IN THE MATTER OF AN APPEAL BY
FLAMBORO DOWNS HOLDINGS LIMITED OF RULING NO. SB 50/2004 OF THE EXECUTIVE DIRECTOR OF THE ONTARIO RACING COMMISSION PURSUANT TO THE RACING COMMISSION ACT 2000 S.O. 2000 c. 20
On March 24, 2004, Flamboro Downs Holdings Limited (“FLDH”) appealed Ruling SB/50 2004 of the Executive Director dated March 15, 2004.
On April 29, 2004 two motions were made to the Ontario Racing Commission by FDHL, one being for a stay of Ruling SB 50/2004 and one for an order requiring the Administration to deliver particulars with respect to the allegations against FDHL made in Ruling SB 50/2004.
Joel Richler and Colleen Robertshaw appeared on behalf of FDHL and Tim Snell appeared on behalf of the Administration before a panel of the Commission composed of Chair Lynda Tanaka.
Upon reading the materials filed as an exhibit on the motion on behalf of FDHL and hearing the arguments made by the parties, the Commission ruled on the motions as follows:
The Administration will provide further particulars to FDHL with respect to the allegations made against FDHL as set out in letters written to the administration by Counsel for FDHL dated March 30 and April 15, 2004 as were set out in Exhibits 4 and 6 of the Affidavit of Richard Jacob, sworn April 15, 2004, included in the materials filed on behalf of FDHL as an exhibit on the motion on or before May 10, 2004;
The Administration will respond to the request made on behalf of FDHL for further disclosure in addition to that provided by the Administration to FDHL on April 13, 2004, on or before May 21, 2004;
A prehearing conference may be requested by either party in the event of further dispute concerning either particulars or disclosure to be heard in the week of May 24 2004;
A stay of Ruling SB/50 2004 is hereby granted until the commencement of the hearing in this matter. At that time the appellant and the Administration should be prepared to address the panel on the issue of the continuance of the stay if that is necessary.
Reasons for decision are attached to and form part of this Ruling.
BY ORDER OF THE COMMISSION
Don Bourgeois
Acting Executive Director
DECISION
On April 29, 2004 two motions were made to the Commission by Flamboro Downs Holdings Limited (“FDHL”), one being for a stay of the ruling of the Executive Director Ruling no. SB 50/2004 and one for an order requiring the Administration to deliver particulars with respect to the allegations against FDHL and the Ruling as requested in three letters dated March 29, March 30 and April 15, 2004. Mr. Joel Richler and Ms. Colleen Robertshaw appeared on behalf of FDHL and Mr. Tim Snell appeared on behalf of the Administration before a panel of the Commission composed of the Chair. The motions were supported by affidavit evidence. The stay was granted that day and these are the reasons for that decision.
The Ruling of the Executive Director provided for a fine of $100,000, a probation of 12 months and a condition on FDHL that required FDHL to retain a consultant acceptable to the Executive Director to undertake an audit of security measures at the track, FDHL’s capacity to comply with Standardbred Rules 3.07.2, 7.01, 7.11, 7.12, 32.02 and its compliance with those same rules; required FDHL to provide the findings and recommendations of the consultant to the Executive Director with a schedule for implementation of recommendations and required implementation of any recommendations of such an audit that are approved by the Executive Director. Dates for compliance of June 15 and June 30 were provided in the conditions at two points. The Ruling was dated March 15, 2004, thereby giving FDHL some three months to retain the consultant and get the consultant approved, undertake the audit and provide the recommendations for approval to the Executive Director.
The appeal was brought March 24, 2004. FDHL essentially denies that it is in breach of the Rules as alleged in the Ruling and denies failing to comply with any undertakings. FDHL complains of the lack of sufficient particulars, disputes the appropriateness of the penalty including the conditions and alleges, among other grounds, that the penalties were imposed for an improper purpose.
With respect to the motion for particulars, the Administration has agreed to provide further particulars in response to the letters of March 30 and April 15, 2004 on or before May 10, 2004, which were included in Exhibits 4 and 6 of the Affidavit of Richard Jacob, sworn April 15, 2004.
By letter dated April 15, 2004, FDHL has also requested additional disclosure pursuant to the Commission’s Rules of Procedure. The Administration has agreed to respond to the request for disclosure additional to that which had been provided on April 13, 2004. It has agreed to do so on or before May 21, 2004.
A prehearing conference may be requested by either party in the event of further dispute concerning either particulars or disclosure to be heard in the week of May 24th.
