Non Raceday Inquiry RIU v L O’Sullivan and A Scott – Decision dated 22 March 2016 – Chair, Prof G Hall
ID: JCA15456
Decision:
BEFORE A JUDICIAL COMMITTEE OF THE JUDICIAL CONTROL AUTHORITY
UNDER THE RACING ACT 2003
AND IN THE MATTER of the New Zealand Thoroughbred Racing Rules of Racing
BETWEEN RACING INTEGRITY UNIT (RIU)
Informant
AND LANCE O’SULLIVAN & ANDREW SCOTT
Licensed Trainers
Respondents
INFORMATION NOS. A7082/3/4/5/6/7
COMMITTEE: Prof G Hall (Chairman)
Mr R McKenzie (Member)
APPEARING: Mr B Dickey for the RIU
Mr A Galbraith QC for the respondent
DECISION OF JUDICIAL COMMITTEE
[1] At the hearing held in Auckland on 16 March last, the respondents, Messrs O’Sullivan and Scott, admitted breaches of r 804(2) of the New Zealand Thoroughbred Racing Rules of Racing, as detailed in informations A7082 to 7807. We thus find these charges proved.
[2] Informations A7082 to 7807 state:
A7082: THAT on the 5th day of February 2015 at Tauranga Race Course, together with Andrew David SCOTT, was the trainer of a horse named “SUFFIRE”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (309) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7083: THAT on the 28th day of February 2015 at Ellerslie Race Course, together with Andrew David SCOTT, was the trainer of a horse named “SOUND PROPOSITION”, which ran in Race 9, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (541) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7084: THAT on the 11th day of March 2015 at Matamata Race Course, together with Andrew David SCOTT, was the trainer of a horse named “QUINTASTICS”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (640) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7085: THAT on the 5th day of February 2015 at Tauranga Race Course, together with Lance Anthony O’SULLIVAN, was the trainer of a horse named “SUFFIRE”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (309) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7086: THAT on the 28th day of February 2015 at Ellerslie Race Course, together with Lance Anthony O’SULLIVAN, was the trainer of a horse named “SOUND PROPOSITION”, which ran in Race 9, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (541) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7087: THAT on the 11th day of March 2015 at Matamata Race Course, together with Lance Anthony O’SULLIVAN, was the trainer of a horse named “QUINTASTICS”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (640) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
[3] Rule 804(2), (7) and (8) provides:
(2) When a horse which has been brought to a Racecourse or similar racing facility for the purpose of engaging in a Race or trial to which the Third Appendix hereto applies is found by a Tribunal conducting an inquiry to have had administered to it or have had present in its metabolism a Prohibited Substance, as defined in Part A of Prohibited Substance Regulations, the Trainer and any other person who in the opinion of such Tribunal conducting such inquiry was in charge of such horse at any relevant time commits a breach of these Rules.
(7) A person who commits a breach of sub-Rule (2) or (3) or (4) or (5) or (6) of this Rule shall be liable to:
(a) be disqualified for a period not exceeding five years; and/or
(b) be suspended from holding or obtaining a Licence for a period not exceeding 12 months. If a Licence is renewed during a term of suspension, then the suspension shall continue to apply to the renewed Licence; and/or
(c) a fine not exceeding $25,000.
(8) Any horse connected with a breach of sub-Rule (2) or (3) or (4) or (5) or (6) of this Rule shall be, in addition to any other penalty which may be imposed, disqualified from any Race or trial to which the Third Appendix hereto applies and/or be liable to a period of disqualification not exceeding five years.
[4] There is an agreed summary of facts, which we set out in full:
The irregular use of cobalt in Thoroughbred Racing in the United States and Australia has prompted closer inspection of historical samples taken by the RIU in Thoroughbred and Harness Racing in New Zealand of recent times.
In 2014 approximately 250 randomly selected historical, frozen urine samples were sent for cobalt analysis. These covered the North and South Islands, Harness and Thoroughbred Racing and a wide range of trainers in both codes.
These test results revealed levels of under 5 to a maximum of 60 with an average of 10.
Subsequent to this testing a further batch of approximately 40 samples were sent for the same analysis. This was in accordance with the RIU’s program of ongoing testing.
In this batch of 40 samples, a sample that was from a horse trained by the respondents returned an indicative reading for cobalt of 576. This is an irregularly high and unusual reading. As a result of this reading, further confirmatory analysis was requested which returned a definite reading for cobalt in this sample of 633. After this extremely elevated reading it was decided to send the B sample to an independent racing laboratory in Australia to confirm this result. A certificate has been received from the laboratory in Western Australia, which stated a defined level of cobalt as 640.
This result then prompted a further 20 historical O’SULLIVAN / SCOTT samples to be sent for cobalt analysis.
The respondents Lance Anthony O’SULLIVAN and Andrew David SCOTT are both licensed trainers under the New Zealand Thoroughbred Racing Rules of Racing and are operating in a registered training partnership.
The details of the horses and the races in which they were presented are as follows:
1. SUFFIRE – 5th February 2015
Tauranga Race 7, Pacific Property 1600m, placed 1st
Prize Money $4,375
Cobalt - 309
2. SOUND PROPOSITION – 28 February 2015
Ellerslie Race 9, NZ Derby, placed 3rd
Prize Money $65,000
Cobalt – 541
3. QUINTASTICS – 11th March 2015
Matamata Race 7, South Waikato Cup, placed 1st
Prize Money $12,500
Cobalt – 640
The Australian threshold for cobalt is positioned at 200 ug/L and the New Zealand level has also been adopted at 200 ug/L and this was officially set on the 1st May 2015, which was subsequent to the events in these proceedings, it is nonetheless an indicator of an unusually high and un-natural level of cobalt.
