Ontario Racing Commission

RULING NUMBER COM SB 030/2008

COMMISSION HEARING TORONTO, ONTARIO – OCTOBER 8, 2008

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

AND IN THE MATTER OF THE APPEAL OF

STANDARDBRED LICENSEE MICHAEL CAPTON

Standardbred licensees Michael L. Capton, License Number R56961, and M.L. Capton Enterprises Inc. appealed Judges’ Ruling Number SB 37680, dated June 8, 2008, wherein the horse Kingfishers Gypsy was declared ineligible for races on May 10, 17 and 25, 2008 pursuant to Rules 5.11 and 26.06 of the Rules of Standardbred Racing.

On October 8, 2008, a Panel of the Ontario Racing Commission consisting of Vice Chair Hon. James M. Donnelly and Commissioners Pam Frostad and George Kelly was convened to hear the matter.

Michael L. Capton and M.L. Capton Enterprises were represented by D. Larry Todd. Johanna Braden appeared as counsel for the Administration.

Upon hearing the evidence of Tom Miller, Senior Standardbred Judge, Ontario Racing Commission, Robert Fellows, trainer, and Michael L. Capton, owner, and on reading the Factums and Joint Brief of Documents, and upon hearing the submissions of both counsel, the Commission dismissed the appeal.

The Panel’s written Reasons for Decision is attached to this Ruling.

DATED in Toronto this 5th day of November 2008.

BY ORDER OF THE COMMISSION

John L. Blakney Executive Director

*AMENDED REASONS FOR DECISION

[1]. Standardbred owner/trainer licensee Michael Capton’s (Capton) appeal of Judges’ Ruling SB37680 dated June 8, 2008 was dismissed with Reasons to follow. These are the Reasons.

[2]. Judges’ Ruling SB37680 was premised upon breach of the Trainer Transfer Rule (Rule 26.08). That Ruling declared Capton’s filly “Kingfishers Gypsy” ineligible for races in which it participated, May 10 (finished 3rd, purse earnings $1,200.00) May 17, (finished 5th, purse earnings $500.00) both at Georgian Downs and May 25 Windsor (finished 1st in a Grassroots Elimination, purse earnings $10,000.00), (Rule 5.15(a)). The Ruling required that purse money and driving/training fees be returned for redistribution (Rule 18.08.01). The Georgian Downs purse money has been paid to Capton (on July 9, 2008, the penalty provision was stayed by order of the Executive Director pending determination of this Appeal (Rule 24.06)). The Windsor purse was withheld pending these proceedings.

[3]. The eligibility problem came to light when the filly was scratched by the Judges at Dresden September 3, 2007. No fine, suspension or expulsion under Rule 5.11 was imposed by the Dresden Judges.

[4]. Undisputed facts based on the evidence and admissions were found as follows:

• Brett Robinson (Robinson) trained Kingfishers Gypsy for M.L. Capton Enterprises Inc., a corporation owned and controlled by Capton. In consequence of a positive drug test on a horse trained by Robinson but unrelated to Capton, Robinson was suspended for ten years from August 30, 2007 to August 18, 2017 and fined $40,000.00. Under Rule 6.14 Kingfishers Gypsy was ineligible to race unless “during the suspension the horses are transferred to another trainer approved by the Judges.” [Underlining added]

• On September 1, 2007, Capton completed and signed a Declaration for Transfer of Trainer seeking Judges’ Consent to transfer Kingfishers Gypsy to trainer Kim Hannah. Through inability to comply with a condition of the transfer relating to stabling accommodation at Mohawk Raceway, the Judges withheld consent.

• On September 8, 2007, Capton completed a similar Declaration for Transfer to Trainer Robert Fellows (Fellows). The Judges consented and Kingfishers Gypsy raced under Fellows care until turned out in November 2007.

• The Fellows Trainer Transfer application signed by Capton provided in part:

  “If this application for transfer is approved by the Judges, I consent to the following terms to my licence …

  (c) No horse owned by me, the stable name, multiple ownership or estate as the case may be, trained by the proposed trainer of record once this transfer is approved shall be transferred to or trained by another trainer without the approval of the Judges

  (e) The horses identified in Part A will be ineligible for entry for racing in Ontario if … the conditions of the Judges’ Approval are not complied with.” [Underlining added]

• In the spring of 2008, Fellows had no available stall for Kingfishers Gypsy. Capton transferred the filly to trainer Shawn Robinson (a brother of suspended trainer Brett Robinson) who raced it in the three races in issue.

• Capton neither applied for nor received Judges’ Consent for the transfer to Shawn Robinson.

