Day v Harness Racing New South Wales - [2014] NSWSC 1402 - NSWSC 2014 case summary — Zoe

NSWNSWSC

Day v Harness Racing New South Wales

[2014] NSWSC 1402

Supreme Court of NSW|2014-09-30|Before: Adamson J, Commission J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2014-09-30

Before

Adamson J, Commission J

Catchwords

249 CLR 1 Ainsworth v Criminal Justice Commission [1992] HCA 10
214 CLR 318 Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22
224 CLR 44 Jones v Dunkel (1959) 101 CLR 298 Kioa v West [1985] HCA 81
ex parte Lam [2003] HCA 6

Source

Original judgment source is linked above.

Catchwords

249 CLR 1 Ainsworth v Criminal Justice Commission [1992] HCA 10214 CLR 318 Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22224 CLR 44 Jones v Dunkel (1959) 101 CLR 298 Kioa v West [1985] HCA 81ex parte Lam [2003] HCA 6214 CLR 1 Re Refugee Tribunalex parte Aala [2000] HCA 57204 CLR 82 Rich v ASIC [2004] HCA 42220 CLR 129 South Australia v Tanner [1989] HCA 3(1989) 166 CLR 161 Stead v State Government Insurance Commission [1986] HCA 54

Judgment (39 paragraphs)

[1]

0 CLR 129 South Australia v Tanner [1989] HCA 3; (1989) 166 CLR 161 Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 Ucar v Nylex Industrial Products Pty Limited (2007) 17 VR 492 Wentworth v NSW Bar Association (1992) 176 CLR 239 Williams v City of Melbourne (1933) 49 CLR 142 Texts Cited: Aronson and Groves, Judicial Review of Administrative Action (5th ed 2013, Thomson Reuters) Category: Principal judgment Parties: Neil Day (First Plaintiff) Dean McDowell (Second Plaintiff) Harness Racing New South Wales (First Defendant) Reid Sanders (Second Defendant) Representation: Counsel: DA Smallbone/DW Rayment (Plaintiffs) Dr AS Bell SC/ATS Dawson/D Forrester (Defendants)

[3]

Introduction

By resolution passed at its board meeting on 16 December 2013 Harness Racing NSW (HRNSW), the first defendant, purported to make a local rule pursuant to its rule-making power in s 22 of the Harness Racing Act 2009 (NSW) (the Act), which provided that cobalt above the threshold concentration of 200 micrograms per litre (µg/L) of urine was a prohibited substance.
On 24 February 2014 Benzi Marsh, a horse raced by Neil Day, won race 5 at the Final Goulburn Soldiers Club Goulburn Championship. A test of its urine detected a concentration of cobalt in the order of 710 µg/L. Mr Day has been licensed as a trainer and driver since 1988. He has been President of the United Harness Racing Association since 2008. He was nominated as a member of the Harness Racing Industry Consultation Group (HRICG) as the representative of the trainers and drivers.
On 28 February 2014, Chevals Charlie and The Twilightdancer, two horses raced by Dean McDowell, won races at Bankstown. Concentrations of cobalt of 550 and 570 µg/L respectively were detected in their urine. Mr McDowell has been a licensed trainer and driver since 1997.
By letters dated 30 April 2014 HRNSW purported to suspend Mr Day's and Mr McDowell's training and driving licences pending further investigation and inquiry.
Correspondence between the parties' solicitors ensued in which the plaintiffs' solicitors sought information and documents and foreshadowed legal proceedings. The plaintiffs commenced these proceedings by summons filed on 9 May 2014.
When the matter came before the Court on 14 May 2014, the Court noted the parties' agreement, including the following: "Any Stewards' enquiries arising out of the matters subject of the challenged suspensions will be postponed, pending the final determination of the proceedings by the Court."
Accordingly, the inquiry into Mr Day did not proceed on the appointed day, 21 May 2014, and no date was fixed for the inquiry into Mr McDowell.
The plaintiffs challenge the validity of various rules, including the new rule concerning cobalt as well as the interim suspension of their licences.

[6]

Urine testing and the results of detection of prohibited substances

HRNSW collects urine samples from horses which are tested for drugs. The most common sample is that taken post-race from the winner. Such samples undergo considerable testing by approved laboratories. After samples are tested there is a delay of about four weeks before the results are available to HRNSW. Once advice is received from an approved laboratory that the sample contains a prohibited substance, it is sent to a second approved laboratory for independent testing. The reason for this derives from the statutory regime, considered further below, which provides (by rule 191) that certificates from two approved laboratories constitute conclusive evidence of the presence of a prohibited substance. The results from the second laboratory are generally available after as few as two days and generally within ten days.
Once the results are known HRNSW, through its stewards, generally conducts an inquiry by way of hearing which is usually concluded within about a month of the results being known. A person affected by the decision has a right of appeal to the NSW Racing Appeals Tribunal (the Tribunal).
Since February 2010 HRNSW has published Penalty Guidelines for breaches of the rules. In about June 2012 HRNSW increased the severity of guideline penalty offences, including a tiered approach to penalties for different classes of substances. The Penalty Guidelines published on 21 March 2013 show that for Class 1 drugs (which have the highest potential to affect performance) the penalty guideline for a first offence is no less than five years disqualification and for Class 2 drugs (which have a high, but lesser, potential to affect performance), the penalty guideline for a first offence is no less than two years.
I accept Mr Sanders' uncontroverted evidence that since 1 August 2011 any trainer who has presented a horse to race with a prohibited substance in its system has been disqualified for a period.

[8]

The investigations that led to the new rule

In about June 2013 Mr Sanders became aware of allegations that inorganic cobalt was being used as a performance-enhancing drug for horses engaged in harness racing. His sources included: anonymous or confidential communications; information from colleagues in the United Kingdom and North America; Dr Martin Wainscott, the regulatory veterinarian at HRNSW; results of blood samples taken in the United States which were analysed in Hong Kong; and a report from Harness Racing Victoria that it was concerned that cobalt might be implicated in the sudden death of a standardbred horse.
Mr Sanders travelled to the United States to investigate the use of cobalt as a performance-enhancing drug. As a result of his trip, and the information he had earlier received, he considered that the use of cobalt ought to be the subject of regulation.
Mr Sanders corresponded with Terence Wan, the head of Racing Laboratory in Hong Kong whom Dr Wainscott regarded as one of the world's leading racing analysts. On 16 August 2013 Mr Wan sent an email to Mr Sanders in which he referred to the complication of 'normal use' of supplements containing cobalt. He also said: "For raceday samples, as long as your rules prohibit all forms of injections on a raceday, a reasonable unpublished threshold might be considered at 60 µg/L in urine (based on a population of 981 samples and a risk of 1 in 10,000) or even 100 µg/L."
Following these investigations, Mr Sanders reported to the board of HRNSW for its meeting in August 2013, relevantly as follows: "EQUINE DRUG CONTROL: COBALT CHLORIDE We have become aware in recent times that there is wide spread use of the substance Cobalt Chloride, which will boost the natural EPO levels in a horse. Unfortunately there are no laboratories in Australia that have the equipment capable of testing for such substance. Cobalt is a red crystallised substance and can be administered to a horse via various means. I am aware that the HKJC Racing Laboratory are able to analyse Cobalt levels as they have the necessary machine, however it is not a simple matter of substance being present or not as Cobalt is a naturally occurring substance. It is an essential trace element for all animals and is also present in some medications and supplements. Therefore although Cobalt is technically a prohibited substance under the Rules, it requires a threshold to be established. This has proved difficult as there has been little interest from many racing authorities. During my discussions with Dr Terry Wan of the HKJC about the detection of Cobalt he has been conducting research on this substance since 2007 in both urine and blood samples. Although he would not commit to a threshold level due to the research paper not being published and reviewed, he does give some clear indication on what levels he believes would be expected in an untreated horse. He believe [sic] that no untreated horse should have a level greater than 60ng/ml but to be safe a level of 100ng/ml would clearly represent a treated horse on raceday. We intend to issue a notice to the industry stating the following in relation to Cobalt Chloride: "HRNSW is aware that the substance COBALT CHOLRIDE may be being used within the harness racing industry. HRNSW has determined that COBALT CHOLRIDE is a prohibited substance under the Rules and warns that the non-standard use of Cobalt salts or Cobalt containing supplements is in breach of the Rules. HRNSW advises that samples will routinely undergo analytical testing for COBALT and consistent with HRNSW swabbing strategy, any sample may be frozen and subject to further testing at a future date"."
Mr Sanders engaged Dr Wainscott to locate two analytical laboratories which could test for cobalt. As a consequence, National Measurement Institute (NMI) was approved as a laboratory for testing for cobalt by a resolution of the board of HRNSW made in early September 2013. The Western Australian Government's ChemCentre in Perth (ChemCentre), which was already an approved laboratory, was also identified as having the capacity to test for cobalt.
In September 2013 Mr Sanders issued a press release on behalf of HRNSW which read as follows: "COBALT CHLORIDE Harness Racing New South Wales (HRNSW) is aware that Cobalt Chloride is being used within the Harness Racing Industry. COBALT CHLORIDE is a prohibited substance under the Australian Harness Racing rules and HRNSW warns that the use of Cobalt salts or Cobalt containing supplement is in breach of the Rules. HRNSW advises that they have engaged both local and international laboratories to analyse samples for the presence of Cobalt. Consistent with HRNSW swabbing strategy, any sample may be frozen and subject to further testing. REID SANDERS"
Shortly after this press release was issued Mr Sanders issued another which read in part: "Following a number of inquiries today, HRNSW wishes to clarify the previous notification in relation to COBALT CHLORIDE. Cobalt Chloride is contained in a number of proprietary supplements and pre-mix feeds used in the Harness Racing industry. If these preparations are used in accordance with manufacturer's guidelines, they are allowable. HRNSW warns against the non-standard use of Cobalt salts or Cobalt containing supplements as it is a breach of the Rules."
Once Mr Sanders had two approved laboratories (NMI and ChemCentre) that could test for cobalt he arranged for 60 urine samples collected after races in regions throughout New South Wales (including from horses trained in Victoria) and 20 post-race urine samples collected in Queensland to be sent to NMI for testing. The samples were taken in the period August to October 2013. The 80 samples were then tested in two batches by NMI and the results collated in a schedule, which Dr Wainscott named "Cobalt Master Blaster". The tests were conducted for the purposes of a so-called "population study". The schedule continues to be updated by HRNSW as more data comes to hand. Mr Sanders calculated the average of the 80 results to be 169.24µg/L and the average of all but the three highest figures to be 16.93 µg/L.
In about October 2013 Mr Sanders briefed Professor Hibbert with the results of the 80 samples and asked to undertake a statistical analysis to determine the expected cobalt level in a normal horse. Professor Hibbert's expertise is not in issue. He is a highly eminent statistician and analytical chemist and Professor of Analytical Chemistry at the University of New South Wales.
Professor Hibbert provided his "Confidential Report Cobalt in Equine Urine" to HRNSW on 2 November 2013. The results ranged from .78µg/L to 3460 µg/L. He found that the majority of horses in the sample, 63 out of 80, had a cobalt concentration of 50 µg/L or lower. There was then a gap between 50 and 97 µg/L. He inferred from the distribution of results and the gap that horses with a cobalt reading of 50 µg/L or lower had not been treated.
Professor Hibbert found no discernible pattern for the results above 50 µg/L. The results below 50 µg/L could be fitted into a number of probability distribution models (lognormal, exponential and Weibull). Professor Hibbert adjudged that the Weibull distribution gave the best fit. He noted that the Weibull distribution is particularly suitable for data with many small values and few higher values. Professor Hibbert opined that, because there were no samples with a concentration between 50 and 97 µg/L and because the vast majority of samples were substantially below 50 µg/L, it was reasonable to infer that those below 50 µg/L came from horses that had not been treated.
As the Weibull distribution gave the best fit, Professor Hibbert used it to calculate the chance of a horse in the population defined by the data (less than 50 µg/L) returning a result with concentrations of cobalt greater than 50 µg/L as follows: Cobalt (µg/L) Chance of false positive expressed as 1/# 50 118 60 420 70 1582 80 6299 90 26370 100 115640 110 529390 120 2523100 200 2258000000000 500 Infinity 1000 Infinity

