NSW Thoroughbred Racing Board v. Waterhouse & Anor. [2003] NSWCA 55

LOWER COURT Supreme Court - Equity Division JURISDICTION : LOWER COURT SC 4585/02 FILE NUMBER(S) : LOWER COURT Young CJ in Eq. JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40098/03 ED 4585/02

HANDLEY JA HODGSON JA SANTOW JA

Wednesday 16 April 2003 NEW SOUTH WALES THOROUGHBRED RACING BOARD v WATERHOUSE & ANOR. Judgment 1 HANDLEY JA: In this appeal I have had the benefit of reading the reasons for judgment of Hodgson JA in draft. I agree that leave to appeal and cross-appeal should be granted and that in substance both appeal and cross-appeal should fail. However I consider that the declaration made by Young CJ in Eq should be varied, and I wish to express my own reasons for concluding that the Racing Appeals Tribunal (the Tribunal) had no power or jurisdiction to increase the penalty imposed on Mr Waterhouse by the Appeal Panel. 2 The appellate jurisdiction of the Tribunal is defined by s 15 of the Racing Appeals Tribunal Act 1983 as amended. This provides: 15. Appeals Tribunal Any person who is aggrieved by: (a) a decision of the Appeal Panel: (i) On an appeal under the Thoroughbred Racing Board Act 1996 ... (b) a decision in respect of which an appeal is made to the Appeal Panel under that Act but which the Appeal Panel neglects or refuses to hear and determine, (c) a decision of the Board, may, in accordance with the Regulations, appeal against the decision to the Tribunal. 3 Appeals are to be heard in open court (s 16), and the decision of the Tribunal is taken to be the decision of the Appeal Panel. Section 18(1) authorises Regulations making provision for the procedures to be followed in appeals, and sub s (2) authorises Regulations which provide that appeals may not be brought except in respect of prescribed classes of matters. 4 The 1999 Regulation made under these powers provides (cl 5) that appeals to the Tribunal are to be made in accordance with Part 2 of the Regulations. Clause 6(1) in that Part provides that appeals may only be made to the Tribunal under s 15(1)(a) or (b) of the Act from decisions of the nature specified. Clause 6(2) makes the same provision in relation to appeals that may be brought to the Tribunal from the Board under s 15(1)(c) with one variation which is not presently relevant. The prescribed classes of appeals under sub clause (1) are: (a) to disqualify or warn off a person, or (b) to suspend for a period of three months or more any licence, right or privilege granted under the Rules, or (c) to revoke the licence of any person under the Rules, or (d) to impose on any person a fine of $2,000 or more, or (e) to disqualify a horse, if the disqualification is made in conjunction with the imposition of the penalty on the appellant or any other person. 5 Clause 7(3) provides, so far as relevant, that an appeal is to be limited to the grounds stated in the notice of the grounds of appeal except with the leave of the Tribunal. Clause 11 provides that an appeal may only be withdrawn with the consent of the Tribunal, and cl 12(1) provides that the Tribunal is confined to the evidence presented to the hearing in respect of the decision appealed against and may not consider other evidence unless there was good reason for it not being presented below. 6 The Tribunal held that the Board had no right to appeal from the decision of the Appeal Panel to substitute a suspension for 9 months for the penalty of 12 months' disqualification imposed by the stewards. Clause 15 defines the orders which may be made by the Tribunal. 7 Prima facie the Board was aggrieved by the decision of the Appeal Panel to substitute a lesser period of suspension for the longer period of disqualification imposed by the stewards. See Attorney General of the Gambia v N'jie [1961] AC 617, 634-5. 8 However the specification in the Regulation of the classes of matters which could be challenged by an appeal to the Tribunal indicates that the avenue of appeal is only open to an individual who is directly and adversely affected by the decision, that is to persons in the position of Mr Waterhouse. Prima facie the Board would not be aggrieved by any decision of the stewards failing within cl 6(1)(a) or (c). The Board would clearly lack standing to challenge a fine of less than $2,000 on the ground that a greater fine should have been imposed. There is no right of appeal from an acquittal or from a penalty other than those specified which is said to be excessively lenient. 9 The paragraphs fail to address in terms the situation where the Appeal Panel has allowed an appeal and acquitted a person charged of some or all of the charges found proved by the stewards or has substituted some lesser penalty. 10 It was in my view arguable that while the Regulation could restrict the classes of matters which could be the subject of an appeal it could not prevent all appeals by a person aggrieved as the present Regulation purports to do in the case of the Board. However the Tribunal ruled that the Board did not have standing to appeal and that decision was not challenged before the Chief Judge in Equity or this Court. 11 The decisive consideration for present purposes, in my judgment, is that the Regulation, by cl 7(3), limits any appeal to the grounds stated by the appellant. Needless to say there was in this case no ground of appeal before the Tribunal which alleged error in the reduction in the penalty ordered by the Appeal Panel. There is no reason to think that cl 7(3) is beyond power, and no such submission was made to this Court. 12 If the only jurisdiction of the Tribunal is to consider and determine whether one or more of the grounds of appeal have been established, and if so what orders should be made to correct those made below, the Tribunal cannot interfere unless it finds error within one or more of the grounds of appeal. In this case the Tribunal did not find any error within the appellant's grounds of appeal and therefore it had no power to interfere with the reduced penalty imposed by the Appeal Panel. 13 It is not necessary to determine the extent of the Tribunal's jurisdiction over penalty if it upholds a ground of appeal alleging error in that respect and has then to re-exercise the discretion of the Appeal Panel on penalty. The practice of the Court of Criminal Appeal in England under Lord Goddard CJ would suggest that in that situation the Tribunal would have power to increase the penalty. However, the general nature of an appeal referred to in The Commonwealth v Bank of New South Wales [1950] AC 235, 294 would suggest that even in that situation the Tribunal could not alter the penalty adversely to the appellant. 14 In my judgment therefore the Tribunal had no power to increase the penalty and its decision to do so was invalid. However it did have jurisdiction to dismiss the appeal on the grounds selected by Mr Waterhouse and its decision to increase the penalty was severable and only that part of its decision was void and liable to be quashed: R v Arundel JJ ex parte Jackson [1959] 2 QB 89. I would therefore propose that the formal orders of the Chief Judge in Equity be varied by deleting the order that the decision of the Tribunal on 6 September 2002 is void and substituting an order that that decision, in so far as it varied the penalty imposed by the Appeal Panel, should be quashed, but not otherwise. 15 This analysis leads me to conclude that the appeal to the Tribunal is by way of rehearing, whether the appeal is brought under paras (a), (b) or (c) of s 15(1) of the Act. If there was no hearing in the ordinary sense before the stewards in the case of an appeal under para (b), or before the Board in the case of the appeal under para (c), the Tribunal would have to exercise its power to admit additional evidence on appeal to enable it to conduct what effectively would be a rehearing de novo. 16 In the case of an appeal under para (a) the appeal is a rehearing on the evidence given below of the general nature of an appeal to this Court. However in every case the subject matter of the appeal is defined by the appellant's grounds of appeal and the Tribunal has no jurisdiction to act outside these grounds. 17 I agree with the orders proposed by Hodgson JA. 18 HODGSON JA: The first opponent Robert William Waterhouse brought proceedings in the Supreme Court of New South Wales seeking declarations concerning decisions of the Appeals Panel (the Panel) of the claimant NSW Thoroughbred Racing Board (the Board) and of the second opponent the Racing Appeals Tribunal (the Tribunal). 19 On 29 November 2002, Young CJ in Eq. ordered that the decision of the Tribunal on 6 September 2002 was void, but otherwise dismissed Mr. Waterhouse's Amended Summons, making no order as to costs. 20 The Board seeks leave to appeal from so much of that decision as determined that the Tribunal's decision was void; and Mr Waterhouse seeks leave to cross-appeal from so much of that decision as otherwise dismissed his Amended Summons. These applications for leave have been argued on the basis that, if leave is granted, the appeal and/or cross-appeal will be decided by this Court without further argument.

