Court decision deals Peter V’landys and Racing NSW a significant blow

Racing NSW and its chief executive Peter V’landys have been dealt a significant blow after a court ruled that its appointment of an administrator to take charge of the Australian Turf Club was invalid.

Justice Francois Kunc handed down his decision in the high-profile case in the NSW Supreme Court on Wednesday following a three-day hearing last month.

The ruling keeps the ATC board in charge of the country’s biggest race club and comes 10 days before the running of the Golden Slipper at Rosehill Gardens, one of the major events on the Sydney racing calendar.

“This case has highlighted that Racing NSW’s power to appoint an administrator is a drastic one, which can have a very real impact on hundreds if not thousands of people,” Justice Kunc said.

“It represents a decisive intrusion into the affairs of a race club, in this case a very substantial one.”

Kunc said he made no finding about the merits of Racing NSW appointing an administrator, only about whether it had properly used its wide-reaching powers.

He determined the appointment was invalid, saying Racing NSW’s function was to control, supervise and regulate “the racing of galloping horses” in NSW and its reasons for bringing in an administrator were limited to financial and corporate governance concerns about the ATC.

He ordered the racing regulator to pay the ATC’s costs.

ATC chairman Tim Hale said the club’s board felt vindicated.

“This has been an unfortunate episode,” Hale said. “It is not in the interests of racing for Racing NSW and race clubs to be in conflict. We should be working together.

“A strong, unified NSW racing industry is in the interests of every participant, club member, owner, trainer, breeder and everyone whose livelihood and passion are connected to the sport.

“The ATC looks forward to engaging with Racing NSW in that spirit as we move forward together.”

Moments after the judgment, however, Racing NSW sought an extension of the club’s caretaker mode, under which the ATC has been restrained from material decisions such as management changes, while it considers its next move. With Racing NSW weighing up an appeal, Justice Kunc postponed his ruling coming into effect until March 20.

The decision could have major ramifications for Racing NSW and the sweeping powers it wields over the $3.3 billion industry in the state.

Former state health minister Brad Hazzard is conducting a government-commissioned review of the Thoroughbred Racing Act, the legislation under which Racing NSW has its power.

Justice Kunc suggested careful attention be given to removing doubt about the extent of the regulator’s authority and said if necessary the law should be amended.

He is still to rule on a separate bid by Racing NSW for access to the ATC financial information on hospitality following a club investigation into alleged theft of beer, wine and food from its fridges and cold rooms at racecourses.

The ATC had raced to court before Christmas after Racing NSW announced the appointment of administrator Morgan Kelly.

Racing NSW’s concerns included a $30 million club loan with the Commonwealth Bank due later this year for which the sport’s controlling body was the guarantor.

But the club, which owns Rosehill, Warwick Farm and Canterbury Park racecourses and operates Royal Randwick, maintained the asset-rich club was solvent and argued Racing NSW had acted beyond its authority with the extraordinary intervention.

The costly dispute emerged in the months after ATC members rejected the proposed $5 billion sale of Rosehill for housing, a plan that divided the industry for 18 months and became the subject of a parliamentary inquiry.

Racing Minister David Harris told a budget estimates hearing last month that the government would try and implement any urgent recommendations of Hazzard’s review before an election next year, but consideration of other changes may have to wait until after the state poll.