Winning Edge Presentations Pty Ltd v Victoria Amateur

[2010] VCC 68

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE

CIVIL DIVISION

COMMERCIAL LIST

EXPEDITED CASES DIVISION

Case No. CI-09-02343

WINNING EDGE PRESENTATIONS PTY	Plaintiff
LTD
v
VICTORIA AMATEUR TURF CLUB	Defendant

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JUDGE:	HIS HONOUR JUDGE ANDERSON
WHERE HELD:	Melbourne
DATE OF HEARING:	8-12 February 2010
DATE OF JUDGMENT:	26 February 2010
CASE MAY BE CITED AS:	Winning Edge Presentations Pty Ltd v Victoria Amateur Turf Club
MEDIUM NEUTRAL CITATION:	[2010] VCC 0068

REASONS FOR JUDGMENT

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Catchwords:  Contract – Supply and sponsorship agreement - Whether terminated by
mutual agreement.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M. Stirling	Baker Jones
For the Defendant	Mr M. Wise	Middletons
HIS HONOUR:

1           The Melbourne Racing Club (“the Club”) conducts horse races at Caulfield and Sandown. Between about 1995 and early 2009 Winning Edge Presentations Pty Ltd (“Winning Edge”) was a sponsor and supplier of trophies to the Club. Initially the arrangement was ad hoc, however in September 2001 the relationship was formalised in a written document to cover the 2001/02 and 2002/03 racing seasons. Further agreements were reached on 10 September 2004 for the 2004/05 and 2005/06 seasons, on 30 May 2006 for the 2006/07 season and on 21 November 2006 for three years – the 2007/08, 2008/09 and 2009/10 seasons – with an option for Winning Edge to renew the agreement for a further three seasons.

2           The Club alleges that on 21 February 2009, at Blue Diamond Stakes Day at Caulfield, an agreement was reached in a conversation between Warran Brown, the Chief Executive Officer of the Club, and Alistair Ewart, the Managing Director of Winning Edge, to terminate the arrangement. The terms and effect of the conversation are disputed by Winning Edge, who allege that the sponsorship and supply agreement should have continued and that the Club effectively repudiated the agreement and should therefore pay damages.

3           The trial commenced on all issues. Early in the trial, the parties reached some agreement on the value of the sponsorship rights and the Court directed a conference of the accounting experts. The experts appeared to reach significant agreement on other issues relating to the quantum of Winning Edge’s loss of profits, if it were found that the contract was not properly terminated. However, as the trial was unlikely to be completed in the time the parties had available for the hearing, the Court was asked to determine as a preliminary question, “Was the agreement between the plaintiff and the defendant, dated 21 November 2006, terminated by mutual agreement of the parties on 21 February 2009?”. It was acknowledged by defendant’s counsel, Mr Wise, that his client bore the onus of proof in relation to the preliminary question.

Competing versions of the conversation

4           It was agreed that the relevant conversation between Brown and Ewart occurred outside the Committee dining room at the Caulfield Racecourse at about the time of the running of the last race that day. The conversation was intended to be conducted privately and was overheard only in part by one other witness who gave evidence. Essentially, I must determine the case upon the two competing versions of the conversation given by Mr Brown and Mr Ewart.

5           Mr Ewart said that Mr Brown approached him in the annex adjacent to the dining room and said that he wanted to see him privately. Mr Ewart gave the following account of the conversation that then took place:

“Brown said, “Get those guests out now”. And I said to Warran to relax, I'd checked

with Kevin O'Brien and we're just watching our race and then we'd be on our way.
Brown seemed very agitated and he said get them out now, you do this all the time,

and I want them out now. Brown started to walk off, I said, “Relax Warran, they're
industry people, they'll be out of the room shortly”. Brown said, “Get them out now”.
So I walked across to Brown, I said, “You're being unfair, this is unreasonable, we've

stayed in Melbourne – We stayed in Melbourne, we had the feature race in Sydney, the Winners Room. Brown said you had no right to be in there. I said if you don't like us sponsoring the Winners Room take it out of the contract. Brown seemed to get very agitated, I said relax I'm going to watch a race and take the clients back down
we just want to watch our race. Brown said that he was upset that I'd been in the

the facility. We concluded the conversation with a handshake”.

6           Mr Brown, on the other hand, said:

“I waited for an opportunity to interrupt and I asked Alistair if I could see him for a

side of the mushroom table to the corner of the room where it was quiet and there

was no one else, and I then proceeded to ask Mr Ewart that - well I stated to

Mr Ewart that he had guests in the dining room that weren't ticketed, would he mind

when they've finished their drinks escorting them from the dining area. Mr Ewart said,

or claimed that Mr O'Brien had given him permission to bring those guests up to the

dining - to the committee area. I then replied, I don't think that's right, that's not

accurate Alistair, if you wouldn't mind your guests finish their drinks and please escort

them from the dining room. On the second - when I asked Alistair the second time he

got a little bit - in my opinion, a little bit angry, raised his voice. He said to me, if that's

the way I'm going to be treated you can cancel my sponsorship, all deals are off.

I responded by saying, Alistair, do you know what you've said, think about it, tried to

cool the situation down. I went to leave. Alistair said no, that's it, all deals are off.

moment, he said yes. I said could we go over here, so I went away to the right-hand that's what you want, I accept it on behalf of the Melbourne Racing Club. We should

shake hands on it”, which he shook my hand and I turned and walked away.

Mr Ewart then - I can't - I didn't hear what he said but quite loudly he was saying a few things that I didn't hear, I didn't want to have a stand up scene in the Committee

Room, and walked away back into the dining area”.

Approach to the determination of the question

7           The High Court of Australia has in recent years reaffirmed the need for trial judges “to

reason to their conclusions, as far as possible, on the basis of contemporary

materials, objectively established facts and the apparent logic of events” rather than
“too readily drawing conclusions about truthfulness and reliability, solely or mainly
from the appearance of witnesses”. (Fox v Percy (2003) 214 CLR 118 at paras 30-
31 per Gleeson CJ, Gummow and Kirkby JJ.)

8           In the present case I consider that my consideration of the evidence should involve:

a.	an examination of the context of the conversation, both on that particular day and in light of the overall relationship between the parties and their representatives;
b.	when assessing the evidence relating to the peripheral detail, to consider whether it enables any conclusions to be drawn about the credibility of particular witnesses or the likelihood of either of the versions of the conversations given by Mr Brown or Mr Ewart being correct;
c.	standing back from the detail, but keeping in mind the factual context and background of the conversation, to see whether either version appears more probable, noting that ultimately it is the defendant who bears the onus of proof.

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generally gave their evidence in a direct and appropriate manner. At times, both

Mr Ewart and Mr Brown equivocated in their responses and I will refer to those

matters later. These were not, however, matters which would lead me to conclude

that I should regard the evidence of any witness, and particularly of Mr Ewart or

Before I embark upon that exercise, I should note that in my view all witnesses their submissions. Attacks on the credibility of witnesses, particularly Mr Ewart and Mr Brown, were generally made on the basis of an examination of the evidence given by them and other witnesses on specific matters and not on the basis of their demeanour as they gave their evidence.

10         It is also worth noting that the introduction of the Uniform Evidence Act provisions for trials commencing after 1 January 2010 meant that a considerable amount of hearsay evidence was heard without objection. It is doubtful, however, that the admission of this evidence made the fact finding exercise any easier although it clearly increased the length of the trial.

Background to the relationship

11         Winning Edge was incorporated in 1993. Mr Ewart is its Managing Director and his wife, Ms Claire Ewart-Kennedy, is presently the Strategy Director with responsibility for human resources, marketing and the overall strategy relating to the direction of

trophies for sporting and corporate customers and has business relations with

between 20 to 30 racing clubs in Australia and New Zealand. In 2008, the turnover of

the business. The company now has about eight to ten employees. It provides the company’s business.

12

Another aspect of the relationship was the company’s sponsorship of the Club, which 2008/09 racing season the company paid a sponsorship fee of about $50,000 per annum payable monthly. The fee was usually offset against the company’s invoices for the supply of trophies. The sponsorship rights included specific aspects of signage, branding and media exposure and involved naming rights for two significant races in the calendar, including the race formerly known as the Herbert Power Quality Stakes on Caulfield Guineas Day and a support race on Caulfield Cup Day.

13         Four specific background matters are relevant to the events which occurred on 21 February 2009:

a.	the length of the trading relationship between the parties;
b.	problems with Winning Edge’s performance of its obligations under the agreements, particularly as regards the pricing and quality of trophies;
c.	alleged abuses by Mr Ewart and his wife of the privileges accorded to them as Club sponsors;
d.	an agreement, finalised in February 2009, granting the company naming rights in relation to the Winners Room at Caulfield Racecourse.

