VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
administrative DIVISION
REVIEW AND REGULATION LIST	
vcat reference No. Z961/2021	
CATCHWORDS	
Review and Regulation List – review of decision by Victorian Racing Tribunal as to penalty, plea of guilty to charge of presenting a horse not free of alkalinising agents, rule 240 of Australian Rules of Racing, appropriate penalties, section 83OH of the Racing Act 1958.

APPLICANT	Peter Gelagotis	
RESPONDENT	Racing Victoria Limited	
WHERE HELD	Videoconference	
BEFORE	N Campbell, Member 	
HEARING TYPE	Hearing	
DATE OF HEARING	19 October 2022	
DATE OF ORDER	5 January 2023	
DATE OF WRITTEN REASONS	5 January 2023	
CITATION	Gelagotis v Racing Victoria Limited (Review and Regulation) [2023] VCAT 13	

ORDERS
1	The decision of the Victorian Racing Tribunal made on 12 November 2021 that Mr Peter Gelagotis be suspended for six weeks and disqualifying the horse ‘Strong Influence’ from the Big Screen Company Handicap at Sandown on 26 June 2019, is affirmed with effect from 12 January 2023.
2	
The stay granted on 18 November 2021 on the decision of the Victorian Racing Tribunal made on 12 November 2021 is lifted with effect from 12 January 2023.

N Campbell 
Member			

APPEARANCES:		
For Applicant 	Mr D Sheales of Counsel	
For Respondent	Mr J Hooper of Counsel instructed by Mr M El Asamar, solicitor. 	

REASONS
The proceeding
1	This is a review of a decision of the Victorian Racing Tribunal (the VRT) to impose a penalty on Mr Peter Gelagotis (Mr Gelagotis or the applicant) after he was found guilty of presenting a horse to race which was not free of alkalinising agents in breach of rule 240 of the Australian Racing Rules (AR).
Background
2	On 25 February 2021, the VRT found Mr Gelagotis guilty of a breach of AR 240 for the presentation of the horse ‘Strong Influence’ to race in the Big Screen Company Handicap at Sandown racecourse on 26 June 2019, which was not free of alkalinising agents. The VRT found Mr Gelagotis not guilty of charges under AR 244 and 245.
3	On 12 November 2021, the VRT made a decision to suspend Mr Gelagotis for six weeks and disqualify the horse ‘Strong Influence’ from the Big Screen Company Handicap at Sandown on 26 June 2019 (the penalty decision).
4	On 18 November 2021, Mr Gelagotis, by his barrister, lodged an application with this Tribunal to review the penalty decision.
5	On 18 November 2021, the Tribunal stayed the penalty decision until the hearing and determination of this proceeding or further order. The stay was not opposed by the Racing Victoria Limited (RVL).
6	On 22 December 2021, RVL filed with the Tribunal its section 49 statement.
7	On 6 July 2022, RVL filed with the Tribunal a joint Tribunal Book.
8	The matter came on for hearing before the Tribunal on 19 October 2022. The parties each relied upon various documents in the Tribunal Book. Each party provided a written outline of submissions on the day of hearing.
9	At the conclusion of the hearing, the Tribunal reserved its decision.
Legal context
10	The Tribunal’s jurisdiction in this matter is limited to reviewing the penalty imposed by the VRT. Section 83 OH of the Racing Act 1958 relevantly states:
(1)	 A person whose interests are affected by a decision made by the Victorian Racing Tribunal may apply to VCAT for review of that decision in relation to a penalty imposed on the person by the Victorian Racing Tribunal.
11	Clause 66 N of Schedule 1 of the Victorian Civil and Administrative Tribunal Act 1998 provides that in a review proceeding under section 83 OH of the Racing Act 1958, VCAT is bound by the findings of fact that were made by the VRT. 
