Appeal RIU v J Waddell – Decision of Appeals Tribunal dated 20 May 2016 – Chair, Prof G Hall

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decisiondate: 23/05/2016

hearing_title: Appeal RIU v J Waddell - Decision of Appeals Tribunal dated 20 May 2016 - Chair, Prof G Hall

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appealdecision: NO LINKED APPEAL DECISION

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Decision:

BEFORE AN APPEALS TRIBUNAL OF

THE JUDICIAL CONTROL AUTHORITY

UNDER THE RACING ACT 2003

AND IN THE MATTER of the New Zealand Rules of Thoroughbred Racing

BETWEEN MR JASON WADDELL Licensed Jockey

Appellant

AND RACING INTEGRITY UNIT (RIU)

Respondent

BETWEEN RACING INTEGRITY UNIT (RIU)

Appellant

AND MR JASON WADDELL Licensed Jockey

Respondent

Appeals Tribunal: Prof G Hall, Chairman - Mr R Seabrook, Member

Appearing: Mr M Curran, for Mr Waddell

Mr S Symon and Mr N Grimstone, for the RIU

DECISION OF APPEALS TRIBUNAL

[1] The RIU have appealed against the decision of the Judicial Committee not to award costs or witness expenses against Mr Waddell, and Mr Waddell has appealed both his conviction and sentence.

[2] The latest telephone conference with the parties was on 4 March last. Mr Waddell advised the Tribunal that Mr Curran was again acting for him and he confirmed that he was abandoning his appeal against both conviction and sentence, as previously indicated in Mr Curran’s written submission.

[3] In our Minute No. 2 of 30 March we granted leave to Mr Waddell to withdraw his appeal, pursuant to r 1006(1). The RIU do not seek payment of costs and expenses with respect to that matter and nor do we believe it is appropriate to award costs to the RIU or the JCA, despite there being a directions teleconference.

[4] The parties agreed that the RIU appeal against penalty, in effect the decision not to award costs, could be determined on the papers.

[5] Mr Symon filed written submissions on 21 December 2015 and supplemented these with further written submissions on 4 March 2016.

6] Mr Curran filed written submissions on 3 March. He was given the opportunity to file a response to the RIU’s submissions of 4 March but no further submissions were received.

[7] We will refer to the RIU as the appellant in this decision and Mr Waddell as the respondent.

The issue before us

[8] On 24 November 2015, the Judicial Committee found the following charges proven against the respondent:

(a) One charge of improper riding under r 638(1)(c).

(b) One charge of doing an act detrimental to the interests of racing, under r 801(1)(a).

[9] On 4 December 2015, the Committee disqualified the defendant for a period of 6 months on the first charge, and a period of 12 months on the second charge. The periods of disqualification were concurrent.

[10] The RIU sought:

(a) Costs of $10,000-$12,000 for itself;

(b) Witness expenses of $3,895.85, and

(c) Costs for the JCA.

[11] The Committee did not make any costs orders in favour of the RIU or the JCA, and did not order the respondent to pay any witness expenses.

[12] The Committee reasoned that as the respondent had been disqualified for a significant period of time, this would impact upon his ability to earn income. In these circumstances it would be inappropriate to impose a costs award or to require him to pay witness expenses, and rather, the RIU should bear the burden of the witness expenses.

[13] The Judicial Committee put it thus (at [9.4]):

Where, as here, the licensed jockey has been disqualified for a significant period of time with the obvious impact upon his income earning ability it would be neither realistic nor fair to impose a costs award and require the payment of witnesses expenses. As to the latter the Committee is of the view that the RIU should make a meaningful contribution to the lost income of the licenced jockeys summonsed to give evidence.

[14] Rule 920(3) provides:

The Judicial Committee may order that all or any of the costs and expenses of:

(a) any party to the hearing;

(b) any other person granted permission to be heard at the hearing by direction of the Judicial Committee;

(c) NZTR and/or any employee or officer thereof;

(d) the Judicial Control Authority and the Judicial Committee

be paid by such person or body as it thinks fit.

[15] The JCA has issued a Practice Note on Costs and Filing Fees. This is dated 3 September 2015 and outlines the general principles that are to be taken into account.

