Seelster Farms v. Ontario Horse Racing Industry Association, 2003 CanLII 74632

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

AND IN THE MATTER OF THE ELIGIBILITY OF THE THREE YEAR OLD TROTTING COLT VICTORY COMMANDER TO THE ONTARIO SIRES STAKES

The owners of VICTORY COMMANDER, Seelster Farms, Chad Milner and Lou Liebenau appealed the decision of the Ontario Horse Racing Industry Association (OHRIA) to exclude VICTORY COMMANDER from eligibility for the Ontario Sires Stakes Program in 2003. The Ontario Racing Commission had delegated the administration of the Program to OHRIA.

On April 8, 2003, Chair Stanley Sadinksy, Q.C., Commissioners Brenda Walker and Thomas Deacon of the Ontario Racing Commission convened to hear the appeal.

Lou Liebenau appeared on behalf of the owners and Don Bourgeois appeared on behalf of the Administration.

On hearing the evidence of Chad Milner and Ann Straatman, on reading the exhibits and on hearing submissions on behalf of the parties, the Ontario Racing Commission, by majority decision, dismissed the appeal. The Reasons for Decision of the majority and the Dissenting Reasons for Decision are attached to this Ruling.

DATED this 15^th^ day of April, 2003.

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

Jean Major Executive Director

MAJORITY REASONS FOR DECISION OF THE CHAIR AND COMMISSIONER BRENDA WALKER

The owners of VICTORY COMMANDER (the Colt), Seelster Farms, Chad Milner (Milner) and Lou Liebenau (Liebenau) appealed the decision of the Ontario Horse Racing Industry Association (OHRIA) to exclude the Colt from eligibility for the Ontario Sires Stakes Program (the Program) in 2003. The Ontario Racing Commission (ORC) delegated the administration of the Program to OHRIA but OHRIA’s decisions can be appealed to the Commission.

At this hearing, Don Bourgeois represented the Administration of the ORC and Lou Liebenau represented the owners. Mr. Liebenau called two witnesses, Milner, a part owner of the Colt and its trainer and Ann Straatman (Straatman), the Reproduction Manager of Seelster Farms and a daughter of the late Chris VanBussel, the Farm’s former owner/manager. In all, five Exhibits were also filed.

Chris VanBussel (VanBussel) had bought the Colt in October 2002 from Robert Waxman (Waxman). VanBussel agreed that Milner would own 40% of the Colt and train him and that Liebenau would own 20% of the Colt. VanBussel advised Heather Reid (Reid) of Standardbred Canada to hold on to the Colt’s registration papers until he settled the question of ownership. VanBussel never did get back to Reid and the Colt remained registered in the name of Waxman.

VanBussel died suddenly on December 4, 2002. His daughters Straatman and Karen Favacho (Favacho) knew that their late father owned a part of the Colt along with Milner and Liebenau but took no steps to ensure that the Colt was registered in the names of the partners. Milner and Liebenau also took no such steps, everyone believing that the registration had been properly done by VanBussel in his lifetime.

OHRIA forwarded the Program’s sustaining payment Notice for 2003 to each horse’s registered owner. The form for VICTORY COMMANDER went to Waxman. Waxman indicated that he ignored the form as a stakes service looked after such matters for him and, in any event, he had sold this horse. (see Exhibit 3) None of the partners took any steps to make the sustaining payment for the Colt as none of them had received the Notice and each wrongfully assumed that one of the other partners had looked after this matter. The final date for payment, February 15, 2003, passed without the required sustaining payment of $600.00 being forwarded to the Program. That explains why OHRIA refused to declare the Colt eligible for the Program in 2003.

On this appeal, we were invited by the owners to make an exception to the relevant Conditions of the Program and declare the Colt eligible upon making the required sustaining payment. The OSS Conditions (Exhibit 5) provide the following (in part):

Future Payments: As a courtesy OHRIA will make every effort to advise nominators of future sustaining payments but it is the responsibility of the owner of the eligible colt, filly or gelding to ensure that future sustaining payments are made whether or not a notice has been received.

Failure to make a payment when due constitutes automatic withdrawal from racing in the Stakes events of that year.

Mr. Liebenau submitted that there were extenuating and sympathetic circumstances in this case which justified an exception being made. He argued that the owners did not have the opportunity to comply with the Conditions of the Program because they did not receive any Notice of the due date for the sustaining payment. In addition, he submitted that the sudden death of VanBussel also contributed to the omission by the owners. VanBussel was the driving force at Seelster Farms and his daughters and the Colt’s other owners understandably assumed that he would have done all that was necessary regarding the registration of the horse with Standardbred Canada. Correct registration would have led to the Program’s Notice being sent to at least one of the registered owners. None of them twigged to the fact that a Notice had not been received.

VanBussel’s daughters found themselves in difficult circumstances following the death of their father. Seelster Farms is primarily a substantial breeding operation and not a racing stable and they had plenty to do in taking over its operation. In addition, they were not as familiar with the processes that applied to the Program’s events on the very limited racing side of their operation

Milner and Liebenau took no steps to ensure proper registration of the Colt or that the required sustaining payment had been made on time. They clearly had the opportunity to do so in the more than two-month period between VanBussel’s death (December 4, 2002) and the date on which the sustaining payment was due (February 15, 2003). Again, they relied on VanBussel and on each another.

