Non Raceday Inquiry RIU v D J Scott – Decision dated 26 April 2016 – Chair, Mr M McKechnie

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decisiondate: 27/04/2016

hearing_title: Non Raceday Inquiry RIU v D J Scott - Decision dated 26 April 2016 - Chair, Mr M McKechnie

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BEFORE NON-RACEDAY JUDICIAL

COMMITTEE OF THE JUDICIAL

CONTROL AUTHORITY UNDER

THE NEW ZEALAND RACING ACT 2003

IN THE MATTER of Greyhound Racing New Zealand

RACING INTEGRITY UNIT (RIU)

INFORMANT

DAVID JOHN SCOTT

DEFENDANT

Non-Raceday Judicial Committee: Mr Murray McKechnie, Chairman & Mr Tangi Utikere

Present: Mr Steve Symon, counsel for the RIU

Mr Neil Grimstone, Manager Racing Integrity Assurance of the RIU

Mr Paul Paino and Ms Shanna Bolland, counsel for Mr Scott

Mr David Scott

Mr Simon Irving, Registrar

PENALTY DECISION OF NON-RACEDAY JUDICIAL COMMITTEE

HEARING WELLINGTON 18TH DAY OF APRIL 2016

WRITTEN DECISION DATED THIS 26TH DAY OF APRIL 2016

INTRODUCTION

At the conclusion of a hearing before the Committee on the 18th day of April 2016 a decision was delivered and this is now set out in writing.

1. PRELIMINARY MATTER

1.1 The Committee is required to rule on an issue which arose during the course of the hearing this morning. As the substantive decision on penalty will explain Mr Scott has pleaded guilty to two (2) charges laid under the Rules of Greyhound Racing New Zealand. An agreed summary was handed forward to the Committee and a copy of that summary will be attached to the penalty decision.

1.2 In the course of submissions made by Mr Symon, counsel for the RIU, the Committee asked a question of him in relation to betting by Mr Scott on Greyhound Racing. Mr Symon sought advice from Mr Grimstone who is the manager of the Racing Integrity Unit and following that discussion between Messrs Symon and Grimstone the Committee was advised of a figure which it was said was being bet by Mr Scott on a periodical basis. Mr Paino, counsel for Mr Scott, took objection to that figure being entered into the public record. That objection was based upon the fact that no reference is made to that in the agreed summary of facts. Secondly that such a figure might be prejudicial to the perception of his client and thirdly, as the Committee understood it, there is or was no suggestion that there were irregular betting circumstances around the dogs with which Mr Scott was associated.

1.3 The Committee has heard submissions on this issue from both counsel. The view we take is that given that there is no reference to any betting figures in the summary of facts, nor is there any allegation of irregular betting, it would in those circumstances be inappropriate for a figure to be nominated or to enter the public record as the figure said or alleged to be bet by Mr Scott on a periodical basis. Accordingly the figure that was mentioned in the exchange between counsel and the Committee earlier today will not be published and the media are asked to ensure that this ruling is complied with.

2. THE CHARGES BROUGHT AGAINST MR SCOTT

2.1 We turn now to the substantive matter. This proceeding involves the prosecution by the Racing Integrity Unit of Mr David John Scott. Mr Scott was at the time of the events with which we are concerned a Board Member of New Zealand Greyhound Racing. He faces three (3) charges under the Greyhound Rules of Racing. The first information is under Rule 87.1(o) and alleges that he did an act or thing or omitted to do an act or thing which was negligent, dishonest, corrupt, fraudulent or improper or which constituted misconduct. The action complained of is that on 12 November last being a Board Member of Greyhound Racing New Zealand he sent a text message to his licenced trainer a Mr Nathan Udy during the course of a Greyhound Board Meeting with the Racing Integrity Unit. That message conveyed confidential information to Mr Udy about a prohibited substance testing regime and the capability or otherwise of that to detect prohibited substances and that this was done dishonestly to obtain a monetary or personal gain from the racing of greyhounds which had been administered that performance enhancing prohibited substance.

