Goadsby & Ors v Harness Racing New South Wales & Ors

Background

1. The first plaintiff was a licenced harness racing trainer. On 6 December 2023, he was disqualified for a period of three months, having pleaded guilty to one charge of breaching a requirement to present a horse to race free from a prohibited substance.
2. Although the plaintiff pleaded guilty, I understand his position to be that the offence was not a doping type offence. That is, he does not accept the characterisation of his breach as being related to the doping of a horse.
3. That period of disqualification has now expired, albeit there remains an appeal on foot before the Racing Appeals Tribunal in respect of the order for disqualification.
4. The second to eighth plaintiffs are companies of which the plaintiff was a director or in which the plaintiff held a substantial interest ("the corporate plaintiffs"). They have been named as plaintiffs as, although they have not been subject to any findings, they have an interest in the orders sought, seemingly on the basis that they may be subject to further directions or findings. Their position appears to be merely theoretical.
5. There is no basis for orders restraining the defendant from engaging in conduct relating to the corporate plaintiffs when there is no evidence which would tend to suggest that the defendant would be making any directions or decision involving those entities.
6. On 17 January 2024, 30 January 2024 and 1 February 2024, directions were issued by the first defendant for the production of mobile phones used by the first plaintiff (I will herein refer to him as the plaintiff) during the period of disqualification. The stewards had the power to require and take possession of any mobile phone for the purposes of examining its data and content pursuant to Australian Harness Racing Rules ("AHRR") r 15B.
7. The plaintiff did not comply with the directions. His response to the directions was to maintain that: 1. during the period, he had used more than one phone and, in fact, had used quite a number of phones, perhaps 12, because he used other people's phones during the course of his business activities, particularly over Christmas when his workers (in businesses unrelated to harness racing) were on leave; and 2. there were privileged communications on the phones, and he was not required to produce privileged material to the defendant.
8. Following the plaintiff raising the issue of legal professional privilege ("LPP") the first defendant proposed a protocol in respect of dealing with the plaintiff's claim for LPP (see letter from first defendant to plaintiff dated 1 February 2024) which would have required: 1. the plaintiff to produce the mobile phones to an investigator retained by the first defendant; 2. that investigator then downloading the material and returning the phones and a copy of the engaged data to the plaintiff; 3. the plaintiff identifying which of the data contained privileged material; and 4. if there was a dispute as to the existence of LPP, that issue could then be determined.
9. The plaintiff did not agree to this protocol. Indeed, the plaintiff responded (by letter dated 2 February 2024) suggesting a third-party be retained to download the contents of the phones in the presence of the representatives of the parties and the plaintiff would then inspect the data for the purposes of claiming privilege.
10. There was no agreement as to this alternative protocol. The plaintiff continued to decline to produce the phones.
11. On 6 February 2024, the stewards commenced an inquiry in relation to the failure of the plaintiff to comply with the three directions issued by the first defendant. At the conclusion of the inquiry, the stewards issued three charges against the plaintiff pursuant to AHRR r 187.
12. The charges were that the plaintiff had failed to comply with an order or direction given by the stewards. Each charge related to each individual direction, that is, the directions made on 17 January 2024, 30 January 2024 and 1 February 2024.
13. On 13 February 2024, the plaintiff pleaded not guilty to each of the three charges. Defences were then provided on 14 February 2024. Several defences were raised by the plaintiff.
14. These proceedings relate only to defences three and five, that is the assertion of LPP.
15. Pit Patrol Pty Ltd (the second plaintiff, which is a company controlled by the first plaintiff) also asserts a claim of LPP over part of the data contents of the mobile phones.
16. The stewards found charge one proven against the plaintiff, but they did not go on to determine charges two and three. Those charges have now been formally withdrawn on a without admissions basis.
17. Having found charge one proven against the plaintiff, the stewards provided seven days for the plaintiff to make submissions about penalty. The plaintiff did not make submissions about penalty. Instead, he commenced these proceedings.
18. The plaintiff seeks that the defendants be restrained from determining penalty.

