Ontario Racing Commission

RULING NUMBER COM SB 026/2009

COMMISSION HEARING TORONTO, ONTARIO – SEPTEMBER 10, 2009

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

AND IN THE MATTER IN THE APPEAL AND REQUEST FOR HEARING OF

STANDARDBRED LICENSEE PATRICK SHIBLEY

Patrick Shibley (“SHIBLEY”) appealed against Standardbred Official Ruling SB 40006 issued by the Western Fair Raceway Judges on January 20, 2009, whereby he was “prohibited from participating effective January 20, 2009”. The penalty was ordered against SHIBLEY for the following reasons:

In accordance with ORC Rule 3.10, Mr. Shibley is prohibited from participating in any activity regulated by the Ontario Racing Commission as a result of Ruling # 07-109 of the Commonwealth of Virginia, Virginia Racing Commission and Massachusetts State Racing Commission Ruling No. 1002-08.

The Administration, on consent of SHIBLEY, filed an Ex Parte Application seeking the following relief:

(i) the appeal of SHIBLEY be allowed; and

(ii) Standardbred Official Ruling SB 40006 issued to SHIBLEY by the Western Fair Raceway Judges on January 20, 2009 be vacated and set aside.

On March 25, 2009, a Panel of the Ontario Racing Commission (“ORC”), comprised of Chair Rod Seiling, was convened to hear the Ex Parte Application.

Jennifer Friedman appeared as counsel for the Administration. SHIBLEY was not in attendance.

Upon reviewing the Application Record and upon hearing the submissions of counsel, the Panel refused to accept the Application and ordered that a full Hearing was necessary.

On June 11, 2009, a Panel of the ORC, comprised of Vice Chair Hon. James M. Donnelly, Commissioner David Gorman and Commissioner Pamela Frostad, convened for the purposes of a Hearing.

Jennifer Friedman appeared as counsel for the Administration. SHIBLEY was in attendance. SHIBLEY indicated that his counsel, Richard Shibley, was out of the country and unable to attend. The Panel adjourned the matter sine die, without prejudice to SHIBLEY’s right to bring the matter back for a Hearing, with SHIBLEY’s stay being vacated.

On June 12, 2009, Richard Shibley, counsel on behalf of SHIBLEY, contacted the Administration to schedule a Hearing. On consent, the Hearing was scheduled for September 10, 2009.

On September 10, 2009, a Panel of the ORC, comprised of Vice Chair Hon. James M. Donnelly, Commissioner David Gorman and Commissioner Pamela Frostad, convened for the purposes of a Hearing.

Jennifer Friedman appeared as counsel for the Administration. Richard Shibley attended as counsel for SHIBLEY.

Upon considering the agreed facts and the submissions of counsel, the Panel ruled as follows:

i.) Counsel made a joint submission which was accepted by the Panel as a reasonable disposition on this record:

a) SHIBLEY to surrender his trainer’s licence forthwith for cancellation.

b) SHIBLEY to receive a conditional tradesman’s licence as a farrier permitting him to be in the secured track area only for the purpose of and while engaged in the practice of that trade.

c) At the expiration of two years from the date of issuance of that licence, SHIBLEY will confer with the Deputy Director to review his licensing status including his record for rule breaches and the deficiencies in his 2007 and 2008 licensing applications.

d) SHIBLEY will, during the term of that licence, keep the peace and be of good behaviour.

ii.) The reciprocal enforcement order of January 20, 2009, imposing a prohibition, is rescinded.

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

DATED at Toronto this 25th day of September 2009.

