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Clements v Racing Victoria Limited (Occupational and Business Regulation) [2010] VCAT 1144 (30 July 2010)

Victorian Civil and Administrative Tribunal

Clements v Racing Victoria Limited (Occupational and Business Regulation) [2010] VCAT 1144 (30 July 2010)

Last Updated: 9 August 2010

VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL

ADMINISTRATIVE DIVISION

ORDER

1. We find that Mr Clements was not subject to the Rules of Racing for the purpose of hearing a charge that he breached AR175(p).
2. We order that:
   • 2.1 the Board’s finding that Mr Clements was guilty of a breach of AR175(p) be set aside; and
   • 2.2 the penalty imposed on Mr Clements by the Board be set aside.
     

REASONS

Background

1. On 13 January 2010 a Stewards Panel was convened to enquire into the performance of the horse Finishing Card in the Progress Signs Super Vobis Handicap at Mornington on 8 January 2010. On that occasion the horse was ridden by licensed jockey Danny Nikolic.
2. The Stewards’ enquiry subsequently expanded to cover some 21 rides of Mr Nikolic between 3 October 2009 and 11 February 2010 and has focussed on alleged associations and regular communications between Mr Nikolic and several other persons who regularly bet on the Betfair betting exchange. It was alleged that following communications between Mr Nikolic and these associates, the associates backed several of Mr Nikolic’s mounts to lose. In essence the Stewards’ enquiry was about whether Mr Nikolic had conveyed information to his associates (one of whom is said to be Mr Clements, the Applicant in these review proceedings) about the prospects of his mounts and these associates then bet on those mounts to lose.
3. Mr Nikolic was charged with various breaches of the Australian Rules of Racing (the ‘Rules’ or ‘AR’). Those charges were heard by the Racing Appeals and Disciplinary Board (‘the Board’) between 21-23 June 2010 and the Board’s decision was handed down on 29 June 2010.
4. Mr Nikolic pleaded guilty to one breach of AR 175(j) (improper or insulting behaviour towards an official) and four breaches of AR 91 (leaving the jockey’s room without permission). He pleaded not guilty to four other charges, being: two breaches of AR 175(a) (‘dishonest, corrupt, fraudulent, improper or dishonourable action or practice in connection with racing’) and two breaches of AR 175A (‘conduct prejudicial to the image, or interests, or welfare of racing’). The charges under AR 175(a) and AR 175A were put in the alternative.
5. The essence of the charges against Mr Nikolic were that he had informed his associates, either directly or indirectly, of what he thought of the chances of his mounts in several races. The Board was not satisfied that Mr Nikolic had communicated with the associates in the manner contended by the Stewards and dismissed the charges.
6. The matters with which we are presently concerned arise out of the Stewards’ enquiry into Mr Nikolic.
7. By letter dated 12 February 2010 Racing Victoria Limited (‘RVL’) directed Mr Clements to provide his telephone records (mobile and landline) for the period 1 September 2009 to 31 January 2010.
8. It was said that the telephone records requested related to matters currently the subject of an enquiry into Mr Nikolic.
9. The direction was purportedly made pursuant to Rule 8(b), which says:

“AR8 To assist in the control of racing, Stewards shall be appointed according to the Rules of the respective Principal Racing Authorities, with the following powers:

... (b) To require and obtain production and take possession of any mobile phones, computers, electronic devices, books, documents and records, including any telephone or financial records relating to any meeting or inquiry.” [emphasis added]

10. Mr Clements did not produce the records re quested, asserting that RVL had no legal basis to demand the production of the records and relied on a concern for his privacy and the privacy of others.
11. On 26 February 2010 Mr Clements was charged with a breach of AR 175(p) which provides that the Stewards may penalise:

‘(p) Any person who fails or refuses to comply with any order, direction or requirement of the Stewards or any official.’

12. The alleged breach was said to relate to Mr Clements’ failure to comply with the Stewards’ direction to produce his telephone records for inspection.
13. The charge was subsequently heard by the Board. On 5 March the Board determined that the Rules applied to Mr Clements and on 24 March found the charge proved and ordered that Mr Clements be ‘warned off’ indefinitely. The reasons for the Board’s decision were published on 29 March 2010 and the order took effect on 6 April 2010.
14. An order that a person be ‘warned off’ has the same effect as disqualification.[1] As a consequence of the Board’s order Mr Clements is prohibited from, among other things, entering any racecourse or training track owned, operated or controlled by any racing club in Australia.[2] Further, AR182A provides that bookmakers ‘shall not bet by telephone or otherwise with a disqualified person’. Not surprisingly being ‘warned off’ has been described as ‘racing death’ as it brings with it the clear implication that the individual concerned is unfit to associate with those engaged in racing.[3]
15. Mr Clements then filed an application in the Victorian Civil and Administrative Tribunal (‘the Tribunal’) seeking a review of the Board’s decision.
16. The central issue in these proceedings is whether AR8 applies to persons who have not consented (either expressly or impliedly) to be bound by the Rules.
17. We propose to deal briefly with the Board’s decision before turning to these review proceedings and the submissions advanced.