12	Section 50ZE of the Racing Act 1958 and section 51 of the VCAT Act in combination provide the relevant jurisdiction for VCAT to review the penalty imposed by the VRT. Section 50A of the Racing Act 1958 provides that penalty means:
(a)	The imposition of a fine under the rules; and 
(b)	The imposition of any of the following penalties under the rules that prevents participation in racing in any capacity –
(i)	A suspension;
(ii)	A disqualification;
(iii)	A warning off.
13	The Tribunal is therefore limited to a review of the penalty imposed by the VRT and is bound in that review by the findings of fact made by the VRT. 
The decision under review
14	RVL set out in its outline of submissions at [2], the findings of fact it submits were made by the VRT. Mr Gelagotis does not contest the matters in [2 (a) to (g)] of RVL’s submissions were findings of fact made by the VRT, but argues that the matters in [2(h) to (l)] were not findings of fact made by the VRT. I accept this submission as correct, save in relation to [2(k)] which is, at the least, a factual conclusion based on material before the VRT. The relevant findings of the VRT in [2] of the respondent’s submissions are therefore:
a.	That Strong Influence was stomach tubed with a drench “three days out” from the race on 24 June 2019 (which could not have been the cause of the above-threshold sample);
b.	That Mr Gelagotis was a credible witness;
c.	That Mr Gelagotis, his staff members and Mr Thomas (who gave character evidence on behalf of Mr Gelagotis) were witnesses of truth;
d.	That the evidence did not support a conclusion that any administration was done by Mr Gelagotis, on his orders or with his knowledge;
e.	That the cause of the high reading remains a mystery, as Mr Gelagotis was unable to explain the cause of the horse’s positive blood sample;
f.	That Mr Gelagotis went to considerable trouble in trying to understand the situation and find an explanation, including with his own staff, veterinarians and the industry;
g.	That speculation about the administration being performed by someone with a grudge or conducting a vendetta against Mr Gelagotis or by a random intruder led nowhere;
…
k. That Mr Gelagotis did not have an unblemished record in relation to matters of this nature;
…
15	As discussed above, this Tribunal is bound by these findings of fact made by the VRT. 
Submissions of RVL
16	Mr Hooper for RVL, in summary, made the following submissions:
•	The Tribunal has the power to increase or decrease the penalty. RVL is not asking for the penalty to be increased only that the penalty not be disturbed. 
•	The Tribunal should be guided by the principles in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson). Pattinson has been considered and applied in other civil penalty matters outside of the Fair Work Act, including under the Australian Consumer Law.
•	The Tribunal should give primacy to general deterrence. It is not an irrelevant factor as argued by Mr Sheales for the Applicant. 
•	The purpose and object of the prohibited substance rules are:
o	To ensure the integrity of racing
o	Provide a level playing field in racing
o	Ensure racing is conducted without prohibited substances
o	Ensure racing is conducted safely for the rider and the horse
o	To ensure racing is conducted fairly with respect to the betting public.
•	Ensuring the integrity of racing requires that general deterrence is given primacy, while taking into account the applicant’s personal circumstances.
•	The argument that Mr Gelagotis’ priors are irrelevant is misconceived. This is the third occasion that Mr Gelagotis has breached prohibited substance/race day medication rules. 
•	The first prior offence involved a breach of AR178 (the predecessor rule to AR240(2) for the detection of ibuprofen in a pre-race urine sample. Mr Gelagotis pleaded guilty on 14 June 2013 before the Racing Appeals and Disciplinary Board (RADB). The Board was satisfied that that there was no deliberate administration and that the administration was accidental. A fine of $2000 was imposed.
•	The second relevant prior involved a breach of AR 178E(1) for administration of a branch -chain amino acid medication orally to a horse on race day. Mr Gelagotis pleaded guilty on 29 May 2015 and the RADB suspended him for three months. 
•	In the present case, a significant penalty needs to be imposed to send a message to Mr Gelagotis that he must exercise even greater care and vigilance to ensure that prohibited substances are not administered by anyone else to racehorses under his supervision. 
