(c) did not keep proper betting books in that he did display a debt of $500,000 attributable to Peter McCoy which had no association with his business as a licensed bookmaker.
56 Further particulars were sought and supplied and in relation to Charge 16, it was alleged that each of the three matters had an adverse effect on the image of racing because "The image of racing both to the members of the racing industry and the general public is a business which is conducted with a high standard of integrity and propriety has been adversely affected by the criticism and suspicion engendered by" the various charges. "This adverse effect on the image of racing was exacerbated by the fact that Mr McCoy and Mr Waterhouse had both been previously warned off due to the notorious 'Fine Cotton' affair and the knowledge of the members of the industry and the general public of that fact."
57 The Panel found that the odds recorded in relation to McCoy were such that a reasonable member of the racing public would regard with suspicion the extraordinary disparity. It also found that a member of the race going public, if apprised of the facts, would reasonably regard that conduct as reflecting adversely on the image of racing. "He or she, on those facts alone, would reasonably suspect that the laying by the [plaintiff] of such disparately favourable odds connoted some impropriety". The matter outlined in particular (b) would increase that suspicion and consequently prejudice and (c) would exacerbate it further. The Panel's view therefore was that the impact of those matters upon a reasonable member of the race going public would be prejudicial to the image of racing and found the charge proved.
58 The Tribunal said:
"I would accept for the purposes of these reasons the submissions that were urged by Mr Brereton SC that before a charge relating to prejudice to the image of racing can be sustained there has to be an element of public knowledge; and, secondly, that there is in fact a tendency to prejudice the sport as distinct from the individual involved; and lastly that the conduct in question can be labelled as blameworthy. All of these matters, however, I think were amply demonstrated in the evidence.
The betting sheets once in the hands of the Stewards, were clearly going to raise questions in their minds. The Stewards would not know of any antecedent financial arrangements between the Waterhouse interests and McCoy. Suspicions would immediately present to the minds of the Stewards. Suspicions might include money laundering or a possible avoidance of income tax. That sort of reaction would be more than likely and it would, as indeed happened, immediately prompt an inquiry by the Stewards into the reality of what had taken place. That was inevitable. The [plaintiff] Mr Waterhouse is a person who has a particular image in the world of racing and any attention paid to him by the Stewards' Panel, particularly in the light of his previous transgressions, would inevitably attract media attention in no minor way. I cannot see that the [plaintiff] can argue that there would not inevitably be public knowledge of what he did and the way in which it was done.
Once the media began to report, there would be damage to the image of racing.
I do not think that it can be argued that those members of the racing public would not entertain similar suspicions and bewilderment at the extravagance of these transactions. …
That the conduct has to be blameworthy, equally I think is demonstrable. I have no doubt, as indeed the Appeal Panel found, that these bets were not legitimate bets as that term is properly to be understood. If they were not legitimate bets they were breaches of the rules applicable to Mr Waterhouse and in that sense it is conduct, which was blameworthy."
59 Mr Brereton says that the mere fact that a bookmaker gives favourable odds to a punter is not objectionable and quotes situations where a bookmaker is endeavouring to increase his market share by giving "overs". It seems to me, however, that this argument fails to address the point that the odds were not slightly over, but were extravagantly over what was being offered by other bookmakers. The second point that the wagers were legitimate I have already considered. As to the third point, Mr Brereton puts that it was not inappropriate to enter the so-called debt by McCoy even though perhaps it was only owing morally on the client balance list which was simply a private record. He referred to the decision of the Queensland Court of Appeal in Quirey v Queensland Principal Club [1995] 2 Qd R 535 which recognises that in the racing industry a person is still in default of paying a bookmaker's debt even though he or she has gone into bankruptcy.
60 I have some doubt about the third of the matters particularised, but it does not seem to me that it has any effect on the outcome of the case. The next matter is whether the image of racing could be said to have been damaged by the relevant conduct. Mr Brereton says the misbehaviour must negatively affect the sport, not merely the accused's personal and financial interests. "An individual's behaviour may be classified as injurious to the sport if: (1) it has some negative bearing on the individual's capacity to perform his or her public duties or functions in the sport; or (2) the individual has been put forward to the public as subscribing to a particular standard, and that standard has been lowered in the eyes of the public." These words are taken from the conclusion reached by Martin Kosla in his article "Disciplined for 'Bringing a Sport into Disrepute' - A Framework for Judicial Review" (2001) 25 Melb ULR 654, 669. The learned author comes to that conclusion by analogous reasoning from Chappell v TCN Channel 9 Pty Ltd (1988) 14 NSWLR 153.