• Both brothers trained at their father William Robinson’s training centre. William Robinson was and is serving a long-term *WEG suspension. Given that family relationship, the Judges would not have consented to the transfer to Shawn Robinson based on considerations of “sphere of influence or control.”

[5]. Counsel for the Administration called Senior Judge Tom Miller (Miller) one of the Judges who approved and signed the Transfer Application. Counsel for the Applicant called trainer Fellows and owner Capton. No issue was taken with the good character or credibility of any of those witnesses. The accuracy and thereby the reliability of their evidence remained to be assessed.

[6]. Judge Miller testified that he has been a Judge for 12 years. In that capacity he has dealt with about one hundred Trainer Transfer Applications. The version of the Transfer Application used in this case had been in use for about six years.

[7]. He had no specific recall of any transfer conversations with Capton relative to the proposed transfer to Hannah or Fellows. His practice was to:

• Tell the Applicant of the requirement of approval of future transfers during the suspension period until there was a bona fide change of ownership as evidenced by such as a claim or sale by public auction.
• Give the Applicant notice of the obligation to advise the Judges when the horse was turned out at the end of its racing season.
• To provide a photocopy of the Trainer Transfer Consent if the Applicant requested.

[8]. Fellows testified that this was his first experience with a Trainer Transfer application. About September 5, he obtained a blank Transfer Application from Miller and was told that the Application must be completed and returned with a copy of the Trainer/Owner contract. Fellows stated he was told that when the horse left his care he was to notify the Judges. He did not recall which Judges were there or if Capton was present.

[9]. Upon attendance by Capton on September 9, Miller endorsed the Judges’ Approval on the application by specifying location of the Fellows Training Facility. Racing Commission records confirm that no other Trainer Transfer was approved by Miller on that date.

[10]. Capton’s evidence was, that for 20 years as a licensed owner/trainer, he had only one entry on his record of violations that being a $25.00 fine for a now forgotten incident. This was his first experience with Trainer Transfer approvals. He claimed to have signed the Hannah application and the Fellows application without reading the content of either. He stated that he was neither given, nor offered a copy of the approved Consent to Transfer. Those events of a year ago were difficult for him to recall. According to his recollection, he was not given oral notice that approval of future transfers would be required. He acknowledged that he was instructed to notify Judge Miller at the end of the filly’s racing season.

[11]. Both Fellows and Capton complied with Miller’s instruction to notify him when the filly was turned out in November 2007.

[12]. On Capton’s behalf submissions were made:

First

[13]. By imposing the condition that future transfers required approval, the Judges exceeded their authority conferred by Rule 26.08 – Hence Capton is not bound by that condition.

Second

[14]. Capton is not bound by his signed agreement because he did not read it.

Third

[15]. Capton is not bound by oral notice of the need for approval of future transfers because no oral notice was provided by Miller.

Fourth

[16]. Since the filly raced three times with Shawn Robinson programmed as trainer, it must have been eligible to race.

The First Submission

[17]. On Capton’s behalf, it is contended that by adding future conditions to their consent the Judges exceeded the authority conferred by Rule 26.08 and in effect usurped the power to make Rules which is reserved to the Commission by s. 11 Racing Commission Act 2000.

Rule 26.08 – Whenever a trainer is suspended under any provisions of the rules, any horse trained by him/her or under his or her care, but not owned wholly or in part by him/her may, with the consent of the judges at that meeting, be released to the care of another licensed trainer and may race.

[18]. To understand the purpose of Rule 26.08 is to understand its proper interpretation. Integrity considerations require a total disconnect between the suspended trainer and the horses which he had been training. Necessarily implicit is that the duration of the disconnect must coincide with the duration of the suspension. What purpose is achieved by having consent to the initial transfer exhaust the Judges’ authority? Judges would be powerless to prohibit an immediate further transfer to the wife, son, or brother of the suspended trainer. Thereby the horse would immediately be eligible to race while within the original trainer’s sphere of influence.

[19]. Rule 6.13.02 deals with a parallel situation, with transfer of a horse by a suspended (ineligible) owner. The Rule identifies the Judges’ power to monitor the continuing eligibility. The timeframe is the “period of ineligibility”. The standard of precaution by the Judges is “to ensure that the racing of the horse is not under the control or influence of the transferor.”

[20]. The same principle underpins both trainer and owner transfers – that is no influence by the suspended person during the suspension.

[21]. “Run of the mill” suspensions have been in the 30-60-90 day range. Of recent vintage are ten-year suspensions precipitated by onset of EPO positive tests. Accordingly the Trainer Transfer consent for long-term violations is equally of recent vintage. If the rule breach is so egregious as to warrant a 10-year suspension, this heightens the importance of safeguards to prevent the offending trainer from retaining or reacquiring influence over the filly during the suspension.

