RULING
IN THE MATTER OF THE RACING COMMISSION ACT 2000, S.O. 2000, c.20;
AND IN THE MATTER OF CLIFFORD SIEGEL
Clifford Siegel requested a hearing with respect to 2003 nominations for several added money events at Mohawk and Woodbine Raceways that were not accepted by the Race Secretary at Woodbine Entertainment Group.
On May 30 and June 2, 2003, Chair Stanley Sadinsky, Q.C., and Commissioner Bernard Brennan, DVM of the Ontario Racing Commission convened to hold the hearing.
Arlen Sternberg appeared on behalf of Clifford Siegel, David McCutcheon and Cameron Paulikot appeared for Woodbine Entertainment Group, John Walzak appeared on behalf of the Ontario Harness Horse Association and Don Bourgeois appeared on behalf of the Administration.
On hearing the evidence of Hugh Mitchell, Scott McKelvie, Clifford Siegel and Rachel Guadalupe, on reading the exhibits and on hearing submissions on behalf of the parties, the Ontario Racing Commission, determined that Mr. Siegel’s nominations should not be accepted and that Mr. Siegel is entitled to be reimbursed for nomination and sustaining payments made, if any.
The panel’s reasons for decision are appended to this Ruling.
DATED this 5th day of June, 2003.
BY ORDER OF THE COMMISSION Jean Major
Jean Major
Executive Director
REASONS FOR DECISION
JURISDICTION
The first issue before us in this matter is whether the Ontario Racing Commission (ORC) has jurisdiction to consider this case and, if so, under what Rule(s) or statutory provision(s). By Rule we mean the Rules of Standardbred Racing (the Rules), and by statutory provision we, of course, mean the Racing Commission Act, 2000 (the Act).
We have heard submissions from counsel representing Mr. Siegel (Siegel), Woodbine Entertainment Group (WEG), and the Administration of the Racing Commission (the Administration), and on the issue of jurisdiction alone, we heard the submission of Mr. Walzak on behalf of his organization, the Ontario Harness Horse Association (OHHA). In essence all counsel support the position that the Commission has jurisdiction to consider this matter, but the real question is under what authority. No party took the position that the Commission absolutely had no jurisdiction under any of the provisions of the Act or the Rules to hear this case. We are going to deal with the various options as to jurisdiction in the order in which they were put to us by Mr. Sternberg, who made the first submission on the point on behalf of Siegel.
The first Rule that we must consider is Rule 24.01. Mr. Sternberg argues that the Commission has jurisdiction in this matter on the basis that it is an “appeal” within the meaning of Rule 24.01. Although we have not as yet heard any evidence in this matter, Mr. Sternberg has provided the following overview. Siegel submitted a number of nominations for horses in a number of stakes races being held by WEG in 2003 and those entries were rejected by its Race Secretary pursuant to Rule 16.18. Siegel now asks the Commission to review that result. That is the nature of the substantive matter that we are being asked to consider, provided we have jurisdiction.
Rule 24.01 reads in part as follows:
"An appeal is a request to review any decisions or rulings of the judges or delegated officials".
We must determine two matters under this part of the Rule; whether the Race Secretary at WEG, who communicated WEG's unwillingness to accept the nominations was a “decision” and, if we conclude that it was, whether the Race Secretary was a “delegated official” within the meaning of the Rule.
Firstly, as to whether it was a “decision”, we have concluded that it was. In our view, what the Race Secretary did under Rule 16.18 was more than a pure administrative act. The Race Secretary considered the facts, considered the Rule and reached a conclusion as to whether the nominations should be accepted. For our purposes, that constitutes a “decision” within the meaning of Rule 24.01.
In addition, it is possible, that the Race Secretary made a decision under Rule 29.01 (f) which reads as follows:
"The race secretary shall: examine nominations and declarations in early closing, late closing, futurity and stake events; verify the eligibility of all declarations and nominations and compile lists thereof for publication".
In our view this also involves a decision-making process.
