Court rules Racing NSW overstepped powers in ATC takeover attempt

Cover image courtesy of Australian Turf Club

The NSW Supreme Court has ruled that Racing NSW’s attempt to place the Australian Turf Club under administration was legally invalid, finding the regulator acted outside the scope of its statutory powers and based its decision in part on a material misreading of the club’s financial information.

In hearings held over February 19, 20, and 23, the case had been to consider whether the regulator was validly using their powers granted under the Thoroughbred Racing Act 1996 to install an administrator to run the club. Justice François Kunc’s judgement, delivered on Wednesday morning, declared the appointment of an administrator “invalid and of no effect” and ordered Racing NSW to pay the ATC’s costs.

The decision is one of the most significant legal tests of Racing NSW’s authority in decades, and arrives as the state government’s independent review of the Thoroughbred Racing Act 1996 examines whether the balance of power between regulator and race clubs needs reform.

An administrative law challenge

Referring to the case as “an administrative law challenge”, Justice Kunc relied on two main reasons for dismissing the appointment. As part of his reasoning, he ruled that section 11 of the Act, which rules that Racing NSW must “act in the public interest and in the interests of the horse racing industry as a whole in New South Wales”, is not separate or additional to the function set out in section 13(1).

Section 13(1) specifies that Racing NSW’s function is to “control, supervise and regulate in New South Wales the racing of galloping horses as referred to in the Australian Rules of Racing”. In reference to this, Justice Kunc found that Racing NSW’s concern over the club’s financial standing and corporate governance was separate to the regulator’s governance of racing.

Therefore, the Act would not validate or authorise any appointment of an administrator by Racing NSW, rendering the appointment invalid.

Second, the Court found that even if the Act had authorised the appointment, the decision would still have been invalid because it relied on a material misreading of accounting information provided by the ATC, amounting to a jurisdictional error.

Following the ruling, Racing NSW’s barrister Oliver Jones requested that the Court temporarily stay proceedings so his client could consider whether to appeal.

Justice Kunc responded: “What do I stay, Mr Jones?”

Jones argued a stay would ensure the ATC did not make “material changes to management” or enter into contracts outside the ordinary course of business while Racing NSW considered its position.

Scott Robertson, barrister for the ATC, opposed the request, saying it would be “misleading to the general public” if the declaration were stayed and noting he had been given no notice that the request would be made.

After a short hearing on Wednesday afternoon, the ATC agreed not to make any changes to management or contracts until 11am on Friday, March 13.

Both parties will return to court in two weeks to address whether Racing NSW has the power to demand information from the club about its hospitality revenue.

ATC’s position vindicated

In the early afternoon, ATC Chairman Tim Hale sent a statement to the club’s members about the ruling. Hale referred to the ruling as “vindication” of the ATC’s current position and its view on how the relationship between the club and Racing NSW should be conducted.

“The Australian Turf Club has always been committed to the highest standards of governance and the long-term health of the racing industry in New South Wales,” the statement read. “It is not in the interests of racing for Racing NSW and race clubs to be in conflict. We should be working together.”

The statement spoke of a hope for genuine engagement with Racing NSW going forward and called for a unification of the industry for the benefit of everyone involved.

“Today's outcome affirms that commitment and allows us to focus fully on what matters most - delivering outstanding racing and experiences for our Members, participants and the wider community,” the statement concluded.

Racing Reform Group welcome ruling

The Racing Reform Group released a statement on Wednesday afternoon, welcoming the judgement from Justice Kunc.

“It is a momentous moment for the club,” the statement read. “But as Justice Kunc states in his judgement, there are wider issues in horseracing that must be resolved.”

RRG urged the New South Wales government to recognise the pressing need for reform in the legislation governing racing in the state - an Act which is currently under independent review led by the Hon Brad Hazzard.

“(The review) must address the structural power imbalances between participants and the regulator,” RRG’s statement said. “This necessitates that Minister (David) Harris expands the terms of reference of Mr Hazzard’s review to include the funding model of racing and the relationship between Racing NSW and the state government.”

The statement served as a reminder that the litigation that has taken place over the past few months between the ATC and Racing NSW has been funded, for the latter, by revenue generated by the industry itself.

