Non-Raceday Inquiry – LK Cropp (Ruling) Page 2

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hearing_title: Non-Raceday Inquiry - LK Cropp (Ruling) Page 2

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Decision:

A further submission of counsel for the defendant on the submission of no case to answer is that the New Zealand Bill of Rights Act

73.      A further submission of counsel for the defendant on the submission of no case to answer is that the New Zealand Bill of Rights Act (NZBORA) applies to the present case, and in particular, the actions of the Racecourse Inspector, Mr B McKenzie.

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74.      Section 3 of the Bill of Rights Act provides:

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"This Bill of Rights applies only to acts done?

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(a) By the legislative, executive, or judicial branches of the government of New Zealand; or

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(b) By any person or body in the performance of any public function, power, or duty conferred or imposed on that person or body by or pursuant to law."

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75.      While a "generous interpretation" is to be given to s 3(b), there is still a requirement that the impugned conduct "fairly come within the description of s 3(b)": R v N [1999] 1 NZLR 713, 721 (CA).

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76.      The leading cases are Lawn v Waikato Bay of Plenty Law Society & Attorney-General (HC, Auckland CP 229/00, 30 March 2001, Master Gambrill) and Ransfield v Radio Network Limited [2005] 1 NZLR 233. In the former case the learned Master considered (at para 67) that the District Law Society in taking action against a member, by deleting his name from a list of approved legal aid practitioners, was not performing a public function in terms of s 3(b), but rather was regulating a private matter.

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77.      In Ransfield the plaintiff sought to assert the applicability of the Bill of Rights Act to private broadcasters operating under a statutory licensing regime.

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78.      Having considered the submissions and authorities, Randerson J summarised his views at para [69]:

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"a) The fact that the entity in question is performing a function which benefits the public is not determinative. If it were, anyone delivering goods or services to the public under licence or other authority conferred by law, would fall within the section. That could not have been intended.

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b) Whether the function, power, or duty is carried out in public is immaterial. A public function, power, or duty under s 3(b) may be performed in private.

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c) Whether the entity is amenable to judicial review is not necessarily decisive and some care needs to be taken in applying decisions from that context for the reasons I have set out.

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d) The primary focus of inquiry under s 3(b) is on the function, power, or duty rather than on the nature of the entity at issue. Nevertheless, the nature of the entity may be a relevant factor in determining whether the function, power, or duty being exercised is a public one for the purposes of s 3(b).

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e) A person or body may have a number of actions, powers, or duties, some of which may be public and some private. It is essential to focus on the particular action, power, or duty at issue.

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f) Given the many and varied mechanisms modem governments utilize to carry out their diverse actions, no single test of universal application can be adopted to determine what is a public function, duty, or power under s 3(b). In a broad sense, the issue is how closely the particular function, power, or duty is connected to or identified with the exercise of the powers and responsibilities of the State. Is it "governmental" in nature or is it essentially of a private character?

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g) Non-exclusive indicia may include:

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(i) Whether the entity concerned is publicly owned or is privately owned and exists for private profit;

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(ii) Whether the source of the function, power, or duty is statutory;

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(iii) The extent and nature of any governmental control of the entity (the consideration of which will ordinarily involve the careful examination of a statutory scheme);

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(iv) Whether and to what extent the entity is publicly funded in respect of the function in question;

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(v) Whether the entity is effectively standing in the shoes of the government in exercising the function, power, or duty;

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(vi) Whether the function, power, or duty is being exercised in the broader public interest as distinct from merely being of benefit to the public;

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(vii) Whether coercive powers analogous to those of the State are conferred;

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(viii) Whether the entity is exercising functions, powers, or duties which affect the rights, powers, privileges, immunities, duties, or liabilities of any person (drawing by analogy on part of the definition of statutory power under s 3 Judicature Amendment Act 1972);

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(ix) Whether the entity is exercising extensive or monopolistic powers;

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(x) Whether the entity is democratically accountable through the ballot box or in other ways.