Moving to the second question, we now address whether the Race Secretary made his decision under Rules 16.18 or 29.01 as a “delegated official” within the meaning of Rule 24.01. The term "delegated official" is not defined in the definition section of the Rules, Rule 2. The Commission therefore, without the benefit of an express ‘definition‘, must consider what that term means within the context of Rule 24.01. We are being asked to determine whether Mr. Sternberg is entitled to appeal the decision of the Race Secretary under Rule 24.01.
In order to determine this matter, we begin by reviewing a number of other Rules and statutory provisions. The first is Rule 5.03 and the relevant part of that Rule reads as follows:
"At all extended pari-mutuel race meetings there shall be the following licensed racing officials approved by the Director of Racing …
(b) Race Secretary and/or Assistant Race Secretary
It is important to note that in Rule 5.03, the Race Secretary is described as a “racing official” and not as a “delegated official”. That Rule, in our view, establishes that a Race Secretary can be a racing official, and if referred to in the Rules in that manner, certain consequences will follow.
We have concluded that when a Race Secretary makes a “decision” under Rules 16.18 or 29.01, he or she does so as a racing official and not as a “delegated official” as set out in Rule 24.01. A “delegated official” is one who acts on behalf of the Commission, e.g. a standardbred judge. A racing official acts on behalf of the association that employs him or her and, at times, performs a function as such under the Rules.
Section 11 (3) of the Racing Commission Act reads in part as follows:
"In its rules the Commission may delegate to stewards, judges, veterinarians, race track officials, racing association officials and others any of the following powers that the Commission considers expedient".
Sub-paragraph 2 of that Section refers to “the power to enforce the carrying out of this Act, the regulations, the rules and all the requirements of the Commission made under this Act”. That Section uses the term "delegate", but, in our view, it does not necessarily follow that every delegation constitutes the delegatee a “delegated official” within the meaning of Rule 24.01. We have concluded that the Commission can delegate certain functions to a racing association official or to a racing official without it constituting a delegation to a “delegated official” within the meaning of Rule 24.01.
In sum, we have concluded on this point that a referral in Section 11 (3) 2. of the Act does not necessarily mean that whatever a Race Secretary does, constitutes him or her a “delegated official” within the meaning of Rule 24.01. While it may be possible for the Commission to expressly constitute a Race Secretary a “delegated official” within the meaning of Rule 24.01, it has not done so in this instance. A “delegated official” in our view, means an official who is required to perform a function on behalf of the Commission -- in the shoes of the Commission -- in the place of the Commission; in essence as an agent or representative of the Commission. Again, an example of this is the delegation of powers to the Judges under the Rules.
As indicated, the Race Secretary in this case, and Race Secretaries generally, do not act on behalf of the Commission or as the representative of the Commission when they make decisions with respect to nominations. They act on behalf of racing associations. Accordingly, we have concluded that there is no right of appeal under section 24.01 of the Rules of Standardbred Racing from the decision of the Race Secretary of WEG when he applied Rule 16.18 or Rule 29.01.
We turn next to Rule 16.17 which reads as follows
"Every nomination shall constitute an agreement by the person making the nomination and the horse shall be subject to these rules. All disputes and questions arising out of such nomination shall be submitted to the Commission, whose decision shall be final".
The issue for us is whether this case involves a “dispute” within the meaning of this Rule thereby giving the Commission jurisdiction to resolve it.
Mr. Bourgeois submitted that this Rule does not apply in this instance as it only applies after a nomination has been received and a dispute then arises. He argues that this Rule does not deal with a dispute arising from the nomination process itself. We disagree. In our view, it is possible for the Commission to consider a question of nomination or entitlement to entry under Rule 16.17.
Third, we were asked to consider Rule 1.09. That Rule reads in part as follows:
…”Provided however, the Commission in its absolute discretion may waive the breach of any of the rules, which wavier or breach the Commission does not consider prejudicial to the best interest of racing".
All parties submitted that the Commission clearly had jurisdiction to consider this case under Rule 1.09. We agree. Depending on the facts of any given case, this Rule provides the Commission with clear jurisdiction to deal with a matter such as the one in issue in this case. Whether the waiver provision will be invoked depends on the facts, which we have not considered as yet.