CIRCUMSTANCES 21 There seems to be little dispute concerning the basic facts giving rise to the proceedings. 22 Prior to 1997, one Peter McCoy had been involved with the claimant Robert Waterhouse and members of his family (apparently including Robert Waterhouse's sister and his father William Waterhouse) in rural pursuits, as a result of which Mr. McCoy came to owe the Waterhouse interests a large sum of money. In 1997, Mr. McCoy was on his own petition declared bankrupt, and in that process he acknowledged a debt to the Waterhouse interests in a figure exceeding $900,000.00. 23 In about 2000, Mr. McCoy was discharged from bankruptcy. His legal liability for the debt to the Waterhouse interests was extinguished by the bankruptcy. However, both Mr. McCoy and William Waterhouse (at least) considered it still owing as a matter of honour. William Waterhouse was said to be reluctant to allow Mr. McCoy to acquire an interest in a Waterhouse business in Fiji unless the debt was reduced. An arrangement was made between Robert Waterhouse and Mr. McCoy that the debt be capped at $500,000.00; and at some time prior to 6 February 2002 an arrangement was made between Robert Waterhouse and Mr. McCoy with a view to further reducing the debt. 24 This arrangement was that Robert Waterhouse (who was a licensed bookmaker) would place bets on horses on behalf of Mr. McCoy with Robert Waterhouse himself, to enable Mr. McCoy to win between $50,000.00 and $100,000.00 and have that taken off the debt. Robert Waterhouse was to select the races, the horses, and the amount of the bets, and also to determine the odds; and he was to put the bets through his own books. The bets were to be placed on credit, and net wins or losses would be applied to reduce or increase the debt of $500,000.00. 25 Both Robert Waterhouse and Mr. McCoy intended that this arrangement not be disclosed to William Waterhouse, and that William Waterhouse would understand any reductions in the debt brought about through this arrangement as indications that Mr. McCoy was truly paying the debt off. 26 Pursuant to this arrangement, on 6 February 2002, while fielding at Canterbury, Robert Waterhouse placed thirteen bets on horses of $20 each at a price of $501.00 (odds of 500:1). The bets were called by Robert Waterhouse and recorded as they were called by his clerk. They were all placed on short-priced favourites, whose prices were otherwise quoted between $1.70 and $3.80, in interstate races. Six of the thirteen horses won, and the other seven lost. Mr. McCoy won $60,000.00, less the outlay of the losing bids, giving a net figure of $59,860.00. 27 The transactions were entered as book (that is, credit) bets in Robert Waterhouse's betting records. Robert Waterhouse also entered in his settling records the debt of $500,000.00, and showed it as reduced by the net winnings of $59,860.00. 28 On the same day, stewards opened an enquiry into these transactions. This enquiry was continued on 22 February 2002, when sixteen charges against Robert Waterhouse were proffered. So far as now relevant, charges 1 to 13 were charges under LR91(q) of the Rules of Racing, of having entered book bets which were not legitimate wagers (one charge in respect of each bet referred to above); and charge 16 was a charge under AR175A of the Rules of Racing of conduct prejudicial to the image of racing, constituted by the placing of the thirteen bets and the entry into the settling records of the debt of $500,000.00, which had no association with Mr. Waterhouse's business as a licensed bookmaker. 29 The hearing of the charges proceeded on 4, 15 and 19 April, and on 19 April, and on 19 April Mr. Waterhouse was found guilty of those charges. On each of the first thirteen, the stewards imposed a fine of $6,000.00, making a total of $78,000.00. On charge 16, the stewards imposed a penalty of disqualification for twelve months. 30 Mr. Waterhouse then appealed to the Panel, against the findings of guilt and against the penalties. The Panel consisted of five persons, and the principal member was the Honourable T.E.F. Hughes AO QC. In respect of the charges now relevant, the Panel dismissed the appeals against the findings of guilt. However, it substituted a penalty of a fine of $1,500.00 on each of the first thirteen charges (totalling $19,500.00), and a penalty of suspension for nine months on charge 16. 31 Mr. Waterhouse appealed to the Tribunal against the findings of guilt and the penalties. So far as now relevant, the Board appealed to the Tribunal against the inadequacy of penalty on charge 16. 32 The Tribunal, constituted by a retired District Court judge, his Honour Mr. B.R. Thorley, found that the Board's appeal was incompetent and he struck it out. However, he held that, if the finding of guilt was sustained on any charge, it was open to the Tribunal to give effect to its own view on penalty, which could be greater than that imposed by the Panel. The Tribunal's decision, given on 6 September 2002, was to confirm the findings of guilt, confirm the penalty on charges 1 to 13, but on charge 16 to impose the increased penalty of disqualification for nine months. 33 Mr. Waterhouse commenced proceedings in the Supreme Court of New South Wales claiming declarations that the adverse decisions of the Panel were void and that the adverse decisions of the Tribunal were void, orders in the nature of certiorari and prohibition, and other consequential relief. As noted earlier, Young CJ in Eq. ordered that the Tribunal's decision of 6 September 2002 was void, but otherwise dismissed the proceedings.

RULES AND STATUTES 34 This appeal requires consideration of some provisions of the Rules of Racing of the Board, constituted by the Australian Rules of Racing as adopted by the Australian Racing Board, and the Local Rules and Rules of Betting of the Board. It also involves consideration of some of the provisions of the Thoroughbred Racing Board Act 1996 (the Board Act), the Racing Appeals Tribunal Act 1983 (the Tribunal Act) and the Racing Appeals Tribunal Regulation 1999 (the Tribunal Regulation). 35 It is to be noted that the Board is not an instrument of government (see the Board Act ss.4-6). The Rules of Racing are rules to which participants in racing become contractually bound; but they are also given statutory consequences, for example by s.14 of the Board Act. 36 Relevant provisions of the Australian Racing Rules are AR8 dealing with the powers of stewards, and in particular AR8(d) and (e), and AR175A, dealing with prejudicial conduct. Those provisions are as follows: AR8. To assist in the control of racing, Stewards shall be appointed according to the Rules of the respective Principal Clubs, with the following powers: … (d) To regulate and control, inquire into and adjudicate upon the conduct of all officials and licensed persons, persons attendant on or connected with a horse and all other persons attending a racecourse and to punish any such person in their opinion guilty of improper conduct or unseemly behaviour. (e) To punish any person committing a breach of the Rules, or refusing to obey, or failing to obey any proper direction of any official, or whose conduct or negligence has led, or could have led, to a breach of the Rules. …

AR175A Any person bound by these Rules who either within a racecourse or elsewhere in the opinion of the Committee of any Club or the Stewards has been guilty of conduct prejudicial to the image, or interests, or welfare of racing may be punished. 37 The Australian Racing Rules also deal with the effect of punishments that may be imposed by stewards, including disqualification and suspension. 38 The business of bookmakers is regulated by the Local Rules, including LR83, LR85 and LR91(h)-(r). Those provisions are as follows: LR83. No person at any race meeting, betting auditorium or registered betting office on a racecourse may carry on, or assist in carrying on, the business of a bookmaker, or act as a clerk to any person carrying on such business, unless he or she holds the required licence with the Board. …

LR85. Except with the permission of the Board, a bookmaker must not accept any bet in relation to any race except upon a licensed racecourse and during such hours as the Committee of the Club may determine. …

LR91. Every bookmaker must: … (h) keep proper betting books, (i) keep a settling book or record of all unpaid bets, to be available on race days for Stewards or other officials, and records of any payments on Board authority, such records to contain the serial number of such authority, (j) upon making any bet, including a bet made as a layer, backer and when betting back, immediately record the bet in a legible manner in the book or sheets provided by the Treasury for the same; provided that such record of any such bet back must identify with whom the bet was made, (k) record the full serial number of the first betting ticket at the top of the betting sheet and do all such things as may be necessary to ensure that clear and legible carbon copies will be made of all entries in such betting book. Provided that for the purpose of compliance with this rule, bookmakers may use any computerised recording system as approved by the Board and the NSW Department of Gaming and Racing, (I) write all tickets in respect of both credit and cash bets in consecutive order and immediately upon making such bets, cause to be entered in the betting book the particulars of such bets, the number of the betting tickets issued in respect of such bets, which must be in strict numerical order, and in respect of any credit bets, the name of the backers, (m) have printed on all betting tickets an address at which the bookmaker issuing the same may be conveniently found, (n) write the name of the horse or sporting contingency and the amount of the bet legibly on the ticket, (o) not alter or allow to be altered any erroneous entries in the betting book but must cause the same to be ruled through and the proper entry made underneath, (p) ensure that all betting tickets are written to show the exact value of the ticket to the nearest 5 cents, (q) enter accordingly all book bets in a recognisable name of the person with whom they are made and none but legitimate wagers must be so entered, (r) not enter or permit to be entered in his or her betting sheets, false, misleading or fictitious entries, or bets made in fictitious names, … 39 Appeals are dealt with by LR104-107. The most relevant parts of those rules are LR106(1), (7) and (8) and LR107(a) and (b). Those provisions are as follows: LR106(1) Subject to section 42 of the Act, any person considering himself or herself to be aggrieved by a decision of a racing authority has the choice of appealing to either one, but not both, of the following Appeal Bodies: (a) the Appeal Panel under the Act, or (b) subject to the jurisdictional limitations prescribed by LR105, the Committee of the Association in whose territory the decision appealed against was made. …

(7) All appeals must be in the nature of rehearings, the evidence to be considered being the evidence adduced at the hearing in respect of the decision appealed against, subject to the discretion of the Appeal Body to admit or receive further evidence called by the parties. (8) The general procedure at all appeals is governed by section 43 of the Act, which may be supplemented from time to time by these Local Rules.

