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Non Raceday Inquiry RIU v C Dalgety - Reserved Decision as to Penalty dated 16 May 2017 - Chair, Prof G Hall

Created on 17 May 2017

BEFORE A JUDICIAL COMMITTEE OF

THE JUDICIAL CONTROL AUTHORITY

UNDER THE RACING ACT 2003

AND IN THE MATTER of the New Zealand Rules of Harness Racing

BETWEEN RACING INTEGRITY UNIT (RIU)

Informant

AND MR CRAN DALGETY

Licensed Public Trainer

Respondent

Informations: A5038 to A5042

Judicial Committee Prof G Hall, Chairman

Mrs N Moffatt, Committee Member

Appearing: Mr C Lange and Mrs K Williams, for the Informant

Mr A Galbraith QC, for the Respondent

RESERVED DECISION OF JUDICIAL COMMITTEE AS TO PENALTY

[1] At a hearing on Monday 1 May at Addington Raceway the respondent, Mr Dalgety, admitted a number of charges relating to the presentation of horses to race with a prohibited substance, namely Cobalt.

[2] In our decision of 7 May, in which we disqualified the horses from their respective races, we accepted Mr Dalgety’s pleas and formally found the charges proved.

[3] We now consider the issue of penalty.

[4] The penalty provision is r 1004(7), which provides a fine not exceeding $20,000, and disqualification or suspension for a period up to five years.

[5] We have an agreed summary of facts.

The Informations

Information A5038

[6] LINTON SHARD is a 4-year-old bay gelding and is trained by Public Trainer Mr Cran Dalgety. LINTON SHARD is owned by Mrs F J Hodge and S L Hodge. LINTON SHARD has raced 22 times for 3 wins and 4 placings and stakes of $19,395 as at 3 March 2017.

[7] LINTON SHARD was correctly entered and presented to race by trainer Mr Dalgety at the Timaru Harness Racing Club’s meeting at Phar Lap Raceway on 19 November 2016. LINTON SHARD was driven in Race 5, the BROSNAN TRANSPORT & PROPERTY BROKERS MOBILE PACE, by Mr D Dunn, winning the race and a stake of $3,750.

[8] Following the race the Stipendiary Stewards ordered that LINTON SHARD be post-race swabbed. The race was programmed to start at 3.09pm with the gelding entering the swab box at 3.29pm. Swabbing Steward Ms D Bondarenko obtained a urine sample from the gelding at 3.29pm. The urine sample was taken in the presence of stable employee Mr D Keast. The urine sample was recorded with the Sample number 117154.

[9] This sample screened at a level of 226 ug/L in New Zealand with the Victorian Racing Laboratory confirming a Cobalt level of 245 ug/L. This is over the threshold of 200 ug/L that is set by Harness Racing New Zealand (HRNZ).

Information A5039

[10] BENCHMARK is a 4-year-old bay gelding and is trained by Public Trainer Mr Dalgety. BENCHMARK is raced on lease by M J Howard, Mrs S M Howard, Mrs D M Howard, Miss D J Howard, A J Boulton and D Howard. BENCHMARK has raced 13 times for 4 wins and 2 placings and stakes of $30,035 as at 3 March 2017.

[11] BENCHMARK was correctly entered and presented to race by trainer Mr Dalgety at the Timaru Harness Racing Club’s meeting at Phar Lap Raceway on 19 November 2016. BENCHMARK was driven in Race 7, the GERALDINE VILLAGE INN SPORTS BAR MOBILE TROT by Mr D Dunn, winning the race and a stake of $3,750.

[12] Following the race the Stipendiary Stewards ordered that BENCHMARK be post-race swabbed. The race was programmed to start at 4.05pm with the gelding entering the swab box at 4.24pm. Swabbing Steward Ms D Bondarenko obtained a urine sample from the gelding at 4.25pm. The urine sample was taken in the presence of stable employee and co-owner Mr M Howard. The urine sample was recorded with the Sample number 117157.

[13] This sample screened at a level of 314 ug/L in New Zealand with the Victorian Racing Laboratory confirming a Cobalt level of 300 ug/L. This is over the threshold of 200ug/L that is set by HRNZ.

Information A5040

[14] FATIMA SIAD is a 3-year-old brown filly and is trained by Public Trainer Mr Dalgety. FATIMA SIAD is owned by Studholme Bloodstock Limited, Mrs S Grainger, S C Gallop and Mrs C M Dalgety. FATIMA SIAD has raced 10 times for 1 win and 2 placings and stakes of $7,660 as at 3 March 2017.

