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Non Raceday Inquiry RIU v K & L Rae and K Williams - Reserved Decision dated 26 November 2018 - Chair, Prof G Hall

Created on 27 November 2018

BEFORE A JUDICIAL COMMITTEE OF THE JUDICIAL CONTROL AUTHORITY

UNDER THE RACING ACT 2003

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

BETWEEN RACING INTEGRITY UNIT (RIU)

Informant

AND Ken & Lisa RAE and Krystal WILLIAMS

Licensed Class A Trainers

Respondents

INFORMATION NO. A8466

COMMITTEE: Prof G Hall (Chairman)

Mrs N Moffatt (Member)

APPEARING: Mr O Westerlund, Racing Investigator, for the RIU

Dr L Molloy, Lay Advocate, for the respondents

RESERVED DECISION OF JUDICIAL COMMITTEE

[1] The informant, the Racing Integrity Unit (RIU), has alleged: "On Thursday the 15th February 2018, at Riccarton, being the registered trainers for the time being in charge of the horse ABSOLUT EXCELENCIA the 8 year old gelding by 'Excellent Art - Jarada', which was brought to the Canterbury Jockey Club meeting for the purpose of engaging in, and did engage in Race 2, the Hughes Racing Stables Rating 85 1400m, conducted by the Canterbury Jockey Club, when the said horse was found to have present in its metabolism a Prohibited Substance, namely Methamphetamine which is in breach of New Zealand Thoroughbred Racing r 804(2) and is therefore subject to the penalty or penalties which may be imposed pursuant to rr 804(6) and 804(7) of the said Rules."

[2] Rule 804(2) provides:

When a horse which has been brought to a Racecourse or similar racing facility for the Purpose of engaging in a Race or trial to which the Third Appendix hereto applies is found by a Tribunal conducting an inquiry to have had administered to it or have had present in its metabolism a Prohibited Substance, as defined in Part A of Prohibited Substance Regulations, the Trainer and any other person who in the opinion of such Tribunal conducting such inquiry was in charge of such horse at any relevant time commits a breach of these Rules.

[3] Rule 804(6) states:

A Trainer of a horse commits a breach of these Rules if the Tribunal conducting an inquiry finds that the horse has had administered to it or has had present in its metabolism a Prohibited Substance as defined in Part B of Prohibited Substance Regulations.

[4] Rule 804(7) states:

A person who commits a breach of sub-Rule (2) or (3) or (4) or (5) or (6) of this Rule shall be liable to:

(a) be disqualified for a period not exceeding five years; and/or

(b) be suspended from holding or obtaining a Licence for a period not exceeding 12 months. If a Licence is renewed during a term of suspension, then the suspension shall continue to apply to the renewed Licence; and/or

(c) a fine not exceeding $25,000.

[5] Rule 804(1) is also relevant. It provides:

A horse which has been brought to a Racecourse or similar racing facility and which is found by a Tribunal conducting an inquiry to have had administered to it or have had present in its metabolism a Prohibited Substance shall be, in addition to any other penalty which may be imposed, disqualified for any Race or trial to which the Third Appendix hereto applies in which it has started on that day.

[6] We held a number of telephone conferences with respect to this matter. Dr Molloy confirmed on each occasion and at the hearing on 15 November that the breach of r 804(2) is admitted. We thus find the charge proved.

Agreed summary of facts

[7] The training partnership of Ken & Lisa Rae and Krystal Williams are the holders of a Class A Trainers Licence issued by New Zealand Thoroughbred Racing (NZTR).

[8] On Thursday 15 February 2018 the horse ABSOLUT EXCELENCIA was correctly entered and presented to race in Race 2, the Hughes Racing Stables Rating 85 1400 metres, at the Canterbury Jockey Club meeting at Riccarton Park Racecourse in Christchurch.

[9] ABSOLUT EXCELENCIA is an 8 year old bay gelding and is trained by the respondents.

[10] ABSOLUT EXCELENCIA finished first of the five horse field and won a stake of $6875.

[11] ABSOLUT EXCELENCIA underwent a random post-race urine swab. The training partnership does not contest the swabbing process. 