[9]

Professor Hibbert included the following executive summary in his November 2013 report: Data from 80 race day harness horses showed cobalt mass concentrations between 1 and 3460 µg/mL. If 50 µg/mL can be taken as an upper level of a 'normal' population, the data <50 µg/mL fits well to a Weibull distribution, which allows calculation of the probability of finding a normal horse with elevated cobalt levels. An action level of 100 µg/mL gives odds of 1:116000 against such a concentration from a horse in the normal population.
Professor Hibbert's report concluded as follows: "Without independent studies on a known control (not administered) population and an administration study to find out levels reached after a typical administration, the analysis given here should be regarded as provisional. Literature could also be found with indicative levels of urinary cobalt, and so inform the normal range."
Although Professor Hibbert used the word "provisional" in this passage he confirmed in his evidence that the contents of the November 2013 report provided sufficient information about the distribution of mass concentration of urinary cobalt to be used by HRNSW in its determination of a threshold of 200 µg/L and that the selection of that threshold was both rational and reasonable. I accept his evidence and his expertise to make that assessment.
Mr Sanders included a copy of Professor Hibbert's November 2013 report with the HRNSW board papers for the meeting on 26 November 2013. Mr Sanders said in the board report: "We believe that a threshold level of between 150 µg/L and 200 µg/L could be set by HRNSW through a Local Rule and this would based [sic] on the statistics only capture treated horses on raceday. However, prior to being able to complete this level, we need to fully understand what the measurement of uncertainty is at the threshold. We have asked National Measurement Institute to provide this information to us."
At the time of the board meeting on 26 November 2013 Mr Sanders was, by reason of his role with HRNSW, the subject of personal threats against him and his family. I accept that his recollection of that meeting is, for that reason, not good. However I am satisfied that the board received and noted Professor Hibbert's November 2013 report at that meeting as is recorded in the minutes.
There was a further board meeting of HRNSW on 16 December 2013. The board report, which was prepared by Mr Sanders, relevantly raised the proposed amendment to the rule in the following terms: Cobalt - Proposed New Local Rule As HRNSW has undertaken considerable research and analytical analysis for the substance Cobalt, it is important that we now ratify this by way of a Local rule. The introduction of a National Rule would be some considerable time away, as we are the only state that is currently testing for it. NSWLR 188A(2) - In addition to AHRR 188A(2) the following substance when present at or above the levels set is deemed a prohibited substance under AHRR 188A(1) (a) & or (b) & or (c): (a) Cobalt Chloride at a level of 200 micrograms per litre in urine. I recommend that the Board adopt the proposed Local Rule effective immediately.
Although the board report referred to "cobalt chloride", I accept the evidence of Mr Sanders and Mr Nati that the discussion at the meeting on 16 December 2013 related to cobalt, rather than "cobalt blue" or cobalt chloride. Mr Sanders recommended that there be a local rule to ban cobalt at or above 200 µg/L. Mr Nati's contemporaneous note of the meeting recorded "Cobalt from", which he explained was a reference to the relevant substance, cobalt. The word "from" was used because there was a discussion about whether the proposed new rule ought be made retrospective to permit testing of samples already collected from race winners.
Mr Sanders gave oral evidence that he thought that he might have drawn the board's attention to the erroneous reference to cobalt chloride in the report in the course of the December meeting. I am not satisfied that he did so since I do not accept that he appreciated at the time of the board meeting that there was such an error.
The board voted unanimously in favour of Mr Sander's recommendation that cobalt above 200 µg/L would be a prohibited substance. There was also discussion about whether the rule would be retrospective. The precise wording of a rule to make it retrospective was not before the board on that day.
The minutes of the board meetings of HRNSW are usually prepared by Julie Waller, the executive assistant to the Integrity Department at HRNSW, from her shorthand notes taken in the course of the meeting. Her usual practice was to prepare the minutes and then provide Sam Nati, the CEO of HRNSW, with a final version of the minutes on the morning of the subsequent board meeting. A final version of the minutes was usually distributed to board members with the other meeting papers for the subsequent meeting. However, Ms Waller was on leave between 13 and 16 December 2013 and therefore was not responsible for preparing the minutes for the board meeting on 16 December 2013.
Because of Ms Waller's absence, Mr Nati created the minutes from the notes he took at the meeting and by reference to the board report. The draft minutes of the meeting on 16 December 2013, which he initially prepared, relevantly recorded: Cobalt Reid Sanders tabled a proposed Local Rule for the testing of Cobalt Blue. The Board made the following resolution: The proposed local Rule NSWLR 188A(2) was approved. It reads as follows: In addition to AHRR 188A(2) the following substance when present at or above the levels set it deemed a prohibited substance under AHRR 188A(1)(a)(b) or (c): (a) Cobalt Chloride at a level of 200 µg/L in urine. Furthermore prosecutions relating to this substance can be backdated to the original Industry Notice published in August.
I accept Mr Nati's evidence that when he prepared the minutes of the meeting he replicated the error in the board papers and included a reference to "cobalt chloride", because he copy typed the phrase from the board report without turning his mind to the discussion, which had been about the prohibition of cobalt.
On the same day as the board meeting Mr Sanders prepared a press release, which HRNSW distributed to press outlets, including the National Trotguide, which included it in its edition published on 26 December 2013. It was prepared from the board report and replicated the words "cobalt chloride". Mr Sanders could not explain why he had typed in 'cobalt chloride' rather than 'cobalt', except by reference to the pressure he was under as a result of the threats referred to above and his mother's poor health. I accept that 'cobalt chloride' was in his mind as the offending substance, being the form in which inorganic cobalt was likely to be administered to horses and which would give rise to an increased cobalt concentration in their urine. However, I am satisfied that he knew at all material times that the substance to be tested for was cobalt since cobalt and chloride ions separate in urine.
On 17 December 2013 Mr Sanders sent an email to Dr Wainscott asking him to finalise the application to complete the administration trial for cobalt (in accordance with Professor Hibbert's recommendation). He said in the email: "I appreciate that we now have the rule in place, but we will also need to have some solid scientific support for when we take action."
I accept Mr Sanders' evidence in cross-examination that he was referring to the need to have evidence in the context of an appeal to the Tribunal against a finding by the stewards of HRNSW that a person was guilty of an offence by reason of an excess amount of cobalt in urine which the person had presented on a race day. He considered that such evidence would assist HRNSW on penalty to establish that the particular concentration (in excess of 200 µg/L) could not be the result of accidental or normal use, but would have to be the result of administration.
On 18 December 2013, when Mr Sanders was in Brisbane for reasons associated with his mother's poor health, he was preparing the copy for the January edition of the Gazette which had to be submitted by that day. The Gazette, which is published monthly, is distributed to all persons licensed under the Act as well as any other subscribers and constitutes the official publication of HRNSW. He referred to his board report and noticed, for the first time, the erroneous reference to "cobalt chloride". He realised that by this time he had already sent out his press release on 16 December 2013 (referred to above) which was also erroneous since it copied the draft rule from the board paper. When Mr Sanders prepared the copy for the Gazette, he referred to 'cobalt' rather than 'cobalt chloride'. He did not issue a press release to correct the one sent on 16 December 2013. He explained that he considered it sufficient to publish what he believed to be the correct rule in the Gazette, HRNSW's official publication, because it was sent to all licence holders.
In about early January 2014 Mr Sanders drew Mr Nati's attention to the error in the board papers for the December 2013 meeting. Mr Sanders, who was not a member of the board and who was not privy to minutes of board meetings, expressed the hope to Mr Nati that the error had not found its way into the minutes of the meeting.
The local rule (in the form referring to cobalt rather than cobalt chloride) was uploaded onto the HRNSW website on 9 January 2014 by Kate Dumesmy, an employee of HRNSW who is responsible for the website.
The matter was raised at the board meeting on 28 January 2014. I accept Mr Nati's evidence that he told the board that there was an error in the draft minutes he had prepared in that there was a reference to cobalt chloride when in fact the substance about which Mr Sanders had addressed the board was cobalt. The board agreed that the draft minutes of the December 2013 meeting (which I find had not been circulated prior to 28 January 2014) ought be amended to reflect the fact that the local rule applied to cobalt rather than cobalt chloride in accordance with their discussion at that meeting. The minutes relevantly recorded: "CONFIRMATION OF MINUTES The minutes of the meeting on Monday 16 December 2013 were confirmed with the exception of correcting the error relating to the approval of Local Rule NSWLR 188A(2) which should have read COBALT and not COBALT CHLORIDE."
Accordingly, the minutes of the January 2014 meeting that confirm the resolution made in December 2013 and which amend the draft minutes of that meeting prepared by Mr Nati establish the resolution by which NSWLR 188A(2) was made. The minutes of the board meeting on 28 February 2014 confirmed that the amendment to the draft minutes was made at the board meeting on 28 January 2014.

