Goodrich v Kilmore Racing Club Incorporated and Racing Victoria Limited
[2021] VSC 20
•28 January 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 |
| RACING VICTORIA LIMITED | Second Defendant |
---
JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne (virtual hearing) |
DATE OF HEARING: | 14 May 2020, further written submissions filed on 5 June 2020 |
DATE OF JUDGMENT: | 28 January 2021 |
CASE MAY BE CITED AS: | Goodrich v Kilmore Racing Club Incorporated and Racing Victoria Limited |
MEDIUM NEUTRAL CITATION: | [2021] VSC 20 |
---
PRACTICE AND PROCEDURE – Application by the defendants for summary judgment pursuant to s 63 of the Civil Procedure Act 2010 (Vic) and/or striking out of the plaintiff’s claim pursuant to Rule 23.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) – Whether the plaintiff’s claim has any real prospect of success – Whether the plaintiff is precluded from obtaining relief – Rules of Racing of Racing Victoria AR 197 and AR 198 – Whether immunity conferred on the second defendant – Hogno & Lee v Racing Queensland Ltd [2012] QSC 303 referred to – Whether pleading discloses a cause of action – Whether damages are available for a claim of unlawful restraint of trade – Application for summary judgment and strike out granted in part.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Appudurai | Davis & De La Rue Legal Costs Lawyers |
| For the First Defendant | Mr A Anderson | Coulter Roache Lawyers |
| For the Second Defendant | Mr E Nekvapil | Minter Ellison |
HER HONOUR:
Introduction and Background
The plaintiff, Ms Kate Goodrich, is a horse trainer by profession, licensed by the second defendant, Racing Victoria Limited (‘RV’) pursuant to the Rules of Racing of Racing Victoria (‘Racing Rules’)[1] and the Racing Act 1958 (Vic) (‘Act’). RV is the statutory authority tasked by the Act with the regulation and management of the racing industry in Victoria.
[1]The Racing Rules in force at the relevant time have subsequently been superseded. The reference to “Racing Rules” in these reasons refer to the rules in force at the relevant time.
Between 2007 and 2016, Ms Goodrich was a member of the first defendant, Kilmore Racing Club Incorporated (‘KRC’), prior to an acrimonious parting of the ways arising out of events in 2013. Until October 2013, Ms Goodrich trained her horses at facilities operated by KRC. Since then, she has trained her horses at facilities operated by the Seymour Racing Club, at what she says is at considerable cost and inconvenience to her.
The chronology of events includes the following relevant matters:
(a) on 4 August 2013, Ms Goodrich received an email from the then Chief Executive Officer (‘CEO’) of the KRC informing her that her permission to use the KRC’s facilities was suspended, allegedly because she and her horses and staff had entered parts of the facilities they had been instructed not to enter (‘first suspension’);
(b) the first suspension followed a Twitter post by Ms Goodrich earlier that day where Ms Goodrich had criticised KRC for the late cancellation of a race meeting scheduled for that day;
(c) on 11 September 2013, Ms Goodrich sought the assistance of stewards appointed by RV (‘stewards’)[2] to resolve the dispute between her and KRC;
[2]Ms Goodrich does not concede, and indeed contests, that the stewards involved in mediating the dispute between her and KRC were in fact validly appointed as stewards by RV in accordance with the Racing Rules, but for ease of reading I will refer in these reasons to the ‘stewards’ rather than ‘purported stewards’.
(d) on 12 September 2013, the then Chairman of Stewards of RV, Mr Terry Bailey, along with two other stewards (‘mediation stewards’), conducted a mediation between Ms Goodrich and KRC (‘mediation’), which resulted in KRC allowing Ms Goodrich to resume training horses at the facilities of KRC until 25 September 2013, when the Board of KRC would meet, and Ms Goodrich would be invited to attend to address the Board;
(e) on 19 September 2013, KRC sent Ms Goodrich a ‘show cause’ notice, which Ms Goodrich alleges was prepared at the suggestion of and with the assistance of the mediation stewards and RV;
(f) the KRC informed Ms Goodrich that the meetings of the KRC Board to discuss the show cause notice and Ms Goodrich’s response scheduled for 25 September, 2 October and 16 October 2013 had been cancelled;
(g) on 17 October 2013, notwithstanding the above, the KRC advised Ms Goodrich that the Board had in fact met on 16 October 2013, and had resolved that:
(i) a medical clearance would be required for her to resume training at Kilmore; and
(ii) for her to resume training, she would need to sign an ‘assurance/ agreement’ (the contents of which are not in evidence);
(h) since 14 October 2013, Ms Goodrich has been unable to train her horses at Kilmore;
(i) on 3 February 2015, the then CEO of RV wrote to Ms Goodrich to advise her that, following representations made by her and the former Premier and Minister for Racing, Mr Denis Napthine, RV had decided to initiate an investigation into:
(i) alleged bullying and threatening behaviour directed at Ms Goodrich while she was training at Kilmore;
(ii) the events surrounding her suspension by KRC; and
(iii) any other related relevant matter (‘investigation’);
(j) a draft confidential report (‘draft report’) was provided by the investigator, a retired police officer, to RV on 28 September 2015;
(k) on 18 February 2016, RV wrote to Ms Goodrich, stating, among other things:
In the context of Fairwork Australia Ombudsman definition, it is the opinion of [the investigator] that the allegations raised by [Ms] Goodrich … are sustained; and
[the investigator] considers that the basis of the suspension of [Ms] Goodrich was flawed, unjustifiable, and did not withstand scrutiny;
(l) notwithstanding the above, Ms Goodrich alleges that RV has taken no steps to finalise the draft report and/or take any necessary remedial actions in relation to the matters raised in the investigation and the draft report.
The above chronology of events is largely derived from the amended statement of claim filed on 13 December 2019. No defences have been filed by either KRC or RV, pending the hearing and determination of the applications currently before the Court.
This proceeding, and the disciplinary proceeding
This proceeding was filed on 2 August 2019, following a period in which there was also protracted litigation between Ms Goodrich and RV regarding an incident at the Kilmore race course on 12 December 2016 (‘disciplinary proceeding’). On that day, Ms Goodrich did not allow two people who introduced themselves to her as RV stewards to inspect a horse she intended to race later that day. She was subsequently charged with breaching AR 8D of the Racing Rules, which provides that a licenced person (such as Ms Goodrich) may be penalised for obstructing or refusing to obey any instructions of a steward made in the course of carrying out their duties.
Ms Goodrich pleaded guilty to the charge, and on 10 March 2017 the Victoria Racing Appeals and Disciplinary Board (‘RDAB’) convicted her and suspended her for three months, suspending that penalty for twelve months. Between 13 December 2016 and 10 March 2017, Ms Goodrich was unable to nominate horses trained by her in Victoria, and, for most of that time, in New South Wales as well. Ms Goodrich applied to the Victorian Civil and Administrative Tribunal (‘VCAT’) to review the decision of the RDAB under s 51 of the Victorian Civil and Administrative Tribunal Act 1995 (Vic) (‘VCAT Act’). What followed next is set out in the decision of the Court of Appeal in Goodrich v Racing Victoria Racing Appeals and Disciplinary Board,[3] delivered approximately a week before the hearing of the defendants’ applications in this proceeding (citations omitted):
[3][2020] VSCA 110.
On 4 October 2017, Racing Victoria advised that it would not adduce evidence in support of the charge and that it would seek an order that the RADB decision be set aside and that it pay the applicant’s costs of the VCAT proceeding.
On 9 October 2017, the applicant advised that she would not be in a position to decide whether to agree to Racing Victoria’s proposed order until she was given an opportunity to inspect the documents by which the two individuals were appointed as stewards. She also advised that a witness summons would be issued for the production of the appointment documents.
On 16 October 2017, a senior member of VCAT directed the Principal Registrar of VCAT not to issue the witness summons.