John L. Blakney

Executive Director

REASONS FOR DECISION

The Appeal

Standardbred owner/trainer licensee Patrick Shibley (Shibley) appeals Ruling SB40006, January 20, 2009 by the Judges at Western Fair Raceway. By that Ruling Shibley was prohibited from participating in any ORC regulated activity during the currency of his ban in Virginia. The reason for the prohibition stated by the Judges was, “in accordance with ORC Rule 3.10, Mr. Shibley is prohibited from participating in any activity regulated by the Ontario Racing Commission as a result of Ruling #07-109 of the Commonwealth of Virginia, Virginia Racing Commission and Massachusetts State Racing Commission Ruling #1002-08”.
Rule 3.10 provides, "Where the licensee is suspended by the Director, or by the pari-mutuel regulatory agency of another province or state recognized by the Commission, or Standardbred Canada or the United States Trotting Association, the suspended licensee shall be prohibited from participating in any activity regulated by the Commission. The suspension shall, in addition, render ineligible for declaration or starting, every horse in which the suspended licensee has any ownership interest or trainer responsibility. Eligibility for affected horses in such cases may be restored by transfer of the suspended licensee’s interest or responsibilities to another licensed person, if approved by the Judges of the meeting. Any licensee suspended by the operation of this provision may request a hearing before the Commission as prescribed by the rules or the Act as the case may be.”
In accordance with current industry practice as described herein, the ORC recognizes and reciprocally enforces suspensions by racing jurisdictions in the United State s. Rule 3.10 is the Standardbred Rule dealing with reciprocal enforcement. Memoranda of Understanding with some State racing jurisdictions are in progress.
The Appeal comes forward under dual authority:

by Rule 3.10, “Any licensee suspended by the operation of this provision may request a hearing before the Commission.”
by Rules 1.07 and 24.01 which provide authority for review of the decision by the Western Fair Raceway Judges.

Background in the United States

on September 11, 2007 Shibley was stated by the Virginia Racing Commission to have been "in possession of hypodermic needles, syringes and/or injectibles, and/or other drugs, at Colonial Downs, Virginia."
because of that incident, on October 11, 2007, by Ruling number 07-109 the Virginia Racing Commission ordered that “No application for a Virginia Racing license will be accepted from Shibley for a period of five years (September 11, 2012).”
Virginia Ruling 07-109 states: “the cleaning and maintenance staff working in the barn occupied by Shibley’s horses found within hours of arrival by Shibley and his horses a box in a trash can. The box was ‘filled with syringes, tubes, funnels and numerous injectible equine medications.” Receipts for some of the items were also found.
on April 1, 2008 by Ruling 1002.08 the Massachusetts Racing Commission ordered “The trainer licence issued to Patrick Shibley on March 17, 2008 is hereby revoked. You failed to inform this Commission that you are unable to attain a licence in another jurisdiction.”

ORC Application

on June 7, 2008, Shibley applied for renewal of his ORC trainer’s license. He responded "yes" to the question on the Application -"Have you ever had a licence or registration certificate of any kind refused, denied, suspended or revoked in any jurisdiction.”
the Application then states, "if you answer “yes”, is it recorded on file with the ORC?” Shibley responded with the notation, "2005 Ontario – not having contacts - 6 months.”

Shibley’s Application failed to disclose:

the Virginia licence ban (2007)
the Massachusetts licence revocation (2008)
that the ban and revocation were for different violations, being respectively injectibles and failure to disclose.

On September the 3, 2008, Shibley again applied for an ORC license renewal. He answered "yes" to the question about denials or suspensions and again failed to disclose either the Virginia ban or the Massachusetts revocation. In answer to the follow-up question about the information being on file with the ORC, he asserted "on file".
No information relative to either the Virginia ban or the Massachusetts revocation was on file with the ORC. No report to the ORC had been made by Virginia, Massachusetts or Shibley. The ban and revocation were discovered by a background check on Shibley by ORC investigators which was completed January 6, 2009.

ORC Proceeding

Following receipt of the information from Virginia and Massachusetts, upon notice to Shibley, the Judges at Western Fair Raceway conducted a Hearing on January 20, 2009. Shibley in company with his mother as spokesperson attended. As stated by ruling SB40006 the Judges prohibited Shibley’s participation in ORC regulated activity.
Shibley filed Notice of Appeal on the following day. On January 27, 2009, the Executive Director granted a Stay of his suspension pending determination of the Appeal.

The Administration Position

The Administration noted that Shibley had not been licensed in Virginia. With no Virginia licence available for suspension, he was banned. The Administration concluded that since there was no license suspension in Virginia, Rule 3.10 had no application.