Finally, it was submitted that the Commission has the jurisdiction to consider this matter under a combination of Sections 11(7), 11(3) 2. and 7 (k) of the Act. These Sections read as follows:
11(7) "Subject to sub-section 9, a person who considers one's self aggrieved by a decision of a person to whom the Commission has delegated a power under sub-section 3 … is entitled to a hearing by the Commission at which the Commission may exercise its powers and duties under section 7 as if it had not delegated them".
11(3) 2. (The Commission has) "The power to enforce the carrying out
of this Act, the regulations, the rules and all the requirements of the Commission made under this Act".
7 (k) (The Commission has the power) to hold hearings relating to the carrying out of its objects or powers…
In our view, these sections when read together provide the Commission with jurisdiction to hear this matter on the basis that the Commission has delegated to a racing official the right to make a decision under Rules 16.18 and 16.17.
In the result, we have concluded that the Commission has jurisdiction to hear this matter under Rules 16.18, 16.17, and 1.09 and Sections 11(7), 11(3) 2. and 7(k) of the Act but not under Rule 24.01.
THE SUBSTANTIVE ISSUES
We now turn to the substantive issues.
Firstly, our Decision is unanimous and so the question of whether we had to agree or whether the Chair had a deciding vote is moot. Had we had to decide it, we would have decided that we had to be unanimous, having regard to the language of Section 28(c) Interpretation Act of Ontario. We will have something to say with regard to the issue of onus later in these Reasons. Clifford Siegel (Siegel) has requested a hearing before a panel of the Ontario Racing Commission to determine whether certain nominations of several of his horses should have been accepted by Woodbine Entertainment Group, (WEG), as being eligible for a number of added money events to be raced at WEG's two standardbred tracks, Mohawk and Woodbine Raceways, in 2003.
The Race Secretary for WEG rejected the entries, pursuant to Rule 16.18 of the Rules. When we refer to "Rules", we, in every case, mean the Standardbred Rules of Racing. Rule 16.18 reads as follows:
16.18 "...Nominations and sustaining payments must be received by the sponsor or presenter not later than the hour of closing, except those made by mail must bear a postmark placed thereon not later than the hour of closing. In the event the hour of closing falls on a Saturday, Sunday or legal holiday, the hour of closing shall be extended to the same hour of the next business day. The hour of closing shall be midnight of the due date..."
Most of the facts in this case are not in dispute. Siegel, a resident of Brooklyn, New York, is a prominent and successful owner of standardbred horses. He purchases and races many horses in Ontario.
In 2002, he had some of the best two-year-olds in North America and they are included in the horses that he wishes to enter at Woodbine and Mohawk this year.
The due date upon which nominations to WEG's stakes races the races in question in this case, was February 15th, 2003.
Siegel, in the past, had developed a pattern for nominating horses and making sustaining payments to stakes races and he had followed this pattern for at least five or six years. Nominations and payments for stakes events in North America are normally due on the 15th of a month. On the 12th of the month in question, Siegel would mail in the nominations and payments for horses that he was sure he wished to enter. He would wait until the 15th of the month for the others. He explained that by doing so, he could hold off until the "last minute", so that he could be sure that each horse was suited to be entered in the right race. In this way he could assess his horse's condition and abilities, down to the last possible moment, and in some cases, avoid making entries and payments for horses that for some reason were not ready.
This strategy had worked for Siegel over the past five or six years, and that is the system that he used in February 2003, for his entries to WEG. Siegel had a list of his horses and the racing events in his computer and he used a printout of his own nomination sheets when he sent them to a particular sponsor of a stakes race. In this case, he mailed a number of nominations to several sponsors in Ontario other than WEG on February 12th. He testified that on Saturday, February 15th, he printed out from his computer a list of nominations for WEG and then gave them to his secretary, Rachael Guadalupe, (Guadalupe) so that she could prepare an envelope and affix the correct postage from his office's postal meter. We heard evidence that Siegel, on the 15th, also prepared nomination sheets for other entries in Ontario and perhaps in the United States.
In the case of WEG, it wasn't necessary for Siegel to forward any monies along with his nominations, as he already had a sufficient balance to cover the nominations in his WEG account.
