Costello v Racing Appeals Tribunal

By amended summons filed on 18 September 2019, Neil Costello (the plaintiff) seeks judicial review pursuant to s 69 of the Supreme Court Act 1970 (NSW) of the decision of the Racing Appeals Tribunal, the first defendant, (the Tribunal) to dismiss his appeal against the warning off directed by Racing NSW, the second defendant.

The Tribunal has filed a submitting appearance. Accordingly, Racing NSW, for which Mr Dawson SC appeared with Ms Forrester, is the only active defendant.

Before addressing the circumstances in which the plaintiff’s claim for relief arises, it is necessary to outline the jurisdictional basis for the decision of the Tribunal, which is the operative decision, and that of Racing NSW, which was the decision challenged in the Tribunal.

Section 4 of the Thoroughbred Racing Act 1996 (NSW) established Racing NSW as a body corporate. Section 13(1) relevantly provides:

Section 14 relevantly provides:

Section 13 of the Betting and Racing Act 1998 (NSW) relevantly provides:

Section 15(1)(d) of the Racing Appeals Tribunal Act 1983 (NSW) (the RAT Act) provides that a person who is aggrieved by a decision of Racing NSW may appeal against the decision to the Tribunal. Section 16 provides that an appeal is to be by way of a new hearing and fresh evidence, or additional or substitute evidence, may be given on appeal. Section 16(2) provides that proceedings on an appeal “are to be held as in open court before the Tribunal”.

Section 16A relevantly provides:

No notice under s 16A was given to the plaintiff for the purposes of his appeal to the Tribunal. Accordingly, he was not obliged to give evidence, although he had a right to do so, it being a fresh hearing.

Section 17 provides for the powers of Racing NSW on an appeal such as the one brought by the plaintiff in the present case. It provides:

Section 18 of the RAT Act provided for a regulation-making power.

The Rules of Racing of Racing NSW comprise the Australian Rules of Racing (AR); the Local Rules of Racing (LR); and the Rules of Betting.

AR 1 includes the following definition:

AR 2 provides that any person who takes part in any matter coming within these Rules thereby agrees with the Australian Racing Board and each and every Principal Racing Authority to be bound by them. Racing NSW is a Principal Racing Authority.

AR 7 provides, relevantly,

AR 182 relevantly provides:

AR 183 provides:

LR 6 provides:

LR 110C provides:

On 11 September 2018, Racing NSW commenced an investigation into Benjamin Smith. The investigation revealed that Mr Smith was in possession of substances which were regarded as suspicious. An analysis of Mr Smith’s telephone led Racing NSW to suspect that the plaintiff had supplied products to Mr Smith.

Accordingly, Racing NSW asked the plaintiff to take part in an interview, which occurred on 21 September 2018. The interview was conducted by Mr Van Gestel, Chairman of the Stewards, and Mr Dingwall, Deputy Chairman of the Stewards. Before the conclusion of the interview, the plaintiff intimated that he would leave the interview before it was concluded. At that point, the Chair said:

Later on 21 September 2018, Racing NSW wrote to the plaintiff in the following terms:

On 27 September 2018 the plaintiff filed a notice of appeal with the Tribunal.

On 5 October 2018 the plaintiff attended a second interview with Racing NSW. On this occasion he was accompanied by a lawyer, Ms Talarico, who was in attendance throughout. Because the parties have made detailed references to the transcript of the second interview, I propose to set out extracts below. The second interview was also conducted by Mr Van Gestel, and Mr Dingwall.