2.2 The second information is laid under Rule 87.1(q). That alleges that Mr Scott did an act or engaged in conduct which was detrimental or prejudicial to the interests, welfare, image, control or promotion of greyhound racing. It is said that the action that he took was to supply a permanently banned prohibited substance; (Gonadotrophin), to a licenced trainer Mr Udy with instructions to administer this substance to Mr Scott’s dogs in breach of the rules.

2.3 The third information is laid under Rule 87.1(q) which alleges that there was conduct which was detrimental or prejudicial to the interests, welfare, image, control or promotion of greyhound racing in that it is alleged that Mr Scott being a Board Member threatened to kill a licenced trainer Mr Udy should his, Mr Scott’s corrupt or improper actions, be brought to the attention of the authorities.

2.4 Mr Scott, through his counsel Mr Paino, initially entered pleas of not guilty in respect of all three (3) informations. A two (2) day defended hearing was scheduled to take place today and tomorrow. A significant number of witnesses were to be called and there had been exchanges of briefs of evidence and disclosure of information held by the RIU.

2.5 Late last week the Committee was advised that following discussions between counsel agreement had been reached that Mr Scott would plead guilty to the first two (2) informations outlined above and that the RIU would seek to have the third information withdrawn. Some difficulty then arose as to the form of the summary of facts which would be put before the Committee. After discussion between counsel and a further telephone conference that matter was resolved and an agreed summary which was spoken of above and which is attached to this decision was settled between counsel.

2.6 The first business this morning was to record guilty pleas in respect of informations No 1 and No 2 and that was done. Following that Mr Symon sought leave to withdraw the third information and that was granted by the Committee.

2.7 The penalty in respect of each of the charges No 1 and No 2 to which Mr Scott has pleaded guilty are set out in Rule 88.1. That rule provides that any person found guilty of an offence under the rules shall be liable to:

a) A fine not exceeding $10,000 for any one offence;

b) And/or suspension;

c) And/or disqualification;

d) And/or warning off.

2.8 In preparation for today’s hearing both Mr Symon and Mr Paino have prepared helpful submissions which were made available to the Committee in advance of the hearing commencing today at 11.30a.m. Those submissions have been carefully considered and both counsel addressed the Committee emphasising the matters which they considered to be of most significance. We shall deal with each of those submissions in turn and in summary.

3. SUBMISSIONS FOR RIU

3.1 Mr Scott was a Board Member of Greyhound Racing New Zealand. We are told he has resigned. That is the governing body for greyhound racing. He was and has been for many years a significant owner of greyhounds. The RIU submission emphasises Mr Scott’s significant role in the governance of greyhound code and contends that a person in such a senior position should be expected to behave with complete integrity and that a failure to do so constitutes a serious breach of trust. Further the RIU points to the motivation which Mr Scott must have had to take the actions which he did. Those motivations can only have been financial either by reference to stake money that his dogs might win when assisted with a prohibited substance or as a result of betting which might take place. It is plain from what the Committee has been told that Mr Scott bet significant sums of money. Further it is said that Mr Scott made efforts to conceal what he had been doing and that when he became aware of the RIU investigation he sought to threaten or did threaten Mr Udy not to disclose what had been taking place. The circumstances of the threat to Mr Udy do not require detailed analysis by the Committee. The charge in relation to what was allegedly said to Mr Udy has been withdrawn.

3.2 Against this background the RIU said that the impact on greyhound racing and its public image must unfortunately be significant. That submission is appropriate when the Committee considers that this matter has drawn significant attention from the racing media and from the wider news media.

