Three federal court justices in Australia have unanimously denied an appeal by Bruce McHugh over his challenge to the thoroughbred industry’s ban on artificial insemination.
McHugh, a former bookmaker and racing official, alleged in the case, which he launched in 2011, that the ban on artificial insemination amounted to a restraint of trade and was anti-competitive.
The case was heard later that year. Justice Alan Robertson handed down his 375-page judgment in December 2012 in which he dismissed the challenge.
McHugh, once Australia’s biggest bookmaker, appealed that judgment to the Federal Court of Australia.
A three-judge panel released its decision on Thursday, denying the appeal.
The ruling upheld the Australian Stud Book rules on breeding thoroughbreds and dismissed McHugh’s view that the ban on artificial insemination restricted free trade.
McHugh took his multimillion-dollar high-profile case against key racing bodies – the Australian Racing Board, the Australian Stud Book, Thoroughbred Breeders Australia, the Victoria Racing Club and the Australian Turf Club.
McHugh, represented in the case by Ian Tonking, argued that the ban on artificial insemination meant powerful interests maintained a stranglehold on the lucrative racing industry.
He argued that allowing artificially bred horses to race would increase competition and make the industry more affordable to smaller breeders.
Thoroughbred jurisdictions around the world have built up a multibillion-dollar breeding industry based on the requirement for live cover.
Desirable stallions command high service fees – up to $A200,000 in Australia – and some travel the globe as shuttle stallions, serving mares in several countries each year.
McHugh argued the restriction on artificial insemination represented a restraint of trade and breached section 45 of the Competition and Consumer Act.
Justice Robertson, in his 2012 ruling, found that McHugh had failed to show the AI ban, introduced in the 1940s to prevent the attribution of incorrect paternity to a thoroughbred horse, represented a restraint of trade.
McHugh also failed to satisfy the judge that the AI rule had substantially lessened competition, which is the test under the Competition and Consumer Act.
Had McHugh won the case, Australia would have become the only country in the world to allow artificial insemination of thoroughbreds. A win would likely have triggered similar challenges in other racing jurisdictions.
Australian Racing Board chairman John Messara praised the appeal ruling.
“The issue of artificial insemination is settled once and for all.”
He said the racing board had said from the outset that the sport’s practices were not anti-competitive or a restraint of trade, pointing out that supporters of artificial insemination were perfectly free to establish their own industry.
“Fortunately, the Federal Court agreed with us,” he said.
“Racing and breeding has many challenges now and into the future, and the finality of this case will allow us to concentrate fully on what matters most to participants, punters, and stakeholders.”
Thoroughbred Breeders Australia president Trevor Lobb labelled the ruling as “wonderful”.
The full judgment can be read here.