[15] FATIMA SIAD was correctly entered and presented to race by trainer Mr Dalgety at the Timaru Harness Racing Club meeting at Phar Lap Raceway on 19 November 2016. FATIMA SIAD was driven in Race 11, the CHANGEOVER & PORT FM FILLIES & MARES MOBILE PACE, by Mr D Dunn, winning the race and a stake of $3,750.

[16] Following the race the Stipendiary Stewards ordered that FATIMA SIAD be post-race swabbed. The race was programmed to start at 6.23pm with the filly entering the swab box at 6.38pm. Swabbing Steward Ms M Orr obtained a urine sample from the filly at 6.41pm. The urine sample was taken in the presence of stable employee Mr D Keast. The urine samples were recorded with the Sample number 119965.

[17] This sample screened at a level of 252 ug/L in New Zealand with the Victorian Racing Laboratory confirming a Cobalt level of 250 ug/L. This is over the threshold of 200 ug/L that is set by HRNZ.

Information A5041

[18] RAUKAPUKA RULER is a 3-year-old brown colt and is trained by Public Trainer Mr Dalgety. RAUKAPUKA RULER is owned by the Colt 45 Syndicate. RAUKAPUKA RULER has raced 6 times for 5 wins and 1 placing and stakes of $36,435 as at 3 March 2017.

[19] RAUKAPUKA RULER was correctly entered and presented to race by trainer Mr Dalgety at the New Zealand Metropolitan Trotting Club’s meeting at Addington Raceway on 16 December 2016. RAUKAPUKA RULER was driven in Race 1, the AVON CITY FORD MOBILE PACE, by Mr N Purdon, winning the race and a stake of $6,890.

[20] Following the race the Stipendiary Stewards ordered that RAUKAPUKA RULER be post-race swabbed. The race was programmed to start at 4.55pm with the colt entering the swab box at 5.13pm. Swabbing Steward Mr G Johnston obtained a urine sample from the colt at 5.15pm. The urine sample was taken in the presence of stable employee Mr N Purdon. The urine samples were recorded with the Sample number 81570.

[21] This sample screened at a level of 1810 ug/L in New Zealand with the Victorian Racing Laboratory confirming a Cobalt level of greater than 600 ug/L. The Australian Laboratory will only confirm results up to 600 ug/L, which is the upper range of their calibration. This is over the threshold of 200 ug/L that is set by HRNZ.

Information A5042

[22] FATIMA SIAD was correctly entered and presented to race by trainer Mr Dalgety at the Banks Peninsula Trotting Club meeting at Motukarara on 29 December 2016. FATIMA SIAD was driven in Race 5, the MCGRATH RACING STABLES & MAVERICK MOBILE PACE, by Mr D Dunn, finishing in 7th place, winning a stake of $200.

[23] Prior to the race FATIMA SIAD was pre-race swabbed. The filly entered the swab box at 11.40am. Swabbing Steward Mr M McCann obtained a urine sample from the filly at 11.45am. The urine sample was taken in the presence of stable employee Mr N Purdon. The urine samples were recorded with the Sample number 109629.

[24] This sample screened at a level of 662 ug/L in New Zealand with the Victorian Racing Laboratory confirming a Cobalt level of 584 ug/L. This is over the threshold of 200 ug/L that is set by HRNZ.

The RIU investigation

[25] On 10 January 2017 RIU staff went to the training establishment of Mr Dalgety and advised him of the positive swab for Cobalt returned by FATIMA SIAD from the Timaru HRC meeting on 19 November 2016.

[26] Mr Dalgety could not offer an explanation for the level of Cobalt in the swab taken from FATIMA SIAD. Mr Dalgety and his staff were interviewed and numerous samples were taken and forwarded to the Racing Laboratory for analysis for the presence of Cobalt.

[27] Mr Dalgety advised that his horses were given McGrouthers Equine Mineral Mix in their feeds on a Monday and Wednesday night. This was also used in drenches when new horses came onto the property but it was not put in the pre-race drenches that were given to horses 1 to 3 days prior to racing.

[28] Mr Dalgety advised that he had been using McGrouthers Equine Mineral Mix for many years, in excess of at least 10 years, and now purchased it off Ms K McGrouther. Mr Dalgety had originally purchased it off the late Dr Cliff McGrouther, who had manufactured the product for over 40 years.

