Scottish Sheriff Court Decisions

SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH

[2016] SC EDIN 69

SA2359/15

JUDGMENT OF SHERIFF KENNETH J MCGOWAN

In the cause

STANLEY WOOD

Pursuer

Against

MUSSELBURGH JOINT RACING COMMITTEE

Defender

Edinburgh, 17 October  2016

The Sheriff, having resumed consideration of the cause, absolves the defender from the claim; and reserves meantime all questions of expenses.

NOTE

Introduction

[1]        This case concerns the allocation of places to on course bookmakers at Musselburgh Racecourse (“the racecourse”). I heard extensive evidence from numerous witnesses over the best part of two days but this judgement is short for three reasons. First, Rule 9.8(2) of the Summary Cause Rules provides that the court should issue “a brief note of…reasons”. Second, despite the scope of the evidence, the issues relevant to the determination of the case were not really in dispute. Thirdly, the factual background to this case has already been the subject of two previous actions, resulting in the preparation of a Note and Stated Case by my brother sheriff, Sheriff Braid. I did not understand, at least for the most part, the factual findings made by him in that connection to be in dispute.

The facts of the present case - briefly stated

[2]        On 14 June 2014, namely Ladies’ Day, there were three areas at Musselburgh Racecourse in which on course bookmakers were entitled to trade, viz. the Rails; the Tattersalls; and the New Areas. The allocation of pitches to bookmakers present is carried out under the terms of their licenses; and pitches in the New Areas are allocated under Appendix 1 thereto: see Pursuer’s Production 10.

[3]        There was one area on the Rails comprising six pitches. There were three areas in the Tattersalls comprising 20 pitches at the front; 20 pitches at the back; and three pitches at the fence. The New Areas were subdivided into three areas comprising two pitches at the half furlong; two pitches at 1 furlong; and three pitches at the marquees. That set up, as determined by the defender in consultation with on course bookmaker representatives, was captured schematically by Mr Clark: Defender’s Production 1.

[4]        The Rails Bookmaker Number for the racecourse on Ladies’ Day 2014 was 6: Pursuer’s Productions 8 and 10/1. The Tattersalls Bookmaker Number for the racecourse on Ladies’ Day 2014 was 43. (Pursuer’s Production 8 has the figure as 46 but Mr Clark’s evidence was that this was a typographical error. I accepted that evidence. In any event, if the figure was 46 rather than 43, that would make the pursuer’s position worse rather than better, given my view on how the licence falls to be interpreted and applied: see below.)

[5]        Bookmakers with licences for the racecourse are allocated a ‘List Position’, number 1 being the top of the list. The holders of Rails List Positions (“RLP”) 1 – 6 (i.e. up to the Rails Bookmaker Number) and Tattersalls List Positions (“TLP”) 1 – 43 (i.e. up to the Tattersalls Bookmaker Number) are given priority over the holders of RLP 7, 8 etc. and TLP 44, 45 etc. when it comes to allocation of pitches on any race day.

[6]        On Ladies’ Day 2014, the holders of RLP 1, 2, 4, 5 and 6 were present at the racecourse. The holder of RLP 3 was not present. The pursuer holds RLP’s 7 and 8 and was present. There were also a number of bookmakers present who held TLP’s numbered between 1 and 43.

[7]        When the time came to allocate pitches, Mr Clark established which bookmaker with the TLP was present that day. That was the holder of TLP 1 (DW Porter). He was offered a pitch in the New Area. He chose pitch 1 at 1 furlong: Defence Production 1.

[8]        The opportunity to take a pitch in the New Area having been offered to and accepted by the bookmaker present with the highest TLP, the next offer of a pitch in the New Area was offered to the holder of the highest RLP present that day. The holder of RLP 1 was present. This also happened to be Mr Porter: Pursuer’s Production 6. In his capacity as holder of that list position, he was offered a pitch in the New Area. He elected to take the pitch 2 at 1 furlong: Defence Production 1.

[9]        The next offer of a pitch in the New Area fell to be made to the bookmaker present that day holding the next highest (after Mr Porter) Tattersalls List Position between 1 and 43. It was offered to a Mr Latham, the holder of TLP 3. He took up pitch 1 at the half furlong: Defender’s Production 1.^[i]

[10]      Mr Clark then reverted to bookmakers present holding RLP’s between 1 and 6. The holder of RLP 2 (W. Hill) was present but elected to take pitch number 1 on the Rails rather than move to a pitch in the New Area: Pursuer’s Production 6 and Defence Production 1.

