James McDonald v Racing New South Wales

In these proceedings the plaintiff, Mr James McDonald (“Mr McDonald”), a jockey, seeks to quash a determination of the Racing Appeals Tribunal (“the Tribunal”) on 10 April 2017, made pursuant to s 17 of the Racing Appeals Tribunals Act 1983 (NSW) that he be disqualified from racing for a period of 18 months for betting on a horse that he was riding at Royal Randwick Racecourse on 5 December 2015. Mr McDonald claims that the Tribunal’s decision was arrived at by reason of error of law on the face of the record i.e. the formal orders of the Tribunal and its reasons for decision. Mr B. Walker SC (with Mr T. Boyle) appears for Mr McDonald. Mr J. Gleeson SC (with Mr J. McLeod) appears for Racing New South Wales (“Racing NSW”). The Second Defendant, the Racing Appeals Tribunal, as is normal in matters of this type, has filed a submitting appearance.

An order for expedition was previously made in the matter.

I have received very helpful oral and written submissions from counsel (the written submissions being the plaintiff’s written submissions, “PWS”, the defendant’s written submissions, “DWS”, and the plaintiff’s written reply, “PWR”).

There is no dispute as to the facts, which I take from paragraphs 17 – 20 of the PWS and paragraphs 5 – 11 of the DWS:

The relevant rules are AR83(d), set out above, and AR196(1), AR196(5) and LR108(2)(a), respectively. I set out these additional rules, including LR108(2)(b) since its terms have some bearing on the arguments advanced.

The following, taken from the plaintiff’s submissions is the legislative framework in which the relevant rules sit:

There are some further matters that are agreed or not contested by the parties:

At [87] – [89] of the Reasons the Tribunal said:

It will be observed that, notwithstanding the assessment at [154] of the Reasons, to which I have referred in [7(3)], the Tribunal did not impose a penalty of 57 weeks disqualification, but rather imposed a period of disqualification of 18 months (approximately 78 weeks). It did so because it regarded itself as constrained by AR196(5) so to do. Mr McDonald has indicated, through his counsel, that he will not seek to challenge the 57 week disqualification should his argument prevail and Racing NSW has indicated, through its counsel, that it will not seek to contend for a higher period of disqualification if the matter is remitted to the Tribunal.

This is not an appeal from the Tribunal’s decision and the Court is not called upon to consider what might be described as the merits of the matter, or the severity (or otherwise) of the penalty, nor does the case require consideration of issues relating to ‘instinctive synthesis’ (see: Muldrock v The Queen (2011) 244 CLR 120) or whether a two stage approach to arriving at a sentence or penalty is permitted. Rather, it is solely a question of whether Mr McDonald has established an error of law in the Tribunal’s approach to AR196(5). The dispute between the parties is narrow in scope and also, in one sense, narrow in effect since the Tribunal’s determination has resulted in disqualification for 18 months (approximately 78 weeks) and the disqualification which Mr McDonald accepts should apply is 57 weeks. However, the difference is of considerable significance to Mr McDonald because he is precluded from working in his profession, or even the thoroughbred racing industry, during the period of disqualification: see AR182(1)(d).

Mr McDonald contends that:

Mr McDonald contends that the Tribunal has fallen into error in its approach because:

The Reasons, as I have noted, are extensive, but I do not think it is necessary to examine them in detail, or to focus upon what was said to be inconsistencies between various paragraphs of the Reasons, because there is agreement that the conclusion reached by the Tribunal was built upon an identifiable approach to the construction of AR196(5) which Mr McDonald contends was an impermissible or incorrect approach and Racing NSW contends was the correct approach. Within the Reasons it is [87](iv) and (vi) which give rise to the essential matters of contention between the parties.

I have referred to the construction advanced on behalf of Mr McDonald. Racing NSW contends that, having determined that 57 weeks disqualification was, apart from AR196(5), the appropriate penalty, the Tribunal was:

Racing NSW contends that this approach is required as a matter of construction and having regard to the obvious purpose of AR196(5). It places emphasis on the words:

Mr Gleeson calls in aid the purposive approach to construing the rules and points out that the ARR and LR are designed to protect the public interest and welfare of the industry and that the effect of the Applicant’s approach is to:

To summarise then, Racing NSW submits that, where an offence under AR83(d) has been established, the Tribunal must impose at least the mandatory minimum of 2 years when a special circumstance is not established. If a special circumstance is established, then the Tribunal can reduce the specified mandatory minimum, taking into account the special circumstance established. Here that would be the plea of guilty leading to a discount of 25% i.e. reducing the disqualification period to 18 months. Racing NSW also submits that the only scope for reduction is of the period- there is no scope in the rule to reduce the penalty from a period of disqualification to a suspension, reprimand, or fine.