The proceedings

1. As set out in the summons, the plaintiff seeks a number of declarations. It is not necessary that I merely recite all the orders sought in the summons in this judgment.
2. Suffice to say that the plaintiff seeks declarations that any notice or directions given under the AHRR do not require production to the defendants of any communication or document to which LPP attaches and that any such order or direction which so requires is ultra vires or invalid.
3. Specifically, the plaintiff seeks declarations that each of the three directions were unlawful or invalid to the extent that they require the production of any document to which LPP attaches. Further, the plaintiff seeks an injunction under s 66(1) of the Supreme Court Act 1970 (NSW) restraining the defendants from acting or giving effect to any notice or direction.
4. Finally, the plaintiff seeks declarations that the charges laid by the stewards were invalid or unlawful and that the decision was invalid or unlawful, again on the basis that they required production of privileged material.
5. There was some disagreement between the parties as to the nature of the orders sought by the plaintiff in the summons with the defendant seemingly taking a more limited view of the orders sought. Be that as it may, at least on my analysis at this time, it seems clear that the plaintiffs are seeking to challenge the power of the defendant to issue the directions and to challenge the laying of the charges and the finding that charge one was proved.
6. The plaintiff seeks a restraining order at this time because the defendant has indicated an intention to impose a penalty in respect of the charge which the stewards have found has been established. There is a range of penalties which may be imposed, which include a further period of disqualification.
7. I understand also that the plaintiff intends to apply for his licence to be reinstated. The plaintiff would also be seeking an order that the defendant not have regard to the fact that the stewards found the charge proven in considering that application for a new licence. It is apparent that the plaintiff wishes to have his application for reinstatement considered without reference to the latest charges.
8. The plaintiff seeks to restrain the defendant from taking any further steps against him whilst these proceedings are being determined.

The plaintiff's submissions

1. As outlined by Ms Heath, the plaintiff's case is that the defendants had no power to require production of material to which LPP attaches. The plaintiff relies specifically on Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 ("Daniels") at [9]- [11], [32]-[35].
2. The plaintiff says that having regard to Daniels, the plaintiff has a strong case that the defendant had no power to do what it did, which was to require production of the mobile phones even despite the claim for LPP. The plaintiff submits that the provisions of the Harness Racing Act 2009 (NSW) ("HR Act"), under which the AHRR are adopted, do not evidence any intention that the fundamental substantive right of LPP be abrogated. In Daniels the Court per Gleeson CJ, Gaudron, Gummow and Hayne JJ, said at [11]: "… statutory provisions are not to be construed as abrogating important common law rights, privileges and immunities in the absence of clear words or a necessary implication to that effect…"
3. The plaintiff raises other issues, such as abuse of process, but the substantive point raised by the plaintiff in terms of there being a serious issue to be tried relates to the plaintiff's claim for LPP and his claim that he is entitled to refuse production of the mobile phones which were used during the period of disqualification on the grounds that they contain privileged material.
4. The plaintiff submits that he will suffer significant prejudice if the injunction is not granted and that the balance of convenience requires the maintenance of the status quo. The plaintiff says that this is not a case in which the public interest requires that the first defendant complete its processes and, further, there is a public interest in the maintenance of the right to LPP.

The defendant's response

1. The defendant submits that: 1. Firstly, this Court should not entertain either the application for interlocutory relief, or the final relief sought, in circumstances in which the scheme regulating harness racing in New South Wales provides a procedural mechanism whereby the plaintiff may appeal a decision to an appeal panel and then appeal from the decision of the appeal panel to the Racing Appeals Tribunal of New South Wales. The defendant thus submits that the plaintiff has two levels of appeal, each of which involves a de novo hearing. In these circumstances, this Court should not be entertaining a summons for an application for judicial review from the decision of the stewards. 2. Secondly, the defendant submits there is no serious issue to be tried in any event. The issue raised by the plaintiff, that is, as to the validity of the directions and determination having regard to the plaintiff's claim for LPP has been the subject of earlier decisions (see JMA Accounting Pty Ltd v Carmody [2004] FCAFC 274; Abbas v NSW Commissioner of Police [2019] NSWSC 588; Fletcher v Racing NSW [2019] NSWSC 358 ("Fletcher"); Racing New South Wales v Fletcher [2020] NSWCA 9). The defendant says that the proposition advanced by the plaintiffs is contrary to established authority (see Racing New South Wales v Fletcher). 3. Thirdly, the defendant says that the plaintiff's approach to the principles which apply on an application such as this is not correct. The defendant submits that this case gives rise to important public interest considerations concerning the protection of the integrity of the sport of harness racing which, amongst other things, affects the betting public. In those circumstances, the defendant submits, there is no presumption in preserving the status quo (New South Wales Bar Association v Stevens [2003] NSWCA 95 per Spigelman CJ at [112]-[114], Meagher and Sheller JA agreeing at [180] and [181]). 4. Finally, the defendant submits that the plaintiff will not suffer any real prejudice if the orders sought by the plaintiff at this time are not made. The defendant submits that there would be no reputational damage (the plaintiff having already been disqualified). Further, the defendant submits that the plaintiff will not be forced to move from his home and that he has already shutdown the businesses operating from his home, such that the imposition of a penalty (whatever that might be) by the stewards will not have the effect on him that he maintains.

