person who has been granted a licence and obtained renewals will have an expectation that the renewals will continue, as long as there is no change in his or her circumstances. However, that expectation cannot turn a licence expressly granted for a limited period into one which is granted, subject to revocation, for an indefinite period. Indeed, even if a subjective expectation could have such an effect, the expectation could not survive a change in circumstances, such as that alleged to have occurred in the present case.

3. [33]

   In any event, the statutory language is clear: s 14(2)(b) of the Thoroughbred Racing Act confers on the applicant powers to licence, refuse to licence, cancel a licence and suspend a licence of a bookmaker. [13] Clause 5 of the Regulation expressly refers only to revocation and suspension of a licence; it does not refer to refusal to license. (Nor, indeed, does it provide a right of appeal in the case of the conferral of a licence, but subject to conditions.) It is contrary to the ordinary meaning of the term “revoke” to expand it to encompass a refusal to licence, whether by way of initial licence or renewal.

4. [34]

   Further, although it is not necessary to decide the point, it is at least doubtful that a decision “to revoke the licence of any person under the rules” (under cl 5(2)(c)) would catch a decision to revoke a bookmaker licence, which is the exercise of powers conferred by s 14(2)(b) and s 14A of the Thoroughbred Racing Act. The Rules of Racing deal with procedures for applications, and with various aspects of licensing; while they purport to confer (or reflect) a power to grant or refuse bookmaker licences, they do not expressly provide a power to revoke on the ground of the licensee no longer being a fit and proper person, in accordance with s 14AA of the Act.

5. [35]

   Accordingly, cl 5(c) of the regulation does not provide Mr Lewin with a right of appeal to the Tribunal from a refusal to renew his bookmaker licence.

Conclusion

1. [36]

   As both grounds raised by Mr Lewin in his notice of contention must be rejected, the appeal should be upheld and the orders made by the primary judge set aside. There remains a question as to the proper orders for costs.

Costs and parties

1. [37]

   In the Court below, Mr Lewin joined Racing NSW, the Minister for Racing and the State of New South Wales. The Minister and the State had common representation. In this Court, they were joined because they had been parties below. Thus the applicant named, in addition to Mr Lewin, the Minister and the State as respondents. The Minister took no active role in the proceedings, but the State filed written submissions and appeared by counsel at the hearing, both below and on the appeal. It adopted a position consistent with that of the applicant.

2. [38]

   The justification for joining the State and the Minister was said to lie in a statement by Kirby P in State of New South Wales v Macquarie Bank Ltd, [14] a case involving a challenge to a regulation made under the Liquor Act 1982 (NSW). The original appellant was the Liquor Administration Board. [15] The State was joined by consent. The President said: [16]

3. [39]

   That statement appears to have been cited only once. In Travel Compensation Fund v Travel Guide Pty Ltd [17] Lehane J considered, but rejected, a challenge to the validity of a regulation. He added, entirely obiter: [18]

4. [40]

   These statements should not be understood as reflecting a rigid rule that the State (or other relevant polity) must be joined whenever a challenge is mounted to the validity of a regulation or an Act. Even s 78B of the Judiciary Act 1903 (Cth) requires no more than notice to Attorneys General where a case involves a matter arising under the Constitution or involving its interpretation. Challenges to the validity of legislation are not uncommon. No State statute or rule of court imposes what would be an onerous burden on private parties litigating rights in the courts. Nor is there any requirement for giving notice in such cases. If, with notice of a challenge, the Attorney or a government entity seeks to intervene, it will usually not receive costs and may expect to bear any additional costs incurred by the parties.

5. [41]

   In proceedings by way of judicial review, it would normally be appropriate to join the Tribunal below, but no application had been made to the Tribunal in the present case. Although the Minister and the State were joined by Mr Lewin, they need not have taken an active role (as the Minister did not). They should bear their own costs. Mr Lewin must pay the applicant’s costs in this Court, and in the Common Law Division. He is entitled to a certificate under the Suitors’ Fund Act 1951 (NSW).

Orders

1. [42]

   The Court should make the following orders:

   1. (1)

      Grant the applicant leave to appeal.

   2. (2)

      Allow the appeal and set aside orders (1) and (2) made in the Common Law Division on 6 March 2018.

