IN THE MATTER OF THE RACING COMMISSION ACT 2000, S.O. 2000, c.20;

AND IN THE MATTER OF PAUL MEGENS

Paul Megens requested a hearing into the Deputy Director’s Notice of Proposed Order to Revoke Licence, dated April 4, 2002, as an owner, driver and trainer.

On October 7 and 8, 2002, Chair Stanley Sadinksy, Q.C. and Commissioners Thomas Deacon and Dr. Bernard Brennan, DVM, of the Ontario Racing Commission, convened to hold the hearing.

Counsel Jeffrey Streisfield appeared on Mr. Megens’ behalf and Counsel Don Bourgeois appeared for the Deputy Director.

On hearing the testimony of Brent Stone, Rick Murchison, Tim Brown, Grant Hollingsworth, Neil MacKay, Shannon Leak, Ron Crimeni, Robert Megens, William Megens and Paul Megens, on reading the exhibits filed and on hearing submissions on behalf of the parties, the Ontario Racing Commission confirmed the proposed order of the Deputy Director and directed the Deputy Director to carry out the order.

The Reasons for Decision of the majority and the Dissenting Reasons for Decision are attached to this Ruling.

DATED at Toronto this 25^th day of October, 2002.

BY ORDER OF THE COMMISSION (original signed by) Jean Major

Jean Major

Executive Director

REASONS FOR DECISION OF THE CHAIRMAN AND COMMISSIONER BRENNAN

PAUL MEGENS

The Deputy Director of Racing issued a Notice of Proposed Order to Revoke the owner, trainer and driver’s licenses of Paul Megens (Megens) on the grounds that he was involved in the fixing of a race at Fraser Downs in British Columbia, which was run on April 22, 1999.

The particulars of the allegations are set out in the Notice (Exhibit 1, Tab 3). It is alleged that Megens conspired with Grant Hollingsworth (Hollingsworth) and Tim Brown (Brown) to fix the race in question and to profit from bets made on the race.

Pursuant to the provision of the Racing Commission Act of Ontario (the Act), Megens requested a hearing before the Commission. At the hearing, the Administration of the ORC was represented by Don Bourgeois and Megens was represented by Jeffrey Streisfield. The ORC called four witnesses, viz. Investigator Brent Stone (Stone), CPMA official Rick Murchison (Murchison), Brown and Hollingsworth. Megens called six witnesses, viz. Neil MacKay (MacKay), Shannon Leak (Leak), Ron Crimeni (Crimeni), Megens, Robert Megens and William Megens. In addition, a total of thirteen Exhibits were filed.

The first issue that we must address is the standard of review that ought to apply in the circumstances. Section 19 of the Act provides in part, as follows:

19 The Director shall refuse to issue a licence to an applicant or to renew the licence of an applicant if,

(a) there are reasonable grounds to believe that, while the applicant carries out activities for which the licence is required, the applicant will not act in accordance with law, or with integrity, honest, or in the public interest, having regard to the past conduct of the applicant…

In such a case, the Director then serves a Notice of a Proposed Order together with written reasons on the applicant and the applicant may request a hearing before the Commission. (Section 22 (1) and (2)) Following a hearing, the panel of the Commission may confirm or set aside the Proposed Order and/or direct the Director to take the action that the panel considers the Director ought to take to give effect to the purposes of the Act. (Section 22 (6)). Section 22(7) of the Act expressly provides that the panel may substitute its opinion for that of the Director.

A number of authorities were cited to us by Mr. Bourgeois in support of the position that the standard of review of the Director’s decision is that the Commission, in order to reverse the Director’s decision, must be able to say that the Director was in error in his conclusion and that the past conduct of the applicant did not afford the Director reasonable grounds for such a belief. In addition, the cases stress that the discretion is that of the Director and not the Commission. (see Re Tot, [1994] O.C.R.A.T.D. No. 113 at #s 26 and 27, citing Re Brenner, 19 O.C.R.A.T.D. , SCO Decisions and Orders (1971-1989) p. 59 (S.C.O. (Div. Ct.) and Re Crone, [1994] O.C.R.A.T.D. No. 73)). The Tot case involved a Decision by the Ontario Commercial Registration Appeal Tribunal (CRAT) which was hearing a matter arising from a proposed order of the Registrar under the Gaming Control Act. The legislation under that Act is similar to the legislation contained in the Racing Commission Act in all relevant respects.