[16] This Practice Note emphasises that decisions whether to award costs, and in what amount, are discretionary but a good “rule of thumb” is an award of 60 per cent of the actual costs reasonably incurred by the party claiming costs and 100 per cent of JCA costs. The amount of any costs awarded must be reasonable in all the circumstances of the case and must not exceed the actual costs incurred by the party claiming costs and/or the Authority. The Practice Note states that there is a public interest in bringing charges in order to better promote and protect the interests of consumers and the integrity of the racing industry, and that it is desirable to recover costs incurred as a result of a respondent’s conduct from the respondent rather than passing those costs on to the racing industry as a whole.

Appellant’s case

[17] The appellant drew the Tribunal’s attention to the Practice Note and to NZTR v McAnulty (2011) where r 920(3) was considered. The Judicial Committee said at [5.2]:

The discretion to award costs under the Rule is on its face unqualified but obviously is required to be exercised on a principled basis. In New Zealand bodies such as NZTR and the Judicial Control Authority are funded by allocations from the New Zealand Racing Board, and in the case of NZTR, partly from fees and levies. Those funds are utilised to meet expenses incurred whenever it becomes necessary to take proceedings against those bound by the Rules who breach them. Unless adequate and effective steps are taken to recover those expenses, the utilisation of funds for disciplinary purposes is inevitably at the expense of the Judicial Control Authority's and NZTR's other activities in relation to the racing industry. On the face of it there seems no compelling reason in principle why those whose conduct has led to the institution of disciplinary procedures should not, within limits, bear the expense of those procedures if they are ultimately found to have breached the Rules as charged. Obviously given the nature and intended width of the discretion conferred by Rule 920(3) that factor will not necessarily be the only consideration to be brought to account in deciding to award costs and fixing the quantum in any case, but there seems no reason why that should not be the starting point for the exercise of the discretion in any given instance.

[18] The appellant submitted that these observations were apposite. In the present case the RIU was effectively being punished financially for bringing a successful prosecution against the respondent, particularly in circumstances where the respondent required 10 witnesses to give viva voce evidence, and where the JCA found the prosecution case overwhelming.

[19] The appellant submitted that the Practice Note had not been followed in that the only evidence of impecuniosity supplied by the respondent was through submissions of counsel to the effect that the respondent's only realistic way to earn income was through returning to racing, which he had been suspended from (though he was permitted to ride track work), and his net income amounted to "around $200 per week". The RIU submitted that this was not satisfactory evidence of impecuniosity — at the very least, the respondent should have sworn an affidavit to this effect.

[20] With respect to payment, the appellant submitted that even if the respondent was impecunious, arrangements could be made for him to pay the costs award in instalments overtime, or to defer the payment of the costs award until after the end of the disqualification period.

[21] The appellant contrasted the Judicial Committee’s decision with that in RIU v Walker, 25 September 2014 where it was said at [19]:

In the circumstances where a significant disqualification has been imposed ... we do not consider it appropriate to impose a fine in addition to the period of disqualification. However, Mr Walker has caused a good deal of expense to be incurred in investigating his conduct, and in conducting this hearing, he must therefore make a contribution towards the costs of the [RIU and JCA].

[22] The appellant said that Walker illustrated there is a difference between the sentence of disqualification, which is concerned with denouncing the conduct, and the costs award, which is concerned with holding the convicted respondent accountable for some of the costs of proving his guilt.

[23] The appellant then referred to the weight of the evidence and the merits of the positions taken by the parties. It observed that in RIU v Morton (2015) the Judicial Committee had stated that the quantum of costs should at least in part reflect the relative merits of the position taken by the parties. The Committee in that case observed that the sparseness of the case for the informant was a legitimate consideration in setting a costs figure higher than might otherwise have been the case. The RIU submitted that the converse was also true — where the prosecution case is strong, and where the respondent is on notice that the weight of the evidence is against him or her, yet chooses to proceed anyway by adopting a defence that has an unrealistic prospect of success, that should increase the obligation to meet a costs award.

[24] The appellant submitted that the respondent's defence was based on attacking the credibility of the RIU's witnesses, by alleging that they were untruthful, or had personal relationships, which motivated them to lie. The Committee did not accept this, found the RIU's witnesses were all credible, and preferred "by a significant margin" the evidence of the RIU witnesses. They found Mr Waddell’s explanation "wholly unconvincing” ([6.4]-[6.51).