[29] The McGrouthers Equine Mineral Mix bottle stated on the label that it contained Cobalt. It did not state the amount of Cobalt in the mixture. The labelling advises “Will not return a positive swab, Licensed under Animal Remedies Act 1967 No 3392.” The RIU submitted that this product may have originally been licensed but has not been since at least 1997 when the Agricultural Compounds & Veterinary Medicines Act was introduced.

[30] The RIU were shown two bottles of McGrouthers Equine Mineral Mix, one had a label, the other did not, but it had “McGrouther Mineral Mix” written on it. A Sea Salt mix (McGrouthers) was also stored in an open container in the feed bin. This was in an unlabelled bag and the salt mix was put in the horses’ feeds nightly, approximately 100 gm for the fillies and 200 gm for the colts.

[31] Mr Dalgety provided the RIU with the diary that he used to note all treatments given to his horses. This showed that those horses that raced on 19 November 2016 were pre-race drenched on 18 November.

[32] The RIU ordered that retrospective testing be carried out on swab samples from horses trained by Mr Dalgety for the presence of Cobalt. A printout was presented to this Committee which showed the results of the testing of horses from the Dalgety stable over a three-year period.

[33] The RIU interviewed Ms McGrouther on 11 January 2017 regarding the McGrouthers Equine Mineral Mix. She advised that she used the same recipe that her late father had used and that Mr Dalgety was the only horse trainer to whom she still provided the mix. The product was hand mixed on her property.

[34] A further sample was obtained from Ms McGrouther and on 25 January 2017 AsureQuality advised that the sample had a Cobalt level of 7500 mg/kg. On 14 February 2017 AsureQuality advised that the Sea Salt (McGrouthers), had a Cobalt level of 290 mg/kg.

[35] On 26 January 2017 AsureQuality advised that the samples of the McGrouthers Equine Mix taken from Mr Dalgety’s stable returned Cobalt levels of 7800 mg/kg and 7900 mg/kg and the syringe used for the liquid was 11000 ug.

[36] Dr Andrew Grierson, Chief Veterinarian for HRNZ, advised on 12 February 2017: “Analysis of samples of McGrouther Equine Mineral Mix taken from Mr Dalgety’s stable feed room were found to be extremely high in Cobalt and based on the dose rate they used it is my opinion this is the likely cause of these positive tests. I make this assumption from another study on an impounded racehorse in Invercargill in December 2015 where it was shown urinary Cobalt levels well in excess of 200 ug/L occurred after oral administration of high concentrations of Cobalt. These remained high for weeks after administration had ceased.” Dr Grierson confirmed that Cobalt is a prohibited substance under the Rules.

Informant’s submissions as to penalty

[37] The RIU stated that Mr Dalgety has held a Public Trainer’s licence since 1991 and has trained over 1000 winners for stakes in excess of $12,000,000.

[38] Mr Dalgety has had two previous breaches of this rule: NZMTC 10 November 2009, Caffeine — fined $3,500; Forbury Park TC meeting 22 November 2012, Bute — fined $6,000.

[39] The RIU acknowledged that Mr Dalgety had been fully cooperative throughout their investigation.

[40] As to the breaches themselves, the RIU observed that Mr Dalgety had acknowledged using a supplement called McGrouthers Equine Mineral Mix, which contains Cobalt. Five ml was added to the horse feeds on a Monday and Wednesday. He did not obtain veterinary advice in relation to using these products but he had respected the directions and indications for use.

[41] Dr Grierson’s opinion was that an analysis of samples of McGrouthers Equine Mineral Mix taken from Mr Dalgety’s stable’s feed room were found to be extremely high in Cobalt (7500 mg/kg) and, based on the dose rate that the respondent used, this was the likely cause of the positive tests returned by the respective horses.

[42] The Informant submitted that the respondent’s culpability was his failure to obtain appropriate advice (from, for example, a veterinarian) on the use of a product containing Cobalt, in particular after a threshold for Cobalt was set in the Prohibited Substance Regulations. Mr Lange acknowledged that whilst a trainer’s obligation to present a horse free of prohibited substances had been emphasised in industry publications and on the HRNZ website at the time the Cobalt threshold had been introduced, no additional advice had been given.

[43] Significantly, the Informant submitted a different approach be taken to penalty than had been taken in O’Sullivan and Scott, which is a recent Cobalt case in the thoroughbred code, and more generally, in other penalty decisions.

[44] The RIU emphasised that the current proceedings were a sporting code’s disciplinary proceedings, and that these were akin to professional disciplinary proceedings.