He then instructed Guadalupe to post the envelope to WEG and he testified that Guadalupe left his office at approximately noon on February 15th in order to do so. The post box was approximately 100 feet from his office and Guadalupe returned in a matter of minutes. Siegel testified that there was a mail pick-up scheduled for Saturday, the 15th, between 1:00 and 2:00 p.m. Guadalupe, in her testimony and in her Affidavits, (Exhibit 3, Tabs 1 and 22), particularly her Affidavit dated May 28th, (Exhibit 3, Tab 1) gave evidence to the same effect, although she indicated that she left the office to mail the WEG nomination at approximately 12:30 p.m., and her understanding was that the Saturday pick-up was by 1:00 p.m.
There is a conflict in the evidence as to whether the envelope for WEG was actually posted on Saturday the 15th and that was in dispute in this hearing.
In an Affidavit sworn by Siegel on March 18th, 2003, (Exhibit 3, Tab 21,) Siegel swore that in addition to giving Guadalupe the WEG nominations, he also gave her the Flamboro Downs, Elmira and Hiawatha nominations at the same time for mailing. These are three other racetracks in Ontario that are holding stakes events during the summer of 2003. Again, this evidence was largely confirmed by Guadalupe, in her Affidavits and in her viva voce evidence.
The envelope addressed to Elmira, (Exhibit 3, Tab 20), bears Siegel's office postage meter stamp, printed in red ink. It is dated February 12th, 2003. The postmark from the U.S. Postal Service on this envelope is blurred and cannot be read.
In his evidence at the hearing, Siegel conceded that the Elmira nomination may have been mailed on February 12th. Similarly, evidence was introduced which included the nomination papers and other supporting documents related to the Hiawatha, Flamboro and the Ontario Sires Stakes events (Exhibits 5 - 8, inclusive).
We note that we are not being asked in this case to decide whether the nominations by Siegel to those tracks or events were in conformity with the Rules. All we are being asked to decide here relates to the WEG nominations.
The envelope for WEG, (Exhibit 3, Tab 18,) also bears the postage meter stamp from Siegel's office, but it is undated. The postmark of the U.S. Postal Service on the WEG envelope reads February 21st.
Siegel testified that Guadalupe dealt with the postage meter and that she may have forgot to ensure that it was dated on February 15th before stamping the February 15th envelopes. He also testified that the date on the meter can be manually set forward but not backward. The WEG envelope containing Siegel's nomination to WEG was received by WEG on February 24th.
According to Rule 16.18, the WEG nomination could have been postmarked on February 18th or earlier and be in compliance. This is because under Rule 16.18 Saturday, February 15th, Sunday, February 16th and Monday, February 17th, which was President's Day in the United States, and a legal holiday there, has the effect of extending the last date for postmarking to the "next business day", that is, Tuesday, February 18th, at midnight.
With a postmarking of February 21st on the WEG envelope, Siegel's envelope for WEG appears to have contravened the plain wording and language of the Rule. That, however, does not end this matter. There are further relevant considerations.
There was an extraordinary snowstorm that hit the New York area on President's Day, Monday the 17th. It began on the Sunday evening and by 2:20 p.m. on Tuesday the 18th, Siegel's area of Brooklyn had received 19.5 inches of snow (Exhibit 3, Tab 14). The storm had abated by that time, that is by noon or so on the Tuesday.
Bobby Cain, (Cain) a customer service supervisor with the U.S. Postal Service in Brooklyn, New York, swore an Affidavit in these proceedings (Exhibit 3, Tab 2). Cain swore that “some” of the mail deposited in the mailbox near Siegel's office was not picked up until February 19th, which was the Wednesday. In addition, the snowstorm created delays in the processing and postmarking of backed up mail. Cain also indicated in his Affidavit that:
"...Getting the mail through the system and processed is not an exact science. Mail can get held up at various points in the process..."
Cain also testified in his Affidavit that some of the mail deposited in the relevant mailbox on February the 15th could have been postmarked earlier than Friday the 21st. If the mail had been deposited before the pick-up time on the 15th, it could have been postmarked on that day or at least on the 18th or 19th. Cain also swore that there was one pick-up time on Saturday the 15th, but he did not indicate in his Affidavit what that was.