The Board Proceedings

18. On 5 March 2010 the Board determined that the Rules applied to Mr Clements and in its reasons for decision of 24 March 2010 the Board dealt with the charge that Mr Clements had breached AR 175(p). The relevant parts of those reasons state:

“In deciding to disobey the direction Mr Clements is not simply failing to cooperate but has adopted a course of action in deliberate defiance of the Rules. The Board regards this conduct as a serious offence under the Rules and one likely to at least frustrate the progress of the enquiry. In so doing it is to be denounced.

It is acknowledged that in the initial stages of the enquiry Mr Clements did provide some information to Stewards, see Tab 5, letter from Mr McHenry to Minter Ellison dated 18 February 2010.

However, in so far as the failure to comply with the direction may be said to be a mitigating factor on the question of penalty, in that it was based primarily on legal advice given to Mr Clements as an unlicensed person, that factor has now evaporated.

After the Board held that Mr Clements was subject to the Rules of Racing and the extended period for compliance had expired, Mr Clements’ continuing refusal to comply occurred in circumstances where Mr Clements well understood the consequences of his action.

Mr Clements personal circumstances as submitted by Mr McHenry have been considered. Any hardship as a result of the penalty the Board has decided to impose on Mr Clements is counterbalanced by the fact, as stated above, that the position he now finds himself in is one of his own making.

Having regard to all the circumstances, the decision of the Board is to ‘warn off’ Mr Clements indefinitely, to take effect from the 6th day of April 2010, that is seven days from the date of delivery of these Reasons for Decision.”

The Review

19. Section 83 OH(1) of the Racing Act 1958 provides that a person whose interests are affected by a decision made by a Racing Appeals and Disciplinary Board may apply to the Tribunal for review of that decision. Time limits apply to applications for review.
20. Mr Clements is a person whose interests were affected by the decision subject to review and the review application was made within the 28 day time period specified in s 83 OI.
21. The Tribunal’s functions in reviewing a decision of the Board are not appellate. On review the Tribunal stands in the shoes of the original decision maker and must determine the correct decision on the material before it. The review is conducted without any presumption as to the correctness or otherwise of the decision subject to review. The Tribunal is not confined to the material upon which the original decision was made and may receive evidence or material which was not before the original decision maker.[4]
22. The proceeding before the Tribunal sought to review three aspects of the Board’s decision:
    • ➢ the finding that Mr Clements was subject to the Rules for the purpose of hearing the charge;
    • ➢ the finding that the charge was proven; and
    • ➢ the Board’s decision to ‘warn off’ Mr Clements indefinitely.
23. For reasons which will become apparent it is only necessary to deal with the first of these issues.

Is Mr Clements subject to Rule AR8?

24. The Board’s reasons for finding that the Rules applied to Mr Clements are set out in the following extract from the proceedings of 5 March 2010:

‘Many persons who frequent racecourses, although they have not given any express undertaking to do so, are bound by the Rules of Racing and may become subject to the disciplinary powers exercised by persons controlling the racecourses which races are being held. The courts have established as a matter of general principle that persons who in one way or another take part in racing are prima facie bound by the rules.

Given that betting is an integral part of racing and a number of the rules regulate betting, people who are engaged in betting would generally be regarded as taking part in racing. Interviews with stewards established that Mr Clements is a professional punter, betting on thoroughbred horse racing in Victoria and to a lesser extent, interstate. Mr Clements bets on his own account and “for a few mates”; transcript of 3 February 2010, page 7.

The Board is satisfied that Mr Clements, by his actions as outlined in paragraph 5 of the written submissions on behalf of the stewards, brings himself within the purview of the rules. In saying that, we adopt the principle established in [Stephen v Naylor] and subsequent cases. Consequently, the Board finds that the rules relevantly apply to Mr Clements.’

25. Paragraph five of the Stewards’ written submissions, referred to by the Board in the above extract, says:

Mr. Clements is not a licensed person under the Rules. However the evidence which he has given to the Stewards in relation to these matters during the course of interviews on 3rd and 23rd February 2010 establish the following:

(a) He is a professional punter betting on the results of thoroughbred horse races in Victoria and elsewhere in Australia.
(b) He frequently attends race meetings in Victoria and accepts that he is one of the leading men in the betting ring (T 3/2/2010 p 20).
(c) He is a friend of a licensed jockey, D. Nikolic, and frequently discusses the horses to be ridden by the jockey in particular races. Between mid December 2009 and mid January 2010 there were at least 17 telephone calls (T 3/2/2010 pp 4, 6 and 23/2/2010 p 10). Generally these discussions took place over a period of “six months or so” (T 23/2/2010 p 12).
(d) He places bets with Betfair which allow him to lay (ie. bet against) horses winning or being placed in races (T 3/2/2010 p 4).
(e) Over a period between at least November 2009 and February 2010 he placed the following successful bets with Betfair that the horses ridden by D. Nikolic would lose in circumstances where he risked some $105,000 to win some $25,000 (T 23/2/2010 p 2). Further he accepted that these bets were outside the normal parameters of his betting. The bets were:

13/11/2009 Midnight Wine to lose $20,000

18/12/2009 Budding Amazing to lose $9,000

8/1/2010 Folichonne to lose $24,000

13/1/2010 Ruby Slippers to lose $26,000 or $27,000

10/2/2010 Prizim to lose $15,000

11/2/2010 Retrieve to lose $4,000

Manuka to lose $6,500

(The detail is at T 23/2/2010 pp 4-7 and 9)

(f) On 3/1/2010 he risked $50,000 that Baby Boom, trained by Nikolic’s brother, would not win a race at the Sunshine Coast whereas his normal exposure in relation to bets on Queensland races was $1-2,000 (T 3/2/2010 pp 8-19 and 24-5 and T 23/2/2010 pp 7-8 and 18-21).
(g) At p 11 of T 23/2/2010 the following appears:

“CHAIRMAN: And we’ve got ---

MR CLEMENTS: That would be very unusual, I would think.

CHAIRMAN: --- seven or eight races here with betting activities outside your normal parameters with a consistent pattern of contact between yourself and Dan Nikolic.

MR CLEMENTS: Right.

CHAIRMAN: It obviously raises the stewards’ concerns as to whether you had some start.

MR CLEMENTS: Yea, well, that’s not the case.

CHAIRMAN: It’s not the case?

MR CLEMENTS: No.”

(h) At p 12 of T 23/2/2010 the following appears:

“CHAIRMAN: How long has Danny Nikolic been contacting you?

MR CLEMENTS: How long?

CHAIRMAN: Yes, for what period of time?

MR CLEMENTS: I’m not too sure. I don’t know however long. I’m not sure.

CHAIRMAN: Is it a month or a year or six years?

MR CLEMENTS: Probably six months or so maybe, yeah, maybe more.”

(i) At p 17 of T 23/2/2010 the following appears:

CHAIRMAN: so the fact that Danny Nikolic speaks to you quite frequently and you’ve managed to lay a number of horses significantly that are all ridden by him is pure coincidence, is it?

26. Conceptually the Stewards and the Board are to be regarded as domestic tribunals. Insofar as their disciplinary powers are concerned they are akin to the committee of a club.[5]
27. Domestic tribunals do not exercise statutory power and have been described as “the bodies or committees in whom authority is vested in professional or trade or sporting organisations, in various social groups or clubs or in various guilds or trade unions”.[6]
28. The disciplinary powers of domestic tribunals derive from the law of contract. Such tribunals have power to discipline any person who expressly or impliedly agrees to be bound by the rules, (either in writing or by custom and practice) by which the tribunal operates.
29. The case of Meyers v Casey[7] illustrates the contractual nature of such disciplinary powers. Meyers had been disqualified for 12 months by the stipendiary stewards for ‘suspicious practices’ in connection with the running of a horse he owned, called Blackpool, in a race at Moonee Valley on 4 December 1912. Meyers appealed to the committee of the Victoria Racing Club (‘the VRC’) who dismissed the appeal and confirmed the stewards’ decision.
30. In the High Court Meyers claimed, among other things, a declaration that the stewards and the VRC had no power to disqualify him for ‘suspicious practices’ in connection with the running of Blackpool. The Court held that the relevant rule (rule 19(d)) gave the stewards power to disqualify a horse in the running of which suspicious practices had been proved, but granted no power to punish any person for that offence. But that was not the end of the matter. By majority (per Barton ACJ, Isaacs and Rich JJ; Powers J dissenting) the Court held that as Meyers had elected to appeal to the VRC against his disqualification he gave the VRC power to decide whether to quash or set aside or confirm the stewards’ decision. The VRC decided to confirm the stewards decision and by rule 33(i) the committee’s decision was final. It is apparent from a review of the judgments that the Court’s decision was based on the fact that Meyers had contracted to abide by the Rules by entering his horse in the race concerned.
31. In his judgment Barton AJA said:

‘The first observation that I have to make as to the Rules of Racing, by which the plaintiff, in entering his horse, contracted to abide ...

This is the case, not of a constitution, but of a contract. It is not be thought of that under rules like these, of contractual effect, there was an intention to exclude an appeal against an actual decision involving an excess or defect of jurisdiction ...

... if the stipendiary stewards disqualify a person -- eg. the owner -- for conduct on his part for which they have authority to disqualify only a horse and not a person, the larger question of jurisdiction is raised, the person complaining has been dealt with beyond the terms of his contract, and it does not preclude him from seeking his redress in the Courts, unless it can be shown either that the defect of authority has been condoned, or that the question is covered by the decision of the domestic tribunal on appeal.’[8]

32. Isaacs J (with whom Rich J agreed) observed:

‘Then we come to the Rules of Racing, which we have to regard in this case as it has been shaped, and conducted, as a valid and binding contract between the parties. Meyers ... must be taken to have agreed with the club that, in consideration of being allowed to enter his horse in the race, he would be bound to abide by the stipulations contained in the Rules ...

