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[2026] NSWCA 115
appellant. Leave to appeal granted; appeal allowed; ATC’s notice of contention dismissed; Kunc J’s 11 March 2026 orders set aside and ATC’s amended summons dismissed; the 19 December 2025 stay order set...
The NSW Court of Appeal held that RNSW could appoint an administrator to the ATC in the particular circumstances described. The Court treated the ATC’s financial health and governance as potentially connected to its ability to operate racecourses and conduct thoroughbred race meetings. It found that RNSW’s reasons, read fairly and as a whole, supported that connection. The Court also rejected the ATC’s arguments that RNSW had unreasonably misread the KordaMentha report, that the Merger Act impliedly repealed the appointment power, or that the power conflicted with the Corporations Act. The appeal succeeded, although the Court temporarily stayed operation of the appointment until 13 July 2026 or further order.
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Racing New South Wales (RNSW) appointed Morgan Kelly as administrator of the Australian Turf Club Ltd (ATC) on 15 December 2025. It relied on s 14(2)(g) of the Thoroughbred Racing Act 1996 (NSW) (TRA), which gives RNSW power to “appoint an administrator to conduct the affairs of a race club” [10]. The appointment followed months of concern about the ATC’s finances, governance and board effectiveness.
The ATC operates Sydney’s four thoroughbred racecourses: Royal Randwick, Rosehill Gardens, Canterbury Park and Warwick Farm [22]-[27]. RNSW’s concerns included the ATC’s reliance on a $30 million Commonwealth Bank facility, the possible need for RNSW to extend its guarantee, uncertainty about the club’s cash-flow forecasts and the ATC board’s response to financial and governance risks [31]-[40], [65].
The ATC challenged the appointment. The primary judge declared it invalid for two principal reasons: the appointment was not made in the exercise of a function under s 13 of the TRA, and RNSW had made a jurisdictionally erroneous assessment of the KordaMentha report [79]-[86]. The ATC also contended that the appointment power was unavailable because it conflicted with the Merger Act and corporations legislation. The primary judge rejected those further arguments [87].
The Court of Appeal granted RNSW leave to appeal and allowed the appeal. It set aside the primary orders, dismissed the ATC’s amended summons and its notice of contention, and ordered costs against the ATC [260]-[262]. The Court stayed operation of the appointment until 5 pm on 13 July 2026, or further order [262]. It stressed that its conclusion addressed this particular factual setting, not every possible use of s 14(2)(g) [4].
The Court’s central statutory question was whether the appointment was within RNSW’s function under s 13(1)(b) to “control, supervise and regulate horse racing in the State”. The answer depended on the meaning of “horse racing”, defined in s 3(1) as “the racing of galloping horses as referred to in the [Australian Rules of Racing]” [6], and on what role race clubs have in that regulated activity.
The Court rejected a narrow construction that would confine “horse racing” to the act of horses racing on the track. The Australian Rules of Racing (ARR), both in 1996 and at the time of the appointment, regulated a system in which thoroughbred racing could take place only at approved meetings conducted by a “Club” [116]-[121]. That system made functioning race clubs and an effective relationship between the clubs and RNSW important to the conduct of racing [121].
The Court therefore treated the statutory definition as identifying the character and topic of regulated racing, not an exhaustive list of activities within it [122]. The promotion, conduct and control of race meetings, the safe operation of facilities, and the finances and governance needed to manage meetings properly “may fall within” horse racing for s 13(1)(b) [122]. That conclusion was not a finding that every commercial or governance issue at any race club automatically concerns horse racing. RNSW itself accepted that matters of fact and degree arise; the Court rejected its broader submission that any threat to a club’s finances or governance necessarily affects racing [90].
The particular connection mattered. The ATC’s constitution stated that it was established for the encouragement of horse racing [20]. The evidence showed racing was a major source of revenue, and that its racecourses were central assets [22]-[25]. The Court inferred that the ATC’s effective functioning was integral to horse racing in NSW [27]. RNSW’s stated concerns were not simply about isolated commercial choices. Read as a whole, its reasons treated the ATC board’s effectiveness, financial strategy and governance as affecting the club’s ability to operate and conduct race meetings [62]-[76].
The Court also addressed the relationship between functions and powers in ss 13 and 14. It did not accept a categorical rule that every power in s 14 must always be exercised within a function listed in s 13. That relationship depends on the Act’s text, context and structure [129]-[130]. But it did not need to decide the broader question because the appointment here fell within RNSW’s s 13(1)(b) function [131]-[140]. Its reasoning included the express power to appoint an administrator, the other powers concerning race clubs, and provisions addressing financial management and information from clubs [133]-[138].
On the KordaMentha report, the Court said RNSW’s reasons had to be read fairly and as a whole, not with an “eye keenly attuned to the perception of error” [61]. The report described several ways of dealing with the maturing bank facility. Some depended on RNSW extending its guarantee; others depended on RNSW permitting the ATC to offer property as security for an extension or refinancing [42]-[44]. But after the report, the ATC’s correspondence focused heavily on requesting an extension of the guarantee [46]-[52]. The Court held that RNSW could take the later correspondence and events into account when assessing how much weight to give the earlier report [161]-[167].
Even if RNSW had made a factual error, that would not automatically establish jurisdictional error. The Court emphasised the high, context-specific threshold for legal unreasonableness and the need to avoid merits review [149]-[158]. Here, there were several independent criticisms of the report and other reasons supporting the appointment. The Court concluded any possible error was neither sufficiently irrational or unreasonable nor material to the ultimate decision [168]-[177].
The appeal judgment describes the prior legal framework through the TRA, the ARR, the Merger Act and the Corporations Act, and explains how those laws interact. It does not announce that every financial or governance concern at a race club falls within “horse racing”. Rather, it rejects an artificial separation between racing activity and the institutional conditions necessary to hold race meetings. In this case, the functioning of the ATC’s board, finances and facilities could be relevant because of their connection to the conduct of thoroughbred meetings [121]-[123].
On statutory powers, the judgment maintains a contextual approach. It does not establish that powers and functions are always co-extensive, or that a power in s 14 can never be exercised independently of s 13. The general boundary remains a matter of statutory construction. The holding is narrower: on these facts, the appointment was a means of controlling, supervising and regulating horse racing [129]-[140].
For judicial review, the decision reiterates that reasons are assessed fairly and as a whole, with appropriate restraint, but that courts must not fill gaps by speculation [145]-[148]. A decision-maker’s factual assessment may be reviewable, but a factual mistake alone will rarely be jurisdictional error. The asserted error must be considered in its statutory setting and, where required, shown to be material [155]-[158], [171]-[177].
For the interaction of State and Commonwealth legislation, the Court explained that Corporations Act s 5E expresses an intention for concurrent operation of State and Territory laws, subject to direct inconsistency [211]-[224]. The test is not confined to whether it is impossible to obey both laws. The issue is whether the State provision would alter, impair or detract from the operation of the identified Commonwealth provisions [220]-[224]. The Court rejected a general proposition that the Corporations Act exhaustively regulates every aspect of company management or administration, while leaving open that a particular topic might be exclusive if the legislation showed that intention [224].
At [122], the Court said that the definition of horse racing “identifies the character of horse racing that is regulated under the TRA” and “does not delineate the particular activities that fall within that definition”. In plain English, the ARR help identify the kind of racing governed by the statute, but do not necessarily set an exhaustive boundary around every relevant activity. The Court treated effective clubs, safe facilities and adequate governance and finances as potentially relevant to conducting races.
At [131], the Court asked whether the appointment “was a means of” controlling, supervising and regulating horse racing. This formulation focuses on the relationship between the power used and the statutory function. The Court’s answer depended on the specific relationship between the ATC’s governance and its ability to conduct race meetings, rather than a general proposition about all race clubs.
At [150]-[154], the Court warned that describing judicial review as a “qualitative assessment” should not invite a court to substitute its view of the merits. In plain English, a court may scrutinise whether the decision-making process meets legal standards, but it is not free to decide whether it would have made the same decision.
At [163], the Court said an administrative decision-maker should take account of the most up-to-date relevant material. Applied here, RNSW was not confined to the information available when KordaMentha wrote its report. It could consider subsequent correspondence bearing on whether the proposed refinancing alternatives remained realistic.
At [224] and [258], the Court framed and answered the Corporations Act issue. The ATC had to show that the TRA power would alter, impair or detract from the operation of the particular federal provisions it relied on. The Court found it had not done so. That does not mean every State law affecting a corporation will be consistent with the Corporations Act; the result turned on the provisions identified and the arguments made in this case.
The judgment is most directly relevant where a statutory racing regulator has a power concerning the affairs of a race club, and the asserted grounds for using it concern the club’s capacity to conduct regulated race meetings. Facts likely to matter under this reasoning include whether the entity is a race club within the statutory definition, what racing it conducts, how central the club and its facilities are to those meetings, and whether the identified governance or financial problems have a demonstrated connection to the club’s ability to function [20]-[27], [121]-[125].
The reasoning also makes the decision-maker’s stated reasons important. Courts will examine their structure and read them as a whole. The distinction in this judgment between factual matters that “contributed to” the decision and evaluative “views” that justified it was material to the Court’s understanding of what RNSW actually decided [65]-[76]. A challenge directed at one factual finding may not establish materiality if other independent reasons support the outcome [171]-[177].
For an inconsistency argument involving corporations legislation, the case shows the importance of identifying the specific Commonwealth provisions said to be impaired and explaining the practical or legal effect of the State provision on their operation. Broad reliance on corporate management or external-administration provisions, without that close analysis, did not establish inconsistency here [224], [226], [258].
The Court expressly cautioned against treating its reasoning as a comprehensive definition of the limits of the administrator power. Other cases may have different facts and raise different issues [4].
The supplied judgment is dated 19 June 2026 and does not refer to any later judicial treatment of its own reasoning. It therefore provides no basis for saying whether subsequent courts have followed, distinguished or criticised it.
The judgment itself applies, discusses or distinguishes earlier authorities. It applies the approach of Wu Shan Liang and Della Bruna to reading reasons fairly and as a whole [61], [145]-[148]. It relies on Leon Fink Holdings when framing whether the appointment was a means of exercising RNSW’s function [126], [131]. It applies Peko-Wallsend in considering the relevance of later material [163]. For the Merger Act, it applies the harmonious-construction approach described in Cottle [191], [199]. For legal unreasonableness and materiality, it discusses Li, SZVFW, LPDT and other authorities [149]-[158]. These are the authorities the judgment uses; they are not later treatments of this decision.
The Court deliberately left open whether s 14(2)(g) can ever be used without the exercise of a function in s 13 [130]-[131]. It also declined to define the precise outer boundary of “horse racing” or the administrator power in other circumstances [4], [122]. Future disputes may therefore need to assess the statutory text and the connection between the particular club’s affairs and regulated racing on their own facts.
The judgment did not identify precisely which powers remain with directors while a TRA administrator is appointed. It observed that the directors are not expressly removed and considered that some residual powers would remain, but said it was neither necessary nor appropriate to define them [242]-[243]. It also did not decide whether the Corporations Act’s s 5G would save the State power if an inconsistency had otherwise been made out [258]-[259].
The judgment does not establish how a materially different corporation, club or regulatory purpose would be treated. Nor does it decide the outcome of any later challenge based on different evidence, different reasons, a different statutory framework or a specific conflict with a particular Corporations Act provision. Those are questions the judgment leaves dependent on the relevant legislation and facts.
This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Racing NSW v Australian Turf Club Ltd [2026] NSWCA 115
Hearing dates: 28-29 May 2026
Date of orders: 19 June 2026
Decision date: 19 June 2026
Before: Kirk JA; Stern JA; Griffiths AJA at [1]
Decision: (1) Leave to appeal is granted.
(2) The notice of contention filed on 1 April 2026 is dismissed.
(3) The appeal is allowed.
(4) The orders of Kunc J of 11 March 2026 are set aside and in lieu thereof it is ordered that:
(a) the amended summons filed by the Australian Turf Club Ltd (ATC) on 12 February 2026 is dismissed; and
(b) the ATC is to pay Racing New South Wales’ (RNSW’s) costs of the proceedings at first instance.
(5) Order 1 of the orders of Kunc J on 19 December 2025 is set aside.
(6) The ATC is to pay RNSW’s costs of the appeal.
(7) The operation of the appointment on 15 December 2025 by RNSW, under s 14(2)(g) of the Thoroughbred Racing Act 1996 (NSW), of Morgan Kelly as administrator to conduct the affairs of the ATC is stayed until 5pm on Monday 13 July 2026, or such other time as is ordered by a judge of this Court.
Catchwords: ADMINISTRATIVE LAW — construction of reasons — functions and powers — whether appointment of administrator fell within the ambit of functions — whether the appointment of administrator was required to fall within the ambit of functions — definition of “horse racing” within the Thoroughbred Racing Act 1996 (NSW)
ADMINISTRATIVE LAW — judicial review — jurisdictional error — whether decision-maker erred in treatment of report produced in response to a show cause notice — high threshold in establishing legal unreasonableness — no such error established
STATUTORY INTERPRETATION — amendment and repeal — whether provision of the Thoroughbred Racing Act 1996 (NSW) impliedly repealed by the Australian Jockey Club and Sydney Turf Club Merger Act 2010 (NSW) — implied repeal not established
CONSTITUTIONAL LAW — alleged inconsistency between Thoroughbred Racing Act 1996 (NSW) and Corporations Act 2001 (Cth) and Corporations Law (NSW) — meaning and scope of operation of s 5E of the Corporations Act — tests for inconsistency under s 109 of the Constitution — whether appointment of an administrator under State Act consistent with provisions in Corporations Act dealing with control and management of corporations — analogy between appointment of an administrator and a receiver — no inconsistency established
Legislation Cited: Acts Interpretation Act 1901 (Cth)
AJC Principal Club Act 1996 (NSW)
Atomic Energy Commission Act 1953-1973 (Cth), s 17
Australian Jockey Club and Sydney Turf Club Merger Act 2010 (NSW), ss 5, 6, 9, 30, 31, 40, 44, Sch 1
Betting and Racing Act 1998 (NSW), ss 4, 5
Building and Construction Industry Security of Payment Act 1999 (NSW)
Commonwealth Constitution, s 109
Corporations Act 2001 (Cth), ss 5D, 5E, 5F, 5G, 5H, 5I, 9AC, 9AD, 134, 135, 140, 179, 180, 181, 182, 183,184,198A,198G, 201A, 588G, 588H; Pts 5.2, 5.3A, 5.4, 5.4A, 5.5; Sch 2, ss 5-5, 5-15
Corporations (New South Wales) Act 1900 (NSW), s 5
Health Practitioner Regulation National Law (NSW) 2009
Interpretation Act 1987 (NSW), s 34
Racing Administration Act 1998 (NSW)
Supreme Court Act 1970 (NSW), s 67
Thoroughbred Racing Act 1996 (NSW), ss 3, 4, 11, 13, 14, 29A-29V
Thoroughbred Racing Amendment Act 2008 (NSW)
Australian Rules of Racing
Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41
Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656
Allianz Australia Insurance Ltd v Viksne (2021) 106 NSWLR 306; [2021] NSWCA 268
Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237; [1980] HCA 8
Australian Turf Club Ltd v Racing NSW (No 2) [2026] NSWSC 184
Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399; [1995] HCA 28
BHD18 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 151
Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199
Chung v R [2007] NSWCCA 231; (2007) 175 A Crim R 579
Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47; [1986] HCA 42
Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1008; (2006) 203 FLR 394
DCP16 v Minister for Immigration and Border Protection [2019] FCAFC 91
Della Bruna v Health Care Complaints Commission [2025] NSWCA 105
Dickson v The Queen (2010) 241 CLR 491; [2010] HCA 30
Elders Forestry Ltd v Bosi Security Services Ltd [2010] SASC 223; (2010) 80 ACSR 122
G Global 120E T2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39; (2025) 99 ALJR 1465
Gambotto v WCP Ltd (1995) 182 CLR 432; [1995] HCA 12
Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] NSWR 782
HIH Casualty & General Insurance Ltd v Building Insurers’ Guarantee Corporation [2003] NSWSC 1083; (2003) 202 ALR 610
Hopkins v Worcester & Birmingham Canal Proprietors (1868) LR 6 Eq 437
Jemena Asset Management (3) Pty Ltd v Coinvest Limited (2011) 244 CLR 508; [2011] HCA 33
John Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB 113
Kathleen Investments (Australian) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117; [1977] HCA 55
Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672; [1979] HCA 26
Loo v Director of Public Prosecutions (2005) 12 VR 665; [2005] VSCA 161
LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2024) 280 CLR 321; [2024] HCA 12
Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49
McHugh v Australian Jockey Club Limited (No 13) [2012] FCA 1441; (2012) 299 ALR 363
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40
Minister for Home Affairs v DUA16 (2020) 271 CLR 550; [2020] HCA 46
Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30
Minister for Immigration and Citizenship v DVRL [2026] FCAFC 73
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18
Minister for Immigration and Citizenship v SZRKT (2013) 212 FCR 99; [2013] FCA 317
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6
Momcilovic v The Queen (2011) 245 CLR 1; [2011] HCA 34
Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26
New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231
NRMA Ltd v Snodgrass (2001) 52 NSWLR 383; [2001] NSWCA 312
NSW Commissioner of Police v Cottle (2022) 276 CLR 62; [2022] HCA 7
Oswal v Burrup Fertilisers Pty Ltd [2013] FCAFC 9; (2013) 295 ALR 708
Palmanova Pty Ltd v The Commonwealth [2025] HCA 35; (2025) 99 ALJR 1362
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30
Plaintiff M1/2021 v Minister for Home Affairs (2022) 275 CLR 582; [2022] HCA 17
Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173; [2015] HCA 50
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Industrial Relations Secretary of New South Wales [2021] NSWCA 64
R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545
Racing New South Wales v Sydney Turf Club [2005] NSWSC 426
Re Geneva Finance Ltd; Quigley (rec and mgr apptd) v Cook (1992) 7 WAR 496
Re Minister for Immigration and Multicultural Affairs; Ex parte Cohen (2001) 75 ALJR 542; [2001] HCA 10
Rosehill Racecourse Co v Commissioner of Stamp Duties (1905) 3 CLR 393
Scone Race Club Limited v Commissioner of Taxation [2019] FCAFC 225
Telstra Corporation Ltd v Worthing (1999) 197 CLR 61; [1999] HCA 12
Williams v Hursey (1959) 103 CLR 30; [1959] HCA 51
Williams v Wreck Bay Aboriginal Community Council (2019) 266 CLR 499; [2019] HCA 4
Work Health Authority v Outback Ballooning Pty Ltd (2019) 266 CLR 428; [2019] HCA 2
Texts Cited: AJC Principal Club Bill 1996 (NSW)
IM Ramsay et al, Ford, Austin and Ramsay’s Principles of Corporations Law (LexisNexis, online edition)
Category: Principal judgment
Parties: Racing NSW (Applicant)
Australian Turf Club Ltd (First Respondent)
Morgan Kelly (Second Respondent, submitting)
Representation: Counsel:
JT Gleeson SC, O Jones SC, K Lindeman, K Woodforde (Applicant)
S Robertson SC, P Afshar, M Pulsford (First Respondent)
Solicitors:
YPOL Lawyers (Applicant)
Johnson Winter Slattery (First Respondent)
Minter Ellison (Second Respondent, submitting)
File Number(s): 2026/00118523
Publication restriction: Nil
[This headnote is not to be read as part of the judgment]
The Australian Turf Club Ltd (ATC) is the owner (or lessee), and operator, of the four racecourses at which thoroughbred horse racing is held in Sydney. On 15 December 2025, an administrator, Morgan Kelly was appointed to the ATC by Racing New South Wales (RNSW). That appointment was purportedly in exercise of the power conferred on RNSW by s 14(2)(g) of the Thoroughbred Racing Act 1996 (NSW) (TRA). The ATC promptly sought to challenge the appointment in the Supreme Court.
The primary judge held that the appointment was invalid for two reasons: first, the appointment had to be, but was not, in exercise of one of RNSW’s functions under s 13 of the TRA; second, RNSW had fallen into jurisdictional error in its treatment of one aspect of a report from KordaMentha which the ATC had provided in response to a show cause notice issued by RNSW on 19 September 2025 (KordaMentha report). His Honour rejected further contentions by the ATC that the appointment was also invalid because s 14(2)(g) of the TRA was not available to enable RNSW to make the appointment, having regard to various alleged inconsistencies between the TRA and other State and Commonwealth statutes.
RNSW sought leave to appeal, and to appeal, against the judgment. By notice of contention the ATC advanced the inconsistency contentions which had been rejected by the primary judge.
The key issues on appeal were whether:
(i) the power to make the appointment fell within the ambit of RNSW’s functions, in particular under s 13(1)(b) of the TRA (appeal ground one);
(ii) the appointment must fall within both RNSW’s functions in s 13 and within its power in s 14(2)(g) of the TRA (appeal ground two);
(iii) RNSW’s treatment of the KordaMentha report was erroneous, amounted to jurisdictional error and invalidated the appointment (appeal ground four);
(iv) the power to appoint an administrator to the ATC in particular was not available to RNSW, because that power had impliedly been repealed by the Australian Jockey Club and Sydney Turf Club Merger Act 2010 (NSW) (Merger Act*)* (contention ground three); and
(v) the power to appoint an administrator was not available to RNSW because exercise of such a power would be inconsistent with various provisions of the Corporations Law or of the Corporations Act 2001 (Cth) (contention grounds one and two).
