Natural Justice
66 There was no dispute between the parties as to the principles of law relevant to the Plaintiff's claim of a denial of natural justice. Nor was there any dispute that the content of the obligation to afford natural justice was liable to vary with circumstances - see Minister for Immigration Multicultural and Indigenous Affairs; Ex parte Lam [2003] 214 CLR at [48]. In substance the issue between the parties on this aspect of the case was what, in the circumstances of this case natural justice required and whether, by that standard, natural justice had been denied.
67 Any judgment on these questions requires consideration of the circumstances as they existed. A number of features stand out. One is the nature of what was at stake and the importance of the relevant issues to the Plaintiff. It is clear that the allocation of race dates to the Plaintiff was of great importance to it and, as it derived most of its income from these occasions, even possibly vital to its continued existence. Furthermore, even if the Plaintiff could adjust to the loss of some or all of its usual allocation, a question likely to arise would be how long any such adjustment would take. If, as appears to be the case, the Plaintiff had conducted its affairs on one basis for many years, it is not unlikely that little thought had been given to alternatives.
68 A second is the number or extent of the possible alternatives to the non-allocation of dates to the Plaintiff. There was an almost unlimited number of permutations and combinations of changes to the industry to contemplate. It is obvious from a consideration of the minutes and the papers that accompanied them that a major issue was whether the savings that the Defendant sought to effect in the area of TAB racing should be obtained from a reduction in the number of race meetings or from a reduction in prize money, (with relatively little attention given to doing some of both). Other possibilities are the effecting of more savings in the field of non-TAB racing and other areas of the Defendant's activities. And even if the conclusion be reached that the savings should be effected in the TAB racing area, issues that obviously arise are whether one or a few clubs should bear the brunt of the savings or whether those saving should be distributed more evenly, and if so, how. Furthermore, the weight to be afforded to many of the considerations may well vary depending on whether the cost of the adoption of one course or action is the demise of a club, rather than merely some reduction in its meetings or income.
69 A third factor to bear in mind is that, while the clubs might have a degree of common interest in, for example, preferring a reduction in race money to a reduction in the number of meetings, at least many of them were likely to have a conflict of interest in the allocation of the reduced number of meetings. Thus the interest of each club might have been opposed to all of the others in suggesting that they, and not the first mentioned, should bear all of the cuts. Nice judgments might be required how those 2 situations were to be dealt with and those judgments were liable to be affected by a possibility that rather than a reduction in meetings, a club might be allocated none.
70 A fourth matter to be considered is the time that might well be needed in the obtaining or marshalling of information and in the preparation of arguments on these issues. How long such a period would be was not the subject of express evidence but it takes no great imagination to think that the sort of things which the Plaintiff would need to consider and might need to gain information about, included the relative wealth of other clubs, their need for the funds flowing from an allocation, the number of participants in the industry or punters or other persons interested in dog racing who might be disadvantaged by any possible decision of the Defendant. It does not follow from the apparent preference of owners and trainers for a reduction in the number of meetings rather than a reduction in prize money, that their preference was for a club to close or have no meetings.
71 On behalf of the Defendant, attention was drawn to the fact that as long ago as June 2003 the Plaintiff had been made aware of the fact, and to an appreciable degree the extent, of financial problems in the industry and in the memorandum of 17 January had its attention drawn specifically to the possibility of a very substantial reduction in the number of TAB meetings and, if that occurred, what impact that would have on club operations, the financial viability of individual clubs and participation in the industry. Attention was also directed to the summary of the result of the 24 January meeting contained in subsequent board papers to the effect that at that meeting the Richmond Club and the NCA had argued for a reduction in the number of meetings and that this could only be achieved by not allocating TAB race dates to all existing TAB clubs in FY07.
72 Reliance was also placed on the memorandum of 21 February and the Agenda for the meeting of 28 February. It was pointed out that at the meeting of 28 February the option of some clubs missing out entirely in an allocation of dates was the subject of express discussion. It was submitted that, in combination, the meetings of 24 January and 28 February and the chance to advance written arguments, afforded the Plaintiff opportunities to advance any case it wished to make in its own interests.