In favour of carrying out this evident intention of the parties, in making their consensual bargain (for it is not a law, and the appellant is only bound because he so chooses) ...

... here the whole jurisdiction, great or small, depends entirely on consent, and can be given at the will of the parties.[9]

33. The matter before us is quite different from the circumstances in Meyers v Casey. Mr Clements did not agree to be bound by the Rules, either expressly or by implication, and RVL did not contend otherwise.[10] Nor was it said that the Racing Act 1958 gives the Rules statutory force.[11] Nor did Mr Clements submit to the jurisdiction of the Board such that he impliedly agreed to be bound by their finding.[12]
34. The Rules are made by a private entity – the Australian Racing Board - a company limited by guarantee (AR1 and AR208). The Rules provide that RVL may make ‘Local Rules’ (‘LR’) which are regarded as Rules of Racing within RVL’s territorial authority. The Stewards are appointed by RVL under LR7A and the Board is established under LR6A.
35. Absent an agreement to be bound or the application of statutory force how is it said that AR8(b) applies to Mr Clements?
36. Mr Clements is not a licensed person within the meaning of the Rules (ie. he is not a jockey: AR81 and LR36A-36B; or a trainer; AR7(III)(b) and LR 35A) nor is he a registered stable employee (LR 39A-39B). He is a member of the public, albeit one that derives income from racing. In the vernacular, Mr Clements is a professional punter.
37. RVL submitted that the Rules extended to unlicensed persons who have acted so as to bring their actions ‘within the purview of the Rules’. In support of this contention RVL relied on the terms of AR2 and LR3 and the judgment of the Privy Council in Stephen v Naylor.[13]
38. AR2 and LR3 state, in essence, that any person who takes part in any matter coming within the Rules consents to be bound by them. But the mere assertion of jurisdiction does not confer it. RVL submitted that Stephen v Naylor provided authority for the application of the Rules to Mr Clements.
39. Stephen was the Chairman of the Australian Jockey Club (‘AJC’) and Naylor was a professional punter. Naylor was questioned by the Stewards about whether he was the true owner of Movoco, a horse which had been ‘pulled up’ in a race in circumstances where the jockey and lessee of the horse were disqualified. Before the NSW courts it was held that the disqualification could not stand because Naylor was not subject to the Rules of Racing, in that:
    • he had not agreed to be bound by the Rules;
    • he was not estopped by his conduct from asserting that he was not bound; and
    • he had not consented to submit to the jurisdiction of the AJC committee.[14]
40. On appeal the Privy Council reversed the decision of the NSW Full Court, saying it was not a question of whether Naylor consented to any adjudication or submitted to any jurisdiction. Lord Roche (delivering the judgment of the Privy Council) said:

“His [ie. Naylor’s] contention was that he was not subject to the Rules of Racing and that they were ineffective to bring about his disqualification and therefore his exclusion from the course. It is this contention which has found favour with Long Innes J. and the majority of the Full Court. They held that the respondent had not submitted to the jurisdiction of the Committee acting under the Rules ... The question then is what is a disqualified person. The dictionary to which reference is to be made, as everyone knew, is the Rules of Racing. The meaning there given is clear and includes one in the respondent’s case. It is not a question whether he consented to any adjudication or submitted to any jurisdiction. The Club properly undertook to regulate racing within its territorial limits and properly announced the rules by which it would regulate it and properly also to satisfy the claims of justice gave an opportunity to anyone whose conduct called for enquiry in connection with racing within those limits to attend and proffer explanations. Disqualification is a well know and a legitimate and indeed a necessary safeguard to be adopted to secure the absence from the race course of persons who have been found guilty of conduct gravely detrimental to the interests of racing. The exercise of such a jurisdiction may as to some matters and things such as licensing , arise out of consent, but in others such as the present, it seems no more to depend upon consent than does the disqualification of a horse. A horse is disqualified because improper things are done with it. The respondent was disqualified because he impeded by lying the course of a necessary and proper enquiry and he has to suffer not because he consented to be bound by the rules, but because he permitted himself so to act as to bring this actions within their purview.”[15] [emphasis added]

41. On the basis of this extract RVL contended that the critical test for jurisdiction was whether a person has, by his or her actions, brought themselves within the purview of the Rules. It was submitted that this test has been consistently adopted by courts and tribunals since Stephen v Naylor.[16]
42. In the extract quoted the Privy Council effectively treated the Rules as if they had statutory force such that they applied to anybody who came within their terms. No authority is cited in support of this proposition.
43. Australian courts are no longer bound by decisions of the Privy Council, but that is not to say that such decisions are to be lightly disregarded.[17]
44. The jurisdiction of the Stewards and the Board to impose a penalty on Mr Clements must rest on a proper legal basis. The power to impose a penalty for failing to comply with a direction of the Stewards is predicated on the proposition that AR8 applies to Mr Clements. As Lewis and Taylor put it:

“Jurisdiction over both the person and the subject matter is required for a governing body to exercise its disciplinary function ... there must be a relationship between the governing body and the person or club that allows the lawful and practical enforcement of that jurisdiction: if there is in fact no basis on which the person or club can be constrained, a claim to jurisdiction is hollow. In short, there must be some reciprocity in relation to jurisdiction as between the person or club and the governing body.”[18]

45. We propose to approach the question of jurisdiction in this case by first examining what courts have said about the legal basis of the authority of domestic tribunals. We then consider the submissions advanced on behalf of RVL in this case and the authorities upon which it relied, before considering the terms of the rule said to have been breached and determining the question of jurisdiction.
46. The courts have consistently refused to use certiorari in relation to decisions of domestic tribunals and in so doing have emphasised that the authority of such tribunals is contractual. As Lord Parker CJ said in R v Criminal Injuries Compensation Board; Ex parte Lain:[19]

“Private or domestic tribunals have always been outside the scope of certiorari since their authority is derived solely from contract, that is, from the agreement of the parties concerned.”[20]

47. Lain’s case has been cited with approval by courts in England[21] and Australia[22] and reflects the present state of the law in Victoria.[23]
48. The general proposition espoused in Lain’s case has also been applied to racing in Australia. In Harper v Racing Penalties Appeal Tribunal of Western Australia[24] the Supreme Court of Western Australia (per Malcolm CJ, Kennedy, Franklyn, Anderson and Owen JJ) determined that the Rules of Trotting were intended to have consensual or contractual force and did not form part of the statute law of that state.[25] The legislative position in WA has altered since these cases were decided.[26]
49. For completeness we note that in a case sometime after Stephen v Naylor the Privy Council made reference to the fact that the disciplinary powers of racing bodies rest on consensus. In Calvin v Carr[27] an owner challenged a disciplinary ruling by the Australian Jockey Club. After referring to the relevant rules and provisions of the Australian Jockey Club Act 1873 their Lordships said:

“Although these rules and statutory provisions contain a good deal of repetition and circularity it is clear that they provide a comprehensive scheme or code for the administration of racing and for the exercise of discipline through domestic bodies whose jurisdiction, though reinforced by statute, is founded on consensual acceptance by those engaged in the various activities connected with horse racing.”[28]

50. A necessary corollary to the contractual source of the Stewards’ powers is that those powers do not extend to individuals who do not agree (either expressly or by implication) to be bound by the Rules. This was succinctly stated by Denning LJ (as he then was) put it in Lee v The Showmen’s Guild of Great Britain:[29]

“The jurisdiction of a domestic tribunal ...must be founded on a contract, express or implied. Outside the regular courts of this country, no set of men can sit in judgment on their fellows except so far as Parliament authori[z]es it or the parties agree to it.”[30]

51. This general proposition has also been held to apply to racing tribunals. As Sir Thomas Bingham MR observed in R v Disciplinary Committee of the Jockey Club, Ex parte Aga Khan:[31]

“The Jockey Club cannot, of course, impose contractual conditions on those who do not seek any licence or permit from it and therefore do not enter into any contract with it. This is a class which includes members of the general public ...”[32]

52. Dr Pannam, counsel for RVL, submitted that Stephen v Naylor was ‘clearly correct’ because ‘otherwise you’d have a clear gap in the operation of the rules. You’d have people not being subject to the rules of racing, even though their actions are intricately bound up with them’.[33]
53. We do not doubt the importance to the general public of the disciplinary functions exercised by the Stewards and the Board. But the fact that the stewards’ investigatory powers may provide a public benefit by protecting the integrity of racing does not alter the fact that their powers are contractual.
54. As Lawton LJ said in Law v National Greyhound Racing Club Limited:[34]

“A stewards’ inquiry under the defendants’ Rules of Racing concerned only those who voluntarily submitted themselves to the stewards’ jurisdiction. There was no public element in the jurisdiction itself. Its exercise, however, could have consequences from which the public benefited, as, for example by the stamping out of malpractices, and from which individuals might have their rights restricted by, for example, being prevented from employing a trainer whose licence had been suspended. Consequences affecting the public generally can flow from the decisions of many domestic tribunals ... the courts have always refused to use the orders of certiorari to review the decisions of domestic tribunals.”[35]