[25] The RIU submitted the position taken by the respondent was meritless in light of the strong prosecution case. This lack of reasonableness should be a factor in favour of the award of costs and witness expenses.

[26] With reference to the number of witnesses and their foregoing income as a result of the hearing, the RIU submitted that many of the witnesses would have been involved in races had they not been required to attend the hearing. The respondent had notice that these expenses would be incurred if these witnesses were required to attend the hearing. Mr Symon submitted that it would be more appropriate for the respondent to bear the burden of the witness expenses, especially since the witnesses had to listen to the appellant attempt to impugn their credibility at the hearing — impugnations that were adamantly not accepted by the Committee.

[27] The RIU referred to cases where costs awards had been made. The highest award was in McAnulty where $12000 was awarded to NZTR and $5000 to the JCA. The penalty in that case was 11 months’ disqualification and a $6000 fine. He had elected not to contest the charges, despite legal defences being available, and had apologised to both complainants.

[28] Another case was Johnson (2015) where the Committee held McAnulty not to be applicable because the charge in that case was serious misconduct. In Johnson the Committee accepted his unsuccessful appeals were not frivolous or time wasting and awarded 60 per cent costs of $300 to the RIU and $350 to the JCA.

[29] The appellant concluded their submissions by stating that the Committee erred in not awarding costs in favour of the RIU and the JCA, and erred in not awarding witness expenses as requested by the RIU.

Respondent’s case

[30] The respondent submitted that the decision not to award costs against Mr Waddell was correct and reflected a principled approach.

[31] The respondent emphasised that considerable care had been taken to allocate a hearing date that did not clash with a race meeting. This was in part to ensure that no witnesses were inconvenienced in respect of their employment.

[32] The respondent alleged that, despite knowing the hearing date, the NZTR scheduled trials at Te Teko on this day. The JCA and counsel had made specific efforts to ensure this did not happen. In these circumstances, Mr Curran said, “the appellant should not be accountable for the decision of the NZTR to stage trials on the hearing date.”

[33] Mr Curran drew an analogy with ss 12 and 14 of the Sentencing Act stating that no financial penalty should be imposed if the offender did not have the means or ability to meet such a penalty. We note that this submission overlooks the fact that the Act enables a court in these circumstances to impose a penalty higher in the sentencing hierarchy.

[34] Mr Curran is on firmer ground when he submits the Sentencing Act requires a court when imposing sentence to consider its impact upon the offender and any dependents.

[35] Mr Curran also submitted that “in making the decision to decline costs and witnesses expenses the JCA properly took into account the circumstances of [Mr Waddell].” The respondent’s current circumstances were: his financial position remained poor; he had secured relatively consistent part-time work and earned between $300 to $400 a week depending on the availability of work; he supported a wife and infant; and he had no surplus funds.

[36] The respondent’s submissions concluded with the statement that he had no desire or plan to ever return to race riding.

Response

[37] Mr Symon for the RIU responded the fact that the NZTR had set down races for the hearing date (and therefore, that witnesses would be forfeiting earnings if they were required to attend the hearing) was raised at a teleconference on 19 November 2015. Mr Waddell maintained at this teleconference that he still required all the witnesses to be present to give viva voce evidence. Therefore, he had pursued a defended hearing in full knowledge that the witnesses would be forfeiting their earnings by missing out on the races to attend the hearing.

[38] The appellant submitted that as the respondent had been put on notice about his prospects of success, and what the witness expenses would be, it was appropriate for him to bear the witness expenses.

[39] With reference to Mr Waddell’s impecuniosity, the appellant emphasised the costs award sought was only 60 per cent of full costs, which reflected the principle of not making a respondent bear the full legal costs of a prosecution. This discounted amount, he submitted, effectively took Mr Waddell’s financial means into account. Furthermore, should we consider it appropriate, the costs award could be deferred until the end of Mr Waddell’s disqualification period, to minimise any burden on him.

[40] The appellant concluded their response by stating the Tribunal should also bear in mind the deterrent effect of a costs award in other proceedings. It would prevent respondents from taking unreasonable positions and pursuing untenable defences in future proceedings, and therefore encourage the resolution of proceedings in a timely manner, which was in the best interests of the racing community.