The Ex Parte Application

In consequence the Administration, with Shibley's consent, brought an Ex Parte Application (in Shibley's absence) before the ORC Chairman sitting as a Panel of one. An Order was sought setting aside the decision by the Judges at Western Fair Raceway thereby reinstating Shibley's ORC licence. On the Ex Parte application, the Administration’s position was stated as follows:

“The relief sought by the Administration with the consent of the appellant Patrick Shibley is as follows: that the appeal of Patrick Shibley be allowed and that Standardbred official Ruling SB40006 issued to Patrick Shibley by the Western Fair Raceway Judges on January 20th, 2009, be vacated and set aside. The basis for this position is that Rule 3.10 which is the applicable rule enumerated in the subject Ruling was not applied, in our respectful submission, as it was intended. Rule 3.10 in the Rules of Standardbred Racing encompasses suspensions and in this case the licensee was banned in another jurisdiction. The jurisdiction was encompassed by the Rule, however, the action, the regulatory action, in our respectful submission, is not encompassed. A ban can be distinguished from a suspension in the sense that a suspension is a situation where a person still has a license from the regulatory body whereas a ban is a situation where there is no license in play.”

(underlining added)

The Chairman concluded that interpretation of Rule 3.10 was of such gravity that it should be determined by a full ORC panel upon a full hearing.
The matter came before this Panel on Thursday, June 11, 2009, upon proper notice. Shibley attended forty minutes late without explanation to the Panel and without Counsel or other representation. Confronted with the task of seeking an adjournment without prior notice, elementary courtesy would seem to dictate arrival as scheduled. He advised that he had some basis to believe that his lawyer would attend. However, on the day preceding the hearing he learned that the lawyer was in the United States or Cayman Islands. Shibley requested an adjournment in order to have his lawyer in attendance.
With no prior notice of the adjournment request, the Panel of the three Commissioners had been assembled; Commission counsel and witnesses Moffat and Maertens were in attendance.
With that background the Hearing was adjourned Sine Die to be brought forward upon Shibley's application. Shibley demonstrated neither awareness of the gravity of his situation nor respect for the authority of the Panel. His dismissive response to the Notice of Hearing bespeaks negligent or willful delay of the Appeal process, either of which disentitles him to a Stay. Responsibility for bringing the matter forward was transferred to Shibley by immediately rescinding the Executive Director's Stay of his licence suspension. The granting of a Stay seems to abate a licensee’s enthusiasm for an early hearing.
On the following day, Friday, June 12, ORC counsel was contacted by Shibley's lawyer who advised that he was in Toronto but would not be available for a Hearing in July or August. Dates for a hearing before the same Panel were canvassed.
On consent the continuance was fixed for September 10 at 9:00 a.m. Shibley appeared on September 10 with counsel R.E. Shibley.
No evidence was called. Counsel agreed that the facts as outlined in the two factums were correct. On the basis of that Record the matter proceeded. The substance of the undisputed facts was:

Shibley stated that he arrived at Colonial Downs in company with the operator of the truck J.M. Ferry and his assistant, “Nancy”. Their trailer carried 10 horses with equipment. Upon arrival about 1:00 a.m., the horses were stabled in a barn containing over 40 stalls. By 3:00 or 4:00 a.m., unloading was completed. Shibley slept until 7:30 a.m. when he left to get feed for the horses. Upon his return he was notified by Nancy that the discarded drug material had been located by the cleaning staff who reported to security. There were no security provisions for the barn. The garbage was collected daily when the barn was occupied. Shibley claimed the barn had been unoccupied for some time before his arrival.

Security searched Shibley’s vehicle and equipment and found no drugs or paraphernalia.
Shibley requested a drug test on the horses which was denied. He claimed there was no investigation by the racing authority. He claims that a hearing was scheduled for the following morning but this was cancelled without his consent and he was ordered off the premises.
On October 12, 2007, the Virginia Commission issued Ruling #07-109 imposing the 5-year ban - still, according to Shibley, having held no hearing.
The reciprocity issue was reviewed in the Vanderkemp Reasons, (SB 016/2009. To briefly recap:

Reciprocal enforcement is an integral component of racing integrity. Ontario will not become a haven for rejects by other jurisdictions.
Issues of fairness and due process are not appealable in Ontario. That responsibility is upon the licensee to be pursued in the foreign jurisdiction.

There is neither intent nor capacity to retry the circumstances that have in other jurisdictions been found to be Rule violations. For example, "possession" of certain articles may be alleged. “Possession” may be demonstrated in various ways - personal possession, constructive possession, joint possession. Was the article knowingly possessed in the sense of having knowledge of the true nature of the article (example, a box of unknown contents)? The elements of possession will not be re-litigated here.

The Administration conclusion that Rule 3.10 does not apply to a ban as opposed to a suspension

This interpretive issue requires comment.
The basis for the Administration contention to the Chairman that Shibley's licence should be reinstated must be critically assessed because of twin risks:

a flawed interpretation of Rule 3.10,
over simplification of Shibley's global situation before the ORC.

On a de novo licensing hearing before an ORC Panel, it is not necessary to isolate the Virginia phase of the alleged misconduct to the exclusion of the Massachusetts and Ontario aspects
An overly technical standard for Administrative Tribunals is not contemplated by the Statutory Powers Procedure Act, Section 15 which provides:

“...a tribunal may admit as evidence at a hearing, whether or not given or proven under oath or affirmation or admissible as evidence in a court,

(a) any oral testimony; and

(b) any document or other thing,

relevant to the subject matter of the proceeding and may act on such evidence,...”

The Spirit of Rule 3.10

The manifest intent of reciprocal enforcement is to deny participation in ORC regulated functions while the person is deprived of the opportunity to participate in other "recognized" racing jurisdictions. (“recognized” is used in the Rule to reference a racing jurisdiction with a reciprocal enforcement protocol with Ontario as is the case with Virginia and Massachusetts)
Denial of opportunity to participate in racing-related activity in the original jurisdiction may be achieved:

in the case of a licensee by licence suspension
in the case of an unlicensed person by a ban.

Attainment of the manifest intent of the Ontario Rule by applying the Rule to both licensees and non-licensees in the original jurisdiction does not offend the spirit of Rule 3.10.

The Language of Rule 3.10

The Rule provides for a licensee's suspension rather than a licence suspension. If Rule 3.10 provided “where the licence is suspended,” then the Administration position could be supported by submission that a licence suspension is a condition precedent to operation of the Rule.
What interpretation is to be given to "where the licensee is suspended?" Firstly, the term “licensee” must be a reference to an Ontario licensee. Secondly, to construe Rule 3.10 as imposing a condition precedent that there be a licence in the “foreign” jurisdiction leads to the following result.
A person banned from licensing in one jurisdiction for possession of injectibles and whose licence has been revoked in another jurisdiction for failure to disclose would be beyond the scope of the Ontario reciprocal enforcement rule. With that offensive licensing background, the person would be entitled to an Ontario licence. Rule 3.10 must not be interpreted to permit such an absurd result.
A more reasonable analysis may be: By dictionary definition "suspend" carries a time limitation "to halt temporarily, to debar temporarily from a post or duties as a punishment". (Concise Oxford Dictionary, 10th ed. rev.) The five-year limitation on the Virginia ban provides the temporal element implicit in the term “suspend”.
Applying that dictionary definition, the five-year ban has temporarily debarred Shibley from participating in Virginia regulated events. Therefore his opportunity to participate in Virginia has been "suspended". Interpretation of Rule 3.10 to embrace the concept of "banned" within the term “suspended” does not offend the language of the Rule.
In passing, it is noted that a ban may be more serious than a suspension. A suspension implies that at some stage the person was eligible for a licence. A person who has been banned may never have been so qualified.

Broader Licensing Considerations bearing on Integrity

The Administration focused on the “no licence in Virginia” issue. However, when Shibley made his ORC applications (June 7/08 and September 3/08), he was subject to the Massachusetts revocation (April 1, 2008).
Can it be successfully contended that this revocation was not a “suspension” within Rule 3.10? In answering that question, the basis for the revocation is of primary relevance, "you failed to inform this Commission that you are unable to attain a licence in another jurisdiction." (an integrity breach)

The Integrity Issue

The Judges at Western Fair Raceway were not required to and did not expressly deal with the results that should flow from the non-disclosure and false disclosure in Shibley’s Ontario licence application. By Standardbred Rule 3.03.01, an applicant for licence shall complete a written application. Explicitly the information requested by the application form must be provided. Implicitly it should be complete and truthful. To mislead by misinformation or partial disclosure bears upon integrity which is crucial to the well-being of racing. Integrity is the foundation of public confidence in horse racing.
The “failure to inform” issue which is squarely before the ORC.