I understand Racing NSW to accept, appropriately in my view, that if the Tribunal’s interpretation of AR196(5) was erroneous than it was an error that materially contributed to the imposition of the disqualification period of 18 months.

Mr Walker very properly conceded that differing interpretations of the rule are open, but he contended that the construction that he places upon the rule should be preferred. He also submitted that, where a penalty is imposed, the Court should, in accordance with the ‘lenity rule’, incline to a construction favourable to the person the potential subject of the penalty: see, for example, Beckwith v The Queen (1976) 135 CLR 569 at 576 per Gibbs J (as his Honour then was), at pp 576 – 577 and Murphy J at p 585.

Mr Walker accepts that the mandatory minimum must be imposed absent special circumstances with the consequence that had Mr McDonald not pleaded guilty there would have had to have been imposed a disqualification of two years, but he submits that, since there was a plea of guilty and that a special circumstance was thereby established, the Tribunal was free to determine penalty without the constraint or starting point of the mandatory minimum, and the fact that it regarded itself as constrained amounts to an error of law. He contended that, once the special circumstance is found, AR196(5) “simply never operates”: see T8.15. He contends that mandatory minimums work a harshness or unfairness because less serious breaches lead to the minimum period of disqualification fettering the decision makers and he submits that, once a special circumstance is determined, the unfairness and harshness of a mandatory minimum can be avoided. He submitted that it could not have been thought that the rule makers would have wanted the unfairness of mandatory minimums to expand beyond cases where there were no special circumstances.

Mr Gleeson accepts that the Tribunal’s decision gave Mr McDonald no discount for subjective matters, but says that the Local Rules by LR108 did not treat such subjective matters as a ground for reduction of the minimum. He submits that if the Tribunal had concluded that 57 weeks was the appropriate period of disqualification that would reflect the taking into account of subjective matters. AR196(5), however, makes any period of disqualification less than 2 years ineffective, except to the extent the special circumstance is established and accepted as a reason to reduce the period.

Mr Walker drew attention to the fact that two of the special circumstances listed in LR108, impaired mental functioning and duress, are of a nature that might very well, if established, be thought to appropriately result in no disqualification at all and that the approach advanced by Racing NSW precludes the possibility of there being only a reprimand or fine. He points out that even if the Tribunal, as a result of such circumstances, reduced the period to a nominal period of one week’s disqualification that would still require a fresh application by a jockey for a license.

Mr Walker drew attention to the fact that AR196(1) uses the words “unless the contrary is provided” and that AR196(5) uses the phrase “unless there is a finding that a special circumstance exists.” This, he submitted, produces the result that if a special circumstance is found the ‘must’ in AR196(5) no longer applies and the Tribunal is thrown back to AR196(1), which by using “may” permits any kind of penalty of any duration or amount. He also pointed out that the ARR themselves do not specify what constitutes a special circumstance, rather leaving that to each State authority to determine what circumstances will constitute a special circumstance. Mr Walker contends that, by this mechanism, the ARR left it to the Local Rules to disapply the mandatory minimum approach- the “unless” having content only by reason of the Local Rule.

Mr Gleeson postulated a scenario for consideration – a comparison between two offenders, A and B, who each had committed a breach of equivalent objective seriousness deserving of a 6 month period of disqualification and who had, he postulated, identically cogent subjective matters in support of a more lenient penalty deserving of a reduction of 45%, but A pleaded guilty and B did not. In the first case A would obtain an effective disqualification, on the approach advanced by Mr McDonald, of 13 weeks (i.e. 55% of 6 months) and B would receive a 104 week period of disqualification. On the approach advanced by Racing NSW, A would obtain a disqualification period of 78 weeks and B a disqualification period of 104 weeks- the difference between A and B being accounted for only by the plea discount of 25%. Mr Walker’s response to the disparate outcomes was that pleading guilty early provides a clear benefit, namely that the person charged will take himself out of the mandatory minimum zone.

The purpose of the suite of rule changes, of which AR83(d) is one example, was to elevate the significance of infringements of these various rules. The rule makers clearly felt that the penalties imposed had been insufficiently severe. Mr Walker accepted that the 2013 “regime” or “juncture” is a new one and that the Tribunal could not ignore the seriousness with which an AR83(d) offence is to be treated. Mandatory minimum sentences, although as I understand it uncommon in the criminal sphere, are not without their difficulties: see R v Pot, Wetangky and Lande (18/01/2011 NTSC Unreported SCC21037929, Riley CJ), Bahar v R (2011) 45 WAR 100, Karim v R [2013] NSWCCA 23; (2013) 83 NSWLR 268, Magaming v R (2013) 252 CLR 381 and Dui Kol v R [2015] NSWCCA 150, which were all concerned with offences relating to transporting to Australia persons without legal immigration status, for which there is a mandatory minimum penalty (see: s 232A of the Migration Act 1958 (Cth)).