In the course of the second interview, the plaintiff was asked where he obtained the Platinum Bute which he said that he had been supplying to Mr Smith. The plaintiff identified his supplier as being a man who “made out that he was a vet” whose name was “Matt”, who “[came] around selling them”. The plaintiff described Matt as “a smallish person, maybe Asian, not full Asian, but Asian in appearance”, whom he had known for about 15 months, who came around without any warning or prior arrangement, whose contact details were unknown to him and whom he always paid in cash. According to the plaintiff, Matt had never given him a receipt. Although the plaintiff said that he did not know when Matt would come, he also said:

The plaintiff volunteered to “make some inquiries” about Matt. He was asked about people who might know Matt. The following exchanges ensued:

Subsequently in the course of the interview, the plaintiff gave names of some of his associates. The plaintiff was also asked about the price list which he said that Matt had given to him. The following exchange ensued:

On 8 October 2018, Racing NSW sent a letter to the plaintiff’s solicitors as follows:

The plaintiff relied on the notice of appeal dated 27 September 2018 in his appeal to the Tribunal against the decision of Racing NSW. He pressed grounds 1 and 3 and abandoned ground 2. Ground 1 was an alleged denial of procedural fairness and ground 3 was that the sanction of warning off was “manifestly unreasonable”.

The Tribunal, which was constituted by Mr Armati, heard the matter on 31 July 2019. Mr Street of counsel appeared on behalf of the plaintiff before the Tribunal and also before me. Mr Van Gestel appeared on behalf of Racing NSW in the Tribunal. The plaintiff did not give evidence at the Tribunal hearing, but relied on the evidence he had given before Racing NSW, extracts of which have been set out above. Early in the hearing before the Tribunal, the following exchange occurred:

Mr Street answered the Tribunal’s question in the negative, that being the obvious consequence of the plaintiff’s decision not to give evidence before the Tribunal.

At the conclusion of the hearing, the Tribunal gave ex tempore reasons for dismissing the plaintiff’s appeal pursuant to s 17(1)(a) of the RAT Act. In its reasons, the Tribunal set out the letter of 8 October 2018 (which is also set out above). It also set out LR 6. The Tribunal correctly noted that the RAT Act provided for a “de novo hearing”.

At [14] of its reasons, the Tribunal said:

Of the plaintiff’s knowledge of Matt’s identity, the Tribunal found, at [36] of its reasons:

I read [36] as amounting to a conclusion that Racing NSW had not excluded, to the Briginshaw standard (named after Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34, which the Tribunal held to be the appropriate standard) the hypothesis that the plaintiff did not know who Matt was.

The Tribunal addressed the plaintiff’s representation to Racing NSW that he would make inquiries about Matt as follows:

The Tribunal considered the plaintiff’s co-operation and said, at [43]-[44] of its reasons:

The Tribunal addressed the relevance of cobalt at [45]-[46]:

The Tribunal concluded, as follows:

I note for completeness that it was not suggested by Mr Street that the plaintiff was prevented by the warning off order from making the inquiries which he said in the interview of 5 October 2018 that he would make.

The plaintiff relied on the following grounds:

The decision of the Tribunal is the operative decision and therefore is the only decision which can be, in the circumstances of the present case, the subject of judicial review: Wishart v Fraser (1941) 64 CLR 470 at 476-477 (Rich ACJ), 478 (Starke J), 483 (Dixon J) and 487 (McTiernan J); [1941] HCA 8.

On 31 July 2019 the Tribunal was faced with the situation that the plaintiff, who had indicated to Racing NSW on 5 October 2018, some nine months previously, that he would make inquiries, had adduced no evidence that he had made any of the inquiries which he told Racing NSW that he would make. As appears from the transcript of the interview with the plaintiff on 5 October 2018, he represented several times that there were inquiries that he could make to ascertain the identity of Matt. In these circumstances, the Tribunal’s finding that the plaintiff had not co-operated with Racing NSW was open to it. I note that it is plain from [43] of the wording of the Tribunal’s reasons that its finding as to the extent of non-co-operation was limited to the plaintiff’s failure to make the inquiries which he undertook, on 5 October 2018, to make. This is sufficient to address ground 1a, which has not been made out.

As to ground 1b, it is plain from [36] of its reasons that the Tribunal refrained from drawing an inference adverse to the plaintiff that he knew Matt’s contact details and was simply not disclosing them to Racing NSW. Thus, the Tribunal proceeded on the footing, which was favourable to the plaintiff, that the plaintiff did not know any more about Matt than he had disclosed to Racing NSW, but that, in accordance with the representations he had made, that there were inquiries he could make which might, or might not, prove fruitful. In these circumstances, the Tribunal not only engaged with the possibility that the plaintiff did not know more about Matt, but accepted that he did not know more about Matt. For these reasons, ground 1b has not been made out.