[11]

The results were available on 24 and 28 April 2014. Mr Sanders decided to suspend the plaintiffs' licences pending the outcome of an investigation and inquiry into the post-race test results. He deposed that he took into account the following matters in coming to this decision: the terms of rule 183 (see below); the requirement for a trainer to present a horse free of substances on race day; the Certificates of Analysis from NMI in respect of the horses; HRNSW's protective functions; the fact that an inquiry was likely to be imminent; the standard policy to suspend with respect to substances within Class 1 or 2 of the Penalty Guidelines and the likelihood of disqualification, even for a first offence of this nature.
Before Mr Sanders notified the plaintiffs of their interim suspension he spoke to the board of HRNSW at its meeting on 29 April 2014. He said: "Neil Day has returned a positive for cobalt. You all understand that the usual protocol on receipt of a first certificate is to suspend the trainer pending the inquiry. Is there any reason why the normal protocol should not be applied for Mr Day?"
Each member of the Board of HRNSW signified that the usual approach should apply.
The plaintiffs were notified of the readings detected and their suspensions by letters dated 30 April 2014. The letters read in part: Action in relation to You Having regard to: (a) The extremely serious nature of the prohibited substance; (b) The absolute liability of a trainer for the presence of a prohibited substance; (c) The existence of a prima facie case against you based on the certificates from NMI; (d) HRNSW's protective objectives in the course of its core function to control supervise and regulate harness racing in this state. HRNSW Stewards have determined that they should also invoke the provisions of Australian Harness Racing Rule (AHRR) 183 (a), (b), (c) & (d) to suspend your training and driving licence until the further investigation and or inquiry is concluded.
The following documents were also enclosed with the suspension letters: the copy of the relevant race results; the identity card for the urine sample; and the NMI report of analysis.
Mr Day received the letter on 1 May 2014. He travelled to Sydney to speak with Mr Sanders. When Mr Day asked Mr Sanders what he had done wrong, Mr Sanders refused to speak to him about the suspension. It is common ground that neither Mr Day nor Mr McDowell was given an opportunity to be heard in relation to the interim suspension.
There is evidence of discussions that took place between persons associated with the plaintiffs and persons associated with the defendants, both before and after the interim suspensions, including as to whether trainers who used supplements and pre-mix feeds would be in breach. The plaintiffs made allegations in the amended points of claim that various statements to that effect were misleading and "prejudicial". There was no cross-examination on these conversations. Accordingly I do not propose to paraphrase them in my reasons. Nor did they form any basis for the submissions. There is no need to address them further.
Harness Racing NSW issued a media release, which it published on its website, notifying of the licences of the trainers it had suspended by reason of cobalt above the threshold found in post-race urine samples. Mr Sanders gave the following evidence: Q. Why was it necessary to publish the suspensions if you hadn't made up your mind? A. That's our standard protocol. The reason for a suspension for a prohibited substance offence is because of the integrity of the industry, and the protective mechanism, because with our stance that's been taken since August 2011, a person that presents a horse, whether knowingly or unknowingly with a prohibited substance in their system, faces a term of disqualification which is a hefty penalty. If that person is entitled or aware of what could be forthcoming, if you like, they may take steps to do things to earn money. This is a money game, wagering. People can earn lots of money out of betting. They could take a horse or do certain things in a race that can get them some money that will get them through. The reason why we take those steps is to protect the mums and dads that have their 25 cents quinellas or the $2,500 straight-out bets to ensure that they have the understanding that it's a level playing field. That's the reason why we take those steps.
Mr Day was informed by letter dated 6 May 2014 that the hearing of the inquiry was to commence on 21 May 2014. It did not proceed because of the agreement noted by the Court referred to above. The hearing of the inquiry in respect of Mr McDowell had not been set down for hearing before the commencement of these proceedings.
Mr Sanders' evidence was that he did not invite the plaintiffs to be heard before suspending them for the following reasons: 1. The decision was made on an interim basis. 2. An inquiry could take place within weeks. 3. The plaintiffs had a right of appeal to the Tribunal against their interim suspensions and could also seek a stay from the Tribunal. 4. Swift action was preferable when a prohibited substance was detected in a race winner since it was undesirable for trainers whose horses had tested positive for prohibited substances to be permitted to continue to race until an inquiry had taken place. 5. Suspension without hearing was consistent with HRNSW's usual practice.
By letter dated 1 May 2014, the plaintiffs' solicitors noted that on 16 December 2013 HRNSW had adopted NSWLR 188A(2) deeming cobalt a prohibited substance when present at or above 200 µg/L in urine. However, they contended that members could not test for cobalt and that they relied on a statement by Mr Sanders that using pre-mixed feeds and supplements would not give rise to such levels. They foreshadowed these proceedings and sought that the interim suspension be lifted.
The defendants' solicitors responded by email on 2 May 2014 and referred to the plaintiffs' statutory right of appeal to the Tribunal, the relevant time limit (7 days) and the associated right to seek a stay of the suspension, as well as the evidentiary force of certificates in the context of prohibited substances.
Subsequent to the interim suspension but before 7 May 2014, tests results were received from the second approved laboratory in respect of the sample taken from Mr Day's horse, Benzi Marsh, which confirmed the earlier results.
As referred to at the commencement of these reasons, correspondence was exchanged between the interim suspension on 30 April 2014 and the commencement of these proceedings on 9 May 2014. Because the plaintiffs place particular reliance on part of the contents of the defendants' solicitors' letter dated 7 May 2014 in support of their allegation of pre-judgment, it is necessary to set out the relevant passages: 1. We repeat the suggestion made by email and letter of 2 May 2014 that the most appropriate forum is the Racing Appeals Tribunal, and that the most appropriate form of relief in the circumstances would be to apply for a stay in that forum. We note that in present you have declined to do so and that the time for filing an application in that forum (7 days) is rapidly expiring; 2. We deny the declaratory relief referred to in your last letter of 6 May 2014 would be appropriate or justified. However, even if your client obtained the declaratory relief in relation to the particular rules relied on, HRNSW would still be empowered to take action suspending your clients, in the circumstances, in light of the extremely broad powers available to it pursuant to the Harness Racing Act 2009, and in particular sections 8 and 9 of that Act. In those circumstances, the application for relief would be entirely pointless. The futility of the relief would also be an additional reason for the Court to decline to order it; In circumstances where NATA Credited Laboratories have returned positive swabs for prohibited substances (and in Mr Day's case, two such laboratories), it seems extremely unlikely that your client would even be in a position to persuade a Court of equity that your client has an arguable case on the merits; In circumstances where HRNSW is obliged by the Harness Racing Act to "control supervise and regulate Harness Racing in the state"; and further in light of the corruption scandal which HRNSW has been taking steps to address over the last several years; and the frequency and need for specific and general deterrence in relation to offences against prohibited substance rules; it also seems extremely unlike [sic] that your clients would persuade a Court of equity that the balance of convenience favours the relief proposed by you; Your letter refers to potential loss of income to be suffered by your client. While HRNSW accepts that there may be some potential loss of income as a result to your clients as a result of the action it has taken, allegations [sic] damages would be a perfectly satisfactory remedy, in the event that your client's accepted by a Court (those complaints are of course denied). Finally, to the extent that your letter complains that certain horses have been prohibited from competing in events, it is telling that both Mr Day and Mr McDowell have transferred their horses into the care of other registered trainers. All of those horses are now eligible to compete in the races referred to.

[13]

Subsequent research conducted by HRNSW into cobalt: the Administration Study

When Dr Wainscott became aware of Professor Hibbert's recommendation that an administration study take place, he applied to the Department of Primary Industries for ethics approval to conduct such a study. The study involved administering a product known as "Hemo-15", an injectable vitamin supplement which contained the highest level of cobalt of any registered veterinary product in Australia (0.7 mg/mL of cobalt gluconate and 150 mg/mL of vitamin B12). The ethics approval was obtained in February 2014. The latest of the relevant approvals was obtained on 18 April 2014, after which the trial was conducted. The trial was approved on the following condition: "In accordance with the AVPMA [Australian Pesticides and Veterinary Medicines Authority] requirements for small trials, the number of animals used must be at least five to obtain a significant result."
The trial was conducted over four separate days in Cowra. Five standardbred horses (designated A, B, C, D and E) were selected. They were non-pregnant brood mares fed on pasture. Urine and blood samples were collected every day from each horse. For the first three days of the trial the horses were injected with Hemo-15 between 8 am and 8.30 am. I accept Dr Wainscott's evidence that the regime was "unusually intensive" and that in practice trainers and veterinarians would almost never have good cause to administer registered products containing cobalt on consecutive days and that such administration would commonly be outside manufacturer's recommendations.
Dr Wainscott summarised the results of the administration study as follows: All horses recorded baseline blood levels of <5 µg/L. On the first 2 days, for all 5 horses, cobalt blood levels returned to baseline levels (<5 µg/L within 6 hours and the maximum level recorded among the 5 horses was 9.4µg/L (Horse B 15 minutes after treatment on day 2). On day 3 the maximum level recorded among the 5 horses was 10µg/L (Horse B 30 minutes after treatment). On day 3 horses D and E returned to baseline levels by 6 hours after treatment whilst horses A, B, and C remained marginally above their baseline levels at 5.1, 5.3 and 5.2µg/L respectively). On day 4, all horses had returned to baseline levels. There was a tendency for a build-up of maximum concentrations following repeated administration. The nominal threshold of 200µg/L was exceeded by one horse four hours after the third administration. That horse (Horse C) achieved a reading of 230 µg/L. Another horse (Horse D) exceeded the nominal threshold of 200 µg/L six hours after the third administration (250µg/L). Within 24 hours after a third administration the urinary cobalt concentrations of all five horses had returned almost to pre-treatment baseline levels.
In summary, two horses exceeded the concentration of 200 µg/L: C recorded a urine concentration of 230 µg/L four hours after the third administration and D recorded one of 250 µg/L six hours after the third administration. Within 24 hours of the third administration the urinary cobalt concentrations of all five horses had returned to almost pre-treatment base levels. Dr Wainscott concluded accordingly that there was a tendency for a build-up of maximum concentrations following repeated administration but that the effects were relatively transient.

