Appeal – HRNZ v T Vince

hearingid: 05b996e6dbb1bf7a3e0a94651a29e01b

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hearing_racingtype: thoroughbred-racing

startdate: 01/01/2001

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decisiondate: no date provided

hearing_title: Appeal - HRNZ v T Vince

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This appeal raises, in acute form, responsibility for a series of mistakes and oversights involved in the nomination, paying up, acceptance and running of the Nevele R Caduceus Club Fillies Classic at the Auckland Trotting Club (ATC) meeting on 9 June 2006.

IN THE MATTER of the New Zealand Rules of Harness Racing

BETWEEN           HARNESS RACING NZ  -  Appellant

AND                     TIMOTHY ROBIN VINCE  -  Respondent

APPEAL HEARING

ALEXANDRA PARK 13 FEBRUARY 2007

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DECISION OF APPEAL TRIBUNAL

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1. Issues and Points on Appeal

1.1 This appeal raises, in acute form, responsibility for a series of mistakes and oversights involved in the nomination, paying up, acceptance and running of the Nevele R Caduceus Club Fillies Classic at the Auckland Trotting Club (ATC) meeting on 9 June 2006. As will later be explained in more detail, the evidence established that sustaining payments had not been made for the filly Top Tempo. She finished second in the race and earned stake money of $14,883.30. She also earned Black Type. The ATC agreed not to seek repayment of the stake.

1.2 Mr Vince was charged with breaches of Rules 821(1), 1002(1) and 1002(2) of the Rules of Harness Racing. It was contended for Harness Racing New Zealand (HRNZ) that Top Tempo was ineligible because of the failure to make two sustaining payments. HRNZ sought disqualification of Top Tempo from the race.

1.3 In a detailed decision dated 9 January this year the Judicial Committee declined to disqualify Top Tempo. HRNZ has appealed that decision. No conviction was sought against Mr Vince. The grounds of appeal are detailed and it is best that they be set out verbatim:

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1. The Tribunal was wrong in focusing on the errors of the Auckland Trotting Club which were in fact irrelevant to the issue of whether Top Tempo was eligible for the race or not.
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2. The Tribunal failed to give sufficient weight to the fact that the Respondent's failure to transfer the ownership of Top Tempo in the time stipulated by the Rules would have prevented the situation from ever arising.
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3. The Tribunal was wrong in determining that a sustaining payment is a payment due in terms of Rule 422(1).
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4. The Tribunal was wrong in that:
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1. The ineligibility of Top Tempo to start in the race was not a trivial error which could be remedied; and
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2. The outstanding payments of $168.75 were not trivial in the context of the race. The correct position was that the outstanding payment fee was $8,437.50 being the late entry fee as allowed under the conditions of the race. A late payment fee of that sum was in fact paid by one starter in the race, being Geld Bromac; and
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3. The subsequent tendering of the sustaining payments (after the information had been laid) did not remedy a trivial error.
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To assist in an understanding of the events they are set out in sequential order:

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9.10.03                                                                  Foaling of the filly Top Tempo

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She is nominated by her breeder, Mr Monty Baker for Caduceus Club Classic (Series 8) ? the Caduceus Series

May 04  -   Agreement between Caduceus Club and ATC. The Caduceus Club Series Trust Board to administer nominations and obtain sustaining payments for Series 8. The Trust was to provide ATC with a schedule of horses eligible for each race. ATC agreed to host the race. The ATC in fact assumed full responsibility for invoicing all payments and, in effect, took over complete administration of the series.

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21.2.05                                                                 Top Tempo sold to Mr Vince.

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29.4.05     Change of Ownership papers sent to Mr Vince.

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June 05 -  ATC posted invoices for Payment B due on 31.7.05. This to Mr Baker.

4.7.05 -  Notice of Change of Ownership to HRNZ recording owners as T Vince, G Rogerson and A McGregor

Jun/Jul 05 - Former owner M Baker returned invoice to ATC with advice that Top Tempo sold

(date uncertain) at February sales. ATC took no action.

Dec 05 - ATC posted invoices for Payment C due on 31.12.05. This notice not sent to connections of Top Tempo.

10.05.06- ATC faxed a list of all fillies for whom a formal nomination was held and who had made sustaining payments. At this time Top Tempo was trained by Mr Mark Purdon in Christchurch and was being looked after by his brother, Mr Barry Purdon. The list of fillies was sent only to trainers in the northern region. Top Tempo was not included. At that time Top Tempo in the care of Mr Barry Purdon.

5.6.06 -  At the request of Mr Mark Purdon, the trainer of Top Tempo, Mr Barry Purdon made a nomination for the Nevele R Caduceus Club Fillies Classic to be run on 9 June.