[45] The RIU emphasised that the Supreme Court in Z v Complaints Assessment Committee [2009] 1 NZLR 1 held that punishment was not a purpose of disciplinary proceedings. The Supreme Court was noted to have developed the principles at several points in its judgment. Elias CJ remarked that punishment was the “responsibility of the criminal justice process” at [70]:

The professional standards are properly the focus of the disciplinary inquiry. Where a distinct finding that a conviction reflects adversely on fitness is made, the Tribunal cannot exercise its usual powers to fine the dentist. Again, this seems to me to be recognition that punishment is the responsibility of the criminal justice process. What remains are the professional sanctions for public protection: removal from the register, suspension of registration, the requirement to practise only under supervision, and censure. The overlay of professional discipline in this way meets the purpose explained by Lord Devlin in Ziderman v General Dental Council:

“The purpose of disciplinary proceedings against a dentist who has been convicted of a criminal offence by a court of law is not to punish him a second time for the same offence but to protect the public who may come to him as patients and to maintain the high standards and good reputation of an honourable profession. … [I]t would be the duty of the committee, before deciding to inflict the only and draconian penalty which lies within their power, to satisfy themselves that the offence of which the dentist had been convicted was if so grave a character to show that he was unfitted to continue to practice his profession.”

[46] McGrath J for the majority (Blanchard, Tipping and McGrath JJ) acknowledged that while statutory disciplinary proceedings did not have the purpose of punishing a practitioner, they might have that effect, however the purpose of such proceedings was to ensure appropriate standards of conduct were maintained in the occupation concerned.

[47] The RIU submitted that the purposes of protection of the public and the maintenance of high professional standards “percolated” the remarks of the Supreme Court Justices. And more specifically, that the purpose of disciplinary proceedings could be summarised as: “To enforce a high standard of propriety to maintain the high standards and good reputation of a profession; and to protect the public from a specific practitioner or others who might be likeminded to offend.”

[48] The RIU further submitted that when the principles of professional disciplinary proceedings are applied to a disciplinary proceeding in a sport the purposes are to enforce a high standard of propriety to maintain the high standards and good reputation of a those involved in the sport, and to protect the betting public and others involved in the sport from future breaches by the individual or others who might be likeminded to breach the Rules.

[49] These principles were noted to be now reflected in cl 5.1 of the Rules of Practice and Procedure for the Judicial Committee and Appeals Tribunal which states:

The purpose of proceedings before a Judicial Committee or Appeals Tribunal include:

(a) to ensure that racing is conducted in accordance with the code rules;

(b) to uphold and maintain the high standards expected of those participating in the sport of racing and the racing industry;

(c) to uphold and maintain the integrity of the sport of racing and the racing industry; and

(d) to protect the participants in the sport of racing, the racing industry, and the public.

[50] The purpose of r 1004, the RIU said, was to maintain the integrity of racing and to impose an obligation on trainers to ensure horses race free of prohibited substances. It was a long established principle of racing that there is a heavy obligation on the part of those who bring a horse to a race meeting to ensure compliance with the Rules.

[51] In assessing the appropriate sanction, the RIU submitted this Committee had to assess the extent to which the respondent’s conduct had fallen below the expected standard. Having regard to the heavy obligation on trainers to ensure horses race free of prohibited substances, trainers should obtain professional veterinary advice when using supplements not only to ensure animal welfare but also to ensure prohibited substance free racing. A Cobalt threshold was introduced in May 2015 and veterinary inquiry should have made with respect to the continued use of a supplement labelled as containing Cobalt.

[52] The RIU referred to RIU v O’Sullivan and Scott, 22 March 2016, which concerned three positive swabs for Cobalt under the Rules of Thoroughbred Racing. The levels were 309, 541 and 640 ug/L. The breaches were admitted and the imposition of sanctions proceeded on the basis that the cause of the elevated levels was the addition of Cobalt to water troughs on the dairy farm from which the horses drunk. Mr Scott had no involvement in the dairy farm and neither Mr O’Sullivan or Mr Scott knew of the practice. Mr Scott had a previous breach of the prohibited substance rule.

[53] The Committee in that case concluded the risk of operating with shared troughs should have been evident to Messrs O’Sullivan and Scott and described the negligence as high. The Committee adopted a starting point of $23,000 (against a maximum of $25,000) per breach having regard to the seriousness of the breach and the level of culpability. After a global 25 per cent reduction for mitigating factors there was a fine of $17,250 for each breach. The Committee then referred to the totality principle and reduced the overall fine to $50,000.