55. Similarly, in D’Souza v Royal Australian and New Zealand College of Psychiatrists and ors[36] Ashley J (as he then was) held that a decision of the College to deny the plaintiff fellowship was not amenable to judicial review despite the public consequences of such a decision.[37]
56. It seems to us that the ‘gap’ identified by Dr Pannam can be remedied by legislative amendment to give the Rules statutory force.
57. Dr Pannam also submitted that the test posited in Stephen v Naylor has subsequently been adopted by courts and tribunals and reference was made to five particular cases. We do not find this submission particularly persuasive for two reasons.
58. The first is that it is hardly surprising that in Caddigan v Grigg[38] Barrowclough CJ followed Stephen v Naylor: the facts were relevantly indistinguishable and at that time his Honour was bound by decisions of the Privy Council.[39] In Jacobson v Steele[40] Gobbo J was similarly bound.
59. The second reason is that an analysis of the other cases referred to reveals an alternative jurisdictional basis for the actions of the relevant disciplinary body:
    • In the matter of Dr Tim Roberts[41] the Thoroughbred Racing Board Act 1996 gave the Rules of Racing statutory recognition and empowered the Board and the Stewards to give effect to those Rules;
    • In the matter of the Queensland Principal Club and Kooralbyn Picnic Race Day[42] the Racing and Betting Act 1980 ‘specifically acknowledges the force and effect of the Rules of Racing’; and
    • Zucal v Harper[43] the person concerned was a licensed trainer and hence bound by the Rules.
60. We also note that Stephen v Naylor was not followed by the Full Court of the Supreme Court of British Guiana in Demerara Turf Club and Anor v Phang. [44] In that case the Demerara Turf Club (the ‘Turf Club’) had ‘warned off’ Phang, a person who was a partner in a business which operated pool betting on races run in British Guiana. Phang was not a member of the Turf Club and there was no contractual relationship between him and the club.
61. Phang filed a writ against the Turf Club claiming, among other things, that the decision to warn him off was null and void, and sought damages for libel. An interlocutory injunction was granted at first instance restraining the Turf Club from publishing any statement that Phang had been ‘warned off’ until the determination of his action. The Turf Club appealed to the Full Court.
62. One of the issues on appeal was whether there was a serious issue to be tried as to the Turf Club’s right to exercise jurisdiction over Phang. The Full Court determined that issue in favour of Phang:

“... it appears to us that there are serious questions, and many of them, to be tried between the parties and that the grant of an interlocutory injunction by the trial judge was, in all the circumstances, a proper exercise of his discretion in the light of the issues which are to be tried ... as to the reasonable probability that the plaintiff may be entitled to relief, we feel there is much merit in the contention that upon an interpretation of the rules which the appellants invoke to justify their action, it does not clearly appear that the respondent falls within any of the groups of persons subject to the control of the Turf Club ...

Whether the respondent is a person who is subject to the control of the Turf Club and therefore amenable to discipline under its rules, or whether he is not such a person, it does seem to us that he has shown in his application for an interlocutory order of injunction a reasonable probability that he may be entitled to relief at the trial.[45]

63. We now turn to the rule said to have been breached.
64. Mr Clements was found guilty of breaching AR175(p) in that he failed to comply with a direction of the Stewards that he provide his telephone records relating to a five month period between September 2009 and January 2010. The direction in question was made pursuant to AR8 which confers very broad investigatory powers upon the Stewards (see paragraph 7 of this decision).
65. The standard or usual approach to statutory construction is informed by the common law presumption that fundamental rights and freedoms cannot be abrogated without ‘a clear expression of an unmistakable and unambiguous intention’.[46] This involves favouring an interpretation which produces the least infringement on common law rights. In R v Secretary of State for the Home Department; Ex parte Pierson,[47] Lord Steyn described this approach as ‘the principle of legality’.[48]
66. The right to privacy and to protection from trespass are protected by this common law doctrine. In Coco v R[49] the High Court held that the Invasion of Privacy Act 1971 (Qld), which authorised the use of listening devices in certain circumstances, did not confer a right on a judge to authorise entry onto premises for the purpose of installing and maintaining a listening device, where to do so would otherwise constitute a trespass.[50]
67. In Electrolux Home Products Pty Ltd v Australian Workers’ Union[51] Gleeson CJ explained the rationale for the principle in these terms:

“The joint judgment in Coco went on to identify as the rationale for the presumption against modification or abrogation of fundamental rights an assumption that it is highly improbable that Parliament would “overthrow fundamental principles, infringe rights, or depart from the general system of law” without expressing its intention with “irresistible clearness”. In R v Home Secretary; Ex parte Pierson, Lord Steyn described the presumption as an aspect of the principle of legality which governs the relations between Parliament, the executive and the courts. The presumption is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of the rule of law.”[52]

68. AR8 is a broad, invasive power. It empowers the Stewards to require a person to hand over any ‘mobile phones, computers, electronic devices, books, documents and records ... relating to any meeting or inquiry’. Courts have been slow to imply the existence of such an invasive power.[53] Nor is it to the point that rules such as AR8 are for the public benefit, to keep the sport of racing untarnished. As Fraser J observed in Demerara Turf Club and Others v Phang:

“Such absolute power when attributed to institutions which are popular may also have to be accorded to the institutions which are disliked and the implications might encourage grave forebodings in the minds of those who cherish individual freedom and are wedded to the idea that no man ought to be made to suffer loss or damage by an arbitrary assumption of jurisdiction ...”[54]

