Cessnock v Greyhound - [2006] NSWSC 759

No judgment structure available for this case.

CITATION: CESSNOCK V GREYHOUND [2006] NSWSC 759

HEARING DATE(S): 28-30 June; 7 July; 26 July 2006

JUDGMENT DATE :
1 August 2006

JUDGMENT OF: Hulme J at 1

DECISION: Stand over for a short period for the parties to formulate such orders

PARTIES: CESSNOCK & DISTRICT AGRICULTURE ASSOCIATION
GREYHOUND RACING NEW SOUTH WALES

FILE NUMBER(S): SC 2006/30069

COUNSEL: P: M Speakman SC; K Oliver
D: S Gageler SC; K Williams

SOLICITORS: P: Smyth Turner Wall
D: Blake Dawson Waldron

- 41 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HULME J
Tuesday, 1 August 2006

30069/06

CESSNOCK AND DISTRICT AGRICULTURE ASSOCIATION v GREYHOUND RACING NEW SOUTH WALES

JUDGMENT

1 HIS HONOUR: The Defendant, referred to in the Greyhound Racing New South Wales Act as GRNSW, is a body incorporated by Section 6 of that Act. Its functions include the registration of Greyhound Racing Clubs, the initiation development and implementation of policies considered conducive to the promotion and welfare of the Greyhound Racing Industry, the distribution of money received as a result of commercial arrangements required by the Totalizator Act 1997 and the allocation of dates on which greyhound races may be conducted. Local Rule 135E of the Greyhound and Harness Racing Regulatory Authority Greyhound Racing Rules, made under the Greyhound and Harness Racing Administration Act provides that “A club must not conduct a race meeting unless the meeting has been approved by GRNSW”.

2 The Plaintiff is the owner of the showground at Cessnock where, for many years, it has conducted greyhound races. For at least the last several years the vast bulk of the Plaintiff’s annual revenue has consisted of moneys distributed by the Defendant from those received as a result of commercial arrangements entered into pursuant to the Totalizator Act.

3 Following a number of decisions bearing on the topic, on 15 May last, the Defendant resolved to allocate race meetings during 2006-07 in a way which denied any to the Plaintiff. These reasons arise from challenges, on a variety of grounds, including denial of procedural fairness, denial of natural justice, and apprehended bias, that the Plaintiff has made to those decisions.

4 However, before turning to the issues that arise or the evidence bearing directly on them, it is desirable to provide some outline of the industry. Documents providing details in this regard are voluminous but the following is sufficient for present purposes.

5 Clubs holding greyhound races fall into 2 categories. One consists of what are called “TAB” clubs and for these TAB Limited provides both on course and off course wagering, the latter through all outlets, retail, phone and internet. Non-TAB clubs are not provided by TAB with off-course wagering totalizator services and the betting services available will usually consist of only local bookmaking services available at the track. TAB Clubs may also hold races at which TAB totalizator services are not available although, as has been said, GRNSW has the ultimate responsibility for deciding when races may be held.

6 Pursuant to contractual arrangements entered into by the Defendant, TAB Limited or an associated company (both of which may conveniently be referred to here as “TAB Limited”) and organisations involved in horse racing of various types, the Defendant receives a percentage of the revenue derived by TAB Limited. The Defendant in turn distributes moneys so received in accordance with formulae upon which it decides. These financial arrangements often result in the Defendant receiving less money in consequence of a particular race meeting than that meeting costs it.

7 Under what is called the Consolidated Racing Distribution Agreement (the “RDA”), TAB Limited agreed to provide off and on-course wagering services for 593 races, including 104 metropolitan races, 238 provincial races and 251 country races. Later there was some variation to the last 2 figures although the total of them remained the same. In the financial year 2005-06 TAB Limited in fact provided its services at 726 races. Other provisions of that agreement provided for the submission to TAB Limited of a draft racing program no later than, in effect, 31 January, and a final program being agreed by the end of February, of each year. In fact, TAB granted some leniency in respect of this timetable during the events with which I am concerned.

8 Within the greyhound racing industry there are a number of other organisations. These appear to be at least in part groupings of clubs although the evidence did not indicate the extent to which the clubs formed the organisations or vice versa. For present purposes it does not matter.

9 One of these organisations is the Greyhound Breeders Owners and Trainers Association Limited (often referred to as “GBOTA”). This organisation operates a number of greyhound racing venues including one at Maitland. The Chairman of the GBOTA is a Mr Mangafas.

10 A second organisation is the National Coursing Association (often referred to as “NCA”. The NCA also operates at Wentworth Park in Sydney, as does the GBOTA, at Tamworth, and at “The Gardens” which is located at Newcastle. It also operates at other places. The President of the NCA is a Mr R Zammit. He is also treasurer of The Gardens.

11 So far as is presently relevant, s8 of the Greyhound Racing Act provides:-

(1) GRNSW consists of the following members:

(a) one person nominated by The New South Wales Greyhound Breeders Owners and Trainers’ Association Ltd,

(b) one person nominated by the New South Wales National Coursing Association Limited,

(c) two persons nominated by greyhound racing clubs (other than those referred to in paragraphs (a) and (b)), with one of those nominees being nominated as a representative of TAB clubs and the other being nominated as a representative of country racing.

(d) one person nominated by participants in the greyhound racing industry (being owners, trainers, bookmakers or other persons involved with greyhound racing),

(e) one person selected by the nominated members of GRNSW, who is to be the Chairperson

…

(6) The following persons are not eligible to be nominated under subsection (1)(d) as a member of GRNSW:

(a) a person who is, or has been at any time in the year immediately preceding the time of nominations, a member of the committee of a greyhound racing club,

(b) an employee of a greyhound racing club.

(8) For the purposes of this section, a TAB club is a greyhound racing club on a majority of whose race meetings TAB Limited conducts an off-course totalizator (within the meaning of the Totalizator Act 1997).

12 At all relevant times Mr Mangafas was the person nominated by the GBOTA, Mr Zimmer the person nominated by the NCA and a Mr Jack Primmer, the person nominated by the TAB Clubs. Mr Primmer is also the President of the Dapto Greyhound Racing Club. At all relevant times the Chairman has been Professor Percy Allan.

13 Since 10 February 2006, the nominee of country racing has been Ms Debbie Prest, who is also the secretary of the Young and District Greyhound Racing Club and the President of the Greyhound Racing Association. Young is a non-TAB club. The nominee of non-club participants in the Greyhound Racing Industry has been Mr Peter Dutton, a breeder. There is no suggestion he has any interest in one of the Hunter region or South Coast clubs. Prior to 10 February 2006, the predecessors of these persons were Messrs Bruce Fletcher and John Tracey.

14 It is also relevant to the issues that arise to record that in the Hunter region there are only 3 greyhound racing venues, “The Gardens”, one at Maitland and that run by the Plaintiff at Cessnock. “The Gardens” would seem to have been established only in 2005. Much of the finance for its construction would seem to have been borrowed. In connection with the establishment of The Gardens, in about July 2004 the Defendant entered into an agreement with the NCA whereunder the Defendant agreed to lend to the NCA up to $2.1M, at the rate of $300,000 per year to fund the servicing of a financing facility with the Commonwealth Bank should The Garden’s own funds be insufficient. It was a term of the agreement that:-

· by taking the 52 TAB rate dates from the Singleton Club and reallocating them to the Borrower; and

· allocating an additional 36 TAB race dates to the Borrower.

as soon as reasonably practicable in the circumstances.

15 In a media announcement also made in July 2004, the Chief Executive of the Defendant said that the Defendant expected the NCA to properly project manage the development so the NCA never had to fall back on the facility that had been provided by the Defendant to give comfort to the Bank.

16 In, or perhaps prior to, June 2005 the moneys received by the Defendant pursuant to the Totalizator Act (hereinafter referred to as “TAB moneys” or “moneys received from TAB”) were in decline. The Defendant considered that it would need to reduce its costs. It took steps to effect such a reduction and otherwise to deal with the downturn in its income it expected to occur during the 2005-06 financial year.

17 In a meeting of its Board held on 4 January 2006 further steps were taken in respect of 2005-06. On that occasion it also approved the commencement of consultation with the TAB clubs in respect of the TAB race dates program for 2006/2007 based on three scenarios:-

Maintaining the number of race meetings in a year at the same number, 726 as had been planned for 2005/06.

Reducing the number to 593, this being the minimum number provided for in the RDA agreement to which I have referred.

A number between 593 and 726 that was regarded as affordable.

18 In that last paragraph, I have referred to the Defendant’s “Board”. That is the expression commonly used in the documents although that body is co-extensive with the persons who, pursuant to s8 of the Greyhound Racing Act, are the Defendant’s members. It will be convenient to continue the use of the term.

19 In a media release of 6 January 2006 the Defendant, after detailing policies it was implementing to save additional costs in the 2005/06 financial year, observed:-

“These actions are step 1 only, resolving the funding shortfall in 2005/06. They do not address the looming funding crisis for 2006/07 and beyond. The incoming board of GRNSW will need to give urgent consideration to reducing the number of race meetings across the State together with other measures to protect the per race prize money levels currently paid.”

20 It seems likely that the media release, or at least the substance of it was communicated to all clubs. They were all written to on 11 January.

21 On 17 January 2006 the Defendant sent to all of the TAB clubs a moderately detailed memorandum preparatory to a meeting which had been arranged for 24 January. In that memorandum it was said that the Defendant might well be looking for savings of the order of $3 - 3.5M in the year and the three options were canvassed. It was said, inter alia, that to maintain the number of meeting at the higher figure, reductions in administration allowances and prize money would need to be considered and figures were given for the cost to the Defendant of various types of race meetings. The memorandum concluded:-

“As options 2 and 3 are both premised on a reduction in the total number of TAB meetings conducted, the issues that need to be considered are similar and include:-

· What is the best approach to accommodating a reduced program given the current spread of TAB meetings.

· What impact will a reduced TAB program have on club operations and the financial viability of individual clubs.

· How would this approach affect participation.”

22 A covering email sent at the same time concluded:-

NOT

23 In the days following the memorandum of 17 January, a number of clubs made suggestions and these were the subject of a further memorandum dated 23 January 2006 provided by the Defendant to clubs, either prior to or at the meeting of 24 January.

24 No minutes of the meeting of 24 January were in evidence but an internal memorandum of the Defendant presented to its Board meeting of 31 January records that:-

“Whilst opinion varied, the general view of the Clubs was:-

· Maintain the current level of race dates in FY/07.

· Clubs could not sustain further reductions in administrative funding in FY/07.

· The funding shortfall would need to be met by various reductions in per race prize money.

· No club was in a position to lose more than 1 to 3 meetings without adversely affecting their trading performance and ongoing viability.

Richmond (one of the clubs) and the NCA argued that there needed to be a reduction in the number of meetings conducted and this could only be achieved by not allocating TAB race dates to all existing TAB clubs in FY/07.”

25 On 25 January a further suggestion involving a reduction in the number of meetings by only 52 and effecting savings in other ways was advanced on behalf of the Nowra club and sent to the Defendant and the Plaintiff (and possibly other clubs). There seems to have been no further consultation by the Defendant with clubs between 24 January and the Board meeting of 20 February.

26 Following the meeting of 24 January, the management of the Defendant conducted a survey of dog owners and trainers. In the same memorandum it is recorded that “overall 70% of (these) Respondents indicated a preference for reducing the number of TAB meetings conducted instead of reducing the average prize money paid per race”.

27 The memorandum also recorded:-

“With specific regard to the TAB calendar, it is the view of management that the number of meetings conducted at TAB level should be reduced by 104. This is based on participant feedback that clearly indicated a preference for reducing racing opportunities over reducing the average per race prize money. Per race price money reductions will have a dramatic affect on the viability, sustainability and image of the NSW Greyhound Racing Industry. In short, we can no longer afford to conduct the number of meetings currently scheduled whilst operating under our current funding model.”

28 The memorandum made it clear that this reduction in meetings would not achieve all of the savings thought to be necessary and other steps would also be needed, including possibly a reduction in the number of non-TAB meetings and their funding. The memorandum recommended that the Board:-

“1. Receive the report.

2. Direct management to continue consultations with the TAB clubs on the basis that the TAB race dates calendar will be reduced by 104 meetings in FY/07.”

29 The Minutes of the Board meeting of 31 January 2006 do not contain anything of significance beyond that the Board noted the report. There is nothing in the Minutes to indicate the Board then accepted the second of the recommendations just quoted.

30 The Minutes of the next Board meeting of 13 February 2006 do indicate a discussion by the Board of the positives and negatives of reducing the number of TAB meetings programmed in 2006/07 and record a decision to hold a special Board meeting on 20 February to decide whether to reduce the total number of meetings. Papers prepared for the meeting contained the same two recommendations as had been advanced for the meeting of 31 January. They also suggest the Board investigate the “feasibility of progressing several club mergers” as a means of reducing expenditure. Again the Board noted the report but did not accept the second recommendation at that time.

31 At the meeting on 20 February the Board resolved:-

“1. Direct management to continue consultations with the TAB clubs on the basis that the TAB race dates calendar will be reduced by 104 meetings in FY/07.

2. Issue a media release indicating that the FY/07 TAB race dates calendar will be reduced by 104 meetings at a saving of $1.6M as the initial step in addressing the funding crisis and the need to achieve savings of $3.3M in FY/07.”

32 Because the precise effect of these resolutions is an issue in the proceedings, it is appropriate to note that the Board Papers for the meeting of 20 February recommended “that the Board:

1. Note and Endorse the projected FY07 funding shortfall of $3.5M

2. Direct Management to continue consultations with the TAB Clubs on the basis that the TAB Race Dates Calendar will be reduced by 104 meetings in FY07.”

33 On 21 February 2006 another memorandum was sent to TAB club secretaries preparatory to a meeting scheduled for 28 February. It is likely that notice of the meeting was provided in an email of 15 February 2006, although that document is not in evidence. The 21 February Memorandum recorded that the Board of the Defendant had resolved to reduce the TAB race dates calendar by 104 meetings in FY/07 and also included the following:-

“The Board of GRNSW is now seeking input as to how the 104 meeting reduction should be implemented.

Excluding metropolitan meetings, there are currently 12 TAB meetings conducted a week and 12 TAB Clubs.

Broadly, options to achieve the 104 meeting reduction include:-

· Reducing the race dates of all clubs by an equal number. This would equate to a reduction of between 8 and 9 race meetings per club from their current allocation.

· The allocation of an equal number of race dates to all TAB Clubs. This would equate to the allocation of 43 TAB meetings per club.

· The non-allocation of TAB meetings to selected venues.

…

Noting the above, the questions to which GRNSW would like your input include:-

· What is the best approach to accommodating 104 less TAB meetings in FY07 given the current allocation of TAB race dates?

· How will each option affect the level of participation in your area?

· If it is determined not to allocate TAB meetings to selected venues, how should the selected venues be chosen?

The Decision Making process

In line with the outline provided at the first consultation meeting on January 24, the following table summarises the decision making process that GRNSW is following:-

21 Feb 06	GRNSW distributes a briefing paper to TAB Clubs on allocation options for FY07in light of the Board’s direction given on 20 Feb 06
28 Feb 06	GRNSW meets with TAB Clubs to discuss the allocation of race dates in FY07
2 March 06	GRNSW Board determines the draft FY07 Race Dates Calendar
3-14 Mar 06	All TAB Clubs given an opportunity to make representations and make submissions to GRNSW on the draft FY07 Race Dates Calendar
14 Mar 06	GRNSW Board resolves the final FY07 Race Dates Calendar
15 Mar 06	GRNSW submits its final FY07 Race Dates Calendar to TAB & Racingcorp”

34 The agenda for the meeting also raised a number of the questions posed in that memorandum.

35 A meeting of the management of the Defendant with TAB club representatives was held on 28 February. Notes of that meeting purport to summarise the comments of persons at the meeting. It is unnecessary for me to detail what is there recorded beyond observing that there was discussion of the three options and that, apparently in response to a complaint by the Secretary of the Plaintiff concerning the decision to decrease the number of meetings by 104 and the absence of more consultation, Mr Bawtree, the Chief Executive of the Defendant, responded to the effect “No discussion/decision by Board as to how to reduce the 104 meetings”. Given the context, I do not understand a later notation attributed to him, “Nothing is off the table”, as a qualification of the earlier one as distinct from indicating that all other matters were open for discussion.

36 At that meeting there was conversation between Mr McKay, the secretary of the Plaintiff, and Mr Bawtree to the following effect:-

Mr McKay “The third option, “non-allocation of TAB meetings to selected venues”; that means some TAB clubs could close, lose their TAB dates?”

Mr Bawtree “Yes.”

37 Following on that meeting papers were prepared for a Board meeting on 2 March 2006. In those papers it was recorded that the option of reducing race dates per club by an equal amount was not supported by any club and was not recommended. The second option of allocating all clubs an equal number of race dates a time slot was said to have been favoured by the majority of TAB clubs as it was seen to treat all clubs fairly and equally. This option also was said not to be recommended by the Defendant’s management which went on to recommend option 3, that is of not allocating TAB meetings to selected venues.

38 Some reasons were given for and against the various options, the disadvantage of option 3 being stated as:-

· “Tracks will close and some clubs may be forced out of business.

· Potential inconvenience to participants.”

39 The Board papers recommended that the 104 race dates (or meetings) to be cancelled be “obtained from the South Coast and the Hunter Region… by ceasing racing at two venues, one in the Hunter and one on the South Coast. A little later in the papers, it was said:-

“In order to achieve the desired outcome of allocating the above number of races to a reduced number of venues, the following steps should be followed:-

1. GRNSW formally notify affected clubs:-

(a) The number of allocated TAB dates for their particular region;

(b) That one venue in the region will not be allocated TAB racing.

(c) In the circumstances, GRNSW sees this as the opportunity to streamline operations and as a catalyst for club amalgamation or a joint venture approach to racing.”

2. The GRNSW facilitate negotiation at club level between the affected clubs to achieve the desired outcome.

3. GRNSW resolve the FY07 TAB Calendar, with the exception of the Hunter and South Coast, by March 17 informing TAB that the venues for the Hunter and South Coast dates will be resolved by March 31.

4. GRNSW review progress of club level negotiations on March 17, if it appears a negotiated resolution is unlikely, GRNSW will clearly define its determination parameters should the Clubs not come to agreement.

5. Club negotiation resolves the allocation otherwise the Board will determine the allocation of race dates on March 31.

Recommendation

It is recommended that the Board:-

1. Approve the draft FY07 TAB Race Dates Calendar (marked as Schedule 2);

2. Approve the process detailed above for determining the allocation of TAB race dates in the Hunter and South Coast.”

40 At a meeting on 2 March 2006 the Board resolved:-

“That the Board hold a further Board meeting to determine option 2 and option 3 and in the meantime, the Board asked management to prepare a paper showing the likely financial and non-financial impacts on each club of option 2 and the financial and non-financial performance indicators of each club in relation to option 3.”

41 Although it was not in evidence, it appears that such a document was prepared and discussed at the next meeting held on 7 March. A resolution substantially to the effect of the five paragraphs recommendation set out above was proposed but not carried. A resolution which was then carried was in terms:-

“That the Board approve a prize money reduction of 22% for all metropolitan, TAB and non TAB race meetings.”

42 Ms Prest was dissatisfied with the way in which that decision was arrived at. She wished it rescinded and at a further Board meeting on 14 March such rescission occurred. Another resolution in the following terms was then passed:-

“1. That the Board approve the draft FY07 TAB Race Dates Calendar marked as Option 3 amended.

2. GRNSW formally notify affected clubs:-

a. the number of allocated TAB dates for their particular region;

b. that one venue in each of the affected regions will not be allocated TAB racing unless an agreed position from Clubs in each region delivers the required financial and meeting reductions for that region.

c. that GRNSW inform all Clubs simultaneously of their allocation of Race Dates in FY07.

d. in the circumstances, GRNSW sees this as the opportunity to streamline operations and as a catalyst for club amalgamation or a joint venture approach to racing.

3. That GRNSW facilitate negotiation at club level between the affected clubs to achieve the desired outcome.

4. GRNSW resolve the FY07 TAB Calendar with the exception of the Hunter and South Coast, informing TAB that the venues for the Hunter and South Coast dates will be resolved by March 31 2006.

5. GRNSW review progress of club level negotiations on March 28, 2006 if it appears a negotiated resolution is unlikely; GRNSW will clearly define its determination parameters should the Clubs not come to agreement.

6. Club negotiation resolves the allocation otherwise the Board will determine the allocation of race dates.”

43 (The reference to “amended” in the first resolution is of no present consequence.)

44 In the Race Dates Calendar approved by the above resolutions, although other clubs were identified and a specified number of race meetings allocated to them, there was no mention of the Plaintiff, Maitland or The Gardens or clubs on the south coast, the Calendar showing only the allocation to the Hunter region of 136 meetings, spread over 3 days, and to the south coast of 130 meetings also spread over 3 days.

45 The Calendar for 2005 – 06 shows that 44, 42, and 88 meetings (a total of 176) had been allocated respectively to the Plaintiff, Maitland and The Gardens and 164 to clubs on the South Coast.

46 It should be mentioned also that at the meeting of 14 March, Mr Mangafas was not present but a Mr Scott was there as his deputy. The presence of deputies is something recognised by section 2 of Schedule 1 to the Act. Mr Scott was the executive officer of the GBOTA. He also seems to have represented the Lismore Club during the meeting of 28 February and he made representations on behalf of the Maitland Club to a committee of the Defendant’s Board on 5 May 2006. Both of these clubs belong to or are affiliated with the GBOTA. He also was the executive officer of the NSW Metropolitan & Provincial Greyhound Clubs Association, an organisation to which both the Maitland and the Lismore Clubs and the Plaintiff belong.

47 On 27 March there were meetings between the management of the Defendant and the Hunter region clubs on the one hand and the South Coast clubs on the other when it was made clear that there would not be an agreement between those in either group.

48 The next meeting of the Board was on 28 March 2006. The Minutes record that after dealing with some other matters, the Board turned its attention to the “TAB Racing Calendar FY/07” item, the description generally given in Board minutes to the matter with which I am concerned. The Minutes record the Manager of Policy and Industry Development led the Board through one or more papers on the topic and the Board then decided to assess the recommendation put forward by management. The Minutes record that a resolution was then proposed:-

“That the Board:-

1. Note receipt of the report.

2. Note that it appears unlikely that the South Coast and Hunter Clubs will be able to come to an agreed position in each region that delivers the required financial and meeting reductions required of each particular region.

3. Note receipt of the legal advice provided by Blake Dawson Waldron with regard to procedural fairness.

4. Adopt the decision making process outlined above to determine the allocation of TAB race dates in the Hunter and on the South Coast; and

5. Appoint a Committee of the Board which does not include members with particular club affiliations potentially affected by this decision to consider the matter as required by the above decision making process.”

49 The Minutes record that the motion was lost and that the Chairman, Professor Allen, then indicated that he considered the meeting business to be concluded, closed the meeting and left to attend an appointment he had foreshadowed earlier to the members. Then, according to the Minutes “the quorum of members still being present, the meeting continued”. In light of the conclusions at which I have otherwise arrived and the fact that there was no argument before me as to the consequences of this course of proceedings, I need not refer to it further. In the balance of the meeting it was agreed, inter alia:-

That the Board should delegate the process of consideration of allocation of race dates to a committee of the Board which does not include members with particular club affiliations potentially affected by the decision;

That the committee’s proposal for the allocation of race dates in the Hunter and on the South Coast should be consistent with the Board’s resolution of 14 March 2006;

That affected clubs would be served a show cause notice explaining the proposal of the committee, its reasons for formulating the proposal and inviting representations within 28 days and the committee would consider any such representations; and

that “the Board of GRNSW would agree to adopt that recommendation of the Committee unless there was a clear reason for not doing so. In considering the recommendation, GRNSW would also consider the representations by an affected club”.

50 Mr Mangafas requested that his dissent on the matters referred to in the 2 immediately preceding paragraphs be noted and then left the meeting. The remaining members, apparently taking the view that there was still a quorum present, then resolved:-

51 On 4 April 2006, the Committee of Professor Allan, Mr Dutton and Mrs Prest met. The Minutes record that the Committee determined upon certain specified relevant considerations for the purpose of allocating dates, discussed the relative merits of each venue against the specified criteria, and resolved

1. THAT it be proposed that 88 TAB race dates be allocated to The Gardens and 48 TAB race dates be allocated to Maitland;

2. THAT the Cessnock & District AA be served a show cause notice explaining the allocation proposal of the Committee, the reasons for formulating this proposal and inviting the Cessnock Club to make representations to the Committee within 28 days;

3. THAT the Gardens and Maitland be advised of the proposal of the Committee.

52 One of the criteria selected was the “financial consequences of a decision to allocate or not allocate TAB race dates to the venue (eg. Expenditure already committed at a venue and expenditure necessary at a venue if TAB racing is to continue)”. Papers prepared for the meeting had suggested this, and many of the other criteria adopted. In connection with these recommendations, the papers had drawn attention to a number of aspects of The Gardens Loan Agreement between the Defendant and NCA, including that:-

· GRNSW has provided a loan facility to an aggregate amount of $2.1m.

· The facility can be drawn down at a maximum of $300,000 per annum.

· The facility is available for a 10 year period commencing on 1 December 2004.

· GRNSW must use its best endeavours, subject to GRNSW’s legal duties, to allocate the NCA a total of 88 TAB Race Dates (Clause 8.1).

· It is important to note that GRNSW is not obliged to allocate TAB Race Dates to the extent that to do so would be in breach of GRNSW’s legal duties (clause 8.1(c)).

· A reduction from 88 race dates could have commercial implications for the Gardens.

53 On 7 April 2006, the Defendant wrote to the Plaintiff, inter alia advising of the Committee’s decision, enclosing a summary of some of the data considered by the committee and inviting the Plaintiff to make representations orally on Friday 5 May or in writing no later than then. The Plaintiff made a written submission on 26 and 27 April and on 5 May Mr McKay, the secretary of the Plaintiff, made an oral presentation to the Committee. The Minutes record, inter alia:-

“Mr McKay asked “whether the committee’s terms of reference allowed it to recommend to the GRNSW Board an allocation that involves reconsidering the March 14, 2006 decision.”

The Chairman indicated that the Committee’s terms of reference did not allow for such a recommendation; however the Committee was open to receiving the Clubs submissions on this issue and would undertake to act as a conduit and report the Cessnock Clubs views to the full GRNSW Board.

… at the Chairman’s invitation (Mr McKay) made extensive representations in respect of the GRNSW Board decisions of March 14, 2006. Mr McKay asserted that there had been other viable alternatives that GRNSW could have adopted.

…

Mr McKay then spoke at length to the Cessnock and District Agricultural Association’s correspondence to GRNSW of April 26, and April 27, 2006.

…

54 Earlier, Mr Scott of the GBOTA on behalf of the Maitland Club had also addressed the committee, speaking to an earlier written submission that had been made on its behalf. It is sufficient for present purposes to observe that that submission is clearly directed to most or all of the criteria that the Committee had identified and seeks to present Maitland in a favourable light. The submission does not denigrate or indeed refer to the Plaintiff. The Plaintiff was never informed of the terms or substance of the written or oral submissions made on behalf of the Maitland Club. Mr McKay also said that until the time he was about to appear before the committee he was unaware that anyone but the Plaintiff would be making or providing submissions. However, if he was unaware he should not have been. Nothing has appeared to make it reasonable for him to think that the Plaintiff was the only club invited to make such representations.

55 The Committee met again on 12 May and resolved to reaffirm its preliminary proposal. It also resolved to acknowledge its undertaking to advise the Defendant’s Board of the plaintiff’s concerns as to the Board’s decision of 14 March.

56 On 15 May 2006 the Minutes of a Board meeting of the Defendant record the Chairman informing the Board members that the Committee had inspected each of the tracks in the Hunter and South Coast regions and in response to an undertaking given to the Secretary of the Plaintiff, “outlined (the Plaintiffs') concerns relating to the Board’s decision of March 14, 2006 together with the Clubs’ request that this decision be re-considered”, that the Board then discussed “at length” the recommendations of the Committee and, correcting the printed minutes to conform with evidence from Mr Bawtree, resolved that:-

“1. 88 TAB race dates be allocated to The Gardens and 48 TAB race dates be allocated to Maitland in FY07.

2. No TAB race dates be allocated to the Cessnock and District Agricultural Association in FY07.

3. 52 TAB race dates be allocated to the Bulli Greyhound Racing Club 26 TAB race dates be allocated to the GBOTA south Coast to be conducted at Bulli, and 52 TAB race dates be allocated to the Dapto Greyhound Racing Club.

4. No TAB race dates be allocated to the Shoalhaven Greyhound Racing Club in FY07.”

57 The Minutes also record that Mr Mangafas abstained from voting on the committee’s recommendation as he believed it was not consistent with the provisions of the Act.

58 The Board also resolved to:-

“Adopt the following TAB Race Dates Allocation Table for FY07 and that GRNSW consult with the relevant TAB Clubs as to scheduling of their TAB Meetings.”

59 So far as is presently relevant, the table accorded with the earlier resolution that I have quoted from the Minutes of this meeting although going further and breaking up the allocations between days of the week.

60 It might be mentioned also that in many of the meetings and other events to which I have referred, a similar approach to that I have described was taken in respect of the allocation of dates to clubs on the South Coast. I have not thought it necessary to detail these. Nor have I thought it necessary, in light of the issues before me, to refer to any significant extent to a deal of material suggesting that there were other options available to the Defendant to effect the savings it desired from either cutting prize money or making a very substantial cut in the number of TAB race dates allocated.

61 The relief sought by the Plaintiff includes orders in the nature of certiorari setting aside the resolutions of the Defendant listed below and alternatively declarations that they are contrary to law, void and of no legal effect:-

The primary determination)

(The regional determination).

(The venue determination).

(The 15 May calendar determination)

62 Counsel for the Plaintiff indicated it no longer sought an injunction or an order in the nature of mandamus as had been sought in the summons.

63 Orders sought in respect of the “15 May calendar determination” were sought only in an amended summons. The Defendant had no objection to the amended summons being filed but indicated some concerns about the further relief sought. Although the topic was not fully debated, these concerns seemed to relate to the possible involvement of third parties. Given my intention to publish these reasons prior to actually making any orders, I do not need to deal at this stage with any such difficulties.

64 The Plaintiff advances its claim on a number of bases. It submitted that it was denied procedural fairness in and about the making of the determinations on 14 March. It submitted that it was denied natural justice in not being given the opportunity to be heard before those decisions were made and denied natural justice in not being informed of adverse material and thus given the opportunity of responding to that material before the committee and/or the 15 May meeting of the Board. It submitted also that the Defendant’s decisions offended against the apprehended bias rule in that:-

(i) Mrs Prest had participated in the meeting of 14 March.

(ii) Mr Zammit and a deputy for Mr Mangafas, a Mr Scott, had participated in the meeting of 14 March

(iii) Mr Zammit and Mr Mangafas had participated in the meeting of 15 May.

65 It is convenient to consider these claims in a somewhat different order.

Natural Justice

66 There was no dispute between the parties as to the principles of law relevant to the Plaintiff’s claim of a denial of natural justice. Nor was there any dispute that the content of the obligation to afford natural justice was liable to vary with circumstances - see Minister for Immigration Multicultural and Indigenous Affairs; Ex parte Lam [2003] 214 CLR at [48]. In substance the issue between the parties on this aspect of the case was what, in the circumstances of this case natural justice required and whether, by that standard, natural justice had been denied.

67 Any judgment on these questions requires consideration of the circumstances as they existed. A number of features stand out. One is the nature of what was at stake and the importance of the relevant issues to the Plaintiff. It is clear that the allocation of race dates to the Plaintiff was of great importance to it and, as it derived most of its income from these occasions, even possibly vital to its continued existence. Furthermore, even if the Plaintiff could adjust to the loss of some or all of its usual allocation, a question likely to arise would be how long any such adjustment would take. If, as appears to be the case, the Plaintiff had conducted its affairs on one basis for many years, it is not unlikely that little thought had been given to alternatives.

68 A second is the number or extent of the possible alternatives to the non-allocation of dates to the Plaintiff. There was an almost unlimited number of permutations and combinations of changes to the industry to contemplate. It is obvious from a consideration of the minutes and the papers that accompanied them that a major issue was whether the savings that the Defendant sought to effect in the area of TAB racing should be obtained from a reduction in the number of race meetings or from a reduction in prize money, (with relatively little attention given to doing some of both). Other possibilities are the effecting of more savings in the field of non-TAB racing and other areas of the Defendant’s activities. And even if the conclusion be reached that the savings should be effected in the TAB racing area, issues that obviously arise are whether one or a few clubs should bear the brunt of the savings or whether those saving should be distributed more evenly, and if so, how. Furthermore, the weight to be afforded to many of the considerations may well vary depending on whether the cost of the adoption of one course or action is the demise of a club, rather than merely some reduction in its meetings or income.

69 A third factor to bear in mind is that, while the clubs might have a degree of common interest in, for example, preferring a reduction in race money to a reduction in the number of meetings, at least many of them were likely to have a conflict of interest in the allocation of the reduced number of meetings. Thus the interest of each club might have been opposed to all of the others in suggesting that they, and not the first mentioned, should bear all of the cuts. Nice judgments might be required how those 2 situations were to be dealt with and those judgments were liable to be affected by a possibility that rather than a reduction in meetings, a club might be allocated none.

70 A fourth matter to be considered is the time that might well be needed in the obtaining or marshalling of information and in the preparation of arguments on these issues. How long such a period would be was not the subject of express evidence but it takes no great imagination to think that the sort of things which the Plaintiff would need to consider and might need to gain information about, included the relative wealth of other clubs, their need for the funds flowing from an allocation, the number of participants in the industry or punters or other persons interested in dog racing who might be disadvantaged by any possible decision of the Defendant. It does not follow from the apparent preference of owners and trainers for a reduction in the number of meetings rather than a reduction in prize money, that their preference was for a club to close or have no meetings.

71 On behalf of the Defendant, attention was drawn to the fact that as long ago as June 2003 the Plaintiff had been made aware of the fact, and to an appreciable degree the extent, of financial problems in the industry and in the memorandum of 17 January had its attention drawn specifically to the possibility of a very substantial reduction in the number of TAB meetings and, if that occurred, what impact that would have on club operations, the financial viability of individual clubs and participation in the industry. Attention was also directed to the summary of the result of the 24 January meeting contained in subsequent board papers to the effect that at that meeting the Richmond Club and the NCA had argued for a reduction in the number of meetings and that this could only be achieved by not allocating TAB race dates to all existing TAB clubs in FY07.

72 Reliance was also placed on the memorandum of 21 February and the Agenda for the meeting of 28 February. It was pointed out that at the meeting of 28 February the option of some clubs missing out entirely in an allocation of dates was the subject of express discussion. It was submitted that, in combination, the meetings of 24 January and 28 February and the chance to advance written arguments, afforded the Plaintiff opportunities to advance any case it wished to make in its own interests.

73 However, the breadth of the matters under consideration, the fact that the Plaintiff as one of a dozen or more clubs or other organisations was being asked to comment also on changes to the whole industry in which it was engaged, the circumstance that the response principally invited was, as it seems to me appropriate to infer, one to be given in oral discussion between the dozen or so club representatives, makes unrealistic the suggestion that the Plaintiff was fairly invited to look to its own survival as a club enjoying TAB race allocations. In the circumstances, no club could reasonably have been expected to firstly prepare what, to do justice to its situation, would be a detailed response extending potentially over its own financial circumstances, regional considerations and benefits to other persons, such as dog owners and trainers, in the industry liable to be affected by any decision to exclude that club from the allocation of dates and also to be in a position to criticise in any informed manner competing submissions from, or arguments in favour of, the other clubs.

74 Given the possible ramifications, natural justice required that if consideration was being given to decisions calculated to lead to the Plaintiff or any other club of being deprived completely or in very substantial measure of what it had previously enjoyed by way of allocation of race meeting dates, far more explicit notice of what was contemplated was required prior to the decisions of 14 March. Subject possibly to the impact on third parties and to any discretionary considerations, those decisions should be set aside on the ground with which I am now dealing

75 Furthermore, in light of the ambit of possible relevant considerations, to be adequate, that notice also should have been much longer than the week or two which was in fact allowed prior to the meeting, or which was envisaged in the timetable set forth in the 21 February memorandum as occurring between the publication of the draft and determination of the final timetable of meetings.

76 To comply with the demands of natural justice, the need for more notice than was afforded is a fortiori when regard is had to a number of remarks in documents of the Defendant which were in evidence. It is clear that for some time prior to the decision on 20 February, closure of clubs was a prospect contemplated by the Defendant. Thus, in a presentation on 17 June 2005 by the Defendant it was said:-

· It is necessary to streamline the industry’s structure before larger changes started to be implemented.

· It is not an exercise in treating clubs “better” or “worse” but rather to recognise the importance of each sector to the industry and to manage those sectors accordingly.

77 Although one must recognise the possibility that the expression “streamline the industry structure” may have been intended to encompass also, or indeed refer to, other changes, some of which are referred to in the same presentation, the use of a similar expression in Board papers for the meeting of 2 March, in a resolution at the 14 March Board meeting, combined with references in the Defendant’s documents to the desirability of club amalgamations, and the matters about to be referred to lead me to the view that on the probabilities the Defendant was, even in June 2005, contemplating taking steps calculated to reduce the number of participants at some level in the industry.

78 In papers prepared for the 4 January 2006 Board meeting, a deal of attention was given to the reduction in income both past and likely in the future, with the terms used including “a major financial crisis for the industry”. Under the heading “A Commercial Approach” it was said:-

“A commercial board would deal with a revenue crises in the following manner:-

1. A cut in the dividend payout to shareholders (the equivalent of prize money participants).

2. A cut to non-commercial activities (the equivalent of non-TAB tracks and smaller TAB tracks).

3. …

4. Boosting investment in the most commercial assets (equivalent to premier tracks upgrade).

5. …

“All of the above issues need to be considered in GRNSW’s current operating context, particularly in respect to FY07 and beyond.”

79 A presentation to the stakeholders’ forum on 29 November 2005 had identified as “premier venues” those at Bulli, Dapto, Gosford, Lismore, Richmond and The Gardens.

80 The Defendant’s own documents thus make it clear that no later than 4 January 2006, at least the management of the Defendant was contemplating the elimination, by which I mean the omission from the calendar of allocations, of some TAB clubs.

81 On 30 June, in light of these documents, I raised with counsel the question whether there may not have been an agenda, prior to the decision to reduce the number of meetings by 104, to eliminate a couple of clubs. After discussion between counsel, Mr Gageler said that such an agenda had never been alleged. Hence, I take no account of the possibility that that may have been the Defendant’s aim. Nevertheless, I do not regard myself as precluded from taking into account the fact that, no later than 4 January, the Defendant recognised that the elimination of some clubs from the TAB racing calendar was a real possibility.

82 Nor are the decisions of 14 March 2006 saved by the fact of the earlier decision of February to reduce the number of race meetings by 104. Although that decision is not so obviously adverse in a substantial or perhaps material degree to the Plaintiff’s interests, that decision suffered also from most of the same considerations as affected the 14 March decisions, and this whether one looks at the decision in prospect or retrospect.

83 In prospect, the Defendant’s awareness no later than 4 January of the possibility of the elimination of one or more clubs, and its perception of advantages in that or in amalgamations occurring, gives an added significance to the possibility of any substantial reduction in the number of race meetings allocated. Common sense indicates that any such a reduction was calculated to increase markedly the possibility of no race dates being allocated to one or more clubs.

84 In retrospect, subsequent events also show the potential of the decision made on 20 February to damage the Plaintiff. Not only were there the decisions made on 14 March and 15 May but there was also the management recommendation made in the papers for the 2 March 2006 Board meeting that the reduction in the number of race meetings should be effected, not by a relatively small impact on a larger number of clubs but by imposing it on a small number of clubs in only the South Coast and Hunter regions. As a matter of inference, I am satisfied also that these sorts of possibilities must have been known to the Defendant no later than 4 January 2006.

85 Thus the decision of 20 February was, to the knowledge of the Defendant calculated, - I do not say designed – to have a serious detrimental effect on the Plaintiff. Although there was the meeting of 24 January in which the Plaintiff, other clubs and the Defendant participated and the papers that preceded it, in no meaningful way were the risks, or the extent of the risks, to the Plaintiff brought to its attention. In that situation, the Defendant’s decision of 20 February was also one made in circumstances of a denial of natural justice to the Plaintiff.

86 Returning to the “regional determination” of 14 March, it is of no consequence that that decision did not itself deny to the Plaintiff the benefits of an allocation of dates but merely made the Plaintiff one of three clubs at risk in that regard. Consideration of the extent of that risk was not a matter that arose in the proceedings before me. It may be that, in any contest between the 3 Hunter region clubs, the other two had a compelling case for preference over the Plaintiff but whether this be so or not, merely to be put at that risk was a substantial detriment.

87 I turn then to the decisions of 15 May. If they are considered in isolation, they do not suffer from the sort of denial of natural justice with which I have been dealing. The Plaintiff was given adequate notice of the issues being addressed and opportunity to advance its own case. However, because the challenged “venue determination” and “calendar determination” are clearly in substantial measure a product of the decisions made on 14 March, and of the denial of natural justice affecting those earlier decisions, the 15 May decision of the Board should, subject to the qualifications mentioned, also be set aside. Furthermore, by the time May arrived the only issue in practical terms left was which of the three Hunter region Clubs was to miss out on the allocation. In no sense could the opportunity which the Plaintiff had of advancing reasons why the Defendant should depart from decisions previously made (and, I would add, publicly announced) be equated with what natural justice entitled it to, viz. the opportunity of, inter alia, making representations prior to the Defendant making a decision in the first place.

88 In arriving at the above conclusions, I do not ignore the fact that the Defendant was itself under some time pressures to provide draft or final calendars by the end of January and February 2006 or somewhat extended dates. But to a not insignificant extent, these time pressures were the product of the Defendant’s own inaction in leaving until January 2006 substantial consideration of how it was to deal in the 2006-07 financial year with a problem that had become apparent, or at least on the cards, months earlier.

89 It was also submitted on behalf of the Plaintiff that it was denied procedural fairness in that the Defendant did not comply with the program it had foreshadowed of preparing a draft race calendar and then affording the clubs “an opportunity to make representations and make submissions to GRNSW on the draft FY07 Race Dates Calendar” before making a final decision as to what the calendar should be and in not being apprised of the substance of the submission advanced by the Maitland Club to the Committee meeting of 5 May.

