McHugh v Australian Jockey Club Limited (No 13)

[2012] FCA 1441

McHugh v Australian Jockey Club Limited (No 13)
[2012] FCA 1441
Robertson J

SUMMARY

In accordance with the practice of the Federal Court in some cases that have attracted publicity, particularly in the case of lengthy reasons for judgment, the Court has prepared a summary of the main conclusions of the judgment. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment. The summary has no legal status as part of, or in explanation of, the reasons for judgment themselves. What follows is such a summary.

By these proceedings, the applicant sought to overturn the exclusion from the Australian Stud Book, and from the register permitting thoroughbreds to race, of thoroughbreds bred by artificial insemination. The first of these exclusions is in the Australian Stud Book Rules and the second is in the Rules of Racing. The applicant relied on the operation of these Rules separately, together, and in combination with Article 12 of the International Agreement on Breeding, Racing and Wagering.

The hearing extended over many weeks in the period September to December 2011 and included extensive written material as to what those involved had said about the topic over the last 30 to 40 years. There were some 30 witnesses, not only from Australia but also from overseas including France, Ireland, the United Kingdom, New Zealand and Hong Kong.

The applicant challenged these provisions on two bases, first as contrary to section 45 of the Competition and Consumer Act 2010 and, second, as being in restraint of trade.

I have held that the section 45 action fails because the applicant has not established on the evidence, as he contended, that a corporation has given effect to a provision of a contract, arrangement or understanding where that provision has the effect or is likely to have the effect of substantially lessening competition. The major reasons for this conclusion are:

·the insufficiency of the evidence directed to establishing substantial lessening of competition;

·the evidence as to the pleaded contracts, arrangements or understandings;

·the status of the provision preventing thoroughbreds bred by artificial insemination from being registered for racing as a rule of the sport;

·the effect on competition of the international consequences, that is, on the evidence, that in a world where the prohibition was overturned in Australia the status of thoroughbred races held in Australia would be downgraded.

That the attack on the Australian Stud Book Provisions fails is also shown by the applicant’s proposal that a separate or third register be established for AI-bred horses and his acceptance of the proposition that he did not need the Proprietors of the Australian Stud Book to establish such a register.

I have also held that the restraint of trade action fails because the law requires an applicant to establish that the restraint was unreasonable at the time it was imposed and the applicant in this case has not be able to do so, given his acceptance of the reasonableness of the alleged restraints when they were imposed many decades ago to prevent the attribution of incorrect paternity to a thoroughbred horse.

The case has not involved the merits of artificial insemination, that is, it has not involved whether the Court considers artificial insemination to be something which should or should not be permitted by the Australian Stud Book nor whether thoroughbreds bred by artificial insemination should or should not be permitted to race in thoroughbred races.

For the reasons given in my judgment, the application fails on the legal grounds on which it was brought and is dismissed.

The published reasons for judgment and this summary will be available on the Internet at Robertson

19 December 2012

FEDERAL COURT OF AUSTRALIA

McHugh v Australian Jockey Club Limited (No 13) [2012] FCA 1441

Citation:

McHugh v Australian Jockey Club Limited (No 13) [2012] FCA 1441

Parties:

BRUCE MCHUGH v AUSTRALIAN JOCKEY CLUB LIMITED, VICTORIA RACING CLUB LIMITED, AUSTRALIAN RACING BOARD LIMITED, THOROUGHBRED BREEDERS AUSTRALIA LIMITED and AUSTRALIAN TURF CLUB LIMITED

File number:

NSD 1187 of 2009

Judge:

ROBERTSON J

Date of judgment:

19 December 2012

Catchwords:

COMPETITION – s 45 of the Competition and Consumer Act 2010 (Cth) – thoroughbred horses – Australian Stud Book – thoroughbred horse racing – artificial insemination – restricting or prohibiting the entry in the Australian Stud Book of thoroughbred horses bred by artificial insemination – restricting or prohibiting the entry into races of thoroughbred horses bred by artificial insemination –whether contract, arrangement or understanding – aggregation of provisions – whether provisions have or likely to have effect of substantially lessening competition in a market – thoroughbred breeding market – thoroughbred acquisition market – scope of market – whether thoroughbreds bred by natural cover or by artificial insemination sufficiently close substitutes – appropriate counterfactual – rules of sport

TRADE AND COMMERCE – restraint of trade – reasonableness of restraint when imposed – relevance of later events – whether later events foreseeable

Legislation:

Competition and Consumer Act 2010 (Cth) s 45

Evidence Act1995 (Cth) ss 81, 128
Racing Act 1958 (Vic)
Racing Act 1999 (ACT) s 92
Racing Act 2002 (Qld) ss 91, 79
Racing and Betting Act 1983 (NT) ss 23, 42, 44
Racing and Wagering Western Australia Act 2003 (WA) s 45
Racing (Proprietary Business Licensing) Act 2000 (SA) s 25
Racing Regulation Act 2004 (Tas) ss 11, 111
Thoroughbred Racing Act 1996 (NSW) ss 4, 13, 14, 42

Cases cited:

Adamson v New South Wales Rugby League Ltd (1991) 31 FCR 242 followed
Aerial Taxi Cabs Co-operative Society Ltd (t/as Canberra Cabs) v Lee (2000) 102 FCR 125 referred to
Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 followed
ASX Operations Pty Ltd and Another v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 followed
Australian Competition and Consumer Commission v CC (New South Wales) Pty Ltd) (1999) 92 FCR 375 followed
Australian Competition and Consumer Commission v Channel Seven Brisbane Pty Ltd (2009) 239 CLR 305 referred to
Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (2006) 157 FCR 162 referred to
Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) 160 FCR 321 followed
Australian Competition and Consumer Commission v Metcash Trading Ltd (2011) 198 FCR 297 cited
Buckley v Tutty (1971) 125 CLR 353 considered
Commonwealth Aluminium Corp Ltd v Attorney-General [1976] Qd R 231 referred to
Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 64 FLR 238 followed
Director-General of Education v Suttling (1987) 162 CLR 427 referred to
Geraghty v Minter (1979) 142 CLR 177 followed
Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Australia) Pty Ltd (unreported, New South Wales Court of Appeal, 23 December 1988) referred to
Lithgow City Council v Jackson (2011) 244 CLR 352 applied
Meyers v Casey (1913) 17 CLR 90 applied
Lindner v Murdoch’s Garage (1950) 83 CLR 628 followed

New South Wales Thoroughbred Racing Board v Waterhouse (2003) 56 NSWLR 691 referred to

News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410 cited
Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126 followed
Raguz v Sullivan (2000) 50 NSWLR 236 applied
Re Media Council (No. 2) (1987) 88 FLR 1 cited
Re Queensland Co-operative Milling Association Ltd; Re Defiance Holdings Ltd (1976) 25 FLR 169 followed
Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 268 followed

Nevele R Stud v The New Zealand Trotting Conference (High Court of New Zealand, unreported, 26 April 1982) cited
New Zealand Trotting Conference v Nevele R Stud Ltd (CA 82/82, 10 December 1982) cited

Clarke v Earl of Dunraven & Mount-Earl (The Satanita) [1897] AC 59 applied
Dickson v Pharmaceutical Society of Great Britain [1967] Ch 708 referred to
Eastham v Newcastle United Football Club Ltd [1964] Ch 413 referred to
Gledhow Auto Parts Ltd v Delaney [1965] 1 WLR 1366 referred to
Greig v Insole [1978] 3 All ER 449; [1978] 1 WLR 302 cited
Nagle v Feilden [1966] 2 QB 633 referred to
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Limited [1894] AC 535 followed
Passmore v Morland Plc [1999] 3 All ER 1005 (CA) referred to
Petrofina (Great Britain) Ltd v Martin [1966] 1 Ch 146 referred to
Pharmaceutical Society of Great Britain v Dickson [1970] AC 403 referred to
Putsman v Taylor [1927] 1 KB 637 referred to
R v General Medical Council, ex parte Colman (ex parte Colman) [1990] 1 All ER 489 referred to
Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 followed
Shepherd v Hills (1855) 11 Exch 55; 156 ER 743 referred to

Baum Research & Dev. Co. v Hillerich & Bradsby Co., 31 F. Supp. 2d 1016 (1998) cited
Brookins v International Motor Contest Association, 219 F.3d 849 (2000) referred to
Boyd v U.S. Golf Association, No. Civ. 07-379-JJF, 2008 WL 2221050 (2008) cited
Easton Sports, Inc. v National Collegiate Athletic Association, No. 98-2351-KHV (D. Kan., 1999) cited
Gilder v PGA Tour, Inc., 936 F.2d 417 (1991) cited
Gunter Harz Sports, Inc. v U.S. Tennis Association, Inc., 511 F. Supp. 1103 (1981) cited
In re Baseball Bat Antitrust Litigation 75 F. Supp. 2d 1189 (1999) cited
M & H Tire Co. v Hoosier Racing Tire Corp., 733 F.2d 973 (1984) cited
National Collegiate Athletic Association v Board of Regents of the University of Oklahoma, 468 U.S. 85 (1984) cited
Race Tires America Inc. v Hoosier Racing Tire Corp., No. 2:07-cv-01294, 2009 WL 2998138 (2009) cited
Sports Racing Services Inc. v Sports Car Club of America, 131 F.3d 874 (1997) cited
STP Corp. v U.S. Auto Club, Inc., 286 F. Supp. 146 (1968) cited
Super Sulky, Inc. v U.S. Trotting Association, 174 F.3d 733 (1999) cited
Warrior Sports Inc. v National Collegiate Athletic Association, No. 08-14812, 2009 WL 646633 (2009) cited
Weight-Rite Golf Corp. v U.S. Golf Association, 766 F. Supp. 1104 (1991) cited
Windage LLC v U.S. Golf Association, No. Civ. 07-4897 ADM/AJB, 2008 WL 2622965 (2008) cited

Heydon JD, The Restraint of Trade Doctrine (3rd ed, LexisNexis Butterworths, 2008)
Lopatka, John E, “Antitrust and sports equipment standards: winners and whiners” Antitrust Bulletin vol 54.4 (Winter 2009) 751
Seddon, N, Government Contracts (4th ed, Federation Press, 2009)

Dates of hearing:

5-9, 12-16, 19-23, 26-30 September 2011; 4-7, 10-14, 27, 28 October 2011; 30 November 2011; 15, 16, 19 December 2011

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

1611

Counsel for the Applicant:

Mr AI Tonking SC with Mr JE Lazarus and Ms P Arcus

Solicitor for the Applicant:

Brock Partners

Counsel for the First, Second and Sixth Respondents:

Mr AJ Bannon SC with Dr RCA Higgins

Solicitor for the First, Second and Sixth Respondents:

Johnson Winter & Slattery

Counsel for the Third Respondent:

Mr BW Walker SC with Mr GES Ng

Solicitor for the Third Respondent:

Yeldham Price O’Brien Lusk

Counsel for the Fifth Respondent:

Mr JS Emmett

Solicitor for the Fifth Respondent:

Esplins Solicitors

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1187 of 2009

BETWEEN:

BRUCE MCHUGH
Applicant

AND:

AUSTRALIAN JOCKEY CLUB LIMITED
First Respondent

VICTORIA RACING CLUB LIMITED
Second Respondent

AUSTRALIAN RACING BOARD LIMITED
Third Respondent

THOROUGHBRED BREEDERS AUSTRALIA LIMITED
Fifth Respondent

AUSTRALIAN TURF CLUB LIMITED
Sixth Respondent

JUDGE:	ROBERTSON J
DATE OF ORDER:	19 DECEMBER 2012
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The application be dismissed.