73 However, the breadth of the matters under consideration, the fact that the Plaintiff as one of a dozen or more clubs or other organisations was being asked to comment also on changes to the whole industry in which it was engaged, the circumstance that the response principally invited was, as it seems to me appropriate to infer, one to be given in oral discussion between the dozen or so club representatives, makes unrealistic the suggestion that the Plaintiff was fairly invited to look to its own survival as a club enjoying TAB race allocations. In the circumstances, no club could reasonably have been expected to firstly prepare what, to do justice to its situation, would be a detailed response extending potentially over its own financial circumstances, regional considerations and benefits to other persons, such as dog owners and trainers, in the industry liable to be affected by any decision to exclude that club from the allocation of dates and also to be in a position to criticise in any informed manner competing submissions from, or arguments in favour of, the other clubs.
74 Given the possible ramifications, natural justice required that if consideration was being given to decisions calculated to lead to the Plaintiff or any other club of being deprived completely or in very substantial measure of what it had previously enjoyed by way of allocation of race meeting dates, far more explicit notice of what was contemplated was required prior to the decisions of 14 March. Subject possibly to the impact on third parties and to any discretionary considerations, those decisions should be set aside on the ground with which I am now dealing
75 Furthermore, in light of the ambit of possible relevant considerations, to be adequate, that notice also should have been much longer than the week or two which was in fact allowed prior to the meeting, or which was envisaged in the timetable set forth in the 21 February memorandum as occurring between the publication of the draft and determination of the final timetable of meetings.
76 To comply with the demands of natural justice, the need for more notice than was afforded is a fortiori when regard is had to a number of remarks in documents of the Defendant which were in evidence. It is clear that for some time prior to the decision on 20 February, closure of clubs was a prospect contemplated by the Defendant. Thus, in a presentation on 17 June 2005 by the Defendant it was said:-
· It is necessary to streamline the industry's structure before larger changes started to be implemented.
· It is not an exercise in treating clubs "better" or "worse" but rather to recognise the importance of each sector to the industry and to manage those sectors accordingly.
77 Although one must recognise the possibility that the expression "streamline the industry structure" may have been intended to encompass also, or indeed refer to, other changes, some of which are referred to in the same presentation, the use of a similar expression in Board papers for the meeting of 2 March, in a resolution at the 14 March Board meeting, combined with references in the Defendant's documents to the desirability of club amalgamations, and the matters about to be referred to lead me to the view that on the probabilities the Defendant was, even in June 2005, contemplating taking steps calculated to reduce the number of participants at some level in the industry.
78 In papers prepared for the 4 January 2006 Board meeting, a deal of attention was given to the reduction in income both past and likely in the future, with the terms used including "a major financial crisis for the industry". Under the heading "A Commercial Approach" it was said:-
"A commercial board would deal with a revenue crises in the following manner:-
1. A cut in the dividend payout to shareholders (the equivalent of prize money participants).
2. A cut to non-commercial activities (the equivalent of non-TAB tracks and smaller TAB tracks).
3. …
4. Boosting investment in the most commercial assets (equivalent to premier tracks upgrade).
5. …
"All of the above issues need to be considered in GRNSW's current operating context, particularly in respect to FY07 and beyond."
79 A presentation to the stakeholders' forum on 29 November 2005 had identified as "premier venues" those at Bulli, Dapto, Gosford, Lismore, Richmond and The Gardens.
80 The Defendant's own documents thus make it clear that no later than 4 January 2006, at least the management of the Defendant was contemplating the elimination, by which I mean the omission from the calendar of allocations, of some TAB clubs.
81 On 30 June, in light of these documents, I raised with counsel the question whether there may not have been an agenda, prior to the decision to reduce the number of meetings by 104, to eliminate a couple of clubs. After discussion between counsel, Mr Gageler said that such an agenda had never been alleged. Hence, I take no account of the possibility that that may have been the Defendant's aim. Nevertheless, I do not regard myself as precluded from taking into account the fact that, no later than 4 January, the Defendant recognised that the elimination of some clubs from the TAB racing calendar was a real possibility.
82 Nor are the decisions of 14 March 2006 saved by the fact of the earlier decision of February to reduce the number of race meetings by 104. Although that decision is not so obviously adverse in a substantial or perhaps material degree to the Plaintiff's interests, that decision suffered also from most of the same considerations as affected the 14 March decisions, and this whether one looks at the decision in prospect or retrospect.