69. It seems to us that the principle of legality applies with equal force to the interpretation of rules of domestic tribunals. Just as domestic tribunals are subject to the rules of natural justice – an aspect of the rule of law – so too should their rules be construed by reference to the principle of legality. Any doubt in interpretation should be resolved in favour of the person said to be subject to the rules.
70. Such an approach applies to both the language of the relevant rule and to the class of persons it purports to cover.
71. The application of the principle of legality in the context of this case supports a conclusion that the powers in AR8 do not extend to persons who have not agreed to be bound by the Rules. It would be contrary to this principle to extend the application of the Rules to persons who have not agreed to be bound by the Rules but have, by their actions, brought themselves ‘within the purview of the Rules’. Such a test is simply too vague and imprecise to provide a proper basis for the conferral of coercive power.
72. In conclusion, and contrary to the decision of the Board, we have decided that Mr Clements was not subject to AR8. The source of the Stewards’ powers under that rule is contractual and those powers do not extend to persons who have not agreed (either expressly or by implication) to be bound by the Rules. The contractual nature of the powers of a domestic tribunal (such as the Stewards and the Board) is clearly supported by authority in both England and Australia and our conclusion is also consistent with the principle of legality.
73. To the extent that Stephen v Naylor stands for a broader proposition – that rules such as AR8 apply to persons who, by their actions, bring themselves within the purview of the Rules – we respectfully decline to follow that decision.
74. 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 public 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.
75. As Mr Clements was not subject to AR8 it necessarily follows that the Board had no jurisdiction to record a finding that he breached AR175(p) and nor did the Board have jurisdiction to impose a penalty. We will order that the finding and penalty be set aside.
    

[1] Australian Rules of Racing Rule 183( the ‘Rules’ or ‘AR’).
[2] AR182
[3] Demerara Turf Club and Anor v Phang (1961) 3 WIR 454, 461 (Fraser J).