LR107. On the hearing of an appeal, the Appeal Body has the following powers: (a) remit the matter in dispute to be reopened or reheard by the racing authority from whose decision the appeal is brought, (b) in the case of an appeal against conviction, may confirm, quash, or set aside the decision appealed against; or in the case of an appeal against penalty, may confirm, quash, set aside, mitigate, reduce, alter, vary, increase or add to the penalty imposed by the racing authority, … 40 The Panel is an Appeal Body with those rules, and the stewards are a racing authority within those rules. 41 Appeals to the Panel are dealt with by the Board Act, and in particular by ss.42 and 43 of that Act, which are as follows: 42(1) A person aggrieved by any of the following decisions of a racing authority has a right of appeal against the decision to the Appeal Panel: (a) a decision to disqualify or warn off any person, (b) a decision to disqualify any horse, (c) a decision to revoke the licence or registration of any person or suspend (for any period) any such licence or registration, (d) a decision to fine any person a sum of $10 or more, (e) a decision that the Board determines, by order published in the racing calendar published by the Board, to be a decision that may be appealed against to the Appeal Panel. (2) A "racing authority" means: (a) the stewards of the Board, (b) (Repealed) (c) the committee or stewards of any race club or race meeting registered by the Board under the Rules of Racing, (d) a racing association. (3) The Board may delegate to a racing association the function of hearing and determining appeals against decisions of the committee or stewards of any club over which the association has jurisdiction. Any such delegation may be general or limited to a particular class or classes of appeals. (4) If an appeal against a decision can be heard by a racing association by virtue of such a delegation, an appellant against the decision has the choice of appealing to the Appeal Panel or to the racing association (but cannot appeal to both). (5) A decision of a racing association on an appeal heard by the racing association by virtue of a delegation under this section, or on an appeal under the Rules of Racing, cannot be appealed against to the Appeal Panel. (6) If the Rules of Racing confer on a person a right of appeal against a decision to the principal club for New South Wales, or the committee of the principal club, and the person has a right of appeal against the decision under this section, the person does not have a right of appeal to the Board (despite the provisions of the Rules of Racing). The function of hearing and determining appeals against decisions that may be appealed against under this section is to be exercised by the Appeal Panel or by a racing association to which that function is delegated under this section, and not by the Board. (7) An appeal is to be made in accordance with the local rules of racing of the Board.

43(1) An appeal to the Appeal Panel is to be in the nature of a rehearing. (2) The Appeal Panel may subject to this Act and the local rules of racing of the Board determine its own procedure. (3) On an appeal the Appeal Panel: (a) is not bound to act in a formal manner, and (b) is not bound by the rules of evidence and may inform itself on any matter in any way that it considers to be just, and (c) is to make its decision on the real merits and justice of the case and is not bound to follow strict legal precedent. (4) The Appeal Panel is to sit as in open court when hearing the appeal but may sit in private if the Appeal Panel considers it necessary to do so in the public interest or to protect the safety of any person. (5) For the purpose of the exercise of the Appeal Panel's functions on an appeal, the person presiding at the hearing of the appeal has the powers, authorities, protections and immunities conferred by the Royal Commissions Act 1923 on a Commissioner appointed under Division 1 of Part 2 of that Act. That Act (except section 13 and Division 2 of Part 2) applies, with any necessary modifications, to a witness summoned by, or appearing before, the Appeal Panel. (6) When an appeal is to a racing association pursuant to a delegation to the association by the Board under this Part, the following provisions have effect: (a) the committee of the association has the function of hearing and determining the appeal, and (b) the members of the committee of the association and the person presiding at the hearing of the appeal have the same powers, authorities, protections and immunities as the members of the Appeal Panel and the person presiding at the hearing of an appeal by the Appeal Panel, and (c) references in this section to the Appeal Panel and to the person presiding at the hearing of an appeal include a reference to the committee and to the person presiding at the hearing of the appeal by the committee, and (d) the same right of appeal as exists under the Racing Appeals Tribunal Act 1983 in respect of a decision of the Appeal Panel also exists in respect of a decision of the committee of the association (and for that purpose references in that Act to a decision of the Appeal Panel are to be read as including a reference to a decision of the committee of a racing association). 42 Members of the Panel are appointed by the Board (s.45), so the Panel is not a tribunal independent of the Board. However, one member (s.45(3)) and also the principal member (s.46(1)) must be a legal practitioner of at least seven years' standing. Section 49 of the Board Act provides for majority decisions: 49. A decision supported by a majority of the members of the Appeal Panel hearing an appeal is the decision of the Panel. If the members of the Appeal Panel are evenly split on a question, the decision of the Convenor of the Panel is the decision of the Panel. 43 The first appeal to a body wholly independent of the Board is the appeal provided by the Tribunal Act to the Tribunal, constituted by a qualified person (ss.4, 6, 7) appointed by the government. Appeals to the Panel are governed by ss.15-18 of the Tribunal Act, which are as follows: 15. Any person who is aggrieved by: (a) a decision of the Appeal Panel: (i) on an appeal under the Thoroughbred Racing Board Act 1996 , or (ii) (Repealed) (b) a decision in respect of which an appeal is made to the Appeal Panel under that Act but which the Appeal Panel neglects or refuses to hear and determine, or (c) a decision of the Board, may, in accordance with the regulations, appeal against the decision to the Tribunal.

16. Proceedings on an appeal under this Act shall be held as in open court before the Tribunal.

17. The decision of the Tribunal in respect of an appeal under this Act is final and conclusive and is taken to be the decision of the Appeal Panel.

18.(1) The regulations may make provision for or with respect to appeals to the Tribunal under this Act and, in particular, for or with respect to: (a) the procedures to be followed at or in connection with any appeals under this Act, (b) the suspension of a decision appealed against under this Act pending the determination of the appeal, (c) the payment of fees and costs in respect of appeals under this Act, and (d) any matters incidental to or connected with appeals under this Act. (2) Without affecting the generality of subsection (1), the regulations may: (a) prescribe classes of matters in respect of which appeals may not be made under this Act, or (b) provide that no appeals may be made under this Act except in respect of prescribed classes of matters. 44 Regulations have been made pursuant to s.18, namely the Tribunal Regulation. The relevant provisions are regulations 6, 7, 11-13 and 15-16. Those provisions are as follows: 6(1) In the case of an appeal made under section 15 (a) or (b) of the Act, an appeal may be made to the Tribunal only in respect of a decision: (a) to disqualify or warn off a person, or (b) to suspend for a period of 3 months or more any licence, right or privilege granted under the Rules, or (c) to revoke the licence of any person under the Rules, or (d) to impose on any person a fine of $2,000 or more, or (e) to disqualify a horse, if the disqualification is made in conjunction with the imposition of a penalty on the appellant or any other person. (2) In the case of an appeal made under section 15 (c) of the Act, an appeal may be made to the Tribunal only in respect of a decision: (a) to disqualify or warn off a person, or (b) to suspend any licence, right or privilege granted under the Rules, or (c) to revoke the licence of any person under the Rules, or (d) to impose on any person a fine of $100 or more, or (e) to disqualify a horse, if the disqualification is made in conjunction with the imposition of a penalty on the appellant or any other person. (3) A reference in subclause (1) or (2) to a person does not include a reference to a racing club. (4) Expressions used in this clause have the meanings given to them in the Rules.