Since the cobalt-testing regime was under taken by the RIU, approximately 1200 tests have been conducted. The results of these tests show that 99.1% of these samples contained 100 ug/L or less of cobalt, with 94% of the results containing less than 25 ug/L. Cobalt is an essential trace element required for life and a horse’s minimum daily requirement is approximately 0.5mg per day.
Under New Zealand Thoroughbred Racing Prohibited Substance Regulations for the Rules of Racing, substances capable at any time acting directly or indirectly on the blood system are prohibited substances. Cobalt is capable of acting upon the blood system and under the amended rules, when present in urine above 200 ug/L is a prohibited substance in accordance with the aforementioned rules.
On the 22 June 2015 RIU staff visited the training establishment of the two respondents at Wexford Stables in Matamata. Both respondents were interviewed and co-operated with investigators, but could not provide any explanation at that time as to how their horses had returned such extraordinary cobalt results. A detailed inspection of the stables also could not further the investigation in any tangible way.
On the 22nd of July 2015 two signed affidavits were received by the Racing Integrity Unit. One from the respondent O’SULLIVAN and the other from his dairy farm manager Alan HAINES.
These statements indicated that O’SULLIVAN had made his own further inquiries into the matter and in the course of these inquiries had found that his manager HAINES had been randomly dosing water troughs with high levels of cobalt using two cobalt preparations.
O’SULLIVAN states that this was done without his knowledge and that all dairy matters are handled by HAINES. It was further explained that this cobalt was put into the troughs to assist the fertility of the cows and that the thoroughbred horses at Wexford also shared the same troughs as the dairy cattle.
Racing Integrity Investigators endeavoured to speak with HAINES to clarify particular points in his statement but he refused to assist and would not be interviewed. He is not a licensed person under the New Zealand Thoroughbred Racing Rules of Racing, and therefore not subject to RIU direction.
The RIU Veterinarian Doctor Andrew Grierson was consulted about replicating this supposed explanation. When he sought Veterinary Ethics Committee approval to conduct control testing in the amounts and formulas provided, that approval was not granted. This was due to the products not being listed for use in horses and that the actual dose was not able to be accurately determined.
It was the expert view that exposing animals to the explained levels given by Wexford would be toxic to the animals and detrimental to animal welfare.
Subsequent testing by racing Integrity Unit Veterinary experts have revealed that the O’SULLIVAN explanation cannot be ruled out as a possible cause of these extremely elevated urinary cobalt readings.
The respondent SCOTT has previously had a breach of the prohibited substance provisions. The respondent O”SULLIVAN has had no previous breaches as a licensed trainer.
[5] We also outline the inter-relationship between Wexford Stables and the dairy farm as stated in the affidavits of the respondents and Mr Haines.
[6] Mr O'Sullivan and his wife are the shareholders and directors of Wexford Stables Limited. The property on which they run their business is owned by Mr P O'Sullivan, the brother of Mr L O'Sullivan. Mr L O'Sullivan trains horses with Mr Scott, who is contracted to Wexford Stables Limited. Messrs O'Sullivan and Scott effectively operate as trainers in partnership.
[7] Mr O’Sullivan and his wife own two investment dairy farms. They live on one of the farms as does the farm manager, Mr Haines. Mr O’Sullivan has delegated full responsibility for the running of the farm to Mr Haines, who is an experienced farm manager. Mr O'Sullivan said he knew nothing of farming and, in particular, the addition of cobalt to the troughs, as he left all day-to-day management decisions to Mr Haines. He reported to Mr O'Sullivan on major issues and they meet monthly to review castings.
[8] Mr Scott has no involvement with the dairy farm. He is employed by Wexford Stables Limited and lives at the stables. He said that while he knew of the practice of bringing cows to the stables each year, he was completely unaware that cobalt had been added to the troughs, which are shared by the cows and the horses.
[9] Mr Scott stated that there could be up to a dozen horses going back from the barn at Matamata racecourse to the stables each day to relax and benefit from being in a paddock. He had checked the training records for each of the horses in question. One of the horses had been trained all season at Wexford Stables and would have been drinking from the troughs shared by the cows. The other two were trained at the barn but were included with the horses that would return to the stables each day where they also would have access to the same troughs. It was from those troughs that the horses would have taken the cobalt.
[10] With reference to the factual basis on which we come to impose penalty, Mr Dickey has said, “It is hard to accept the respondents’ explanation”. However, the RIU is unable to exclude the possibility that the respondents’ explanation is true. We note the RIU does not endorse that explanation as being true, it simply does not know. We further note that Mr Dickey in his oral submissions accepted that cobalt at such high levels as a consequence of oral ingestion rather than by administration, was “not beyond the bounds of scientific evidence”.
[11] We emphasise that we accept the explanation provided by the respondents as to the cause of the elevated cobalt readings.
[12] We have received written submissions as to penalty from the parties. These were addressed and supplemented at the hearing in Auckland.
Informant’s submissions
[13] Mr Dickey stated that the charges arose from the presenting of three horses to race that had in their metabolisms the prohibited substance cobalt, a substance that is capable of acting directly on the blood system by increasing the production of red blood cells. Cobalt at the relevant time was not specifically listed with a threshold level of acceptability; it is now, and the level is 200 ug/L.
[14] The horses that were the subject of the charges all tested well in excess of that figure being respectively 309, 541 and 640. Cobalt at these levels does not naturally occur in the metabolism of a horse, notwithstanding that it is a trace element and it must have been introduced unnaturally, that is by human act directly or indirectly to the horses’ blood system.
[15] Mr Dickey commenced his oral submissions by stating this was a serious matter and a significant penalty was necessary as cobalt at these levels was both performance enhancing and raised issues of animal welfare. The culpability of the respondents, he said, fell to be determined on a gross negligence basis, it being a major departure from the standard of care expected from licensed trainers.
