Howe v Rosier; King v Greyhound Racing Authority (NSW)

[2001] NSWSC 1194

CITATION:	Howe v Rosier & Anor; King v Greyhound Racing Authority (NSW) & Anor [2001] NSWSC 1194
CURRENT JURISDICTION:	Common Law Administrative Law
FILE NUMBER(S):	SC 30062/00; 30063/00
HEARING DATE(S):	28 March 2001, 1 June 2001
JUDGMENT DATE:	21 December 2001
PARTIES :	Kenneth Edward Howe (Plaintiff) v Stephen Rosier (First Defendant) & Regulatory Committee of the Greyhound Racing Authority (NSW) (Second Defendant) Raymond Thomas King (Plaintiff) v Greyhound Racing Authority (NSW) (First Defendant) & The Regulatory Committee of the Greyhound Racing Authority (NSW) Second Defendant
JUDGMENT OF:	Adams J at 1

COUNSEL :	Mr J B Bishop/Mr N Packer (Howe) Mr B J Gross QC (King) Mr M G Rudge SC with Mr R Webb (Defendants)
SOLICITORS:	Heard McEwan Lawyers (Howe) Thurlow Fisher (King) Hartmann & Associates (Defendants)
LEGISLATION CITED:	Greyhound Racing Authority Act 1985 Independent Commission Against Corruption Act 1988 Drug (Misuse and Trafficking) Act 1985 Crimes Act 1900
CASES CITED:	Webb v The Queen (1993-1994) 181 CLR 41 Hall v The NSW Trotting Club Limited [1997] 1 NSWLR 378 Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 Livesey v New South Wales Bar Association (1983) 141 CLR 288 Australian National Industries Ltd v Spedley Securities Ltd (in liq) & ors (1992) 26 NSWLR 411 at 417
DECISION:	Summonses dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISON

ADAMS J

Friday 21 December 2001

30062/00 Howe v Rosier & Anor
30063/00 King v Greyhound Racing Authority

JUDGMENT

1 HIS HONOUR: Each of the plaintiffs is a greyhound trainer registered with the Greyhound Racing Authority of New South Wales (the Authority). Each has been charged on behalf of the Authority with breaches of rules promulgated by the Authority. In the usual course, those charges would be heard and determined by the Regulatory Committee of the Authority. The members of the Regulatory Committee are Messrs Ross Magin (Chairperson), Gerry Candrick, and John Morris, all of whom are directors of the Board of the Authority appointed on the nomination of the relevant Minister as provided by the Greyhound Racing Authority Act 1985 (the Act).

2 The plaintiffs claim declarations, in effect, that the Regulatory Committee cannot properly hear the charges against the plaintiffs because it might be biased, an order prohibiting the Committee as comprised by Messrs Magin, Candrick and Morris from hearing and determining the charges and an order that the charges be heard and determined by a Regulatory Committee to be constituted by otherwise appropriate persons who are unaware of certain evidence given to the Independent Commission Against Corruption (ICAC) in the course of its investigation into aspects of the greyhound racing industry, which investigation gave rise to the charges against the plaintiffs. By consent, I made orders that both proceedings were to be heard together with the evidence in one being treated as evidence in the other.

3 Before dealing with the circumstances giving rise to the present litigation it is useful to set out the legal framework applying to the various protagonists. The Authority is constituted under the Act, section 9(1) of which makes the Authority “responsible for the control and regulation of greyhound racing” in New South Wales. For this purpose, it may make rules with respect to the control and regulation of greyhound racing including, (so far as may be presently relevant) rules relating to the registration and cancellation of registration of persons associated with greyhound racing, including owners and trainers, the disqualification and fining of such persons (up to 20 penalty points) and suspension of any right or privilege conferred by the Act or rules made by the Authority under it. The Act also authorises the Authority to adopt (with or without enquiry) penalties imposed by clubs or other authorities conducting or controlling greyhound racing, the appointment of stewards and their functions and the conferring on such stewards many of the powers exercisable by the Authority under the Act. The particular matters to which I have adverted obviously fall, at all events, under the general responsibility given to the Authority under s 9(1) of the Act. Section 7 of the Act provides (so far as is relevant) that the Board of the Authority is responsible for exercising the functions of the Authority other than its regulatory functions, which must be undertaken by the Regulatory Committee. Under s 6, the Board comprises seven directors appointed by the Governor, of whom four may be generally described as industry nominations, the other three being nominated by the Minister. Schedule 1 to the Act permits, amongst other things, the Governor to appoint acting directors from time to time during illness or absence of a director. Section 8E of the Act provides for the employment of a chief executive officer of the Authority who is responsible for day-to-day management in accordance with the policies and other decisions of the Board and the Regulatory Committee.

4 Division 3 of the Act provides for the establishment of the Regulatory Committee. It is significant, as it seems to me, that this Committee comprises the three directors appointed on the nomination of the Minister and, thus, the industry nominees are excluded. It is obvious that the purpose of such a division of responsibilities is to ensure member of the Regulatory Committee are not beholden to or seen as the delegates of any industry grouping. It is not the Board of the Authority but the Regulatory Committee that has statutory responsibility for exercising what the Act defines as “the regulatory functions of the Authority”. In particular, the Regulatory Committee has “the functions of initiating or conducting inquiries in relation to the control and regulation of greyhound racing and any disciplinary or decision-making functions with respect to such inquiries”: s 8(1)(a).

5 The Independent Commission Against Corruption (ICAC) was created by the Independent Commission Against Corruption Act 1988 (the ICAC Act) for the purpose of investigating and reporting on corrupt conduct of various kinds but which, essentially, focused on improper conduct that adversely affected the proper exercise of his or her duty by a public official. The ICAC is empowered by its Act, amongst other things, to conduct hearings at which witnesses are questioned, both privately and in public, as to matters which the ICAC is investigating (see, generally, Division 3 of the ICAC Act). Amongst other provisions, s 31 of the ICAC Act permits hearings to be held in public or in private, s 32 permits the ICAC to authorise a person who is substantially and directly interested in any subject matter of a hearing to appear at it and s 35 permits persons to be summonsed to appear before the ICAC to give evidence and produce documents or other things. Section 37 of the ICAC Act, which is particularly relevant in the present case, removes the privilege normally accorded to citizens against self incrimination with the partial protection that, if objection on grounds of the privilege is taken, answers made or documents and things produced by a witness at a hearing before the ICAC is not (with irrelevant exceptions) admissible in evidence against that person in any civil, criminal or disciplinary proceedings. The proceedings here are disciplinary.