7(1) An appeal is to be initiated by the lodging of a notice of appeal in writing with the Secretary: (a) in the case of an appeal made under section 15 (a) or (c) of the Act - within 7 days of the date on which the appellant is notified of the decision appealed against, or (b) in the case of an appeal made under section 15 (b) of the Act - at any time after the expiration of 28 days after the appeal to the Appeal Panel was lodged. (2) The Secretary is, on receiving a notice of appeal: (a) to forward notice of it to the Tribunal, and (b) to serve on the appellant a transcript of the evidence taken at the hearing in respect of the decision appealed against. (3) Within 7 days of receiving the transcript of evidence, the appellant is to lodge with the Secretary a written notice of the grounds of appeal. The appeal is to be limited to those grounds, except by leave of the Tribunal. (4) On receiving notice of the grounds of appeal, the Secretary is to forward a copy of the notice to the Tribunal along with a transcript of the evidence taken at the hearing in respect of the decision appealed against. (5) The date, time and place for the hearing of an appeal is to be fixed by the Tribunal. The Secretary is to give at least 7 days' written notice of the date, time and place to the appellant and to such other persons as the Tribunal thinks fit. (6) The Tribunal is to commence the hearing of an appeal as soon as practicable within 28 days of the lodging of the notice of the grounds of appeal. (7) The Tribunal may, in a particular case, extend any period of time specified in this clause if in its opinion the circumstances of the case so require. …

11. An appeal duly lodged may not be withdrawn except with the leave of the Tribunal. In granting such leave, the Tribunal may impose such conditions as to the payment of costs or otherwise as it thinks fit.

12.(1) The Tribunal, when hearing an appeal, is to consider as the evidence in the matter the evidence presented at the hearing in respect of the decision appealed against. The Tribunal may not consider any other evidence unless it is satisfied that it is relevant to the subject-matter of the appeal and that there is good reason why it was not presented at that hearing. (2) The Tribunal, when hearing an appeal, is not bound by the rules of, or practice as to, evidence but may inform itself of any matter in such manner as it thinks fit.

13(1) The Tribunal may hear an appeal in the absence of a party to the appeal. (2) The Tribunal may grant leave for each party to be represented by a lawyer or agent at the hearing. …

15. The Tribunal may do any of the following in respect of an appeal: (a) adjourn or dismiss the appeal, (b) uphold, reverse or vary the decision appealed against, (c) refer any matter in which the decision appealed against was made for re-hearing (in accordance with directions given by the Tribunal) to the Appeal Panel or the Board, (d) make such other order in relation to the disposition of the appeal as the Tribunal thinks fit.

16. The Tribunal may, subject to the Act and this Part, direct the manner in which any appeal before it is to be conducted.

PRIMARY JUDGE'S DECISION 45 In relation to questions concerning whether the Panel or Tribunal erred in finding the transactions in question were not "legitimate wagers", the primary judge first noted that the question whether facts fully found fall within the provisions of a statutory enactment properly construed is a question of law: Hope v. Bathurst City Council (1980) 144 CLR 1 at 7. In relation to charges 1-13, the primary judge held that the thirteen transactions in question were not bets, and that even if they were bets, they were not legitimate wagers. 46 In relation to charge 16, the primary judge held that the evidence was capable of supporting a finding of conduct prejudicial to the image of racing, and that the Panel and/or the Tribunal did not err in the way it approached the charge. 47 As regards the penalty under charge 16, the primary judge held that, before the Tribunal could exercise any power to alter a decision appealed from, it had to find error in respect of some matter raised in the Notice of Appeal. What it did was to alter the penalty on a basis not raised in the Notice of Appeal and without finding error. Accordingly, it did not have the power to increase the penalty as it did. In addition, the primary judge held that the tribunal should have alerted Mr. Waterhouse to the fact that it was seriously considering increasing the penalty before it took that course: it did not do so, so there was a denial of procedural fairness which had the effect of making the order increasing the penalty void.

GROUNDS OF APPEAL 48 The Board seeks leave on the following grounds: 1. His Honour erred in holding that in all cases where the Court or Tribunal below has formed a discretionary judgment or a judgment akin to a discretionary judgment, the Appellate Court (or Tribunal) can only act to correct error (86). 2. His Honour should have held that the duty of a Tribunal, when reviewing an administrative decision, is to determine for itself the correct or preferable decision on the material before it; whether or not there is identifiable error on the part of the administrative decision-maker. 3. His Honour erred in holding that there is a presumption in an administrative appeal to an administrative body that: the issue is whether the decision was correct when it was made. The hearing is not de novo. This is so whether or not the Tribunal is empowered to hear additional evidence (89). 4. His Honour should have held that Tribunals are generally entitled to make the correct or preferable decision upon review of a decision of an administrative decision-maker. 5. His Honour erred in holding that an appeal to the Tribunal was not a hearing de novo, and that before the Tribunal could exercise its power, it had to find error (91-97). 6. His Honour should have held that upon the proper construction of s.15 of the Racing Appeals Tribunal Act 1983 and Regulations 6, 12 and 15 of the Racing Appeals Tribunal Regulation 1999, the Tribunal was obliged to give its own decision on the evidence before it and was not constrained by the need to identify error. 7. Alternatively, his Honour erred in holding that: (a) the First Respondent made no complaint of any error in his Notice of Appeal so far as "sentence" was concerned; (b) the Tribunal did not find that the Appeal Panel had made any error at all in any of the matters raised in the Notice of Appeal; and (c) it was only on a matter not raised by the Notice of Appeal that error was discerned (97 and 98). 8. His Honour should have held that: (a) the First Respondent did complain of error so far as the "sentence" was concerned in his Notice of Appeal in that he contended that the penalty imposed by the Appeal Panel in respect of charge 16 was excessive; (b) by Grounds of Appeal 12 and 13, the First Respondent did complain of error so far as the "sentence" was concerned in that the First Respondent contended that the Appeal Panel was in error in concluding that a monetary penalty would not be an adequate reaction to the gravity of the matters giving rise to Charge 16, and that the penalty imposed by the Appeal Panel on Charge 16 was manifestly excessive; and (c) the Tribunal did find that the Appeal Panel had made two errors in respect of the matter of "sentence" raised in the Notice of Appeal, namely: (i) that Charge 16 as proved involves an element of "dishonesty" or "deviousness"; (ii) that the Appeal Panel failed to have sufficient regard to the need for personal deterrence when imposing penalty. 9. His Honour erred in finding that the Tribunal ought to have alerted the First Respondent to the fact that it was seriously considering increasing the penalty imposed upon the First Respondent by the Appeal Panel (102). 10. His Honour erred in finding that any failure by the Tribunal to have alerted the First Respondent to the fact that it was seriously considering increasing the penalty imposed upon the First Respondent by the Appeal Panel could have amounted to a denial of natural justice. 11. His Honour should have found that in the circumstances there was no denial of natural justice before the Tribunal. 49 Mr. Waterhouse seeks leave to cross-appeal on the following grounds: 1. His Honour was in error in (1) holding that the transactions the subject of charges were not bets; (2) holding that the transactions the subject of charges 1-13, if bets, were not legitimate bets; and (3) failing to hold that the Cross-Respondent by its Appeal Panel had erred in law (on the fact of the record) in holding that the thirteen bets in question were not legitimate bets because they were not truly bipartite transactions. 2. His Honour was in error (1) in holding that the Panel and the Tribunal were justified in making the finding that charge 16 had been made out; and (2) in failing to hold that the evidence was not capable of establishing conduct prejudicial to the image of racing. 50 Although the Court first heard extensive argument on the Board's appeal, I propose to deal with the issues in the following order. 51 First, whether the primary judge was in error in his decision as to whether the transactions were "legitimate wagers" within LR91(q). Second, whether the primary judge was in error in relation to the question of whether there was prejudicial conduct within AR175A. Third, the question of the nature of the appeal to the Tribunal and the question of penalty on charge 16.

LEGITIMATE WAGERS 52 This aspect was argued on the basis that error of law could justify intervention of the Court, on the basis of relief in the nature of certiorari.