The length of the trading relationship

14         In November 2006, the parties had entered a three year agreement for the racing seasons commencing on 1 August 2007, 2008 and 2009. The agreement contained an option for Winning Edge to renew the agreement for a further three seasons. The option was in the following terms:

“6.1 WEP shall have the option to renew the Agreement for another three (3) racing seasons from 2010/2011 through to 2012/2013 on such terms and conditions as reasonably agreed between the parties, provided WEP shall notify MRC of its intention to do so in writing by no later than 31 October

2009”.

15         Mr Ewart said that he would have wished to exercise this option to renew on behalf of the company. This issue will require further examination if it is necessary to quantify the company’s losses as a consequence of a wrongful termination of the agreement.

Problems with Winning Edge’s performance

16         During the course of the trading relationship, the parties formally negotiated contracts in September 2001, September 2004, May and November 2006. There were documents referred to in evidence that suggest there were some issues raised, particularly in 2004 and 2005, in discussions between the parties and privately within the Melbourne Racing Club, which related to the performance by Winning Edge of its contractual obligations. These matters included the quality of products supplied and pricing issues. These matters were generally given little significance by Mr Ewart or Ms Ewart-Kennedy, on the one hand, or Mr Brown on the other. I will, however, refer to their evidence later in these reasons.

17

Ms Mary Morton was the person at the Club with responsibility for the management issues, no evidence was led from her in relation to the company’s performance of its obligations. Two of the defendant’s witnesses did, however, give evidence critical of the performance by Winning Edge of its contractual obligations. The witnesses were the Chairman of the Club, the Honourable Justice Peter Young of the Family Court of Australia and Mr Nicholas Fletcher, the Club’s Sponsorship Account Manager, who had specific responsibility for the Winning Edge sponsorship.

18         Mr Fletcher said that after 2007 there were no complaints made to Winning Edge about pricing or quality of the trophies supplied, although he did mention to his manager, Ms Morton, concerns he had about the quality of certain trophies and he thought that these matters may have been discussed informally with Mr Ewart.

19

within the Club about the quality of the trophies supplied by the company and about

its personnel. He said that in the Club’s committee meetings there had been

discussion about the quality of particular trophies and their value for money.

Justice Young gave evidence that at the Club’s regular committee meeting, on

Thursday 26 February 2009, following the race meeting, the committee had received

a report from Mr Brown about the incident with Mr Ewart. The committee had

endorsed Mr Brown’s actions in agreeing to the termination of the contract.

Justice Young said that as at February 2009 he was aware of previous concerns that he was “pleased to get rid of” Winning Edge, that the “Club was better off without them” and would be “able to get alternative suppliers” who would provide “as good or better” service.

20         It is probable, in my view, that Justice Young’s evidence on these matters was accurate and that Mr Brown underplayed these matters in his evidence as he may have regarded them as tending to show a degree of animus towards Mr Ewart and Winning Edge. Mr Ewart and Ms Ewart-Kennedy, on the other hand, were unlikely, in my view, to have been aware of the attitude of Mr Brown and members of the Club’s committee about the performance by Winning Edge of its obligations. Specific issues had been raised about four or five years earlier and since that time the supply and sponsorship agreement had been twice extended. Both Mr Ewart and Ms Ewart- Kennedy said that they had very good relations with Ms Morton and she gave no evidence to the contrary.

Abuses of Club privileges by Mr Ewart and Ms Ewart-Kennedy

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parties’ business relationship was instigated because Mr Brown and other Club staff

believed there had been an abuse of the privileges the Club had afforded to Mr Ewart

and Ms Ewart-Kennedy. It was believed that the Ewarts had brought about four

“unticketed” guests to the Committee Room area and those guests had either been

taken into the committee dining room, where they had no permission to be, or had

On 21 February 2009, the conversation which resulted in the termination of the interstate race on the television screens in the annex adjacent to the dining room. There were also complaints that, earlier in the day, Mr Ewart had been observed in the mounting yard and Mr Ewart, Ms Ewart-Kennedy and the four guests had been at the Winners Room and that they had no entitlement to be in either of these places. I will examine these matters in more detail later in these reasons.

22         It was also suggested by defendant’s counsel, in cross-examination of Mr Ewart and Ms Ewart-Kennedy, and by certain of the defendant’s witnesses, that Mr Ewart and Ms Ewart-Kennedy had “made a habit” of abusing the privileges offered to them by the Club. Evidence to this effect was given by Ms Julie Patterson, Mrs Anna Jongebloed and Ms Morton. The suggestion was denied by Mr Ewart and Ms Ewart- Kennedy.

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November 2009. On race days, she had the responsibility to “meet and greet” guests

at the committee area and give them their name tags. She knew Mr Ewart and

Ms Ewart-Kennedy and had a conversation with Mr Ewart on 21 February 2009

shortly before his conversation with Mr Brown. I will refer to these matters later.

Ms Julie Patterson was the personal assistant to Mr Brown from September 2005 to time people tried to bring uninvited guests into the committee area. She said in relation to Mr Ewart and Ms Ewart-Kennedy, she could recall the following occasions on which they had abused their privileges:

a.	About two to three years ago she had noticed Mr Ewart standing and talking to people without proper tickets in the middle of the committee dining room. Ms Paterson had not spoken to Mr Ewart or any of the persons he was with and could not say if Mr Ewart had brought the other persons into the dining room;
b.	On about three or four occasions over the previous four years, Ms Ewart- Kennedy had asked Ms Patterson whether she could bring unticketed guests into the Committee Room area. On one occasion Ms Paterson cleared the matter with the Club Chairman, on the other occasion she used her own judgment to admit Ms Ewart-Kennedy and her guests.

24         Mrs Anna Jongebloed and her husband Leon Jongebloed worked for the Melbourne Racing Club as event staff. They were each involved in the incident on 21 February 2009. Mrs Jongebloed said that on the race day before a Caulfield Cup meeting

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Mrs Jongebloed and Ms Morgan much weight, particularly in view of the emphatic

denials by Mr Ewart and Ms Ewart-Kennedy. Certainly, a significant amount of time

in the hearing was spent on the issue of abuse of Club privileges. Ms Patterson and

Mr and Mrs Jongebloed had specific responsibilities on race days to ensure that

there was not unauthorised access to the committee area. On 21 February 2009,

Mr Ewart brought four guests who had tickets to the Promenade Room to the

committee area and asked if they could watch a Sydney race on the television screen

only going to come in and see me for a little while”. Mrs Jongebloed said she was “new to the job” so she let the woman in with Ms Ewart-Kennedy but “kept an eye on her”. Mrs Jongebloed said that there “may have been other incidents”.

some years earlier, Ms Ewart-Kennedy had been in the committee dining room. A into the committee area. The woman did not have a ticket. Ms Ewart-Kennedy told Mrs Jongebloed that the woman was “
woman had come up in the lift to the committee area reception and had asked to see

25 may have been led to understand
Mr Ewart or Ms Ewart-Kennedy had obtained access to areas of the racecourse

Ms Morton gave evidence she “” that people with of the committee had asked her whether she had given access to Mr Ewart (and/or his guests). She said that she “would have discussed” the issue of unauthorised access with Mr Ewart “on odd occasions” although she “cannot be specific” or relate the occasions “with any degree of accuracy”.

In the circumstances, it is difficult to give the evidence of Ms Patterson, O’Brien. It is likely that on previous occasions Mr Ewart and Ms Ewart-Kennedy had done something similar, ie. sought permission, on the spot, for temporary or otherwise limited access. There is, however, no credible evidence to suggest that beyond these occasions there had been any breach of the conditions upon which access had been granted to various areas of the racecourse.

Naming rights to the Winners Room

27         The Caulfield Racecourse had a “Winners Room” called the “Sir Tom North Room”. After each race, the owners of the winning horse were presented with the appropriate prize and trophy and were then taken with the other “connections” to the Winners Room where they could watch a replay of the race on television and generally celebrate the success of their horse.

28         In about September 2008, Ms Morton had had discussions with Ms Ewart-Kennedy about a number of matters concerning the supply and sponsorship contract. Under the contract, there was reference to “a minimum spend of $150,000 (excl GST)”.

During the 2007/08 season, Winning Edge alleged that there had been a significant “shortfall” on the amount the Club was required to spend if the pricing structure were to be maintained. In an email on 17 September 2008 to Ms Morton, Ms Ewart-

Kennedy confirmed their discussion at a meeting earlier that day that “compensation of underspend” would have certain monetary consequences, “as well as sponsoring

the Winners Room to be known as the Winning Edge/Tom North Winner Room – MM

to come back to CEK regarding this”.