The Court held (Kirk JA, Stern JA and Griffiths AJA), granting leave to appeal and upholding the appeal:
As to the ambit of this Court’s decision
(1) This Court’s decision addressed the validity of the appointment in the very specific factual context before it. It was neither necessary nor appropriate to seek to detail the precise metes and bounds of the power of RNSW to appoint an administrator under s 14(2)(g) in other cases: [4].
As to the construction of RNSW’s reasons for the appointment
(2) Close attention must be given not just to the content, but also the structure of the reasons for the decision of RNSW to make the appointment. The reasons should be read fairly, and as a whole: [61], [142]-[148].
Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6; Della Bruna v Health Care Complaints Commission [2025] NSWCA 105, applied.
(3) The evaluative assessments made by RNSW went to the essence of the ATC’s corporate governance and its effective functioning, without which the ATC’s ability to operate, including in its primary activities of promoting, conducting or controlling race meetings, was necessarily undermined: [73]. Given the ATC’s operations, RNSW’s reasons disclose that it relied centrally on matters that would impact upon the ATC’s ability to function, which necessarily included its ability to promote, control and operate race meetings: [74].
As to issue (i)
(4) The definition of “horse racing” in the TRA identifies the character of horse racing that is regulated under the TRA; it does not delineate the particular activities that fall within that definition, but it identifies the topic upon which the TRA operates. The promotion, conducting or controlling of race meetings, the availability and operation of facilities to enable race meetings to take place (and to do so safely), and ensuring that both appropriate corporate governance and adequate finances are available to enable race meetings to be appropriately managed and operated, are all matters which may fall within the definition of horse racing for the purpose of s 13(1)(b) of the TRA. It follows that the primary judge erred in holding at [70] that the finances and corporate governance of the ATC do not fall within the definition of horse racing in the TRA: [122]-[123].
As to issue (ii)
(5) The separate focus of ss 13 and 14 of the TRA, namely that the former delineates functions and the latter powers, does not necessarily and always mean that powers may only be exercised within the ambit of a function in s 13. The proper ambit of the power in s 14 must be delineated as a matter of statutory construction taking account of the whole context, including the structure, of the TRA, and the range of powers which RNSW is expressly given under s 14(2). In any case, RNSW was acting within the ambit of its function under s 13(1)(b) of the TRA in making the appointment, taking account of the text, context and purpose of the relevant provisions, which strongly support the conclusion that the appointment “was a means of” controlling, supervising and regulating horse racing in NSW: [129]-[139].
Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672; [1979] HCA 26, applied.
(6) The upholding of appeal grounds one and two made it unnecessary to determine appeal ground three: [14].
As to issue (iii)
(7) On a fair and proper reading of RNSW’s statement of reasons, RNSW did not misread the KordaMentha report, and it was well open to it to use the reasoning it did in explaining why it gave no weight to the “ultimate conclusions” expressed in the report. In circumstances where RNSW was assessing the responsibility of the ATC board for the financial performance and corporate governance issues of concern to RNSW, it was appropriate for it to have regard to events which post-dated the KordaMentha report, and it is apparent that it did so: [161]-[167].
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40, applied.
(8) If, contrary to the Court’s finding, RNSW’s treatment of the KordaMentha report caused it to make an erroneous finding of fact, any such finding was not so irrational, unreasonable or lacking in an intelligible justification as to amount to jurisdictional error: [168]-[170].
(9) Even if, contrary to the Court’s finding, reviewable error was demonstrated, any such error was not material so as to amount to jurisdictional error: [171]-[177].
As to issue (iv)
(10) The context and purpose of the Merger Act and the extrinsic materials before the Court made clear that creating a special immunity for the ATC was not the intention of the Merger Act. The presumption that statutes of the same Parliament do not contradict one another had not been rebutted: [194]-[199].
NSW Commissioner of Police v Cottle (2022) 276 CLR 62; [2022] HCA 7, applied.
As to issue (v)
(11) Section 5E of the Corporations Act authorises the concurrent operation of State and Territory law with that Act. The question to be addressed here is whether the operation of s 14(2)(g) of the TRA, insofar as it enables the appointment of an administrator to a public company governed by the Corporations Act such as the ATC, would alter, impair or detract from the operation of the provisions of the Corporations Act which the ATC has identified as founding the inconsistency. Such inconsistency can arise even if it would be possible to comply with both laws. No general negative implication is to be inferred to the effect that corporations are regulated this far and no further within the regulatory area covered by the corporations legislation. That does not necessarily exclude the possibility that the provision on some specific topic within that legislation was intended to be exclusive on that topic: [224].
Telstra Corporation Ltd v Worthing (1999) 197 CLR 61; [1999] HCA 12; Momcilovic v The Queen (2011) 245 CLR 1; [2011] HCA 34; Jemena Asset Management (3) Pty Ltd v Coinvest Limited (2011) 244 CLR 508; [2011] HCA 33; Work Health Authority v Outback Ballooning Pty Ltd (2019) 266 CLR 428; [2019] HCA 2; Williams v Wreck Bay Aboriginal Community Council (2019) 266 CLR 499; [2019] HCA 4; G Global 120E T2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39; (2025) 99 ALJR 1465, considered.
(12) The appointment of an administrator under s 14(2)(g) of the TRA would not alter, impair or detract from the operation of any of the provisions of the Corporations Act identified by the ATC, and the ATC accepted that any such conclusion would apply equally with respect to its argument based upon the Corporations Law. No direct inconsistency in the relevant sense had been established: [258].
Williams v Hursey (1959) 103 CLR 30; [1959] HCA 51; Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47; [1986] HCA 42; Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399; [1995] HCA 28; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30; NRMA Ltd v Snodgrass (2001) 52 NSWLR 383; [2001] NSWCA 312; Oswal v Burrup Fertilisers Pty Ltd [2013] FCAFC 9; (2013) 295 ALR 708; Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] NSWR 782; Elders Forestry Ltd v Bosi Security Services Ltd [2010] SASC 223; (2010) 80 ACSR 122; John Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB 113, considered.
THE COURT: The trigger for these proceedings was the appointment by Racing New South Wales (RNSW), under s 14(2)(g) of the Thoroughbred Racing Act 1996 (NSW) (TRA), of an administrator, Morgan Kelly (the second respondent), to the Australian Turf Club Ltd (ATC, the first respondent) on 15 December 2025. The ATC promptly challenged, and sought an interim stay of, the appointment. A stay was granted by Slattery J on 16 December 2025 and continued by Kunc J on 19 December 2025. Subsequently, on 11 March 2026, Kunc J (primary judge) declared that the appointment was invalid and of no effect: Australian Turf Club Ltd v Racing NSW (No 2) [2026] NSWSC 184. This was for two reasons. First, because the appointment had to be, but was not, in exercise of one of RNSW’s functions under s 13 of the TRA. Second, because RNSW fell into jurisdictional error in its treatment of one aspect of a report dated 24 October 2025 from Scott Langdon of KordaMentha (KordaMentha report) which the ATC submitted to RNSW as part of its response to a show cause notice issued by RNSW on 19 September 2025 (to which we return below). His Honour rejected the ATC’s contention, advanced before him and by notice of contention on appeal, that having regard to various alleged inconsistencies, the power under s 14(2)(g) of the TRA was not available to enable RNSW to make the appointment.
By summons filed 23 March 2026 RNSW seeks leave to appeal, and to appeal, against that decision.
The case raises significant issues of principle and leave to appeal should be granted. For the reasons set out below, the appeal must be allowed.
It is necessary to say something at the outset about the ambit of our decision. In our reasons we have addressed the appointment of an administrator in the very specific factual context at hand. That context involves the ATC which (for the reasons set out below) we are satisfied has at all relevant times had the primary purpose of conducting race meetings falling within the ambit of those regulated by the Australian Rules of Racing (ARR). Moreover, the factual context in which the proceedings arise includes a range of concerns by RNSW which go to the very ability of the ATC to function as a race club, and thus to hold race meetings at the four venues at which race meetings falling within the ambit of the ARR are held in Sydney. Other cases will raise other issues. It is neither necessary nor appropriate to seek to detail the precise metes and bounds of RNSW’s power to appoint an administrator under s 14(2)(g).
It is convenient at the outset to set out the three key provisions in the TRA upon which this appeal turns.
First, in s 3(1) “horse racing” is defined to mean:
the racing of galloping horses as referred to in the [ARR].
The ARR are, in turn, defined in s 3(1) as the “Australian Rules of Racing as adopted by the Australian Conference of Principal Racing Clubs”. Both the ARR in force when the TRA was introduced (as included in The Rules of Racing of the Western Australian Turf Club, as revised and reprinted on 1 August 1996), and those at the time of the appointment of the administrator, were put before the primary judge and before this Court on appeal.
Second, s 13 relevantly provides:
13 Functions of [RNSW]
(1) [RNSW] has the following functions—
(a) all the functions of the principal club for New South Wales and committee of the principal club for New South Wales under the [ARR],
(b) to control, supervise and regulate horse racing in the State,
(b1) such functions in relation to the business, economic development and strategic development of the horse racing industry in the State as are conferred or imposed by this Act
…
(e) such functions as may be conferred or imposed on [RNSW] by or under the [ARR] or any other Act,
…
(2) The functions of [RNSW] are not limited by the [ARR] and are to be exercised independently of Racing Australia Limited.
Further, “function” is defined in s 3(1), to include “power, authority or duty”.
Third, s 14 provides:
14 Powers of [RNSW]
(1) [RNSW] has power to do all things that may be necessary or convenient to be done for or in connection with the exercise of its functions.
(2) Without limiting subsection (1), [RNSW] has power to do the following—
(a) investigate and report on proposals for the construction of new racecourses, and inspect new racecourses or alterations or renovations to existing racecourses,
(b) register or licence, or refuse to register or licence, or cancel or suspend the registration or licence of, a race club, or an owner, trainer, jockey, stablehand, bookmaker, bookmaker’s clerk or another person associated with racing, or disqualify or suspend any of those persons permanently or for a specified period,
(c) supervise the activities of race clubs, persons licensed by [RNSW] and all other persons engaged in or associated with racing,
(d) inquire into and deal with any matter relating to racing and to refer any such matter to stewards or others for investigation and report and, without limiting the generality of this power, to inquire at any time into the running of any horse on any course or courses, whether or not a report concerning the matter has been made or decision arrived at by any stewards,
(e) allocate to registered race clubs the dates on which they may conduct race meetings,
(f) direct and supervise the dissolution of a race club that ceases to be registered by [RNSW],
(g) appoint an administrator to conduct the affairs of a race club,
(h) register and identify galloping horses,
(i) disqualify a horse from participating in a race,
(j) exclude from participating in a race a horse not registered under the Rules of Racing,
(k) prohibit a person from attending at or taking part in a race meeting,
(l) impose a penalty on a person licensed by it or on an owner of a horse for a contravention of the Rules of Racing,
(m) impose fees for registration of a person or horse,
(n) require registered race clubs to pay to it such fees and charges (including fees for registration of a race club) as are required for the proper performance of its functions, calculated on the basis of criteria notified to race clubs by [RNSW],
(o) consult, join, affiliate and maintain liaison with other associations or bodies, whether in the State or elsewhere, concerned with the breeding or racing of galloping horses,
(p) enter into contracts,
(q) acquire, hold, take or lease and dispose of real and personal property whether in its own right or as trustee,
(r) borrow money,
(s) order an audit of the books and accounts of a race club by an auditor who is a registered company auditor nominated by [RNSW],
(t) scrutinise the constitutions of race clubs to ensure they conform to any applicable Act and the Rules of Racing and that they clearly and concisely express the needs and desires of the clubs concerned and of racing generally,
(u) publish material, including periodical publications, to inform and keep informed the public concerning matters relating to racing, whether in the State or elsewhere,
(v) undertake research and investigation into all aspects of the breeding of horses and of racing generally,
(w) take such steps and do such acts and things as are incidental or conducive to the exercise of its powers and the performance of its functions.
Whilst RNSW’s grounds as set out in its notice of appeal were framed somewhat differently, RNSW’s overarching contentions of error on the part of the primary judge which formed the basis of grounds one and two of its notice of appeal were that his Honour erred:
in holding that the appointment did not fall within the ambit of RNSW’s functions, in particular under s 13(1)(b) of the TRA. One facet of this contention was that RNSW was entitled to take into account the ATC’s financial position and corporate governance when making the appointment if these concerns bore upon the ability of the ATC to carry out its functions as a race club as defined in the TRA or upon the horse racing industry; and
in holding that the appointment must fall within both RNSW’s functions in s 13, and within its power in s 14(2)(g) of the TRA.
These contentions are considered at [88]-[140] below.
Ground three of RNSW’s notice of appeal, in which RNSW contended that the appointment was lawful as it was necessary or convenient to be done for or in connection with the exercise by RNSW of its functions was the subject of written, but only very limited oral, submissions. Given our conclusions below, it is in any event unnecessary for us to consider this contention.
In ground four, RNSW contended that the primary judge erred in holding that its treatment of the KordaMentha report was erroneous and that that amounted to jurisdictional error invalidating the appointment. Ground four is considered at [141]-[178] below.
The ATC’s key contention in response was, in essence, that RNSW mistook its power by erroneously acting on the understanding either that the appointment did not need to be made pursuant to a function under s 13, or taking an erroneously broad view of its function under s 13(1)(b) of the TRA*.* This was framed as a misunderstanding of the relevant law within the types of jurisdictional error identified in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2024) 280 CLR 321; [2024] HCA 12 at [3], or an exercise of power for an unauthorised purpose or legal unreasonableness. Senior Counsel for the ATC accepted, however, that if the appointment was authorised under the TRA then it would be valid irrespective of whether RNSW had misunderstood its powers when making the appointment. The ATC also contended that the primary judge was right to find that RNSW erred in its treatment of the KordaMentha report and that that error was a jurisdictional error invalidating the appointment.
It was common ground between the parties that, as a matter of construction of s 14(2)(g) of the TRA*,* the administrator was (and could only be) appointed to conduct all of the affairs of the ATC for a limited period of time subject only to any residual powers of the directors of the ATC (as to which, see [239]-[243] below).
By notice of contention filed on 1 April 2026 the ATC contended that the power under the TRA to appoint an administrator is not available in relation to the ATC for three reasons, advanced in the alternative: first, as a matter of construction, taking account in particular of s 5 of the Corporations (New South Wales) Act 1900 (NSW), where that Act gave effect in this State to the Corporations Law; second, by force of s 109 of the Constitution by reason of it being inconsistent with the Corporations Act 2001 (Cth); or third, as the power under s 14(2)(g) of the TRA was impliedly repealed by the Australian Jockey Club and Sydney Turf Club Merger Act 2010 (NSW) (Merger Act).
The notice of contention is considered at [179]-[259] below.
4.1 The Company has been established for the encouragement of horse racing, and other incidental related purposes and to carry on any other activity which is calculated directly or indirectly to enhance or further the interests of registered horse racing.
4.2 The Company may undertake such other activities not inconsistent with the objectives set out in paragraph 4.1 to enhance, promote or protect the interests of the Company.
It follows that the starting point is that, under its Constitution, the ATC was formed for the purpose of the encouragement of horse racing, albeit that it is permitted to undertake incidental or not inconsistent activities. Consistent with this starting point, during the course of argument at first instance the primary judge said that he accepted, and the ATC did not seek to dissuade him from this position, that the ATC’s income was all derived from or channelled into horse racing. We also note that the Charter & Code of Conduct for Board Members of the ATC dated January 2023 identifies the responsibilities of the board of the ATC by reference to “the proper administration and management of ATC and its Canterbury Park, Rosehill Gardens, Royal Randwick and Warwick Farm racecourses, the conduct of ATC race meetings and other ATC activities”.
These four racecourses, which are owned (or in the case or Royal Randwick held subject to a 99 year lease expiring in 2107) and operated by the ATC, are the only racecourses where galloping races are held in Sydney. The ATC also runs one non-racing venue, the Rosehill Bowling Club.
It appears that these racecourses are the ATC’s primary assets. The KordaMentha report, which was said to be based in part upon the ATC’s financial statements and in part upon discussions with the ATC, described the ATC’s activities as follows (footnotes omitted):
Today, ATC owns and operates 4 racecourses (Royal Randwick, Rosehill Gardens, Canterbury Park and Warwick Farm) and one related venue (Rosehill Bowling Club) in Sydney, from which it conducts racing, events and hospitality services. ATC employs c.280 full time equivalents and c. 1,200 casual staff. ATC operates as a not-for-profit entity, structured to serve the interests of its 11,547 members (as at 31 July 2025) and the broader community. …
The KordaMentha report also identified that the ATC’s revenue from racing accounted for approximately 65% of its revenue in each of FY24 and FY25 (and of the other 35% a significant component was “Training & Stables”). The KordaMentha report also identified that the ATC’s largest expense was prize money and trophies. All of this is consistent with a primary focus of the ATC being upon horse racing, in the sense of promoting, conducting and controlling race meetings and other activities which have as their ultimate focus the racing of thoroughbred horses.
Having regard to these matters, we would infer that the primary purpose for which the ATC is operated is for activities associated with the racing of galloping horses. In light of this, we are satisfied that the financial viability and governance of the ATC is integrally related to horse racing as defined in the TRA (see [111]-[123] below).
The ATC was formed in February 2011 through the merger of the Australian Jockey Club (AJC) and Sydney Turf Club (STC), effected by the Merger Act. The agreement in principle speech of David Harris, Parliamentary Secretary, described the merger and accompanying investment as “essential to the future viability of the New South Wales thoroughbred racing industry” (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 29 October 2010 at 27200). The significance of the ATC, and its activities, to horse racing in NSW was also recognised by Timothy Hale SC, the Chair of the ATC board, in a letter dated 24 October 2025 to Peter V’Landys, Chief Executive of RNSW, acknowledging “the close interdependence of the ATC and [RNSW] in delivering a strong, vibrant racing industry” and stating that any decision by RNSW to withhold certain funding from the ATC would be “unquestionably against the interests of the horse racing industry as a whole”.
In light of the matters set out above we would infer that the ATC, and its effective functioning, is of integral significance to horse racing in New South Wales.
RNSW, a body corporate, is established under s 4(1) of the TRA. It is to consist of a Chief Executive and seven other members to be appointed by the Minister. Whilst RNSW refers in correspondence and corporate governance documents to its “board”, under the TRA it has no board described as such, and it is readily apparent that it uses that term to refer to its members (and we have adopted that usage). The members of RNSW are under a duty under s 11 of the TRA “to act in the public interest and in the interests of the horse racing industry as a whole in New South Wales”. As is clear from the text of s 11, that is a duty imposed on the members of RNSW, not on RNSW itself.
In its submissions on the appeal RNSW placed some reliance upon s 11, as it contended that RNSW’s potential financial exposure by reason of the matters identified in RNSW’s decision letter imperilled RNSW’s ability to exercise its industry wide function, under s 13(1)(b) of the TRA, of controlling, supervising and regulating horse racing in NSW and doing so in a manner which is consistent with the individual members of RNSW’s duty to act in the public interest and in the interests of the horse racing industry as a whole in NSW. Given our conclusions, set out below, as to the proper construction of s 13(1)(b) it is unnecessary to reach any concluded view as to this.
The first document in evidence recording these concerns is a letter from Mr V’Landys to Matt Galanos, then Chief Executive of the ATC, dated 31 July 2025. In that letter RNSW communicated its concern about the financial position of the ATC and referred to the auditors of the ATC having stated that, in the absence of the ATC meeting any requirements of the Commonwealth Bank of Australia (CBA) in respect of its debt facilities, they were only prepared to provide a qualified opinion as to the ATC’s solvency for the ATC’s 2025 Annual Report. In that context, RNSW said that it was concerned that it had not been advised of any application by the ATC to RNSW to further guarantee its debt facilities.
By letter dated 4 August 2025, RNSW wrote again to the ATC, this time raising concerns regarding what it described as “an alarming and unacceptable failure in basic corporate governance principles”, stating that the “conduct of the ATC Board has raised serious concerns as to whether its directors understand, let alone uphold, their fiduciary duties and obligations under the Club’s own governance framework”.
Further correspondence between the ATC and RNSW followed. On the ATC’s part this correspondence included only a passing reference to discussions which Mr Galanos said were then on foot between the ATC and the CBA regarding extension of the ATC’s $30 million debt facility beyond its current expiry of October 2026 (CBA facility). No request was made for a further guarantee from RNSW. Meanwhile, RNSW continued to express its concern about the ATC’s financial position, including that a three-year cash flow forecast provided by the ATC to RNSW forecasts “a deterioration in cash generated from operations”.
The evidence also includes extracts of an undated internal report to the RNSW board (which appears to post-date 29 August 2025), which discussed at some length the ATC’s financial performance. The report noted that there was a going concern risk associated with the ATC’s ability to repay the CBA facility and that the ATC “have been unable to illustrate how it can either repay or refinance this facility”. The report further noted that no approach had been made by the ATC for RNSW to extend the guarantee. This report also identified that RNSW had provided “one off funding” to the ATC of $21.5 million in the past five years to assist the ATC’s cash flow and had also provided $172 million of industry monies to fund a new grandstand, and $47 million of RNSW’s revenues from an agreement with the TAB to fund the Winx stand, both at Royal Randwick racecourse.