Submissions 53 Mr. Brereton SC for Mr. Waterhouse submitted that the transactions were bets or wagers, because the essential elements of bets or wagers are that they relate to a contingency the outcome of which is unknown to both parties, and each party can win or lose: Carlill v. Carbolic Smoke Ball Co. [1892] 2 QB 484 at 490-1, [1893] QB 256 at 261; Attorney-General v. Luncheon & Sports Club Limited [1929] AC 400 at 405; Tote Investors Limited v. Smoker [1968] 1 QB 509; Windeyer, Australian Law of Gaming & Gambling, p.19; Gaming & Betting Act 1912 NSW, s.5. Each of the thirteen transactions satisfied both these requirements. 54 Next, Mr. Brereton submitted that the transactions were legitimate. He pointed to the primary definition of "legitimate" in the Macquarie Dictionary as "according to law, lawful". He submitted that "legitimate" in LR91(q) was the obverse of "false, misleading, or fictitious" in LR91(r). He pointed out that there was no fictitious name, no suggestion of tax fraud or money laundering, and no suggestion that the bets were not made. 55 Mr. Brereton noted that the Panel held that the transactions lacked any "bipartite" character, because different views were not professed by Mr. McCoy and Mr. Waterhouse. However, Mr. Brereton submitted, Mr. Waterhouse could be both a principal and the agent for the other principal (Limako BV v. H. Hentz & Co. Inc. [1979] 2 Lloyds Rep 23); and could profess different views in each capacity (cf. DPP v. Costa, Supreme Court of Victoria, 8/8/94, Ashley J). The Tribunal said that these were not debts which had the appearance of regularity and which would not otherwise be called into question; but this was not what was meant by "legitimate". 56 The primary judge held that a bet transacted by a bookmaker as principal and as agent for a punter could be valid if the odds were left to the bookmaker, but not if the selection of the race, the horse, and the stake were also left to the bookmaker. However, Mr. Brereton submitted, this was only a matter of the scope of the bookmaker's authority. The primary judge also held that "legitimate" meant real, genuine, not a fabrication; but, Mr Brereton submitted, he did not explain why these bets did not satisfy these criteria.

Decision 57 I accept that both parties stood to win and lose by the transactions individually. Even if Mr. McCoy's debt was only a debt of honour, adjustment up or down would be a benefit or loss to him in the circumstances of this case: see Quirey v. Queensland Principal Club [1995] 2 QdR 535. Certainly, it was not shown not to be so. 58 However, in my opinion intention is of the essence of wagering contracts: See v. Cohen (1922-23) 33 CLR 174 at 182. Although each of the charges 1-13 relate to individual transactions, in ascertaining the intention of the parties one can have regard to all the transactions and the surrounding circumstances. 59 When one has regard to those matters, in my opinion it is plain that the real basis of the transactions, and each of them, did not lie in the "chance or hope of winning the stake being in the intention of both parties" (Windeyer op.cit. at 19). The intention of both parties and their sole purpose was to confer a benefit on Mr. McCoy in such a way as to conceal that this was being done, by means of a series of transactions at extraordinary odds which gave Mr. McCoy the near certainty of receiving that benefit. 60 In those circumstances, in my opinion none of these transactions was a bet. Certainly, this intention and purpose precludes each transaction from being a genuine wager, and therefore, in my opinion, from being a legitimate wager. 61 This conclusion is confirmed by the circumstance that the "bets" were made by Mr. Waterhouse as principal with himself as agent for Mr. McCoy on terms wholly determined by Mr. Waterhouse. I accept that, if A authorises B to make bets on A's behalf with third parties, the authority may be wide enough to authorise B to select events, horses, and stakes, and to accept whatever odds B can obtain. Bets so made would still be bets, even though A had no role, otherwise than through B, in determining any of their terms. 62 However, if such authority is to B to make "bets" on A's behalf with B himself, and if it is left entirely to B to select the events, horses, stakes and odds, in my opinion such transactions do not have the bipartite character required for a bet. There is a complete absence of anything like competing professions of contrary views by the parties or their agent or agents: there is simply a selection by a single person of events, horses, stakes and odds, which is then treated as being a bet between another person and the person making the selection. 63 These considerations confirm the lack of an appropriate intention to wager; and in my opinion they would of themselves be sufficient to show that the transactions were not wagers, and certainly not legitimate wagers.

CONDUCT PREJUDICIAL 64 Charge 16 alleged that, contrary to AR175A, Mr. Waterhouse engaged in conduct whilst fielding at Canterbury Park on 6 February 2002 which was prejudicial to the image of racing. The particulars of the charge were that Mr. Waterhouse placed thirteen bets in his records on behalf of Mr. McCoy at odds of 500:1, when the APN official price ranged between $1.70 and $3.80; placed the said thirteen bets in his betting records which were not legitimate wagers; and failed to keep proper betting books in that he displayed in his client settling records a debt of $500,000.00 which had no association with his business as a licensed bookmaker.

Submissions 65 In his detailed written submissions, Mr. Brereton dealt separately with the decisions of the Panel, the Tribunal and the primary judge. In essence, his submissions were that there was no impropriety in giving extravagant odds; the bets were legitimate wagers, but even if they were not, the charge would do no more than duplicate charges 1-13; there was nothing wrong in including a non-racing debt in the settlement records; no blameworthiness attached to Mr. Waterhouse, and the possibility of false suspicion of impropriety is insufficient; and there was no damage or reasonable possibility of damage to the image of racing.

Decision 66 In my opinion, the decision on charges 1-13 means that the challenge to the upholding of the guilty finding on charge 16 must fail. 67 The business of bookmaking is plainly open to abuse in various ways, including tax evasion and money laundering. The Rules of Racing contain extensive and detailed provisions to ensure that bookmakers conduct their businesses in such a way as to minimise the possibility of abuse. These include provisions limiting the kinds of bets that can be taken and ensuring meticulous recording of bets and of financial dealings with punters in relation to bets. What Mr. Waterhouse did in this case was to create and record as bets transactions which were not genuine bets but devices to achieve a result wholly removed from the activity of betting, in such a way as would give a misleading impression of what was being done, and as would tend to cause reasonable suspicion of impropriety such as tax evasion or money laundering. 68 Mr. Brereton submitted to the effect that this could not, in the circumstances of this case, amount to conduct prejudicial to the image of racing: Mr. Waterhouse was not charged with dishonesty or with misleading his father, and there was no allegation or finding of tax evasion or money laundering; and even if there were breaches of LR91(q), and blameworthy conduct to that extent, the charge of prejudicial conduct did no more than duplicate the charges of those breaches. However, in my opinion, the misleading nature of what was done (the reason for which only emerged during Mr. McCoy's evidence) and its tendency to give rise to reasonable suspicions are matters both associated with the blameworthy breaches of LR91(q), and also additional to those breaches so as to make appropriate the further charge and finding of conduct prejudicial. 69 In my opinion, it is prejudicial to the image of racing that such conduct should become known. In my opinion, it is no answer for Mr. Waterhouse to say that he did not wish this to become known. If that were an answer, even the most dishonest conduct by bookmakers, which they intended to keep secret, could not be conduct prejudicial to the image of racing. There is always a chance that improper conduct will be discovered, and at least unless the possibility of discovery is remote, the circumstance that the participants hoped that it would be kept secret would not, in my opinion, prevent such conduct, on its becoming known, being properly characterised as conduct prejudicial to the image of racing.

CHARGE 16 PENALTY 70 As mentioned earlier, the Tribunal struck out the Board's appeal on penalty, but held that, the matter being thrown open by Mr. Waterhouse's appeal, the whole question of penalty was for his decision. 71 This view was expressed by the Tribunal at the outset of the hearing before him on 4 September 2002, as follows: HIS HONOUR: I read in the transcript that Mr Hughes started by asserting it was a hearing de novo. This Tribunal has delivered judgments about the matter. The view, which we have embraced, is that it is a rehearing but not de novo. It is a rehearing based on the written material from those places from which the appeals emanated, subject only to the right of the Tribunal in constrained circumstances to admit more evidence. That is the view that was finally embraced by him was it not? P. BRERETON: Yes. S. RUSHTON: Yes. HIS HONOUR: There is a corollary to that, of course, once an appeal is before this Tribunal it is all up for grabs, if I can use that non-legal expression, not only is a question of guilt or innocence at stake but also, is the question of penalty. You have used in your submissions, both in written form and otherwise the phrase "manifestly inadequate", a phrase no doubt which you are used to when you are appearing before a Court of Appeal complaining about a jury verdict or a judge's nasty prizes to which the response may well be, "Well it is within the range of verdicts and we do not propose to alter it." The position we have embraced here over many years is that is a question of what this Tribunals thinks is the appropriate penalty. It does not matter whether it is within the so-called range; equally you do not interfere because it may be too high. "Manifestly inadequate" is not a phrase of appropriate quality. Does anyone dissent from that broad statement? P. BRERETON: We accept the question of penalty is in your Honour's hands completely unrestrained by what was decided below. 72 The Board by its written submissions sought an increased penalty, and this was pressed orally on the basis of intent to deceive and the need for deterrence. These submissions were answered orally by Mr. Brereton, then appearing for Mr. Waterhouse. 73 The matter was dealt with in this way in the Tribunal's judgment: That brings me to the issue of penalty. The Appeal Panel delivered very short reasons to accompany their decision to substitute lesser penalties for those imposed by the Stewards. The reasons that were given embraced the concept of totality. I would agree that this is an appropriate matter at all times for a sentencing body to bear in mind. Indeed, the Stewards gave service to that concept when they assessed their own penalties. However in reassessing the penalty for charge 16 the Appeal Panel said: Turning to charge 16 a salient fact in the case is that dishonesty is not charged and the evidence does not support a finding of dishonesty. Nevertheless charge 16 is a serious charge and the Panel's view is that a monetary penalty would not be an adequate reaction to the gravity of the matters that gave rise to that charge nor in the opinion of the Panel would the imposition of a period of disqualification be an appropriate reaction to charge 16 in light of the matters proved in the evidence.