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On 23 January 2009, Ms Morton sent an email to Mr Ewart and Ms Ewart-Kennedy to “minimum spend per racing season” for the following two years and, “presenting

partner of the Sir Tom North Room – MRC happy to offer this to WEP for the

remainder of the existing agreement with details to be agreed”. Ms Ewart-Kennedy responded in an email, which a relevant part reads as follows: “Great. What are the

details but I assume as per my email following our discussion on 17 Sept. room to be

known as Winning Edge/Tom North Room Winner Room”.

30         In subsequent correspondence on about 9 February 2009, Ms Morton recorded in an email that it was proposed that the room “will be called the Sir Tom North Room

presented by Winning Edge Presentations and we will sort out some signage to go

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presenting rights to the room entailed and Mr Ewart had asked for access to the room

the following day. Mr Fletcher told Mr Ewart that access to the room “would have to

be through me or another member of staff”. Mr Fletcher told Mr Ewart that he was

likely to be busy the next day, but “if he had time we could go down to the room

together”. Apart from Ms Morton and Mr Fletcher it is unlikely that many others were

aware of the fact that naming rights to the Winners Room had been given to Winning

on the door accordingly which reflects this
2009, there was an ongoing debate about the name; this remained unchanged
although it was apparently agreed that there would be “two signs – A4 for the door
and one inside underneath the TV”. During his evidence, Mr Ewart appeared to
equivocate about the reason for his attempts to change the wording of the signage.
Finally, Mr Ewart conceded that he had been attempting to obtain the best advantage
to the company in the way the Winning Edge name appeared on the signage.

”. In subsequent emails on 16 February of Mr Ewart’s credibility.

31         On Friday 20 February 2009, Mr Ewart spoke with Mr Nicholas Fletcher at a luncheon they were both attending. They discussed erecting signage for the room later that day. During a telephone conversation, Mr Fletcher gave Mr Ewart the access code for the Winners Room door. There is some dispute about the circumstances in which the code was given. Mr Fletcher said that Mr Ewart told him he was already at the Winners Room ready to erect the signs. When Mr Fletcher reached the room a short time later, Mr Ewart had already erected the sign on the door and together they erected the sign under the television screen. Mr Ewart said that he was given the code for the Winners Room by Mr Fletcher “on Friday and on Saturday morning”.

Earlier, at lunch on the Friday, Mr Fletcher and Mr Ewart had discussed what the Justice Young were aware of the change of name in relation to the Winners Room.

Events at Caulfield Racecourse on 21 February 2009

33         It is appropriate to examine the events leading up to and following the conversation between Mr Brown and Mr Ewart under a number of specific headings:

a.	timing of races;
b.	access rights available that day;
c.	in the mounting yard and the Winners Room;
d.	the contact between Mr Ewart and Ms Patterson;
e.	lead up conversations and observations;
f.	the critical conversation between Mr Brown and Mr Ewart;
g.	subsequent conversations and correspondence.

Timing of races

34         It was agreed that the following were the advertised race times:

Caulfield

4.10pm, Race 7, Blue Diamond Stakes;

4.50pm, Race 8;

5.30pm, Race 9.

Rosehill

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had been given to him by Nicholas Fletcher on the morning of race day “if he needed

access”. Mr Fletcher had also given him the number code to the door of the Winners

Room which could be accessed from the mounting yards. Mr Fletcher agreed that he

had given Mr Ewart the code for the Winners Room on the Friday when Mr Ewart

telephoned from outside the room when he wanted to erect the signs. Mr Fletcher

said that he did not imagine that Mr Ewart would use the code at any other time.

Mr Ewart also said that he and his wife had ticketing for the mounting yards, which mounting yard either on the Friday or the morning of race day. He said that on Blue Diamond Stakes Day, all ticketing was sent out prior to race day and it was very rare at any time to give out tickets on race day.

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Mr Ewart has significantly impaired vision and is unable to read documents. He

dictates his correspondence and, on the Monday morning, the email was typed by his

wife from his dictation. A significant paragraph of the email commences with the

(rather unusual) phrase, “As I elocuted to you …”. I note that in the email from

5.18pm, Race 7, Winning Edge Presentations Classic. The race at Rosehill was
delayed a few minutes by rain. It is not clear whether it was in fact run before or after
Race 9 at Caulfield.

Access rights

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with two guests, Mr Levi Cavanaugh and Mr Alister McNab. In addition, they had

tickets for six guests to the Promenade Room. The guests included Mr Alex Doble,

On 21 February 2009, Mr and Mrs Ewart had tickets to the Committee Dining Room Mr McNab to the Committee Room area.

Mr Ewart sent an email to Mr Brown at 9.19am on Monday 23 February 2009. previously made reference), Ms Ewart-Kennedy used the phrase, “To elocute the discussion held today … “. It may be that the word “elocute” was in common use by both Mr Ewart and his wife, or that Ms Ewart-Kennedy included her own phrasing in the email of 23 February 2009.

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Mr Ewart “had been invited in” to the Winners Room “by the connections of the

Reward for Effort team”. Mr Ewart explained in the email that at the time he was

showing “clients the course and [to] see how the new marketing initiatives were going

In the email sent by Mr Ewart, at 9.19am on 23 February 2009, it was stated that into the Winners Room, Mr Ewart had been “showing clients the signage”.

39         Evidence was given that access to the Winners Room was ordinarily for patrons who had a reason to be there and was generally gained via the mounting yard. The Winners Room is in the “basement” of the grandstand although other access to the room was possible for racecourse staff. Mr Ewart said that he went with his guests to the Winners Room from the mounting yard. Mr Ewart gave a number of explanations for his presence with guests in the mounting yard and the Winners Room. He said in evidence that he thought he had access to the mounting yard as part of the sponsorship agreement in relation to the Winners Room. He said he had gained this impression from a general conversation with is wife. He also said that Mr Fletcher had told him he would “see you in the mounting yard”. When he had presented himself and his guests at the mounting yard he was at the front and an officer had said to go through.

40         Mr Ewart said that he thought that he was entitled to be in the Winners Room and had discussed with his wife that he would “check out” the signage. At some stage the owners of the winning horse in the Blue Diamond Stakes, Reward for Effort, had

said to Mr Ewart, “Let’s all go for a drink in the Winners Room”. Mr Ewart stated in
the email on Monday morning that he did not need the code to access the door to the
Winners Room as he “had been invited in … by the connections of the Reward for
Effort team”.

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not had contact with him. He said that patrons seeking to enter the mounting yard

were carefully checked before they were permitted to enter. Evidence about how

Mr Fletcher said that he had seen Mr Ewart in the mounting yard on race day but had To gain access to the mounting yard, he would ordinarily have needed a ticket and would need to pass by the checking officer at the gate. In his evidence, Mr Ewart said, at one point, that he believed he was entitled to access the mounting yards. At another point in his evidence, he said that he had been given tickets by Mr Fletcher. It is unclear, therefore, whether the evidence is that Mr Ewart and/or his guests were said to have tickets to the mounting yard, or that Mr Ewart considered he and his guests had an entitlement to enter the mounting yard and proceed to the Winners Room and they had somehow got past the checking officer.

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guests to the mounting yard and the Winners Room. It is possible that Mr Fletcher

was mistaken in his evidence, although I would not be prepared to make that finding.

On the other hand, it is difficult to conclude otherwise than that Mr Ewart believed he

and his party had an entitlement to enter the mounting yard and from there to go to

the Winners Room, either as a consequence of the new sponsoring arrangement

which included the Winners Room or because of an invitation by the connections of

the winning horse. On the other hand, it is possible that Mr Ewart, in his enthusiasm

to show his guests the recent marketing initiative by which Winning Edge had

acquired the naming rights to the Winners Room, had taken advantage of lax

42         There is also an issue as to whether Mr Ewart’s unticketed guests were in the Committee Dining Room, not just the annex, later in the day. Apart from that matter, there is no evidence to suggest that Mr Ewart had ever sought access to restricted parts of the racecourse for himself or others without having the necessary entitlement or first seeking permission from an authorised person. Mr Fletcher was “very confident” he had not given Mr Ewart tickets to the mounting yard. Mr Fletcher appeared to have a clear recollection of other events on the Friday and Saturday and readily admitted giving the Winners Room door access code to Mr Ewart. However, Mr Fletcher was not one of the Club staff that Mr Brown had spoken to the following Monday and it is unclear when Mr Fletcher was asked to recollect these matters.

