1.3.3 Third Question: Do the members have day-to-day control over the operation of the scheme (whether or not they have the right to be consulted or give directions)?

The answer to this question is “No”.

A. Day-to-day control over the operation of the scheme

The fundamental distinction which underlies the whole of the definition of a managed investment scheme is between:

  1. schemes where ALL the members in fact exercise control over the operation of the scheme by making ALL the decisions and implementing what is agreed; and
  2. schemes where the members contributions are either:

    1. pooled for use as the property of the scheme; or
    2. not pooled but used in a common enterprise that constitutes the scheme;

      with the day-to-day [routine, ordinary, everyday] activities of the scheme being managed or carried out by an operator on behalf of the members (as a group), whether or not they have the right to be consulted or give directions;

the objective assessment in determining day-to-day control being temporarily limited to the point in time when the arrangements are made.    

[See judgements of Lord Sumption in Asset Land v FCA [91], [93], [94], [97], [99] and [102], and Buss JA in Burton v Arcus [82] and [83]].

The day-to-day control test is not about ownership or the legal right to control. It is about whether the right to control is in fact exercised.

  • The purpose of the day-to-day control test is to make the important distinction about the nature of the investment each member of the scheme is making.
  • If the substance is that ALL the members in fact exercise control over the operation of the scheme by making ALL the decisions and implementing what is agreed [actively managing or carrying out the routine, ordinary, everyday activities which comprise the scheme’s operations], then the scheme WILL NOT be a managed investment scheme.
  • However, if the substance is that the members contributions are either pooled for use as the property of the scheme, or not pooled but used in a common enterprise that constitutes the scheme, to produce financial benefits, or benefits consisting of rights or interests in property, and the members (as a group) appoint a person to operate the scheme [with the authority to manage or carry-out the routine, ordinary, everyday activities which comprise the scheme’s operations] on behalf of the group, then the scheme WILL be a managed investment scheme (whether or not they have the right to be consulted or give directions).

Horse racing schemes

Horse racing schemes generally [by practical necessity and in order to comply with the Australian Rules of Racing (ARR) are sufficiently uniform in their basic key elements [structure and modus operandi] to justify the conclusion that any arrangement between 2 or more people (members) to own or lease a racehorse for the purpose of participating in the undertaking of caring for, training and racing it [the horse as a whole] to best advantage for the benefit of the group will, prima facie, satisfy the definition of a managed investment scheme.

The key elements that satisfy the definition are the following:

  1. the members contributions of money or money’s worth are either:

    1. pooled for use as the property of the scheme [typical of partnership or unit trust-based “investment” arrangements]; or
    2. not pooled but used in a common enterprise that constitutes the scheme [typical of co-ownership contract-based “enterprise” arrangements];

      to produce financial benefits, or benefits consisting of rights or interests in property; and
  2. the scheme is operated by a manager and a licensed trainer [with actual possession of the horse (as a whole)] on behalf of the members (as a group), whether or not they have the right to be consulted or give directions.

Consequently, from an operational perspective:

  1. each member’s interest is inseparable from the interests of the other members; and
  2. the right of the members to control over their respective interests is effectively:

    1. subordinated to the rights of the members (as a group) and the authority of the manager and the trainer to operate the scheme on behalf of the group; and
    2. limited to voting on those matters specified in the relevant Owners Agreement or Training Agreement as requiring the members’ approval (by the requisite majority).

Conversely, the members DO NOT have day-to-day control over the operation of the scheme, or their respective interests (in the horse or the scheme in so far as they are different), prospectively viewed from the point in time when the arrangements are made. Practical necessity and the ARR require that they, either expressly or by implication:

  1. appoint a manager and a licensed trainer [with actual possession of the horse (as a whole)] and delegate to them the authority to operate the scheme on behalf of the members (as a group); and
  2. surrender day-to-day control over their interests to the manager and the trainer so that those people can manage the members’ interests in common [the horse as a whole] for the benefit of the group;

whether or not they have the right to be consulted or give directions.

However, a scheme may not possess these characteristics alone. The fact that it may also possess other characteristics such as terms which provide for the members to:

  1. pay their contributions towards operating expenses directly* to the relevant service providers [proportionate direct invoicing and payment of fees and expenses];
  2. be paid their distributions of any income (prize money) directly* via the stakes payment system

[*an alternative to the manager administering these arrangements via a designated scheme bank account];

  1. participate as a group in making decisions (by the requisite majority) relating to specified matters, including the racing of the horse (as a whole) [applying the nonrestrictive modifier statement attaching to the third limb of the definition and the principles established by the case law];

does not take it outside the scope of the definition.

