Clements v Queensland Racing Ltd [2010] QCAT 637

CITATION: Clements v Queensland Racing Ltd [2010] QCAT 637 PARTIES: Neville Clements v Queensland Racing Ltd APPLICATION NUMBER: OCR103-10 MATTER TYPE: Occupational regulation matters HEARING DATE: 17 September 2010 HEARD AT: Brisbane DECISION OF: Brockwell Miller – Presiding Member Susann Holzberger – Member Bill LeMass – Adjudicator DELIVERED ON: 14 December 2010 DELIVERED AT: Brisbane ORDERS MADE: 1. The decision of the Respondent that the Applicant be warned off for life is set aside. 2. The Applicant is warned off for a period of three (3) years. CATCHWORDS : Application for review – Rules of Racing – Application to unlicensed persons – Steven v Naylor – Natural justice – Penalty, Jurisdiction, statutory power, refusal to cooperate, warning off APPEARANCES and REPRESENTATION (if any): APPLICANT : Mr Neville Clements was represented by Mr Michael Croucher of counsel RESPONDENT: Queensland Racing Limited was represented by J.E Murdoch SC -- 1 of 11 -- OCR103-10 / Page 2 of 11 REASONS FOR DECISION [1] On 3 January 2010, the horse “Baby Boom” raced at the Sunshine Coast Turf Club. She started as favourite with very short odds. Despite her short odds she failed to place in the race. [2] As is not unusual in these circumstances stewards for Racing Queensland Ltd immediately opened an enquiry into the performance of Baby Boom. Both the trainer, Mr John Nikolic and Jockey Keating were questioned by the stewards. Mr Nikolic told stewards that he expected the horse to win and in fact was going to place a bet of $1,000 on the horse however when he saw her priced at $1.40 he decided not to have any bet. [3] Jockey Keating was also interviewed by the steward with respect to his riding of the horse in the race. The stewards put to him, variously: ƒ That he had held Baby Boom’s head strangely in the stalls causing a bad jump ƒ That he had failed to take a favourable lane when an opportunity presented and ƒ That he was less than vigorous with the whip. [4] Jockey Keating denied all of the above and said that he had ridden as best as he could in the circumstances that prevailed in the race. He also disclosed to the stewards all of his telephone records. [5] The stewards suspended their enquiries to investigate an unusually large betting pool which had been wagered with the betting organisation “Betfair”. The chairman of stewards remarked, “because it is extremely unusual for a maiden at the Sunshine Coast on a Sunday to hold $225,000 whether it be on the tote or whether it be on Betfair or with any corporate bookmaker in Australia” and “the Betfair figures are alarming on the horse today. We will start our investigations into the origin of that money… and we will be in contact with you both.” [6] The usual sum wagered on this race was considered to be about $40,000. The abnormality of this sum is put in further contrast when it was apparent that the great majority of this money was laid upon Baby Boom not to win but to lose the race when that horse was a very short odds favourite, in the realm of $1.30 to win. [7] To explain this, a person betting with the organisation Betfair may place money on a horse to win at certain odds or lay the horse meaning that if it does not place in the race then you will be successful. [8] The enquiry was reconvened on Friday 12 th February 2010 by which stage the stewards had obtained the financial records from Betfair as well as the Betfair transaction history for this applicant, Mr Neville Clements. As well as others including Mr Alamo. The chairman put to the trainer, Mr Nikolic a three month history of Mr Alamo’s account on Betfair and said, -- 2 of 11 -- OCR103-10 / Page 3 of 11 “On this particular day Mr Alamo laid your horse for a little over $15,500 at a risk of $12,000. Now is this a person you have an association with?” [9] It became apparent that the trainer had a long association, over 20 years, with Mr Alamo and visited him on the evening of the race, because, he said his wife had left her sunglasses at his house. Later the stewards put it to Mr Nikolic that at a time when he was visiting Mr Alamo on or about 6pm Mr Alamo withdrew $7,000.00 from his Betfair account. [10] The stewards commented that the quantum of the bet made by Mr Alamo was well outside his usual bet. [11] The chairman put to Mr Nikolic certain facts from Betfair information with respect to this applicant Mr Neville Clements, at 30: “The Chairman; Mr Clements also well and truly outside his normal parameters laid the horse for $56,000. He would have lost $45,500 had it won. Prior to that on Queensland Racing has topped – hasn’t topped more than $3,500.” [12] The Chairman of stewards had discovered that Mr Clements wagered $45,500 to win $56,000 if the horse lost. Prior to this Mr Clements had not made a bet in Queensland of an amount more than $3,500 and that he comments that this is therefore out of his normal parameters. [13] Mr Nikolic told the stewards that he had known Mr Clements for some 20 years but had not spoken to him since the last Spring Carnival. Mr Nikolic told the stewards that his brother Danny, whom he speaks to very regularly, is a close friend of Mr Clements. [14] During the adjournment, the stewards sought the assistance of this applicant, and 2 others who had laid Baby Boom to lose including Mr Alamo, in particular to