83 In prospect, the Defendant's awareness no later than 4 January of the possibility of the elimination of one or more clubs, and its perception of advantages in that or in amalgamations occurring, gives an added significance to the possibility of any substantial reduction in the number of race meetings allocated. Common sense indicates that any such a reduction was calculated to increase markedly the possibility of no race dates being allocated to one or more clubs.
84 In retrospect, subsequent events also show the potential of the decision made on 20 February to damage the Plaintiff. Not only were there the decisions made on 14 March and 15 May but there was also the management recommendation made in the papers for the 2 March 2006 Board meeting that the reduction in the number of race meetings should be effected, not by a relatively small impact on a larger number of clubs but by imposing it on a small number of clubs in only the South Coast and Hunter regions. As a matter of inference, I am satisfied also that these sorts of possibilities must have been known to the Defendant no later than 4 January 2006.
85 Thus the decision of 20 February was, to the knowledge of the Defendant calculated, - I do not say designed - to have a serious detrimental effect on the Plaintiff. Although there was the meeting of 24 January in which the Plaintiff, other clubs and the Defendant participated and the papers that preceded it, in no meaningful way were the risks, or the extent of the risks, to the Plaintiff brought to its attention. In that situation, the Defendant's decision of 20 February was also one made in circumstances of a denial of natural justice to the Plaintiff.
86 Returning to the "regional determination" of 14 March, it is of no consequence that that decision did not itself deny to the Plaintiff the benefits of an allocation of dates but merely made the Plaintiff one of three clubs at risk in that regard. Consideration of the extent of that risk was not a matter that arose in the proceedings before me. It may be that, in any contest between the 3 Hunter region clubs, the other two had a compelling case for preference over the Plaintiff but whether this be so or not, merely to be put at that risk was a substantial detriment.
87 I turn then to the decisions of 15 May. If they are considered in isolation, they do not suffer from the sort of denial of natural justice with which I have been dealing. The Plaintiff was given adequate notice of the issues being addressed and opportunity to advance its own case. However, because the challenged "venue determination" and "calendar determination" are clearly in substantial measure a product of the decisions made on 14 March, and of the denial of natural justice affecting those earlier decisions, the 15 May decision of the Board should, subject to the qualifications mentioned, also be set aside. Furthermore, by the time May arrived the only issue in practical terms left was which of the three Hunter region Clubs was to miss out on the allocation. In no sense could the opportunity which the Plaintiff had of advancing reasons why the Defendant should depart from decisions previously made (and, I would add, publicly announced) be equated with what natural justice entitled it to, viz. the opportunity of, inter alia, making representations prior to the Defendant making a decision in the first place.
88 In arriving at the above conclusions, I do not ignore the fact that the Defendant was itself under some time pressures to provide draft or final calendars by the end of January and February 2006 or somewhat extended dates. But to a not insignificant extent, these time pressures were the product of the Defendant's own inaction in leaving until January 2006 substantial consideration of how it was to deal in the 2006-07 financial year with a problem that had become apparent, or at least on the cards, months earlier.
89 It was also submitted on behalf of the Plaintiff that it was denied procedural fairness in that the Defendant did not comply with the program it had foreshadowed of preparing a draft race calendar and then affording the clubs "an opportunity to make representations and make submissions to GRNSW on the draft FY07 Race Dates Calendar" before making a final decision as to what the calendar should be and in not being apprised of the substance of the submission advanced by the Maitland Club to the Committee meeting of 5 May.
90 I have dealt with the first of these matters circa [72] above. In light of my conclusions as to the May determinations I need not deal with the second. However, there is something to be said for the view that, as the Maitland Club's submission was not critical of the Plaintiff, and directed attention only to its own virtues - an approach that could not be regarded as unexpected - the Plaintiff had adequate opportunity to deal with these matters. However, not having to decide the matter, I do not.
91 I also do not need to embark upon a further argument of the Plaintiff who submitted that it had been denied natural justice in that, while there had been an undertaking given in the committee meeting of 7 April to report to the Defendant's full Board the Plaintiffs' views concerning the decisions of 14 May, and "extensive representations" were then made by Mr McKay, the minutes of the Board meeting of 15 May indicate that all that had been passed on was an "outline" of the Plaintiffs' concerns. Nor do I need to consider whether the Plaintiff should have been informed of the criteria by which some of the decisions that Board made were judged.