6 At all material times, Mr Stephen Rosier was the Chief Executive Officer of the Authority. In early July 1999, some of the stewards employed by the Authority expressed some concerns to the Chairperson of the Authority, Mr Magin, about the then Chief Steward, Mr Rodney Potter. At Mr Magin’s request, Mr Rosier arranged for a meeting between Mr Magin and himself with the Authority’s stewards, except for Mr Potter and a Mr Billett (regarded as a friend of his). As a result of what the stewards said at the meeting and following some inquiries of his own, Mr Rosier contacted ICAC on 21 July 1999 and reported to them, as was his duty, the possibility of corrupt conduct by Mr Potter. Following this initial contact with ICAC, Mr Rosier assisted ICAC with its preliminary investigations and, subsequently, surveillance. In the course of doing so, he became aware of evidence concerning dealings between Mr Potter and, amongst others, Mr Howe and Mr King.

7 Quite apart from the ICAC investigations, as I understand it, rumours were circulating in the greyhound racing industry about an investigation into Mr Potter’s dealings with trainers and owners. Indeed, in January 2000, Mr Potter confronted Mr Rosier about public statements by an industry official that he was under investigation. In the course of the ICAC investigation, ICAC investigators interviewed the stewards who had met with Mr Magin and Mr Rosier on 16 July 1999. What Mr Rosier describes as “the ICAC secret investigation” came to an end of 30 March 2000, at least so far as Mr Potter was concerned, when he was confronted with a number of allegations by ICAC investigators. Mr Potter was immediately taken into protective custody. It is clear that he had disclosed information which not only implicated himself but others involved in greyhound racing in criminal offences of various kinds. Mr Rosier said, and I understand this is not disputed, that although rumours about the investigation had been commonplace in the greyhound racing industry, neither the Board nor the Regulatory Committee were informed of any details of allegations against Mr Potter that were being investigated by the ICAC. Of course, the Board was made aware in general terms that an investigation was under way.

8 On 2 April 2000, the ICAC announced that it had been investigating the greyhound racing industry and that public hearings would be conducted from 11 April 2000. Minutes of the Regulatory Committee note that Mr Rosier had reported to the Committee concerning the ICAC investigations. However, Mr Rosier said in evidence before me that up to 30 March 2000 neither the Board nor the Regulatory Committee were informed of the names of persons under investigation or the nature of the allegations being investigated by the ICAC. Of course, once the public hearings were undertaken, much of what the ICAC had been investigating entered the public arena. Mr Howe gave evidence at the Inquiry on 12 April 2000, that is to say on the second day of the public hearings, and Mr King gave evidence both on that day and on 5 May 2000. They did so after taking objection to disclosing incriminating matters. As it happened, Mr Magin was also present at the hearing at this time.

9 Public hearings were conducted by the ICAC on 11, 12 , 13, 27 and 28 April and 1, 5 and 8 May 2000. During these hearings, four Authority stewards gave evidence. Not surprisingly, the Authority was legally represented at the hearing and Mr Rosier attended to assist and instruct them. On most hearing days, many journalists were present both in the hearing room and outside the building. Many members of the public also attended the hearings, a significant number of whom were involved in or connected with the greyhound racing industry, either known to Mr Rosier or identified to him and such. Mr Magin had also attended all of the public hearings of the ICAC and was involved in discussions with Mr Rosier and the Authority’s legal representatives about the Inquiry. In addition, Mr Rosier made available to the three members of the Regulatory Committee copies of the transcript of evidence of the first three hearing days. No other transcript has been supplied to or, as I understand it, obtained by Messrs Magin, Candrick or Morris.

10 On 17 May 2000, charges were laid on behalf of the Authority against a number of people, including the plaintiffs, in respect of matters which were disclosed in the course of the ICAC investigation and hearings. Those charges were laid at the direction of Mr Rosier and after the Regulatory Committee accepted a recommendation from him that such charges should be laid. The ICAC Report on its Inquiry was issued in August 2000. The findings against Mr Howe were in the following form -

“His conduct adversely affected the honest and impartial performance of official functions of [Rodney Wayne] Potter as Chief Steward of the GRA [Greyhound Racing Authority] by the payment of secret commissions (10 per cent of winnings) in return for Potter ensuring that his racing greyhounds would not be detected with drugs in their urine. The conduct occurred between 1996 and April 2000.
s 9: Such conduct could constitute or involve the following offences:

· s 249B(2) Crimes Act (NSW) 1900

· common law bribery.”

11 The ICAC expressed the opinion that consideration should be given to prosecuting Mr Howe for common law bribery or offences under s 249B of the Crimes Act 1900 and offences relating to the possession of prohibited drugs under ss 10 and 29 of the Drug (Misuse and Trafficking) Act 1985.

12 The findings concerning Mr King were -

“His conduct adversely affected the honest and impartial performance of the official functions of [Rodney Wayne] Potter as Chief Steward of the GRA in that he aided and abetted and benefited from the corrupt arrangement between Potter and [Andrea] Sarcasmo in return for Potter ensuring that the dogs would not be detected with drugs in their urine. The conduct occurred between December 1999 and April 2000.
S 9: Such conduct could constitute or involve the criminal offence of s 249F ‘aid and abet’ the commission of a s 249B offence of the Crimes Act (NSW) 1900.”

The ICAC expressed the opinion that consideration should be given to prosecuting Mr King for offences under s 249F of the Crimes Act 1900.

13 The ICAC Report refers, not surprisingly, to the admissions made by Mr Howe in the course of the enquiry and quotes part of his evidence. The Report also contains details of admissions made by Mr King. It will be obvious, however, from what I have already said, that both Mr Howe and Mr King were charged by the Authority before the ICAC Report was published.

14 On 20 April 2000, Mr Rosier provided a status report to the Regulatory Committee (though Mr Candrick was then absent on leave) on the ICAC Inquiry including details of the three days of public hearings. On 17 May 2000, the written charges were notified to each of Messrs King and Howe. On 26 May 2000, Mr Rosier provided the Regulatory Committee with a further status report on the ICAC Inquiry, including progress on the evaluation of evidence and processes to be followed during the hearing of the charges that had been brought against six persons, including the plaintiffs, which had been set down for hearing on 31 May 2000.