Guadalupe, in her evidence, was absolutely certain, 100 percent certain to use her language, that she posted the WEG envelope at approximately 12:30 p.m. on the 15th. She indicated that she recalled the WEG envelope specifically because no cheque was required to be inserted in it, while cheques were required in the other envelopes that she had prepared.
Having regard to all of the evidence as to the time of mailing of the WEG nominations, we have concluded that Guadalupe placed the envelope in the mailbox in question sometime on Saturday the 15th, perhaps after the Saturday pick-up time. Otherwise, according to Cain, it would likely have been postmarked on the 15th, 18th or 19th and, of course, it was not postmarked until the 21st.
While the lack of the date, (and other circumstances which we will mention), on the Siegel office postal meter stamp on the WEG envelope is somewhat suspicious, we are prepared to grant the benefit of any doubt on this point to Siegel and Guadalupe. We have concluded, that the WEG envelope was mailed sometime on Saturday the 15th.
Circumstantial evidence including the details of the other nominations to Ontario tracks that were mailed on time, the lack of the date stamp from the postal meter on the WEG envelope, the failure of Siegel to remember the only other rejected nomination that he had made in a Breeders Crown event, and the lack of a date on the WEG nomination sheets while dates appeared on the nomination sheets sent to other Ontario sponsors cause us concern as to Siegel and Guadalupe’s credibility. However, in our view, none of that is sufficient to change our conclusion that the WEG nomination was, in fact, mailed sometime on February 15th.
Whether we are being asked to resolve a dispute as to nominations pursuant to Rule 16.17 or conduct a hearing, pursuant to Sections 11(3) 2. and 7(k) of the Act or determine whether there was a breach of Rule 16.18, or whether this case involves a determination of whether Rule 1.09 applies, (which deals with the waiver of a breach,) we have considered the matter de novo.
Rule 1.09 reads, in part, as follows:
“...Provided, however, the Commission, in its absolute discretion, may waive the breach of any of the Rules which waiver or breach the Commission does not consider prejudicial to the best interests of racing..."
Before dealing further with Rule 1.09, we make the following additional observations.
Rule 16.18 normally requires that nominations and sustaining payments must be received by the sponsor or presenter of a stakes event not later than midnight of the due date. There are no express directions in the Rule as to how this may be done. Presumably, personal delivery, registered mail, courier, fax or even e-mail may be used. It is only if an owner wishes to use the mails, that the postmark reference in Rule 16.18 becomes relevant.
Siegel admitted that he was not aware of the contents of Rule 16.18, nor had he read the nomination book or nomination forms provided by WEG for the purposes of nominating horses to each of its stakes events. That book containing the forms was marked as Exhibit 3, Tab 19 in this proceeding.
Those forms not only provide full information as to the eligibility of the horse, but also provide “the General Racing Conditions that apply to a nomination to a WEG stakes event… " These Conditions include the following, found on the back of the nomination form for each separate stakes race:
"...The Rules of Racing of the Ontario Racing Commission in effect at the time the race is raced shall govern this race and any and all entries to the race will be
received only with the understanding and on the agreement of the subscriber that the said Rules of Racing govern and that the following additional conditions apply:
Condition 1: At the absolute discretion of Woodbine Entertainment, the entries of any person, including this entry, or the transfer of any entry, including this entry, may at any time be refused and/or cancelled without either notice or reason being given and without liability, except by the return of any subscriptions paid on an entry or entries refused and/or cancelled..."
Condition 15: which is in bold print and is encircled by a box and highly noticeable, says this:"...A breach of any of these general racing conditions and/or any applicable racing rules and policies of Woodbine Entertainment that are in effect at the time of racing may result in fine, suspension of privileges, the loss of any or all nomination fees, sustaining fees and/or starting fees and/or eviction from the premises of the Woodbine Entertainment..."
And below that, under the heading, "Important Notice", there is a Note that reads as follows:
"...Woodbine Entertainment will not accept inadequacies of the postal system as an excuse for late payments. It is therefore suggested that payments be made by registered mail to ensure safe delivery..."