[11]      The holder of RLP 3 was not present. The holder of RLP 4 (F. Williams) also elected to remain on the Rails, taking up pitch 2.

[12]      The holder of RLP 5 (M. Harrap) was offered and accepted pitch 2 at the half furlong in the New Area.

[13]      The offer of a pitch in the New Area then reverted back to bookmakers present holding TLP’s between 1 and 43. In the same way as happened with Mr Latham, the next offer of a place in the New Area was the holder of TLP 11 (“Matt”) who took pitch number 1 at the marquees.

[14]      Mr Clark then reverted to the bookmakers present holding RLP’s between 1 and 6. The holder of a RLP 6 (Blackjack) was present but chose pitch 3 in the Rails: Pursuer’s Production 6 and Defence Production 1.

[15]      The pursuer being the holder of Rails List Positions 7 and 8, he was not entitled to be offered a pitch in the New Area until any remaining vacant New Area Pitches had been offered to any bookmakers who were present who held TLP’s in the range 1 – 43: Pursuer’s Production 1, Appendix 1, paragraph A1.1 (a) – (d). As a result, the remaining two New Area pitches, located at pitches 2 and 3 at the marquees, were offered to and taken up by the holders of TLP’s 16 (Bell)  and 19 (Mont[?]).

[16]      That process having been completed, only three pitches on the Rails had been filled. The pursuer as holder of RLP 7 was offered and took up a pitch 4 at the Rails and traded there.

[17]      In accordance with the defender’s policy that vacant spaces in the Rails which existed because one or more holders of RLP’s 1-6 had accepted a pitch in a New Area were not ‘filled up’, the remaining spaces on the Rails were not offered to either the pursuer or any other bookmaker and remained vacant.

Discussion

Defence Production 1

[18]      Before turning to the substance of the dispute, I should explain, for the record, how Defence Production 1 came to be before me. On the morning of the hearing, it was tendered at the bar by Mr Garioch who sought leave to have it received into process. The pursuer, as he was entitled to do, objected to that on the grounds that he had not had prior notice of it as required by Small Claims Rule 16.1. It appeared to me that in the face of that objection I should rule in favour of the pursuer, but I did specifically say to him that if the author of that document was called to give evidence by him (i.e. the pursuer) it would be open to Mr Garioch to put it to the witness in cross examination, even although it had not been lodged in advance of the hearing: “The Law of Evidence in Scotland”, Walker & Walker, 4^th edition, paragraph 12.10.2. In the event, that is exactly what happened.

[19]      At the commencement of the continued hearing, the pursuer indicated that he no longer insisted on his objection to it being received as a production. He went on to invite me to allow him to lodge another copy of the document in question, which copy as I understand it had been utilised in one of the earlier cases before this court. The pursuer’s position was that there were differences between the two copies. I refused to allow him to lodge that document for four reasons. First, part of the proposition underlying the pursuer’s claim was that there was, in fact, an empty pitch in the New Area on Ladies Day 2014 and that that unoccupied pitch should have been offered to him. The defender’s position was that there was no unoccupied pitch in the New Area. Accordingly, the pursuer knew, or should have known, that this was an area of dispute. The document on which he relied was relevant to that issue and it was, as I understand it, recovered from his former solicitors i.e. it was available to him in advance of the hearing. He also called Mr Clark, the author of that document, as a witness. Thus, its potential relevance to the hearing was something that should have been apparent to him and it could have been produced earlier. Second, the copy produced by the pursuer was, in my opinion, illegible and could have had little or no evidential value. Third, Mr Clark completed his evidence on the first day of the hearing and was not present to give evidence about it on the second day. Fourth, it had been put to Mr Clark in examination by the pursuer that Defence Production 1 had alterations on it. Mr Clark agreed with that, in the sense that he accepted that annotations to provide additional information had been added. He explained all this in his evidence. So, again the evidential value of an illegible copy of the “original” would have been negligible.

The pursuer’s claim as holder of Rails List Position 7

[20]      Although the pursuer accepted in evidence and under reference to the amended statement of claim lodged on his behalf that his claim was restricted to what he said should have happened in relation to him in his capacity as holder of RLP 8, his position before me appeared at times to be that he also had a claim as holder of RLP 7. For the avoidance of doubt, I will give my view on that claim.