   3. (3)

      In lieu therefore declare that Mr Lewin has no right of appeal to the Racing Appeals Tribunal from the decision of Racing NSW to refuse to grant him a bookmaker licence for the year ending 30 June 2018.

   4. (4)

      Mr Lewin is to pay the costs of Racing NSW in this Court and in the Common Law Division.

   5. (5)

      Grant Mr Lewin a certificate under the Suitors’ Fund Act 1951 (NSW) with respect to the costs of the appeal.

2. [43]

   MACFARLAN JA: I agree with the orders proposed by Basten JA and with his Honour’s reasons. I add the following observations.

Construction of clause 5

1. [44]

   Mr Lewin contends that, as he has been the holder of an annual bookmaker’s licence for many years, Racing NSW’s decision not to grant him a further annual licence was “in substance” a decision to revoke his licence and therefore subject to a right of appeal to the Racing Appeals Tribunal. As Basten JA points out, there is however a “distinction between extant legal rights and mere expectations of the grant of a (further) legal right” ([29] above). Deprivation of the former might readily be regarded as warranting the conferral of a right of appeal, whilst disappointment of the latter might reasonably be regarded by the law-maker as insufficient to justify that. The interests of the disappointed applicant might in that latter case be regarded as sufficiently protected by the assumed good judgment of the regulator, the possibility of judicial review and the applicant’s ability to re-apply in accordance with any limitation imposed by the Rules of Racing (presently 12 months, subject to the discretion of Racing NSW – see Local Rule 51(6)).

2. [45]

   There is therefore a logical and sensible basis upon which a distinction might be made between the two types of decision. As a result, they are not, as Mr Lewin submits, to be treated as in substance the same, such that Racing NSW’s decision not to renew Mr Lewin’s licence was a decision “to revoke the licence” from which Mr Lewin could appeal under clause 5(2)(c) of the Racing Appeals Tribunal Regulation.

3. [46]

   Clause 9 of the Regulation confirms the correctness of this construction. It relates to greyhound and harness racing and expressly confers a right of appeal to the Tribunal in respect not only to the cancellation of registration (analogous to cancellation of a licence in the case of thoroughbred horses) but also the refusal to register (equivalent to a refusal to grant a licence). In light of the contrasting terms of the two clauses, it must be inferred that the regulation-maker specifically decided not to confer a correspondingly broad right of appeal in clause 5.

Validity of clause 5

1. [47]

   The distinction between the two types of decision to which I have referred is reflected in the language of s 14(2) of the Thoroughbred Racing Act 1996 (NSW) which confers on Racing NSW powers inter alia to:

2. [48]

   This section refers separately to the grant or refusal of bookmaker and other licences on the one hand, and their cancellation or suspension on the other. Clause 5 of the Racing Appeals Tribunal Regulation 2015 excludes appeals in respect of the former of these types of decisions, as does s 42(1) of the Thoroughbred Racing Act in relation to appeals to the Appeal Panel. Mr Lewin contends that it was “capricious and unjust”, and therefore impermissible, for the Regulation to make this distinction but, as just noted, the legislature made the same distinction in the Thoroughbred Racing Act, which is a cognate of the Racing Appeals Tribunal Act under which the Regulation was made.

3. [49]

   The merits of the Regulation making the distinction are not open for consideration by this Court, even on the most expansive view of the Court’s power to review delegated legislation (see Attorney-General for South Australia v Adelaide City Corporation (2013) 249 CLR 1; [2013] HCA 3 at [47]-[53], [123], [198]-[201] and [224]). Mr Lewin’s claim that clause 5 of the Regulation is invalid fails whether its validity is tested by asking whether it is “so capricious and oppressive that no reasonable mind can justify it” or whether it “could not reasonably have been adopted as a means of attaining the purposes of the power” (ibid at [54], [117], [199] and [224]). As I have said, there is a logical and sensible basis upon which the distinction might be made.

4. [50]

   THE COURT: Following delivery of judgment the appellant drew to the Court’s attention the fact that order (2) made on 6 March 2018 had been vacated and replaced by further costs orders (2)-(4) made on 19 April 2018. Accordingly, pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 36.17, order (2) made on 3 May 2018 is amended to read: