In our extensive Equestrian based practice we all too often come across issues regarding syndication.
Ownership of a racehorse can be thrilling and rewarding; it can bring friends together over a mutual interest, and syndication can spread the expense to allow more people access to the sport as an owner.
Unfortunately however, the recreational nature of such an activity, clouds peoples judgement as to what they are really entering into, and the answer is: it’s a Partnership.
Most people would never enter into a business partnership without a clear understanding as to the position of all the partners and without documenting the agreement. Far too often however, racehorse syndicates are entered into with verbal agreements and little detailed understanding of how the syndicate is to be managed. It is a recipe for misunderstanding, arguments, and sadly sometimes a trip to court.
No matter what your relationship to the syndicate members, be they long standing friends, relatives, or business cohorts, get your partnership/syndication relationship in writing.
It should set out clear understandings as to how the syndicate is to work, who is the appointed manager, what are the manager’s responsibilities generally, and the responsibilities to the Racing Authorities in each State in Australian? What are the conditions under which the horse may be sold, the conduct of training and decisions as to the racing program for the horse. What are the financial obligations of everyone and what happens if a member of the syndicate does not fulfil those obligations, who then is liable? What happens when there is a disagreement as to training or the horse proves unsuitable, some members wish to sell the horse and others do not? What happens if the horse is thought suitable to send to stud? All issues that can end in tears if there is discord amongst the owners.
Also remember, all syndication agreements must be registered with the Racing Authorities in each State in Australia
Most of the questions posed above can have clear answers and it is neither difficult nor overly expensive to document them. When you have entered into a well documented partnership/syndicate then you can enjoy the sport of racing in the knowledge that everyone enjoys a secure partnership relationship.
The pain comes if you do nothing and later regret it.
Koffels Solicitors & Barristers