[16] Mr Dickey summarised the key features of the breaches.
[17] There were three horses presented on different days. Each horse presented with a very high reading for cobalt. Two of the horses won their races, and the third finished 3rd in New Zealand's premier thoroughbred race, the New Zealand Derby. The actual damage to the New Zealand racing industry’s reputation was significant.
[18] The respondents’ explanation suggested gross negligence as racehorses in training and dairy cattle were sharing water troughs in an uncontrolled environment and without those responsible for the welfare of the horses (the respondent trainers) even knowing that supplements were being administered to the shared drinking troughs. The respondents, as responsible trainers, should not have permitted the shared and uncontrolled arrangement to occur, and it seemed, systemically.
[19] Mr Dickey emphasised cobalt in these dosages was not a justifiable dairy farming practice, let alone racehorses. We note that Mr Haines is not before us to explain his actions and we are concerned with Mr O’Sullivan’s responsibilities as a horse trainer and not as the owner of a dairy farm.
[20] Mr Dickey emphasised that the case had to be differentiated from the more recent Australian cases, which had concerned the administration of cobalt to horses. In the Hope (2015) case and in others recently reported from Australia, the racing Tribunals were concerned with the cynical administration of cobalt as a performance enhancing drug to horses to over perform on race day. He reiterated that the case against the respondents did not involve allegations of administration.
[21] A case upon which the informant relied heavily was NZTR v M and P Moroney (2010), which dealt with the same rule and after the penalties were lifted from a maximum fine of $15,000. The uplift in the fine, he submitted, manifested an intention of the rule makers that the penalties for this type of breach should increase from previous levels. That case involved a large and high profile partnership. There was one breach of r 804(2) by presenting a horse which had had administered to it a prohibited substance namely indomethacin. The horse won a handicap race at Matamata; the winning stake was uncertain. The breach amounted to gross negligence, as the substance had been administered by an employee because of poor stable systems and supervision. The administration was found to be a simple mistake. Mr P Moroney had had a relatively similar event occur because of poor management and supervision. The Judicial Committee noted the recent uplift to $25,000 and decided by “a narrow but clear margin” not to suspend the trainers. A fine of $17,500 was imposed, as were substantial costs.
[22] The Moroney case referred to NZTR v M Baker and B Baker (2008), which pre-dated the fine uplift, and which related to a similar but different rule. The Baker case was of an honest but mistaken belief that a genuine animal health remedy was not prohibited when in fact it was. Given its timing, and its particular circumstances, Mr Dickey said it was little assistance to this penalty hearing, and we agree.
[23] Mr Dickey identified the key sentencing principles in this exercise to be:
(a) Penalties are designed to punish the offender for his/her wrongdoing. They are not 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 like offences;
(c) A penalty should also reflect the disapproval of the Judicial Committee for the type of behaviour in question;
(d) The need to rehabilitate the offender should also be taken into account.
[24] Mr Dickey stated that although the RIU viewed this as a case of gross negligence, it did not seek the imposition of a penalty of disqualification or suspension of the respondents. In reaching this conclusion the RIU relied on Moroney.
[25] With reference to the quantum of the fine, Mr Dickey reiterated that the case was serious. He emphasised the impact it had had on the reputation of New Zealand racing. Significant stakes were won, and one case was the New Zealand Derby, a premier race. Cobalt was a hot topic in international racing and New Zealand had to be strict, and seen to be strict, in its application of the prohibited substances rules as they applied to cobalt in the domestic racing industry. If not, New Zealand would be seen as an “outlier internationally and its reputation tarnished accordingly”.
[26] As the levels were high, Mr Dickey submitted that ingestion had to be very close to or on raceday. We note that we do not have scientific evidence before us to support this submission but we accept ingestion would have been proximate to raceday.
[27] Penalties for these breaches, the RIU submitted, should “move in severity with the increasing international concern for the integrity and reputation for racing particularly where prohibited substances were concerned, albeit the result of gross negligence and not intent.” The $17,500 fine in the Moroney case was some years ago and there had been ample time, Mr Dickey said, for trainers to get their stables in order to avoid any potential contamination of racehorses. The tariff should now be increased. Additionally, the Moroney case could not be distinguished by the previous breach in that case, as the charges before us related to races spread over a period of about five weeks, so it could not be said to be one mistake. The mistake or error was systemic in the husbandry practices of the stable.
[28] The RIU emphasised that this case was to be determined under the generic rule of 804(2) rather than the changed rule, which attributes cobalt as a prohibited substance with a threshold level. The case was one of gross negligence and was not a deliberate breach.
[29] The informant identified personal mitigating factors.
[30] The respondents had accepted the facts as set out in the summary of facts and had admitted the breaches at the first opportunity after having been charged. However, it was not helpful to the RIU that the farm manager, Mr Haines, whilst prepared to provide his employer with an affidavit for the RIU, was not prepared to engage in a meeting/interview with the RIU to verify the context.
[31] The respondent, Mr O'Sullivan, on the narrative provided by the respondents was the more responsible of the two trainers. However, the RIU acknowledged that he had had a long and distinguished career in New Zealand Thoroughbred Racing and had no breaches of the Rules as a licensed trainer. Mr Dickey emphasised there were no issues concerning Mr O’Sullivan’s integrity.
[32] Looking at the partnership, Mr Dickey said, Mr Scott did not have that unblemished record. Mr Scott had a previous breach in 2010 for the prohibited substance ketoprofen (r 804(2)) for which he was fined $6,000. In 2005 Mr Scott was disqualified for five months for supplying false information to a Stipendiary Steward. He submitted this factor “evens [things] out” when it came to the imposition of penalty.