Mr Street argued that, in so far as Racing NSW and the Tribunal considered the dangers posed to the integrity of horse racing by the substance cobalt, this was an irrelevant consideration since the products which the plaintiff supplied to Mr Smith were not shown to contain any cobalt.

Ground 1c would appear to rest on a misapprehension about this Court’s jurisdiction under s 69 of the Supreme Court Act. This Court’s jurisdiction is confined to two kinds of errors, both of which are errors of law: errors on the face of the record and jurisdictional errors. For a failure to take into account a relevant consideration to amount to an error of law, the consideration must be one which the decision-maker is bound, as a matter of law, not to take into account: Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 at 39-40 (Mason J); [1986] HCA 40. It was not disputed that Racing NSW was entitled to investigate Mr Smith, whose racehorses had traces of cobalt in their blood. Nor was it disputed that Racing NSW was entitled to investigate the plaintiff, since there was evidence that he had supplied certain products to Mr Smith. The Tribunal was not disentitled to be concerned about the presence of cobalt in Mr Smith’s horses when deciding on a suitable penalty for the plaintiff’s failure to co-operate. That there was no evidence that the products which the plaintiff supplied to Mr Smith contained cobalt did not make concern about cobalt irrelevant to the wider investigation. This was a factual issue for the Tribunal and Racing NSW and is not a basis on which this Court could intervene.

The grounds in the amended summons do not contain an express ground that the Tribunal’s finding that the investigation conducted by the Stewards was “potentially thwarted” by the plaintiff’s lack of co-operation was not open. However, Mr Street made submissions, both orally and in writing in support of this submission. As I understood the submission it was that the plaintiff had given Racing NSW the names of many of his associates, which meant that the stewards could have made their own inquiries and were not dependent on the plaintiff making inquiries of his own on their behalf. Mr Street argued that the investigation could not be said to have been “thwarted”.

It is beside the point that the stewards of Racing NSW had various inquiries which they could have made. The Tribunal’s finding, that the plaintiff’s failure to make the inquiries which he said that he would make “potentially thwarted” investigation, was open. Racing NSW was entitled to take the plaintiff at his word that there were inquiries which he could make which might be sufficient to identify Matt. Whether or not such inquiries would have been able to identify Matt was a matter that could not be known until the plaintiff made them and told Racing NSW or the Tribunal what they were.

Mr Street raised in oral submissions the circumstance that Racing NSW had warned off the plaintiff for the two reasons given in the letter of 8 October 2019 but that the Tribunal had warned him off for a different reason: failure to make the inquiries which he undertook to Racing NSW that he would make at the hearing of 5 October 2018. As I understood Mr Street’s submission, he confirmed that he did not rely on this as a ground of procedural unfairness. That concession was correctly made. Parliament made express provision in s 16 of the RAT Act for the appeal to be by way of new hearing. Accordingly, the Tribunal was not bound by the reasons given by Racing NSW for its decision to warn the plaintiff off, but was obliged to determine the matter for itself at the time at which the Tribunal made its decision.

I note for completeness that those who are licensed by Racing NSW are entitled to a statement of charge setting out the basis of any disciplinary action. Mr Dawson confirmed that there is no provision for those, such as the plaintiff, who are not licensed by Racing NSW and who are, relevantly, in the category of members of the public, to be given a statement of charge. Although there was some suggestion that the plaintiff had once been licensed by Harness Racing NSW, it was not suggested that this was relevant to the present case. Mr Street, accordingly, did not take any point based on the absence of a statement of charge.

Ground 2 was based on the inferences drawn against the plaintiff by his choosing not to give evidence before the Tribunal. I consider that the exchange extracted above between the Tribunal and Mr Street about the relevant evidence being the evidence as at 31 July 2019 and the question whether the plaintiff was going to give evidence before the Tribunal was sufficient to put the plaintiff, and Mr Street, on notice of the inference that would be available to be drawn against the plaintiff if he chose to maintain his decision not to give or adduce evidence as to any inquiries he had made and the results of any such inquiries.