It is difficult to reconcile the evidence on the issue of the access by Mr Ewart and his main race of the day.

there

Inside the Winners Room

44         After the running of the Blue Diamond Stakes, there was a presentation in the mounting yard. The connections of the winning horse were then invited to the Winners Room. This was at about the time Race 8 was to be run. Justice Young

and Mr Brown accompanied the connections of the winning horse to the Winners accompanying him entered the Winners Room and stood for a couple of minutes near the door after which they left.

45         Whilst these matters are agreed, there are discrepancies and other matters of note in the evidence:

a. Justice Young and Mr Brown said they recognised Ms Ewart-Kennedy in the party with Mr Ewart, but none of the other persons with them. Mr Brown said in cross-examination that he “didn’t believe it was possible that she was not

”. Both Mr Ewart and Ms Ewart-Kennedy denied that she was present. Committee Dining Room. I consider that it is more likely that Justice Young and Mr Brown were mistaken and Ms Ewart-Kennedy was not with her husband in the Winners Room.

It appears that a fairly short time later, when Mr Ewart, and apparently the

same party of guests, arrived at the Committee Room reception area,

b.

see the new sign on the door until he was inside the room. Mr Brown and

Justice Young said that they were standing together inside the room when

Mr Ewart and his party entered. Mr Brown said that the Chairman asked him,

“What was Alistair doing in the room”. Mr Brown heard Mr Ewart say to his

guests, “This is where we bring the winners, this is our room”. Mr Brown said

that, at the time, the Chairman was asking him, and they were discussing,

Mr Brown said that the door of the Winners Room was open and he did not Justice Young that he did not know but he would find out. Mr Brown said that it was “the first time he had seen the sign”. In cross-examination, he said he was “bewildered” at seeing the sign. Apparently all changes in naming rights needed committee approval and not simply the agreement of the marketing manager. Mr Brown said that when he looked up again Mr Ewart, Ms Ewart- Kennedy, and their guests had left the room. At this time the winning horse’s connections were watching (or waiting to watch) a replay of their race on the television screen in the room.

c.

Justice Young had asked him what Mr Ewart was doing in the Winners Room.

Mr Brown had “shot a look” at Mr Ewart and Mr Ewart and his party had left

soon after. During his evidence I asked Mr Brown about Mr Wise’s opening

statement. Mr Brown replied, “My intention was to get them to leave. As soon

In defence counsel’s opening, Mr Wise said that Mr Brown would say that Mr Brown said that he “didn’t need to approach them”.

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winning horse he was standing with Mr Brown. Mr Brown “brought it to his attention”

that Mr Ewart and others had entered the room. Mr Brown had said, “They shouldn’t

be in the room” and that he would “ask them to leave”. Mr Brown went towards

Mr Ewart’s party and soon after Justice Young saw that Mr Ewart and his party had

left. Justice Young said in cross-examination that his “observations of Mr Ewart were

limited”. He had “only looked up” and there was a “fair crowd in the room”. Mr Brown

had drawn the Ewart party to his attention. His reaction was that “they shouldn’t have

been there”. Justice Young said that whilst he may have seen some

“acknowledgement of Winning Edge on the trophy” he could not recollect having

seen the signage referring to Winning Edge. He did not say to Mr Brown, “What is

the Winning Edge signage doing here”, as he had never seen the sign.

Justice Young said that whilst in the Winners Room with the connections of the rights on that day or later.

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There are discrepancies in the evidence of Mr Brown and Justice Young, including Mr Brown had approached Mr Ewart’s party to ask them to leave. It seems more likely that Mr Brown’s recollection is more accurate on these matters and that Justice Young’s attention was primarily elsewhere.

Mr Ewart’s conversation with Ms Patterson

48         At some time shortly after 5.18pm, the scheduled start of the race at Rosehill sponsored by Winning Edge, Mr Ewart took his party of five guests to the committee area. After they exited the lift, Mr Ewart said he approached Ms Julie Patterson and told her that he was taking his guests on a “tour of the facility” and asked if they could watch the race at Rosehill in the Committee Room. He said that Ms Patterson had said, “No problems, just keep them to the back of the Committee Room”. Mr Ewart understood that this was the area where the television screens and TAB facilities were and not the formal dining room area.

and then leave. Mr Jongebloed thought the race being referred to was the next race at Caulfield which was to start in about two minutes time.
52	went to walk past her stopped because she challenged him. Mr and Mrs Jongebloed’s account does not directly confirm that evidence, although they were not as “involved” as Ms Patterson in the contact with Mr Ewart. Ms Patterson’s version is consistent with the view of

49 Committee Room Annex when Alistair Ewart and three or four people went to walk past her. She said she stopped Mr Ewart and said, “I don’t think these people have tickets”. She told Mr Ewart that they could not come in. Mr Ewart said, “They just want to view the race on television”. Ms Patterson said that she gave permission provided that they “don’t move from the annex to the dining room”. Ms Patterson Ms Patterson said that she was standing at the reception desk leading into the downstairs or they missed it downstairs”.

50         Mrs Anna Jongebloed said that she saw Mr Ewart and about four others approach Ms Patterson and her husband, Mr Jongebloed, and that Julie had “stopped them”. Mrs Jongebloed said that she was not near the desk and could not hear any

conversation. She saw Mr Ewart and his group approach the reception desk and that they “stayed there for a while”. Ms Patterson told her shortly afterwards that she had told Mr Ewart that the group must “stay in the annex” and that the group would “be

leaving shortly”.

51         Mr Leon Jongebloed said that he was at the reception area. Mr Ewart came up with a number of guests and was met by Julie Patterson. The guests were not ticketed. Ms Patterson told Mr Ewart that he could take his guests in to watch the one race

Ms Patterson said that Mr Ewart “” with his guests and had only I should accept in relation to the mounting yard, the Winners Room and later the Committee Dining Room. I do not consider I can make a finding on this issue in isolation. It is not clear whether Ms Patterson’s recollection was affected by the events which later happened and the fact that Mr Ewart’s guests had only gained access to the Committee area because she had given them permission. On the other hand, it might be said that Mr Ewart had tailored his evidence to highlight the fact that Ms Patterson had permitted the entry of his guests. In the email on Monday morning, Mr Ewart said that he “had requested with Julie and Kevin O’Brien … that I

could bring three of our clients up from the Promenade … so we could watch the
running of the Winning Edge Classic at Rosehill which had been delayed due to the

weather issues”.

Lead up conversations and observations

53 Mr Kevin O’Brien approached him. Mr O’Brien was a committee member of the Club.

Mr Ewart said that after he entered the Committee Room annex with his guests, two (ticketed) guests had been seated. Mr Ewart said that when he later entered the annex, he introduced Mr O’Brien to his guests and described their connections with the racing industry. Mr Ewart said he then asked Mr O’Brien, “if it was ok if they could stay after our race”. Mr O’Brien had told him he did not have an issue with what Mr Ewart proposed but would check with Mr Brown.

54         In the email and other correspondence on the following Monday and Tuesday, Mr Ewart had referred to Mr O’Brien’s involvement. I have earlier referred to the reference to Mr O’Brien in the email sent by Mr Ewart on Monday morning.

55         In the letter he sent to Mr Brown on 24 February 2009, Mr Ewart wrote: “I approached

Julie Patterson or the person I believed to be Julie Patterson who allowed access to
the back part of the Committee Room for the group for the purpose of viewing the
race. Kevin O’Brien who is a committee member of the Club at our table and our
host for the day approached the group. After introductions of our racing industry
guests I informed him that these people were guests downstairs in the Promenade
and again checked that it was permissible for them to be in the Committee Room for
a short time. He replied that it was alright with him but he would check with yourself.
We did not hear anything further until you approached myself and ordered our guests

58

out of the Committee Room”.

56         Mr O’Brien said that late in the afternoon on race day, he observed Mr Ewart and his friends in the foyer area adjacent to the Committee Room near the TAB windows and the television screens. Mr O’Brien approached Mr Ewart who called him aside and

asked whether he “could bring some friends up from the Promenade Room after the
last race”. Mr O’Brien said he told Mr Ewart that he was “not sure of the protocols”
but would speak with Mr Brown.

57

to Mr Brown: “Alistair was wanting to know if he could bring some friends up the

Promenade area for a drink after the last [race]”. Mr O’Brien said that Mr Brown’s

“immediate response was no” and then Mr Brown said, “It’s too late anyway because

Mr Ewart’s party are already here”. Mr O’Brien then saw what Mr Brown was

Mr O’Brien said that he found Mr Brown at the bar in the Committee Room. He said bar to the table” where the Ewarts had sat with Mr O’Brien at lunch. Mr O’Brien said that Ms Ewart-Kennedy “carried some flutes of champagne back to the table and they had been distributed to the people at the table”. Mr O’Brien said he was “not sure” whether Mr Ewart was at the table or not. Mr O’Brien said that these events occurred after “the last race had been run”.