15 On 24 July 2000 Mr Howe’s solicitors were informed that the charges originally proposed on 17 May 2000 were, in part, not to be pressed, leaving only the following charge -

“Being a registered person you did from about 1997 to April 2000 do something in connection with Greyhound Racing which was corrupt in that you did corruptly pay money to Rodney Potter the Chief Steward of the Greyhound Racing Authority (NSW), being a breach of Authority Rule 9(4)(a).
Particulars
The payments were for the purpose of having Mr Potter endeavour to prevent the taking, or the analysis, of urine specimens from greyhounds trained by you and brought to compete in races.”
Mr King was charged under Authority Rule 5(1)(c) as follows -
“(1) being a registered person you did on or about December 11, 1999 commit a breach of the Rules of the Greyhound Racing Authority (NSW) in that you did breach the Club Rules for Greyhound Racing (Rule 4(l)) in that you did administer a drug to a greyhound which was brought to compete in a race namely ‘Mel’s Fancy’.
(2) being a registered person you did on or about December 18, 1999 commit a breach of the Rules of the Greyhound Racing Authority (NSW) in that you did breach the Club Rules for Greyhound Racing (Rule 4(l)) in that you did administer a drug to a greyhound which was brought to compete in a race namely ‘Flash Joan’.
(3) being a registered person you did on or about December 18, 1999 commit a breach of the Rules of the Greyhound Racing Authority (NSW) in that you did breach the Club Rules for Greyhound Racing (Rule 4(l)) in that you did administer a drug to a greyhound which was brought to compete in a race namely ‘Mel’s Fancy’.
(4) being a registered person you did on or about January 2000 and March 2000 commit a breach of the Rules of the Greyhound Racing Authority (NSW) in that you did breach the Club Rules for Greyhound Racing (Rule 4(l)) in that you did administer a drug to a greyhound which was brought to compete in a race namely ‘Mel’s Fancy’.”

It is obvious that the charges are very serious indeed and fall into the most serious category of wrongful behaviour.

16 Neither Act nor the Rules nor any regulations govern the procedure to be followed by the Regulatory Committee in the conduct of inquiries under the Act. It is not bound by the rules of evidence and is entitled to inform itself of relevant matters as it thinks fit. Where a person is at risk of punishment as a consequence of an inquiry the rules of procedural fairness require that he or she must be given a fair and adequate opportunity of answering any allegation or charge and defending himself or herself. It may well be, however, that an opportunity to cross-examine a witness is not essential, especially having regard to the lack of any available coercive procedures requiring the attendance of witnesses or the production of documents or things. Of course, the inability to test a witness’ statements in this way would be a very relevant consideration in evaluating their cogency. There is no doubt that, subject to the requirements of the Act, the Committee must both appear to be and be free of bias in connection with the hearing and determination of allegations against persons liable to be dealt with by it.

17 The Regulatory Committee commenced hearing the charges against the plaintiffs on 2 August 2000. It was informed that the plaintiffs intended to defend the charges against them and counsel for the plaintiffs submitted that the Committee should disqualify itself from hearing the charges against them upon the ground, in substance, that its members had prior knowledge about the matters requiring decision such as to justify the reasonable apprehension of bias.

18 The principal matter of concern, as submitted by counsel to the Committee, was the provision to its members of the transcripts of the ICAC hearings. In this respect, Mr Morris placed on record that he deliberately had not read the transcripts because he believed that, at a later time, he would be required to hear a matter arising out of the ICAC Inquiry as a member of the Regulatory Committee. Mr Magin disclosed that he attended every hearing day of the ICAC Inquiry. He also said, in effect, that the evidence which he then heard and which would not form part of the Committee’s hearings because of privilege, would play no part in his consideration of the charges. He intended to consider those charges impartially and wholly on the evidence admitted in the Committee’s hearing. He added that he did not apprehend that he himself had any problem with independence or impartiality in respect of the charges.

19 Mr Candrick said that he had no perception of any bias against the plaintiffs, as did Mr Morris, who repeated that he had not read any transcripts of the ICAC hearings. In the circumstances, I think it fair to infer that both Mr Magin and Mr Candrick had, indeed, read the transcripts which had been provided to them. The Regulatory Committee refused to disqualify itself. Mr Morris was aware, at least, of what Mr Rosier had said in his briefings of the Committee, to which I have referred.

20 On 29 August 2000, the Regulatory Committee reconvened in respect of the charges against the plaintiffs. Counsel, armed with additional information, renewed their application that the members of the Committee should disqualify themselves. The grounds upon which the application was made were these: firstly, the provision to the Committee of the transcripts of the first three days of the ICAC hearings including, in particular, the privileged evidence which could not be admitted before the Committee; secondly, the participation by Mr Magin in meetings with Mr Rosier and the Authority’s legal team during the ICAC enquiry, that legal team also representing the Authority in the proceedings in the Committee; thirdly, Mr Magin’s having given instructions to the Authority’s legal team in the course of the ICAC Inquiry; and fourthly, communication between Mr Rosier and Mr Magin whilst the Regulatory Committee proceedings were under way, which were not divulged at the time to the parties. This communication occurred on 24 July 2000 by way of a memorandum from Mr Rosier to Mr Magin forewarning the latter that the legal representatives for the plaintiffs might once again seek an adjournment of the hearing of the charges and foreshadowing certain amendments to the proposed charges. The Regulatory Committee again rejected the application and indicated that it proposed to proceed with the hearing of the charges against the plaintiffs. Proceedings were then adjourned, the plaintiffs having indicated that they proposed to seek declarations and orders in this Court.

