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Horse & Law - Issue 3 April 2013

05 April 2013

Written agreements can benefit all parties when buying, selling or leasing horses.

Generally, oral agreements are an effective and popular way to purchase, sell or lease a horse. Because of this many people involved in equine may argue written agreements are unnecessary. However not only can written agreements provide evidence to base a claim or dispute between parties, they also offer benefits to sellers, purchasers, lessees and lessors that are outside of the usual sale and purchase disputes. One such benefit of a written agreement is proving ownership.

 

To demonstrate, ask yourself:

  • How do I own my horse?
  • Do I own it personally or does another entity own it?
  • Can I prove this ownership?

These questions are particularly important if you are an owner of a horse with multiple other people, are in a precarious financial position, or are going through a relationship separation. Just as a house or car, a horse is also an asset. Horses can be owned by you as an individual, jointly, in a Trust, as a partnership, in a syndicate or in a company. Therefore how you own your horse and how you can then prove this ownership is an important consideration.

Horses can be subject to creditors as well as relationship property claims and in these situations (as well as others) it may be necessary to prove how the horse is owned to protect your ownership. A written agreement at the time of sale and purchase or leasing provides a solution. As the parties are named on the agreement, it provides physical irrefutable proof of who owns the horse.

An additional but different example of how a written agreement is beneficial would be in the case of Syndicate. If a syndicate owner is disputing their share of ownership in a horse and refuses to pay their share of the costs, what happens? If the parties had a written agreement, the agreement would provide the required evidence of ownership to enforce payment, as each owner would be named on the agreement. Without an agreement in writing the syndicate exposes itself to a risk of not being able to prove the ownership share. If the ownership share cannot be proven, payment cannot be enforced.

 

Written agreements also provide evidence for circumstances such as:

  • If you are ever accused of not having the legal right to possess the horse.
  • If the horse is ever stolen from you (Police will require evidence of your ownership).
  • When you are trying to insure the horse (insurers may need proof of ownership).
  • If you need to prove you no longer own the horse (for example if a horse causes damage to another person’s property and you are accused of owning it).

Along with written agreements, FEI, ESNZ and breed society registrations could also provide evidence of ownership. However, these types of registrations only show the persons named on the application to register, often these persons will not be the legal owners. Additionally, these registrations also fail to illustrate the seller’s willingness to sell and the purchaser’s acceptance of the ownership. This is particularly important when a horse is alleged to have been stolen. Often in multi-person ownership situations, only one of the owners will be named on the registration for ease of administration. Consequently the registration does not accurately record the true owners or lessors and is of little assistance in an ownership dispute.

 

In summary when thinking about ownership of horses always remember;

  • Horses are assets, they can be subject to (amongst other things) creditor and relationship property claims.
  • You can protect ownership and lease rights in your horse by possessing a written agreement, (sale and purchase or lease agreement) which provides evidence.
  • Think about how you own your horse (ie. personally or in a Trust etc) and whether this method will protect your ownership or lease rights now and in the future.

 

Our next editorial will focus on the liability of vets, farriers and other equine service providers.

 

The Norris Ward McKinnon Equine Team endeavors to write articles that are beneficial to you whatever your involvement with Equine. This issue discusses how written agreements can benefit all parties when buying, selling or leasing horses. The Norris Ward McKinnon Equine Team invites you to submit topics about Equine matters you would like more information on so that we may write pieces useful to you. Please email topics or questions to Alice Nunn.


Alice Nunn is a solicitor at Norris Ward McKinnon. Information in this article should not be a substitute for legal advice. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.