[54] When considering the application of the O’Sullivan and Scott decision, the RIU submitted regard should had to the fact that the maximum financial sanction under the Thoroughbred rule is $25,000 and under the Harness rule it is $20,000. The starting point of $23,000 would thus proportionally decrease to $17,250 where the risk was evident and the degree of negligence high.

[55] The RIU submitted the culpability in O’Sullivan and Scott and the present proceedings were broadly similar. The risks of operating with shared troughs should have been evident. Equally, the continued use, without veterinary advice, of a supplement labelled as containing Cobalt, after a threshold for Cobalt was introduced was a clear risk, as it was with the use of any supplement without obtaining proper advice. Mr Lange emphasised that the O’Sullivan and Scott case should have put trainers on notice.

[56] The RIU further observed that the Committee in O’Sullivan and Scott adopted a criminal sentencing approach including referring to s 8(d) of the Sentencing Act and referring to totality principles and providing discounts in line with criminal sentencing. The RIU repeated its submission that judicial proceedings in racing were not criminal proceedings nor was their purpose to punish. Whilst some principles might overlap, fundamentally any sanction in racing had to be a proportionate response in light of the misconduct, and the purpose, which underpinned the proceeding.

[57] If the Committee was to adopt the same reasoning in the present matter as adopted in O’Sullivan and Scott, a starting point of $17,250 for each breach would result in an overall starting point of $86,250. If that was reduced to say $85,000 applying totality and a 25 per cent reduction applied, that would result in a fine of $63,750. Alternatively, if the Committee were to adopt a level of financial sanction in line with that in the penalty guideline of $10,000, the overall staring point would be $50,000, and applying say $2000 reduction for totality and a 25% reduction, this would result in a financial sanction of $36,000, coupled with a period of disqualification.

[58] However, the Informant was seeking only the imposition of a financial sanction. The earlier breaches of this rule by Mr Dalgety were in 2009 after Itz Magic had leaked into feed bins resulting in a positive for caffeine and in 2013 for Phenylbutazone and Oxyphenbutazone (Bute).

[59] The RIU submitted that in determining the level of financial sanction this Committee should have regard to the purpose of the proceedings, which include: to ensure the rules are complied with; to uphold and maintain the high standards expected of trainers relating to prohibited substances; and to protect the other participants in racing and the betting public.

[60] Where the penalty in this case lay, having regard to the Penalty Guide and the decision in O’Sullivan and Scott, the RIU said, was a matter for this Committee.

[61] The RIU attached a schedule of breaches of the Prohibited Substance Rule. This schedule illustrated a pattern of breaches resulting from failure by trainers to meet the obligation imposed on them. The vast majority of breaches, the RIU believed, could have been avoided by trainers obtaining appropriate advice before using products and exercising greater care in the use of products.

[62] The RIU concluded its submission by requesting that this Committee record in its decision that the time had come for sanctions of either suspension or disqualification to be imposed for breaches of this rule in circumstances where there was a failure by trainers to obtain proper veterinary advice before using supplements.

Respondent’s submissions

[63] The respondent commenced his submission by accepting the summary of facts.

[64] Mr Dalgety also accepted that the underlying objective of disciplinary processes in respect to activities such as horse racing and its associated rules is directed to maintaining appropriate standards. However, as McGrath J had recognised in Z (above), Mr Galbraith, on behalf of Mr Dalgety, emphasised the effect of a penalty in such a jurisdiction may well inflict punishment. That consequence was not to be ignored because it was a fundamental principle of any penalty regime that a penalty must be fair, reasonable and proportionate to the facts of the particular case. The imposition of penalty was not to be viewed as a formulaic exercise. Roberts v Committee of the Nursing Council [2012] NZHC 3354 at [51] was cited as authority for this proposition.

[65] The RIU, as one alternative, had submitted that the Committee’s approach in the O'Sullivan and Scott case should be applied. However, reference to the schedule of outcomes of presentation breaches over recent years showed that that decision diverged from the pattern. The respondent submitted it would be “wrong in principle to treat such an outlying case as the starting point for any other case”. The fact that it also involved Cobalt was no justification, as there was no objective basis for a proposition that Cobalt was better or worse than the run of prohibited substances.