[33] Whilst the respondents had undertaken to repay the prize money to their owners, so that the owners would not be out of pocket for circumstances, which were entirely outside their control, this, Mr Dickey submitted, was a private matter and not mitigation. Those owners had already benefited from the stakes won. The actual owners who had been out of pocket were those owners of the horses placed behind O’Sullivan/Scott runners in the races concerned.
[34] The RIU sought a $20,000 fine for the respondents for each breach.
Respondents’ submissions
[35] As had Mr Dickey, Mr Galbraith highlighted matters covered in his written submissions.
[36] These submissions outlined the history of the Wexford Stable, which had been operated in the past eight years by the respondents in partnership. Wexford was originally established in the 1960s by Mr Dave O'Sullivan, who was this country’s champion trainer on a number of occasions.
[37] The respondent, Mr Lance O'Sullivan, was Mr Dave O'Sullivan’s son and he had been champion New Zealand jockey on 12 occasions and had ridden 2,479 winners. He had been inducted into the New Zealand Racing Hall of Fame and the New Zealand Sports Hall of Fame.
[38] Mr Scott had 17 years' experience as a trainer, and for some time he was in partnership with Mr Mike Moroney, during which time he was the hands-on trainer of two New Zealand Derby winners and a number of other Group winners. Since his transfer to Wexford, the respondents had had success with a number of well-known horses.
[39] Mr Galbraith described the operation of the Stable: Mr Scott had the hands on day-to-day responsibility for the horses; with Mr O'Sullivan involved in all of the assessment, decision making and liaison with clients. Mr O'Sullivan continued to ride some work.
[40] Mr Galbraith emphasised that Wexford Stable was run to the highest standards with appropriate record keeping of all feed and treatment processes, engagement with a thoroughly experienced and professional vet, and requiring the highest standards of its staff. He described it as an old-fashioned, first class stable, and asked us to compare this to the operation of the stables in two of the cases before the Committee — Moroney and Hope.
[41] Mr Galbraith stated that the arrival of RIU representatives at the stable on 22 June 2015 came as a huge shock to the respondents. They co-operated, the stables were searched, some materials were taken for analysis, and members of Wexford staff were interviewed. Nothing arose from the search, analysis or interviews that gave an indication of any misuse of any drugs affecting Wexford horses.
[42] It then became a question of identifying how the positive tests for cobalt could have arisen. Wexford identified all possible sources — feed, supplements, salt licks, fertiliser etc, but while there were small amounts of cobalt as ingredients, these could not explain the high levels returned in the positive tests.
[43] In accordance with standard practice, the RIU publicly identified the fact of the positive tests. Given the high level of media publicity about cobalt breaches in Australia, there was media speculation, which was negative to Wexford’s and the respondents’ reputation in the industry. In this regard, Mr Galbraith described the difficulty the respondents had had in obtaining buyers at the recent sales.
[44] At the time the expert view was that elevated levels of cobalt could only be achieved by intravenous injection. This view, Mr Galbraith said, was based on relatively limited research, as cobalt, as a potential source of performance enhancement in horses, was a recent phenomenon. Accordingly the suspicion, Mr Galbraith described it as “scuttlebutt”, was that “somebody” had been responsible for injecting the horses involved.
[45] Quite by chance, and some weeks after the RIU search, Mr O'Sullivan stumbled across the source of the cobalt. Sworn statements by the respondents and Mr Haines, the dairy farm manager, supported this explanation. Mr Galbraith explained the farm manager lived at Tirau, had responsibility for 900 acres of farm operations and over 1300 head of stock. Apart from a 10 per cent share in a horse purchased in January 2015, he had no other involvement with the horses or the stable.
[46] Mr O'Sullivan discovered that Mr Haines, his contracted farm manager, had been dosing water troughs with cobalt on the Wexford property. These troughs were shared between small paddocks of not in-calf heifers and the day paddocks for the horses. Cobalt was being supplemented to improve stock health, and without any understanding that this supplementation might cause a collateral problem with the horses.
[47] The first positive led the RIU to investigate some 20 earlier samples from Wexford horses. An attached schedule of these results showed readings, which were above the level of cobalt that would normally be expected in horses. Mr Galbraith stated these were evidence of the variability in the effect of the cobalt supplementation that Mr Haines’ activities were producing. Mr Haines had erroneously been operating on the basis that “more was better”.
[48] Mr Galbraith commented that for some time the RIU were sceptical of the Wexford explanation. Eventually, and as a result of a separate incident and the tests identified in the summary of facts, it was accepted that elevated levels of cobalt could result from oral ingestion and therefore that Mr Haines’ activities were a credible explanation for the elevated cobalt levels.
[49] With reference to the respondents’ admission of the breaches, Mr Galbraith stated that the Rules of Racing relating to prohibited substances contained offences not only of commission but also of no fault/ absolute liability. Rule 804(2) was one such rule. Wexford were obliged, he said, to accept the fact that the three horses involved were presented, albeit unknowingly, at the races with elevated levels of cobalt in their system. The trainers were, in terms of the rule, responsible.
[50] Mr Galbraith stated it was common ground that the appropriate penalty was a fine. The issue was quantum. He acknowledged prohibited substance offences were sensitive for the industry because of the negative media and public attention they could attract, however he emphasised that penalties had to be set on the particular facts and be consistent with principle.
[51] Mr Galbraith submitted that this was “truly a no fault case”. The set up of sharing troughs between paddocks had existed at Wexford since Mr Dave O'Sullivan's day. They were small spelling paddocks and it had been thought not to be economic to have two troughs. There had never been a
Appeal Decision: NO LINKED APPEAL DECISION
Decision Date: 22/03/2016
Publish Date: 22/03/2016
JCA Decision Fields (raw)
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Data from these fields should be mapped appropriately to display amongst the standard fields above; please make note of any values below that are missing in the above standard fields but should be there.
