Clements v Racing Victoria Limited

Clements v Racing Victoria Limited - [2010] VCAT 1144 - VCAT 2010 case summary — Zoe

[7]

On 13 January 2010 a Stewards Panel was convened to enquire into the performance of the horse Finishing Card in the Progress Signs Super Vobis Handicap at Mornington on 8 January 2010. On that occasion the horse was ridden by licensed jockey Danny Nikolic.
The Stewards' enquiry subsequently expanded to cover some 21 rides of Mr Nikolic between 3 October 2009 and 11 February 2010 and has focussed on alleged associations and regular communications between Mr Nikolic and several other persons who regularly bet on the Betfair betting exchange. It was alleged that following communications between Mr Nikolic and these associates, the associates backed several of Mr Nikolic's mounts to lose. In essence the Stewards' enquiry was about whether Mr Nikolic had conveyed information to his associates (one of whom is said to be Mr Clements, the Applicant in these review proceedings) about the prospects of his mounts and these associates then bet on those mounts to lose.
Mr Nikolic was charged with various breaches of the Australian Rules of Racing (the 'Rules' or 'AR'). Those charges were heard by the Racing Appeals and Disciplinary Board ('the Board') between 21-23 June 2010 and the Board's decision was handed down on 29 June 2010.
Mr Nikolic pleaded guilty to one breach of AR 175(j) (improper or insulting behaviour towards an official) and four breaches of AR 91 (leaving the jockey's room without permission). He pleaded not guilty to four other charges, being: two breaches of AR 175(a) ('dishonest, corrupt, fraudulent, improper or dishonourable action or practice in connection with racing') and two breaches of AR 175A ('conduct prejudicial to the image, or interests, or welfare of racing'). The charges under AR 175(a) and AR 175A were put in the alternative.
The essence of the charges against Mr Nikolic were that he had informed his associates, either directly or indirectly, of what he thought of the chances of his mounts in several races. The Board was not satisfied that Mr Nikolic had communicated with the associates in the manner contended by the Stewards and dismissed the charges.
The matters with which we are presently concerned arise out of the Stewards' enquiry into Mr Nikolic.
By letter dated 12 February 2010 Racing Victoria Limited ('RVL') directed Mr Clements to provide his telephone records (mobile and landline) for the period 1 September 2009 to 31 January 2010.
It was said that the telephone records requested related to matters currently the subject of an enquiry into Mr Nikolic.
The direction was purportedly made pursuant to Rule 8(b), which says:

[38]

Conceptually the Stewards and the Board are to be regarded as domestic tribunals. Insofar as their disciplinary powers are concerned they are akin to the committee of a club.[5]
Domestic tribunals do not exercise statutory power and have been described as "the bodies or committees in whom authority is vested in professional or trade or sporting organisations, in various social groups or clubs or in various guilds or trade unions".[6]
The disciplinary powers of domestic tribunals derive from the law of contract. Such tribunals have power to discipline any person who expressly or impliedly agrees to be bound by the rules, (either in writing or by custom and practice) by which the tribunal operates.
The case of Meyers v Casey[7] illustrates the contractual nature of such disciplinary powers. Meyers had been disqualified for 12 months by the stipendiary stewards for 'suspicious practices' in connection with the running of a horse he owned, called Blackpool, in a race at Moonee Valley on 4 December 1912. Meyers appealed to the committee of the Victoria Racing Club ('the VRC') who dismissed the appeal and confirmed the stewards' decision.
In the High Court Meyers claimed, among other things, a declaration that the stewards and the VRC had no power to disqualify him for 'suspicious practices' in connection with the running of Blackpool. The Court held that the relevant rule (rule 19(d)) gave the stewards power to disqualify a horse in the running of which suspicious practices had been proved, but granted no power to punish any person for that offence. But that was not the end of the matter. By majority (per Barton ACJ, Isaacs and Rich JJ; Powers J dissenting) the Court held that as Meyers had elected to appeal to the VRC against his disqualification he gave the VRC power to decide whether to quash or set aside or confirm the stewards' decision. The VRC decided to confirm the stewards decision and by rule 33(i) the committee's decision was final. It is apparent from a review of the judgments that the Court's decision was based on the fact that Meyers had contracted to abide by the Rules by entering his horse in the race concerned.
In his judgment Barton AJA said:

[45]

The matter before us is quite different from the circumstances in Meyers v Casey. Mr Clements did not agree to be bound by the Rules, either expressly or by implication, and RVL did not contend otherwise.[10] Nor was it said that the Racing Act 1958 gives the Rules statutory force.[11] Nor did Mr Clements submit to the jurisdiction of the Board such that he impliedly agreed to be bound by their finding.[12]
The Rules are made by a private entity - the Australian Racing Board - a company limited by guarantee (AR1 and AR208). The Rules provide that RVL may make 'Local Rules' ('LR') which are regarded as Rules of Racing within RVL's territorial authority. The Stewards are appointed by RVL under LR7A and the Board is established under LR6A.
Absent an agreement to be bound or the application of statutory force how is it said that AR8(b) applies to Mr Clements?
Mr Clements is not a licensed person within the meaning of the Rules (ie. he is not a jockey: AR81 and LR36A-36B; or a trainer; AR7(III)(b) and LR 35A) nor is he a registered stable employee (LR 39A-39B). He is a member of the public, albeit one that derives income from racing. In the vernacular, Mr Clements is a professional punter.
RVL submitted that the Rules extended to unlicensed persons who have acted so as to bring their actions 'within the purview of the Rules'. In support of this contention RVL relied on the terms of AR2 and LR3 and the judgment of the Privy Council in Stephen v Naylor.[13]
AR2 and LR3 state, in essence, that any person who takes part in any matter coming within the Rules consents to be bound by them. But the mere assertion of jurisdiction does not confer it. RVL submitted that Stephen v Naylor provided authority for the application of the Rules to Mr Clements_._
Stephen was the Chairman of the Australian Jockey Club ('AJC') and Naylor was a professional punter. Naylor was questioned by the Stewards about whether he was the true owner of Movoco, a horse which had been 'pulled up' in a race in circumstances where the jockey and lessee of the horse were disqualified. Before the NSW courts it was held that the disqualification could not stand because Naylor was not subject to the Rules of Racing, in that:
- he had not agreed to be bound by the Rules;
- he was not estopped by his conduct from asserting that he was not bound; and
- he had not consented to submit to the jurisdiction of the AJC committee.[14]
On appeal the Privy Council reversed the decision of the NSW Full Court, saying it was not a question of whether Naylor consented to any adjudication or submitted to any jurisdiction. Lord Roche (delivering the judgment of the Privy Council) said:

[59]

Similarly, in D'Souza v Royal Australian and New Zealand College of Psychiatrists and ors[36] Ashley J (as he then was) held that a decision of the College to deny the plaintiff fellowship was not amenable to judicial review despite the public consequences of such a decision.[37]
It seems to us that the 'gap' identified by Dr Pannam can be remedied by legislative amendment to give the Rules statutory force.
Dr Pannam also submitted that the test posited in Stephen v Naylor has subsequently been adopted by courts and tribunals and reference was made to five particular cases. We do not find this submission particularly persuasive for two reasons.
The first is that it is hardly surprising that in Caddigan v Grigg[38] Barrowclough CJ followed Stephen v Naylor: the facts were relevantly indistinguishable and at that time his Honour was bound by decisions of the Privy Council.[39] In Jacobson v Steele[40] Gobbo J was similarly bound.
The second reason is that an analysis of the other cases referred to reveals an alternative jurisdictional basis for the actions of the relevant disciplinary body:
- In the matter of Dr Tim Roberts[41] the Thoroughbred Racing Board Act 1996 gave the Rules of Racing statutory recognition and empowered the Board and the Stewards to give effect to those Rules;
- In the matter of the Queensland Principal Club and Kooralbyn Picnic Race Day[42] the Racing and Betting Act 1980 'specifically acknowledges the force and effect of the Rules of Racing'; and
- Zucal v Harper[43] the person concerned was a licensed trainer and hence bound by the Rules.
We also note that Stephen v Naylor was not followed by the Full Court of the Supreme Court of British Guiana in Demerara Turf Club and Anor v Phang. [44] In that case the Demerara Turf Club (the 'Turf Club') had 'warned off' Phang, a person who was a partner in a business which operated pool betting on races run in British Guiana. Phang was not a member of the Turf Club and there was no contractual relationship between him and the club.
Phang filed a writ against the Turf Club claiming, among other things, that the decision to warn him off was null and void, and sought damages for libel. An interlocutory injunction was granted at first instance restraining the Turf Club from publishing any statement that Phang had been 'warned off' until the determination of his action. The Turf Club appealed to the Full Court.
One of the issues on appeal was whether there was a serious issue to be tried as to the Turf Club's right to exercise jurisdiction over Phang. The Full Court determined that issue in favour of Phang:

[66]

It seems to us that the principle of legality applies with equal force to the interpretation of rules of domestic tribunals. Just as domestic tribunals are subject to the rules of natural justice - an aspect of the rule of law - so too should their rules be construed by reference to the principle of legality. Any doubt in interpretation should be resolved in favour of the person said to be subject to the rules.
Such an approach applies to both the language of the relevant rule and to the class of persons it purports to cover.
The application of the principle of legality in the context of this case supports a conclusion that the powers in AR8 do not extend to persons who have not agreed to be bound by the Rules. It would be contrary to this principle to extend the application of the Rules to persons who have not agreed to be bound by the Rules but have, by their actions, brought themselves 'within the purview of the Rules'. Such a test is simply too vague and imprecise to provide a proper basis for the conferral of coercive power.
In conclusion, and contrary to the decision of the Board, we have decided that Mr Clements was not subject to AR8. The source of the Stewards' powers under that rule is contractual and those powers do not extend to persons who have not agreed (either expressly or by implication) to be bound by the Rules. The contractual nature of the powers of a domestic tribunal (such as the Stewards and the Board) is clearly supported by authority in both England and Australia and our conclusion is also consistent with the principle of legality.
To the extent that Stephen v Naylor stands for a broader proposition - that rules such as AR8 apply to persons who, by their actions, bring themselves within the purview of the Rules - we respectfully decline to follow that decision.
We acknowledge the public importance of the disciplinary functions exercised by the Stewards and the Board in protecting the integrity of racing. But such a public benefit does not alter the contractual source of their powers. To the extent that our decision creates a regulatory gap, it can be addressed by the legislature.
As Mr Clements was not subject to AR8 it necessarily follows that the Board had no jurisdiction to record a finding that he breached AR175(p) and nor did the Board have jurisdiction to impose a penalty. We will order that the finding and penalty be set aside.

At a glance

Court

Decision date

Before

Source

Judgment (111 paragraphs)

Clements v Racing Victoria Limited (Occupational and Business Regulation) [2010] VCAT 1144 (30 July 2010)

Clements v Racing Victoria Limited (Occupational and Business Regulation) [2010] VCAT 1144 (30 July 2010)

Parties

Legislation Cited (2)

Cases Cited (11)