Racing NSW to appeal Supreme Court decision

Cover image courtesy of The Image Is Everything

Racing New South Wales have announced their intention to appeal the Supreme Court judgement handed down by Justice Francois Kunc on Wednesday that ruled the regulator’s attempt to place the Australian Turf Club under administration was invalid on all accounts.

Concerns of impacting funding

After three days of hearings in late February, Justice Kunc reserved judgement on the case and delivered his final decision on the morning of Wednesday, March 11. Justice Kunc was of the opinion that Racing NSW had misinterpreted financial documents from the ATC in order to come to the decision to put the club into administration, and that the regulator’s powers as set out in the Thoroughbred Racing Act of 1996 did not find cause for the regulator to do so.

The judgement also awarded costs to the ATC.

Racing NSW barrister Oliver Jones had asked for a stay of proceedings so that the PRA could consider an appeal, which was granted to 11am on Friday, March 13.

In a Chairman's Report released by the principal racing authority on Friday morning, Racing NSW announced that it would be appealing the decision, stating that it was “due to the precarious position it places Racing NSW in funding race clubs across the State and supporting the 50,000 participants who rely on the NSW Thoroughbred Racing Industry for their livelihoods”.

“During the hearing and in the judgment, the Court made findings about whether Racing NSW’s powers extend beyond matters solely related to the ‘racing of galloping horses’,” the statement said.

“If that narrow interpretation were to stand, it could significantly restrict Racing NSW’s ability to fund important club activities such as infrastructure, facilities and operational support that underpin racing across NSW.

“Without certainty on this issue, Racing NSW’s ability to continue supporting the State’s 120 race clubs and the communities they serve could be put at risk.”

Yet the statement also made the claim that New South Wales racing clubs, aside from the ATC, are “in the best financial position that they have ever been” and referenced the "record returns to participants" last season amounting $110 million than the nearest rival jurisdiction.

It also stated that Justice Kunc’s ruling confirmed the regulator’s powers to place a club under administration, only that it was denied in this case.

“The case was about how the legislation was interpreted, not the merits of Racing NSW’s decision,” the statement read.

It continued, “Racing NSW Board members have a responsibility to act in the interests of the industry as a whole, not those sectional interests with the loudest voice.

“This appeal is necessary to provide certainty and clarity about Racing NSW’s ability to fund and support race clubs across the State and to protect the long-term stability and viability of the industry.”

Racing Reform Group hits back at regulator

The Racing Reform Group released a statement in response to the bulletin on Friday afternoon, which noted that the appeal will draw more money from the regulator’s coffers as well as causing distraction as the autumn carnival gets underway.

“Racing NSW's justification - that the Court's decision could impact their ability to fund operations, infrastructure and facilities at race clubs across the state - does not stand up to reasoning,” said the RRG’s statement.

“Brad Hazzard is in the final stages of delivering his review of the Thoroughbred Racing Act, the very legislation at the centre of the Supreme Court decision. If there are legitimate concerns about the impact of this week's ruling, they should be addressed in Mr Hazzard's review and the Act can be amended on his recommendation.”

The RRG have been on the forefront of rallying the industry around Hazzard’s independent review, and have repeatedly highlighted the need for the review to carefully consider how the Thoroughbred Racing Act of 1996 dictates governance in the state. In his final judgements, Justice Kunc contributed his own support to the review, commenting that the wording of the Act left too much room for doubt by either party.

“These issues are not necessarily straightforward,” he said. “I respectfully suggest that they merit careful attention on the part of all those involved in this important industry and including, if thought necessary, amendment of the Act.”

In their statement, RRG reaffirmed their support of the review, and called on Racing NSW to demonstrate greater transparency with regards to income and expenditure.

“This review, far more than costly and adversarial litigation, is the appropriate mechanism for resetting the relationship between the regulator and race clubs,” RRG’s statement said. “Racing NSW's claims that provincial and country clubs are in a strong financial position does not align with the feedback we have received time and again from clubs across the state.

“For participants to understand the industry's finances, we call on Racing NSW to follow other principal racing authorities and publish a full breakdown of their income from wagering and other sources.

“The regulator should also provide transparent information on their financial transactions with clubs, including the transfer of assets and provision of grants. Only by doing this can we assess how Racing NSW are spending the industry's money.”

The RRG statement closed by reaffirming that the Hazzard review is a crucial piece of work that needs to be upheld and implemented by Racing Minister David Harris and the state government.

“To ensure racing remains sustainable for generations, it needs to recommend that Racing NSW becomes accountable to the industry and government, and set clear limits on its powers,” it said.