On 13 November 2017, VCAT made an order by which it required the applicant to indicate whether she consented to Racing Victoria’s proposed order. VCAT’s order provided that, in the event that the applicant did not consent, the parties had to file written submissions on whether VCAT should, on its own initiative, strike out or dismiss the proceeding as an abuse of process under s 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’) or make an order under s 51A inviting Racing Victoria to reconsider the RADB decision.
…
The applicant did not consent to Racing Victoria’s proposed order. On 28 March 2018, without any further hearing, VCAT made the following order (‘VCAT’s March 2018 order’):
1Under s 50 of the [VCAT Act], Racing Victoria is joined as second respondent to this proceeding.
2Under s 75 of the VCAT Act, the proceeding is dismissed insofar as the applicant seeks to rely on whether or not relevant instruments of delegation/appointment … validly appointed persons purporting to be Stewards of Racing Victoria Stewards who, on 12 December 2016, came to conduct a race day stable inspection and inspect a horse racing that day.
3On or before 13 April 2018, the applicant is to file and serve advice as to whether she consents to the [RADB] decision … being set aside and that Racing Victoria be ordered to pay her costs in this proceeding.
4Costs reserved.
In accordance with para 1 of VCAT’s March 2018 order, Racing Victoria became the second respondent to the VCAT proceeding and became the contradictor, with RADB not taking an active role.
In accordance with para 3 of VCAT’s March 2018 order, the applicant advised VCAT that she did not consent to the making of Racing Victoria’s proposed order.
On 20 April 2018, VCAT made the following order (‘VCAT’s April 2018 order’) and set out the following reasons for the order:
1Under s 75(1) of the [VCAT Act], this proceeding is dismissed as an abuse of process.
2[Racing Victoria] must pay the applicant’s costs on the County Court costs scale, to be assessed by the Costs Court, if the parties cannot agree an amount.
Reasons
With the applicant by letter, dated 12 April 2018, advising that the applicant does not consent to the decision under review being set aside, the above orders are made, as foreshadowed in [VCAT’s] Orders and Reasons of 28 March 2018.
On 18 May 2018, the applicant applied to the Trial Division for leave to appeal against para 1 of VCAT’s April 2018 order. She relied on eight grounds of appeal. In substance, she alleged that VCAT erred in not examining whether the two stewards had been validly appointed and in finding that her continuation of the proceeding constituted an abuse of process, and that VCAT’s decision was vitiated by apprehended bias.
On 18 April 2019, Niall JA, sitting as the Trial Division, granted leave to appeal on all but two of the grounds of appeal, but dismissed the appeal.[4]
[4]Ibid [3]-[13].
The Court of Appeal allowed the appeal against the decision of Niall JA, holding that his Honour erred in finding that VCAT’s failure to dismiss the charge against Ms Goodrich was merely a formal defect, such that the orders made by VCAT should not be set aside, stating:
This is because the setting aside of a conviction and penalty does not provide the same level of vindication and exoneration as the setting aside of a conviction and penalty which is accompanied by dismissal of the underlying charge. Setting aside a disciplinary decision does not represent a definitive determination that the charge is not proven in the same way as dismissal of a charge.[5]
[5]Ibid [84].
The Court of Appeal held that in dismissing the proceeding under s 75 of the VCAT Act, VCAT had failed to carry out its review function under s 51 of the VCAT Act, and concluded as follows:
As we have found that the only order that was open to VCAT on the evidence before it was the setting aside of the RADB decision and dismissal of the charge, such an order will be made in accordance with s 148(7)(b) of the VCAT Act, rather than an order remitting the proceeding to VCAT.[6]
[6]Ibid [89].
There is some overlap between the allegations made by Ms Goodrich in this proceeding and the submissions made by her in the disciplinary proceeding, in that one of Ms Goodrich’s allegations against RV in this proceeding is that, by reason of the failure of RV to properly appoint the stewards who attended the Kilmore race course on 12 December 2016, RV’s suspension of her training licence on the following day was invalid. Further, she says that RV’s unilateral conduct breached its obligations to afford her procedural fairness, and breached its contractual and statutory duties towards her. The issue of whether the stewards were validly appointed by RV is an issue that Ms Goodrich has pursued doggedly in both this proceeding and in the disciplinary proceeding.
The amended statement of claim
The amended statement of claim is a document of some length and complexity, and, I agree, requires some work before Ms Goodrich’s claims against the defendants, or either of them, can proceed to trial. The specific complaints made by KRC regarding the amended statement of claim will be dealt with later in these reasons, but RV submits that no amendment could address the fundamental flaw with Ms Goodrich’s claims in this proceeding, being that the terms of AR 197 and AR 198 of the Racing Rules (‘immunity provisions’) preclude Ms Goodrich from obtaining the relief she seeks in this proceeding, namely, declarations, a mandatory injunction, and damages for the alleged breaches by RV of its contractual and statutory duties to her.
Before turning to the defendants’ applications, the allegations in the amended statement of claim insofar as they concern RV are summarised in the following paragraphs.
First, the amended statement of claim identifies the parties and their roles, including, in the case of RV, that it has the power to enforce the Racing Rules against Ms Goodrich and the KRC, that it may, in its discretion, enquire and deal with any matter related to racing, and RV is, Ms Goodrich alleges, under a duty to act in good faith, fairly, and in accordance with the powers conferred by the Act and the Racing Rules in its dealings with participants in the racing industry. The amended statement of claim also referred to RV’s Strategic Framework and Code of Conduct (‘policies’) as informing the content of RV’s statutory duty.
Alternatively, Ms Goodrich alleges that by reason of the Act and the Racing Rules, there was a contract between RV and Ms Goodrich, which, among other things, required RV to act in good faith, fairly, and in accordance with the Act, the Racing Rules, and the policies. RV’s obligation to act fairly (and the duty of stewards appointed by the Board of RV pursuant to AR 8 of the Racing Rules) applied to RV (and the stewards) in acting to regulate or control, inquire into and adjudicate upon the conduct of the Board of KRC, and those appointed by the Board of KRC to manage its facilities, such as the CEO of KRC.
Ms Goodrich went on to allege that, following the first suspension, she sought the assistance of the stewards, following which she was contacted by Mr Bailey. Ms Goodrich disputes that Mr Bailey was validly appointed as the Chairman of Stewards of RV, but accepts that he purported to act in that capacity. She alleged that on 13 September 2013, the mediation stewards purported to conduct a mediation at the premises of KRC. She alleged that the mediation stewards met with her and Mr Cameron (the CEO of KRC), and privately with Mr Cameron. She alleged that the mediation stewards actively assisted KRC to ensure that she would be suspended after the issue of a ‘show cause’ letter, which was prepared by KRC with the assistance of the mediation stewards and legal counsel for RV. The particulars to paragraph 19 of the amended statement of claim included a lengthy extract from the transcript of the mediation, which recorded discussions between the mediation stewards and the CEO of KRC.[7]
[7]Thereby falling foul of the requirement that a pleading should include the necessary material facts, but not the evidence proposed to be advanced in support of those facts.
Ms Goodrich alleged that the conduct of the mediation stewards was in breach of RV’s statutory duty and the contract between her and RV (‘RV contract’).
The amended statement of claim went on to make allegations about RV’s conduct of the investigation, which was initiated pursuant to RV’s powers under the Racing Rules, and was said to be thus subject to RV’s statutory duty and the terms of the RV contract. Ms Goodrich said she was permitted to read a redacted draft report prepared following the investigation after giving confidentiality undertakings to RV. On 18 February 2016, RV wrote to Ms Goodrich acknowledging that Ms Goodrich’s allegations concerning the conduct of KRC and the validity of her suspension had been sustained by the investigation. However, RV has failed, in breach of its statutory duty and the terms of the RV contract, to finalise the investigation and take the necessary remedial action recommended by, or arising from the findings of the investigation.