9.6.06 - Race run at Alexandra Park. Top Tempo finished second.

Post 9.6.06 - It was discovered that sustaining Payments B and C had not been made for Top Tempo.

11.8.06 - Mr Vince tendered the outstanding two sustaining payments to Mr K Crooke, a trustee of the Caduceus Club Trust.

3.1 Mr McIwraith, for Mr Vince sought to put information before the Tribunal in relation to advice received from Mr David Rankin concerning the horse Sweet Georgia which was nominated for the same race but did not in fact start. A late sustaining payment had been accepted for this filly. Mr Branch for HRNZ objected.

3.2 The Tribunal agreed to receive the material (a record of the telephone conversation) de bene esse (subject to the objection).

3.3 The Tribunal has determined that it will receive advice concerning Sweet Georgia. The present case, however, must be judged on its own unique facts and only limited assistance can be gained from an examination of the circumstances surrounding the horse Sweet Georgia.

4.1 The Tribunal was informed that this horse, which had run 5^th in the subject race, had never been nominated for the series and no payments whatever had been made on its behalf. The horse was disqualified and this was not contested by its connections.

4.2 See also reference which follows to the horse Geld Bromac.

5.1 The primary submission advanced by Mr Branch was that the requirement to make the sustaining payments was a necessary qualification to take part in the race.

This submission was developed in two parts.

First, Mr Branch emphasised the following considerations:

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1. That the conditions of the race were well known and were binding on all parties. These conditions were advertised at the yearling sales. The eligibility of the filly appears on the page in the catalogue where her details are set out.
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2. That the Caduceus series had been going for some years and that it had, as a matter of fact, been administered by the Auckland Trotting Club (ATC).
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3. That the terms and conditions of the race (including reference to the requirement to make sustaining payments) was published in the HRNZ calendar. A copy of the relevant entry was shown to the Tribunal. Moreover this entry in the calendar made clear that the payments were to be made to ATC.
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5.2 The Tribunal interpolates here to record that Mr Vince explained that he did not know of the need to make the sustaining payments. At another point in the proceeding Mr Vince had explained that he was a well known owner and that it ought to have been common knowledge to officials of the ATC that he owned Top Tempo. If this claimed common knowledge on the part of officials of the ATC is correct then it is difficult for the Tribunal to accept Mr Vince's assertion that he knew nothing of the need to make sustaining payments to qualify Top Tempo for the Caduceus series.

5.3 Secondly, it was contended that even if the conditions of the race relating to the making of sustaining payments had not been properly promulgated by the Caduceus Club there was an implied term that eligibility for the race was dependent upon all sustaining payments being made before the race was run. Mr Branch contended that it was necessary to invoke such an implied term in order to make the arrangements between the parties work. Sometimes, in the context of strictly commercial arrangements, such an implied term is said to be necessary to give business efficacy to the contract. Before such a term can be implied the decided legal authorities have established that two things must be shown to exist. First, the term must be necessary to make the arrangements or contract between the parties work. The term must be reasonable. Secondly, the term sought to be implied must be so obvious that it went without saying ? that being, in effect, why the parties had not said it. This obviousness requirement means that the implied term contended for must be capable of clear and obvious explanation. The leading contemporary authorities on implied terms, in chronological order are:

BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 16 ALR 363 (PC);

Devonport Borough Council v Robbins [1979] 1 NZLR 1 (CA);

Leisure Centre Ltd v Babytown Ltd [1984] 1 NZLR 318 (CA);

Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 (PC)

5.4 Here it was submitted that the Caduceus series was run on the footing that sustaining payments were required to be made; at the very least before the race was run. It went without saying, Mr Branch contended, that if not made then the necessary qualification for taking part in the race had not been met.

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5.5                     Further submissions for HRNZ were as follows:

