McHugh v Australian Jockey Club Limited (No 13)

[2012] FCA 1441

Robertson J

SUMMARY

In accordance with the practice of the Federal Court in some cases that have attracted publicity, particularly in the case of lengthy reasons for judgment, the Court has prepared a summary of the main conclusions of the judgment. The only authoritative statement of the Court’s reasons is that contained in the published reasons for judgment. The summary has no legal status as part of, or in explanation of, the reasons for judgment themselves. What follows is such a summary.

By these proceedings, the applicant sought to overturn the exclusion from the Australian Stud Book, and from the register permitting thoroughbreds to race, of thoroughbreds bred by artificial insemination. The first of these exclusions is in the Australian Stud Book Rules and the second is in the Rules of Racing. The applicant relied on the operation of these Rules separately, together, and in combination with Article 12 of the International Agreement on Breeding, Racing and Wagering.

The hearing extended over many weeks in the period September to December 2011 and included extensive written material as to what those involved had said about the topic over the last 30 to 40 years. There were some 30 witnesses, not only from Australia but also from overseas including France, Ireland, the United Kingdom, New Zealand and Hong Kong.

The applicant challenged these provisions on two bases, first as contrary to section 45 of the Competition and Consumer Act 2010 and, second, as being in restraint of trade.

I have held that the section 45 action fails because the applicant has not established on the evidence, as he contended, that a corporation has given effect to a provision of a contract, arrangement or understanding where that provision has the effect or is likely to have the effect of substantially lessening competition. The major reasons for this conclusion are:

•    the insufficiency of the evidence directed to establishing substantial lessening of competition;

•    the evidence as to the pleaded contracts, arrangements or understandings;

•    the status of the provision preventing thoroughbreds bred by artificial insemination from being registered for racing as a rule of the sport;

•    the effect on competition of the international consequences, that is, on the evidence, that in a world where the prohibition was overturned in Australia the status of thoroughbred races held in Australia would be downgraded.

That the attack on the Australian Stud Book Provisions fails is also shown by the applicant’s proposal that a separate or third register be established for AI-bred horses and his acceptance of the proposition that he did not need the Proprietors of the Australian Stud Book to establish such a register.

I have also held that the restraint of trade action fails because the law requires an applicant to establish that the restraint was unreasonable at the time it was imposed and the applicant in this case has not be able to do so, given his acceptance of the reasonableness of the alleged restraints when they were imposed many decades ago to prevent the attribution of incorrect paternity to a thoroughbred horse.

The case has not involved the merits of artificial insemination, that is, it has not involved whether the Court considers artificial insemination to be something which should or should not be permitted by the Australian Stud Book nor whether thoroughbreds bred by artificial insemination should or should not be permitted to race in thoroughbred races.

For the reasons given in my judgment, the application fails on the legal grounds on which it was brought and is dismissed.

The published reasons for judgment and this summary will be available on the Internet at www.fedcourt.gov.au.

Justice Robertson

19 December 2012