21 The transcripts which were supplied to the members of the Regulatory Committee comprised, amongst other things, admissions by the plaintiffs of behaviour which appears to me to be directly related to the charges brought against them, although some further information as to dates and circumstances would be required for them to be regarded as admissions of the particular matters charged. There is no evidence that any members of the Committee have read the ICAC Report and, in light of the objections expressed by the plaintiffs, it may well be that the members of the Committee did not read it. Indeed, counsel for the plaintiffs in this Court fairly submitted that I could assume that the members of the Committee did not read those parts of the ICAC Report which set out the plaintiffs’ evidence or the recommendations based upon that evidence. Furthermore, it was not submitted by counsel on behalf of the plaintiffs that I should draw any inference that the members of the Committee are aware of the particular matters relied on by the ICAC as justifying the recommended charges. Even so, I think that it would be unreal to think other than that anybody connected with the greyhound racing industry, including the members of the Committee, would be likely to be aware of the fact, at least, that the plaintiffs admitted in the ICAC to serious wrongdoing connected with the training and racing of greyhounds. Quite apart from the ICAC Report itself, which was widely distributed, wide publicity was given to their admissions, including those of misbehaviour, which appear to me to be comprehended by the charges preferred against them in the Committee.

22 In Webb v The Queen (1993-1994) 181 CLR 41 Deane J said at 74 (omitting references) -

“The area covered by the doctrine of disqualification by reason of the appearance of bias encompasses at least four distinct, though sometimes overlapping, main categories of case. The first is disqualification by interest … The second is disqualification by conduct, including published statements. That category consists of cases in which conduct, either in the course of, or outside, the proceedings, gives rise to such an apprehension of bias. The third category is disqualification by association. It will often overlap the first and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings. The fourth is disqualification by extraneous information. It will commonly overlap the third and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.”

23 It was submitted by counsel that Mr Magin’s attendance at the ICAC hearings, together with his involvement in instructing counsel, in the knowledge that it was likely that the Regulatory Committee would need eventually to inquire into and decide disciplinary proceedings against a number of as yet unidentified persons in addition to Mr Potter amounted to conduct demonstrable of bias. In argument, this submission was not developed beyond assertion. I see no basis for it. The conduct which was in issue in Webb was, of course, very different. There, a juror had given a flower to the mother of the victim of the victim of a crime allegedly committed by the accused whose trial was then proceeding. The question was whether this conduct bespoke a bias against the accused or, at least, such sympathy with the victim’s mother as to lead to the apprehension that the juror would or could not determine the issues in the trial with appropriate objectivity. Deane J’s reference to bias by conduct must be looked at in light of this context.

24 Having regard to his position and the nature of the ICAC Inquiry, I think it was necessary for Mr Magin to ensure that he was entirely familiar with the evidence being considered by the ICAC, which was of the greatest importance to the exercise by the Authority of its statutory functions, in relation to which he had important responsibilities. This must have involved conferring with counsel and giving instructions, directly or through Mr Rosier, as to the approach to be adopted by the Authority in the Inquiry. It was reasonable, though not perhaps essential, that he should also attend the hearing. This conduct would not, in my opinion, instigate the suspicion in a fair-minded, objective observer that Mr Magin might have a prejudgment about or a prejudice against the plaintiffs in connection with the disciplinary charges now to be heard and determined by the Committee. Even so, it seems to me that it is likely that the very reason that Mr Magin was involved in the Inquiry of the Authority’s behalf, namely to appreciate the significance of the matters disclosed in the ICAC on the exercise by the Authority of its functions, inevitably involved an evaluation, however tentative or qualified, of the cogency of the evidence, including the evidence of Mr Potter and, for that matter, of the plaintiffs. What that evaluation was and its level of certainty are unknown but a fair-minded observer might think that Mr Magin could have judged the admissions of the plaintiffs to be damning and to that extent, at least, Mr Potter’s evidence was all the more believable, despite his self-confessed dishonesty in other respects.

25 In addition to or, more accurately, associated with the likelihood of prejudgment was Mr Magin’s possession of extraneous information which, in the circumstances, falls into two categories. The first, and perhaps less troublesome, is the evidence of Mr Potter. It is intended, I understand, to call Mr Potter to give evidence against the plaintiffs before the Regulatory Committee. The procedure is likely to be that Mr Potter will be asked to confirm on oath the truth of the evidence that he gave in the ICAC in connection with the plaintiffs and then be liable to be cross-examined on their behalf. If it so wished, of course, the Committee could simply receive the transcript of Mr Potter’s evidence in the ICAC, so far as it is relevant, providing of course it gave the plaintiffs the opportunity to make their defence and reply. It is submitted on the plaintiffs’ behalf that Mr Magin’s personal experience of Mr Potter’s evidence may well have led him to a conclusion about its veracity which depends, not only on Mr Potter’s demeanour as observed by Mr Magin but also, no doubt, the fact that he watched the evidence of other witnesses who gave evidence in the ICAC Inquiry (including persons charged before the Committee other than the plaintiffs, against whom adverse decisions have been made by it) which has had the likely effect of confirming or, at least, reinforcing his credibility. It is submitted, not only that it is difficult for the plaintiffs to deal with that extraneous experience but also that a fair-minded observer could reasonably conclude that it was at least unlikely but in reality next to impossible, that Mr Magin, as a member of the Committee hearing the charges against the plaintiffs, could put out of his mind opinions that he may have formed about Mr Potter’s credit. It was not submitted on behalf of the plaintiffs that this consideration affected either Mr Candrick or Mr Morris.

26 The second category of extraneous knowledge and, to my mind, of greater significance than any view about Mr Potter is the knowledge by Mr Magin and Mr Candrick though not, perhaps, Mr Morris (although I would be prepared to infer that this information had been communicated to him either by Mr Rosier or the press reports) of the significant admissions made by the plaintiffs under privilege in the ICAC Inquiry. As I have mentioned, these admissions are not admissible against the plaintiffs in the proceedings before the Committee.

