An interesting postscript to the running of last year’s Cox Plate won by the 3yo colt ‘Shamus Award’ involved the claim by the Australian Taxation Office for payment to it of the $900,000 prizemoney.
One of the two owners registered with Racing Victoria was Sean Buckley, founder of the Ultratune business, and whom the Tax Office asserted owed $11m in unpaid tax.
Shortly after the running of the Cox Plate and before the prizemoney had been distributed the Tax Office issued a garnishee notice to Racing Victoria under the Taxation Administration Act directing Racing Victoria to pay the prizemoney directly to the Tax Office.
A company associated with Sean Buckley, Ultra Thoroughbred Racing Pty Ltd, instituted Victorian Supreme Court proceedings seeking orders to prevent this.
The grounds of claim by Ultra Thoroughbred Racing Pty Ltd were that it was the true owner of the share in the horse and that Sean Buckley had merely provided his name for racing registration purposes, in particular to act as the managing owner.
Evidence relied upon by Ultra Thoroughbred Racing Pty Ltd included:
Ultra Thoroughbred Racing Pty Ltd had provided the purchase monies for the share in the horse when it was acquired;
Ultra Thoroughbred Racing Pty Ltd had paid all expenses in connection with the horse;
Income and expenses relating to the horse had been recorded in the tax returns of Ultra Thoroughbred Racing Pty Ltd;
In 2005 a written agreement had been entered into between Sean Buckley and Ultra Thoroughbred Racing Pty Ltd which specified that any revenue from horses acquired by the company but registered in Sean Buckley’s name belonged to the company and Buckley had no entitlement to such monies;
When the horse was registered with Racing Victoria the bank account details of Ultra Thoroughbred Racing Pty Ltd were noted on the registration form for receipt of any prizemoney, rather than Sean Buckley’s personal bank account details.
Based upon the above, the Court was satisfied that Ultra Thoroughbred Racing Pty Ltd was the beneficial owner of the share in the horse and not Sean Buckley personally.
The Tax Office had sought to rely upon a provision in the Racing Victoria Rules which specified that:
“The manager of a horse shall, alone of the joint owners, lessees or syndicate managers be entitled to receive any prizemoney or trophy won by such horse.”
The view of the Court was that:
“The provision entitling the manager to receive any prizemoney alone of the joint owners does not affect the beneficial ownership in the prizemoney of the joint owners upon the entitlement arising. The clause contemplates joint ownership and, no doubt for convenience, provides that one of the joint owners is entitled to receipt of the prizemoney. A function of such a clause is to ensure that payment by Racing Victoria to the manager acts as an effective receipt and discharge of any obligations it would otherwise have to make payment to those who may be entitled to the winnings. It does not purport to alter the entitlement which the owners may have to the winnings immediately.”
Therefore, the Court held that the garnishee notice issued by the Tax Office was invalid and Racing Victoria was entitled to pay the prizemoney to Sean Buckley.
If you have any queries about this case or racing matters generally please do not hesitate to contact Michael Bishop of our office. Michael has acted for a number of participants in the racing industry including trainers, breeders & companies involved in the establishment of large scale horse racing clubs. Michael maintains a keen interest in racing as an owner of thoroughbred and harness horses, as a breeder and as a longstanding member of the Victoria Racing Club.
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