2.Subject to orders 3 to 5, costs be reserved.

3.The parties file and serve within 10 business days from today such written submissions (of not more than 3 pages each), if any, they propose to make in respect of costs.

4.If no such submissions are filed and served, the applicant pay the costs of the first, second and sixth respondents and of the third respondent, the fifth respondent to bear its own costs.

5.In the event that any party files and serves a written submission in respect of costs, a party affected may file and serve a reply (of not more than 3 pages) within a further 10 business days.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1187 of 2009

BETWEEN:

BRUCE MCHUGH
Applicant

AND:

AUSTRALIAN JOCKEY CLUB LIMITED
First Respondent

VICTORIA RACING CLUB LIMITED
Second Respondent

AUSTRALIAN RACING BOARD LIMITED
Third Respondent

THOROUGHBRED BREEDERS AUSTRALIA LIMITED
Fifth Respondent

AUSTRALIAN TURF CLUB LIMITED
Sixth Respondent

JUDGE:	ROBERTSON J
DATE:	19 DECEMBER 2012
PLACE:	SYDNEY

The parties........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[8]
Terminology........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[13]
The impugned provisions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ..	[24]
History........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[32]
The state of the debate historically – particularly internationally........ ........ ........ ..	[41]
The applicant’s lay evidence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[133]
Mr McHugh........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[134]
Mr David Baxter........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[193]
Mr Alistair McFarlane........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[220]
Mr Anthony Hartnell........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[255]
Dr Karen Affleck........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[282]
Mr Michael Moore........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[315]
Mr Hendrik Smit........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[327]
Mr Malcolm Campbell........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[340]
Mr Steven Brem........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[355]
Mr John Coffey........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[375]
Mr William Saunders........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[405]
Mr Aleco Vrisakis........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[437]
Mr Kenneth Dyer........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[464]
Dr John Digby........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[478]
The first, second and sixth respondents’ lay witnesses........ ........ ........ ........ ........ .	[503]
Mr Michael Ford........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[503]
Mr Dale Monteith........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[570]
Mr David Chester........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[596]
Mr Grant Pritchard-Gordon........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[625]
The third respondent’s witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[656]
Mr Romanet........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[656]
Mr Winfried Engelbrecht-Bresges........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[675]
The fifth respondent’s witnesses........ ........ ........ ........ ........ ........ ........ ........ ........ ....	[699]
Mr Clem Murphy........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[699]
Mr Charles-Henri de Moussac........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[714]
Mr Tim Johnson........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[728]
Mr Mark Webster........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[747]
Mr Messara........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[772]
The medical evidence concerning artificial insemination........ ........ ........ ........ ......	[787]
Dr Stuart Keller........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .......	[787]
Dr Angus McKinnon........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[834]
The statistical evidence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[871]
The economic evidence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[954]
Dr Williams........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[954]
Mr Houston........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[1101]
The statutory competition case........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .	[1205]
Submissions........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[1206]
Findings........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ......	[1305]
Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[1375]
Contract, arrangement or understanding........ ........ ........ ........ ........ ........ ........ ........	[1377]
Substantial lessening of competition........ ........ ........ ........ ........ ........ ........ ........ .......	[1428]
Rules of sport........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[1445]
The restraint of trade case........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........	[1466]
Consideration........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .....	[1513]
Rulings on evidence........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ...	[1535]

REASONS FOR JUDGMENT

Introduction

1  These proceedings involve two causes of action. Each raises the question of the lawfulness of restricting or prohibiting the entry of a thoroughbred horse in the register known as the Australian Stud Book (ASB) where that horse has been conceived by artificial insemination and the restricting or prohibiting of the registration for racing of a thoroughbred horse where that horse has been conceived by artificial insemination.

2 The first cause of action is statutory and depends on s 45 of what is now the Competition and Consumer Act 2010 (Cth) (“s 45”), while the second invokes the common law doctrine of restraint of trade. The applicant relies on those provisions of s 45 which prohibit a corporation from giving effect to a provision of a contract, arrangement or understanding if that provision has or is likely to have the effect of substantially lessening competition.

3           The resolution of the case does not involve the Court deciding whether or not artificial insemination should be available, but whether it is unlawful for the relevant respondents to restrict or prohibit the entry of a thoroughbred horse in the ASB or to restrict or prohibit the racing of a thoroughbred horse where that horse has been conceived by artificial insemination.

4           Similarly, the resolution of the case does not involve the Court deciding whether or not artificial insemination is a good thing from the perspective of a breeder, trainer or owner of a thoroughbred horse, or from the perspective of a veterinarian or geneticist.

5           Apart from the provisions in issue in the proceedings, it is only the method of conception that distinguishes a particular horse bred by artificial insemination, as generally understood, from a particular horse bred by “natural” cover. There is no difference in appearance, physical make up, physical attributes or performance.

6           Artificial insemination as generally understood involves a reproductive method or process whereby semen is introduced into the uterus of a mare by injection through a syringe and pipette. I focus my consideration on thoroughbred horses bred by artificial insemination rather than by other forms of artificial breeding because the applicant’s challenge was in substance limited to artificial insemination and, if that challenge were successful, it would be open to the relevant respondents, despite the current form of the rules aggregating various methods of artificial breeding, to remake those rules so as to exclude artificial insemination.

7           The immediate reason that a horse bred by artificial insemination is not a “thoroughbred” is the prohibition on horses bred by artificial insemination from being eligible to be included in the ASB. The first formal rule against breeding thoroughbreds by artificial insemination was introduced in order to enhance the integrity of the pedigree records of the ASB.

The parties

8           Mr McHugh, the applicant, is a thoroughbred horse breeder and former chairman of the Sydney Turf Club.

9           Until February 2011, the Australian Jockey Club Limited (AJC) (the first respondent) and the Victoria Racing Club Limited (VRC) (the second respondent) were the joint proprietors (Joint Proprietors) of the ASB, each holding a 50% interest. The AJC conducted race meetings at Randwick and Warwick Farm in New South Wales. The VRC conducted race meetings at Flemington in Victoria. In February 2011, the AJC merged with the Sydney Turf Club Limited. The newly merged entity is known as the Australian Turf Club Limited (the sixth respondent). The Australian Turf Club Limited and the VRC became the Joint Proprietors of the ASB. They are referred to as the “ASB respondents” (the first, second and sixth respondents). Where it is appropriate to refer to the organisation rather than the ASB as a register, I use the term “the Australian Stud Book”.

10         The Australian Racing Board Limited (the third respondent) (ARB) has as its object making, changing and administering the Australian Rules of Racing (ARR). Its membership comprises the six State and two Territory principal racing authorities (PRAs).

11         Racing Information Services Australia Pty Limited (the fourth respondent) is the Registrar of Racecourses within the meaning of the ARR. By agreement with the applicant, on 17 May 2010 it was excused from further participation in the proceedings and the allegations previously made against it in the proceedings were withdrawn without admissions.

12         The Thoroughbred Breeders Australia Ltd (the fifth respondent) (TBA) was joined as a respondent on a limited basis. Mr McHugh made no allegations against the TBA.

Terminology

13         It was common ground that the case involved only thoroughbred horses and the breeding and racing of thoroughbred horses.

14         One of the contrasts pursued in evidence was in relation to harness racing or trotting which does not involve thoroughbred horses and where participating horses, called standardbreds, had been, but were no longer, subject to rules against artificial insemination.

15As to “thoroughbred”, I set out two dictionary meanings. The Macquarie Dictionary online says:

6. (upper case or lower case) a horse of the English breed of racehorses, developed by crossing domestic and Middle Eastern strains.

The Oxford English Dictionary says, relevantly:

2. a. Of a horse: Of pure breed or stock; spec. applied to a race-horse whose pedigree for a given number of generations is recorded in the studbook. Also of a dog, bull, etc.

16         The point is that the word defines a breed of horse rather than being a word that relates directly to actual or perceived quality or to appearance or to behaviour.

17         What is said in the “rules”? This is important because that is the universe within which or by reference to which the case was conducted.

18         The rules of the ASB, updated in February 2011, contain no general definition of “Thoroughbred”. Under the heading “DEFINITIONS” the word “Thoroughbred” includes non-Thoroughbreds eligible to race as Thoroughbreds under the ARR. The rules of the ASB do however refer to the ASB’s status as approved by the International Stud Book Committee (ISBC) and that to retain this status the ASB must comply with the terms of Article 12 of the International Agreement on Breeding and Racing, the March 2011 version being named the International Agreement on Breeding, Racing and Wagering. Each is referred to as the “Federation Agreement”.  

19         Article 12 of the Federation Agreement, entitled “Definition of a Thoroughbred”, states as its first precept:

A Thoroughbred is a horse which is recorded in the Thoroughbred Stud Book of the country of its foaling, that Stud Book having been granted Approved status by the International Stud Book Committee (Appendix 8) at the time of its official recording.

Appendix 8 to the Federation Agreement contains a list of 67 approved stud books, including Australia.

20         The rules of the ASB also state that there are two categories of racehorses in the Non-Thoroughbred Register. Some horses go back to thoroughbreds in all branches of their pedigree but are not in the ASB because of “administrative reasons”. The second category is horses which do not go back to a thoroughbred in all branches of their pedigree. They have as an ancestor a station mare or stallion, an unidentified mare or stallion or a quarter horse mare or stallion in at least one branch of their pedigree. Under international rules horses in this category can only be promoted to the Stud Book if there are eight consecutive crosses of thoroughbreds between them and the “flawed ancestor” and they can only be promoted by the unanimous decision of the ISBC.

21         What is meant by “AI” or “artificial insemination” was a subject of controversy in the case. One manifestation of the debate was, on the applicant’s side, to point to the permissibility of “reinforcement” and to human involvement in “natural” mating and then to say that it followed that some forms of artificial insemination were permitted under the rules. “Reinforcement” is effected by collecting residual semen, from service of the mare, and then inserting the semen through the cervix of that same mare, thus reinforcing the stallion’s service. On the respondents’ side it was said from time to time that “artificial insemination” was conceptually the same as embryo transfer and cloning and both of those methods of reproduction were unthinkable to be permitted and there was no line to be drawn between any of them. It was said that the words “artificial insemination” in the impugned provisions also covered embryo transfer and cloning, at least. In my view the Court is not required to and should not enter into this debate for the purpose of resolving the legal issues. I limit my consideration to artificial insemination as generally understood, as the rules may be redrawn. Put differently, it is not necessary for the applicant to succeed in relation to all forms of artificial insemination presently prohibited by the rules.