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79.      After listing these factors, Randerson J emphasised that these were no more than a range of possible considerations, and that a decision in any particular case as to the applicability of the NZBORA would be fact dependent. While a flexible and generous approach was required, it had also to be recalled that a private organisation (whether or not it was providing services to the public) was entitled to manage its business as it sees fit. He added at para [70]: "Unless it is exercising public functions, powers, or duties conferred or imposed by or pursuant to law in terms of s 3(b), the only constraints upon its freedoms are those imposed by the general law."

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80.      We further helpfully note that the applicability of s 3(b) in the context of the Rules of Racing has previously been considered by a non-raceday Committee when considering a charge under R 89 in NZTR v Pascoe (Wellington, 18 March 1997). The decision of the Committee was delivered by the Chairman, Mr N Harris. He said:

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"It is clear from this that section 3(a) only applies to acts done directly by one of the three branches of Government. The New Zealand Racing Conference in its administration of the racing code does not in our view come within this section. Nor, as Goddard J. put it in McGuinn v Palmerston North Boys High School Board of Governors (HC, CP 36/95), could it be said to have "a sufficiently close and direct agency relationship with the Government" such as to bring it within the provision.

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On this issue, we have considered relevant Canadian jurisprudence in respect of the application of the Canadian Charter of Rights and Freedoms. One test that has been applied in Canada is that of "control" in the sense of, is the function in question subject to control from one of the branches of Government? In McKinney v University of Guelph (1990) 76 DLR 545 Wilson J (dissenting) discussed the concept of "control" and how one might test for it by reference to the degree and extent of influence the government exercises over a body in the areas of funding, decision making, governing structure and policy.

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The Racing Act 1971 establishes governance and funding framework for the administration of all forms of racing - principally through the Racing Industry Board - but the government exercises no input or control over the matters Wilson J referred to in respect of the Racing Conference and its administration of racing. The Conference manages its own affairs, appoints its own governing body and regulates the sport of racing uninhibited by government. We do not consider the Conference's actions in performance of this role can be subject to section 3(a) of the Bill of Rights Act.

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Turning to section 3(b) we agree with Mr Davenport's analysis that the Racing Conference's functions are akin to those of a domestic organisation and its Rules bind or affect only those who choose to bring themselves within them. They extend no further. Jockeys, trainers and others join the industry on terms and conditions set out in their licence to participate as it were. Those terms and conditions carry with them an obligation and responsibility on the licence holder to submit to and observe the Rules of Racing as set by the Conference from time to time. This regime and the relationship between the Conference and the industry is not unlike the occupational licensing regimes for a number of professions and callings such as lawyers, accountants, motor vehicle dealers and medical practitioners.

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The Racing Conference in the regulation and management of its affairs and those within its sphere of control does not exercise statutory powers or functions. Equally its functions are not "public functions" in the sense of State or governmental action."

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81.      While this decision is not binding on us, it being the decision of another non-raceday Committee, and noting the words of caution expressed in Lange v Atkinson [1997] 2 NZLR 22 and Ransfield (above) that it is inappropriate to use Canadian cases to read down the scope of s 3(b), the reasoning contained therein is adopted by this Committee. Although that reasoning relates to the Racing Act 1971, this is not a material distinction, in our view, as the present Rules are similarly derived, but, in this case, under the Racing Act 2003. Both Acts regulate the racing industry and the primary relationship to those affected by the Rules is one of licence. To use the words in Pascoe: Jockeys, trainers and others join the industry on terms and conditions set out in their licence to participate. The constitution of NZTR at cl 1(9) states that NZTR is the same body as that previously constituted as an unincorporated body under the name the "New Zealand Racing Conference". Section 29(1) of the Racing Act 2003 requires both NZTR and HRNZ to "make, and maintain in force, rules regulating the conduct of racing". Under subs (2) of that section these rules may provide for, inter alia:

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• the appointment, functions and duties of stipendiary stewards and race course inspectors (s 29(2)(a)). --
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• the licensing of trainers, jockeys, drivers and apprentices, and related matters (s 29(2)(b)). --
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• the conduct and control of race meetings, including safety requirements (s 29(2)(d)). --
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• Punishments for breaches of the rules (s 29(2)(f)). --
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• disqualifications and suspensions (s 29(2)(h)). --

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82.      Rule 102 of the Rules states that the Rules apply to and are binding upon:

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• all licensed and other persons working in or about any racing stable, or in connection with the management, care, control or superintendence of racehorses and their training and riding (R 102(1)(c)); --
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• Every person who so acts as to bring himself within the purview of these Rules (R 102(1)(h)). --

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83.      The primary focus of inquiry under s 3(b) is on the function, power, or duty rather than on the nature of the entity at issue. However, the nature of the entity is a relevant factor in determining whether the function, power, or duty being exercised is a public one for the purposes of s 3(b). It is necessary to look to the structure of NZTR. It is an incorporated society and is primarily responsible to its members (the racing clubs) as regulated by the provisions of the Incorporated Societies Act and, through the Racing Act, is also subject to the supervision of the NZ Racing Board. The NZ Racing Board is a body corporate with perpetual succession (Racing Act 2003, s 7(1)). Members are appointed by the Minister (s 11), however the Board is independent of government and its objects and functions (set out in ss 8 and 9, respectively) primarily relate to the promotion and regulation of racing. The only public aspect to the Board's role is the requirement that it exhibit a sense of social responsibility by having regard to the interests of the community in which it operates (s 9(2)(b)) and comply with the principles of natural justice (s 9(2)(a)). We agree with the informant's description of NZTR as being fundamentally a private body that reports not to the Crown or the government of the day, but to an independent body corporate which operates in the best interests of racing.

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84.      The defendant is a professional jockey. As such she is bound by the Rules of Racing. Those Rules are formulated by New Zealand Thoroughbred Racing Inc (NZTR), pursuant to s 29(1) and (2) of the Racing Act 2003, and in accordance with cl 11 of the constitution of NZTR. She holds a licence from the incorporated society to ride horses at race meetings. This function of granting a person a licence to ride, subject to conditions, is a private law function. While we accept NZTR may exercise some public functions, we do not believe that licensing is one of them.

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85.      Rule 307(4) provides that no jockey's licence is to be issued unless the Chief Executive receives written consent from a jockey to a sample of their urine being obtained from him or her if and whenever that person is required by a Racecourse Inspector to give a sample. Every jockey's licence has to contain a condition that the jockey must permit a urine sample to be taken, whenever required to do so by a Racecourse Inspector: R 310(2). Rule 310(3) provides that every person who applies for a jockey's licence is deemed to accept all the conditions imposed by or under the Rules. A jockey attending a racecourse to ride is deemed to have consented to a sample of urine being obtained from him or her if required by the Racecourse Inspector: R 528(3). In addition, a jockey is deemed to have full knowledge of the Rules and of his or her rights, duties, liabilities and obligations thereunder (cl 18(1)(b) of the Constitution). The purpose of these Rules is to ensure racing is conducted in a safe fashion. The Rules can therefore be seen to have been lawfully promulgated pursuant to s 29(2)(d) and more generally s 29(1) and 29(2)(i) of the Racing Act.