In Bahar, McLure P took the view that minimum penalties, like maximum penalties (see: Markarian v R (2005) 228 CLR 35 at [31]), provide a yardstick: see [48] – [49] and [58], but neither Bahar nor any of the other cases mentioned in [25] involved a finding of a special circumstance.

There can be discerned, in Mr Walker’s argument, a strong emphasis on the practical “unfairness” and “harshness” of mandatory minimums. Indeed he submits that to treat the mandatory minimum as having work to do once a special circumstance is found would lead to “outstandingly unjust outcomes”: see T13.6. What is said to be unfair or harsh about mandatory minimum sentences is that a very low level (objectively speaking) offence (in the criminal context) or breach (in the present type of case) with a high component of ameliorating subjective aspects will, nevertheless, lead to a minimum sentence or penalty. That is the effect of mandatory minimum sentences- they reduce the scope of leniency in sentencing by the decision maker, and, it can be inferred, that is precisely what the legislators or rule makers want to achieve.

It was accepted by the High Court in Magaming that the fact that a mandatory minimum is harsh or unfair compared to the more general sentencing approach does not render the legislation invalid. At [52], having noted at [7] the comments of the trial judge that the “appellant’s part in the offence fell “right at the bottom of the scale”, and that, in the ordinary course of events, “normal sentencing principles would not require a sentence to be imposed as heavy” as the mandatory minimum sentence” the plurality (French CJ, Hayne, Crennan, Kiefel and Bell JJ) said:

In a similar vein, if there is some harshness in the penalty imposed by AR196(5), it is a result of the rule making and it has been imposed for policy reasons to deal with the perceived need for integrity in racing and increased penalties. Mr Gleeson submitted that at [92] of the Reasons, the Tribunal was paraphrasing almost exactly what Keane J had said in the passage cited in [27].

I agree, in relation to the question of special circumstance (b) and (c) that the requirement of disqualification of some period, even if those circumstances are met, may be anomalous. I take that into account, but I think the approach for which Mr Walker contends also produces an anomalous result and I prefer the construction advanced by Mr Gleeson for reasons which I set out below.

The argument about “unless” and the Local Rule referred to at [23] ignores the fact that the only matter left to the Local Rules was to specify what should be regarded as a special circumstance. Once the special circumstance is identified, the question of construction remains- is it that special circumstance to which regard should be had in reducing the sentence or can the Tribunal have regard to matters beyond the special circumstance, and to what does “the penalty” refer.

In my view, the argument advanced on behalf of the Applicant does seek to eliminate, or render insignificant, the effect of the words “whereupon the penalty may be reduced”. I do not think the words can be ignored because:

I, therefore, do not accept that a finding of a special circumstance leads to AR196(5) having nothing further to say about the penalty to be imposed, and the mandatory minimum being ‘got rid of’, as Mr Walker put it: see T20.50 – T21.9.

In my view AR196(5) is to be read as:

In relation to the lenity point mentioned at [19], accepting for present purposes that it does apply to what is effectively professional disciplinary matters rather than solely criminal offences, and noting that Gibbs J described the rule as “perhaps one of last resort”, I think that on close analysis, and with consideration of the purpose of the rule, AR196(5) is sufficiently clear in its words and necessary intendment.

I do not think there is anything particularly surprising about this result in a context where the rule maker obviously regarded breaches of this kind as serious. On the contrary, it seems to me surprising that the rule maker would think that a plea of guilty could take the matter out of the realm of a mandatory minimum, except to the extent of adjustment for the plea itself. If the approach, which I think AR196(5) requires, can be characterised as requiring a disqualification period of 2 years as the starting point or prima facie result for a breach of AR83(d), then that is the effect of a mandatory minimum.

To the extent that it may be thought that the approach which I have adopted renders subjective matters irrelevant, I do not think that is so, they remain relevant in determining what (absent considerations required by AR196(5)) the penalty should be, and that will have practical effect wherever the objective seriousness of the breach would lead to imposition of a penalty of more than 2 years. Thus if the Tribunal concluded that the breach was a serious one deserving of a 4 year disqualification, but concluded that subjective circumstances and an early plea should reduce the penalty by 45%, leading to a penalty of 2 years and 2 months disqualification, subjective circumstances will have been accorded due weight. Where they are not accorded due weight (at the lower end of the scale) is a consequence of the introduction of a mandatory minimum.

It follows that there has been no error of law demonstrated and the Summons should be dismissed. Having regard to the result, Mr McDonald should be ordered to pay Racing NSW’s costs of the proceedings.