While this last note refers to payments and not to nominations, it nonetheless deals with the use of the postal system.
Siegel admits never seeing, reading or knowing about these Conditions, nor the relevant Rules of Racing.
Hugh Mitchell, a Vice-President of WEG, testified that WEG sends out its nomination books and forms to all known horse people that it believes would be interested in entering stakes events. As Siegel had entered horses in WEG's stakes events in the past, it was Mitchell's belief that he had been sent this material. In addition, the material is published in a number of trade magazines.
There is no doubt that Siegel could have employed several other methods for getting his nominations in on time and in compliance with Rule 16.18. With a nomination as important as the nomination to WEG, it is inconceivable to us that it was not mailed earlier if the mail was to be used. It is astounding to us that a person of his obvious intelligence and business acumen would not familiarize himself with the Ontario Standardbred Rules of Racing, nor WEG's Terms and Conditions for entering stakes events, when he has such excellent horses and where there is a great deal of money and prestige involved.
Siegel, for his own business purposes, chose to use the mail for his nominations and, in some cases, to post those nominations on the last day, without knowing the Rules and the potential consequences. He had experienced no problems in the past and he believed that this was a common practice used by others. Accordingly, he was comfortable with his practices.
In Mitchell's evidence, he indicated that statistically, 60 to 65 percent or at least more than half of such nominations received by WEG, are delivered at WEG's race offices by hand. Mitchell candidly indicated that it was not uncommon to receive nominations by mail, but that method certainly was not the most common practice.
Siegel, for his own purposes, as already explained, chose not to mail earlier and thereby reduce any risks of late postmarking. He chose not to use a staking service, as he had in the past, because of the cost and because he wanted to maintain flexibility right up to the last in deciding which horses should be entered and where. With the substantial number of excellent horses that Siegel has and with the very large number of added money events that exist in North America in any given year, he obviously had choices to make. And, he chose his own system for making those choices by mailing batches of nominations on the 12th and the 15th of the relevant month as his method of operating.
Siegel believes, and his counsel stressed, that he "did everything he could” by mailing the nominations on the 15th and particularly the nomination to WEG. He submitted that the problem that resulted was entirely due to the U.S. Postal Service and to the weather, problems, he said, that were beyond his control. Siegel clearly failed to appreciate the importance of the Rules and Conditions and, as already indicated, failed to familiarize himself with them.
Siegel's submission to us that he did all that he could do, was, in our view, a gross overstatement. Siegel was required to abide by the Rules to the best of his ability. In our view, the methodology that Siegel adopted for his own reasons and for his own purposes certainly contributed in a major way to the problems that he now faces.
Counsel for Siegel made two basic submissions; first, that on a broad, liberal and purposive interpretation of Rule 16.18, Siegel was not in breach; and, second, and in the alternative, that if there was a breach of Rule 16.18, that breach should be waived pursuant to Rule 1.09.
As to the first point, we were asked to consider the fundamental purpose of Rule 16.18. This is important because it not only relates to Mr. Sternberg's first argument that Siegel did not breach this Rule, but abided by its purpose and spirit, but it is also relevant to a consideration of how we apply Rule 1.09 if that becomes necessary.
In the course of this hearing, we received many submissions as to what were the fundamental purposes of Rule 16.18. Mr. Sternberg urged us to accept that the fundamental purpose of the Rule was to ensure that entries were delivered on time and that if mailed, the postmark was only a vehicle for confirming the date of mailing which, he argued, met the Rule’s requirement.
He argued that if the mails were used, the important date was the date of mailing not the date of post marking because mailing constituted an irrevocable step by the nominator as to his or her desire to enter a horse. The postmark, he argued was only evidence of mailing.
On the other hand, we heard submissions from the Administration of the ORC and from WEG that abiding by the postmark requirement afforded better certainty and consistency and provided an objective process that would give all interested parties confidence in the system and in how the Rules would be applied. This, we were urged, would give horsemen in particular greater assurances of a level playing field and reliable knowledge as to which horses remained eligible for the event in question. In addition, the possibility of actual or perceived favoured treatment by creating exceptions would be eliminated.