The amended statement of claim also alleged that on 20 February 2014 RV sent Ms Goodrich a letter requesting that she provide to it a copy of a medical report provided by her to KRC. That request was not authorised by any provision of the Racing Rules or the Act, and constituted a breach of RV’s statutory duty and/or its contract with Ms Goodrich, and
was an unlawful interference with [Ms Goodrich’s] right to exercise her right under the licence granted by [RV] to train horses.
The amended statement of claim then referred to the conduct of RV which culminated in charges being laid against Ms Goodrich, which in turn led to her suspension on 13 December 2016 (‘RV suspension’), and the disciplinary proceeding. Ms Goodrich alleged that the stewards had not been validly appointed by the directors of RV, as required by LR 7A of the Racing Rules, and, accordingly, there was no wrongful refusal on the part of Ms Goodrich to obey the direction of the stewards. As such, the RV suspension was invalid. Further, the initiation and prosecution by RV of the disciplinary proceeding was made without according Ms Goodrich procedural fairness, and accordingly, its conduct in doing so was in breach of RV’s statutory duty and the RV contract.
Finally, the amended statement of claim alleges that by reason of RV’s breaches of its statutory duty and the terms of the RV contract in connection with the conduct alleged above, Ms Goodrich has suffered loss and damage, including that she suffered a stress related injury caused by RV’s conduct. In her prayer for relief, Ms Goodrich seeks the following relief against RV:
(a) a declaration that RV has breached its statutory duty and the terms of the RV contract;
(b) a mandatory injunction compelling RV to complete the investigation, and publish to her the results of that investigation; and
(c) damages for the loss and damage suffered by Ms Goodrich by reason of the second KRC suspension, RV’s conduct with respect to the investigation and in requesting the medical report, the RV suspension and the disciplinary proceeding.
The allegations made by Ms Goodrich against KRC are summarised in the following paragraphs.
First, the amended statement of claim refers to the contract between Ms Goodrich and KRC (‘KRC contract’), the terms of which were prescribed by KRC’s Rules, and, as such, any attempt by KRC to limit, restrict or withhold its permission for Ms Goodrich to use KRC’s facilities to train horses could only be done in accordance with the KRC Rules.
Ms Goodrich alleged that the KRC Rules expressly provided for certain disciplinary and dispute resolution procedures, and that, by suspending Ms Goodrich on 4 August 2013 without providing her with an opportunity to make representations on her own behalf, KRC breached the terms of the KRC contract. Further, the decision made by the KRC Board on 16 October 2013 (in her absence) to impose conditions upon Ms Goodrich’s continued use of the KRC facilities, which Ms Goodrich says was a constructive suspension (‘second suspension’), was also made in breach of the KRC contract.
In paragraph 49 of the amended statement of claim, Ms Goodrich alleged that the suspension by KRC of her rights to use KRC’s facilities constituted an unlawful restraint of trade. She alleged that by reason of the unlawful suspensions by KRC, she has suffered loss and damage, as follows:
The plaintiff has suffered loss and damage to her business as a trainer of race horses and has suffered damage to her livelihood as a result.
The plaintiff’s loss and damage includes legal and medical expenses and expenses related to the costs arising from the interruption to her ability to use KRC’s facilities, including to relocate training to Seymour Racing Club.
Further particulars of loss and damage, including by reason of stress‑related injury caused by the imposition of the first and second suspensions, will be provided prior to trial.
In her prayer for relief, Ms Goodrich claimed the following relief against KRC:
(a) a declaration that the first and second suspensions were void, having been made by KRC in breach of the KRC contract, and in breach of the rules of procedural fairness; and
(b) damages, as set out above.
On 29 May 2020, Ms Goodrich filed a proposed further amended statement of claim in accordance with directions I made on 14 May 2020. This direction was made for two reasons: first, to address the issue of whether the amended statement of claim had been properly marked up in accordance with r 36.05(4) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Court Rules’), and secondly, to give Ms Goodrich’s lawyers the opportunity to address the defendants’ concerns about the adequacy of the pleading raised by them in their submissions, particularly the submissions advanced on behalf of KRC.[8]
[8]For present purposes I have assumed that the proposed amended statement of claim circulated on 29 May 2020 meets the requirements of r 36.05(4).
The main changes to the amended statement of claim made by the proposed further amended statement of claim are summarised below:
(a) first, Ms Goodrich alleged that KRC’s conduct constituted an unlawful restraint of trade by reason of KRC’s breach of the terms of the KRC Rules with respect to the process by which disciplinary action and dispute resolution should be managed by KRC; and
(b) the allegations regarding KRC’s alleged breach of the KRC Rules and the rules of procedural fairness with respect to the suspensions were restated, and, with respect to the first suspension, Ms Goodrich also claimed that the CEO of the KRC was not invested with any power to suspend her use of KRC’s facilities.
As noted above, Ms Goodrich was provided an opportunity to deliver the proposed further amended statement of claim in order to address the ‘marking up’ problem identified by the defendants, and to address criticisms of the amended statement of claim made by KRC in particular. However, the proposed further amended statement of claim Ms Goodrich went further, and made further allegations against RV regarding the mediation and the disciplinary proceeding. Following protests made by the solicitors of RV, I indicated that I would determine RV’s application for summary judgment on the basis of the amended statement of claim. However, for completeness, the proposed changes to Ms Goodrich’s claims against RV are summarised as follows:
(a) RV is said to have breached the RV contract and its statutory duty during the course of the mediation by sanctioning the proposed conduct of KRC, and assisting KRC, which led to the second suspension; and
(b) the proposed further amended statement of claim added to and updated the chronology of events concerning the disciplinary proceeding, including Ms Goodrich’s application to VCAT, the submissions made by RV at the VCAT hearing regarding the appropriate orders to be made by VCAT, and the proceedings brought by Ms Goodrich in the Trial Division of this Court and the Court of Appeal. RV’s conduct in those proceedings, including the submissions made by it in those proceedings, was said to be in breach of RV’s statutory duty and the terms of the RV contract.
Referring to the proceeding in the Court of Appeal, Ms Goodrich made the following allegations against RV:
43H.On 20 May 2020 (the Court of Appeal, inter alia, refused the grant of indemnity certificate under the Appeal Costs Act 1998) to Racing Victoria because it had ‘… materially contributed to the errors made by VCAT and the judge at first instance’.
43I.The conduct by Racing Victoria of the proceedings in the tribunal, and the Supreme Court, as identified by the Court of Appeal, caused the plaintiff to:
a.commence proceedings in the Supreme Court and the Court of Appeal; and
b.endure a further 2.5 years (from October 2017) of otherwise unnecessary additional mental stress and uncertainty;
in order that she might (as she, ultimately, did) achieve the ‘… level of vindication and exoneration as the setting aside of a conviction and penalty which is accompanied by dismissal of the underlying charge’.
43J.The conduct of Racing Victoria, referred to in paragraph 43I hereof, constituted a breach of Racing Victoria’s statutory duty and the Racing Victoria [contract].
The prayer for relief in the proposed further amended statement of claim also claimed an order for specific performance (as an alternative to a mandatory injunction) with respect to the investigation.
In a letter sent to the Court on 3 June 2020, Ms Goodrich’s solicitors indicated that to the extent that the proposed further amended statement of claim introduced new allegations against RV, then Ms Goodrich seeks leave to introduce the new allegations.
The current applications
On 20 March 2020, KRC filed a summons seeking the following orders:
Pursuant to rule 23.02 of the Rules, an order that paragraphs [8], [13], [14], [26], [29], [49], [49A], [50] and [A] and [D] of the prayer for relief of the plaintiff’s statement of claim dated 13 December 2019 be struck out.
Further or alternatively, an order that the plaintiff’s amended statement of claim dated 13 December 2019 be struck out as a result of its failure to comply with rule 36.05(4) of the Rules.
On 25 March 2020, RV filed a summons seeking the following orders:
Pursuant to s 63 of the Civil Procedure Act 2010 (Vic) and Pt 3 of O 22 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules), summary judgment be entered in favour of the second defendant in respect of the relief sought by the plaintiff in each of paragraph B, paragraph C and paragraph D of the prayer for relief in the plaintiff’s statement of claim dated 2 August 2019.
Alternatively, pursuant to rule 23.02 of the Rules, an order that paragraphs [12], [18], [19], [21], [22], [31]-[36], [37]-[38], [39]-[48], and [51] of the plaintiff's statement of claim dated 2 August 2019 be struck out.
A declaration that the document filed by the plaintiff on about 13 December 2019, headed “Amended Statement of Claim”, does not comply with rule 36.05(4) of the Rules.
Summary judgment application - submissions
In its written outline of submissions, RV acknowledged that, in order to obtain summary judgment in its favour, the Court must take a generous approach to the pleading of the plaintiff’s claims (compared with the critical approach to be taken in an application under r 23.02 of the Court Rules) in order to identify each possible cause of action which might arise, and RV must demonstrate how each of those causes of action have no real prospects of success.
RV’s submissions observed that the amended statement of claim pleaded:
(a) a cause of action in private law claiming damages and possibly injunctive relief for breach of contract; and
(b) a cause of action in public law seeking injunctive and declaratory relief.
Ms Goodrich’s claims for relief arise out of alleged breaches by RV of its contractual and statutory duties arising out of the following matters:
(a) the mediation stewards’ involvement in the mediation;
(b) RV’s response to the investigation;
(c) RV’s request for a medical report on 20 February 2014; and
(d) the RV suspension and the disciplinary proceeding.
RV conceded, appropriately, that the Racing Rules form the terms of a contract between RV and participants in the racing industry, and that, in exercising its disciplinary powers and functions under the Racing Rules, RV owes participants in the racing industry a duty to afford procedural fairness. However, RV submitted that the conduct of RV complained of by Ms Goodrich could not amount to any breach of duty, or otherwise did not give rise to any right to relief on the part of Ms Goodrich. Further, RV submitted, it has not been explained how the policies can inform the content of any contractual or statutory duty of RV.
In particular, RV relied upon Rule AR 198 of the Racing Rules, which provides as follows:
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 confirmed or imposed, under the Rules.
RV observed that the mediation stewards are not parties to the proceeding and did not suspend Ms Goodrich from KRC. RV submitted that the conduct alleged against them was not conduct which affected Ms Goodrich’s legal rights and obligations. In any event, Rule AR 198 protects the mediation stewards from liability, as they are officials within the meaning of the Racing Rules.
Further, the amended statement of claim does not identify any breach of any Racing Rule which could found a breach of contract. Relying upon AR 8 (d) of the Racing Rules, Mr Goodrich pleaded that RV owed her a duty to act fairly and in accordance with the rules of procedural fairness.
RV submitted that the conduct of the stewards in the mediation could not give rise to a viable cause of action against RV, as follows:
Rule AR 8 confers a power on Racing Victoria to appoint stewards: ‘[t]o assist in the control of racing, Stewards shall be appointed according to the Rules of the respective Principal Racing Authorities, with the following powers…’. It then identifies the powers that stewards so appointed shall have. These include (d): ‘[t]o regulate and control, inquire into and adjudicate upon the conduct of al officials and licensed persons, persons attendant on or connected with a horse and all other persons attending a racecourse’.
In the particulars to SoC, [11], Ms Goodrich draws attention, in this regard, to the definition of ‘official’, which relevantly includes:
(a)a Member of the Committee of a Racing Club;
…; and
(c)any other person appointed by the Committee of a Racing Club [scil. For?] the management of a training facility … .
Thus, rule AR 8(d) empowered Racing Victoria to appoint stewards, themselves empowered to ‘regulate and control, inquire into and adjudicate upon the conduct of all’:
(a)‘officials’ (including a committee member of KRC or person appointed by the committee to manage a training facility);
...; and
(c)licensed persons.
But SoC, [22] alleges a breach of a duty of procedural fairness owed by Racing Victoria to Ms Goodrich not to KRC.
It appears that Racing Victoria’s power to appoint stewards, themselves empowered to take action in respect of conduct of KRC committee members and training facility managers or Ms Goodrich, is somehow converted into an obligation by Racing Victoria to accord procedural fairness to Ms Goodrich when assisting the KRC and Ms Goodrich to mediate a dispute between them about the exercise of a power by KRC to suspend Ms Goodrich. That allegation is non-viable.
RV went on to submit, in relation to the allegations made against the mediation stewards, as follows:
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.
RV submitted that, in any event, even if the conduct of the mediation stewards did breach any obligation of procedural fairness owed by RV to her, damages would not be an appropriate remedy, being rarely awarded against private tribunals for breaches of procedural fairness and other public law duties. In any event, Ms Goodrich has no real prospect of establishing that any loss she has suffered by her suspension by KRC was caused by any breach of contract on the part of RV, even if that relief was not precluded by the immunity provisions.
As for Ms Goodrich’s claims against RV with respect to the investigation, RV observed that the amended statement of claim does not allege in its terms that, by its failure to advance the investigation, RV has breached its statutory or contractual duty to Ms Goodrich. However, on the presumption that Ms Goodrich intended to plead such a breach, RV submitted that this cause of action has no real prospects of success, as Rule AR 7(iii)(c) of the Racing Rules provides that RV shall:
… in furtherance and not in limitation of all powers conferred on it or implied by these Rules, have power, in its discretion … [t]o inquire into and deal with any matter related 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 …
RV referred to the decision of this Court in R v Brewer; Ex parte Renzella[9] (‘Renzella’) which also concerned an investigation conducted by stewards appointed by the predecessor organisation to RV, in support of the proposition that an investigator is not performing a quasi-judicial function, and accordingly, when carrying out an investigation under the Racing Rules, RV is not required to afford a person affected by an investigation procedural fairness.
[9][1973] VR 375.
RV observed that the amended statement of claim does not reveal what terms of the RV contact were said to have been breached by RV not taking further steps to advance the investigation. However, as rule AR 7(iii)(c) confers a discretionary power upon RV, not an obligation. RV submitted that the assertion to the effect that once RV commences an inquiry it is bound to follow a particular path is untenable. Accordingly, Ms Goodrich’s claims with respect to the investigation have no real prospects of success.
As for the reference in the amended statement of claim to the request for a medical report of 20 February 2014, RV referred to Ms Goodrich’s claims with respect to that matter as being ‘elusive’, observing that the amended statement of claim fails to identify which term of the RV contract which RV is said to have breached, or any facts, matters or circumstances by which it is said that RV’s request for a medical report (which had already been provided by Ms Goodrich to KRC) caused her loss and damage, or any other adverse consequences.
As for Ms Goodrich’s claims with respect to the RV suspension, and the disciplinary proceeding, RV relied upon the immunity provisions. Rule AR 198 is set out at paragraph 37 above. Rule AR 197 provides as follows:
No person shall be entitled to make any claim for any 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.
RV relied upon the decision of Martin J in Hogno & Lee v Racing Queensland Ltd,[10] (‘Hogno’) where his Honour rejected claims brought by a horse trainer in negligence and negligent misstatement in relation to conduct and statements of the defendant (‘RQL’) (RV’s Queensland equivalent) which were said to have led to him being erroneously disqualified by RQL, on the basis that the imposition of a common law duty to take care upon the RQL would be inconsistent with, and have a tendency to discourage the performance of its statutory duties. Martin J then went on to find that RQL was protected by the immunity provisions, stating as follows:
These rules are designed to protect those who administer the rules of racing where a loss arises out of the exercise of a power under the rules. The loss alleged to have been suffered by the defendants arises, on their own case, as a result of the exercise of such a power. Of course, the plaintiffs have argued that the rule relied upon by the stewards did not apply to them and that was held to have been correct by the Court of Appeal. But AR 198 excludes liability for loss arising out of the exercise of any power bona fide believed to have been conferred or imposed under the rules. It was not seriously in issue that there was a lack of bona fides on the part of the stewards. In any case, I find that the stewards proceeded according to their understanding of the rules and acted bona fide in doing so.[11]
[10][2012] QSC 303, upheld on appeal [2013] QCA 139.
[11][2012] QSC 303 [93].
Further, RV submitted that in addition to the immunity provisions, RV also has the protection of s 84 of the Wrongs Act 1958 (Vic) (‘Wrongs Act’), which applies to:
a proceeding for damages for an alleged breach of statutory duty by a public authority in connection with the exercise of or a failure to exercise a function of the authority.
RV submitted that RV is a public authority within the meaning of the Wrongs Act. Section 84(2) of the Wrongs Act provides as follows:
For the purposes of the proceeding, an act or omission of the public authority relating to a function conferred on the public authority specifically in its capacity as a public authority does not constitute a breach of statutory duty unless the act or omission was in the circumstances so unreasonable that no public authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions.
RV submitted that, as the reference to ‘unreasonable’ in the provision above should be read as being equivalent to the unreasonableness standard specified in Associated Provincial Picture Houses Ltd v Wednesbury Corporation[12] (‘Wednesbury standard’), even if Ms Goodrich could overcome the effect of the immunity provisions, there is no real prospect that this Court would hold that the conduct of the stewards of RV, was, in the circumstances, unreasonable in accordance with the Wednesbury standard.
[12][1948] 1 KB 223.
Further, to the extent that Ms Goodrich’s claims with respect to her suspension by RV are founded on an allegation that the stewards who attended the Kilmore race course on 12 December 2016 were not validly appointed by RV, RV submitted that the extended definition of “official” in the Racing Rules includes people who are not properly appointed. Further, RV submitted that Ms Goodrich has already obtained the relief available to her with respect to the RV suspension, in that the decision of VCAT dismissing her application to review the decision of the RDAB has been overturned by the Court of Appeal.
Accordingly, RV submitted that Ms Goodrich’s claims for damages have no real prospects of success.
As for Ms Goodrich’s claims for a mandatory injunction to compel RV to complete and act upon the investigation, RV’s submissions noted that, ordinarily, a mandatory injunction is not available for a breach of contract. If the remedy sought was really specific performance (as was confirmed by the delivery of the proposed further amended statement of claim), then such a claim would have no real prospects of success, because:
(a) Ms Goodrich cannot convert a discretionary power into a contractual duty; and
(b) the current case is an example of where the Court would inevitably decline to exercise its discretion to award specific performance, because an order of that nature would require ongoing supervision by the Court.
In her written outline of submissions, Ms Goodrich referred to the various versions of the statement of claim which has been filed or circulated, and suggested that RV’s application for summary judgment was an abuse of process, as it sought judgment upon a pleading which was no longer in force. That submission was not strongly pressed at the hearing of the defendants’ applications.
Ms Goodrich accepted that the immunity provisions may be relied upon by RV to resist a claim for damages, but said that the protection purported to be given under AR 197 is conditioned by the requirements that the actions taken by RV be taken ‘under the [Racing Rules]’, Ms Goodrich referred to the principles governing applications for summary judgment laid down by the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[13] and submitted as follows:
Whether RV is entitled to the protection of AR 197 is a matter for trial. In particular, the question of whether [the Stewards] had been validly appointed Chairman of Stewards and Stewards respectively, in accordance with the [Racing Rules] is a matter expressly put in dispute...
[13](2013) 42 VR 27.
Ms Goodrich submitted that the decisions in Hogno[14] did not concern any allegation about the validity of the appointment of the stewards concerned, and, contrary to RV’s submissions, the Court of Appeal decision with respect to the disciplinary proceeding did not rule upon the bona fides of the stewards.
[14][201]2 QSC 303, [2013] QCA 139.
In the course of the hearing of the defendants’ applications, counsel for Ms Goodrich submitted, somewhat emotively, that Ms Goodrich has been treated harshly by KRC and RV, which has caused her considerable financial and psychological stress.
Ms Goodrich submitted that the power to summarily dismiss a proceeding should be exercised sparingly, referring to the following statement by Derham AsJ in Hoh v Frosthollow:[15]
Particular caution is warranted where the objections taken are technical and the boundaries of the area of law relied upon to support the pleading are still developing.[16]
[15][2014] VSC 77.
[16]Ibid [20].
Ms Goodrich submitted that the Court should presume that her allegations that the stewards were not validly appointed are true (and RV has never produced documents which could rebut that allegation). The question of whether the immunity provisions apply to excuse RV or the stewards of actions taken without power is a live issue in the proceeding, noting that the immunity provisions did not apply to protect the CEO of RV’s New South Wales equivalent in Golden v V’Landys.[17]
[17][2016] NSWA 300. However, I note that this proceeding concerned an attempt to overturn a disciplinary decision: unlike the current case, it involved no claim for damages.
As for Ms Goodrich’s claims concerning the mediation, counsel for Ms Goodrich queried whether the relevant meetings could in fact be described as a mediation, saying that the mediation stewards sent Ms Goodrich away, and then set about helping the CEO of KRC to ‘stitch things up’ by helping KRC to prepare and issue a show cause notice. Counsel submitted that mediators are required to act fairly, but instead the mediation stewards aided and abetted the second suspension by providing expertise and comfort to KRC, and the second suspension would not have happened without the succour, support and the imprimatur of the mediation stewards and RV.
As for Ms Goodrich’s claims with respect to the investigation, counsel submitted that while the power to commence an investigation is a discretionary power, once having exercised that power, there is no discretion to walk away from the investigation. Rather, RV is charged with ensuring that the business it oversees is carried out properly and for the benefit and well-being of the participants in the racing industry. Ms Goodrich rejected the proposition that one can’t rely upon the policies: participants in the racing industry and entitled to take them at face value.
Finally, counsel for Ms Goodrich observed that all of the relevant documents concerning the mediation, the investigation, and the RV suspension are in the hands of RV, which is another reason why RV’s claims should be permitted to proceed to trial.
In his submission in reply, counsel for RV submitted, in summary, as follows:
(a) the proceeding is an adversarial proceeding, not an ombudsman’s inquiry;
(b) in its reasons concerning the disciplinary proceeding, the Court of Appeal said that the documents concerning the appointment of the RV stewards are relevant;
(c) Ms Goodrich chose to sue RV, rather than the stewards, and it is difficult to see how RV can be liable to her if the stewards are not so liable;
(d) the meaning and effect of the immunity provisions are matters which can be dealt with summarily;
(e) Ms Goodrich’s submissions to the effect that the mediations stewards and/or RV aided and abetted KRC in the second suspension concern allegations which are not referred to in the amended statement of claim; and
(f) Ms Goodrich’s submissions concerning the policies suggest that RV had breached a duty to afford participants in the racing industry substantive fairness, but this has not been pleaded, and in any event, the Australian authorities are against the proposition that statutory authorities can be compelled to adhere to their promises and policies.
Discussion – summary judgment application
It is not necessary for present purposes to dwell upon the test for granting summary judgment, given that the relevant principles are well known and not in dispute. I endorse the approach proposed by counsel for RV; that is, it is necessary to consider, taking a generous approach to the pleaded case, each possible cause of action available to Ms Goodrich, and to evaluate whether those causes of action, or any of them, have any real prospects of success, having regard to the nature of the relief sought by Ms Goodrich. The causes of action concerns Ms Goodrich’s allegations against RV with respect to:
(a) the mediation stewards’ participation in the mediation;
(b) RV’s response to the investigation;
(c) RV’s letter of 20 February 2014; and
(d) the RV suspension.
In summary, I agree with RV that Ms Goodrich’s claims with respect to the mediation, the investigation, and the letter of 20 February 2014 have no real prospects of success, and should be dismissed. However, I am not comfortable in reaching a conclusion, at least at this stage of the proceeding, that Ms Goodrich’s claim for damages for breach of contract (which might also be capable of being characterised as a breach of its statutory duty) with respect to the RV suspension have no real prospects of success. While those claims as they are currently pleaded are not viable, the (as yet undisputed) facts are such which could give rise to a claim which could be made by Ms Goodrich which may have more than a fanciful prospect of success, despite the many hurdles in her way in making good such a claim. My reasons follow.
In relation to Ms Goodrich’s claim with respect to the steward’s 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.
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.
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.
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 construed in such a way as to give them full effect (by reason of the policy considerations referred to in Hogno[18] as outlined in paragraph 48 above, along with the need for RV stewards to routinely act promptly and summarily[19]), 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.
[18][2012] QSC 303.
[19]See, for example, Renzella at 383-384.
While I accept that there is a persuasive argument that the use of the term ‘bona-fide’ in AR 198 is concerned with the question of whether the official or entity concerned honestly and reasonably believed it had the power to do something under the Rules, when in fact they were not so empowered, it seems to me that it is at least arguable that the term ‘bona-fide’ also means decisions made or conduct engaged in in an absence of bad faith or malice. If that broader construction of the term ‘bona-fide’ is adopted, it may well be that the immunity from suit conferred by the immunity provisions does not extend to conduct or actions which are tainted by bad faith and/or malice. For example, the immunity provisions may not apply to conduct which, in a different context, might give rise to a cause of action for malicious prosecution.
RV accepts that Ms Goodrich had, at all relevant times, a contract with RV in accordance with the Racing Rules. Whether in fact its conduct in suspending Ms Goodrich in December 2016 was a breach of the terms of that contract, or of any statutory duty imposed upon RV, is not really a matter which is appropriate for summary determination.
What may also be inappropriate for summary determination, in the absence of any binding authority on the proper construction of the term ‘bona-fide’ in AR 198, is the question of whether the direction given by the stewards to Ms Goodrich on 12 December 2016 attracts the immunity ostensibly conferred by AR 198, where the refusal of Ms Goodrich to comply with the direction resulted in the RV suspension the following day.
On its face, there appears to be no such qualification to the immunity conferred upon RV by AR 197. However, in Hogno[20], the Queensland Court of Appeal drew no such distinction between AR 197 and AR 198, stating that immunity provisions were:
...deliberately expressed to cover circumstances in which persons had suffered loss through the erroneous exercise of powers under the rules provided that the powers exercised were bona fide[21]
[20][2013] QCA 139.
[21]Ibid, [34].
It was not necessary for either Martin J or the Court of Appeal to give any detailed consideration to the proper construction of the immunity provisions, given that there were no allegations to the effect that the stewards concerned were not acting bona fide: in that case, the stewards merely proceeded on what was ultimately found to be a mistaken view of the law. However, in his reasons, Martin J appeared to conflate the term ‘bona-fide’ with absence of malice and/or bad faith.[22] Further, in Renzella,[23]Adams J implicitly left open the possibility of challenge to decisions made by stewards which were tainted by ‘want of honesty or personal bias’.[24] It is usually inappropriate to grant summary judgment if there is a real possibility that a case may be advanced which raises a debatable question of law.[25]
[22]Hogno, [63].
[23][1973] VR 375.
[24]Ibid, 378.
[25]See Uber Australia Pty Ltd v Adrianakis [2020] VSCA 186 [35] – [36]
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 r 13.10(3)(b) of the Court Rules.
As for whether there is a real prospect that Ms Goodrich can responsibly contend that either or all of the stewards and/or RV acted in bad faith or were actuated by malice in their dealings with Ms Goodrich in December 2016, it is not necessary or appropriate to evaluate any such allegations at this stage, particularly given that no such allegations have been expressly made to date. However, it is apparent from the various iterations of the statements of claim and the submissions advanced on the part of Ms Goodrich at the hearing of the defendants’ applications that Ms Goodrich, rightly or wrongly, feels very aggrieved at the conduct of KRC, RV and the stewards towards her, and that she holds the view that RV has treated her unfairly. Whether that treatment could be said to amount to or evidence bad faith on the part of RV and/or the stewards, and whether such allegations could be adequately and responsibly pleaded, is of course a matter for Ms Goodrich and her legal representatives, cognisant of course of their obligations under the Civil Procedure Act 2010 (Vic) to certify that any allegations made in the proceeding have a proper basis in fact and law.
A further issue which arises is that if allegations are to be made that the stewards did not act bona fide, it may well be necessary for the stewards to be joined as defendants to the proceeding.
I accept that s 84(2) of the Wrongs Act would almost certainly, on the basis of the facts pleaded, preclude Ms Goodrich from obtaining relief for any alleged breach of statutory duty against RV. However, in its terms, s 84(2) does not seem to preclude any claim based upon an alleged breach of contract. Further, as observed by Leeming JA in the decision relied upon by RV, Bankstown City Council v Zraika[26], what is ‘unreasonable’ for the purpose of s 84(2) of the Wrongs Act needs to be viewed ‘through the eyes of a responsible public authority’[27]
[26](2016) 94 NSWLR 159.
[27]Ibid, 181.
For completeness, the fact that the Court of Appeal did not conclude that the conduct of the stewards or RV was outside the Racing Rules may not preclude the legality of that conduct being pursued in another forum. The decision of the Court of Appeal was concerned only with the disposition of the disciplinary proceeding in the light of the manner that the disciplinary proceeding was conducted at VCAT. Ms Goodrich’s complaints in this proceeding (save for the new allegations made by her for which leave has not yet been granted) concern the conduct of the stewards and RV antecedent to the bringing of the disciplinary proceeding. It is therefore possible that no issue estoppel or Anshun estoppel arises, at least with respect to the allegations in the amended statement of claim in its current form, but that might be a matter which warrants further consideration and argument.
In summary, while I do not consider Ms Goodrich’s claims 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.
The pleading issues
KRC’s application concerns the form of the amended statement of claim. Rule 23.02 of the Rules provides as follows:
Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading-
(a) does not disclose a cause of action or defence;
(b) is scandalous, frivolous or vexatious;
(c) may prejudice, embarrass or delay the fair trial of the proceeding; or
(d) is otherwise an abuse of the process of the Court-
the Court may order that the whole or part of the indorsement or pleading be struck out or amended.
In its submissions, KRC referred to the principles governing the application of rule 23.02 of the Rules as set out by John Dixon J in Wheelahan & Anor v City of Casey & Ors (No 12) (‘Wheelahan’) [28].
[28][2013] VSC 316.
RV’s written submissions contain a useful summary of the relevant principles adapted from Wheelahan[29], as follows:
[29]Ibid. See also Pentridge Village Pty Ltd v CFMMEU [2020] VSC 47.
(a)Order 13 of the Rules set out the relevant requirements of a sufficient pleading, while r 23.02 provides the grounds on which the sufficiency of a pleading may be impugned;
(b)the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;
(c)the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence). The expression ‘material facts’ is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;
(d)as a corollary, the pleading must be presented in an intelligible form – it must not be vague or ambiguous or inconsistent. Thus a pleading is ‘embarrassing’ within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;
(e)the fact that a proceeding arises from a complex factual matrix does not detract from the pleading requirements. To the contrary, the requirements become more poignant;
(f)pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);
(g)a pleading which contains unnecessary or irrelevant allegations may be embarrassing – for example, if it contains a body of material by way of background factual matrix which does not lead to the making out of any defined cause of action (or defence), particularly if the offending paragraphs tend to obfuscate the issues to be determined;
(h)it is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing;
(i)every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));
(j)the effect of any document or purport of any conversation, if material, must be pleaded as briefly as possible, and the precise words of the document or the conversation must not be pleaded unless the words are themselves material (r 13.03);
(k)particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement – namely, to fill ni the picture of the plaintiff’s cause of action (or defendant’s defence) with information sufficiently detailed to put the other party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;
(l)a pleading should not be so prolix that the opposite party is unable to ascertain with precision the causes of action and the material facts that are alleged against it;
(m)extensive cross-referencing of facts in a pleading may render parts of the pleading unintelligible;
(n)in an application under r 23.02, the court will only look at the pleading itself and the documents referred to in the pleading.
(o)the power to strike out a pleading is discretionary. As a rule, the power will be exercise only when there is some substantial objection to the pleading complained of or some real embarrassment is shown; and
(p)if the objectionable part of the pleading is intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading.
The following observations of Derham AsJ in Hoh v Frosthollow Pty Ltd[30] are also relevant to the current applications:
The power to summarily strikeout or dismiss the whole or a part of a claim under rule 23.02, on the grounds that it does not disclose a cause of action, is to be exercised with caution, especially where it appears to the Court that there is a real question to be tried. Particular caution is warranted where the objections taken are technical and the boundaries of the area of law relied upon to support the pleading are still developing. The Court will not make an order under rule 23.02 where the pleading raises a debatable point of law. The power should only be exercised where, assuming the facts pleaded are established, the claim is so manifestly hopeless that a trial will be a futility. Where a pleading is struck out under rule 23.02, the affected party will generally be given leave to amend the pleading, or where the whole pleading is struck out, to serve another pleading.[31]
[30][2014] VSC 77.
[31]Ibid [20].
It is not necessary for present purposes to deal with RV’s criticisms of the pleading of the amended statement of claim, given that I have dismissed some of Ms Goodrich’s claims against RV, and, for the claim which remains alive, at least for the time being, I have directed that Ms Goodrich file a proposed further amended statement of claim. Rather, in the remainder of these reasons, I will focus upon the criticisms of the amended statement of claim advanced on behalf of KRC.
KRC submitted that the amended statement of claim offends a number of the principles outlined in Wheelahan.[32]
[32][2013] VSC 316.
Paragraphs 5 to 8 of the amended statement of claim provide as follows:
5. By reason of the operation of s 46 of the Incorporation Act:
a.KRC’s Rules constituted the terms of a contract between KRC and its members (including the plaintiff); and
b.insofar as the Turf Rules were by-laws made, pursuant to clause 4.1 of KRC’s Rules, the Turf Rules also constituted the terms of a contract between KRC and each member (including the plaintiff), who was also permitted to use KRC’s facilities to train racehorses (KRC contract).
6.By reason of paragraph 5 hereof, any attempt by KRC to limit, restrict or entirely withhold permission for the plaintiff to exercise her rights as a member of KRC and to use KRC’s facilities to train race horses could only be done in accordance with the KRC contract.
Particulars
Clause 9 of KRC’s Rules made express provision for the procedure to be followed in the event that an occasion arose which required the Board of KRC to take steps to discipline, suspend or expel a member. Amongst other things, the power to suspend a member from the privileges of membership was entrusted only to the Board of KRC and, even then, subject to compliance with the provisions of clause 9.
The Turn Rules also expressly included a ‘Complaint and dispute resolution guidelines’ (in Appendix 1) and a ‘Discipline, suspension and expulsion from venue users policy’ (in Appendix 2). The power to suspend a person from using KRC’s facilities to train race horses was entrusted only to the Board (referred to as the ‘Committee’ in the Turf Rules).
Both KRC’s Rules and the Turf Rules, by their terms, made express provision for a member (including one who was a ‘venue user’) to be given notice of the allegations made against that person, the consequences which might follow and 6to be invited to show cause, including to address the Board at a meet6ing called in accordance with clause9 of the KRC’s Rules, or Appendix 2 of the Turf Rules, prior to any decision being made by the Board against that person.
7.By reason of paragraphs 5 and 6 hereof, it was an express term of the KRC contract that any attempt to suspend (or otherwise limit) the plaintiff’s rights of membership, or her use of KRC’s facilities to train race horses, may only be made in accordance with KRC’s Rules and the Turf Rules and, in particular, in accordance with the rules of procedural fairness.
8.Further, and alternatively, the plaintiff refers to, and repeats, paragraph 7 hereof and says that, in the circumstance that any restriction of her rights of membership and, in particular, her use of KRC’s facilities to train race horses, would amount to a restraint of trade (as did KRC’s actions, referred to in paragraphs 13 and 28 hereof) the requirement to accord procedural fairness was implied by law.
In its written outline of submissions, KRC submitted as follows:
Firstly, paragraph 8 is confusing and embarrassing to plead to in that:
(a) The paragraph confusingly cross references and repeats paragraph 7;
(b)It is not clear if the paragraph is alleging a restraint of trade or not (‘in the circumstance that…would amount to a restraint of trade’);
(c)The paragraph alleges that ‘any (emphasis added) restriction of her rights of membership…would amount to a restraint of trade’ which is plainly wrong;
(d)The cross referencing and language (‘as did KRC’s actions, referred to in paragraphs 13 and 28 hereof’) is confusing and leave KRC uncertain as to what is alleged;
(e)The paragraph contains many allegations within the one paragraph contrary to rule 13.01(2); and
(f)The paragraph does not show the deletions which have been made from the Statement of Claim in breach of rule 36.05(4) of the Rules.
KRC also submitted that the amended statement of claim does not include any material facts supporting the allegation that the requirement to accord procedural fairness was implied by law. Further, if paragraph 8 of the amended statement of claim was intended to allege an unlawful restraint of trade, no material facts are pleaded to support such an allegation.
Paragraph 13 of the amended statement of claim provides as follows:
At approximately 11:24am on 4 August 2013, the plaintiff received an email from the then CEO of KRC (John Cameron) which included the following:
·Kate you have been instructed not to go into that area with your staff and horses and you continue to challenge my instruction therefore your permission to use the Club facilities have been suspended as from today until such time that we receive a letter from you assuring the Club you will abide by instructions we issue you with. I am happy to meet with you immediately but you will need to bring with you a signed copy of the Training conditions I supplied to you and a letter in writing stating that you will abide by our instructions (the first suspension)
Particulars
The first suspension was made in contravention of the KRC contract.
A copy of the email of 4 August 2013 from the CEO of KRC, headed ‘Subject: Re: Twitter’, may be inspected by prior appointment with the lawyers for the plaintiff.
In its written outline of submissions, KRC submitted as follows:
The amendment now asserts in the particulars ‘the first suspension was made in contravention of the KRC contract’. Firstly, that is an allegation of a material fact and not a particular. Secondly, it is embarrassing to plead to because it does not state what term of the KRC contract the first suspension is alleged to have breached.
Paragraph 14 of the amended statement of claim provides as follows:
The first suspension was imposed by KRC without any opportunity being afforded to the plaintiff to make representations on her behalf, whether pursuant to cl 9 of KRC’s Rules, Appendix 2 of the Turf Rules or at all.
In its written outline of submissions, KRC submitted as follows:
The words ‘or at all’ render the paragraph vague and embarrassing to plead to. The paragraph also does not make clear the relevance of the allegation that the first suspension was imposed by KRC without any opportunity to make submissions on her behalf. If the paragraph is intended to allege that the first suspension was imposed by KRC in contravention of clause 9 of KRC’s Rules and Appendix 2 of the Turf Rules then it should say so. KRC would then know what allegation is has to meet. The particulars to paragraph 14 also have no apparent relevance to any material facts pleaded in that paragraph and ought to be struck out.
Paragraph 26 of the amended statement of claim provides as follows:
Notwithstanding the advice from KRC that the meeting had been cancelled, the Board of KRC proceeded to hold that meeting (in the absence of the plaintiff) in breach of the KRC contract and passed resolutions that day in relation to the plaintiff and, inter alia, advised the plaintiff by its letter of 17 October 2013 that:
a.as she was then ‘…unfit to continue with [her] normal occupation, some form of medical clearance will be required for [her] return to training at Kilmore Racecourse’; and
b.for her ‘to return to training at Kilmore in the future’ she would have to sign the enclosed ‘assurance/agreement’.
Particulars
A copy of the letter of 17 October 2013 (and the enclosed assurance/ agreement may be inspected by prior appointment with the lawyers for the plaintiff.