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1. The surrounding circumstances are irrelevant; that is to say the circumstances surrounding the failure to make the sustaining payments. Once the breach was established it was not appropriate to enquire into the circumstances that may have led to that situation. If this proposition were adopted it would be what is sometimes known as a drop dead test and a party could not be excused compliance even if they were wholly blameless and the fault was entirely elsewhere.
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2. The making of sustaining payments always involved a matter of chance. Payments could be made in circumstances where it was anticipated the horse would start but some injury or mishap might prevent that. The sustaining payments are not refundable.
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3. The Judicial Committee said that the amount of the stake, when set against the amount of the sustaining payments not met, was a consideration. HRNZ did not accept that, the more so when the Tribunal was advised that there was provision for a late payment fee of $7,500 plus GST. The horse Geld Bromac made such a late payment, was permitted to take part in the race and was unplaced.
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4. Refer Rule 422(1). Sustaining payments do not fall within the definition.
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5. There was no positive obligation upon the ATC. The failings of the ATC did not prohibit HRNZ from pursuing a breach. The rules are cast in such a way that HRNZ must pursue the connections of the horse rather than the organization (ATC) which had assumed responsibility for running the series.
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6. Further on this, when the invoice was sent out for the second sustaining payment to Mr Baker and returned with the notation change of ownership there was no positive obligation upon ATC to seek out the new owners.
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7. With reference to the change of ownership, HRNZ contended that the Judicial Committee had not placed sufficient weight upon the failure to meet the ownership changeover timetable. HRNZ contended that had this timetable been met then the ATC would have known where to send the invoice for the second sustaining payment.
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8. As to the tendering of the payments after the race HRNZ made a distinction between payments that may have been tendered late but before the running of the race and those which are tendered after the race has been run. It is said that after conclusion of the race the Rules of Racing take over and there is no discretion with the promoters Caduceus Club or ATC to accept late payments nor is there authority for the Judicial Committee to hold that the tendering of the moneys amounted to a remedy of the breach.
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9. The payment(s) required were not tendered for 1 month after the race and were not in fact ever accepted by either the Caduceus Club or the ATC. When the money is not accepted the Judicial Committee could not find that there has been a remedying of the breach. Refer back to Rule 835 as to whether the club and/or the Judicial Committee can remedy a breach and whether the rule contemplates application to the club in the first instance and only thereafter application to the Judicial Committee. As to whether there had been a remedying of the breach HRNZ pointed to what it said was confused reasoning by the Judicial Committee. In as much as the Judicial Committee had found that there was no breach and then concluded that the breach had been remedied it was said these two propositions could not stand together.
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6.1 Mr McIlwraith prepared written submissions. At the forefront of these was a contention that the eligibility issue depended upon the age and sex of the horse. Conditions relating to sustaining payments peculiar to this race were said not to be central to eligibility.

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6.2                    Allied to the submission just quoted was a proposition that the conditions were, in any event, a nullity for the reasons set out in para 3 of Mr McIlwraith's submissions. It was said that the Caduceus Club Trust had never been properly set up, that there was no valid Trust Deed, no functioning Trust Board, no registered office and no secretary.

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6.3                   Further to the primary submissions it was said:

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1. That the Caduceus Club and/or the ATC could have amended the conditions so as to make clear exactly what was required by the connections of the horses that might be eligible and by advertising that. This obligation rested on ATC particularly because of these considerations:
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• It had taken over the obligation of receiving entries and determining eligibility;
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• Sustaining payments were requested by invoices sent out by the ATC and payment was made to that organization.
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• As to the transfer of ownership the failure here, said Mr McIlwraith, was with ATC in not following up the advice from the previous owner, Mr Baker.
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b.                          Reference was made to Rule 422(1). It was contended that upon the sale of a horse the obligation to make the sustaining payments remained with the seller of the horse. It was said that here there had been no transfer of the horse's engagements between the seller and the purchaser, much less any transfer being approved by the ATC. Thus, it was said there was no culpability on the part of Mr Vince and that it would, in the result, be wrong to disqualify the horse.

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6.4                       If there was a breach then the Judicial Committee was correct in characterizing that breach as a trivial error. Further, tendering of the money had remedied the breach and the reasoning of the Judicial Committee on that issue was correct. On this point:

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• The sum payable was small. The race was valuable. When the payment not made is set against the sum at stake, and the black type which the filly would obtain from being placed in a stakes race the consequences of disqualification were out of proportion to the omission.
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• The mistakes which had led to the non-payment of the sustaining payments were primarily with the ATC and that the connections of Top Tempo were blameless. While this submission does have real force it overlooked the fact that neither the owners nor Messrs Barry and Mark Purdon made any enquiry in May or early June 2006 to establish if sustaining payments for Top Tempo had been made. With reference to para 3.1 above it is not necessary to definitively determine whether Mr Vince knew of the need to make sustaining payments. Certainly Messrs Purdon, who are vastly experienced in harness racing, would have known that the Caduceus Series proceeded on the basis of sustaining payments made over time.
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7.1 Mr Branch contended that the submission in relation to the conditions for payment made for the Respondent was not open. It was claimed that if it had been intended to advance the submissions in relation to the conditions the Respondent ought to have filed a cross-appeal. The Tribunal indicated that it took the view that the significance of the conditions of the race and whether these were validly promulgated and binding was clearly raised by the decision of the Judicial Committee and that it was, therefore, open to the respondent to contend that the conditions were of no effect or were not binding. No cross-appeal was necessary.