22         No doubt there are logical problems in the expression “artificial insemination” in the rules and no doubt there are degrees of naturalness involved in “natural” mating, but they tended to be distracting in the sense that they went to the merits or otherwise of different forms of reproduction. In my view it is not helpful to examine the issues by focusing exclusively on the terminology used. The word “natural” in “natural cover” is a relative concept if one considers the amount of human intervention that is involved both immediately in relation to the “cover” and more remotely in terms of the mare being ready for breeding at the time of year that best suits the economic and other interests of the humans involved. Plainly there is more that is “natural” in breeding between horses in the wild or in a paddock. If what is “artificial” about “artificial insemination” is considered, there is not a bright line between that artificiality and the artificiality involved in immediate reinforcement: there are different degrees of human intervention involved. Again, a less tendentious synonym for “natural cover” is “live cover”. “Hand breeding” as a further term shows that “natural cover” involves a degree of human intervention.

23         What is important is that it was not suggested by any party that there was any difference in appearance, physical make up, physical attributes or performance between a thoroughbred horse the product of “the physical mounting of a mare by a stallion” on the one hand and a thoroughbred horse produced by artificial insemination. I note that it was implicit in rule ix of the ASB rules and explicit in Article 12 of the Federation Agreement that mating by the physical mounting of a mare by a stallion involved intromission of the penis and ejaculation of semen into the reproductive tract.

The impugned provisions

24The impugned provisions were as follows.

25         Paragraph 26 of the Third Further Amended Statement of Claim identified the “ASB Provisions” as the following:

The ASB Rules contain provisions to the effect that:

(a)       no horse which has been produced:

(i)        as a result of any form of AI;

(ii)from a natural covering of a mare by a stallion which in that same covering season was being bred to other mares by AI;

is eligible for entry in the Stud Book or the Non-Thoroughbred Register;

(b)       no horse which has been produced:

by a mare which has been the subject of any artificial breeding procedure within 385 days before the birth of such produce;

may be entered in the Stud Book or the Non-Thoroughbred Register; and

(c)the semen of a stallion owned by a breeder any of whose stallions is included in the Stud Book shall not be used for any form of artificial breeding.

26         These “ASB Provisions” as defined in the Third Further Amended Statement of Claim have their basis in the following provisions of the ASB Rules:

Non Eligibility Resulting From Artificial Breeding

A horse will not be eligible for the Stud Book or Non Thoroughbred Register if it is produced: –

•     By any form of artificial breeding,

or

•    From a natural covering of a mare by a stallion which in that same covering season was being bred to other mares by artificial insemination (i.e. was a semen donor).

A horse may not be eligible for the Stud Book or Non Thoroughbred Register if it is produced by a mare which was:-

•The subject of any artificial breeding procedure within 385 days before the birth of such produce.

General Rules, Terms and Conditions

i.Any person taking part in any matter coming within these Rules, Terms and Conditions and the other requirements specified in this booklet, or returning any information to the Keeper of the Stud Book agrees with the joint proprietors to be bound by these Rules, Terms and Conditions and requirements herein set out, and such other requirements as may be required from time to time by the Keeper of the Stud Book;

•    acknowledges that the joint proprietors have jurisdiction to enforce the Rules, Terms, Conditions and requirements contained herein and to delegate this jurisdiction to the Keeper of the Stud Book;

•    acknowledges that the Keeper of the Stud Book is entitled to not deal with any person who, in his opinion, is untrustworthy or whose conduct breaches or prejudices the standards of trust, reliability, accuracy and honesty required by him.

…

ix.A foal is only eligible for inclusion in the Australian Stud Book or the Australian Non-Thoroughbred Register if it is the product of a natural service, which is the physical mounting of a mare by a stallion, and unless a natural gestation takes places [sic] in and delivery is from the body of the mare in which the foal is conceived.

1.This natural service may include the immediate reinforcement of the stallion’s service by using residual semen ejaculated by the stallion while it penetrated that mare during that service of that same mare;

2.No semen obtained from a stallion by any artificial means may be used to reinforce a service;

3.The reinforcement of service must be immediately after the natural covering and the semen must not be processed or altered in any way before it is used for reinforcement;

4.The intention to use immediate reinforcement of a stallion’s service should be notified in advance to the Keeper of the Australian Stud Book (see below);

5.The names of the stallions and mares covered, the Stud Book approved veterinarian supervising the protocols, the persons witnessing or assisting the reinforcement and the date of such reinforcement must be certified to the Keeper within forty-eight hours after that reinforcement occurred.

…

xi.The products of artificial breeding are not eligible for inclusion in the Australian Stud Book or the Australian Non Thoroughbred Register and consequently are not eligible to be registered under the Australian Rules of Racing.

…

xiii.The Australian Stud Book may not accept a foal born within 385 days from the date its dam was last the subject of any artificial breeding technique.

1.8A breeder who returns a stallion to the Australian Stud Book declares, agrees and undertakes that the semen of any Australian resident stallion returned by him will not be used for any form of artificial breeding.

27         Paragraph 32D of the Third Further Amended Statement of Claim identified the “ARR Provisions” as the following:

The ARR include, and have at all material times included, provisions to the effect that:

(a) any person who takes part in any matter coming within the ARR thereby agrees with the ARB and the PRAs to be bound by them;

(b) no horse if in Australia shall be entered for and no horse shall run in any race unless it has been registered with the Registrar of Racing; and

(c)no horse born after 1980 can be registered unless it has been accepted in the Australian Stud Book or Non-Stud Book, or equivalent stud books of a recognised authority.

28         These “ARR Provisions” as defined in the Third Further Amended Statement of Claim had their basis in the following provisions of the ARR.

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

AR.6. (1) These Rules apply to all races held under the management or control of a Principal Racing Authority, and shall, together with such Rules (not being repugnant to or inconsistent with these Rules) as may from time to time be made by the Principal Racing Authority in its territory, be read and construed as the rules of the Principal Racing Authority in such territory and, subject to the provisions of A.R. 35, shall apply to all races held under the management of a Principal Racing Authority or any registered Club and to all meetings registered by a Principal Racing Authority.

(2) Unless the Principal Racing Authority otherwise determines, if any race or race meeting is not held under these Rules –

(a)       any horse taking part shall ipso facto be disqualified;

(b)any person taking part therein shall be ineligible to enter a horse for any race, or to hold or continue to hold any licence or registration under these Rules;

(c)any person who acts in connection therewith as promoter, organiser, president, chairman, secretary, treasurer, committee member, or in any advisory or official capacity, shall be debarred from acting in any official capacity at any race meeting, and any horse in which he has an interest shall be ineligible to race at any registered meeting.

(3) Paragraphs (b) and (c) of subrule (2) shall not apply to any race or race meeting in which thoroughbreds do not take part and which is or are held under the management or regulation of an organisation formally recognised by the Government of the State or Territory in which the race meeting is conducted.

(4) Any question not provided for by these Rules shall be determined by the Principal Racing Authority concerned.

AR.7. A Principal Racing Authority shall:

(i)        … ;

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

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

(a)To hear and decide appeals as provided for in its Rules or by law.

(b)        ….
(c)        ….
(d)       To penalise:-

(i)any person contravening the Rules or disobeying any proper direction of any official, or

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

REGISTRATION OF HORSES

AR.14. No horse if in Australia shall be entered for and no horse shall run in any race or official trial unless it has been registered with the Registrar of Racehorses, provided that the Principal Racing Authority or Stewards, after conferring with the Registrar, may allow a horse registered abroad to start upon such conditions as they see fit; further provided that an unregistered yearling may be entered for a race if the conditions so provide.

AR.15A. A horse born on or after the 1st August, 1980, cannot be registered unless it has been-

(i)Accepted for inclusion as a foal in the Australian Stud Book or the Stud Book of a recognised turf authority, or

(ii)Accepted for inclusion in the Australian Non-Stud Book Register or Non-Stud Book Register of a recognised turf authority.

29         It is convenient here to set out the relevant provisions of the Federation Agreement between members of the International Federation of Horseracing Authorities (IFHA). The March 2011 English version of this agreement was in evidence.

30The introduction, stated to be agreed by Australia together with some 50 other countries, provided:

The Agreement is designed to assist horseracing authorities by promoting the following objectives:

•    to enhance public confidence in the integrity of the sport of racing and of its breeding industry.

•     to protect the safety and welfare of horses and riders.

•    to coordinate and harmonise approaches across the world of racing and breeding to promote the growth of the international dimension.

•    to maximise opportunities for the promotion of racing and for its financial welfare by protecting racing's intellectual property rights from piracy by non-authorised wagering operators.

All members of the Federation commit themselves to furthering those objectives and undertake to use their best endeavours wherever this is reasonably possible. Under each Article is a list of those countries which have adopted the Article, indicating in some cases those parts which they have excluded. Members who have adopted an Article in full or in part shall make provision within their domestic rules implementing its intentions.

Later provisions central to the case are Articles 12 and 13:

BOOKS OF HEREDITY (STUD-BOOKS)

Article 12. - DEFINITION OF A THOROUGHBRED

A Thoroughbred is a horse which is recorded in the Thoroughbred Stud Book of the country of its foaling, that Stud Book having been granted Approved status by the International Stud Book Committee (Appendix 8) at the time of its official recording.

1: QUALIFICATION

For a horse to be eligible to be recorded in an approved Thoroughbred Stud Book all of the following requirements must be satisfied:

1.1The horse must be the product of a mating between a sire and a dam, both of which are recorded in an approved Thoroughbred Stud Book or either or both must have been promoted from a Non-Thoroughbred register under the terms set out in Article 13 paragraph 4.1.

2: SERVICE TO PRODUCE AN ELIGIBLE FOAL

2.1The Thoroughbred must be the result of a Stallion’s mating with a Mare which is the physical mounting of a Mare by a Stallion with intromission of the penis and ejaculation of semen into the reproductive tract. As an aid to the mating and if authorised by the Stud Book Authority of the country certifying the Thoroughbred, a portion of the ejaculate produced by the Stallion during such mating may immediately be placed in the reproductive tract of the Mare being bred.

3: GESTATION TO PRODUCE AN ELIGIBLE FOAL

3.1A natural gestation must take place in, and delivery must be from, the body of the same Mare in which the Foal was conceived. Any Foal resulting from or produced by the processes of Artificial Insemination, Embryo Transfer or Transplant, Cloning or any other form of genetic manipulation not herein specified, shall not be eligible for recording in a Thoroughbred Stud Book approved by the International Stud Book Committee.

4: RECORDING OF THE MATING AND RESULT

4.1The details of the mating must be recorded by the Stallion owner or authorised agent on an official form or electronic system provided or approved by the Stud Book Authority certifying the Thoroughbred which should include:

4.1.1    name of the Stallion,
4.1.2    name of the Mare,
4.1.3    the first and last dates of mating to the Stallion and,

4.1.4a statement signed by the Stallion owner or authorised agent that the mating was natural and did not involve the processes of Artificial Insemination, Embryo Transfer or Transplant, Cloning or any other form of genetic manipulation (see 3.1).

Australia is noted as one of the approximately 70 countries which have adopted Article 12. As I have said, Appendix 8, referred to in Article 12 above, contained a list of 67 approved Stud Books which included Australia.

Article 13 - REGISTER OF NON-THOROUGHBRED HORSES
1. Scope and purpose of Register.