[66] The RIU's alternative submission, which referred to the JCA Penalty Guide of $10,000 for a second offence, was said to have “at least … the benefit of referring to a benchmark which was set having regard to the common run of presentation breaches”. That common run would include cases, where if veterinary advice had been obtained, the breach would be likely not to have occurred. Failure to obtain veterinary advice at the time of the introduction of the Cobalt limit in May 2015 was alleged to be the substance of Mr Dalgety's breach. The JCA Penalty Guide should therefore be the starting point, the respondent submitted, subject to the necessary caveat that the individual facts of a particular case would ultimately be determinative.

[67] For that same reason the respondent submitted it was wrong in principle to arbitrarily apply the approach taken by the Committee in O'Sullivan and Scott to the assessment of mitigating or aggravating factors, as these factors could only be derived from, and be in respect to, the facts of the particular case before the tribunal. Accordingly, adopting a starting point of $10,000, the appropriate consideration for this Committee was whether there were aggravating or mitigating factors.

[68] The respondent identified a number of mitigating factors:

“The product was supplied and recommended by a respected veterinarian who was experienced in respect to the prohibited substance rules.

The labelling on the product confirmed the oral discussions and recommendation and specifically said that the product was formulated for horses in training, was licensed under the Animal Remedies Act, and would not return a positive.

While the RIU places reliance on the setting of a cap of 200 ug/L in May 2015 it would seem that neither HRNZ or the RIU communicated with licence holders as to the fact and justification for that setting, warned of the care which a licensed person should take with products containing Cobalt (of which there are many), or advised of the desirability of obtaining veterinary advice. The management of the integrity of a system should require more than simply leaving it to the participants.

The absence of any advisory communication inevitably meant that trainers' understandings would vary and likely be conditioned by the, at the time, overly dramatic media coverage emanating from Australia. Whatever might be thought in hindsight, it was unsurprising that Mr Dalgety' s consciousness at the time was of a problem arising from the deliberate injecting of horses with high Cobalt substances that for him was a far cry from his standard feeding practice based on the recommendation he had initially received from Mr McGrouther.”

[69] These were submitted to be mitigating factors that applied to the base line application of the JCA Guideline of $10,000, which should “materially reduce that starting point to a range of $5-6,000”.

[70] The respondent identified further factors that were relevant in relation to penalties:

“Co-operation and an early guilty plea by a charged party justifies a significant discount. The transcript of interview with Mr Dalgety and his staff on 10 January shows absolute openness and co-operation. That co-operation continued. In the run of cases that should justify a discount of around one-quarter.

The contribution, which Mr Dalgety has and continues to make to the industry and its public. The references make it clear that his contribution is outstanding. There is not a skerrick of evidence that this breach, which Mr Dalgety hugely regrets, has in fact been regarded by the general betting public as other than an unfortunate accident. Mr Dalgety's horses continue to be followed and backed because he produces good quality, well trained horses to the races, which are expertly driven, and he presents in his Trackside and other interviews as open and realistic about their capabilities.

The financial consequences are significant. Mr Dalgety, and other leading trainers, not only have the financial investment in their facilities but also are now major providers and investors in the horses, without which there would be no show. And it is their willingness and ability to continue to put their money at risk with little direct financial reward from training that keeps the industry going. The extent of Mr Dalgety' s financial commitment is significant and, as his statement says, the fine is going to be a further imposition, which will have to be borrowed to be met — along with the stakes refund.”

[71] The respondent emphasised that the question in assessing penalty was what was the conduct that fell short of the standard. Subject to the mitigating factors, there was only one matter of conduct or non-conduct, which was the alleged failure to obtain veterinary advice. The fact that that conduct had had a consequence more than 18 months later that affected a number of horses did not justify a linear multiplication of the penalty amount, which was appropriate to the single failure. Separate charges had to be brought because the individual horses were required to be disqualified. However, to simply multiply the appropriate penalty by the randomness of the number of horses that were affected or were swabbed was said to create a result that would almost inevitably be disproportionate to the causative failure. If the consequence was that more than one horse was affected, that consequence was not to be totally ignored. But, whether it was described as the totality principle or not, the ultimate penalty was to be driven by whatever the shortfall was in meeting the standard not in some formulaic or linear multiplication by a number of random later events.

[72] Mr Galbraith concluded his written submission by stating that ultimately the appropriate penalty involved an assessment of what is fair, reasonable and proportionate in the particular factual circumstances. In making that assessment the Committee’s focus should be on the conduct that was said to have fallen short of the standard. That was alleged to be the failure to obtain specific veterinary advice in or around May 2015. There were significant reasons why the Committee, not applying hindsight, could properly accept that it was understandable why separate veterinary advice was not sought at that time. However, if the Committee concluded that not doing so breached a standard, then all of the matters identified in the respondent’s penalty submissions were relevant to our consideration of penalty. At most, these were said to support a penalty in the region of $15,000.