[21]      As holder of RLP 7, the pursuer was offered and accepted a pitch on the Rails and traded from it. For there to be a claim as articulated by the pursuer he would need to show (i) that the method of allocation of pitches in the New Area on the day in question was not carried out in accordance with his licence; (ii) that had the allocation been done in the ‘correct’ way as desiderated by the pursuer a pitch in the New Area would have been available to be offered to him; (iii) he would have accepted offer of a pitch in the New Area if made and (iv) he would have earned more in the New Area than he earned from pitch 4 on the Rails.

Interpretation and application of the licence

[22]      Points (i) and (ii) can be taken together. In my opinion, the evidence showed that New Area pitch allocation was carried out in accordance with the licence. As for the question of construction of the licence in general and Appendix 1 thereto in particular, I defer to and adopt the interpretation of it set out in the (i) Note for case SB1/15 and (ii) the Stated Case for case number SA1055/15, both prepared by Sheriff Braid. I respectfully agree with his reasoning and specifically refer to paragraphs 29 in the former and 16 and 17 in the latter.

[23]      The pursuer did contend that Sheriff Braid had said that the defender’s construction of the licence was wrong. Sheriff Braid did use that phrase: paragraph [27] of Note for case SB1/15. But he was referring to an argument which was not relied on by the defender in the present case.

[24]      Dealing with the point which is under consideration here, Sheriff Braid made it clear that the licence permitted the defender the power to admit fewer than the maximum number of bookmakers permitted by the Bookmaker Number on any given race day: paragraphs [29] and [30].

[25]      Moreover, at paragraph [17] in the Stated Case for case number SA1055/15, he said:

“It should be noted that the fundamental point arising from what I consider to be the correct (and clear) construction of the licence is that [Mr Wood], as the holder of licences number 7 and 8, is only ever entitled to a position in a New Area if a place remains after the offer of places to all those numbered 1 to 43 (ie to those within Bookmaker Number) on the Tattersalls List, irrespective of how many places had been offered to, or taken by, numbers 1 to 6 on the Rails List. The licence, and the examples therein, make clear that the offer of places to those outwith Bookmaker Number, only becomes alternate as between The Rails and Tattersalls, after offers have been made to all within Bookmaker Number on both lists. Putting that another way, [Mr Wood] could only ever succeed in the present claim if he could show, either that a position in the New Area had been offered to a bookmaker only Tattersalls List numbered 44 or below…” (Emphasis added). ^[ii]

[26]      The pursuer sought to argue that Appendix 1 was badly drafted and that I should construe it in a way which ignored or omitted certain phrases. He referred to this as the “blue pencil test”. I think that he meant the “blue pencil doctrine”. For such to be applied, it would need to be demonstrated that parts of the contract were unenforceable and could be ignored, while allowing the remainder of the contract to stand. In my opinion, some ambiguity or difficulty in construing the contract would not justify such an approach.

[27]      Accordingly, in my view, the defender construed and applied the licence terms correctly on Ladies’ Day 2014; and the evidence demonstrated that by the time that the pursuer as holder of RLP 7 might otherwise have been offered a pitch in the New Area, there were none left because they had all been allocated, in accordance with Appendix 1 to any bookmakers present holding RLP 1 – 6 and/or TLP 1 – 43.

[28]      It is worth adding that the pursuer’s own witnesses agreed that the chance of any New Area pitch ever becoming available to the holder of RLP 7 was very slight, because there are 49 bookmakers  (RLP 1 – 6 and TLP 1 – 43) to be considered ahead of RLP 7 in the ‘queue’. None of them had experienced of a pitch in the New Area being offered to the holder of RLP 7 and all thought it was highly improbable that it would happen.

acceptance of pitch in the New Area and earnings from it

[29]      Turning to points (iii) and (iv), I accept that had the pursuer had been offered a pitch in the New Area he would have accepted it. But any claim for damages would have to be based on the proposition that he would have earned more from a pitch in the New Area than he did in fact earn from the pitch operated on the Rails. The claim would constitute the earnings from the former less the earnings from the latter. There was no evidence to show, even as a matter of probability, what the pursuer might have earned had he been offered and taken up a pitch in the New Area, so even if the pursuer had established such a claim in principle, it would not have been possible for me to calculate any loss.

CONCLUSION

[30]      For all these reasons, I am satisfied that any claim based on the proposition that the pursuer, as holder of Rails List Position 7, was deprived of earnings as a result of the defenders’ breach of his licence cannot succeed.

The pursuer’s claim as holder of Rails List Position 8

[31]      I turn now to consider the pursuer’s claim in his capacity as the holder of RLP 8.

[32]      In so far as that claim is based on the proposition that he should have been offered a pitch in the New Area, then everything that I have said above that argument in relation to RLP applies with equal force. That claim must fail.

[33]      The pursuer’s alternative argument was that he should have been offered an additional place on the Rails as holder of RLP 8.

[34]      This issue was previously considered and decided by Sheriff Braid. He expressed the following opinion at Stated Case, for case number SA1055/15, paragraph 16:

“… there was no requirement on the [defender] to admit the permitted maximum on every, or indeed any, race day, the maximum being a limit rather than a target, and in my view, the [defender] had absolute discretion as to the number of bookmakers who may be admitted. Doubtless that had to be exercised reasonably, but in my view there was no reason why the [defender] should not decide, on days when there was a New Betting Area, that the usual numbers only Rails and in the Tattersalls should be reduced by seven overall. To put it another way, on a normal race day, the [pursuer] would not be entitled to a place on the Rails if all of numbers 1 – 6 were present, and in my view the same applied on special race days, irrespective of whether those six bookmakers were on the Rails or in the New Area.”

[35]      Without developing the argument in any respect, the pursuer seemed to be relying on Sheriff Braid’s comment that the discretion had to be exercised reasonably. I agree with that – but I also agree with Mr Garioch’s submission that unreasonableness in this context would depend on proof of bad faith or a decision which was in some respect arbitrary or capricious. In my opinion, there was simply no evidence of such. Mr Clark was following the defender’s instructions. The defender, as its Manager Mr Farnsworth explained, operates a policy of not “filling up” places in the existing Rails betting areas which are vacant only because bookmakers who would otherwise be entitled to pitches in them have elected to move to pitches in New Areas on race days when the latter are being operated. As he explained, this is a way of rewarding bookmakers who show loyalty to the defender by turning up on less popular days when the crowds will be significantly smaller. It is a system which is operated by the defender after consultation with bookmakers through the relevant associations. According to the pursuer’s own witnesses, the defender is not unique in operating such a policy. The fact that some racecourses do operate a contrary policy of “filling up” such vacant pitches is neither here nor there.

[36]      Finally, the fact that it is a policy operated by the defender does not mean that it is not a discretionary decision. In my opinion, Mr Farnsworth’s evidence made it clear that those charged with the running of the racecourse at Musselburgh had applied their minds to the issue and reached a decision to apply a particular approach which was rational and comprehensible. Accordingly, in my opinion this claim too must fail.

Miscellaneous issues

[37]      During the course of the hearing, some other issues were touched on. None were crucial to my decision but for the sake of completeness, I will deal with them briefly.

Custom and Practice

[38]      There would need to be evidence that a particular “custom” or “practice” had in fact been operated for such period as to elevate it to a term which should be implied into the contract constituted by the licence. In the present case, the evidence was that the defender and other racecourses did not operate the practice contended for by the pursuer. Accordingly it is clear that even within the horseracing industry itself, the practice is not universal. Furthermore, where there is an express term of the contract regulating a particular matter, there is simply no room for any implied term.

Competition

[39]      The pursuer suggested that the defender was acting in an anti-competitive way. This argument was not developed by reference to any legislation or case law. If the defender was so acting, it appears to me that that would be a matter for the relevant regulatory authority. Again, there was the evidence that the defender is not alone among racecourses in the UK in operating this policy.

Clause 3.9

[40]      Mr Garioch sought to rely on this exclusion of liability cause. It does appear to create some difficulty for the pursuer and he seemed rather surprised at its terms when it was put to him in cross examination. Reliance on this clause was not foreshadowed in the defences and as a result I did not hear any developed argument about the law applicable to such. In these circumstances, I am reluctant to express any concluded view on it.

Disposal

[41]      In the whole circumstances, I have concluded no matter how the pursuer’s claim as articulated or formulated, this action cannot succeed. Accordingly, I shall absolve the defender from this claim. I was not addressed on expenses. I shall reserve them meantime. If parties are able to resolve that issue between them, that is all to the good. If they are not, they should contact the Sheriff Clerk’s office with a view to a date for a hearing on expenses being allocated.

Endnotes