Where appropriate a register should be kept of horses which cannot be entered in an approved Thoroughbred Stud Book. The purpose of this register is to ensure that all relevant particulars of every horse named for racing purposes are known and registered.

Australia is noted as one of the approximately 70 countries which have adopted Article 13.

31                   Paragraph 36 of the Third Further Amended Statement of Claim identified as “the Combined Provisions” the following:

By reason of the facts and matters pleaded in paragraphs 33 to 35 above, there is and has been at all material times a contract, or alternatively an arrangement, or alternatively an understanding, between:

(a)       the ARB;
(b)       the PRAs;
(c)       the Joint Proprietors;
(d)       all other racing clubs in Australia;
(e)       racehorse owners in Australia;
(f)       breeders;
(g)       owners of stallions; and

(h) all other persons who from time to time take part in any matter coming within the ARR,

pursuant to which:

(i)        each party above agrees to be bound by the ARR;

(ii) only horses which have been registered with the Registrar of Racehorses may be entered for a Thoroughbred horse race conducted in Australia;

(iii)a horse cannot be accepted for registration by the Registrar of Racehorses unless it has been accepted for inclusion as a foal in the ASB or accepted for inclusion in the non-thoroughbred register or the sub-book of a non Australian turf authority;

(iv)      no horse which has been produced:

(A)      as a result of any form of AI; or

(B)from a natural covering of a mare by a stallion which in that same covering season was being bred to other mares by AI;

is eligible for entry in the Stud Book or the NonThoroughbred Register; and
no horse which has been produced

by a mare which has been the subject of any artificial breeding procedure within 385 days before the birth of such produce

may be entered in the Stud Book or the Non-Thoroughbred Register.

History

32                   On the applicant’s case, the thoroughbred industry had a relatively open mind to the possible development of artificial breeding until perhaps 15 or 10 years ago, when a change in approach could be discerned, both at the international level and in Australia. From about 2002, the industry both in Australia and overseas became increasingly dogmatic in its opposition to any form of artificial breeding.

33                   The ban on artificial breeding is not unique to Australia. It had developed in other racing jurisdictions, and those countries started to meet in international forums in the late 1970s with a view to harmonising the rules and procedures. What was said in those international forums reflected the reasoning of those times, and it served also to hold up a mirror to what was happening in Australia at the relevant times, particularly on the question of artificial breeding.

34                   It took many years and a great deal of debate before agreement was reached in those international forums on a definition of a thoroughbred which all countries could live with. What emerged from that process was a document referred to as the Federation Agreement.

35                   The history was also important, on the applicant’s case, in seeking to evaluate the likely response of other racing jurisdictions to invalidating the rules against artificial breeding. In that respect, it was submitted, it was important to understand what had motivated the attitude of those jurisdictions in the past, and what forces were at work in the current environment, internationally, in light of that history.

36                   Since the 1990s, the question of artificial insemination, which had regularly featured in discussions in the international forums for nearly two decades, was largely removed from the agenda.

37                   This led to a situation which now existed, the applicant submitted, whereby the very fact of having agreed internationally on the definition of thoroughbred, which definition precluded artificial breeding, itself became the public justification for the position adopted, rather than a rational expounding of the supposed inherent advantages of the ban itself. That is, it was said that being a party to a voluntary agreement was in itself sufficient to justify the position.

38                   The applicant submitted that there was no basis on which it can be said that the ASB would cease to be an approved stud book if, as he proposed, a separate register were established for AI-bred horses for them to be recognised for the purposes of the rules of racing, because there would be no impact on the ASB and it would continue to comply with Article 12 of the Federation Agreement.

39                   The applicant further submitted there were reasons why the respondents’ assumptions were not in the least plausible. They included the fact that if there was a good competitive reason for Australian breeders to adopt artificial insemination once they were free to do so, then those Australian breeders in the industry at large would be seen to be at a competitive advantage with others, and that would have a tendency to undermine the financial and competitive position of those industries overseas which refrained from using artificial insemination, such that other racing jurisdictions would be inclined to follow Australia’s lead. That in turn would threaten the viability of the international ban, and the position would be unlikely to remain unchanged, even assuming there had been no legal challenge in those other jurisdictions.

40                   The applicant submitted that Australia’s representative at the IFHA was the ARB, the third respondent. It was the body which adopted Article 12, thereby accepting an obligation to include a ban on horses bred by artificial means in its rules of racing. It does so by referring to the rules of the ASB. No witness was called from the ARB to explain what it would do or what contingency plans it might have against the eventuality that the ban was ruled unenforceable.

The state of the debate historically – particularly internationally

41                   The detail for these propositions was largely contained in the documents tendered. These documents were tendered as evidence of the understanding held by persons who were the authors or who were involved, as well being illustrative of particular reasons and justifications that were put forward in them, and relevant to the perception that that created in the minds of others at the time: the material was tendered to show the state of the debate.

42                   The particular aspect of this case which, the applicant submitted, provided importance to these documents was said to arise in relation to the international position, particularly as contended for by the respondents in relation to the counterfactual and what might happen if there were a change in Australia in relation to the impugned rules.

43                   The first annual meeting of the ISBC was convened by Weatherbys in 1976. The business of concern to Stud Book authorities (SBAs) required the establishment of a body separate from the International Conference of Racing Authorities, which met annually in Paris. As a major breeding country, Australia attended the initial meeting, along with France, Great Britain and Ireland, New Zealand, South Africa and the USA, together with a representative of the South America Stud Books. Members were nominated by their own Stud Book authorities.

44                   The document stated that normally the Committee (later the Conference) was able to reach unanimous agreement on decisions. If there was a dissenting opinion there was the option to report as such in the Minutes of the meeting. Where relevant, the IFHA would be asked to support an ISBC decision and, if appropriate, to incorporate it in the Federation Agreement.

45Clauses 1.4.2 and  1.4.3 included the following:

Individual SBAs are requested to implement ISBC decisions and normally do so. If an SBA has difficulty with a specific ISBC policy or procedure then discussions are held through the relevant ISBC Member to resolve the matter.

The ISBC retains the right to remove the “approved” status from an SBA if after discussions an SBA is unable to comply with its policies but this has never been necessary.

Clause 2.1.1 stated:

The mission of the ISBC is to establish standards of Stud Book operation that will ensure the integrity and future development of the Thoroughbred breed and provide the foundation necessary for a healthy international Thoroughbred industry.

At clause 3.1 the document stated:

The list of achievements of the ISBC and its associated regional partners includes the following: –

•    The Thoroughbred horse which was formerly considered to be a purely British/Irish animal is now treated universally on an international basis.

It took four years of consideration and discussion to agree the definition of the term “thoroughbred”.

•    The adoption of uniform policies towards blood typing and more recently DNA typing and the promotion of both techniques used in parentage verification by SBAs.

At the same time the ISBC campaigned for the improvement of technical standards in laboratories and with the assistance of the International Society of Animal Genetics (ISAG) established a minimum standard for parentage testing.

•    The formulation and general acceptance of an international policy which prohibits the registration of horses by artificial breeding.

•    The recognition that the status of thoroughbred Stud Books across the world needed to be established.

A comprehensive set of requirements was agreed which a Stud Book authority must meet to achieve "approved" status.
. . .

The effect of "approval" has been to facilitate the international exchange of thoroughbred horses for racing and breeding. Horses registered as foals in an "approved" Stud Book of one country are accepted for racing and breeding in all other countries with "approved" Stud Books on the evidence of documentation prepared to an agreed standard supplied by the country of origin.

Clause 3.2 stated that the ISBC was currently investigating the feasibility of establishing a world exports database and continued to monitor developments and horse identification techniques and other technologies which may benefit the breed.

46                   Also tendered was the first extant edition of the ASB, dated 31 December 1949. It cancelled the booklet issued on 31 December 1947. It described itself as an “Outline of Stud Book Procedure, governing Returns of Eligible Brood Mares to the Australian Stud Book, Issued for the Guidance of Breeders”. It stated at page 9, under the heading Artificial Insemination:

A foal is not eligible for Australian Stud Book inclusion unless it is begotten by natural service, although it is permitted to reinforce at once the natural service by artificial insemination with semen from the stallion performing the natural service on the mare that has just been covered.

[original emphasis]

47                   There were in evidence a number of iterations of that book which contained the same proscription and exception. In his evidence, the Keeper of the ASB, Mr Ford, said that the Outline of Procedure Governing Returns of Eligible Brood Mares to the Australian Stud Book contained a provision to identical effect, that Outline being issued first on 31 December 1953, continuing until 30 May 1975.

48The Outline issued on 1 January 1976 contained the following provision:

A foal is not eligible for inclusion in the Australian Stud Book unless it is begotten by a stallion’s natural service of a mare and unless a natural gestation takes place in and delivery is from the body of the mare in which the foal is conceived.

The Proprietors will not accept returns of service for any stallion owned or leased by any person or company breeding horses by artificial insemination.

This was amended in 1982.

49                   The minutes of the first ISBC meeting in London in 1976 record that Australia was represented by Mr WJ McFadden, who was the then Keeper of the ASB. In the introduction, it was stated that the conference was an extension of the Annual Conference of Racing Authorities held in Paris each October, designed specifically to deal with international racing matters and:

The International Stud Book Conference would aim to deal with only Stud Book matters, with particular attention to the standardisation, wherever possible, of the documentation and identification of Thoroughbreds throughout the world.

50There was a reference to the non-thoroughbred register, as follows:

It appeared there were doubts in the minds of some Stud Book Authorities about the reasons behind the setting up of the Register of Non Thoroughbred Brood Mares in England. The reasons [sic] behind the establishment of the register was to ensure that every horse that runs (and this particularly applied to Steeplechasing in Great Britain) was correctly identified and documented.

M. Blanc said that any country could create its own register of Non Thoroughbreds but what concerned him was that the conditions of transferring any families from that register to the main Stud Book should be strictly controlled.

51There was also discussion of Artificial Insemination:

Artificial Insemination

Agreed:

That while the Conference was entirely opposed to artificial insemination, it was a matter that could not be ignored and that a review of what was happening in various countries, both with Thoroughbreds and standard breeds, should be conducted by the International Racing Bureau (David Hedges) in preparation for next year’s Conference.

52                   The minutes for the 1977 meeting of the ISBC record a good deal of discussion about artificial insemination. Mr McFadden was again present. Under the heading Artificial Insemination, Mr CN Weatherby said:

… Weatherbys had prepared a discussion paper for the Conference following the agreement at the First Conference that A.I. could not be ignored.

Mr CE Weatherby said that:

[T]he Weatherbys’ views were set out in the paper. Some pressure for Stud Book Authorities to admit A.I. was now detectable, although it was not yet particularly strong, unanimous or vociferous. The reasons for this pressure were well known. It was known in particular that some veterinarians were hoping for a change in attitude by Stud Book Authorities. . . . On the other hand, the Council of the English Thoroughbred Breeders' Association had very recently decided to support moves towards the introduction of A.I., with proper safeguards, and it was believed that the International Breeders’ Conference in Paris had expressed similar, though less specific, views.