Mr Brown told Mr O’Brien that he would talk to Mr Ewart. Mr O’Brien went back to his Mr O’Brien said there were “other guests at the table as well as the Ewart people.

There were members of the public that I had seen earlier in the day sitting at the

table”. Mr O’Brien said his goodbyes, “gathered my gear and was on my way home”. Mr O’Brien said that he had not recognised the people he had seen with Mr Ewart in the annex and “wouldn’t know if they were the people who were with me at the

Committee Room table” at lunch.

59

Mr Brown said that shortly before the final race he had entered the committee dining Mr Brown said Mr O’Brien told him, “Alistair Ewart had asked him whether he could

bring some guests from the Promenade dining room into the Committee Room after

the lastI think it might be a little late for thattable that Alistair and Claire had some people sitting with them”. Mr Brown “observed

”. Mr Brown said to Mr O’Brien, “”.

Claire Ewart going to the bar taking four flutes of champagne back to the table that

was Kevin O’Brien’s table at the luncheon”. Mr Brown’s “recollection” was that there
were “six people sitting at the table”. Mr Brown said, “I recognised Mr Ewart and

obviously his wife, but his wife wasn’t sitting when I did notice her because she was

in transit from the bar with the champagne”. Mr Brown was then approached by
Mrs Jongebloed and had a discussion with her which I will relate shortly.

60         Generally the evidence of Mr Ewart and Mr O’Brien and the evidence of Mr Brown and Mr O’Brien coincides. The points of uncertainty which remain would seem to be:

a.	whether Mr Ewart was asking for permission from Mr O’Brien for his guests to have more extended access, or to remain longer, than the permission given by Ms Patterson;
b.	whether Mr Ewart and his unticketed guests were already in the dining room at the time Mr Brown was talking to Mr O’Brien.

61

Ms Patterson had given permission for Mr Ewart to take his guest into the annex area correspondence from Mr Ewart with Mr Brown seemed to suggest that, because Mr O’Brien had approached him, he had “again checked that it was permissible for them to be in the Committee Room for a short time”.

62         Mr Ewart in his oral evidence said he had asked Mr O’Brien “if it was ok if [his guests] could stay after our race”. This suggests that Mr Ewart wanted an extension of the permission granted by Ms Patterson. The only purpose for remaining longer would appear to be to socialise, as the racing would have finished. This matter was not, however, explored further in the evidence.

63

something Mr Ewart was proposing in relation to guests who were still in the

Promenade Room, and not to the group with Mr Ewart to whom Mr O’Brien had been

introduced in the annex. This seems to have been the impression given to

Mr O’Brien in his evidence related a conversation that seemed to be referring to Mr Brown’s evidence of that conversation.

64

It is difficult to resolve the uncertainty. I consider that it is more likely that what guests he had with him at that time to stay longer and probably to have access to refreshments from the bar in the dining room, although not necessarily to have access to the dining room.

65

As to the movements of Mr Ewart’s unticketed guests in the Committee Room area, it Jongebloed overheard Ms Patterson give Mr Ewart permission to bring his guests into the Committee Room area “to watch the one race in the annex room” after which “the guests would leave”. Mr Jongebloed believed the race they were given permission to watch “was the next race at Caulfield…because the race was going to start in two minutes time when he approached the reception centre”. Mr Jongebloed said that Mr Ewart and his guests watched the race “in the annex room”.

66         After that race, Mr Jongebloed observed Mr Ewart and his guests “for five minutes” and they “remained at the mushroom table in the annex room”. Mr Jongebloed said that someone had got “drinks for the people who were invited in”. Mr Jongebloed

said that at that stage his wife, Mrs Jongebloed, had fetched Mr Brown from the
dining room. Mr Brown spoke to Mrs Jongebloed and her husband at the reception
area. It is not clear whether Ms Patterson was involved in this exchange. Mr Brown
said that Mrs Jonebloed had told him that when Mr Ewart had earlier come up to the
committee area, he “had spoken with Julie Patterson who was on duty that day. He
was challenged by them that his guests didn’t have ticketing for the dining room”.

67         Mr Brown continued, “I was told he then asked – he had a race to watch at could he just go into the anteroom and then he would leave with his guests”. Later in his evidence, Mr Brown said that he had not, at that time, been told by Ms Patterson (and presumably also not by Mr and Mrs Jongebloed) “that she had said to Mr Ewart

that it was all right for him to have those four unticketed guests in the anteroom or the

foyer of the Committee Room, for a short period”. Mr Jongebloed said, “We

explained that Alistair’s guests were still in the room and they had got themselves

some drinks”. After this Mr Brown went and found Mr Ewart and they had a
conversation “outside the left door of the dining room”.

68         Mrs Anna Jongebloed said that after her husband had returned from observing Mr Ewart and his party she “went and had a look and noticed that they were still there

but then they [Mr Ewart and the group of people he was with] moved into the

Committee Room near the bar”. Mrs Jongebloed said the people she saw near the bar were “Mr Ewart and his group of people”. She was asked, “Were they the same four people?” and she replied, “Yes exactly, yes his group of friends”. She said the only one of the group she knew was Mr Ewart and that Ms Ewart-Kennedy, whom

she also knew, was not with the group.

69

“walking around near the bar” in the dining room and was “about a metre [or] two

away from Mr Ewart and his party”. She asked Mr Brown to come and speak with

her. They went back to the reception desk. After she explained what had happened,

Mr Brown went back into the committee dining room and approached Mr Ewart, who

After making her observation she had sought out Mr Brown. She said he was “near the door in the entrance with the Committee Room”.

70         Mr Brown said that after speaking with Mrs Jongebloed he “went to find Mr Ewart. I

looked in the dining room. I couldn’t see him. I went out the second set of double
doors into the ante room and right outside in front of what I call the stewards’ replays
is a mushroom table where I observed Mr Ewart talking with another gentleman who I

did not recognise”. At an appropriate opportunity, Mr Brown interrupted and asked to
speak with Mr Ewart privately.

71

and the dining room. He knew that his wife was in the dining room. Mr Ewart said

that it was about “five minutes” after his conversation with Mr O’Brien before

Mr Brown approached him. There is no dispute that when Mr Brown first spoke to

Mr Ewart and asked if he could speak privately with him, that this occurred in the

annex near the television screens, the TAB and the mushroom table. Although

It is possible that during this relevant period Mr Ewart had moved between the annex she must be mistaken about this.

72         Mr Brown thought he saw Mr Ewart in the dining room sitting at the O’Brien table as his wife brought drinks from the bar. This is possible, as Mr Ewart was appropriately “ticketed” for the dining room. It is unlikely, however, as shortly before, Mr Ewart had been with his “unticketed” guests in the annex and shortly afterwards that was where Mr Brown had found him. I think it more likely that Mr Brown was mistaken about this matter. Mr Brown certainly jumped to the conclusion that the persons at the O’Brien

table, when he saw Mrs Ewart-Kennedy approaching with drinks, were the guests after the last race.

73

consider that Mr Brown has supported his conclusion by recollecting having seen

Mr Ewart at the table in the dining room at that time. Mrs Jongebloed said that she

observed Mr Ewart in the dining room at the bar at the time she approached

Mr Brown. In the light of Mr Brown’s evidence of his conversation with Mr O’Brien

and his observation of Mrs Ewart-Kennedy carrying drinks to the table where

Mr Ewart was seated, it would be surprising that Mr Brown would have been

approximately one or two metres from Mr Ewart in the bar area without talking to him.

There is little basis on the evidence for the conclusion reached by Mr Brown. I drinks, there is no reason why Mr Brown would not have approached Mr Ewart after he finished speaking with Mr O’Brien. It is possible that, at some stage, Mr Ewart had been in the vicinity of the bar as Mr Jongebloed observed Mr Ewart’s guests outside in the annex with drinks, which apparently must have been obtained from the bar.

74         When Mr Brown approached Mr Ewart in the annex to speak privately with him, it is more likely that the unticketed guests were still with Mr Ewart in the annex area and were about to watch the delayed Sydney race on the television screen. This

conclusion appears to be supported by the evidence of Mr Jongebloed who observed Mr Ewart and his guests (with drinks) in the annex and the evidence of Mr Brown who found Mr Ewart in the annex talking to someone when he went looking for him shortly afterwards.

75

dining room, in between her husband’s observation and Mr Brown seeking out

Mr Ewart to speak to him, is difficult to accept in its entirety. I have already referred

to her evidence that Mr Brown had only been a metre or two away from Mr Ewart and

his guests at the time of her observations. It is possible that Mrs Jongebloed saw

Mrs Jongebloed’s evidence that she saw Mr Ewart and his group at the bar in the his guests. It is unlikely, however, that Mr Ewart’s unticketed guests had moved from outside in the annex.