Shibley failed to disclose to the ORC that he was prevented from racing in two jurisdictions for separate violations.
That failure to disclose is aggravated by Shibley misleading the ORC. The assertion that this licensing information was "on file" with the ORC was false. That failure to disclose and false assertion impact on Shibley’s ORC licence eligibility.

From Shibley’s presentation, he is fairly assessed as a person of modest academic background or potential. The deficiencies in his licensing applications are assessed in that light.

Due Process

As was observed in Vanderkemp, Ontario has no capacity to re-hear proceedings from a foreign jurisdiction. The reasons relate to:

Jurisdictional competence
Difficulties in assimilating and presenting evidence both for and against the charge

In addition, there must be a presumption that a matter regular on its face was regular in substance. However, if the foreign proceeding was:

not regular on its face or
if the licensee displaces the presumption of regularity

Then the ORC must guard against becoming a party to an injustice and must at least be wary about becoming a party to a perceived injustice.

The burden of displacing the presumption of regularity must be on the licensee; the standard of proof on a balance of probability. This is similar to the burden on an accused in a criminal prosecution:

To demonstrate reasonable excuse for refusing a breath test or
To displace the presumption of care or control if occupying the driver’s seat by establishing that he/she did not enter the vehicle for the purpose of setting it in motion.

Shibley claims denial of due process in that he requested a hearing; the request was refused and he was penalized without a hearing. That claim is serious and warrants careful examination.
Unfortunately, the evidence presented in support of Shibley’s contention was something less than robust. Shortfalls in the evidence were:

No acknowledgement or denial by letter, deposition, telephone evidence, viva voce evidence or otherwise from the Virginia Racing Commission about a hearing.
No evidence by any of those modes from Shibley’s two companions during the incident.

Assessment of Shibley’s evidence entails the following:

Shibley was something less than candid with the Panel when dealing with his adjournment request. He advised that his lawyer stated he would he in attendance and failed to arrive. He amended this to say that his lawyer was expected to be there. He advised that he learned the night before the hearing that his lawyer was in the U.S. A few minutes later he stated his lawyer was in the Cayman Islands.
Shibley was less than forthcoming in his licensing application.
He provided false information on his licensing application.
The Virginia document refers to receipts found in the box in the trash can. Information about any names on the receipts may have probative value.
Shibley’s Notice of Appeal indicates that he signed a trespass order. Whether that was the conduct to be expected of an innocent man may be open to question.

Thereby persuasive force of his uncorroborated testimony has been eroded to some degree.

The determinative factor is the content of the Virginia order. That order makes no mention of a hearing or findings of fact. Instead, it follows the format of an investigative report. In that negative sense if it cannot corroborate Shibley’s evidence, the document is consistent with his evidence.
Although the evidence has multiple unsatisfactory elements, there is substance sufficient that the Panel is left with genuine concern that there may have been imposition of penalty without opportunity for a hearing and thereby a denial of due process.
The analysis must start with first principles:

The importance of procedural fairness and natural justice is beyond over statement.
The Commission shall exercise its powers and perform its duties in the public interest and in accordance with the principles of honesty and integrity and social responsibility.
As stated in the ORC decision in WEG/Hamather SB 017/2008, “Regulation lacking procedural fairness would be a total failure to comply with the standard of honesty, integrity and social responsibility.” A further statement of that ORC commitment to due process appears in Hamather as follows:

“For the ORC to pay mouth honour to but fail to practice and enforce integrity is hypocrisy.”