27 The significance of the extraneous knowledge held by the members of the Regulatory Committee must be considered in the context of its role, here governed by the statutory character of its responsibilities. In Hall v The NSW Trotting Club Limited [1997] 1 NSWLR 378 the Court of Appeal considered the extent to which the rules of natural justice applied to a steward’s enquiry conducted by the club under its rules. The appellant had attended a trotting meeting conducted by the club and, it was alleged, that he had instigated a physical affray involving a club employee about whose behaviour he complained. Matters went from bad to worse and it was alleged that the appellant abused other staff, who were offended by his behaviour. Two of the club stewards had witnessed some part of these events and complaints had also been made to one of them by the staff. An inquiry was initiated into these events before five stewards including the two who had been earlier involved and themselves gave evidence of what they had observed and been told. The stewards imposed a disqualification for a period of three months. It was not disputed that the stewards, in the conduct of their inquiry, had a duty to observe the rules of natural justice. The appellant submitted, however, that the stewards were required to act and be seen to act fairly, which was not done because two of them gave evidence adverse to the appellant of their own knowledge of the events in question. Hence, they were in the position of accusers, which was incompatible with their concurrent role as judges. Samuel JA said (at 386 ff) -

“[It] has been well established that members of a domestic disciplinary tribunal are always entitled to act upon their own knowledge of the facts in issue: Australian Workers Union v Bowen (No 2) (1948) 77 CLR 601 at 628 where Dixon J as he then was said:

‘It is important to keep steadily in mind that we are dealing with a domestic forum acting under rules resting upon a consensual basis. It is a tribunal that has no rules of evidence and can inform itself in any way it chooses. Members may act upon their own knowledge and upon hearsay if they are satisfied of the truth of what they so learn and if they give the member with whom they are dealing a proper opportunity of answering the charge and defending himself.’
And his Honour there had in mind factual knowledge and not merely expert knowledge: cf Re Anderson and the Medical Practitioners’ Act (1967) 85 WN (Pt 1) (NSW) 558 at 570; Kalil v Bray [1977] 1 NSWLR 100.

The adoption by their members of a multiple role is inherent in the nature and function of many different kinds of domestic tribunals. In the present case, the stewards were charged … to ensure that the rules were ‘observed and enforced in respect of all matters relating to racing’ at any trotting meeting to which they were appointed. Without pausing to consider the precise ambit of this power, it is at least clear that the stewards were required to act as policemen and supervisors during the course of the meeting, in addition to the ‘judicial’ function which they might have to assume under [the rules] … The rules, therefore, contemplate that they might be bound to enquire into, and punish, conduct which they might themselves have discovered or observed …

It follows that the proceedings at the enquiry were not invalidated by reason only of the fact that [two of the stewards] … were in effect, witnesses before the committee of which they were members. That power may be excluded where a steward is so directly and personally involved in the matters under consideration that the only reasonable inference is that he must have an interest in the outcome of the proceedings…
…
It is necessary first to establish what rules of natural justice the stewards were required to observe. It my view, they were these. The stewards were bound to inform the appellant of the nature of the accusations made against him, and to give him ‘a fair opportunity of make any relevant statement which he may desire to bring forward and a fair opportunity to correct to controvert any relevant statement brought forward to his prejudice’: De Veteuil v Knaggs [1918] 18 AC 557 at 560 applied in University of Ceylon v Fernando [1960] 1 WLR 223 at 232; [1960] 1 All ER 631 at 638. Moreover, I respectfully agree with what Adam J said in R v Brewer; Ex parte Renzella [1973] VR 375 at 381: ‘as it is the duty of the stewards to give a fair hearing to the person charged, they must of course, until he has been heard in his defence and keep their minds open in the sense of being ready and willing to be persuaded by the party charged’”.
Mahoney JA said at 397 (omitting references) -
“Whether a decision of a tribunal will be vitiated because of the presence at its deliberations of a particular individual must be determined in light of the nature of the tribunal and its functions, and the relationship of the ‘accused’ to the person in question. The stewards of a racing club had in general, been seen as occupying a position different in significant respects from that of, eg, a court in the strict sense.
…
Stewards are contemplated as acting administratively as well as in a quasi judicial fashion; when they exercise their quasi judicial functions they may exercise them in the context of a ‘enquiry’; and they are entitled to act upon their own observation and knowledge. In so far as they act in this way, the requirements of natural justice touching the composition of tribunals, which in courts and similar bodies, require the strictest observance, do not apply with the same rigour. In the case of courts, a judicial officer may be disqualified if he is involved in any way in the obtaining or giving of evidence. Stewards, as in the present case, have the function of themselves obtaining or receiving information, determining administratively whether and what should be taken in relation to it and generally acting in a manner administrative rather than judicial. In a proceeding which is of the nature of an enquiry, rather than an adversary procedure, the members of the tribunal may be required more directly to intervene in the obtaining of evidence. This may, perhaps, mean that the attainment of the highest standards of justice is the less likely … moreover where a tribunal is permitted to act upon its own observation or knowledge, it is at least desirable, and in some cases will be essential, that the facts on which it is so to act are detailed to the person before it so that he will have an ample opportunity of dealing with them. As appears from the cases to which I have referred, the fact that the material is, accordingly, detailed by, eg the member of the tribunal stating it before the tribunal and the person involved, does not involve that that person may not act as a member of the tribunal.
There are, however, limits. It is now firmly established that, where a member of the tribunal not merely provides information but acts in substance as (to use the words used in the cases) accuser, prosecutor or interested party, the tribunal proceedings will be vitiated. These terms are not definitions of the proscribed relationships. But whenever a tribunal members occupies such a position, then, irrespective of actual bias, his participation will vitiate the tribunal’s deliberations.”

28 Of course, the Regulatory Committee is part of a statutory structure and not a committee of a private club and it is not exercising domestic jurisdiction but a statutory function mediated by the legislation which created it. However, an adverse decision by the club stewards in Hall would have prevented the appellant from undertaking his livelihood. The case also shows how far a tribunal can depart from conventional procedures which would be essential in other judicial or quasi-judicial contexts, and yet not be regarded as, in principle, unfair. In Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70, Deane J said at 90 -

“It has long been settled that the content of the requirements of procedural fairness may vary according to the particular circumstances of a case, including the nature and general functions of the entity required to observe them and the relationship between that entity and the person to whom procedural fairness must be accorded. Plainly, such variations may occur in the content of the requirement that a tribunal required to observe procedural fairness be not tainted by either the actuality or the appearance of disqualifying bias. Thus, acquaintanceship with or preconceived views about a party of a kind which would create the appearance of disqualifying bias in a judge exercising the judicial power of a court of law may be permissible and unobjectionable in the statutory body which, while required to accord procedural fairness in the discharge of a particular function, is entrusted with other functions which necessitate a continuing relationship with those engaged in a particular industry.”