[12] All swab samples from the meeting were couriered to the New Zealand Racing Laboratory and were analysed for the presence of substances prohibited under the New Zealand Rules of Thoroughbred Racing.

[13] On 27 February 2018 a Certificate of Analysis signed by Mr Rob Howitt, the Official Racing Analyst, reported in writing that the samples from ABSOLUT EXCELENCIA had tested positive to the controlled drug Methamphetamine and Amphetamine.

[14] Amphetamine is a metabolite of Methamphetamine. It is a Class A controlled drug as defined in the Misuse of Drugs Act 1975.

[15] This is a Prohibited Substance within the meaning of the Rules and its presence in a race day sample is, prima facie, a breach of the Rules.

[16] The training partnership of Ken & Lisa Rae and Krystal Williams have two training facilities for their horses. The training stables are situated at Ruakaka by the Ruakaka Racecourse and at the Riccarton Raceway, Christchurch.

[17] On Monday 5 March 2018 Mr Rae was spoken to by a RIU Investigator at his stable in Ruakaka. He stated that there was no one from the training partnership present on the day the horse raced. He left the five horses in the care of his staff to be taken to the to the Canterbury Jockey Club race meeting. He could offer no explanation for the positive test result on the horse ABSOLUT EXCELENCIA.

[18] Also on Monday 5 March 2018 Mrs Williams was spoken to at the Ruakaka stable. She stated that she was not in Christchurch on 15 February 2018. She could offer no explanation for the positive test result on the horse ABSOLUT EXCELENCIA.

[19] The training partnership operates at the Riccarton Raceway from yards that are shared by other trainers which have little or no security. The feed area is a shed described as being relatively untidy and unlocked.

[20] In the Stable Block at the Riccarton Raceway in Christchurch a sample of ‘Alkaline-Electrolyte and Vitamin Additive’ was sent for testing.

[21] On 3 April 2018 the Official Racing Analyst reported in writing that the ‘Alkaline’ sample was analysed for the presence of methamphetamine and amphetamine and these substances were not detected.

[22] All persons employed by Mr Rae who had contact with the horse ABSOLUT EXCELENCIA during the period in which it tested positive have been tested for Methamphetamine, via the hair testing method, and have all come back clear.

[23] Mr Rae has been involved in the Thoroughbred Racing Industry for 35 years. He has been in a training partnership with his wife, Lisa, for 15 years and his daughter, Krystal Williams, for 2 years.

[24] Ken & Lisa Rae and Krystal Williams have not previously appeared on a breach of the Rules.

[25] An order is sought for the horse ABSOLUT EXCELENCIA to be disqualified from the race and the stakes money to be repaid.

Informant’s penalty Submissions

[26] The informant identified three principles of sentencing that had relevance in this matter:

Penalties are designed to punish the offender for his/her wrong doing. They are not meant to be retributive in the sense the punishment is disproportionate to the offence but the offender must be met with a punishment.

In a racing context it is extremely important that a penalty has the effect of deterring others from committing similar offences.

A penalty should also reflect the disapproval of the JCA for the type of offending in question.

[27] The informant believed that a case from Australia and three from New Zealand would assist the Committee.

[28] In Racing NSW v C Waller (9.12.16) a Thoroughbred horse tested positive to Methyl amphetamine, the cause of which was not confirmed. The penalty imposed was a fine of $30,000. On appeal the penalty was reduced to a fine of $5,000.

[29] There were two New Zealand Methamphetamine/Amphetamine Positives (Greyhound – New Zealand). In RIU v D Schofield (29.04.18) a greyhound tested positive to methamphetamine. The penalty imposed was a disqualification for 2 years, costs to the RIU, and the greyhound was disqualified. In RIU v D D Schofield (12.12.11) a greyhound tested positive to Amphetamine the cause of which was not confirmed. The penalty imposed was a fine of $3,000 plus JCA costs and the greyhound was disqualified.

[30] In RIU v T Newton (2.10.14) a thoroughbred horse tested positive to methamphetamine. The trainer admitted previously using methamphetamine. The penalty imposed was a disqualification for 3 years, costs to the RIU and the JCA, and the horse was disqualified.