[16]

Professor Hibbert

Professor Hibbert was provided with further results of post-race samples following the making of NSWLR 188A(2). By the time of his report of 15 August 2014 he had available to him almost ten times as many samples (796 instead of 80) as he had for his population study that had formed the basis of his November 2013 report. He found that, whereas previously there had been no samples with cobalt concentrations between 50 and 97 µg/L, subsequent samples recorded results in that range. The Weibull distribution was no longer as good a fit as it had been with respect to the initial 80 samples. When Professor Hibbert analysed these further results he initially considered, as is recorded in his report dated 2 September 2014: "Without knowledge of the administration regimes of individual horses it is not possible to identify a statistical population having been administered cobalt according to a particular practice. The choice of the 'normal' population is therefore somewhat arbitrary. If the upper bound of this population is less than 50 µg/L, the probability of finding values over 200 µg/L become even smaller, and if a greater value is chosen the probability increases."
However, on further reflection, Professor Hibbert ultimately considered that these subsequent results could best be explained by the making of the rule itself, which he inferred affected the conduct of those engaged in the harness racing industry. He suspected that those who had previously administered cobalt to their horses had modified their conduct after the making of the rule. For this reason he considered that the results from the population study conducted on the 80 post-race samples (taken before the rule was made) to be a better indication of the normal population than samples taken after the rule was made. The hypothesis that trainers had changed their conduct as a result of the rule was consistent with the decline in outliers in post-race results taken after 16 December 2013.
I accept Professor Hibbert's preference for the earlier results. On this basis, the prospect of a false positive was remote in the extreme.

[17]

Dr John Vine: chemist called by the defendants

Dr Vine is a chemist who presently works as a consultant and who, for twenty four years from 1988 to 2012, was Laboratory Director of Racing Analytical Services Limited, which provides drug testing to the racing industry of Victoria.
I accept Dr Vine's opinion that urinary threshold concentrations for prohibited substances are generally established on the basis of population studies (as occurred in the present case when the 80 post-race samples were tested or analysed) and/ or administration studies (as occurred in the present case after the making of the local rule). Dr Vine's opinion was that the threshold of 200 µg/L was such that "the probability of a false positive has been calculated as a number so large that the probability can be effectively discounted".
I accept Dr Vine's refutation of the proposition for which the plaintiffs contended: that urine testing is not a reliable indicator because the results depended on the degree of hydration of the horse. Dr Vine explained that, although there was no control of hydration in the urine samples that comprised the population study, the samples would have exhibited a range of degrees of hydration. He concluded that the variance caused by differing degrees of hydration was, accordingly, built into the variance of the population data and captured by the statistical analysis upon which the threshold was calculated.
I also accept Dr Vine's opinion that the performance of the further studies recommended by Professor Hibbert at the conclusion of his November 2013 report would be likely to lead to a reduction of the threshold of 200 µg/L. He described the utility of an administration study in his oral evidence and said that it would not show the normal range (which is shown in the population study) but it would show what the range might be in animals that have been treated (by deliberate administration of the relevant substance).
Dr Vine was asked about the minimum number of horses that could be used in an administration study. He said that 40 or 50 would be good but that since horses are difficult experimentally and very expensive to keep, it was necessary to make compromises and that a useful administration study could be done on a lesser number.

[18]

Dr Herbert: veterinarian called by the plaintiffs

Dr Herbert conducted an experiment on the instructions of the plaintiffs' solicitors pursuant to which three supplements that contained inorganic cobalt were simultaneously administered to three horses over a period by injecting the substances into their jugular veins. Dr Herbert followed the schedule provided by the plaintiffs' solicitors. The horses were not allowed to drink for a period from 8 pm to 8 am. Their urine was tested at intervals.
There were, in my view, many features of the experiment Dr Herbert conducted which made its results insufficient to establish the proposition for which it was tendered, namely that normal or innocent use of commonly available feed supplements could increase the cobalt concentration of the urine of a horse beyond the threshold of 200 µg/L.
Dr Herbert had not obtained the requisite licence under s 16 of the Animal Welfare Act 1985 (SA) to conduct her experiment. Accordingly, it had not been subject to any regulatory or peer review. Furthermore, the fact that Dr Herbert was unaware of the applicable statutory requirements does not engender confidence either in the validity of her experiment or the appropriateness of her methodology. Dr Herbert herself regarded the experiment as being unreliable because it only involved three horses. Her reservations were consistent with the condition imposed on the approval granted to Dr Wainscott to conduct the administration trial that the number of animals used must be at least five to obtain a significant result.
She used three substances that were similarly constituted, which had the effect of increasing the concentration of cobalt in the urine of the horses. She subjected the horses to dehydration for a period of 12 hours which, even if not harmful to the animals, tended to inflate the results.
I am not satisfied that Dr Herbert's experiment was conducted in circumstances that could reasonably be regarded as replicating normal use. It is of significance that the plaintiffs neither gave evidence as to their normal use of supplements that contained cobalt; nor did they adduce evidence as to such normal use by other trainers or owners. In my view, Dr Herbert's experiment was, in effect, an administration study. However, it lacked appropriate safeguards, scientific features and regulatory authorisation. Nonetheless, it tended to show (as did Dr Wainscott's) that the concentration of cobalt in the urine of a horse rises with repeated administration and that one can, with repeated administration, achieve a result higher than the threshold imposed by the local rule (although not of the order of the concentrations detected in the plaintiffs' own horses post-race).

[21]

The legislation: the Harness Racing Act 2009 (NSW)

The Act is, according to its long title, an Act to make provision with respect to the control and regulation of harness racing. The Act, by s 4, constituted HRNSW as a body corporate to consist of five members (s 6) appointed by the Minister. By s 9 of the Act its functions include to control, supervise and regulate harness racing (s 9(2)(a)), to register harness racing clubs, horses, owners, trainers and drivers (s 9(2)(b)) and to initiate, develop and implement policies considered conducive to the promotion, strategic development and welfare of the harness racing industry (s 9(2)(c)).
HRNSW has, by s 10(1), power to do all things that may be necessary or convenient to be done for and in connection with the exercise of its functions. It also has specific powers (which are expressed not to limit s 10(1)) which include the following: . . . (b) supervise the activities of harness racing clubs, persons registered by HRNSW and all other persons engaged in or associated with harness racing, (c) inquire into and deal with any matter relating to harness racing and to refer any such matter to stewards or others for investigation and report and, without limiting the generality of this power, to inquire at any time into the running of any harness racing horse on any course or courses, whether or not a report concerning the matter has been made or decision arrived at by any stewards, . . . (h) prohibit a person from attending or taking part in a harness racing meeting, (i) impose a penalty on a person registered by it or on an owner of a harness racing horse for a contravention of the rules, . . .
By s 11(1) HRNSW is to exercise its registration functions so as to ensure that persons registered are fit and proper to be so registered (having regard in particular to the need to protect the public interest as it relates to the harness racing industry).
The Act, in Part 5, provides for HRICG and obliges HRNSW to consult with HRICG formally on a regular basis with respect to policies and its strategic plans (s 12).
HRNSW may register (and refuse to register) horses, owners, trainers, drivers or bookmakers but is not permitted to refuse to register horses or individuals "unless it is of the opinion that it would be in the best interests of the harness racing industry to do so": s 18.
Section 21 confers on HRNSW the power to cancel the registration of, or disqualify, permanently or temporarily, any owner, trainer, driver or bookmaker or prohibit any such person from participating in harness racing in any specified capacity. However, it may only take action under s 21 for disciplinary purposes or for the purposes of work health and safety: s 21 (3).
HRNSW also has power to make rules not inconsistent with the Act or the regulations for or with respect to the control and regulation of harness racing: s 22(1). The topics listed in s 22(2) (which are expressed not to limit the generality of s 22(1)) include the appointment of stewards by HRNSW and the conferring of HRNSW's functions on them. By s 23(2) a rule may incorporate any publication in force. It is common ground that the Harness Racing Rules (the Rules), which were made by Harness Racing Australia Inc (a body corporate incorporated in the Australian Capital Territory), have been adopted by HRNSW and apply in New South Wales. There are also Local Rules made by HRNSW, NSWLR, which are referred to in more detail below.
By s 28 HRNSW has the power to set minimum standards "in connection with the conduct by harness racing clubs of harness races and harness racing meetings, including minimum standards with respect to" various enumerated matters. The list concludes with (h): "such other matters relating to the conduct of harness races and harness racing meetings as may be prescribed by the regulations". HRNSW is obliged, before setting such minimum standards, to consult with harness racing clubs and must give a club a reasonable opportunity to be heard and make submissions.
Section 40 requires HRNSW to keep records for the purposes of the Act relating to its functions.
By s 42 HRNSW may delegate its functions but not a function relating to the registration of a harness racing club or the suspension or cancellation of such registration.
Section 47 provides that proceedings for an offence under the Act or the regulations are to be dealt with summarily. Accordingly, the Act contemplates that the regulations may create offences.
Section 48 provides for a regulation making power and also that regulations will prevail over rules to the extent of any inconsistency. Although the plaintiffs alleged in the amended points of claim that HRNSW was not permitted to make rules that could be the subject of regulations, I understood this allegation not to have been pressed.

[22]