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86.      As noted, s 29(2)(d) requires NZTR to make rules as to the conduct and control of race meetings, including safety requirements. A Full Bench of the Employment Court in NZ Amalgamated Engineering Printing and Manufacturing Union Inc v Air New Zealand [2004] ERNZ 614 upheld a random drug testing policy imposed on Air NZ staff. Air NZ wanted to administer drug tests on its employees but neither collective nor individual contracts permitted or empowered these tests. The Court held that Air NZ was entitled to administer the policy with respect to those employees working in safety sensitive areas. The Court concluded that the NZBORA did not apply as the s 3 threshold was not crossed. After referring to provisions in the Civil Aviation Act with which Air NZ had to comply, the Full Court said (at para [207]): "However, we do not think that is enough to bring the first defendant's operations and activities within s 3 of the NZBORA. Many private commercial activities are conducted under statutory authority or licence but could not reasonably be described as discharging public functions. We therefore conclude that the first defendant is not subject to the NZBORA."

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87.      The Court noted, nonetheless, that the Bill of Rights was a valid consideration when the question for decision was whether an employer's action is reasonable when it cuts across fundamental rights recognised by the NZBORA. It added: "Although not determining that the policy is unlawful, the NZBORA informs our decision on whether it is reasonable." The Health and Safety in Employment Act 1992 was said in Air NZ to provide significant guidance on the lawfulness and reasonableness of the proposed testing regime. NZTR may be seen as having an obligation to implement a drug testing regime in order to comply with the Health and Safety in Employment Act (eg s 16). We have not had the benefit of detailed submissions directed to this issue.

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88.         A feature of the Air NZ case is that Air NZ had unilaterally imposed the drug testing regime (testing was not a condition of the employment contracts), yet the Court still found it to be lawful. A significant distinction between the cases is that unlike the situation in Air NZ where there was no agreement with employees as to testing, jockeys, including the defendant, have a choice, which is clearly brought to their attention when they apply for their licence to ride, and that is to either agree to abide by the rules and consent to the drug testing regime or not. If they choose not to, they will not ride. A licensed jockey is deemed to have consented to having a sample obtained on presenting himself or herself to ride. This element of choice was not present in the Air NZ case; the drug testing regime was imposed upon employees after the contractual arrangements were put in place.

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89.      We accept the submission of counsel for the informant that if any jockey, including Ms Cropp, does not wish to adhere to the Rules of Racing their remedy is to hand in their licence or not attend a racecourse for the purpose of riding. Any jockey who wishes to enjoy the benefits of a licensing relationship with NZTR is required to adhere to the Rules which relate to drug testing. In this sense the provision of a urine sample, or such other sample as is requested, is mandatory.

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90.      Of the indicia identified in Ransfield, one pointing to a public function is whether the Racecourse Inspector is exercising coercive powers analogous to those of the State. Another is whether the entity is exercising powers or duties which affect the rights or liabilities of any person. We are conscious of the severity of the maximum penalties that might be imposed on a jockey who is found to be in breach of R 528 and, as we have noted, that if a jockey wishes to hold or continue to hold a licence, he or she must agree to being tested (RR 307 and 310). A rider returning a positive test may be fined, and/or suspended or disqualified. The consequences upon a rider's ability to earn a living can obviously be severe. However, the consequences of a positive test in the Air NZ case may also have implications for a person's ability to continue to hold down a position with that company, or indeed within the airline industry as a whole. While NZTR is in receipt of money from the TAB, which is the body responsibility for the regulation of totalisator and equalisator licences, and the betting public have an interest in ensuring that racing is drug free, we do not believe this is sufficient to regard jockey drug testing as being the exercise of a public function.

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91.      A further consideration in Ransfield is how closely, in a broad sense, the particular function, power, or duty is connected to or identified with the exercise of the powers and responsibilities of the State. In answering the question in this case of whether the testing of riders for illegal or illicit drug use is "governmental" in nature or is essentially of a private character, we would answer that it is the latter.