On 15 September 2025, RNSW resolved that the show cause notice be issued to the ATC requiring that the ATC show cause why RNSW should not appoint an administrator to conduct its affairs.
A letter, attaching the show cause notice, was sent by Mr V’landys to Mr Hale on 19 September 2025.
Mr V’landys’ letter began by identifying that, under s 13(1)(b) of the TRA, RNSW was “the statutory body responsible for the control, supervision and regulation of horse racing in NSW”. That showed unequivocally that RNSW understood that it was acting pursuant to its function in s 13(1)(b) of the TRA in issuing the show cause notice, and in taking such steps as it might take were the concerns identified in the show cause notice not sufficiently addressed by the ATC. In that regard, having identified RNSW’s function under s 13(1)(b), Mr V’landys identified three powers in his letter attaching the show cause notice: ss 14(2)(c), 14(2)(f) and 14(2)(g). Again, we infer that RNSW considered that those powers could only be exercised within the ambit of the function under s 13(1)(b). The ATC did not contend to the contrary. Rather, its submission was that RNSW misunderstood the scope of s 13(1)(b) in making the appointment.
The show cause notice asked the ATC to show cause as to why an administrator should not be appointed to conduct the affairs of the ATC by reason of any one or more of nine identified matters, which included concerns about the ATC’s solvency, that its board had ceased to be effective as a governing body and that the ATC was in a state of deadlock or dysfunction**.**
The show cause notice then set out a detailed statement of the facts and circumstances which could reasonably give rise to RNSW’s conclusion that the ATC “is financially unstable, strategically directionless and plagued by governance failures”. The show cause notice also stated that it was “extremely alarming” that notwithstanding the passage of time and the “precarious financial position of the ATC”, its board had not proposed any strategy to address its financial position.
As regards the topic of the guarantee of the ATC’s debt facilities, the show cause notice stated:
31. As set out above, [RNSW] made a one-off payment to the ATC of $5 million as the ATC was in the position that it was unable to service its facilities with Westpac Bank. The ATC then sought to restructure its debt facilities and received proposed terms from CBA that were significantly better than those offered by Westpac Bank. In particular, the interest rate was almost 2% less than under its facilities with Westpac Bank which the ATC advised would result in interest savings of approximately $2 million over the 3-year term of the facility. In addition, CBA was prepared to waive its standard $200,000 establishment fee.
32. However, the terms offered by CBA were contingent upon [RNSW] providing a guarantee of the proposed debt facility of $30 million and the overdraft facility of $5 million. Most importantly, CBA would also not require any security over ATC’s racecourses if [RNSW] provided that guarantee.
33. Accordingly, in October 2023, [RNSW] provided a 3-year guarantee of the above debt facilities held by the ATC with CBA.
34. As set out in [RNSW’s] letter dated 31 July 2025, the ATC had informed [RNSW] that the ATC’s auditors were only prepared to provide a qualified opinion for the ATC’s 2025 Annual Report as to the ATC’s solvency in the absence of the ATC meeting any requirements of its bank in respect of its debt facilities. In this respect, such a qualified opinion may be perceived as the ATC being insolvent.
35. In those circumstances, it is concerning that [RNSW] has not been advised of any application from the ATC to further guarantee its debt facilities, given the proposed qualified opinion and impact upon the ATC’s solvency.
1.1.5 The main risks to [the] ATC’s cashflow forecast to 31 July 2026 are:
a. Continued receipt of the Totalizator Agency Board (‘TAB’) distribution ‘Top Up’: In recent years, in addition to the amount [the] ATC is eligible to receive under the TAB distribution arrangement (as described at section 2.2.3b), [the] ATC has received ‘Top Ups’ from RNSW to offset any decline in revenue it receives under the TAB distribution (‘the TAB Distribution Top Up’), the most recent of which was a $12.2m TAB Distribution Top Up in FY25, resulting in an annual TAB distribution of $80.4m (see Appendix 8). Absent the TAB Distribution Top Up, the FY25 TAB distribution was $68.3m. The annual amount of $80.4m has been paid in equal monthly instalments of c. $6.9m (plus GST) since FY24. [The] ATC’s cashflow forecast assumes continued receipt of $80.4m via equal monthly instalments (inclusive of the TAB Distribution Top Up). It is reasonable to expect continued receipt of the TAB Distribution Top Up for the reasons outlined in section 4.4.13a. The TAB distributions [the] ATC received in August 2025 and September 2025 included the TAB Distribution Top Up, noting equal monthly instalments of the $80.4m minimum annual TAB distribution were received in these months. Notwithstanding this, should the TAB Distribution Top Up arrangement cease, [the] ATC’s cashflow forecast indicates that, all else being equal, it will maintain a positive cash position to 31 July 2026, i.e. it will be able to pay all its debts as and when they become due and payable up until 31 July 2026.
b. Potential or contingent repayment to Mirvac: [the] ATC and Mirvac are in dispute, due to Mirvac issuing a rescission of a development agreement in respect of the King Street, Canterbury Park development. [The] ATC had previously received an $8.0m (plus GST) prepayment from Mirvac in respect of this development, which may be repayable subject to the outcome of the dispute. Should a repayment to Mirvac of $8.0m (plus GST) be required in FY26, [the] ATC’s cashflow forecast indicates that, all else being equal, it will maintain a positive cash position to 31 July 2026. However, at the date of this correspondence, there is no agreement to make any payment to Mirvac or final judgement requiring [the] ATC to repay Mirvac.
1.1.6 Subject to extending or refinancing the [CBA facility] and the continued receipt of the TAB distribution ‘Top Up’ (as outlined in section 1.1.5a), [the] ATC’s three-year cashflow forecast shows that [the] ATC will be remain [sic] solvent to 31 August 2028 as it is forecast to pay all its debts as and when they become due and payable. This represents the longer-term financial forecast and inherently has greater risk given the extended timeframe. I consider it to be a reasonable assumption or expectation that that [sic] the CBA facility will be able to be extended or refinanced.
1.1.7 The maturity of the CBA facility on 10 October 2026 is not a material risk to the forecast, as in my view, [the] ATC’s proposed strategy to extend the facility (with or without a RNSW guarantee) or a refinance with a new lender is an executable strategy. Whilst [the] ATC agreed that it would not dispose of, encumber or joint venture any of its freehold assets without first obtaining RNSW’s consent in writing, which consent could be withheld or conditioned in RNSW’s absolute discretion, in my opinion, it is reasonable for the [b]oard to expect:
a. RNSW to continue to provide a guarantee to CBA to allow the CBA facility to be extended, or
b. The debt facilities to remain with CBA (without the RNSW guarantee) with RNSW providing consent to offering property assets as security, or
c. RNSW to permit [the] ATC obtaining new finance to repay the CBA facility, with RNSW providing consent to offering property assets as security.
I say this because, at the time of agreeing this arrangement in the letter dated 28 September 2023, countersigned by [the] ATC on 3 October 2023, in my opinion, RNSW is unlikely to have expected the CBA debt facility to be fully repaid within circa 3 years based on its business-as-usual financial projections. Therefore, RNSW would have reasonably expected to be required to extend the RNSW guarantee, provide an ability to refinance, or allow [the] ATC to realise assets to repay the debt.
1.1.8 Whilst the CBA facility does not mature in the period to 31 July 2026, it is reasonable to expect that [the] ATC will be required to progress an extension or refinance of the facility, given maturity on 10 October 2026 is c. two months after this period. This may include negotiating with CBA or prospective new lenders, drafting loan documentation and other requirements to facilitate an extension or refinance of the facility prior to 10 October 2026.
The emphasis given to the parenthetical phrases in [1.1.7] above reflect the emphasis given to those phrases in the primary judge’s reasons. Sub-paragraphs (a), (b) and (c) in that paragraph are the three options referred to by the primary judge, to which we return in our consideration of ground four, below.
It is convenient to set out further extracts from the KordaMentha report which also reproduce the primary judge’s emphasis upon similar phrases regarding the RNSW guarantee. The primary judge considered that the emphasised phrases demonstrated that RNSW had seriously misread the KordaMentha report:
…
4.1.5 Whilst the [CBA facility] matures within the three-year forecast period, it is the Board’s expectation that RNSW will continue to provide a guarantee and [CBA facility] be extended, or RNSW will allow [the] ATC to encumber assets to either remain with CBA (without the RNSW guarantee) or refinance with an alternative debt provider. Notwithstanding the counter-signed letter of 28 September 2023, which restricts [the] ATC from encumbering any freehold assets without RNSW’s consent, in my opinion, [the] ATC’s proposed strategy to extend or refinance the CBA facility (as outlined at Section 4.5.4) is achievable and the maturity on 10 October 2026 does not pose a solvency risk to [the] ATC.
4.1.6 In my opinion, it is reasonable for the Board to expect RNSW to continue to provide a guarantee to CBA to allow the CBA facility to be extended, or the debt facilities to remain with CBA (without the RNSW guarantee) or obtain new finance. I say this because, at the time of counter-signing the letter on 28 September 2023, in my opinion, RNSW is unlikely to have expected the [CBA facility] to be fully repaid within circa 3 years based on [the] ATC’s business-as-usual financial projections. Therefore, RNSW would have reasonably expected to have to extend the guarantee; provide [the] ATC an ability to refinance, or grant approval for [the] ATC to realise assets to repay the debt.
…
4.5.4 The cashflow forecast assumes that the CBA facility that expires on 10 October 2026 is not repaid at maturity, rather the tenure is extended. The forthcoming maturity of the CBA facility does not in itself result in an insolvency of [the] ATC. Based on information provided by Management and the Board of [the] ATC, there are a number of options available to address the CBA debt maturity. [The] ATC has approximately 12-months to develop and execute a strategy to extend or repay the facility. These options may include:
a. Extend the CBA facility, with a RNSW guarantee: An extension of the existing loan and conditions with the RNSW guarantee appears to be the most commercially sensible option. Given the mutuality of interests between RNSW and [the] ATC, and the duty of the members of RNSW to act in the interests of the horse racing industry as a whole in New South Wales, [the] ATC’s Board has a reasonable expectation that RNSW will continue to provide the guarantee. Further, RNSW should be motivated to continue to provide the guarantee in order for [the] ATC to roll the [CBA facility]. In ordinary business and lending circumstances, a $30m loan against the asset portfolio of [the] ATC would provide a lending LVR of less than 3%. At the date of this report, whilst [the] ATC has not requested, RNSW has not advised that it will not extend the guarantee of the [CBA facility], either on an extension of the tenure of the [CBA facility] or a refinance of the [CBA facility].
b. Extend the CBA facility, without a RNSW guarantee: It is [the] ATC’s expectation that, absent a guarantee by RNSW of the CBA facility, that CBA will require security from [the] ATC for an extension of the facility. Prior to the receipt of the Notice, [the] ATC was exploring options with CBA to extend the facility in the absence of a RNSW guarantee, including offering security over [the] ATC’s property assets. Since the Notice was issued, CBA has advised [the] ATC that it may continue to extend the existing facility without an RNSW guarantee, however, CBA will require further diligence regarding [the] ATC’s serviceability of the loan. At the date of this report, whilst [the] ATC has not requested, RNSW has not advised [the] ATC that it would not consent to CBA taking security over [the] ATC’s property assets.
c. Refinance with a new lender: [the] ATC may be able to refinance with another lender. While [the] ATC expects that CBA or an alternative lender may require asset security absent a guarantee from RNSW, it is the Board and Management’s expectation that an alternative lender will provide financing to [the] ATC should CBA not provide an extension of the facility. At the date of this report, whilst [the] ATC has not requested, RNSW has not advised [the] ATC that it would not consent to CBA taking security over [the] ATC’s property assets. Given the debt maturity is approximately 12-months away, it is my experience that [the] ATC has sufficient time to explore this option and implement a refinance of the CBA loan facility.
4.5.5 A term of RNSW agreeing to provide the guarantee of the CBA facility was that [the] ATC agreed that it would not dispose of, encumber or joint venture any of its freehold assets without first obtaining RNSW’s consent in writing, which consent could be withheld or conditioned in RNSW’s absolute discretion.
4.5.6 Whilst the CBA debt facility matures within the three-year forecast period, it is the Board’s expectation that RNSW will continue to provide a guarantee and the [CBA facility] be extended, or RNSW will allow [the] ATC to encumber assets to either extend the tenure of the CBA facility (without the RNSW guarantee) or refinance with an alternative debt provider. Notwithstanding the counter-signed RNSW Bank Guarantee Letter, which restricts [the] ATC from encumbering any freehold assets without RNSW’s consent, in my opinion, [the] ATC’s proposed strategy to extend or refinance the CBA facility (as outlined at Section 4.5.4) is achievable and the maturity on 10 October 2026 does not pose a solvency risk to [the] ATC.
4.5.7 In my opinion, it is reasonable for the Board to expect RNSW to continue to provide a guarantee to CBA to allow the CBA facility to be extended, or the debt facilities to remain with CBA (without the RNSW guarantee) or obtain new finance. I say this because, at the time of counter-signing the RNSW Bank Guarantee Letter, in my opinion, RNSW is unlikely to have expected the CBA debt facility to be fully repaid within circa 3 years based on [the] ATC’s business-as-usual financial projections. Therefore, RNSW would have reasonably expected to be required to extend the RNSW guarantee, provide [the] ATC an ability to refinance or allow [the] ATC to realise assets to repay the debt.
…
7.2.1 My team met KPMG (ATC auditor) on 25 September 2025 to discuss the status of the audit opinion and FY25 report. KPMG has been the auditor of [the] ATC through its various iterations for more than 40 years. KPMG advised that in its view, the level of financial hygiene at [the] ATC is high, with quality management accounts, reconciliations and cashflow monitoring. I have also reviewed the KPMG Report to the Board for the year ended 31 July 2025 dated 17 September 2025. In my experience, there is nothing in the KPMG report that changes my view on [the] ATC’s solvency.
7.2.2 The finalisation of the FY25 annual report is pending. [The] ATC is required to finalise the FY25 annual report prior to the annual members’ meeting. Absent confirmation of a clear pathway as to refinancing or extending the CBA facility, the auditor has stated that a disclosure of material uncertainty related to going concern will be required. The current draft audit opinion is an unqualified opinion, with a material uncertainty related to going concern that references the following items raised in the draft notes to the FY25 financial statements:
a. [The] ATC will seek to refinance the CBA facility prior to expiry, however at the date of the annual report, [the] ATC had not received a binding commitment from CBA to extend the facility, or RNSW to provide a guarantee for the facility.
b. If the CBA facility cannot be refinanced, it is the Board’s view that asset sales will be required to repay the CBA facility. [The] ATC notes that member approval is required for the sale of core assets, and there is a requirement to make repayments for interminable loans in certain circumstances, including where asset sales exceed $1.0m.
c. [The] ATC assume the continued receipt of the TAB Distribution Top Up, however does not have a formal agreement for this arrangement.
7.2.3 In my opinion, this does not alter my view that [the] ATC is solvent. As noted previously in this correspondence:
a. In my view, [the] ATC’s proposed strategy to extend the facility (with or without a RNSW guarantee) or a refinance with a new lender is an executable strategy (see Section 4.5.4).
b. It is reasonable to expect continued receipt of the TAB Distribution Top Up for the reasons outlined (see Section 4.4.13a).
c. Solvency and going concern are two different concepts. Solvency primarily considers an organisation’s current and forecast cast, flow position (per section 3.2.2). While, going concern primarily focuses an organisation’s future operations and viability (generally for the following 12 months), or assessed by auditors under ASA570 (Going Concern). In my experience, there are numerous instances where companies have received a material uncertainty related to going concern audit opinion, however have been able to pay its debts as and when they become due and payable, which is the true test of solvency (see section 3.1.1). In my review, the audit opinion is not indicative of [the] ATC’s solvency or insolvency.
d. KPMG considers there is a material going concern risk with the October 2026 expiry of the CBA facility as there is currently no confirmation of a post-expiry solution. However, [the] ATC has strategies in place to deal with the October 2026 expiry and in my opinion, it is reasonable to expect that [the] ATC will have a post-expiry solution.
What transpired after the show cause notice, and the ATC’s response thereto, is relevant in informing RNSW’s assessment of the significance of the ATC board’s reliance on the KordaMentha report as matters stood as at mid-December 2025.
On 17 November 2025, Steve McMahon, Interim CEO of the ATC, wrote to Mr V’Landys placing on the record, for the first time, a request for financial assistance in the form of a bank guarantee over the ATC’s debt facilities. Mr McMahon indicated that the ATC had been in discussions with the CBA regarding “the provision of non-core land as security for the loan, with the aim of eliminating the requirement for RNSW to act as guarantor” but that, despite this, “together with the ATC receiving the [s]how [c]ause notice [from RNSW], the CBA had been encountering difficulties in confirming the club’s ability to service the loan on a cash basis”. He said that the CBA had “expressed concerns that the current approach to refinancing may be too high-risk”. He said that the CBA had indicated that they would be amenable to extending the debt facilities if RNSW continued as guarantor and there was no change to the terms of debt levels. He said that “this would remove the requirement for the ATC to list its racecourses as security over the facilities, which was previously requested by [RNSW]”. Thus, as at this date, the ATC’s focus was very much on option (a) with no explicit mention of options (b) and (c) (out of the three options identified in the KordaMentha report).
The letter also requested RNSW to continue “the current arrangement regarding the discretionary monthly payments of the TAB distribution and the annual top-ups provided by [RNSW]”.
On 27 November 2025, representatives of the ATC attended a meeting of the board of RNSW. A heavily redacted copy of the minutes of that meeting is included in the evidence. The meeting with the ATC representatives was apparently recorded, but no recording was adduced in evidence. The minutes do not summarise the discussion other than to note that the ATC was given seven days to provide further information and documents which were requested at the joint meeting, including a statutory declaration from Mr Hale responding to allegations from the Hon Mark Latham MLC.
It is evident that RNSW also sent a letter dated 27 November 2025 to the ATC, but a copy of that letter was not included in the evidence.
On 4 December 2025 Mr McMahon provided further information to RNSW (via its General Counsel, Pete Sweney) in response to RNSW’s letter of 27 November 2025. The letter candidly acknowledged that the ATC “must take urgent and decisive steps to reset the business financially”. Mr McMahon said that the ATC was committed to that task. He also said that the ATC’s property strategy was “not about selling assets to fill short-term gaps, as has occurred in the past”. A reference was made to cost savings, restructuring and “early-stage property initiatives” which would provide a “financial bridge” enabling the ATC to reach a stronger and more diversified position over the next few years. Later in the letter, there was a reference to “proposed property divestments”, which it was said would, together with various “operational opportunities”, “have a favourable uplift in our FY26 cashflow and into the out years”.
The CBA loan
You asked at the meeting how [the] ATC propose to remedy the CBA debt issues if [RNSW] do not continue to provide a guarantee for the loan. Ideally, [RNSW] will extend the bank guarantee, allowing a 3 year extension of the loan. In that time, we will have realised a positive outcome on at least one of our property strategies. Whilst the efficiencies listed above will certainly improve our financial position, in the interest of racing and maintaining our facilities to the appropriate standards, we again request [RNSW] assistance with the bank guarantee and straight-line TAB funding.
The ATC Board believes that co-development of long-term capital and land strategies, in partnership with [RNSW], support racing infrastructure, create community and long-term economic value for racing.
We acknowledge the importance of the existing [RNSW] guarantee of the CBA facility and the straight-line TAB distributions. To safeguard industry infrastructure and avoid premature asset disposals, the ATC formally requests:
(a) Extension of the current guarantee for a further three years; and
(b) Continuation of straight-line TAB funding over the forecast period.
This support will provide the runway necessary to complete the property transactions and deliver the operational improvements described herein. Should [RNSW] be unable to extend the guarantee, the ATC would explore partial repayment combined with refinancing of the residual balance. This scenario would require deeper cost-containment measures, including but not limited to:
• Further optimisation of staffing ratios;
• Temporary closure of under-utilised venue areas; and
• Deferral of non-essential capital projects.
One of the appendices to this letter identified three “Asset Divestments”, namely Rosehill Bowling Club, the Circus Site at Rosehill and the King Street Canterbury Development with a stated value between FY26-FY28 of $11.5 million, $23.5 million and $25 million respectively. Significantly, there was no express mention of either options (b) or (c) in the letter or the appendices.
The primary judge did not refer to this letter or its detailed appendices.
Also on 4 December 2025, the ATC provided RNSW with a copy of a statutory declaration of Mr Hale dated 4 December 2025 as requested by RNSW.
On 5 December 2025, RNSW resolved to request further information from the ATC and for there to be a further meeting with the ATC on 12 December 2025.
Further correspondence followed and at a special meeting of the RNSW board on 14 December 2025 the board (having first had a joint meeting with the ATC) resolved to make the appointment as early as possible on 15 December 2025. By letter of 15 December 2025, RNSW via its chair, Dr Saranne Cooke notified Mr Hale that:
Mr Morgan Kelly of Ernst & Young has been appointed as administrator to conduct the affairs of the ATC. The powers and functions of the ATC Board cease for the duration of the administrator’s appointment. You should provide all appropriate assistance of the administrator to facilitate the administrator’s conduct of the affairs of the ATC.