“If Racing NSW were an organisation that was genuinely accountable to the industry, it is doubtful this case would have gone this far,” it continued. “We hope today’s decision paves the way for the club to refocus on running horse racing.”

Not the end yet

Justice Kunc noted in conclusion, “the evidence suggests that this judgment will not end the disagreements between the ATC and Racing NSW.”

However, this case is a reminder of what is set out in the Act and how that governs Racing NSW’s actions, and how the actions of the state regulator have the capacity to affect thousands of people across the state.

Gallery: Racing NSW Board Members

“Horse racing is a very substantial part of the NSW economy,” said Justice Kunc. “It directly employs many people and indirectly supports the jobs of those who provide the numerous services on which the industry depends. For even more people in this state, horse racing is a source of much interest, pleasure and recreation.

“Horse racing is undertaken by the race clubs. They are important institutions in their local communities. However, horse racing must be independently regulated and developed as an industry of statewide significance. That regulation and development is the core business of Racing NSW.

“This case has highlighted that Racing NSW's power to appoint an administrator is a drastic one which can have a very real impact on hundreds, if not thousands, of people.”

Justice Kunc also noted that the case was a “decisive intrusion” into a club with a board that has mostly been democratically elected by the members of the club themselves and “otherwise operates in accordance with the well-developed body of law that applies to companies”.

Preparations for the autumn carnival have been continuously interrupted by this case, the result of which is no material change to the club’s governance since September. Three positions on the board remain empty.

Gallery: Australian Turf Club Board Members

Two independent director positions have made no progress since early February, when the Racing Minister told publications that he had written to Racing NSW’s chairperson and the ATC board members “seeking their nominations for people to constitute a selection panel to appoint independent directors”.

No announcement has been made on the member-appointed director.

Continuous litigation

This case is one of several significant legal disputes involving Racing NSW in recent years, including defamation proceedings brought by chief executive Peter V’landys against the Australian Broadcasting Corporation that were unsuccessful at first instance and on appeal. It also comes not long after last year’s parliamentary inquiry into the proposed sale of Rosehill Racecourse.

Following the inquiry and the members’ vote to not sell the iconic track, the Legislative Council’s Privileges Committee handed down a formal rebuke to Racing NSW in October for their conduct during the proposal period, expressing concern that Racing NSW’s behaviour had a “chilling effect” on potential witnesses during the inquiry.

As a consequence, an independent review of the Thoroughbred Racing Act of 1996 was ordered by the Racing Minister David Harris, with Hazzard installed to conduct it. The Act's bearing on the state PRA's governance structures and processes, transparency and accountability, and the viability of the industry all fall within its scope.

Justice Kunc said the case had exposed uncertainty in the Thoroughbred Racing Act that warrants careful attention and, if necessary, legislative amendment. NSW Shadow Minister for Racing Dave Layzell released a statement saying those observations reinforced the importance of the current Act review, while also highlighting the need for clear and consistent funding allocation across race clubs.

“Thoroughbred racing in New South Wales is an incredibly important industry that supports thousands of families and deserves secure funding arrangements,” he said.

“Regional and metropolitan race clubs have identified the need for the clear, consistent allocation of funding. A reliable stream of funds is required to allow our racing clubs to plan for the future, identify capital works upgrades, and ensure their long-term viability.”

The review is due to conclude during the second quarter of 2026, at which point Hazzard’s findings will be presented before Parliament. As a result of Wednesday's ruling, Layzell has called on the Racing Minister and the state government led by Chris Minns to commit to acting on the outcome of the review before the state election in 2027.

“The Minns Labor Government and Racing Minister David Harris must now prioritise additional support for the racing industry and commit to acting on Brad Hazzard’s Review of the NSW Thoroughbred Racing Act, before the 2027 state election,” Layzell said.

Justice Kunc’s remarks laid bare the uncertainty and blurred boundaries within the 30-year-old Act. In doing so, the ruling carries implications far beyond the ATC, giving every race club in New South Wales a clearer understanding of where Racing NSW’s powers end - and underscoring why the governance framework now under review warrants close scrutiny.

Those wider tensions are still playing out elsewhere. Separate defamation proceedings brought by Racing NSW chief executive Peter V’landys against The Thoroughbred Report, Vicky Leonard and Kit Gow remain on foot, with a directions hearing set for March 27.