Decision

[73] The JCA Penalty Guide provides a guide of: $8,000 fine for a first offence; and two years’ disqualification and a fine of up to $10,000 for a second offence.

[74] The parties agree that the principal purpose of the imposition of penalty in this case should be to uphold the standards of harness racing.

[75] Mr Lange submitted that fines in a range of $36000 to $85000 were appropriate in the circumstances of this case. When questioned by this Committee, he indicated “a fine towards the lower end of the spectrum” would in his opinion be the more appropriate and would hold the respondent to account. He emphasised the need for the imposition of a penalty that would result in trainers taking all reasonable steps to prevent a breach of the rule occurring. As a consequence, professional standards would be maintained for the benefit of the whole of the industry. The respondent has submitted that a fine in the region of $15,000 should be considered.

[76] We accept that in determining the respondent’s culpability it is appropriate to have regard to the industry standards and to determine how far below these standards his actions fall.

[77] We are satisfied that the respondent’s negligence lay in his continuing to give the McGrouther mixture to his team in circumstances where the label clearly indicated it contained Cobalt when he was aware, or at least should have been aware, that Cobalt was a prohibited substance with a specified threshold level. It apparently never occurred to Mr Dalgety to check with a veterinarian the wisdom, indeed the legality, of his continuing to use the McGrouther mixture; ie whether its use complied with the Rules.

[78] We were informed that the mixture was originally made by Mr Cliff McGrouther, whom we accept was a veterinarian of good repute, and who was well respected in racing circles. We are told that the mixture continued to be made by his daughter, who followed the original formula. We were not informed as to the qualifications of Dr McGrouther’s daughter and there is no evidence before us as to whether the current product is in fact the same as the product that was sold to Mr Dalgety by Dr McGrouther.

[79] When questioned by this Committee as to why he continued to use the mixture when we were informed no other trainers continued to do so, Mr Dalgety’s reply was that he had met with good results from using the mixture, so he saw no reason to alter his practice of many years standing. The mixture was replenished when necessary and the mixture in issue had been purchased relatively recently. It was not, for example, an old product that had been left lying around the stables.

[80] Mr Dalgety explained he only used the mixture in the summer when the Canterbury paddocks dried out and his horses needed a mineral supplement. The results of 22 tests over a three-year period were before us (from 5 January 2014 to 6 January 2017) and these showed four other elevated levels in the range of 63 to 82 ug/L but in the main the readings were under 15 and many were in single digits. There were thus no other readings that came close to the 200 ug/L threshold. Mr Dalgety believed the explanation for RUAPUKA RULER’s extremely high level was due to the fact he was a colt (and we note his evidence was to the effect that colts were given a higher dosage of the mixture).

[81] Harness Racing, like all forms of racing, must be conducted on a level playing field. People must be able to participate in and invest in racing (or to use the current expression, “the product”) with confidence. When horses are found to have raced with prohibited substances in their system this confidence is eroded. Naturally, this is only accentuated when the person charged is a trainer of high standing, such as Mr Dalgety.

[82] We accept the purpose of the penalty we impose is to ensure appropriate standards of conduct are maintained in the harness industry. It is inevitable that this penalty will punish Mr Dalgety. The majority judgment of the Court in Z (above) acknowledges that this is the reality of sanctions imposed by a professional body. One method of ensuring these standards are met, is deterrence. That is to say, a trainer who falls below the required standard (in this case presents a horse with a level above the Cobalt threshold) will be aware that the consequence will be one of a fine, suspension or disqualification. In this regard, the Informant has asked us to state that the time has come for sanctions of either suspension or disqualification to be imposed for breaches of this rule in circumstances where there has been a failure by trainers to obtain proper veterinary advice before using supplements. We prefer simply to alert licence holders that suspension or disqualification is a possible penalty. While a fine was the penalty the RIU submitted was appropriate in this case and, having had regard to the circumstances of the breaches of the rule, we have adopted that submission, we emphasise every case will depend on its particular circumstances. In this regard, however, the folly of continuing to use a product that is known to contain Cobalt, without taking the appropriate professional advice, we would expect would now be evident to all licence-holders.

[83] We also observe that the science around Cobalt is expanding and that it is now accepted that oral ingestion can lead to levels above the threshold and that administration by way of injection is not necessary.