While there is some merit in Mr. Sternberg’s submission, we find that it is not the correct position that should be taken. In our view, postmarking provides an objective standard for determining who is in and who is out when the mails are chosen; it provides a level playing field for nominators; it provides the reality and the perception that everyone is being treated fairly and equally; and, very important, it provides a perception that the system operates with objective integrity and this will maintain a high level of confidence, in the system by all participants.
A level of confidence in the system on the part of horsemen and racing associations is especially important. A level of confidence by the public in objectivity, fairness and even-handedness may be even more important in the application and enforcement of the Rules.
The requirement of postmarking when the mails are used provides a high degree of certainty. So long as the participants know of the requirement, they are able to structure their affairs such as to comply with it. That may involve a number of trade-offs by nominators and those trade-offs must be made by each entrant as each sees fit.
Also, as we have mentioned, it is important for horsemen with accepted entries to have knowledge of the entries that have been accepted after the due date so that each can make judgments as to whether to stay in the competition and make ongoing sustaining payments. We do recognize, however, that nothing is certain for them. There are always the possibilities that horses that are nominated will not race or, under Rule 1.09, that someone left off a list of eligible horses may be added. And, because even postmarking is not an absolute, Rule 1.09 is there, to provide the Commission with a broad discretion to waive the application of the Rule. That is a discretion that Race Secretaries do not have. We find no fault in the decision that the Race Secretary for WEG made in this case based on the facts before him.
However, we are not here to decide whether the Race Secretary at WEG did or did not do the correct thing. We are here to decide afresh whether Siegel complied with Rule 16.18 or, alternatively, whether under Rule 1.09, the discretion not granted to the Race Secretary should be invoked and exercised by us.
Mr. Sternberg, on behalf of Mr. Siegel, asked us to interpret Rule 16.18 in a broad, liberal and purposive way and we agree that that is the correct test. The difficulty is determining what that purpose or prime purpose is.
We have concluded that even on a broad, liberal and purposive interpretation of Rule 16.18, it was breached in this particular case. The purpose and the spirit of the Rule go far beyond the grounds that Mr. Sternberg articulated.
In so deciding, the Commission must consider the different purposes suggested by the parties and determine what the more weighty ones are. In that respect, we come down on the side of objectivity, the best chances of certainty, the preservation of a system in which horsemen, racetracks and the public can have confidence and the greatest extent of consistency in the application of the Rules as is possible.
It was open to the draftsmen of Rule 16.18 to have chosen the ‘date of mailing’ as meeting the due date requirement when the mails are used. They did not do so but rather chose the “postmark” requirement. In our view this was done for good reason.
As some degree of discretion should be available, Rule 1.09 provides an alternative approach. That Rule deals with cases involving exceptional circumstances where the Commission, in its absolute discretion, may decide to waive a breach of a Rule if to do so would not be prejudicial to the best interests of racing. Siegel has asked us to consider applying that provision in Rule 1.09, having regard to the circumstances of this case.
Mr. Sternberg skillfully argued that the requirements of Rule 16.18 should be waived in this case as the public should be permitted to see and wager on the best horses available in these major stakes events at WEG. As some of Siegel’s horses are clearly champions and Ontario breds, his counsel submits that to exclude them would, in itself, be prejudicial to the best interests of racing.
The materials submitted on Siegel’s behalf attest to his standing and importance in the standardbred industry in North America (Exhibit 3, Tab 5.). Additionally, there are letters supporting his position on the waiver of the Rule from members of the public and from well-known horsemen, some of whom own horses that are also nominated and may well compete against Siegel's horses if they are declared eligible (Exhibit 3, Tabs 5 – 13).
Fewer, but similar letters were filed on behalf of the Administration of the Commission although their author took the opposite view (Exhibit 9). Indeed, WEG, itself, has taken different positions on this very issue, one in Jamie Martin's letter to the Racing Commission, dated March 20th, 2003, (Exhibit 3, Tab 17); the other by Mitchell in his evidence and in WEG’s position on this issue at the hearing.