Dealing with charge 16 the Panel must bear in mind the principle of totality. Giving the matter the best consideration we can our decision is to impose a suspension of the appellant's licence for a period of nine months from today.

Whilst it is true that dishonesty is not by itself an essential feature of anything that would support a charge such as that brought under charge 16 (and therefore not particularised), nonetheless, as I have pointed out in these reasons, the evidence does reveal that the transactions were sullied by a considerable degree of deviousness. Some though might describe that as dishonest - some may not. But I do not think it is sufficient simply to say that dishonesty has not been charged and the evidence does not support a finding of dishonesty when reference might have been made, it seems to me, to the quality of that which coloured the transactions.

It is further to be observed that the Appeal Panel did not pay any attention or at all events did not provide any lip-service to the issues of deterrency, whether that deterrency be contemplated in general terms or in a particular sense. Whilst one agrees that the facts of the Fine Cotton matter are now ancient history and whilst one is mindful of the then consequences to him are now properly to be regarded as spent, nonetheless this appellant would surely understand that his conduct was going to be scrutinised far more closely than that of others. Of course Mr. Brereton S.C. pointed to the fact, as is undoubtedly correct, that these bets and the transactions which were said to be involved in the background were all transparent in the sense that they were documented in his betting records and did not in the result involve any defrauding of the Taxation Commissioner or other criminality. All of that is acknowledged. Equally one acknowledges the significant bundle of evidence, both in written and in oral form, tendered to support the appellant in terms of his personal characteristics and his on-going contributions within the racing world.

All of these matters have to be weighed together, as indeed they were weighed both by the Panel of Stewards and, one presumes, by the Appeal Panel itself, but I have to substitute my own view of the gravity of the facts as demonstrated to me. This is not like an appeal from a court to an appeal court where the appeal would only be successful if the appeal court came to the view that the assessment of penalty or damages was so out of kilter that intervention was required. In this type of appeal it is obligatory for me to approach the whole issue anew and to impose whatever penalty I think properly reflects the facts that have been demonstrated.

I think the appellant does not yet adequately comprehend the utter need for public confidence in his bookmaking operations. I regret to say that I do not share the view of the Appeal Panel. It is my judgment that the difference in my view with that of the Appeal Panel needs to be reflected in an order for disqualification although I do not propose to alter the length of the term chosen by the Appeal Panel.

The disqualification of 9 months hereby ordered will now run from 16 August 2002 being the date from which no stay was granted.

There will be no order for costs. 74 Before this Court, there was argument concerning the nature of the Tribunal's appellate jurisdiction. Glass JA in Turnbull v. NSW Medical Boards [1976] 2 NSWLR 281, at 297-8, identified six forms of litigious process loosely called "appeal". However, it seems clear that only three of these are possibilities in this case, namely: (1) An appeal in the strict sense, where the only questions are whether the tribunal below erred and if so what should it have done, and later changes in the law are disregarded and no fresh evidence is allowed; (2) an appeal by way of rehearing, where the questions addressed are whether the decision of the tribunal below is vitiated by error and what should now be done, in the circumstances as they exist at the time of the rehearing, on the basis of the evidence below and such additional evidence as the court permits; and (3) an appeal involving determination of all issues de novo, on evidence led on the appeal. 75 Mr. Rushton SC for the Board suggested another category not included in Glass JA's six categories, being something of a hybrid of categories (2) and (3): an appeal where the court is to consider the evidence below and any additional or substituted evidence on the appeal, and "resolve for itself afresh the ultimate issue for determination" (see Cooper v. Coffs Harbour Council (1997) 97 LGERA 125 at 127). 76 For the Board, it was submitted that the appeal to the Panel involved a de novo hearing or an appeal of the type referred to in Cooper, or at worst a re-hearing; while for Mr. Waterhouse it was submitted that it was an appeal in the strict sense, or at worse a re-hearing.