Further evidence and submissions

[41] The decision of the Judicial Committee is based on the stated impecuniosity of the respondent in this matter. The RIU are correct when they state that little evidence of this was before the Committee. The only evidence appears to be through submissions of counsel to the effect that the respondent's only realistic way to earn income is through returning to racing, from which he had been suspended. There was no signed statement, by way of affidavit for example, as to Mr Waddell’s means.

[42] It is our view that the Committee was in error to proceed on a basis that lacked an evidential foundation and accordingly we believe it is appropriate for us to reconsider the issue of whether an award should be made.

[43] Despite our receiving written submissions from counsel, we found we did not have sufficient evidence before us to determine the appeal.

[44] The Tribunal by order of 30 March required the RIU to prepare a full breakdown of the costs of the RIU and to detail witness expenses, in particular to identify the amounts that related to travel expenses and to loss of earnings, respectively.

[45] We also required that both parties address the issue of the appropriateness of this Tribunal ordering witness expenses to cover loss of earnings.

[46] Finally, with respect to Mr Waddell’s means we required that he put before us a statement of means, preferably by way of a sworn affidavit, that included information on the sources and amount of his income, assets, liabilities and outgoings.

Developments post appeal

[47] We have now received further submissions from the appellant, and the respondent has sworn an affidavit stating his means. Mr Curran confirmed by email of 9 May that Mr Waddell did not intend to respond to the appellant’s further submissions of 6 April.

[48] Mr Symon’s further submission acknowledged that witness expenses for loss of earnings was “unusual” but he submitted it was appropriate because the respondent was aware since 19 November that the witnesses would be unable to ride at the Te Teko trials due to their being required to give evidence but had continued to maintain a stance that required them to be present.

[49] Mr Symon also reiterated his earlier submission that the strength of the prosecution case was made clear to Mr Waddell from the outset, and that his decision to defend the charges, as he did, was “highly unreasonable”. This was reinforced, he said, by the Committee’s finding at (p11) that Mr Waddell’s evidence was not credible, and that his defence (ascribing improper motives to the prosecution witnesses) had no credible foundation.

[50] In this regard reference was made to s 4(1) of the Costs in Criminal Cases Act 1967, where the court may order an unsuccessful defendant to pay a sum towards the costs of the prosecution that it considers “just and reasonable”. One of the factors relevant to this discretionary assessment, he observed, was whether the defendant had acted reasonably in the proceedings.

[51] In addition, Mr Symon referred to r 14.6 of the High Court Rules where the Court has the power to award increased or indemnity costs against a party, including in cases where a party has “unduly prolonged a case by groundless contentions – essentially, the ‘hopeless case’ situation.” The RIU submitted that that rationale applied in this case. The award of loss of earnings would be akin to an award of increased or indemnity costs in other jurisdictions.

[52] This aspect of the RIU’s submission concluded by stating:

At the very least, the defendant should pay some amount to compensate the witnesses for their foregone earnings in having to attend a matter which should not have needed to proceed to a hearing. The Tribunal may wish to apply the rule of thumb of 60 per cent specified in the Practice Note.

[53] Mr Symon also provided a breakdown of witness expenses: the amount attributable to loss of earnings was $3,575; the amount attributable to travel expenses was $417.60.

[54] The RIU maintained its original submission that costs of $6,658.20 were appropriate, this being 60% of actual RIU costs, which were $11,097.

[55] Mr Waddell’s affidavit states that his “income is now paid through ACC” as he has unfortunately broken his tibia and fibula as a result of a sporting accident. He has been hospitalised and has had an operation to insert rods/screws. He would not be able to return to work for some six months. His partner is employed but there is increased expenditure with respect to the care of his infant daughter as he is unable to care for her whilst he is on crutches. There is a possibility that further assistance might be obtained through the Working for Families scheme.

[56] We do not intend to describe Mr Waddell’s current financial position but we are satisfied that it is such that any payment of costs will create a considerable burden for him.

Decision

[57] Rule 1007(2)(d) empowers an Appeals Tribunal in the case of an appeal against penalty to exercise any power that the tribunal whose decision is appealed against might have exercised.

[58] The decision to award costs is discretionary. This is emphasised in the Practice Note and in the relevant caselaw. Where a respondent is unsuccessful in defending a charge it is usual that a contribution be made to the costs of the informant and the tribunal, in this case the JCA.

