The business relationship between a horse owner and a professional horse breaker or re-trainer involves a lot of uncertainty and trust. For the owner, there is uncertainty over how long it will take the professional to achieve what he or she expects and what the eventual cost will be. For the professional, there is uncertainty about how the horse will go, what it is achievable, and if the owner will pay the invoice at the end of it all. The owner trusts that in the allotted time, the trainer will work diligently and competently to fulfil expectations: the trainer trusts that the owner will respect the expertise and effort that has gone into working the horse and pay money owing at the end of the process.
Disappointed expectations can sometimes follow high hopes. Unless fees and services are discussed, agreed and, as I have said more than once over the years, put into some sort of written form, there are risks for both sides. So what are the terms between the owner and professional and the legal principles underpinning the relationship between them which are important to agree and understand?
The professional charges a fee for service. The basis for calculating the fee and the content of the service are important considerations. It is up to the professional to ensure the owner understands how the fee will be charged. Is it a fixed one per week, month or other defined period and what amount of training is included? What type of agistment is included in the fee? Will there be extras and how will they be made up? Fees and charges must be crystal clear at the outset.
Owner expectations around service delivery are commonly a cause of frustration and dispute. In the owner’s mind, service is mostly about achieving an end result, not so much what the professional has done to get there. To the professional, however, the process is just as important since he or she does not charge a contingency fee. Remuneration is not dependent on owner satisfaction, albeit the aim of every professional to please the customer. Owner expectation will be sharply focused on a goal where the purpose of the breaking or re-training is specifically made known to the professional, for example, to educate the horse under saddle to walk, trot and canter using basic aids, or to re-train the horse to eliminate a chronic behavourial problem, or to advance the education of the horse so that it shows no resistances between the gaits. But the owner’s expectations might equally be vague or unrealistic. The professional must address such expectations promptly, within days of commencing work with the horse, to realign them to what is realistic and achievable.
Where the owner is displeased with the outcome or with the time taken to achieve it, the professional must be mindful that under the Australian Consumer Law, he or she has guaranteed that the services were of a nature and quality such that they could be expected to achieve the owner’s purpose. This is not a legal obligation to guarantee that the owner’s purpose will be achieved, only a guarantee that the professional’s services were reasonably fit for the purpose. But the distinction is easily blurred in the owner’s mind when faced with an invoice to pay which might be higher than expected. This is why it is so important for the professional to clarify and manage the owner’s expectations and purpose initially and throughout training.
There are some pointers to successful management of the client relationship that a professional must employ to reduce the risk of a dispute over money owing because the hoped for purpose was not reached. They will also help to evidence compliance with the guarantee. Firstly, the professional must keep a diary to record the date and time spent training the horse to substantiate the work performed if there is any suspicion let alone an allegation of fee for no service. Second, the invoice or periodic invoices must set out the dates and duration of training, which the diary can provide. This level of transparency assures the owner that the professional is accountable. Third, prompt and effective communication with the owner whenever an issue presents in the course of training that might necessitate extension of the training period or modification of the owner’s expectations. The professional must confirm to the owner by text or email any important advice given or instruction received. Raising any problem with the owner in a timely fashion and coming up with a plan to address it will impart confidence that the professional is on the ball and working for the owner. Fourth, if, as often the case, the owner is unable to witness the training in person regularly or at all, the professional must supply the owner regular video footage to demonstrate progress or to show the difficulties faced. These steps will help the professional to maintain the trust and respect that are important to the relationship.
Sometimes, an owner will dispute fees, with or without good reason. If the dispute is not resolved, it is important for the owner to be aware of an important and powerful legal right of the professional to secure payment of unpaid fees. At law, the professional is entitled to exercise a lien over the horse until payment. A lien is the right to detain the horse until the breaking or training fees and charges are paid in full, irrespective of any dispute about their validity or amount. The right of lien does not have to be in writing or even agreed between the parties because the common law confers the right on the professional.
Given this position of strength, all the more reason for the owner to discuss and agree on fees, service content and delivery expectations up front with the professional so there is clarity and understanding. It is better for the owner to raise concerns upfront or in the course of the professional’s work rather than say nothing until faced with an invoice and then go berserk.
The professional must be aware that the common law lien does not, however, authorise the sale of the horse to recover the money owing. A right of sale might arise under statute law, for example in Victoria under the Impounding of Livestock legislation. While the lien is exercised, the professional must take reasonable care of the horse.
If the professional maintains a lien over the horse for payment of fees, the owner can do one of 2 things: either pay the entire fees under protest (to reserve the right to challenge the fees later); or tender the amount that is validly owing (after careful calculation) and if the professional will still not hand over the horse, sue the professional in Court to get the horse back.
As with any business relationship, clear and ample communication flow is important. The professional must be responsive to the owner and the owner must be reasonable and respectful.
14 February 2019
© 2019 Michael Mackinnon, Solicitor & Independent Counsel