3.3 Mr Symon has assembled a number of relevant authorities which he submits are of assistance in determining the level of penalty. All of these decisions are known to the Committee. The Chairman who presides today presided at each of the hearings to which Mr Symon has made reference. These are:

I. RIU v Dyke, 9 July 2008

II. RIU v Walker, 22 September 2014

III. RIU v McDonald & Donaldson, 23 April 2015

IV. RIU v Waddell, 4 December 2015

3.4 In addition to the authorities mentioned the Committee drew attention to a decision of the Non-Raceday Judicial Committee in RIU v Fisher, McRae & Faber, 2 September 2014. That decision with reference to thoroughbred racing involved possession by a licenced trainer of a prohibited substance of a kind similar to the notoriously banned performance enhancing drug EPO.

3.5 Mr Symon contended that the offending here was at the very highest level and that in those circumstances it was appropriate to impose the maximum period of disqualification namely a lifetime disqualification. Further, he contended that in addition to that the Committee should impose the maximum fine permitted under the rule – namely $10,000 and that this fine should be imposed in each case. In addition Mr Symon spoke of the costs incurred by the RIU which he explained had been kept to a minimum and he acknowledged that there would be significant costs which had been incurred by the Judicial Control Authority.

3.6 Mr Symon’s submission acknowledged some mitigating considerations in Mr Scott’s favour. The first of these was his previous good character. The Committee for its part does not believe that a great deal can be placed upon this for one would expect that a board member of a racing code would necessarily be of good character. Mr Scott has had a long time participation in greyhound racing and has not breached the rules on any previous occasion. The next matter that Mr Symon acknowledged was the guilty pleas. It is well established in the criminal law that guilty pleas are a legitimate consideration in discounting the penalty that might otherwise be imposed. That said the guilty pleas here came very late in the piece and the established legal principal is that the earlier the guilty pleas are made the greater the discount that can properly be allowed on that account.

3.7 In summary the RIU position was that there should be a lifetime disqualification, fines of $10,000 on each charge with some discount as we understand it for mitigating factors and contributions towards the costs of the RIU and the JCA.

4. SUBMISSIONS FOR MR SCOTT

4.1 Mr Paino’s submissions are by and large entirely realistic. He recognises in those submissions that this offending is at a very serious level and that a significant period of disqualification is appropriate.

4.2 The submissions for Mr Scott draw attention to how much worse the position might have been. These matters are:

a) There was no administration of a prohibited substance and thus no unfair competition;

b) Reference (a) above there was no cheating actually taking place;

c) No issue of animal health arose;

d) The betting on greyhound racing was not compromised.

These submissions, as the Committee understood them, point to the fact that the position could have been much worse. That is true but the reason the position was not much worse than it turned out to be is not of itself something that arose from the conduct of Mr Scott. Rather it came about because his trainer after some delay decided to draw to the attention of the authorities the fact that he was holding a prohibited substance and to explain the circumstances as to how that come into his possession. It has been suggested that the trainer may have had some ulterior motivation for the actions which he took. That is not something that the Committee needs to rule upon or comment upon. The plain fact is that Mr Scott has pleaded guilty to two (2) very serious charges and the motivation of the informant for being in touch with the authorities does not bear one way or the other upon Mr Scott’s culpability.

4.3 Mr Paino took some issue with the first charge in as much as it is framed in a way that speaks of conduct which is “corrupt” and “improper”. Mr Paino told the Committee that Mr Scott acknowledged that what he did was improper but issue is taken with whether that improper conduct amounted to conduct which was corrupt. It is the Committee’s view that an analytical definition of Mr Scott’s conduct to determine whether it fits within the definition of impropriety or corruption is not necessary. What Mr Scott did was wholly unacceptable the more so for somebody in his position of governance. For a board member to knowingly purchase a prohibited substance and then set about having it administered to his dogs is in the Committee’s view conduct that is wholly unacceptable. If it were necessary to make a ruling that conduct could properly been seen as corrupt. It has long been established since 2006 in the case of Carter v JCA, High Court Hamilton, CIV-2006-419-841, Harrison J, 7 December 2006 that what constitutes conduct that is detrimental to racing and by analogy what is corrupt conduct in relation to racing is properly for the determination of the presiding Non-Raceday Judicial Committee.

