1.3.2 Second Question: Are any of the contributions to be pooled, or used in a common enterprise, to produce financial benefits, or benefits consisting of rights or interests in property, for the people (the “members”) who hold interests in the Scheme (whether or not as contributors to the scheme or as people who have acquired interests from holders)?

The answer to this question is “Yes”.

How the contributions are “pooled”, or “used in a common enterprise”

The members’ contributions of money or money’s worth are either pooled for use as the property of the scheme, to produce financial benefits or benefits consisting the rights or interests in property, in the case of a scheme that is:

  1. a partnership or unit trust-based “investment” arrangement, by the members [partners or unitholders] agreeing to contribute money or money’s worth to or on behalf of the scheme to facilitate their pooled funds being used to:

    1. acquire the horse (as a whole) for use as the property of the scheme and the benefit of the members (as a group); and
    2. pay the scheme’s operating expenses, including horse expenses; or
  2. a co-ownership contract-based “enterprise” arrangement, by the members [co-owners] agreeing to contribute to a common enterprise that constitutes the scheme:

    1. the right to use their respective interests (in the horse) in the operation of the common enterprise; and
    2. money [in the same proportions as the interests held] to pay the operating expenses, including horse expensesto facilitate their interests being managed in common [the horse as a whole] for the benefit of the members (as a group).

The fact that the members may agree to:

  1. making their ongoing monetary contributions to a designated bank account administered by the manager to facilitate payment of the scheme’s operating expenses; or
  2. each member being invoiced directly by and paying directly to the trainer and other third-party service providers their respective proportions of operating expenses;

is not significant in determining the nature of the contributions or the scheme. Regardless, the members contributions are either “pooled” [in the case of a partnership or unit trust-based arrangement], or “used in a common enterprise” [in the case of a co-ownership arrangement], to produce “financial benefits” [distributions of income (prize money), if any], or “benefits consisting of rights or interests in property” [the right to participate in the activity of racing the horse (as a whole), owned or leased by, the members, and to receive distributions of income].