Weatherbys’ main concern was that the Stud Book Authorities should be ready for A.I. when, or if, it is introduced, and that Authorities should avoid having to take a decision under pressure at some future date.

Mr McFadden said that:

[A]lthough he was free to express his own personal views, they had not been discussed with the proprietors of the Australian Stud Book, and might not be shared by them. It would be accepted by all Authorities that the integrity of Stud Books was vital, and any development which might threaten that integrity should be banned. Hence the ban on A.I. to date. However, a ban ought to be supported by valid reasons, and in his view, the reasons for banning A.I. in principle were no longer valid, since the question of identification could now be satisfactorily resolved by blood-typing. Regarding the prevention of in-breeding it should be possible to devise systems to control this.

He considered that the economic arguments in favour of A.I. could be sub-divided into two different classifications; the enhancement of profit, and the avoidance of loss. On the second category, he felt that Stud Book Authorities could become increasingly vulnerable for refusing to accept A.I. where its use might assist in avoiding a serious loss. There had been a number of cases in recent years where this might have applied, and there would doubtless be others in the future. He supported the general thesis of Weatherbys’ paper.

The Conference agreed to the following summing up of the position by Mr C. N. Weatherby:

A.The Conference was unanimous in its concern that anything which might risk the deterioration of the Thoroughbred breed must be avoided. Consequently it remained totally opposed to A.I. at the present time.

B.Beyond A, above, the Conference was divided on most points and was clearly not yet ready to take any decisions about any possible change of attitude in the future.

C.On the other hand, the Conference now recognised the need to keep the question of A.I. under regular review, and to keep informed on developments in each country. Delegates from each country would reconsider the various issues raised at the Conference, on their return home, with their respective authorities. In particular, as stressed by the U.S.A., the question of legally enforceable controls in each country should be investigated, and, in general, when considering A.I., countries should be as meticulous and forward looking as possible.

D.Certain countries were unwilling to agree that A.I. was inevitable, or even likely, especially so far as their public stance was concerned. They were unwilling to be associated with any suggestion that A.I. might eventually be condoned. Their position should be respected.

The following text was agreed for a press release:

The Conference is still opposed to Artificial Insemination at the present time.

In the light of developments, delegates agreed to refer the discussions of the Conference to the representative authorities in their own countries for further consideration.

53                   At a meeting of the Australian Stud Book Committee in March 1977, a report on artificial insemination was received for consideration.

54                   At a meeting of the Australian Stud Book Committee in December 1977, it was recorded that, following the agreement at the second ISBC meeting, it was agreed that the Stud Book Sub-Committee should discuss the use of artificial insemination with the Bloodhorse Breeders’ Association of Australia and the results of that discussion would be reported to the Proprietors in due course.

55                   At a meeting of the Joint Proprietors in March 1978 it was recorded under “Blood-typing Laboratory”:

(iii) The total ban on the use of artificial insemination is now under review by the International Stud Book Conference. If the ban should be modified, it would be subject to the mare, stallion and foal being blood-typed.

Then there is recorded further discussion initiated by the Keeper based on what had been discussed at the Second International Stud Book Conference.

The Bloodhorse Breeders’ Association had already been consulted and it had advised that it believed that the traditional prohibition of artificial insemination was best for the industry. However, in very exceptional circumstances, such as the outbreak of a contagious disease which could be controlled by artificial insemination, it would condone the use of the technique. In such cases it considered that a very strict code of regulations would have to be enforced by the Australian Stud Book if the collection of semen and the insemination of mares was to be adequately controlled and that it should be mandatory for all animals involved to be blood-typed.

The Keeper then sought the view of the Proprietors. Mr. K.F. Cox said that he was opposed to the use of artificial insemination as a general rule as it could change the whole breeding industry but he did not accept the allegation that its use would encourage malpractice. In his opinion the development of the technique of blood-typing had changed the situation. He now believed that artificial insemination should be permitted in exceptional circumstances. He pointed out that contagious metritis has spread to all the major breeding countries and, although it has forced studs to introduce stringent veterinary procedures, it could still only be controlled effectively by the use of artificial insemination.

…

After further discussion, it was agreed by the Proprietors that they would approve of a modification to the present ban on the use of artificial insemination provided that the International Stud Book Conference could define the circumstances under which its use was permissible, and could draw up a set of regulations which could adequately control the application of the technique.

It was accepted that any decision by the International Stud Book Conference to modify the present ban should be unanimous and that any country acting unilaterally would risk the possibility of its stud book not being recognised.

56                   A record of proceedings of a conference of delegates of the principal clubs in Australia, dated 26 March 1978, was in evidence. There were different positions in different States in relation to Register of Non-Stud Book mares.

57                   In evidence also were the minutes of the meeting of the Federal Council of the Bloodhorse Breeders’ Association of Australia in March 1978. That meeting had a discussion about artificial insemination. The following is recorded:

The Keeper of the Stud Book has written seeking the opinion of the Association on the matter of artificial insemination. This was raised at the Second International Stud Book Conference in London in October, 1977 and Weatherbys submitted a paper suggesting a review of the traditional view on this matter.

The N.S.W. Division would accept artificial insemination only in the exceptional case of Metritis 77 and that under very strict controls.

The Victorian, South Australian and Queensland Divisions were against artificial insemination.

The Western Australian Division would accept it in the case of serious disease but only with fresh semen and under strict conditions.

After some discussion it was agreed that the Delegates take home with them the points that a stud could be out of business completely if disease was discovered among the mares or stallions when the virus could be controlled by the addition of chemicals to the semen and that A.I. be used as an adjunct to control disease and under the strictest conditions and supervision and discuss them with a Committees. The vote on the matter to be delayed until the Committees had decided in their opinions.

58                   The British Thoroughbred Breeders’ Association wrote to the Senior Steward of the Jockey Club in London in June 1978, the context being recent outbreaks of contagious equine metritis in Great Britain, Ireland, France, Australia and America. The letter said, in part:

The T.B.A. wishes to place a firm request before the International Studbook Conference to the effect that A.I. with fresh semen be introduced into Thoroughbred breeding at the earliest opportunity and that its use under veterinary and Stud Book Authority (S.B.A.) supervision be made permissible under the rules governing registration in The General Stud Book.

The potential for use in various forms included the use of deep frozen semen:

The single advantage of deep-frozen semen is that it may be transported over long distances relatively easily if so desired. However, there are a great many practical problems associated with the deep-freezing of stallion semen, not least of which is a considerable loss of fertility compared to fresh or extended semen.

…

… Further research in this field is obviously necessary and it seems likely that improvement in conception rates will come from the development of treatment systems which precisely control the time of ovulation in the mare than from trying to increase the lifespan of the frozen stallion sperms.

…

There are doubtless other forms of control which may be useful and which should be investigated and discussed by all parties concerned. To this end, we would propose establishing at the earliest opportunity a joint commission or working party composed of one or more representatives from interested and concerned organisations. This group to discuss all practical, technical, administrative and control matters related to A.I. and to agree and prepare firm proposals, rules and limitations, etc. upon its use for international agreement and implementation by Stud Book Authorities.

…

Much ill-informed rubbish has been written and said about A.I. during the past 20 years which has led to some breeders and other interested parties remaining adamantly opposed to its introduction for fear of possible misuse and especially the over-use of particular stallions. Fanciful stories and ideas have arisen suggesting that vials of frozen semen will be shipped around the world at will, that large stallion stations concerned solely with the collection and storage of semen will arise and replace existing stallions/mares studs and that individual popular stallions will impregnate hundreds of mares each year at the expense of less popular horses. These notions are entirely fanciful and impracticable.

59                   The minutes of the 1978 meeting of the ISBC were in evidence. Mr McFadden was again representing Australia. The proposed press statement on the topic of artificial insemination was:

•     Unanimous endorsement of the refusal by Weatherbys and the Jockey Club of the English Thoroughbred Breeders’ Association's request for A.I. in 1979.

•     The general strong support for the ultimate introduction of total blood typing as an essential method of identification.

•     In spite of a long discussion, the problem of A.I. is such that the Conference had been unable to express a definite united view on whether A.I. would, or would not, ever be acceptable. Such a view would be premature in view of the separate investigations still in progress in several different countries.

•     In the meantime the Conference’s attitude remains unanimously opposed to the use of A.I., in any form, at present, and the rules absolutely forbidding its use continue in force.

•     The agreement that A.I. should only ever be introduced on the basis of an international agreement. Any country introducing A.I. in isolation would be acting against the best interests of Thoroughbred breeding.

60                   At a meeting of the Joint Proprietors in November 1978, the following was recorded in relation to artificial insemination:

The Keeper reported that he had tendered the draft rules adopted by the Proprietors and the legal opinion as to whether or not they contravened the restrictive Trade Practices Act to Messrs. Weatherby for reference to the English Committee investigating artificial insemination in horses.

The Keeper pointed out that no further progress can be made regarding the use of artificial insemination until the reports of all Committees investigating the legal, genetic, economic, veterinary and administrative aspects of the problem had been received and considered.

61                   At the conference of delegates of the principal clubs in November 1978, the minutes recorded the original form of ARR 15A.

62                   Also a non stud book register was discussed. Mr McFadden said it was his opinion that the register required a rule such as this if it was to be effective. At the moment, there was a pool of stud book horses and a pool of non stud book horses all of which were unidentified. The purpose of the rule was to make sure that all that second pool was identified, and it was a question of financing. Mr McFadden said:

It is creating virtually a second Stud Book. You cannot get into the Stud Book unless both your parents are in the Stud Book, and both have a registered name. In the case of the second Stud Book, we will take anything in originally, provided it has a registered name. After that, all the descendants will be eligible to be in this book.

63                   In the 1979 minutes of the ISBC, with Mr McFadden again attending, Mr Weatherby was reported to have said about artificial insemination that:

… by keeping this subject under review it was hoped to find out what progress had been made on any of the investigations into A.I. over the past year, what the climate of opinion towards A.I. was around the world, and whether any incidents or developments relating to A.I. had occurred since the 1978 Conference. Papers have been circulated with the Agenda from the U.S.A., setting out a preliminary report of Jockey Club study into A.I., and from O.S.A.F. setting out the general opposition to A.I. from South American countries. Members had also been sent the interim report of the Joint Working Party in the United Kingdom.

Mr Weatherby summed up, saying:

In conclusion, it seemed that pressure for A.I. to be allowed was possibly greater at present in the United Kingdom than in any other country, with the official breeders organisation having openly requested its use under controlled conditions and there being sustained agitation for its use from certain veterinary and breeding quarters.

64The 1980 version of the Outline of Procedure for the ASB contained the following:

A foal is not eligible for inclusion in the Australian Stud Book or the Australian Register of Non-Stud Book Mares unless it is begotten by a stallion’s natural service of a mare and unless a natural gestation takes place in and delivery is from the body of the mare in which the foal is conceived.

The Proprietors will not accept returns of service for any stallion owned or leased by any person or company breeding horses by artificial insemination.

[Original emphasis]

There was no reference to reinforcement. The provision also made clear that the Register of Non-Stud Book Mares likewise required natural service. A section was then introduced on blood typing, requiring acceptable blood samples to be submitted in certain circumstances.