4.4 Mr Paino’s submissions make detailed reference to the Walker decision referred to earlier. Mr Walker was a prominent jockey who was convicted following a defended hearing of corrupt practice in failing to ride out a horse when he had bet upon another horse in the same race and by his conduct caused his horse to finish behind the horse upon which he had placed the bet. Mr Walker was disqualified for seven (7) years. On appeal that penalty was reduced to 5½ years. It is worth observing that Mr Walker has since been convicted of breaching his disqualification. Further the circumstances which caused the Appeals Tribunal to reduce the original penalty from 7 years to 5½ years were somewhat unique in as much as Mr Walker did not attend the penalty hearing and thus no submissions were addressed to the Non-Raceday Judicial Committee on his behalf as to the level of penalty which should be set.

5. ANALYSIS

5.1 In our view the most significant consideration here is the position which Mr Scott held in the greyhound racing code. He was a board member and thus at the highest level of governance within that code. Persons who are elected to that Board as we are told he was can rightly be expected to uphold the rules and indeed promote them rather than deviously setting about undermining and breaching those rules as has been established here. Mr Scott clearly knew that the prohibited substance was prohibited, he came by that information and the testing regime in relation to it by reason of his being a board member and attending meetings in that capacity where this very issue was discussed. He thus used information which came to him in his position as an office holder on the board to try and advance his own individual financial position which, had it happened, would necessarily have been at the expense of others taking part in the industry to say nothing of the wider betting public. That sort of conduct is objectionable at any level but especially objectionable when the person guilty of that conduct is in the position of significant authority that Mr Scott held.

5.2 In mitigation of Mr Scott’s position we acknowledge that he has not previously offended in any way. He has been, we are told, a longstanding and strong supporter of greyhound racing and we acknowledge the guilty pleas albeit such having been made very late.

5.3 It is necessary to try and establish an appropriate starting point at which the disqualification will take effect. As outlined above it is the RIU’s position that there should be a lifetime ban. It is the position for Mr Scott, as we understand it, that the ban should bear some resemblance to the penalty imposed in the Walker case spoken of above. In our view the correct period of disqualification is neither a lifetime ban nor a ban at the level imposed upon Mr Walker. First we consider that a lifetime ban would only be appropriate in the most egregious case. While this offending is serious and reprehensible it is not difficult to imagine more objectionable offending – for example – the position would necessarily have been more serious if there had been administration of the prohibited substance provided by Mr Scott to Mr Udy and that had led to compromising the conduct of greyhound racing. When we look at the Walker decision the distinguishing feature between that case and this is that Mr Walker had no position of governance or authority within thoroughbred racing. He was a jockey who was acting solely for his own selfish ends and beyond a general obligation to obey the rules he had no part in the administration of the thoroughbred racing code.

5.4 In our judgment an appropriate starting point for the period of disqualification would be twelve (12) to thirteen (13) years. For the reasons that we have sought to explain above the aggravating and mitigating considerations are largely in balance. The aggravating considerations are with reference to Mr Scott’s role in the greyhound code as explained and the mitigating considerations centre around the guilty pleas.

5.5 The relevant sentencing principles are well known. These were spoken of in the RIU submissions and were identified some years ago by Mr Justice Warwick Gendall as he now is and we shall set these out:

a) Penalties are designed to punish the offender for his or her wrongdoing. They are not meant to be retributive in the sense that the punishment is disproportionate to the offence but the offender must be met with a punishment;

b) In a racing context it is extremely important that a penalty has the effect of deterring others from committing similar offences;

c) A penalty should also reflect the disapproval of the JCA for the type of behaviour in question;

d) The need to rehabilitate the offender should be taken into account.