Counsel have been made aware of the Commission’s intent to have this matter heard at the earliest date feasible. Once the appellant has an opportunity to review the particulars and any further materials provided by the Administration, the parties can turn their minds to determining the anticipated length of the hearing and appropriate dates, especially given the upcoming summer holiday season which may cause difficulties for the availability of witnesses.
With respect to the motion for a stay of the penalty, the Administration indicated that it had no objection to the stay of the payment of the fine but opposed the stay of the probation period and the conditions.
The parties are agreed on the appropriate test to be applied to the determination of whether or not a stay should be granted. Further the Administration did not dispute that the appellant had satisfied two of the three tests, the requirement that there be a serious issue to be tried and the requirement that compliance with the Ruling while the matter was under appeal would cause “irreparable harm” as that phrase is understood in law.
The only matter in dispute was whether or not the appellant had satisfied the third test, the balance of convenience and, in this matter, in the context of the regulatory environment and the statutory direction of the Racing Commission Act with respect to the public interest.
The only evidence on any of the issues and the motion was provided by the Affidavit of Richard Jacob referred to above. No responding affidavit was provided by the Administration and no cross-examination of Mr. Jacob was undertaken and filed. The statements in the affidavit therefore stand as uncontested and as the only evidence before the panel for the purposes of the determination of the motions.
In his affidavit Mr. Jacob outlines the concerns with the imposition of the conditions concerning the probation period and the retainer of the consultant and the undertaking of the security audit. Given the date of this motion and the dates for provision of the disclosure it is possible for the hearing on the merits of the appeal to be heard prior to the expiry of the dates given in the Ruling but that does not address the issue of the various steps to be taken within the period unless the stay is granted. As the appellant points out, if the appeal is successful then the conditions will not need to be fulfilled at all.
The Rules that FDHL is alleged to have violated have, as their underpinning, the need to control and restrict access to areas of the track property where horses are stabled and preparing to race. FDHL does not dispute the validity of the Rules it is alleged to have violated, nor the conditions of its licence related to security in the restricted areas. There is no appeal of the licence conditions or the terms of the Security Plan which FDHL submitted and which were approved as part of the approval of the licence. Mr. Richler, on behalf of the appellant, affirmed the appellant’s intent to comply during the period of any stay with the Rules of Racing and the terms and conditions of the licence.
Looking at the conditions of the Ruling other than the probationary period, the conditions that the Executive Director sought to impose provide for the retainer of a consultant to conduct an audit, the approval of the retainer by the Executive Director, the development of recommendations on a go forward basis for future steps to be taken (or alternatively perhaps conduct to be stopped) by the appellant, the consideration by the Executive Director of those recommendations with a view to the approval and imposition of those recommendations, whatever they may be, within a time frame that would have a firm direction on issues related to security at the track addressed by the end of June 2004. The issue on the stay is whether or not the balance of convenience lies with the appellant or the Administration and specifically the protection of the public interest during the period of any such stay.
Flamboro Downs conducts live harness racing 12 months of the year, five days per week and in addition provides stabling and training on its track on a year round basis.
I do not accept the argument of FDHL that the stay should be granted because the Administration has not shown that any of the alleged breaches of security had compromised the integrity of any race or resulted in interference with any horse or inappropriate betting or other improprieties. Nor do I accept the argument that there may be confusion on the part of the track as to its obligations to provide a secure environment in the backstretch and paddock areas, especially as the rationale for the Rules and conditions are understood by the racing industry.
I find that, given the structure of the Rules and the licence conditions including the Security Plan of FDHL and the policy foundation of the Rules in the control and restriction of access to the backstretch and paddock areas, the public interest can be sufficiently protected during the term of the stay, so long as FDHL complies with those Rules and conditions and the appropriate directions of the judges and Commission officials. The structure that exists even without a stay is such that, on any day during the term of the stay, the track could be the subject of further allegations of breaches of the Rules and its licence conditions, separate and apart from those allegations that are the basis of the March 15, 2004 Ruling. The track also has a self-interest in appearing to be compliant with the Rules and its licence in that it offers to the public a product whose foundation is honesty and integrity.
I therefore grant the motion for the stay of the Executive Director’s ruling as requested by the appellant until the commencement of the hearing in this matter. At that time the appellant and the Administration should be prepared to address the panel on the issue of continuance of the stay if that is necessary.
DATED this 5th day of May, 2004.
Lynda Tanaka
Chair