61 Kosla points out that there are some people in a sport whom the public never accepts as role models, and accordingly, that sort of person's misbehaviour can rarely cause the sport to be in disrepute. He says that there are "colourful" characters who bring diversity to a sport and "if such individuals engage in misbehaviour, it cannot necessarily be said that they have engaged in conduct injurious to a sport, as they were not held out as subscribing to a particular standard of behaviour in the first place." (page 677).
62 However, in the instant case, even if the plaintiff might be described as a colourful racing identity, he holds himself out as being a person of good character and a person who is honest and trustworthy as a bookmaker. Accordingly, conduct which shows that he falls below the standard yet might be allowed to continue to participate, may be conduct which affects the image of racing.
63 I consider, with respect, that Mr Kosla's tests as reiterated in Mr Brereton SC's submissions are probably as good a set of guidelines as any as how one approaches this aspect of the case. However, the question merges in with the next question as to whether there is any blameworthiness attaching to what the plaintiff did. Is it sufficient that there be publicity of a reasonably held suspicion that the bookmaker has fallen short of the standard, or has the matter got to go beyond reasonable suspicion to proof of fault?
64 As I have said, the Tribunal found there was blameworthiness in making the improper entries in the books in that they were not legitimate bets, that the plaintiff must have known this would cause suspicion, and that the suspicion must become widely reported.
65 It now seems accepted that where a person knew or reasonably should have appreciated that the press were likely to repeat what she said, she will be responsible in defamation for the damage caused by the press report of a defamatory statement: McManus v Beckham [2002] 4 All ER 497, 509 and see Ward v Weeks (1830) 7 Bing 211; 131 ER 81.
66 The facts were that Mr Waterhouse did do something blameworthy in that he did something wrong in recording other than legitimate bets.
67 However, it would seem to me that if one does look at blameworthiness, the raising of suspicion which suspicion may reasonably be expected to get publicity, may qualify as blameworthiness.
68 It must be remembered that the concept of blameworthiness originally came into military law in connection with charges of neglect. In those cases, one had to look at the duty that the soldier was under to take care for the article in question. Blameworthiness is not the equivalent of mens rea (per Black CJ and Davies J in Chief of General Staff v Stuart (1995) 58 FCR 299, 308). More perhaps to the point is Lockhart J's observation in the same case, an observation with which I would think Lee and Heerey JJ agreed, that the word "blameworthiness" itself is too ambiguous and imprecise to be of real value in a case of this nature. There are situations where to create suspicion could amount to blameworthiness. Thus, in the days when adultery was looked on much more seriously than it is today, a party cited whose conduct had given rise to reasonable suspicion that he had committed adultery with the wife, would be refused costs; see eg Trenerry v Trenerry (1966) 9 FLR 163.
69 I certainly would not, with respect, go as far as the Tribunal in saying that if a person might reasonably suspect from the conduct of a bookmaker that he might be money laundering or avoiding income tax, that that would be enough if in fact, as would appear to be the case here, he was doing neither. However, where there was some wrong conduct or where the conduct would give rise to suspicion in the minds of a reasonable observer, when the conduct was publicised (if the bookmaker could reasonably assume that it would be), then the offence could be made out.
70 In my view, the Panel and the Tribunal were justified in making the finding that Charge 16 had been made out.
71 Before dealing with penalty, I should note that there was some debate before me as to whether the matters dealt with in this case were being considered for the public protection or by way of penalty.
72 There is not a true dichotomy between the two concepts as penalty or punishment usually carries with it a deterrence to others and hence operates to protect the public from the commission of like offences.
73 However the vital difference is that where a professional body's activities are mainly protective, an incident warranting only a slap on the wrist may, in its context or added to other conduct not of itself a breach of the rules, lead to the conclusion that the person should not be permitted to prey on the public in that profession. Thus suspension is rarely an option for bodies whose prime aim is protective.
74 It seems to me that the scheme of the Rules of Racing involving precise charges shows that the present matter is a penal matter rather than primarily for the public protection.
75 In a penal matter, the rights of the accused are to be more tenderly considered. Particularly is this so whee the decision affects the right to work. However there was no cause for complaint here as the questions relating to the charges were considered under the higher standard from Briginshaw v Briginshaw (1938) 60 CLR 336, 362.
76 The next matter is the question of penalty. This is a very complex matter.
77 A series of preliminary matters needs to be considered.
78 There is no doubt at all that Mr Thorley, who constituted the Tribunal, made it clear to the parties that in his view he had jurisdiction to make any order he thought was appropriate and that the parties concurred in that view. Secondly, although there was no direct notice to the plaintiff that Mr Thorley was seriously considering awarding an increased penalty, he made it perfectly clear that that was always a possibility.