Reference was also made to Re Galbraith, (1990), 20 C.R.A.T. 462 which involved a hearing arising under the Real Estate and Business Brokers Act. Following the Brenner decision, the Tribunal, CRAT, at p. 465, said the following:

…it is only with great reluctance that we can overturn the decision of the Registrar and only when we find that the Registrar did not act clearly or did not have facts clearly before him which would support his position. It is our view that the Registrar in his position as the protector of the public interest has acted properly in the circumstances and under that basis, we cannot overturn his decision.

And in Re Siba, [1997] O.C.R.A.T.D. No. 129, which involved a hearing arising under the Gaming Control Act, the Tribunal, CRAT, in following the Brenner decision said the following at # 10:

This Tribunal should not interfere lightly with the decision of the Registrar unless it feels that the Registrar did not have the grounds to make her decision. As this Tribunal is an administrative tribunal, it is not bound by precedent. Each case needs to be reviewed on the basis of its particular circumstances. The decision of the Tribunal must be based on all of the evidence.

Mr. Streisfield urged us to adopt a much broader approach and hear this matter de novo. He argued that we should only uphold the proposed actions of the Director if we are satisfied on clear and cogent evidence that his decision was correct.

In our view, the standard of review that we should adopt lies somewhere between these two positions. The cases cited to us by Mr. Bourgeois involve decisions of CRAT or decisions of the courts that were reviewing decisions of CRAT. Unlike the Commission, CRAT is an administrative tribunal that hears appeals from the decisions of a variety of Ontario Boards and Tribunals and their respective Registrars or Directors. As a reviewing body, CRAT is not involved in the activities of the Boards or Tribunals themselves nor in their policy making function. On the other hand, the Commission is directly involved with policy-making and is in as good a position as its Director to protect the public interest. Furthermore, CRAT does not have a statutory direction that permits it to substitute its opinion for that of the body or persons whose decision it is reviewing as does the Commission. (see Section 22(7) of the Act) In addition, none of the cases cited deal with the standard of review that should apply when a tribunal, such as the Gaming Control Commission, reviews a proposed order of its Registrar.

While we adopt the view that the Commission should not interfere lightly with the decisions of the Director, we have concluded that it has the jurisdiction and mandate to do so if it is of the view, after reviewing all of the evidence that the Proposed Order of the Director should not be made. Furthermore, when the matter involves the right of a licensee or an applicant for a licence to earn a living by participating in the horse racing industry, denial should be based on clear and cogent evidence (see Re Schickendanz, [2001] O.R.C.D. No. 25)

Turning to the facts of this case, the most important evidence against Megens comes from Brown. Brown both implicated and exculpated Megens in fixing the race in question on different occasions. He admitted to lying to officials of the British Columbia Racing Commission (BCRC) and to friends. MacKay, Leak and Crimeni testified that Brown told them that in order to get his licenses back from the BCRC he would have to implicate Megens even though Megens was not involved in the fixed race. Brown now says that he is telling the truth and that he finally told the truth to the BCRC about Megens’ involvement in the ‘fix’. It is clear that Brown exchanged information about Megens, in part, with the BCRC in return for an earlier re-instatement of his licenses in BC. Megens alleges that Brown was under considerable pressure from the BCRC to implicate him in the ‘fix’ and that was the paramount reason why Brown named Megens.

On the other hand, there are reasons to believe that Brown is now telling the truth about Megens. First, Hollingsworth testified that on the day of the race, Brown came to his barn and suggested that he try not to win the race in question or be in the money with his horse. Brown also told Hollingsworth that Megens was in on the ‘fix’ and that he too would not be in the money. It is important to note that at this time, there was no possibility that Brown was under any pressure from the BCRC to implicate Megens. It is, of course, possible that Brown was lying on this occasion as well and was only using Megens’ name to convince Hollingsworth to participate in the ‘fix’.

In addition, it is clear that one Ken Hulan (Hulan) who comes from Ontario and is a friend of Megens, attempted to cash winning Triactor tickets on the race in question. Hulan was not a friend of either Brown or Hollingsworth. Murchison identified Hulan near the cashiers’ windows following the race and sought to obtain his name and telephone number. By this point, Murchison had identified betting irregularities on the race and had frozen payouts on any outstanding Triactor tickets. Hulan gave an incorrect name and telephone number. Megens testified that he met Hulan on the day after the race, April 23, and that Hulan told him that he had trouble cashing winning tickets on the previous evening. We are asked to draw the conclusion that Megens used Hulan as his vehicle for betting on the race and that Megens gave Hulan information on the fixed race.

Megens denied having any recent contact with Hulan prior to the race in question. He testified that he knew that Hulan was coming out to BC but that he did not see him until April 23. Brown testified that not only did he meet with Megens at lunch time on April 22 to arrange for the ‘fix’ but that Megens also agreed to get “someone he knows” to place the bets. Furthermore, Brown testified that on April 23 he met with Megens and Hulan at a training centre and discussed the events of the previous day. Hulan was identified by Megens as the person who placed the bets. Brown testified that they all agreed to tear up the uncashed winning tickets and did so.

