On 1 August 2017, Racing Australia introduced new reforms, known as the Trainers and Owner Reforms (TOR), incorporated into the Australian Rules of Racing.
The reforms include a Standard Training Agreement (STA) which are applicable to all trainers and owners; only owners who either train a horse themselves or employ a trainer exclusively for them under a written agreement will be exempt.
Unless trainers and owners (other than those exempt) make other written arrangements regarding their training relationship in accordance with the TOR Rules, they will be bound by the STA.
However, if trainers and owners wish to make other arrangements which differ from the STA, they can, in writing, agree to:
- Vary specific terms of the STA, provided they don’t exclude, vary or limit the operation of any provision of the Rules of Racing (including the TOR Rules).
- Continue with an existing training agreement or enter into a new training agreement (which operates in conjunction with, or instead of, the STA), provided that they comply with the TOR Rules.
Importantly, if there is any inconsistency between any amended terms of the STA or any terms of the other agreement and the Rules of Racing (including the TOR Rules), the Rules of Racing will prevail to the extent of the inconsistency.
For more information on the STA, click here.
The reforms also include the Co-owner Agreement (COA) that strengthens the rights and obligations of co-owners of a horse.
The COA applies to all co-owners except for those co-owners who own an interest in a horse as a result of acquiring shares through promoter syndicates who operate under ASIC issued Australian Financial Services Licence (AFSL).
A key principle of the COA arrangement is that each owner agrees to be severely liable in respect of the horse ownership venture, but not jointly and severely liable. Accordingly:
- Each co-owner has to pay his or her percentage share of the costs or expenses of the venture in accordance with his or her ownership of the horse; and
- If a particular co-owner defaults, the other owners do not have to cover or contribute to the defaulting owner’s percentage share of costs or expenses as well.
Unless co-owners (other than those exempt) make other written arrangements regarding their horse ownership venture in accordance with the TOR Rules, they will be bound by the COA.
However, if co-owners wish to make other arrangements which differ from the COA, they can, in writing, agree to:
- Vary specific terms of the COA (in accordance with its terms), provided they don’t exclude, vary or limit the operation of any provision of the Rules of Racing (including the TOR Rules).
- Continue with an existing ownership agreement or enter into a new ownership agreement (which operates in conjunction with or instead of the COA), provided that they comply with the TOR Rules.
Importantly, if there is any inconsistency between any amended terms of the COA or any terms of the other agreement and the Rules of Racing (including the TOR Rules), the Rules of Racing will prevail to the extent of the inconsistency.
For more information on the COA, click here.
A Training Disputes Tribunal (TDT), has been established in each state and territory by the relevant PRA, specifically to hear disputes between owners and trainers, and determine whether the owner owes money to a trainer in relation to training services, and if so, how much.
The TDT will not deal with disputes arising between owners under the COA.