provide telephone and financial records. The authority for the stewards to make such enquiry is found in the offences section, in the Australian Rules of Racing Local Rules (Thoroughbred). AR 175P, set out below: “The Committee of any Club or the Stewards may penalise; AR.175 (p) any person who fails or refuses to comply with any order, direction or requirement of the stewards or any official.” [15] On 4 March 2010 correspondence was sent to Mr Clements requesting his mobile and residential telephone records, any financial records and requesting that he make himself available to take part in an inquiry. The relevant paragraph states as follows: “Please note that should you fail to provide the assistance mentioned within the stated timeframe, Queensland Racing Ltd will consider taking further actions considered necessary to protect the integrity of the industry. Such further action may include warning you off all racecourses in Queensland.” -- 3 of 11 -- OCR103-10 / Page 4 of 11 [16] Mr Birch, the Chief Steward, by letter dated 15 March to Mr McHenry (the legal adviser to Mr Clements) confirmed that “the process which you have described of Queensland Racing Stewards providing telephone numbers and Mr Clements providing certain information in response is not acceptable to Queensland Racing Stewards”. This provoked a response of 15 March reminding the Chief Steward that the issue of Racing’s jurisdiction over Mr Clements is now the subject of an appeal and that any action that might be taken against Mr Clements pending the outcome of that appeal would be entirely premature. [17] On 16 March, Queensland Racing issued a “Show Cause Notice” to Mr Clements. The Notice required that, not later than the close of business on 24 March 2010, Mr Clements show cause why he should not be warned off all racecourses in Queensland. Submissions in writing were then submitted on behalf of Mr Clements dated 24 May 2010 but obviously received on 24 March 2010. [18] On 1 April 2010, Queensland Racing Limited made a decision to warn Mr Neville Clements off all racecourses in Queensland and provided a Statement of Reasons in that respect which were attached to the letter dated 7 April 2010 to Mr McHenry. [19] The stewards state as their reasons for decision: “4 Reasons for decision. On the basis of the findings of fact, there was a sufficient basis for the stewards to form a suspicion that a person or persons engaged in misconduct in relation to race 2 at the Sunshine Coast Turf Club on 3 January 2010.” [20] Relevantly both other persons who were requested to provide information financial and telephone did not provide those and were also warned off. Mr Nikolic at 40 says, “It doesn’t affect me I’ve already handed in my license, I’ve got no interest at all in having anything to do with racing so it does not affect me”. [21] As a result of that determination, an Application to Review a Decision was filed by the applicant on 20 April 2010. [22] The Applicant contends now and in submissions that he did not refuse the request that rather that the request was unreasonably wide and was prejudicial to his privacy. [23] It is true that the information requested of its nature is of a very great breadth but it appears to the Tribunal, that in investigations of this nature, the initial enquires must of their nature be broad such that the investigators are able to look at all possibilities of a pattern emerging from the information at hand. The ability to remove some of the information would fatally prejudice an investigation of this nature. [24] Upon the hearing of this matter and contained in previously written submissions, it was contended that the Applicant did so in order to preserve -- 4 of 11 -- OCR103-10 / Page 5 of 11 the privacy of both himself and others with whom he deals. However, upon being pressed for examples actual prejudice, counsel for the Applicant did not take the opportunity of addressing particular matters of actual concern and detriment to this Applicant. The Applicant’s case [25] In light of the above facts the Applicant’s case is in distinct parts 1. Jurisdiction i) That the Respondent has no jurisdiction because the Applicant is not a person who is covered by the Respondent’s powers, or rules and further; ii) That the Respondent’s jurisdiction to proceed is not enlivened as there have been no charges laid against the owner, trainer and jockey. The Applicant says this is the central point of its application. 2. Natural Justice That the rules of natural justice have not been followed, in that the Applicant has never been given an opportunity to be heard and defend his position and that he has been prejudiced by being penalised without the ability for the case against him to be presented and to allow him to make fair submissions. 