Breeders saddle up for legal charge
Long-running civil action concerns sudden ending of revenue-sharing plan
If civil actions had bookies, these horse folks might be 100-to-1 long shots.
Three years ago, a group of Ontario racehorse breeders took Premier Kathleen Wynne’s government to court over claims the province made a “bad faith” decision in 2012 to abruptly end a lucrative revenuesharing agreement with the horse racing industry. The standardbred breeders allege cancellation of the Slots at Racetracks Program damaged their livelihoods.
But the rural plaintiffs — who in 2015 notched a legal victory in obtaining government documents tied to the agreement cancellation, as court-ordered disclosure — continue to battle the government.
On Monday, the sides are back in a Guelph courthouse. Ontario Superior Court Justice Michael Emery will hear motions from the province and co-defendant Ontario Lottery and Gaming Corp. (OLG) to quash summonses for 13 witnesses — including Wynne, her predecessor Dalton McGuinty, former finance minister Dwight Duncan and economist Don Drummond.
“The evidence shows that these are the folks who are the only ones who can bring any level of transparency to the decision that was made and imposed in 2012,” said Toronto lawyer Jonathan Lisus, who represents the breeders seeking $65 million in damages.
“They were directly and personally involved in the decision, its implementation and the response to the harm that was caused.”
The province and the OLG deny all allegations of wrongdoing in their statements of defence. Earlier this year, both filed motions to have the case summarily dismissed, a matter scheduled for a November hearing.
Emilie Smith, a spokesperson for the Ministry of the Attorney General, said in a written statement that, “After Ontario confirmed that it would be bringing a summary judgment motion, the plaintiffs served 15 summonses to witness.
“Ontario has brought a motion to quash 13 of the 15 summonses on the basis that the evidence of the summonsed witnesses is not relevant to the summary judgment motion and that the summonses are an abuse of process.”
Both Smith and a spokesperson for the OLG said it would be inappropriate to comment further on matters before the courts.
The defendants have already deposed 17 plaintiffs. Lisus said his clients want the opportunity to examine current and former senior government officials on their witness list, under oath.
“I understand the government may not want this decision-making process to be scrutinized but it (ending the slots agreement) caused a lot of harm to a lot of people,” Lisus said. “The documents and evidence demonstrate they (the defendants) knew it would cause a lot of harm to a lot of people.”
Around 1998, the slots agreement grew out of the Ontario government’s interest in installing the machines at racetracks. In 2012, thenfinance minister Dwight Duncan an- nounced the revenue-sharing deal would be scrapped. With a year’s notice to the horse racing industry, it officially ceased in 2013. Up to that point, horse racing’s share of slots revenue was about $4 billion.
A key component of the breeders’ allegations hinges on the five-to-seven-year cycle needed to produce a standardbred racing horse from conception to the start gate. They claim the breeding cycle was well-known to the defendants, who also understood that breeders plan their businesses on this timeline.
Lisus said the government’s oneyear notice to end the slots deal devastated breeders, noting “the value of horses completely halved overnight.”
“It’s not the plaintiffs’ position that the revenue share had to continue forever or could never be renegotiated,” the lawyer said.
“The way the government did it, which was to essentially give no notice and say revenue sharing is going to stop, caused the bottom to fall entirely out of the market, and it never came back,” Lisus continued. “The documents show they knew that would happen.”
The breeders claim that information contained in the court-ordered disclosure shows senior government officials were planning to cancel the slots program “without warning” even while the province was reassuring the horse industry that the partnership would continue, according to the plaintiffs’ responding factum to the motion to quash summonses.
The disclosure documents also contain emails between government officials.
Another aspect of the civil action pertains to the government compensating racetrack owners and not those who produce the racing animals after the slots deal was scrapped.
“Ontario and OLG paid $80.6 million in compensation to those racetrack owners, while refusing to even discuss compensation for the standardbred breeders,” are among the allegations contained in the breeders’ statement of claim.
The standardbred breeders were not a party to the slots contracts, which were signed by individual racetrack owners and OLG.
However, Justice Emery, in his 2015 decision to order broad document access for the plaintiffs, wrote that “reports by (the Ontario Racing Commission) and other publications reflected the long-term nature of the commitments Ontario and OLG were making to racetracks and stakeholders in the horse racing industry.”
The province, in its statement of defence filed by the attorney general’s office, denied “all allegations of liability and wrongdoing referred to in the plaintiff’s claim” and said at all times “the Crown acted in the public interest.”
In addition, government decisions “made in relation to the implementation and termination of the Slots at Racetracks Program were core policy and fiscal decisions made in the public interest and made at the Ministerial and Cabinet level of government and are, accordingly, immune from suit,” according to defence pleadings filed by the attorney general’s office.
The province also contends: “If the plaintiffs suffered any losses, which the Crown denies, those losses resulted from something other than actions of the Crown.”