•	A fine would be too lenient in the context of priors for prohibited substances. 
•	A distinguishing feature of this case is that it is a mystery how the horse presented for the race with an alkalising agent in its system.
•	The submissions made by Mr Sheales that as we do not know what happened and the applicant and his staff were found to witnesses of truth, means that no penalty should be applied is incorrect. The submission fails to recognise the absence of evidence of an explanation in this case. Unknown reasons cannot be mitigating circumstances.
•	This case needs to be distinguished from a case where the trainer has given an explanation for a positive sample. Such an explanation could mitigate or aggravate.  In this case, as no reasons has been found, this matter cannot be a mitigating circumstance supporting the imposition of a fine. 
•	Mr Sheales’ argument that ‘everyone gets a fine’ is incorrect. The table on page 533 of the Tribunal Book is a complete record of TCO2 cases at the time of preparation. Pages 541-2 of the Tribunal Book has an explanation of the table. This provides a reference point of what penalties have been imposed in other cases, where this substance was involved and the same charge made. The submission that ‘everyone gets a fine’ is not the case. 
•	General deterrence is a very important factor. In light of the decision in Pattinson it has a significant role to play. There was no indication of blameworthiness one way or another, as there is an absence of evidence of what took place. 
•	Where the applicant had relevant prior offending, the six week suspension is an appropriate and measured form of general deterrence.
•	The relevant threshold for the charge is alkalising agents in excess of 36.0 millimoles per litre in plasma. An elevated TCO2 in a horse can improve performance and reduce fatigue. 
•	General deterrence is important as the integrity of racing requires nothing in the trainer’s operation to allow this type of thing to happen. A fine is not enough to deter others from engaging in such activities. The High Court in Pattinson recognised that a civil penalty is not to be regarded as an acceptable cost of doing business. Suspension is a significant penalty and six weeks is not a long time.
•	It is appropriate to take into account Mr Gelagotis’ plea of guilty, that there were findings that he was a witness of truth and is of good character.
Submissions on behalf of Mr Gelagotis
17	Mr Sheales for Mr Gelagotis, in summary, made the following submissions:
•	Mr Sheales submitted that the reliance by RVL on the decisions of Paul Banks and Craig Widdison was misconceived.  The Widdison matter was for breach of AR 244, which is an administration with intention charge with a mandatory minimum of three years unless special circumstances shown. A plea of guilty in that case led to a reduction in penalty to a two year disqualification. The matter of Banks was in relation to a number of charges. The charge relating to TCO2 was under AR245, where there was a plea of not guilty but the charge was proven. The penalty was a four week disqualification. At the same time different charges under AR 240 for Molox were dealt with. The penalty for the AR240 charge was a fine of $8000, with $3000 of that suspended. Mr Sheales submitted that these cases have been misquoted to the Tribunal in support of a suspension in AR240 matters. Cases under AR240 lead to the penalty of a fine and cases under the administration rules may result in a suspension or disqualification.
•	The High Court decision in Pattinson has little application to the present matter. The relevant section of the Fair Work Act refers to an ‘appropriate penalty’ to be imposed. In the present matter, the statutory provision is the penalty be fixed in the interests of justice. Mr Sheales submitted that the Pattinson matter related to reckless or deliberate conduct which was likely to continue. The appropriate penalty in Pattinson required that general and specific deterrence be treated as very important in fixing the penalty in that matter.
•	The Rules of Racing changed significantly on 1 September 2001. A number of things could no longer be done to a horse on race day. There were further changes from 1 March 2013 around the previous AR196. If found guilty a minimum period of suspension of 12 months was required, absent special circumstances. The changes meant that a horse could not be stomach tubed or be administrated an alkalinising agent on a race day. The problem of the use of alkalinising agents largely disappeared with the changes to the rules and offences do not come up much anymore.