3. Penalty That in all the circumstances the penalty is manifestly excessive and should be reduced. Jurisdiction [26] The Applicant relies upon the decision of the Victorian Commercial and Administrative Tribunal in a Victorian proceeding which almost exactly mirrors these proceedings, Clements v Racing Victoria Ltd1. [27] The Applicant invited the Tribunal to look at the above decision and make precisely the same conclusion as is set by the precedent in that case. That matter was heard by Victorian Supreme Court Justice Ross who concluded that Racing Victoria Ltd had no jurisdiction to make orders or impose penalties with respect to the Applicant in that case. [28] This Tribunal finds that the above decision is properly distinguished because the lack of jurisdiction found by Justice Ross does not exist with respect to Racing Queensland Ltd. [29] It is common ground between the parties that this Respondent is a body established by a statutory framework and, as submitted by the Respondent, the appropriate statutory provisions are; • Racing Act 2002 • Policies of Queensland Racing • Australian Rules of Racing 1 [2010] VCAT 1144 -- 5 of 11 -- OCR103-10 / Page 6 of 11 • Local Rules (of racing) [30] Relevantly, with respect to the Victorian case, Justice Ross notes at paragraph 74 of the decision as follows; “We acknowledge the public importance of the disciplinary functions exercised by the stewards and the board in protecting the integrity of racing. But such a benefit does not alter the contractual source of their powers. To the extent that our decision creates a regulatory gap it can be addressed by the legislature.” (Our emphasis) [31] His Honour there acknowledges that the Victorian body finds its jurisdiction pursuant to a contract between those parties who are to be regulated. This is not the case in Queensland where persons or bodies are regulated by the powers contained in the above acts. We must now proceed to look at the Queensland legislation. [32] The Respondent obtains its statutory power from the Racing Act 2002 (“the Act”). The opening section 3 in the introduction to the Act states; “3 Act binds all persons (1) This Act binds all persons, including the State and, as far as the legislative power of the Parliament permits, the Commonwealth and the other States.” Further “4 Main purposes of Act and how they generally are achieved (1) The main purposes of this Act are— (a) to maintain public confidence in the racing of animals in Queensland for which betting is lawful; and (b) to ensure the integrity of all persons involved with racing or betting under this Act; and” [33] With respect to the question of Queensland jurisdiction, we find that upon any reading of the opening paragraphs of the Act it is clear that; ƒ The power given has statutory force and the body empowered is Racing Queensland Ltd; and ƒ The legislation is expressed widely, to bind all persons and, more particularly in s 4 “all persons involved in the industry of racing including persons lawfully betting.” [34] The Applicant also relies upon the statements of the Honourable Justice Michael McKew made in a paper presented in November 2005 wherein he says, inter alia; “It is fundamental rule of statutory interpretation that statutes are presumed as not intended to interfere with fundamental rights unless the statute does by expressed words or necessary implication. In accordance with that law of interpretation clear language would be needed before a court would accept that in the absence of agreement a statute should be so construed so as to give one body of persons the power to impose penalties on another person or persons. -- 6 of 11 -- OCR103-10 / Page 7 of 11 Accordingly I think the better view is that the rules of racing do not operate as statutory enactments and all that entails, and that the power of the stewards under the rules depend upon making the persons affected or charged subject to the rules by agreement whether expressed or implied.” This Tribunal considers that in distinguishing the opinions of His Honour that the words used by the Queensland statutes are in such clear language that they apply to the Applicant either expressly, or because of his business as a professional punter, in racing, by necessary implication. [35] Given the findings above it may be unnecessary to address the second limb for which jurisdiction is said to be found wanting, however having been raised by both parties it should be considered. This is the application of the principle found in Stephen v Naylor. [36] This principle arises from the decision of the privy counsel in Stephen v Naylor2 and subsequently relied on by a decision which binds this Tribunal, namely the decision of His Honour Justice Williams in the Supreme Court. Kooralbyn Picnic Race Day, unreported decisions BC9900102 and heard on 14 January 1999 and the 29 January 1999. [37] In Stephen v Naylor, the respondent appeared before the Racing Tribunal and was found to have given false evidence with respect to the ownership of a horse. The applicant contended that the was not subject to the rules of racing and as such the rules did not apply to allow his disqualification. [38] It was held by the Privy Counsel that he was a person who had consented to be bound by the Rules because he permitted himself so to act as to bring his actions within their purview. These words seem to mirror the sentiment of section 4 of our own Racing Act. [39] This case was followed by Justice Williams where he held that the rules of racing applied to persons holding an illegal race meeting in Kooralbyn because those activities were, of their nature, within the purview of the rules. [40] In this matter the Applicant is by his own admission a professional punter who earns his living by wagering upon horses. [41] A person in such circumstances is in the opinion of the Tribunal the highest benefactor of the strict enforcement of the purposes of the Act and its rules. A person