Before turning to the detail of RNSW’s reasons, it is important to understand that the appointment was the culmination of a process that began with the show cause notice. In these circumstances, and noting what we say at [37] above, we infer that RNSW considered that it was acting within the function conferred by s 13(1)(b) for the entirety of the process commenced by the show cause notice and concluding with the appointment (s 14(2)(g) of the TRA having been one of the powers that RNSW identified in the show cause notice). We thus reject the ATC’s contention that RNSW did not consider that the appointment needed to fall within the ambit of, or be made for the purposes of, one of its functions under s 13(1) of the TRA.
In large measure, the answer to the question whether the appointment did in fact fall within the ambit of RNSW’s function under s 13(1)(b) turns upon a proper reading of RNSW’s reasons. As to this, RNSW contended that, properly understood, its reasons (read in the context which we have summarised above) show that RNSW made the appointment on account of matters which, on any view of the TRA, go to the ability of the ATC to function as a race club, meaning to promote, conduct or control race meetings, and also go to the ability of RNSW to perform its functions due to the extent of its financial exposure if the ATC was in financial difficulty.
The ATC, by contrast, contended that there was nothing in RNSW’s reasons that linked any of its identified concerns to “horse [racing] in the sense of the running of thoroughbreds down the track”.
Close attention must be given not just to the content, but also to the structure, of RNSW’s reasons. The reasons should be read fairly, and as a whole, avoiding “an eye keenly attuned to the perception of error”: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272; [1996] HCA 6; Della Bruna v Health Care Complaints Commission [2025] NSWCA 105 at [9]-[16].
After exhaustive consideration of the ATC’s submissions, supporting materials, and the evidence put forward by the ATC Board and management, [RNSW] has determined that the ATC has comprehensively and fundamentally failed to show cause as to why an administrator should not be appointed. Accordingly, and with immediate effect, [RNSW] has resolved, pursuant to section 14(2)(g) of the Thoroughbred Racing Act 1996 (NSW), to appoint an administrator to conduct the affairs of the ATC.
[RNSW] considers that this determination is both necessary and unavoidable to ensure the proper discharge of its statutory functions and duties. It is not a decision taken lightly, nor is it one arrived at precipitously. Rather, it is the culmination of months of escalating concern regarding the ATC’s financial viability, governance issues, and the apparent incapacity of the ATC Board to discharge its duties to a standard commensurate with the scale, importance, and public trust inherent in its role. Especially considering the length of time that the ATC Board members have been on the ATC Board, ranging from 10 months to almost 5 years, with an average tenure of 3 years.
[RNSW] commenced the show cause process because of serious and growing concerns regarding the ATC’s deteriorating financial position. Those concerns did not abate during the process. Instead, they intensified.
The ATC Board was unable to articulate or provide a credible, coherent, or disciplined strategy to stabilise or improve the ATC’s financial performance. The material advanced was overwhelmingly reactive, superficial, and devoid of rigorous commercial analysis. Far from demonstrating leadership, the ATC Board’s focus appeared to be limited to short-term, distressed asset disposals, pursued without adequate strategic planning and in circumstances where there is a significant risk that assets will be sold grossly undervalue and thus impair the ATC’s balance sheet. The ATC did not demonstrate, at the appropriate level of detail, how it would increase revenues and decrease costs in the future. Its responses were often superficial and in the nature of motherhood statements.
The ATC Board also failed to adequately address the corporate governance issues raised by [RNSW]. The information provided by the ATC did not provide [RNSW] confidence that they would be able to implement and adhere to best practice corporate governance going forward.
As is clear, RNSW made the appointment pursuant to s 14(2)(g) of the TRA on the basis that it considered it necessary to do so to ensure the proper discharge of its functions, which we infer (including for reasons set out above) included at least s 13(1)(b) of the TRA.
The introduction reflects a consistent theme of RNSW’s reasons, namely that it was the failures of corporate governance and effective functioning of the ATC board, including in its response to significant financial risks, which prompted RNSW to make the appointment.
RNSW then identified some of the factual conclusions that had led it to make the appointment, making it clear that the matters set out were not all of the matters it had relied upon. These comprised eight conclusions that were elaborated upon over about ten pages. It is unnecessary to set out the entirety of the eight conclusions included in RNSW’s reasons. It suffices to summarise the following matters of particular significance.
The ATC was reliant upon RNSW guarantees and discretionary financial support to maintain solvency and that presented a risk that RNSW would have to honour guarantees exceeding $30 million which, in turn, would imperil industry funds and undermine RNSW’s ability to act in the best interests of the NSW thoroughbred racing industry as a whole.
Despite being on notice since at least May 2025 that the CBA was unlikely to extend facilities absent a guarantee from RNSW, and despite advice from auditors that they were likely to issue a qualified report, the ATC board had failed to develop an adequate contingency plan of substance. This demonstrated an indefensible degree of inertia and complacency. The ATC’s response also showed a failure to adequately identify and grapple with the risks and there was an extremely concerning lack of adequate transparency about those risks.
Having regard to the primary judge’s reasons, and to ground four of RNSW’s grounds of appeal, it is convenient to set out the full text of the third factual conclusion (emphasis added):
3. In responding to the Show Cause Notice, the ATC Board relied heavily upon advice from KordaMentha. [RNSW] has concluded that reliance was misplaced.
The KordaMentha analysis proceeded on a critical and erroneous assumption, namely, that [RNSW] would extend its guarantee of the ATC**’**s debt facilities. That assumption was neither authorised nor discussed with [RNSW]. It involved the consultant presuming a regulatory decision that it was not delegated or competent to make.
Absent that assumption, the ultimate conclusions expressed in the report cannot be sustained.
Further, KordaMentha’s revenue projections were materially inflated. In particular, increases totalling $2.8 million in stable rents, track fees, and barrier trial fees were included notwithstanding advice that the implementation of these measures had been delayed. Subsequent information provided by the ATC confirmed that those increases were reduced to approximately $200,000. The effect was a $2.6 million overstatement of revenue.
The ATC Board nevertheless continued to rely on the report without qualification.
Further, [RNSW] raised concerns with the ATC in the 27 November 2025 Joint Meeting, that the KordaMentha engagement appeared to be a very narrow scope, focused on the question of solvency as opposed to addressing [RNSW] concerns about the ATC’s financial performance generally. At this meeting, the ATC advised that they were not sure what the scope was, but would check. This lack of knowledge about what was the fundamental report accompanying the ATC’s show cause response illustrated a concerning lack of understanding and care. At the 12 December 2025 Joint Meeting, the ATC were asked to confirm the answer to the above and advised that the KordaMentha scope was limited only to the solvency assessment and they had not been engaged to do any further work for the ATC.
The reference in the third paragraph above to “the ultimate conclusions expressed in the report cannot be sustained” is presumably a reference to the conclusions set out at [7.2.2]-[7.2.3] (extracted at [44] above) and [8] of the KordaMentha report.
RNSW did not have confidence that the ATC’s capital expenditure forecasts were adequate, noting that the ATC had itself described these as “grossly inadequate”. RNSW said that this exposed the ATC to the prospect of not being able to comply with safety regulations, noting that RNSW had had to provide $7 million to replace defective cladding at the Queen Elizabeth II grandstand at Royal Randwick racecourse that the ATC had not been able to fund. RNSW observed that the ATC board had failed to provide a plan or strategy for appropriate capital expenditure. RNSW said that the absence of adequate planning in this regard created “a material risk that the ATC is exposed to undisclosed or unquantified obligations that it lacks capacity to fund”.
The ATC board also had no cogent plans in place on cost reduction, revenue growth, property sales and development and any plans presented to RNSW were in the nature of general statements or aspirations. This was despite the ATC having informed RNSW on 26 September 2025 that it had already commenced a “root-and-branch” review of its entire operations to identify new revenue opportunities and cost efficiencies. RNSW then included two examples to highlight this issue. The first was the lack of any proper analysis by the ATC board, or proper formulation of a plan, in relation to its submission to RNSW that it could achieve costs savings in the region of $3.5 to $4 million through reducing the number of its employees (headcount reduction). The second was the ATC board’s inability to present any proper analysis of its claim that it could save significant sums in IT.
Further concerns arose in respect of financial figures provided by the ATC board, in particular, that four different sets of cash flow forecasts ranging from a forecasted cash balance in FY28 from $5 million to $14 million. Also, the ATC board and the ATC were unable to confirm which set of forecasts RNSW was meant to rely upon. A revised set of forecasts were then provided but two critical components were subsequently identified by the ATC as inaccurate and “not representative of the ATC’s actual strategy”.
Concerns raised during the show cause process were not answered satisfactorily as to: (a) the ATC having failed to take advantage of the platform for commercial success provided by RNSW and had no cogent strategy to do so; and (b) notwithstanding the extent of revenues procured by RNSW for the ATC, RNSW providing infrastructure funding for revenue generating assets, discretionary financial support from RNSW to the ATC and $152 million in annual prizemoney funding from RNSW, the ATC’s financial performance and position had continued to decline. RNSW then itemised 12 different matters going to the ATC’s failure to provide satisfactory answers to these concerns.
In light of the conclusions above, [RNSW] has formed the following views:
- the ATC Board has ceased to be effective as a governing body;
2. the ATC Board has fallen short of the standard that a competent board would be expected to meet;
3. one or more of the directors of the ATC has breached their directors duties;
- one or more of the directors of the ATC has failed to comply with the ATC Code of Conduct;
- one or more of the directors of the ATC has acted contrary to accepted standards of corporate behaviour;
- the ATC Board is in a state of disfunction [sic];
7. the relationship of trust and confidence between [RNSW] and the ATC Board has broken down; and
- there is a lack of fairness, confidence and commercial morality in the ATC’s company affairs.
While [RNSW] has formed each of the views identified above, it considers that any one, or combination of more than one, of these conclusions justify the appointment of an administrator.
Having regard to the structure of RNSW’s reasons, and reading them (as we must) fairly and as a whole, we read the “views” set out in [70] above as the evaluative assessments which underpin the reasoning in the introductory paragraphs in [62] above. They are the key opinions upon which RNSW acted in making the appointment and disclose why RNSW found that the appointment should be made in the exercise of its functions, including under s 13(1)(b) of the TRA. That is also consistent with RNSW describing these views as “justifying” the appointment. By contrast, RNSW described its factual conclusions (summarised above) as “contributing to” its decision. Consistent with this, and with the structure of RNSW’s reasons, RNSW’s conclusions identify the factual underpinning of RNSW’s key evaluative findings upon which it acted in making the appointment.
Contrary to the ATC’s submission, these evaluative assessments go to the essence of the ATC’s corporate governance and its effective functioning. Without an effective or functioning board the ATC’s ability to operate, including in its primary activities of promoting, conducting or controlling race meetings, was necessarily undermined. With no relationship of trust and confidence between the ATC and RNSW, the ability of RNSW to control, supervise or regulate those activities of the ATC, which we are satisfied fall within the ambit of horse racing as defined in the TRA*,* is necessarily compromised. As RNSW argued, “you can only be a race club doing your job controlling horse racing meetings if you have an adequate standard of financial performance and corporate governance”. Beyond this, the concerns identified by RNSW suggest that it considered that it might well be required to make significant financial contributions if the ATC was not able to function effectively, including if RNSW were called upon under its guarantee of the CBA facility.
It follows that we reject the ATC’s contention that there is nothing in RNSW’s reasons that has anything to do with “the racing of thoroughbred horses down the track”. Given the ATC’s operations, RNSW’s reasons disclose that it relied centrally on matters that would impact upon the ATC’s ability to function, which necessarily included its ability to promote, control and operate race meetings at its four race tracks in Sydney. Further, given RNSW’s focus upon overarching issues of corporate governance in both the introductory paragraphs and in the “views” which justified the appointment, we are not satisfied that RNSW misunderstood its function or power in making the appointment. The ATC has not made good its contention that RNSW’s understanding when making the appointment was that “there [were] no relevant limits to its function under [s] 13(1)(b)”.
In light of the structure of RNSW’s reasons, moreover, it is readily understandable why no express reference is made in this part of RNSW’s reasons to its assessment of the KordaMentha report. That is not to say that the assessment did not contribute to the final stated views. Fairly read, that assessment may have contributed to RNSW’s view that the ATC board had fallen short of the standard that a competent board would be expected to meet, having regard to RNSW’s conclusion that the ATC board’s reliance on the KordaMentha report was misplaced. It is clear, however, from the statement of reasons as a whole that this finding regarding the ATC board’s reliance on the KordaMentha report formed only one part of the conclusions which, in turn, informed RNSW’s key opinions which were relied upon in making the appointment.
On the same day as the appointment was communicated by letter to the ATC, the ATC commenced proceedings in the Court below and the appointment was stayed. The matter was heard on 19, 20 and 23 February 2026 and his Honour handed down judgment promptly on 11 March 2026.
As noted above, the primary judge found that the appointment was invalid for two principal reasons: first, the appointment was not authorised by the TRA; second, the appointment was based upon a material misreading by RNSW of information in the KordaMentha report sufficient to constitute a jurisdictional error.
As regards the first reason, his Honour noted that the parties were agreed that any exercise of the power in s 14(2)(g) to appoint an administrator had to be done in the exercise of one of RNSW’s statutory functions (that was, however, no longer common ground in this Court). Before his Honour, but not before this Court, it was contended that one such function arose from the terms of s 11 of the TRA and his Honour rejected that contention. His Honour also rejected RNSW’s contention that the appointment was made in the exercise of its function under s 13(1)(b) of the TRA. His Honour thus held that the appointment was not authorised by the TRA*.*
In reaching this conclusion, his Honour attached particular significance to the meaning he attributed to the term “horse racing”, which is the focus of RNSW’s function under s 13(1)(b). His Honour found, at [53]-[55] that the universe of what RNSW could control, supervise and regulate under s 13(1)(b) was “any matter or thing referred to in the [ARR]”, and proceeded, at [56]-[57] to identify the breadth of that universe by reference to the subject headings in the ARR.
His Honour then made his construction of “horse racing” pellucidly clear at [58] by stating that “any activity, subject matter or role referred to in the ARR” falls within the meaning of “horse racing” for the purposes of s 13(1)(b) of the TRA. His Honour found that it would be an invitation to uncertainty to construe s 13(1)(b) such that RNSW could properly take steps where, for example, a club was at risk of insolvency which would, in turn, have an effect on horse racing. According to his Honour, “by anchoring the definition in the ARR, the legislature has laid down an objective criterion, even allowing for grey on the outer edges, for identifying what I have referred to as the ‘universe’”: at [60].
Relevantly, at [61]-[62] his Honour also rejected RNSW’s contention that the proper ambit of RNSW’s function in s 13(1)(b) should be determined having regard also to the range of powers conferred under s 14. His Honour found that this was “an impermissible backwards way of reasoning”.
His Honour held, at [70], that the appointment was not made in the exercise of RNSW’s function under s 13(1)(b) of the TRA because:
…the finances and corporate governance of the ATC do not fall within the definition of the “racing of galloping horses as referred to in the [ARR]” which RNSW controls, supervises and regulates in NSW.
His Honour characterised this, by reference to LPDT at [3], as “a misunderstanding of the applicable law”.
As regards his Honour’s second reason for finding jurisdictional error, his Honour found, at [84], that RNSW had erred in its reasons in finding that KordaMentha had proceeded on the assumption that RNSW would extend its guarantee of the ATC’s debt facilities when the KordaMentha report in fact took into account other possibilities which did not involve RNSW extending guarantee facilities. At [93], his Honour found that this error was such that the decision to make the appointment did not “satisfy the ‘qualitative assessment’ that the unreasonableness ground of judicial review invites”, citing Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [75] per Payne JA (Gleeson JA and Griffiths AJA agreeing), and, at [94], because it was a material error, citing LPDT at [14].
The primary judge rejected the three bases of inconsistency relied upon by the ATC at first instance, which are the same as those relied upon before this Court.
As already observed, resolution of this issue depends in part upon our conclusions at [72]-[77] above as to how RNSW’s reasons should be construed. It also involves proper construction of RNSWs functions and powers under the TRA, to which we now turn.
RNSW’s central contentions as to construction were, first, that the powers under s 14 of the TRA could validly be exercised even if they were not being exercised in aid of a function identified in s 13. In RNSW’s submission, the limiting factors on the exercise of power under s 14(2)(g) are that it calls for “something about that conduct of the affairs [of a race club] which is relevant to and indeed threatens […] the ability of the race club to act as a race club”, that is, to carry out its function of promoting, conducting or controlling race meetings. Second, RNSW argued that in any event, the appointment fell within the ambit of RNSW’s function under s 13(1)(b) and was thus a valid exercise of power. In the present factual context, RNSW identified two bases for this second submission. First, RNSW’s concerns about the financial performance and corporate governance of the ATC went to the ability of the ATC, as a race club, to carry out its function of promoting, conducting or controlling horse racing meetings which, in turn, fell within the ambit of horse racing as defined in s 3(1). Second, the ATC’s conduct of its affairs was something which the members of RNSW individually considered, in the context of their duty under s 11, to be a threat to the public interest and the interests of the horse racing industry as a whole in NSW. Both of those things, RNSW contended, fell within the ambit of s 13(1)(b).
RNSW also contended that conduct which threatens the financial performance or corporate governance of a race club necessarily bears upon its ability to promote, conduct or control race meetings. We reject that contention which is expressed in absolute terms. Merely because a race club must undertake such activities does not mean that everything that threatens its financial performance or corporate governance will impact such activities. Issues of fact and degree are likely to arise. We also reject RNSW’s contention that anything that threatened the financial performance or corporate governance of the ATC would necessarily bear upon such matters.
The ATC contended that the exercise of a power under s 14 of the TRA was only lawful if RNSW was acting pursuant to a function under s 13, and here, the only function relied upon was that under s 13(1)(b). The ATC submitted, moreover, that under s 13(1)(b) RNSW is not the general regulator of all activities of a race club. Rather, its function is limited to controlling, supervising of regulating activities where there is a connection between the particular activity or concern and the racing of thoroughbreds down the track. That was the key matter which, in the ATC’s submission, led to the conclusion that the appointment was beyond the ambit of RNSW’s function under s 13(1)(b) and, thus, unauthorised.
It is convenient to start by considering the matters relied upon by the ATC by way of context.
On 9 June 1995 Ian Temby QC was commissioned to review the rules governing the conduct of thoroughbred racing in NSW and the current mechanisms for ensuring compliance with these rules. He was also commissioned specifically to report findings and conclusions, and recommendations for changes, to prevent unfair competition in the conduct of thoroughbred racing, prevent fraud and corruption in thoroughbred racing and associated betting activities and maintain public trust and confidence in the conduct of thoroughbred racing.
Mr Temby’s report was published in October 1995 (Temby r****eport). The Temby report recommended that the new governing body (which he recommended be set up) should take over “all principal club functions from the [AJC] and have responsibility for integrity assurance and strategic development of racing throughout New South Wales”. Contrary to the ATC’s contention, we do not read this as limiting the functions to be allocated to this body. Rather, we read this as setting out functions that Mr Temby considered should be allocated to the new body on account of concerns about conflicts of interest (with which he was centrally concerned in his report), without intending to curtail the functions that might ultimately be given to the new body. This is consistent with two further recommendations he made. First, that, subject to statute, it would be a matter for the body to set its own objectives, noting that a prime function of the new body would be integrity assurance. Second, that the new body:
…have key functions as laid down by statute, and such other functions as are conferred upon it by the Minister for Gaming and Racing from time to time, and that it have power to delegate its functions to committees or otherwise as it sees fit. …
Mr Temby did not, in his report, say anything about the extent of the powers that should be given to his proposed new body. Nor did he include any proposed draft legislation in his report.
Further, it is apparent from the second reading speech for the AJC Principal Club Bill 1996 (NSW) (Bill), that became what is now the TRA (by Mr Face, Minister for Gaming and Racing) that after receiving Mr Temby’s report, the Government consulted extensively with the AJC, other race clubs and industry groups before “tailor[ing] this measure in the way it will proceed through the Parliament” (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 5 June 1996 at 2550). Mr Face described the consultation overall as “the most extensive consultation process ever undertaking by an Australian government in relation to the thoroughbred racing industry”. He said that the Bill implemented the essential aim of the recommendations in the Temby report, “namely to create a broadly representative governing body able to carry out its functions independently from individual race clubs”. It is implicit in these statements that the Government had taken the Temby report as the starting point but not the exhaustive source of the reforms it sought to implement.
Mr Face identified four purposes of the Bill, one of which was to establish the AJC Principal Club (AJCPC – now RNSW) “as a representative body to govern thoroughbred racing in New South Wales”. He later said that:
[t]he AJCPC will be the new controlling authority for thoroughbred racing, and its functions and powers in clauses 13 and 14 are appropriately comprehensive. Its functions include traditional “principal club” functions, and also the promotion, strategic development and welfare of the industry. …
Emphasising the breadth of the AJCPC’s role under the TRA, Mr Face referred to the contribution that Government looked forward to from “the race clubs and industry groups who will directly participate for the first time in the control and management of their industry”.
In summary, contrary to the ATC’s contention, there is nothing in Mr Temby’s report, or in the second reading speech for the Bill, that supports a narrow reading of the functions and powers of RNSW under the TRA*.*
As already noted, in support of its overarching contentions as to construction, the ATC relied upon the limited ambit of amendments made to the TRA in 2008.