The ORC reciprocity rule therefore anticipates or is premised upon the foreign penalty having been imposed following opportunity for due process, that being notice, full opportunity to be heard, a hearing of the merits and adjudication involving findings of fact. The ORC will not provide a re-hearing but there must have been an opportunity to be heard in the foreign jurisdiction before ORC penalties can be imposed. If the licensee has not availed himself/herself of such opportunity he/she will not be heard to complain. The entirety of this record leaves that procedural fairness issue unresolved.
However, Shibley remains in breach of ORC licensing application requirements and imposition of penalty must be considered.
Counsel made a joint submission which was accepted by the Panel as a reasonable disposition on this record:

Shibley to surrender his trainer’s licence forthwith for cancellation.
Shibley to receive a conditional tradesman’s licence as a farrier permitting him to be in the secured track area only for the purpose of and while engaged in the practice of that trade.
At the expiration of two years from the date of issuance of that licence, Shibley will confer with the Deputy Director to review his licensing status including his record for rule breaches and the deficiencies in his 2007 and 2008 licensing applications.
Shibley will, during the term of that licence, keep the peace and be of good behaviour.

A fair inference may be that in terms of re-training potential, Shibley’s best results would be achieved by on the job experience. This was a factor to be considered en route to the decision to grant a conditional licence enabling him to practice his profession of choice.
The Western Fair Judges acted appropriately based on the record before them. However, on this expanded record and for the reasons herein relating to uncertainty as to a hearing being held, the reciprocal enforcement order of January 20, 2009, imposing a prohibition is rescinded.

Adjournment

Adjournment requests, even though some may transparently be an instrument of delay, are rarely refused. The reason, the purpose of the Hearing is to achieve a just result by fair means. Prompt delivery of justice may on occasion be subordinated to accommodate adjournment requests.
The adjudicative responsibility of the ORC Board is increasingly demanding. In first instance the costs of an adjournment are properly borne by the ORC as a facet of the social responsibility imperative to provide full access for licensees to the appeal process. The ORC is entirely funded by the industry. Provision of that funding carries a fiduciary obligation to expend responsibly.
The issue of costs incurred by irresponsible adjournment requests must be examined in light of that fiduciary obligation.
Cost consequences accrue from:

travel and accommodation for Commissioners
travel time
preparation by the Panel, including reviewing factums, books of documents and precedents cited
per diem allowances for Commissioners
travel, accommodation and fees for witnesses
attendance by court reporter
preparation by Commission counsel

Those expenditures have no countervailing benefit. Without making provision for value of the time wasted, the “cost thrown away” by irresponsible adjournment range upward from $3,000. Whose purse should bear those costs? The applicable principles are:

Licensees have no right to willfully or negligently abuse the Appeal system.
Failure to provide reasonable notice of a known adjournment request is such an abuse.
In furtherance of fiduciary obligation, the ORC must act to deter this abuse.
To impose the entire costs burden on the licensee could be an impediment to the licensee’s access to the Appeal process.
An apportionment of costs thrown away may carry a two-fold benefit. Firstly, as a significant disincentive. Secondly, to reduce the ORC costs burden.
The ORC Panel dealing with the issue would have discretion as to the quantum of a costs penalty so that the financial censure may be appropriate to the individual and his/her circumstances.
Any such costs sanction would be more accurately assessed upon final determination of the Appeal as opposed to on the day of the adjournment.

Currently the maximum costs penalty for a frivolous appeal is $1,500 (perhaps shortly to be $5,000). A frivolous appeal and an irresponsible adjournment come to the same result, a wasted day. Accordingly, an appropriate maximum costs sanction for an irresponsible adjournment might be $1,500.
Arising from issues on this hearing, the Administration may to advantage, review:

The Rules of Racing in relation to licensing trades people and governing their conduct.
Revision of the reciprocity rule with expansion on the terms “recognized” and “suspended”.
Attaching visual prominence to the section of the licence Application dealing with former licensing difficulties.

DATED this 25th day of September 2009.

James M. Donnelly

Vice Chair

Rules of Standardbred Racing

Rule 1.07

Every person participating in and every patron of a meeting shall abide by these rules and accept the decisions of the Judges, subject to the right of appeal to the Commission.

Rule 24.01

An appeal is a request to review any decisions or rulings of the Judges or delegated officials. An appeal may deal with placings, penalties, interpretations of the rules, or other questions dealing with the conduct of racing. Appeals shall lie to:……

Patrick Shibley v. Ontario Racing Commission, 2009 CanLII 91223

Case Summary