John Patrick Green, Brian Hughes, Barry Rattray, Wayne McLaughlin and the Estate of Mrs W McLaughlin v Racing Integrity Unit Ltd

• Jurisdiction: New Zealand
• Judge: Harrison J
• Judgment Date: 09 April 2014
• Neutral Citation: [2014] NZCA 133
• Docket Number: CA389/2013
• Court: Court of Appeal
• Date: 09 April 2014

Between

John Patrick Green, Brian Hughes, Barry Rattray, Wayne McLaughlin and the Estate of Mrs W McLaughlin

Appellants

and

Racing Integrity Unit Limited

First Respondent

and

Harness Racing New Zealand Incorporated

Second Respondent

[2014] NZCA 133

Court:

O'Regan P, Harrison and Wild JJ

CA389/2013

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against High Court's dismissal of an application for judicial review based on challenges alleging breach of a legitimate expectation and fettered discretion — racehorse had tested positive for arsenic above the permitted threshold — NZ laboratories were not equipped to test for arsenic so this had not been done previously — the sample in issue had been tested by Hong Kong laboratory — plaintiffs alleged that for over 20 years the defendants had consulted on the use of therapeutic substances in race horses — claimed that they had a legitimate expectation to be consulted on (1) the appointment and approval of laboratories for the purposes of the racing rules; or (2) any proposal or decision to test urine samples under a testing regime that had not previously been undertaken or employed — whether the plaintiffs had established that there was a settled practice or policy, to act in a certain way had been adopted which amounted to a commitment — if so, whether a remedy should be granted — whether in deciding to prosecute, the Racing Integrity Unit had done so on the basis of a fettered discretion.

Counsel:

M J Fisher and L Hui for Appellants

C A McVeigh QC and C J Lange for Respondents

JUDGMENT OF THE COURT

• A The appeal is dismissed.

• B The appellants are ordered to pay the respondents one set of costs on a standard appeal on a band B basis in this Court and usual disbursements. We certify for two counsel.

REASONS OF THE COURT

(Given by Harrison J)

Introduction

1 Delightful Christian is what is called a pacing filly. She participates successfully in harness horse racing. Following her victory in a prestigious race, samples of her urine were tested by a laboratory in Hong Kong at the request of the Racing Integrity Unit (the RIU). A positive result was returned for arsenic above the permitted threshold level. Harness Racing New Zealand (HRNZ) has decided to lay a charge with the Judicial Control Authority alleging that the horse raced with a prohibited substance in her system. The charge is yet to be heard but, if it is proved, disqualification is a mandatory penalty.

2 Delightful Christian's trainers, John Green and Brian Hughes, and her owners, the Rattray Family Trust, (collectively “the connections”), applied to the High Court to judicially review the separate decisions by HRNZ and the RIU to approve the Hong Kong laboratory for testing and to lay the charge. Among their grounds of challenge were that (1) the HRNZ rule under which the charge was laid was invalid; (2) they had a legitimate expectation that HRNZ and the RIU would consult them before approving the Hong Kong laboratory to conduct the tests; (3) in deciding to lay the information, the RIU failed to take into account relevant considerations; and (4) the RIU acted unreasonably and improperly fettered its discretion to prosecute.

3 After a defended hearing, Simon France J delivered a comprehensive judgment dismissing the application. 1 He was not satisfied that any of the four grounds of challenge were made out. The connections now appeal his decision but limited to the legitimate expectation and, to a lesser extent, fettered discretion grounds. As a result, it is unnecessary for us to revisit Simon France J's careful and correct analysis of the validity of the HRNZ rules which occupied a significant part of his judgment.

4 We record that the connections' appeal falls for determination according to settled principles of administrative law to be applied to undisputed facts. The material facts are within a small compass and are helpfully recited and explained in affidavits filed by HRNZ and the RIU. By contrast much of the evidence adduced by the connections is plainly inadmissible; for example, the affidavits filed in reply are largely in the nature of submissions or argument.

Statutory scheme

5 Simon France J summarised the broad structure of the statutory scheme governing horse and dog racing in New Zealand as follows:

[12] Racing in New Zealand occurs in three formats, each of which is called a “Code” – thoroughbred horses (the gallops), harness horses (the trots) and greyhounds (the dogs). The industry is governed by the Racing Act 2003 (the Act).