76 satisfied that the persons whom Mrs Jongebloed saw Mr Ewart talking to at the bar in

Mr and Mrs Jongebloed and Mr Brown did not know Mr Ewart’s guests. I am not Mrs Ewart-Kennedy was advancing with flutes of champagne, were the same persons Mr Jongebloed observed with Mr Ewart at the mushroom table or included the man with whom Mr Ewart was talking when Mr Brown came searching for him shortly afterwards.

Mr Brown’s conversation with Mr Ewart

77

It is perhaps instructive to examine the likely state of mind of both Mr Brown and entertaining his guests. He had decided to stay in Melbourne and attend the race meeting at Caulfield rather than the meeting at Rosehill where Winning Edge had naming rights to one of the major races. The principal reason Mr Ewart said he had stayed in Melbourne was because that day was the first occasion the name of Winning Edge would be displayed on a race day in the Winners Room. Mr Ewart was obviously very pleased with having secured Winning Edge’s association with the Winners Room, as was apparent from the fact that he took his guests to show them the sign.

78         At the time Mr Brown approached him later in the day, the racing at Caulfield had finished and Mr Ewart was about to watch the Sydney race on the television screen with his guests. After the race, there would perhaps be only a short time for further socialising, not only because of his undertaking to Ms Patterson, but also, as appeared from the evidence of Mr Brown and Mr O’Brien, the socialising in the Committee Room concluded soon after the racing finished at the course.

79         Mr Ewart should have been in a satisfied state of mind, unless he was aware that he had overstepped the privileges afforded to himself and his guests. If his unticketed guests had remained in the annex area, and if the Sydney race was yet to be run when Mr Brown approached him, then he would have had a clear conscience. He had sought and obtained permission from Ms Patterson and had reaffirmed the position with his lunch table host, the committee member Mr O’Brien. If he had fetched drinks for his guests from the bar in the dining room it is unlikely that he (or others) would have regarded this as a serious indiscretion.

80

Winners Room as appropriate (whether because he held tickets, or Mr Fletcher had

invited him or because he believed it was his entitlement as a sponsor or he had only

intended to go to the door of the room until invited inside by the connections of the

winning horse). In any event, to use an expression from his Monday morning email,

he was always “transparent” in what he did. He and his guests had been allowed

entry to the mounting yards and Mr Brown had been present in the Winners Room

and could have approached him at the time if he were upset by the intrusion. Unless,

therefore, Mr Ewart was aware that he had directly abused the privileges offered to

him by taking his unticketed guests into the dining room, either to the bar or to sit at

Mr Ewart in his evidence regarded his earlier visits to the mounting yards and the Mr Ewart.

81         From Mr Brown’s perspective the conversation was the culmination of a number of examples of irritating behaviour by Mr Ewart that day:

a.

Mr Brown had found Winning Edge signage on the Winners Room door which he knew nothing about;

b.

the Club Chairman had questioned him about the signage and he had admitted he could offer no explanation but “would look into it”. Mr Brown knew that there were “protocols” in place which required name changes for rooms to be approved by the full committee of the Club;

c.

Mr Ewart had then entered the Winners Room with a number of guests and had said “This is where we bring the winners after the race”;

d.

the Chairman had immediately queried the entitlement of Mr Ewart and his party to be in the Winners Room and Mr Brown had regarded it as his responsibility to ask them to leave. The Chairman believed Mr Brown had approached them. Mr Brown said that a “look” was sufficient after which the intruders had “bolted”;

e.

a short time later in the committee dining room, Mr O’Brien approached him and relayed Mr Ewart’s request for permission to bring Promenade Room guests up to the Committee Room;

f.

Mr Brown, observing Ms Ewart-Kennedy carrying four champagne flutes to her lunch table, where he believed he also saw Mr Ewart and other persons, assumed that these other persons were Mr Ewart’s guests from the Promenade Room and that Mr Ewart had not bothered waiting for Mr O’Brien to relay his request to Mr Brown for permission;

g.

when he spoke to them in the reception area and they relayed their

observations. Mr Brown noted that Mrs Jongebloed was “upset”. Mr Brown

said that Ms Patterson had not told him on race day that she had told

this conclusion was confirmed almost immediately by Mr and Mrs Jongebloed they were there watching a race in Sydney of which Winning Edge was the sponsor;

no issue
from Mr Ewart “bringing unticketed guests” into the committee dining room.

h. Mr Brown had had to seek out Mr Ewart before he found him in the annex area.

82

was that he was “mystified”, that he was not “annoyed” but only “bemused” as he had

“far more important matters to deal with”. Mr Brown said that when he spoke to

Mr Brown said that his reaction to the Winning Edge signage in the Winners Room Room”. Mr Brown said that he was not agitated in the conversation with Mr Ewart although Mr Ewart “did get agitated”. Mr Brown said that the “biggest issue” for him was that Mr Ewart had brought “unticketed guests into the Committee Room” and that was something which “must have my or the Chairman’s approval”.

83 sponsorship to continue” and that he did not want “to get Winning Edge” out of its contract. Notwithstanding, in a very short conversation Mr Brown had accepted the termination of the supply and sponsorship contract. He said he did not need to think about the deal going off. Mr Brown said that the request had come from Mr Ewart to Mr Brown said that at the time of the conversation he had “wanted Winning Edge’s Mr Brown accepted the termination as he “was doing as requested by a sponsor”.

84         In relation to the broader issue of Mr Brown’s personal relationship with Mr Ewart and Ms Ewart-Kennedy and the performance by Winning Edge of its obligations under the supply contract, Mr Brown denied that any such factors were operating during his

conversation with Mr Ewart that day. Mr Brown said that there was “” apart Mr Brown “liked him” and “had no reason to dislike him” although “we had our moments”. There had been “some disagreements but all were resolved amicably and professionally”.

85         Mr Brown was taken to some earlier internal Club documents where concern had been expressed about Winning Edge’s performance of its obligations. Mr Brown said he had little recall of these matters. He said that no consideration had been given to terminating the Winning Edge contract; he could not remember any written complaint to Winning Edge, although these were matters normally left to the Club’s marketing department. Mr Brown had personally been involved in the May and November 2006 negotiations for the renewal of Winning Edge’s supply and sponsorship agreement.

86

the performance by Winning Edge of its obligations under its supply contract.

Justice Young said that these matters had been discussed “variously around the

Committee Room” and they related to “type, quality, size, value for money” of the

trophies supplied by Winning Edge. Justice Young said that the following Thursday

It is surprising therefore that Justice Young had a clear recollection of concerns about “pleased to get rid” of Winning Edge and that “the Club was better off without them”.

87         Mr Ewart said that he was “not aware of any negative issues” between Winning Edge and the Club and that he had a “great relationship with Mary Morton and Nicholas Fletcher”. His evidence was generally confirmed by Ms Ewart-Kennedy that there was a very good relationship with the club’s marketing staff and no complaints about pricing or quality of trophies supplied had been received by Winning Edge, at least since 2004.

Conversation between Brown and Ewart

88

conversation was given by them and by Mr Jongebloed. Mr Jongebloed heard a few

words before he moved away. Otherwise evidence was admitted (without objection)

of the discussions Mr Brown had immediately afterwards with Mr Ellery and

Mr Brown and Mr Ewart spoke with each other privately. The only evidence of the conversation between Mr Brown and Mr Ewart were also included in the correspondence between Mr Ewart and Mr Brown on the following Monday and Tuesday.

89         It is necessary to examine the detail of the conversation to determine the points of agreement and the points of difference. The conversation can be broken down as follows:

a.	Mr Brown drawing Mr Ewart aside to speak with him;
b.	discussion about the unticketed guests and the request that they leave;
c.	Mr Ewart’s previous conversation with Mr O’Brien;
d.	further request by Mr Brown that the guests leave;
e.	reference by Mr Ewart to wanting to watch the Sydney race;
f.	discussion about the Winners Room and taking it out of the sponsorship contract;
g.	Mr Ewart’s cancellation of the sponsorship contract; Mr Brown’s suggestion he think about it; Mr Brown’s acceptance of the cancellation of the contract;
h.	the handshake;
i.	Mr Ewart continuing to say things loudly.

90

agreed that the first part of the discussion concerned Mr Brown’s request that

Mr Ewart’s guests leave the Committee Room area. Mr Brown said that he told

Mr Ewart “that he had guests in the dining room that weren’t ticketed”.