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decisiondate: 22/03/2016
hearing_title: Non Raceday Inquiry RIU v L O'Sullivan and A Scott - Decision dated 22 March 2016 - Chair, Prof G Hall
charge:
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appealdecision: NO LINKED APPEAL DECISION
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Decision:
BEFORE A JUDICIAL COMMITTEE OF THE JUDICIAL CONTROL AUTHORITY
UNDER THE RACING ACT 2003
AND IN THE MATTER of the New Zealand Thoroughbred Racing Rules of Racing
BETWEEN RACING INTEGRITY UNIT (RIU)
Informant
AND LANCE O’SULLIVAN & ANDREW SCOTT
Licensed Trainers
Respondents
INFORMATION NOS. A7082/3/4/5/6/7
COMMITTEE: Prof G Hall (Chairman)
Mr R McKenzie (Member)
APPEARING: Mr B Dickey for the RIU
Mr A Galbraith QC for the respondent
DECISION OF JUDICIAL COMMITTEE
[1] At the hearing held in Auckland on 16 March last, the respondents, Messrs O’Sullivan and Scott, admitted breaches of r 804(2) of the New Zealand Thoroughbred Racing Rules of Racing, as detailed in informations A7082 to 7807. We thus find these charges proved.
[2] Informations A7082 to 7807 state:
A7082: THAT on the 5th day of February 2015 at Tauranga Race Course, together with Andrew David SCOTT, was the trainer of a horse named “SUFFIRE”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (309) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7083: THAT on the 28th day of February 2015 at Ellerslie Race Course, together with Andrew David SCOTT, was the trainer of a horse named “SOUND PROPOSITION”, which ran in Race 9, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (541) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7084: THAT on the 11th day of March 2015 at Matamata Race Course, together with Andrew David SCOTT, was the trainer of a horse named “QUINTASTICS”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (640) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7085: THAT on the 5th day of February 2015 at Tauranga Race Course, together with Lance Anthony O’SULLIVAN, was the trainer of a horse named “SUFFIRE”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (309) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7086: THAT on the 28th day of February 2015 at Ellerslie Race Course, together with Lance Anthony O’SULLIVAN, was the trainer of a horse named “SOUND PROPOSITION”, which ran in Race 9, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (541) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
A7087: THAT on the 11th day of March 2015 at Matamata Race Course, together with Lance Anthony O’SULLIVAN, was the trainer of a horse named “QUINTASTICS”, which ran in Race 7, which was presented and raced with a prohibited substance in its metabolism, namely cobalt, at an elevated level (640) which is a prohibited substance of the type set out in Part A of Prohibited Substance Regulations, being a substance capable of acting directly or indirectly on the blood system.
[3] Rule 804(2), (7) and (8) provides:
(2) When a horse which has been brought to a Racecourse or similar racing facility for the purpose of engaging in a Race or trial to which the Third Appendix hereto applies is found by a Tribunal conducting an inquiry to have had administered to it or have had present in its metabolism a Prohibited Substance, as defined in Part A of Prohibited Substance Regulations, the Trainer and any other person who in the opinion of such Tribunal conducting such inquiry was in charge of such horse at any relevant time commits a breach of these Rules.
(7) A person who commits a breach of sub-Rule (2) or (3) or (4) or (5) or (6) of this Rule shall be liable to:
(a) be disqualified for a period not exceeding five years; and/or
(b) be suspended from holding or obtaining a Licence for a period not exceeding 12 months. If a Licence is renewed during a term of suspension, then the suspension shall continue to apply to the renewed Licence; and/or
(c) a fine not exceeding $25,000.
(8) Any horse connected with a breach of sub-Rule (2) or (3) or (4) or (5) or (6) of this Rule shall be, in addition to any other penalty which may be imposed, disqualified from any Race or trial to which the Third Appendix hereto applies and/or be liable to a period of disqualification not exceeding five years.
[4] There is an agreed summary of facts, which we set out in full:
The irregular use of cobalt in Thoroughbred Racing in the United States and Australia has prompted closer inspection of historical samples taken by the RIU in Thoroughbred and Harness Racing in New Zealand of recent times.
In 2014 approximately 250 randomly selected historical, frozen urine samples were sent for cobalt analysis. These covered the North and South Islands, Harness and Thoroughbred Racing and a wide range of trainers in both codes.
These test results revealed levels of under 5 to a maximum of 60 with an average of 10.
Subsequent to this testing a further batch of approximately 40 samples were sent for the same analysis. This was in accordance with the RIU’s program of ongoing testing.
In this batch of 40 samples, a sample that was from a horse trained by the respondents returned an indicative reading for cobalt of 576. This is an irregularly high and unusual reading. As a result of this reading, further confirmatory analysis was requested which returned a definite reading for cobalt in this sample of 633. After this extremely elevated reading it was decided to send the B sample to an independent racing laboratory in Australia to confirm this result. A certificate has been received from the laboratory in Western Australia, which stated a defined level of cobalt as 640.
This result then prompted a further 20 historical O’SULLIVAN / SCOTT samples to be sent for cobalt analysis.
The respondents Lance Anthony O’SULLIVAN and Andrew David SCOTT are both licensed trainers under the New Zealand Thoroughbred Racing Rules of Racing and are operating in a registered training partnership.
The details of the horses and the races in which they were presented are as follows:
1. SUFFIRE – 5th February 2015
Tauranga Race 7, Pacific Property 1600m, placed 1st
Prize Money $4,375
Cobalt - 309
2. SOUND PROPOSITION – 28 February 2015
Ellerslie Race 9, NZ Derby, placed 3rd
Prize Money $65,000
Cobalt – 541
3. QUINTASTICS – 11th March 2015
Matamata Race 7, South Waikato Cup, placed 1st
Prize Money $12,500
Cobalt – 640
The Australian threshold for cobalt is positioned at 200 ug/L and the New Zealand level has also been adopted at 200 ug/L and this was officially set on the 1st May 2015, which was subsequent to the events in these proceedings, it is nonetheless an indicator of an unusually high and un-natural level of cobalt.
