Golden v V'landys

[2016] NSWCA 300

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Golden v V’landys [2016] NSWCA 300

Hearing dates:

22 September 2016

Decision date:

04 November 2016

Before:

McColl JA at [1];
Leeming JA at [2];
Payne JA at [3].

Decision:

(1) leave to appeal granted;

 

(2) the affidavit of Mr Golden sworn 6 September 2016 is admitted as evidence on this appeal pursuant to s 75A of the Supreme Court Act;

 

(3) further amended notice of appeal to be filed within 7 days of the date of publication of this judgment;

 

(4) ground 4 of the further amended notice of appeal is upheld;

 

(5) all remaining grounds of the further amended notice of appeal are dismissed;

 

(6) set aside orders of Adamson J of 17 November 2015 and in lieu thereof order:

 

(a) the decision of the first respondent dated 24 June 2011 to warn off the appellant from all race tracks controlled by the second respondent is quashed;

 

(b) the first and second respondents to pay 75 per cent of the appellant’s costs of the appeal as agreed or assessed;

 

(c) within 7 days of the publication of this judgment the appellant to file submissions about the appropriate order for costs before the primary judge;

 

(d) within 14 days of the publication of this judgment the first and second respondents to file submissions about the appropriate order for costs before the primary judge;

 (e) within 21 days of the publication of this judgment the appellant file submissions in reply about the appropriate order for costs before the primary judge.

Catchwords:

JUDICIAL REVIEW - decision of Racing NSW to warn off applicant from race courses - apprehended bias - whether fair minded observer might reasonably apprehend decision-maker might not apply impartial mind - whether logical connection between letter of demand from decision-maker's solicitors and apprehended deviation from making decision on merits - whether role in initiating warning off decision incompatible with making decision - whether claim of improper purpose established - failure to bring appeal within time - whether relief should be withheld as a matter of discretion - appeal allowed in part and decision quashed

  TORTS - misfeasance in public office - whether decision-maker knew, or was recklessly indifferent to, the invalidity of the warning off decision - appeal as to misfeasance in public office dismissed

Legislation Cited:

Defamation Act 2005 (NSW) s 9
Racing Appeals Regulation 2010 (NSW) cl 6
Racing Appeals Tribunal Act 1983 (NSW) s 15
Supreme Court Act 1970 (NSW) s 75A
Thoroughbred Racing Act 1996 (NSW) ss 4, 6, 12, 13, 14, 24

Cases Cited:

Austral Monsoon Industries Pty Ltd v Pittwater Council (2009) 75 NSWLR 169; [2009] NSWCA 154
Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 508
Crossman v Sheahan [2016] NSWCA 200
Dickason v Edwards (1910) 10 CLR 243
Director-General of Education v Suttling (1987) 162 CLR 427
Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63
Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146; [2008] HCA 32
Garde-Wilson v Legal Services Board (2008) 19 VR 398; [2008] VSCA 43
Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649
Isbester v Knox City Council (2015) 255 CLR 135; [2015] HCA 20
Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90
Mandurah Enterprises Pty Ltd v Western Australia Planning Commission (2008) 38 WAR 276; [2008] WASCA 211
McHugh v Australian Jockey Club (No 13) (2012) 299 ALR 363; [2012] FCA 1441
Michael Wilson and Partners Ltd v Nicholls (2001) 244 CLR 427; [2011] HCA 48
Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594; [2011] HCA 1
Northern Territory v Mengel (1995) 185 CLR 307
NSW Thoroughbred Racing Board v Waterhouse (2003) 56 NSWLR 691; [2003] NSWCA 55
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57
Rodger v de Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97
Sanders v Snell (1998) 196 CLR 329
Stollery v Greyhound Racing Control Board (1972) 128 CLR 509
Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1

Texts Cited:

M Aronson and M Groves, Judicial Review of Administrative Action, (5th ed, 2013, Lawbook Co)
M Aronson, “Misfeasance in Public Office: Some Unfinished Business” (2016) 132 Law Quarterly Review 427

Category:

Principal judgment

Parties:

Joseph Golden (applicant)
Peter V’landys (first respondent)
Racing New South Wales (second respondent)

Representation:

Counsel:
A Crossland / D Sweeney (applicant)
I Jackman SC / N Owens (first respondent)
D Tynan (second respondent)

  Solicitors:
Moray & Agnew Lawyers (first respondent)
DLA Piper Australia (second respondent)

File Number(s):

2015/362606

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Common Law Division

Citation:

[2015] NSWSC 1709

Date of Decision:

17 November 2015

Before:

Adamson J

File Number(s):

2013/140063

headnote

[This headnote should not be read as part of the judgment]

The applicant, Mr Joseph Golden, was a professional racehorse trainer. The first respondent, Mr Peter V’landys, was the Chief Executive Officer of the second respondent, Racing New South Wales (RNSW).

On 10 May 2011, Mr Golden wrote a letter to RNSW, accusing Mr V’landys of being corrupt and incompetent. Following this, Mr V’landys delegated his authority to the RNSW Licensing Committee to hold a show cause hearing in relation to Mr Golden, as to why his trainer’s licence should not be suspended. Mr Golden was issued a show cause notice on 16 May 2011.

On 19 May 2011, Mr Golden wrote two letters to RNSW officials, the first accusing Mr V’landys of corruption and the second accusing two members of the Licensing Committee of corruption.

Between 23 and 25 May 2011, between 8am and 10am, Mr Golden stood on the southern end of Grafton Bridge with a placard that read “RACING NSW CORRUPT CEO, ROBS TAX PAYERS”.

On 23 May 2011, Mr V’landys delegated to the Licensing Committee the authority to amend the show cause notice of 16 May 2011 to “include any behaviour of Mr Golden between the date of my original delegation and the hearing of that show cause notice and to make a recommendation to me at the conclusion of the hearing”.

On 24 May 2011, Mr Golden was issued with a show cause notice amended to include the comments in his 19 May letter and his behaviour on Grafton Bridge. Mr Golden was told that the hearing now extended to Mr Golden showing cause why he should not be warned off racecourses within RNSW’s control.

On 30 May 2011, Mr Golden stood outside the office of Federal MP, Ms Jannelle Saffin, in Grafton and held a placard reading, “RACING NSW CORRUPT CEO ROBS TAXPAYERS” and “CHAPS PUBLIC AUDIT REPORTS $200,000,000 MISAPPROPRIATION PUBLIC ENQUIRY NEEDED”.

A show cause hearing was held on 31 May. Following this, on 8 June 2011, Mr V’landys informed Mr Golden that his horse trainer’s licence had been suspended for six months (the first decision).

Also on 8 June 2011, Mr V’landys and RNSW instructed lawyers to write a letter of demand concerning alleged defamation conveyed by the placards Mr Golden displayed on the bridge and outside Ms Saffin’s office to be sent to Mr Golden. This was sent on 10 June 2011. It is apparent from its text that only defamation proceedings on behalf of Mr V’landys (and not RNSW) were contemplated.

A second show cause hearing was held by the Licensing Committee on 24 June 2011, the subject of which was Mr Golden’s conduct in displaying the placards on the bridge and outside Ms Saffin’s office. Mr V’landys approved the Committee’s recommendation that Mr Golden be “warned off” all racetracks under the control of RNSW indefinitely (the second decision).

Mr Golden sought judicial review of Mr V’landys’ decisions on the bases of actual bias, apprehended bias, improper purpose and that they constituted the tort of misfeasance in public office. The primary judge dismissed these challenges.

Issues on appeal

Mr Golden’s appeal focused on the second decision to warn him off racecourses indefinitely, in particular three aspects of the primary judge’s decision:

(1) Should the primary judge have found that the decision to warn Mr Golden off was affected by apprehended bias on Mr V’landys’ part?

(2) Should the primary judge have found that the decision to warn Mr Golden off was made for an improper purpose?

(3) Should the primary judge have found that the decision to warn Mr Golden off constituted the tort of misfeasance in public office?

Held allowing the appeal (per Payne JA, McColl and Leeming JJA agreeing):

Apprehended bias

(1) The test for a reasonable apprehension of bias requires satisfaction of the double might test: whether a fair minded observer might reasonably apprehend that a decision-maker might not apply an impartial mind to the question to be decided. There must also be a logical connection between the first matter and the feared deviation from the course of deciding the case on its merits: [88]

Ebner v The Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63; Michael Wilson and Partners Ltd v Nicholls (2001) 244 CLR 427; [2011] HCA 48

(2) In this case, the relatively low threshold posed by the “double might” test (Ebner) was satisfied by Mr V’landys exercising a power to decide an appropriate punishment for Mr Golden in circumstances where, at the same time, Mr V’landys was demanding that Mr Golden pay him damages and costs for engaging in the same conduct as was the subject of the decision to warn him off: [104]

(3) The logical connection test does not require proof of the existence of personal animus: [108].

(4) The logical connection test was made out when Mr V’landys personally threatened legal proceedings against Mr Golden about certain conduct as a result of which he was claiming damages and costs and then proceeded to make a decision affecting Mr Golden’s rights about that same conduct: [110]

(5) Mr V’landys’ role in initiating the proceedings against Mr Golden was “incompatible” with his making the decision to warn off Mr Golden: [111] – [119].

Isbester v Knox City Council (2015) 255 CLR 135; [2015] HCA 20; Stollery v Greyhound Racing Control Board (1972) 128 CLR 509; Dickason v Edwards (1910) 10 CLR 243 applied.

(6) The discretion should not be exercised to deny the appellant the relief he seeks: [125] – [131].

Improper purpose

(7) An inference of improper purpose should only be drawn if the evidence could not be reconciled with the proper exercise of power and should be determined by reference to the decision-maker’s subjective state of mind: [134]‑[135].

Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649; Mandurah Enterprises Pty Ltd v Western Australia Planning Commission (2008) 38 WAR 276; [2008] WASCA 211; Austral Monsoon Industries Pty Ltd v Pittwater Council (2009) 75 NSWLR 169; [2009] NSWCA 154 applied.

(8) The appellant’s failure to challenge the primary judge’s finding that Mr V’landys’ subjective state of mind was consistent with a proper exercise of power means this aspect of the appeal must fail: [141]

Misfeasance in public office

(9) The appellant’s case must fail as he did not prove Mr V’landys’ knowledge of, or reckless indifference towards, the invalidity of the decision to warn Mr Golden off racetracks: [149] – [153].

Judgment

1. MCCOLL JA: I agree with Payne JA’s reasons and the orders his Honour proposes.

2. LEEMING JA: I agree with Payne JA.

3. PAYNE JA: The applicant, Mr Joseph Golden, was a professional horse trainer. At all relevant times, the first respondent, Mr Peter V’landys, was the Chief Executive Officer of the second respondent, Racing New South Wales (RNSW).

4. On 8 June 2011, Mr V’landys communicated his decision to Mr Golden to suspend Mr Golden’s horse trainer’s licence for six months (the first decision).

5. On 24 June 2011, Mr V’landys communicated his decision to Mr Golden that Mr Golden be “warned off” all racetracks under the control of RNSW for an unlimited period of time (the second decision).

6. The first and second decisions were challenged in proceedings commenced by Mr Golden in the Supreme Court. The primary judge dismissed those proceedings.

7. Subject to one matter addressed as part of the misfeasance in public office claim, there is no longer a challenge in this Court to the making of the first decision. In relation to the second decision, Mr Golden complains about the primary judgment in three respects:

1. first, he complains that the second decision was affected by Mr V’landys’ apprehended bias and her Honour should have so concluded;

2. secondly, he complains that the second decision was an improper use of power and her Honour should have so concluded;

3. thirdly, he complains that the primary judge should have found that the decision to warn him off from racetracks within the control of RNSW for an indefinite period constituted misfeasance in public office.

8. For the reasons that follow, leave to appeal should be granted and the appeal allowed on the apprehended bias ground, but dismissed in relation to the improper use of power and misfeasance in public office grounds.

Brief facts

9. On 21 February 2005, the Board of RNSW resolved, under s 24 of the Thoroughbred Racing Act 1996 (NSW), to confer on its CEO the power and authority to manage the business of racing in New South Wales.

10. In response to the equine influenza virus in 2007, the Commonwealth established the Commercial Horse Assistance Payment Scheme (CHAPS), the purpose of which was to compensate owners and trainers affected by that virus.

11. In January 2008, Mr Golden wrote to various public officials and to Mr V’landys about his concerns with the way that CHAPS was being administered.

12. On 17 March 2008, the Board of RNSW resolved to abolish the Licensing Committee as a sub-committee of the Board and to delegate its licensing functions to the CEO.

13. On 15 September 2008, the Board of RNSW resolved to authorise its CEO to sub-delegate his functions to the management and employees of RNSW. A Licensing Committee was established to provide “assistance to the CEO in dealing with licensing matters at his or her discretion”.

14. On 10 May 2011, Mr Golden wrote a letter addressed to the “General Manger, Racing NSW”, in which Mr V’landys was accused of being corrupt and incompetent. That letter was apparently received by Mr Keith Bulloch, a RNSW official, who sent an email to Mr V’landys excerpting the letter and commenting that it contained “offensive and insulting comments”. In that email, Mr Bulloch proposed that Mr V’landys delegate to the Licensing Committee (of which Mr Bulloch was a member) the power to hold a show cause hearing with respect to Mr Golden and to make a recommendation to Mr V’landys at the conclusion of that hearing. He also attached a draft show cause letter. On 13 May 2011, Mr V’landys agreed to Mr Bulloch’s proposed course of action.

15. In a letter dated 16 May 2011, Mr Bulloch, acting as chairman of the Licensing Committee, wrote to Mr Golden advising him that a show cause hearing would be held on 31 May 2011 at the RNSW offices and that Mr Golden would be required to show cause as to why his trainer’s licence should not be suspended or revoked, on the basis of the contents of his 10 May 2011 letter regarding Mr V’landys.

16. On 19 May 2011, Mr Golden wrote to Mr Alan Brown, then Chairman of RNSW, accusing Mr V’landys of corruption in relation to CHAPS. On the same day, Mr Golden also wrote to Mr Bulloch and Mr Rudge (another member of the Licensing Committee) informing them that he would not be attending the show cause hearing, accusing Mr Bulloch of playing an “integral role” in the misappropriation of taxpayers’ money and again accusing Mr V’landys of being corrupt.

17. From 23 May 2011 to 25 May 2011, between the hours of 8am and 10am, Mr Golden stood on the southern end of Grafton Bridge, which spans the Clarence River at Grafton, with a placard that read, “RACING NSW CORRUPT CEO, ROBS TAX PAYERS”.

18. On 23 May 2011, Mr V’landys delegated to the Licensing Committee the authority to amend the show cause notice of 16 May 2011 to “include any behaviour of Mr Golden between the date of my original delegation and the hearing of that show cause notice and to make a recommendation to me at the conclusion of the hearing”. Mr V’landys also asked Mr Bulloch to advise the Board of RNSW about the matter.

19. On 24 May 2011, the following events occurred:

1. Mr Bulloch, following Mr V’landys’ instruction, emailed the Board of RNSW describing the events that had occurred to date with regards to Mr Golden;

2. Mr Bulloch issued Mr Golden with a show cause notice amended to include “the offensive and insulting comments in your letter dated 19 May 2011 and the placard displayed by you while standing on Grafton Bridge on 23 May 2011”. Mr Golden was told that the hearing now extended to Mr Golden showing cause why he should not be warned off racecourses within RNSW’s control;

3. Mr Bulloch and Mr Rudge stepped aside from the show cause hearing scheduled for 31 May 2011, on the basis of allegations contained in Mr Golden’s second letter dated 19 May 2011, referred to at [16].

20. On 30 May 2011, Mr Golden stood outside the office of Federal MP, Ms Jannelle Saffin, in Grafton and held a placard reading, “RACING NSW CORRUPT CEO ROBS TAXPAYERS” and “CHAPS PUBLIC AUDIT REPORTS $200,000,000 MISAPPROPRIATION PUBLIC ENQUIRY NEEDED”.

21. On 31 May 2011, the Licensing Committee held a show cause hearing in respect to the notice dated 16 May 2011. Mr Golden did not attend the hearing.

22. On 6 June 2011, the Licensing Committee recommended to Mr V’landys that Mr Golden’s trainer’s licence be suspended for six months, however, as the Committee could not be satisfied that Mr Golden had received the amended show cause notice dated 24 May 2011, the matter was adjourned to a further show cause hearing on 24 June 2011. Mr V’landys accepted that recommendation and decided to suspend Mr Golden’s trainer’s licence for six months.

23. On 8 June 2011, Mr V’landys wrote to Mr Golden informing him that, on the basis of the matters raised in the show cause notice of 24 May 2011, his trainer’s licence was suspended for six months. As noted at the outset, the making of the first decision was almost wholly outside the scope of this appeal.

24. In a second letter also dated 8 June 2011, Mr V’landys informed Mr Golden that there would be a further show cause hearing on 24 June 2011 for him to show cause as to why his trainer’s licence suspension should not be extended beyond six months and why he should not be warned off from all racecourses within the control of RNSW on the basis that Mr Golden’s “presence on racecourses is not desirable by reason of” his conduct on the Grafton bridge and outside Ms Saffin’s office.

25. Also on 8 June 2011, Mr V’landys and RNSW instructed Mr Patrick George, a senior litigation partner of Kennedys practising in defamation law, to draft letters of demand concerning alleged defamation to be sent to Mr Golden, as well as to the Northern Star and Coolum News, each of which published an article concerning Mr Golden’s behaviour with a photograph of his placard.

26. On 10 June 2011, all three letters were sent to Mr V’landys for his approval. The letters were sent to Mr Golden, the Northern Star and Coolum News on that day. The primary judge inferred from Mr Golden’s receipt of the Kennedys’ letter that Mr V’landys approved of the contents of the letters and gave instructions for at least the one Mr Golden received to be sent.

27. The letter sent to Mr Golden was in the following terms:

Dear Sir

DEFAMATION

We act for Racing New South Wales and its chief executive office[r], Mr Peter V’landys.

You were quoted on 7 June 2011, in the Northern Star Newspaper and the Coolum News and photographed outside the office of Federal MP Janelle Saffin holding a placard that states ‘Racing NSW Corrupt CEO Robs Taxpayers’. We further note you were standing next to the Grafton Bridge on 23 May 2011 holding a placard with the same words- ‘Racing NSW Corrupt CEO Robs Taxpayers’

The statement conveys the following false and defamatory imputations of and concerning Peter V’landys:

(i) That Mr V’landys as the CEO of Racing NSW is corrupt.

(ii) That Mr V’landys as the CEO of Racing NSW robs taxpayers;

Your conduct in displaying such a sign and allowing yourself to be photographed with the sign is seriously defamatory and in bad faith, particularly when you are aware that there were no grounds for an independent judicial inquiry into the administration of the CHAPS scheme. In order to minimize the harm already caused, Mr V’landys requires that you:

1 Publish a retraction and an unreserved apology in a form to be agreed by our client within 7 days of the date of this letter;

2 Take all necessary steps to avoid further repetition of such statements or anything similar;

3 Take all reasonable steps to inform any person to whom the material was published that the media statements complained of were false and defamatory of Mr V’landys and that you have withdrawn them and apologized for them in the form agreed as set out in paragraph 1.

4 Pay our client’s damages and reasonable legal costs.

We reserve our client’s rights generally.

Please confirm your agreement to our client’s demands.

28. Although the Kennedys’ letter was expressed to be written on behalf of “Racing New South Wales and its chief executive officer, Mr Peter V’landys”, it is apparent from its text, and as Senior Counsel for Mr V’landys ultimately conceded, that it was a letter of demand foreshadowing only defamation proceedings on the latter’s behalf.

29. On 16 June 2011, Mr Bulloch sent to Mr V’landys a copy of an email that Mr Bulloch had sent to the RNSW Board updating the Board in relation to Mr Golden. This email did not refer to the letters sent by Kennedys on behalf of RNSW and Mr V’landys.

30. On 24 June 2011, the second show cause hearing was held. Mr Golden did not attend. The Licensing Committee discussed the terms of the “warning off” from all racecourses within the control of RNSW being proposed. A transcript of the hearing records Mr Bulloch saying that the penalty was motivated by Mr Golden’s “lack of remorse or contrition” and that he “shows no sign that the behaviour will change”.

31. Also on 24 June 2011, following the hearing, the Licensing Committee recommended to Mr V’landys that Mr Golden be warned off all racecourses within the control of RNSW for an unlimited period of time.

32. On 24 June 2011, Mr V’landys accepted that recommendation and wrote to Mr Golden informing him that he had been warned off all racecourses within the control of RNSW for “an unlimited period of time”. He also informed Mr Golden that his rights of appeal were contained in the Racing Appeals Tribunal Act 1983 (NSW) and that he had seven days to lodge an appeal.

33. Mr Golden gave evidence that at the time of receiving the 24 June 2011 letter he was “very ill and unable to lodge an appeal within the required seven day period”. The primary judge did not accept that Mr Golden was so indisposed.

34. On 4 July 2011, Mr George of Kennedys again wrote to Mr Golden, on this occasion solely on behalf of Mr V’landys, and said:

We refer to our letter to you dated 10 June 2011.

We note we have not received a response. We are instructed to commence legal proceedings against you, should you fail to meet our client’s demands within 7 days of this letter.

Your failure to respond and/or apologise will be relied upon in aggravation.

35. On 13 January 2012, Mr Golden wrote to RNSW asking for an extension of time to appeal against the decision contained in the 24 June 2011 letter to warn him off for an unlimited period of time. RNSW forwarded the letter to the NSW Racing Appeals Tribunal.

36. On 16 February 2012, the Racing Appeals Tribunal requested submissions from RNSW on whether it had jurisdiction to hear an appeal out of time. RNSW thereafter sent submissions asserting that the Tribunal lacked power to hear such an appeal.

37. On 2 April 2012, Mr Golden made submissions to the Tribunal to the effect that he had been ill during the period required for lodging an appeal from the second decision. He gave a history of the matters that led to the second decision. He also attached a doctor’s report referring to a thyroid scan indicative of Graves’ disease.

38. On 7 May 2012, the Tribunal wrote to Mr Golden advising that it had no power to extend the seven day period for an appeal, as set out in cl 6 of the Racing Appeals Regulation 2010 (NSW).

The decision of the primary judge

39. After first dealing with the relevant facts and the claim for actual bias which is not pressed on this appeal, the primary judge turned to the question of apprehended bias.

40. After setting out the “double might” test as articulated by the High Court in Ebner v The Official Trusteein Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [6] and correctly observing that the High Court test required the articulation of a “logical connection” between the matter complained of and the feared deviation from deciding the case on its merits, the primary judge concluded that Mr Golden had not been able to articulate a logical connection between, on the one hand, the circumstances that Mr V’landys had alleged that Mr Golden had defamed him and, on the other, the feared deviation by Mr V’landys from his obligation to decide the case on its merits.

41. As to improper purpose, the primary judge found that improper purpose will not lightly be inferred, stating that the inference of improper purpose will only be drawn if the evidence cannot be reconciled with the proper exercise of the power: Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 at 672. The primary judge found that the second decision should be seen to arise from a concern that Mr Golden’s public statements tended to diminish the reputation of the horse racing industry. Her Honour was not prepared to infer that Mr V’landys acted with an improper purpose. Her Honour concluded that Mr V’landys was not required to give reasons beyond those which appeared in the letters conveying the first and second decisions to Mr Golden. There was no other evidence of Mr V’landys’ actual subjective intention and no proper basis for drawing an adverse inference about his subjective intention: Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594; [2011] HCA 1 at [67] per Gummow J.

42. As none of the grounds of challenge were made out, it was unnecessary for her Honour to consider the question of discretion. Her Honour concluded, however, that had any challenge been made out she would not have exercised her discretion to grant relief. This was for two principal reasons:

1. first, the primary judge regarded as important the failure by Mr Golden to exercise his right of appeal to the NSW Racing Appeals Tribunal in a timely manner. Although not a bar to relief, it was a powerful factor against the grant of relief: Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 508 at 509; and

2. secondly, the primary judge regarded as important the failure by Mr Golden to seek to have the second decision annulled by RNSW.

43. Finally, the primary judge dealt with the allegation of misfeasance in public office. Her Honour first explained the elements of the tort as described in Northern Territory v Mengel (1995) 185 CLR 307. The primary judge concluded that the only element of the tort that Mr Golden had established was that Mr V’landys was a public officer who had purported to exercise a power.

44. Her Honour concluded that there was no proof that the purported exercise of power was ultra vires or otherwise wrongful. There was no proof that Mr V’landys exercised the power with actual knowledge that he had no power or was recklessly indifferent to the existence of that power. There was no proof that Mr V’landys knew or was recklessly indifferent to the possibility that injury would be suffered. Finally, the primary judge concluded that Mr Golden had not proven that he had in fact suffered damage and that if he had, Mr V’landys was protected by privative provisions contained in s 12(1) of the Thoroughbred Racing Act and Rule 197 of the Australian Rules of Racing.

Grounds of appeal

45. In his further amended notice of appeal, the appellant relied on four essential matters, although there were numerous overlapping sub-grounds.

46. First, the appellant submitted that the primary judge erred in finding that the second decision made by Mr V’landys should not be set aside for apprehended bias. This was ground four of the further amended notice of appeal, which contained 12 sub-grounds or particulars of the ground.

47. Secondly, the appellant submitted that the primary judge erred in finding that the second decision was not liable to be set aside as it was made for an improper purpose, namely to punish Mr Golden for his actions and stop him continuing those actions. This was ground five of the further amended notice of appeal, which contained six sub-grounds or particulars of the ground.

48. Thirdly, the appellant submitted that the primary judge erred in finding that the circumstances of the case were such as not to enliven her discretion to set aside the second determination and in particular erred in finding that “[the plaintiff’s] remedy is in his own hands and yet he has steadfastly refused to lift a finger to grasp it”. This was ground seven of the further amended notice of appeal.

49. Fourthly, the appellant submitted that the primary judge erred in finding that in making the first and/or second decisions the first respondent did not commit the tort of misfeasance in a public office. Consequential complaints, limited to the tort of misfeasance in public office, are made about the primary judge’s findings about damages and the privative provisions contained in s 12(1) of the Thoroughbred Racing Act and Rule 197 of the Australia Rules of Racing. These were grounds eight, nine and ten of the further amended notice of appeal.

50. It is to be noted at this stage that so far as misfeasance in public office is concerned, the appellant’s failure to appeal against the primary judge’s findings concerning the first decision on any other basis made a complaint about misfeasance in public office concerning the first decision untenable. That is because no ground of appeal sought to review her Honour’s findings that the first decision was made within power. It is thus unnecessary to address the first decision further.

Leave to appeal and fresh evidence on appeal

51. On 7 September 2016, Mr Golden filed a notice of motion seeking the following orders:

1. Pursuant to section 101(2) of the Supreme Court Act 1970, leave to appeal from the orders of Adamson J made 17 November 2015.

2.    That the appellant be permitted to file in the appeal additional evidence being the affidavit of Joseph Golden sworn 6 September 2016 (8 paragraphs and 6 Annexures).

52. The respondents did not oppose leave to appeal being granted. The matter is one raising issues of importance and leave to appeal should be granted.

53. Concerning the fresh evidence sought to be led by Mr Golden, the respondents objected to the admission of the affidavit of Joseph Golden sworn 6 September 2016 and its annexures.

54. That affidavit and its annexures demonstrated that on 15 December 2015, after the primary judge had delivered her reasons, Mr Golden made a request to the Board of RNSW to annul the second decision. On 18 December 2015 the Board of RNSW replied, seeking further information and submissions. On 23 December 2015 Mr Golden provided that further evidence and made submissions. No reply was received and on 2 February 2016 Mr Golden sent follow up correspondence.

55. On 16 February 2016, RNSW by its general counsel Mr Sweney replied to Mr Golden. The Board of RNSW, he said, had determined to lift Mr Golden’s warning off on three conditions:

1.    That you make a full public apology to Racing NSW Chief Executive Mr Peter V’landys AM and to Racing NSW in that your assertions were completely without foundation and were offensive;

2.    That your [sic] publically apologise for any hurt to Mr V’landys and his family; and

3.    That you ensure the legal fees of Racing NSW and its insurers associated with Supreme Court Proceedings No. 140063 of 2103 [sic], as assessed by the Court, are paid.

56. The Court has a discretionary power to receive further evidence concerning matters occurring after the trial: Supreme Court Act 1970 (NSW) ss 75A(7) ‑ 75A(9).

57. The evidence demonstrates that the exercise of the right to seek the annulment is conditioned upon, in particular, a full public apology to Mr V’landys and RNSW about the allegedly defamatory statements he made and payment of the costs of RNSW and its insurers “associated” with the proceedings before the primary judge. It is unclear whether those “associated” costs included costs in relation to preparing for the threatened defamation proceedings the subject of the Kennedys letters.

58. In his written submissions Mr V’landys invited this Court to conclude that the process of seeking to have the warning off lifted “was, and remains, available to the appellant”. (italics added)

59. The fresh evidence is relevant, at least, to the Court’s consideration of that submission. Accordingly, I would permit Mr Golden’s affidavit sworn 6 September 2016 (including its six annexures) to be read on this appeal.

Relevant contractual and statutory provisions

60. The parties accepted as correct a statement in this Court about an earlier version of the relevant rules of racing in NSW Thoroughbred Racing Board v Waterhouse (2003) 56 NSWLR 691; [2003] NSWCA 55 at [35]:

The Rules of Racing are rules to which participants in racing become contractually bound; but they are also given statutory consequences, for example by s.14 of the [Thoroughbred Racing – then called the Thoroughbred Racing Board] Act.

61. A conclusion to the same effect about the Rules of Racing in the form they took at the time of these events was reached by Robertson J in McHugh v Australian Jockey Club (No 13) (2012) 299 ALR 363; [2012] FCA 1441.

62. Section 4 of the Thoroughbred Racing Act 1996 (NSW) establishes a body corporate with the corporate name of RNSW, which may use the name “Racing NSW”. RNSW is to consist of the Chief Executive and seven other members appointed by the Minister from time to time: s 6(1).

63. Section 13 of that Act gives RNSW certain functions which include all the functions of the principal club for New South Wales and committee of the principal club for New South Wales under the Australian Rules of Racing (“AR”):

13 Functions of Racing NSW

(1) Racing NSW has the following functions:

(a)    all the functions of the principal club for New South Wales and committee of the principal club for New South Wales under the Australian Rules of Racing,

(b)    to control, supervise and regulate horse racing in the State,

. . .

(e)    such functions as may be conferred or imposed on Racing NSW by or under the Australian Rules of Racing or any other Act,

64. By s 13(2), the functions of RNSW are not limited by the AR and are to be exercised independently. By s 14, RNSW has power to do all things that may be necessary or convenient to be done for or in connection with the exercise of its functions:

14 Powers of Racing NSW

(1) Racing NSW has power to do all things that may be necessary or convenient to be done for or in connection with the exercise of its functions.

(2) Without limiting subsection (1), Racing NSW has power to do the following:

. . .

(b)    register or licence, or refuse to register or licence, or cancel or suspend the registration or licence of, a race club, or an owner, trainer, jockey, stable hand, bookmaker, bookmaker’s clerk or another person associated with racing, or disqualify or suspend any of those persons permanently or for a specified period,

(c)    supervise the activities of race clubs, persons licensed by Racing NSW and all other persons engaged in or associated with racing,

(d)   inquire into and deal with any matter relating to racing and to refer any such matter to stewards or others for investigation and report and, without limiting the generality of this power, to inquire at any time into the running of any horse on any course or courses, whether or not a report concerning the matter has been made or decision arrived at by any stewards,

. . .

(k)    prohibit a person from attending at or taking part in a race meeting,

(l)    impose a penalty on a person licensed by it or on an owner of a horse for a contravention of the Rules of Racing,

. . .

(w)    take such steps and do such acts and things as are incidental or conducive to the exercise of its powers and the performance of its functions.

65. Contracts made under statutory powers must be consistent with any statutory provision which affects the relationship: Director-General of Education v Suttling (1987) 162 CLR 427 at 437 per Brennan J (with whom Mason ACJ and Deane J agreed).

66. The power to “warn off” a person is contained in rule 6 of the Local Rules of Racing (“LR”):

The Board has the power to warn off any or all racecourses within its control any person whose presence thereon in the opinion of the Board is not desirable.

67. The LR, along with the AR and the Rules of Betting comprise the Rules of Racing of Racing NSW. AR 2 provides that any person who takes part in any matter coming within these Rules thereby agrees with the Australian Racing Board and, relevantly, RNSW, to be bound by them.

68. AR 7 provided, relevantly:

AR 7. A Principal Racing Authority shall:

. . .

(ii) have the control and general supervision of racing within its territory;

(iii) in furtherance and not in limitation of all powers conferred on it or implied by these Rules, have power, in its discretion:-

. . .

(b)    To license jockeys, trainers and others on such terms and conditions as it shall think fit, and at any time to suspend, vary or revoke any such licence without giving any reason therefore.

. . .

(d)    To penalise:-

. . .

(ii)    any licensed person or official whose conduct or negligence in the performance of his duties has led, or could have led, to a breach of the Rules.

(e)    At any time to exercise any power conferred on Stewards by the Rules.

. . .

(i)    To annul or mitigate any punishment incurred within its territory.

Apprehension of bias - submissions

Appellant’s submissions

69. The appellant submitted the primary judge erred in finding that she was not persuaded that he had been able to articulate a ‘logical connection’ between, on the one hand, the circumstances that Mr V’landys’ title appeared on the signs and that he alleged that Mr Golden had defamed him; and, on the other, the feared deviation from Mr V’landys’ deciding whether to accept the recommendations of the Licensing Committee and make the second decision.

70. The appellant submitted that the primary judge erred in finding that “although [Mr Golden] placed great significance on the Kennedys letter as placing the present case in a special category, I do not regard it as having that effect”. It was submitted that the error was demonstrated in the finding that the letter was “an incidental matter”.

71. It was submitted that the correct question, based on Ebner, was whether Mr Golden had articulated a logical connection between:

1. the fact that Mr Golden’s impugned conduct was the subject of the Kennedys letter which sought damages and costs to be paid to Mr V’landys personally; and

2. a possible deviation on the part of Mr V’landys’ exercising the warning off power impartially in respect of the same conduct by Mr Golden for which he was seeking damages and costs.

72. The appellant also advanced an alternative case which, he submitted, the primary judge erred in rejecting. That case was that “a person in [Mr V’landys’] position, which was akin to the prosecutor and decision maker in Isbester v Knox City Council (2015) 255 CLR 135; [2015] HCA 20 at [33]‑[34], would have an interest in the decision which could affect [his or her] proper decision-making”, being an interest “which would conflict with the objectivity required of [him]” in deciding whether to warn Mr Golden off and for how long. In making this complaint, the appellant also relied upon the decision of Isaacs J in Dickason v Edwards (1910) 10 CLR 243 at 259 and the High Court in Stollery v Greyhound Racing Control Board (1972) 128 CLR 509.

72. Shortly put, it was submitted that Mr V’landys’ position as decision-maker was “incompatible” with his personal interest in the matter he was deciding.

Respondents’ submissions

74. The respondents submitted that the primary judge was correct to find that there was no “logical connection” between the matters relied upon by the appellant, and the feared deviation from the merits of the decision Mr V’landys was called upon to make.

75. The respondents submitted that the second decision would have had no impact on Mr V’landys’ interests in any way. He would not have received any benefit from Mr Golden being warned off. He certainly would not have received any financial benefit from a warning off. Nor, it was submitted, would warning off Mr Golden be likely to have silenced him. Mr Golden did not use racetracks as a forum for making comments about Mr V’landys; his public statements were made on the Grafton Bridge and outside a federal Member of Parliament’s office.

76. The respondents submitted that the “interest” relied upon by the appellant amounted to no more than the fact that the appellant had said untrue and unpleasant things about Mr V’landys. This, it was submitted, did not give rise to an apprehension that Mr V’landys had an “interest” in punishing Mr Golden.

77. It was submitted that “the entire show cause process was initiated and prosecuted by the unbiased Licensing Committee”, with Mr V’landys simply being asked to agree or disagree with its recommendation. Mr V’landys did not seek to initiate, guide, control, or participate in that process, and was content to examine the recommendation forwarded for his consideration.

78. It was also submitted that it was important that the decision was in any event subject to a merits review in the Racing Appeals Tribunal under s 15(1)(d) of the Racing Appeals Tribunal Act, a fact that was pointed out to the appellant by Mr V’landys.

79. The second respondent submitted that Mr Golden’s offensive and crude language, written on placards he displayed publicly on multiple occasions, was directed towards Mr V’landys as CEO of RNSW and, in substance, towards RNSW. Both had an interest “in protecting their reputation and that of the broader racing community against the appellant’s vitriol”. In those circumstances, both the content and the purpose of the Kennedys letter were justified. Put another way, there was a proper basis for the letter, given the circumstances. It was submitted that the letter, of itself, did not give rise to an apprehension of bias on the part of Mr V’landys. There was, it was submitted, no logical connection between the content and purpose of the letter and the feared deviation from the course of Mr V’landys deciding the case on its merits.

80. As to the appellant’s broader case, that Mr V’landys’ position as decision-maker was “incompatible” with his personal interest in the matter he was deciding (based upon the principles described by the High Court in Knox City), the respondents submitted that this was a “fundamentally new” case. It was submitted that this case, that Mr V’landys participated in bringing the underlying allegation, was not pleaded nor the subject of any submission either before the primary judge or in writing in this Court.

81. The respondents submitted that the High Court in Knox City made it clear at [45] that there was no special category of “incompatibility” which arises out of being the target of abuse:

It is true that Ms Hughes' role in this matter did not involve her at quite the same personal level as the manager in Stollery, who was subjected to, and affronted by, the alleged bribe; nor was she the target of abuse as in Dickason, which was directed to the District Chief Ranger. It may be accepted that these factors added another dimension to the level of involvement of those persons. It cannot, however, be said that this dimension accounted for the disqualification in those cases. The interest identified in Dickason and Stollery as necessitating disqualification was that of a prosecutor, accuser or other moving party. An interest of that kind points to the possibility of a deviation from the true course of decision-making.

82. The respondents submitted that the appellant was attempting to extend the reasoning in Knox City and the earlier cases to someone involved in the decision making who was specifically the target of the underlying abuse. It was submitted that the High Court in Knox City had specifically rejected that approach in the passage quoted immediately above and the reasoning of the High Court in the three cases cited by the appellant was specifically confined to the intrinsic incompatibility of the accuser also being a decision maker in the case.

Consideration of apprehended bias ground

A preliminary matter

83. At no stage was any question of the implied freedom of political communication raised, despite the fact that Mr Golden was protesting about a corrupt use of government funds outside the local Member of Parliament’s electoral office.

84. Questions of considerable complexity would arise in relation to the purported exercise of a “consensual” or contractual power of the present kind motivated, in terms, by conduct which squarely fell within the area of protected communications. Indeed, Mr Golden’s conduct is on one view much more “political” than the protests against police corruption in Coleman v Power (2004) 220 CLR 1; [2004] HCA 39.

85. As the parties chose not to raise the implied freedom of political communication it plays no part in this decision.

The test for apprehended bias

86. In Ebner v Official Trustee in Bankruptcy, the joint judgment of Gleeson CJ, McHugh, Gummow and Hayne JJ stated, at [6] and [8]:

… a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.

The apprehension of bias principle admits of the possibility of human frailty.… Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. … Only then can the reasonableness of the asserted apprehension of bias be assessed.

87. It was uncontroversial that the principles in Ebner applied to the question whether Mr V’landys was affected by apprehended bias in his role in connection with Mr Golden’s warning off.

88. Thus, the test for a reasonable apprehension of bias requires an analysis of three interrelated questions: (a) what the fair-minded observer might apprehend [would lead the decision maker to decide a case other than on its merits]; (b) whether the decision maker might not be impartial and; (c) the reasonableness of the asserted apprehension: Crossman v Sheahan [2016] NSWCA 200 at [22] per Basten JA.

89. The analysis of the reasonableness of the apprehension requires a “logical connection” between the matter identified as an indicator of possible pre-judgment and the deviation from impartial determination of the matter by the decision maker which might be apprehended. This requirement for a logical connection imposes a constraint on what might otherwise be a low (in the sense of undemanding) standard for disqualification for apprehended bias.

90. The assessment of the reasonableness of the apprehension is objective. In Michael Wilson and Partners Ltd v Nicholls (2001) 244 CLR 427; [2011] HCA 48 at [33] the Court said:

Because the test is objective it is important to keep an inquiry about apprehension of bias distinct from any inquiry about actual bias. An inquiry about actual bias in the form of prejudgment would require assessment of the state of mind of the judge in question. No doubt that would have to be done, at least for the most part, on the basis of what the judge had said and done. But to allow an inquiry about whether the judge had in fact prejudged some issue to enter into a debate about what a fair-minded lay observer might apprehend is to introduce considerations that are irrelevant to the issue that is to be decided when a party submits that there is or was a reasonable apprehension of bias.

The significance of the Kennedys letter to the apprehended bias claim

91. The primary judge described (in the context of dealing with the claim based on actual bias) the Kennedys letter as “an incidental matter”, and did not accept the submission that the letter of demand placed “the present case in a special category”.

92. The primary judge also concluded that there was no suggestion that Mr V’landys would have had to pay Kennedys himself for legal costs incurred, because RNSW was also responsible for retaining the firm.

93. For the reasons that follow, I do not agree that the Kennedys letter can be correctly described as “an incidental matter”. Nor should it be concluded that Mr V’landys was not liable to pay Kennedys’ legal costs for acting for him.

94. First, as I have said, Senior Counsel for Mr V’landys ultimately conceded, that what was contemplated was a defamation action in which Mr V’landys was the sole plaintiff. Although not necessary for the outcome of this appeal, in my view it is likely that RNSW, a body constituted by NSW statute, had no entitlement to make a claim in defamation: see s 9 of the Defamation Act 2005 (NSW), which provides that a corporation has no cause of action in defamation if, inter alia, it is a public body, defined as “a local government body or other governmental or public authority constituted by or under a law of any country”.

95. Secondly, as was again ultimately conceded by Senior Counsel for Mr V’landys, the inference should be drawn that Mr V’landys would have to have been at least liable to pay Kennedys’ costs. If that were not so, any costs order in his favour would be valueless by reason of the indemnity principle.

96. Thirdly, when dealing with the claim based on actual bias, the primary judge relied upon the fact that criticisms of institutions such as RNSW are often directed to the person leading the institution. Mr V’landys submitted that a fair-minded lay observer would appreciate that complaints such as those made by Mr Golden would be something he would readily be able to deal with, even though it was “public criticism of a very emotional kind”.

97. Accepting that criticisms of institutions such as RNSW are often directed to the person seen to be leading the institution and that, as a general matter, Mr V’landys would readily be understood as able to deal with these criticisms, the Kennedys letter to Mr Golden takes on a particular significance. Despite being, in general, able readily to cope with “public criticism of a very emotional kind”, Mr V’landys chose to retain private solicitors and threaten Mr Golden with defamation proceedings about the very matter that he was subsequently called upon to judge.

98. On 8 June 2011, the same day as Mr V’landys sent the detailed amended show cause notice to Mr Golden, he instructed Kennedys about the defamation he had allegedly suffered at Mr Golden’s hands.

99. On 10 June 2011, Kennedys sent a letter, demanding an apology and the payment to Mr V’landys of damages and reasonable legal costs, about the same conduct the subject of the show cause notice.

100. The events of 24 June 2011 are important. The documents tendered by RNSW are not entirely consistent about when and how Mr V’landys delegated his authority to the Licensing Committee. The letter of 8 June 2011 sent by Mr V’landys told Mr Golden that Mr V’landys had already delegated the investigation and recommendation functions to the Committee. However, the transcript of the second show cause hearing held on 24 June 2011 records a member of the Committee tabling “the delegation email from the Chief Executive to the License Committee dated 20 June 2011 to conduct this hearing and make a recommendation at the conclusion of the hearing”. There are also other instances of Mr V’landys exercising the power of delegation by email: on 13 May 2011, Mr V’landys emailed Mr Bulloch delegating his authority to the Licensing Committee to issue a show cause notice, conduct a hearing and make a recommendation in relation to Mr Golden and on 23 May 2011, Mr V’landys further delegated his authority by email to Mr Bulloch, authorising the Licensing Committee to amend the show cause notice issued to Mr Golden, conduct a hearing and make recommendations in relation to the amended notice .

101. Notwithstanding these earlier communications, a formal memorandum on the letterhead of RNSW dated 24 June 2011 and signed by Mr V’landys records his delegation of authority to the Licensing Committee to conduct a hearing about the maters the subject of the show cause notice to Mr Golden on 8 June 2011 and make a recommendation upon the conclusion of that hearing.

102. Therefore, irrespective of whether there had been earlier (informal) delegations by Mr V’landys, it seems clear that on the very day of the decision, at some time before 11 am, Mr V’landys formally delegated the power to conduct the hearing and make a recommendation. After receiving the written report of the Licensing Committee, Mr V’landys signed the report and also signed the letter to be sent to Mr Golden, thereby accepting the recommendation of the Licensing Committee and making the second decision.

103. As Mr Golden submitted, there was no inhibition upon Mr V’landys delegating the entirety of the function, including imposing any penalty, to the Committee. Senior Counsel for Mr V’landys accepted that he was not putting an argument of necessity. The fact that the delegation, which saw ultimate decision-making power continue to be vested in Mr V’landys, was qualified and limited strengthens the satisfaction of the “double might” test.

104. In this case, the relatively low threshold posed by the “double might” test was satisfied by the ultimate decision maker, Mr V’landys, exercising a power to decide an appropriate punishment for Mr Golden in circumstances where, at the same time, Mr V’landys was demanding that Mr Golden pay him damages and costs for engaging in the same conduct as was the subject of the second decision. In such circumstances, the fair minded observer might apprehend that Mr V’Landys might not bring an impartial mind to the question whether the second decision should be made.

105. Hence Senior Counsel for Mr V’landys concentrated, as he had in submissions before the primary judge, upon what he submitted was an absence of a logical connection.

106. As explained in Ebner and Michael Wilson, the Court must be satisfied of the logical connection between the matter identified and the feared deviation from the course of deciding the case on its merits.

107. The logical connection test is satisfied here. The logical connection between the matter relied on as an indicator of pre-judgment, here Mr V’landys’ role in retaining lawyers to threaten Mr Golden personally with defamation proceedings, and the feared deviation from impartial determination of the matter by the decision maker, is made out. It is logical that the threatened defamation action, a cause of action personal to Mr V’landys in which Mr Golden would be the defendant, was sufficiently connected with the exercise of a power by Mr V’landys to warn off, to meet that test.

108. The higher standard urged by the first respondent, that the Court need conclude the existence of personal animus before a logical connection can be established, should be rejected. The logical connection test to which I have referred does not require proof of the existence of personal animus. To require such proof would tend to blur the distinction between apprehended bias and actual bias.

109. The present is a case where the double might test is satisfied and the logical connection between Mr V’landys instructing lawyers to threaten Mr Golden personally with defamation proceedings, and the fear that he would deviate from making an impartial determination about Mr Golden’s warning off is made out. The primary judge should have so concluded.

110. The logical connection test was made out when Mr V’landys personally threatened legal proceedings against Mr Golden about certain conduct as a result of which he was claiming damages and costs and then proceeded to make a decision affecting Mr Golden’s rights about that same conduct.

The broader case advanced on appeal by Mr Golden based upon Mr V’landys’ role in initiating the proceedings against Mr Golden being “incompatible” with his making the second decision

111. Given my conclusion about the narrower way in which the appellant addressed the issue of apprehended bias it is strictly unnecessary to determine the case based on the allegedly incompatible roles of Mr V’landys as instigator of the show cause hearing and decision maker, something Senior Counsel for Mr V’landys maintained was outside the scope of the pleadings and the issues decided by the primary judge.

112. This submission was maintained although the case was squarely put by Mr Golden in written opening submissions supplied in advance of the trial that “it was Mr V’landys who initiated the disciplinary process leading to the first determination” and “it was Mr V’landys who initiated the amendment to the second show cause notice to include Mr Golden’s conduct in displaying placards which Mr V’landys considered “offensive and insulting””.

113. Irrespective of the pleadings, that submission was in issue between the parties. RNSW responded to the substance of it. Mr V’landys specifically responded to it in closing oral submissions:

In other words, the initiative for the process that was put in place was the Licensing Committee. It was an initiative taken by Mr Bulloch, not by Mr V’landys himself.

114. It may be inferred that the primary judge’s reasoning at [84] ‑ [85] was a direct response to this issue being presented before her Honour by all parties.

115. Senior Counsel for Mr V’landys resisted the conclusion that the matter had been in issue between the parties at trial and submitted that “It may be some tangential step along the way to something, but it's not a particular of apprehended bias that was relied upon”: That, however, does not appear to be how any party treated the point at trial.

116. It is plain that all parties here made submissions on an issue which was outside the case as particularized. It is not open to the respondents to lead the primary judge to resolve issues which, only on appeal, are said to be outside the scope of pleadings. The law has long recognised cases where parties have chosen to litigate on issues outside the pleadings.

117. Mr V’landys’ roles and actions in this matter involved him personally in much the same way as the manager in Stollery, who was subjected to, and affronted by, the alleged bribe. Mr V’landys was also the target of abuse of the kind directed to the District Chief Ranger in Dickason. As Senior Counsel for the first respondent correctly pointed out, however, that was not sufficient in itself to demonstrate the relevant “incompatibility”.

118. The incompatibility identified in Dickason, Stollery and Knox City as necessitating disqualification was acting as a decision maker in circumstances where the person was also a prosecutor, accuser or other moving party. It is clear from the history described above that Mr V’landys initiated the amendment to the second show cause notice to include Mr Golden’s conduct in displaying placards which Mr V’landys considered “offensive and insulting”, delegated the hearing function to the Licensing Committee and ultimately made the decision to warn off Mr Golden himself, albeit on the Committee’s recommendation.

114. Mr V’landys’ position in the present case was akin to accuser or other moving party as well as decision maker. The appellant’s broader complaint about apprehended bias should also be upheld.

The exercise of discretion

Submissions by the appellant

120. The appellant submitted that the primary judge erred in her exercise of discretion. It was submitted that this Court should exercise the discretion afresh for the following reasons:

1. if apprehended bias was found, the circumstances favoured granting relief;

2. this was a case where Mr Golden failed to pursue his appeal rights because he misunderstood those rights;

3. judicial review is the only avenue now available for Mr Golden to seek redress;

4. a serious departure from the rules of procedural fairness required that judicial review should be permitted, notwithstanding an alternative means of appeal, especially where Mr Golden’s livelihood was at stake;

5. the fact that Mr Golden could have made an approach to RNSW to have the warning off annulled under AR 7(iii)(i), was not a matter that should weigh against him. It was submitted that Mr Golden should not be denied relief in this Court because he has decided not to take his chances with an organisation whose decision-making produced a result he legitimately perceives as unfair.

Submissions by the respondents

121. The first respondent submitted that the appellant did not challenge in this appeal her Honour’s identification of the nature of the discretion, or the considerations applicable to its exercise.

122. The crux of the appellant’s challenge appeared to be the primary judge’s rejection of Mr Golden’s contention that “judicial review in this Court is the only avenue now available for the plaintiff to seek redress”, by her finding that the appellant’s “remedy is in his own hands and yet he has steadfastly refused to lift a finger to grasp it”. It was submitted that the remedy of seeking to have the warning off lifted pursuant to AR 7(iii)(i)) was, and remains, available to the appellant.

Consideration of the exercise of discretion

123. In my view the discretion of the primary judge miscarried. The primary judge addressed the exercise of discretion on a global basis. She said, at [131] ‑ [132] and [136]:

As none of the grounds of challenge has been made out, it is not necessary to consider the question of discretion. However, for completeness, I propose to give brief reasons for my view that, had any challenge been made out, I would not have exercised my discretion to grant relief.

The right of appeal to the Tribunal was readily available to the plaintiff. He was amply notified of the right and of the time limit. He was not relevantly indisposed. He was able to write documents throughout the period and, had he been minded to, such documents could have included a notice of appeal to the Tribunal. He would have, in that event, had a fresh hearing on the merits before a Tribunal whose members did not include Mr V’landys. The Tribunal would have been obliged to consider whether any penalty was warranted, and, if so, what penalty.

…

Further, the time for which the plaintiff’s licence was revoked has long passed. The current impediment to his activities is the warning off, which remains in place at least potentially because he has taken no step to ask Racing NSW that it be lifted. His remedy is in his own hands and yet he has steadfastly refused to lift a finger to grasp it. In these circumstances I am not persuaded that it would be appropriate for this Court to exercise its discretion in his favour.

124. It will be recalled that the appellant had complained, inter alia, about actual bias, apprehended bias, improper purpose and bad faith. In the facts of this case, for the primary judge to have addressed the exercise of discretion on a global basis, without identifying which cause of action she was addressing when exercising that discretion, involved an error of principle. If the primary judge intended to dismiss each of those separate claims on discretionary grounds, those grounds should have been identified and addressed separately. For example, much more would have been required to justify the discretionary withholding of relief if the decision had been shown to have been affected by actual bias or bad faith. Accordingly, it is necessary for this Court to exercise the discretion afresh.

125. In my view, the discretion should not be exercised to deny the appellant the relief he seeks for the following reasons.

126. First, this was not a case in which rights of appeal to an administrative tribunal remain unexhausted. It is thus quite different to cases such as Boral Gas (NSW) Pty Ltd v Magill at 518‑519. Beazley JA (as her Honour then was), with whom McColl and Macfarlan JJA agreed in Rodger v de Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 at [92] described the relevant principle thus:

...when a party … has a right of appeal in the court or tribunal whose orders are subject to judicial review, that party is not confronted with mutually exclusive choices. Rather, a superior court with supervisory jurisdiction usually requires a party first to exhaust those other remedies.

127. Secondly, this was a case where the appeal remedy available was no longer available seven days after making the second decision. Judicial review is the only avenue practically now available for the appellant to challenge the second decision.

128. The relevant discretionary consideration in those circumstances, by reference to the decision of the High Court in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57, is whether it can be said that the aggrieved party has acquiesced or waived his or her right to seek judicial review. In Rodger v de Gelder at [90] Beazley JA described such a finding as requiring a conclusion that the aggrieved party had abandoned his or her rights. The conduct of Mr Golden in this case does not demonstrate an abandonment of his rights.

129. Thirdly, where there has been a serious departure from the rules of procedural fairness judicial review will usually be allowed, notwithstanding the availability of an alternative method of review, even where a full merits review is available: Garde-Wilson v Legal Services Board (2008) 19 VR 398; [2008] VSCA 43 at [10] per Nettle JA (as his Honour then was) and [115] ‑ [116] per Dodds-Streeton JA.

130. Fourthly, I am not persuaded the discretion should be exercised against the grant of relief by reason of Mr Golden’s failure to seek the annulment of the warning off under AR 7(iii)(i). The annulment power is discretionary. The fresh evidence admitted on this appeal demonstrates that the exercise of the power would involve, at the very least, Mr Golden paying all of the costs of Mr V’landys in circumstances where I have concluded that Mr Golden was entitled to succeed on the apprehended bias ground.

131. It follows that the second decision should be set aside.

Improper purpose

The appellant’s submissions

132. The appellant submitted that the decision to warn him off was not made for the purpose of controlling, supervising or regulating horseracing, but instead, was intended to punish him for making comments about Mr V’landys and to deter him from repeating that conduct. In support of this submission, the appellant relied on the following matters:

1. the second show cause notice hearing and the letter containing the second decision indicated that the purpose of the second decision was to punish Mr Golden for displaying placards which said offensive things about Mr V’landys; and

2. a person can only be warned off if their presence on a racecourse “is not desired”. This, however, is not the purpose of the section and it is insufficient to say that a person has been warned off because their presence is not desirable.

133. Mr Golden submitted that the power granted to RNSW by LR 6 was used for an improper purpose against him if it was used for a purpose other than “controlling, supervising or regulating horse racing in New South Wales” (s 13(b) of the Thoroughbred Racing Act) or to control and general[ly] supervis[e] racing (AR 7). So much was accepted by the first respondent. The appellant submitted that the second decision was made for such a purpose, to be inferred from the circumstances in which Mr V’landys made it, namely:

1. at the time of the second decision, Mr Golden’s trainer’s licence had already been suspended for six months so he was not actively involved in horse racing;

2. the conduct of Mr Golden in displaying placards offensive to Mr V’landys was not conduct he engaged in during the course of his involvement in any aspect of horse racing;

3. there was no material before Mr V’landys suggesting that Mr Golden intended to attend a racecourse and display any offensive placard there; and

4. RNSW could not warn off any person who had engaged in offensive behaviour where that behaviour was not even remotely connected to horse racing and the person had never been to a racecourse.

Consideration of improper purpose ground

134. The appellant accepted that an inference of improper purpose should only be drawn if the evidence could not be reconciled with the proper exercise of power: Industrial Equity Limited v Deputy Commissioner of Taxation at 672.

135. Whether an exercise of power is vitiated by an improper purpose on the part of the decision maker is determined by reference to his or her subjective state of mind: Mandurah Enterprises Pty Ltd v Western Australia Planning Commission (2008) 38 WAR 276; [2008] WASCA 211 at 289 – 290; Austral Monsoon Industries Pty Ltd v Pittwater Council (2009) 75 NSWLR 169; [2009] NSWCA 154 at [98].

136. Decisions are impeachable for improper purpose only where the relevant power is purposive or, at least where some purposes are forbidden: M Aronson and M Groves, Judicial Review of Administrative Action, (5th ed, 2013, Lawbook Co) at [5.510].

137. The primary judge found that the appellant did not make out a claim that Mr V’landys acted with an improper purpose when he made the second decision. In particular, her Honour found, at [117], that:

no inference that Mr V’landys acted with an improper purpose can be drawn about his subjective intention from the determinations themselves, since they are consistent with a proper exercise of the power.

138. As there was no further evidence of Mr V’landys’ actual subjective intention, the primary judge concluded it was not open to her to draw an inference of improper purpose: at [118].

139. Applying conventional principles of judicial review to the exercise of consensual power under LR 6, there could only be abuse of power or an improper purpose if Mr V’landys’ subjective purpose was shown to be improper. The absence of any challenge to the primary judge’s findings about that purpose is sufficient to resolve this aspect of the case.

140. It may be accepted that the power to warn off under LR 6 can only be used for the purpose of controlling, supervising or regulating horse racing (as provided in s 13(b) of the Thoroughbred Racing Act) or for the control and supervision of racing (as provided in AR 7). It is a quite different thing, however, to conclude that there is an implied limit on the power requiring Mr V’landys to be satisfied that Mr Golden intended to attend a racecourse and display any offensive placard there. Further, there is no reason to think that RNSW’s power to “warn off” is limited to offensive behaviour “connected to horse racing” or occurring “on a racecourse.”

141. In any event, as noted above, the appellant’s failure to challenge the primary judge’s finding that Mr V’landys’ subjective state of mind was consistent with a proper exercise of power, means this aspect of the appeal must fail.

Misfeasance in public office

Elements of the tort

142. Although the outer limits of the tort remain unsettled (see Sanders v Snell (1998) 196 CLR 329 at 346 at [42] and M Aronson, “Misfeasance in Public Office: Some Unfinished Business” (2016) 132 Law Quarterly Review 427) the elements of the tort of misfeasance in public office may for present purposes be summarised as follows:

(1)    a public officer has purported to exercise power;

(2)    the purported exercise of power is ultra vires or otherwise wrongful;

(3)    the public officer, when purporting to exercise the power:

(a)    was malicious, that is, was intending to injure the plaintiff; or

(b)    did so, with actual knowledge that there was no power and that the conduct was calculated to produce the injury; or

(c)    was recklessly indifferent to the existence of the power and the possibility that injury would be suffered; and

(4)    the plaintiff has in fact suffered damage: Northern Territory v Mengel (1995) 185 CLR 307.

143. The essence of the tort is bad faith in the exercise of public powers: Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 at 137. Allegations that statutory powers have been exercised with deliberate disregard to the scope of those powers are not lightly to be made or upheld: Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146; [2008] HCA 32 at 165 [60].

Was Mr V’landys actually a “public officer”?

144. It will be recalled that the primary judge concluded that Mr V’landys was a public officer for the purposes of the tort.

145. In Leerdam v Noori (2009) 227 FLR 210; [2009] NSWCA 90 at 214–215 [16], Spigelman CJ said:

The concept of an “office”, in the context of liability for abuse of power, connotes an official position to which continuing functions or duties are assigned. Those duties or functions must be of a “public” nature. It is not sufficient merely to be employed by a public authority for public purposes. (C/f Ex parte Kearney (1917) 17 SR NSW 578).

146. The parties before this Court agreed that Mr V’landys was a “public officer” for the purposes of the various grounds of review. These reasons do not address whether that common position was correct.

The appellant’s submissions

147. The appellant submitted that, in relation to knowledge of or recklessness towards the invalidity of the second decision:

(a)    the risk of appearance of bias in Mr V’landys issuing the Warning Off was objectively very high, especially given the content of the Kennedys letter;

(b)    the contents of the Code of Conduct, especially as they appear under the heading “CONFLICTS OF INTEREST” a document about which Mr V’landys as CEO would have been familiar with;

(c)    the inference to be drawn from the fact that Mr V’landys did not allow himself to be cross-examined despite his knowledge about or recklessness towards the invalidity of his decision having been a pleaded allegation.

148. In relation to Mr V’landys’ knowledge of or recklessness towards Mr Golden’s loss, the appellant submitted that:

(a)    Mr V’landys knew that Mr Golden owned horses, that he regularly raced them and that until the suspension of his trainer’s license on 8 June, he had a license that allowed him to earn an income from training;

(b)    there was a reasonable likelihood given the nature of his training license that Mr Golden earned an income from training or intended to do so in the future (there is no other apparent reason for having a Country Trainers license) and that if so his income would therefore be affected by an indefinite warning off;

(c)   there is no evidence of enquiries that Mr V’landys made, or had reference to, concerning whether Mr Golden earned an income from training or intended to.

Consideration of misfeasance in public office

149. The appellant’s case must fail as he did not prove Mr V’landys’ knowledge of, or reckless indifference towards, the invalidity of the second decision.

150. The “risk” of appearance of bias in Mr V’landys issuing the second decision, even assuming that it was objectively very high, is insufficient to prove knowledge of or reckless indifference towards the invalidity of the second decision. This submission tends to elide the elements of apprehended bias and actual bias. The appellant failed in relation to the latter and no appeal was brought challenging that failure.

151. The contents of the Code of Conduct, especially as they appear under the heading “CONFLICTS OF INTEREST”, take the matter no further. They do not support an inference that in Mr V’landys making the second decision, he acted with knowledge of or reckless indifference towards the invalidity of that decision.

152. The suggested inference that Mr V’landys did not allow himself to be cross-examined despite his knowledge of or recklessness towards the invalidity of his decision having been a pleaded allegation does not arise. Mere failure to give evidence cannot fill an evidential void on a critical issue where the appellant bears the legal onus. Merely to plead that a defendant had knowledge of or was recklessly indifferent towards the invalidity of his or her decision does not shift that legal onus or create an evidential onus.

153. That conclusion is sufficient to dispose of the appellant’s misfeasance in public office case. If it were necessary to decide, the case would also fail for the following reasons:

1. there was no proof that Mr V’landys knew or was recklessly indifferent to the possibility that injury would be suffered by Mr Golden by making the second decision. Mere negligence is not enough; and

2. the appellant sought damages on the basis that the second decision was the product of the first respondent’s misfeasance in a public office. His claim is based on a loss of opportunity to make an income as a horse trainer. If it were relevant, the appellant also failed to lead any, or any satisfactory, evidence of loss or damage by reason of the making of the second decision.

154. Accordingly, it is unnecessary to address the privative provisions contained in s 12(1) of the Thoroughbred Racing Act and AR 197, on the basis that the tort was otherwise established.

155. The appeal concerning misfeasance in public office should be dismissed.

Costs of the appeal and the trial

156. As the appeal has been allowed only on the apprehended bias ground the respondents should pay 75 per cent of Mr Golden’s costs of the appeal as agreed or assessed.

157. Given the number of issues ventilated at trial, many of which were not the subject of appeal, the parties should have the opportunity to make submissions about the appropriate orders to be made concerning the costs of the hearing before the primary judge.

158. Orders should be made to permit those submissions to be considered by the Court on the papers.

Orders

159. Accordingly, I propose the following orders:

1. leave to appeal granted;

2. the affidavit of Mr Golden sworn 6 September 2016 is admitted as evidence on this appeal pursuant to s 75A of the Supreme Court Act;

3. further amended notice of appeal to be filed within 7 days of the date of publication of this judgment;

4. ground 4 of the further amended notice of appeal is upheld;

5. all remaining grounds of the further amended notice of appeal are dismissed;

6. set aside orders of Adamson J of 17 November 2015 and in lieu thereof order:

1. the decision of the first respondent dated 24 June 2011 to warn off the appellant from all race tracks controlled by the second respondent is quashed;

2. the first and second respondents to pay 75 per cent of the appellant’s costs of the appeal as agreed or assessed;

3. within 7 days of the publication of this judgment the appellant to file submissions about the appropriate order for costs before the primary judge;

4. within 14 days of the publication of this judgment the first and second respondents to file submissions about the appropriate order for costs before the primary judge;

5. within 21 days of the publication of this judgment the appellant file submissions in reply about the appropriate order for costs before the primary judge.

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Amendments

04 November 2016 - Typographical errors corrected in [61], [72], [88] and [133].

Decision last updated: 04 November 2016