In order to assess the inferences drawn by the Tribunal, it is necessary to analyse the chronology of events which are summarised above. On 5 October 2018, the plaintiff undertook to make certain inquiries, which he gave Racing NSW to understand would be likely to be fruitful in finding out more about Matt. On the appeal, which was a rehearing, on 31 July 2019, there was no evidence that the plaintiff had made any of the inquiries which he had undertaken to make.

There were at least four possibilities as to what had occurred between 5 October 2018 when the plaintiff undertook to make inquiries and 31 July 2019 when the Tribunal heard the plaintiff’s appeal:

The fourth possibility can be excluded at the outset because the Tribunal found, at [36] that it was possible that the plaintiff did not know any more about Matt than he had divulged to Racing NSW. Because the plaintiff chose not to give evidence, the Tribunal could not determine which of the first three possibilities was in fact the case. However, each of them amounted to a failure by the plaintiff to co-operate with Racing NSW and a failure by him to fulfil the representations he had made at the hearing on 5 October 2018 as to the inquiries he could and said he would make.

Mr Street did not contend that the plaintiff was entitled to the privilege against self-incrimination such as would have applied had he been charged with a criminal offence. In other words, he did not submit that the plaintiff was entitled to have the Tribunal prohibited from drawing inferences against him by reason of his not giving evidence at the hearing on 31 July 2019: Azzopardi v The Queen (2001) 205 CLR 50; [2001] HCA 25 at [51] (Gaudron, Gummow, Kirby and Hayne JJ). Mr Street accepted that the Tribunal was permitted to draw Jones v Dunkel inferences (so-called after Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8) as long as they were drawn “reasonably”.

The question of the right to silence in disciplinary proceedings against a barrister was considered by the Court of Appeal in Council of the New South Wales Bar Association v Power (2008) 71 NSWLR 451; [2008] NSWCA 135. In that case, one of the issues was what had happened to an F drive, which was a drive on which the respondent was alleged to have stored images of child pornography. The F drive was not found when a search warrant was executed soon after the respondent had been alerted to the allegations against him. Hodgson JA said, at [22]:

This passage was followed in Prothonotary of the Supreme Court of New South Wales v Nikolaidis [2010] NSWCA 73 where the Court of Appeal (Allsop P, McColl JA and Young JA) said at [25]:

In the present case, the issue is, in my view, even clearer. The plaintiff undertook to Racing NSW on 5 October 2018 to make certain inquiries to advance the identification of the person whom he said he knew as “Matt”. Notwithstanding the passage of nine months since he was first warned off, he did not adduce in his appeal to the Tribunal any evidence of what, if any, inquiries he had made and, if he had made any such inquiries, what the results were of such inquiries. The plaintiff was in a unique position to know whether he had made inquiries and what the results of the inquiries were. Mr Street conceded that Racing NSW bore no onus on the appeal of proving that the plaintiff had not made any inquiries.

Although in the letter of 8 October 2018 Racing NSW did not, in terms, require the plaintiff to make the inquiries which he had undertaken to make, it is plain from its terms that Racing NSW sought the information which the plaintiff had informed it on 5 October 2018 that he would need to make inquiries to ascertain.

In these circumstances, I am not persuaded that there was any denial of procedural fairness. The Tribunal was entitled to take into account that the plaintiff had decided not to give evidence when deciding whether the warning off ought stand. Indeed, any finding to the contrary would have been arguably perverse.

I note that, there was, other than as set out above, no challenge to the Tribunal’s decision to dismiss the appeal from Racing NSW’s decision to warn off the plaintiff. In particular, there was no challenge to Racing NSW’s power to warn the plaintiff off, it being accepted that, as the plaintiff was not licensed by Racing NSW, there was no other available remedy and that the remedy of warning off was provided for by LR 6, which extended to “any person”, whether licensed or not.

The plaintiff has failed to make out any of his grounds of appeal. The parties agreed at the conclusion of the hearing that there was no reason why costs ought not follow the event in accordance with the general rule: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

For the reasons given above, I make the following orders: