Goodrich v Kilmore Racing Club Inc
[2021] VSC 767
•25 November 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT BENDIGO
COMMON LAW DIVISION
CIVIL CIRCUIT LIST
S ECI 2019 03486
| KATE GOODRICH | Plaintiff |
| v | |
| KILMORE RACING CLUB INCORPORATED | First Defendant |
| and | |
| RACING VICTORIA LTD | Second Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 7 October 2021 |
DATE OF JUDGMENT: | 25 November 2021 |
CASE MAY BE CITED AS: | Goodrich v Kilmore Racing Club Inc |
MEDIUM NEUTRAL CITATION: | [2021] VSC 767 |
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APPEAL — Summary judgment granted in favour of second defendant in respect of three claims of breach of contract and breach of statutory duty — Pleading of breach of contract and breach of statutory duty deficient — Deficiencies in pleading of breach of contract capable of being remedied by amendment — Claim for breach of contract has a real prospect of success in respect of two of the claims — Summary judgment order set aside in respect of two claims — Pleading of breach of contract and breach of statutory duty struck out with a right to re-plead — Civil Procedure Act 2010 ss 7, 63 — Racing Act 1958 ss 3, 5E, 5F, 5G, 6, 7, 24A.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Appudurai | Russell Kennedy |
| For the Second Defendant | Mr E Nekvapil | Minter Ellison |
HIS HONOUR:
Ms Kate Goodrich is a horse trainer by profession, licensed by the second defendant, Racing Victoria Ltd (‘RV’), pursuant to the Rules of Racing Victoria (‘Rules’) and the Racing Act 1958 (‘the Act’). Between 2007 and 2016 Ms Goodrich was a member of the first defendant, Kilmore Racing Club Inc (‘KRC’). Until October 2013 Ms Goodrich trained horses at facilities operated by KRC. Ms Goodrich’s licence has been suspended on two occasions by KRC: 4 August 2013 and 16 October 2013. On 13 December 2016 Ms Goodrich’s licence was suspended by RV.
On 2 August 2019 Ms Goodrich commenced the present proceeding. An amended statement of claim (‘ASOC’) was filed on 13 December 2019. There are four claims pleaded against RV in the ASOC: the mediation claim at [16]–[30]; the investigation claim at [31]–[36A]; the medical report claim at [37]–[38]; and the RV suspension claim at [39]–[48].
The mediation claim: ASOC [16]–[30]
Ms Goodrich alleges that following KRC’s first suspension of her trainer’s licence on 13 October 2013 she received a telephone call from the Chairman of Stewards of RV, Mr Bailey, during which he told her that he intended to conduct a mediation at the premises of KRC in relation to the first suspension. Ms Goodrich claims that the conduct of Mr Bailey and two other RV stewards during the mediation constituted a breach of RV’s statutory duty and a contract between her and RV constituted by the Rules (‘RV contract’).
Investigation claim: ASOC [31]–[36A]
Ms Goodrich alleges that in February 2015 the Chief Executive Officer of RV advised her in writing that RV had decided to initiate an investigation to be conducted by a third party (‘FBIS’) into the dispute between her and KRC. Ms Goodrich alleges that RV was provided with a draft of the investigation report on 28 September 2015 which contained findings favourable to her. Ms Goodrich alleges that, in breach of RV’s statutory duty and the RV contract, RV has failed to take steps to finalise the investigation report.
Medical report claim: ASOC [37]–[38]
Ms Goodrich alleges that on 20 February 2014 RV’s Customer Relationships Manager asked her to provide a copy of a medical report dated 15 October 2013 which she had previously provided to the Board of KRC. Ms Goodrich alleges that the request constituted a breach of RV’s statutory duty and the RV contract.
RV suspension claim: ASOC [39]–[48]
On 13 December 2016 RV suspended Ms Goodrich’s trainer’s licence. The suspension followed charges laid against Ms Goodrich on 12 December 2016 alleging that she had refused to obey the reasonable instructions of RV’s stewards by refusing to allow two stewards to conduct a race day stable inspection. Ms Goodrich challenges the validity of the appointment of the RV stewards. She contends that, by reason of the invalid appointment of the stewards, there was no basis upon which she could be charged with a breach of the Rules or suspended. Ms Goodrich alleges that the laying of the charge and the suspension were in breach of RV’s statutory duty and the RV contract.
The summary judgment application
On 25 March 2020 RV filed a summons seeking summary judgment under s 63 of the Civil Procedure Act 2010 in respect of the mediation claim, the investigation claim, the medical report claim and the RV suspension claim. An associate justice granted the application with respect to the mediation claim, the investigation claim and the medical report claim. The associate justice did not grant summary judgment in respect of the RV suspension claim. Rather, Ms Goodrich was ordered to file a proposed further amended statement of claim including ‘any proposed amendments to advance any claim against Racing Victoria with respect to the Racing Victoria suspension and the disciplinary proceeding consistent with the reasons delivered this day’.[1] By notice of appeal filed 3 March 2021, Ms Goodrich challenges the summary judgment order.
[1]Order of Associate Justice Daly in Goodrich v Kilmore Racing Club (Supreme Court of Victoria, S ECI 2019 03486, 10 February 2021), 3(b).
I have concluded that the associate justice erred in ordering summary judgment in favour of RV in respect of the mediation claim and the investigation claim. I agree with the associate justice’s conclusion that the medical report claim has no real prospect of success and that there should be judgment for RV in respect of that claim. I do not agree with the associate justice’s conclusion that the mediation claim and the investigation claim have no real prospect of success. However, the pleading of these claims, particularly insofar as they are based on allegations of breach of RV’s statutory duty and the RV contract, are deficient and need to be re-pleaded. It will also be necessary for Ms Goodrich to re-plead the RV suspension claim because that claim also alleges a breach of RV’s statutory duty and the RV contract.
Given the weight which I attach to the deficiencies in the pleading of RV’s statutory duty and the RV contract, it is appropriate to address the pleading of the RV statutory duty and the RV contract at the outset. Having done so, I shall address the associate justice’s reasons for upholding RV’s summary judgment application.
RV’s statutory duty
Paragraph [8A] of the ASOC is as follows:
By reason of the matters alleged in paragraph 3 hereof, Racing Victoria is, and was at all material times, the sole and exclusive controller and supervisor of horse racing in the State of Victoria and, consequently, in exercising such control and supervision is, and was, under a duty to act:
(a) in good faith;
(b) fairly; and
(c)in accordance with, and within the scope of its powers under, the Racing Act and the Racing Rules;
in relation to its dealings with participants in horse racing, including the plaintiff (Racing Victoria’s statutory duty).
The particulars annexed to [8A] include detailed references to RV’s Strategic Framework and RV’s Code of Conduct. The particulars include the following:
Racing Victoria’s Strategic Framework and Racing Victoria’s Code of Conduct both constitutes acceptance by Racing Victoria of its obligations under Racing Victoria’s statutory duty and the implementation of policies to ensure compliance with that duty.
Paragraph [8A] pleads that RV’s statutory duty is ‘by reason of the matters alleged in paragraph 3 hereof’. Paragraph [3] of the ASOC is as follows:
Racing Victoria is, and was at all material times:
(a)a company (limited by guarantee) and registered under the Corporations Law;
(b)certified, pursuant to s 3A of the Racing Act, to be ‘Racing Victoria’;
(c)the ‘controlling body’ with respect to horse racing under the Racing Act;
(d)the ‘Principal Racing Authority’ for the purposes of the Racing Rules and is, accordingly, the body which has ‘the control and general supervision of racing’ within the State of Victoria (rule AR7 of the Racing Rules); and
(e)by reason of s 5F(1)(a) of the Racing Act, entitled to enforce the Racing Rules against the plaintiff and KRC.
The ASOC prayer for relief includes claims for both declaratory relief and damages for breach of RV’s statutory duty.
A cause of action for damages for breach of statutory duty has three elements. First, the statute imposes an obligation for the protection or benefit of a particular class of persons. Second, the statute evinces an intention to provide a ground of civil liability for breach. Third, the damage caused by the breach must be damage of a kind against which the statute was designed to afford protection.[2] In Gardiner v State of Victoria[3] Phillips JA stated:
The fundamental task, then, is to determine whether the statute evinces an intention that the individual should have a right of action for breach of the statutory duty.[4]
[2]Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 424.
[3][1999] 2 VR 461.
[4]Ibid 469 [24].
In [8A] Ms Goodrich pleads that RV was under a statutory duty to act in good faith, fairly and in accordance with the scope of its powers under the Act and the Rules in relation to its dealings with participants in horse racing, including Ms Goodrich. The existence of an actionable statutory duty is contingent upon Ms Goodrich identifying provisions of the Act which impose an obligation on RV for the protection and benefit of a particular class of persons of which Ms Goodrich is a member. The existence of a cause of action for damages for breach of statutory duty requires Ms Goodrich to establish that the Act evinces an intention to confer a right of action for breach of the statutory duty.
Paragraph [3(e)] pleads that by reasons of s 5F(1)(a) of the Act, RV is and was at all material times entitled to enforce the Rules against Ms Goodrich and KRC. Section 5F(1)(a) provides:
The Rules of Racing apply to and may be enforced against—
(a) a person who is the holder of a licence, registration, permit or other authority issued by Racing Victoria …
Section 5F(1)(a) was inserted into the Act by s 40 of the Justice Legislation Amendment (Miscellaneous) Act 2013. Section 40 commenced operation on 29 January 2014.[5] Ms Goodrich alleges that conduct engaged in by RV prior to 29 January 2014 constituted a breach of RV’s statutory duty. The alleged conduct includes:
(a) the participation of two RV stewards in a mediation attended by Ms Goodrich on 17 September 2013; and
(b) the involvement of RV officials in the preparation of a show cause letter sent to Ms Goodrich on 19 September 2013.
[5]Governor of Victoria, ‘Justice Legislation Amendment (Miscellaneous) Act 2013 — Proclamation of Commencement’ in Victoria, Victorian Government Gazette, No S17, 28 January 2014, 1.
Section 5F(1)(a) does not support the existence of RV’s statutory duty prior to 29 January 2014. The second reading speech for the Justice Legislation Amendment (Miscellaneous) Bill 2013 included the following:
The Victorian Civil and Administrative Tribunal (VCAT) recently held that rules of racing are only enforceable by contract law and therefore a non-licensed person is not subject to the rules if they do not agree (either expressly or by implication) to be bound by them.[6]
The VCAT decision referred to by the Minister is Clements v Racing Victoria Ltd (‘Clements’).[7] In Clements, VCAT held that the source of the stewards’ powers under the Rules of Racing was solely contractual.[8]
[6]Victoria, Parliamentary Debates, Legislative Assembly, 30 October 2013, 3675 (Robert Clark, Attorney-General).
[7][2010] VCAT 1144.
[8]Ibid [72].
Prior to the insertion of s 5F(1)(a), s 49 of the Act provided that Harness Racing Victoria could make rules and, pursuant to s 45(1)(g), ‘may fine or otherwise punish any club or person offending the Rules’. Sections 77 and 82 made similar provision in respect of greyhound racing. However, there were no comparable provisions in relation to thoroughbred horseracing. In Thompson v Racing Victoria Ltd (‘Thompson’)[9] Cavanough J observed that the Rules ‘are hybrid in nature — partly contractual and partly statutory’.[10] In support of this proposition, his Honour footnoted six provisions of the Act: ss 5E, 5F, 5G, 6, 7 and 24A. Only ss 6 and 7 were operative prior to 29 January 2014. I do not consider the judgment in Thompson to be clear authority for the proposition that prior to 29 January 2014 the Rules had statutory effect pursuant to the Act.
[9][2020] VSC 574.
[10]Ibid [18].
If, prior to the insertion of s 5F(1)(a) into the Act, the Rules were enforceable only by contract, the Rules as they existed prior to 29 January 2014 do not support the existence of RV’s statutory duty. Any pleading of RV’s statutory duty must distinguish between the periods before and after 29 January 2014. If, notwithstanding the decision in Clements, Ms Goodrich contends that prior to 29 January 2014 the Rules were enforceable by statute, it is incumbent upon her to identify which provisions of the Act imposed a statutory duty on RV to act in good faith, fairly and in accordance with the Act and the Rules.
Absent the Rules having statutory force by virtue of s 5F(1)(a) it is difficult to envisage a proper pleading of a statutory duty as set out in [8A]. It was only during the hearing on 7 October 2021 that RV contended for the first time that s 5F(1)(a) had not been operative prior to 29 January 2014. It would be unfair to Ms Goodrich if she was shut out from having an opportunity to plead the existence of a statutory duty prior to 29 January 2014. It will be a matter for those advising Ms Goodrich to reflect on whether there is a proper basis for doing so.
Although s 5F(1)(a) was operative post 29 January 2014, the matters pleaded in [3] and [8A] do not establish the existence of RV’s statutory duty post 29 January 2014. It is necessary for Ms Goodrich to plead the provisions of the Act which impose an obligation upon RV to act in good faith, fairly and in accordance with, and within the scope of its powers under the Act and the Rules. The failure of [8A] to do so is borne out by the particulars of RV’s statutory duty annexed to [8A]. Having set out the extracts from RV’s Strategic Framework and RV’s Code of Conduct the particulars state:
Racing Victoria’s Strategic Framework and Racing Victoria’s Code of Conduct both constitutes acceptance by Racing Victoria of its obligations under Racing Victoria’s statutory duty and the implementation of policies to ensure compliance with that duty.
The Strategic Framework and the Code of Conduct are irrelevant to the existence of a statutory duty to act fairly and in good faith. The existence of any such duty is contingent upon Ms Goodrich identifying provisions of the Act which impose an obligation upon RV to act fairly and in good faith. Paragraphs [3] and [8A] do not do so.
Further, assuming Ms Goodrich can establish the existence of RV’s statutory duty, the ASOC does not plead a cause of action for damages for breach of statutory duty. In particular, the ASOC does not:
(a) identify the provisions of the Act which provide for RV to be liable for damages; and
(b) plead that the damage which she has suffered as a consequence of a breach of RV’s statutory duty is damage of a kind against which the Act affords protection.
I shall order that the pleading of RV’s statutory duty in [8A] be struck out with a right to re-plead.
The RV contract
It is common ground that the Rules constitute a contract between RV and Ms Goodrich. In Commissioner of Taxation v Racing Queensland Board[11] Griffiths and Derrington JJ stated:
The argument that the relationships between persons who participate in the thoroughbred racing industry are contractual in nature is well-founded in authority. It has its origins in ARR 2, which provides that any person who takes part in any thoroughbred racing ‘thereby agrees with the Australian Racing Board’ and the Principal Racing Authorities to be bound by the rules. It creates a standing offer to persons intending to participate in the industry to the effect that, if they choose to participate, then they are agreeing to be bound to comply with the prescribed rules. The acceptance by the person choosing to participate in the race forms the agreement between them and other participants to be bound to each other to comply with the rules.[12]
[11](2019) 374 ALR 241.
[12]Ibid [92].
Before the associate justice RV conceded that the Rules form the terms of a contract between RV and participants in the racing industry. RV accepted that in exercising its disciplinary powers and functions under the Rules, it owes participants in the racing industry a duty to accord procedural fairness.[13] The same concession was made in the present proceedings.[14] However, RV’s concession is subject to the qualification that any contractual obligation to accord Ms Goodrich procedural fairness is enlivened only when RV engages in conduct authorised by the Rules involving the exercise of disciplinary powers and functions which might adversely affect Ms Goodrich’s interests. RV submits that none of the conduct RV allegedly engaged in gave rise to any obligation to accord Ms Goodrich procedural fairness.
[13]Goodrich v Kilmore Racing Club Inc and Racing Victoria Ltd [2021] VSC 20, [36] (‘Goodrich’).
[14]Transcript of Proceedings, T 67 L 22–6 (7 October 2021).
[9A(b)] of the ASOC pleads that RV was required in its dealings with Ms Goodrich to act in good faith, fairly and in accordance with the Act and the Rules. RV’s summons dated 20 March 2020 did not challenge this pleading. Paragraph [2] of the summons sought orders striking out many paragraphs in the ASOC, but did not seek to strike out [9] and [9A] which plead the existence and terms of the RV contract.
In Commonwealth Bank v Barker,[15] Kiefel J (as her Honour then was) observed that the question of whether a standard of good faith should be applied generally to contracts has not been resolved in Australia.[16] In Beling v Victorian Legal Services Commissioner,[17] Kaye and Niall JJA stated that as the law currently stands in Victoria there is no general contractual term, implied by operation of law, that requires parties to a contract to act in good faith in the performance of the contract.[18] However, citing the judgment of Buchanan JA in Esso Australia Resources Pty Ltd v Southern Pacific Petroleum NL[19] Kaye and Niall JJA acknowledged the possibility that a good faith term may be implied into a contract in accordance with the principles in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (‘BP Refinery’).[20] In New South Wales Rifle Association Inc v Commonwealth of Australia[21] White J held that a good faith term was implied into a contract in accordance with the principles in BP Refinery.[22]
[15](2014) 253 CLR 169.
[16]Ibid 214 [107]. See also 195–6 [42] (French CJ, Bell and Keane JJ).
[17][2021] VSCA 257.
[18]Ibid [98]. See also Specialist Diagnostic Services Pty Ltd v Healthscope Ltd (2012) 41 VR 1, 20 [86]–[87].
[19][2005] VSCA 228, [25].
[20](1977) 180 CLR 266, 282–3.
[21](2012) 293 ALR 158.
[22]Ibid 179–82 [107]–[118], 183–5 [129]–[138]. See also Insight Oceania Pty Ltd v Philips Electronics Australia Ltd [2008] NSWSC 710.
Although not addressed in the submissions of either party, the pleading of the good faith term in [9A(b)] is flawed because there is no pleading that the good faith term is implied in accordance with the criteria laid down in BP Refinery. Rather, the particulars to [9A(b)] refer to and repeat the particulars sub-joined to [8A] in respect of RV’s statutory duty. Those particulars set out aspects of RV’s Strategic Framework and RV’s Code of Conduct. As presently pleaded, [9A] is properly read as a pleading that the good faith term is implied into the RV contract by operation of law. So read, the pleading is inconsistent with the current state of the law in Victoria. Paragraph [9A(b)] will be struck out with a right to re-plead the good faith term in accordance with these reasons.
Paragraph [12] of the ASOC pleads:
By reason of Racing Victoria’s statutory duty and the Racing Victoria contract, Racing Victoria (and the stewards, acting under the authority of Racing Victoria) in acting to regulate and control, inquire into and adjudicate upon the conduct of the:
a. Board of KRC; and
b. those appointed by the Board of KRC to manage KRC’s facilities, including the Chief Executive Officer (CEO) of KRC;
was, with respect to the plaintiff, under a duty to act in accordance with the Racing Act and the Racing Rules, including a duty to act fairly and otherwise abide by the rules of procedural fairness.[23]
[23]Plaintiff, Amended Statement of Claim, 13 December 2019 [12].
An aspect of [12], repeated throughout the ASOC, is the phrase ‘by reason of Racing Victoria’s statutory duty and the Racing Victoria contract’. The same formulation appears in [19], [22], [36], [36A] and [38]. In its current form, the ASOC pleads separate causes of action and claims discrete relief in respect of both the breach of RV’s statutory duty and the breach of the RV contract. The current form of the pleading whereby allegations of breach of statutory duty and breach of contract are rolled up together is confusing. If Ms Goodrich maintains a claim for breach of statutory duty, allegations of breach thereof should not be rolled up together with allegations of breach of the RV contract.
Paragraph [12] pleads that ‘by reason of Racing Victoria’s statutory duty and the Racing Victoria contract, Racing Victoria’ was under ‘a duty to act fairly and otherwise abide by the rules of procedural fairness’. The pleading of RV’s statutory duty in [8A] does not allege that RV was subject to a statutory duty to accord Ms Goodrich procedural fairness. Further, [9A] does not plead that it was a term of the RV contract that RV was under a duty to abide by the rules of procedural fairness in its dealings with Ms Goodrich. Paragraph [12] does not plead an allegation that a failure to abide by the rules of procedural fairness constitutes a breach of the RV statutory duty and/or the RV contract. Rather, [12] pleads the existence of a discrete duty to abide by the rules of procedural fairness. Similarly, [46] which makes allegations in respect of the RV suspension claim, pleads a discrete duty ‘pursuant to Racing Victoria’s statutory duty and the Racing Victoria contract to accord procedural fairness’. Neither the pleading of RV’s statutory duty in [8A] or the RV contract in [9] provide a foundation for the pleading in [12] and [46] that the duty to abide by the rules of procedural fairness is ‘by reason of Racing Victoria’s statutory duty and the Racing Victoria contract’. If Ms Goodrich wishes to allege that RV was subject to a statutory duty to accord Ms Goodrich procedural fairness, the foundation of any such duty must be set out in the pleading. Similarly, if Ms Goodrich wishes to allege that there was a term of the RV contract, separate and distinct from the good faith term, requiring RV to accord her procedural fairness, the basis for any such obligation to accord procedural fairness must be pleaded.
The law does not recognise a cause of action for damages arising from a denial of procedural fairness in the exercise of statutory powers.[24] However, where a denial of procedural fairness by a statutory authority results in a breach of contract, ‘an award of damages does not cut across the principle that, where there has been a denial of procedural fairness in the exercise of statutory or prerogative powers, the law does not recognise a cause of action for damages and confines a complainant to public law remedies’.[25]
[24]Attorney-General for the State of New South Wales v Quin (1990) 170 CLR 1, 45 (Deane J).
[25]Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44, 63 [59].
There is authority for the proposition that where the rules of an organisation have contractual effect and decisions may affect the rights of members, a requirement to accord procedural fairness is implied into the rules as a matter of public policy.[26] There is also authority for the proposition that a requirement to accord procedural fairness may arise as a result of the proper construction of the rules of an organisation. In McClelland v Burning Palms Surf Life Saving Club[27] Campbell J stated that in Australia:
The preferable view is that natural justice comes to operate in private clubs and associations by the rules of those private organisations being construed on the basis that fair procedures are intended, but recognising the possibility that express words or necessary implication in the rules could exclude natural justice in whole or in part.[28]
[26]See the authorities discussed in McClelland v Burning Palms Surf Life Saving Club (2002) 191 ALR 759, 784–5 [96].
[27](2002) 191 ALR 759.
[28]Ibid 785 [97]. See also Kabbara v Australian Sports Club Inc [2020] NSWSC 497 [40]–[42].
If Ms Goodrich alleges that RV’s obligation to accord her procedural fairness arises as a matter of construction of the Rules, it is incumbent upon her to identify particular rules and plead how such rules are to be construed when read as imposing an obligation to accord procedural fairness.
This is not a pedantic pleading point. A failure to accord procedural fairness, by reason of a failure to provide an opportunity to be heard or the absence of the actuality or appearance of disqualifying bias[29] may constitute a breach of a contractual obligation to act in good faith. However, an obligation of good faith is not necessarily coextensive with an obligation to accord procedural fairness. In Paciocco v Australia and New Zealand Banking Group Ltd[30] Allsop CJ stated:
[Good faith is] an obligation to act honestly and with fidelity to the bargain; an obligation not to act dishonestly and not to act to undermine the bargain entered or the substance of the contractual benefit bargained for; and an obligation to act reasonably and with fair dealing having regard to the interests of the parties (which will, inevitably, at times of conflict) and to the provisions, aims and purposes of the contract, objectively ascertained.[31]
[29]Isbester v Knox City Council (2015) 255 CLR 135, 154 [55] (Gageler J).
[30][2015] FCAFC 50.
[31]Ibid [288]. See also Masters Home Improvement Pty Ltd v North East Solution Pty Ltd (2017) 372 ALR 440, 465–6 [99]; Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 383 ALR 577, 638–9 [146].
An obligation to act in good faith may impose broader obligations than an obligation to accord procedural fairness and may be enlivened in different circumstances than those enlivening an obligation to accord procedural fairness.
Summary judgment orders
The associate justice ordered judgment for RV in respect of the mediation claim, the investigation claim and the medical report claim. Judgment was entered pursuant to s 63 of the Civil Procedure Act 2010. Section 63 provides that a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of a claim, defence or counterclaim, has no real prospect of success. The test for the grant of summary judgment under s 63 is set out in the joint judgment of Warren CJ and Nettle JA in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[32] as follows:
Upon the present state of authority:
(a)the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a “real” as opposed to a “fanciful” chance of success;
(b)the test is to be applied by reference to its own language and without paraphrase or comparison with the “hopeless” or “bound to fail test” essayed in General Steel;
(c)it should be understood, however, that the test is to some degree a more liberal test than the “hopeless” or “bound to fail” test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent’s case is not hopeless or bound to fail, it does not have a real prospect of success;
(d)at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.[33]
[32](2013) 42 VR 27.
[33]Ibid 40 [35].
The mediation claim
Ms Goodrich alleges that RV facilitated a mediation between herself and KRC, attended by RV’s Chairman of Stewards and two other stewards (‘mediation stewards’). Ms Goodrich alleges that in breach of RV’s statutory duty and the RV contract the mediation stewards did not act fairly or in good faith. Ms Goodrich alleges that the mediation stewards ‘actively assisted KRC to ensure the subsequent purported suspension of the plaintiff’.[34] The particulars annexed to this allegation comprise extracts from a transcript of the mediation which records exchanges between the Chief Executive Officer of KRC, Mr John Cameron, and Mr Trevor Bailey and the mediation stewards. The transcript records Mr Bailey pointing out potential flaws in the process followed by KRC relating to the decision to suspend Ms Goodrich’s licence on 4 August 2013. Mr Bailey is recorded as stating:
There is a flaw in it because really, she hasn’t either been given or had the opportunity to respond to the Club on why her privileges should be withdrawn.[35]
[34]Plaintiff, Amended Statement of Claim, 13 December 2019, [19].
[35]Ibid.
The transcript also records the mediation stewards and Mr Cameron agreeing to lift the August 2013 suspension and to send Ms Goodrich a show cause letter. One of the mediation stewards, Mr Montgomery, is recorded as stating:
If you do it properly it’s going to save you some grief down the track … Obviously I get the feeling that the Club doesn’t – you are better off – it seems like a better working environment when she’s not here, so that’s obviously something that needs to be brought up at board level.[36]
[36]Ibid.
The extracts from the transcript of the mediation may need to be read in a different light when read in the context of the full transcript of the mediation. Nevertheless, the extracts from the transcript set out in the particulars to [19] of the ASOC do lend some weight to Ms Goodrich’s contention that the mediators acted in a partisan fashion by advising KRC how to achieve a suspension of her licence without being subject to a claim of denial of procedural fairness.
Ms Goodrich also alleges that following the mediation RV assisted KRC in the preparation of a show cause letter which ultimately led to her suspension.[37] Ms Goodrich alleges that the conduct of the mediation stewards constituted a breach of RV’s statutory duty and the RV contract.[38] The particulars of the breach of RV’s statutory duty and the RV contract are as follows:
The mediation stewards failed to act in accordance with the Racing Act and the Racing Rules and denied the plaintiff procedural fairness by proceeding to meet with the CEO of KRC in her absence, including to assist the CEO of KRC (with access to the expertise of the Legal Counsel of Racing Victoria) to the disadvantage of the plaintiff.[39]
[37]Ibid [21].
[38]Ibid [22].
[39]Ibid.
The associate justice concluded that the mediation claim had no real prospect of success and should be dismissed:
In relation to Ms Goodrich’s claim with respect to the steward’s [sic] participation in the mediation, I agree that:
(a)the fact that the mediation stewards were empowered to facilitate or participate in the mediation did not mean that the mediation stewards had a duty to act in a particular way;
(b)given that mediation is a consensual process, the mediation itself, and the conduct of the stewards in the course of the mediation could not affect Ms Goodrich’s legal rights and obligations in her capacity as a member of KRC. As such, the stewards were not required to accord Ms Goodrich procedural fairness, and in any event, it is simply not possible to define what the content of that duty might be in the context of a mediation; and
(c)As such, there is no real prospect that Ms Goodrich could establish that any losses caused by her suspension by KRC are compensable by RV.[40]
[40]Goodrich (n 13) [67].
In the opening line of the paragraph set out above, the associate justice expressed her agreement with the submissions advanced on behalf of RV. Those submissions included the following:
Racing Victoria accepts that there is an obligation to accord procedural fairness in making quasi-judicial disciplinary decisions that involve the imposition of penalties. That is because the exercise of that power affects the legal rights or interests of the industry participant (ie, their livelihood). But that does not entail a free ranging procedural fairness obligation any time a steward does anything. In Renzella, Adam J observed that rule AR 8(d) of the former Rules of Racing gave the stewards “powers of inquiry”, which “in many respects resemble the function of policemen”. While the adjudicative function of deciding whether to take disciplinary action was conditioned by a procedural fairness requirement, the investigative function was not.[41]
[41]Ibid [41].
The gravamen of RV’s submission before the associate justice was that the circumstances in which the mediation stewards participated in the mediation with Ms Goodrich and KRC did not give rise to any obligation to accord her procedural fairness. RV submitted that Ms Goodrich’s participation in the mediation did not give rise to any obligation upon it to accord Ms Goodrich procedural fairness because the mediation could not affect her legal rights. RV submitted that any impact upon Ms Goodrich’s legal rights flowed from her suspension, which was a decision solely made by KRC.
For the purpose of determining whether the mediation claim has a real prospect of success, the question is not whether the mediation stewards were subject to a duty to accord her procedural fairness. Rather, the question is whether Ms Goodrich has a real prospect of success in contending that a failure to accord procedural fairness constituted a breach of the good faith term of the RV contract.
It is a curiosity that RV, notwithstanding its robust challenge to the ASOC, has not challenged [9A(b)], which alleges that it was a term of the RV contract that RV was required in its dealings with Ms Goodrich to act in good faith and fairly. This is particularly so as, for the reasons set out above, [9A(b)] does not properly plead the basis upon which a contractual obligation to act in good faith is to be implied into the RV contract. The deficiencies in the pleading of the good faith term can be remedied by amendment such that the basis upon which the good faith term is to be implied into the contract is set out. Subject to the amendment of [9A(b)], Ms Goodrich has a real prospect of succeeding in establishing that the conduct of Mr Bailey and the mediation stewards constituted a breach of RV’s contractual obligation to act in good faith and fairly in its dealings with Ms Goodrich.
Paragraph [9A] does not plead that it was a term of the RV contract that RV would accord Ms Goodrich procedural fairness. If Ms Goodrich wishes to plead, in addition to the good faith term, that RV was subject to a separate contractual obligation to accord her procedural fairness, the basis of such obligation, whether by the implication of a term in accordance with the principles in BP Refinery, or by way of construction of the Rules, will need to be clearly articulated.
I do not agree with the associate justice’s conclusion that the mediation claim has no real prospect of success. It is regrettable that the manner in which the summary judgment application was conducted before the associate justice failed to address two key issues which are critical to any assessment of whether the mediation claim has a real prospect of success. First, the efficacy of the pleading of the good faith term in [9A(b)]. Second, whether Ms Goodrich has a real prospect of establishing that the conduct of Mr Bailey and the mediation stewards in the mediation and in the preparation of the show cause letter could constitute a breach of the good faith term. The deficiencies in the pleading of the good faith term set out earlier in this judgment are capable of being cured by amendment. Further, Ms Goodrich may be able to plead a discrete contractual obligation, by way of an implied term or alternatively as a result of the construction of the Rules which imposed a contractual obligation upon RV to accord her procedural fairness.
The associate justice erred by failing to address the question of whether the conduct of the mediation stewards constituted a breach of the good faith term. In any event, the associate justice erred in concluding that:
(a) as the mediation was a consensual process, the mediation itself and the conduct of the stewards in the course of the mediation could not affect Ms Goodrich’s legal rights and obligations in her capacity as a member of KRC; and
(b) the stewards were not required to accord Ms Goodrich procedural fairness, and in any event, it is not possible to define what the content of that duty might be in the context of a mediation.
In Kioa v West[42] Mason J (as his Honour then was) stated:
In Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation, Kitto J. pointed out that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on “the particular statutory framework”. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision-maker is acting. …
In this respect the expression “procedural fairness” more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case.[43]
[42](1985) 159 CLR 550 (‘Kioa’).
[43]Ibid 584–5.
It is necessary when considering both the existence of an obligation to accord procedural fairness and the content of any such obligation to have regard to the particular circumstances of a case. The mediation on 17 September 2013 occurred in circumstances where Ms Goodrich’s licence as a trainer had been suspended by KRC. It is reasonable to infer that a purpose of the mediation was to endeavour to resolve the dispute between Ms Goodrich and KRC which had resulted in the suspension of her licence. The suspension of the licence directly affected Ms Goodrich’s legal rights. It is arguable that the conduct of the mediation stewards could affect her licence to train horses at KRC. A potential outcome of the mediation was the reinstatement of Ms Goodrich’s licence. This is in fact what occurred, albeit the suspension was subsequently reinstated on 22 October 2013. Both the reinstatement of Ms Goodrich’s licence and the subsequent further suspension of the licence affected her legal rights as a member of KRC. It is correct that the decision to reinstate the licence and to suspend it was a decision taken by KRC rather than RV. However, Ms Goodrich’s contention is that in making and implementing these decisions KRC and RV were working hand in glove. Her contention is that there is a direct nexus between the conduct of the stewards in the mediation and the subsequent reinstatement/suspension of her licence.
Evidence regarding the circumstances of the convening of the mediation and what occurred during the mediation may be relevant to both the existence and content of any obligation for RV to accord Ms Goodrich procedural fairness. This reinforces the need to act with caution before granting summary judgment in respect of a claim based on a denial of procedural fairness. The associate justice erred in concluding that as the mediation was a consensual process, the conduct of the stewards in the course of the mediation could not affect Ms Goodrich’s legal rights as a member of KRC.
Further, even if the conduct of the mediation stewards did not affect Ms Goodrich’s legal rights as a member of KRC, it does not follow that RV was not subject to a duty to accord her procedural fairness. In Ainsworth v Criminal Justice Commission[44] the High Court granted a declaration that the Criminal Justice Commission had failed to observe the requirements of procedural fairness in preparing a report which contained adverse findings in respect of Ainsworth. The plurality concluded that an obligation to accord procedural fairness arose notwithstanding that the Commission’s report, of itself, had no legal effect and no legal consequences, whether direct or indirect.[45] Although the report had no legal effect or consequence, it had the practical effect of blackening Ainsworth’s reputation.[46] The plurality held that Ainsworth’s reputation was an interest falling within the category of ‘legitimate expectation’[47] such that the Commission was required to accord procedural fairness to Ainsworth in the preparation of the report.[48]
[44](1992) 175 CLR 564 (‘Ainsworth’).
[45]Ibid 580.
[46]Ibid 581.
[47]See also Annetts v McCann (1990) 170 CLR 596, 598; Kioa (n 42) 384.
[48]Ainsworth (n 44) 577.
If the conduct of the stewards in the mediation could not have affected Ms Goodrich’s legal rights and obligations in her capacity as a member of KRC, it does not follow that the stewards were not subject to an obligation to accord her procedural fairness. Arguably, the conduct of the stewards in the mediation had the potential to prejudice Ms Goodrich’s reputation as a trainer. Ms Goodrich contends that the conduct of the stewards in the mediation was directly linked to the subsequent suspension of her licence. Ms Goodrich’s suspension had potential to impact on her reputation, thereby enlivening an obligation upon the stewards to accord her procedural fairness.
Subject to Ms Goodrich amending [9A(b)] to properly plead the basis of the good faith term, the mediation claim has a real prospect of success.
Investigation claim
By letter dated 3 May 2015 the Chief Executive Officer of RV wrote to Ms Goodrich advising her that RV had decided to initiate an investigation by a former member of the Victorian Police into the ongoing dispute between herself and KRC, in accordance with terms of reference attached to the letter.[49] Ms Goodrich alleges that the RV investigation was an exercise of its powers under rule AR 7(iii)(c) and was subject to RV’s statutory duty and the RV contract.[50] Ms Goodrich alleges that after she was interviewed by the investigator a draft report was forwarded to the CEO of RV on 28 September 2015. Ms Goodrich alleges that by letter dated 18 February 2016 addressed to her RV acknowledged key findings of the investigation report. First, that the allegations raised by Ms Goodrich of bullying and threatening behaviour were sustained. Second, that the investigator considered that the basis of KRC’s suspension of Ms Goodrich was ‘flawed, unjustifiable and did not withstand scrutiny’.[51] Ms Goodrich alleges that in breach of RV’s statutory duty and the RV contract, RV has failed to take any steps to advance the investigation so that it may be finalised.[52]
[49]Plaintiff, Amended Statement of Claim, 13 December 2019, [31].
[50]Ibid [32].
[51]Ibid [35].
[52]Ibid [36].
The relief claimed by Ms Goodrich in her prayer for relief includes a claim for a declaration that RV’s failure to take any steps to advance the investigation so that it may be finalised breached RV’s statutory duty and the RV contract. The associate justice concluded that the investigation claim had no real prospect of success and should be dismissed:
As for the claim with respect to RV’s alleged failure to finalise the investigation and/or to take steps in accordance with the interim findings of the investigation, I accept RV’s submissions that, given the power conferred upon RV by AR 7(iii)(c) of the Racing Rules is a discretionary power, that provision does not impose any obligation upon RV to exercise its discretion in any particular way, or to any particular effect. At their highest, Ms Goodrich’s allegations that RV has failed to complete the investigation, and has failed to take steps to implement any recommendations arising from the investigation may amount to evidence which supports a possible allegation that RV has acted in bad faith in its dealings with her, but do not of themselves give rise to a viable cause of action against RV.[53]
[53]Goodrich (n 13) [68].
AR 7(iii)(c) of the Rules is as follows:
A Principal Racing Authority shall:
In furtherance and not in limitation of all powers conferred on it or implied by these Rules, have power, in its discretion:
(c)to inquire into and deal with any matter relating to racing and to refer and/or delegate any such matter to stewards or others for investigation and report and/or for hearing and determination and, without prejudice to the generality of the foregoing power, to inquire at any time into the running of any horse upon any course or courses, whether a report concerning the same has been made or decision arrived at by any Stewards or not.
Ms Goodrich alleges that in circumstances where RV received a draft report which contained findings which were favourable to her, RV breached its statutory duty and the RV contract by failing to finalise the investigation and to take any action recommended in the report. RV’s delegation of the task of investigating and reporting involved the exercise of a discretionary power. However, a question arises as to whether, having engaged FBIS to investigate and report into the matters specified in the terms of reference, RV retained a residual discretion to refrain from finalising the investigation. The answer to this question may be informed by the terms of the contract pursuant to which FBIS was engaged to investigate and report. That contract is not in evidence.
Assuming that AR 7(iii)(c) of the Rules does not require RV to finalise the investigation, it does not follow that Ms Goodrich’s investigation claim has no real prospect of success. Ms Goodrich alleges that RV’s failure to complete the investigation constitutes a breach of the RV contract. Ms Goodrich alleges that the RV contract contains a good faith term. For the reasons set out earlier in this judgment the current pleading of the good faith term is flawed and requires amendment. However, if Ms Goodrich properly pleads the basis of the good faith term, Ms Goodrich may be able to establish a real prospect of success in contending that RV’s conduct in failing to finalise the investigation has breached a contractual obligation of good faith. In particular, Ms Goodrich may be able to establish a real prospect of success in claiming that RV breached the good faith term in circumstances where FBIS have produced a draft report which contains findings which are favourable to her.
The associate justice erred in granting summary judgment in favour of RV in respect of the investigation claim. I propose to strike out [32], [36] and [36A] of the ASOC and grant leave to Ms Goodrich to re-plead the allegations contained therein. Any re-pleading of these paragraphs will need to address the criticism set out earlier in this judgment of the pleading of RV’s statutory duty and the good faith term in the RV contract. The pleading will also need to address the criticism of the rolling up of allegations of breach of RV’s statutory duty and breach of the RV contract.
The investigation claim postdates the amendments to the Act introduced in January 2014 which gives statutory force to the Rules. If Ms Goodrich wishes to allege that RV’s conduct in failing to finalise the investigation report constitutes a breach of statutory duty, it will be necessary for the pleading to clearly identify relevant provisions of the Act which give rise to a statutory duty.
Medical report claim
Ms Goodrich alleges that by letter dated 20 February 2014, RV’s Customer Relationships Manager requested her to provide RV with a copy of a medical report dated 15 October 2013 which Ms Goodrich had previously provided to the board of KRC.[54] Ms Goodrich alleges that RV’s request for provision of the report was a breach of RV’s statutory duty, the RV contract and unlawful interference with her right to exercise her right under the licence granted by RV to train horses.[55]
[54]Plaintiff, Amended Statement of Claim, 13 December 2019, [37].
[55]Ibid [38].
The particulars of breach/unlawful interference state:
The plaintiff raised the conduct of Racing Victoria described in paragraph 37 and 38 hereof in her interview with the investigator at pp 53-57 of the version of the FBIS report released to her under [Freedom of Information] legislation.
Further particulars will be provided after discovery and, in particular, after inspection of the FBIS report, and related documents in their entirety.[56]
[56]Ibid.
The associate justice granted summary judgment in favour of RV in respect of the medical report claim:
Further, I agree that Ms Goodrich’s claim with respect to the contents of the letter sent by RV on 20 February 2014 is “elusive”, and has no real prospects of success. It may well be that Ms Goodrich was offended by the request in the letter, but it is difficult to see how such a request is actionable by Ms Goodrich, although again, the contents of the letter may support an allegation of bad faith on the part of RV.[57]
[57]Goodrich (n 13) [69].
I agree with the associate justice’s conclusion that the medical report claim has no real prospects of success. Assuming in Ms Goodrich’s favour that the breach of the RV contract referred to in [38(a)] is a breach of the good faith term, there is no basis for concluding that RV’s request for a medical report is actionable.
RV’s suspension claim
Thus far I have dealt with the associate justice’s orders and reasons for granting RV’s summary judgment application in respect of the mediation claim, the investigation claim and the medical report claim. The associate justice also dealt with a further claim in the ASOC arising out of a decision by RV on 13 December 2016 to suspend Ms Goodrich’s training licence. This suspension was based upon Ms Goodrich’s refusal on 12 December 2016 to allow two RV stewards to conduct a race day inspection of Ms Goodrich’s stables on 12 December 2016. Ms Goodrich alleges that the two RV stewards had not been validly appointed with the consequence that:
(a) her refusal to allow the stewards to inspect her stables could not be a breach of the Rules; and
(b) there was no basis for RV to validly suspend her licence.[58]
Ms Goodrich also alleges that because RV’s suspension could adversely affect her livelihood, RV was under an obligation pursuant to RV’s statutory duty and the RV contract to accord her procedural fairness prior to making the suspension decision.
[58]Plaintiff, Amended Statement of Claim, 13 December 2019, [45].
RV applied for summary judgment in relation to the RV suspension claim. It contended that the immunity conferred upon RV by AR 197 and 198 results in the RV suspension claim having no real prospect of success.
AR 197 and 198 provide as follows:
AR 197
No person shall be entitled to make any claim for damages by reason or in consequence of the imposition, annulment, removal, mitigation, or remission of any penalty imposed or purporting to be imposed under the Rules.
AR 198
No club, official or member of a club shall be liable to any person for any loss or damage sustained by that person as a result of, or in any way (either directly or indirectly) arising out of the exercise of any right, privilege, power, duty or discretion conferred or imposed, or bona fide believed to have been conferred or imposed, under the Rules.
As regards the operation of AR 197 and 198, the associate justice stated as follows:
However, as noted above, while I accept that Ms Goodrich has to overcome a number of hurdles in making good her claim, not the least being the immunity provisions, I cannot be sufficiently confident that those hurdles are insurmountable, such as to warrant summary judgment, at least at this stage. In particular, while I accept that the immunity provisions are expressed very broadly, and ought to be considered in such a way as to give them full effect (by reason of the policy considerations referred to in Hogno as outlined in paragraph 48 above, along with the need for RV stewards to routinely act promptly and summarily), there does appear to be a possibility that the immunity provisions may not apply where either RV, and/or the stewards, are not acting bona fide.[59]
and
Of course, apart from making an allegation that the stewards were not validly appointed by RV, the amended statement of claim makes no allegations that the stewards, and/or RV, acted in bad faith, or were actuated by malice. It seems to me that the only way in which Ms Goodrich could possibly avoid the consequences of the immunity conferred by the immunity provisions is to make an allegation that the stewards, and/or RV, did not act bona fide. Such an allegation would need to be expressly made, and supported by proper particulars in accordance with rule 13.10(3)(b) of the Court Rules.[60]
[59]Goodrich (n 13) [70].
[60]Ibid [76].
In respect of RV’s application for summary judgment the associate justice stated as follows:
In summary, while I do not consider Ms Goodrich’s claim against RV in relation to the mediation, the investigation and the letter of 20 February 2014 have any real prospects of success, and should be dismissed, there may be (and I would emphasise the word “may”) some possibility of Ms Goodrich presenting an appropriately formulated claim with respect to the RV suspension and the actions of the stewards leading up to the RV suspension which has a real prospect of avoiding the operation of the immunity provisions. However, no such claim has yet been advanced.
In the circumstances, what I propose to do is to grant Ms Goodrich the opportunity to prepare a proposed further amended statement of claim (which may, if she sees fit, include the additional allegations concerning the disciplinary proceeding for which leave has not yet been granted), and, if considered appropriate, an application to join the stewards, and adjourn RV’s summary judgment application to a date to be fixed. I would be willing to hear further argument on the proper construction of the immunity provisions in the light of the observations I have made above, but these arguments should be heard in the context of a properly formulated and particularised claim. In the event that no such proposed pleading (which should be accompanied by certificates pursuant to s 42 of the Civil Procedure Act 2010 (Vic)) given the nature of the allegations which might be made, is filed by a specified date, then judgment should be entered for RV on the entirety of the claim without the need to return to Court.[61]
[61]Ibid [81]-[82].
The orders made by the associate justice on 10 February 2021 included at [3(b)]:
By 4.00pm on 10 March 2021 the plaintiff file a proposed further amended statement of claim which includes any proposed amendments to advance any claims against the second defendant with respect to the Racing Victoria suspension and disciplinary proceeding, consistent with the reasons delivered this day.
On 22 March 2021 the associate justice made an order amending the order of 10 February 2021 by deleting [3(b)]. As a result of this amendment there was no operative order in relation to the RV suspension claim when the appeal was heard on 8 October 2021. RV’s application for summary judgment in respect of the RV suspension claim was in abeyance. During the hearing on 7 October 2021 I informed the parties that I considered it inappropriate to remit the proceeding to the associate justice for further argument in relation to RV’s summary judgment application in respect of the RV suspension claim.
If RV wishes to rely upon AR 197 and 198 as a defence to the RV suspension claim, the appropriate course is for RV to do so by way of its defence to the RV suspension claim. I do not agree with the associate justice’s conclusion that the only way Ms Goodrich could possibly avoid the consequences of the immunity conferred by AR 197 and 198 is to make an allegation that the stewards and/or RV did not act bona fide. Further, AR 197 and 198 do not confer any immunity on RV in respect of a claim for a declaration that the conduct of RV constituted a breach of the good faith term and/or a denial of procedural fairness.
Prima facie, AR 197 and 198 are exclusion clauses which restrict the right which Ms Goodrich would otherwise have to claim damages from RV for breach of contract. It is arguable that any ambiguities in AR 197 and 198 should be construed against the interests of RV should it seek to rely upon these provisions in its defence to the RV suspension claim.[62]
[62]Darlington Futures Ltd v Delco Australia Pty Ltd (1986) 161 CLR 500, 510. See also Kamil Export (Aust) Pty Ltd v NPL (Australia) Pty Ltd [1996] 1 VR 538.