[4] See s 51 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), Davidson v Victorian Institute of Teaching [2006] VSCA 193; (2006) 25 VAR 186. In some circumstances it will be appropriate for the Tribunal to take the findings and determination of the Board into account and to give them some weight: Van Lan Ha v Pharmacy Board of Victoria [2002] VSC 322; (2002) 18 VAR 465.
[5] See Meyers v Casey [1913] HCA 50; (1913) 17 CLR 90, 99 (Barton ACJ).
[6] J. Morris, ‘The Courts and Domestic Tribunals’ (1953) 69 LQR 318-333, 321.
[7] [1913] HCA 50; (1913) 17 CLR 90.
[8] Ibid 97, 98 and 101.
[9] Ibid 109, 111 and 119.
[10] Transcript of Proceedings, Clements v Racing Victoria Limited (Victorian Civil and Administrative Tribunal, Ross J, Judge Nixon and Senior Member Riegler, 25 June 2010) (‘Tn’) p 17, lines 8-12.
[11] Tn p 20, lines 12-16. Section 49 of the Racing Act 1958 provides that Harness Racing Victoria may make rules and, by s 45(1)(g) of the Racing Act 1958, may ‘fine or otherwise punish any club or person offending against the rules’. Similar provisions operate with respect to greyhound racing (ss 77 and 82 of the Racing Act 1958). But there are no comparable provisions in relation to thoroughbred horse racing.
[12] Cf Davis v Carew – Pole and others [1956] 1 WLR 833; Byrne v Kinematograph Renters Society [1958] 1 WLR 762, 783 (Harman J).
[13] [1937] NSWStRp 2; (1937) 37 SR (NSW) 127, 140 (Lord Roche).
[14] Naylor v Stephen [1934] NSWStRp 20; (1934) 34 SR (NSW) 231, 232 (Long Innes J); [1934] NSWStRp 61; (1934) 35 SR (NSW) 71, 71 (Davidson and Maxwell JJ, Harvey CJ in Eq. dissenting).
[15] [1937] NSWStRp 2; (1937) 37 SR (NSW) 127, 139-140 (Lord Roche).
[16] See Caddigan v Grigg [1958] NZLR 708, 711-712 (Barrowclough CJ); In the matter of Dr Tim Roberts [1998] (Thoroughbred Racing Board NSW, presided over by the late Federal Court Judge Peter Hely, 22 April 1988) [22] - [23]; In the matter of the Queensland Principal Club; In the matter of the Kooralbyn Picnic Race Day (Unreported, Supreme Court of Queensland, Williams J, 14 January 1999, 29 January 1999) [32] - [35]; Zucal v Harper [2005] WASCA 76 (Unreported, Steytler P, 15 April 2005) [43].
[17]  Australia Acts (Request) Act 1985  (Vic): sch 1, s 11; Hawkins v Clayton & ors t/as Clayton Utz & Co. (1986) 5 NSWLR 109, 136-137 (Mc Hugh JA).
[18] A Lewis and J Taylor (eds), Sport: Law and Practice, (2nd ed, 2008) [A2.10].
[19] [1967] 2 QB 864.
[20] Ibid 882.
[21] R v British Broadcasting Corporation, Ex parte Lavelle [1983] 1 WLR 23; Law v National Greyhound Racing Club Limited [1983] EWCA Civ 6; [1983] 1 WLR 1302; R v Disciplinary Committee of the Jockey Club, Ex parte Aga Khan [1992] EWCA Civ 7; [1993] 1 WLR 909.
[22] R v Wadley, Ex parte Burton [1976] Qd R 286; R v Wilson, Ex parte Robinson [1982] Qd R 642; Whitehead v Griffith University [2002] QSC 153; [2003] 1 Qd R 220.
[23] D’Souza v Royal Australian and New Zealand College of Psychiatrists (2004) 12 VR 42, 58 (Ashley J); see also Australian Football League and ors v Carlton Football Club Ltd [1998] 2 VR 546.
[24] (1995) 12 WAR 337.
[25] See also: Maynard v Racing Penalties Appeal Tribunal of Western Australia (1994) 11 WAR 1.
[26] See the Racing and Wagering Western Australia Act 2003 esp. s 45 and Zucal v Harper [2005] WASCA 76.
[27] [1979] UKPC 1; [1980] AC 574.
[28] Ibid 589 (Lord Wilberforce, Viscount Dilhorne, Lord Hailsham of St. Marylebone, Lord Keith of Kinkle and Lord Scarman).
[29] [1952] 2 QB 329. See also Denning LJ in Abbott v Sullivan [1952] 1 KB 189, 197-198. While his Lordship dissented in that case the Court was in agreement as to the proposition that the jurisdiction of a domestic tribunal must be founded on contract: see 194 (Evershed MR) and 209-210 (Morris LJ).
[30] Ibid 341.
[31] [1992] EWCA Civ 7; [1993] 1 WLR 909.
[32] Ibid 915.
[33] Tn p18, lines 15-19.
[34] [1983] EWCA Civ 6; [1983] 1 WLR 1302, see also Fox and Slade LJJ.
[35] Ibid 1307.
[36] [2005] VSC 161; (2005) 12 VR 42.
[37] Ibid [116].
[38] [1958] NZLR 708.
[39] Appeals from New Zealand courts to the Privy Council were abolished in 2003 with the passage of the Supreme Court Act 2003 (NZ).
[40] (Unreported, Supreme Court of Victoria, Gobbo J, 12 February 1982).
[41] [1998] (Thoroughbred Racing Board NSW, presided over by the late Federal Court Judge Peter Hely, 22 April 1988), see also [24]-[27] of the Board’s decision.
[42] (Unreported, Supreme Court of Queensland, Williams J, 14 January 1999, 29 January 1999) [26], see also [24]-[35].
[43] [2005] WASCA 76.
[44] (1961) 3 WIR 454. Also see D. Lloyd, ‘Natural Justice and the ‘Warned Off’ Bookmaker’ (1968) 26 MLR 412.
[45] Demerara Turf Club and Anor v Phang (1961) 3 WIR 456, 475 (Fraser J on behalf of the Full Court).
[46] Coco v R [1994] HCA 15; (1994) 179 CLR 427, 437 (Mason CJ, Brennan, Gaudron and McHugh JJ).
[47] [1997] UKHL 37; [1998] AC 539.
[48] See also RJE v Secretary to the Department of Justice [2008] VSCA 265; (2008) 21 VR 526.
[49] [1994] HCA 15; (1994) 179 CLR 427, esp 436 – 437 (Mason CJ, Brennan, Gaudron and McHugh JJ).
[50] Similarly, In Morris v Beardmore [1981] AC 446 the House of Lords refused to read general language in the Road Traffic Act 1972 (UK) as being sufficient to authorise the police to enter the home of a person involved in an accident and require that person to submit to a breath test. Lord Scarman said, at 465: “The appeal turns on the respect which Parliament must be understood, even in its desire to stamp out drunken driving, to pay to the fundamental right of privacy in one’s own home, which has for centuries been recognised by the common law”.
[51] [2004] HCA 40; (2004) 221 CLR 309.

[52] Ibid 329 [21]. See also R v Secretary of State for the Home Department, Ex parte Simms [1999] UKHL 33; [2000] 2 AC 115, 131 (Lord Hoffmann); cited with approval by Gleeson CJ in Plaintiff 5157/2002 v The Commonwealth (2003) 211 CLR 476, 492 [30]; Kirby J in Daniels Corporation International Pty Ltd v ACCC [2002] HCA 49; [2002] 213 CLR 543, 582 and Vickery J in Nolan v MBF Investments Pty Ltd [2009] VSC 244 (Unreported, Vickery J, 18 June 2009) [182].
[53] Egan v Willis [1998] HCA 71; (1998) 195 CLR 424, 468-469 (McHugh J).
[54] (1961) 3 WIR 454 , 473.