To modernize industry practice, Racing Australia is introducing new reforms to standardise the arrangements between owners and trainers, and also agreements between co-owners. These new measures will be known as the Trainer and Owner Reforms (TOR).
The TOR will provide greater clarity and certainty between owners and trainers as well as between co-owners.
The commencement date for the reforms will be 1 May, 2017. There are three key features to the TOR:
(1) Standard Training Agreement (STA)
A new set of standard contractual terms will for the first time apply to all owners and trainers. These terms will be known as the “Standard Training Agreement” (the STA).
The STA will be compulsory for owners and trainers. However, to preserve flexibility in relation to the contractual arrangements between trainers and owners, the STA can be varied so long as certain terms are not excluded or limited. The terms that cannot be varied will be defined in the Australian Rules of Racing.
If the trainer and owner are parties to a separate agreement in relation to training services as at 1 May, 2017, they can agree in writing that their other agreement continues to operate as well. However if there is any conflict or inconsistency between the STA and that agreement, the STA prevails to the extent of that conflict or inconsistency.
The STA will expressly impose some basic requirements on trainers. Those requirements are in practice already undertaken by many trainers.
For example, trainers will be required to set out in a document called a “Fees Notice” the training fees and disbursements the trainer plans to charge. A Fees Notice will need to be issued within 14 days of a trainer being appointed by an owner. The STA will also require that trainers meet basic standards for caring for and training a horse, and to report to the owner from time to time about the welfare and progress of a horse. The STA will formalise services many trainers already provide their owners.
The STA is specifically designed to facilitate and encourage trainers getting paid training fees and disbursements promptly by owners. An invoice for training fees and/or disbursements will be presumed due and payable to a trainer at the end of a month as long as the invoice is issued within the first 15 days of that month.
Principal Racing Authorities (PRAs) will have powers under the Rules of Racing to facilitate payment to trainers (including powers to reject the registration of an interest in a horse where fees are due and payable to a trainer, to freeze prizemoney, and to direct payment of prizemoney to trainers in some circumstances).
(2) Training Disputes Tribunal (TDT)
Of course safeguards are built into the STA, including that an owner may dispute an invoice by serving a “Dispute Notice”. Once a Dispute Notice is lodged, a trainer and owner will each have the right to elect to have an independent tribunal convened and arranged by each PRA called a Training Disputes Tribunal (TDT).
The TDT will determine disputes in relation to fees and disbursements for training services. Those hearings will take place in a practical and informal forum so that that if there is a dispute, it can be brought to a head promptly. The TDT process will fairly balance the rights and interests of both trainers and owners.
(3) Co-owners Agreement (COA)
Racing Australia believes that many trainers/owners and Co-owners operate informally and don’t have access to a document setting out where they stand. This leads to numerous misunderstanding and disputes to the detriment of the industry. There has long been a need for standard documents which state the rights and obligations of trainers and owners and co-owners.
The COA applies in multiple ownerships (except for Co-owners who have acquired shares in a horse offered by a promoter approved by a PRA and licenced under the Corporations Act (Cth) and/or offered pursuant to an ASIC instrument or Class Order in relation to shares in horses.
If groups of owners already have in place separate contracts or deeds governing their venture, they can agree for them to operate side by side with the COA, as long as they do not conflict with and/or are not inconsistent with the COA. Again, the COA will prevail to the extent of the conflict or inconsistency.
Co-owners will also be able to add to or vary the COA (except that they cannot exclude or limit a requirement of the rules of racing).
The new TOR will be provided for by the Rules of Racing. There are obviously some detailed points about it and will take some time getting used to. Racing Australia will work with stakeholders to familiarize themselves with the terms and operation of both the STA and COA. A number of communication initiatives are being considered.
A Frequently Asked Questions and a copy of the STA and COA documents is available available here.