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Non Raceday Decision - Stratford RC penalty decision 21 April 09


Non Raceday Inquiry : Stratford Racing Club - Decision as to penalty :

DECISION DATE:   21 April 2009



IN THE MATTER of the New Zealand Rules of Racing

BETWEEN BRYAN F McKENZIE of Hamilton, Racecourse Inspector




G Hall (Chairman)
J Phelan

HEARING DATE: 15 April 2009

APPEARING: Mr M Colson for the Informant
Mr P Brosnahan for the Defendants Blue, Caskey, Gilbert, & Hart
Mr B Needham in person

DECISION DATE:   21 April 2009

Decision as to penalty

[1] The defendants are to be sentenced for breaches of Rule 1001(1)(v)(i), which were found to have been established by this Judicial Committee (hereinafter “this Tribunal”) in its decision of 30 January 2009.  These breaches are particularised in para [113] of that decision.

[2] Counsel for the informant, Mr Colson, commenced his oral submissions as to penalty by stating that sentencing would be a difficult task for this Tribunal, as there were no relevant previous decisions that were of assistance.  He sought disqualification of all 5 defendants on the premise that their actions, as guardians of the SRC, had caused irreparable damage to the operation of that Club, and had disenfranchised a large number of the community who wished to participate in that Club.  He stated that the intent of the defendants was to perpetuate their own power base.  He emphasised disqualification would provide an opportunity for the SRC to re-establish itself free of the influence of the defendants.

[3] Mr Colson asked that the periods of disqualification reflect the varying degrees of culpability of the defendants.  He submitted that Mr Caskey and Dr Blue be disqualified for 5 years; Mr Hart, Mr Gilbert and Mr Needham for 3 years.

[4] Counsel for the defendants, Mr Brosnahan, described Mr Colson’s submissions as “absurd”.  He emphasised that the defendants were all voluntary workers who had put thousands of unpaid hours into the administration of the SRC over a number of years.  He detailed the improvements that had been made to the SRC in recent years and recorded the funds held in the bank as at 31 July of each year.  The financial positions in 2007 and 2008 were an improvement on those in 2002 and 2003; with funds in the bank at 31 July 2001 being very similar to those in 2008.  We observe these figures for 2007 and 2008 would be even more satisfactory had the SRC not had to bear the costs associated with litigation over the past 5 years.

[5] Each defendant produced glowing written testimonials attesting to their dedication to the SRC and the wider Stratford and Taranaki communities over the years.  References to matters other than the characters of the defendants have been disregarded by this Tribunal.  Mr Needham had 2 witnesses, Mr McLay and Mr Jeffares, the former mayor of Stratford, speak to his good character.  We were impressed by the sincerity and force of their advocacy.

[6] Despite counsel for the informant’s submission that disqualification is the appropriate penalty, we are concerned as to the wide impact of such action where, as Mr Colson has acknowledged to this Tribunal, a principal purpose of disqualification in this case is to ensure that the defendants are not involved in the administration of a racing club.

[7] Disqualification would have the effect that the defendants would be unable to attend race meetings or play a part in the administration of any racing club; they would be unable to race horses (all of the defendants have interests in horses); and, in the case of Dr Blue, he would be unable to hold an owner/trainer’s licence, and there would almost certainly be some financial detriment arising out of his inability, in his practice as a veterinarian, to treat racehorses.

[8] We have given consideration to whether the penalty we impose needs to emphasise general deterrence.  We are satisfied it does not.  We indicated at para [115] of our decision of 30 January, that we see this Tribunal’s judgment in this matter as having a significant educative function, in that other racing clubs and sporting organisations with similar constitutions will now be aware that blackballing prospective members can only be done for legitimate reasons.  The delivery of that decision should be a sufficient general deterrent.  We accept there is a need to frame a penalty that does justice to the impact of the defendants’ conduct, yet recognises these were men who, as we described at para [80] of our decision of 30 January, with respect to the black-balling charges, were “caught up in a web of their own self-confidence that what they were doing was right.”  Nonetheless, specific deterrence and the denunciation of the defendants’ actions are at the forefront of our determination of penalty.