Since the cobalt-testing regime was under taken by the RIU, approximately 1200 tests have been conducted. The results of these tests show that 99.1% of these samples contained 100 ug/L or less of cobalt, with 94% of the results containing less than 25 ug/L. Cobalt is an essential trace element required for life and a horse’s minimum daily requirement is approximately 0.5mg per day.
Under New Zealand Thoroughbred Racing Prohibited Substance Regulations for the Rules of Racing, substances capable at any time acting directly or indirectly on the blood system are prohibited substances. Cobalt is capable of acting upon the blood system and under the amended rules, when present in urine above 200 ug/L is a prohibited substance in accordance with the aforementioned rules.
On the 22 June 2015 RIU staff visited the training establishment of the two respondents at Wexford Stables in Matamata. Both respondents were interviewed and co-operated with investigators, but could not provide any explanation at that time as to how their horses had returned such extraordinary cobalt results. A detailed inspection of the stables also could not further the investigation in any tangible way.
On the 22nd of July 2015 two signed affidavits were received by the Racing Integrity Unit. One from the respondent O’SULLIVAN and the other from his dairy farm manager Alan HAINES.
These statements indicated that O’SULLIVAN had made his own further inquiries into the matter and in the course of these inquiries had found that his manager HAINES had been randomly dosing water troughs with high levels of cobalt using two cobalt preparations.
O’SULLIVAN states that this was done without his knowledge and that all dairy matters are handled by HAINES. It was further explained that this cobalt was put into the troughs to assist the fertility of the cows and that the thoroughbred horses at Wexford also shared the same troughs as the dairy cattle.
Racing Integrity Investigators endeavoured to speak with HAINES to clarify particular points in his statement but he refused to assist and would not be interviewed. He is not a licensed person under the New Zealand Thoroughbred Racing Rules of Racing, and therefore not subject to RIU direction.
The RIU Veterinarian Doctor Andrew Grierson was consulted about replicating this supposed explanation. When he sought Veterinary Ethics Committee approval to conduct control testing in the amounts and formulas provided, that approval was not granted. This was due to the products not being listed for use in horses and that the actual dose was not able to be accurately determined.
It was the expert view that exposing animals to the explained levels given by Wexford would be toxic to the animals and detrimental to animal welfare.
Subsequent testing by racing Integrity Unit Veterinary experts have revealed that the O’SULLIVAN explanation cannot be ruled out as a possible cause of these extremely elevated urinary cobalt readings.
The respondent SCOTT has previously had a breach of the prohibited substance provisions. The respondent O”SULLIVAN has had no previous breaches as a licensed trainer.
[5] We also outline the inter-relationship between Wexford Stables and the dairy farm as stated in the affidavits of the respondents and Mr Haines.
[6] Mr O'Sullivan and his wife are the shareholders and directors of Wexford Stables Limited. The property on which they run their business is owned by Mr P O'Sullivan, the brother of Mr L O'Sullivan. Mr L O'Sullivan trains horses with Mr Scott, who is contracted to Wexford Stables Limited. Messrs O'Sullivan and Scott effectively operate as trainers in partnership.
[7] Mr O’Sullivan and his wife own two investment dairy farms. They live on one of the farms as does the farm manager, Mr Haines. Mr O’Sullivan has delegated full responsibility for the running of the farm to Mr Haines, who is an experienced farm manager. Mr O'Sullivan said he knew nothing of farming and, in particular, the addition of cobalt to the troughs, as he left all day-to-day management decisions to Mr Haines. He reported to Mr O'Sullivan on major issues and they meet monthly to review castings.
[8] Mr Scott has no involvement with the dairy farm. He is employed by Wexford Stables Limited and lives at the stables. He said that while he knew of the practice of bringing cows to the stables each year, he was completely unaware that cobalt had been added to the troughs, which are shared by the cows and the horses.
[9] Mr Scott stated that there could be up to a dozen horses going back from the barn at Matamata racecourse to the stables each day to relax and benefit from being in a paddock. He had checked the training records for each of the horses in question. One of the horses had been trained all season at Wexford Stables and would have been drinking from the troughs shared by the cows. The other two were trained at the barn but were included with the horses that would return to the stables each day where they also would have access to the same troughs. It was from those troughs that the horses would have taken the cobalt.
[10] With reference to the factual basis on which we come to impose penalty, Mr Dickey has said, “It is hard to accept the respondents’ explanation”. However, the RIU is unable to exclude the possibility that the respondents’ explanation is true. We note the RIU does not endorse that explanation as being true, it simply does not know. We further note that Mr Dickey in his oral submissions accepted that cobalt at such high levels as a consequence of oral ingestion rather than by administration, was “not beyond the bounds of scientific evidence”.
[11] We emphasise that we accept the explanation provided by the respondents as to the cause of the elevated cobalt readings.
[12] We have received written submissions as to penalty from the parties. These were addressed and supplemented at the hearing in Auckland.
Informant’s submissions
[13] Mr Dickey stated that the charges arose from the presenting of three horses to race that had in their metabolisms the prohibited substance cobalt, a substance that is capable of acting directly on the blood system by increasing the production of red blood cells. Cobalt at the relevant time was not specifically listed with a threshold level of acceptability; it is now, and the level is 200 ug/L.
[14] The horses that were the subject of the charges all tested well in excess of that figure being respectively 309, 541 and 640. Cobalt at these levels does not naturally occur in the metabolism of a horse, notwithstanding that it is a trace element and it must have been introduced unnaturally, that is by human act directly or indirectly to the horses’ blood system.
