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”

In the case of a scheme that is:

  1. a partnership or unit trust-based “investment” arrangement, the partners or unitholders [members] 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 collectively; and
    2. pay operating expenses, including horse expenses; or
  2. a co-ownership contract-based “enterprise” arrangement, the co-owners [members] agree to contribute to a common enterprise that constitutes the scheme:

    1. the right to use their individual 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 expenses;

      to facilitate their interests being managed in common [the horse “as a whole”] for the benefit of the 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 for use as the property of the scheme, or not pooled but used in a common enterprise that constitues the scheme, 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” that is owned or leased by the members and to receive distributions of income].