90 I have dealt with the first of these matters circa [72] above. In light of my conclusions as to the May determinations I need not deal with the second. However, there is something to be said for the view that, as the Maitland Club’s submission was not critical of the Plaintiff, and directed attention only to its own virtues – an approach that could not be regarded as unexpected – the Plaintiff had adequate opportunity to deal with these matters. However, not having to decide the matter, I do not.

91 I also do not need to embark upon a further argument of the Plaintiff who submitted that it had been denied natural justice in that, while there had been an undertaking given in the committee meeting of 7 April to report to the Defendant’s full Board the Plaintiffs' views concerning the decisions of 14 May, and “extensive representations” were then made by Mr McKay, the minutes of the Board meeting of 15 May indicate that all that had been passed on was an “outline” of the Plaintiffs' concerns. Nor do I need to consider whether the Plaintiff should have been informed of the criteria by which some of the decisions that Board made were judged.

Apprehended Bias

92 On behalf of the Plaintiff it was submitted that the principles governing the question of whether a decision of a body such as the board of the Defendant should be set aside on the ground of apprehended bias included the following:-

Webb v R

Ebner v The Official Trustee in Bankruptcy

Minister for Immigration and Multicultural Affairs v Jia Legeng

Re Finance Sector Union of Australia; ex parte Illaton Pty Ltd

R v Huggans

Chu v Minister for Immigration

R v London County Council; ex parte Akkersdye & Fermenia

R v Meyer

I W v City of Perth

R v Huggins

R v Barnsley Licensing Justices; ex parte Barnsley and District Licensed Vitaler’s Association

Laws v Australian Broadcasting Tribunal

Chu v

Minister for Immigration

IW v City of Perth

Builders Registration Board v Rauber

Laws v Australian Broadcasting Tribunal

93 There was no disagreement on behalf of the Defendant with these principles and I accept them. It follows that I also accept the submissions for the Plaintiff that in the face of the decision in Chu v Minister for Immigration and Ethnic Affairs the contrary views of Palmer J in Alfabs Engineering Group Pty Ltd v Regan [2002] NSWSC 316 and of Adams J in Cubic Transportation Systems Inc v State of New South Wales [2002] NSWSC 656 at [59-60] should be rejected.

94 I have already detailed the position and interests of those Board members who comprised the committee on 7 April and 5 and 12 May and of the Board which, on 15 May, received that recommendation and made an allocation of dates which accorded with it. It is clear that Mr Mangafas and Mr Zammit who participated in the meeting of 15 May had a clear interest in preferring, out of the three Hunter region clubs, Maitland in the one case and the Gardens in the other and, subject to the operation of the principles in the paragraph numbered (ix) above, that interest would lead to the conclusion that this ground was made out.

95 The Defendant submitted however that the circumstances attracted the qualification embodied in paragraph (ix), and that a statutory requirement that a tribunal perform functions assigned to it must prevail over and displace the application of the rules of natural justice. Cited in support, in addition to the authorities mentioned in paragraph (ix), were Ebner v Official Trustee (2000) 205 CLR 337 at [4] and Minister for Immigration and Multicultural Affairs v Jia Legeng at [99-102], [181-3] and [186-7].

96 Counsel for the Defendant drew attention to the terms of Section 8 of the Act dictating the make up of the Defendant and to Section 9 (2)(d) imposing on the Defendant the allocation of dates. In substance it was submitted that the statute imposed on nominees of a number of bodies, interested and potentially having competing demands for dates, the allocation of them, and that Parliament had directed its attention to the problems that might arise in this area, providing by section 12 of Schedule 1 to the Act:-

“It is the duty of each member of GRNSW to act in the public interest and in the interests of the Greyhound Racing Industry as a whole. (For example, in the case of a nominated member, this duty requires the member to put the interest to which the duty relates before the interests of the body that nominated the member.)

97 Turning then to the topic of necessity, Section 14 of Schedule 1 to the Act provides that a quorum for a meeting of GRNSW is a majority of its members. There are six members in all so, unless one of the remaining four was disqualified for some reason, the exclusion of Messrs Zammit and Mangafas would leave a quorum.

98 There is no evidence, or even suggestion, that Professor Allan has any relevant interest in any of the Hunter region clubs and the same may be said of the remaining three members of the GRNSW. So far as the southern region is concerned Mr Primmer, the President of the Dapto Club – one of the South Coast clubs to be allocated race dates – may well have been disqualified on grounds similar to those applying in the case of the Hunter region clubs to Messrs Zammit and Mangafas but he had no relevant interest if attention is confined to only the Hunter region clubs.

99 Undoubtedly it can be argued that Mr Primmer on the one hand and Messrs Zammit and Mangafas on the other, had such similar interests, albeit in different regions, that each might have been tempted to look after the interests of the other(s). However, that is not the sort of interest that attracts the application of the principles relied on by the Plaintiff. The yielding to any such temptation cannot be inferred simply from the similarity of interest and thus I see no grounds for concluding that Mr Primmer was disqualified.

100 It follows that a quorum of disinterested Board members could have met to decide the issues dealt with at the meeting of 15 May and considerations of necessity did not require the presence of ether Mr Zammit of Mr Mangafas in the decision making process or at Board meetings relevant to the Hunter region clubs. The decisions of that day should be set aside on this ground also.

101 On behalf of the Plaintiff, it was submitted that the decisions on 14 March also were invalidated by the presence at the meeting of Mr Zammit and a Mr Scott who, as has been said, was present as a deputy for Mangafas, and by the presence there of Mrs Prest. The argument so far as Mrs Prest is concerned was that:-

(i) She was secretary of the Young Club and president of the NSW Greyhound Clubs Association;

(ii) the determinations of 14 March were made in lieu of the resolution to reduce prize money for all clubs;

(iii) those determinations did not affect the Young Club or the NSW Greyhound Clubs Association, whereas the resolution to reduce prize money did; and

(iv) these circumstances would give rise in the mind of a fair-minded and informed member of the public to a reasonable apprehension of a lack of impartiality on the part of Mrs Prest.

102 Considered in isolation, there is clearly something to be said for this argument. However, it is clear from the what I have said and from other of the evidence before me that there are many bodies and classes of participants in the greyhound racing industry and that there are also very many facets of the financial dealings between the Defendant and the clubs. Inevitably there will be many decisions which affect in different measure different bodies or groups. Examples are provided by:-

(i) the decision at one stage to reduce prize money;

(ii) the decision to reduce the number of TAB meetings;

(iii) a decision, recorded in the Minutes of a Board meeting of 10 April 2006 to “adopt, in principle, a proposal to reduce distributions to the non-TAB sector by $561,000 by amending the Scheme of Distribution so that a non-TAB Club would be funded for a maximum of 8 races per meeting conducted, subject to consultation with the Greyhound Racing Clubs Association; subject to a complete review of the non-TAB sector structure with a view to fundamental reform from January 1, 2007”; and

(iv) a proposed resolution at that same meeting to “adopt in principle a proposal to reduce distributions to the Metropolitan sector by $728,000 by reclassifying Monday Night Wentworth Park Meetings to a Division B Graded meeting (TAB meeting) with the minimum prize money payable per race being $3000 subject to consultation with the Metropolitan Clubs; unless the Metropolitan clubs can present and alternative solution that saves $728,000”

103 (In fact the last mentioned resolution was not passed. In lieu, the one passed was simply that “The Metropolitan sector find $728,000 per annum in savings”.)

