Many owners (often high net worth individuals) engage with a professional rider to train and compete a horse. The owner’s aim will be to develop the horse’s talent, achieve competition success and increase its market value. The horse’s performance level in training and competition is usually the metric adopted by the owner to gauge the prospects of the combination and his or her commitment to continue sponsorship.
While a professional rider will yearn for a ride on a truly talented and trainable horse, he or she will not normally pay the owner for the opportunity! On the contrary, he or she depends on remuneration for their livelihood. The owner, however, particularly one in the business world, can look upon the arrangement as conferring a privilege on the professional rider which must be earned. If this view is unstated, as it usually is, it will inexorably clash at some point with the expectations of the rider. Disputes unfortunately arise where the owner wishes to remove the horse from the rider, for whatever reason, but the rider is owed money or believes that the ride was secure in the long term or believes that he or she is a part owner of the horse.
Here are some pointers for professional riders to consider.
Establish with the owner what fees are chargeable, their rate and when they are payable. A rider acting as an agent to sell a horse must take steps to articulate and secure any commission entitlement.
A right to be paid fees and commission must be documented. If there is a debt or liability due to the rider, there should also be documented a right to detain the horse or horses and other personal property belonging to the owner until all money owing is paid. A horse trainer has a general law right to exercise no more than a particular lien over the horse trained for payment of its training and nothing more. A professional rider therefore needs the owner to grant a lien that extends to all property of the owner until discharge of all debts and liabilities.
Addressing fee and commission entitlements up front will flush out the owner’s expectations concerning financial details. If the owner intended to offer a share of the horse in return for the rider’s input, in lieu of remuneration, then the rider must get the proposal out in the open and tease out the details. Such an incentive can sometimes disguise an owner’s real intention to procure the rider’s skill and effort for nothing. A business owner might even intend the rider to be liable for a portion of third party costs, like veterinary and farriery fees, as the price to pay for the chance to succeed and gain greater peer recognition.
Informal part ownership arrangements between owners and professional riders can be complex to understand months or years down the track and costly (in terms of legal advice) to evaluate.
These part ownership arrangements should never be left informal and undocumented. Some things for the rider to consider and propose to the owner for agreement are: Is the part ownership proposal in lieu of or complimentary to remuneration for training, agistment and competition? How and when is the right of part ownership to take effect? Is the right dependant on some event or circumstance, like a qualifying score or rider ranking? How is a share of the horse to be transferred legally to the rider? Should the rider’s ownership entitlement be recorded on the Personal Property Securities Register? What is to happen in the following contingencies (among others) – the rider is injured, either side wishes to sell their share, the horse needs expensive medical intervention, current agistment arrangements are unsuitable?
Professional riders must adopt a business approach in their affairs with owners. They have valid financial interests to protect for all the knowledge, skill and physical demands that go into producing the stars of the future.
12 July 2017
© 2017 Michael Mackinnon, Solicitor & Independent Counsel