29 Deane J pointed out, in the context of that case, that it was unavoidable that the members of the Australian Broadcasting Tribunal would have direct and indirect experience of particular licensees and individuals who are engaged to television or radio broadcasting and that this experience could give rise to views about them and about their character, responsibility and standards. However, his Honour considered that merely to have such views did not, of itself, constitute disqualifying bias for the purposes of an enquiry concerning the conduct of particular broadcasting activities by that licensee or individual. His Honour said (170 CLR at 91) -

“That follows, in my view, from the need to adjust the content of the requirements of procedural fairness to what is appropriate to the circumstances of the particular case. Even if the requirements of procedural fairness were not to be so adjusted, it would nonetheless be possible to discern in the Act an overriding statutory intent that preconceived general views of a type which must almost inevitably result from the performance by members of the Tribunal of functions under the Act should not, of themselves, constitute disqualifying bias.
On the other hand, such preconceived general views about a licensee or an employee of a licensee must be distinguished from prejudgment of the very issue involved in an enquiry under the Act …”

30 In Laws, the Court accepted that the Australian Broadcasting Tribunal was entitled to make a preliminary investigation in order to decide whether it should hold a formal inquiry for the purpose of considering whether it should exercise any of its substantive powers relating to the continuation or suspension of licenses to broadcast but (to cite Mason CJ and Brennan J at 170 CLR 81), the Tribunal “made the mistake of taking what was a preliminary investigations to the point where it resulted in positive findings of contravention [and by] participating in the making of such findings, they would lead an objective bystander reasonably to apprehend that they had predetermined the question” whether Laws had failed to comply with the relevant broadcasting standards.

31 In this case, I consider, as I have said, that it was not only entirely appropriate but necessary for Mr Magin to make himself aware of the evidence given before the ICAC in relation to matters directly affecting the Authority and, indeed, to be involved in conferring with and instructing counsel for the Authority to participate in and assist the ICAC Inquiry. The mere fact that it was, at least, likely that matters would come to light which would necessitate or make it desirable that the Authority should conduct its own inquiry in the exercise of its regulatory functions under the Act, did not make it inappropriate for Mr Magin to undertake the role that he exercised. Despite the likelihood to which I have referred that Mr Magin has to some extent or other evaluated the credibility of Mr Potter and the truthfulness of the evidence of the plaintiffs admitting to wrongdoing identical or similar to that charged in the proceedings, I consider that the reasonable observer, taking into account Mr Magin’s express statement that he would confine his consideration to the evidence before the Committee, would not conclude that he might not bring an open mind to considering the charges against the plaintiffs “in the sense of being ready and willing to be persuaded by the party charged” (vide Mahony J in the quote set out above from Hall).

32 Even if the other members of the Regulatory Committee were aware by reading the transcript (and, I accept that Mr Morris has not done so) of the evidence of the first three days of the ICAC hearing and, by virtue of media publicity, may be aware of the plaintiffs’ admissions, I think that the reasonable observer would not consider that they have or might have prejudged such issues as might arise under the charges against the plaintiffs.

33 It seems to me to be important that the precise character of those issues has not been defined, even for the purpose of these proceedings. Thus the cases of the plaintiffs have the distinct air of unreality. At this stage, the Regulatory Committee has not sought and the plaintiffs have not provided any particulars of the grounds of the defence which they intend to maintain. Although the Committee has the power to fine, its inquiry bears no similarity to a criminal trial either in its procedural incidents or its purpose. Amongst other differences, the Committee is entitled to draw adverse conclusions from a failure (if that occurs) by the plaintiffs to mount a positive case, say by giving evidence to controvert the charges. Its function is not punitive or retributive but to protect the public interest. At the end of the day, of course, the Committee cannot find adversely to the plaintiffs unless it is satisfied of the truth of the charges to a degree which is appropriate having regard to the seriousness of the consequences that flow from such a decision but this is very far indeed from the strict and substantive modes and standards of proof which are applicable to criminal trials.

34 The orders sought by the plaintiffs would have the effect of preventing a statutory body from exercising significant responsibilities in what is undoubtedly the public interest. In my view, they bear the onus in these proceedings of showing more than a merely theoretical possibility of apprehended bias. Yet, beyond pointing to the charges themselves, they have not identified any fact or particular matter which is in dispute and capable, let alone likely, to be affected by any prejudgment or extraneous knowledge in one or more members of the Regulatory Committee. Whilst, of course, the admissions of the plaintiffs in the ICAC hearing cannot be used as evidence against them before the Committee and, indeed, can only be used in a very limited way in the present proceedings (by consent, the transcript and the ICAC Report were admitted without waiver of privilege to show the connection between the admissions and the charges and the extent of publicity about them), it was nevertheless evidence given on oath and, unless instructions were significantly changed, the ethical and professional obligations of counsel for the plaintiffs would circumscribe the cases which they could advocate in the Committee proceedings. I do not think that it would be right or, indeed, fair for me to assume, let alone infer, that the plaintiffs intend to present cases to the Regulatory Committee which will controvert their evidence to the ICAC. Nothing said by the plaintiffs’ counsel suggested this possibility. It is therefore difficult to see, if there be any preliminary opinions in the members of the Regulatory Committee as to the issues, how such preliminary opinions might affect the attitude of the Committee to the evidence or influence the outcome of the proceedings. As it seems to me, this could only occur if the plaintiffs sought to controvert or significantly qualify the testimony that they gave in the ICAC hearing. Accordingly, the mere fact that the plaintiffs have stated that they propose to defend the charges in the Regulatory Committee does not necessarily imply, to my mind, that they intend to take this course.