In addition to submitting that the owners had amply opportunity to make inquiries and ensure that their interests were protected, Mr. Bourgeois argued that in fairness to all those participating in the Program who complied with its Conditions, no exception should be made in this case.

No one disputed that both OHRIA and the Commission have the power to make an exception to the Conditions of the Program if they see fit to do so. Everyone accepts that this should be done in very limited circumstances.

Mr. Bourgeois, in his usual fair manner, referred us to one case where an exception was made. In Re Walter (Art) Lawson, SB 62/1997, March 12, 1997, an application was made to allow late nomination of a filly to the Program. The owners of the horse, a yearling, were elderly and prior to going to Florida for the winter, Mrs. Lawson filled out a form that she thought would render the horse nominated for the Program as a two year old. It was the wrong form. Mrs. Lawson was diagnosed with leukemia while in Florida, and on her return to Ontario, she broke her leg. In the result, she missed the nomination payment date and the late payment date as well. Mrs. Lawson then put the horse up for sale and assured prospective buyers that the horse was eligible for the Program.

The Commission concluded that the horse should be rendered eligible for the Program. It found that the circumstances were truly unique and that admitting the horse to the Program would not “undermine the integrity of the program or the process in question”. The Commission concluded that upon payment of the nomination fee and an additional $2,000 the horse should be considered eligible for the Program.

In our view, the Lawson case is distinguishable from the case before us. In Lawson, the Commission was dealing with the nomination of a filly and not with sustaining fees. One can understand that given the objectives of the Program, the Conditions regarding nomination fees might be waived in exceptional circumstances. However, once a horse has been nominated, the waiver of a Condition relating to sustaining fees should only occur in an even more exceptional case.

While there is certainly one unique circumstance that exists in this case, viz. the untimely death of VanBussel, we are not satisfied that this in itself is a sufficient reason to render this Colt eligible for the Program in 2003. In spite of VanBussel’s passing, there was ample opportunity (between December 4, 2002 and February 15, 2003) for someone at Seelster Farms or for Milner or Liebenau to have enquired of Standardbred Canada, the Program itself or of each other to ensure that their respective interests were protected. Things simply ‘slipped through the cracks’. In our view, that is not a sufficient reason to waive what is otherwise a reasonable and fair Condition.

In the result, we have concluded that OHRIA was correct in determining that VICTORY COMMANDER was not eligible for the Program in 2003.

DATED this 15^th^ day of April 2003.

(original signed by) Stanley Sadinsky

Stanley Sadinsky, Q.C. Chair

DISSENTING REASONS FOR DECISION OF COMMISSIONER THOMAS DEACON

I have the considerable benefit of having reviewed the Chairman’s Reasons for Decision in this matter. I use herein the defined terms as developed in those Reasons and I adopt completely the factual conclusions proceeding from evidence adduced at the hearing as found in such Reasons.

The Lawson decision of March 1997 referred to in the Chairman’s Reasons (Exhibit 1 Tab 3) clearly enunciates two principles to guide the Commission in treating with this appeal. First, described as “the main concern”, is to avoid creation of a precedent as could foster similar applications, which accumulated, could undermine “the integrity of the (OSS) program”. Second, is to allow relaxation of the OSS conditions, in particular, the last sentence in the portion thereof quoted in the Chairman’s reasons, only in the “rare” occurrence of “extenuating circumstances”.

To my view, the untimely death of VanBussel, clearly the driving mind in the operation of Seelster Farms and I believe equally clearly the driving mind of the October 2002 acquisition of the two-year-colt VICTORY COMMANDER and the subsequent piecing off of portions of such colt’s ownership to Milner and Liebenau, and the entirely understandable consequences of his death opposite the colt’s registration with Standardbred Canada (VanBussel literally ran out of time to do so) collectively constitute the required extenuating circumstances. While by no means irrelevant, the issue of whether “opportunity” during the two-month period between VanBussel’s death and the eligibility payment due date of February 15, 2003, was accorded to Milner and/or Liebenau upon inquiry, to rectify the situation regarding the Colt’s registration, to my view is secondary. I agree with Commission Counsel that such opportunity existed and, as indicated below, would have that condition reflected in the Panel’s decision.

The primary issue confronting the Panel, to my view, is whether in all the circumstances, which as indicated, I find both “rare” and “extenuating”, the Panel’s discretion should be exercised in the Appellant’s favour; I believe it should and accordingly would allow the appeal on conditions as follows:

1. Referring to the Supplemental Nominations section of Exhibit 5 and acknowledging that same intend to apply primarily to a failure to nominate a yearling to the program, I would apply the ultimate late payment fee of $5,000 in present circumstances;
2. The three-year-old sustaining payment (and gait declaration if not previously made) of $600 shall also be paid;
3. All payments totalling $5,600 shall be made on or before April 30, 2003, and if not timely made, the colt shall be deemed automatically withdrawn from the OSS program. In the latter event, the Appellants shall pay costs of these proceedings forthwith, in the amount of $500.

DATED this 15^th^ day of April 2003.

(Original signed by) Thomas Deacon

Thomas Deacon Commissioner