Samuel Quaranta (Re), 2005 CanLII 81035

OWNER/TRAINER SAMUEL QUARANTA

Owner/Trainer Samuel Quaranta and Owner/Groom John Quaranta appealed Stewards Ruling TB 115/04, in which:

(a) Samuel Quaranta was found to have violated Rule 15.09.1 (a), (b), (c), (e) and (g) of the Rules of Thoroughbred Racing, was suspended for the balance of the 2004 racing season commencing August 10, 2004, was suspended for the entire 2005 racing season, and was fined the sum of $5,000.00 payable at the conclusion of the suspension; and

(b) The Stewards ordered that the ownership of the horse MAGEE should be transferred from John Quaranta back to Owner/Veterinarian Dr. Donald Fishman.

On March 30, April 25, and 2005, the Panel consisting of Chair Tanaka and Commissioners Kelly and Gorman, convened to hear the appeal. Brendan Van Niejenhuis represented the Administration and Eugene Trasewick represented the Appellants.

Ruling COM TB 006 2005, in which Samuel Quaranta and John Quaranta were appellants, is released together with this Ruling.

On hearing the evidence of Dr. Donald Fishman, Steward Russell Ferandes, Samuel Quaranta and John Quaranta, and on reading the Exhibits and on hearing the submissions of counsel, the Panel ordered as follows:

(a) The Panel dismissed the Appeal with respect to the ownership of the horse Magee;

(b) The Panel dismissed the Appeal with respect to liability and found that Samuel Quaranta had violated Rule 15.09.1(a), (b), (c), (e) and (g) of the Rules of Thoroughbred Racing;

(c) The Panel allowed the Appeal in part with respect to the suspension, and ordered that Samuel Quaranta shall be suspended from July 1, 2005 until December 31, 2005; and

(d) The Panel dismissed the Appeal with respect to the fine and ordered that Samuel Quaranta shall pay a fine of $5,000.00 payable at the conclusion of this suspension and the suspension imposed in Ruling COM TB 006/2005.

In the course of the proceedings on April 25, 2005, the Panel issued Ruling COM TB 005/2005, lifting the stay in place over Ruling TB 115/04 until the resumption of the hearing on May 6, 2005. On the hearing on May 6, 2005, the Panel ordered that the stay would continue to be lifted until and including May 15, 2005. As of May 16, 2005, the stay of Ruling TB 115/04 was restored pending the release of the Panel’s decision.

The Commission’s Reasons for Decision are attached to this Ruling.

John L. Blakney

Executive Director

This is an appeal from Stewards’ Ruling 115/04 issued August 10, 2004 by the Stewards at Fort Erie. The case involves a dispute over the ownership of the thoroughbred horse MAGEE and an allegation of misconduct on the part of trainer Samuel Quaranta. The Stewards in Ruling 115/04 found Samuel Quaranta to be in breach of Rule 15.09.1 (a), (b), (c), (e) and (g) of the Rules of Thoroughbred Racing. The penalty imposed was a suspension for the balance of the 2004 racing season starting August 10, 2004, and suspension for all of the 2005 racing season, and a fine of $5,000 payable at the end of the suspension period. The Stewards further ordered that the horse MAGEE be transferred back to Dr. Fishman immediately from John Quaranta and that all moneys that had accrued as earnings by MAGEE for the year 2004 were to be transferred back to Dr. Fishman as well.

The allegation of the complainant Dr. Donald Fishman is that Samuel Quaranta executed a transfer of ownership of this horse by abusing his authorized agent privileges. The horse was transferred by Samuel Quaranta on the face of the foal certificate to Samuel Quaranta’s son John Quaranta from Dr. Fishman.

Samuel Quaranta has appealed from the ruling and John Quaranta has appealed as an aggrieved person relating to the order for the transfer of ownership of the horse.

The penalty has been stayed by ruling TB252/2004 dated August 18, 2004.

Rule 15.09.1 provides as follows:

15.09.01 Any act or omission in business practices related to Thoroughbred horse racing in any or all of its forms, which, when measured against generally accepted standards of good conduct would be regarded as dishonest, unfair or unsportsmanlike or contrary to the public interest, shall be deemed to be an illegal practice under these Rules and shall be dealt with accordingly at the discretion of the Stewards. The ruling and subsequent publication regarding penalty shall include the specific part of the Rule which the licensee violated. In determining whether any act or omission offends this Rule, regard may be had to any Code of Ethical and Professional Business Conduct that may have been adopted by a horsemen’s association.

The following subparagraphs of this Rule provide particulars of conduct contemplated by this Rule but are not meant to be exhaustive.

(a) Without limiting the generality of the foregoing, the relationship between an owner and trainer shall be based on integrity, disclosure, maintaining the health and welfare of the horse and acting in the best interests of racing. Conduct unbecoming an industry participant also refers to con duct that occurs out side of the business of horse racing but which brings the industry into disrepute.

(b) Any person who may gain a benefit, financial or otherwise, directly or indirectly, in connection with the sale, purchase, lease or claiming of a race horse shall disclose in writing to all affected par ties involved in the transaction the details of such benefit or the existence of any arrangement that would lead to such a benefit.

(c) All of the terms of a trainer’s engagement should be set out in a written contract between the owner and trainer. At minimum, a trainer shall advise an owner in written form as to the services to be provided by the trainer for which the owner is to be financially responsible, the trainer’s rate schedule including day rate and commissions on purses earned by he horses and the terms of payment.

(d) A trainer shall ensure that an owner is advised as soon as it is practical to do so of any material problems affecting an owner’s racehorse in their care that could affect its racing potential or ability to be trained on a continuous basis.

(e) If an oral offer is presented to a trainer to purchase or lease any interest in an owner’s horse, the trainer shall request that such offer be reduced to writing. A trainer shall immediately notify the owner of any writ ten offer received.

(f) A trainer shall maintain records relating to the particulars of any medications ad ministered to horses in their care. For the purposes of this Rule, the term medication shall mean a medication that could result in a positive test. All documentary evidence provided under this Rule shall be kept confidential by the Ontario Racing Commission. At any hearing before the Stewards, the Industry Board of Appeal (Thoroughbred Division) or a panel of the Commission, all such documents shall remain confidential unless otherwise ordered.

(g) A trainer shall not put his/her interest above the interests of his/her owner.

(h) An owner who wishes to cease using the services of a trainer and transfer some or all of their race horses to an other trainer, shall pay prior to the time of transfer the outstanding account of the said trainer to the date of the transfer with respect to the horses being transferred.

(i) The Director of Racing, the Supervisor of Thoroughbred Racing and/or the Stewards may require a licensee to provide documentary evidence of any transaction or record referred to or contemplated by this Rule. Refusal or failure to comply may result in immediate suspension of the licence.

(j) Any act or omission which contravenes this Rule shall be dealt with at the discretion of the Director of Racing, the Supervisor of Thoroughbred Racing and/or the Stewards and may include fine and/or suspension regarding penalty shall include the specific part of the rule which the licensee violated.

The Administration submits that the issue before us is whether or not Samuel Quaranta breached the Rules of Thoroughbred Racing and in particular Rule 15.09.1. We are advised that there are legal proceedings before the Courts with respect to the horse MAGEE between these parties, the Quarantas and Dr. Fishman. Our jurisdiction is confined by the terms of the Racing Commission Act and therefore we make the findings below solely in the context and for the purpose of discharging our jurisdiction under the Act.

Rules 2.05, 33.02, 33.03, and 33.01 of the Rules of Thoroughbred Racing deal with authorized agents. Rule 2.05 defines an authorized agent as a person licensed by the Commission and appointed by written instrument, signed by the owner in whose behalf the agent will act. The appointment of an authorized agent must be in writing filed with the Commission. Rule 33.02 provides that any change in or revocation of an appointment of an authorized agent must be in writing and signed by the owner and is not effective until filed with the Commission. Such an appointment is effective until December 31^st of the current calendar year unless it is earlier revoked.

An order excluding witnesses was made at the request of the Administration, and on consent of the appellants.

FACTS

The proceedings started with respect to the Stewards when Samuel Quaranta (“Mr. Quaranta”) took two agreements to the Stewards with an allegation that he was owned money by Dr. Donald Fishman (“Dr. Fishman”) pursuant to these agreements. The investigation by the Stewards included among other things a letter that was entered as an exhibit through Steward Fernandes apparently submitted by Dr. Fishman as part of the inquiry undertaken by the Stewards into Mr. Quaranta’s allegations.

Dr. Fishman testified before us. He has been an ORC licensee for his entire adult life. He is now retired from his veterinary practice. He bought MAGEE as a yearling in Ocala Florida in August 2000. The foal certificate was marked as an Exhibit 2, Tab 2.

Dr. Fishman brought the horse to Canada where he was turned out on a farm. Training began with the goal of racing him as a two year old but he did not. The horse raced a couple of times as a three year old and seemed to hold some promise. Dr. Fishman testified that “It looked like he was kind of a valuable horse…”. Before he won his first race he developed an infirmity. Dr. Fishman testified that in late 2002 he agreed to and offered to give the children of Mr. Quaranta a revenue sharing in this horse.

Mr. Quaranta at the relevant time was training other horses for Dr. Fishman. He has two adult sons, both of whom are currently employed outside of racing but both of whom did at one time earn their living working for their father as grooms in his stable. Though Mr. Quaranta referred to them as “children”, they are both adults in their mid twenties.

As noted above, MAGEE came under the training of Mr. Quaranta as a three year old and at the end of his three year old season (at the end of November 2002) Dr. Fishman and one of Mr. Quaranta’s sons, John, had a conversation concerning the future of the horse. According to Dr. Fishman, the agreement between them that came out of this conversation was that Dr. Fishman intended to give John and his brother known as Rocky a chance to get ahead by giving them a 50% share of the earnings of the horse and if it were sold then they would get half of the sale price, or if it were claimed in a claiming race, they would get half of the claiming price. What John and his brother had to do in order to get these benefits was to care for the horse as its grooms for the entire 2004 racing season. The share of John and Rocky to the winnings earned in 2004 was to be kept in the horsemen’s account at the track and divided at the end of the year, if they looked after the horse until the end of the year. At this point, if they had lived up to their part of the bargain they would get a half interest in the horse. This agreement (apparently made in late 2002) was not put into writing then.

John’s version of the agreement differs in that his understanding as explained in his evidence was that he was a half owner of the horse, not just a groom being compensated for his work by receiving half the purses earned and half the proceeds of sale or a claim.

The horse was not to race until the beginning of the 2003 season at Fort Erie and so it was sent to a farm, as is the normal course over the winter, and late in the winter it began its training for the coming season. Once Fort Erie’s barns opened, the horse was transferred back to the track for the season to race and Mr. Quaranta took over training. Dr. Fishman paid the bills over the winter as he had the previous winter and as is the owner’s usual responsibility.

The horse raced throughout the 2003 season programmed as being owned by Dr. Donald Fishman. Neither John nor Rocky were licensed as owners in this period and neither of them applied for such a licence in 2003. Their father Mr. Quaranta was the trainer of record.

Mr. Quaranta produced two handwritten agreements dealing with the training of horses owned by Dr. Fishman, dated June 1, 2003 and trained by him. These agreements are at Tabs 6 and 7 in Exhibit 2. Mr. Quaranta testified that he prepared the two agreements himself and that they reflected accurately the relationship between Dr. Fishman and himself. One agreement specifically made provision for MAGEE. Neither of these agreements was signed by Dr. Fishman. Mr. Quaranta acknowledged that he signed them on his own behalf and on behalf of Dr. Fishman.

Mr. Quaranta had obtained from Dr. Fishman the authority to act as authorized agent for the 2003 racing season in the standard form provided under the Rules and required by Fort Erie to allow a trainer or authorized agent to do certain things with respect to the ownership of a horse and the purses earned. None of the authorizations on the form signed by Dr. Fishman (Tab 3, Exhibit 2) authorized Mr. Quaranta to sign a trainer’s agreement on behalf of Dr. Fishman.

Mr. Quaranta testified that he showed the agreements to Dr. Fishman in the barn one day and that Dr Fishman told him to use his authorized agent’s power to sign them on his behalf. Dr. Fishman testified that he did not see the agreements until the dispute as to the trainer’s fees and the ownership of the horse arose in 2004. Mr. Quaranta has no contemporaneous note of showing the agreement to Dr. Fishman, no initialing of the agreement by Dr. Fishman, or other written corroboration. John Quaranta testified that the reason the agreements had not been done earlier was that Dr. Fishman had been away down south as was his usual practice since the end of the 2002 season and they had to wait until he returned. John was not present when the agreements were allegedly presented to Dr. Fishman for approval and neither he nor his brother Rocky are parties to either agreement.

The agreements are both on their face “personal and not assignable”. They are between Samuel Quaranta and Dr. Fishman and neither John nor Rocky are referred to in the text. The agreement at tab 6 provides for a daily rate of $50.00 per horse plus 10% of any winnings. Mr. Quaranta was responsible for keeping the horses and taking such steps as he deemed necessary to get the horses to the races.

These terms are in accordance with normal industry practice. The trainer out of the daily training fee usually pays expenses for the day-to-day maintenance and training of the horse such as the exercise rider’s fee, groom’s fees which Mr. Quaranta estimated at $100 to $125 per week per horse, bedding and feed, and it may cover other expenses as well. How these expenses are to be divided is often a matter of negotiation and eventually dispute between owners and trainers, and the best practice is to have a written agreement. The Rules of Racing in fact require a written agreement between owner and trainer.

The agreement at tab 7 sets out a daily training fee of $50 per horse per day and payment of 10% of the purse payable to the trainer as well but makes the exception of the horse MAGEE. The agreement prepared by Mr. Quaranta provided that for this horse there would be no daily training fee and that there would be a 50-50 sharing of the purses. The division of expenses as between Dr. Fishman and Mr. Quaranta that are the normal incidence of racing a thoroughbred horse were for the most part set out, though in testimony it became clear that there was a dispute as to some expenses that were not set out in the agreement. Nowhere does the agreement deal with the expense of the jockey’s fees or the jockey’s share of the purse. Further there is no provision in the agreement for John Quaranta and Rocky Quaranta to be paid either the specific 50% referred to in the agreement or the other 50% but the parties agreed in their evidence that Dr. Fishman was to receive 50% of the purses and of the sale or claim price and the Quarantas were to receive 50% of the same.

Nowhere in this agreement is there any mention of John Quaranta or Rocky Quaranta and, specifically there is no mention their obtaining a 50% ownership interest in the horse MAGEE at the conclusion of the 2003 racing season if they look after and care for the horse for the racing season.

According to Samuel Quaranta, corroborated by his son John, he was acting on behalf of his two sons in signing this agreement. There is no explanation as to why, in those circumstances, there is no reference to the alleged 50% ownership interest that the two sons would be entitled to at the end of the 2003 season.

Apparently Rocky Quaranta and Dr. Fishman did not get along, and the evidence indicates that at the end of the season only John had perhaps fulfilled the terms of the unwritten agreement and was entitled to call for a transfer of the 50% interest. Even so, when Mr. Quaranta discussed with Dr. Fishman taking some money out of the horsemen’s account, it was on the basis that the two sons wanted some money for Christmas and it appears that both sons were to be benefited by the purse proceeds. It is also significant that Mr. Quaranta asked for permission from Dr. Fishman prior to taking the funds.

In the last race of the season MAGEE finished 17 lengths behind the winner and well back of the field. Mr. Quaranta was watching the race in the stands and either called Dr. Fishman immediately or Dr. Fishman was listening to the race via Mr. Quaranta’s cell phone. The horse appeared to be injured and Mr. Quaranta told Dr. Fishman he did not know how bad it was and he would call him back when he saw the horse in the barn after the race. He did call Dr. Fishman then and the two talked every day over the next few days concerning the horse’s health. There was swelling in the ankle that had to subside before any conclusion could be reached on what needed to be done. This horse had had problems with its ankle before. The veterinarian was called in to look at the horse.

Dr. Fishman testified that he had already left Ontario on his way south when the horse had its last race and that he was on the phone with Mr. Quaranta frequently thereafter. He said that the proceeds of the year of racing had to be divided but Mr. Quaranta wanted some money for the boys because Christmas was coming. Dr. Fishman said he authorized Mr. Quaranta to take out $10,000 from the account. Dr. Fishman also said that in the discussion with Mr. Quaranta he had in mind that he owed Mr. Quaranta about another 4 to 5 thousand dollars for the training for 2003 and that he and Mr. Quaranta agreed that they would do a final reckoning when all the bills were in.

Mr. Quaranta testified that at the time of this discussion concerning taking money out of the account he thought there was more than that amount owing and that Dr. Fishman authorized him taking out $10,000 to $15,000. In fact he withdrew $14,436 but he did not provide any written calculation of how that figure was arrived at.

With respect to the ownership of the horse, Mr. Quaranta testified that within a few days of the last race Dr. Fishman told him to get rid of the horse or to give it to John and Rocky. Dr. Fishman denies this and says that the conversation in which he said to get rid of the horse or give it to John and Rocky occurred in January and in the context of a settlement of the outstanding training fees. He had the final bills in and he figured that he owed Mr. Quaranta another $4 to 5 thousand dollars. He figured that the horse was worth that much and so the option that he gave was that he would give Mr. Quaranta’s sons the horse in settlement of the account. He did not know that Mr. Quaranta had withdrawn more than the $10,000 he said he authorized. His position is that the $4,436 was close to what he figured he owed and that if he had known that Mr. Quaranta had already taken that amount he would not have agreed to transfer the horse.

Dr. Fishman does not deny that he told Mr. Quaranta to get rid of the horse and in very strong terms. He did not want to pay for over winter training of the horse, which had required expensive veterinary treatment that Dr. Fishman had had to supply. He denies, however, that it occurred prior to December 31, 2003, the expiry of Mr. Quaranta’s authority to act as his authorized agent. He is not otherwise clear as to the timing of the conversation.

There are very few documents that were presented with respect to this period. The documents that were relied on by the Administration included the foal certificate for MAGEE on the back of which are recorded any ownership transactions and a stall application form for Woodbine for the 2004 season, executed by Samuel Quaranta on January 18, 2004.

The foal certificate was in the possession of Samuel Quaranta at all relevant times. He obtained it from the track according to the record at Tab 8 of Exhibit 2 on November 29, 2003, and he acknowledges endorsing it with a transfer of the ownership of MAGEE to John Quaranta. The date noted on the foal certificate is “Dec/06/03”. He testified that that was the date on which he executed the certificate for the transfer. The transfer was not of a partial interest in the horse but of all of the ownership of the horse. He says that he had already had the conversation with Dr. Fishman in which Dr. Fishman had told him to either get rid of the horse or give it to his sons.

On December 6, 2003, John Quaranta was not licensed as an owner but the horse had finished racing for the season so the change in owner for the purposes of the program was not required. John Quaranta became licensed as an owner in April 2004. He apparently paid his father a daily $50 training fee for the horse in 2004.

The horse was sent to a farm for the winter of 2003-2004, which Dr. Fishman says he arranged. He testified that he had decided prior to the last race by MAGEE that he would not use Mr. Quaranta as his trainer for 2004 as he had a friend who was moving to Canada from the States and he wished to give his horses to that individual to train. He said that he had not told Mr. Quaranta about his decision and he did not until January 2004. He testified that in telling Mr. Quaranta to either get rid of the horse or give it to his boys he was attempting to extricate himself from the relationship with the trainer. Indeed it is a requirement of the Rules that an owner attend to settlement of any outstanding training bills prior to transferring a horse to another trainer.

No bill of sale was executed as between Mr. Quaranta and Dr. Fishman or as between John Quaranta and Dr. Fishman.

We were not provided with any correspondence written in this time frame of November 2003 and April 2004 to corroborate either party. What was produced was an application for stalls by Samuel Quaranta to Woodbine Entertainment Group for the 2004 racing season. That form requires on its face that the owner of any horse listed on the form be specified and the trainer must certify as to the truth of the statements on the form. On that form, the horse MAGEE is listed as being owned, along with two other horses, by Dr. Fishman. Mr. Quaranta acknowledges filling out and signing the form and he explains the inclusion of MAGEE as an oversight due to his rushing and his discomfort and inconvenience at the time of filing of the form. The two other horses had also been trained by Mr. Quaranta in the 2003 season and there was no agreement pertaining to them similar to that of MAGEE concerning the ownership.

Dr. Fishman’s testimony is that at the time of the last race, he had not told Mr. Quaranta that he would not be his trainer in the coming year but Dr. Fishman cannot be specific as to the date. He also testified that it was some time after the last race in November and after the discussion about withdrawing funds for Christmas for “the boys”, that he had his conversation with Mr. Quaranta over the final payment on the training fees and that it was in this context that he told Quaranta to either get rid of the horse or to give it to his sons. He acknowledges using strong language concerning disposing of the horse. He said that he did not want to have another set of winter training bills for this horse and he wanted to be quit of this relationship with Mr. Quaranta.

When Dr. Fishman returned to Canada later in the spring of 2004 he was called in to see the Stewards concerning allegedly unpaid training bills that Mr. Quaranta had presented to the Stewards. He said he told the Stewards that Mr. Quaranta should sue him if he wants to be paid and that in fact proceedings were commenced against him, which he has defended. In response to the allegations, he followed up on the horse MAGEE which was in fact earning money in 2004 under the ownership of John Quaranta and the training of Mr. Quaranta. Dr. Fishman whose only knowledge of the condition of the horse at the end of the 2003 season had been through his conversations with Mr. Quaranta followed up on the transfer of the horse and brought the issue of the ownership to the Stewards’ attention. The horse had earned $50,000 by the time of the Steward’s hearing.

Based on their investigation, the Stewards ordered that the transfer endorsed on the foal certificate to John Quaranta be reversed and the horse returned to Dr. Fishman. The winnings, net of the jockeys’ fees for riding, were to be turned over to Dr. Fishman. Dr. Fishman took possession of the horse and ultimately sold it. The horse has apparently since died. The Stewards also imposed the penalties including a full suspension of Samuel Quaranta from August 10, 2004 to the end of the racing season in 2004 and for all of 2005, as well as a $5,000 fine.

If we accept Dr. Fishman’s evidence, then Mr. Quaranta submitted the stall application form, either not knowing that he would not be Dr. Fishman’s trainer in 2004 or in defiance of that, attempting to use those horses to get stalls at Woodbine. While Mr. Quaranta says that including MAGEE was an oversight given that he had filled out the foal certificate transferring the horse’s ownership to his son, there is no such explanation for including the names of the other horses, unless he did not realize that he was not going to be training these horses. The manner in which the stall application was filed is consistent with Dr. Fishman’s evidence that it was not until January that he had the discussion with Mr. Quaranta to terminate their relationship, to settle up the bills and in which he told Mr. Quaranta to get rid of the horse or give it to his boys. If the conversation occurred in January 2004, then Mr. Quaranta did not have the authority to execute the foal certificate.

In dealing with this case we must make determinations as to the credibility of witnesses. We are guided in our deliberations by the Divisional Court ruling in Megens v. Ontario Racing Commission (April 11, 2003, Court file 127/03). The Divisional Court in that case held that the reasons for decision in that case were insufficient. The Court at paragraph 13 cited with approval the reasons in O.P.S.E.U., et al. v. The Queen (Ontario) (1984) 1984 CanLII 2204 (ON HCJ), 5 D.L.R. (4^th) 651 at 659 where O’Driscoll J said:

“A trier of fact may believe all, part or nothing of the evidence of any witness or any exhibit. However, a trier of fact cannot ignore nor fail to evaluate, nor forget a relevant portion or portions of the evidence. The trier of fact must consider all the evidence before deciding what is believed and what is rejected. If the trier of fact fails to carry out that fundamental responsibility, it results in a denial of natural justice as defined for the Supreme Court of Canada in Nipawin, supra.

The [Board} was faced with a fundamental conflict between the evidence of Barnes and the evidence of the applicants-grievors; it was a classic credibility case. In order to do natural justice3 to all concerned, it was the duty of the [Board] to decide what was to be believed and what was to be rejected; in doing so, the trier of fact was required to consider, evaluate and weigh all the evidence.”

The Divisional Court in Megens (paragraph 14) also referred to the exposition of the duty in Gray v. Ontario (Director, Disability Support Program) (2002) 2002 CanLII 7805 (ON CA), 212 D.L.R. (4^TH) 353 (Ont. C.A.) where the tribunal’s reasons were held not to suffice and said at page 364

“The obligation to provide adequate reasons is not satisfied by merely reciting the submissions and evidence of the parties and stating a conclusion. Rather the decision maker must set out its findings of fact and the principal evidence upon which those findings were based. The reasons must address the major points in issue. The reasoning process followed by the decision maker must set out and must reflect consideration of the main relevant factor.”

The Divisional Court in Megens also referred (at paragraphs 15 and 16) to the common law requirement to give reasons set out in Baker v. Canada (Minister of Citizenship and Immigration) (1999), 1999 CanLII 699 (SCC), 174 D.L.R. (4^th) 193 (S.C.C.) where the Supreme Court of Canada observed “that requirements could vary with the circumstances including how closely the nature of the tribunal process resembled the judicial process, the statute within which it was operating and the importance of the decision to the party.”

We have also referred to the reasons of the appeal panel of the Law Society of Upper Canada (“LSUC”) in the matter of Law Society of Upper Canada v. Gary Neinstein 2005 ONLSAP 1, 2005 ONLSAP 0001, February 10, 2005 in which the panel overturned the decision of the hearing panel based on its view of the proper approach to assessing credibility of witnesses. The appeal panel referred to the approach required in the criminal law context of R v. W. (D.) (1991), 1991 CanLII 93 (SCC), 63 C.C.C. (3df) 397 and the application of the approach by the Ontario Judicial Council in Re Evans, [2004] Law Net 4.

As set out in the reasons of the appeal panel of the LSUC, the correct approach is (paragraph 27)

“First, if you believe the evidence of the accused, obviously you must acquit.

Secondly, if you do not believe the testimony of the accused, but you are left in reasonable doubt by it, you must acquit.

Thirdly, even if you are not left in doubt by the evidence of the accused, you must ask yourself, whether, on the basis of the evidence which you do accept, you are convinced beyond a reasonable doubt by the evidence of the guilt of the accused.”

This tribunal is addressing the allegations of rules violations in the context of the licensing of individuals to participate in horse racing. In this case licensees, two of whom have considerable experience in the industry, have presented dramatically different versions of events dealing with the ownership of a horse. There is little documentation to assist us and in these circumstances we must assess the credibility of each witness in the context of what documentary evidence does exist as well as their testimony before us. The standard of proof is not “beyond a reasonable doubt” but rather on the balance of probabilities. With that modification in the particular circumstances of this case we adopt what was originally an approach in the criminal law context. We are not to be taken by doing this to be acknowledging that adopting a criminal law approach to matters before this Commission is either necessary or required. In this case it permits us to be conservative in our approach and in so doing we give the licensees whose appeals are before us the benefit.

Mr. Quaranta says that the horse should not have been transferred back to Dr. Fishman. He says that Dr. Fishman had agreed to transfer a half interest in the horse to John and Rocky if they looked after the horse for the 2003 season. He says that they did so and they are entitled to their share of the horse and the horse’s earnings. Further he says that Dr. Fishman did not want the horse and that in addition to giving away the one half interest in late 2002, Dr. Fishman gave away the remaining half interest in his conversation with Mr. Quaranta after the November 2003 race when the horse was injured. Mr. Quaranta relies on his authorized agent’s power and further on his recollection of the events. He also relies on a letter sent to the Stewards by Dr. Fishman in the course of the investigation in which Dr. Fishman refers to the half interest (rather than the whole interest that the Stewards transferred back to Dr. Fishman).

Dr. Fishman has no credible explanation for the reason he wrote the reference in the letter to the Stewards with respect to the half interest and his position where he now defends having the sole ownership of the horse. The half interest would be consistent with his agreement with John Quaranta that in return for the grooming duties being discharged, Dr. Fishman would transfer a half interest in the horse.

Dr. Fishman took no steps to address the training of MAGEE for the 2004 season. No evidence was provided that another trainer was expecting to have that horse in his or her stable for the season. Therefore we accept Mr. Quaranta’s evidence that Dr. Fishman told him to either get rid of the horse or to give it to his sons. What we do not accept is that Mr. Quaranta received that instruction prior to January 1, 2004. Therefore we find that the foal certificate execution that purports to have been made in December 2003 was in fact backdated.

Further we find that Dr. Fishman believed that he had discharged his obligations for training bills by giving the horse to Mr. Quaranta to get rid of or to give to his sons, and that he thought that the horse was in addition to the $10,000 he had authorized. We accept Dr.Fishman’s evidence that he was not aware that Mr. Quaranta had taken out $14,436 at the time of the discussion over the future of MAGEE. No training bills were filed with us to support this amount or any other amount on behalf of Mr. Quaranta. There is no evidence that Dr. Fishman was provided with documents that supported Mr. Quaranta’s assessment of the likelihood of the horse racing again or Mr. Quaranta’s training bills as of the December, 2003 day when Mr. Quaranta says he executed the foal certificate or of any date in January, 2004.

Indeed it is likely that if Mr. Quaranta had not sought payment for what he says were outstanding training fees and if the horse had not won some purses in 2004 Dr. Fishman might very well have left the matter alone. The problem, of course, is that Dr. Fishman had not seen (or did not recall) the training fees agreements and he had relied on Mr. Quaranta’s assessment of the horse’s injuries. If an owner believes that a horse is likely to win purses, given that the over winter training bills are not large (on the evidence here some $4200 for four months or so), he is not likely to throw away the horse. Dr. Fishman thought that he had discharged his obligations to attend to his trainer’s bills by instructing Mr. Quaranta to either get rid of the horse or give it to his sons. Dr. Fishman’s view that such a transfer would settle the training bills from Mr. Quaranta is consistent with Mr. Quaranta’s position that his training agreement was made on behalf of his sons. The alleged training agreement, on Mr. Quaranta’s evidence, included no daily training fees, but only an equal division of the purses. Since there is no evidence that anyone but John and Rocky were to get the benefit of the division of the purses (other than this alleged agreement), Dr. Fishman’s evidence that he thought he was discharging his obligations to the trainer by transferring his interest in the horse to the sons is consistent with all the other evidence concerning his obligations to Mr. Quaranta.