Mr Jongebloed confirmed that “Mr Brown informed Mr Ewart that it was incorrect for

those people to be in there”. Mr Jongebloed went further and said that Mr Ewart

acknowledged “that he shouldn’t have brought the people in or they should have left

after they had finished”, although Mr Jongebloed could not “recall the exact words”.

Mr Ewart said that Mr Brown had told him to “get those guests out now” whereas

Mr Brown said he asked Mr Ewart “would he mind, when they’ve finished their drinks,

escorting them from the dining area”. Perhaps the disagreement between versions is

simply one of emphasis, phrasing and tone of voice. It is likely, however, that

It was agreed that Mr Brown drew Mr Ewart aside to speak with him privately. It was they did not have the necessary permission.

92 checked with Kevin O’Brien
his guests had not outstayed their welcome because they had not yet watched the
race. Mr Brown had, shortly before, been told by Mr O’Brien that he had not given
permission but would simply be passing on Mr Ewart’s request. Mr Brown was
apparently not aware, at that time, of the permission given by Ms Patterson for

91         The next stage of the conversations was the reference to Mr O’Brien which directly raised the question of the authority of Mr Ewart’s guests to be there. Mr Ewart said he received a peremptory demand to remove his guests, whilst Mr Brown said the request was made reasonably and politely. It would be surprising that the events would have escalated as quickly as they did, if the request were made in the terms stated by Mr Brown.

Mr Ewart referred to having “” and suggested that he and annex. It is not clear whether Mr Brown believed that Mr Ewart had abused the limited permission given by Ms Patterson by taking the guests into the dining room, although in his evidence of the conversation with Mr Ewart, Mr Brown appeared to correct himself and say that it was the “committee area”, rather than the dining room to which Mr Ewart’s guests had no permission.

93 Mr O’Brien was “not accurate” and repeated his request for Mr Ewart to have his

Mr Brown said he told Mr Ewart that what he had said about his conversation with room”. Again it is unlikely that a request in such moderate terms, which would have allowed Mr Ewart and his guests to watch the Sydney race on the television and then leave, would have provoked the response Mr Brown said it did.

94         Mr Ewart described Mr Brown as “very agitated” and insisting that he wanted “them out now”. Mr Ewart said that he told Mr Brown his guests were “industry people” and again referred to the limited purpose for which they were in the Committee Room, to watch the Winning Edge sponsored race in Sydney. These matters are not referred to in Mr Brown’s version of the conversation and this detail was not contained in the later correspondence except where Mr Ewart stated that, “when I attempted to discuss with you I was told just to ‘get them out’”.

95

Mr Brown which led on to the offer by Mr Ewart for the Winners Room sponsorship to

be taken “out of the contract”. This is the major discrepancy between the versions.

Mr Brown said in evidence that the Winners Room was not mentioned and that

Mr Ewart said that there was then a discussion about the Winners Room initiated by you can cancel my sponsorship. All deals are off”. Mr Brown asked him to “think about it” but said that Mr Ewart repeated that “all deals are off”, which Mr Brown said he immediately accepted on behalf of the Club and suggested they shake hands to acknowledge the agreement.

96 particularly the intrusion by Mr Ewart and his guests, or the further suggestion by

It would not have been surprising if the Winners Room had been mentioned, been earlier abuses of Club privileges. Mr Brown was ignorant of the negotiations concluded the previous week by Ms Morton with Winning Edge which (contrary to the Club protocols on naming rights) permitted Winning Edge to have naming rights as the sponsor of the Winners Room and to have signage erected. Mr Brown had thought Mr Ewart had made a comment to his guests in the Winners Room suggesting that the connections of winning horses were brought to the Winners Room directly by Winning Edge. Mr Ewart’s presence in the Winners Room with his guests had also attracted the attention of the Club Chairman.

97         It seems logical that the conversation between Mr Brown and Mr Ewart might have progressed from the right of access to the Committee Room area to previous abuses of privileges including the presence of Mr Ewart and his guests a short time earlier in the Winners Room, leading on to an offer by Mr Ewart to reverse the agreement put in place only a short time previously. On the other hand, it may be that, if Mr Ewart had been pushed to the degree where he was seriously offended by Mr Brown’s conduct, he may have sought to cancel the whole supply and sponsorship agreement. Although Mr Brown described the conversation on his part, in moderate and reasonable language, Mr Ewart’s email sent at 9.19am on the Monday morning discloses that Mr Ewart had been extremely upset by what had transpired. The issue of the Winners Room is central to the matter that I am required to determine as the preliminary question and I will return to it in due course.

98         Mr Ewart said that the conversation concluded with him telling Mr Brown, “Relax, I’m going to watch a race and take the clients back down the facility”, after which he and Mr Brown shook hands. On the other hand, Mr Brown said that, after he accepted

Mr Ewart’s termination of the agreement on behalf of the Club, he had suggested they shake hands (to acknowledge their deal). However, Mr Brown said that although the “business” of the conversation had concluded, Mr Ewart was “quite loudly” continuing to say “a few things that I didn’t hear”. Mr Brown said he walked away quickly to avoid a “stand up scene in the Committee Room”. In his second email on the following Monday, Mr Ewart wrote, “As you may recall, you kept walking away and I was attempting to explain the scenario to no avail”.

99         A hand shake appears, initially at least, more consistent with recognition that the parties’ contract was concluding. On Mr Ewart’s version, it was his statement to Mr Brown to “relax” and that he was going to take his guests away after they watched

the race that ended the conversation, and they shook hands simply to conclude the
exchange. In the circumstances, a hand shake might seem a surprising aftermath of
such an inconclusive resolution. On the other hand if, as Mr Brown suggested, he
and Mr Ewart had concluded their business by agreeing to the cancellation of their
long-standing contractual arrangement, why should Mr Ewart have continued a loud
discussion which Mr Brown claimed he did not hear?

Mr Brown’s conversation with Mr Ellery

100       After Mr Brown left Mr Ewart, he entered the dining room and met a committee member, Mr Greg Ellery. Mr Brown said that he was “a little bit upset” and Mr Ellery asked him what was wrong. Mr Brown said, “I explained that Alistair on behalf of

Winning Edge had cancelled his sponsorship and pulled all deals and I was going to report it to the Chairman and I needed to find the Chairman quickly to report what

had happenedbumped into
Committee Room, Mr Brown “looked very flustered and a little red in the face”.

”. Mr Ellery said that when he “” Mr Brown in the massive blue with Alistair and it’s over”. He said it was a “very brief contact and he could not recall anything further”.

101       Mr Brown then found the Chairman, Justice Young, near the dining room bar facility. Mr Brown said he told the Chairman, “I’ve just had to ask Alistair to take some guests

out that weren’t ticketed for this area and asked him to escort his guests from the room. He took offence to this, said to me, ‘If that’s the way I’m going to be treated you can cancel all my sponsorships, all deals are off’. I gave him the opportunity to

think about it, he was adamant that that’s what he wanted and we shook hands on

the deal”.

102       Justice Young said Mr Brown told him “words to the effect” that, “I’ve had a

discussion with Alistair and we’ve agreed or I think we’ve agreed to terminate the
agreement, meaning the sponsorship agreement and we’ve shook hands on it.
Certainly those words were – those last words ‘we’ve shook hands on it’ was very

clearly said by Warren to me”. Justice Young said that he told Mr Brown, “Fill me in

later or words to that effect as to the detail and, secondly, I acknowledged what he

said to me, that is, yes, you have terminated the agreement and he said yes”.

103       Mrs Ewart-Kennedy said that she saw Mr Brown and Justice Young at the bar in the dining room at the conclusion of the day and heard him say, “We’ll finish it this week”, and also heard him refer to “Winning Edge”. It is inappropriate, however, to draw any conclusions from this evidence as Mrs Ewart-Kennedy agreed that she “didn’t hear enough of what was said to understand the meaning of those words”.

104

escorted his guests back downstairs. Later that night he spoke with his wife and told

her that he “was disappointed with Warran’s reaction in the Committee Room and

Mr Ewart said that, after he had concluded his discussion with Mr Brown, his wife Ms Ewart-Kennedy gave evidence that (in the dining room) her husband had “come

up to me and asked me if I could escort the guests that weren’t ticketed correctly for
the Committee Room back to the Promenade Dining as … Mr Brown had asked them

to leave the Committee Room”. She said she asked her husband “something along
the lines of ‘Is he serious?’” Her husband replied, “Yes, he is, he said to get them out
now and I said OK and I did that”.

105       Ms Ewart-Kennedy said that over dinner that evening she spoke again with her husband. Her husband had told her that Mr Brown had “said to Alistair that he was

sick and tired of Alistair abusing the privileges of rooms like the Committee Room

and he shouldn’t have been in the Winners Room”. She said there was some other
discussion which she could not remember but said she could remember her husband
“saying that he thought that Warran was very surprised that Winning Edge was a …
presenting partner of the Winners Room and seemed to be concerned about that”.

