What the Court of Appeal decision in Kavanagh and O’Brien means

By Natalie Hickey, November 19, 2017

The long awaited Court of Appeal judgment has been delivered in the Mark Kavanagh and Danny O’Brien cobalt saga.  Or more accurately, three judgments have been delivered. Racing Victoria achieved some success.  Had they challenged certain factual findings from VCAT, they might have won completely.  The devil is in the detail of this decision.

For (some) of the history of this decision, please see my previous posts, ‘Now for the Court of Appeal: What we can expect next in O’Brien and Kavanagh cobalt case’ and ‘Let there be no mistake: VCAT decision on O’Brien, Kavanagh is not a technical one’.

So, what exactly did the Court of Appeal conclude? Here is my analysis.

The Presentation Charge

Let’s start with the easy bit, the presentation charge. One of the surprising elements of the VCAT judgment of President Garde was that, whilst he accepted that all the horses had elevated levels of cobalt in their system on race day, nevertheless he dismissed the charge under AR 178 (known as the presentation charge).  AR 178 provides:

Subject to AR 178G, when any horse that has been brought to a racecourse for the purpose of engaging in a race and a prohibited substance is detected in any sample taken from it prior to or following its running in any race, the trainer and any other person who was in charge of such horse at any relevant time may be penalised.

AR 178D sets out procedures that govern the sample testing and reporting regime to be adopted by stewards and by laboratories where samples are taken from horses.  However, RVL had not followed these procedures to the letter.  Garde P had determined that this meant RVL was unable to rely on testing, analysis and certification arising from the exercise of those powers.

One of the question marks arising from this approach was that, according to the rule, certified findings by an Official Racing Laboratory have the status of “prima facie evidence”, meaning evidence ‘on its face’.  This suggests that the rule offers a ‘short cut’ home (to use the language of some of the judges) but that, even if the short cut is not pursued, there is a long way home.

However, Garde P found that there was no way home because the procedures were not followed, even though he was “in no doubt” that cobalt had been administered to the horses.  Accordingly, if the test results were admitted, the presentation charge would be sustained.

All three judges of the Court of Appeal concluded that Garde P’s construction was wrong.  We clearly understand this because Maxwell P used the word ‘wrong’, and the other judges agreed.  Cavanough used the word ‘erred’ which is a polite word for wrong.

In short, there was a unanimous view that AR 178D is not an exclusive means of proving detection of a prohibited substance in a sample, but a short cut procedure of proving a positive which does not preclude other methods of doing so.

As Maxwell P stated, “there is nothing in the Rules, in my opinion, to suggest that the prima facie evidence provision was intended to exclude conventional methods of proof. All of the indications are to the contrary. It having been common ground that the evidence otherwise before the Tribunal established the presence of cobalt in the samples, the charges under AR 178 (which depended only on proof of detection) should have been found proved.”

For completeness, Garde P had also excluded evidence of subsequent testing in 2016 (which also showed the prohibited substance) on the basis that AR 178D only allows for additional testing to be carried out within a reasonable time.  Garde P held that a period exceeding 15 to 18 months from the relevant races and six months after the RAD Board decision  was an excessive period.  However, this was rejected by the Court of Appeal which found that there is no implied reasonable time limit on re-testing.

I will turn shortly to the implications of this finding and what happens next.

The Administration Charge

In relation to the administration charges, the position is far more complicated.  As President of the Court of Appeal, Maxwell P was the first in order of published reasons.  It is therefore understandable to read what he has to say and assume he is speaking for the Court.  However, Maxwell P was, in fact, in the minority.  What this means is that the views he expressed on administration are not the law.  This is called a dissenting judgment.  The views of the two remaining judges prevail.

Here’s what happened.  First, President Maxwell broadly agreed with the approach of Garde P at VCAT in the interpretation of the administration rule.  Secondly, McLeish JA disagreed with President Maxwell.  Thirdly, Cavanough AJA came in as tie-breaker and he sided with McLeish JA.  The upshot is that it’s a points decision: Maxwell P loses, and the other two win on their interpretation of AR 175(h)(i) and (ii).  The law going forward will be based on what the two judges had to say.

Both of the other judges concluded that Garde P had been in error in his approach to the administration rule.  But for being saddled with the findings of fact from VCAT, one gains the clear impression that either or both of them may well have upheld Racing Victoria’s appeal on this element of the case as well.

Kavanagh and O’Brien can therefore count themselves as lucky.  If Racing Victoria had challenged some of the findings by VCAT, there is a very good chance the trainers would right now be facing a mandatory three-year ban (subject to a local rule 73A permitting reduction in special circumstances).