The Rules

By NSWLR 1, the Australian Harness Racing Rules (AHRR, or the Rules), are incorporated into the NSWLR and apply to harness racing in NSW. HRNSW is the relevant "Controlling Body": the Dictionary, AHRR.
Rule 14 provides for the appointment of "Stewards" and a Chief Steward, who is to be the "Chairman". At any race meeting where there is more than one steward present, one shall be the "Chief Steward". At any meeting attended by more than one steward, the Chief Steward has the casting vote. Rule 15 provides for the powers of stewards. Rule 15(1)(e) provides that Stewards are empowered to suspend or disqualify any person from participating in or being employed or engaged in or about the harness racing industry.
Rule 90 provides that HRNSW may by licence regulate any activity connected with the harness racing industry and may refuse an application for a licence without assigning a reason. Rule 90(6) provides that a licence may be cancelled or suspended for breach of a term or condition of the licence or where HRNSW is satisfied that the licensee is not a fit and proper person. Rule 91 prohibits the carrying out of an activity regulated by a licence if a person is not the current holder of a licence or the licence is suspended. Rule 90A provides for the various types of licences: drivers, trainers and stablehands.
Rule 181 empowers the stewards, when directed by HRNSW, to conduct an inquiry "in such manner as they think fit" into "anything concerning the . . . enforcement of these rules". Rule 182 provides for legal or other representation if the stewards allow. It also provides that written and oral evidence, including expert evidence, may be given.
Rule 183 provides that the Stewards may suspend a licence pending the outcome of an inquiry, investigation or objection or where a person has been charged with an offence.
Rule 183A provides that on receipt of a certificate relevantly from an approved laboratory, which is prima facie evidence of the presence of a prohibited substance, the stewards may determine that the horse not compete until the outcome of an inquiry or investigation.
Rule 184 provides for a rehearing by the stewards on the application by anyone adversely affected by a decision of the stewards. However, the stewards have no power to conduct a rehearing once an appeal to an Appeal Tribunal or a proceeding in a court is initiated: Rule 186.
Part 12 of the Rules deals with prohibited substances. Rule 188 provides that HRNSW may determine a substance to be a prohibited substance. Rule 188A(1) describes prohibited substances as substances having, or capable of having, a particular effect on various bodily systems. Rule 188A(2) provides that certain listed substances "when present at or below the levels set out are excepted from the provisions of sub rule 1 and Rule 190AA".
Because of the nature and extent of the plaintiffs' challenges it is necessary to set out rule 188 and 188A in some detail. Determination of prohibited substance 188. (1) The Controlling body may determine - (a) anything to be a substance; (b) a substance to be a prohibited substance; (c) a substance which in the opinion of the Controlling Body has or may have a certain effect to be a prohibited substance; (d) a substance coming within a nominated category or class to be a prohibited substance; (e) substance when in or on a horse to be a prohibited substance; (f) a substance when in or on a horse at or above a nominated level to be a prohibited substance. (g) A substances when in or on a horse for a nominated time to be a prohibited substance (2) When making a determination under sub rule (1) the Controlling body may act under any paragraph or any combination of paragraphs in that sub rule. 188A. (1) The following are prohibited substances: (a) Substances capable at any time of causing either directly or indirectly an action or effect, or both an action and effect, within one or more of the following mammalian body systems:- the nervous system the cardiovascular system [the list continues in a similar vein] … (b) Substances falling within but not limited to the following categories:- acidifying agents adrenergic blocking agents adrenergic stimulants agents affecting calcium and bone metabolism alcohols alkalinising agents anabolic agents [the list continues in a similar vein] …. (c) Metabolites, artifacts and isomers of the prohibited substances prescribed by sub rules (1) (a) and (1)(b). (2) The following substances when present at or below the levels set out are excepted from the provisions of sub rule 1 and Rule 190AA: (a) Alkalinising Agents, when evidenced by total carbon dioxide (TCO2) present at a concentration of 36.0 millimoles per litre in plasma. [the list continues in a similar vein] … (g) Testosterone (including both free testosterone and testosterone liberated from its conjugates) (i) in geldings: at a concentration of 20 micrograms per litre in urine, (ii) in fillies and mares: at a concentration of 20 micrograms per litre in urine, (iii) In fillies and mares that have been notified as pregnant so as to comply with rule 103B at any concentration … (3) The following are not prohibited substances: - antiparasitics approved and registered for use in horses - ranitidine - omeprazole - ambroxol - bromhexine - dembrexine - registered vaccines against infectious agents - orally administered glucosamine - orally administered chondroitin sulphate - altenogest when administered to fillies and mares
An amendment was made to the NSWLR which was said to be effective on 16 December 2013. The version of the amendment appears on the website of HRNSW as follows: "NSWLR 188A(2) In addition to AHRR 188A(2) the following substance when present at or above the levels set is deemed a prohibited substance under AHRR 188A(1)(a) & or (b) & or (c): (a) Cobalt at a level of 200 micrograms per litre in urine. (b) As at the date on which NSWLR 188A(2) takes effect, all urine samples taken from a horse prior to that date which have not been adjudicated upon by the Controlling Body (HRNSW) shall be dealt with subject to this Rule."
Rule 190 requires a horse to be presented for a race free of prohibited substances and, if not, the trainer of a horse (and if the horse is left in charge of another person, that person) is guilty of an offence. Rule 190(4) provides that an offence is relevantly committed "regardless of the circumstances in which the prohibited substance came to be present in or on the horse".
Rule 191 provides that a certificate from a laboratory approved by HRNSW is prima facie evidence of the matters certified and that if another approved laboratory also certifies the presence of a prohibited substance in the sample tested by the first, the two certificates are conclusive evidence of the prohibited substance. Rule 193 prohibits the administration of medication to a horse on race day.
Part 15 of the Rules provides for penalties, including a fine, a suspension and a disqualification that may be imposed on persons found guilty of an offence under the Rules (rule 256). Rule 256(7) provides for a hearing throughout which the Stewards who make the decision are required to be present and in which an accused person is afforded a reasonable opportunity to cross-examine, adduce evidence and make submissions.
Rule 313 provides that the singular includes the plural except "where it is obvious from the context that either the singular form or the plural form solely applies".

[25]

Whether NSWLR 188A(2) was made

The first issue is whether NSWLR 188A(2), being a rule relied upon by HRNSW to suspend the plaintiffs, was actually made and in what terms.
The plaintiffs submitted that the only rule that was actually made by HRNSW was the rule, a draft of which was contained in the board report of December 2013, which made cobalt chloride a prohibited substance. They submitted that what occurred at the January 2014 meeting was simply an attempt by the board to reconstruct what had happened at the December 2013 meeting and that what was required, in order to make cobalt a prohibited substance at or above the specified concentration was to repeal the rule made in December (which prohibited cobalt chloride) and make a new rule which prohibited cobalt.
The plaintiffs also contended that I should draw the Jones v Dunkel (1959) 101 CLR 298 inference against the defendants that the evidence of any of the other board members would not have assisted their case. I am satisfied for the reasons given that the board intended to prohibit cobalt and that the members of the board unanimously signified their intention to accept Mr Sanders' oral recommendation that it be prohibited at or above concentrations of 200 µg/L. The Jones v Dunkel inference does not authorise the drawing of an inference opposite to the evidence given by the witnesses who were actually called.
It follows from the factual findings I have made above that I am satisfied that the rule that was made by the board on 16 December 2013 was a rule which made cobalt at or above the specified concentration a prohibited substance. I reject the submission that all that the board did was adopt the recommendation that was to be found in terms in Mr Sanders' board report.
My conclusion is not affected by Mr Sanders' replication of the error in the press release issued on 16 December 2013 or Mr Nati's replication of the error in the draft board minutes he prepared in preparation for the January 2014 meeting. Each has explained his error on the basis of unthinking copy typing, which, though regrettable, is understandable. Mr Sanders was under a degree of personal pressure and was leaving the office in Sydney for Brisbane to attend to his mother. Mr Nati was unaccustomed to bearing the responsibility of preparing board minutes and may have had greater recourse to the board report than Ms Waller, who took shorthand, would have done had she not been on leave. Neither Mr Nati nor Mr Sanders was under any misapprehension as to the identity of the substance to be prohibited, nor of the content of the discussion in the course of the board meeting, which was directed to the prohibition of cobalt at or above the specified concentration.
It is also of significance that Mr Sanders identified the error two days later, on 18 December 2013, corrected it in the copy for the Gazette, raised it with Mr Nati in early January 2014 and ensured that the correct rule went up on HRNSW's website. These matters occurred well before the January board meeting, at which point the board was asked to confirm the draft minutes with the correction. They also occurred well before the samples were taken from the plaintiffs' winning horses.
Section 45 of the Act applies in terms to the board minutes of the January 2014 and February 2014 board meetings. The incorrect draft prepared by Mr Nati of the December 2013 meeting could not attract the benefit of the provisions of s 45 since it had not been confirmed by the board at its subsequent meeting.

[26]

Whether the challenged rules (90, 91, 188, 188A and 190 and NSWLR 188A(2)) are invalid

The plaintiffs contended that the power to control did not include a power to prohibit. They argued that the imposition of a general prohibition on harness racing in New South Wales without a licence was ultra vires and that accordingly rule 183, which provided for interim suspension pending an inquiry, was invalid. They submitted that there was a common law right to engage in harness racing and that the Act ought be construed against that background. They argued that if there were a power to prohibit without licence it would have to be found in the Act itself. They relied on Williams v City of Melbourne (1933) 49 CLR 142 (Williams) at 155.
I reject this submission. Dixon J, in the passage from Williams relied on by the plaintiffs, after referring to authorities to the effect that the power to regulate a subject matter does not authorise the donee of the power to prohibit the subject matter, continued at 155-156: But this doctrine [that regulation does not permit prohibition] does not altogether exclude the prohibition of particular acts or things which may be contained within the subject matter. The nature, operation, and apparent purpose of the restraints imposed must be considered and, if they fairly answer the description of a regulation of the subject matter, the power will sustain them.
Williams concerned traffic or, as Dixon J put it at 155, "the movement of men and things through the streets". Prohibition of traffic would be inimical to its control. The present is a wholly different case. The use of licensing to control and regulate an industry such as harness racing appears to be well within power. Indeed the Act, by s 9(2)(b), expressly contemplates registration of clubs, horses, owners, trainers and drivers. The use of licences or a register is an orthodox means of regulating occupations that, by reason of a relevant public interest, are thought to require external control. Regulation of the legal profession, the medical profession and company directors provide examples. Indeed, although the regulation of traffic does not include its prohibition, the regulation of public roads does include a prohibition on unlicensed drivers being in charge of motor vehicles on them. The test posed by Dixon J in the passage set out above shows that the question is one of substance, not form. I regard the prohibition on unlicensed persons engaging in harness racing as being fairly within the subject matter of regulation or control of harness racing.
If there is, indeed, a common law right to engage in harness racing (a proposition that may be doubted, except if it means no more than that which is not prohibited is permitted), it has in my view been regulated validly by the Act and rules such that only those who are licensed may engage in it. I reject the plaintiffs' submission that such regulation amounts to an unreasonable restraint of trade or that, even if it were, this would affect the validity of the rules.
The plaintiffs contended further that the power to make rules did not include the power to make a rule "for or with respect to" minimum standards in connection with the conduct by harness racing clubs of harness races and harness race meetings. They submitted that the effect of s 28(3) of the Act is to impose a requirement that HRNSW consult with harness racing clubs before minimum standards are imposed. In my view, the rules sought to be challenged do not fall within the ambit of the operation of s 28 since they do not impose "minimum standards in connection with the conduct by harness racing clubs of harness races and harness racing meetings". Although the words "in connection with" are words of significant breadth, the minimum standards must relate in some way to the conduct by clubs of races and racing meetings.
I do not consider the requirement in rule 190 that a trainer present a horse for a race free of prohibited substances can properly be regarded as a "minimum standard". Rather, it is an absolute rule that must be complied with. But even if it were a minimum standard, it does not relate to the conduct by clubs of races, but rather to the conduct of trainers when presenting a horse to race. The list of matters in s 28(1)(a)-(g) with respect to which minimum standards may be set concerns static race facilities, fees and prize money. These are matters that are peculiarly within the control of harness racing clubs. Accordingly s 28(1)( h) ought, consistent with the principle of ejusdem generis, be read as referring to the conduct of harness races and harness racing meetings by harness racing clubs since this is the common element of the matters specifically referred to in the list at s 28(1)(a)-(g).
Accordingly I reject the challenge to these rules on that basis.