in the Applicant’s position has a direct and personal interest in maintaining the integrity of all persons involved in racing and betting. Indeed without such integrity he would be robbed of the means of earning his livelihood as the whole administration would fall into chaos, impropriety and cheating rendering any genuine wagering worthless. [42] As such as a person who is a professional punter and earns his living by the placing of bets and wages is clearly within the purview of the rules. Indeed while it unnecessary to decide in this matter it is probable that any person who 2 [1937] SR (NSW) 127 -- 7 of 11 -- OCR103-10 / Page 8 of 11 places a bet at all, whether or not a professional punter, is within the purview of these rules. Lack of Jurisdiction as there have been no charges preferred [43] Counsel for the Applicant, Mr Croucher says that his application must succeed because without charges being laid against the trainer or the jockey, then there can not possibly be raised any suspicions with respect to his client. Mr Croucher makes his case that whilst there are no charges proffered then there can be no jurisdiction of Racing Queensland Ltd enlivened to allow the warning off of his client. [44] The Applicant submits that: “29 the only evidence – is reflected in the failure to take action or make findings against the jockey, Mr Keating or the trainer Mr John Nikolic was (therefore)[1] that Baby Boom had not been pulled up in short the Applicant says that if there have not been any charges raised then there is no misconduct to be investigated and therefore his actions cannot be seen as ones for which the Respondent has jurisdiction to warn off.” [45] With respect to the Applicant and his counsel and the skill with which he puts his case the Tribunal nevertheless finds this argument to be circuitous. [46] It would seem that, but for the failure of the Applicant to cooperate with the stewards, charges may have indeed been preferred against the owner trainer and jockey, but that such charges are now not available to the stewards due to the vacuum of information and their inability to inspect the records of the Applicant, to discover what they may disclose. Accepting that they may disclose nothing at all, the matter would be finalised without any unfair presumptions against any party, but without which, proceedings may be simply suspended indefinitely with a cloud over the good character of all involved. This argument with respect to lack of jurisdiction must be dismissed. Natural justice [47] The rules of natural justice apply to proceedings before administrative bodies like the Respondent type Australia wide. This was made clear in the decision of the High Court, Heathley v Tasmanian Racing and Gaming Commission3, a case not cited by the parties. [48] Heathley was served with a warning off notice issued by the Respondent Commission on 4 June 1975 pursuant to its relevant Act. [49] Aickin J found; “The appellant was given no prior notice of the intention to issue this notice and no opportunity to make any representation to the Commission about it prior to its service upon him. No reasons were given for the issue of the [1] My emphasis 3 (1977) ACA 39 137 CLR 487 -- 8 of 11 -- OCR103-10 / Page 9 of 11 notice and it was of indeterminate length. The Appellants application for leave to appeal was successful” His Honour finding at 41: “The very width of the power given by section 39(3) enables it to be used for the protection of persons legitimately engaged in racing activities and to the general public, while at the same time adhering to the principles of natural justice. Fairness requires that the person affected should, say in an emergency, be given notice by the commission of its intention to issue a warning off notice and on the grounds for that proposed action and should be afforded an opportunity to make representations to the commission on its own behalf, which it must consider before taking action. A notice effective for an indefinite period should not be issued without compliance with at least those procedural requirements I do not think that fairness requires in this context an oral hearing though in some circumstances the Commission may well find that it cannot resolve inconsistencies between its information and written submissions for the person concerned without such a hearing. It is however for the commission itself to devise its own procedures in the light of its obligations to act fairly. It should however not act on information the general nature of which is not revealed to the person affected.” [50] The Tribunal finds that the Applicant has been afforded material, natural justice and procedural fairness in this matter. [51] The Applicant in this matter was at all material times represented by legal counsel and was put on notice that unless he made full disclosure he would be warned off and submissions were invited in this regard. [52] Submissions were made by his solicitors on his behalf and considered by the stewards prior to any decision being made and it is not accepted by this Tribunal as submitted, that the decision maker had prejudged the matter. [53] The Tribunal further finds that in the event that the Applicant was not afforded an appropriate degree of procedural fairness at the hands of the Control Body, that this hearing is a review of a reviewable decision by