Golden v V'landys

[2015] NSWSC 1709

Supreme Court

New South Wales

Medium Neutral Citation:	Golden v V’landys [2015] NSWSC 1709
Hearing dates:	10 and 11 November 2015
Decision date:	17 November 2015
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	1. Judgment for the defendants.  2. Unless any party makes an application for a different order in writing to my Associate within seven days, order the plaintiff to pay the defendants’ costs of the proceedings.
Catchwords:	JUDICAL REVIEW – actual bias – apprehended bias – unreasonableness – whether bad faith or improper purpose – whether decisions of Racing NSW to suspend trainer’s licence and to warn plaintiff off racetracks could be impugned   TORT – misfeasance in public office – whether invalid or unauthorised act – requisite intention not established – loss not proved
Legislation Cited:	Racing Administration Act 1998 (NSW), s 13 Racing Appeals Regulation 2010 (NSW), cll 5, 6 Racing Appeals Tribunal Act 1983 (NSW), ss 15, 16, 18 Thoroughbred Racing Act 1996 (NSW), ss 4, 6, 11, 11A, 12, 13, 14, 14AA, 21, 24
Cases Cited:	Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501 Ebner v Official Trustee [2000] HCA 63; 205 CLR 337 Farrington v Thomson and Bridgland [1959] VR 286 Flaherty v National Greyhound Racing Club Ltd [2005] EWCA 1117 Hot Holdings Pty Ltd v Creasy [2002] HCA 51; 210 CLR 438 Industrial Equity Ltd v Deputy Commissioner of Taxation (1990) 170 CLR 649 McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504 Michael Wilson and Partners Ltd v Nicholls [2011] HCA 48; 244 CLR 427 Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507 Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 Northern Territory v Mengel (1995) 185 CLR 307 Re Refugee Tribunal; Ex Parte H [2001] HCA 28; 75 ALJR 982 SBBS v Minister for Immigration and Multicultural Affairs (2002) 194 ALR 79 SCAS v Minister for Immigration and Multicultural Affairs [2002] FCAFC 397
Texts Cited:	Australian Rules of Racing Local Rules of Racing Racing NSW Board Code of Conduct Rules of Betting Rules of Racing of Racing NSW
Category:	Principal judgment
Parties:	Joseph Golden (Plaintiff) Peter V’landys (First Defendant) Racing New South Wales (Second Defendant)
Representation:	Counsel: AD Crossland/D Sweeney (Plaintiff) I Jackman SC/N Owens (First Defendant) H El-Hage (Second Defendant)     Solicitors: Koffels Solicitors & Barristers (Plaintiff) Moray & Agnew Lawyers (First Defendant) DLA Piper (Second Defendant)
File Number(s):	2013/140063

Judgment

Introduction

1. Joseph Golden, the plaintiff, challenges two decisions made by Peter V’landys, the first defendant, on behalf of Racing New South Wales (Racing NSW), the second defendant. Mr V’landys is, and was at the relevant time, the Chief Executive of NSW Racing. The first decision, made on 8 June 2011, resulted in the plaintiff’s trainer’s licence being suspended for six months. The second decision, made on 24 June 2011, resulted in the plaintiff being warned off racetracks controlled by Racing NSW indefinitely. The plaintiff also claims damages for alleged misfeasance in public office by Mr V’landys.

2. In order to address the questions to be determined it is necessary to set out the regulatory framework.

Relevant legislation and rules

Thoroughbred Racing Act 1996 (NSW)

3. Section 4 of the Thoroughbred Racing Act established Racing NSW as a body corporate. Section 6 provided that it was to consist of a Chief Executive and five appointed members. Section 11 provided that it is the duty of each appointed member to act in the public interest and in the interests of the horse racing industry as a whole in New South Wales. Section 11A provided that Racing NSW must adopt a code of conduct to be observed by members and staff of Racing NSW which is required to include a statement of the duty of members of Racing NSW under s 11 and the duties and obligations of members under s 21.

4. Section 12 provided:

“12 Personal liability

(1) A matter or thing done or omitted to be done by Racing NSW, the Chief Executive, or a member of Racing NSW or the Selection Panel or any person acting under the direction of Racing NSW does not, if the matter or thing was done or omitted to be done in good faith for the purpose of executing this Act, subject the Chief Executive, the member or a person so acting personally to any action, liability, claim or demand.

(2) If this section prevents liability attaching to a person, the liability attaches instead to Racing NSW.”

5. Section 13(1) relevantly provided:

“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,

. . .”

6. Section 14 relevantly provided:

“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.”

7. Section 14AA relevantly provided:

“14AA Registration and licensing functions of Racing NSW—general

(1) Racing NSW is to exercise its registration and licensing functions so as to ensure that any individuals registered or licensed by Racing NSW are persons who, in the opinion of Racing NSW, are fit and proper persons to be so registered or licensed (having regard in particular to the need to protect the public interest as it relates to the horse racing industry).

. . .

(4) In this section:

. . .

registration and licensing functions means the functions referred to in section 14 (2) (b).”

8. Section 21 required the disclosure of pecuniary interests by members of Racing NSW or members of a Racing NSW’s committee. Section 22 provided that Racing NSW may establish committees to assist it in connection with the exercise of any of its functions.

9. Section 24 provided:

“24 Delegation of functions

(1) Racing NSW may delegate to an authorised person or body any of its functions, other than this power of delegation.

(2) A delegate may sub-delegate to an authorised person or body any function delegated by Racing NSW if the delegate is authorised in writing to do so by Racing NSW.

(3) In this section, authorised person or body means:

(a) the Chief Executive or any other member of Racing NSW, or

(b) a committee of Racing NSW or any member of such a committee, or

(c) a race club or racing association.”

Racing Administration Act 1998 (NSW)

10. Section 13 of the Racing Administration Act relevantly provided:

“13 Certain persons prohibited from entering racecourses

(1) Any person who has been warned off a racecourse, or who is disqualified from participating in any racing activities, by a controlling body must not enter any racecourse under the administration or control of that controlling body while the warning off or disqualification is in force.

Maximum penalty: 50 penalty units or imprisonment for 12 months (or both).”

Racing Appeals Tribunal Act 1983 (NSW)

11. Section 15(1)(d) of the Racing Appeals Tribunal Act (the RAT Act) provided that a person who is aggrieved by a decision of Racing NSW may appeal against the decision to the Racing Appeals Tribunal (the Tribunal). Section 16 provided that an appeal is to be by way of a new hearing and fresh evidence, or additional or substitute evidence, may be given on appeal.

12. Section 18 of the RAT Act provided for a regulation-making power, including a power to make regulations that provide that no appeals may be made under the Act except in respect of prescribed classes of matters.

Racing Appeals Regulation 2010

13. Clause 5 of the Racing Appeals Regulation provided that, in a case of an appeal under s 15(1)(d) of the RAT Act, an appeal may be made to the Tribunal from certain decisions, which include a decision to warn off a person or to suspend any licence. Clause 6 provided that in the case of an appeal under s 15(1)(d) of the RAT Act appeals are to be initiated by the lodging of a written notice of appeal with the Secretary, in the case of an appeal made under s 15(1)(d), within seven days of the date on which the appellant is notified of the decision. There is no provision in either the RAT Act or the Racing Appeals Regulation for an extension of this time period.

Rules of Racing of Racing NSW

14. The Rules of Racing of Racing NSW comprise the Australian Rules of Racing (AR); the Local Rules of Racing (LR); and the Rules of Betting.

15. AR 2 provided that any person who takes part in any matter coming within these Rules thereby agrees with the Australian Racing Board and each and every Principal Racing Authority to be bound by them.

16. 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.”

17. AR 175 relevantly provided:

“The Committee of any Club or the Stewards may penalise:

. . .

(j)   Any person guilty of improper or insulting behaviour at any time towards the Committee or any Club or Association or any member thereof, or Stewards, or any official, in relation to their or his duties.

. . .”

18. AR 182 relevantly provided:

“(1) Except with the consent of the Principal Racing Authority that imposed the disqualification, and upon such conditions that they may in their discretion impose, a person disqualified by the Stewards or a Principal Racing Authority shall not during the period of that disqualification:-

(a)   Enter upon any racecourse or training track owned, operated or controlled by a Club or any land used in connection therewith;

(b)    Enter upon any training complex or training establishment of any Club or licensed person;

(c)   Be employed or engaged in any capacity in any racing stable;

(d)   Ride any racehorse in any race, official trial, jump-out or test;

(e)   Enter or nominate any racehorse for any race or official trial; or

(f)   Subscribe to any sweepstakes;

(g)   Race or have trained any horse whether as owner, lessee or otherwise;

(h)   Share in the winnings of any horse;

(j)   Participate in any way in the preparation for racing or training of any racehorse.”

19. AR 182A provided:

“A bookmaker shall not bet by telephone or otherwise with a disqualified person.”

20. AR 183 provided:

“A person warned-off by a Principal Racing Authority shall be subject to the same disabilities as a person disqualified.”

21. AR 197 relevantly provided:

“No person shall be entitled to make any claim for damages by reason or in consequence of the imposition . . . of any penalty imposed or purporting to be imposed under the Rules.”

22. LR 6 provided:

“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.”

23. LR 51(2) provided:

“The Board may grant any licence or permit upon such terms and for such period and for such locality as they may see fit, and may refuse to grant any such licence or permit without assigning any reason for such refusal, and may at any time cancel or suspend or vary without giving any reason any such licence registration or permit before the termination of the period for which such licence or permit was granted.”

The Racing NSW Board Code of Conduct

24. The Racing NSW Board Code of Conduct provided, relevantly:

“3.   DUTIES OF THE BOARD

Board members are subject to a range of duties owed to Racing NSW. These are derived from the Thoroughbred Racing Act 1996, Common Law and other sources. At the most fundamental level these duties are-

The fiduciary duty of loyalty which is usually expressed as a duty to act in good faith and in the interests of the body as a whole, and -

. . .

The fiduciary duty of loyalty is owed to Racing NSW itself as a whole. The members duty of loyalty to Racing NSW as a whole is “fiduciary” that is to say it imposes the highest standard of fidelity, because the Member occupies a position of trust vis-à-vis Racing NSW. The nature of the duty is similar to that of the trustee towards the beneficiaries of a trust. The principal manifestations of this duty of a member are; -

To act bona fide in the best interests of Racing NSW as a whole.

To exercise the powers conferred by the Act for the proper purposes of Racing NSW and not for any extraneous purpose, and

Seeking to avoid being placed in a position where the member’s duty to Racing NSW as a whole conflicts or may conflict with personal interest, and if such a possibility arises disclosing the matter and handling it in the interests of Racing NSW as a whole.”

. . .

6.   CONFLICTS OF INTEREST

The Thoroughbred Racing Act 1996 and Common Law set high standards for removing conflicts of interest. Conflicts of interest are assessed in terms of the likelihood that Board Members possessing a particular interest could be influenced or might appear to be influenced, in the performance of their duties on any matter. At all times a Board Member must be able to act in the interests of Racing NSW as a whole…

Where a conflict or perceived conflict does arise, the Board Member must consider whether to refrain from participating in the debate and/or voting on the matter, whether to arrange that the relevant Board Papers are not sent, or in an extreme case whether to resign from Racing NSW. The Chairman or Chief Executive is available to discuss potential conflicts of Interest with Board Members. In any event, full disclosure of conflicts or potential conflicts must be made at the Racing NSW Board meeting, or prior in writing to the Chief Executive.”

The facts

The delegation of power in Racing NSW

25. On 21 February 2005 the Board of Racing NSW (the Board) resolved to confer on the Chief Executive the power and authority to manage the business of Racing NSW, subject to its limitations policy.

26. On 17 March 2008 the Board resolved to abolish the Licensing Committee as a sub-committee of the Board and to delegate its licensing functions to the Chief Executive.

27. On 23 April 2008 the Board resolved to delegate its warning off authority, under LR 6 to the Chief Executive.

28. On 15 September 2008 the Board resolved to authorise the Chief Executive to sub-delegate his functions to management and employees of Racing NSW. A Licensing Committee was established, which comprised a panel of Racing NSW managers and employees representing the Licensing, Stewards, Legal and Industry Training Departments of Racing NSW. The Licensing Committee was chaired by the General Manager-Regulatory and provided assistance to the Chief Executive in dealing with licensing matters at his or her direction.

The plaintiff’s background

29. The plaintiff lives on a property at Grafton of about 45 hectares where he keeps horses. He used to own the property but, in 2013, he sold it to his daughter. He kept Brahman cross-bred cattle on the property from 1984 to 1988 but since that time he has carried out various improvements to the property for the benefit of horses.

30. The plaintiff was, by occupation, an accountant but in about 2005 he reduced the time he spent on accountancy and consulting services and dedicated more of his time and energy to building up a horse breeding and racing business. In 2010 he began training his own horses.

31. The plaintiff raced his horses, with mixed success. The total prize money for the 2010 financial year was $7,600 and for the following year, $10,400. He also earned money for starter’s fees (paid in respect of horses which started a race) and rebates (paid in respect of horses that finished but did not get a place). In 2010 the plaintiff’s gross income from racing horses was $11,362; in 2011 it was $20,670. In those years he made taxable losses, after deductions for expenses.

32. In 2007 the equine influenza virus affected horses in Australia. In response the Commonwealth established the Commercial Horse Assistance Payment Scheme (CHAPS) to compensate horse owners and trainers.

33. In 2009 the plaintiff applied for a full country training licence. He had previously held an owner/trainer’s licence but had allowed it to lapse due to his disenchantment with the way CHAPS had been administered. In January 2008 the plaintiff wrote to Kevin Rudd (the then Prime Minister), Tony Burke (the then Minister for Agriculture, Fisheries and Forestry) and Mr V’landys about his concerns. He spoke to local newspapers, such as the Daily Examiner, about what he saw as the abuse of CHAPS. The Daily Examiner published an article in April 2008 reporting some of the plaintiff’s allegations.

34. In November 2010 the plaintiff was notified by Racing NSW that he was not to race one of his horses, Abilina, more than once a week, apparently due to its concern that more frequent racing might be detrimental to the health of the horse. By letter dated 17 November 2010 the plaintiff wrote to Mr V’landys to complain about the decision. In the letter, the plaintiff accused Mr V’landys of being responsible for an “unprofessional review”.

The plaintiff’s letter of 10 May 2011

35. The plaintiff had entered Abilina in at least two races that were fewer than seven days apart. Accordingly, he became liable for scratching fees in respect of races for which Abilina was entered but was not, by reason of the directive from Racing NSW, permitted to run. The plaintiff was charged a scratching fee of $80. His request that the fee be reversed was declined.

36. On 10 May 2011, the plaintiff wrote a letter addressed to the “General Manager, Racing NSW” which read:

“Subject:   A reply to my letter to you of 26th Feb re reversal of scratching fee for ABILINA – Race 5 Port Macquarie 1st Feb has never been replied to!!!

Dear Sir,

Your [sic] corrupt, incompetent & incapable of performing a review of the above horse CEO interfered in my racing this horse.

I should be suing RNSW for the costs, stress, inconvenience your CEO played in his interfering in this horses [sic] racing programs.

Any subsequent accounts you send to me should be hastily shoved up his arse until such time that the $80 fee is reversed.”

37. By email of 13 May 2011 Keith Bulloch (who, as the General Manager- Regulatory, chaired the Licensing Committee) reported to Mr V’landys on the plaintiff’s letter, alleging that it contained “offensive and insulting comments”. After setting out the text of the plaintiff’s letter, Mr Bulloch said:

“If you agree to delegate to the licensing committee the function to issue a show cause notice and conduct a hearing there is a draft letter attached.

You could use these words by return email:

As the authorised officer with the delegated authority from the Board, I sub-delegate to the Licensing Committee my delegated power to issue a show cause notice to Mr Joseph Golden, conduct a hearing of that show cause notice and to make a recommendation to me upon the conclusion of that hearing.

Regards,

Keith”

38. Mr V’landys accepted Mr Bulloch’s suggestion and, by return email, sub-delegated his authority from the Board to the Licensing Committee to issue a show cause notice, conduct a hearing and make a recommendation to him following the hearing.

The First Show Cause Notice

39. By letter dated 16 May 2011 Mr Bulloch wrote to the plaintiff (the First Show Cause Notice) in accordance with the draft letter he had sent in the email of 13 May 2011 to Mr V’landys. The letter began with the statement that Racing NSW, as the regulator of thoroughbred racing in NSW, was duty bound to act in the interests of the industry as a whole. He referred to AR 7, LR 51 and s 14AA of the Thoroughbred Racing Act. He informed the plaintiff that he was required to attend at a hearing on 31 May 2011 to show cause why his trainer’s licence ought not be suspended or revoked on the basis that he was not a fit and proper person to be licensed as a trainer. A typescript of the substantive part of the plaintiff’s letter of 10 May 2011 was reproduced in the First Show Cause Notice. Mr Bulloch set out the plaintiff’s rights to make submissions; how such submissions could be made; and his right to legal representation.

40. The notice continued:

“The Chief Executive Officer, Mr Peter V’landys, who is the authorised officer with the delegated authority to exercise the powers of Racing NSW has sub delegated to the Licensing Committee the function to issue this show cause notice and to conduct this hearing. Further, the functions of licensing are delegated to the Licensing Committee pursuant to LR 51(3).”

41. The First Show Cause Notice also contained the following paragraphs:

“Please note that this matter is of extreme importance. You should attend to the matter immediately and consider seeking legal advice.

Please note that if you fail to appear, or do not forward a written submission in lieu of appearing, Racing NSW will proceed with the matter in your absence.”

42. On 17 May 2011 Mr Pringle, Chairman of Stewards, handed the First Show Cause Notice to the plaintiff. The plaintiff read the notice and confirmed that he understood the contents. He told Mr Pringle that he would probably not attend the hearing; that he “is not sure whether he will undertake legal advice”; and that he would write a further letter saying that he had received the notice and indicating what his intentions were.

The plaintiff’s response to the First Show Cause Notice

43. On 19 May 2011, the plaintiff wrote to Mr Bulloch and Gary Rudge (Licensing Supervisor of Racing NSW), relevantly, in the following terms:

“I will not be attending your meeting for 31st May.

I am not prepared to engage in legal costs to attend a ‘kangaroo court’, nor waist [sic] anybodyelses [sic] time in presenting myself (& others) before the minions of your corrupt CEO – P V’landys.

As General Manager Racing NSW (RNSW) you played an integral role in the maladministration and misappropriation of tens of millions of Australia taxpayers dollars, which suggests to me you were either party to the case or being directed & instructed by your CEO (to play ball).

I wrote to your CEO 31st January 2011 requesting a review of my horse now the subject of an $80 fee RNSW imposed on me. This fee came about as a result of your CEO trying to harass and bully me because I tried to call him to account about his role as Head of RNSW in the distribution of tens of millions of taxpayers’ dollars back in 2007-2008.

…

In the 31st Jan letter to your CEO, I requested he either not interfere with my racing program and send me addresses of the entire RNSW Board members that I could inform his fellow directors as to the level of jeopardy he was bringing upon every directions head with the decisions he made 2007-2008. (No addresses were forthcoming because his arse in (sic) on the line.)

He did not provide me with directors address (Non Druitt St) as requested, instead he handed the problem onto Mr Murrihy (and we dealt with it quite civilly and quickly). Later I received an account for $80 for this horse, wrote a letter 26th February requesting the amount be reversed, to which there was no response, and the rest is history. When the next month’s account arrived requesting insurance be paid, I then instructed RNSW to shove the account up you corrupt CEO’s arse because it is Vlandy that commenced this witch hunt on me, and then asks minions/puppets to clean up the mess. Please take all of the above into account should you be pressured into a decision about my character (and licence) with the CEO’s gun at your head(s).”

The plaintiff’s further conduct

44. On Monday 23 May 2011 the plaintiff drove to Grafton Bridge, which is about 20kms from his property, and stationed himself at the southern end of the bridge for a period of about two hours next to a large sign which read:

“RACING NSW CORRUPT

CEO ROBS TAXPAYERS”

The report to police

45. It appears that someone took a photograph of the plaintiff on the bridge on 23 May 2011 and sent it by email to Racing NSW. Mr Nicholson, Chief Racing Inspector, contacted the police. By email sent at 5.11pm on 23 May 2011, Mr Nicholson subsequently made the following report to Mr Bulloch, which was copied to Mr V’landys and to Pete Sweney, Racing NSW’s General Counsel:

“About 10am on Monday 23 May 2011, I spoke by telephone to Sergeant Rebecca Pipes, Grafton Police Station with the regards to the behaviour of licensed Racing NSW trainer, Joseph Golden. An earlier email received at this office depicted Golden standing on a Grafton street holding a placard with offensive wording relating to Racing NSW.

A request was made to Sergeant Pipes to speak with Golden as to his manner of behaviour and reason for this type of behaviour. The Sergeant agreed to assist but firstly to carry out certain inquiries relating to Golden.

I later spoke again with Sergeant Pipes who informed me that Golden had since moved on from the location shown in the email photograph. She was satisfied with his identity particulars and has since made a formal record of this incident. Sergeant Pipes further informed me that as Golden was conducting a ‘silent protest’ there was little the Police could do other than directing him to move along should he again behave in this way. Should he disobey such a direction, the Police would then be able to formally charge him.

Sergeant Pipes will contact me should Golden come to their attention in the future.”

46. On 23 May 2011 by email sent at 4.15pm Mr Bulloch sent a draft delegation to Mr V’landys so that Mr V’landys could sub-delegate his authority to the Licensing Committee to amend the First Show Cause Notice to add any subsequent behaviour of the plaintiff. Mr V’landys responded by email headed “Re: J Golden – elevating matters with poor behaviour” at 6.36pm that evening, sending the sub-delegation to Mr Bulloch (in a form identical to that proposed by Mr Bulloch). The email concluded:

“Please advise Board and in particular my action on Stewards recommendation to stop him racing his horse 4 times in one week.

Also that his Chaps payment allegations were without foundation.”

47. On Tuesday 24 May 2011 the local paper, The Daily Examiner, contained a story on page 5 concerning the plaintiff’s protest on the bridge. A photograph of the plaintiff holding his (clearly legible) sign was also published. The journalist reported:

“THREE years after the horse racing industry came to a shuddering halt through an outbreak of the equine influenza virus, one Grafton man is still fighting what he believes was a lack of accountability and rorting of the government assistance scheme introduced to help the horse industry through the crisis.

Yesterday he took that campaign to the streets with a one-man protest near the Grafton Bridge during peak hour traffic and said he would be back rain, hail or sunshine today and tomorrow to get his point across.

And if that doesn’t get the attention he believes the issue deserves, he will head to Sydney to do the same.

Joseph Golden does not like to give up.”

48. By email sent at 8.31am on 24 May 2011 Mr Bulloch sent an email to Ken Brown and Arthur Inglis, in which Mr V’landys was copied. Mr Bulloch recounted the plaintiff’s conduct on the bridge and the fact that it had been reported in the Grafton Examiner. Mr Bulloch said in the email:

“He may be copycatting the guy that climbed the Harbour Bridge last week and stopped traffic.”

49. After recounting the background to the incident Mr Bulloch wrote:

“We are left with little option now but to elevate [next] week’s hearing to include the latest actions and include the prospect of him facing heavier sanctions including being warned off. He has no horses racing at the moment.”

50. On Tuesday 24 May and Wednesday 25 May 2011 the plaintiff again drove to Grafton Bridge and displayed the same sign for about two hours on each day.

The Amended Show Cause Notice

51. By letter of 24 May 2011 Mr Bulloch wrote to the plaintiff and referred to the First Show Cause Notice; the plaintiff’s letter of 19 May 2011; and a copy of a photograph of the plaintiff standing next to Grafton Bridge holding a placard. Mr Bulloch informed the plaintiff that the show cause hearing scheduled for 31 May 2011 had been amended to include the insulting comments in the plaintiff’s letter of 19 May 2011 and the placard displayed on the Grafton Bridge on 23 May 2011. The plaintiff was invited to show cause why his trainer’s licence ought not be suspended or revoked on the basis that he was not a fit and proper person and why he ought not be warned off all racecourses within the control of Racing NSW on the basis that his presence was not desirable. Once again, he was invited to make submissions and appear.

52. On 24 May 2011 at 4.40pm Mr Bulloch sent an email to Greg Rudolph (Deputy Chairman (Racing) in Racing NSW’s Stipendiary Stewards Department), Mr Sweney and Maurice Logue (a member of Racing NSW’s management team), which was copied to Mr Rudge, which said:

“Please note that the Joseph Golden show cause is set for Tue 31 May at 11am. Golden has addressed his latest correspondence/accusations [the letter of 19 May 2011] to myself (and Gary [Rudge]).

As a consequence we will stand aside and the Committee will be Greg (Chair), Pete [Sweney] and Maurice.”

53. On 30 May 2011 Mr Bulloch sent an email to Mr Pringle which was copied to Mr Rudge, Mr Rudolph, Mr Sweney and Mr Logue, in which he raised his concern that there had been no response to the Amended Show Cause Notice. Mr Bulloch asked Mr Pringle to visit the plaintiff’s property to see if he had received it. Mr Pringle reported by email to Mr Bulloch sent later that day that he had visited the plaintiff’s property but the gate was padlocked and he could not see any sign of anyone being there. He confirmed that he had made numerous calls to his house but there had been no response.

The plaintiff’s further conduct

54. On Monday 30 May 2011, the plaintiff held two placards outside the office of the Commonwealth Member of Parliament Janelle Saffin in Lismore. One read:

“RACING NSW CORRUPT

CEO ROBS TAXPAYERS”

55. The other read:

“CHAPS PUBLIC AUDIT REPORTS $220,000,000 MISAPPROPRIATION PUBLIC INQUIRY NEEDED”

56. There is no evidence that the plaintiff’s further conduct came to the attention of the Licensing Committee at, or prior to, the Show Cause Hearing on 31 May 2011.

The First Show Cause Hearing: 31 May 2011

57. The Licensing Committee, constituted by Mr Rudolph, Mr Sweney and Mr Logue, conducted the First Show Cause Hearing on 31 May 2011. The plaintiff did not attend.

58. Following the hearing, the Licensing Committee informed Mr V’landys:

1. that it was satisfied that the plaintiff:

1. had been adequately put on notice of the hearing by the First Show Cause Notice; and

2. had failed to show cause why his trainer’s licence ought not be suspended or revoked on the basis that he was not a fit and proper person on the basis of his letters of 10 May 2011 and 19 May 2011;

2. that it was not satisfied that he had received the Amended Show Cause Notice;

3. that it had considered, in deciding on a recommended penalty, the plaintiff’s “complete lack of contrition or remorse” and the aggravation of the original conduct (the letter of 10 May 2011) by the sending of the letter on 19 May 2011; and

4. that it recommended that:

1. the plaintiff’s trainer’s licence be revoked for a period of six months; and

2. the show cause hearing based on the Amended Show Cause Notice be adjourned to 24 June 2011 at which time his further conduct would be considered.

59. The report of the First Show Cause Hearing was contained in a memorandum dated 6 June 2011 from the Licensing Committee to Mr V’landys. It made provision at the end of the document for Mr V’landys to agree or disagree with the recommendations. The document recorded that Mr V’landys accepted the recommendations by signing the memorandum.

60. On Tuesday, 7 June 2011, a local paper, The Northern Star, published a story with the headline, “Trainer’s protest over equine flu payments”, which was accompanied by a photograph of the plaintiff outside Ms Saffin’s electorate office, beside the same sign as he had displayed on Grafton Bridge the previous week.

The First Determination

61. As referred to above, Mr V’landys accepted the recommendations of the Licensing Committee. By letter dated 8 June 2011, he informed the plaintiff of the recommendations and the decision to revoke his trainer’s licence for six months (the First Determination). The letter concluded:

“I confirm that the decision to revoke your licence is a decision of Racing NSW and your rights of appeal are set out in the Racing Appeals Tribunal Act. In this respect, an appeal is made by lodging a written notice of appeal within 7 days of the date of notification of the decision of Racing NSW.”

62. The plaintiff’s evidence was that when he received the notice revoking his horse trainer’s licence, he was very ill with yet-to-be diagnosed Graves’ disease. I am not satisfied that any indisposition from which he was suffering at the time was such as to compromise his capacity to lodge an appeal by sending a written notice. He seems to have been capable of sitting or standing beside large placards in prominent locations in the open air for hours at a stretch and writing letters in May and June 2011.

63. Moreover, in his cross-examination, he gave as a reason for not appealing that he was still waiting for a response from Allan Brown, the Chairman of the Board. This was the same letter to which he referred in his letter of 18 June 2011 (referred to below). That he gave this reason is a powerful indication that, although he may have been in relatively poor health at the time, his health was not a material factor in his decision not to appeal during the seven-day period allowed.

The 8 June 2011 Show Cause Notice

64. On the same day, 8 June 2011, Mr V’landys wrote a further letter to the plaintiff about his further conduct in displaying the two placards outside Ms Saffin’s electorate office. He invited him to make submissions, noted the “extreme importance” of the matter and warned the plaintiff that if he did not appear the Licensing Committee would proceed in his absence.

Instructions given to Kennedys to write to the plaintiff

65. The defendants conceded that, at some time on 8 June 2011, they instructed Kennedys, solicitors, concerning the plaintiff’s conduct. Patrick George, a senior partner of that firm, drafted three letters which were addressed to the plaintiff; and the editors of The Northern Star and Coolum News respectively. They were in similar terms. The draft letter to the plaintiff 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.”

66. By email sent at 3.43pm on 10 June 2011 Mr Sweney sent the three draft letters of demand to Mr V’landys for his approval. I infer from the fact that the plaintiff received the letter that Mr V’landys had approved of its contents and had given instructions that at least the letter to the plaintiff be sent.

67. On 16 June 2011 the 8 June 2011 Show Cause Notice was served on the plaintiff by Tim Saladine, the Deputy Chairman of Stewards. The plaintiff told Mr Saladine that he would not attend any inquiry held at the offices of Racing NSW.

68. At 9.27am on 16 June 2011 Mr Bulloch sent an email to Mr Sweney attaching “the summary of the Joe Golden matter that is in my monthly Board report”. The report referred to the various notices and the First Show Cause Hearing and the First Determination. There was no mention of the letter from Kennedys to the plaintiff.

69. The plaintiff responded to the 8 June 2011 Show Cause Notice by a letter dated 18 June 2011 to the Licensing Committee of Racing NSW in the following terms:

“Subject: letters 8th June delivered 16th June

Dear Sirs,

I will not be attending 24th June meeting request.

I still await a reply from your chairman RNSW A.BROWN & V’landys in his haste has already issued penalties, which demonstrates his unprofessional conduct.

In the event that I am unable to meet with the entire RNSW Board, I will assume V’landys [sic] conduct in 2007-2008 was with the full RSNSW Board approval.

And as regards V’landys defamation solicitors [sic] letter to me, if they are silly enough to proceed with defamation charges against me, this will fall in perfectly with my plans in exposing RNSW and V’landys in misappropriating millions of taxpayers [sic] monies and supporting fraudulent criminal CHAPS claims. Please advise solicitors to proceed.

Sincerely

Joseph Golden (3372 SUSPENDED!!)”

70. I infer from the contents of the letter set out above that Kennedys sent the letter to the plaintiff, a draft of which is set out above.

The Second Show Cause Hearing: 24 June 2011

71. The Second Show Cause Hearing took place on 24 June 2011. The Licensing Committee was constituted by Mr Bulloch, Mr Sweney and Mr Rudge. Mr Nicholson was also present. The plaintiff did not attend. At the conclusion of the hearing, the transcript recorded the following decision of the Licensing Committee:

“Keith Bulloch:   The Licencing Committee resumes the matter of Joseph Golden. The committee has considered the evidence before it as submitted and tabled by Mr Sweeny and marked Exhibits 1-4. It is the decision of the committee to recommend to the chief executive that Mr Golden had adequate notice to appear or to show cause by the written submission why action should be taken against him. There was a written submission received. The committee decision is to recommend to the chief executive that Mr Golden has failed to show cause why action should not be taken and further that the recommended action should be that he be warned off all racecourses within the control of Racing NSW on the basis that his presence on racecourses is not desirable. The committee did give consideration as to whether there should be a fixed period for that warning off which is a matter or which is a penalty which has been handed down in recent times but it is our view and decision that the behaviour exhibited to date by Mr Golden and further the lack of remorse or contrition in the subsequent letter that he forwarded Racing NSW shows no sign that the behaviour will change and for that reason it goes back to the fundamental examples of why the penalty of warning off has been previously used so we intend to make that recommendation to the CEO and also advise if the CEO adopts that penalty that Mr Golden be advised his rights of appeal to the Racing Appeals Tribunal. That concludes the hearing.”

72. The Licensing Committee reported its decision to Mr V’landys in a memorandum dated 24 June 2011. It recorded that it was not satisfied to the requisite standard that the plaintiff had shown cause why he should not be warned off racecourses within the control of Racing NSW. The memorandum concluded:

“In deciding on a recommended penalty, the Licensing Committee considered that Mr Golden’s complete lack of contrition or remorse in respect of his conduct demonstrated that it was extremely unlikely that his behaviour would change at any time in the foreseeable future. As such, it was appropriate to recommend warning off for an unlimited period of time. In making this recommendation, the Licensing Committee gave due regard to the fact that Mr Golden can apply to Racing NSW to have the warning off order lifted.

The Licensing Committee recommends that Mr Golden be warned off from all racecourses within the control of Racing NSW on the basis that his presence on racecourses is not desirable.”

73. The memorandum made provision for Mr V’landys to agree or disagree with the recommendation. He signed the memorandum to signify his acceptance of the recommendation.

The Second Determination

74. By letter dated 24 June 2011 Mr V’landys wrote to the plaintiff to inform him of the recommendation of the Licensing Committee, which he had adopted (the Second Determination). He confirmed that the decision was a decision of Racing NSW and informed him of his rights of appeal to the Tribunal and that an appeal is made by lodging a written notice within seven days of the date of notification of the decision.

75. By letter dated 4 July 2011, Kennedys wrote to the plaintiff in the following terms:

“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 the date of this letter.

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

76. On 13 January 2012 the plaintiff wrote to Racing NSW asking for an extension of time to appeal to the Tribunal against the revocation of his trainer’s licence and against the warning off. Racing NSW forwarded the letter to the Tribunal. The Tribunal called for submissions on whether it had jurisdiction to hear an appeal that was lodged out of time.

77. The plaintiff wrote to Racing NSW by letter dated 27 February 2012 seeking “an unbiased decision in my appeal”. He described himself as a “victimised whistle blower” who was being “punished” at the hands of an “incompetent and corrupt CEO”. He did not address whether the Tribunal had power to extend time within which to lodge an appeal.

78. By submission dated 5 March 2012 addressed to the Tribunal, Mr Sweney (on behalf of Racing NSW) submitted that the letter of 13 January 2012 did not constitute a “written notice of appeal” for the purposes of cl 6(1) of the RAT Regulations as it was out of time.

79. On 2 April 2012 the plaintiff forwarded to the Tribunal a detailed 15-page written submission in support of his application for an extension of time. He referred to his health at the relevant time and attached a doctor’s report referring to a thyroid scan indicative of Graves’ disease.

80. On 7 May 2012 the Tribunal wrote to the plaintiff enclosing its determination of his application to extend time made on 27 April 2012. The Tribunal’s conclusion appears from the final paragraphs of its reasons:

“24. The Tribunal finds that clause 6 requires compliance within its precise terms and such compliance is an essential preliminary to the exercise of the statutory power to hear an appeal. The Tribunal does not find that the requirements of clause 6 deal with mere procedural conditions but are essential preliminaries to a statutory power. This can be further explained on the basis that a lawful appeal must be lodged before the procedural requirements for the management of that lawful appeal are considered.

25. In the circumstances the Tribunal determines that the ‘appeal’ was lodged outside the timeframe provided by clause 6 and that there is no power in the Tribunal to extend the 7 day provided in that clause.

26. To the extent that the Tribunal may be in error in finding there is no power to extend time, it nevertheless comes to the conclusion that Mr Golden has not demonstrated any factual reason to extend any discretion, should such a discretion exist, to extend time. In particular the Tribunal does not find that an extension from 5 July 2011 to 13 January 2012 could be granted on the facts available to it.

27. In view of these findings it is not necessary for the Tribunal to determine whether the letter of 13 January 2012 was a written notice of appeal for the purposes of clause 6.

28. The effect of non-complying with an essential preliminary is that there is at law no appeal before this Tribunal and that it therefore has no jurisdiction, and cannot clothe itself with jurisdiction, to determine an appeal or an application to appeal out of time.

29. The Tribunal determines that it does not have jurisdiction to deal with the application of Mr Golden of 13 January 2012 to extend time to lodge an appeal, nor an appeal.”

The bases of the plaintiff’s claims for judicial review of the First and Second Determinations

81. The plaintiff contended that both determinations are invalid on six grounds: actual bias; apprehended bias; improper purpose; irrelevant considerations; bad faith; and unreasonableness and serious illogicality. These bases will be considered in turn.

Allegations of bias: actual and apprehended

82. The plaintiff, in his Second Further Amended Statement of Claim, set out the particulars relied on in support both of the allegation of bias, or, alternatively, apprehended bias:

“A.   Mr Golden had attacked Mr V’landys as being incompetent and corrupt and had done so in public;

B.   Mr V’landys in his letter of 10 June 2011 had threatened to exercise his private law rights against Mr Golden in respect of the public criticisms of Mr V’landys which were said to be seriously defamatory;

C.   Mr V’landys in his letter of 10 June 2011 had demanded the payment of damages and legal costs;

D.   Mr V’landys in his letter of 10 June 2011 had taken the opportunity to deny Mr Golden’s allegations regarding the CHAP system.”

The relevance of the process adopted to the allegations of bias

83. No allegation is made that the Licensing Committee was either actually biased or that any matter associated with the Licensing Committee gave rise to a reasonable apprehension of bias. Nor was it alleged that Mr V’landys had in any way interfered with the Licensing Committee’s process or deliberations.

84. The narrative above indicates that it was Mr Bulloch who initiated the proposals that a show cause letter be sent to the plaintiff arising from his conduct on Grafton Bridge; and that Mr V’landys sub-delegate his power from the Board to the Licensing Committee to issue a show cause notice and conduct a show cause hearing and make a recommendation to him. Mr Bulloch’s initiative was the genesis of the First Determination. Mr V’landys merely agreed to the sub-delegation; adopted Mr Bulloch’s proposed wording; accepted the recommendation when it came to him after the hearing; signed the memorandum without comment; and signed the letter that constituted the First Determination.

85. The Second Determination was made in similar manner to the first in that Mr V’landys accepted the advice of Mr Bulloch as to procedure, including the wording of the sub-delegation; accepted the recommendation of the Licensing Committee; signed the memorandum without comment; and signed the letter that constituted the Second Determination.

86. Nonetheless the plaintiff submitted that, because Mr V’landys retained a discretion to accept or reject or amend the Licensing Committee’s recommendations, the conclusion was still available that his decision was affected by actual or apprehended bias, even though he did no more than accept the recommendations of the (admittedly unbiased) Licensing Committee. The plaintiff contended (in his written submissions):

“Needless to say, a biased decision may just as easily be made as part of an otherwise fair process as one which is otherwise unfair.”

[Emphasis in original.]

87. The defendants, however, relied on the fairness of the process and submitted that the process Mr V’landys and Racing NSW adopted and the recommendations it produced (which were accepted without amendment) was inconsistent with bias, whether actual or apprehended.

88. I consider the process adopted makes it inherently improbable that Mr V’landys was motivated by actual bias. The process he adopted, which was, in the circumstances of the present case, initiated by Mr Bulloch as Chair of the Licensing Committee, and the fact that any decision he made would be subject to an automatic right of appeal to the Tribunal pursuant to s 15(1)(d) of the RAT Act, was, in my view, inconsistent with actual bias. However, although the process was fair, it is nonetheless necessary to consider the other bases on which the plaintiff sought to establish actual bias since the fairness of the process, while indicative, is not determinative.

Actual bias

89. An allegation of actual bias is a serious one. It must be shown by cogent evidence that the decision-maker’s mind was not open to persuasion: Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17; 205 CLR 507 at [71], [75] and [78] per Gleeson CJ and Gummow J. It must be “distinctly made and clearly proved”: at [69]. The test for actual bias is a subjective one: Michael Wilson and Partners Ltd v Nicholls [2011] HCA 48; 244 CLR 427 at [33].

90. In Minister for Immigration v Jia Legeng, Gleeson CJ and Gummow J described as “orthodox” the test for actual bias applied by French J at first instance, which they summarised at [36]-[37] in the following terms:

“[36]   . . . where there is a claim of actual bias involving prejudgment, the applicant must show that the decision-maker ‘had a closed mind to the issues raised and was not open to persuasion by the applicant's case’, and that actual bias exists where ‘the decision-maker has prejudged the case against the applicant, or acted with such partisanship or hostility as to show that the decision-maker had a mind made up against the applicant and was not open to persuasion in favour of the applicant’.

[37] French J found that the evidence indicated that the Minister had formed, on the basis of Mr Jia's convictions and sentence, a view strongly adverse to the conclusion that he could be described as a person of good character. However, he said, the question was whether, by his mental state, the Minister was disabled from or unwilling to have regard to other relevant circumstances. French J expressed his conclusions as follows:

‘The onus of demonstrating actual bias lies upon an applicant for judicial review and it is a heavy onus. The fact that an applicant may have demonstrated that on the decision-maker's provisional views he has an uphill job to persuade him away from those views is not enough to demonstrate actual bias. . .’”

[Footnotes omitted.]

91. As the English Court of Appeal held in Flaherty v National Greyhound Racing Club Ltd [2005] EWCA 1117 at [28]:

“Bias means a predisposition or prejudice against one party’s case or evidence on an issue for reasons unconnected with the merits of the issue.”

92. The plaintiff’s allegation of actual bias appears to be based, not on prejudgment (of which there is no evidence), but on interest. The plaintiff submitted that because of Mr V’landys concern for his reputation and his potential claim for damages for defamation against the plaintiff, he was actually biased against him when making the First and Second Determinations because he had an economic interest at stake.

93. As recorded above, the defendants conceded that Kennedys had first been instructed on 8 June 2011. This was the day on which the First Determination was made. The commencement of the process that led to the First Determination had pre-dated that day by about four weeks, since it was on 13 May 2011 that Mr Bulloch had suggested a sub-delegation to the Licensing Committee arising from the plaintiff’s letter of 10 May 2011.

94. Even assuming (against Mr V’landys) that he had given instructions that the Kennedys letter be sent before he made the First Determination (a matter which I do not consider to have been established on the balance of probabilities), I do not consider that any financial interest Mr V’landys might have had in the outcome of any defamation proceedings (and there is no evidence that there were any such proceedings), was such as to make him actually biased against the plaintiff.

95. The question of the effect of a judge’s financial interest in the outcome of litigation arose in Ebner v Official Trustee [2000] HCA 63; 205 CLR 337. In that case, the judge was the beneficiary of a trust which owned shares in a bank which, though not party to the litigation, had an interest in the outcome. The High Court found that the judge was not disqualified from hearing the matter. The applicant argued that if a judge has a direct pecuniary interest in the outcome of a case then the judge is automatically disqualified. The High Court rejected the test proposed and said at [58]:

“For reasons already given, we accept that, in the practical application of the general test to be applied in cases of apprehended bias, economic conflicts of interest are likely to be of particular significance, and that, allowing for the imprecision of the concept, the circumstance that a judge has a not insubstantial, direct, pecuniary or proprietary interest in the outcome of litigation will ordinarily result in disqualification. That circumstance did not exist in either of the present cases.”

96. Although this statement was made in the context of apprehended, rather than actual, bias, it is nonetheless useful to determine whether, in the present case, the circumstance that Mr V’landys had accused the plaintiff of defamation and demanded damages and reasonable legal costs meant that he had a financial interest in the making of the First Determination (on the assumption set out above) and the Second Determination such as to make him actually biased.

97. Mr V’landys had no financial interest in the First or Second Determinations, since both resulted in disciplinary action against the plaintiff which did not benefit Mr V’landys in any direct sense. Mr V’landys had an interest in protecting his own reputation. However, his interest in protecting his own reputation was closely allied with Racing NSW’s protection of its reputation and, in turn, their common interest in protecting the reputation of the horse racing industry in New South Wales. Although the Kennedys letter demanded money from the plaintiff (for damages and reasonable legal costs), it did not quantify any sum. The letter was directed to obtaining both an apology for past conduct and an undertaking from the plaintiff not to repeat the conduct.

98. The plaintiff postulated that Mr V’landys would bear him some personal animus as a result of the abuse and the alleged damage the plaintiff had caused to Mr V’landys’ reputation and that this would incline Mr V’landys to want to punish the plaintiff by revoking his licence and warning him off. This conjecture falls far short of proof. The plaintiff bears the onus of establishing actual bias; it is not for Mr V’landys to positively demonstrate its absence.

99. I reject the suggestion that Mr V’landys was actually biased against the plaintiff because of his interest in protecting his reputation. A person in Mr V’landys position would expect criticism from the public. Wherever money is concerned, particularly where gains and losses may seem to be a matter of chance, emotions can run high. Criticisms of institutions, such as Racing NSW, are frequently directed at the public face of the institution, and often at the person who is seen to be leading the institution. Mr V’landys, as the Chief Executive of Racing NSW, occupied such a position. As such, it could be expected that any complaint about Racing NSW would, or might, involve a complaint about him and his administration of Racing NSW. Any individual, such as the plaintiff, who had a grievance against Racing NSW, might decide to personalise the grievance (rightly or wrongly) by criticising Mr V’landys.

100. Moreover, as Mr V’landys’ delegated authority from the Board was so extensive, he could justifiably be held responsible for all manner of matters (whether directly involving him or not) including: the administration of CHAPS; a ruling as to how frequently a horse could be raced; whether a scratching fee should be refunded; whether his power ought be sub-delegated to the Licensing Committee; whether a licence ought be suspended or revoked and whether someone ought be warned off; and (presumably) whether someone who had been warned off should have the warning off annulled.

101. Mr V’landys was subjected to a degree of abuse from the plaintiff. The objective reason for the action taken by Racing NSW was that the plaintiff’s conduct tended to be detrimental to horse racing because it involved the public denigration of Racing NSW and its Chief Executive, who happened at the time to be Mr V’landys, in language which was objectively offensive and crude and which was presented in a manner which was conducive neither to analysis nor discussion.

102. In these circumstances, if criticism of Racing NSW and of Mr V’landys were to lead to Mr V’landys having to step aside, the system would soon reach a stage whereby individual parties could effectively remove Mr V’landys from the decision-making process entirely: cf. Ebner v Official Trustee at [20]. Although the plaintiff 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. Nor do I regard the circumstance that the Board does not appear to have been informed of the Kennedys letter as a material non-disclosure which leads to an inference of bias. In the circumstances of the present case, the Kennedys letter was an incidental matter. There is no suggestion, in any event, that Mr V’landys would have had to pay Kennedys himself for legal costs, since Racing NSW was also responsible for retaining them.

96. This is not to suggest that the plaintiff was not entitled in the exercise of his right to free speech to express his opinions about Racing NSW or Mr V’landys in public, but rather to record that I am satisfied that there was a basis for the action taken by Mr V’landys and Racing NSW, which does not, in my view, indicate actual bias. The plaintiff has failed to establish actual bias.

Apprehended bias

104. In [62] of the pleading, the plaintiff alleged:

“Further or in the alternative, a fair-minded lay observer might reasonably have apprehended that Mr V’landys might not have brought an impartial and unprejudiced mind to the question of whether to adopt the recommendation of the Licensing Committee that was the subject of the First and/or Second Determination.”

105. The relevant test for apprehended bias was as stated in Re Refugee Tribunal; Ex Parte H [2001] HCA 28; 75 ALJR 982 at [28]:

“[whether] a hypothetical fair minded lay person who is properly informed as to the nature of the proceedings, the matters in issue and the conduct which is said to give rise to an apprehension of bias [would reach that conclusion].”

106. The principle, as articulated in Ebner v Official Trustee at [6] (Gleeson CJ, McHugh, Gummow and Hayne JJ) is:

“. . . a judge [or other decision-maker] is disqualified if a fair-minded lay observer might reasonably apprehend that the judge [or other decision-maker] might not bring an impartial mind to the resolution of the question the judge is required to decide.”

[Footnotes omitted.]

107. Although this is the principle, it is not appropriate to approach its application without reference to the statutory context set out above since this is, properly, the starting point: McGovern v Ku-ring-gai Council [2008] NSWCA 209; 72 NSWLR 504 at [6] per Spigelman CJ. The hypothetical fair-minded observer is to be assumed to be aware of the actual circumstances of the case: Hot Holdings Pty Ltd v Creasy [2002] HCA 51; 210 CLR 438 at [68] and [76]. Thus, such a person would have been aware of the matters set out above as to the genesis of the show cause notices and hearings and how Mr V’landys’ power had come to be sub-delegated to the Licensing Committee.

108. Such an observer would also have been aware that, far from desisting from the conduct the subject of the First Show Cause Notice when he received it, the plaintiff persisted in the conduct as well as responding to the notice in crude and insulting language, apparently designed to offend and disgust the recipients. The observer would also have known that the plaintiff chose not to make submissions to the Licensing Committee at either of the show cause hearings.

109. The observer would also have been aware that Mr V’landys (either personally or through an agent) had, at some time on 8 June 2011, consulted solicitors regarding the plaintiff’s conduct and that by 10 June 2011 (after the First Determination but prior to the second) he had instructed them to draft a letter to the plaintiff regarding his statements to the press and his conduct in displaying the placard. I infer that the draft letter was seen by Mr V’landys on 10 June 2011, at which time he instructed his solicitor to send it.

110. The so-called “two mights” test from [6] in Ebner v Official Trustee (set out above) is the first part of the inquiry into the question of apprehension of bias. The second part appears from the following extract from at [8]:

“[8] The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as 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. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.”

111. I am not persuaded that the plaintiff has 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 had alleged that the plaintiff had defamed him; and, on the other, the plaintiff’s feared deviation from Mr V’landys’ deciding whether to accept the recommendations of the Licensing Committee and make the First and Second Determinations.

112. Neither the allegation of actual bias, nor of apprehended bias has been made out.

Improper purpose

113. The plaintiff relied on the following in support of his submission that Mr V’landys made the First and Second Determinations for an improper purpose:

1. the conduct the subject of the show cause notices did not take place on a racecourse;

2. the conduct did not “concern horseracing”; and

3. the conduct “did not in any way affect the control, supervision or regulation of horseracing”.

114. An improper purpose will not lightly be inferred. 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. In my view, the plaintiff’s submissions do not take adequate account of the functions and powers of Racing NSW. The functions of Racing NSW include ensuring that those licensed in various capacities in the horse racing industry (whether as jockeys, trainers, and so on) are “fit and proper persons” having regard to “the need to protect the public interest as it relates to the horse racing industry”: s 14AA(1) of the Thoroughbred Racing Act. Protection of the public interest in the horse racing industry includes protection of the reputation of the industry.

115. I accept Mr V’landys’ submission that sporting and professional associations tend to have rules, such as AR 175, which empower the governing body to penalise certain conduct by participants. The purpose of these rules is to prevent participants in the sport from insulting those who administer the sport in general or who play a particular role such as umpiring a particular race or match since this conduct, if allowed to go unchecked, is said to bring the particular sport into disrepute. This rule was not relied on by Mr V’landys in support of the First or Second Determination but serves to provide an illustration of the general extent of the power under s 13 with respect to the horse racing industry.

116. The First and Second Determinations can be seen to arise from a concern that the plaintiff’s public statements and the manner of their expression and publication was such as would tend to diminish the reputation of the horse racing industry. There is nothing in either of the determinations which would suggest that they were intended to achieve any purpose other than to get the plaintiff to stop making public outbursts of that nature and writing abusive correspondence to Racing NSW and, perhaps, to stop other persons who harbour a grievance against Racing NSW from believing that they could air their own views in a similar fashion with impunity.

117. Thus, 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.

118. Mr V’landys was not required to give reasons beyond what appeared in the determinations. There is no evidence otherwise of Mr V’landys’ actual subjective intention and no proper basis for any inference as to its content: Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 at [66]-[68] per Gummow J. Accordingly, the ground of improper purpose has not been made out.

Irrelevant consideration

119. The same matters have been raised by the plaintiff in support of this contention as were raised in the context of improper purpose. The plaintiff’s conduct was the issue: it was the matter that had a tendency to bring the industry of horse racing into disrepute. Whether he stood on Grafton Bridge or on the streets of the neighbouring town was not to the point: the point was that his utterances were such as to have a tendency to bring the horse racing industry into disrepute. He did not have to be on a racecourse to bring about that result.

120. This ground has not been made out.

Bad faith

121. The plaintiff submitted that in making the First and Second Determinations Mr V’landys sought to punish the plaintiff for criticising him. He accepted that he was required to prove Mr V’landys’ state of mind: SBBS v Minister for Immigration and Multicultural Affairs (2002) 194 ALR 79 at [43]. The plaintiff contended that Mr V’landys’ decision not to give evidence allows me to draw an inference that nothing he could have said would have assisted him. He contended that I ought infer that the subjective motivations of Mr V’landys were, in substance, vindictive.

122. The seriousness of an allegation of bad faith is not in question. In SCAS v Minister for Immigration and Multicultural Affairs [2002] FCAFC 397 at [19] the Court (Heerey, Moore and Kiefel JJ) said:

“An allegation of bad faith is a very serious one. Bad faith in this context implies a lack of an honest or genuine attempt to undertake the task and involves a personal attack on the honesty of the decision maker: NAAV v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 228 at [107] - [108]. It is no less serious if it is said to arise from conduct of the type discussed by von Doussa J in SCAZ v Minister for Immigration & Multicultural & Indigenous Affairs. While members of the legal profession representing disappointed applicants for protection visas may often act for reasons of high principle, and on many occasions pro bono, that is no warrant for making the serious allegation if it is not justified on the material. . . .But because of the nature of the allegation of bad faith, serious questions of professional ethics arise. It should be clearly understood that an allegation of bad faith, like an allegation of fraud, should not be advanced by an advocate unless there are proper grounds for doing so.”

123. I do not regard the allegation of bad faith as justified by the material. It ought not to have been made. No relevant inference arises from the fact that Mr V’landys did not give evidence since no foundation for the allegation has been made. I do not consider there to be any basis for the contention that Mr V’landys did not make an honest and genuine attempt in good faith to make the correct and preferable decisions when he made the First and Second Determinations, on the basis of the consideration of the Licensing Committee based on the memoranda and recommendations that had been made to him.

Unreasonableness and serious illogicality

124. The plaintiff’s written submission on this ground was:

“The First and Second Determinations were made without evidence of any intelligible or plausible justification. Mr Golden’s conduct in standing in two public places unrelated to racetracks and making statements unrelated to horseracing, or in writing letters saying similar, could not reasonably give rise to a finding that the presence of Mr Golden on racetracks was not desirable. In this respect, the decision to warn Mr Golden off racetracks is a “glaring injustice” (Fuduche v Minister for Immigration and Citizenship (1993) 45 FCR 515 at 529) of the type to which the reasonableness ground of review is properly directed.”

125. As with several of the other grounds, the plaintiff’s submissions depend on acceptance of the proposition that what he was doing in standing on the Grafton Bridge and displaying a placard there and in the town centre had nothing to do with horse racing. For the reasons already given, I do not accept this proposition. There was, in my view, a rational connection between his conduct and the reputation of the horse racing industry.

126. As was said in Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [76] (Hayne, Kiefel and Bell JJ):

“Unreasonableness is a conclusion which may be applied to a decision which lacks an evident and intelligible justification.”

127. In the present case, the justification for the First and Second Determinations is both evident and intelligible from the evidence and from the terms in which they were communicated to the plaintiff. When deciding how to stop the plaintiff’s conduct, Racing NSW had a range of methods that could potentially be used: revoking or suspending his licence or warning him off. The method of threatening revocation or suspension of his licence, which was the first method tried (as reflected in the First Show Cause Notice) did not produce the desired effect. To the contrary, the plaintiff escalated his conduct and became even more abusive. This left the threat of warning off. When the plaintiff refused to make submissions, much less to apologise or express any contrition, the Second Determination was made, with the consequence that he was warned off.

128. I note that the submissions made on behalf of Mr V’landys included a submission that the warning off power was not used, as a matter of objective inference, as a deterrent to Mr V’landys, designed to chasten him into modifying his behaviour for the better, but rather to protect the race-going public from being confronted by his placards and belligerence on race day. Notwithstanding this submission, I consider the inference to be available that one purpose, which was a legitimate one, of warning off the plaintiff, was to get him to modify his conduct so that whatever criticisms he might make would be made in a more civilised way, which did not involve offensive denigration of Racing NSW or Mr V’landys. I accept that another, proper, purpose, was to protect the public from his crude remonstrance on race day.

129. It is important to note that the Second Determination did not have the effect that the plaintiff was warned off racecourses (with all that such a penalty entailed) for the rest of his natural life. What it meant was that, in order to have the warning off lifted, the plaintiff would have to apply to Racing NSW. It appears from the material that there is at least some prospect of such an order being lifted if the person subjected to the warning off expresses remorse, contrition and indicates that he or she will not behave in a similar way again. Indeed, Mr V’landys’ defence specifically alleges that the plaintiff “could apply to Racing NSW, at any time, to lift the warning off order”.

130. The plaintiff confirmed in the hearing that he had never made any attempt to have the warning off lifted by Racing NSW and did not propose to. In this respect, as in others, he has proved to be the author of his own predicament.

Discretion

131. 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.

132. 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.

133. For the reasons given above, the plaintiff chose, through some mistaken view of his entitlement to receive a letter from the Chairman of the Board, not to activate his rights of appeal. Although the availability of a statutory appeal is no bar to relief on judicial review, it is a powerful factor against the grant of such relief: Boral Gas (NSW) Pty Ltd v Magill (1993) 32 NSWLR 501 at 508-509 per Kirby P.

134. It appears that it was only in early 2012 when the plaintiff learned of the true extent of the warning off that he saw fit to challenge the decision. He may have been under the misapprehension previously that he was simply warned off racecourses, rather than that he was prohibited from all manner of activities associated with horse racing, including betting, by reason of the operation of AR 182, 182A and 183.

135. Nonetheless the Tribunal did not simply refuse to consider his application although it was out of time. Although it accepted that it did not have jurisdiction to hear his appeal it addressed the merits of his application for extension and declined to grant it.

136. 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.

Misfeasance in public office

137. For the reasons given above the tort of misfeasance in public office must fail as no misfeasance has been established. As Mr V’landys did not give evidence, there is no basis other than in the documents from which his intention could be established. Thus, I enjoy no advantage as trial judge in making a determination of his intention. Nonetheless as part of my obligation to make all relevant findings, I propose to address the elements of the tort.

138. The elements of the tort of misfeasance in public office are:

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:

1. was malicious, that is, was intending to injure the plaintiff; or

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

3. 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: Farrington v Thomson and Bridgland [1959] VR 286 at 293 per Smith J.

1. (Northern Territory v Mengel (1995) 185 CLR 307).

139. Of these elements, the plaintiff has established only the first. Element (2) has not been established for the reasons given above by reference to the grounds of challenge.

140. The plaintiff relied on the following in support of his submission that he had established that Mr V’landys had the requisite mental element for the tort of misfeasance in public office:

1. the content of the Kennedys letter, which “clearly placed Mr V’landys in a position of conflict”;

2. Mr V’landys had been the Chief Executive of Racing NSW for seven and a half years at the time of the decisions;

3. Mr V’landys was bound by the Code of Conduct;

4. despite these requirements, Mr V’landys did not tell the Board about the Kennedys letter, which ought be regarded as a consciousness of guilt;

5. Mr V’landys knew that both Mr Rudge and Mr Bulloch had stepped aside from their positions on the Licensing Committee for the First Show Cause Hearing because the earlier correspondence had been addressed to them and they, too, had been the subject of attack; and

6. Mr V’landys knew that the determinations would affect the plaintiff’s livelihood as a horse trainer.

141. As to (a), I do not regard the Kennedys’ letter as placing Mr V’landys in a position of conflict: his interests and those of Racing NSW were relevantly the same. They both wanted the plaintiff to stop criticising them because they regarded the abusive form of his public statements to be inimical to the public reputation of the horse racing industry in New South Wales; and they both wanted to use such legitimate means at their disposal to achieve this aim. Moreover, the reason Mr V’landys was being criticised was because he was the Chief Executive of Racing NSW.

141. The matters in (b) and (c) are incontrovertible but do not take the matter further. As to (d), I do not regard the absence of a reference to the Kennedys letter in a report to the Board as suspicious or as creating any adverse inference. As to (e), it does not follow from the circumstance that Mr Rudge and Mr Bulloch saw fit to step aside, that they were required to do so, or that their decision to step aside meant that it was wrong for Mr V’landys not to step aside. I regard (e) as neutral. As to (f), it can be accepted that, if one wants to earn a living as a horse trainer, revocation of one’s licence deprives one of an opportunity of endeavouring to do so. However there is no evidence that Mr V’landys knew of the plaintiff’s particular circumstances.

142. In summary, I am not satisfied that there is any basis to conclude that Mr V’landys, when he made either the First or the Second Determinations, had any of the mental elements referred to in (3)(a), (b) or (c) above.

143. The fourth element has not been established. The plaintiff submitted that horse racing was his life and his livelihood and that he would not have spent so much money on the property had he not expected to earn money from it. He referred to the winnings of his horses and his prospects of success, including that he would earn money training horses on his property.

144. The evidence, such as it was, showed that the plaintiff consistently made losses from horse racing. His tax returns showed that any income he received was exceeded by his expenses. I accept his evidence that a trainer is judged by results. The evidence reveals that, on many occasions (particularly from November 2010), the plaintiff’s horses finished last or second to last, despite occasional success at individual country races.

145. It is not necessary to cite the actual figures to establish the plaintiff’s financial position in the years prior to the First and Second Determinations, which was both parlous and precarious. The submission that he could have turned his losses into profits but for the First and Second Determinations appears, in all circumstances, unduly optimistic.

146. The plaintiff’s submission that he lost a chance (of training horses) which ought be regarded as being of some value is not enough. He had to show that the chance probably had an economic value to him. He has failed to do so.

147. Accordingly, the plaintiff has failed to make out his claim for damages for misfeasance in public office.

The defences

149. I accept the defendants’ submission that AR 197 applies as a matter of contract and, accordingly, the plaintiff is not entitled to make the claim for damages against either of the defendants since it falls within the description “by reason or in consequence of the imposition . . . of any penalty imposed or purporting to be imposed by the Rules”.

150. Mr V’landys, in any event, has a statutory immunity by reason of s 12(1) of the Thoroughbred Racing Act as I consider that he acted in good faith.

Orders

151. I make the following orders:

1. Judgment for the defendants.

2. Unless any party makes an application for a different order in writing to my Associate within seven days, order the plaintiff to pay the defendants’ costs of the proceedings.

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Decision last updated: 17 November 2015