RULING NUMBER COM SB 027/2013

COMMISSION HEARING TORONTO, ONTARIO – JUNE 4, 2013

NOTICE OF DECISION

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

AND IN THE MATTER OF THE GEORG LEBER APPEAL

Georg Leber appealed against Ruling Number SB 45827

Date of Hearing: June 4, 2013

ORC Panel Members: Chair Rod Seiling

Representative for Appellant: Self-represented

Counsel for the Administration: Jennifer Friedman

The Panel denied the appeal.

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

DATED at Toronto this 10^th day of June 2013.

Steven Lehman

Executive Director

REASONS FOR DECISION

Overview

1. Licensee Georg Leber appealed SB Ruling Number 45827. This ruling was issued on April 29, 2013, suspending the horse, Rubis Prescott, for 90 days, April 29, 2013 to July 27. 2013, as a result of a positive TCO₂ test from the horse racing in the 4^th race at Woodbine Racetrack on April 25, 2013. The hearing was on penalty only and therefore the onus shifted to the appellant to prove via cogent and compelling reasons as to why his appeal should succeed.

Background

2. A de novo hearing was convened on June 4, 2013. Jennifer Friedman represented the Ontario Racing Commission (ORC) as legal counsel. Mr. Leber waived his right to counsel.

3. Mr. Leber is a relatively new owner in the horse racing business as of 2010. Since that time, he has acquired some 30 horses. In this relatively short time frame, three different horses owned by him have had three positive test results for TCO₂.

4. His introduction to racing was via a friend whom he met in Europe and introduced him to trainer Murray Kennedy. It was with this person, as his trainer, that he bought his first horse and that he incurred his first TCO₂ positive on May 16, 2012, with the horse Cocoa Beach at Sudbury Downs.

5. On November 9, 2012, he incurred a second positive TCO₂ test with Ziggy Stardust.

6. The 3^rd TCO₂ positive was for the horse, Rubis Prescott. It raced at Woodbine Racetrack on April 25, 2013. The horse was trained by Sean McSwain for the appellant.

7. The appellant submitted that he is not an expert and lets the “experts” run his horse operation. On the other hand, he bought Rubis Prescott in spite of the advice of those same experts.

8. Mr. Leber requested that the Panel show discretion and reduce the 90 day suspension for Rubis Prescott notwithstanding under this Rule there is no room to vary the time.

9. The basis for the request was financial. The horse will now miss at least 2 Ontario Sires Stakes events, which according to him, will make it problematical for the horse to qualify for the year-end “Grass Roots” Championship plus the Quebec Sires Program. Additionally, he submitted that he had a $50,000 offer for the horse just before the TCO₂ positive test. Not being able to race has affected that value according to him.

10. ORC Judge, Craig Walker, assured Mr. Leber that the horse, Rubis Prescott, was randomly selected by him for testing. There was no intent by the Judges to target any horses trained by Mr. McSwain. As to alleged comments from the Supervisor of Racing for the ORC, Brent Stone, to the appellant regarding the potential to target certain trainers based on intelligence, he was not personally aware of anything.

11. The 90 day, “Owner Responsibility Rule” (SB 11.10.01), according to Judge Walker, was implemented to help deal with the number of positive tests occurring in Ontario. The purpose was to have the owner take responsibility for his/her horses. The objective was to stop the owner of a horse, testing positive, to simply move the horse to another trainer and carry on business as usual.

12. Judge Walker submitted on cross examination that the owner is responsible for the trainer selection and was unaware of what due diligence Mr. Leber utilized in his trainer selection process. He offered suggestions as to what some steps an owner might follow on being asked how to select a trainer. They included asking for the history on the trainer and for any Rulings involving that person. It was also suggested that the owner tell his/her trainer to “follow the rules”. Mr. Leber's selection criterion has been to look at the success rate of the person. He hired McSwain because he did well with a horse that he claimed from him, and that drivers Jody Jamieson and Anthony MacDonald spoke well of him. He does not have a contract with his trainer as required by ORC Rules.

13. Mr. Leber is aware of sodium loading (milk shaking) and the purpose behind it. He also submitted that trainer McSwain informed him the horse did not eat her breakfast the morning of the race and was likely dehydrated, helping to cause the positive test. This raises the question as to why a veterinarian was not called to offer advice or why was the horse not scratched?