[22]. To interpret the Rule so as to preclude future monitoring by the Judges is reduction to an absurdity. A proper purposive interpretation of the Rule would thereby be denied. During the suspension period eligibility flows from the horse being raced by an approved trainer. Lacking that prerequisite there is no eligibility. The conditions imposed on Capton were reasonable and necessary to give effect to the Rule and its underlying purpose. The Judges did not act beyond their authority. The first submission fails.

The Second Submission

[23]. Dealing with the result which would flow if Capton’s evidence was accepted that, although he had opportunity, he read neither the Hannah nor the Fellows application.

[24]. The general rule is that a person is estopped or bound by his deed.

“A party of full age and understanding is normally bound by his/her signature to a document whether he/she reads or understands it or not. If, however, a party has been misled into executing a deed or signing a document essentially different from that which he intended to execute or sign, he/she can plead “non est factum” Chitty on Contracts, 28th edition, Vol. I, 5-054. [Underlining added]

[25]. In cases of “non est factum” the written instrument becomes void by operation of law on the basis that the mind of signor did not accompany the signature. That is he/she never intended to sign and, in contemplation of law, did not sign. However in Capton’s case there is “no essential difference.” The document contemplated by him was a Transfer Application. The document signed by him was a Transfer Application. Capton was not misled by an ORC official into signing or about the nature or content of the document. His signature was not induced by fraud or deceit. If in fact Capton did not read, that choice was his, as is responsibility for events flowing from that choice. By willfully and knowingly signing a transfer document, he must be deemed to have voluntarily assumed the consequences. He may not shed his obligation lawfully even though carelessly assumed. He is responsible for his willful blindness.

[26]. A secondary reason why liability for his signed agreement must be imposed is - Implicitly regulation of the Racing Industry requires some level of licensee responsibility. This proposition is supported in small measure by reference to Standards of an Owner’s Business Practices in Rule 3.09.01 which speaks to generally accepted standards of good conduct. If a licensee makes a free and uninduced choice to sign without reading, he/she must not be permitted to frustrate the proper regulation of the Industry, particularly on such a vital point. Regulation is for the benefit of the Industry as a whole and that must be accorded primacy over acknowledged individual irresponsibility. The second submission fails.

The Third Submission

[27]. Capton having failed in his attempt to evade liability on the written transfer document, discussion of oral notice becomes moot. However, mindful of the Panel’s obligation to consider evidence, find facts and give Reasons, that submission is subject to comment as follows:

[28]. That there will be difficulty recalling conversations of less than five minutes duration thirteen months ago is to be expected and was acknowledged in evidence. That difficulty is further compounded by the inherent difficulty in proof of a negative, that is that an event did not happen. The distinction between “that statement was not made” and “to my best recollection that statement was not made” must be borne in mind.

[29]. Additional factors bearing on the reliability of the evidence of the three witnesses are:

• Miller is accepted as a competent Judge experienced in dealing with similar applications and with no direct interest in the outcome.
• He was well aware of the importance of the Trainer Transfer Rule which is at the intersection of the twin pillars of racing – the Trainer Responsibility Rule and Drug-Free racing.
• That Miller delivered the portion of his standard instruction to the effect that he must be notified when the filly was turned out was acknowledged and acted upon by both Fellows and Capton. It would be improbable that the less significant portion would be delivered and the vital portion relating to future transfers omitted. No reason appears on the evidence indicating that Miller would deviate from his established and important protocol.
• Capton’s denial is premised upon a remote, nebulous and non-persuasive recall. Fellows’ recollection is similarly circumscribed. There was no obligation on the Judges to notify trainer Fellows regarding future transfers. The approval of future transfers was Capton’s responsibility.

[30]. The panel accepts that Miller, mindful of the gravity of the sphere of influence issue and dealing with only one Transfer decision on that date, did follow his standard practice. Accordingly, the panel finds that Capton was provided with oral notice that the transfer approval was conditional upon approval of subsequent transfers. The third submission fails.

The Fourth Submission

[31]. It is contended that the fact that the filly raced three times with Shawn Robinson programmed as trainer indicates eligibility. This bespeaks error or oversight by the Judges at those races rather than their reasoned decision that the filly was eligible. The “CRIS” computer system for use by the Judges at those races did not indicate Shawn Robinson as an approved trainer at that time. No evidence from these Judges was called. Whether that system was unavailable to, unchecked by, or misunderstood by them is irrelevant to ineligibility through a trainer transfer breach. Furthermore Rule 26.14 provides “The trainer of record of a horse declared is responsible for the eligibility of the horse.” The fourth submission fails.