[15] Mr Dickey commenced his oral submissions by stating this was a serious matter and a significant penalty was necessary as cobalt at these levels was both performance enhancing and raised issues of animal welfare. The culpability of the respondents, he said, fell to be determined on a gross negligence basis, it being a major departure from the standard of care expected from licensed trainers.
[16] Mr Dickey summarised the key features of the breaches.
[17] There were three horses presented on different days. Each horse presented with a very high reading for cobalt. Two of the horses won their races, and the third finished 3rd in New Zealand's premier thoroughbred race, the New Zealand Derby. The actual damage to the New Zealand racing industry’s reputation was significant.
[18] The respondents’ explanation suggested gross negligence as racehorses in training and dairy cattle were sharing water troughs in an uncontrolled environment and without those responsible for the welfare of the horses (the respondent trainers) even knowing that supplements were being administered to the shared drinking troughs. The respondents, as responsible trainers, should not have permitted the shared and uncontrolled arrangement to occur, and it seemed, systemically.
[19] Mr Dickey emphasised cobalt in these dosages was not a justifiable dairy farming practice, let alone racehorses. We note that Mr Haines is not before us to explain his actions and we are concerned with Mr O’Sullivan’s responsibilities as a horse trainer and not as the owner of a dairy farm.
[20] Mr Dickey emphasised that the case had to be differentiated from the more recent Australian cases, which had concerned the administration of cobalt to horses. In the Hope (2015) case and in others recently reported from Australia, the racing Tribunals were concerned with the cynical administration of cobalt as a performance enhancing drug to horses to over perform on race day. He reiterated that the case against the respondents did not involve allegations of administration.
[21] A case upon which the informant relied heavily was NZTR v M and P Moroney (2010), which dealt with the same rule and after the penalties were lifted from a maximum fine of $15,000. The uplift in the fine, he submitted, manifested an intention of the rule makers that the penalties for this type of breach should increase from previous levels. That case involved a large and high profile partnership. There was one breach of r 804(2) by presenting a horse which had had administered to it a prohibited substance namely indomethacin. The horse won a handicap race at Matamata; the winning stake was uncertain. The breach amounted to gross negligence, as the substance had been administered by an employee because of poor stable systems and supervision. The administration was found to be a simple mistake. Mr P Moroney had had a relatively similar event occur because of poor management and supervision. The Judicial Committee noted the recent uplift to $25,000 and decided by “a narrow but clear margin” not to suspend the trainers. A fine of $17,500 was imposed, as were substantial costs.
[22] The Moroney case referred to NZTR v M Baker and B Baker (2008), which pre-dated the fine uplift, and which related to a similar but different rule. The Baker case was of an honest but mistaken belief that a genuine animal health remedy was not prohibited when in fact it was. Given its timing, and its particular circumstances, Mr Dickey said it was little assistance to this penalty hearing, and we agree.
[23] Mr Dickey identified the key sentencing principles in this exercise to be:
(a) Penalties are designed to punish the offender for his/her wrongdoing. They are not 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 like offences;
(c) A penalty should also reflect the disapproval of the Judicial Committee for the type of behaviour in question;
(d) The need to rehabilitate the offender should also be taken into account.
[24] Mr Dickey stated that although the RIU viewed this as a case of gross negligence, it did not seek the imposition of a penalty of disqualification or suspension of the respondents. In reaching this conclusion the RIU relied on Moroney.
[25] With reference to the quantum of the fine, Mr Dickey reiterated that the case was serious. He emphasised the impact it had had on the reputation of New Zealand racing. Significant stakes were won, and one case was the New Zealand Derby, a premier race. Cobalt was a hot topic in international racing and New Zealand had to be strict, and seen to be strict, in its application of the prohibited substances rules as they applied to cobalt in the domestic racing industry. If not, New Zealand would be seen as an “outlier internationally and its reputation tarnished accordingly”.
[26] As the levels were high, Mr Dickey submitted that ingestion had to be very close to or on raceday. We note that we do not have scientific evidence before us to support this submission but we accept ingestion would have been proximate to raceday.
[27] Penalties for these breaches, the RIU submitted, should “move in severity with the increasing international concern for the integrity and reputation for racing particularly where prohibited substances were concerned, albeit the result of gross negligence and not intent.” The $17,500 fine in the Moroney case was some years ago and there had been ample time, Mr Dickey said, for trainers to get their stables in order to avoid any potential contamination of racehorses. The tariff should now be increased. Additionally, the Moroney case could not be distinguished by the previous breach in that case, as the charges before us related to races spread over a period of about five weeks, so it could not be said to be one mistake. The mistake or error was systemic in the husbandry practices of the stable.
[28] The RIU emphasised that this case was to be determined under the generic rule of 804(2) rather than the changed rule, which attributes cobalt as a prohibited substance with a threshold level. The case was one of gross negligence and was not a deliberate breach.
[29] The informant identified personal mitigating factors.
[30] The respondents had accepted the facts as set out in the summary of facts and had admitted the breaches at the first opportunity after having been charged. However, it was not helpful to the RIU that the farm manager, Mr Haines, whilst prepared to provide his employer with an affidavit for the RIU, was not prepared to engage in a meeting/interview with the RIU to verify the context.
[31] The respondent, Mr O'Sullivan, on the narrative provided by the respondents was the more responsible of the two trainers. However, the RIU acknowledged that he had had a long and distinguished career in New Zealand Thoroughbred Racing and had no breaches of the Rules as a licensed trainer. Mr Dickey emphasised there were no issues concerning Mr O’Sullivan’s integrity.