[9] We give limited weight to the fact that the defendants’ actions, the subject of the charges found to be proved, were some 6 1/2 years ago.  Much of the delay has been the consequence of High Court action to determine, inter alia, the legality of New Zealand Thoroughbred Racing (NZTR) proceeding against the defendants under the Rules of Racing, which resulted ultimately in a ruling by the Court of Appeal.  Nevertheless, we accept there has been a lengthy period of time where the uncertainty of this matter has rested heavily upon the defendants.  We do not overlook the fact that witnesses who gave evidence before this Tribunal, and Mr Broughton, in particular, were also adversely affected by the delay in the final determination of the charges.

[10] Counsel for the informant placed before this Tribunal penalty submissions from Mr Kemp Broughton.  These graphically described the impact of the defendants’ actions upon Mr Broughton and the wider Concerned Owners and Trainers Group (COTG). Mr Broughton also addressed us briefly.  We are concerned that these submissions covered wider issues than those that were the subject of the charges before this Tribunal.  It is evident in the period leading up to 2003 that the COTG felt unable to continue to have horses trained at the Stratford racecourse due to the actions of the defendants, or at least some of the defendants, or those of employees of the SRC, and that this caused severe displeasure and inconvenience in that horses were not able to be trained locally and had to be trained elsewhere.  However, we do not believe that these consequences arose out of the breaches of the Rules that have been found to be proved by this Tribunal.  It is clear there has been a wider conflict with respect to the operation and management of the SRC than is encompassed by the charges that are before us.  We expressly refrain from taking these matters into consideration when determining penalty.  We have considered, however, the impact upon Mr Broughton, personally, of his being ruled by the SRC committee to be a non-financial member of the Club, with the consequence that his candidacy for President was voided.  We accept that these actions of the defendants have caused distress to Mr Broughton and we are heartened to read in his submission, that despite his unfortunate experience, he remains passionate about the racing industry.  We should add there has been nothing heard by this Tribunal that would place in question, in any way whatsoever, the integrity and credibility of Mr Broughton.

[11] Mr Colson, in his submissions, viewed Mr Caskey and Dr Blue as being equally culpable.  Mr Broughton in his written statement described Dr Blue as being the most culpable and that, without his involvement, “none of this proven disgraceful conduct would ever have occurred”.  We suspect Mr Broughton’s assessment may have some foundation.  Dr Blue’s failure to recognise an obvious conflict of interest where he himself was a Presidential candidate and to recuse himself when Mr Broughton’s membership status was put to the vote, is clearly an aggravating factor.  It can fairly be described as conduct unbecoming an experienced administrator and, to use the words of the Court of Appeal, Dr Blue’s failure to remove himself from the process was “appalling”. 

[12] Nonetheless, on looking at the totality of the evidence found to be established to the satisfaction of this Tribunal to the enhanced civil standard, we are not satisfied that we are justified in distinguishing between Mr Caskey and Dr Blue.  Mr Caskey was the President of the SRC at the relevant times, and there is no evidence before us, even having regard to his advanced years, to suggest that he was unduly influenced by Dr Blue.  Indeed, in giving evidence to this Tribunal, Mr Caskey was extremely forthright in his assessment of the direction in which the SRC would have been taken, had those persons nominated, succeeded in obtaining membership of the SRC, and in his analysis of the dire consequences for the Club should this have been allowed to occur. 

[13] At the conclusion of oral submissions from counsel, we requested that counsel and Mr Needham, who appeared on his own behalf, appear before us “in chambers”.  We did this because we wanted to express to the parties our tentative view that disqualification was an unduly harsh penalty in the circumstances of this case.  It was evident to this Tribunal that a principal purpose of disqualification was the ensuring that the defendants were no longer involved in the administration of the SRC.  We were of the view that this purpose could be achieved in a less intrusive fashion than by the imposition of disqualification, which we saw as having significant adverse flow-on consequences for voluntary workers, the majority of whom, we accept, had devoted a significant part of their adult life to unpaid work for the SRC.  In addition, the stigma attached to the penalty of disqualification is not to be under-estimated when we are dealing with men who are held in such high regard and who have worked tirelessly for the good of both the racing and the general community.