104 In relation to these sorts of matters, the Board members are likely to have different and at times opposing interests. While, wearing her non-TAB hat, Mrs Prest has an interest in ensuing the TAB clubs rather than the non-TAB clubs bear more rather than less of any savings that have to be made, Messrs Zammit and Mangafas may well have interests directly opposing those of Mrs Prest, for example in trying to ensure that the Wentworth Park meetings bore none of the savings (although because both of the organisations they represent include both TAB and non-TAB clubs and for other reasons, they may have their own conflicts). Furthermore, both groups are not unlikely to have further, less obvious, interests to take into account. To take but one example, notwithstanding the interest to which I have referred, at a broader level Mrs Prest might take the view that the industry and as part of it, the non-TAB clubs would suffer if the allocation of race days to TAB clubs led some of them to close and this outweighed the interest I have earlier postulated.

105 It strikes me as at least probable that any consideration of savings which ranges over the all of the areas where the Defendant spent money is likely to involve so many of the members of the Defendant’s Board that it would be impossible to constitute a quorum if their apparent interests precluded them participating. Necessity would thus permit those with an interest to participate.

106 No doubt to some extent some of the areas of possible savings could be considered separately, e.g. Wentworth Park or the non-TAB clubs and, looking only at those areas, quorums of Board members without an apparent interest found. However, because decisions in one area would be likely to have an impact in other areas, this would hardly be satisfactory or accord with the scheme apparent in the Act of having nominees of potentially competing bodies make up the Board.

107 I have found that notwithstanding that scheme, Messrs Mangafas and Zammit had an interest or apparent interest which justified setting aside the decisions of 15 May. However, important to that finding was the nature and extent of that interest including the clear advantage of eliminating a competitor rather than having their own, or one of the clubs Mr Mangafas represented, eliminated. There is much to be said for the view that Mrs Prest had nothing like the same interest in the decisions of 14 March. Put another way, she did not have an interest going beyond what may fairly be regarded as the sort of conflict contemplated by the Act.

108 None of the matters upon which the Plaintiff relied in support of its contention that Ms Prest had an interest so as to preclude her participation in the decisions of 14 March 2006 had any bearing on her entitlement to participate in the decision between the three Hunter region clubs.

109 The argument advanced that the 14 March determinations were invalidated by the presence of Mr Zammit and Mr Scott was that while these determinations had the potential to disadvantage the NCA and the GBOTA, they also had the commercial benefit of protecting race dates allocated to other venues in which those organisations were interested, in particular Wentworth Park where both operated. One might add to this argument another, viz that, unless all clubs in the Hunter region had an equal chance of being the club denied an allocation, the decision not to allocate one of those clubs TAB meetings was itself one in which Mr Zammit and Mr Scott had interests such that they should not have been involved. Absent such an equal chance, there is a deal to be said for the view that that decision was affected by similar considerations that led me to conclude on the ground of apprehended bias that the decisions of 15 May should be set aside. If, on 14 March, the Plaintiff had, or appeared to have, a lesser chance of being allocated race dates than the other 2 clubs in its region, the decisions on that date clearly favoured the other 2 clubs in the region.

110 However, I do not need to decide these issues. They or ones that are similar are liable to arise in any reconsideration by the Defendant consequent on my decision. However the particular circumstances are liable to be different from those I have to consider and there are obvious disadvantages in my giving what may be mere advisory opinions.

111 Before concluding, I should return to the meeting of 20 February, the Minutes of which I have quoted circa paragraph [31] above. On behalf of the Plaintiff it was submitted that this did not indicate that there had been a formal decision to reduce the number of meetings by 104 and, even if there had been, such a decision was impliedly rescinded by the decision on 2 March to approve the prize money reduction. The latter conclusion flowed, so it was submitted, from the fact that the Defendant had been looking at the issues of cutting prize money and reducing the number of meetings by 104 as alternatives which would effect somewhat similar savings of the order of $1.4 to $1.8M from the TAB clubs, and such that both could not have been intended – see e.g. Exhibit 2, pages 105, 116g, 138, 176, 195, 226 and Mr Hogan’s affidavit of 26 June, paragraphs 20-21. It may also be noted that the Calendars approved on 14 March and 15 May 2006, provided for 628 and 627 meetings respectively, reductions of only 98 and 99 from the 726 held in 2005-06.

112 Although my mind has vacillated on the issues, ultimately I think that both of these submissions are correct. The resolutions of 20 February do provide a good indication of what the Board intended to do but the form of the resolutions is such as to convey the impression that the Board stopped short of formally resolving on the issue. Consideration of the documentation surrounding the issues of reductions in prize money or reduction in the number of meetings also leads to the view that the Board cannot have intended, when it passed the resolution of 2 March, that both should occur. One may add that any decision to reduce the number of meetings by 104 cannot stand with the subsequent approval of calendars that effected a reduction by a different number.

113 I should perhaps add that on 29 June last – see T124 - senior counsel for the Plaintiff made clear that, even if I did not accept those submissions, the Plaintiff did not want to be left in the situation where the decisions on 14 March and 15 May were quashed but it could be said that the decision of 20 February survived in some way. He suggested that perhaps the Defendant did not contend otherwise. Discussion on the topic of the 104 meeting reduction which occurred on 30 June tended to confirm that that was the Defendant’s approach. Given some of the bases for the attack on the decisions of 14 March that was hardly surprising.

114 However, the summons did not seek any order in relation to any 20 February decision. When I raised the topic when the matter was in Court for a short time on 7 July, counsel for the Plaintiff said:-

“If your Honour does not agree with either of those submissions (i.e. those canvassed a few paragraphs ago) then we accept that there has been a decision to reduce by 104. We have not challenged what might be characterised as a decision in February to reduce by 104. We say either there was not decision of it was rescinded. We have not and do not mount a challenge to that decision.”

115 It was made apparent during the principal hearing and on subsequent occasions when the matter was re-listed that the parties see virtue in discussing the best way to give effect to my conclusions. Accordingly I shall publish them and then stand the matter over for a short period for the parties to formulate such orders.

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Citations

Cessnock v Greyhound [2006] NSWSC 759

Most Recent Citation

Greyhound Racing NSW v Cessnock & District Agricultural Association [2006] NSWCA 333

Cases Citing This Decision

1

Greyhound Racing NSW v Cessnock & District Agricultural Association [2006] NSWCA 333

Cases Cited

10

Statutory Material Cited

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Alfabs Engineering Group Pty Ltd v Robert Regan [2002] NSWSC 316

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CITATION:	CESSNOCK V GREYHOUND [2006] NSWSC 759
HEARING DATE(S):	28-30 June; 7 July; 26 July 2006
JUDGMENT DATE :	1 August 2006
JUDGMENT OF:	Hulme J at 1
DECISION:	Stand over for a short period for the parties to formulate such orders
PARTIES:	CESSNOCK & DISTRICT AGRICULTURE ASSOCIATION GREYHOUND RACING NEW SOUTH WALES
FILE NUMBER(S):	SC 2006/30069
COUNSEL:	P: M Speakman SC; K Oliver D: S Gageler SC; K Williams
SOLICITORS:	P: Smyth Turner Wall D: Blake Dawson Waldron