14. SB Rule Number 11.10.01 does not offer any discretion. The penalty is 90 days.

Issue

15. Should the Panel intervene in the 90 day penalty, which by policy design by the Board of the Commission, offers no discretion?

Decision

16. After carefully listening to the testimony and reviewing the evidence and documents filed, the Panel denies the appeal.

Reasons for Decision

17. Rule 11.10.01 was implemented with a specific objective in mind by the ORC Board. It was, as Judge Walker correctly testified, to ensure owners took a proactive role in the care, custody and control of the horses they own, and the trainers they employ to race their horses. In other words, to have a financial deterrent. The purpose of the deterrent is twofold; to penalize the owner with the positive test for a Class I, II, III drug or TCO_2, and to serve as a warning to other owners as to the consequences of the actions of the trainers they employ.

18. Owners may not have an active role in the day to day care of their horses but they can and should be involved in the ethical treatment of their horse. They should have a hard and fast rule to their trainer, obey the Rules of Racing and ensure the health and safety of the animal. Those requirements can be easily included in the trainer's contract that Mr. Leber should have had with his trainers. The aforementioned answers the question of the appellant as to what a trainer's contract would accomplish.

19. It was also the objective of the ORC Board not to allow any discretion in the application of the Rule. To allow tinkering with the time frame could negate the objectives of the Rule. It was incumbent for the Board to stop the “business as usual” approach owners had developed with regard to positive tests. It was threatening the integrity of horse racing, and for the good of racing, the ORC had to act. Integrity is the lifeblood of racing and the ORC has a responsibility to protect it.

20. Former Vice Chair, Justice Donnelly in the Aimonetti, Ruling Number TB 009/2009 laid out in detail the rational for the “90 day Rule”. It was pertinent then and remains so today. It reads as follows:

“Discretionary Penalties and Fixed Minimum Penalties

17 There are two types of penalty:

• A discretionary penalty permitting an assessment of quantum. The determination of the quantum is based on standard sentencing considerations as discussed in the Scott case, SB 021/2007, June 11 & 12, 2007:

“88. The amount of the fine is properly determined by the degree of responsibility and the gravity of the offence without regard to the wrongdoer’s resources. Thereafter that amount is subject to adjustment on considerations of hardship and ability to pay.”

• A mandatory minimum penalty permitting no reduction through the exercise of discretion based on extenuation or otherwise.

The Ninety-Day Rule

20. The Ninety-Day Owner Responsibility Rule was implemented in the context of industry-wide response to the insidious advance of drugs and illegal medications in the racing industry. That industry, although not perfect, is functional. Through its various phases and locations, it provides a livelihood for many families. Opportunity is provided for an interesting, challenging and satisfying occupation for a significant component of the population, principally beyond the urban centres. The common goal of ORC licensees must be to sustain a viable industry.

21. On how to achieve that goal, opinions differ. Self-interest, a powerful motivator, may obscure perception and subconsciously or otherwise influence judgment.

22. The objective underlying the ninety-day Rule was to engage the owner on the drug issue. The specific risk was that with strict liability standards applying to trainer responsibility, the industry was defenseless and inordinately victimized by this scenario:

• A positive test.

• The owner disclaims – I have no responsibility. I pay the bills and tell the trainer to abide by the rules.

• The trainer claims

o “Neither I nor anyone in my employ administered the illegal substance.”

o “I took all reasonable precautions, locked medication cabinet” and so on.

• There is no direct evidence as to whose was the guilty hand.

23. The final result – with no one called to account, illegal drugs and medication can be administered with impunity.

24. As a component of that industry response the owner responsibility ninety-day Rule was introduced. Owners fund the industry. Their active and aggressive involvement with trainers will be a major component in preserving that industry. At the time the 90-day Rule was introduced it was recommended that the rule requiring written owner/trainer contracts should be more rigorously enforced – further that provisions relating to the owner responsibility rule be incorporated into the written contract.