•	There was no finding that Mr Gelagotis had failed to do all he could to prevent the administration of a prohibited substance and he was found to be a witness of truth. Mr Sheales submitted that the evidence of Mr Gelagotis was that he had done all he could do to prevent the prohibited substances and as he was found to be a witness of truth, the VRT accepted that he had done all he could do.
•	The decision of Judge Williams in the Victorian Racing Appeals Tribunal (Harness Racing) matter of McDonough (HAR) – App 04 2008 [2008] VRAT 6 (24 June 2008) (McDonough) found that in strict liability substance offences there were generally three categories of culpability for the purpose of penalty. Firstly, where a positive culpability of the person can be established. Secondly, where the Tribunal is left with no real idea as to how the prohibited substance came to get into the horse, and thirdly, where the trainer provides an explanation which the Tribunal accepts and which demonstrates that the trainer had no culpability. Mr Sheales submitted that in each category, a fine is the correct penalty. 
•	The Tribunal raised with Mr Sheales that the VRT in its penalty decision at page 552 of the Tribunal Book had found “… the onus was on you to have in place a system that eliminated risk and it is apparent that you failed so to do.”  In response, Mr Sheales stated that no one can say and no has said what the deficiency in the system was. No one can point to a problem. It is just QED, there is a positive sample therefore more could have been done. All the VRT has done is to say that by the fact of a positive sample, Mr Gelagotis’ system did not eliminate risk. There is no characterisation of how the risk is to be determined. The VRT did not say anything needed to be fixed. 
•	Mr Sheales questioned how specific deterrence can be relevant when Mr Gelagotis has a completely clear conscience and is a witness of truth. No one has suggested a security lapse caused the outcome. What is the general deterrence message to be sent to other trainers? 
•	There is no mens rea required for the proving of the charge. Absolute liability applies if the person is the trainer of the horse and a positive test is returned. 
•	There is no need for general deterrence when something is not a problem in the industry. The old precedents as to penalties are not relevant at the present time. Previously, offences in the rules were described in a more general way. They are now described more specifically and there are a lot more offences. 
•	The penalty history speaks for itself. A fine is imposed for this type of offence if the person has priors and a lesser fine if they have no priors.
•	A suspension of six weeks for a trainer is devastating for his business. Horses are trained for three months before racing and then have five or six runs. If a trainer is suspended every horse will need to go to another trainer or go back to the paddock. Owners will not want to throw away trainer’s fees of approximately $12,000-15,000. If a horse is in work, racing, they will go to another trainer. A trainer’s greatest asset is the horses he is training. 
•	Prior convictions cannot increase a penalty, only not provide for a reduction, see Turnbull. Every single penalty consideration including deterrence carries little weight in this case.
•	The starting point is a fine and nothing causes it to be a serious form of the offence. Priors for a person never amount to anything other than a financial penalty. 
•	In this case, a stomach tube must have been used, Mr Gelagotis denied using a stomach tube and was found to be a witness of truth. Therefore, any suspicion of Mr Gelagotis must be removed. 
Consideration 
18	As submitted by Mr Sheales the matter for which Mr Gelagotis was found guilty is an absolute liability offence. Mr Gelagotis was the trainer of a horse which returned a positive sample, he was therefore guilty of the charge and appropriately plead guilty. The VRT found that Mr Gelagotis was unable to explain the positive swab. The circumstances of how the horse came to test positive are therefore unknown.  The facts as found by the VRT are summarised at [14] above.
19	I am not satisfied that, as the mechanism of how the horse came to test positive is unknown, the need for general deterrence is dispensed with as submitted by Mr Sheales. The need for general deterrence is affected by the relevant circumstances of the case.
20	I am satisfied that there is a need for specific deterrence to be considered in circumstances where the VRT reached the conclusion that the onus was on Mr Gelagotis “to have in place a system that eliminated risk and it is apparent that you have failed to do so”. 