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92.      The Rules to the extent that they empower the taking by a Racecourse Inspector of urine samples for the purposes of drug testing are not the exercise of state powers or any public function for the purpose of s 3(b), rather it is the outcome of a private relationship between parties and is analogous to a contractual or employment relationship. Ms Cropp's relationship with NZTR is founded in her licence to ride as a professional jockey, otherwise she need not submit herself to the Rules. NZTR is empowered under the Rules of Racing to require only those persons who are licensed as riders to submit a sample. It is a condition of a jockey holding a licence that is brought to the attention of riders by it being expressed highlighted on the jockey application form. As a consequence of holding a licence and a jockey presenting him or herself at a racecourse to ride on raceday, NZTR is thereby empowered to request that that jockey provide a urine sample, and a failure to consent to providing a sample may constitute a breach of the terms of his or her licence. However, a jockey cannot be forced to provide a sample. He or she can leave the room set aside for testing or indeed the racecourse, without any lawful restraint being placed upon them. To do so, however, may place them in breach of the Rules.

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93.      We do not need to apply s 31(1) of the Racing Act 2003 which provides that "any provision of any racing rules that is in conflict with any provision of this Act, any other Act, or the general law of New Zealand is invalid" as we have not identified any conflict between the relevant Rules and the NZBORA. We naturally give s 29 a Bill of Rights compliant construction (as necessitated by s 6 of the NZBORA) and also interpret the common law having regard to the NZBORA. But we see no ambiguity with the interpretation or application of either s 29 or s 31.

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94.      In R v Hansen (2005) 22 CRNZ 83 the Court of Appeal refused to read down a statute in a manner consistent with s 25(c) of the NZBORA (the presumption of innocence). The Court held that s 6 could not be relied upon to justify a change to the clear meaning of s 6(6) of the Misuse of Drugs Act 1975. Counsel for the defendant referred the Committee to Ghaidan v Godin-Mendoza [2004] UK HL 30 and urged the Committee to apply it. We prefer to follow Hansen where the NZ Court of Appeal said of the NZBORA and s 3 of the Human Rights Act 1998 (UK) (which requires, so far as it is possible to do, legislation to be read in a way that is compatible with European Convention rights), at para [39]:

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"The respective provisions require different judicial approaches. The New Zealand Bill of Rights Act permits the Courts to consider only meanings which "can", in the sense of "properly" or "reasonably" be applied to the provision in question. The UK statute requires the Courts to search for other "possible" meanings in order to give effect to a provision in a Convention-complaint way. The latter is much broader."

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95.      We do not believe there is a need to consider s 5 and whether there is a "justified limitation" of the NZBORA. But, had we to do so, the testing processes and related Rules, in our view, may properly be viewed as a justified limitation in terms of s 5 of NZBORA.

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96.      We note that in Kotzikas v HRNZ [2005] NZAR 268, a decision involving judicial review, the Court of Appeal, in the context of the public levy Rules, referred to HRNZ at para [107] and [108] as "not an obviously public body, such as a city council or a statutory corporation. But it is nevertheless a statutorily recognised body with exclusive control of harness racing and the power to impose rules affecting participants in that sport?. HRNZ is not purely a private, contractual body, which can make any such arrangements as may be agreed within that entity. It is discharging a public function. And the levy is on members of the public who elect to come within that statutory scheme." This description of HRNZ is to the effect that in the main ("not purely") it is a private, contractual body. In addition, it is the function that must be looked at, and at issue before us, are not public levies, but a licensing/drug testing regime.

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97.      Thus it is our conclusion that the application of the Rules of Racing do not trigger the NZBORA as there is no act done by the legislative, executive or judicial branches of government, nor is NZTR, in the particular circumstances of this case where an incorporated body is enforcing a condition of its licensing regime against a licensed jockey, Ms Cropp, performing a public function.

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8 Conclusion

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98.      We find that there is a case for the defendant to answer, in that there is before the Committee sufficient evidence on which a reasonable tribunal may find either of the charges (informations Nos. 62182 and 64994) to be proved. The hearing will recommence at Ellerslie Racecourse at 10 am Wednesday 21 February 2007.

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G G Hall, Chairman                                           P H Welch, Member 

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