[31] The respondents have admitted the breach and have been fully co-operative throughout the process.

[32] The Respondents have been involved in the racing industry as public trainers for a period of 52 years collectively: Mr K Rae for 35 years; Mrs L Rae for 15 years; and Mrs K Williams for 2 years.

[33] The respondents have a blemish free record of offending against or breaching the Rules of Racing and are highly regarded by their peers as honest and hardworking and are a credit to the industry. Over the years the respondents have been responsible for training and caring for some exceptional thoroughbreds.

[34] Neither the respondents nor their employees are suspected of using or dealing with methamphetamine in their daily life and there is no evidence to suggest otherwise. All staff tested for methamphetamine returned a negative result (clear).

[35] Legal precedent provides that trainers have an absolute liability for presenting their horses free of Prohibited Substances.

[36] None of the respondents were present at the Canterbury Jockey Club meeting on 15 February 2018 but relied on employees to carry out duties diligently on their behalf. Therefore, supervision or lack thereof is a factor.

[37] The security of the premises/yards used by the respondents at the Riccarton Park complex is non-existent. Access to the premises can easily be accomplished by any person and there are no monitored security arrangements provided.

[38] The RIU believe that this breach can be dealt with by way of a monetary penalty.

[39] The RIU are seeking the costs of $1250.56 for having the B sample tested in Australia and an order for the disqualification of the horse ABSOLUT EXCELENCIA from race 2 at the Canterbury Jockey Club meeting on 15 February 2018 pursuant to r 804(1).

Respondent’s penalty submissions

[40] The respondents accept the summary of facts and admit to a breach of r 804(2), but only because of the absolute liability of that rule. 

[41] They train as a partnership using two bases, Ruakaka and Christchurch. In February 2018 the horse ABSOLUT EXCELENCIA was stabled at Riccarton in unsecured public stables in what is known as the "visitors barn", which is under the control of, and is the responsibility of, the Canterbury Jockey Club.

[42] ABSOLUT EXCELENCIA won a very small 5 horse midweek race on 15 February. The horse subsequently returned a positive to methamphetamine and amphetamine at a level of 5 & 8 nanograms per ml, or 5 parts per 100 million.

[43] The RIU has conducted all manner of sampling and testing of the Rae partnership, their staff, feed supplements, and found absolutely no evidence of any use of amphetamines (aka P) within that stable. Subsequently the RIU commissioned the NZ Drug Detection Agency (NZDDA) to conduct two raids on Riccarton racing personnel at morning trackwork.

[44] During those raids two persons who were known to be using the same public stables as the Rae partnership tested "non-negative" to methamphetamine.

[45] The level of contamination with respect to ABSOLUT EXCELENCIA is incredibly low. To give this some context the NZDDA threshold for workplace testing is 300 ng; 60 times this positive, see exhibit “B”, and the formal laboratory threshold for human testing is 150 ng.

[46] Dr Molloy said it was worth noting that had the NZDDA tested the handler who led ABSOLUT EXCELENCIA into the birdcage for the race in question, that handler could have had nearly 60 times as much methamphetamine in their system, but still tested negative.

[47] The respondent’s position was that the RIU should exercise their discretion and simply seek disqualification of ABSOLUT EXCELENCIA, and the Rae partnership should never have been charged given the barely recognisable level of contamination.

[48] Dr Molloy stated there were numerous precedents for this option, the most recent of which being the three horses who tested positive for P at the New Plymouth races on 26 November 2017, they being KITTYKITTYBANGBANG, MALTESE RUBY and FIRST NEPHEW.

[49] Dr Molloy stated that the NZ Trainers Association has been in dialogue with the RIU and NZTR with a view to introducing a new third rule that will, in cases where the level of methamphetamine detected is below 50 ng, warrant immediate disqualification of the horse, but, in the absence of evidence to the contrary, presume such levels are due to passive or environmental contamination and the trainer will face no charges.