65                   The minutes of the meeting of the Joint Proprietors held in April 1980 record further progress in relation to blood typing. There was also recorded that the status of the West German Stud Book had been held in abeyance pending the outcome of an investigation into the use of artificial insemination in relation to thoroughbreds in that country. In the result it was said that the proprietors agreed to recognise the West German Stud Book with the exception of those animals known to have been born by artificial insemination. There was also reference to some further requirements by way of a declaration that artificial insemination had not been practised, proposed to be incorporated in returns by thoroughbred breeders in Australia and “that the adoption of this proposal would greatly strengthen the integrity of the Australian Stud Book”.

66                   At the ISBC meeting in London in October 1980, there was a further discussion of artificial insemination. Mr McFadden again attended. Mr McFadden was reported to have said, in relation to the three West German fillies apparently produced by artificial insemination:

If the Proprietors were to be sympathetic and recognise any of the three fillies, thereby creating a dangerous precedent, the Australian Stud Book would be placed in an impossible position, since it had previously consistently rejected foals born in Australia in breach of its own regulation of A.I. Since 1947, The Australian Stud Book had published a rule forbidding the use of A.I. During the last 33 years breeders had been steadfastly refused permission to use A.I., and on one occasion the entire year’s produce of a stud had been ejected from the Stud Book because of the use of A.I. The Australian Stud Book could not accept any of the three fillies.

67                   The 1981 minutes of meeting of the ISBC Committee recorded under the heading “Artificial Insemination, Policy”:

The committee again confirmed its policy that A.I. should remain absolutely prohibited. It was agreed that the subject need not be considered again at future meetings unless raised in connection with a specific problem or development.

There was also reference to a joint report of the US Jockey Club and Weatherbys Working Party. The following is recorded:

It was reported that the report had been finalised and submitted during 1981, subject to clarification of one point. The co-sponsors of the report disagreed with some of the Working Party’s conclusions. Prior to any possible eventual publication domestically, the co-sponsors wished certain senior representatives of the major Stud Book Authorities to be aware of the content of the report, and to know whether their views and reactions coincided with their own. It was therefore intended to circulate the report to members of the Committee on a strictly confidential basis. This would be done in October. Members agreed to consider the report and advise the Jockey Club or Weatherbys of their views by the end of December 1981. Distribution would be on a minimum basis deliberately, and members agreed to use every effort to keep the report totally confidential.

That report was not in evidence.

68                   The 1982 edition of the Outline of Procedure governing returns to the ASB, issued on 1 January 1982, relevantly read:

1. A foal is not eligible for inclusion in the Australian Stud Book or the Australian Register of Non-Stud Book Mares unless it is the product of a natural service, which is the physical mounting of a mare by a stallion, and unless a natural gestation takes place in and delivery is from the body of the mare in which the foal was conceived. Natural service may include the immediate reinforcement of the stallion’s service by a portion of the ejaculate produced by that stallion during that service of that same mare.

2. The products of artificial insemination are not eligible for inclusion in the Australian Stud Book or the Australian Register of Non-Stud Book Mares and consequently are not eligible to be registered for racing.

3. The proprietors will not accept returns of service for any stallion owned or leased by any person or company breeding horses by artificial insemination.

This last provision followed the Proprietors’ endorsement of the ISBC’s suggestion and the Proprietors’ agreement that the AJC arrange for the matter to be discussed at the next Conference of Principal Clubs. It was intended to deal with a horse entered in the stud book of a country which condoned artificial insemination and which could be imported and submitted for registration for racing.

69                   At a meeting of the Joint Proprietors in 1982 the Keeper read out extracts from Weatherbys’ confidential report dealing with the genetic, legal, veterinary, administrative and international aspects of the permissive use of Artificial Insemination. The following is recorded:

The Proprietors agreed that the Stud Book Sub-Committee should draft a letter to Messrs. Weatherby informing them that they had no intention of, or could not see any justification for, varying in any way the present total ban on the use of Artificial Insemination.

The Proprietors considered the proposition that the factors causing pressure for Artificial Insemination to be allowed may become beyond the control of the Stud Book authority, but rejected the recommendation that a contingency plan to control Artificial Insemination should be prepared in advance.

70                   In September 1982 the ISBC agreed in principle on the definition set out in paragraph 1 of the draft revision of Article 12 of the Federation Agreement. Paragraph 1 was in the following terms:

1.        Thoroughbred

A Thoroughbred:-

A. is the product of a mating between a sire and dam both of which were registered prior to 1.1.80, in a Thoroughbred Stud Book recognised and approved by the International Stud Book Committee, or which traces in all lines of its pedigree to horses so registered,

OR

B. must be able to prove satisfactorily eight recorded crosses consecutively with horses in the category defined in A. Above, including the cross of which it is the progeny.

The prohibition on AI was to be found in paragraph 2 of that draft revision of Article 12. Australia supported this initiative.

1529                Notwithstanding the seven assumptions I have set out above, authority establishes that the validity of the restraint being imposed is to be tested at the time it was imposed: see Adamson at 285-286 where Gummow J said:

The time at which validity is determined

As a general proposition, the time for testing the validity of a restraint is the date when it was imposed, in the present case with the adoption of the relevant rules at the meeting of the Board of the League on 23 July 1990. This is because at common law (in the administration of which the court lacks the wide powers given by s 87 of the Trade Practices Act 1974 (Cth)) the issue is the absolute one of whether the restraint was void ab initio as offending public policy. It is not whether the restraint is voidable nor, it seems, whether it has become void by reason of later events which occurred before the institution of proceedings to challenge it.

In a number of decisions, the High Court has treated the date of imposition of the restraint as the time for testing its validity: see Lindner v Murdock’s Garage (1950) 83 CLR 628 at 653; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at 318; Geraghty v Minter (1979) 142 CLR 177 at 179, 187-188, 193, 200. In the last cited case, Mason J alone (at 199-200) regarded the principle as unsettled. The Privy Council (to which Geraghty v Minter (supra) had been cited) has expressed the same view as the majority of the High Court: see Bridge v Deacons [1984] AC 705 at 718. However, Gibbs J pointed out in the Amoco case (supra) (at 318) that facts which have occurred since the relevant date may throw light on the circumstances existing at that date.

…

In many cases the restraint was imposed some considerable time before its validity was tested in litigation. In those circumstances, and subject to the caveat entered by Gibbs J in the Amoco case, the principle that the time for testing the validity of the restraint is that of its imposition has assumed particular importance.

The caveat referred to was that facts which have occurred since the relevant date may throw light on the circumstances existing at that date.

1530                I also refer to The Restraint of Trade Doctrine (op. cit.) at page 45 under the subheading “Time Factors” where the learned author wrote:

The circumstances with respect to which construction and reasonableness issues are to be judged are those existing at the time of entering the contract. However, the court may take into account future probabilities which could have been foreseen. Further, events occurring after the relevant date may throw light on the circumstances existing at that date … Further, a restraint which is initially unenforceable cannot become enforceable and the restraint which is initially enforceable cannot become unenforceable merely because it operates unfairly in changed circumstances. And the subsequent conduct of the covenantor, however unlawful it may be independently of the question whether it breaches the covenant, is irrelevant to the issue of whether the covenant is reasonable.

The authorities cited for the penultimate proposition included Gledhow Auto Parts Ltd v Delaney [1965] 1 WLR 1366 at 1377 per Diplock LJ; Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187 at 1198, 1201-2 and 1203, Passmore v Morland Plc [1999] 3 All ER 1005 (CA) at 1022-1023 and Geraghty v Minter (1979) 142 CLR 177 at 188. It may be noted that in Lostock Garage (above), Lord Denning MR recognised that this was the general rule, but suggested an exception; being prepared to hold that a covenant in restraint of trade, valid at the time that it was entered into, should not be enforced if circumstances afterwards arose in which it would be unreasonable or unfair to enforce it. The other members of the court disagreed: see at 1201–2, 1203.

1531              In particular I refer to Geraghty v Minter (above) where four of the five justices stated that the circumstances with respect to which construction and reasonableness issues are to be judged are those existing at the time of entering the contract: see at 179 and 181 per Barwick CJ, 187-188 per Gibbs J, 192-193 per Stephen J and 200 per Aickin J. I also refer to Lindnerv Murdock’s Garage (above) at 638 per Latham CJ, 641 per McTiernan J and 653 per Kitto J.

1532                I also add references to Adamson where Wilcox J at 269 and 271 and Gummow J at 285, said that the question was the reasonableness of the rules at the time they were made. The opinion of Sheppard J on this issue is not so clear: his Honour agreed generally with Wilcox and Gummow JJ, but see the report at 247-248.

1533                In the present case there was no contemporaneous relevant evidence of future foreseeable probabilities in this respect. Later facts do not relevantly throw light on the circumstances then existing. I reject the applicant’s submission that it was always to be expected that tests such as blood-typing and DNA testing would evolve to a point where they would provide a reliable method of verifying pedigree.

1534For these reasons the applicant’s restraint of trade case fails.

Rulings on evidence

1535     MFI 67 was admitted as an exhibit following my reasons for judgment on 2 December 2011 in McHugh v Australian Jockey Club Limited (No 12) [2011] FCA 1374. The effect of that ruling was that paragraph 193 of the applicant’s final written submissions should be read as follows:

After the merger (which gave Aushorse 2 members on the board, in addition to the State representatives) Mr Messara, who took over as Chairman, had a role in persuading the [fifth respondent] to change its position to one of support for reinforcement. At the same meeting a proposal from South Australia to debate AI was not approved, Mr Messara having commented that “there is no debate on AI”.

I also then noted, at [27], that Mr Messara’s comment was, as reproduced, an accurate restatement of what appeared in the minutes of the Board Meeting of the fifth respondent on 14 September 2007 and I read it in the context of what was there said about artificial insemination and the debate or absence of debate on the subject of artificial insemination.

1536     In an interlocutory judgment of 1 November 2011, McHugh v Australian Jockey Club Limited (No 11) [2011] FCA 1247, I postponed ruling on MFI 72. I said:

26There are, I was informed, some 150 documents in dispute as listed in a document entitled “Schedule of Documentary Issues in Dispute between the Applicant and the First, Second and Sixth Respondents” which I now mark as MFI 72.

27The parties agreed I should defer ruling on these documents until it could be seen how the parties, particularly the applicant, sought to use these documents in submissions. In my view, although not orthodox, this is a necessary approach in the circumstances and I defer ruling on the admissibility of these documents until those submissions are made. Those submissions should state whether the objections in that schedule, that is MFI 72, are maintained.

1537     The limited number of documents which remained in dispute, because the applicant relied on them in his submissions, therefore require a ruling. Those rulings now follow.

1538     A letter dated 14 April 1993 was from the Executive Director of the New Zealand Thoroughbred Breeders’ Association (NZTBA) to the International Breeders’ Meeting Secretariat in England with reference to an agenda item 11 for the International Breeders’ Meeting in Rome: tab 88 of the tender bundle. It was discovered by the fifth respondent. The first, second and sixth respondents submitted that the document should be admitted as a communication only. The applicant contended that it should be admitted to establish that the New Zealand Commerce Commission had been in fact examining the prohibition of AI with a view to considering whether it was a restrictive practice.