These differences are partly explained by the fact that further information came to WEG's attention after March the 20th, when Mr. Martin wrote his letter.
While all of these contradictory opinions have some relevance, they do not conclusively resolve the issue for us as to whether we should apply Rule 1.09 in these circumstances.
In addition, we were advised that nominations by Siegel to certain Breeders Crown events sponsored by the Hambletonian Society, were rejected. The circumstances in that case are virtually identical to those before us. That, too, does not determine the issue for us. Furthermore, nominations to at least one Ontario track, Elmira, included a postmark that was blurred and difficult to read. Again, this information is informative but not determinative.
In our view, Rule 16.18, has selected an objective, albeit arbitrary, cut-off time for nominations and sustaining payments to be made when the mails are used. As previously noted, this permits an orderly and objective process for the conduct of such stakes events. Waiver of this requirement must involve truly exceptional circumstances. Otherwise, that would certainly be prejudicial to the best interests of racing.
There may be extraordinary circumstances where the waiver of a breach of Rule 16.18 may be advised. Where someone has done all that he or she could have done to comply with the Rule but has been met with circumstances truly beyond their control, Rule 1.09 may be applied. That is not the case here. Siegel could have done much more in order to avoid the problem had he only known of the Rules. His breach was not simply a technical one. Prudent horsepeople should be aware of the governing Rules and Conditions of stakes races and should allow for the vagaries of the post and the weather when considering how to deliver their nominations. If they wish to do otherwise and bear the risks, they must also bear the consequences. The choice is the nominators’ as to how they wish to proceed. They have many alternative choices other than using the mail.
There is some merit in Siegel’s argument that it is desirable for the public to witness the best horses race in stakes events and that there would be prejudice to the best interests of racing, if this does not occur. However, in our view, this is more than offset by the prejudice that would result to racing if Siegel’s horses were permitted to race particularly having regard to the manner in which he chose to proceed and the factors he failed to consider in determining how he would deliver his entries. The postmark requirement was easy to comply with if only Siegel had known about it.
We have reviewed the three cases that have been cited to us by Mr. Sternberg, viz Lawson, VanBussel, (referred to sometimes as Liebenau) and Jamieson, where, in some instances, the Commission exercised its discretion and waived a Rule under Rule 1.09, and in others, did not. Each case turns on its unique set of facts. While those cases are instructive and illustrative, our task here was to decide this case on its own unique facts.
In one of the cases, Lawson, the floodgates argument was dealt with in a situation involving an eligibility issue. We were asked to consider the effect that a decision, one way or the other, would have on the number of applications that might be made to the Commission to exercise its discretion under Rule 1.09. That is a factor, but not a main or significant one, in our view.
Finally we were asked to consider the common law rule that applies in contract law when the mail is used to accept an offer. In our view, that rule has no application to this case.
As to onus, having regard to our view of the evidence and our interpretation of the Rules, we do not think that it would make any difference as to who bears the onus of proof. Mr. Sternberg indicated, quite candidly, that the onus of proof rests with Mr. Siegel, both with respect to the factual issues and also with respect to who has the onus of establishing no prejudice (or prejudice) to the best interests of racing under Rule 1.09. It was agreed that the standard of proof was “on a balance of probabilities”.
If the onus rests with Mr. Siegel, particularly on this last point, in our opinion, he has failed to satisfy it. If, on the other hand, it rests with the Administration of the Commission or WEG and that is, that there would be prejudice to the best interests of racing if we waived the Rule on these facts, they have satisfied the onus.
In conclusion, we have decided not to grant a waiver of what we have found to be a breach of Rule 16.18 on the facts of this case. We are satisfied that to do so, given all of the circumstances, would be prejudicial to the overall best interests of racing, and therefore, it should not be done.
Accordingly, the nominations tendered by Siegel to WEG for the 2003 stakes events in question should not be accepted. Siegel is entitled, to the return of any payments made initially or subsequently by way of sustaining payments if, indeed, they have been turned over to WEG.
At the hearing of this matter, we delivered oral reasons but reserved the right to elaborate further, in writing and we have now done so.
Stanley Sadinsky
Stanley Sadinsky, Q.C.
Chair