35 In Livesey v New South Wales Bar Association (1983) 141 CLR 288, it had been submitted on behalf of the Bar Association that Mr Livesey’s appeal should be approached on the basis that, when the hearing commenced in the Court of Appeal, it was not intended to call Ms Bacon (about whom two members of the Court of Appeal had, in an earlier case, expressed extremely adverse opinions) as a witness and that therefore the views previously expressed about her credit or her evidence about the matters at issue in the case against Mr Livesey were of no real significance. The High Court rejected that submission, pointing out that the possibility that Ms Bacon would be called as a witness had been expressly mentioned by Priestley QC (as he then was), Mr Livesey’s counsel. As the Court explained, Mr Livesey was confronted by the problem that, if he called Ms Bacon, it would be in the face of adverse decisions about her which had already been made by two members of the Court whilst, if he did not call her as a witness, he would be in the position where those two members of the Court of Appeal had already determined that her evidence was untruthful and demonstrated the truth of the allegations that were made against Mr Livesey by the Association. The Court posed the relevant test as being the possibility that “a fair minded observer might entertain a reasonable apprehension of bias by reason of prejudgment if a judge sits to hear a case at first instance after he has, in a previous case, expressed clear views either about a question of fact which constitutes a live and significant issue in the subsequent case or about the credit of a witness whose evidence is of significance on such a question of fact” (151 CLR at 300, emphasis added). Of course, as the Court pointed out in the passage immediately following that which I have cited above, the possibility that “the relevant question of fact may be conceded or that the relevant person may not be called as a witness if the particular judge sits would not, of course, avoid the appearance of bias” but, rather, “it would underline the need for the judge to refrain from sitting”. However, I do not read this passage as suggesting that the question of apprehended bias should be considered as a mere hypothetical matter divorced from the real issues in the case.

36 As I see it, it is necessary that the plaintiffs should demonstrate, before they are entitled to the orders which they seek in this Court, that there are “live and significant” issues in the proceedings before the Regulatory Committee which properly found the apprehension of relevant bias. To my mind, this conclusion follows from the passages in Livesey (supra), which I have quoted. Thus, assume that the Regulatory Committee had acted in such a way as to give rise to a reasonable apprehension of bias by prejudgment but that, in ignorance of this, the plaintiffs pleaded guilty; I do not see how the proceedings would have been liable to be vitiated merely because, at a later stage, the plaintiffs discovered the unknown bias. I am not, of course, suggesting that, if the plaintiffs wished to present cases contrary to or significantly differing in substance or effect from that to which they swore in the ICAC Inquiry, that they could or, indeed, should be prevented from so doing or that, in such an event, their ICAC testimony could be placed in the scales in any sense to evaluate such cases. I am, however, of the opinion, that I should not assume (or, for that matter, infer) that they intend to do so. It follows that there does not appear to be, at present, any adequate basis in the evidence before me that there is any live issue to which the possession of knowledge in a member of the Regulatory Committee of the inadmissible evidence is material. The same reasoning applies to any prejudgment about Mr Potter’s credibility. Thus, even if the reasonable observer might apprehend that there is a possibility of bias by prejudgment or extraneous knowledge in the abstract, the evidence before me does not establish that it might affect the inquiry and the summonses must be dismissed. At all events, I would decline to exercise the Courts discretion to grant that relief.

37 Putting this matter aside, however, and assuming that the plaintiffs intend to defend the proceedings upon a factual basis that, to a greater or lesser extent, departs from their evidence in the ICAC, the question arises whether the direct knowledge by Mr Magin both of the evidence of Mr Potter and the admissions of the plaintiffs and, in respect of Mr Candrick, his knowledge of the transcript of the first three days of the proceedings which comprehended much (though not all) of Mr Potter’s evidence and admissions of the plaintiffs and Mr Morris’s knowledge (acquired one way or the other) of the plaintiffs’ admissions of wrongdoing renders it inappropriate as a matter of procedural fairness that they should hear the charges against the plaintiffs.

38 It is submitted on behalf of the plaintiffs that a reasonable and fair minded observer might consider that the members of the Regulatory Committee would be unable to put out of their minds the extraneous information which, though properly coming to them in the exercise of their functions, now must be put aside for the purpose of bringing open minds to the issues they need to determine in hearing the charges. As is obvious, this argument is strongest so far as Mr Magin is concerned, and weakest in Mr Morris’ case. However, as I have already mentioned, there is no evidence that Mr Magin has, in fact, drawn any conclusions at all about the issues in the cases against the plaintiffs, let alone “expressed clear views” about them. However, for the reasons that I have already mentioned concerning the purpose for which he attended the ICAC hearing, I consider that in the circumstances a fair minded observer might have the apprehension that Mr Magin had drawn adverse conclusions, to a greater or lesser extent, about the plaintiffs from his witnessing those proceedings. This does not conclude the matter, since the question remains whether such an observer might think that he might be unable to put those conclusions aside for the purposes of the Committee hearing. Each of the members has already been informed by counsel assisting the Regulatory Committee that it must entirely disregard any admissions of wrongdoing made by the plaintiffs in the ICAC hearings and have regard only to the evidence as it is adduced before them. I consider that a fair-minded observer would not have an apprehension that Messrs Candrick and Morris might not be able to obey this injunction. The observer would know that the Committee must give reasons for its determination of the charges against the plaintiffs and make clear the process of reasoning leading to its conclusions, dealing with the evidence in the case, including any evidence by or on the plaintiffs’ behalf and the principal arguments advanced by them. I think that he or she would accept any such reasons as conscientiously stating the true basis for the conclusions arrived at. Judges and magistrates are often called upon to consider evidence on the voir dire to determine interlocutory questions and make rulings on the admissibility of evidence. It is accepted that evidence which is received in these circumstances will not, if ruled to be inadmissible, play a role in determining the questions arising in the trial itself. No case of apprehended bias would succeed in such circumstances, however memorable the inadmissible evidence might be, though it may be that the true basis for this is the necessity rule. Kirby P (as his Honour then was) expressed scepticism as to the capacity of judges and other lawyers to put prior conclusions entirely out of mind, despite “the natural human desire for consistency of thought and action and the usual inclination of any human being to uphold and opinion earlier expressed if supported by grounds which seemed totally convincing to that person at the time of their expression” (see Australian National Industries Ltd v Spedley Securities Ltd (In Liq) & ors (1992) 26 NSWLR 411 at 417). Similar scepticism might be expressed as to the true ability of judicial tribunals to disregard inadmissible but prejudicial evidence but, it seems that, although disqualification does not depend on proof of actual bias, the fair-minded observer would not apprehend that it is reasonably possible that a legally qualified tribunal might not be able to do so. This conclusion may be all the safer because there is, after all, a significant difference between disregarding evidence incidentally acquired on the one hand and changing one’s mind about a decision both arrived at and announced on the other. Would such an observer consider that the Committee’s ability was any different to that of a judge or magistrate? Having regard to the status, character, role and procedures of the Committee, the answer to this question should be “No” in respect of Messrs Candrick and Morris. In respect of Mr Magin, and applying what Kirby called “the rule of stringency” (see Spedley 26 NSWLR at 418), I have concluded, on balance, that the hypothetical observer might think that Mr Magin might not be able to disregard the opinions about Mr Potter and the plaintiffs that he was very likely to have formed as a result of his involvement in the ICAC hearing as Chairperson of the Authority, although he would accept that Mr Magin would conscientiously attempt to do so and might well consider that he had been successful. However, this does not conclude the matter.

