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.”


A group of On­tario stan­dard­bred horse breed­ers is su­ing On­tario for $65 mil­lion over the abrupt can­cel­la­tion of the Slots at Race­tracks Pro­gram.

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