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Non Raceday Inquiry RIU v K Morton - Costs Decision dated 8 October 2015 - Chair, Mr M McKechnie

Created on 12 October 2015




IN THE MATTER of the New Zealand Thoroughbred Rules of Racing



KEVIN MORTON, Licensed Trainer


Judicial Committee: Mr Murray McKechnie, Chairman & Mr Richard Seabrook, Committee Member

Present: Mr Steve Symon, Counsel for RIU

Mr Bryan Oliver
Mr Paul Dale, Counsel for Mr Morton
Mr Greg Purcell
Mr Kevin Morton
Ms Philippa Kinsey, Registrar




1.1 In the written decision of the Non-Raceday Judicial Committee dated 8 September 2015 both parties were invited to file submissions on the issue of costs. These have now been received. In each case they are comprehensive. Mr Dale has filed a submission in reply to that received on behalf of the Informant. Reply submissions were not spoken of in the Committee’s direction as to costs in the decision of 8 September 2015. The reply submissions have been considered by the Committee.

1.2 The Rules of Racing provide by Rule 920(3) as follows:

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

(a) any party to the hearing;

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

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

(d) the Judicial Control Authority and the Judicial Committee be paid by such person or body as it thinks fit[…].

The Committee has a wide discretion and the rule itself provides little guidance.

1.3 The decision of the Non-Raceday Judicial Committee in NZTR v McAnulty, 29 April 2011 contains a detailed and helpful analysis of how a Committee might approach the application of Rule 920(3). The relevant passage in the decision in NZTR v McAnulty is as follows:

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

1.4 In this Committee’s view the reasoning set out above has equal application when a charge laid under the Rules of Racing has not been made out and proved.


2.1 Two (2) informations were laid under Rule 801(1)(s)(ii) alleging the commission of two serious racing offences. The curious circumstances leading to the laying of the second information with reference to Mr Purcell are set out in the decision of the Committee of 8 September 2015. Rule 801(1)(s)(ii) is framed to address inappropriate behaviour of the worst kind. That is plain from the penalty provisions in Rule 801(2). Given how persons accused of abusive behaviour have previously been prosecuted: refer Third Minute of the Committee dated 28 July 2015, the laying of the informations in this case under Rule 801(1)(s)(ii) was plainly inconsistent with the approach previously adopted by the RIU. The evidence to support the allegations of behaviour constituting serious racing offences bordered on the hopeless. Both informations were dismissed.

2.2 After many months alternative informations were laid by the Informant under Rule 340. That is known as The Misconduct Rule. This is the rule under which the Informant ought to have proceeded throughout. For reasons explained in the decision of 8 September 2015 the Committee held that what was alleged against Mr Morton did not involve language that was insulting or abusive or which called into question the integrity of the persons about whom he spoke. The misconduct charges were dismissed.


3.1 Mr Dale submitted that the Committee should be guided by the High Court Rules. It is said that a 2B basis is appropriate.

3.2 Following reference to the High Court Rules there is a submission for Mr Morton that he should have increased or indemnity costs. The Committee was furnished with a copy of the judgment of the Court of Appeal in Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400. The Committee has carefully considered that judgment and also the judgment of Harrison J at first instance.

3.3 The costs calculated on a 2B basis under the High Court Rules come to $19,104.00. There are disbursements for the witness Mr Gardner totally $668.00. Mr Dale advised the Committee that the actual legal costs incurred by Mr Morton were $20,094.59. Mr Morton makes no claim for costs incurred before Mr Dale was instructed.

3.4 Mr Dale in his first submission indicated that he was not aware of any precedent by Non-Raceday Judicial Committees or Appeal Tribunals as to how costs were to be set. There are in fact a number of decisions which give some assistance. Some of these are referred to in the submissions filed for the RIU. They are known to the Committee. Reference NZTR v McAnulty in paragraph 1.3 and those decisions set out in paragraph 4.3 below.

3.5 Mr Dale in his reply submission pointed to a posting by the RIU on its website following the decision of the Committee on 8 September 2015. Mr Dale submitted with reference to that posting “the message may not necessarily have got through to the RIU”. The Committee declines to make any comment whatever in relation to the website posting by the RIU.


4.1 Mr Symon first submitted that there is no presumption that costs will be awarded in favour of a successful party. While there is nothing in the relevant rule to suggest that costs must follow the Committee’s determination it has long been the practice of Non-Raceday Judicial Committees and Appeal Tribunals to make costs awards where the circumstances are thought to be appropriate.

4.2 The RIU submissions then make reference to the Costs in Criminal Cases Act 1967. That is a restrictive piece of legislation and is of little assistance. There is then reference to the District Court Rules 2014. It is contended that the nature of the proceeding against Mr Morton bears better comparison to proceedings in the District Court than proceedings in the High Court. There is some force in that submission. The facts in this case were comparatively straight forward. No involved legal issues were presented. Regrettably however a good deal of irrelevant evidence was tendered and ruled inadmissible.