[50] By way of mitigation, Dr Molloy stated the Rae partnership has 52 years of combined training experience and has been blemish free during those 52 years. The partnership has been totally cooperative and entered a guilty plea at the first opportunity.

[51] The Raes provided information to the Committee as to their annual income for the past two years.

[52] With reference to comparable cases, Dr Molloy said the respondents could find no similarities with the Schofield case other than the type of drug involved, given that “the level of methamphetamine involved was so much greater in that case.”

[53] The Waller case, he believed, was “vaguely similar”, the penalty on appeal there was $5,000. However, Dr Molloy emphasised that “Waller had 6 members of staff test positive to a variety of banned recreational drugs, and furthermore Waller himself has 'form', with three previous positives.”

[54] Dr Molloy submitted there was no "intent" here and thus there should be no penalty other than disqualifying the horse. These rules are written for offenders with intent and the RIU accepts there was none.

[55] Dr Molloy emphasised that the Rae partnership could not be considered negligent in any way because the public boxes that they were using were “entirely the responsibility of the host club, the CJC, and they should at least have had surveillance cameras in place, and should be encouraged to install the same with urgency.”

[56] The respondents noted that the RIU did not specify a monetary penalty and added that the RIU seeks none other than that of processing the B sample, and that “that $1250 cost is where this should rest.”

[57] Dr Molloy submitted and then emphasised in his oral submission that “the Raes have suffered here, they're the essence of what's described as 'racing battlers', their reputations have been diminished and it's all for a level of contamination that is of absolutely no consequence in the performance enhancing context.”

[58] The respondents concluded their penalty submission in this manner: “We urge the JCA to make a bold stand here, dismiss the charges but disqualify the horse, and urge the RIU to exercise more discretion in future, whilst encouraging NZTR to introduce the new option described for these very low-level contaminations.”

[59] In his oral submission Dr Molloy drew the Committee’s attention to the NZTR “Advisement to Trainers” issued on 2 November 2018 which warned trainers of the possibility that race day boxes could be contaminated with human medications due to persons urinating in the boxes while on medication. The notice referred to a recent New Zealand case, and that Dr Grierson had confirmed that there had been cases overseas where this had occurred. Dr Molloy said this needed to be considered in the context that two persons not employed by the respondent but who were known to be using the same public stables as the Rae partnership had tested “non-negative” to methamphetamine.

[60] Dr Molloy said that in light of the discovery in Ferguson and the suspicion surrounding the fact people had been sleeping near where the three horses had been stabled on the day at New Plymouth, it was unfortunate that the RIU had not taken sawdust samples from the box ABSOLUT EXCELENCIA was in.

[61] Dr Molloy referred to his written submission that the NZ Trainers Association was in dialogue with the RIU and NZTR with a view to introducing a new third rule to cover cases where the level of methamphetamine detected is below 50 ng. He said this dialogue was continuing and a number of prominent and well-respected trainers were involved. He acknowledged there was a toxicology issue in that often a laboratory would only state whether there was a positive or negative result without indicating a level. He believed P was the scourge of the industry and many trainers did not have an understanding of passive or environmental contamination.

Decision

[62] The imposition of penalty in this case is not without difficulty. Dr Molloy is adamant that the fact the respondents have been charged demonstrates inconsistency on the part of the RIU. He believes the fact of disqualification and the associated costs for Mr K Rae is a sufficient penalty. He refers to “the New Plymouth cases” in support of this submission. This is a reference to informations laid in respect of the horses KITTYKITTYBANGBANG, MALTESE RUBY and FIRST NEPHEW. We note the informations have been laid in these cases seeking only the disqualification of the three horses that returned positive swabs to methamphetamine. The matters are yet to be heard by a Judicial Committee.

[63] When questioned as to the RIU’s view as to the appropriate penalty, Mr Westerlund was most reluctant to nominate a figure but when pressed said a fine clearly lower than that imposed in Waller. He believed some penalty was appropriate to mark the negligence on the part of the respondents. When further questioned as to this, he said it was the absence of security measures at the Rae stables.