Subsequent correspondence on the following Monday and Tuesday

106

In the email Mr Ewart sent Mr Brown at 9.19am on Monday morning, he stated that relation to the incident, including the conversation in the Committee Room, Mr Ewart said, “You attacked me – I was insulted and horrified that when I attempted to

discuss with you I was told just to ‘get them out’, they were understandably

embarrassed as was I”. Mr Ewart continued in the email, “As I elocuted to you, if you

are unhappy with the marketing initiatives undertaken then you will need to
recommend alterations to the parameters of the contract, both from a service delivery

perspective and sponsorship fee”. Earlier in the email, Mr Ewart had referred to “the naming of Sir Tom North/Winning Edge Winners Room” as an example of one of the “new marketing initiatives”.

107       The response from Mr Brown, later that day, expressed Mr Brown’s “very strong disappointment” at Mr Ewart’s behaviour and confirmed “my formal acceptance of

your decision to terminate the existing sponsorship and supply rights agreement
between Winning Edge Presentations (WEP) and the Club dated 21 November 2006

(the agreement) which you communicated verbally to me on 21 Saturday 2009”. In a
responding email at 5.41pm Mr Ewart said, “This is again incorrect – on Saturday I

referred to the termination of the new marketing initiatives of our sponsorships eg. the to explain the scenario to no avail … we do not accept your email as termination of our contract and we will honour and enforce the terms of our contract as we expect

MRC will do the same”.

108       In the letter sent the following day, Mr Ewart, after referring to his discussions with Julie Patterson and Kevin O’Brien said, “We did not hear anything further until you

approached myself and ordered our guests out of the Committee Room. I attempted The guests were then escorted out of the room by my wife, I asked to speak to you privately and you refused and replied that you were sick of us, that we had abused the Winners Room and had taken advantage of the Committee Room. At that time I stated that the Winners Room was a new marketing initiative previously untried and that if you didn’t like it he could withdraw that aspect of the sponsorship. At no time did I say that I regarded the contract as [at] an end or to suggest that I was
to discuss this with you and requested that we wait until the running of the Winning

withdrawing from the sponsorship agreement”.

109

The correspondence between the parties expressed diametrically opposed views and suggested that the aggressive tone adopted by Mr Ewart in is Monday morning email was an example of “attack as the best form of defence” and the reference to the naming of the Winners Room as an example of a “marketing initiative” was vague and disingenuous. This does suggest, however, a dishonest and Machiavellian approach by Mr Ewart and his wife, for which there is otherwise little support in the evidence. On the other hand, Mr Brown’s response might be explicable as having been the result of a misunderstanding rather than dishonesty or opportunism.

No intention to create legal relations

110       In his final address, plaintiff’s counsel, Mr Stirling, raised for the first time, the issue of whether the parties had demonstrated an intention to be bound by legal relations in the purported agreement to terminate the supply and sponsorship agreement. I required the plaintiff to raise the matter squarely in a properly particularised amended pleading. The plaintiff delivered a proposed further amended reply on 15 February 2010. The defendant did not oppose the amendment, which was formally allowed.

111       The amended pleading refers to circumstances, which it suggests, if considered objectively, would not permit the Court to be satisfied that “the parties, by their

conversation on 21 February 2009, intended to create binding legal relations and

mutually agree to terminate the existing contract, dated 21 November 2006”.

112       The relevant circumstances the pleading referred to included:

a.	the social setting of the race meeting;
b.	the fact that neither party had in contemplation the termination of the agreement, and the Club did not regard Winning Edge as having breached its obligations;
c.	the conversation arose from a dispute about a purported abuse of access privileges to specific areas of the racecourse;
d.	Mr Brown was not aware that permission had been granted to Mr Ewart’s guests to access the Committee Area or that naming rights had been given to Winning Edge in respect of the Winners Room;
e.	The conversation was very brief, the parties were talking at cross purposes and Mr Brown either did not listen, or did not hear, everything Mr Ewart was saying;
f.	The contract alleged to have been terminated had substantial accrued and potential rights and benefits.

115

between Mr Brown and Mr Ewart, they reached an agreement to terminate the supply

and sponsorship contract. The onus is upon the defendant to establish such an

agreement. If I were to accept the evidence of Mr Brown, the defendant would

successfully discharge the onus. By accepting Mr Brown’s evidence I would be

rejecting the version given by Mr Ewart. I would therefore have to reach a conclusion

113       In my view, this further plea takes the debate no further. Unless the defendant satisfies the Court that an unequivocal agreement was reached, substantially in the terms alleged by Mr Brown, the defendant cannot succeed. There is no question of the authority of the parties’ representatives to reach such an agreement, and the terms as stated by Mr Brown (particularly if it were accepted that no mention was made of the Winners Room in the conversation) were unambiguous. Although there were social aspects to the day’s events, Mr Ewart referred to his guests as his “clients” and noted their “industry” connections. He was at Caulfield that day because of the sponsorship arrangement reached shortly before in relation to the Winners Room. Otherwise, Mr Ewart and his wife would have been at Rosehill where the plaintiff was sponsoring a major race.

114       The subsequent correspondence from Mr Ewart did not raise the issue of any lack of intention to create legal relations and although Mr Brown said that he had expected a later retraction and apology from Mr Ewart, I consider it unlikely that Mr Brown really had that belief or that Mr Ewart would have considered that course.

Conclusions

The factual issue which needs to be determined is whether, in the conversation to the critical part of the conversation was more probable than the version given by Mr Ewart. I am, however, unable to reach that conclusion.

116       There are a number of alternative conclusions that might be reached in relation to the critical issue:

a.	that Mr Brown has accurately given evidence of the substance of the conversation in which the parties unequivocally agreed to terminate the whole of their contractual arrangements;
b.	that the conversation was substantially as Mr Ewart gave evidence, and that the only part of the contractual relations between the parties that was to be affected was the recent arrangement concerning naming rights for the Winners Room;
c.	whilst Mr Brown honestly believed that what was being discussed was the termination of all contractual relations, his ignorance of the recent arrangement reached between Winning Edge and the Club as to the naming rights of the Winners Room, meant that Mr Brown and Mr Ewart had been effectively discussing different matters and their minds did not meet;
d.	I am unable to be satisfied where the truth of the matter lies.

117       It is only if I were to be satisfied with the first alternative that the defendant would be successful. There are a number of aspects of Mr Ewart’s evidence which are either less than satisfactory or would appear to require further explanation. These matters include:

a.	the basis upon which Mr Ewart believed that he and his guests had access rights to the mounting yard and to the Winners Room;
b.	the reason Mr Ewart asked permission from Mr O’Brien and whether it involved an extension of the previous permission given by Ms Patterson;
c.	whether Mr Ewart had obtained drinks for his guests from the dinning room and brought them to the annex or whether those guests had been taken by Mr Ewart into the dining room;
d.	whether shaking hands with Mr Brown represented the reaching of an agreement or simply the finish of their discussion.

118       However, in relation to the evidence of Mr Brown, there are also a number of aspects which were also unsatisfactory or in respect of which I am not satisfied that Mr Brown was totally frank. These include:

a.	the likelihood that the presence of Mr Ewart and his guests in the Winners Room and the signage with Winner’s Edge name on it would have been the subject of discussion during the conversation.
b.	the likelihood that Mr Brown was on 21 February 2009 generally unhappy with the contract with Winning Edge, both as a sponsor and as a supplier, and his desire to bring the contract to an end either led to a misunderstanding of what he was being told by Mr Ewart or Mr Brown used the uncertainty to sever the Club’s ties with Winning Edge;
c.	the conversation with Mr Ewart was probably more appropriately described as a “massive blue”, rather than being conducted with the polite reasonableness, Mr Brown suggested characterised his behaviour.

119       On balance, I would be more inclined to accept the version given by Mr Ewart. I certainly do not regard it as “less probable” than the version given by Mr Brown. I am, however, reluctant to express a firm conclusion about this matter when there is no necessity to do so. The conduct of both Mr Ewart and Mr Brown on that day and in their later correspondence does not reflect particularly well on either of them. The cessation of a trading relationship of many years in an ill-tempered exchange in a public place was unfortunate and it is difficult to understand why the parties were not able to later resolve their differences.

120       The preliminary question will be answered, no, the agreement between the plaintiff and the defendant, dated 21 November 2006, was not terminated by mutual agreement of the parties on 21 February 2009.

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Certificate

I certify that these 45 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 26 February 2009.

Dated: 26 February 2009

Caroline Dawes

Associate to His Honour Judge Anderson