In Conclusion

[32]. Capton’s breach of written transfer conditions rendered Kingfishers Gypsy ineligible for the three races. Racing an ineligible filly triggered Rule 18.08.01, which required return of the purse money. The Judges discharged their obligation under Rule 5.01 by collectively carrying out the duties and responsibilities specified in the Rules.

[33]. Regarding the purse money, a final submission is made that this is a case for waiver of the consequences of the breach under the absolute discretion conferred by Rule 1.09. In that event Capton would have retained the purse money and entitlement to points earned in the OSS Elimination Series.

[34]. This discussion must start with acknowledgement that although Capton’s failure to comply with his written undertaking is the root of his plight, the ORC Judges at Georgian Downs and Windsor inadvertently provided an environment where that plight could flourish. Early detection of ineligibility would have enabled earlier correction. If the issue related to abatement of a fine or even a period of suspension, then compassionate or equitable grounds premised upon that unexplained oversight by the Judges may prevail.

[35]. The difficulty is that other licensees have a vested, if non-represented, interest in the result of this proceeding. Competition is the essence of horse racing. Licensees compete for purse money and in the Windsor race for points awarded in the OSS Elimination Series. Fairness is not a one-sided coin. An exercise in benevolence in favour of one licensee is not to be conducted at the expense of competing licensees. Conferring this philanthropy on Capton would permit entry of an ineligible filly to unfairly deprive other competitors of earned purses and OSS points. There is no basis for invoking the clemency discretion in Rule 1.09. Accordingly, the Appeal fails.

[36]. The Rules referenced herein are reproduced in the attached Schedule A.

[37]. As a procedural observation, the prospects of future difficulty may be reduced by such as:

• Boldfacing the portion of the Transfer Application dealing with future consents.
• By a boldfaced notation above the signature line “Read before signing. You will be deemed to have done so.”
• By providing a copy of the signed Transfer Consent to the Applicant.
• Part B, paragraph 1(c) opens with the expression “No horse …” This statement is overly inclusive but does embrace the filly in issue. The Transfer Application form would be more specific if amended to read “None of the above listed horses.”

[38]. These suggestions relate to supplementary safeguards and are not to be construed as indicative of current inadequacy.

DATED this 5th day of November 2008.

James M. Donnelly Vice Chair

Schedule A

Rule 1.09

If any case occurs which is not or which is alleged not to be provided for by the rules, it shall be determined by the Judges or the Commission as the case may be, in such manner as they think is in the best interests of racing. 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.

Rule 3.09.01

Any act or omission in business practices related to Standardbred 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 Judges. 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.

Rule 5.01

At an extended race meeting, except in the case of an emergency, there shall be three Judges employed and appointed by the Commission, one of whom shall be designated by the Commission as senior judge under whose supervision the Judges shall, collectively, carry out all the duties and responsibilities specified in the rules. All decisions of the Judges shall be determined by majority vote. In the case of an emergency and only two Judges are officiating, the senior Judge or the Judge designated as senior Judge by the Director, shall have in addition to the regular vote, a casting vote.

Rule 5.11

The Judges have the power, and it is their duty, to regulate and govern the conduct of all racing, and all participants. If any participant refuses to comply with the directions of the Judges, he/she shall be fined, suspended, or expelled.

Rule 5.15(a)

The Judges may:

Declare any horse disqualified or ineligible to race for violations of the rules or for noncompliance with the conditions of any race in which the horse has been declared.

Rule 6.13.02

If a suspended, disqualified, unlicensed or ineligible person purports to transfer his or her interest in a horse during such period of ineligibility, the Judges may enquire into any transfer in order to ensure that the racing of a horse is not under the control or influence of the transferor.

Rule 6.14

Where a trainer is suspended by reason of a positive drug test or violation of Rule 22.38 relating to a horse trained by him or her, all horses trained by the suspended trainer may be permitted to compete provided during the suspension the horses are transferred to another trainer approved by the Judges. Upon a second or subsequent offences by the trainer, the horse or horses to which the violation applies shall be suspended and ineligible to start in any race for such period of time as the Judges or Commission may order.

Rule 18.08.1

If for any reason a horse is disqualified or declared ineligible, any purse monies or trophies received by the owner, or driving and/or training fees (paid under Rule 18.11 to the driver and/or trainer of the horse in the race) shall be returned, within 15 days of notification, to the association for redistribution.

Rule 24.06

Pending disposition of an appeal, all penalties imposed shall continue in full force and effect except when stayed by order of the Director.