The ATC’s directors’ legal objection to Racing NSW’s action is expected to heard on Monday. (Photo: Law Courts)
The Australian Turf Club directors’ bid to keep the club out of administration will be determined by a New South Wales Supreme Court hearing on Tuesday.
The legal battle between Sydney’s only metropolitan club and the state’s racing regulator erupted after a notice was received on Monday morning that Racing NSW would appoint an administrator to run the ATC, operating under the advice of a specially convened committee.
The ATC directors, chair Tim Hale, deputy Caroline Searcy, plus Annette English and David McGrath, whose power would be superseded by the establishment of the administrator, Morgan Kelly of Ernst and Young, and a committee, took the matter to the Supreme Court on Monday.
Their legal counsel, Scott Robertson SC, said the appointment of an administrator by the regulator was made for an “improper purpose” and was “invalid”, according to reporting in the Sydney Morning Herald.
Oliver Jones SC is representing Racing NSW, who agreed not to take any further steps until the matter can be fully heard on Tuesday.
The directors released a statement on Monday afternoon before the initial hearing.
“Australian Turf Club (ATC) notes today’s announcement by Racing NSW that it has ‘appointed an administrator to conduct the affairs of the Australian Turf Club’ following the recent show-cause process,” it read.
“The ATC board does not accept that Racing NSW has the legal power to remove or displace the duly appointed directors of the club, or to install an administrator in their place.
“The board remains in office and continues to regard itself as the lawful governing body of the ATC under the ATC Constitution, the Corporations Act 2001 (Cth) and the Australian Jockey and Sydney Turf Clubs Merger Act 2010 (NSW).”
Racing NSW’s statement earlier in the day had said its action was due to the board being “unable to demonstrate it could develop and implement a strategy to improve the commercial performance of the club, or rectify the serious financial issues”.
However, the ATC directors denied this in their own counterstatement.
“Throughout the show cause process, the ATC has engaged constructively and in good faith. The club has provided detailed written submissions, extensive financial and strategic material, and independent expert advice addressing the issues raised by Racing NSW,” they said.
“The board rejects any suggestion that it has failed to develop or present a coherent strategy to improve the club’s commercial performance or to address governance concerns and does not accept the characterisation of its response in Racing NSW’s statement.
“Given the position now taken by Racing NSW, the ATC has no choice but to seek urgent relief from the Supreme Court of New South Wales. The club will ask the court to determine whether Racing NSW has any power to appoint an administrator to conduct the affairs of the ATC in place of its board, and to examine the way in which this decision has been reached, including questions of predetermination and independence.”
Pending the court’s determination, the directors said the ATC board would continue to “act in what it considers to be the best interests of the club, its members and the broader racing industry”.
“Day-to-day racing and events at ATC venues will continue as scheduled, and the club’s focus remains on delivering safe, successful race meetings and high-quality experiences for participants, members and customers,” the directors’ statement said.
It is the latest development after Racing NSW issued a show-cause notice in September.
It has been a drawn-out process, featuring several meetings between the parties, with the last of these meetings held on Friday before Racing NSW’s decision to place the ATC into administration on Monday morning.
Racing NSW was contacted for comment on the legal challenge.
