[2024] UKUT 304 (LC)

The training of licenced racehorses requires a licence from the BHA which as conditions of the grant, inspects the training premises and requires adherence to its rules and regulations. Mr Marriott provided extracts from BHA’s guidance relating to licence applications and under the heading ‘Training Yards and Facilities’ it is stated at paragraph 13 that:

A separate regulatory regime (also under the authority of the BHA) exists for the training of point-to-point horses. A copy of the point-to-point regulations dated 2016 were adduced in evidence, and it can be seen that they are not concerned with the suitability of the trainer or the stables in which the horses are kept.

The use of part of the Farm as a licenced racing yard began in 2004 and it was noted by the landlord’s agent in correspondence dated 14 December 2006 that as Mrs Bailey was running a ‘full training yard’ the position should be regularised by means of a licence consenting to this diversification. Mrs Bailey acknowledged in her evidence that she was not in possession of any written confirmation that the landlord had issued a licence to vary the terms of the Farm tenancy. It is not clear from either parties’ evidence when Mr Bailey’s management of the Point-to-Point yard commenced but it is agreed that it was in existence at the material day.

Mrs Bailey was successful in obtaining a trainer’s licence and she surmised that the BHA must therefore have been satisfied that she had 12 months security of tenure. She has no tenancy of her own and Toby Saunders as tenant was prohibited from granting a tenancy to her or anyone else, but as she and Toby are in partnership in the business which occupies the Farm from which she carries on the licenced activity, her assumption may have been correct. Mr Barraclough of the VO put the question of security of tenure in circumstances such as those that existed at the Farm to Annette Baker, Senior Integrity Supervision Manager at the BHA in an e-mail dated 16 April 2024:

The operation of the point-to-point yard did not require any security of tenure. Mr Bailey was not a partner in the partnership, and he used the yard without a tenancy. His occupation was with the permission of the partnership which paid all his bills and received the income.

Mr Marriott also provided a copy of an e-mail from Mr Ross Hamilton of the BHA in response to a query from Mr Marriott as to whether “there is an official BHA directive to the effect that any such arrangement requires the yards to be physically separated and that BHA licenced boxes cannot be used for point-to-pointers and vice versa?” Mr Hamilton responded that:

“The principle under the licencing criteria is that on licenced premises a trainer can only have horses under their care or control that are either in training for running under Rules, temporarily out of training or in their sole ownership free from joint arrangements. Therefore, having Point-to-Point horses on licenced premises that are in the ownership of another person does not satisfy that principle.

And this makes sense, the Point-to-Point regulations cover this issue from a pointing perspective. Horse eligibility (under Regulation 34 iv) is dependent on the horse not having been in the care of a licenced trainer/permit holder under the Rules of Racing for 28 days prior to registration of the Hunter Certificate unless the horse is the property of the trainer or immediate family. In your scenario this means that if the husband is training horses on behalf of others then they will not be eligible to run in Point-to-Point if on licenced premises. They require separate premises.”

Although Mrs Bailey was training horses at the licenced yard under the trading style Caroline Bailey Racing she did not do so through a separate legal entity. Mrs Bailey was a sole trader for the purposes of BHA licencing and was in control of the licenced yard for the purpose of training horses that belonged to others. Copies of her licences from the BHA were included in her evidence. These covered the period from 2016 to 2022, were individual to Mrs Bailey and enabled her to train from the named stables on the licence. All of the income which she received and costs which she incurred in connection with her licenced training activities were entered in the partnership’s accounts. In order to demonstrate the separation between Mrs Bailey’s training activities and the partnership Mr Marriott provided photographs of a cheque book with the account name of C R Saunders t/a Caroline Bailey Racing. In reality this related to an account held and operated by the partnership. I was also shown a photograph of a second chequebook relating to ‘C R Saunders Livery Account’. Income and expenses in connection with the point-to-point yard were also included in the partnership accounts, but Mrs Bailey said in her evidence that the point-to-point training was barely profitable and that her husband had other business interests including a dairy farm. Mrs Bailey explained that it was cost effective for the farm to have one set of accounts and that the equestrian activities were shown as separate items. All the staff associated with the licenced yard were employed by Mrs Bailey (as mandated by the BHA). Mrs Bailey included in her evidence a copy of an employment contract dated 10 August 2020 for a stable lass (apprentice). Mrs Bailey was shown as the employer but there was a proviso that the employer could be:

“…such other person, company or partnership as he/she may from time to time require the employee to work for”.

The place of work was recorded as Holdenby North Lodge. Staff for the point-to-point yard were employed by Mr Bailey but staff were shared where necessary. The wage bill for the two sets of staff was met by the partnership.

Although there are gates between the two yards, both the licenced and point-to-point horses had to traverse the farmyard to reach the shared gallops and the point-to-point horses had to enter the licenced yard to use the horse walker.

In terms of utilities, there is a single supply of each, and they are therefore shared between the Farm and the two yards. Mrs Bailey confirmed in her evidence that the two yards sometimes collaborated in the purchase of feed and bedding for the horses where the items were common to both yards and a discount could be secured for buying in bulk. As the yards have now closed and the equipment has been removed it was not possible at the time of my inspection to discern whether there was any demarcation or signage to differentiate the two yards.

The Appellant’s evidence also included some screen shots of the website for Caroline Bailey Racing. The website is no longer operational but one of the pages is titled ‘The Horses’ with separate links to Point-to-Point and National Hunt (licenced horses). These pages provided details of the training for each and the names of the horses under training. The point-to point page said that point-to-pointers have been trained at the Farm for more than 40 years. A further page headed ‘Meet the Team’ included details and experience of both Mrs and Mr Bailey.

Beyond the training yards the remainder of the Farm is entirely given over to agricultural uses. At the time of my inspection most of the Farm appeared to be used for the cultivation of cereal crops and a small acreage was devoted to the raising of sheep. It was not apparent from my visit that either of the training yards had occupied any areas other than the yard space and the shared gallops but the website mentioned that:

“The schooling facilities are within easy access of the yard, hurdles, small fences schooling tyres, and five larger steeplechase fences. There is also a large outdoor, all weather arena which is used for teaching the young horses to canter and jump. There is an array of poles, fillers, barrels etc to improve their jumping techniques. There is also a horse walker in the yard which can take up to six horses.”