RV’s foreshadowed reliance upon AR 198 is premised on the rule conferring immunity upon it. AR 198 confers immunity on a ‘club, official or member of a club’. AR 198 does not expressly confer immunity on RV. In Hogno v Racing Queensland Ltd (‘Hogno’)[63] Muir JA (White JA and Lyons J agreeing) held that the Racing and Betting Act 1980 (Qld) ‘implicitly acknowledges that the Rules of Racing are to be applied by the [Queensland Principal Club (‘QPC’)] in the performance of its statutory functions. Australian Rule 197 and 198 thus form part of the regulatory framework contained in the Australian Rules of Racing and Local Rules of Racing which have general application, by force of statute, to the performance by QPC of its statutory functions’.[64]
[63][2013] QCA 139.
[64]Ibid [32].
Hogno is not authority for the proposition that AR 197 and 198 apply to RV. Muir JA’s conclusion that the Rules applied to QPC was based on an analysis of the provisions of the Racing and Betting Act 1980 (Qld). Adopting this approach would require an analysis of the provisions of the corresponding Victorian legislation in September 2016 when RV suspended Ms Goodrich’s licence.
There is also a question as to whether AR 198 applies to RV stewards. RV submits that a steward is an ‘official’ as defined in the Rules. It is correct that the definition of ‘official’ under the Rules includes a Steward. The immunity conferred by the opening words of AR 198 is as follows:
No club, official or member of a club shall be liable …
The question of construction which arises is whether the reference to ‘official’ in the composite phrase ‘No club, official or member of a club’, is confined to ‘an official of a club’.[65] If so, a further question arises as to whether a steward appointed by RV is an official of a club.
[65]Dennis Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 9th ed, 2019) 148 [4.13].
In [48], [51] and paragraph E of the ASOC prayer for relief Ms Goodrich claims damages for losses sustained by her as a result of the RV suspension. RV contends that AR 197 prevents Ms Goodrich from making this claim. Ms Goodrich was suspended by RV after having been charged with a breach of rule AR 8D for, inter alia, refusing on 12 December 2016 to obey the reasonable directions of RV stewards.[66] Ms Goodrich alleges that the stewards who gave the directions underpinning the charge of breach of AR 8D were not validly appointed.[67] Ms Goodrich further alleges that by reason of the failure of RV to have validly appointed the stewards there was no basis upon which RV could validly suspend her licence.[68]
[66]Plaintiff, Amended Statement of Claim, 13 December 2019 [43].
[67]Ibid [44].
[68]Ibid [45].
Assuming in Ms Goodrich’s favour that she is able to establish that the stewards were not validly appointed, a question arises as to whether AR 197 confers immunity in respect of damage sustained as a result of an invalid suspension. I disagree with the associate justice’s conclusion that the only way Ms Goodrich can avoid the operation of AR 197 and 198 is to make an allegation that the stewards and/or RV did not act bona fide. If RV wishes to rely upon AR 197/198 it should plead such reliance in its defence. If Ms Goodrich wishes to contend that AR 197 and 198 did not prevent her making a claim for damages arising out of the suspension of her licence, this can be done by way of reply to RV’s defence.
The RV suspension claim is pleaded at [39] to [51] of the ASOC. Paragraphs [39] to [43] plead factual matters relating to the laying of the charge of breach of AR 8D. Paragraphs [44] and [45] plead that the RV stewards were invalidly appointed and that as a consequence there was no basis upon which RV could lay a charge against Ms Goodrich and suspend her licence. I do not consider that there is any requirement for Ms Goodrich to re-plead the matters pleaded in [39] to [45]. However, [46] to [47A] and [51] need to be re-pleaded to address the rolling up of alleged breaches of RV’s statutory duty and the RV contract. Further, [46] needs to be re-pleaded to set out the basis upon which Ms Goodrich contends that there was an obligation (whether by way of statutory duty or pursuant to the RV contract) to accord her procedural fairness. Paragraphs [46] to [47A] and [51] will be struck out with a right to re-plead.
On 29 May 2020 Ms Goodrich filed a further amended statement of claim (‘FASOC’) which included new allegations against RV at [43A] to [43J]. This pleading was filed after the hearing of RV’s summons on 14 May 2020 before the associate justice. Accordingly, the associate justice’s reasons do not address [43A] to [43J]. When the existence of the FASOC was raised during the hearing on 7 October 2021 I asked counsel for RV whether his client objected to the proposed amendments. Subsequent to the conclusion of the hearing RV’s solicitors advised that RV did object to [43A] to [43J] of the FASOC.
Paragraphs [43A] to [43J] allege that the conduct of RV in proceedings in the Victorian Civil and Administrative Tribunal and the Supreme Court breached RV’s statutory duty and the RV contract. As a result of this judgment Ms Goodrich’s pleading of the RV statutory duty in [8A] and the pleading of the terms of the RV contract in [9A(b)] will be struck out with a right to re-plead. Any consideration of whether Ms Goodrich should be granted leave to file and serve a FASOC including the allegations in [43A] to [43J] should be deferred to await Ms Goodrich’s re-pleading of RV’s statutory duty and the terms of the RV contract.
Conclusion
Paragraph [1] of the orders made by the associate justice on 10 February 2021 will be set aside. I propose to make the following orders in lieu of those made by the associate justice:
(1)There be judgment for the second defendant for the claims in paragraphs [37] and [38] of the amended statement of claim filed on 13 December 2019.
(2)Paragraphs [8A], [9A(b)], [12], [18], [19], [22], [32], [36], [36A], [46], [47], [47A] and [51] be struck out with the right to re-plead.
(3)By 4.00pm on 20 December 2021 the plaintiff file and serve a proposed further amended statement of claim which gives effect to paragraphs (1) and (2) of these orders.
(4)By 4.00pm on 18 January 2022 the second defendant notify the plaintiff and the Court whether it consents to the filing of the proposed further amended statement of claim.
This proceeding was commenced by writ filed on 2 August 2019. More than two years have passed and no defence has been filed. This delay is regrettable. The overarching purpose under s 7 of the Civil Procedure Act is the just, efficient, timely and cost effective resolution of the real issues in dispute. A delay of more than two years with no defence having been filed sits uncomfortably with the objectives of efficiency and timeliness. Nevertheless, these objectives cannot undermine the critical role which pleadings perform in the identification of the real issues in dispute. A properly drafted statement of claim assists in identifying and defining the real issues in dispute and thereby assists in facilitating the overarching purpose under s 7 of the Civil Procedure Act. Regrettably, the current iteration of the statement of claim obscures the issues in dispute. The pleading of RV’s statutory duty and the RV contract are deficient. The basis on which the plaintiff pleads a contractual obligation of good faith is unclear. It is also unclear whether the plaintiff alleges the existence of a discrete term of the RV contract that RV was required to accord her procedural fairness, or alternatively, whether Ms Goodrich alleges that any denial of procedural fairness was a breach of the good faith term. If Ms Goodrich alleges that it was a discrete term of the RV contract that RV was required to accord her procedural fairness, the basis of the term, be it by way of an implied term or construction of particular rules, must be spelled out. RV is entitled to be put squarely on notice as to the claim it has to meet.
I shall provide the parties with an opportunity to make submissions on costs. My provisional view is that as each party has enjoyed a measure of success, the appropriate order should be no order as to costs, or alternatively, that the costs of the appeal be costs in the cause.
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