Trainer and Owner Reforms

• The reforms provide greater certainty and clarity in the relationship between owners and trainers, as well as between multiple owners of a horse.
• The reforms are aimed at encouraging on-time payments of fees and introduce a streamlined process to resolve issues where payments are not made in a timely fashion.

• The reforms operate pursuant to the TOR Rules, which are part of the Australian Rules of Racing. Accordingly, trainers and owners are bound by and subject to, the TOR Rules.

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.

• Trainers issue a Fees Notice within 7 days of appointment as the trainer of the horse and it is the managing owner’s responsibility to accept the fees on behalf of the owners (after providing a copy to, and consulting with, the owners).
• Trainers issue an invoice within the first 15 days of the start of the month for training services that were provided in the previous month.
• Payment will be due by the end of the month in which the invoice is issued.
• Where only a percentage of an invoice is in dispute, the amount of the invoice not in dispute is still due and payable by the end of the month.
• The reforms provide safeguards for owners, including the right to dispute a trainer’s invoice.
• If the owner does not pay the trainer by the end of that month of invoice, Racing Australia and/or Principal Racing Authorities (PRA) may be able to act under the Rules of Racing to encourage payment. That could include:
  • (i) Refusing registrations of, or transfers of interest in a horse to another trainer, or between owners; and
  • (ii) Freezing prizemoney to which an owner would otherwise be entitled and directing payment of that prizemoney to the trainer, if the trainer contends that money for training fees and/or costs are owing.

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.