Submissions 77 Mr. Rushton SC for the Board referred to grounds relied on by the primary judge at par.[95] of his judgment in support of his view that the Tribunal could interfere with the Panel's decision only if it identified error. Those grounds were that the Tribunal Act gave only the defendant a right of appeal, that the penalties in question could involve deprivation of a person's livelihood, that the appeal was an appeal to an independent body, and that there was no policy reason for a hearing de novo. The primary judge also relied on what he called the ordinary presumption that success in an appeal required identification of error. 78 Mr. Rushton submitted that the Tribunal Act in fact gave a right of appeal to the Board as a person aggrieved. However, the Board did not dispute the Tribunal's decision in this present case that the regulations, made pursuant to s.18 of the Act, had the effect that only defendants could appeal. In any event, Mr. Rushton submitted that the limitation of the right of appeal to defendants was at best neutral: when the Crown did not have an appeal in criminal cases, this was considered to be a reason for the appeal court exercising the power to re-sentence by increasing sentences. 79 Mr. Rushton submitted that the circumstance that penalties could involve deprivation of livelihood, and that the Tribunal was the first independent body that might look at the question, were grounds which supported there being a consideration of the matter de novo: see Builders Licensing Board v. Sperway Constructions (Sydney) Pty. Limited (1976) 135 CLR 616 at 624-5. 80 Mr. Rushton submitted that the hearing before the Panel was certainly a de novo hearing or at least a hearing of the type referred to in Cooper. He referred to ss.43(1) and 43(3) of the Board Act, and pointed out that the only previous enquiry was by a body which was police and prosecutor and judge combined: cf. R. v. Brewer Ex Parte Renzella [1973] VR 375, at 380, Sellen v. Victorian Amateur Turf Club (Victorian Supreme Court 15/6/98) at p.15. Indeed, Mr. Rushton submitted, there was no requirement in the Rules of Racing or the Board Act that the stewards even hold a hearing. The provision of LR106(7) could not affect the construction of the Act, or again at worst would make the position similar to that discussed in Cooper. Mr. Rushton pointed to s.15(b) of the Tribunal Act, and submitted that this meant that the appeal to the Tribunal must be of the same nature as the appeal to the Panel. Mr. Rushton also referred to Clarke & Walker Pty. Limited v. Department of Industrial Relations (1985) 3 NSWLR 685 at 691-7 and 698-9; and submitted that the circumstance that the appellate body was not a court did not mean that the approach of this authority was not applicable: McDonald v. Guardianship & Administration Board [1993] 1 VR 521 at 528-9. 81 Mr. Rushton submitted that, even if the appeal to the Tribunal was a rehearing in which it was necessary to identify error, the Tribunal did find error in this case, namely that the Panel said that Mr. Waterhouse's conduct was not dishonest, gave insufficient attention to deterrence, and imposed a penalty that was manifestly inadequate. The absence of an appeal by the Board did not mean that the Tribunal could not increase the penalty (the Board's appeal was precluded only by the Tribunal Regulation, not by the Tribunal Act). Further, the circumstances disclosed by the transcript, set out above, disclosed there was no departure from procedural fairness. 82 Mr. Brereton submitted that the Tribunal misconceived its jurisdiction, because the appeal to the Tribunal was an appeal in the strict sense, or at least a rehearing in which jurisdiction could be exercised only if error was found. Accordingly, its decision was void. Alternatively, the Tribunal did not in fact find error and was not entitled to increase the penalty. Alternatively again, there was a denial of natural justice. 83 Mr. Brereton submitted that prima facie an appeal provided for by a statute is an appeal in the strict sense: Re Farrar (1895) 16 LR(NSW) BNP 3; Logan v. Woongarra Shire Council [1983] 2 QdR 689. This was confirmed by the reference to "rehearing" in the Board Act concerning the appeal to the Panel, and the absence of such word in the Tribunal Act. 84 Mr. Brereton submitted that this was not an appeal from an executive or administrative authority to a court, as in Ex Parte Australian Sporting Club Limited, Re Dash (1947) 47 SR(NSW) 283 or Sperway, but rather an appeal from an administrative authority to another administrative authority, where the presumption is that the rights of the parties are to be determined on the materials that existed at the date of the original decision: see Strange-Muir v. Corrective Services Commission NSW (1986) 5 NSWLR 234 at 249-251, Re Coldham Ex Parte Brideson [No.2] (1990) 170 CLR 267 at 273-4. Mr. Brereton also referred to Coal & Allied Operations Pty. Limited v. Australian Industrial Relations Commission (2000) 203 CLR 194 at [12]-[14] and Allesch v. Maunz (2000) 203 CLR 172 at [23]. 85 Mr. Brereton submitted that LR106(7) meant that even the appeal to the Tribunal was not a de novo appeal. This was clearer again in relation to the Panel: under the Panel Regulation, the appeal was confined to grounds of appeal, no further evidence was admitted without good reason, and there was power to remit. He referred to a similar view concerning somewhat similar provisions in Western Australia: Danagher v. Racing Penalties Appeal Tribunal (1995) 13 WAR 531. In relation to the possibility of a hybrid type appeal as discussed in Cooper, Mr. Brereton noted that Cooper itself was doubted in Histollo Pty. Limited v. Director-General of National Parks & Wildlife Service (1998) 45 NSWLR 661. 86 Mr. Brereton submitted that the Tribunal, in dealing with penalty in this case, made it clear that the question it addressed was not whether error had been demonstrated, but rather what in its view was the appropriate penalty, and this was an error of jurisdiction: see Coal & Allied at [31]-[32], Minister for Immigration & Multicultural Affairs v. Yusuf (2001) 206 CLR 323 at [82], and Re Patterson Ex Parte Taylor [2001] 207 CLR 391 at [82] and [189]. Although to misconceive a source of jurisdiction is not as such an error going to jurisdiction (The Queen v. Moore, Ex Parte Graham (1977) 138 CLR 164), if this caused the tribunal in question to ask the wrong question, it will be an error going to jurisdiction (Mercantile Mutual Life Insurance Co. Limited v. Australian Securities Commission (1993) 40 FCR 409 at 412). 87 Mr. Brereton submitted that the Tribunal did not, on a fair reading of its reasons, identify error. Even if it had done so, it could not increase the penalty. There was no appeal by the Board under the Tribunal Act: this was so as a matter of construction (cf. Australian Securities & Investment Commission v. Vis (2000) 35 ACSR 416 at [74]) supported by the history of the legislation. The word "vary" in Regulation 16 did not include increase. The appeal was confined to the grounds stated by Mr. Waterhouse in his Notice of Appeal, and those grounds did not refer to dishonesty, deterrence or inadequacy: the Board could not have sought leave to have those grounds included, and in any event it did not do so and no leave was granted. To find and rely on such an error would have been an error of law by the Tribunal justifying intervention by certiorari. 88 As regards denial of natural justice, Mr. Brereton submitted that since Parker v. DPP(NSW) (1992) 28 NSWLR 282, a practice had developed of explicit warnings being given that an increase in penalty was under serious consideration, a practice followed by the Tribunal. The absence of such an explicit warning in this case meant that Mr. Waterhouse was denied the opportunity to consider applying for leave to withdraw the appeal. Mr. Brereton referred to the case of McL (2000) 114 ACrimR 491. 89 Finally, Mr. Brereton submitted that this was not a case in which the issues justified the grant of leave to appeal to the Board. 90 In reply, Mr. Rushton submitted that if there was an error by the Tribunal in relation to the nature of the appeal, it was not one which affected the exercise of power, because the Tribunal did find the necessary conditions for exercise of the power, namely errors by the Panel: see Yusuf at [82], The King v. Bevan Ex Parte Elias and Gordon (1942) 66 CLR 452 at 487, Fairfield City Council v. N. & S. Olivieri Pty. Limited [2003] NSWCA 41 at [2] and cases referred to there, and Minister for Immigration & Multicultural Affairs v. Wang [2003] HCA 11. Furthermore, if the decision was properly supportable, the Court would not, as a matter of discretion, interfere: Australian Broadcasting Authority v. Saatchi & Saatchi Compton (Victoria) Pty. Limited (1985) 10 FCR 1 at 9.

Decision 91 For reasons which include the Board's argument based on s.15(b) of the Tribunal Act, it is appropriate first to consider the nature of the appeal from the stewards to the Panel. The passage from Renzella [1973] VR at 380, per Adam J, relied by the Board, is pertinent: What then do the Rules provide relevant to the nature of a Stewards Inquiry and the principles of natural justice? It is the Stewards acting at a race meeting and no others who are to exercise the powers of inquiry conferred under the Rules, AR (8) (d), and to convict and punish offenders. The same Stewards are required to attend at race meetings and to perform what in many respects resemble the function of policemen to watch and observe racing in all its aspects, on the lookout for any improper conduct on the part of participants which may be the subject of a subsequent inquiry to be conducted by themselves.

It is conceded that at such an inquiry, they are entitled, nay bound, to act upon their own personal observations as part of the evidence before their inquiry. It is conceded, too, that if they decide that the evidence warrants charging an offence, then they must formulate the charge and notify the person to be charged of the particulars of the charge. Thus, they must also act as accusers.

As it is their duty after an inquiry to find the charges sustained or otherwise, and if sustained also to impose an appropriate punishment, we are presented under the Rules with a tribunal of a character radically different from that of an ordinary Court of law, but required to exercise powers of a similar nature. It is clearly quite contrary to the ordinary concept of a fair trial that the Judge should also have acted in the role of a policeman and made personal observations on the very matters to be adjudicated upon, that he should himself be the accuser, that he should himself be, as in many instances here must be the case, the principal witness for the prosecution, and entitled, if persuaded by the accuracy of his own personal observations, to act on such evidence, whatever evidence to the contrary may be adduced.