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7.2                                Mr Branch emphasised that there were two steps in the eligibility process as follows:

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• First, as the Judicial Committee noted, the horse must be nominated and be of the right age and sex;
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• The connections of the horse must make the qualifying sustaining payments. It was not appropriate, said Mr Branch, to concentrate entirely on the first step and treat the second step as a process where non-compliance could be excused ? certainly not when non-compliance was extant at the time the race was run. There was a distinction to be made here, said Mr Branch, between a sustaining payment that may have been tendered a few days late and one which was never made at all and which led to the race being run without the payment having been made. By that time, he contended, it was plainly too late.
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7.3                           Non-payment of the sustaining payments at the time the race was run could not properly be characterized as a trivial error or violation under Rule 835.

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8.1 It can now been seen that when the race was run on 9 June 2006 a late sustaining payment had been accepted for the horse Sweet Georgia which did not in fact start. Rhythmic Rose had never been nominated and was disqualified. Geld Bromac had paid a late payment fee and was permitted to start. The horse was unplaced.

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8.2                                In respect of Top Tempo the second and third sustaining payments were unpaid at the time of the race. Nobody amongst the connections knew this. Neither the ATC nor the Caduceus Club checked. In respect of the former it seems incomprehensible that the horses entered were not checked. The material made available shows that neither the nominations (witness Rhythmic Rose) or the sustaining payments in the case of Top Tempo were investigated.

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8.3                                 All races must be run by certain rules or conditions. The rules of HRNZ have application across the whole harness code. However, some races have special rules or conditions. This was one such. The concept of sustaining payments for special races, generally confined to horses of one sex and of one age, are well established and widely known. The Caduceus Club series had been operating for some years. There had been significant publicity in sales and race publications.

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8.4                                For the respondent the primary submission is that no valid conditions had ever been adopted. There is a major difficulty if the conditions are held to be of no effect and not binding on any of the parties. In the first place they have been held binding on some of the parties as noted above; refer the late payment made and accepted. Secondly, if they are a nullity, or have no effect, then the race is run without reference to any rules and conditions about sustaining or qualifying payments and the logical conclusion from that state of affairs would be that no sustaining payment could be taken and all parties who took part in the race should get their money back. This would lead to an unacceptable absurdity.

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8.5                              The conditions of the race, including the need to make sustaining payments, if not expressly validated were nonetheless widely known and if not known were easily discoverable.

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8.6                                The Tribunal has concluded that even if the conditions were not validly adopted in their early life they were known to exist. Moreover, as earlier noted, it was widely known that the Caduceus Club series operated on the basis of making sustaining payments. The first such payment had in fact been made for Top Tempo. The question arises whether, in these circumstances, there should be an implied term held to exist that the making of the sustaining payments was a necessary condition for valid entry into the race. A degree of caution should be exercised when a quasi judicial tribunal is invited to find the existence of an implied term. It is necessary to conclude that both parties, had they turned their minds to the matter, would have come to the same view. The circumstances surrounding the failure to make the sustaining payments for Top Tempo came about because nobody turned their minds to the necessary conditions for the race. There were such conditions in place. If they had not been formally promulgated then they were not an express term. It is not considered necessary to determine whether the conditions of the race had been validly promulgated. It is sufficient to say that it is clear to the Tribunal that had the parties turned their minds to the matter ? and they clearly did not ? then there would have been an immediate realization that one of the conditions for qualification was that the sustaining payments be made before the race. By determining that there was an implied term that the conditions of the race relating to sustaining payments be met no additional burden was placed upon the connections. The implied term contended for does not contradict any other arrangements or conditions relating to the race. Further, the Tribunal is satisfied that had the position been made known both the ATC, who was administering the race, and the connections would have accepted that the condition requiring sustaining payments before the race had to be met.

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8.7                              By reference to the circumstances which have been explained, and the authorities set out in paragraph 5.3, the Tribunal, therefore, finds that in the arrangements for the conduct of the subject race there was an implied term that all sustaining payments must have been made before the running of the race. That was not done. It follows from what has been said that there has been a breach of Rule 821(1).

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9.1 For the reasons already explained the Tribunal is satisfied that the responsibility for compliance with Rule 821(1) is with the connections of the horse. There was not compliance with the implied term which has been held to exist. Nonetheless the Tribunal has very considerable sympathy with the connections of Top Tempo. The reasons are these:

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• The time taken to return the ownership papers was not unreasonable given that there were three persons taking up ownership of the filly.
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• When the invoice for the second sustaining payment was returned by Mr Baker the ATC did nothing. No great effort would have been required to establish that the horse had been transferred to Mr Vince.
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• When the list of nominations was sent out on 10 May 2006 nobody at ATC checked to establish if the sustaining payments were up to date.
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• When the nomination of Top Tempo was made on 5 June there was again a complete failure to check the position.
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hearing_type: Old Hearing

Rules: 422.1, 363.pc, 1.ca, 318.ca, 641.ca, 821.1

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