On a final general note, it appears that Maxwell P was strongly influenced by the severity of the sanction, as well as a High Court criminal law case called Miller featuring a man, his son, a road and a vehicle.  The facts of that case do not bear repeating, and call to mind the lesson given to young lawyers to avoid arguing analogies.  McLeish JA engaged in heated (written) repartee about the case, with both parties torturing the facts and findings of various judges to suit their own construction.

Following this rather unsatisfying read, McLeish JA reminded the reader (in my view correctly) that this is a world away from racing integrity, where a severe sanction for participation in doping is regarded as a justifiable means to protect public integrity in the sport:

“If it is correct to think that the financial well-being of the industry depends significantly on the maintenance of betting turnover, the need to maintain integrity in horse racing, and to do so manifestly, is easily seen to be imperative and of paramount importance. It may well be anticipated that unless racing is perceived to be fair and honest, people may be discouraged from betting. This might be thought to justify stringent controls in respect to the administration of drugs to horses and the enforcement of those controls by peremptory means.”

AR 175(h)(i) and (ii) provides:

The Principal Racing Authority (or the stewards exercising powers delegated to them,) may penalise: 

 (h)      Any person who administers, or causes to be administered, to a horse any prohibited substance: 

(i) for the purpose of affecting the performance or behaviour of a horse in a race or of preventing its starting in a race; or 

(ii) which is detected in any sample taken from such horse prior to or following the running of any race. 

Note: Emphasised words concern the main territory of the argument.

Maxwell P took the view that, for ‘causes to be administered’ to be made out, the accused must have some knowledge or awareness of what the substance was which he was causing to be administered to the horse (whether or not he knew the substance was prohibited). That means, based on his interpretation, a trainer needs to know it’s cobalt, but does not need to know that cobalt is prohibited to fall foul of the rule.

McLeish JA did not agree.  His perspective was that the rule is directed to conduct not knowledge, and that this needs to be evaluated having regard to the relevant circumstances.

Cavanough AJA (our tie-breaker judge who went with McLeish JA) summarized the debate quite nicely. I will paraphrase it here:

• Maxwell P addressed the ordinary meaning of ‘administer’, in the sense of giving something to a person or animal. His take was that, in ordinary usage, when a person ‘administers’ a specified medication, the person knows what it was that he or she is administering. It follows that it would not ordinarily be correct to say that a stable hand ‘administered cobalt to a horse’ in circumstances where a drip containing cobalt had been prepared by someone else previously and had been left for the stable hand (who knew nothing about the presence of the cobalt) to give to the horse.
• Next, Maxwell P noted that there are six ‘administration’ offences under the Rules of Racing and that four of them carried substantial fixed penalties or substantial mandatory penalties. The fixing of such penalties was said to be a strong indication that the conduct to be caught by these rules was intentional, that is, conduct by a person ‘with knowledge or a belief’ about the identity of the substances being administered.
• Maxwell P concluded that neither trainer could have been proved to have contravened either AR 175(h)(i) or AR 175(h)(ii) unless it were established that he had ‘some knowledge or awareness of what the substance was which he was causing to be administered’. It follows, Maxwell P further concluded, that there was no error in the interpretation by Garde J of AR 175(h) and that, on Garde J’s findings of fact as to the trainers’ ‘lack of knowledge that cobalt was to be administered’, the trainers could not have been found guilty of either offence under that rule.
• McLeish JA disagreed with Maxwell P’s line of reasoning. McLeish JA took the view that, as a matter of ordinary language, a person ‘administers’ a substance to a horse if the person gives or applies the substance to the horse; it doesn’t mean the person has to know what the substance is.  In other words, ‘administer’ is directed to conduct not knowledge.
• McLeish JA was also not persuaded that the fixing of mandatory penalties had much to do with the interpretation of the rule. For example, there is no fixed penalty for AR 175(h)(ii). Further again, the implication of a required mental element was unnecessary in the case of AR 175(h)(i), because the ‘purpose’ requirement addresses this issue specifically. He also drew upon what was said in Harper v Racing Penalties Appeal Tribunal (WA) about the general policy of the Rules of Racing in relation to doping (in relation to the need to protect integrity).
• McLeish JA agreed with the ultimate conclusion of Maxwell P (that the appeal on this ground had to be dismissed). He did so because the findings of fact were unchallenged on appeal, that the impugned vet was on a frolic of his own and the trainers were unaware that the Vitamin Complex was being administered to their horses via a drip program.

As we know, Cavanough AJA used his tie breaker status to support McLeish JA.

What does the Court of Appeal decision mean for the interpretation of AR 175(h)(i)?