There is no apparent basis upon which any person, including a licensed trainer, who is in the business of establishing or operating such schemes could successfully argue [in any legal forum] that the resultant schemes, prospectively viewed from the point in time when the arrangements were made, are outside the scope of the definition. Any such argument would likely be an artificial construction of the documents to avoid the legislative intention of the statutory provisions.

The need for ALL the members to in fact exercise control over the operation of the scheme by making ALL the decisions and implementing what is agreed would be impractical and a significant impediment to the operation of such schemes which is only overcome by the members (as a group):

  1. appointing a manager and a licensed trainer [with actual possession of the horse (as a whole)]; and
  2. delegating to them the authority to operate certain aspects of the scheme on behalf of the group.

B. Applying the principles relevant to the day-to-day control test to a typical horse racing scheme

How is a typical horse racing scheme designed to operate in practice?

A typical horse racing scheme is designed so that a manager and a licensed trainer [with actual possession of the horse (as a whole)] will operate aspects of the scheme on behalf of the members (as a group).

Practical necessity and the ARR, including the TOR Rules, require that the members appoint both:

  1. a manager, to exercise control on behalf of the group over certain aspects of the scheme (those relating to its legal structure and administration, including dealings with racing officialdom and the trainer) [in accordance with the ARR and the terms of the TOR COA or other agreement adopted by the members]; and
  2. a licensed trainer, to take actual possession of the horse (as a whole) on behalf of the group for the purpose of managing and carrying out the day-to-day [routine, ordinary, everyday] activities required in order to care for, train and race it to best advantage [in accordance with the ARR and the terms of the TOR STA or other agreement adopted by the parties], regardless of:
    1. how contributions towards the scheme’s operating expenses (including horse expenses) are made; and
    2. arrangements for the apportioning and distribution of any income (prize money and owners’ bonuses) earned; and
    3. whether or not the members have the right to be consulted or give directions.

Note: in the case of schemes established as a result of licensed trainers dealing in shares/interests it is likely that the trainer will also act as the manager [even if the trainer is not a member of the scheme]. This is not significant to an analysis of the key elements of the scheme to determine whether or not it satisfies the definition.

The trainer is clearly more than:

  1. a mere agent of the individual members [see Burton v Arcus]; or
  2. a professional adviser who simply provides advice to the members [on what they should do] without exercising control [see Asset Land v FCA].

The trainer is an operator of the scheme with control over the management or carrying out of those activities that make up the art of training [see Racing NSW v Vasili [21] and [22]], the proper performance of which is fundamental to the scheme achieving its purpose.

This is further evidenced by most of the scheme’s operating expenses likely to comprise invoices of either the trainers for services rendered [including materials and products supplied, race entry fees, etc.], or third-party service providers procured by the trainer to provide services in relation to the horse whilst in training, pre-training or on agistment.

If the promoter or operator manages the scheme (or certain aspects of it) on behalf of members (as a group), DOES NOT impute to the members by their agent, the promoter or operator, day-to-day control over the operation of the scheme [see Burton v Arcus [82]].

Consequently, day-to-day control over the operation of the scheme will, prima facie, devolve to the manager and the trainer, as it is those people who will perform “… the acts which constitute the management of or the carrying out of the activities which constitute the managed investment scheme” [as stated by Davies AJ in ASIC v Pegasus. Also see Burton v Arcus].

Conversely, the members DO NOT have day-to-day control over the operation of the scheme whatever their right to be consulted or give directions [confirmed by Byrne J in ASIC v IP Product] – prospectively viewed from the point in time when the arrangements are made [see judgement of Lord Sumption in Asset Land v FCA].

While the Owners Agreement and Training Agreement [both now mandatory under the TOR Rules] set out various powers and duties of the manager and the trainer AND specify that certain decisions cannot be taken by the manager or the trainer without the approval of the requisite majority of the members [e.g. change of trainer, gelding, relocation of the horse to race in another jurisdiction, race entry fee above a specified amount, etc.], this DOES NOT equate to the members having control over the operation of the scheme in the meantime [see judgement of Lord Carnwath in Asset Land v FCA]. There are usually few, if any, other restrictions on the authority of either the manager or the trainer to operate the scheme.