4.3 Mr Symon drew attention to a number of contemporary relevant decisions in thoroughbred and harness racing. These are:

Butcher v RIU, 21 December 2011
RIU v Fisher, Macrae & Faber, 2 September 2014
Sir Patrick & Lady Hogan & Walker V RIU, 22 April 2015
McDonald & Donaldson v RIU, 7 August 2015

The Committee is familiar with the decisions just referred to and indeed the Chairman had an involvement in three of the decisions set out above.

4.4 Mr Symon with reference to the decision of the Appeals Tribunal in Butcher v RIU 21 December 2011 drew attention to a judgment of Devlin LJ, as he then was which made a distinction between costs in civil litigation where parties act in their own interests and costs where a prosecutor is fulfilling a statutory function. The learned Judge was of the view that costs against a prosecutor fulfilling a statutory functions should not be at the same level as might be awarded against a litigant who had failed when seeking to advance his or her own personal or financial interests.

4.5 A calculation of costs under the District Court Rules 2014 results in a figure of $8099.00. The RIU submits that costs in favour of Mr Morton in the sum of $8,000.00 would be appropriate. Further the RIU acknowledges that some contribution should be made towards the costs of the Judicial Control Authority.


5.1 The JCA has been put to considerable expense. The principal items are the following:

• Fees to Committee members (estimate)      8,000.00
• Travel expenses                                            440.00
• Teleconferences                                            100.00
• Ellerslie room hire and catering                     822.00

5.2 Further it should be emphasised that the Committee was required to consider a significant volume of material tendered to it which was ruled to be irrelevant.


6.1 The Committee determined that the criticisms and comments which Mr Morton directed at Messrs Neal and Purcell were within permitted limits. The RIU originally chose not to lay any charge or charges in relation to what was said about Mr Purcell. That position was changed as a result of what was essentially an invitation by Mr Morton’s supporter Mr Molloy to have a further charge laid. The RIU would have been wise not to have responded as it did.

6.2 It is not accepted that proceedings under the Rules of Racing and certainly the issues raised before this Committee make a comparison with the High Court Rules appropriate. The conduct of litigation in the High Court generally involves extensive preparation. That preparation is often in relation to evidence to be tendered, the cross examination of witnesses and the making of legal submissions. While Mr Dale’s submissions are helpful the Committee considers that the time required for the preparation of this proceeding does not bear a valid comparison with the preparation of what is known as a witness action in the High Court.

6.3 As to the claim for indemnity costs the Committee has carefully considered the judgment of the Court of Appeal in Bradbury v Westpac Banking Corporation (supra) and other authorities in relation to applications to fix indemnity costs. In the Committee’s view the necessary criteria for an indemnity award have not been made out. There is no evidence of an ulterior or improper motive on the part of the RIU. The hearing was not unduly extended. While the informations alleging serious racing offences had almost no prospect of succeeding the informations alleging misconduct were not completely without merit. There was an argument – not found persuasive – to be made suggesting that the language used by Mr Morton had gone too far.

6.4 Non-Raceday Judicial Committees and Appeal Tribunals have in the past observed that the quantum of costs should, in part at least, reflect the relative merits of the position taken by the parties. The sparseness of the case for the Informant is a legitimate consideration in setting a costs figure higher than might otherwise have been the case. The Committee in its written decision of 8 September 2015 made plain that it thought that the prosecution of Mr Morton was misguided. In consequence Mr Morton has been put to very significant expense. In those circumstances a costs award somewhat greater than would otherwise have been ordered is appropriate. With reference to proceedings before Disciplinary Tribunals which govern the conduct of licence holders reference has been made to the very recent judgment of the High Court in Cooper v Waikato Bay of Plenty Standards Committee No 2 of the New Zealand Law Society [2015] NZHC 2352, Venning J, 28 September 2015. Mindful of the costs actually incurred by Mr Morton and sums that have been awarded on previous occasions (again refer NZTR v McAnulty) an appropriate figure for the RIU to pay Mr Morton would be $13,000.00. That figure includes an allowance for the submissions on costs.

6.5 Mr Morton makes a claim for the witness expenses of Mr Gardiner. That is a matter for resolution between Messrs Morton and Gardiner.

6.6 As to the position of the JCA a meaningful contribution to the costs incurred is appropriate. Extended briefs of evidence were put before the Committee. Significant passages were ruled out. Both counsel had at various times filed written legal submissions which required careful consideration. All of what has just been spoken of was time consuming. The hearing at Ellerslie extended over a full day and it was necessary thereafter for the Committee members to deliberate before issuing a written decision. Having regard to all of these circumstances an appropriate figure to be paid towards the costs of the JCA would be $7,500.00.

6.7 There will be a costs award in Mr Morton’s favour payable by the RIU of $13,000.00. There will be a costs award payable by the RIU to the JCA in the sum of $7,500.00.

DATED this 8th day of October 2015

Murray McKechnie


Signed pursuant to Rule 920(4)

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