Determination

1. An injunction of this type may be necessary to protect a legal right or prevent a legal wrong (Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 per Gaudron J at [60] ("Lenah Game Meats")).
2. On the plaintiff's case, it is necessary that an injunction be issued to prevent him being penalised for a failure to do something which he was not legally obliged to do.
3. As set out in s 66(4) of the Supreme Court Act, the Court may at any stage of the proceedings grant an interlocutory injunction in any case in which it appears to the Court to be just or convenient to do so. The Court has a discretion whether to grant the injunction.
4. In determining whether to grant the injunction, the Court will have regard to matters such as the nature of the plaintiff's case, the apparent strength of the case and the balance of convenience. The plaintiff must establish that there is a serious question to be tried, that is, the plaintiff's claim must invoke a recognised principle (Lenah Game Meats) and have sufficient prospects of success to justify the interlocutory order, that is, justify imposing an order on the defendant which restricts the defendant's right to take action as it sees fit.

A Serious issue to be tried?

1. The parties made extensive submissions on whether there is a serious issue to be tried. The defendant pointed to cases such as Fletcher in which a similar issue was considered under the Australian Rules of Racing ("ARR"), suggesting that the principal arguments advanced by the plaintiff in this matter have been expressly rejected by the Court in Fletcher and further that, although there was an appeal in Fletcher, neither party contested the finding of the primary judge on this issue.
2. On the other hand, the plaintiff says that this is a case which must be determined on the basis of the ordinary common law right of a party to maintain LPP, and this Court will be bound by the approach of the High Court in Daniels. Further, the plaintiff points to other cases which have considered other statutory schemes such as ACT Integrity Commission v Levy (a pseudonym) (No 2) (2022) 371 FLR 527 and A Person v Independent Commission Against Corruption (No 3) [2021] SASC 31 as supporting the arguments which he advances.
3. It is not necessary that I expand on those arguments for the purposes of this determination. It does seem to me that the decision in Fletcher at [86]-[92] has some force and applicability but the principle raised by the plaintiff of why and whether he should be required to produce mobile phones which he says contain privileged information at least raises some issues of importance. There may be an argument that the circumstances of this matter are different from in Fletcher.
4. The right to maintain confidentiality over privileged documents is an important principle which cannot be lightly abrogated or limited. The protocol advocated by the defendant would have required the plaintiff to produce even privileged material to the defendant albeit not to the stewards.
5. It is only necessary to say that, at least for the purposes of this application, I am satisfied that there is a serious issue to be tried.
6. Having said that, that is not of itself sufficient. There are other factors to consider in deciding whether to exercise the discretion to grant the injunction.
7. I accept the defendant's submission that the proper approach to this matter does not merely involve the application of what is described as a balance of convenience test. There is a public interest in the protection of the integrity of the sport of harness racing. As was said in Stevens at [115]: "Where the public interest is engaged, the status quo is of no particular significance. There is no presumption in favour of the continuation of the status quo in such a context."
8. Despite the orders sought in the motion and the plaintiff's initial submissions (suggesting that there needed to be a restraining order for a number of reasons, such as the impact on the corporate plaintiffs and to prevent the defendant from proceeding with the other charges), having regard to what was said at the hearing, the only relevant conduct to which the claimed restraint could relate is the stewards proceeding to determine penalty in respect of charge one.
9. None of the other "concerns" of the plaintiff, such as the position of the corporate plaintiffs, have any relevance at this stage. The question is whether I should exercise the discretion to restrain the defendants from moving to the penalty phase of the process in respect of charge one. Refusing an injunction at this stage does not interfere with the ability of the plaintiff to continue to assert LPP if he chooses to do so. The first defendant has already proceeded with charges and is moving to the imposition of penalty. At this stage of the process, the first defendant is not making any decision in respect of the plaintiff's right to privilege.