With the greatest of respect to Justice Gendall that judgment which is often quoted was in a case which bears little or no comparison with the present and has more reference to licence holders, persons such as trainers, jockeys or drivers in harness racing. Nevertheless those sentencing principles are of assistance and where the offending is at the very serious level that we have found to exist here (b) above is of particular relevance. That is to say it must be made known to people who are engaged in the administration or governance of greyhound racing or thoroughbred racing or harness racing that offending of this kind will be met with a meaningful response.

5.6 As stated above we consider that twelve (12) to thirteen (13) years is the appropriate period of disqualification but having balanced the aggravating and mitigating circumstances we reduce that start point to a period of eleven (11) years and that is the period of disqualification which will take effect in respect of each charge.

5.7 We turn to the question as to whether there should be fines in addition to the disqualification. As explained above the RIU position was not only should there be the maximum period of disqualification but also maximum fines in respect of both charges. We are not attracted to that proposition but we do think that there should be fines in respect of each charge but not at the level that was proposed by the RIU. When setting penalties for misconduct as in the criminal division the proper approach is to start at the bottom and work up not from the top and work down. That is not set as a criticism of the RIU submissions because we do think that a fine is appropriate in respect of each of these charges but at a lesser level.

5.8 The fine in respect of each charge will be the sum of $5,000 thus total fines of $10,000.

5.9 We turn to the question of costs to the RIU and the JCA. In line with the submissions made for the RIU we award costs in that party’s favour of $5,500 which is very close to the figure that was put forward in Mr Symon’s explanation this morning. With reference to the Judicial Control Authority there have been no fewer than four (4) telephone conferences, this hearing has been assembled today and both Committee members have travelled from a distance. An appropriate award of costs in favour of the JCA and this is not an indemnity figure but rather a contribution to those costs is the sum of $7,500.

5.10 For completeness and clarity on each of the informations to which pleas of guilty have been entered there will be a disqualification for eleven (11) years. On each of those same informations there will be a fine of $5,000. That period of disqualification or disqualifications will be concurrent – that is to say they will run side by side. As to costs there will be an order in favour of the RIU of $5,500 and an order in favour the JCA in the sum of $7,500.

5.11 Mr Scott has a number of dogs and there was some discussion about this in a telephone conference earlier. Arrangements will have to be made for the future accommodation of those dogs. The disqualification will not take effect until 1 May 2016. That will give Mr Scott and his trainers the opportunity to make appropriate arrangements for the future housing of the animals.

Dated this 26th day of April 2016

Murray McKechnie

Chairman

(Signed pursuant to Rule 91.14)

ADDENDUM

Following the dictation of the above decision counsel were asked if there were any outstanding matters. Mr Paino counsel for Mr Scott drew attention to paragraph 17 of the summary of facts which is attached to the decision. He indicated that it was not agreed that Mr Scott had said what is attributed to him there. The Committee for its part made it clear that it understood that counsel had agreed upon this summary of facts in advance of the hearing and that it was put before the Committee on that basis. This summary was read to the Committee in the presence of the media this morning. Mr Paino proposed that paragraph 17 of the summary be redacted. After hearing counsels’ submissions the Committee rules that the paragraph will not be removed from the summary. It is however appropriate to record and in the presence of the media that what is said in paragraph 17 does not relate to the two (2) charges to which Mr Scott has pleaded guilty.

Paragraph 17 has reference to the charge which has been withdrawn. Precisely what may or may not have been said by Mr Scott in discussion with Mr Udy on or around the 27 December 2015 is not something which the Committee has had to resolve and the Committee does not express any view about the correctness or otherwise of what is said in paragraph 17. 

BEFORE THE JUDICIAL COMMITTEE

AT WELLINGTON IN THE MATTER the New Zealand

Rules of Greyhound Racing

BETWEEN RACING INTEGRITY UNIT

Neil Grimstone

Manager Integrity Assurance

Informant

AND David John SCOTT

NZGRA Board Member

Defendant

SUMMARY OF FACTS

1 David John Scott is a Board Member of Greyhound Racing New Zealand. He was appointed as the Central Districts Representative on the Board in October 2015 for a two year term.