[64] Waller is indeed a helpful case. The facts briefly were that the horse BETCHA THINKING returned a level of 4 to 5 mcg/ litre of methylamphetamine (methamphetamine) in a post-race urine sample taken following the colt being placed second in Race 2 at Canterbury Park on 5 October 2016. Mr Waller admitted the breach.

[65] At first instance the NSW Stewards fined Mr Waller the sum of $30,000. Matters emphasised in reaching this figure were: this was Mr Waller’s third offence under the rule; the failure of Mr Waller’s security cameras to store the relevant footage; six staff members of Chris Waller Racing tested positive to other banned substances, which was indicative of inadequate stable practices; Mr Waller’s guilty plea; and Mr Waller’s co-operation with the Stewards’ investigation and inquiry. Whilst accepting Mr Waller had now introduced random workplace testing for his staff and introduced mandatory hand washing prior to staff commencing work each day, the Stewards advised Mr Waller that these practices should have been introduced as a proactive measure rather than as a reactive measure subsequent to the notification of the irregularity.

[66] On appeal the fine was reduced to $5,000. The Racing NSW Appeal Panel noted the low level of methamphetamine and concluded the likely source was a member of Mr Waller’s staff by inadvertent means. There was no suggestion of administration and the level was such that it was not likely it would have affected performance.

[67] Aggravating factors identified in Waller were: the nature of the drug and, in that regard the Panel made reference to its notoriety in the community and its harming social consequences; the fact it had no role in the management and treatment of horses; that 17 out of a staff of 100 tested positive to illicit substances; and that Waller had previous breaches of the rule. (It is not clear to us where this figure of 17 comes from other than to note the first instance decision states the 17 members of the Waller staff that could have had contact with the horse were tested: 30 samples were taken over a number of days and, as noted previously, six were found to contain other banned substances, with three of these donors having direct contact with the horse during the relevant period.)

[68] Significantly, in view of the decision that we have reached, counsel for Mr Waller identified cases where no penalty had been imposed. These were Waterhouse and Laurie. The circumstances of these cases were not made known to us but counsel for Mr Waller described them as cases involving similar breaches of the rule.

[69] The Appeals Panel emphasised the breach of the rule was “an objectively serious offence” and that it was “paramount to the integrity and image of racing, to its long term viability as an industry that it be drug free.” We agree with this statement.

[70] The Panel then immediately noted the small amount of prohibited substance detected in the horse’s system and that the expert evidence on the balance of probabilities was that this would not have affected the horse’s performance. They also noted Mr Waller had increased surveillance and the ability of his workers to wash their hands before handling horses.

[71] In reducing the fine to $5,000, the Panel stated in their reasons for penalty (at [25]) that the offending, which involved an objectively serious breach of the rules, was unfortunate as Mr Waller ran a stable to high standards generally. The breach involved no intent and no apparent carelessness. When looking at sentencing principles, the Panel identified the relevant one to be general deterrence. This had to be factored into the penalty, as did Mr Waller’s previous breaches. Specific deterrence was not relevant as the stable standards were high.

[72] To state the obvious, the financial circumstances of the Waller stable differ markedly from those of the respondents. Otherwise, the facts of the two cases are remarkably similar other than the fact two aggravating factors are absent here, as there is no evidence of methamphetamine or illicit drug use by any of the Rae’s staff, and no prior breach. The Rae’s record is unblemished, and this is significant in the context that Mr K Rae, in particular, has had a lifetime of involvement in the industry.

[73] A key aspect of this case is the extremely low level of methamphetamine. If methamphetamine had been deliberately given, to enhance performance, it might be expected that the level detected would be significantly higher. We do not place any weight on the amphetamine level as we understand its presence is simply consequential upon the finding of methamphetamine. As in the Waller case, there is no suggestion of administration and the level is such that it is not likely it would have affected the performance of ABSOLUT EXCELENCIA. These are significant factors when assessing the gravity of the breach and the culpability of the respondents.

[74] When further questioned as to whether the Raes would have been charged today with the now greater awareness of the possibility of passive or environmental contamination resulting in a positive swab, Mr Westerlund acknowledged that it was possible that they would not have been charged. He said no thought had been given to contamination at the time as there was not the knowledge of it then.