79 I have already set out the provisions of s 15 of the Racing Appeals Tribunal Act. The Act itself gives no guidance as to what sort of appeal is contemplated. However, it does empower the making of regulations to deal with procedures and the class of case in which an appeal will lie.
80 The Racing Appeals Tribunal Regulation 1999, by Regulation 7 requires a notice of appeal with grounds to be stated and provide that without the leave of the Tribunal, an appellant is confined to the grounds. Further, no further evidence is to be considered on the appeal except by leave, and then only if there is an excuse as to why it was not presented below.
81 The Act itself makes it clear that it is only the defendant who can appeal, that there is no right of appeal to the Board.
82 The appeal to the Tribunal is to be contrasted with the appeal to the Panel which is governed by s 43(1) of the Thoroughbred Racing Board Act 1996 which clearly states that an appeal to an Appeal Panel is to be by way of rehearing.
83 Mr Brereton says that this means that the appeal to the Tribunal must be an appeal in the strict sense, or alternatively, an appeal by way of rehearing, and in each case it is necessary for error to be established before the appeal tribunal can substitute its own view.
84 There is certainly a considerable amount of authority in favour of that general proposition, even on an appeal by way of rehearing; see eg Powell v Streatham Manor Nursing Home [1935] AC 243, 249 and CDJ v VAJ (1998) 197 CLR 172, 182 et sq and 230 et seq.
85 The proposition in the previous paragraph is an overstatement as there are some situations where on an appeal by way of rehearing the appellate court may in some defined situations reach its own conclusion in the absence of error below; see eg Warren v Coombes (1979) 142 CLR 531.
86 However in all cases where the court or tribunal below has formed a discretionary judgment or a judgment akin to a discretionary judgment, the appellate court can only act to correct error; see eg Moran v McMahon (1985) 3 NSWLR 700.
87 There is no doubt that a determination of a penalty is a discretionary judgment within this rule. Indeed the leading case of House v The King (1936) 55 CLR 499 is directly analogous being a case of an appeal from a sentence of imprisonment by the judge in bankruptcy. The oft quoted passage from that case at p 505, clearly states the principle that the appellate court or tribunal can only act if it appears that some error has been made in exercising the discretion.
88 Mr Rushton says that whilst what was put by Mr Brereton may be appropriate when courts are involved, a presumption arises that a body which has the power to review or hear an appeal from another administrative body, exercises original jurisdiction to determine the matter on the evidence and law applicable as at the date of the appeal proceedings. He cites Ex parte Australian Sporting Club Ltd; Re Dash (1947) 47 SR (NSW) 283 and Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd (1976) 135 CLR 616, 621. Neither of those cases are authority for that proposition. Each concerned itself with an appeal from an administrative tribunal to a court.
89 Indeed, the presumption is the reverse. In Strange-Muir v Corrective Services Commission of NSW (1986) 5 NSWLR 234, 250, McHugh JA said:
"There is a presumptive rule that in an administrative appeal to an administrative body the issue is whether the decision was correct when it was made. The hearing is not de novo. This is so whether or not the tribunal is empowered to hear additional evidence."
90 However, Mr Rushton is correct when he submits, based on Re Coldham; Ex parte Brideson (No 2) (1990) 170 CLR 267, 273-4, that:
"Whether the right of appeal against an administrative decision is given to a court or to an administrative body, the nature of the appeal must ultimately depend on the terms of the statute conferring the right."
91 This passage was taken up by the Full High Court in Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194, 203, where the majority said:
"There is, thus, no definitive classification of appeals, merely descriptive phrases by which an appeal to one body may sometimes be conveniently distinguished from appeal to another.
It is common and often convenient to describe an appeal to a court or tribunal whose function is simply to determine whether the decision in question was right or wrong on the evidence and the law as it stood when that decision was given as an appeal in the strict sense. …
If an appellate tribunal can receive further evidence that its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually and conveniently described as an appeal by way of rehearing. Although further evidence may be admitted on an appeal of that kind, the appeal is usually conducted by reference to the evidence given at first instance and is to be contrasted with an appeal by way of hearing de novo. In the case of a hearing de novo, the matter is heard afresh and a decision is given on the evidence presented at that hearing.
Ordinarily, if there has been no further evidence admitted and if there has been no relevant change in the law, a court or tribunal entertaining an appeal by way of rehearing can exercise its appellate powers only if satisfied that there was error on the part of the primary decision-maker. That is because statutory provisions conferring appellate powers, even in the case of an appeal by way of rehearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error."
92 Mr Rushton submits that the power to receive fresh evidence, the statement in the Regulation that the Tribunal may inform itself of any matter in such manner as it thinks fit, and to make such order in relation to the disposition of the appeal as the Tribunal thinks fit, is indicative of a hearing de novo.