That the Stewards should be empowered to adjudicate under such circumstances offends many of the more elementary Rules of natural justice, the rule, for example, that a Judge must not be a Judge in his own cause and must be in a position to make a detached and impartial adjudication. In substance, the only requirement of natural justice unaffected by the Rules relating to the Stewards and their inquiry, because not therein dealt with, are that the Stewards must give adequate notice to a person charged of the precise charges against him, and a fair opportunity after hearing the evidence against him of making his defence thereto. ... 92 Although there is no express requirement in the Rules of Racing or the Board Act that the stewards hold a hearing, in my opinion LR106(7), referring to rehearings on "evidence adduced at the hearing in respect of the decision appealed against" sufficiently indicates that the stewards must hold a hearing. And although stewards may rely on their own observations, in my opinion natural justice would require that, at this hearing, the stewards give fair notice to the accused person of the substance of those observations. There is no express requirement that stewards give reasons, but in my opinion there is an implied requirement that at least basic reasons be given. 93 It is plain from s.43 of the Board Act that the appeal to the Panel is by way of rehearing, so that even if this appeal is treated as an appeal from one administrative body to another, the presumption referred to in Strange-Muir is displaced. The question is whether the Panel's role is limited to detection and correction of error, or whether the Panel is to substitute its own view on a consideration de novo of the material. 94 The fact that further evidence received on the rehearing is subject to the discretion of the Panel (LR106(7)) and the power to remit (LR107(a)) point towards limitation to correction of error. However, the lack of any requirement for grounds of appeal, the width of the powers under LR107(b) (explicitly including increasing penalty) and s.43(3) of the Board Act (providing that the Panel should act informally, inform itself in any way, and decide on the real merits and justice of the matter) suggest that the role is not limited to correction of error. 95 The Panel is not completely independent of the Board, but has membership with legal expertise (ss.45(3) and 46(1)), and sits as in open court (s.43(4)). The considerations referred to in the passage from Renzella, plus these characteristics contrasting strongly with the position of the stewards, suggest to me that the Panel should be able to look at the matter de novo; and in my opinion that is the position. 96 What then is the nature of the appeal to the Tribunal? The Board submits that, if the appeal to the Panel is not de novo, the appeal to the Tribunal must be, otherwise there is no de novo hearing after the hearing by the stewards, which has the deficiencies referred to in Renzella; while if the appeal to the Panel is de novo, then s.15(b) of the Tribunal Act suggests that the appeal to the Tribunal must also be, otherwise the right to a de novo appeal would be lost because of the Panel's default. 97 It can be said further, in favour of the Tribunal being able to consider the matter de novo, that it is very like a court in that it is independent of the Board and is constituted by a retired judge or person qualified to be a judge (ss.4, 6, 7), and its proceedings are as in open court (s.16); so one has an appeal from an administrative body, the Panel, to a court-like body, as in Clarke & Walker. 98 However, many features of the Regulation point to its role being limited to the correction of error. Regulation 7(3) requires grounds, and very importantly limits the appeal to those grounds except with leave. Regulation 12(1) provides that there should be no other evidence unless the Tribunal considers there is good reason why it was not presented below (although the effect of this is to some extent cut down by the liberties provided by Regulation 12(2)). 99 The Regulation cannot control the construction of the Act, but the Act itself does not specify the nature of the appeal, and it does authorise regulations making provision "for or with respect to appeals" including procedures and matters "incidental to or connected with appeals". In those circumstances, I think one can have regard to the Regulation in deciding what is the nature of the appeal. 100 Taking all these matters into account, and also having regard to the consideration that it seems unlikely that the legislature would provide for two tiers of de novo appeals, my opinion is that, if one could disregard any effect of ss15(b) and 15(c) of the Tribunal Act, the appeal to the Tribunal is one where the Tribunal's role is limited to the detection and correction of error. 101 However, there is force in the Board's submission, based in particular on s.15(b) of the Tribunal Act, that an accused person would not be deprived of a de novo appeal by the default of the Tribunal, so that the appeal under s.15(b) must be de novo; and therefore the appeal under s.15(a) must also be de novo. Certainly, appeals under s.15(b) are appeals from stewards, who can give very limited natural justice, having regard to the considerations set out in the passage from Renzella, to a court-like body, so that Clarke & Walker would strongly support that there be consideration of the matter de novo. Furthermore, s.15(b) itself suggests that the Tribunal should do what the Panel should have done, if it had not defaulted, that is (on my view as to appeals to the Panel) reach its own view as to the correct result. That has some confirmation from s.17 of the Tribunal Act, whereby the decision of the Tribunal is taken to be the decision of the Panel. 102 There are contrary indications from the Regulation, as before, namely the requirement for grounds in Regulation 7(3) and the limitation concerning evidence in Regulation 12(1). However, it can be said that the ground in such cases could simply be that the correct and preferable decision is different from that which the stewards made, and the power of the Tribunal under Regulation 12(2) could overcome Regulation 12(1) limitations. 103 There seem to be three possibilities here: first, that s.15(b) appeals are rehearings requiring detection of error; second, that s.15(b) appeals and s.15(a) appeals are both appeals requiring de novo consideration; and third, that s.15(b) appeals are appeals requiring de novo consideration, while s.15(a) appeals require detection of error. Of these three possibilities, I think the second is the least satisfactory: I do not think that it could have been intended that there be two tiers of appeals each requiring de novo consideration. 104 Although it is not absolutely necessary to decide the matter in this case, I prefer the third alternative to the first, although it might prima facie seem unlikely that the Act and Regulation should provide for two different types of appeal to the one body. But the statute gives a right of appeal and does not itself specify what is involved in that right of appeal, leaving it to the Regulation and to the context to determine the nature of the appeal. Under the Act, the determination of the Tribunal is treated as a determination of the Panel, and in those circumstances it seems to me not unreasonable that, if the Panel has made a decision, the question before the Tribunal should be whether error is shown; while if the Panel has not made a decision but has neglected or refused to deal with an appeal, the Tribunal should in substance do what the Panel should have done. 105 Accordingly, in my view, s.15(a) appeals require detection of error. If, contrary to my view expressed above, the appeal to the Panel did not involve de novo consideration, I would still reach the same conclusion. I think it most unlikely that an appeal involving de novo consideration would be introduced for the first time at the second tier of appeals. I would add that there were no detailed submissions as to the nature of hearings by the Board itself or of appeals from the Board under s.15(c). I do not think it necessary to reach any conclusion on this. 106 In this case, I accept that the Tribunal did not approach its task as one where detection of error was required before the decision of the Panel could be interfered with. On the appeal against sentence, the Tribunal took the view that it could substitute its own view without first deciding that there was error. That was in my opinion an error going to jurisdiction, or at least an error of law on the face of the record. I am unable to say that it was not material. 107 The next question is whether relief should have been refused by the primary judge, because there was in truth error by the Panel in relation to the questions of honesty, deterrence and manifest inadequacy, giving a discretionary reason to deny relief: cf. Saatchi. That raises a further question, namely even if there were such errors, could the Tribunal have entered upon a review of penalty by reason of these errors? 108 I note that the Board has not challenged the Tribunal's finding that the Board had no right of appeal from the Panel, although it did submit that this was by reason only of the Regulation and not by reason of the provisions of the Tribunal Act. I do not find it necessary to rule on that aspect. However, the Tribunal's finding that the Board had no appeal meant that the Board could not have sought to have the Panel's penalty reviewed by reason of the errors referred to, or to have these errors added to Mr. Waterhouse's grounds of appeal. Those errors were certainly not within Mr. Waterhouse's grounds of appeal, and Mr. Waterhouse certainly did not seek to have them added. In my opinion, the limitation in Regulation 7(3) is binding on the Tribunal as well as the parties, so the appeal is limited to the grounds of appeal, and matters outside those grounds "by leave of the Tribunal". This contains no suggestion that the Tribunal can simply add its own grounds, only that it can give leave to a party to rely on further matters. 109 If an error within the grounds of appeal (such as that the Panel acted on irrelevant considerations) vitiated the Panel's decision on penalty, it may then be open to the Tribunal to impose the penalty which it believed appropriate, even if this is greater than that imposed by the Panel. But the errors that the Board now seeks to rely on were not within the grounds of appeal, were never sought to be added by anyone, and were never the subject of leave by the Tribunal. 110 In my opinion, therefore, the primary judge was not in error in granting relief, in so far as it had the effect of quashing the increase in penalty; and there can be no question of remitting the matter to the Tribunal for further consideration. Accordingly, any appeal from that part of the primary judge's decision would fail. 111 It is not necessary to decide the question of denial of natural justice. However, I am inclined to the view that, if the case had been one where the Panel decision was vitiated by an error raised by a ground of appeal, Mr. Waterhouse would have been sufficiently on notice that an increased penalty was a real possibility. I do not think the material referred to by Mr. Brereton, contained in reports of cases decided by the Tribunal, indicates a uniform practice of informing appellants that an increase in penalty was seriously under consideration, such that any failure to do this in circumstances where a penalty is increased is a denial of natural justice. In this case, in my opinion, the question of increase and the view of the Tribunal that it could increase the penalty were well and truly on the table. The case is in my opinion very different from Parker.

CONCLUSION 112 Although Mr. Brereton submitted that leave should not be granted, in my opinion the issues sought to be raised on the appeal are sufficiently substantial and of sufficient general significance to justify the grant of leave, and in my opinion it is also appropriate to grant leave for the cross-appeal. I agree with Handley JA that the formal order of the primary judge should be varied as he proposes. Otherwise, for reasons I have given, both the appeal and cross-appeal should be dismissed. 113 No particular submissions on costs were made. In my opinion, it is appropriate to make orders for costs, but give leave to either party to apply by written submissions within 7 days for a different order. 114 The appellate process was initiated by the Board, and the issues raised on the appeal were more substantial that that raised on the cross-appeal. I think it would be difficult to separate out completely the costs of the appeal and the cross-appeal, and in my view the appropriate course is to make an order which has the general effect of leaving the Board liable to pay about three-quarters of the costs of the totality of the appellate proceedings. I think this would be achieved by an order leaving the Board paying its own costs of the appeal and cross-appeal, and requiring the Board to pay one-half of Mr. Waterhouse's costs of the appeal and cross-appeal. 115 Accordingly, I propose the following orders: 1. Leave granted for the appeal and cross-appeal, notices of appeal and cross-appeal to be filed within 14 days. 2. Set aside order that the decision of the Tribunal on 6 September 2002 was void, and in lieu thereof order that that decision, in so far as it varied the penalty imposed by the Appeal Panel, but not otherwise, be quashed. 3. Otherwise, appeal dismissed. 4. Cross-appeal dismissed. 5. The Board to pay one-half of Mr. Waterhouse's costs of the applications for leave, appeal and cross-appeal. 6. Liberty to either party to apply by submissions in writing within 7 days for a different costs order, in which case the other party can respond by submissions in writing within a further 7 days. 116 SANTOW JA: I agree with the reasons and orders proposed by Hodgson JA and the additional observations of Handley JA.

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