[59] We agree with the Judicial Committee that the respondent’s limited financial resources are a relevant consideration. Indeed, we view this as a significant mitigating factor in this case, and, as a consequence, we do not believe it is necessary or appropriate in this decision to traverse the principles that guide the exercise of the discretion. This is also a reason for our not accepting the appellant’s submission that the award in this case should be one that acts as a general deterrent, although we accept the general merits of that proposition.

[60] We are of the view that the decision as to costs will be fact dependent and that the 60 per cent guideline in the JCA Practice Note is an appropriate starting point with respect to costs of the opposing party.

[61] But we emphasise it is just a guideline. We are aware, for example, there are cases where the figure has been set at 50 per cent or at a level between that percentage and 60 per cent: see eg Cropp (2011) and O’Sullivan & Scott (2016).

[62] The fact the charge against Mr Waddell was the subject of a full hearing and was proved by the informant is relevant to the exercise of our discretion, as is the fact that the Committee formed an unfavourable view of the respondent’s evidence and did not accept his version of events. Significantly, in this regard, in concluding the charge under r 801(1)(s)(i) was proved, the Committee stated at [6.5]:

The Committee does not believe that any of the witnesses called for the RIU had any motive to give evidence that was not truthful and accurate. All were credible witnesses. Mr Waddell’s evidence about what happened at Avondale was contradicted by all those who saw the events and by the film coverage. As to what happened at Cambridge on or about 3 October following the trials at Avondale the Committee accepts the evidence of Ms Johnson who we consider to be an honest and reliable witness. Mr Harvey was straightforward. He acknowledged that Mr Waddell had talent and that he had, at times, done good work. Where the evidence of Mr Waddell and Mr Harvey was at odds we prefer, by a significant margin, what was said by Mr Harvey.

[63] When the Te Teko trials were scheduled is not clear. It is clear, however, that the parties did not know the trials date at the time the fixture date was set. We are of the view that it would be highly unlikely for the date to be fixed deliberately in the knowledge that it conflicted with the Waddell hearing and that many persons who would be required to give evidence would be riding on that day, as is alleged by the respondent. Mr Symon has emphasised the trials date was known at the time of the teleconference of 19 November, when the issue was raised. We have viewed the directions minutes issued by the Committee, which do not advance this matter.

[64] We have not received full submissions as to whether it is appropriate for a payment to be made to witnesses on an hourly, daily or some other basis, such as number of rides lost. Mr Symon states it would be “unusual” and Mr Curran does not address this matter. Having regard to this fact and in the particular circumstance of this case (the fixing of the trials date after the hearing date was set and the respondent’s financial circumstances) we do not believe it is appropriate that the riding fees forfeited by those persons who were required to give evidence before the Committee be addressed in the costs order.

[65] When regard is had to the outcome of the hearing at first instance and the prospects of success of the respondent’s defence, we see no reason to depart from the imposition of costs against the respondent at the level of 60 per cent. That leaves the issue of the respondent’s means.

[66] We believe that an award of 60 per cent of the RIU costs would be appropriate were it not for the respondent’s limited financial circumstances. However, we differ from the Judicial Committee in that despite Mr Waddell’s straightened financial position, we believe a contribution from him is appropriate. We would fix this at 40 per cent but having regard to the fact that his financial circumstances have taken a further hit as a consequence of his serious and debilitating sporting injury, we reduce this to 25 per cent purely as a compassionate response.

[67] RIU costs are $11,097. An award at the level of 25 per cent is $2774.25.

[68] We believe it is appropriate that the respondent pay the witnesses’ travel expenses in full. This amounts to $417.60. We thus order costs and witness expenses to the RIU in the sum of $3191.85.

[69] The costs of the JCA at first instance in this matter were a tad under $8,000. When regard is had to the respondent’s circumstances we again believe an award at the level of 25 per cent is appropriate.

[70] We award costs to the JCA in the sum of $1950.

[71] Rule 1007(3) requires that a sum ordered to be paid by way of costs be paid within 14 days of the decision of the Appeals Tribunal. That sub-rule also provides that if a costs order remains unpaid after this time the person can be placed on the Unpaid Forfeit List. However, we understand that NZTR will permit payment by instalment and this would seem appropriate in this case.

[72] We make no award of costs with respect to the hearing of this appeal.

Dated at Dunedin this 20th day of May 2016.

Geoff Hall, Chairman

Signed pursuant to r 1007(5).

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