PROPOSED TRAINER & OWNER AGREEMENTS. June

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1 PROPOSED TRAINER & OWNER AGREEMENTS June

2 Owner-Trainer agreement update Proposed new compulsory contract to encourage trainers getting paid by owners promptly. Will bring it all under Australian Rules of Racing New contact expected from December 1 will apply to current and future contacts. Trainers will need to get current owner, owners to sign the new contract. There is a proposed Joint Owners agreement that they all sign it sets out what owners are required to do as a group. Many owners currently do not have agreements among themselves. There will be an arbitration where there is a dispute notified by either a trainer or an owner for unpaid bills, or other disputes relating to a horse placed with a trainer. This will be run by Racing NSW.

3 What it means trainers Trainers must use reasonable endeavours to care for and train the horse in accordance with Rules of Racing Report to Owner (s) about welfare, progress and performance at a minimum of: 1. When it enters stable or departs for agistment, or transfers to any inter-state stable of trainer 2. When nominated or accepted 3. When suffers a material injury 4. Post race report within a reasonable time including verbally, , telephone, text message, audio. Right to engage suitable qualified persons (Vets, farriers etc.) but must notify and seek approval for any costs above $2000. Right to nominate, enter, scratch, withdraw unless separate agreement on any of these. Engage and instruct a jockey unless separate agreement Accept instructions of the Managing Owner as representing all owners except if decision on gelding, sale or retirement. Trainer must make sure that 50pc of Owners have agreed to gelding, sale or retirement by a confirmation of consent of more than 50.01pc.

4 What it means trainers Fee Notice: all trainers to give to owner/s showing upfront showing training fees and likely indirect costs to an owner/s within 14 days of the commencement date of the new agreement. This must set out daily training fees, and anticipated other costs by name of service and provider. And details of direct payment disbursements (i.e. direct debit etc.) Trainers can state they will charge interest for overdue bills no more than 6pc above Reserve Bank cash rate. Scope to set out bonuses or any commissions on selling a horse for them. Once Owner (s) continue to instruct after a fee notice, deemed acceptance. Trainer can vary fees on 14 days notice, unless objection within 7 days of the notice or a termination, new fees binding. Trainer entitled to minimum of 10pc pf prizemoney. Any other bonus must be set out in the agreement Trainers must do what is required it falls under Rules of Racing to do so. This included regular updates to owner/s. Trainers can add extra conditions in the basic contract as long as it isn t inconsistent. Trainer should give Invoice by 15 th day of month if not disputed by end day of month assumed Owner owes the money. Trainers can add extra conditions in the basic contract as long as it isn t inconsistent. Note that Trainers MUST get all current owners to do the new agreement within a tight time frame. It is retrospective, that is a significant burden on all trainers to get current owner groups to sign up. Various requirements that allow a trainer to refuse consent to a transfer to a new trainer if outstanding fees. Or an owner can put disputed fees in a trust account, and then Racing NSW will allow a transfer to a new trainer.

5 What it means.. trainers When there is a dispute, trainer can charge interest (6pc above cash rate) Put a lien on the horse. Suspend training, retain ownership card, keep the trophies. Charge for any fees while there is a dispute. Terminate the training agreement If there is a order in favour of the trainer and still not paid, various ways to then sell the horse to get the funds back. If this does not cover the training fees owed, the trainer can pursue their own legal action for outstanding funds. Where a Owner and a Trainer agree to terminate the agreement and there are no monies owed, this can be done on 24 hors notice. Then owner has 7 days to take the horse If they then do not take it, trainer can then sell the horse under process in the Owner-Trainer agreement. If there was a prior training agreement, it merges with the new one. There can be some of the previous terms, but only if not inconsistent with the new Owner-Trainer agreement. Various requirements on how to give notice to owners and from owners to trainers.

6 What it means Owners OWNERS OWNERS Owner/s must do a new Joint Owner Agreements. Can have a syndicate as part of owner group (but must be a Syndicate Manager). Licenced ASIC Syndicates separate There must be a Managing Owner stated to Racing Australia in initial registration form/updated. There is majority consent required on some matters by a formal vote/approval. Various things must go to owners for approval (e.g. a treatment that costs over $4000 (says $2000 in trainer agreement, drafting flaw), to terminate a owner-trainer agreement, decision to pick a new trainer, decision to geld, sell, retire it, etc.) Various rules around what to do if an owner is defaulting on his trainer bills If owners disagreeing, they have option to get an independent third Party to sort it out. Syndicate disputes to be sorted out among syndicate, and an individual syndicate member. Syndicate member cannot claim against any other joint owner. Approval by more than 50.01pc for any owner to sell their share with some exceptions (deceased estate, to a family member. Must be information on any proposed sale to Owners, including proposed price. Other owners get 14 days to buy the share, or pro-rata buy it. Otherwise can be sold to a new owner.

7 What it means owners OWNERS OWNERS If an owner is ineligible to own (Rules of Racing), declared bankrupt, fails to make payments (including to trainer), serious breaches considered not justified by Managing owner. The a sales process buy majority consent (Inglis/Millions, or after a valuation (2) If an auction, other owners must get 14 days notice and can bid if they want to. Proceeds after paying trainer/other bills) go to the defaulting owner. Defaulting owner cannot take legal action over the sale process unless is fraudulent. Notices on all administrative matters are set out. Disputes among owners must go to a mediator, or one nominated by racing NSW. Disputes between owners are NOT responsibility of Racing NSW.

8 What it means Dispute resolution DISPUTES & RACING NSW DISPUTES AND RACING NSW Owners must dispute a Trainer invoice/fees within 14 days of receiving Invoice otherwise deemed as accepted and payable. So if Trainer gets invoice out by th day, by end of month the bills are deemed to be accepted for payment. If trainer does not do this, deemed to roll over until next month to dispute. If an Owner disputes, they can dispute part of a bill (rest must be paid), must provide details of why to the trainer. The parts not disputed must be paid immediately. If a dispute, it can be notified within 14 days of a dispute notice by trainer or owner to Racing NSW seeking a determination. Owner must put the disputed amount into a trust account pending the dispute being resolved or there will be a freeze on any transfer to another trainer. (this needs to be clarified) There is no legal representation on a dispute unless racing NSW agrees due to complexity of matter. Racing NSW unless exceptional reasons must hear matter within 10 days of notification. Once a decision, there is only 7 days to advise it will be challenged in court prizemoney etc. Various filing fees will be charged for dispute resolution. then frozen until resolution by another legal outcome. If an award in favour of trainer, until monies paid there is a freeze on a transfer, possible freeze of owner prizemoney. If Owners do not pay within 14 days, then prizemoney redirected to trainer, may refuse a nomination to race the horse

9 Owner-Trainer agreement 1 What it means Trainers Key points Agreement does significant increase the ability for trainers to take action on training fees and bad debts Requires additional responsibilities tight time frames to send out invoices. Need to clearly provide details on likely costs Need written confirmation of key additional costs to owners. Tight deadline to get out invoices and notify of any disputes 2 A lot more responsibility on owners and especially the Managing Owner Owners Note that a Trainer as a Managing Owner will have dual responsibilities