93 However, the passage I have cited from the Strange-Muir case shows that the power to take further evidence does not, by itself, give rise to this situation and the power of the Tribunal to inform itself must be in like plight.
94 Although the power to "make such order as it thinks fit" was considered to be a key note in Re Coldham, the power in 15(d) of the Racing Appeals Tribunal Regulation 1999 in the instant case is not quite as strong. Indeed, the power in 15(c) to remit the matter to the Panel suggests that the hearing is not a hearing de novo.
95 Mr Brereton also appeals to the purpose of the statute which he says is clearly to give the accused person a right of appeal, the Tribunal was intended to provide a remedy for persons in effect deprived of their livelihood by the racing authorities to an independent body. There is no reason at all why the ordinary presumption should not apply and that the Tribunal was put in place to correct error. There is just no policy reason for a third tier tribunal to conduct a hearing de novo, particularly as the second tier tribunal had an appeal to it by way of rehearing.
96 In my view, Mr Brereton's submissions are to be preferred. The preferable view is that the appeal is by way of rehearing and the general proposition that the power is there to correct error is applicable.
97 Accordingly, before the Tribunal could exercise its power it had to find error. Moreover, it had to find error in respect of the matters brought to its attention in the grounds of appeal. The Tribunal clearly did not find that the Panel had made any error at all in any of the matters raised in the notice of appeal. Indeed it agreed with the view of the Panel on such matters. It was only on a matter not raised by the notice of appeal and on which the opposing party could not mount an appeal that error was discerned.
98 To my mind in these circumstances the Tribunal had to dismiss the appeal. It could not, especially in a case where there was no right in the Board to appeal, and the appellant made no complaint of any error so far as the "sentence" was concerned, substitute its own view on penalty.
99 Mr Rushton says that even if I were to come to this conclusion, this was an error committed by the Tribunal within jurisdiction. I doubt this. It may be that Mr Rushton and I are just using the word "jurisdiction" in different senses. The Tribunal only had power to make an order which corrected error below. It went beyond its power and exceeded its jurisdiction.
100 The next matter which now becomes otiose is whether the Tribunal should have specifically warned Mr Waterhouse that it was seriously considering increasing the penalty.
101 The general proposition which has been debated before me derives from Parker v DPP (1992) 28 NSWLR 282 where the Court of Appeal held that the failure by a trial judge to disclose that he was contemplating imposing a custodial sentence in lieu of a non-custodial sentence appealed from amounted to a denial of procedural fairness. The decision has been applied generally since; see for instance Victims Compensation Fund Corp v Nguyen (2001) 52 NSWLR 213. It is true that Mason P said in Nguyen's case at 219 that Parker's case was not authority for the proposition that a tribunal must always signal a specific intention. It depended on the particular circumstances. However, the practice in the racing industry does seem to follow Parker's case. This was the procedure adopted, for instance, by Mr Justice Perrignon in the Appeal of Buik before the Harness Racing Appeals Tribunal on 4 April 1997 and by Mr Tom Hughes QC in Appeal of Moffatt before the Appeal Panel on 16 May 2002.
102 In my view the Tribunal ought to have alerted the plaintiff to the fact that it was seriously considering increasing the penalty. The mere fact that all counsel knew or thought they knew that the Tribunal could increase the penalty or that counsel for the Board argued in favour of an increase of penalty does not seem to me to get over the barrier. Accordingly, had it been necessary, I would have found for the plaintiff on this ground as well.
103 It follows that the decision of the Tribunal must be declared to be void. This has the effect of restoring the decision of the Panel so that the plaintiff is suspended for nine months from 16 August 2002. I will, however, direct that the order I have just made not be entered for seven days so that if counsel considers that it is more appropriate to award certiorari to quash, that can occur.
104 So far as costs are concerned, the ordinary rule adopted by the Court of Appeal is that where an appellant has succeeded on appeal on a point not taken before the trial judge or where the trial judge has fallen into error induced by the acts or omission of counsel, the appellant does not get an order for his costs. Although I in no way intend to suggest that there was anything blameworthy in the way either counsel conducted himself before the Tribunal, it would seem that the present point was not seriously considered by the Tribunal and that the Tribunal was allowed to lull itself into a false sense of security in what it was doing.
105 Accordingly, in my view, there should be no order for costs of the appeal.
106 I should note again, to avoid any misunderstanding, that the decision of the Panel suspending the plaintiff for nine months from 16 August 2002 stands.
107 Accordingly I order that the decision of the Racing Appeals Tribunal on 6 September 2002 is void. I otherwise dismiss the amended summons and make no order for costs. I direct that the orders I have just made not be taken out for seven days after I have pronounced them.