39 The terms of s 8(1)(a) of the Act, which I have set out above so far as is relevant, envisage that the Regulatory Committee will initiate and conduct inquiries and make such decisions and impose such discipline as it considers to be appropriate with respect to such inquiries. As a quorum for a meeting of the Committee is two members (Sched 2, cl 3), it cannot effectively divide its functions. These functions cannot be delegated: s 19(2)(b). In Laws (supra), Mason CJ and Brennan J said (170 CLR at 89) -

“The rule of necessity gives expression to the principle that the rules of natural justice cannot be invoked to frustrate the intended operation of a statute which sets up a Tribunal and requires it to perform the statutory functions entrusted to it. Or, to put the matter another way, the statutory requirement that the Tribunal perform the functions assigned to it must prevail over and displace the application of the rules of natural justice.”
As Deane J pointed out, however, (170 CLR at 96) the rule “applies only to the extent that necessity justifies”. In this case, to use the language of Deane J (170 CLR at 97) there is “no suggestion that any individual member has acted otherwise than in accordance with what … he saw as the proper discharge of … his functions as a member of the [Committee] or that any member of the [Committee] has voluntarily assumed a role inconsistent with participation in the discharge of the [Committee’s] functions. Having regard especially to what Gaudron and McHugh JJ said (170 CLR at 102), I emphasise that this is not a case in which it is suggested that the members of the Regulatory Committee have prejudged the issues that would need to be determined if the plaintiffs sought to make cases that departed from their previous positions.

40 Although, in general, there are good reasons for separating the investigative and determinative roles, both Hall and Laws (supra) demonstrate that this is not essential to provide adequate procedural fairness, whether because, in principle, fairness can be achieved, with care, despite the combination of the roles or because, in an appropriate case the legislature should be taken to have varied the rules of procedural fairness to the extent necessary to permit such a combination. As I have said, it seems to me that Mr Magin acted properly in attending the hearings of the ICAC and conferring with the Authority’s legal representatives. I consider that, by virtue of the responsibilities placed on the Regulatory Committee by the Act, the appearance of bias that may have arisen as a consequence of his so doing is not to be regarded as disqualifying him from sitting as a member of the Committee to consider the charges against the plaintiffs provided he considers that he is able to bring a truly open mind to the issues raised in the proceedings. If Mr Magin had expressed a conclusion about the matters likely to be raised, he would have been disqualified from sitting, especially having regard to the quorum requirements, but he has not done so. So far as the other members of the Committee are concerned, I think that the probabilities clearly favour the conclusion that they are both capable of disregarding the inadmissible evidence of the plaintiffs and intend to do so. If, contrary to the view I have already expressed in this regard, it is reasonably possible that they might not be able to do so, then the “rule of necessity” requires, nevertheless that they should not disqualify themselves from hearing the proceedings involving the plaintiffs.

41 So far as approving the charges to be considered by the Committee are concerned, I do not consider that any fair-minded observer would apprehend any resulting bias. Deciding that charges should be investigated, which is essentially the Committee’s task at the inquiry does not involve a suggestion of prejudgment. Nor, I should mention, is the fact that Mr Rosier communicated to Mr Magin about likely procedural matters in connection with the inquiry of any significance.

42 It has been submitted, by reference chiefly to s 8B(4) of the Act, that stewards appointed by the Authority under the Rules would be able to hear and determine the charges brought against the plaintiffs. As I understand it, however, the present stewards have been involved as informants to the ICAC and were witnesses at its hearings. They would not be appropriate persons to conduct the proceedings and the Authority would be required to appoint additional stewards for that purpose. It is obviously desirable that stewards dealing with the issues raised by the charges should be familiar with the training and racing of greyhounds. But it is also obvious from the evidence as to the publicity given to the ICAC hearing, the evidence of the various witnesses and the ICAC Report that any person with such desirable qualifications is likely to be aware of the plaintiffs’ roles in those proceedings and the determinations of the ICAC in respect of them. Appointing stewards ad hoc for the purpose of hearing the charges against the plaintiffs (assuming suitably ignorant persons could be found) is, for obvious reasons open to objections relating to their independence. The mere fact that the Authority can appoint additional stewards does not, to my mind, overcome the application of the necessity rule. Moreover, and perhaps more fundamentally, it is a matter for the Committee to consider whether it is appropriate in any particular case, having regard to the serious of the issues and its supervisory responsibilities, to decline to exercise its jurisdiction. There is nothing before me that indicates that it would be appropriate that stewards, whether the Authority’s or from a club or clubs, should undertake the hearing of the particular allegations against the plaintiffs. The evidence does not permit me to conclude that any body other than the Committee is appropriate.

43 It was weakly submitted that the Minister could appoint acting members of the Committee for the purpose of conducting the inquiry. Although the rule of necessity goes only so far as is truly essential, the possibility, even if practicable (and, aside from assertion, it has not been shown to be), of the appointment of ad hoc members does not, in the circumstances of this case, mitigate the necessity of the present Committee hearing the matter. Apart from the principle objection, that the power to make such appointments is irrelevant, there is the problem of identifying suitably qualified but relevantly ignorant persons whose independence would not be seen as compromised by the ad hoc character of their appointment.

44 The alternative proposed by the plaintiffs though their counsel is that the charges could be heard under the Club Rules for Greyhound Racing, which have been approved by the Authority. It appears that the stewards acting under those rules have much the same powers as the Authority’s stewards although they are expressed in slightly different terms. However, the fact alone that the maximum fine that can be imposed on a person found guilty of breaching the rules cannot exceed $500, a sum which is very much smaller than the twenty penalty points available to the Regulatory Committee or the Authority’s stewards, strongly suggests that this is not an appropriate mode and the club stewards would not provide an appropriate forum for the determination of the allegations in this case.

45 Accordingly, the summonses are dismissed with costs.

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Last Modified: 12/24/2001