The appellant owned race tracks. The respondent owned race horses. The appellant refused to permit the respondent to race his horses at its tracks unless he signed its Access Agreement (“agreement”) which provided the terms of entry and a formula for sharing wagering revenue. The respondent refused to sign the agreement and sought a declaration from the Ontario Racing Commission (“Commission”) that he could not be required to sign the agreement. The Commission dismissed the application. Upon judicial review, the Divisional Court found the decision to be unreasonable and ordered that appellant be prohibited from excluding the respondent’s horses solely on the basis that he did not sign the agreement. In this case, the appellant appealed the Divisional Court’s decision and the Ontario Court of Appeal restored the Commission’s original decision.

Administrative law – Decisions of administrative tribunals – Horse Racing – Racing Commission – Government – Gaming and betting – Public interest – Judicial review – Natural justice – Procedural requirements and fairness – Standard of review – Reasonableness simpliciter

Whelan v. Ontario (Racing Commission), [2011] O.J. No. 1748, 2011 ONCA 299, Ontario Court of Appeal, April 18, 2011, S.T. Goudge, R.G. Juriansz and J.L. MacFarland JJ.A.

All racetracks in Ontario are regulated by the Commission. This mandate gives the Commission the power, in the public interest, to take action which may incidentally affect the property rights of racetrack owners. A second area in which the appellant is subject to regulation is wagering. To obtain a license by a federal agency, the appellant is required to have an “agreement with horsemen” setting out how wagering revenues are shared.

Until December 2008, the appellant had a contract with the Ontario Harness Horse Association about how wagering revenues were to be shared; however, it expired at the end of 2008. Starting in January 2009, the appellant entered into individual agreements with each horseperson using its racetracks. In addition, the agreements provided a formula for sharing wagering revenue. The respondent took issue with a number of aspects of the agreement including that it required him to abide by the appellant’s rules and that the appellant had the right to revoke access to its premises “at any time in its sole and absolute discretion and without notice, reason or compensation”. The respondent refused to sign the agreement and as a consequence the appellant refused him entry. Although the Commission dismissed the respondent’s application, the Divisional Court allowed it on the basis that: (1) the agreement permitted the appellant to arbitrarily exclude individuals from racing at its own tracks at its own discretion, without any fault, and without an opportunity to be heard and (2) the agreement was contrary to public interest and thus unenforceable.

The Ontario Court of Appeal held that the standard of review was reasonableness. The Appeal Court found that the majority in the Divisional Court erred in two ways: (1) the Commission decision did not require the respondent to sign an agreement that denied him an opportunity to be heard nor did the agreement provide the appellant with absolute unfettered power to arbitrarily exclude him. The right to be heard arose on an appeal to the Commission by the appellant to exclude the respondent. There was nothing in the agreement that purported to take away the right to due process before the Commission, and (2) the Divisional Court failed to consider that the Commission balanced the burden on the respondent (by having to sign the agreement) against the various public interest considerations supporting the appellant’s requirement that the respondent sign the agreement. Accordingly, the Appeal Court restored the Commission’s decision and dismissed the respondent’s application for judicial review.

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