Who Re­ally Owns Your Horse?

Ladies in Racing - - Contents -

One of the is­sues we con­stantly face is the lack of un­der­stand­ing of the Per­sonal Prop­er­ties Se­cu­rity Act 2009 (Act) and its ef­fect on many peo­ple in the horse in­dus­try. This Act was in­tro­duced in 2012 and has pro­found ef­fect on the le­gal con­cept of “own­er­ship” of the horse when your horse is in the pos­ses­sion of some­one whose busi­ness fails. This Act is com­plex and goes against the com­mon un­der­stand­ing of what own­ing your own horse means for you es­pe­cially if your horse is fre­quently in some­one else’s pos­ses­sion. The ef­fect of the Act cov­ers all per­sonal prop­erty that is not land. The dif­fi­culty comes with re­spect to horses when the “owner of the horse” sends the horse to an­other prop­erty such as a trainer or an ag­ist­ment farm and no longer re­tains cus­tody. Did you know that while your horse is on some­one else’s prop­erty, if that per­son be­comes the sub­ject of fi­nan­cial dif­fi­cul­ties your horse may be deemed an as­set of their prop­erty or busi­ness and be seized as part of the debtor’s as­sets to be sold to dis­charge the debt? We give you the fol­low­ing ex­am­ple: Amy sends her horse to Brid­get who is a trainer. The horse stays with Brid­get at her train­ing com­plex for the du­ra­tion of prepa­ra­tion and rac­ing. Un­known to Amy, Brid­get is suf­fer­ing fi­nan­cial dif­fi­culty. Brid­get has bor­row­ings with Com­mer­cial Bank which has a fixed and float­ing charge over the non-land as­sets of Brid­get’s rac­ing com­pany. Com­mer­cial Bank then reg­is­ters its in­ter­est on the Per­sonal Prop­erty Se­cu­ri­ties Reg­is­ter (PPSR). While Amy’s horse is at Brid­get’s sta­ble, Brid­get de­faults on her loan and Com­mer­cial Bank ap­points a re­ceiver/man­ager and seizes the as­sets of Brid­get which it has reg­is­tered on the PPSR. The horses (in­clud­ing Amy’s horses) which are on the prop­erty, may be­come in­cluded as the as­sets seized by the bank. Amy then has to ac­tu­ally prove the own­er­ship of her horse and that she as a greater “pri­or­ity” than Com­mer­cial Bank, on the reg­is­tra­tion on the PPSR. De­pend­ing on the cir­cum­stances this may be­come prob­lem­atic and with­out clear proof as to reg­is­tra­tion, own­er­ship and pri­or­ity, Amy may well lose her horse to the claim of Com­mer­cial Bank. The process of reg­is­ter­ing your horse or any in­ter­est in the horse the PPSR is rel­a­tively sim­ple and in­ex­pen­sive. It is im­por­tant to un­der­stand the ef­fect of this leg­is­la­tion, not only in re­la­tion to the own­er­ship of your horse but also by us­ing this Act to gain se­cu­rity with re­spect to debts in­curred to you by your clients. Through your con­tracts you may have an in­ter­est or a right to sell a horse should your client not pay their debts. In sum­mary:

1. The PPSA cap­tures all per­sonal prop­erty in­clud­ing live­stock. 2. While you may be the “owner” of the horse, if your horse be­comes the sub­ject of com­pet­ing se­cu­rity in­ter­ests on the PPSR, and you do not have “pri­or­ity”, then this claim may be ir­rel­e­vant in the eyes of the law. 3. Se­cur­ing your in­ter­est on the PPSR is cheap and easy to do. 4. Never as­sume you are not af­fected by the PPSA – if your work in­volves horses mov­ing on to a third-party’s prop­erty then you are af­fected by the PPSA. 5. Your con­tracts need to en­sure that you are pro­tected by the PPSA and that your in­ter­est in the horse as owner is pro­tected and as pri­or­ity. This area of law is un­tested to many peo­ple, but as a far reach­ing ef­fect es­pe­cially in the Thor­ough­bred in­dus­try where many peo­ple are en­trusted with your horse. Re­mem­ber if your horse is mov­ing off your prop­erty you should pro­tect your in­ter­est in it. To be sure reg­is­ter.

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