[13] The Act recognises the separate governing body of each Code and requires each organisation to make its own rules for the conduct of its version of the sport. The Act identifies various topics the Rules might cover, but these are not exclusive. The listed topics are described in the Act as not limiting the general power to make rules, and conclude with the power to provide for: 2

any other matters relating to the conduct of races and racing that the racing code thinks fit.

[14] Sitting above the three Codes is the New Zealand Racing Board. Its task is to promote racing and maximise profits for the long term benefit of New Zealand racing. The income garnered from betting on any of the Codes goes to the Racing Board, which has the task of distributing that money to the Codes in a way that it considers will promote the racing industry.

6 The Racing Act also provides for an internal racing judicial system. 3 The Judicial Control Authority has, as its name suggests, the ultimate role with a range of functions including the appointment of judicial and appeal committees. 4 Breaches of HRNZ rules are enforceable by stipendiary stewards and race course inspectors who are responsible for monitoring compliance. Simon France J described them as “the police officers of the sport”. 5 Significantly, they alone have the power to lay informations for non-race day breaches. Such an information can only be laid with

the prior permission of the RIU operations manager. 6 The RIU has entered into service agreements with each of the three racing codes to exercise and perform the powers and duties of stipendiary stewards, race course inspectors and investigators

Legitimate expectation

(a) Facts

7 The facts essential to the connections' claim of breach of a legitimate expectation that they would be consulted before the authorities approved a new regime for testing can be stated shortly.

8 On 1 May 2012 HRNZ approved a laboratory operated by the Hong Kong Jockey Club and four Australian laboratories to analyse samples of equine urine for the presence of prohibited substances including arsenic. HRNZ did not consult or liaise with the New Zealand Equine Veterinary Association (NZEVA), the New Zealand Harness Racing Trainers and Drivers Association (NZHRTDA) or industry participants. Nor did HRNZ previously have the capacity to test for arsenic even though the substance had been banned above a certain threshold for many years.

9 On 1 June 2012 Ivan Bridge, a licensed veterinary surgeon who was acting on the connections' instructions, administered 30 millilitres of Caco-Iron-Copper to Delightful Christian. Caco-Iron-Copper is a therapeutic remedy designed to maintain the health and wellbeing of race horses while in training. The next day, 2 June 2012, Delightful Christian placed first in the Group 1 Diamond Mobile Pace for two-year-old fillies at the Harness Jewels Meeting at Cambridge Raceway. Messrs Green and Hughes, as her trainers, will receive 10 per cent of the stake payable under the rules for first place, being $75,000, if the horse is entitled to retain its first placing; and the owners will receive the balance of the stake after meeting other expenses.

10 Immediately after the race a routine sample of Delightful Christian's urine was taken for analysis. In late June 2012 and again in early July the racing

laboratory operated by the Hong Kong Jockey Club issued test reports confirming that the mass concentration of total arsenic in the sample was 0.47 milligrams per litre. The permitted threshold of arsenic is 0.30 milligrams per litre as prescribed by HRNZ's prohibited substance regulations. 7

11 In August 2012 the RIU's operations manager authorised a race course inspector to file an information seeking a ruling on Delightful Christian's disqualification, alleging that the horse had been taken to a race course for the purpose of engaging in a race and was found to have administered to or ingested by it a prohibited substance. As noted, the HRNZ rules require the horse be disqualified if the charge is proved.

(b) The connections' claim

12 Against this background, the connections plead they had a legitimate expectation that HRNZ or RIU would consult or liaise with NZEVA, NZHRTDA or industry participants about either: (1) the appointment and approval of laboratories for the purposes of the HRNZ rules; or (2) any proposal or decision to cause urine samples taken from race horses to be subjected to a testing regime relating to arsenic that had not previously been undertaken or employed.

13 It was not in dispute in the High Court or before us that the connections must establish three elements if they are to succeed on a claim for breach of a legitimate expectation, in the administrative law context: (1) a promise or commitment, in this case by the adoption of a settled practice or policy, to act in a certain way; (2) their legitimate or reasonable reliance on the promise or commitment; and (3) the appropriate remedy if any that should be granted.

14 We accept that success at the first step – establishing the existence and content of the expectation pleaded – might not come in the form of an explicit promise. A promise can be implied from past practice or policy. 8 But where the expectation is in the form of a practice or policy, as alleged here, its existence and

content must equally...