25. As stated in the Todd Gray Reasons, Ruling July 16, 2007, SB 023/2007:

“45. Owner responsibility and banning the horse for extended periods could on a risk/reward analysis make the doping exercise far less attractive. The pressure would be on trainers to desist and safeguard rather than perhaps the reverse (life on the edge?).”

28. The Hamather Reasons provide in part as follows (SB 017/2008 May 15):

“60. The adage “money talks” may suggest avenues for exploration. Is the last hope for the industry to have the owners who fund the process flex their collective muscle?

61. Should owner/trainer contracts be mandatory? If so, should certain terms and conditions be mandatory? What would be wrong with the trainer’s record for racing violations and particularly suspensions being a schedule to the contract? Should there be a clause specifically prohibiting the improper use of drugs and medication, possibly with a cancellation of training accounts for a fixed time following a breach? If the WEG rejection or some variation thereof is upheld, should that peril to the owner be disclosed in the contract? Should there be reference to the recent ORC rule preventing the horse from racing for 90 days following certain positive tests?

62. Should the racing records of other trainers be available to owners to permit a fully informed choice of trainer? If owners are to be exposed to this type of peril, should racing not be obliged to give owners accessible tools for self protection? With that background, owners could practice due diligence in making a trainer selection.”

63. The 90-day rule was the subject of comment in the Scott McFadden case 2009 ORCD No. 6 as follows:

“28. Rule 11.10.01 confirmed the concept of owner responsibility as a part of the industry response to the illegal medication plague. The importance of owner responsibility was underscored by designation as an absolute liability offence. (Rule 11.10.03), General Deterrence, was one of the objectives underlying the new Rule. Inherent in general deterrence is a hardship element. Deterrence is eroded if compassion overwhelms hardship absent good cause.

29. Rule 24.03 confers discretion to waive provisions in the Rules of Racing. That waiver is not whimsical. There is a precondition in that the waiver must not be considered prejudicial to the best interests of racing.

30. That precondition cannot be said to exist in this case. Clearly the overall good of racing takes precedence over the convenience and financial benefit of a sale of these horses now as opposed to about six weeks hence.”

31. To introduce a policy of tinkering with the length of the suspension under authority of Rule 24.03 would be folly for two reasons:

a. The underlying principles of drug free racing and general deterrence as public interest concerns simply overwhelm individual hardship claims. An ambivalent approach to penalty erodes the general deterrence component. Integrity is not measured by halves - or by any other fraction.

b. To foster further appeals through an arbitrary and inconsistent application of penalty is unfair to the licensees (inducing a false hope for success) and the ORC (wasting adjudicative costs).

34. The 90-day Rule was introduced with full awareness of the distinction between penalty ranges and fixed minimum penalties. There was awareness of the impact of extenuating circumstances where there is an available penalty range. With that background a policy decision was made. A fixed minimum penalty was established. The rule was implemented and adequately promulgated. Similar to every innovation in the industry, it was known that the Rule would encounter opposition.

35. Nonetheless, it was deemed to be a vital component in a vigorous and sustained response to those whose irresponsible greed would destroy the industry. That Rule is a part of the whole response and so it will remain – an effective and necessary element in the war against drugs in the horse racing industry.”

36. Mr. Leber is a sophisticated business person. It is reasonable (F.H. v. McDougall 2008 SCC 53, [2008] 3 SCR41) to conclude that he could find the means to conduct due diligence on the trainers he employs. At the very least, he could have asked the ORC officials for assistance and advice. With two previous TCO₂ positive tests before engaging Mr. McSwain to train Rubis Prescott, it is reasonable to conclude he would have had a discussion with him regarding sodium loading. As he admitted, he was well aware of the practice.

37. The balance of convenience must fall to the “good of racing”. The Statute requires the ORC to act in the “public interest”. The public interest is, in this instance, no tinkering with the Rule.

38. This Commission, with very good reason, has not and should not “tinker” with the penalty. It has in the past, when the facts support a change as in the Williams appeal, Ruling Number SB 006/2013 made a change. In that case the trainer was not held responsible due to a mistake of the feed company. With the trainer held blameless, it was reasonable that the owner should benefit the same. Those facts are not present in this appeal.

DATED this 10^th day of June, 2013.

Rod Seiling

Chair