[75] The RIU believe a small financial penalty is appropriate. The respondents say any further penalty is not required. Costs of the B sample and loss of stake money (trainer’s percentage and part-owner) amount to some $2,500.

[76] Personal mitigating factors are that the respondents have 52 years of combined training experience and, as we have noted, have been blemish-free in that time. The Rae partnership has co-operated with the RIU and has admitted the breach at the first opportunity. These factors merit some weight.

[77] Were we able to see clear signs of negligence we would impose a penalty to denounce the respondents’ actions and to deter and hold them accountable.

[78] The level of security, as explained to us, is not inconsistent with the majority of stables and racecourses throughout the country. The Rae’s stable is leased from the Canterbury JC. We understand this is on a six-monthly basis. Whether the Raes would be able to erect surveillance equipment was never canvassed fully by either party before us. Mr Westerlund stated that one trainer, Ms Terri Rae, leased boxes long term and they had surveillance equipment, so perhaps it is possible. Equally, it could be thought appropriate for the Club to provide this, especially when horses are being housed nearby immediately prior to and on raceday. Dr Molloy’s submission is that the stables are owned by the CJC and the provision of security should be a matter for the Jockey Club. We do not pursue this issue further in this decision but the possibility of passive contamination is a real one and is one that racing clubs throughout this country have to address.

[79] Ultimately, in determining penalty, we have regard to the low level of the drug detected, the absence of any clear evidence of negligence on the part of the respondents, and the acknowledged practice of the RIU of not charging trainers where there is no evidence of negligence by the trainers (“the New Plymouth cases”) or where there is evidence of negligence on the part of a third party (eg Ferguson, where it was another trainer who had urinated on previous occasions in the box in which the respondent’s horses had been housed on raceday) and Walkinshaw (where it was the feed manufacturer’s error and the mix sold did not match the ingredients described on the packaging).

[80] We believe in the unusual circumstances of this case it is appropriate that we find the charge proved and impose no penalty. We accept that the respondents have suffered the financial impost as described above, and that this is a sufficient penalty. In so doing, we emphasise we do not overlook the need to uphold the integrity of racing. But we do not believe our imposing a further small financial penalty, perhaps in the interests of general deterrence, as sought by the RIU, advances this cause. This charge has impacted heavily upon Mr K Rae, in particular, in that his integrity has been challenged, indeed has been under the microscope for some time. We would add unfairly, as the circumstances have demonstrated.

[81] Mr Rae, to his credit, removed his horses from the stables he was using at Riccarton as soon as he found out about the positive sample. The Raes now transport their horses from Prebbleton before racing. He has a temporary stable there and, we are told, he is still not using the public boxes at Riccarton. This, of course, is an extra cost for the Raes. Dr Molloy has indicated that the cost of security lighting is not prohibitive (perhaps upwards of $20,000) and this is a matter that the respondents may wish to pursue with the CJC should they intend to house their horses in the barn in the future.

[82] We wish to make one final point. It is not our intention that this case be viewed as being a precedent for the imposition of no penalty where the circumstances surrounding a breach of the rule are not evident. This, in itself, we accept, is not an unusual occurrence. The circumstances of this case are, however. The level of methamphetamine is extremely low and is unlikely to have affected the performance of ABSOLUT EXCELENCIA, and the involvement of third parties is not only unable to be excluded, but is a distinct possibility.

Disqualification

[83] At the hearing we indicated that ABSOLUT EXCELENCIA would be disqualified. We formally order the disqualification of ABSOLUT EXCELENCIA from race 2 at the Canterbury Jockey Club meeting on 15 February 2018 pursuant to r 804(1). We understand that no payments have been made to the connections of the horses.

[84] Amended placings are:

1st 2 VOLCANO
2ND 5 WHISPERING
3RD 3 TOMM JONES
4TH 4 BONAPARTE

Costs

[85] The RIU do not seek costs other than the cost of the testing of the B sample. There is an award in favour of the RIU of $1250.56. There is no award to the JCA.

Dated at Dunedin this 26th day of November 2018.

Geoff Hall, Chairman

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