The Amendment Act was introduced following the decision of STC and the publication of the Brown report. In STC Bergin J was considering whether or not RNSW had power to make directions relating to television and media rights, which sought to prevent the AJC and the STC from extending their agreements with broadcasters, or entering into new agreements in relation to media and broadcast rights, without the agreement of RNSW. These issues were raised by way of separate questions, one of which was whether RNSW had power to issue those directions. RNSW contended that the directions were authorised on the basis of its role in relation to the “thoroughbred racing industry”: at [96]. In that context, her Honour observed at [101] that RNSW did not have the function of controlling, supervising or regulating the horse racing industry.
Having regard to the limited issues raised in STC, we do not read this observation as bearing upon the issues in this case, which go to the ambit of RNSW’s function under s 13(1)(b) and power under s 14(2)(g). There is no suggestion here that RNSW was purporting to supervise or regulate the horse racing industry per se in making the appointment. Moreover, we do not read her Honour’s observation in STC that it was important that RNSW exercised its power of supervision under s 14(2)(c) of the TRA for or in connection with the exercise of its functions as intending, as a matter of generality, to hold that all powers in s 14(2) were limited by the ambit of s 14(1). In any event, this was not an issue that arose from the questions before her Honour*.*
As for the Brown report, Mr Brown was asked to:
[r]eview the [TRA] to determine whether the policy objectives of the [TRA] remain valid and whether the terms of the [TRA] remain appropriate for securing those objectives.
The TRA was enacted as the AJC Principal Club Act 1996 (NSW) (AJCPCA) and was given its current name in 2004.
The long title of the TRA is as follows:
An Act to make provision for the establishment, management and functions of [RNSW] as the representative body to control thoroughbred racing in the State; and for other purposes.
The long title can be taken into account on construction, as appropriate, under s 34(2)(a) of the Interpretation Act 1987 (NSW). To the extent that there is uncertainty as to the ambit of the TRA, the long title confirms that it was intended to cover thoroughbred racing.
The Amendment Act introduced s 13(1)(b1), and Pt 2A entitled “Special Functions of [RNSW]” (comprising ss 29A-29N).Sections 29O-29V were introduced by further amendments in 2019.
The definition of horse racing in s 3(1) is set out at [6] above. Given that RNSW’s function under s 13(1)(b) is directed to “horse racing”, one key issue between the parties is as to how the phrase “racing … as referred to in the [ARR]” in that definition should be construed.
RNSW contended that a key error in the primary judge’s reasoning is that, at [58] and [60], his Honour approached this phrase as if it restricted the ambit of horse racing in the TRA to the “universe” of activities, subject matters or roles referred to in the ARR. RNSW contended that, contrary to the primary judge’s approach, the definition of horse racing in s 3(1) was intended by Parliament to identify the character of horse racing which was to be regulated by the TRA, a “coat-hanger” upon which RNSW’s functions are then hung. This comprised that subset of the racing of galloping horses that is referred to, or subject to, the ARR, being (save for very limited exceptions) the racing of thoroughbred horses. In this regard, RNSW submitted that the ARR creates “as it were, a closed system for the racing of galloping horses”. Having regard to this, RNSW submitted that the financial performance and corporate governance of a race club could be relevant considerations for the purpose of RNSW exercising its function under s 13(1)(b), as these are matters that might go to a race club’s ability to promote, conduct or control race meetings falling within the ambit of the ARR, or the manner in which it could do so. In this context, RNSW contended that, upon a proper construction of the TRA, the question for the Court raised by these proceedings was, in essence:
Is there something about the conduct of [the ATC’s] affairs generally that’s sufficiently connected to the horse racing that calls for this fairly draconian exercise of power?
The ATC’s contention was not that the ambit of horse racing in s 3(1) of the TRA is limited to matters that are the subject of an express power or duty in the ARR. The ATC argued that that would “necessarily be wrong” given that s 13(2) (above at [8]) makes it clear that the functions of RNSW are not restricted to those in the ARR. It contended that that was not how the primary judge’s reasons at [58] and [60] should be understood. Rather, the ATC contended that the definition of the phrase “as referred to in the [ARR]” identifies the “topic to which the concept of horse racing is directed” and a “tool to assist you understanding the scope of [the] concept” of horse racing and that his Honour’s reasons should be read as being consistent with this. It contended that the significance of the concept of horse racing in the TRA, and in particular in s 13(1)(b), was twofold. First, it makes it clear that horse racing is focussed upon the galloping of horses down the track and not upon other activities of a race club such as catering, non-race day revenue, bowling clubs or hotels. Second, that it discloses a legislative choice that RNSW was to control, supervise and regulate horse racing rather than race clubs. It followed, in the ATC’s submission, that horse racing under the TRA does not include business decisions or general matters of corporate governance of a race club.
It is unnecessary to resolve whether or not the ATC is correct as to the proper reading of the primary judge’s reasons at [58] and [60]. RNSW did not contend that the ATC was unable, absent a notice of contention, to rely upon its contentions as to the proper construction of the definition of horse racing in s 3(1). In these circumstances, we are content to approach this issue of construction on the basis that the contest between the parties is as set out above and that neither party sought to contend that the ambit of horse racing under the TRA was limited to activities, powers or duties in the ARR.
In light of the parties’ competing contentions, it is apparent that the meaning to be attributed to the term “horse racing” in the TRA turns in the first instance upon a proper understanding of the ARR.
As at June 1996 the ARR relevantly provided:
“Club” was defined in r 1 to include “any person or body holding or proposing to hold a race meeting in the Commonwealth”. Thus, in order to hold a race meeting falling within the ambit of the ARR the person or entity would have to be a Club as defined.
Under r 2, any person who took part in any matter coming within the ARR agreed with each and every Principal Club to be bound by the ARR, and Principal Club was defined in r 1 to mean, in NSW, the AJC.
Under r 6(a), the ARR applied to “all races held under the management or control of a Principal Club” and under r 6(b) “If any race meeting is not held under these Rules all horses taking part shall ipso facto be disqualified and no person taking part therein shall be competent to enter a horse for any race held under the [ARR] or to continue to hold any licence unless the Committee [of the Principal Club] shall otherwise determine”.
Under r 7, the committee of a Principal Club had “the control and general supervision of racing within its territory” and, at r 7(l), the power to register clubs and race meetings.
Under r 11, the Principal Club was to keep a register of every Club in its territory applying to hold race meetings under the ARR and every such application was to be in writing by the Secretary or other Official of such Club.
Under r 12, the Principal Club was to keep a register of all race meetings approved to be held under the ARR other than those held by Registered Clubs. It would appear from the definition of Club in r 1, however, that such an entity, albeit not a Registered Club, would still be a Club.
Under r 13, the Committee could, in its discretion, accept or refuse registration of “any such Club or meeting”.
Under r 14, (save for a limited exceptions) a horse could not be entered or run in a race unless it had been registered with the Registrar of Racehorses.
Under r 15A, a horse could not be registered unless it had been accepted for inclusion either in the relevant Stud Book or in a “Non Stud Book Register”. Whilst there is no evidence as to this before us, it may be that the Non Stud Book is a reference to something akin to the Non-Thoroughbred register, inclusion in which is tightly circumscribed, referred to by Robertson J in McHugh v Australian Jockey Club Limited (No 13) [2012] FCA 1441; (2012) 299 ALR 363 at [20].
The position described under the ARR as at the date of the appointment is materially similar to that described above:
“Club” is defined in AR 2 as “any body approved to hold a race meeting under the [ARR]”.
Under AR 3, any person “who takes part in any matter or race meeting coming within these [ARR] agree[d] with Racing Australia and each PRA to be bound by and comply with them”, and PRA is defined, relevantly, to mean:
…a body (statutory or otherwise) recognised as a principal racing authority under Racing Australia’s Constitution, that has the control and general supervision of racing within a State or Territory, and comprises, [RNSW] …
What these rules disclose is that, at the date of the appointment, the ARR provided (as they did as at June 1996) for a scheme whereby the racing of certain types of horses (which for convenience we will refer to as “thoroughbred” as, save for very limited exceptions, that is what the ARR cover) was regulated by the ARR and such racing could only take place at approved race meetings conducted by an entity which fell within the definition of “Club” in the ARR. This structure fits within that described by Griffith CJ in Rosehill Racecourse Co v Commissioner of Stamp Duties (1905) 3 CLR 393 at 399-400 as a voluntary compact between the different race clubs and the (then) Jockey Club that accords benefits and substantial privileges, in particular the privilege of holding race meetings which “is entirely a matter of compact”; see also, more recently, Scone Race Club Limited v Commissioner of Taxation [2019] FCAFC 225 at [63] where the ARR were described as “rules to which racing participants were contractually bound” and which were given statutory consequences and recognition including in s 3 of the TRA.
What is of particular significance, moreover, is that, under the ARR, thoroughbred horseracing could only be conducted at race meetings which could, in turn, only be conducted by Clubs as defined. That meant that the exercise of control, supervision and regulation of thoroughbred horse racing under the ARR in large part involved the exercise of powers and functions in respect of race clubs.
The requirement that a race meeting may only be conducted by a race club registered by RNSW now also flows from the terms of the Betting and Racing Act 1998 (NSW). Under that Act, a race meeting may not be held at a racecourse unless the race meeting is conducted by a non-proprietary association: s 5. Non-proprietary association is, in turn, defined as a corporation, club or other unincorporated body of persons formed for the purpose of promoting and conducting race meetings that is registered as a racing club by RNSW: s 5 read with the definitions in s 4.
In light of the terms and ambit of the ARR, both as at 1996 and as at the date of the appointment, three things are clear. First, the ARR seek to regulate only a subset of horse racing, namely the racing of thoroughbred horses (save for the very limited exceptions referred to above) conducted under the ARR. Second, the racing of thoroughbred horses in NSW as referred to in the ARR requires the promotion, conduct or control of race meetings which, in turn, requires effective and functioning race clubs. Third, the conduct of race meetings also depends upon an effective and working relationship between (what is now) RNSW and race clubs.
In that context, and also having regard to the text of the definition in s 3(1), the definition of horse racing identifies the character of horse racing that is regulated under the TRA. It does not delineate the particular activities that fall within that definition, but it identifies the topic upon which the TRA operates, which is the racing of galloping of horses within the ambit of the ARR. The ATC is correct that a distinction can be drawn under the TRA between horse racing, race clubs and the horse racing industry. However, that of itself does not require a narrow or artificial view of the ambit of horse racing under the TRA. Nor is it helpful to seek to delineate the precise boundaries of what is or is not encompassed within the ambit of horse racing. It suffices, given the issues in this case, that we are comfortably satisfied that the promotion, conducting or controlling of race meetings, the availability and operation of facilities to enable race meetings to take place (and to do so safely), and ensuring that both appropriate corporate governance and adequate finances are available to enable race meetings to be appropriately managed and operated, are all matters which may fall within the definition of horse racing for the purpose of s 13(1)(b) of the TRA.
It follows that the primary judge erred in holding at [70] that the finances and corporate governance of the ATC do not fall within the definition of horse racing in the TRA. Ground one of RNSW’s notice of appeal, which focussed particularly on this finding, should be upheld.
any body or other association of persons, whether incorporated or unincorporated, that promotes, conducts or controls, or that is formed for promoting, conducting or controlling, a horse racing meeting or meetings.
In their submissions as to the extent to which there is a demarcation in the TRA between the functions and powers of RNSW, and as to whether the latter is necessarily constrained by the ambit of the former, both parties variously relied upon, or sought to distinguish, Kathleen Investments (Australian) Ltd v Australian Atomic Energy Commission (1977) 139 CLR 117; [1977] HCA 55, Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672; [1979] HCA 26 and Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1008; (2006) 203 FLR 394. Ultimately, each of these authorities supports the general principle that the ambit of powers conferred by legislation must be determined having regard to the Act as a whole: Kathleen Investments at 138 (Gibbs J), Leon Fink at 680 (Mason J) and Darkinjung at [89] (Barrett J). In this regard, features of the legislation in issue and the relevant constitutional context may well influence conclusions as to construction.
By way of example, one element of the reasoning of Gibbs J in Kathleen Investments at 138 was that the functions of the Australian Atomic Energy Commission under the Atomic Energy Commission Act 1953-1973 (Cth) (AEC Act) kept the Act and the Commission from straying beyond constitutional power. It was in that context that his Honour held that the Commission could only exercise its powers for the purpose of carrying out its statutory functions. It is also of some significance that the AEC Act did not expressly confer power on the Commission to acquire shares. The relevant power, if any, was one to do all things necessary or convenient in the exercise of the Commission’s functions under s 17(1) of the AEC Act. In that context, Barwick CJ, in dissent, held at 128-129 that the acquisition of the shares in question was authorised only if incidental to the execution of some authorised purpose of the Commission. To some extent similarly, the power in issue in Leon Fink was a general power “to do all things necessary or convenient to be done for or in connexion with the performance of its functions”: see at 677-679. Such powers raise different issues of construction from those that arise in this appeal.
RNSW’s functions and powers are set out at [8]-[10] above.
Whilst at first blush functions and powers in the TRA seem to be separately delineated, we do not regard the separate focus of ss 13 and 14, namely that the former delineates functions and the latter powers, necessarily and always means that powers may only be exercised within the ambit of a function in s 13.
At [85]ff, the primary judge addressed RNSW’s contention that the proper assessment of its reasons concerning its treatment of the KordaMentha report had to take into account the fact that, of the three options set out in [1.1.7] of the report, options (b) and (c) did not involve any assumption that RNSW would extend its guarantee of the ATC’s debt facility and that those options had fallen away by mid-December when RNSW decided to appoint the administrator.
In addressing that submission, the primary judge assumed in RNSW’s favour that options (b) and (c) had in fact fallen away. His Honour stated, however, that such an assumption did not remove the need for the Court to assess the appointment by reference to RNSW’s reasons, even where, as here, there was no statutory duty to give reasons. His Honour referred to various relevant authorities, including Plaintiff M64/2015 v Minister for Immigration and Border Protection (2015) 258 CLR 173; [2015] HCA 50. His Honour stated at [90] that the authorities “support the conclusion that a voluntary provision of comprehensive reasons enables the Court more confidently to find, as a matter of fact, that those are the reasons for which a particular decision was made”.
After noting the express statement in RNSW’s reasons that the “conclusions” contributing to the decision to appoint an administrator included, but were not limited to, the eight matters set out in the reasons (including the assessment of the KordaMentha report), the primary judge said:
[91] In the context of that fact finding exercise, the qualification expressed in the reasons which I have quoted in the preceding paragraph leaves open the possibility that a decisionmaker such as RNSW could seek to prove by evidence that there were other conclusions which had led to the relevant decision. However, RNSW has not produced any such evidence. Therefore, there is no evidence that RNSW had the state of mind which reflected the explanation or understanding which I have set out in [85] above that options (b) and (c) were no longer available to the ATC. Notwithstanding the qualification to which I have referred, in the absence of any evidence from RNSW, and to the extent it is necessary, the Court finds that the only matters upon which RNSW relied in its decision to make the appointment are the matters set out in the reasons.
[92] There can be no doubt that a very significant part of the ATC’s response to the notice was the KordaMentha report. The reasons themselves recognize that “the ATC Board relied heavily on advice from KordaMentha”. Reading the reasons as a whole, and mindful that the Court should not be over-zealous to find error, the Court also has no doubt that the statement in the reasons that “absent that assumption, the ultimate conclusions expressed in the report cannot be sustained” is a very important conclusion for the purposes of the decision. RNSW’s conclusion that the ATC’s “reliance [on the KordaMentha report] was misplaced” is one of the conclusions expressly identified in the reasons when they state: “in light of the conclusions above, Racing NSW has formed the following views”. It is those views which individually or jointly in any combination RNSW asserted justified the appointment.
(i) Decision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others. Ordinarily they review the whole of the evidence, and consider all issues of fact, before they write anything. Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole: Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 77 ALJR 1165; [2003] HCA 30 at [14] (Gleeson CJ);
(ii) the court should not read passages from the reasons for decision in isolation from others to which they may be related: Politis v Commissioner of Taxation (1988) 20 ATR 108 at 111; [1988] FCA 739 at [14];
(iii) the reasons must be read fairly and as a whole: Ex parte Applicant at [147] (Kirby J); Wu Shan Liang at 291; Bisley at 251;
(iv) the reasons recorded ought not to be inspected with a fine-tooth comb attuned to identifying error: Pozzolanic at 287; Wu Shan Liang at 272, 291;
(v) there should be a degree of tolerance for looseness in the language of the tribunal, unhappy phrasing of the tribunal’s thoughts or verbal slips: Pozzolanic at 287; Wu Shan Liang at 272 and 291.
[15] Consistently with approaching the task in a sensible and balanced way, a beneficial approach to reasons does not demand that any ambiguity be resolved in favour of the decision-maker…
[16] The Court’s review of the reasons of a decision-maker should not proceed in a manner inclined to finding error. But that does not mean the Court must strive to read the reasons in such a way as to avoid the conclusion of error. For example, it is not for the Court to fill gaps in reasons by speculating about what further unarticulated considerations, if any, lie behind what the decision-maker said. The Court’s duty is to read the reasons fairly and as a whole, making due allowance (where relevant) for the fact that the authors are not lawyers accustomed to writing in a legal manner.
To similar effect, see Minister for Immigration and Citizenship v DVRL [2026] FCAFC 73 at [141] per Perry, Stellios and Lenehan JJ.
The observations in Della Bruna were made in the context of reasons given by the NSW Civil and Administrative Tribunal (NCAT) where s 165M of the Health Practitioner Regulation National Law (NSW) 2009 obliged NCAT to “give a written statement of the decision”. The statement had to set out any findings on material questions of fact, refer to any evidence or other material on which the findings were based, and give the reasons for the decision.
We explain below why we respectfully consider that, although the primary judge acknowledged the need for judicial restraint in scrutinising RNSW’s reasons, his Honour proceeded to apply an erroneous standard and approach.
[75] The unreasonableness ground of judicial review is no longer limited to what is in effect an irrational, if not bizarre, decision – which is to say one that is so unreasonable that no reasonable person could have arrived at it: Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 at [68] (Hayne, Kiefel and Bell JJ). In Judicial Review of Administrative Action and Government Liability by M Aronson, M Groves and G Weeks (Thomson Reuters, 6th ed, 2017) at [6.450], it is suggested, in my view correctly, that Li “invites a qualitative assessment of the impugned discretionary decision, but it does not allow an appeal to the judicial review judge’s subjective sense of reasonableness”.
We consider that the primary judge took the emphasised phrase out of context. This contributed to his Honour applying the wrong standard of judicial review in concluding that there was legal unreasonableness. For completeness, it might also be noted that the passage Payne JA referred to in the sixth edition of Judicial Review of Administrative Action and Government Liability does not appear in the seventh edition of that leading textbook. We do not suggest that the description of a “qualitative assessment” is intrinsically wrong, but its use in isolation carries with it the risk that the Court will not apply the requisite degree of restraint and will instead engage in an impermissible review of the merits of the matter. Appropriate restraint is essential in applying the head of review for legal unreasonableness in all statutory contexts. That is the point of the subsequent words in the quotation above. The need for this is particularly acute in some particular statutory contexts, as is well illustrated by Martinus Rail itself, with reference to the Building and Construction Industry Security of Payment Act 1999 (NSW) (see Martinus Rail at [80]).
The essential need for judicial restraint in applying review for legal unreasonableness has been emphasised in numerous cases. As stated in Martinus Rail at [79], there is “usually a high threshold for a conclusion that a power has been unreasonably exercised as a matter of law”, citing inter alia Minister for Home Affairs v DUA16 (2020) 271 CLR 550; [2020] HCA 46 at [26]; Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30 at [11], [52], [89] and [135].
The leading authority in Australia on this ground of review is Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18. The key relevant principles which were either affirmed or established in that decision may be summarised as follows:
It may generally be assumed that the legislature intends that a statutory discretionary power will be exercised reasonably (at [63]).
“The requirement of reasonableness is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgement with which the Court disagrees, even though that evaluative judgement is rationally open to the decision-maker” (at [30]).
There is an area within which a decision-maker has “a genuinely free discretion”, which resides within the bounds of legal reasonableness (at [66]).
The legal standard of unreasonableness applies not only to the decision ultimately arrived at in the exercise of a discretionary power, but also extends to the process leading up to the making of that decision (at [68]).
Expression of the standard of legal reasonableness in terms of the minimum to be expected of any “reasonable repository of the power” in the circumstances of the impugned decision or action has the benefit of emphasising both the “extremely confined” scope and context-specific operation of the limitation it imposes. That is not to say that the standard might not be appropriately expressed in another form of words.
Those observations highlight the importance of identifying the particular error which is said to involve legal unreasonableness as well as emphasising the stringent nature of this head of review and how its application is “context-specific”.
Many of these points were emphasised by the High Court in LPDT, in the context of a broader analysis of the scope of judicial review for jurisdictional error. The key relevant principles identified in LPDT may be summarised as follows:
Because an express or implied condition of a statutory conferral of decision-making authority can take many different forms and also because breach can occur in many different circumstances, “the categories of jurisdictional error are not closed”, but include a statutory decision-maker “exceeding the bounds of reasonableness” (at [3]).
The limits of the statutory conferral of decision-making authority can only be understood by construing the relevant statute and determining whether any error has occurred and, if so, whether any such error is jurisdictional (at [4]).