21	On the question of culpability, the onus is on the trainer to show that he is free from blame. Mr Sheales argued that as Mr Gelagotis had given evidence that he was free from blame and was found to be a witness of truth, this meant the VRT had found he was free from blame. I do not accept this submission. Firstly, the VRT made a specific finding that Mr Gelagotis had failed to eliminate the risk. Secondly, when pressed as to where in transcript or elsewhere Mr Gelagotis gave evidence amounting to the fact that he had done all he could to eliminate risk, Mr Sheales was unable to take the Tribunal to the aspects of the evidence which would lead to that conclusion. I conclude the evidence in the VRT did not show such a result. Thirdly, even if the Mr Gelagotis gave evidence that he had done certain things to eliminate risk, the Tribunal may have accepted the truth of that evidence, as far as it goes, but still found that Mr Gelagotis had failed to put in place a system to eliminate risk.
22	The culpability of Mr Gelagotis is assessed in circumstances where the cause of the positive sample is a mystery.  Mr Gelagotis did not administer or cause to be administered the prohibited substance and it was not administered with his knowledge. He did not put forward an explanation to the VRT which was accepted and demonstrated that he had no culpability. This is not a case in the third category discussed in McDonough, where a trainer had established no culpability at all for the breach and consideration could be given to there being no need for general deterrence in setting a penalty.
23	I find that there is a need for general deterrence, to deter other trainers from presenting horses not free of prohibited substances. In this context, Mr Gelagotis’ level of culpability is relevant, as discussed above.  The deterrence needs to indicate to other trainers the importance of ensuring systems to eliminate risk in circumstances of this strict liability offence. The integrity and reputation of racing and the requirement of a level playing field in racing also make general deterrence relevant in the present matter.
24	I find that there is a need for specific deterrence for Mr Gelagotis. This is to ensure that, in future, systems are in place for the elimination of risk. The efforts he went to after the positive sample reduce to some extent the need for specific deterrence. 
25	I take into account the nature of the prohibited substance. In this case, the parties agree that it is a substance that can improve performance and reduce fatigue in a horse. 
26	Mr Gelagotis is entitled to credit for his early plea of guilty. I also note that he went to some efforts after the positive sample to find out what had occurred. The VRT found that he was a witness of truth and of good character.
27	I take into account the relevant priors, being an administration offence of ibuprofen in June 2013 for which he was fined $2000.00 and a presentation offence of a branch-chain amino acid in May 2015, for which he was suspended. Both matters are relevant as they relate to the prohibited substances rules. 
28	I take into account the significant effect any suspension may have on Mr Gelagotis, in particular the damage it is likely to cause to his business.
29	RVL relied upon a table headed Victorian Thoroughbred TCO2 Presentation Decisions, which it submitted set out the relevant penalties previously imposed for presentation offences for TCO2. Each of these decisions appeared to be in the period from 2004 to 2007.  The age of these decisions meant I found them to be of little to no assistance in setting the correct penalty in the present matter. 
30	Mr Sheales provided a table within his submissions of what was said to be presentation offences and penalties imposed under presentation rules. None of the cases related to alkalinising agents. Most were for therapeutic medication rather than for performance enhancing substances. I found this table of some assistance, with the limitation being the lack of alkalinising agent matters and the majority of matters related to therapeutic substances. All cases in the table were said to have imposed a fine or no penalty, save for the matter involving cocaine which led to a two month suspension. 
31	In considering all the relevant matters, I determined that a suspension is warranted. I have considered whether a longer suspension than imposed by the VRT is required. The RVL did not seek a longer suspension. On balance, I have decided not to increase the period of suspension. I have no hesitation in reaching the conclusion that a shorter period would not be appropriate. I therefore find that the period of suspension of Mr Gelagotis be six weeks.
Conclusion
32	The Tribunal will therefore affirm the decision under review and lift the stay on the decision of the VRT.

N Campbell 
Member