[27]

Whether rule 188A is valid or whether it is too wide and uncertain

The plaintiffs submitted that rule 188A was ultra vires the Act because it was unreasonable and not reasonably proportional to the rule-making power conferred on HRNSW for the fulfilment of its functions. The plaintiffs put this submission on several bases, each of which will be addressed in turn.
The plaintiffs contended that each of water, oats, lucerne hay, carrots and iron supplements were capable of falling within rule 188A(1)(a) because it is common ground that each is capable of affecting one or more of the mammalian systems of a horse. They submitted that the rule, accordingly, was so broad that it could not properly be characterised as a rule made by HRNSW in the exercise of its functions since it, in substance, covered substances to which no reasonable objection could possibly be made (such as water, oats and the like), and effectively reserved to itself the discretion to determine which substances would be the subject of testing and investigation.
The plaintiffs submitted: "AHRR Rules 188, 188A, 190 and 193 and NSWLR 188A(2) purport to erect a powerful regime of 'prohibited substances'. A problem with these rules is that they go too far. They go so far as to prohibit practically everything, leaving it to officials to decide idiosyncratically what they will or will not permit. That is not valid. It is not reasonable regulation."
The plaintiffs relied on House v Forestry Tasmania (1995) 5 Tas R 169 in which the Tasmanian Full Court held invalid delegated legislation that required an occupier of a work place to cause all parts of the work place and all equipment to be maintained in such a condition as "does not constitute a risk" to the safety of workers. The Full Court held that, as the words of the regulation were absolute, it was not open to the court to add a moderating word such as "reasonable" before the word "risk". Unmodified, the regulation was impossible to comply with, the removal of all risk being practically impossible. The plaintiffs in the present case submitted that rule 188A(1)(a) was in the same category in that it could not be complied with as common substances fed to horses and even water would infringe the rule.
The defendants contended that, although it was possible to construe rule 188A(1)(a) in the way for which the plaintiffs contended, such a construction would be at odds with the evident purpose of the rule, which was to preserve a so-called "level-playing field" in the harness racing industry. The defendants relied on rule 191, which expressly provides that a certificate from an approved laboratory is prima facie evidence of the presence of a prohibited substance and that a certificate from a second approved laboratory is conclusive evidence of such presence. They submitted that it would be appropriate, having regard to its purpose, to read rule 188A(1)(a) as including the words "other than naturally occurring substances" after the word "substances" where it appears at the beginning of the rule.
However, the defendants contended that it was not necessary for me to address rule 188A(1)(a) or determine its validity since the only relevant was NSWLR 188A(2), alleged breach of which resulted in the interim suspension of the plaintiffs. They contended that it was, accordingly, not necessary to consider rule 188A(1)(a) or, for that matter, (b) or (c), except as background to NSWLR 188A(2).
I accept the defendants' submissions. The word "deemed" in the phrase "deemed a prohibited substance" in NSWLR 188A(2) makes cobalt at or above the prescribed concentration a prohibited substance. The expression "deemed" can refer either to a statutory fiction or to the removal of a doubt which might otherwise exist: Macquarie Bank Limited v Fociri (1992) 27 NSWLR 203 per Gleeson CJ at 207. In my view, NSWLR 188A(2) is in the latter category. There is good scientific evidence to the effect that inorganic cobalt at or above the prescribed concentration has an effect on the respiratory system of a horse (within rule 188A(1)(a)) and is a respiratory stimulant (within rule 188A(1)(b)). The effect of NSWLR 188A(2) is to put beyond doubt that cobalt at or above the specified concentration is a prohibited substance.
Accordingly, it is not necessary to address the attacks made by the plaintiffs on the breadth of rule 188A(1)(a) as it would apply without the deeming provision of NSWLR 188A(2) since the question does not arise for determination in the present case. Nor is it necessary to address the validity of NSWLR 188A(2)(b), which purports to give retrospective operation to the rule since the relevant post-race samples were taken after the rule was made.
Further, although the substances otherwise listed in Rule 188A(2) are said to be "exempted" below a certain concentration and NSWLR 188A(2) is framed in terms of a lower threshold, at or above which cobalt is prohibited, I do not consider that anything turns on that since the intent of the local rule is, in my view, clear, as is its expression.
In summary, what HRNSW intended to do, and what it did in fact do, when it made NSWLR 188A(2), was: 1. to deem cobalt at or above a concentration of 200 µg/L a prohibited substance; 2. to provide that cobalt is not a prohibited substance below that concentration; and 3. to make the inquiry whether cobalt, either at that concentration or at all, falls within rule 188A(1)(a), (b) or (c) irrelevant.

[28]

Proportionality of NSWLR 188A(2)

The plaintiffs' challenge to the rules on the basis of irrationality and lack of proportionality was based, in part, on the alleged capricious and arbitrary nature of rule 188A. To the extent to which this submission applies to rule 188A(1) rather than NSWLR 188A(2), it has been addressed above.
The plaintiffs submitted further that what the defendants had done, by setting the concentration at the level of 200 µg/L or above, was a "stab in the dark" and that the making of the rule was precipitate, ill-advised and premature. They also argued that the rule was uncertain. They relied on Minister for Primary Industries and Energy v Austral Fisheries Pty Ltd (1993) 40 FCR 381 (Austral Fisheries) in which delegated legislation was found to be invalid on the ground of irrationality.
In Austral Fisheries the validity of a management plan which had been made under the Fisheries Act 1952 (Cth) to control fishing in designated waters was challenged. Austral Fisheries established, by expert evidence, that the method adopted to allocate catch under the plan contained a statistical fallacy and produced an irrational result. The test, sometimes referred to as the irrationality test, is whether there is a real connection between the delegated legislation and the purpose for which the Parliament conferred the authority to make the law under challenge: Austral Fisheries, per Lockhart J at 382-384; Bienke v Minister for Primary Industries and Energy (1994) 125 ALR 151 at 163 per Gummow J; (1996) 63 FCR 567 at 569 per Black, Davies and Sackville JJ. This is to be compared with the test of so-called Wednesbury unreasonableness (Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223) which applies to administrative decisions made under an enactment.
Delegated legislation made pursuant to a purposive power is also to be measured against the proportionality test: whether the regulation goes beyond any restraint that could reasonably be adopted for the prescribed purpose: South Australia v Tanner (1989) 166 CLR 161 at 165; AG (SA) v Adelaide City Corporation [2013] HCA 3; 249 CLR 1 at [59] per French CJ.
I am satisfied of the requisite connection between the functions of HRNSW and NSWLR 188A(2). HRNSW determined what it would do in response to the threat posed to the industry by the use of cobalt salts on horses engaged in harness racing in a thorough and responsible manner. That HRNSW did not choose to consult the local harness racing industry as to the content and ambit of the proposed rule is not a matter that affects its validity.
For the reasons given above I do not accept that the results of the experiment conducted by Dr Herbert are a reliable indication of the risk of a false positive. However, even if Dr Herbert's opinion were accepted, more would be required to impugn the rule. In Austral Fisheries there was no evidence to the contrary of the expert evidence of Dr Nicholls that identified the statistical flaw. In the present case I am satisfied by the evidence of Professor Hibbert, Dr Vine and Dr Wainscott, which I accept for the reasons given above, that NSWLR 188A(2) did not go beyond what could reasonably be adopted by HRNSW to regulate harness racing in New South Wales by preventing the use of inorganic cobalt at or above the prescribed concentration as a performance-enhancing substance on horses engaged in harness racing.
The plaintiffs raised the further ground that HRNSW acted irrationally: first, by failing to turn its mind to whether participants in the industry had the means of determining whether they were complying with the new rule; and secondly, by publishing a rule in circumstances where participants had no means of knowing whether they were compliant with the rule or in breach of it.
This is not a ground of invalidity. Even if HRNSW was obliged to turn its mind to means of compliance before making delegated legislation by making NSWLR 188A(2), the evidence established that it did so. HRNSW extensively investigated the risk of a false positive if the level was set at 200 µg/L and deliberately set the initial level at a relatively high figure pending further investigations which, as Dr Vine explained, might have the effect of providing a basis for lowering it in the future. The general unavailability of means of testing for cobalt (other than by approved laboratories) may have the effect of depriving putative contravenors of the opportunity of administering the maximum level of inorganic cobalt under the threshold to their horses. However, it is not a ground of invalidity that putative contravenors do not have the means of measuring the precise extent to which they can administer inorganic cobalt without contravening the relevant prohibition.
HRNSW was entitled to make a judgment as to when it was in a position to set a threshold for cobalt in urine. The plaintiffs have not established that it did so at a time before its knowledge was sufficient to do so within the bounds of its power to declare a substance to be prohibited. The plaintiffs have neither established irrationality nor lack of proportionality such as would impugn the rule.

[31]