Accordingly, as stated at [5]:
Determining whether an error exists as well as whether it is jurisdictional starts with an analysis of the nature of the error alleged in the statutory context within which the decision has been made. Given the broad range of decisions in which errors might be made, the large variety of statutory schemes in which those decisions might be made, and the range of circumstances which may attend the making of any particular decision, it is impossible to divine a rigid classification of the errors that constitute jurisdictional errors. There are no bright lines to be drawn – “[t]he nature of the error has to be worked out in each case concerning a specific decision under a particular statute”.
A factual error made in the course of making a determination or decision is unlikely to be a jurisdictional error unless the particular fact is a jurisdictional fact. Courts should be slow to find that an erroneous finding of fact or an error of reasoning in finding a fact, made in the course of making a decision, demonstrates that an administrative tribunal so misunderstood the question it had to decide that its error constituted a jurisdictional error.
There is no doubt that just because the alleged errors were factual enquiries does not mean they are precluded from constituting jurisdictional error … However, an erroneous finding of fact will typically not amount, in and of itself, to jurisdictional error … A finding of fact involving an error might constitute jurisdictional error if, for example, it is shown to be irrational, or unreasonable, or lacking in an intelligible justification … Further, in order to establish jurisdictional error, the factual error must be material in the sense that there is a realistic basis to consider that the decision maker’s ultimate conclusion might have been different if the alleged error had not been made … Where the impugned finding is but one of a number of findings that independently may have led to the [decision-maker’s] ultimate conclusion, jurisdictional error will generally not be made out …
Ground four challenges the primary judge’s conclusion (although strictly not part of the ratio for his Honour’s decision) that RNSW’s exercise of power to appoint an administrator under s 14(1)(g) of the TRA was legally unreasonable because of how RNSW treated the KordaMentha report in its reasons (at [84], [91], [93]-[94]). His Honour considered that the threshold of materiality was established and that the error was jurisdictional in nature (at [94]).
We respectfully consider that the primary judge erred in upholding the ATC’s claim that the appointment was legally unreasonable.
First, on a fair and proper reading of RNSW’s statement of reasons, we do not consider that RNSW misread the KordaMentha report. As noted above, the primary judge assumed in RNSW’s favour that options (b) and (c) had fallen away as at mid-December 2025. Both options (b) and (c) required RNSW to consent to the ATC offering property assets as security so as either to extend the debt facilities with the CBA (option (b)) or refinance with a new lender (option (c)). Having regard to the events that occurred post the KordaMentha report, in which the central focus was on whether RNSW would continue to guarantee the debt facilities with the CBA, it is unsurprising that the primary judge was prepared to assume in RNSW’s favour that options (b) and (c) had fallen away.
Once this assumption was made, however, only option (a) remained. In its own terms, it wholly depended on RNSW continuing to provide a guarantee for the the CBA debt facilities. In the circumstances which existed as at the date of the KordaMentha report and also at the date of the appointment, it was not incorrect for RNSW to say in its statement of reasons that the KordaMentha report proceeded on an erroneous assumption that the guarantee would be extended, that the assumption was never discussed with RNSW and that the assumption effectively involved KordaMentha presuming that the guarantee would in fact be extended without any discussion with RNSW.
It was well open to RNSW to use this reasoning in explaining why it gave no weight to the “ultimate conclusions” expressed in the KordaMentha report. Those conclusions were directed to the issue of solvency. In assessing the weight that it would give to the KordaMentha report, RNSW was entitled not only to take into account matters as they stood as at the date of the report, but also to take into account relevant matters occurring after that date. There is a general obligation on an administrative decision-maker to take into account the most up-to-date material which is relevant to its decision: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 44; [1986] HCA 40 (Mason J). In circumstances where RNSW was assessing the responsibility of the ATC’s board for the financial performance and corporate governance issues of concern to the RNSW, it was appropriate for it to have regard to events which post-dated the KordaMentha report.
First, the use of expressions such as “illogicality” or “irrationality” may be no more than to strongly emphasise disagreement with someone else’s process of reasoning on an issue of fact … But that does not in and of itself establish jurisdictional error.
Second and relatedly, the use of such expressions may be little more than a contrivance to shoehorn arguments about the merits of the Authority’s conclusion into the category of jurisdictional error, but that is to descend into impermissible merits review.
Third, differences of degree, impression and empirical judgment between the approach and reasoning of the Authority as compared with the opinion of a court undertaking judicial review do not establish illogicality or irrationality … There is a high threshold. The question is whether no rational or logical decision-maker could arrive at the relevant decision on the evidence before the decision-maker ….
Fourth, the weight that the Authority accorded to each aspect of the evidence was a matter for it to determine in the light of the evidence and submissions before it. Questions of weight per se are not amenable to judicial review …
Fifth, some probative material or other logical basis for a fact finding by the Authority was sufficient. The Authority was not obliged to uncritically accept evidence or a submission made by the appellant.
We are not persuaded that RNSW’s assessment of the KordaMentha report, in the factual context described above, involved irrationality, illogicality or lacked an intelligible justification.
Finally, and in any event, even if (contrary to the above) reviewable error was demonstrated in RNSW’s assessment of the KordaMentha report, any such error was not material so as to amount to jurisdictional error. The present case is an instance where “irrationality in respect of one finding is immaterial given other findings”: Minister for Immigration and Citizenship v SZRKT (2013) 212 FCR 99; [2013] FCA 317 at [158] per Robertson J.
When attention is focused on RNSW’s ultimate decision to appoint an administrator and not merely focusing on that part of the statement of reasons relating to the KordaMentha report, it is clear that any error in RNSW’s treatment of the report was not material in the relevant sense so as to amount to jurisdictional error (as to which, see LPDT at [7]). First, as noted above, RNSW’s reasons make no reference to RNSW having reached a conclusion regarding the solvency of the ATC which is the central issue addressed in the KordaMentha report. Hence, we respectfully disagree with the primary judge’s findings as to materiality at [94].
Second, RNSW’s reasons make it plain that the appointment was based on many reasons unrelated to RNSW’s criticisms of the ATC board’s reliance on the report. Those other reasons included the lack of any “cogent or structured plans in place on cost reduction, revenue growth, property sales and development” and “serious and systemic corporate governance concerns”. The ATC does not claim that any of those other reasons underpinning the appointment were irrational or illogical or unreasonable. It cannot be said that there was a realistic possibility that the decision to appoint an administrator could have been different but for RNSW’s alleged misreading of the KordaMentha report, even under the applicable, relatively undemanding, standard: see, eg Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26 at [1], [33].
Third, on the issue of materiality, Mr Robertson SC (who appeared for the ATC together with Mr Afshar and Mr Pulsford) made the following submission orally with reference to the eight “conclusions” we discuss at [65]-[69] above:
ROBERTSON: I’m bound to accept I’ve got to undermine all eight. But each of those eight are expressed to have been made in light of the conclusions above and those conclusions are all said to contribute to each other. So, that point, while I’m bound to accept, it’s really a materiality type point, so the first stage of materiality. I’m bound to accept that I’ve got to impugn one through to eight, but I do that in circumstances where each of those eight are expressed to have been formed in light of the eight conclusions that go beforehand. It’s not suggested in the reasons, for example, that well, conclusions one through to five relate to one and conclusion six relates to seven and so on and so forth. What we say, when you actually look at them, one couldn’t divide them up in that kind of fashion anyway.
The particular conclusions that have contributed to Racing NSW determining to appoint an administrator to conduct the affairs of the ATC include, but are not limited to, the following conclusions:
…
[and as regards the “views” which RNSW formed, discussed at [70]-[71] above] While Racing NSW has formed each of the views identified above, it considers that any one, or combination of more than one, of these conclusions justify the appointment of an administrator.
Nothing in those two passages nor anywhere else in RNSW’s reasons supports Mr Robertson’s submission. The “contribution” referred to in the first of those passages relates to the ultimate decision by RNSW to appoint an administrator. It does not state that all the conclusions contributed to each other.
For these reasons, even if it were the case that RNSW misunderstood the KordaMentha report in the way alleged by the ATC (contrary to our conclusion), no jurisdictional error is established.
For all these reasons, ground four is upheld.
The ATC sought to support the orders made by the primary judge on the three further bases articulated in a notice of contention (set out above at [18]).
The primary judge usefully addressed these issues briefly, lest he was wrong on his principal conclusions. His Honour rejected the ATC’s contentions. He held that any administrator appointed by RNSW under s 14(2)(g) would be a “director” for the purposes of the Corporations Law and Corporations Act (at [97]-[99]). On that understanding, he concluded that an administrator would be obliged to act in the best interests of the company and thus there was no inconsistency of the kind asserted by the ATC as regards the first and second issues (at [98]-[106]).
His Honour also concluded that there was no indirect inconsistency between the provision and the Corporations Act because they “deal with quite different subject matters” (at [107]).
As regards the third issue, his Honour concluded that there was no implied repeal because “the two acts can stand or live together when it is understood … that the power to appoint an administrator under s 14(2)(g) can only be exercised in connection with the functions specified in section 13(1) of the Act” (at [115]). His Honour also noted that the second reading speech for the Merger Act made clear that that Act “was not intended to take the [ATC] out of the regulatory regime for the conduct of horse racing” (ibid).
We will address grounds one and two of the notice of contention together. However, it is convenient first to address ground three, as the matters relevant to that ground form part of the backdrop for the other grounds. None of the grounds is made out.
As noted above, the ATC was formed when the AJC and the STC merged in 2010. That merger was facilitated by the Merger Act. The objects of that Act, stated in s 3, include “to facilitate the merger of the AJC and the STC into a new racing club incorporated under the Corporations Act”, and “to make provision in relation to the corporate governance of the merged racing club”.
The Merger Act refers to “mandatory corporate governance provisions”, being the provisions set out in Sch 1 to the Act (see s 5(1)(a)). The inclusion of those terms in the constitution of a company established for the purposes of the merger is said to be “specifically authorised” (s 6(1)), with the merged club being “specifically authorised to carry on its affairs in accordance with the mandatory corporate governance provisions included in its constitution” (s 6(2)). Section 6(3) states that the section does not limit the powers of the merged racing club to conduct its affairs in accordance with other provisions included in its constitution, so long as those other provisions are not inconsistent with the mandatory corporate governance provisions.
The Act does not say in terms that the mandatory corporate governance provisions are required to be found in the ATC’s constitution. And the Act did not itself insert them, as reflected in the fact that s 5(1)(b) states that the constitution includes the provisions if the constitution “includes provisions in the same terms as, or to the effect of, the mandatory corporate governance provisions”. However, the inclusion of such terms is a precondition of the Minister declaring a company to be the merged racing club, and other provisions in the Act (such as those effecting the transfer of assets) hinged on that declaration. Further, when those provisions are included then s 9(1) comes to apply. It provides that an alteration to the constitution of the merged club “that would operate to omit or otherwise alter any of the mandatory corporate governance provisions included in the constitution does not have effect unless the Minister gives written consent to the alteration”.
Section 44(1) of the Merger Act provides that ss 6 and 9 and Sch 1, amongst other provisions, are corporations legislation displacement provisions for the purposes of s 5G of the Corporations Act.
The mandatory corporate governance provisions in Sch 1 address various matters of corporate governance, such as the composition of the Board, and the term of, and replacement mechanisms for, directors. Relevantly, Sch 1 includes this provision:
3 Board to manage Company
(1) The management and control of the business and affairs of the Company are vested in the Board.
(2) The Board may exercise all powers of the Company which are not, by the Corporations Act or this Constitution, required to be exercised by the Company in general meeting.
The ATC’s constitution includes a clause in essentially these terms (cl 10.4).
Ground three of the ATC’s notice of contention, put in the alternative to grounds one and two, was that if the power in s 14(2)(g) of the TRA could apply with respect to a racing club that was a public company then that provision must be read as impliedly repealed by the Merger Act insofar as it would apply to the ATC. It argued that the Merger Act indicated that its mandatory corporate governance provisions were intended to prevail over any inconsistent statutory provision, including in the TRA. In that regard it relied upon: the mandatory nature of the provisions, as reflected in s 6; the declaration in s 44(1), where it was suggested that it would be surprising if the Parliament intended the Act to prevail over inconsistent federal but not State laws; the fact that certain provisions expressly preserved the operation of any other relevant State legislation (ss 30(3) and 31(3)); and what it said were the limited terms of s 40 (quoted below).
Relevant principles of construction for overlapping statutes of the same Parliament were summarised by the plurality in NSW Commissioner of Police v Cottle (2022) 276 CLR 62; [2022] HCA 7 (citations omitted):
[23] After consideration of this Court’s decision in Ferdinands v Commissioner for Public Employment, the plurality in Eaton referred to the presumption that statutes do not contradict one another. In that respect, the principle that an Act of Parliament should be construed in a way that best achieves a harmonious result also informs the construction of two statutes which may share a field of operation. Nonetheless, if, properly construed, it is concluded that the two statutes or provisions cannot “stand or live together”, the presumption is displaced. That “requires the construction of, and close attention to, the particular provisions in question”. Ultimately:
“the question as to the operation of the statutes remains a matter to be gleaned by reference to legislative intention. That intention is to be extracted ‘from all available indications’.”
40 Relationship of Act with other racing legislation
Nothing in this Act limits the operation of the Betting and Racing Act 1998 or the Thoroughbred Racing Act 1996 in their application to the conduct of racing activities by or on behalf of the merged racing club.
The provision has been amended once, in 2017, to recognise that what had been the Racing Administration Act 1998 (NSW) was renamed the Betting and Racing Act 1998.
On the face of it there is an inconsistency between the mandatory corporate governance provision vesting management and control of the business and affairs of the Company in the Board, on the one hand, and the potential for the appointment of an administrator on the other. But the inconsistency is not as stark as the ATC suggests, given that the management and control provision can be understood as establishing the general position, without necessarily seeking to exclude other possibilities in exceptional circumstances. It seems an unlikely intention, for example, that the State Parliament should be taken to have excluded the potential for a liquidator to be appointed to the ATC under the Corporations Act in the event of insolvency.
The heart of the dispute between the parties on this issue is whether the reference in s 40 to the application of the TRA to “the conduct of racing activities” extends to regulatory functions and powers of RNSW, including the potential appointment of an administrator under s 14(2)(g). The term “racing activities” is not defined in the Merger Act and it is not employed in the TRA. The phrase might be construed as limited to the actual conduct of races, but the word activities suggests something broader. It is not necessary to seek to resolve the precise metes and bounds of the phrase, as it suffices here to note that the text does not provide unqualified support for the ATC’s position.
It is also necessary to consider issues of context and purpose. Even before considering extrinsic materials, it would seem to be somewhat surprising for the Parliament to have intended the ATC, alone amongst racing clubs, to be immune to at least some significant extent from the regulatory supervision of RNSW provided under the TRA. As RNSW contended, the objects identified in s 3 of the Merger Act do not include limiting the regulatory powers of RNSW with respect to the merged club. The mandatory corporate governance provisions can readily be understood as making clear the basic machinery relating to corporate governance without addressing exhaustively and exclusively all governance issues that might arise, whether under the TRA or provisions of the Corporations Act.
In any event, the extrinsic materials make clear that creating a special immunity for the merged club was not the intention. As the primary judge noted (at [113]), in the second reading speech for the bill which became the Merger Act, the Parliamentary Secretary said (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 29 October 2010, 27202-27203):
Clause 40 of the bill provides an explicit reminder that the merger bill is intended to be subject to the provisions of the Racing Administration Act 1998 and the Thoroughbred Racing Act 1996. Nothing in the proposal alters the status of the merged club nor its responsibilities to comply with the provisions of the two Acts mentioned.
The ATC submitted that such extrinsic material cannot displace the clear meaning of the text, citing Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41 at [47]. But, as explained, the text here is not clear. And in any extent context is to be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise: Palmanova at [5] and [67].
Moreover, as explained in Cottle, there is a presumption that statutes of the same Parliament do not contradict one another. That presumption is not rebutted here as this is not a case where the two schemes cannot stand or live together. They can do so in an entirely unremarkable way if the reference in s 40 of the Merger Act to the TRA applying to “the conduct of racing activities” of the merged club is understood to extend (relevantly) to the function of RNSW “to control, supervise and regulate horse racing in the State” (s 13(1)(b) of the TRA), such that the ATC is subject to the same regulatory supervision and control by RNSW as for all other racing clubs in this State.
Ground three of the ATC’s notice of contention is not made out.
Senior Counsel for the ATC accepted that both the first and second grounds depended upon establishing inconsistency between the power in question in the TRA and the Corporations Law (for the first ground) and the Corporations Act (for the second). He also accepted that whatever the precise test is for inconsistency on the first ground, if s 109 inconsistency was not established on the second ground then the ATC could not succeed on the first. It was not suggested by either side that there was a material difference between the relevant provisions in the Corporations Law and the Corporations Act for the purposes of assessing inconsistency. In this context it is sufficient here when assessing inconsistency to address that issue as between the current Corporations Act and the current version of the TRA, being the claimed clash raised by the second ground.
The parties were in agreement both in the Court below and in this Court that an administrator appointed to a race club under s 14(2)(g) would be empowered to “conduct the affairs of [the] race club” – to quote the provision – to the exclusion of its directors (see primary judgment at [96]). RNSW’s position was that this did not wholly deprive the directors of powers, who have residual powers, however, as is further explained below. The ATC is a public company governed by the Corporations Act.
The ATC’s core argument on s 109 inconsistency was as follows. Contrary to the conclusion of the primary judge, an administrator was not a director for the purposes of the Corporations Act. However, even if the administrator was a director, there was inconsistency. Various provisions in the Corporations Act vested management of companies in elected or appointed directors comprising a board. Indeed, for public companies such as the ATC there was a requirement that there be more than one director. When external administrators are appointed pursuant to the Corporations Act itself, the powers of directors are suspended pursuant to s 198G of that Act. No such suspension would apply with respect to an administrator appointed under s 14(2)(g). Thus the appointment of such an administrator would alter, impair or detract from the operation of these provisions by vesting the conduct of the affairs of the race club in the administrator rather than in the board of directors elected or appointed under the Corporations Act. The argument made by RNSW that such an administrator was equivalent to a receiver and manager appointed pursuant to a security agreement or by court order was not an answer. Receivers are appointed to deal with property, not to take over the whole affairs of the company, in contrast to a s 14(2)(g) administrator.
The ATC summarised its case as follows (on its Corporations Law variation of the argument; footnotes omitted):
As Professors Ford and Austin observed in Principles of Corporations Law (7th ed, 1995), at [7.050], “the Corporations Law contemplate[d] that management, in the absence of contrary provision in the memorandum or articles, will be vested in a board of directors consisting of natural persons”. Exceptions to that principle were expressly provided for in the Corporations Law by way of carefully calibrated statutory regimes that expressly suspend the powers of directors and put someone in their place who owed duties to the company and is ultimately subject to the supervision of a Court. As Professors Ford and Austin have explained, “external administration” is a kind of “abnormal operation… because somebody other than the company’s board of directors and members controls the affairs of the company”.
Questions abound. For example, where a s 14(2)(g) administrator is appointed to a company, do the directors still have a duty to prevent insolvent trading? If so (and in any event), can the directors appoint an administrator under Pt 5.3A of the [Corporations Act] (or could they under the Corporations Law when it had application)? Can the members resolve voluntarily to wind up the company and appoint a liquidator? If a Pt 5.3A administrator or liquidator is appointed, who is in charge of the company – that administrator or liquidator or the s 14(2)(g) administrator?
(1) A director of a company or other body is:
(a) a person who:
(i) is appointed to the position of a director; or
(ii) is appointed to the position of an alternate director and is acting in that capacity;
regardless of the name that is given to their position; and
(b) unless the contrary intention appears, a person who is not validly appointed as a director if:
(i) they act in the position of a director; or
(ii) the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes (excluding advice given by the person in the proper performance of functions attaching to the person’s professional capacity or their business relationship with the directors or the corporation).
RNSW argued that an administrator would fall within subs (1)(b)(i), namely acting in the position of a director, although not validly appointed as such. The only point made by the ATC in this regard was this brief oral submission: “such a person is not appointed to the position of a director, et cetera. An administrator is of a different kind”. The ATC’s argument tends to contradict itself here. Its inconsistency complaint is that an administrator supplants the role of the directors, but the ATC then says an administrator would not act in the position of a director as such. As noted, both sides proceeded on the basis that an administrator under s 14(2)(g) would be empowered to conduct the affairs of the company to the exclusion of the directors (subject to RNSW arguing that the directors would have some residual powers). In this context, the ATC’s undeveloped argument that such an administrator would not in effect act in the position of a director must be rejected. The primary judge’s conclusion to that effect was correct.
In any event, the ATC did not dispute that an administrator would be an “officer” for the purposes of the Corporations Act. Presumably that acceptance was on the basis that an administrator would be a person “who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the corporation”, falling within the definition of “officer” in s 9AD(1)(b)(i) of that Act.
In this context, any administrator appointed under s 14(2)(g) to a race club governed by the Corporations Act would be subject, amongst other things, to the obligations in ss 180-184 of that Act both as a director and as an officer.
Concurrent operation intended
(1) The Corporations legislation is not intended to exclude or limit the concurrent operation of any law of a State or Territory.
(2) Without limiting subsection (1), the Corporations legislation is not intended to exclude or limit the concurrent operation of a law of a State or Territory that:
(a) imposes additional obligations or liabilities (whether criminal or civil) on:
(i) a director or other officer of a company or other corporation; or
(ii) a company or other body; or
…
(f) requires a company:
(i) to have a constitution; or
(ii) to have particular rules in its constitution.