The Owners Agreement or Training Agreement may also include terms which:

  1. empower the manager or the trainer to pursue remedies against a member who is in default of payment obligations; or
  2. restrict the members in dealing with their individual interests [in the horse] or require the sale of the horse (as a whole) if the members holding the requisite majority of interests determine that this be done.

Even if it is proposed, at the point in time when the arrangements are made, that the members will be involved in making the significant decisions relating to the racing of the horse, this will not place the scheme outside of the definition of a managed investment scheme, because the manager and the trainer [as the operators of the scheme] are the people who will be responsible for implementing what is agreed.

Co-ownership

Co-ownership is the most common form of racehorse ownership involving 2 or more people (members). Such arrangements are typically contract-based “enterprise” schemes.

In the case of a typical co-ownership arrangement:

  1. the members acquire and hold their respective ownership interests in the horse as tenants-in-common and agree [either expressly or by implication] to:

    1. participate in a common enterprise the purpose of which is to care for, train and race the horse (as a whole) to best advantage for the benefit of the members (as a group);
    2. contribute to the common enterprise that constitutes the scheme:

      • the right to use their respective interests (in the horse) in the operation of the common enterprise; and
      • money to pay operating expenses, including horse expenses [in the same proportions as the interests held];

        to facilitate their interests being managed in common [the horse as a whole] for the benefit of the group;
    3. apportion the benefits, including owners’ raceday ticketing and the right of the members to receive distributions of income [in the same proportions as the interests held];
    4. appoint a manager and a licensed trainer [with actual possession of the horse (as a whole)] and delegate to them the authority to operate aspects of the scheme on behalf of the group; and
    5. hold their respective interests (in the horse) subject to the terms of the Co-owners Agreement;
  2. each member’s interest (in the horse) from an operational perspective is inseparable from the interests of the other members; and
  3. the right of each member individually to control over their interest (in the horse) is effectively:

    1. subordinated to the rights of the members (as a group) and the authority of the manager and the trainer to operate the scheme on behalf of the group; and
    2. limited to voting on those matters specified in the relevant Co-owners Agreement or Training Agreement as requiring the members’ approval (by the requisite majority).

Furthermore, the member(s) of a co-ownership arrangement holding (a moiety or upwards) fifty per cent or more of the interests may also have a statutory right to apply to the court for an order requiring the sale of the horse and partitioning of the proceeds.

The members do not have day-to-day control over their individual interests (in the horse or the scheme in so far as they are different), prospectively viewed from the point in time when the arrangements are made. Practical necessity and the ARR require that they:

  1. appoint a manager and a licensed trainer [with actual possession of the horse (as a whole)] and delegate to them the authority to operate the scheme on behalf of the members (as a group); and
  2. surrender day-to-day control over their interests to the manager and the trainer so that those people can manage the members’ interests in common [the horse as a whole] for the benefit of the group;

regardless of the right of the members to be consulted or give directions.

Hence the definition is satisfied.

Partnership or unit trust

A similar analysis of a typical partnership or unit trust-based arrangement will support the same conclusions, with the most significant difference with these arrangements in the content of the most MIS regime being that they involve the pooling of members contributions for use in:

  1. acquiring the horse (as whole) as the property of the scheme; and
  2. paying the scheme’s operating expenses.

The role of the manager

The owners or lessees of a racehorse are required to submit themselves to the jurisdiction of the Principal Racing Authority in the state or territory where they propose to race the horse, and to comply with the ARR and any local rules.

Where an ownership or leasehold arrangement has 2 or more members, the ARR require that they appoint a manager .

manager means:

“a person registered with Racing Australia as the manager of a horse owned or leased by a natural person, a group of natural persons, or a Syndicate. Unless established otherwise:

  1. The first named person appearing in the Certificate of Registration or other official ownership or leasing record held by Racing Australia will be deemed to be the manager [subject to AR63(1); and
  2. If a horse is owned or leased by more than one Syndicate, the first named person appearing in the Certificate of Registration or other official ownership or leasing record held by Racing Australia will be deemed to be the manager.