In its written outline of submissions, KRC submitted as follows:
The amendment now asserts that ‘the second suspension was made in breach of the KRC contract’. It is embarrassing to plead to because it does not state what term of the KRC contract the second suspension is alleged to have breached.
Paragraph 29 of the amended statement of claim provides as follows:
The first suspension and the second suspension were made in breach of the KRC contract including as referred to in paragraphs 5 to 8 hereof.
In its written outline of submissions, KRC submitted as follows:
This paragraph is vague and embarrassing to plead to in that:
(a)The use of the word ‘including’ leaves KRC uncertain as to what basis the breach is alleged other than by reference to paragraphs 5 to 8;
(b)The cross referencing to facts alleged in paragraphs 5 to 8 renders the pleading unintelligible; and
(c)The reference to paragraph 8 in particular is confusing and embarrassing to plead to for the reasons outlined in paragraphs 8 and 9 above.
Paragraph 49 of the amended statement of claim provides as follows:
The first suspension and the second suspension were unlawful as they had been imposed in circumstances in which KRC had acted:
a. in breach of the KRC contract; and
b. in contravention of the rules of procedural fairness.
In its written outline of submissions, KRC submitted as follows:
Paragraph 49 comes under the heading ‘Damages’ but makes allegations of breaches that are already referred to elsewhere in the document.
Paragraph 49(a) is also embarrassing to plead to because it does not state what terms of the contract KRC is alleged to have breached. Further, the paragraph does not show the deletions which have been made from the Statement of Claim in breach of rule 36.05(4) of the Rules.
Paragraph 49(b) is also embarrassing to plead to because it alleges a conclusion that KRC acted in contravention of the rules of procedural fairness without specifying any material facts in support of the conclusion. It does not assert any underlying contractual or other entitlement giving rise to an obligation for RKC to afford Goodrich procedural fairness.
Paragraph 49A of the amended statement of claim provides as follows:
Further, and in the alternative, the plaintiff refers to, and repeats, paragraph 8 hereof and says that the first suspension and the second suspension constituted unlawful restraint of trade.
In its written outline of submissions, KRC submitted as follows:
Paragraph 49A comes under the heading ‘Damages’ but makes an allegation of unlawful restraint of trade which is already referred to elsewhere in the document.
Paragraph 49A is also embarrassing to plead to in that it asserts that the first suspension and the second suspension constituted unlawful restraint of trade but contains no material facts in support of that conclusion.
Paragraph A of the prayer for relief in the amended statement of claim seeks:
A declaration that each of the first suspension and the second suspension were void ab initio having been made by KRC in breach of the contract between KRC and the plaintiff.
In its written outline of submissions, KRC submitted as follows:
Paragraph [A] of the Prayer for Relief includes the allegation of breach of the rules of procedural fairness in circumstances where a cause of action for breach of the rules of procedural fairness is not disclosed in the December Amended Statement of Claim.
Following the hearing of the defendants’ application on 14 May 2020, Ms Goodrich was, as previously noted, given an opportunity to serve a proposed further amended statement of claim to address the deficiencies identified above, and did so, in a document provided on 29 May 2020. In its written submissions filed on 5 June 2020, KRC acknowledged that this document did indeed remedy a number of deficiencies in the amended statement of claim, but submitted that the pleading of Ms Goodrich’s allegations that KRC had engaged in an unlawful restraint of trade remained defective, and that it pressed its applications to strike out paragraphs 8, 14B, 29A and 49A of the amended statement of claim, and paragraphs B and E of the prayer for relief. KRC submitted, in summary, as follows:
(a) those paragraphs do not disclose a cause of action against KRC, as they do not constrain the material facts required to ground a cause of action based upon a unlawful restraint of trade;
(b) those paragraphs are embarrassing, in that they plead a conclusion from unstated facts; and
(c) as a matter of law, damages are not available for unlawful restraint of trade.[33]
[33]Referring to Mogul Steamship Co Ltd v McGregor, Gow & Co [1892] AC 25.
KRC also submitted that the fourth and fifth paragraphs of the particulars to paragraph 14 of the amended statement of claim ought to be struck out on the basis that they have no apparent relevance to the material facts pleaded in that paragraph.
Given the concessions made by counsel for Ms Goodrich during the course of the hearing that the amended statement of claim required some work in order to address the deficiencies identified by KRC, it is not necessary to rehearse Ms Goodrich’s submissions in response to KRC’s application, save that, Ms Goodrich formally rejected the submissions to the effect that the pleading was objectionable and embarrassing. Ms Goodrich did not file any response to KRC’s submissions of 5 June 2020, where KRC maintained its objection to Ms Goodrich’s claims that KRC had engaged in unlawful restraint of trade. That said, she had not been ordered or invited to make any such submissions.
Turning first to KRC’s submissions that the pleading of Ms Goodrich’s claim that the KRC first and second suspensions amounted to an unlawful restraint of trade is deficient, the following extract from Halsbury’s Laws of Australia provides a useful summary of the element of this cause of action in the context of a sporting industry (omitting footnotes):
The application of the doctrine is determined by the facts of each particular case. It will operate where:
(1) a sportsperson is involved in a recognised trade;
(2)a clause of a contract, a decision, or a rule of a sports body restrains the sportsperson in his or her trade; and
(3)the restraint is unreasonable in the private interests of the parties or in the public interest. [34]
[34]LexisNexis, Halsbury’s Laws of Australia, 175 Entertainment, Sport and Tourism ‘6 Employment and Trade’ [175-6440].
While it can be inferred from the pleading in paragraph 8 (in the form it appeared in the proposed further amended statement of claim) that the alleged restraint of trade arose from what is said to be a breach of contract, I agree that the proposed further amended statement of claim does not plead the material facts supporting each and every element referred to above. In particular, there is no pleading that the ‘restraint’, which I presume to mean Ms Goodrich’s exclusion from using KRC’s training facilities, was unreasonable. Paragraphs 8, 14B, 29A and 49A should therefore be struck out.
However, while I accept that the preponderance of the authority weighs against Ms Goodrich being entitled to damages by reason of any unenforceable restraint of trade, my review of the relevant authorities[35] indicates that if the relevant restraint also involves a breach of contract, Ms Goodrich may not be precluded from obtaining relief in the way of damages.
[35]See, for example, Nagle v Feilden [1966] 2 QB 633.
Finally, in relation to the particulars to paragraph 14 of the amended statement of claim, these particulars provide as follows:
Contrary to the terms of the email of 4 August 2013, the plaintiff had not acted in contravention of any instructions of the KRC.
The plaintiff had not, prior to the first suspension, breached any terms of [the] KRC contract, and she had signed and returned the acknowledgement form included in the Turf Rules...
The plaintiff had, however, earlier that morning (following the cancellation of the race meeting at KRC scheduled that day) reiterated on Twitter her view that the track at Kilmore was always going to be unsuitable for racing on 4 August 2013, and commented about the unfairness to the owners and participants of the late cancellation.
A copy of the post on Twitter may be inspected by prior appointment with the lawyers for the plaintiff.
KRC says the last two paragraphs of the particulars are irrelevant, and ought to be struck out.
I disagree. While the connection of these particulars with the allegations in paragraph 14 of the amended statement of claim is not expressly drawn, it is tolerably clear that while Ms Goodrich denies breaching any terms of the KRC contract, she admits to the contract which she says motivated the first suspension, namely, posting a comment critical of KRC on Twitter.
For completeness, I have reviewed the amendments to the claim against KRC in the proposed further amended statement of claim which were not the subject of the submissions filed by KRC on 5 June 2020, and, subject to my earlier observations concerning the adequacy of the pleading of Ms Goodrich’s claim that KRC has engaged in conduct which amounts to an unlawful restraint of trade, the proposed amendments appear to remedy the deficiencies identified by KRC in its original submissions.
Draft orders to give effect to these reasons will be circulated for the consideration of the parties.
7
0