1539     I do not admit that letter as establishing that fact. I admit it as establishing that the Executive Director of the NZTBA considered that the New Zealand Commerce Commission was so examining the prohibition. In any event it is of the most marginal relevance.

1540     A document bearing a facsimile stamp October 1996 and headed “Results of Information Night Questionnaire”, discovered by the fifth respondent, was apparently (see below) tendered by the applicant (tab 109). The first, second and sixth respondents objected to it on the ground of relevance. The applicant tendered it only for the fact of the “survey” rather than the truth of the responses. At most the document shows that the fifth respondent asked a question at an information night in 1996 “Do you think the ban on Artificial Insemination for thoroughbreds in Australia should be lifted” for certain purposes. I reject this document as irrelevant.

1541     In oral submissions the applicant said that the reference to tab 109 in footnote 225 should read tab 199. Tab 199 is a document dated 18 December 2001 seemingly extracted from a forum on the ISBC’s website with the subject line: “ISBC, artificial insemination”. It was discovered by the AJC. It was relied on at footnote 225 to evidence the view of the Indian authorities that India and many other Asian countries “will not be severely affected if the ban on AI was to be removed”.

1542     The applicant submitted it was a business record. The first, second and sixth respondents submitted it should be admitted as a communication only.

1543     I admit this document as a communication only and not as evidencing whether in fact India or other Asian countries would be severely affected if the ban were to be removed.

1544 The next document is a report dated 28 November 1996 by the then Keeper, Mr Digby, about the 1996 ISBC meeting (tab 116). It was objected to by the first, second and sixth respondents who submitted that the document should be admitted as a communication only. The applicant submitted it was a business record and an admission as against the first, second and sixth respondents under s 81 of the Evidence Act. The applicant sought by this document to support the proposition in his footnote 235: “It appears to have been a generally held view that the prohibition on AI was liable to challenge.” In turn, that footnote is referable to the proposition that: “If the ASB Provisions are found to be unlawful because they are anti-competitive, then it is highly likely that a similar conclusion would be reached in the likely event that the equivalent rules of overseas jurisdictions were challenged”. The disputed evidence states: “Most delegates agreed that sooner or later an authority would be challenged over the ban – of course all are hoping it won’t be their authority.”

1545     This document is of the most marginal relevance as it would not tend to establish the likelihood contended for. I admit this statement as a communication only. In my view it is not an “admission” because it is not adverse to the entities’ interest in the outcome of the proceeding.

1546     Next was a letter dated 30 May 1997 from the Manager, Racing Administration of the Jockey Club of Southern Africa to Dr Digby, the Keeper. The applicant submitted that the document was a business record of the AJC, which had discovered it, and should be admitted as an expression of the true views of the Jockey Club of Southern Africa. The first, second and sixth respondents submitted the document should be admitted as a communication only.

1547     The proposition in the applicant’s written submissions to which this document is said to relate was as follows: “The South African authorities have made it clear that they are opposed to the continuation of the AI ban, and consider that its removal would be of substantial benefit to South Africa because of quarantine issues.”

1548     The letter constituted a commentary on a paper by Dr Digby. The writer of the letter said: “I support the view that the only reasons for retaining the ban relate to commercial disruptions (reorganisation?).” It goes on to say that the most important difficulty the writer had with the draft statement was “I do not believe that commercial disruption is a valid reason for retaining the ban.”

1549     I do not admit the document as an expression of the true views of the Jockey Club of Southern Africa. In any event, in my view it does not tend to establish the proposition in the applicant’s written submissions.

1550     The footer to the next document, discovered by the fifth respondent, states it was from a September 1998 “International Breeders’ Meeting”. The applicant submitted it was a business record of the fifth respondent, at least. It was said to support the proposition that the removal of AI would be of substantial benefit to South Africa.

1551     All the document says on this aspect is: “In South Africa, the Jockey Club administers the Stud Book on behalf of the South African TBA. The Jockey Club would not act contrary to the wishes of breeders. However, the Jockey Club would follow the lead of major breeding countries if there was a change to AI rules”. I do not admit it on the basis contended for by the applicant as it is irrelevant.

1552     The applicant also submitted that the discussion about the legal opinion obtained by Weatherbys was relevant but the endpoint of the submission was that the Stud Book and Racing Authorities would pay close regard to any legal opinions they obtained. I do not admit this document on that basis either, as it is irrelevant.

1553     Next was a record of a meeting of the Joint Proprietors on 1 September 1998. The document was discovered by the AJC. The first, second and sixth respondents submitted that it should be admitted as a record of meeting only. The applicant submitted that the document should be admitted as an admission. It was sought to be deployed in footnote 235 of the applicant’s written submissions, for the same proposition as the document at tab 116 which I have considered above.

1554     In the case of the present document the alleged admission is that the Keeper said at the meeting of the Joint Proprietors in September 1998 “the industry could not bank on the ASB being able to maintain the ban on artificial insemination in thoroughbreds forever. There was a view around the world that the thoroughbred ban would not stand up in a court of law – particularly in English speaking countries.”

1555     The applicant submitted that so long as the opinion was contained in a business record there was no separate requirement for the Court to be satisfied as to an exception to the opinion rule, however I reject that submission: see Lithgow City Council v Jackson (2011) 244 CLR 352.

1556     I admit this document only as proving that the then Keeper said to the meeting what I have set out above. I would not admit it as establishing that there was such a view or that the thoroughbred ban would not stand up in a court, particularly in English-speaking countries.

1557     Next, tab 152, was a letter dated 21 March 2001 from the then Keeper, Dr Digby, to Paul Jones. It was discovered by the AJC. The applicant submitted the document should be admitted as a business record and as an admission.

1558     The relevant statement was that recently the Chairman of the British TBA wrote to his Australian counterpart advising that the British TBA had received legal advice that any challenge to the AI ban was very likely to be successful.

1559     In the applicant’s written submissions this document was put in the context that the major overseas jurisdictions will follow Australia’s lead and if the ASB Provisions are found to be unlawful because they are anti-competitive then it is highly likely that a similar conclusion would be reached in the likely event that the equivalent rule in the overseas jurisdictions were challenged. However, in oral submissions, counsel for the applicant said that he did not rely on the relevant paragraph for the truth of its contents but for the fact that it had been communicated and that the ASB was aware of the opinion and presumably was likely to, and did in fact, give it serious consideration.

1560     I admit this document as establishing that the Chairman of the British TBA had written in those terms to his Australian counterpart, and not for any broader purpose.

1561     A March 2001 document, discovered by the AJC and entitled “Proposal for a Fall Back Position in the Event of the Ban (on Artificial Insemination) Being Found Not Legal in a Court of Law”, is in the same category as the document at tab 152 and I admit it on the same basis.

1562     Next was a document discovered by the AJC dated, relevantly, 4 September 2001 and apparently consisting of comments on a third draft of a document called “Change of Approach to Paper AUS20013”. The immediate context seems to be the possibility of a legal challenge to the ASB rule banning embryo transfer technology. The question was posed “Could AUS establish a separate register for recording artificial breeding to enable progeny so got to be recorded for use in Australia only.”

1563     The applicant submitted that this material should be admitted as a business record. The relevance appears from footnote 196 to the applicant’s written submissions to the effect that when the issue of a legal challenge to the rule banning embryo transfer technology was discussed at the 2001 ISBC meeting it was Weatherbys that proposed a solution involving the establishment of a separate register, in which case it would be up to Australian racing authorities to determine whether a horse recorded in the artificial breeding register could at least race in Australia.

1564     I would admit this document as a business record. However in light of its form as a question in a comment and in light of the balance of the evidentiary material, I regard it as of very little weight in establishing what the English authorities would or might do.

1565     Next was a document dated 28 September 2001 and discovered by the AJC. The applicant submitted that the letter to Dr Digby should be admitted as a business record. In the applicant’s reply submissions the relevant proposition is “There is a lengthy history of interest in the topic [of artificial insemination]. In 2001 there was a survey of studs in the Hunter Valley and Tamworth on AI.”

1566     In my view this document could not be relevant to that issue as at most it shows that an inspection was done of 29 studs with a view to ensuring that there was no artificial insemination being practised. I reject the tender.

1567     The next document was a report dated October 2001, discovered by the AJC, on the meeting of the ISBC. This document is in the same category as the other documents referable to footnote 235 of the applicant’s submissions and I admit it on the same basis as the document at tab 116.

1568     Next were the minutes of the 2001 annual meeting of the ISBC. The document was discovered by the AJC. Its relevance was said by the applicant to be that the minutes recorded the consensus that semen donation “would not be banned”: footnote 10. It was also said to be relevant to the matter in footnote 235.

1569     The applicant drew my attention to two parts of these minutes. The first was that the Committee agreed that the use of stallions as semen donors would not be banned; those Stud Book Authorities which permitted dual purpose stallions should be encouraged to have in place adequate rules and procedures so that the practice could be monitored effectively.

1570     The second part of the minutes relied on by the applicant, again for the truth of the statements, was that it was agreed that it was likely that a legal challenge to permit registration of a foal produced by AI or ET would have to be faced at some point in the future and that it might be successful. Two of the established arguments (effect on the gene pool and difficulty in determining parentage) to support the ban on AI or ET were open to question and may not be sustainable in a court of law. It was agreed that the proactive approach was more sensible and that the way forward was for the Committee to develop a contingency plan, although strictly not for publication. The Secretary would collate work already done in the field and provide a composite document on the website by the end of March 2002. It was also agreed that in due course, after members had had the opportunity to consider the issues to be covered by a contingency plan, the opinion of an international lawyer might be sought. It was also recognised that ultimately the IFHA would need to decide its policy in conjunction with the ISBC.

1571     I admit the first part of this material as a business record. The second part, going to footnote 235, I admit on the same basis as the document at tab 116.

1572     Next was a document, discovered by the AJC, which was a full report on a business session of the Asian Racing Conference on 13 November 2001. The applicant submitted that the document should be admitted as a business record.

1573     The document was referred to in five footnotes of the applicant’s written submissions. One of those references was that, over many years, racing authorities in foreign jurisdictions had been concerned that their analogous rules may contravene relevant national or supranational laws dealing with competition. I admit the document for that purpose. I also admit it for the purpose of showing what Mr Hamish Anderson said at that meeting.

1574     Next was a paper for the 4 February 2002 meeting of the Joint Proprietors, discovered by the AJC. The applicant seeks to use it to prove that Dr Digby expressed the view that whether or not such horses bred by embryo transfer technology were allowed to race in New Zealand, Hong Kong, Singapore, Malaysia, South Africa etc would be a matter for the authorities in those countries.

1575     I admit this material as evidencing what Dr Digby then wrote but I note that it was on the basis that a parallel register was established for embryo transfer bred horses and on the further basis that the ARB agreed to change the rules so that horses in that register could race in Australia.

1576     Next was a paper dated March 2002 for the Dubai meeting, written by Dr Digby. There is no reference in the applicant’s footnotes to his written submissions, as amended, to this document. If relevant, I would admit it as evidencing what Dr Digby then wrote.