AR.63 states:

“Removal of manager of a horse

  1. Subject to the TOR Rules [and/or a term of the COA, if relevant], a manager of a horse may be removed or replaced from that position by written notice signed by the owners, lessees or Syndicate members representing more than 50% of the ownership of the horse.
  1. A manager of a horse is of their own right [and without separate express authorization by the owners, lessees or Syndicate members] entitled to:
    1. enter, nominate, accept or scratch a horse for any race;
    2. engage a jockey to ride a horse in any race;
    3. receive any prize money or trophy won by a horse;
    4. act for and represent the owners, lessees or Syndicate members in relation to the horse for the purpose of these Australian Rules;
    except that where a provision of the TOR Rules [and/or a term of the STA or the COA, if relevant] specifies a process, requirement, or course of action, that provision or term binds the manager in the event of any conflict or inconsistency with this subrule.
  2. The entry or nomination of a horse for any race must state the name of the manager.
  3. The trainer of a horse who enters, nominates, accepts or scratches a horse is, absent of proof an agreement between the trainer and owners to the contrary, deemed to have done so with the authority of the manager and all other nominees.”

This rule is a practical way of overcoming what would otherwise be impractical and significant impediment to the day-to-day operation of the scheme [a need for unanimity in decision-making and for all the members to exercise control over the implementation of what is agreed]. It ensures that the differing opinions and competing preferences of the individual members of any ownership or leasehold arrangement are manageable, particularly in dealings with the trainer and racing officialdom.

On 1 August 2017, Racing Australia introduced the Trainer and Owner Reform Rules – TOR Rules. The TOR Rules are set out in Schedule 2 of the ARR.

A requirement under the TOR Rules is that the members of a co-ownership arrangement must have an agreement setting out the terms which will govern the legal relationship between them. The terms of the TOR Co-owners Agreement (TOR COA) are deemed to apply [EXCEPT in the case of lead regulator approved syndicates established by licensed promoters, each of which will have its own approved agreement which must comply with the requirements of the ASIC Instrument] UNLESS the members elect either to add to or amend those terms, or to exclude and replace that agreement with another agreement.

The TOR COA includes the following terms which are clear and unambiguous and give the manager the power and authority to manage and operate aspects of the scheme on behalf of the members (as a group):

“3.4 The Managing Owner will manage the Horse Ownership Venture for the benefit of all Co-Owners. That will be on the basis of there being no cost to the Co-owners for the Managing Owner’s services unless otherwise agreed by them by Unanimous Consent”.

“3.5 The Managing Owner must:

  1. use reasonable endeavours to properly manage the Horse Ownership Venture, including using reasonable endeavours to ensure that the Trainer complies with the Trainer’s reporting obligations as set out in clauses 2.2(c) and 2.3 of the STA;
  2. make decisions in the best interests of the Co-owners as a whole;
  3. comply with the Managing Owner’s obligations under the TOR Rules; and
  4. ensure that no funds provided by the Co-owners in respect of the Horse Ownership Venture are applied other than for the purpose of the Horse Ownership Venture”.

“3.6 The Managing Owner can only make the following decisions, and carry out any reasonable actions to effect those decisions, on behalf of the Co-owners with Majority Consent:

  1. approve a scheduled treatment event for the Horse (including veterinary or surgical treatment) which in the reasonable opinion of the Managing Owner is expected to exceed $4000 (including GST);
  2. geld the Horse and/or to provide the consent to surgery for a gelding procedure;
  3. accept or object to a Fees Notice provided by the Trainer (including a decision in respect of any proposed variations to a Fees Notice), provided that if Co-owners with 50% aggregate ownership of the Horse wish to accept, and Co-owners with 50% aggregate ownership of the Horse wish to object to, a Fees Notice (or any proposed variations), the Managing Owner must object on behalf of the Co-owners;
  4. engage a new Trainer;
  5. offer for sale, and/or sell, the whole of the Horse;
  6. pay nomination, acceptance or late acceptance fees in an amount in excess of $10,000 (including GST) for the Horse to contest a race;
  7. relocate the Horse to race in another State, Territory or Country;
  8. retire the Horse;
  9. pay or provide for a discretionary bonus or commission to a jockey or to the Trainer (other than if prescribed by the agreement for Training Services between the Trainer and the Co-owners);
  10. change the Managing Owner of the Horse; and
  11. if the Horse is used for breeding as part of the Horse Ownership Venture, then:

    1. if the Horse is an entire to be stood as a stallion, which stud the Horse should stand at and his service fee each year;
    2. if the Horse is a filly or mare, whether she is to be bred in any given year and if so which stallion the Horse is to be bred to”.
“3.7 The Managing Owner can only make the following decisions, and carry out any reasonable actions to effect those decisions, on behalf of the Co-owners with Special Consent:

  1. if the Horse is a colt or entire, stand the Horse as a stallion, either alone as part of the Horse Ownership Venture or in joint venture or partnership with others;
  2. if the Horse is a filly or mare, use the Horse as a broodmare rather than sell or retire her;
  3. change any of the terms of this Agreement, except that a decision to make Co- owners jointly and severally liable in respect of obligations in connection with the Horse Ownership Venture can only be made with Unanimous Consent”.
“3.8 A decision to borrow funds for the purpose of the Horse Ownership Venture requires Unanimous Consent”.

“3.9 Other than as provided in clauses 3.6 to 3.8, and subject to the obligations of the Managing Owner in clauses 3.4 and 3.5, the Managing Owner can make all other decisions reasonably required for the purpose of managing the Horse Ownership Venture as the Managing Owner sees fit in his or her absolute discretion”.

The role of the trainer

The ARR also require that the horse be trained by a licensed trainer.

trainer” means:

“a person licensed or granted a permit by a PRA to train horses, and includes any persons licensed to train as a training partnership”.

AR.61 states:

“Only horses trained by a licensed trainer to race, official trail or jump out

  1. To be able to be entered for or run in any race or official trial or jump-out, a horse must be trained by a person with a licence to train.
  2. Subrule (1) does not apply:

    1. to a horse entered for a race where the entries close more than 60 days before the advertised date for the running of a race; and
    2. to any other race excepted under the Rules”.

AR.63(4) is also relevant here (see above).

AR.105 states:

“Matters that may affect the running of a horse in a race

  1. The trainer of a horse, or any person that is in control of a horse, that is nominated for a race must:

    1. ensure that the horse is fit and properly conditioned to race;
    2. by nominating time, report to the Stewards any occurrence, condition, surgery or treatment that may affect the horse’s performance in the race where the occurrence takes place, condition is present, surgery is performed or treatment is administered before nomination time;
    3. as soon as is practicable after nomination time and before acceptance time, report to the Stewards any occurrence, condition, surgery, or treatment that may affect the horse’s performance in the race where the occurrence takes place, condition is present, surgery is performed or treatment is administered after nomination time and before acceptance time;
    4. if the horse is accepted for the race – as soon as practicable, report to the Stewards any occurrence, condition, surgery or treatment that may affect the horse’s performance in a race where the occurrence takes place, condition is present, surgery is performed or treatment is administered after acceptance time.
  2. The Owner and/or trainer of a horse must:
    1. as soon as practicable after a race, report to the Stewards anything which might have affected the running of their horse in a race; and
    2. immediately after a race, report to the Stewards:

      1. any loss or breaking of gear which occurred during the race; or
      2. any unusual happening in connection with the race.
  3. Further to subrule (2), if a trainer becomes aware of any condition or injury which may have affected the horse’s performance in the race, the trainer must report the condition or injury to the Stewards as soon as practicable and no later than acceptance time for its next race engagement.

It is also a requirement under the TOR Rules that the owner(s) or lessee(s) and the trainer must have an agreement setting out the terms upon which the trainer will provide training and ancillary services. The terms of the TOR Standard Training Agreement (TOR STA) are deemed to apply UNLESS the parties elect either to add to or amend those terms, or to exclude and replace that agreement with another agreement. The terms of the TOR STA provide for the appointment of a licensed trainer to take possession and control of the horse and to care for, train and race it to best advantage for the benefit of the owner(s) or lessee(s).

The TOR STA includes the following terms which are clear and unambiguous and give the trainer the power and authority to manage and operate aspects of the scheme on behalf of the members (as a group):

“THE RIGHTS AND OBLIGATIONS OF THE TRAINER

2.1 The Trainer agrees to care for, train, stable, feed, exercise and arrange appropriate treatment for the Horse in accordance with the Rules of Racing and to the standard of a reasonable Trainer in the Australian thoroughbred racing industry.