[32] Looking at the partnership, Mr Dickey said, Mr Scott did not have that unblemished record. Mr Scott had a previous breach in 2010 for the prohibited substance ketoprofen (r 804(2)) for which he was fined $6,000. In 2005 Mr Scott was disqualified for five months for supplying false information to a Stipendiary Steward. He submitted this factor “evens [things] out” when it came to the imposition of penalty.
[33] Whilst the respondents had undertaken to repay the prize money to their owners, so that the owners would not be out of pocket for circumstances, which were entirely outside their control, this, Mr Dickey submitted, was a private matter and not mitigation. Those owners had already benefited from the stakes won. The actual owners who had been out of pocket were those owners of the horses placed behind O’Sullivan/Scott runners in the races concerned.
[34] The RIU sought a $20,000 fine for the respondents for each breach.
Respondents’ submissions
[35] As had Mr Dickey, Mr Galbraith highlighted matters covered in his written submissions.
[36] These submissions outlined the history of the Wexford Stable, which had been operated in the past eight years by the respondents in partnership. Wexford was originally established in the 1960s by Mr Dave O'Sullivan, who was this country’s champion trainer on a number of occasions.
[37] The respondent, Mr Lance O'Sullivan, was Mr Dave O'Sullivan’s son and he had been champion New Zealand jockey on 12 occasions and had ridden 2,479 winners. He had been inducted into the New Zealand Racing Hall of Fame and the New Zealand Sports Hall of Fame.
[38] Mr Scott had 17 years' experience as a trainer, and for some time he was in partnership with Mr Mike Moroney, during which time he was the hands-on trainer of two New Zealand Derby winners and a number of other Group winners. Since his transfer to Wexford, the respondents had had success with a number of well-known horses.
[39] Mr Galbraith described the operation of the Stable: Mr Scott had the hands on day-to-day responsibility for the horses; with Mr O'Sullivan involved in all of the assessment, decision making and liaison with clients. Mr O'Sullivan continued to ride some work.
[40] Mr Galbraith emphasised that Wexford Stable was run to the highest standards with appropriate record keeping of all feed and treatment processes, engagement with a thoroughly experienced and professional vet, and requiring the highest standards of its staff. He described it as an old-fashioned, first class stable, and asked us to compare this to the operation of the stables in two of the cases before the Committee — Moroney and Hope.
[41] Mr Galbraith stated that the arrival of RIU representatives at the stable on 22 June 2015 came as a huge shock to the respondents. They co-operated, the stables were searched, some materials were taken for analysis, and members of Wexford staff were interviewed. Nothing arose from the search, analysis or interviews that gave an indication of any misuse of any drugs affecting Wexford horses.
[42] It then became a question of identifying how the positive tests for cobalt could have arisen. Wexford identified all possible sources — feed, supplements, salt licks, fertiliser etc, but while there were small amounts of cobalt as ingredients, these could not explain the high levels returned in the positive tests.
[43] In accordance with standard practice, the RIU publicly identified the fact of the positive tests. Given the high level of media publicity about cobalt breaches in Australia, there was media speculation, which was negative to Wexford’s and the respondents’ reputation in the industry. In this regard, Mr Galbraith described the difficulty the respondents had had in obtaining buyers at the recent sales.
[44] At the time the expert view was that elevated levels of cobalt could only be achieved by intravenous injection. This view, Mr Galbraith said, was based on relatively limited research, as cobalt, as a potential source of performance enhancement in horses, was a recent phenomenon. Accordingly the suspicion, Mr Galbraith described it as “scuttlebutt”, was that “somebody” had been responsible for injecting the horses involved.
[45] Quite by chance, and some weeks after the RIU search, Mr O'Sullivan stumbled across the source of the cobalt. Sworn statements by the respondents and Mr Haines, the dairy farm manager, supported this explanation. Mr Galbraith explained the farm manager lived at Tirau, had responsibility for 900 acres of farm operations and over 1300 head of stock. Apart from a 10 per cent share in a horse purchased in January 2015, he had no other involvement with the horses or the stable.
[46] Mr O'Sullivan discovered that Mr Haines, his contracted farm manager, had been dosing water troughs with cobalt on the Wexford property. These troughs were shared between small paddocks of not in-calf heifers and the day paddocks for the horses. Cobalt was being supplemented to improve stock health, and without any understanding that this supplementation might cause a collateral problem with the horses.
[47] The first positive led the RIU to investigate some 20 earlier samples from Wexford horses. An attached schedule of these results showed readings, which were above the level of cobalt that would normally be expected in horses. Mr Galbraith stated these were evidence of the variability in the effect of the cobalt supplementation that Mr Haines’ activities were producing. Mr Haines had erroneously been operating on the basis that “more was better”.
[48] Mr Galbraith commented that for some time the RIU were sceptical of the Wexford explanation. Eventually, and as a result of a separate incident and the tests identified in the summary of facts, it was accepted that elevated levels of cobalt could result from oral ingestion and therefore that Mr Haines’ activities were a credible explanation for the elevated cobalt levels.
[49] With reference to the respondents’ admission of the breaches, Mr Galbraith stated that the Rules of Racing relating to prohibited substances contained offences not only of commission but also of no fault/ absolute liability. Rule 804(2) was one such rule. Wexford were obliged, he said, to accept the fact that the three horses involved were presented, albeit unknowingly, at the races with elevated levels of cobalt in their system. The trainers were, in terms of the rule, responsible.
[50] Mr Galbraith stated it was common ground that the appropriate penalty was a fine. The issue was quantum. He acknowledged prohibited substance offences were sensitive for the industry because of the negative media and public attention they could attract, however he emphasised that penalties had to be set on the particular facts and be consistent with principle.
[51] Mr Galbraith submitted that this was “truly a no fault case”. The set up of sharing troughs between paddocks had existed at Wexford since Mr Dave O'Sullivan's day. They were small spelling paddocks and it had been thought not to be economic to have two troughs. There had never been a
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