[14] We indicated to counsel that we believed that one means by which disqualification could be avoided was by this Tribunal requiring the defendants to undertake to have no involvement in any office-bearing or administrative position in the SRC or any thoroughbred racing club or organisation; and to resign immediately from any such position and not to put themselves forward for or to accept any such position.  Mr Brosnahan stated that he believed the defendants would agree to give such an undertaking, and Mr Needham indicated his willingness to do so.  Mr Colson accepted the purpose of our requiring an undertaking from the defendants, but remained of the view that disqualification was the appropriate penalty.

[15] We gave careful consideration to disqualifying Mr Caskey and Dr Blue only, as their involvement in the 3 breaches of the Rules is, in our assessment, significantly higher than that of Mr Hart, while Mr Gilbert and Mr Needham have been found to be in breach with respect to only 2 matters.  However, we realise disqualification would have significant adverse consequences for Dr Blue in his occupation as a rural veterinarian, and a severe impact upon Mr Caskey, now aged 84 and a man who has contributed much to the community over a lengthy period.  We also believe to disqualify some and to require only an undertaking from others would be to treat the defendants disproportionately and thus unfairly.  We have determined that it would create an unwarranted disparity in penalty were we to disqualify Mr Caskey and Dr Blue only.  We believe that their increased culpability can be reflected by requiring their undertaking be for a longer period than that required of the other 3 defendants.

[16] The defendants have each provided a written undertaking to this Tribunal: Dr Blue and Mr Caskey for a period of 3 years; Mr Hart, Mr Gilbert and Mr Needham for a period of 2 years.  We are satisfied that any failure by a defendant to abide by his undertaking can be the subject of a charge under the Rules of Racing.  In these circumstances, we refrain from the imposition of a penalty of disqualification with respect to any of the defendants.

[17] Counsel for the informant did not request that we consider the imposition of a financial penalty as an alternative to disqualification.  He informed us that the constitution of the SRC indemnifies members of the SRC committee were such a penalty to be imposed.  Thus any such penalty would impact upon the members of the SRC and not the defendants.

[18] The legal position, we were again informed, is similar with respect to the imposition of costs.  Despite Mr Brosnahan’s submission that this was a test case and, as a consequence, costs should lie as they fall, we believe their imposition is just and reasonable in order to reflect the outgoings of the informant and the Judicial Control Authority in the hearing of this matter, albeit in a lesser sum than that requested by Mr Colson.  He submitted that costs be apportioned: Mr Caskey and Dr Blue — $12,000 each; Mr Hart — $7,000; and Mr Gilbert and Mr Needham — $5,000 each.

[19] This Tribunal’s jurisdiction to award costs is to be found in R 1122(3), which confers a very broad discretion.  Mr Colson has asked that costs encompass both the Inglis Inquiry, which he submitted was part of NZTR’s investigation process, and also the hearing of the charges against the defendants.  We believe in the peculiar circumstances of this case that the award of costs should relate only to the hearing of the informations by this Tribunal.  Mr Colson has estimated this at between $60,000 and $80,000.  Mr Brosnahan has not disputed this figure.

[20] Mr Colson referred to caselaw where awards were in the order of 50% of outgoings.  The total costs requested by Mr Colson are $41,000.  We would normally agree that a sum close to or at this figure would be appropriate.  Again because the award will impact upon the members of the SRC, we temper the award.  As we have stated previously, we view Mr Caskey and Dr Blue as being the most culpable of the 5 defendants and we award costs in the sum of $7000 each.  Mr Hart, whom we have found to be in breach of the Rule on 3 occasions, is ordered to pay the sum of $5000; and Mr Needham and Mr Gilbert, who were found in breach on the black-balling charges only, $3000 each.  The total sum is thus $25,000.  This sum is to be apportioned $15,000 to NZTR and $10,000 to the Judicial Control Authority.

[21] The undertaking given by each of the defendants is attached as an appendix to this judgment.

(Please note for privacy reasons the undertakings referred to are not attached.)


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