1577     Next was a document consisting of notes from the extraordinary meeting of the ISBC on 22 March 2002 in Dubai. The applicant referred to this at footnote 224 for the proposition that the South African authorities had made it clear that they were opposed to the continuation of the AI ban and consider that its removal would be of substantial benefit to South Africa because of quarantine issues. However in oral submissions this document was said to be relevant to the separate register proposal in relation to horses bred by embryo transfer.

1578     The applicant also referred to this, at footnote 198, to evidence one of the conclusions of the ISBC at the meeting that the question of a separate register was a matter for the Australian Stud Book but the meeting believed that should such a separate register be set up in any country it would only be a matter of time before a further challenge could be expected to try and elevate the status of any horse of ability within that register and with breeding potential. There was also reference to the advent of DNA typing having perhaps removed one of the historic objections to the introduction of artificial insemination but science continued to move on and it was therefore concluded that the ISBC should revisit its definition of artificial breeding and that this subject should form an agenda item at the next full ISBC meeting.

1579I admit this document as showing what was said at the meeting.

1580Another document in issue was a note on the extraordinary meeting of the ISBC in Dubai on 22 March 2002.

1581     The relevant footnote in the applicant’s written submissions sought to rely on this document as showing that a challenge to the ban on AI in the United States had been mooted at various times. The document says that a Mr Stahl advised that the US Jockey Club was facing a potential challenge to the ban on AI but “its attorneys were confident that the ban can be defended.”

1582I will not repeat what I have said above about the substantive submission to which footnote 235 relates.

1583     I admit this document as showing what was said at the meeting. I note it was also said at the meeting, according to this document, that the meeting was advised that the ASB “will be retaining the ban on AI until such time as the breeders have a change of heart or until the ban can no longer be sustained under the law.”

1584     Next was an opinion dated 22 March 2002 by South African counsel, David Unterhalter. It was produced on subpoena by Dr Digby. It was referred to twice in the applicant’s written submissions, first as to what the South African authorities have made clear (footnote 224) and secondly in relation to the subject matter of the likely consequences in overseas jurisdictions of the court finding that the ASB provisions were unlawful as anti-competitive (footnote 238).

1585     I do not admit this document to prove what the legal position in South Africa is or was. I will admit it as a communication. Further, I note that the document was not discovered by any of the respondents.

1586     There was argument about a document dated 8 June 2002 from the Chief Executive of the Jockey Club of Southern Africa to, I assume, Dr Digby. It was discovered by the AJC. Its relevance was said to be the views of the South African authorities (footnote 224). I will admit it as a communication.

1587     Next was a document dated 14 June 2002 discovered by the AJC and described in the footer to the document as AHRC Notes, second draft. The document was said to be referred to at footnote 10 to the applicant’s submissions but it does not there appear. It refers only to the position of standardbreds. The applicant said in oral submissions that he did not rely on the document for the proof of the underlying facts concerning the standardbred industry. It simply went to the submission that the standardbred analogy was relevant and, because the document was discovered, it showed that there had been some exploration or consideration of what had happened in the harness racing industry after the introduction of AI in that industry.

1588I admit the document as a communication only. I note that it is of the most marginal relevance.

1589     Next was a letter dated 7 January 2003 from the President of the TBA to Dr Digby. The applicants referred to this document at footnote 229 for the proposition that the TBA appeared to have been of the view that Asian countries with no breeding industry would be happy to see the AI ban lifted. I admit the document for that limited purpose.

1590     Then there was a letter dated 19 January 2004 from the outgoing chairman of the Jockey Club of Southern Africa to the Secretary General of the Asian Racing Federation (ARF). It was discovered by the ARB.

1591     It was referred to, amongst other documents, in footnote 224 for the proposition that the South African authorities had made it clear that they were opposed to the continuation of the AI ban, and considered that its removal would be of substantial benefit to South Africa because of quarantine issues.

1592     The letter contains, largely, extracts of the minutes of the session of the 28th Asian Racing conference held in Bangkok in November 2001. The letter is largely a complaint by the author as to what the ARF had done, or not done, in light of the debate at that conference.

1593     I admit that document as showing that the author was strongly in favour of the present implementation of long-term planning to deal with the coming of AI “as it must in the likely event of a successful challenge to the retention of Article 12 and for sound commercial reasons in the interests of the international breeding and racing community as an industry at large.”

1594     Next in issue was an email from Derek Major, an equine veterinarian, sent on 3 December 2007 to Mr Ford, the Keeper. It responded to a letter by Mr Ford seeking information on aspects of artificial breeding in thoroughbred horses. It was referred to in the applicant’s reply submissions at footnote 85 for the proposition, under the heading “likely demand AI”, that there was a lengthy history of interest in the topic including the EI enquiry conducted by Commissioner Callinan QC. The document was discovered by the AJC.

1595     In oral submissions it was made clear that this document was not relied on by the applicant for the truth of its contents but merely to establish that artificial insemination was at least considered by the EI enquiry and others to be a potential answer to the problems of EI and other such diseases and that was what prompted Mr Ford to communicate with Mr Major in order to provide some expert assistance.

1596     I will admit it for that limited purpose, that is, that artificial insemination was at least considered by the EI enquiry and others to be a possible answer to the problems of EI and other such diseases although, in my view, it is of marginal relevance to the issue of the likely demand for AI.

1597I note also that Mr Ford was cross-examined on the form of the questions which he asked Mr Major.

1598     There was then was a chain of emails in May 2009. The document was discovered by the AJC. It was said to be referred to in the applicant’s submissions at footnote 10 but it was not there listed. There was some suggestion that Mr Ford may have been cross-examined on this document but I have not been able to find such questioning. In oral submissions the applicant contended that the emails were relevant to the issue of whether service fees would decline as a result of AI and it was said to be more generally relevant to the issue as to whether the Australian Stud Book considered the experience in the standardbred industry was relevant to what would happen in thoroughbreds. Those two matters were as high as the applicant put that document.

1599     I do not admit the documents to establish whether or not service fees for thoroughbreds, or some thoroughbreds, would decline as a result of AI. I do admit it as going to the issue as to whether the ASB considered the experience in the standardbred industry could be relevant to what might happen in thoroughbreds.

1600     Next was a letter dated 1 June 2009 to Mr Ford, the Keeper, from the applicant’s then solicitors. This was discovered by the AJC. In oral submissions this was said to be simply Mr McHugh’s solicitors writing to the Keeper in relation to a third register. It was not tendered to prove any underlying fact. It was referred to in footnote 106 of the applicant’s reply submissions under the general heading that the applicant has standing and his claim is not hypothetical.

1601     I admit this document as correspondence, that is, the basis on which it was tendered by the applicant, and not as proving any underlying fact. It summarised Mr McHugh’s position.

1602     Next was an email from July 2009, discovered by the AJC. In oral submissions the applicant said the document was not relied on for the proof of its contents but for the fact that someone considered the experience in standardbreds to be relevant. The substance of the document was a letter from the Chief Executive of Harness Racing Australia to the applicant, Mr McHugh. It provided to Mr McHugh information he had asked for. Mr McHugh forwarded Mr Harding’s email to a Sharon Skeggs at Saatchi who forwarded it to a Mr Ingham who forwarded it to Mr Ford, the Keeper. The document was referred to in footnote 23 of the applicant’s submissions in support of the proposition that both expert economists sought to rely on the harness racing experience and Mr Houston described it as a useful natural experiment from which inferences might be drawn as to the way in which breeding patterns for thoroughbreds might change if AI were introduced. This document was said to go to the relevance of the consideration of the actual experience in the standardbred industry as a result of the liberalisation of the restrictions on AI.

1603     There was some difference in emphasis between the use to which this document was sought to be put in the written submissions on the one hand and the oral submissions, to which I have referred, on the other hand.

1604     I admit this document to show that Mr McHugh and those making representations to the ASB on his behalf considered there was a useful analogy provided by standardbreds.

1605     Next was a series of emails dated November 2009. The document was discovered by the fifth respondent. It was referred to in footnote 226 of the applicant’s submissions under the general heading “likely international reactions” and for the more particular submission that New Zealand, an important breeding centre, appears to be in favour of least encouraging debate on the subject of AI.

1606     The email exchange was between Mr Blackburne, then Director of Racing at the Orient Lucky Horse Wuhan Jockey Club, PRC, who had previously been an administrator of the New Zealand Stud Book, and Mr McGauran, CEO of the TBA.

1607     In fact all the email relevantly states is that Mr Blackburne said that he raised the AI issue with the ISBC in about 2004 at the request of the NZTR Board following strident calls from an independent breeder.

1608     At that level of generality and given its terms the document is of no relevance and I reject it. I do not admit it as a business record.

1609     Last was an email thread in January 2010 between Mr Peters of the fifth respondent and Mr Michael Martin, the Chief Executive of the New Zealand TBA (NZTBA). It was discovered by the fifth respondent. It was referred to in footnote 226 of the applicant’s written submissions for the same proposition as the document at tab 353, that is, in relation to the views in New Zealand. Mr Peters said he had been asked, I infer by Mr McGauran, whether NZTBA had a policy on AI and whether NZTBA had stated its position towards the use of AI breeding practices. The response was that AI in the thoroughbred breeding industry was discussed at the NZTBA’s most recent meeting held in Auckland on 14 May 2007. A wide range of opinions were expressed in response to a questionnaire posted on its website to assist any of their 2,300 members to submit an opinion and the NZTBA Council had not adopted an official view on AI. The Council did support international debate on the subject and also supported further discussion with the international thoroughbred community on the development of an international protocol for artificial insemination which could be implemented in the event of a major equine health catastrophe.

1610I admit this document as evidencing the position of the NZTBA, although it has only marginal relevance.

Orders

1611     The order I make is that the application be dismissed. In relation to costs, my provisional view is that the applicant should pay the costs of the active respondents apart from the fifth respondent which was joined on the basis that, unless good reason was advanced to the contrary, it would be responsible for its costs of the proceeding. I propose in the first instance to reserve costs and to give directions making provision for an exchange of written submissions in the event that any party wishes to contend against my provisional view.

I certify that the preceding one thousand six hundred and eleven (1611) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Robertson.

Associate:

Dated:       19 December 2012

ABBREVIATIONS

AI	Artificial Insemination
AJC	Australian Jockey Club Limited
ARB	Australian Racing Board Limited
ARR	Australian Rules of Racing
ASB	Australian Stud Book
ATC	Australian Turf Club Limited
Blue Book	International Cataloguing Standards Book
Federation Agreement	International Agreement on Breeding, Racing and Wagering
ICHRA	International Conference of Horse Racing Authorities
IFHA	International Federation of Horse Racing Authorities
IFHRA	International Federation of Horse Racing Associations
IRPAC	International Grading and Race Planning Advisory Committee
ISBC	International Stud Book Committee
Joint Proprietors	The Australian Turf Club Limited and the Victoria Racing Club Limited as Joint Proprietors of the Australian Stud Book
NZTBA	New Zealand Thoroughbred Breeders’ Association
PRA	Principal Racing Authority
SITA	Society of International Thoroughbred Auctioneers
STC	Sydney Turf Club Limited
TBA	Thoroughbred Breeders Australia Limited
VRC	Victoria Racing Club