In face, however, of the trainer claiming more money for training based on agreements Dr. Fishman says he did not see, and based on a trainer’s transfer of a horse which was still winning purses in 2004 even though it was apparently badly injured in its last race in 2003, Dr. Fishman is understandably upset.

The Rule violation alleged deals with the business relationship between Samuel Quaranta and Dr. Fishman. In our view Mr. Quaranta had no authority to execute a trainer’s agreement on behalf of an owner and even if he thought he had orally obtained that authorization, that execution was not consistent with the business practices rule. Further we find that Mr. Quaranta, having custody of the horse MAGEE during and after the last race in November, 2003 had a duty to provide clear and proper advice to the owner as to the potential recovery of the horse. Further prior to transferring the ownership of the entire interest in the horse, Mr. Quaranta should first have executed the foal certificate for a one half interest in the horse to his son John Quaranta and we find that he had the power to do so as of the end of the last race based on Dr. Fishman’s evidence and that of John Quaranta. He did not have the authority or the power to transfer all ownership interest in the horse in December 2003. It was incumbent on Mr. Quaranta, given that it was his family that would benefit from the transfer of all interest in the horse, to prepare the appropriate documents and have them executed by Dr. Fishman to support the execution of the foal certificate. Even if Dr. Fishman had given Mr. Quaranta authority to get rid of the horse or give it to his children in December 2003 prior to the expiry of the authorized agents authority, the obligation on Mr. Quaranta was to properly undertake the transaction with a bill of sale and documentation to record the understanding he says was reached with his owner and to not prefer his own or his children’s interest ahead of that of his owner.

In the language of the industry, a horse is “given” to a trainer by an owner to train and race in a season. The word “given” is true in the sense that the trainer has custody of the horse, is responsible for its well-being (including the hiring of grooms, hot walkers, exercise riders and jockeys) and its protection. The owner in most instances relies on the trainer’s good judgement as to what races to enter the horse, as to the training details, and to the value of the horse. In this case, Dr. Fishman was frequently involved in the care of his horses even though Mr. Quaranta was the trainer. He relied on Mr. Quaranta once he was out of the country to do the right thing in terms of this horse and that cannot include benefiting himself and his family ahead of his owner, even if the owner has indicated that he will not be continuing the relationship for the next season. Mr. Quaranta looked no further ahead than the following season; at no time does he appear to consider the possibility that Dr. Fishman might come back to him as an owner, given that they had had some success with MAGEE in 2003, and there was no guarantee that Dr. Fishman would have a better outcome with his new trainer. Certainly by virtue of the handling of the relationship with Dr. Fishman he has ensured that he would not be trusted again with one of Dr. Fishman’s horses.

Rule 15.09.1 is intended to require a professional business relationship between trainers and owners. In our view Mr. Quaranta’s conduct falls short of what is required of a trainer and we agree with the finding of the Stewards that Mr. Quaranta is in breach of the Rule. The penalty imposed was the transfer back of the horse whose ownership was transferred without proper authority and without a bill of sale, as well as a lengthy period of suspension and fine.

We will not interfere with the transfer of the horse’s ownership given that it is now dead and there are proceedings in the courts with respect to claims of funds owing as between the parties. With respect to the penalty of suspension, we modify the penalty to suspend Mr. Quaranta for the rest of the 2005 season, approximately six months (being July 1 to December 31, 2005). We have been asked to include in our calculation of the appropriate suspension that Mr. Quaranta was suspended as a result of an adjournment of the hearing scheduled for April 25 to May 15, 2005. We have decided that the suspension from July 1 to December 31, 2005 should be in addition to the suspension April 25 to May 15, 2005, which was imposed due to Mr. Quaranta’s unreasonable conduct with respect to the continuation of the hearing in this matter.

We will not interfere with the fine of $5,000 or the terms of payment, i.e. that it be paid at the end of the period of suspension.

DATED this 21^st day of June, 2005.

Lynda Tanaka

Chair