Megens has consistently denied that he had any involvement in the fixing of the race or in betting on its result. He denied every important detail of Brown’s testimony and relied on Brown’s inconsistent stories as proof of Brown’s untrustworthiness. Megens also told friends that he had nothing to do with the ‘fix’. The Administration alleges that Megens moved back to Ontario to escape prosecution in BC. We reject this suggestion. Both Robert Megens and William Megens testified that it was planned in advance that Megens would return to Ontario to take charge of the family farm and we accept this evidence.

In assessing Brown’s credibility, we have considered the nature and extent of the story that he related to us in his evidence as to Megens’ involvement. Brown’s story covered events both prior to and subsequent to the race in question. Brown related details of meetings, face-to-face conversations and telephone discussions. If Brown were fabricating the involvement of Megens, one would not ordinarily expect the extent and detail provided. In spite of the inconsistencies in Brown’s evidence, his story concerning Megens’ involvement rings true.

We were not impressed with the demeanour of Megens. He appeared vague and uncertain about straightforward matters and was somewhat hostile and belligerent.

This case largely turns on matters of credibility. After hearing the evidence of Brown, Hollingsworth and Megens and seeing them in the witness box, we are satisfied that there is clear and cogent evidence of Megens’ involvement in the ‘fix’. We are mindful of our duty to protect the public interest and the racing industry from those inclined to fix races and thereby act dishonestly while at the same time, have due regard for the desire of individuals to participate in the industry.

We have reached the conclusion that the Proposed Order of the Deputy Director should be confirmed.

DATED this 25^th day of October, 2002.

(original signed) by Stanley Sadinsky

Stanley Sadinsky, Q.C.

Chair

DISSENTING REASONS FOR DECISION OF COMMISSIONER THOMAS DEACON

PAUL MEGENS

I have read the Reasons for Decision of the Chair and Dr. Brennan, and while I am in general agreement with the manner in which those Reasons address the facts (as they may be adduced from conflicting testimonies) in the matter and am in full and vigorous agreement with their remarks concerning the appropriate standard of review, I must differ with the conclusion reached therein.

In my mind, for at least two reasons, the clarity and cogency of the evidence required to sustain the Deputy Director’s course of action, is wanting. First as pointed out in the majority Reasons, the Administration’s principal witness, Tim Brown, is an admitted liar, who for a matter of nearly two years, “stonewalled” BC Racing Commission investigators in their endeavours to resolve the responsibilities for what was indisputably a fixed race run at Fraser Downs, Cloverdale, B.C., April 22, 1999. I find it entirely plausible, although far from proven by clear and cogent evidence, that Brown, pressured by economic circumstances (to which he freely admitted) and encouraged to think his racing privileges would be restored at the track in question, (in itself, a sad comment, given his admitted complicity in race fixing), contrived to bring Megens into the conspiracy given that final placement of horses in the offending race was then long since established (Megens finished last or second last). Further, four witnesses, three with no apparent axe to grind in the matter, and a fourth, Megens’ father, who while perhaps fixed with a parental bias, was nonetheless in my view a credible witness, gave evidence to the effect of Brown having declared himself with no alternative to implicating Megens given the pressures confronting him, notwithstanding that Megens “did nothing”. While I find this last remark attributed to Brown’s declarations on two separate occasions, the first heard by MacKay, Leak, and Crimeni at a party hosted by the last, and the second, months later during a long-distance phone conversation between Brown and Megens during which the latter passed the phone to his father, no more or less believable than Brown’s declarations elsewhere in his testimony implicating Megens, the collective effect of their opposed positions reduces considerably the clarity and cogency of Brown’s overall evidence.

Moreover, counsel to Megens invited the panel to draw a negative inference from the Administration’s failure to call Ken Hulan as a witness. Certain testimony suggested Hulan to be a Mississauga, Ontario resident. Three of the Administration’s four witnesses were brought to Toronto (and accommodated there) from British Columbia. Clearly it was not the expense of producing this witness which resulted in his absence. I therefore accept such counsel’s invitation, at the same time recording that the inference thus taken, in and of itself, does not in my mind, resolve the issue one way or the other, merely once again colours adversely the clarity and cogency of the evidence against Megens.

I have therefore concluded that the proposed Order of the Deputy Director should not be made and that Megens’ licenses should remain in place.

DATED this 25^th day of October, 2002.

(Original signed by) Thomas Deacon

Thomas Deacon

Commissioner