…
(4) This section does not apply to the law of the State or Territory if there is a direct inconsistency between the Corporations legislation and that law.
Note: Section 5G prevents direct inconsistencies arising in some cases by limiting the operation of the Corporations legislation. …
Section 5F enables State or Territory legislation to declare a particular matter to be an excluded matter in which case, subject to any contrary federal law, the corporations legislation does not apply in the State or Territory with respect to that matter.
Section 5G rolls back the operation of the corporations legislation in various respects so as to enable the operation of State or Territory laws even where there may otherwise be a direct inconsistency. Aspects of that provision were relied upon by RNSW in the alternative to its main argument that there was no inconsistency. Section 5G(2) itself provides:
Section does not deal with provisions capable of concurrent operation
(2) This section does not apply to a provision of a law of a State or Territory that is capable of concurrent operation with the Corporations legislation.
Note: This kind of provision is dealt with by section 5E.
In that context, before addressing s 5G it is appropriate first to consider whether a potential exercise of power to appoint an administrator pursuant to s 14(2)(g) of the TRA can operate concurrently with the provisions of the Corporations Act relied upon by the ATC, in the sense in which that notion is employed in s 5E.
It has been common when considering inconsistency under s 109 of the Constitution to draw a distinction between “direct” and “indirect” or “covering the field” inconsistency. Justice Dixon drew such a distinction, in terms subsequently quoted by the High Court in Telstra Corp**oration Ltd v Worthing (1999) 197 CLR 61; [1999] HCA 12:
[28] In Victoria v Commonwealth [(1937) 58 CLR 618 at 630], Dixon J stated two propositions which are presently material. The first was:
“When a State law, if valid, would alter, impair or detract from the operation of a law of the Commonwealth Parliament, then to that extent it is invalid.”
The second, which followed immediately in the same passage, was:
“Moreover, if it appears from the terms, the nature or the subject matter of a federal enactment that it was intended as a complete statement of the law governing a particular matter or set of rights and duties, then for a State law to regulate or apply to the same matter or relation is regarded as a detraction from the full operation of the Commonwealth law and so as inconsistent.”
As the High Court later noted, “[t]he first proposition is often associated with the description ‘direct inconsistency’, and the second with the expressions ‘covering the field’ and ‘indirect inconsistency’”: Dickson v The Queen (2010) 241 CLR 491; [2010] HCA 30 at [14]. As can be seen, Dixon J’s second proposition itself echoes his first proposition by speaking of a State law detracting from the operation of federal law, being part of the notion invoked with respect to direct inconsistency. The High Court has recently said that the two approaches “should be seen as different aspects of the single concept of inconsistency”: G Global 120E T2 Pty Ltd v Commissioner of State Revenue [2025] HCA 39; (2025) 99 ALJR 1465 at [39]; note also Work Health Authority v Outback Ballooning Pty Ltd (2019) 266 CLR 428; [2019] HCA 2 at [65]-[72]. All tests articulated for s 109 purposes “are tests for discerning whether a ‘real conflict’ exists between a Commonwealth law and a State law”: Jemena Asset Management (3) Pty Ltd v Coinvest Limited (2011) 244 CLR 508; [2011] HCA 33 at [42] (footnote omitted); see also Ansett Transport Industries (Operations) Pty Ltd v Wardley (1980) 142 CLR 237 at 260 and 280; [1980] HCA 8.
The significance of a federal law being taken to cover the field was explained by Gummow J in Momcilovic v The Queen (2011) 245 CLR 1; [2011] HCA 34 at [244], in terms subsequently approved in, for example, Williams v Wreck Bay Aboriginal Community Council (2019) 266 CLR 499; [2019] HCA 4 at [47]. His Honour said:
[T]he essential notion is that, upon its true construction, the federal law contains an implicit negative proposition that nothing other than what the federal law provides upon a particular subject matter is to be the subject of legislation; a State law which impairs or detracts from that negative proposition will enliven s 109.
If a Commonwealth law, by expression or implication, provides that it is intended to operate exclusively over a subject matter, then within that subject matter there is no further need to examine whether any particular provisions in the State or Territory law alter, impair, or detract from those in the Commonwealth law.
Even then it is still necessary to determine the scope of the field – ie the subject matter or topic and the correlative negative implication – over which the Commonwealth has manifest an intention to regulate exclusively.
The notion of direct inconsistency itself has different aspects. One is where it is not possible to obey both the State and federal law, that is, there is a direct collision: see eg the discussion in Ansett Transport at 259-260. But the notion of direct inconsistency is not limited to such cases. Rather the issue is whether the State law would alter, impair or detract from the operation of the federal law: note Telstra at [28]-[34]; Jemena at [43].
Whether or not it would have been open to construe s 5E(1) of the Corporations Act as manifesting an intention to limit inconsistency to cases of a direct collision, any such construction would not be consistent with the reference to “direct inconsistency” in s 5E(4). The two subsections must be read together. They can be understood as not intending to extend permissible concurrency of State or Territory law to instances where that law would alter, impair or detract from the operation of provisions of the corporations legislation.
Justice Edelman explained the nature of such concurrency provisions in Wreck Bay (citations omitted; see further R v Credit Tribunal; Ex parte General Motors Acceptance Corporation (1977) 137 CLR 545 at 563-564; [1977] HCA 34):
[139] Commonwealth legislation sometimes contains a provision that negatives indirect inconsistency by making clear that no implication should be drawn that the Act, or a part of it, covers a subject matter exclusively. In other words, the Commonwealth law might provide “that it is not intended to make exhaustive or exclusive provision with respect to the subject with which it deals” and thereby enable the operation of State laws that are “not in direct conflict”.
[140] An example of such an anti-exclusivity provision is s 51AAA of the Competition and Consumer Act 2010 (Cth). That section provides that “[i]t is the Parliament’s intention that a law of a State or Territory should be able to operate concurrently with this Part unless the law is directly inconsistent with this Part”. Another example is s 75(1) of the Trade Practices Act 1974 (Cth), which provided that, subject to an exception, “this Part is not intended to exclude or limit the concurrent operation of any law of a State or Territory”. In R v Credit Tribunal; Ex parte General Motors Acceptance Corporation, Mason J said that this was an expression of an intention that the Part “is not an exhaustive enactment on the topics with which it deals and that it is not intended to operate to the exclusion of State laws on those topics”.
[141] Although every legislative provision must be construed in its own context, there are other provisions that refer to concurrent operation but which are not anti-exclusivity provisions. …
Section 5E is one of those concurrent operation provisions which is intended to convey that the federal legislative scheme is not intended to operate exhaustively and exclusively in its field of operation. Justice Edelman referred to it as such in his judgment (in dissent on the outcome) in Outback Ballooning at [130].
Thus the question to be addressed here is whether the operation of s 14(2)(g) of the TRA, insofar as it enables the appointment of an administrator to a public company governed by the Corporations Act such as the ATC, would alter, impair or detract from the operation of the provisions of the Corporations Act which the ATC has identified as founding the inconsistency (as to which see [226] below). Such inconsistency can arise even if it would be possible to comply with both laws. No general negative implication is to be inferred to the effect that corporations are regulated this far and no further within the regulatory area covered by the corporations legislation. That does not necessarily exclude the possibility that the provision on some specific topic within that legislation was intended to be exclusive on that topic.
This understanding is consistent with the approach adopted in earlier cases: eg HIH Casualty & General Insurance Ltd v Building Insurers*’* Guarantee Corporation [2003] NSWSC 1083; (2003) 202 ALR 610 at [78]; Loo v Director of Public Prosecutions (2005) 12 VR 665; [2005] VSCA 161 at [25] and [40]; Chung v R [2007] NSWCCA 231; (2007) 175 A Crim R 579 at [22]-[23]; Allianz Australia Insurance Ltd v Viksne (2021) 106 NSWLR 306; [2021] NSWCA 268 at [40].
The ATC identified particular provisions of the Corporations Act to support its inconsistency argument: ss 134-135, 140, 180-183, 198A, 198G, 201A and 588G, along with Pts 5.3A, 5.4, 5.4A and 5.5 and the Insolvency Practice Schedule (Corporations) (Sch 2 to the Corporations Act). The ATC’s argument did not involve a detailed focus upon the terms of those provisions. Yet in circumstances where s 5E provides against drawing a broad general implication of the Corporations Act being exhaustive and exclusive, the argument requires close attention to how the operation of s 14(2)(g) of the TRA would alter, impair or detract from the operation of the provisions of the Act with which it is said to be inconsistent.
Section 201A of the Corporations Act provides that a proprietary company must have at least one director, who must ordinarily reside in Australia, and a public company must have at least three directors, of whom at least two must ordinarily reside in Australia. The appointment of an administrator under s 14(2)(g) of the TRA does not remove the directors (as discussed further below by reference to the analogy of receivers). The ATC did not suggest to the contrary. Rather, it contended that such appointment had the effect of depriving the directors of their authority to run the company.
Section 198A of the Corporations Act addresses that topic:
Division 4—Powers
198A Powers of directors (replaceable rule—see section 135)
(1) The business of a company is to be managed by or under the direction of the directors.
Note: See section 198E for special rules about the powers of directors who are the single director/shareholder of proprietary companies.
(2) The directors may exercise all the powers of the company except any powers that this Act or the company’s constitution (if any) requires the company to exercise in general meeting.
Note: For example, the directors may issue shares, borrow money and issue debentures.
On its face, s 198A lends some support to the ATC’s argument. As noted, the parties were agreed that an administrator appointed under s 14(2)(g) of the TRA would be empowered to conduct the affairs of the race club to the exclusion of its directors (save for any residual powers). That would mean the business of the race club would not be “managed by or under the direction of the directors”, as provided for by this section. However, the provision must be read in context. It does not preclude the effective control of the directors being displaced by an external administrator operating pursuant to provisions in the Corporations Act (note s 198G(1), discussed below). The question here is whether the Corporations Act also permits that control to be displaced by an administrator of the kind at issue here, not appointed pursuant to provisions in that Act.
Sections 134, 135 and 140 of the Corporations Act are relevant in that regard:
Part 2B.4—Replaceable rules and constitution
134 Internal management of companies
A company’s internal management may be governed by provisions of this Act that apply to the company as replaceable rules, by a constitution or by a combination of both.
Note: There are additional rules about internal management in ordinary provisions of this Act and also in the common law.
135 Replaceable rules
Companies to which replaceable rules apply
(1) A section or subsection (except subsection 129(1), this section and sections 140 and 141) whose heading contains the words:
(a) replaceable rule—applies as a replaceable rule to:
(i) each company that is or was registered after 1 July 1998; and
(ii) any company registered before 1 July 1998 that repeals or repealed its constitution after that day; and
…
Company’s constitution can displace or modify replaceable rules
(2) A provision of a section or subsection that applies to a company as a replaceable rule can be displaced or modified by the company’s constitution.
…
140 Effect of constitution and replaceable rules
(1) A company’s constitution (if any) and any replaceable rules that apply to the company have effect as a contract:
(a) between the company and each member; and
(b) between the company and each director and company secretary; and
(c) between a member and each other member;
under which each person agrees to observe and perform the constitution and rules so far as they apply to that person.
…
Section 198A is a replaceable rule. The Corporations Act does not require that the business of a company must be managed by or under the direction of the directors in the manner provided for in that section. Rather, company law has long allowed “the incorporators free reign to ‘contract’ for the kind of management and structure which they wish to have, by provision in the company’s constitution”: IM Ramsay et al, Ford, Austin and Ramsay*’*s Principles of Corporations Law (LexisNexis, online edition) at [7.040]. Thus, for example, a company constitution can create two classes of directors having different powers: eg John Shaw & Sons (Salford) Ltd v Shaw [1935] 2 KB 113. A company constitution can provide for nominee directors, that is, ones nominated by particular persons to represent their interests (whilst also being subject to general directors’ duties). Subject to compliance with procedural requirements in the corporations legislation, the “contract embodied in the constitution is inherently capable of amendment”: NRMA Ltd v Snodgrass (2001) 52 NSWLR 383; [2001] NSWCA 312 at [13]; note also Allen v Gold Reefs of West Africa Ltd [1900] 1 Ch 656 at 671-673; Gambotto v WCP Ltd (1995) 182 CLR 432 at 444; [1995] HCA 12; Bailey v New South Wales Medical Defence Union Ltd (1995) 184 CLR 399 at 435; [1995] HCA 28.
Section 198A has in fact been displaced for the ATC insofar as the issue is specifically addressed (consistently with the Merger Act) in cl 10.4 of its constitution, with cl 2.1 of the constitution saying that the replaceable rules in the Corporations Act do not apply to it. Both the fact that displacement is possible, and that it has occurred, undercut the ATC’s reliance on the provision.
Nevertheless, taken in isolation, the text of s 134 might be understood to convey that a company’s internal management is to be governed only by either or both the replaceable rules in the Act or the provisions of the company’s constitution. The ATC’s constitution makes no express provision for the appointment of an administrator under s 14(2)(g) of the TRA.
However, that reading of s 134 is inconsistent with the note in the section, which indicates that there are “additional rules about internal management” not only elsewhere in the Act but “also in the common law”. The note manifests an intention that the Act does not make exclusive provision on the topic of the internal management of a company. Notes to a section, along with headings, are part of the Act: Acts Interpretation Act 1901 (Cth), s 13(1).
Issues of internal management may, for example, also be addressed by a shareholder agreement outside of a company’s constitution: see eg at [7.091]. There may be a “special” contract between a company and shareholders which does not confine the statutory power of the company to alter its constitution but which may nevertheless survive any such alteration and, in that way, restrict the freedom of internal management: note at 411. Justice Kourakis gave a useful explanation in [2010] SASC 223; (2010) 80 ACSR 122 (see also [70]-[72]):
[114] In my view, s 134 of the Act does not by implication limit the way in which a company’s internal management “may” be governed to the replaceable rules of the Act and a company’s constitution. As a matter of common law, the rights and obligations of the company and its members may be affected by contract and the terms of a deed. Leaving aside for a moment the question of the extent to which a subsequent assignee of a share might be bound in that way, it cannot be the effect of s 134 of the Act that a company and its shareholders are precluded from binding themselves in any other way which is effective at law. The purpose of s 134 is to bind companies and their shareholders to the rights and obligations conferred by replaceable rules and the constitution of the company precisely because it is not always practicable to do so contractually.
Further, s 179(1) of the Corporations Act recognises that the general law imposes duties on directors and officers beyond those set out in Pt 2D.1. Directors owe a fiduciary duty and a common law duty of care to the company: see eg Principles of Corporations Law at [8.010]. Those general law duties may operate to affect or constrain directors’ freedom of action in managing the affairs of the company. Further, in particular factual circumstances more specific fiduciary duties or other equitable doctrines may apply to directors, doing so in ways which could affect their management powers: note eg Brunninghausen v Glavanics (1999) 46 NSWLR 538; [1999] NSWCA 199.
As RNSW submitted, it has long been accepted that receivers, and receivers and managers, may be appointed to property of companies pursuant to security instruments – ie pursuant to contract – or by court order. The power to appoint a receiver is “one of the oldest remedies” known to the Court of Chancery: Hopkins v Worcester & Birmingham Canal Proprietors (1868) LR 6 Eq 437 at 447. Such a power is manifest, for example, in s 67 of the Supreme Court Act 1970 (NSW). The potential for the appointment of, and exercise of powers by, receivers is now recognised in (for example) Pt 5.2 of the Corporations Act, but the practice predates such provisions.
The ATC pointed out that receivers are appointed to deal with property not, per se, with the affairs of the company generally. But the receiver may be appointed by a security-holder who holds a floating security interest over the whole property of the company. A receiver might similarly be appointed by a court to manage all of a company’s property. In such cases the distinction drawn by the ATC is of limited significance.
The appointment of receivers does not have the effect of removing the directors. It may, however, have the effect of substantially disempowering them from managing the affairs of the company. In a much-cited discussion, Street J explained the effect of the appointment of a receiver on the position and powers of directors in Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] NSWR 782 at 790:
Receivership and management may well dominate exclusively a company’s affairs in its dealings and relations with the outside world. But it does not permeate the company’s internal domestic structure. That structure continues to exist notwithstanding that the directors no longer have authority to exercise their ordinary business-management functions. A valid receivership and management will ordinarily supersede, but not destroy, the company’s own organs through which it conducts its affairs. The capacity of those organs to function bears a direct inverse relationship to the validity and scope of the receivership and management.
[54] The appointment of a receiver to the assets and undertaking of a corporation does not strip the directors of all of their powers and duties. The directors remain in office but in the normal course have no power during the receivership over the assets in the possession and control of the receiver.
[55] The powers and authority of a receiver are primarily derived from the security instrument pursuant to which he has been appointed. Those powers are supplemented by the specific powers given to a receiver of property of a corporation by s 420 of the Corporations Act.
The Court went on to explain that the board of directors retains “residual powers” to apply for an order that the corporation be wound up or wound up provisionally, or to resolve to appoint an administrator, or to cause proceedings to be taken in the corporation’s name to enforce rights which are not comprised in the receiver’s appointment or which the receiver does not wish to pursue (at [76]). Further, the Full Court approved and applied principles explaining the right of directors to seek access to the books and records of the company from a receiver, subject to not impeding or prejudicing the receivership (at [74]-[77]).
The ATC submitted that receivers could be distinguished from a s 14(2)(g) administrator because, to use the words of Street J, the powers of such a person are such as to “permeate the company’s internal domestic structure”. But the distinction is, at best, a limited one of degree. Section 14(2)(g) of the TRA authorises the appointment of an administrator to “conduct the affairs of a race club”. That Act does not provide any further detail as to what the administrator may do. However, the TRA does not state that the directors of the race club are removed. Nor does it say that they are wholly disempowered, although clearly (as both parties accepted) they generally are displaced as to conducting the affairs of the race club. It is not necessary or appropriate to seek to identify the precise residual powers that the directors of the race club would have. However, there is little reason to doubt that they would, for example, retain the right to access the books and records of the company in much the same way as was addressed in Oswal. And they would retain the power to seek appointment of a liquidator pursuant to the Corporations Act if they considered that the company was insolvent.
The receivership analogy reinforces the point already made that the provisions in the Corporations Act relating to the management of the company – including s 134, with its reference to the Act and a company’s constitution – do not provide exhaustively for how the affairs of a company may be managed. And it illustrates that an external manager may be appointed to run the affairs of a company without removing the directors and with the directors retaining some limited residual powers.
Furthermore, as noted, a receiver may be appointed without the consent of the company by a court, or with the company’s consent granted in advance by way of contract. In substance, a race club can be understood to have also consented in advance to the potential for an administrator to be appointed pursuant to s 14(2)(g) of the TRA.
If a race club included a provision in its constitution authorising RNSW to appoint an administrator – or a nominee director capable of exercising specific overriding powers in particular circumstances – to conduct its affairs then the ATC’s arguments would have no foundation. The State legislative scheme could have been drafted in such a way as to require any registered race club to include such a provision in its constitution as part of the price of obtaining registration, without direct inconsistency arising. As noted above, s 5E(2)(f)(ii) of the expressly permits concurrent operation of State or Territory laws requiring a company to have particular rules in its constitution. The State scheme did not take that approach. But it is not far removed from it, at least for race clubs such as the ATC which conduct race meetings. The power to appoint an administrator under s 14(2)(g) does not apply to any company. It applies only to “race clubs”, the definition of which (in s 3(1) of the TRA) has already been discussed. If a company does not wish to be subject to the potential liability of having such an administrator appointed, then it could simply ensure it did not engage in the activities or have the purpose identified in that definition.
[42] … Corporations, like natural persons, can be subject to laws governing relationships and conduct. A law of the Commonwealth which governs the relationship of employer and employee does not purport to alter, and would not be construed as intending to alter, a State law prescribing a general regime for the administration of the assets of insolvent companies or the assets of companies which are, or are likely to become, insolvent.
The converse could also be said now: at least in general terms, a State law governing relationships and conduct would not be taken to alter the Corporations Act regime relating to external administration. Of course, in a broad sense the appointment of an administrator under s 14(2)(g) does involve company administration. But, as indicated, there is no reason why the Corporations Act should be taken to cover the field in that regard, and the long history of receivers militates against finding any such negative implication.
The ATC sought to place some weight on s 5G(8) of the Corporations Act, which enables the operation of the Act to be rolled back to enable a State or Territory law to apply “to a scheme of arrangement, receivership, winding up or other external administration of a company”, to the extent that s 5G applies. The ATC sought to draw an inference that otherwise such laws should be taken to be inconsistent with the Corporations Act. The argument is undercut, however, by the fact that s 5G(2) provides that the section “does not apply to a provision of a law of a State or Territory that is capable of concurrent operation”. Section 5G thus does not operate in that area of operation addressed by s 5E of the Corporations Act, being the area addressed here. No expressio unius implication can thus be drawn from s 5G(8).