Whether the interim suspension of the plaintiffs' licences was ultra vires

Whether or not a decision maker correctly appreciated the source of power is not determinative of the validity of the exercise of the power provided the conditions for the exercise of the power were met: Australian Education Union v Department of Education and Children's Services [2012] HCA 3; 248 CLR 1 at [34], referring to Heydon J in Eastman v Director of Public Prosecutions (ACT) [2003] HCA 28; 214 CLR 318 at [124].
Accordingly, although Mr Sanders informed the plaintiffs in his letters of 30 April 2014 that his decision to suspend their licences had been taken pursuant to Rule 183(a), (b), (c) and (d), he can justify the suspensions by reference to any power available to him at the time.
HRNSW contended that the powers conferred on it either by s 10 or s 21 of the Act were sufficient to justify both the making of rule 183 under s 22 of the Act and the suspensions.
The plaintiffs contended that HRNSW's power to take action under s 21 could only be exercised "for disciplinary purposes or for the purposes of work health and safety". They contended that interim suspension pending a charge being laid for an offence was anterior to disciplinary action and therefore could not amount to a disciplinary purpose. They also submitted that the words "work health and safety" were irrelevant since, even if "safety" included the safety of a horse, interim suspension of a trainer and driver was not sufficiently connected with that purpose. They contended further that the powers conferred on HRNSW by s 10 of the Act ought not be permitted to swamp the requirements of s 21 since, were they to be construed widely, the words of constraint in s 21 would have no real operation.
In support of these submissions the plaintiffs relied on the well-known principle of construction enunciated in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 (Anthony Hordern) at 7 per Gavan Duffy CJ and Dixon J that where Parliament gives a power by a provision that specifies the mode of its exercise, general expressions elsewhere in the Act ought not be used to justify the exercise of the power other than in accordance with the specific provision. This principle of construction was considered in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; 228 CLR 566 (MIMA v Nystrom). Justices Gummow and Hayne said at [59]: "However, what the cases reveal is that it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power. In all the cases considered above, the ambit of the restricted power was ostensibly wholly within the ambit of a power which itself was not expressly subject to restrictions."
The plaintiffs submitted further that the rules could not provide for what the Act could (or had) not, and, accordingly, rule 183 was invalid and outside the rule-making power in s 22.
Accordingly, the question that arises is whether the broad powers conferred by s 10 ought be constrained by reference to the ambit of s 21, or whether the power conferred by s 21 applies only to a particular category of case but does not confine the power to suspend which might otherwise be conferred by s 10 if it were to be read on its own terms and without reference to s 21. This question need not be determined if the suspension could otherwise be justified by s 21, being the narrower provision.
In my view, s 21(1)(g) supports the making of rule 183 and, accordingly, the suspension. The words "suspend, for such term as HRNSW thinks fit" are sufficiently broad to encompass an interim suspension pending the determination of the inquiry. A term may be defined by reference either to a date or an event, as long as, in the latter case, the term is either certain or capable of being rendered certain by subsequent events.
In my view, the suspension was an action that could reasonably be characterised as being either for disciplinary purposes or for the purposes of work health and safety. In considering whether a measure, such as the making of rule 183 or the suspension of the plaintiffs, is valid by reference to the purposes in s 21(3), the Court is inevitably required to look at the purpose of the measure and determine whether it is satisfied that there is a real connection between the measure and the identified purpose: see Dawson v The Commonwealth (1946) 73 CLR 157 at 173 per Latham CJ, in the context of whether a law could be characterised as with respect to defence, being a purposive power.
The words "disciplinary purposes" ought not, in my view, be limited to the period following the laying of charges. They are apt to include an inquiry, or investigation, which may be anterior to the laying of charges. The event that triggered the interim suspension was the detection of a prohibited substance in post-race horse urine. The rules make the presentation of a horse for racing in that condition an offence. Although no charges had been laid, the plaintiffs' conduct was the relevant subject of the inquiry. Action taken by a body such as HRNSW to suspend a participant in advance of such an inquiry can, in my view, properly be characterised as being for a disciplinary purpose. The words "disciplinary purpose" connote a wider concept than, for example, disciplinary charge or disciplinary proceedings (which are regarded as sui generis in that they are concerned with protection of the public: Wentworth v NSW Bar Association (1992) 176 CLR 239 at 250-251). The interim suspension of a participant before inquiry or charge tends to protect the public interest. It ensures that the industry, which HRNSW is responsible for protecting in the public interest, is not affected by possible interference from someone in respect of whom there is prima facie evidence of contravention. It prevents a person from participating in the industry until the inquiry has determined guilt one way or another (assuming a charge is laid) and also determined the appropriate penalty.
The position is, in my view, a fortiori, in circumstances where, having regard to the nature of the offence (one of absolute liability), the plaintiffs' conduct as revealed by an inquiry could not relevantly exculpate them, but could only mitigate the penalty imposed if they were to be charged and found guilty. The reasons for my conclusion that the offence is one of absolute liability appear below in the context of the allegation of denial of procedural fairness.
It does not follow from the fact that an interim suspension has, as far as the plaintiffs are concerned, a punitive effect, that its purpose is not relevantly for the protection of the public and therefore for a disciplinary purpose, since the two are not mutually exclusive: Rich v ASIC [2004] HCA 42; 220 CLR 129 at [35].
I also consider an interim suspension such as occurred in the present case to be for the purposes of work health and safety. The evidence established that excessive amounts of inorganic cobalt (such as would be involved above the threshold concentration) is adverse to the health of the horse to which such amounts have been administered. The health and safety of such animals is compromised by such administration. The short-term effect of such a substance is to enhance the horse's performance in a race to the detriment of its long term health and longevity. The interim suspension of a trainer who has presented a horse for a race where there is prima facie evidence of a prohibited substance can properly be seen, in my view, as falling within that purpose.
The Act, by s 22(2)(j) authorises HRNSW to make rules that confer its functions, including under s 21(1)(g) on a steward or stewards. In my view, this is the effect of rule 183.
The plaintiffs submitted that the power to suspend is confined by both s 11 (which imports a fit and proper person test to registration) and s 18(2) of the Act which provides that HRNSW must not refuse to register, relevantly, a trainer or driver, "unless it is of the opinion that it would be in the best interests of the harness racing industry to do so". They contended that suspension is, effectively, a refusal to register, and rule 183 is invalid because it does not import any requirement that suspension can only occur if HRNSW (or the stewards) are "of the opinion that it would be in the best interests of the harness racing industry to do so". Nor does it require any change in the assessment of the licensee from that of a fit and proper person.
Because of the view to which I have come about the width of s 21 of the Act I do not consider that either s 11 or s 18(2) ought be given precedence over s 21. The power to suspend under s 21 is not limited by the requirement that HRNSW is of opinion that it is in the best interest of the harness racing industry to do so. Nor does it affect the requirement that a person who is registered it to be fit and proper. There is no reason, in my view, for reading the words of s 11 or s 18(2) as a qualification to the operation of s 21 or to any rules made under s 22(2)(j) that confer on stewards the functions of HRNSW under Division 1 (which includes s 21).
I add for completeness that, if a narrower view is taken of the words "for disciplinary purposes or for the purposes of work health and safety", then it does not assist the plaintiffs since, in that event, the Anthony Hordern principle would not apply the exercise of power would be supported by s 10, which is a very broad source of power.

[32]

Whether Mr Sanders, acting alone, had power to suspend the plaintiffs

The plaintiffs contended that the decision to suspend them on an interim basis was made by a single steward, Mr Sanders, and that the rules, by necessary implication, contemplated that the decision must be one taken by all the stewards collectively. They relied on the reference to "stewards" in the rules and in particular the reference in rule 14(6) to the Chief Steward having the casting as well as a deliberative vote in support of the proposition that a single steward cannot act alone.
The plaintiffs submitted that it was not necessary to decide whether the power had to be exercised by all the stewards unanimously or whether a simple majority was sufficient since the evidence established that Mr Sanders acted alone.
The defendants relied on rule 313 in support of their contention that the plural includes the singular and vice versa and submitted that it was not obvious that an individual steward could not exercise the power to suspend.
I accept the defendants' submissions. I do not consider it to be "obvious" that only the stewards collectively could suspend a licence. Indeed, that no provision is made for whether a decision of the stewards collectively ought be unanimous, or by simple majority, or some other proportion, is strongly suggestive that such collective decision-making was not contemplated. Furthermore I infer from the number of races that there is a great number of stewards in New South Wales. Without express words, it could hardly be contemplated that it would be necessary to convene a meeting or other collegiate gathering of such stewards to make a decision to suspend which would, in any event, be subject not only to an inquiry but also to a full review on the merits before the Tribunal if the aggrieved licensee chose to avail him or herself of the right to an appeal.
Nor would any other subset of stewards (rather than all of them) make sense in the context of a prohibited substance detected in a urine sample collected post-race from the winner. There is, for example, no reason in the text of the rules for reassembling the stewards who were in attendance at the relevant race for the purposes of deciding whether to suspend the trainer who presented the horse for the race.
In my view, Mr Sanders, as a single steward, had the power to suspend the plaintiffs, as he purported to do under rule 183.

[34]

Whether an offence under rule 190 is an offence of absolute liability

It was common ground that the character of the putative offence of presenting a horse to race otherwise than free of prohibited substances is relevant to the question whether procedural fairness required a hearing before interim suspension. I am bound to follow Harper, which characterised such an offence in Western Australia as one of absolute liability, unless I am satisfied that it is clearly wrong: Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; 230 CLR 89.
The relevant laws in Harper were as follows. The Criminal Code (WA) relevantly provided, subject to express or implicit exclusion, for the defence of honest and reasonable mistake of fact (s 24) in relation to any offence against the statute law of Western Australia (s 36). The Trotting Rules relevantly provided that a person with custody of a horse from which a sample revealed a prohibited substance "shall be deemed guilty of an offence" (rule 364). Rule 365B deems a horse, a sample from which contains a prohibited substance, to have had that substance administered to it. Rule 364A provided that a person referred to in rule 364 shall not be guilty if he satisfies the stewards that he took all reasonable and proper precautions to prevent the administration of a drug to the horse.
The stewards were not satisfied that Mr Harper had established the defence under rule 364A. They did not consider the defence of honest and reasonable mistake of fact. Mr Harper's appeal to the Tribunal on that ground was dismissed. The issue for the Full Court was whether the Tribunal erred in law in finding that the defence of honest and reasonable mistake of fact was not available.
The Full Court (Malcolm CJ, Kennedy, Franklyn, Anderson and Owen JJ) found that s 24 of the Criminal Code did not apply in terms and, in any event, had been excluded by necessary implication. They found, further, that the Trotting Rules were set up to maintain public confidence in an industry susceptible to cheating and that there was no ground for implying into the rules a necessity on the part of the stewards to negate a claim of honest and reasonable mistake of fact. In their joint judgment Anderson and Owen JJ (Kennedy and Franklyn JJ agreeing) said at 349: Counsel for the applicant made much of the fact that a literal construction of the Rules could conceivably result in a trainer guilty of no wrong conduct being disqualified. He tried to persuade the court that no such intention should be attributed to the committee of the Trotting Association which drew up the Rules. We do not see why. It may well be the case that those familiar with every aspect of the industry and with long experience in it have come to the conclusion that to ensure the integrity of racing and to maintain public confidence in its integrity, there is a need to impose very stringent controls and that those who wish to participate in racing for rich rewards will have to accept that the privilege of doing so may well be taken from them if for any reason, even without actual fault on their part, they present a doped horse for racing.
Far from being satisfied that Harper is clearly wrong, I respectfully acknowledge the correctness of the decision.
I do not consider there to be any basis for distinguishing the corresponding rules in the present case from those considered in Harper, notwithstanding their different wording. I accept the defendants' submissions that the underlying purpose of rule 190 would be frustrated if the defence of honest and reasonable mistake of fact were available or if it were incumbent on HRNSW, or the stewards, to prove how the prohibited substance came to be in the horse. Indeed, the wording of rule 190(4) is to the contrary. A purposive construction is to be preferred: rule 309. In all the circumstances, I consider the offence created by rule 190 to be one without a fault element and in respect of which no defence of reasonable mistake of fact is available. In other words, I consider it to be an offence of "absolute liability". Accordingly, fault and mistake, while relevant to penalty, are not relevant to guilt.