way of fresh hearing on the merits pursuant to section 19 of the Queensland Civil and Administrative Tribunal Act 2009 and that the Applicant has in this form been accorded the ability to hear the case against him and make necessary submissions both written and oral as his counsel has done. [54] The Tribunal is satisfied that the Applicant has been afforded natural justice. Penalty manifestly excessive [55] It has been submitted by the Applicant’s counsel that as a professional punter the affect of a penalty of indefinite warning off is so severe as to deprive the Applicant of the means of earning a livelihood. [56] We note that from the inception of this matter it was made clear to the Applicant that the likely consequence of his failure to comply with the -- 9 of 11 -- OCR103-10 / Page 10 of 11 requirements of the control body were that he would be warned off. It is relevant that in light of these consequences which the Applicant now say is so severe that they must be overturned, that the Applicant chose voluntarily on now three occasions when given full opportunity to disclose all of the records requested by the stewards to refuse such request knowing full well that the consequences would be warning off. [57] The Tribunal has remarked above, that upon being invited by the Tribunal to make more clear the precise detriment which would be suffered by the Applicant in the revelation of his private telephone financial and other records. The Applicant declined so to do. The Applicant contends that the Applicant co- operated with the stewards enquiry by participating in interviews but with respect this was of no ultimate assistance to the stewards and is in that regard a red herring. The Applicant also contends that it freely offered information to the stewards but as this was an offer of limited cooperation it was of little value to any proper investigation [58] The Applicant submits; “The stewards complaint such as it can be determined is one of failing to produce records in response to an extremely broad and intrusive request. It is not a charge of corrupt conduct or the like in relation to racing. No finding of that nature was or could be made on the evidence.” This is of course true and the charge does not relate to corruption but rather the refusal to cooperate in the possible finding of corruption or at worse a perversion of the course of justice by failure to produce records. [59] The penalty is severe particularly given the Applicant’s stated profession, but its severity must be measured not against the corruption which has not been found as suggested by the Applicant’s counsel but rather, the degradation caused to the industry as a whole, where those individuals involved in it can effectively thumb their nose at the stewards when the circumstances well justified the suspicion of actual corruption. [60] Unfortunately neither party has seen fit to assist us with comparative sentences. [61] The case of Jockey Danny Hobby and Owner of “Strike Softly”, Laurie Connell, where Hobby eventually admitted taking $5000 to ensure that the horse did not win the AHA cup, is instructional. The Jockey was jailed for three years and Connell for five. Such is the serious nature of a “pulling up” allegation. [62] Also, relevantly in the Fine Cotton matter, the trainer Hiatana was jailed for a year and is still the subject of a life warning off which he applied to be lifted in 2003 and was unsuccessful. Mr Robbie Waterhouse and others including a Catholic Priest Father Odwyer who had wagered on the horse also received life bans. We say relevantly because, similarly to this matter they denied any knowledge of the scam and indeed there was no hard evidence of any such knowledge, as indeed there is in this case. Waterhouse ban being overturned in 1998 after 14 years. -- 10 of 11 -- OCR103-10 / Page 11 of 11 [63] In the harness racing decision of “Make Alongshadow”, race 4 Gold Coast 10 September 2009 “Owner Mr L Sullivan was found guilty of three separate charges under Rule 187(2) in that on three separate occasions he provided false or misleading evidence to the Stewards. Mr Sullivan was disqualified for a period of two (2) years on each charge, to be served concurrently. Owner Mr L Sullivan was found guilty of two (2) separate charges under Rule 187(2) in that on two separate occasions he refused to answer questions at an inquiry. Mr Sullivan was disqualified for a period of twelve (12) months on each charge, to be served concurrently. Owner Mr L Sullivan was found guilty of a charge under Rule 241 in that he engaged in fraudulent conduct in connection with a part of the harness industry by manipulating the course of a race, namely Race 4 at the Gold Coast on 10 September 2009. Mr Sullivan was disqualified for a period of ten (10) years.” The relevant periods being 2 years and 12 months respectively. [64] Whilst this matter has similar facts to both of the above and the potential, found conduct may have lead to criminal proceedings as outlined in the Connell case above. However, it certainly can not warrant greater or equal punishment than the matter of Waterhouse. The potential conduct is indeed worse than that outlined in the “Make Alongshadow” race. [65] The Tribunal considers that a life ban in this case is excessive and substitutes that penalty with a warning off for a period of 3 years. -- 11 of 11 --