2.2 The Trainer (or an authorised representative of the Trainer) must:

  1. care for and train the Horse in accordance with the Rules of Racing and to enable it to race to the best of its ability;
  2. train the Horse with due care, skill, and diligence with reference to industry practice in the thoroughbred racing industry in Australia; and
  3. periodically and in a timely manner report to the Owner about the welfare, progress, and performance of the Horse, at a minimum and without limitation:

    1. when the Horse enters the Trainer’s stable for training;
    2. when the Horse departs the Trainer’s stable for agistment (including by identifying the place of agistment);
    3. when the Horse transfers to another stable of the Trainer, or interstate, or to another Trainer, or to a selling agent;
    4. when the Horse is nominated for or accepted for a trial or a race;
    5. when the Horse suffers a material injury or illness, requires veterinary treatment, or dies; and
    6. by providing a post-trial or post-race report within a reasonable time of the completion of either.

2.3 A report in relation to any of the matters set out in clause 2.2(c) above may be provided in any comprehensible form including:

  1. verbally in person;
  2. by telephone (including by leaving a voicemail);
  3. in written form (including by post, email, text message or facsimile).

2.4 Subject to clause 2.5, the Trainer has the right to engage a qualified person considered by the Trainer to be appropriate and/or necessary to attend to the Horse, including a veterinarian, farrier, horse dentist, horse chiropractor, horse acupuncturist, or water walker therapist.

2.5 If the cost of any scheduled treatment event for the Horse (including veterinary or surgical treatment) is in the reasonable opinion of the Trainer expected to exceed $2000 (including GST), the Trainer must obtain the approval of the Managing Owner before arranging that treatment.

2.6 The Trainer has the right to nominate, enter, accept, scratch or withdraw the Horse from any race or trial as the Trainer thinks fit, except:

  1. if the Trainer comes to a separate agreement in relation to any of those matters to the contrary with the Managing Owner;
  2. if the amount of a fee associated with the nomination, entrance, acceptance, scratching or withdrawal of the Horse exceeds $2000 (including GST), the Trainer must seek approval from the Managing Owner in relation to its payment. If a Managing Owner does not respond within a reasonable time of that request for approval, the Trainer may proceed and will not be liable for doing so, including in relation to the payment of any fee referred to in this clause.

2.7 The Trainer is not required to nominate, enter or accept in relation to the Horse if, despite having made requests of the Managing Owner to be put into funds for the cost of the relevant nomination, acceptance or entry, that does not occur prior to the time for nomination, entry, or acceptance.

2.8 The Trainer will engage and instruct the race jockey unless prior agreement to the contrary is made between the Trainer and the Managing Owner.

2.9 The Trainer is entitled to accept the instructions of the Managing Owner as representing all Owners, except in relation to the proposed gelding, sale or retirement of the Horse, in which case the Trainer must inform all Owners and obtain confirmation of the consent of more than 50% of the ownership equity of the Horse”.

The role of the trainer is a complex one. The trainer is:

  1. a contracted provider of training and ancillary services (including materials and products), with it being necessary for the trainer to take actual possession of the horse (as a whole) in order to be able to provide the services;
  2. the agent of the owner(s) or lessee(s) when procuring the services of other parties to provide services in relation to the horse while it is in the care and under the control of the trainer, including (without limitation) chiropractic care, dentistry, farriery and veterinary care, transportation, etc.[the trainer may also provide or procure agistment, breaking-in and pre-training];
  3. the authorized representative of the owner or lessee, or manager and all other nominees (if 2 or more owners or lessees), when nominating and accepting the horse for races and in most cases engaging the services of a jockey; and
  4. the person directly responsible under the ARR for notifying the Principal Racing Authority of the location of the horse whilst it is in training and for presenting it at the races in a fit and proper condition to race (including being free of any prohibited substance or race day treatment).

The trainer is also a manager:

  1. responsible for supervising the trainer’s own staff (including foreperson, stable hands, grooms, trackwork riders, racing manager, etc.) and all third-party service providers (including in most cases the jockey) in how they perform their duties and supply their services in relation to the horse; and
  2. in the sense that the trainer is the directing mind of the scheme, with day-to-day control over those aspects of the scheme relating to the care, training and racing of the horse [as a whole] to best advantage, with it being necessary for the trainer to exercise his or her own professional skills, judgment and considerable discretion, when supplying these services and carrying out these activities, including formulating and implementing during each preparation:

    1. a training program [including initial liability for payment of track fees] to bring it to racing fitness ; and
    2. a racing program [including initial liability for payment of most race nomination and entry fees] with the objective of racing it to best advantage;

      notwithstanding any right of the owner(s) or lessee(s) to be consulted or give directions.