[35]

The requirements of procedural fairness

In order to determine whether procedural fairness required Mr Sanders to hear from the plaintiffs before suspending their licences it is necessary to determine the relevant point in the overall process at which the suspension occurred. The reason for this is that there are, in the present case, at least two distinct points at which a licence may be suspended, namely: 1. Pursuant to rule 183, pending the outcome of an inquiry by the stewards under rules 181 and 182. 2. Pursuant to rule 256, by way of penalty, following a finding that a person is guilty of an offence under the rules.
It is common ground that the plaintiffs are entitled to be heard before suspension of the second type occurs. The issue is whether they have a right to be heard before interim suspension of the first type occurs. One of the purposes of the second type of suspension is penal. The purpose of the first type of suspension is not, although its consequences, so far as the licensees whose licences are subject to interim suspension are concerned, may be similar or indistinguishable (except as to the time period of the suspension) as those occasioned by the second type.
Statements of general principle regarding the right to be heard, if applied without regard to the context in which they were made, could be taken to apply universally and, in particular, to require a steward to hear from a licensee before suspending his or her licence pending inquiry. The plaintiffs relied on the following statement in Jarratt v Commissioner of Police for New South Wales [2005] HCA 50; 224 CLR 44 (Jarratt) by Gleeson CJ at [26]: Where Parliament confers a statutory power to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, Parliament is taken to intend that the power be exercised fairly and in accordance with natural justice unless it makes the contrary intention plain. This principle of interpretation is an acknowledgment by the courts of Parliament's assumed respect for justice.
However, immediately before that statement of principle Gleeson CJ said: We are concerned with a statutory scheme for the management of the Police Service and for the employment of its members, likely to have been intended to embody modern conceptions of public accountability.
Jarratt concerned the removal of a Deputy Commissioner from the force. The question was whether he was entitled to be heard before a recommendation for his removal was made to the Governor, who was bound, as a matter of convention, to act on advice. The High Court decided that he was entitled to be heard before the recommendation was made and the fact that he was not given an opportunity to be heard invalidated the recommendation. Jarratt illustrates that the context is not only important but also determinative.
In Kioa v West (1985) 159 CLR 550 Mason J said at 585: In this respect the expression "procedural fairness" more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, that is, in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations (cf Salemi (No 2) (1977) 137 CLR at p 451, per Jacobs J).
Whether there has been a denial of procedural fairness is a matter of "practical injustice": Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6; 214 CLR 1 at [34] and [38] per Gleeson CJ; see also NBNB v Minister for Immigration and Border Protection [2014] FCAFC 39 at [4]-[5] per Allsop CJ and Katzmann J and the authorities referred to therein. Attention must also be paid to the question whether denial of procedural fairness could possibly have affected the outcome: Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141. The provision of natural justice, or procedural fairness, is neither a solemn farce nor a ritual that, whatever the circumstances, must be performed whenever a person's interests or rights are or might be adversely affected by a decision.
In the present case, there are relevant public and private interests. The private interests of the individual plaintiffs include the following: 1. to earn a living; 2. to race horses that they have trained for profit; and 3. to maintain their reputations in the industry.
The relevant public interests include: 1. making and keeping harness racing fair by ensuring that the performance of horses engaged in it is not affected by doping; 2. the encouragement of wagering on horses engaged in harness racing (being a matter that Parliament can be taken to regard as being in the public interest); 3. the protection of the reputation of the harness racing industry so that people who engage in it (in whatever capacity) believe, on reasonable grounds, that the industry is not contaminated by cheating.
The "flexible obligation" to which Mason J referred in Kioa v West requires consideration of the relevant circumstances. The relevant circumstances include, in my view, that the tests undertaken on the post-race samples by an approved laboratory showed a concentration of prohibited substance of very high order. Further, the charging of the plaintiffs with an offence of absolute liability under rule 190(2) was reasonably in contemplation, although it had not actually occurred. The plaintiffs would have a chance to be heard (including to give evidence and make submissions) at the inquiry, which was expected to take place within weeks of the interim suspension. They also had a right to appeal to the Tribunal against the interim suspension or against any decision of the inquiry.
Failure to suspend the plaintiffs' licences on an interim basis in these circumstances would have left hanging the cloud over the industry that the tests had engendered.
Further, although there is no onus on the plaintiffs to indicate what they would have said had they been given the opportunity, it is difficult to conceive of anything they could have said to Mr Sanders which would, or could, have made a difference to his decision to suspend their licences pending the outcome of the inquiry.
The defendants submitted that a useful distinction could be drawn between allegations which could, by their nature, be controverted, such as those that depended on a person's word and those that, because they were based on compelling, or incontrovertible, evidence, could not be. They submitted that the conclusion that the person the subject of the allegation had a right to be heard before any adverse consequence followed the accusation could readily be drawn in the first category, but not in the second.
There is, in my view, considerable force in the significance of this distinction. Experience teaches that one story may be good until another is told. To hear one side of the story, and act on it even on an interim or urgent basis, without hearing the other side, is generally unfair, since matters of credibility are, or may be, involved. For this reason, denial of an opportunity to be heard in cases belonging to the first category impugns the validity of an adverse decision in these circumstances.
However, where an adverse decision (particularly one made on an interim basis with a short-term effect) is based on an allegation which is founded on an objective test derived from an authorised source (particularly one which is given weight by a statutory rule), there may be no unfairness in acting on that result without giving the person affected an opportunity to be heard: see Ucar v Nylex Industrial Products Pty Limited (2007) 17 VR 492 at 519 at [75]-[76] per Redlich JA, referred to in Aronson and Groves, Judicial Review of Administrative Action (5th ed 2013, Thomson Reuters) at [7.380]; see also Re Refugee Tribunal; ex parte Aala [2000] HCA 57; 204 CLR 82 at [4] per Gleeson CJ. I regard the present case as a paradigm example of a case in the second category.
In dividing the cases in this way, in accordance with the distinction adverted to by the defendants, I do not intend to suggest that the requirements of procedural fairness are to be determined other than by reference to the circumstances of each case, which must be considered as a whole and not by reference to particular categories. However, this factor is, in my view, highly material to the conclusion which I have reached: that there was no requirement that the plaintiffs be heard before the interim suspension of their licences in the present case.
Further, the plaintiffs relied on Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 (Heatley), which does not, on close analysis, assist them. In Heatley, the High Court found that the respondent had to comply with the rules of natural justice before issuing a warning off notice to the applicant which had the effect of barring him from racecourses for an indefinite period. However, Aikin J referred to a scenario postulated by the Solicitor-General in argument in the following terms at 515: "If one postulates such a person as the Solicitor-General contemplated in argument, i.e. one engaged in doping, bribery and rigging of races, it may, in circumstances of likely immediate detriment to the public, be appropriate for the Commission to issue a warning-off notice without notice or stated grounds but limited to a particular meeting or meetings over a short period of time, coupled with a notice that the Commission proposed to make a long-term order on stated grounds and giving an opportunity for the person concerned to make representations on the matter to the Commission. There would then be a true opportunity for the person affected to bring forward any material to the Commission which he thought helpful to him and to seek to disabuse the Commission of any misapprehensions which he thought it entertained."
In my view the scenario postulated in this passage broadly approximates the circumstances of the present case. First, it appeared from the post-race samples that the plaintiffs had engaged (whether intentionally, recklessly, mistakenly, or otherwise) in doping with inorganic cobalt, a practice of "likely immediate detriment to the public". Secondly, the suspension was issued without notice, although the grounds of the suspension were articulated in the relevant correspondence. Thirdly, the time within which the suspension was to operate was likely to be short since it was contemplated that an inquiry would take place within weeks. Fourthly, at such an inquiry, the plaintiffs would have a "true opportunity" to adduce evidence and make submissions.
The analysis undertaken by Aickin J in Heatley is an illustration of the need to view the "overall process" "in its entirety" to determine whether procedural fairness is accorded: see Assistant Commissioner Michael James Condon v Pompano Pty Limited [2013] HCA 7 at [156] per Hayne, Crennan, Kiefel and Bell JJ and [192] per Gageler J. In my view, the overall process in the present case, which includes an imminent inquiry and, if the plaintiffs chose to avail themselves of it, a right of appeal to the Tribunal on the merits, accords procedural fairness to the plaintiffs. In these circumstances I do not consider that they had a right to be heard before their licences were suspended on an interim basis following the results of the post-race urine samples.
Had I been of the view that there was an obligation to afford a hearing before interim suspension of the plaintiffs' licences I would have declined relief in the exercise of my discretion. First, there was nothing the plaintiffs could have said that would have altered the outcome of the decision to suspend their licences pending the inquiry (Stead v State Government Insurance Commission at 145). Secondly, the plaintiffs could have appealed to the Tribunal against the interim suspension and could have sought a stay of the interim suspension from the Tribunal and chose not to do so: see Foster v Jododex Australia Pty Limited (1972) 127 CLR 421 at 427 per Walsh J.

[36]

Alleged pre-judgment or bias by Mr Sanders

The plaintiffs submitted that Mr Sanders had already pre-judged the issue. They relied on the letter dated 7 May 2014 from the defendants' solicitors to their solicitors, and in particular the reference to "specific and general deterrence". The plaintiffs contended that specific and general deterrence are germane to penalty and not to guilt and that the use of these terms was an indication of pre-judgment.
I accept the explanation which is set out above that Mr Sanders gave in his oral and written evidence for the interim suspensions. He was concerned about the cloud that would hang over the industry if the trainer of a horse from which a post-race sample had been taken and found to contain a prohibited substance were permitted to continue to present horses for racing before there was in inquiry into his conduct. Mr Sanders was also concerned that such a trainer, knowing of the prospect, if not inevitability, of suspension by way of penalty might yield to the temptation to make quick money by nefarious means to tide him over financially. His view was that, by reason of the test results of the post-race samples, interim suspension pending inquiry was appropriate.
Mr Sanders was, in my view, cognisant of the distinction between pre-charge suspension pending inquiry and post-conviction suspension by way of penalty. I do not consider that the reference to "specific and general deterrence" in the defendants' solicitors' letter of 7 May 2014 indicates, in the context in which it was used, any confusion about the two concepts, or any pre-judgment. It would, however, be unreal to suppose that Mr Sanders did not hold a well-founded belief that each of the plaintiffs would, after inquiry, be found guilty if charged with an offence under rule 190. In the case of Mr Day, two certificates had, by this time, been obtained from approved laboratories which rule 191 provided constituted conclusive evidence of the presence of a prohibited substance. A second certificate was not to hand in respect of the post-race samples of the horses Mr McDowell had presented to race.
I do not accept that there was any prejudgment by Mr Sanders such as would have the effect of invalidating the interim suspension of the plaintiffs' licences. He was entitled to act on the evidence to hand to suspend the licences on an interim basis.

Day v Harness Racing New South Wales

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