10. Even on a balance of convenience test, the prejudice which the plaintiff says he will suffer is overstated for the following reasons: 1. Firstly, he has already been disqualified. Whilst that disqualification should not be described as a "doping disqualification" and the defendant withdrew reliance on the term, the fact remains that he has been disqualified. I do not know what penalty might be imposed by the defendants on the range of penalties available. Whatever penalty might be imposed, the question of reputational damage must be considered in the context that the plaintiff has already been disqualified. 2. Secondly, the impact that the plaintiff says that any penalty imposed upon him will have must depend upon the nature of the penalty. Assuming the worst, that is assuming a further period of disqualification, the plaintiff has not established that he will suffer the detriment he maintains. The businesses he was operating from his home have already been shut down. If he was living in his home, he certainly would be forced to make a choice about keeping of horses at that address, but it is not a case that the penalty imposed by the defendant will necessarily force the plaintiff out of his home or prevent him from earning an income. It is quite clear that the defendant operates a number of other successful businesses.
11. In my view, the detriment which would arise to the plaintiff if the orders sought in the motion were not made is overstated. Further, the level of detriment that the plaintiff might suffer must be weighed against the public interest in ensuring the integrity of the sport of harness racing.
12. In any event, the detriment that the plaintiff says he will suffer will be limited if he invokes the processes available to him under the HR Act. Those processes were most recently described by Nixon J in Trainor v Harness Racing New South Wales & Anor [2023] NSWSC 1278 at [36]-[40]: "[36] In circumstances where the stewards determine to disqualify, suspend or impose a fine of more than $200 on a person, that person has a right to appeal against the decision to the Appeal Panel: s 34B(1) of the Act. An appeal to the Appeal Panel is to be conducted as a new hearing: s 34C(1). Fresh evidence, or evidence in addition to or in substitution for the evidence on which the decision appealed against was made, may be given on the appeal: s 34C(2). The principal member of the Appeal Panel must be an Australian lawyer of at least 7 years standing, as must be any person who is presiding at the hearing of the appeal: ss 34F(2) and 34G(4)(b)(ii). [37] The Appeal Panel has the power to dismiss the appeal; to confirm the decision appealed against; to vary the decision by substituting a decision that could have been made by the racing authority; to refer a matter for rehearing in accordance with directions given by the Appeal Panel; or to make another order in relation to the disposal of the appeal as the Appeal Panel thinks appropriate: s 34D(1). [38] On the lodging of an appeal, and an application for a stay of proceedings, the Appeal Panel has the power to grant a stay in circumstances where it considers that a substantial injustice may be caused to the appellant if the stay is not granted: rule 181E of the Local Rules of Harness Racing NSW, which have been adopted by HRNSW. [39] An appeal lies from the Appeal Panel to the Racing Appeals Tribunal of New South Wales. Section 15B of the Racing Appeals Tribunal Act 1983 (NSW) provides as follows: "(1) A person who is aggrieved by any of the following decisions may, in accordance with the regulations, appeal against the decision to the Tribunal - (a) a decision of the Appeal Panel on an appeal under the Harness Racing Act 2009, (b) a decision for which an appeal is properly made to the Appeal Panel under the Harness Racing Act 2009 if the Appeal Panel - (i) neglects or refuses to hear the appeal or (ii) fails to make a decision on the appeal, (c) a decision of HRNSW. (2) HRNSW may, in accordance with the regulations, appeal to the Tribunal against a decision referred to in subsection (1)(a) or (b)." [40] An appeal to the Tribunal is by way of a new hearing, and fresh evidence, or evidence in addition to or in substitution for the evidence on which the decision appealed against was made, may be given on the appeal: Racing Appeals Tribunal Act, s 16(1). The Tribunal has similar powers to the Appeal Panel, including the power to dismiss the appeal, confirm the decision appealed against, substitute a new decision, refer the matter for rehearing, or make such other order in relation to the disposal of the appeal as the Tribunal thinks fits: Racing Appeals Tribunal Act, s 17(1)." See also Ross v Harness Racing NSW [2020] NSWSC 1397, per Fagan J at [33]-[35].
13. Whatever penalty is imposed by the defendant, the plaintiff has a right of appeal against the decision to the Appeal Panel (HR Act s 34B(1)). An appeal to the Appeal Panel is by way of a new hearing. The arguments raised by the plaintiff before the stewards, in particular, arguments three and five, which relate to LPP can be pursued before the appeal panel. In other words, the matters which the plaintiff wishes to pursue in this Court can be pursued before the Appeal Panel.
