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Equine Law Q&A – What should the equine community consider

Equestrian Community Queensland

As last week’s Equestrian Queensland, Equestrian Community Hub Q&A presenter, Commercial Litigation Lawyer, Georgia Taylor, takes a look at our frequently asked questions from the equine community.

 

Insurance

There are a number of important insurance policies that members of the equine community should carefully consider, no matter your involvement either as a professional or enthusiast. However, the following policies are the most vital:

  1. public liability insurance;
  2. loss of income;
  3. permanent disability.

If you’re a member of your equestrian’s governing body (i.e. Equestrian Queensland) you should review the Equestrian Australian national insurance program and see which top-up options may be available through your membership.

Professional Athletes

Riders, coaches or anyone that practices as an athlete within the equine industry, should consider insurance for loss of income and/or permanent disability.

Both insurances can be accessed through superannuation funds or obtained privately through an insurance broker. It’s common for a superannuation fund to attach a loss of income or permanent disability insurance policy to your superannuation fund, however, this does not necessarily extend to a dangerous sport, such as equestrian.

It is important you contact your superannuation fund to determine what your level of cover does provide for. An insurance broker or legal practitioner can review your policies and provide you with adequate advice on if you are appropriately covered. If you’re not, you will be able to obtain advice on what cover you should be looking to take out.

Property Owners

The second type of insurance policy which is important within this field is public liability insurance.

An off-the-shelf home and contents insurance policy will generally not cover any business that is conducted on a property.

Whether you’re a coach who has riders attend your property, you’re running an agistment business, or you’re a professional trainer, your standard home and contents public liability policy isn’t underwritten to assume the liability of running these types of activities on your property.

You may need to consider a policy commonly referred to as farm insurance. Farm insurance is designed to provide cover for a range of risk protection, with peace of mind and financial protection against an array of insured events, including equine and stud stock.

Purchase and Sale Contracts

Purchase and Sale Contracts can frequently lead to litigation if not drafted correctly or done at all. There are three main areas that are either commonly disregarded or frequently litigated over, these include:

  • Jurisdiction of sale
  • Disclosure
  • Risks associated with purchase

Jurisdiction

The jurisdiction of the purchase is often disregarded as when you are purchasing a horse, you don’t necessarily consider what would happen if a dispute ensues. However, if a dispute does occur it is necessary to be able to determine where the purchase (i.e. contract) took place as this will determine the laws that apply to any Court action.

For example, if a Queensland buyer purchases a horse from a Victorian seller, the horse is located in Victoria, the money is transacted in Victoria, therefore it is likely that laws of Victoria will apply.

You can choose to stipulate in your contract which state or territory you want the contract to be bound by.

The main reason to do this is for convenience. If you’re located in Queensland and need to proceed with a dispute in another state or territory, this means you will need to hire a lawyer, and potentially counsel, in that jurisdiction and travel to the location for Court hearings in relation to the matter.

This can be an expensive process which will only add to an otherwise expensive challenge you have in proceeding with litigation of a sale contract.

Disclosure

The most litigated topic in relation to purchase and sale contracts is the non-disclosure of a material fact regarding the horse from a seller.

If you’re a seller, you must disclose all possible information to the buyer about the horse, including all details regarding its temperament and medical history. The more information you can provide, will mitigate the risk of the buyer being able to sue for damages for misrepresentation should something unfortunately go wrong with the sale.

For buyers, the general contractual principal is ‘buyer beware’.  As a buyer you need to do your due diligence and ensure that what the seller has presented the animal to be is true. This can include completing a vet check, flexion testing, blood work and x-rays, should the purchase price allow for these checks to be undertaken.

The buyer must have the consent of the seller to perform any veterinary checks on the horse and the seller (and if possible the buyer) should be present for any examination.

If you’re concerned at all about the horse’s temperament or previous medical history, then it is critical you get this checked prior to entering a purchase and sale contract, especially if you’ve been provided disclosure by the seller as to any issues.

Risk

When the risk passes from the seller to the buyer is often misunderstood or disregarded. Many buyers assume that the risk passes to the buyer when the money hits the sellers bank account, or when the horse is in the buyer’s possession.

Both these scenarios can be correct depending on what the contractual arrangement is.  In general, case law supports that the risk of the horse passes from the seller to the buyer upon payment of the funds. That is the consideration that forms the contract.

This is something that needs to be considered depending on your unique circumstances.

The best way to mitigate this risk and ensure both parties agree on when the risk passes from seller to buyer is to have the term stipulated in a written contract.

Agistment Agreements

Agistment agreements are one of the most common contractual arrangements in the equine industry. For horse owners and owners of agistment facilities, it is important for all parties involved to understand what their obligations are to the horse to ensure a successful collaborative working relationship between property owner and horse owner.

There are three different types of agistment contracts. These include:

  • Self-care
  • Part care
  • Full care

If you’re a professional trainer, then training will either be additional or inclusive based on the agreement made with the owner of the horse.

Self-care and part care arrangements tend to require more clarity within the agreement as to who will be responsible for which duties and how and when will these be performed.

What should be included in an Agistment Agreement?

  • Date of agreement
  • Address of property along with agistment business name, contact details and ABN
  • The property location, size and feed type
  • Insurance held by both parties
  • Facilities
  • Level of care agreed upon
  • Access rights for the animal owner
  • Fees
  • Type, quantity and timing of feed and supplements
  • Payment schedule and method of payment
  • Communication procedures
  • Veterinary call out procedures
  • Responsibility for losses
  • Dispute resolution clause
  • Right of lien
  • Training schedule (if applicable)

These terms can be negotiated and agreed upon between the agistment property owner and the horse owner so that both parties know that the horse is going to receive the appropriate care.

What happens if a horse owner does not pay their agistment fees?

Without an appropriate Agistment Agreement there is very little that can be done. It may be the case that the agistment owner needs to approach the Court to obtain permission to either sell the horse to recoup costs or pursue the owner for any damages that may have been suffered as a result of the actions or negligence of the horse owner. Which of course, along with the additional costs of faring for the horse during this process, is often unequitable for the owner of the property to pursue.

How can Attwood Marshall Lawyers help?

With an experienced team who understand the equine industry and laws applicable to the equine industry, we can offer a comprehensive service, whether that be drafting buy and sell contracts or agistment agreements, handling compensation claims for injured jockeys or staff, providing taxation advice and ATO Racing Industry Audits, and business structuring for breeders and owners and dispute resolution.

For advice and guidance, contact department manager, Amanda Heather, on direct line 07 5506 8245, email aheather@attwoodmarshall.com.au or free call 1800 621 071.

 

Watch Georgia’s video here:

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Georgia Taylor

Georgia Taylor

  • Lawyer
  • Commercial Litigation
  • Direct line: 07 5506 8253
  • Mobile: 0423 842 969