[84] Mr Dalgety’s culpability is at the high end of mid range. He continued to use a product in circumstances where he was alerted to the fact it contained a substance that if found above a certain threshold, was prohibited. He was clearly misguided in his belief that the McGrouther mixture would not produce a positive reading because it contained Cobalt at a level that was below the threshold. To be balanced against this, however, is the fact that the product was originally supplied and recommended by a respected veterinarian who was experienced in the matter of the prohibited substance rules. Whether veterinarian or other professional advice at the time the Cobalt threshold was introduced would have alerted the respondent to the illegality of the mixture is not known. Mr Galbraith has submitted that it would not alerted Mr Dalgety because of the slow development in the understanding of the science relating to Cobalt. We are reluctant to speculate, as the simple fact is Mr Dalgety, for whatever reason, made no such inquiries.

[85] The JCA Penalty Guide provides that the starting point is two years’ disqualification and a fine of up to $10,000 for a second presentation offence. The conjunctive “and” suggests a fine is to be considered together with disqualification. Were this not so, it is difficult to believe the intention was to have a fine of $8,000 for a first offence and a fine of up to $10,000 for a second offence. The Penalty Guide is of little assistance to us in circumstances where the RIU has sought only a fine. We add that there is nothing before us that would lead us to adopt the ultimate sanction in this case.

[86] We are not persuaded that a starting point of $10,000 is appropriate in the circumstances of this case. We accept that the penalty in O’Sullivan and Scott is high when regard is had to the penalties in other presentation cases, although, significantly, those cases do not relate to the substance, Cobalt. The majority of these cases have resulted in penalties in the thousands of dollars but in single digits.

[87] The RIU submitted the culpability in O’Sullivan and Scott was broadly similar to that of the respondent. The risk of operating with shared troughs should have been evident in that case. The Informant is correct to state that the continued use, without veterinary advice after a threshold was introduced, of a supplement labelled as containing Cobalt, was a clear risk. We view Mr Dalgety’s culpability as perhaps a little lower than that in O’Sullivan and Scott in that the label did mislead him by stating that the product would not produce a positive swab. However, the historical nature of the labelling and the current awareness of the introduction of a threshold level for Cobalt should clearly have put him on his guard.

[88] We take a starting point of $14,000. This is 70% of the maximum penalty and reflects the fact that we believe the breach is at the high end of mid range. There is logic in the respondent’s submission that the one continuing act of negligence has led to the five positive swabs. Indeed, the Informant acknowledged this in their oral submissions. However, Mr Dalgety could equally count himself fortunate that more positives were not recorded, which would have been the case if he had continued in his ignorance to provide his racing team with the McGrouther mixture. We accept, of course, he ceased using the mixture the moment the Cobalt positives were made known to him by the RIU.

[89] Mr Dalgety has two previous breaches of r 1004. One in 2009 and the other in 2013. We accept the circumstances of each of those breaches were not similar to the charges before us, in that one involved contaminated feed and the other the treatment of the wrong horse. We thus attach some but only limited weight to these breaches.

[90] We also have regard to the fact that the respondent is a well-respected trainer of good character who has made a significant contribution to the Harness Racing industry. Mr Dalgety has admitted the breaches and has co-operated fully with the RIU inquiry. Having regard to the parties’ submissions, we refrain from attaching a specific figure to our discount for mitigating factors but rather look to these for assistance in providing a proportionate response to the particular breaches in this case.

[91] We agree with Mr Galbraith that a simple multiplication of our base figure by 5 is not appropriate. We have regard to cl 5.1 of the Rules of Practice and Procedure for the Judicial Committee and Appeals Tribunal. When we stand back, make an assessment of the extent to which the respondent’s actions fell below the industry standards, and factor in the need to hold him accountable to ensure compliance with the Rules and to protect the integrity of Harness Racing, we reach a figure of $32,000. To return to the decision in Roberts (see [64]), we see this as being the penalty that is fair, reasonable and proportionate in the circumstances of this case. Our final figure is a touch over a multiplication of 2.25 from our starting point, but that is the consequence of our assessment of the breaches in the particular factual circumstances of this case rather than being the foundation for our penalty.

[92] The RIU do not seek costs.

[93] A contribution by the respondent to the costs of the JCA is appropriate. An award in the sum of $2,000 is both just and reasonable.

Dated at Dunedin this 16th day of May 2017.

Geoff Hall, Chairman

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