When there are different judgments, one has to synthesise the reasons to come up with principles.  There is plenty of room for fertile debate around this.  Here is my attempt:

1. There is a basic mental element; the person must intend that ‘a’ substance is to be administered to a horse.
2. You do not have to prove the person knew the identity of the substance being administered.
3. You need to evaluate the nature of the relevant conduct, by reference to the circumstances which led the person who administered the substance to do so. Knowledge might bear on that question but it is not a necessary element.
4. Authority or direction to perform the act of administering the substance will be enough. As McLeish JA stated, a person causes another person to administer a prohibited substance to a horse, “if the person either authorises that person to administer the substance to the horse or exerts a capacity of control or influence to direct the person to do so, in either case intending, contemplating or desiring that the authority or direction will be acted upon.”
5. The ‘purpose’ provision in sub-para (i) expands the mental element to a degree – one has to show the person had knowledge or a belief about the identity of the substance, but only as to the effect or effects that the substance was likely to have on the horse.
6. For a person to give free licence to another person to administer to a horse belonging to the first person whatever substance the second person wished to administer might also, at least in some circumstances, amount to causation within the meaning of AR 175(h)(i) and (ii).

So, applying the above, if a trainer authorizes a vet to administer a Vitamin Complex to a horse to improve its performance, and this tests positive for cobalt, then the trainer might well be found to have satisfied the Court of Appeal’s interpretation of the rule.

Point 6 would appear to capture the situation of willful blindness, for example, the trainer who says, “Mate, do what you have to do to make the horse win, just don’t tell me what you are doing”.  However, there is a level of reading between the lines about this.

The upshot is that there are some remaining ambiguities which may require the Rules of Racing to be amended if they are to be clarified.

Why then didn’t Racing Victoria win?

Racing Victoria did not win because the VCAT findings remained unchallenged (it is to be remembered that these findings were the opposite of those of the RAD Board).  Cavanough AJA, in particular, expressed skepticism about the findings:

“I also agree with McLeish JA that for a person to give free licence to another person to administer to a horse belonging to the first person whatever substance the second person wished to administer might also, at least in some circumstances, amount to causation within the meaning of AR 175(h)(i) and (ii). However, as McLeish JA holds, on the unchallenged findings of fact made by Garde J, that is not this case. In this case, on the unchallenged findings of fact made, causation could not properly be established against the trainers. There was no finding that the trainers gave an open-ended licence to Dr Brennan. On the findings that were made, the trainers had no awareness or suspicion whatsoever, nor even an inkling, about the existence in Dr Brennan’s possession of the one and only substance that brought about the elevated cobalt readings. Nor, on those findings, did the trainers have any awareness or suspicion or even an inkling about Dr Brennan’s proposed inclusion of that substance in the drips. On those findings, the trainers no more caused the administration of a prohibited substance than if some unidentified, trespassing rogue (in racing parlance, a nobbler) had slipped some prohibited substance (whether cobalt or something else), unnoticed, into otherwise clean drips.” [emphasis added]

The skepticism is apparent from the words I have highlighted. The repetition of ‘unchallenged findings’, the repeated reference to the findings, and the repetition of ‘even an inkling’ suggests the author was frustrated by his inability to review them.

So too McLeish JA stated:

“Had the respondents simply given Dr Brennan free licence to administer whatever substances he wished to their horses, as the applicant contended, a different result might have ensued. It would have been necessary then to decide how far such licence extended, and in particular whether it permitted administration of substances irrespective of whether they were prohibited. But on the Tribunal’s very clear and specific findings, that was not this case.”

Does this mean that those at Racing Victoria should have sleepless nights revisiting their decision to challenge only the law and not the facts?  For those contemplating this issue, it is worth bearing in mind that it is very difficult to overturn factual findings on appeal.  Lawyers are also taught to focus on their best points.  Hindsight is a wonderful thing, but a factual re-evaluation could have cluttered the analysis given that the parties on appeal only have a limited time to present their case.

What happens next?

The question of penalty on presentation has been remitted back to VCAT (likely Garde P) for determination.

Some might think it odd that the same person who has just been overturned (in part) will consider the rest of the case.  However, there is a presumption that the decision maker is independent, and the issues here are different, because they are confined to penalty.

The question of penalty is at large and a variety of factors will be relevant.  One of them is that cobalt is a prohibited substance at elevated levels.  The effects of cobalt in horses are essentially unknown at elevated levels. There are strong animal welfare concerns around such use which can lend itself to significant penalty.  There is also no known therapeutic use for cobalt, so it is unlikely to be considered in a similar way to, say, ibuprofen.

Against this though, is that the factual findings of Garde P were in the ‘nobbler’ category as Cavanough AJA suggests, which might lend itself to a light touch approach.

It follows that what happens next involves high stakes for all concerned.