2 He is an “official” as defined in the Greyhound Racing New Zealand Rules.

The prohibited substance charge (Information 7080)

3 Nathan Udy is a licenced trainer under the Rules. He trained several of the defendant’s dogs.

Fertagyl and Gonasyn

4 The fifth schedule to the Greyhound New Zealand Rules of Racing stipulates that Gonadotrophin releasing hormone (gnRH, gonadorelin) is a Permanently Banned Prohibited Substance.

5 Fertagyl is not available in New Zealand, but is available in Australia. There is a large black market for Fertagyl in Australia. Gonasyn is a cheaper alternative of Fertagyl which is available in New Zealand.

6 Both Fertagyl and Gonasyn are ghRHs, and therefore Permanently Banned Prohibited Substances under the Rules.

7 Administering these substances to male Greyhounds results in an increased level of testosterone and lutenizing hormone in the Greyhound. This enhances the Greyhound’s performance in races. These substances may also be administered to female Greyhounds to bring them into heat.

January 2015 – the defendant instructed Mr Udy to obtain Fertagyl from veterinarian.

8 In January 2015, the defendant and Mr Udy obtained Fertagyl from a veterinarian, Dr Malcolm Jansen. Mr Udy asked Dr Jansen for Fertagyl, purportedly for a bitch he was trying to get in season. Dr Jansen prescribed Gonasyn instead, because Fertagyl was not available in New Zealand.

9 Mr Udy requested that Dr Jansen’s charge this to the defendant, as it was for him. Dr Jansen’s invoice was addressed to the defendant.

May 2015 – the defendant sourced Fertagyl from Australia, and instructed Mr Udy to administer this to FABIO

10 On or around 15 May 2015, Mr Udy was racing one of the defendant’s dogs (FABIO) at the Hatrick Raceway in Wanganui. The defendant left a 5 ml vial of Fertagyl in Mr Udy’s car, and told Mr Udy that he had brought a substance back from Australia. He requested that Mr Udy administer the substance to FABIO. He told Mr Udy not to tell anyone about the substance.

11 Mr Udy did not in fact administer the substance to FABIO, though acted as he had done so to placate the defendant.

The Corruption charge (Information 7079)

12 Mr Udy and the defendant exchanged further text messages on this matter. On 12 November 2015, the following text message exchange took place between 12:04:53 and 12:22:53

[DS] “Pretty sure they aren’t testing for that stuff buddy so we may have a crack with one of the boy pups in the next few weeks.”

[NU]: “Yeah he will be sweet that’s gd to no”

[DS]: “Yeah here with RIU and they are saying they can’t test for testosterone at the moment and that’s what it is isn’t it? Delete these messages as well ”

[NU]: “yes they will b deleted and yeah it is testosterone that’s the stuff u got when u went to Aussie”

[DS]: “All good. Lets see the fields for Wednesday and take a look. I assume u remember the doses?”

[NU]: “yeap I do”

DS]: “Do we only have the stuff I brought back or do we still have some of the Malcolm stuff?”

[NU] “Sweet and it’s a 2 ml dose?”

[DS]: “yeap that’s righy” 3

[NU]: “So we have at least 7 doses?”

[NU]: “yeap”

[DS]: “Sweet”.

13 The defendant sent the text message in bold above when he was attending a meeting with the RIU Management in his capacity as an official (the RIU meeting text message). Matters were discussed at this meeting, including the RIU’s capabilities for detecting prohibited substances in Greyhounds. At the meeting, he asked questions about whether the RIU tested for testosterone in Greyhounds. When another attendee at the meeting explained that the RIU did not do so, the defendant sent the RIU meeting text message to Mr Udy.

14 The defendant continued to request that Mr Udy administer Fertagyl to his dogs, including SCOTT NO VALUE, after the incident on 15 October 2015. On 18 November 2015, between 7:59:05 a

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