14. Further, the plaintiff may then appeal from the Appeal Panel to the Racing Appeals Tribunal (s 15B of the Racing Appeals Tribunal Act 1983 (NSW)). Again, that appeal would be by way of a new hearing where further evidence may be adduced. The plaintiff can again pursue the matters he wishes to raise before the Racing Appeals Tribunal.
15. By applying for judicial review in this Court, the plaintiff is seeking to have this Court determine issues which would ordinarily be determined through the processes set in place by the HR Act which, as I have said, involve the right to a new hearing on appeal to the Appeal Panel and another new hearing on appeal to the Racing Appeals Tribunal.
16. The plaintiff complains that there is no right of appeal from the stewards at this stage, which is so. However, that is only because the plaintiff has commenced these proceedings prior to the stewards recording any conviction and imposing any penalty.
17. The plaintiff complains that he would be forced to litigate on two fronts if a restraining order is not made, but this problem arises because of the plaintiff's own action in commencing these proceedings prior to the imposition of penalties.
18. The simple fact is that the plaintiff has a right of appeal to the Appeal Panel and then to the Racing Appeals Tribunal. The plaintiff may apply for a stay. It may be difficult to anticipate why a stay would not be granted, although that is of course a matter for the Appeal Panel.
19. In Kamha v Australian Prudential Regulation Authority [2007] FCA 1422, Gyles J observed that there is a public interest in proper use of the resources of the Court, suggesting that the issues in that case were better determined by the Administrative Appeals Tribunal, the body chosen by Parliament to review the substantive decisions in question.
20. It seems to me that the fact that Parliament has set up a process whereby aggrieved persons involved in the harness racing industry may appeal from a steward's decision and apply for a stay of the steward's decision is of some significance in the determination of whether this Court should exercise its discretion to grant the orders sought in the motion.
21. It is of some significance to the outcome for two reasons, being: 1. in the context of the regulatory framework which governs harness racing in New South Wales, including the statutory right of appeal from any decision of the stewards (once the decision has been finalised), this Court should be reluctant to restrain the stewards from finalising their processes because the plaintiff has filed a summons seeking judicial review; and 2. the prejudice of which the plaintiff complains could be substantially avoided if the plaintiff follows the processes available to him under the Act. That is, if after the penalty, the plaintiff is aggrieved by the decision, he may lodge an appeal to the Appeal Panel. He may apply for a stay. If the stewards' orders are stayed, the prejudice he says he will suffer will be greatly diminished.
22. It follows that even on the balance of convenience test, even without regard to the important issue of public interest, the grounds on which the Court should make the orders are not strong.
23. It is a matter for the plaintiff which course he takes but the fact that he has elected to file proceedings in this Court, rather than pursue the appeal process established under the HR Act is an important factor in determining whether to exercise the discretion to restrain the defendant from completing the process, that is determining penalty against him.
24. As the defendant submits, that may also be an important factor on the final hearing but that is a matter for another day. Further, different principles may apply on the final hearing as opposed to the determination of the plaintiff's amended notice of motion.
25. I am not persuaded that the interim restraining orders sought by the plaintiff should be made. The defendant should be permitted to complete its process. The plaintiff will then have a right of appeal and may apply for a stay. Having commenced these proceedings, the plaintiff may prefer to continue with these proceedings but that would be his decision.
26. In terms of the finalisation of these proceedings, it seems to me that a prompt hearing date could be set to enable the final issues to be determined.
27. In the circumstances, I make the following orders in respect of the plaintiff's motion filed on 13 March 2024: 1. I decline to make the orders set out in paragraphs 1, 2 and 3 of the motion. 2. That part of the motion is dismissed. 3. I order the plaintiff to pay the first defendant's costs in respect of that part of the motion which has been determined. 4. I grant liberty to the plaintiff to apply on 3 days notice with respect to the balance of the motion. 5. I grant liberty to the parties to have the matter relisted for future directions.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 April 2024