It has been said that “it is constitutionally impossible for a State statute to prescribe what shall or shall not be the powers of a corporation which is created and empowered by a law of the Commonwealth”: Williams v Hursey (1959) 103 CLR 30 at 61; [1959] HCA 51. However, the appointment of an administrator under s 14(2)(g) does not affect the powers of a race club, but rather affects the manner of their exercise, just as numerous State and Territory laws may do. The Corporations Act does not “lay down the whole legislative framework within which the activity” of managing the affairs of a company is to be conducted: quoting, by analogy, Commercial Radio Coffs Harbour Ltd v Fuller (1986) 161 CLR 47 at 57; [1986] HCA 42; see also Wreck Bay at [69]. On the contrary, it expressly leaves room for a company’s constitution and the common law to operate. And there can be no sensible reason why the Act should be understood to leave the common law room to work but not State or Territory statutory law modifying what would otherwise be the position at common law.
The appointment of an administrator under s 14(2)(g) of the TRA would not alter, impair or detract from the operation of any of the provisions identified by the ATC. No direct inconsistency in the relevant sense has been established.
For that reason, grounds one and two of the ATC’s notice of contention are not established. It is not necessary to address RNSW’s further argument that s 5G would save the operation of s 14(2)(g) even if there was a direct inconsistency. Nor, for the reason already explained, is it necessary to address the detail of the ATC’s argument with respect to ground one.
The appeal must be upheld. There is no reason why costs should not follow the event both in this Court and in the Court below.
The ATC asked that if we were against it on the appeal we grant a short stay of our orders to allow it to consider whether to make a further application for a stay in aid of any application for special leave to appeal to the High Court. No submissions were made by RNSW opposing such an order. Given the practical context in which this appeal arose, it is appropriate to grant a short stay. Taking account of the fact that the primary judge did not set aside the appointment as such but instead granted declaratory relief, the appropriate order in that regard is simply a stay of the operation of the appointment itself for a short period.
The orders of the Court are:
Leave to appeal is granted.
The notice of contention filed on 1 April 2026 is dismissed.
The appeal is allowed.
The orders of Kunc J of 11 March 2026 are set aside and in lieu thereof it is ordered that:
(a) the amended summons filed by the Australian Turf Club Ltd (the ATC) on 12 February 2026 is dismissed; and (b) the ATC is to pay Racing New South Wales’ (RNSW’s) costs of the proceedings at first instance.
**********
Racing NSW
Australian Turf Club Ltd
Leave to appeal granted; appeal allowed; ATC’s notice of contention dismissed; Kunc J’s 11 March 2026 orders set aside and ATC’s amended summons dismissed; the 19 December 2025 stay order set aside; ATC to pay RNSW’s first-instance and appeal costs; operation of the administrator appointment stayed until 5 pm on 13 July 2026 or further order.
Importantly, towards the end of the letter, under the heading “The CBA loan”, Mr McMahon referred to a request made by RNSW at the 27 November 2025 meeting as to how the ATC “propose[d] to remedy the CBA debt issues if [RNSW] do not continue to provide a guarantee for the loan”. Relevantly, he said (emphasis added, noting also that the emphasised words do not reflect the terms of either options (b) or (c) as described in [4.5.4] of the KordaMentha report):
RNSW had formed the clear and considered view that the conduct of the ATC board gave rise to serious and systemic corporate governance concerns. RNSW said that “[t]aken collectively, these matters demonstrate a pattern of conduct that falls materially short of the standard of governance, transparency, and probity expected of the board of an organisation of the scale, public significance, and statutory importance of the ATC”. A number of specific matters were then set out.
Only the third of the conclusions set out above was the subject of the primary judge’s finding of legal unreasonableness and the ATC did not seek to challenge any of the other conclusions on appeal.
We read these conclusions as the factual matters which contributed to RNSW reaching eight “views” which, read together with the introductory paragraphs of RNSW’s reasons, set out the essence of RNSW’s decision to make the appointment. Thus, for example, whilst RNSW referred to headcount reduction and IT costs as examples to highlight the matters it identified in (5) of [65] above, it is readily apparent that, contrary to the ATC’s submission, it did not make the appointment for the function of reining in the ATC’s IT costs or securing headcount reduction. Similarly, RNSW’s reference (under the rubric in (7(b)) of [65] above) to the ATC board’s statement that it needed a hotel at Randwick did not suggest that RNSW made the appointment for the purpose of regulating the ATC’s hospitality or non-race day activities. Rather, this was an example included to illustrate RNSW’s concerns about the ATC’s declining financial performance and position.
It follows that we reject the ATC’s contention that RNSW regarded the factual matters set out in the eight conclusions, and in the examples illustrating some of those conclusions, as themselves being the justification for its decision to make the appointment. More particularly, contrary to the ATC’s submission, RNSW did not make the appointment because they did not like how much the ATC was charging for beers or because they did not like the fact that the ATC had a hotel, nor because RNSW was seeking to supervise property sales, IT, headcount at the ATC or maximisation of the ATC’s revenue. Rather, these matters provided the factual premise for the concerns about governance (set out in the introductory paragraphs and in its “views” which we discuss below) which RNSW considered justified the making of the appointment.
We are, moreover, satisfied that when RNSW’s reasons are read as a whole, the conclusions summarised above go to the ATC’s ability to promote, conduct or control race meetings, and thus go to the functions of a race club under the TRA and impact upon horse racing as defined in the TRA (see below at [111]-[123]). That is so irrespective of the fact that the matters which formed the factual underpinning of the conclusions summarised may not directly entail the promotion, conduct or control of race meetings. Ultimately, as Senior Counsel for the ATC accepted, whether RNSW can properly exercise its function under s 13(1)(b) on the basis of concerns about corporate governance or financial performance is a question of fact and degree. And as set out above, we are satisfied that the matters relied upon above amply sufficed to engage s 13(1)(b).
It can also be observed that not only were there multiple reasons underpinning each of the eight views expressed, but the statement of reasons explicitly confirmed that the decision to appoint an administrator was justified by these eight views, jointly and severally.
Read in this way, it is not easy to understand how any misreading of the KordaMentha report (assuming that there was a misreading which amounted to an erroneous finding of fact as claimed by the ATC) was a material error. We elaborate upon this in our consideration of ground four, below.
The ATC relied, in support of its contentions, upon extrinsic material going to the background to the TRA which it argued supported its key contention as to construction. The ATC also relied upon the fact that, when the Thoroughbred Racing Amendment Act 2008 (NSW) was passed in 2008, Parliament did not adopt the recommendation in the Independent Review of the TRA conducted by Ken Brown AM, published on 29 September 2006 (Brown r****eport), that RNSW should have a more broadly defined function.
There is no dispute as to how we should approach these questions of statutory construction. It is well-settled that the construction of a statutory provision “begins and ends with the statutory text understood in context and in light of the statutory purpose – being what the provision is designed to achieve in fact – in so far as that purpose is discernible from the statutory text and context” (footnotes omitted): Palmanova Pty Ltd v The Commonwealth [2025] HCA 35; (2025) 99 ALJR 1362 at [4]. Moreover, legislation must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [70]. In this case, as considerations of text, context and purpose are interwoven, we consider them together.
We also accept RNSW’s contention that we should not approach the task of construction by assuming that RNSW can only lawfully exercise its powers under s 14 as a means of exercising its functions under s 13. Rather, when questions arise such as those here, the proper ambit of the power in question must be delineated as a matter of statutory construction taking account of the whole context, including the structure, of the Act. We accept the possibility that there may be instances where a particular power may lawfully be exercised without it fitting neatly within the ambit of a function delineated in s 13, particularly having regard to the terms of s 14(1).
Ultimately, it is unnecessary for us to reach any conclusion as to whether the power to appoint an administrator in s 14(2)(g) of the TRA can only ever be exercised in pursuit of one of the functions identified in s 13(1). That is so because, in the present case, we are readily satisfied that RNSW was acting within the ambit of its function under s 13(1)(b) of the TRA when it made the appointment taking account of the following matters. Consistently with the approach taken by Mason J in Leon Fink at 678, we have approached the question of whether the appointment was within the ambit of RNSW’s function under s 13(1)(b) by asking whether it “was a means of” controlling, supervising and regulating horse racing in NSW.
First, the language of s 13(1)(b) strongly supports this conclusion, having regard to the definition of horse racing in s 3(1), as discussed above at [121]-[122]. The focus of RNSW’s control, supervision and regulation must be on horse racing, which in turn encompasses the matters we have already discussed. The views which RNSW formed, and which justified the appointment, were directed towards the ATC’s corporate governance and effective functioning, which went to its ability to carry out what we have found was its primary function of promoting, conducting or controlling race meetings at the four race tracks in Sydney. It follows that we reject the ATC’s contention that its financial position and corporate governance were “not connected to horse racing” under the TRA.
Second, the ambit of RNSW’s function under s 13(1)(b) must be determined having regard to the TRA as a whole, including the range of powers which RNSW is expressly given under s 14(2). Notwithstanding that we have not found it necessary to conclude that the powers of RNSW under s 14 can only be used within the ambit of a function in s 13, we are satisfied that the nature of the powers conferred under s 14 necessarily informs Parliament’s intention as to the ambit of RNSW’s functions in s 13, and the converse is also the case. In this way, the TRA can be construed to achieve harmonious, and not conflicting or disjunctive, goals. The ATC accepted as much.
A number of the powers conferred on RNSW under s 14(2) of the TRA are consistent with it exercising powers over or in respect of race clubs as a means of it controlling, supervising and regulating horse racing and with issues such as the financial performance or corporate governance of a race club being relevant to whether such powers should be exercised. The nexus may in appropriate cases be the race club’s role in promoting, conducting or controlling race meetings or other activities within the ambit of horse racing. The power to appoint an administrator to conduct the affairs of a race club, in s 14(2)(g), is an obvious example. RNSW’s powers to register, refuse to register, cancel or suspend the registration of a race club (s 14(2)(b)), supervise the activities of race clubs (s 14(2)(c)), direct the dissolution of a race club that ceases to be registered (s 14(2)(f)), order an audit of the books of a race club (s 14(2)(s)) or to scrutinise a race club’s constitution (s 14(2)(t)) also suggest that RNSW’s powers readily comprehend exercise of powers over or in respect of race clubs in appropriate circumstances and that concerns about financial performance and corporate governance may be relevant to the exercise of such powers. That, in turn, supports our construction of s 13(1)(b).
Our conclusion is also supported by the terms of s 29A(1)(d) of the TRA, which permits RNSW to set minimum standards with respect to “the financial management of race meetings, including the management of the costs of conducting race meetings” along with s 29B which permits RNSW to give a direction in writing to a registered race club requiring it to provide documents or information that RNSW considers will be of assistance in connection with the exercise of its functions under s 13(1)(b), (b1) or (c) or s 29A.
Third, it is of particular significance that the power in s 14(2)(g) is a power to appoint an administrator to conduct “the affairs of a race club”, which, as RNSW contended, necessarily entails the whole of the race club’s affairs subject only to any residual powers of the directors of the ATC (as to which, see [239]-[243] below). That suggests that the Parliament did not intend that RNSW’s function under s 13(1)(b) should be narrowly construed, but instead intended, in appropriate cases, that it could extend to the taking of steps relating to all of a race club’s affairs.
Fourth, there is nothing in the TRA that suggests that RNSW’s function under s 13(1)(b) could not be engaged by concerns about the financial condition or corporate governance of a race club. Indeed the power to order an audit of the books and accounts of a race club suggests strongly to the contrary. Moreover, given the centrality of race clubs to the promotion, conduct and control of race meetings under the ARR, and the use of these terms in the definition of a race club, we would infer that the Parliament intended that the control, supervision and regulation of horse racing may well necessitate that attention be given to the finances and corporate governance of race clubs and, in appropriate cases, that those matters might justify RNSW exercising its powers under s 14(2).
Fifth, as already discussed, there is nothing in the extrinsic materials the ATC relied upon to suggest that RNSW’s function under s 13(1)(b) should be narrow or limited in the manner claimed by the ATC.
Sixth, we are satisfied, having regard to our reading of the TRA as a whole, that the purpose underlying s 13(1)(b) is to enable RNSW to take steps to both promote, and prevent compromise to, horse racing in NSW. The financial condition and corporate governance of race clubs might readily compromise that purpose. Moreover, whilst we have rejected RNSW’s contention that all activities of the ATC will necessarily be directed towards the promotion, conduct or control of race meetings, and at least on that basis fall within the ambit of horse racing as defined in the TRA, as we have already found, RNSW’s reasons for making the appointment directly impact such matters. We say “at least”, because we recognise that other matters such as “Training and Stables” (referred to in the KordaMentha report) and potentially other activities of the ATC may also fall within the ambit of horse racing in the TRA. For the purpose of our analysis of how the ATC’s activities fall within the ambit of horse racing, however, we rely upon the ATC’s activities in promoting, conducting or controlling race meetings.
In applying judicial review for legal unreasonableness, it is important that the Court not stray beyond its legitimate role and undertake a review of the merits of the decision (at [66]).
The following observations of Gageler J in SZVFW at [52] have particular resonance (footnote omitted and emphasis added):
Reading RNSW’s reasons fairly, it is evident that, in assessing the weight it gave to the KordaMentha report, account was taken of such events. Implicitly, this included the fact that, as was made clear in the ATC’s letters dated 17 November 2025 and 4 December 2025, the central focus was then very much on the issue whether RNSW would extend the guarantee. But RNSW’s reasons also include other reasons why RNSW gave no weight to the report. This includes the express reference in this part of its reasons to the concerns raised by RNSW at the 27 November 2025 meeting regarding the narrow scope of the report, it being focused on the question of solvency as opposed to addressing RNSW’s concerns about the ATC’s financial performance generally. The reasons also refer to the meeting held on 12 December 2025, when the ATC confirmed that the scope of the report was limited only to the issue of solvency.
Another stated reason for RNSW’s critical assessment of the report related to RNSW’s finding that KordaMentha had overstated the ATC’s revenue projection in the not insignificant amount of $2.6 million. RNSW described KordaMentha’s revenue projections as “materially inflated”. Yet the ATC board continued to rely on the report without qualification.
Thus there were several independent reasons why RNSW was critical of the ATC board’s reliance on the KordaMentha report, including but not confined to the assumption that RNSW would extend its guarantee.
RNSW was not required to adduce evidence establishing that, when the decision was made, it held a state of mind to the effect that options (b) and (c) had fallen away (cf the primary judgment at [91]). That is because that state of mind is evident from RNSW’s reasons themselves, when fairly read. The correspondence and meetings during this period indicate that the primary focus of both the ATC and RNSW was on the issue of whether or not the CBA guarantee would be extended.
If, contrary to the above, RNSW’s treatment of the KordaMentha report caused it to make an erroneous finding of fact, any such finding was not so irrational, unreasonable or lacking in an intelligible justification as to amount to jurisdictional error. Assuming that erroneous fact-finding by an administrator may give rise to jurisdictional error where unreasonableness, irrationality or illogicality is established (cf Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 156-7 and Public Service Association and Professional Officers*’* Association Amalgamated Union of New South Wales v Industrial Relations Secretary of New South Wales [2021] NSWCA 64 at [70]), any incorrect finding of fact made by RNSW in assessing the KordaMentha report would not meet those standards.
In DCP16 v Minister for Immigration and Border Protection [2019] FCAFC 91 at [83]-[85] and [87]-[88], Beach, O’Callaghan and Anastassiou JJ made five observations about the labels of “illogicality” and “irrationality” in the context of a challenge to a decision-maker’s factual findings, which have a particular resonance with the circumstances here and with which we agree:
Moreover, RNSW has power to “register or licence” race clubs under s 14(2)(b) of the TRA. The power in s 14(2)(g) to appoint an administrator to a race club is not limited in terms to registered clubs. However, as we have already observed, clubs which conduct race meetings – such as the ATC – are required under s 5(1) of the Betting and Racing Act to be registered.
In this context, in practical terms the potential liability to having an administrator appointed pursuant to s 14(2)(g) of the TRA is a condition of being engaged in the conduct of race meetings within the ambit of the ARR win this State, being an activity engaged in by the choice of any particular company.
These aspects of the State statutory scheme – along with the fact that the same result could have been achieved in another way in reliance on s 5E(2)(f)(ii), as outlined above at [245] – further weaken the ATC’s arguments that the s 14(2)(g) power is inconsistent with the provisions in the Corporations Act addressing the internal management of companies.
The ATC submitted that the appointment of an administrator would cut across the ability of the race club’s directors to comply with their directors’ duties under ss 180-183 of the Corporations Act. Again, the analogy with receivers is instructive. A “director of a company in receivership could not be called to account for a failure to pursue an asset which was in the possession and control of the receiver with the same diligence as the director would were the company not in receivership”: Re Geneva Finance Ltd; Quigley (rec and mgr apptd*) v Cook* (1992) 7 WAR 496 (Owen J) at 510, quoted approvingly in Oswal at [72]. Similarly, a director could not be held liable for failing to comply with their duties to the extent that it was not in their power to comply – just as would be true if, for example, they had been outvoted by the other directors on some particular issue.
The ATC raised the particular duties of directors to prevent the company engaging in insolvent trading, as provided for in s 588G of the Corporations Act. Those duties would continue to apply to directors. That point reinforces the legitimacy, for example, of them continuing to have general access to the books and records of the company. But that does not mean that they would be liable if the race club, under the direction of the administrator, incurred debts whilst insolvent. Subsection (3) of that provision creates an offence, an element of which is that the director’s failure to prevent the company incurring the debt was dishonest. That would not be satisfied if the debt was incurred by the company at the instigation of the administrator. Subsection (2) is a civil penalty provision which does not involve that element. However, s 588H(4) provides that it is a defence if it is proved that “because of illness or for some other good reason, he or she did not take part at that time in the management of the company”. That provision would apply. More generally, s 588H(5) provides that it is a defence if the person “took all reasonable steps to prevent the company from incurring the debt or making the disposition of its property”.
As addressed above, any administrator appointed under s 14(2)(g) would themselves be a director and an officer and thus be subject to the duties of such. Those duties would include those under s 588G. The appointment of an administrator would not, thus, alter, impair or detract from the operation of the duties in s 588G, both because they would continue to apply to the person conducting the affairs of the company, and because the existing directors would not potentially be rendered liable for a breach of those duties in circumstances beyond their control and where such liability could not have been intended. The same is true of the duties imposed by ss 180-183.
The ATC invoked s 198G of the Corporations Act along with Pts 5.3A, 5.4, 5.4A and 5.5 of the Insolvency Practice Schedule (Corporations). Section 198G(1) provides that while “a company is under external administration, an officer of the company must not perform or exercise a function or power of that office”. Section 198G(9) states that “external administration” has the same meaning as in Sch 2 of the Act. It is defined there, in s 5-15, in terms which do not include a receiver, and would not extend to a s 14(2)(g) administrator (taking account of the definition of “start of an external administration” in s 5-5). Thus “external administration” as referred to s 198G(1) would not extend to an administrator appointed under s 14(2)(g) of the TRA. It may be that that was the very point sought to be made by the ATC, as it seemed to be arguing that the position of the directors was left unaddressed if such an administrator was appointed. However, as already explained by reference to the receiver analogy, the directors would remain in place, and they would retain some residual powers as such.
The ATC’s argument with respect to Pts 5.3A, 5.4, 5.4A and 5.5 of the Insolvency Practice Schedule (Corporations) was undeveloped. Its written submissions stated simply that these provide “forms of external administration in which an administrator or liquidator would have control of the business of the company … but on the basis of express protections to the company, its members and creditors”. This seemed to be an argument in effect that the federal Parliament intended to cover the field – that is, address exclusively and exhaustively – the topic of external administration. Any such covering the field argument is undercut by the terms of s 5E, as explained above. The ATC did not explain how the appointment of an administrator under s 14(2)(g) would alter, impair or detract from the operation of these parts of the Corporations Act. Indeed, s 198G(1) itself undermines any such suggestion. If an external administrator was appointed under the Corporations Act then the administrator appointed under TRA would themselves be subject to the restriction in s 198G(1), being an officer of the company.
In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; [1998] HCA 30 an issue arose as to the effect of a federal industrial relations law on what was then the State and Territory based Corporations Law. Five members of the High Court said:
[1996] HCA 6
[1998] HCA 30
[1988] FCA 739
(2009) 239 CLR 27
(2021) 106 NSWLR 306
(1980) 142 CLR 237
(1985) 4 NSWLR 139
(1995) 184 CLR 399
(1999) 46 NSWLR 538
(1986) 161 CLR 47
(2006) 203 FLR 394
(2010) 241 CLR 491
(2025) 99 ALJR 1465
(1995) 182 CLR 432
(2003) 202 ALR 610
(2011) 244 CLR 508
(1977) 139 CLR 117
(1979) 141 CLR 672
(2005) 12 VR 665
(2024) 280 CLR 321
(2012) 299 ALR 363
(1986) 162 CLR 24
(2020) 271 CLR 550
(2018) 264 CLR 541
(2013) 249 CLR 332
(2013) 212 FCR 99
(1996) 185 CLR 259
(2011) 245 CLR 1
(2022) 276 CLR 80
(2019) 100 NSWLR 578
(2001) 52 NSWLR 383
(2022) 276 CLR 62
(2013) 295 ALR 708
(2025) 99 ALJR 1362
(1998) 195 CLR 1
(2022) 275 CLR 582
(2015) 258 CLR 173
(1998) 194 CLR 355
(1977) 137 CLR 545
(1992) 7 WAR 496
(2001) 75 ALJR 542
(1905) 3 CLR 393
(1999) 197 CLR 61
(1959) 103 CLR 30
(2019) 266 CLR 499
(2019) 266 CLR 428
(2003) 77 ALJR 1165
(1937) 58 CLR 618