Australian Turf Club rushes to court to fight sacking by Racing NSW

The directors of Australia’s biggest racing club have rushed to court to fight a move to sack its board and replace it with an administrator by Racing NSW.

The unprecedented action against the Australian Turf Club rocked the state’s racing industry on Monday.

The club’s directors have challenged Racing NSW’s capacity to install an administrator and filed for an emergency injunction in the Supreme Court late on Monday.

Appearing for the ATC’s remaining four board members, Scott Robertson SC told the court the appointment of an administrator by the regulator had been made for an “improper purpose” and was “invalid”.

That was countered by Oliver Jones SC, representing Racing NSW, who said the controlling body had the statutory authority to take such action and had “grave concerns as to the Australian Turf Club’s ability to manage itself”.

The matter was briefly raised in court again on Tuesday and will be determined by a judge on Thursday.

Racing NSW, led by chief executive Peter V’landys, appointed administrator Morgan Kelly of Ernst and Young to run the ATC three months after issuing the club with a show-cause notice due to financial and governance concerns.

“Throughout the show-cause process, the ATC board was repeatedly invited to provide detailed submissions, present its proposed strategy to improve the club’s financial performance, its future solvency and respond comprehensively to concerns regarding corporate governance,” Racing NSW said in a statement.

“Specifically, the ATC board was unable to demonstrate it could develop and implement a strategy to improve the commercial performance of the club, or rectify the serious financial issues. Further, the corporate governance concerns had not been appropriately addressed.”

The court heard Racing NSW was particularly concerned about a $30 million loan the ATC has with the Commonwealth Bank for which it is the guarantor and which is due in late 2026.

The club’s directors have maintained it is solvent and rich in assets including metropolitan racecourses Rosehill Gardens, Canterbury Park and Warwick Farm and other land holdings.

They said the board remained in office and continued to be the lawful governing body of the club.

“The ATC board does not accept that Racing NSW has the legal power to remove or displace the duly appointed directors of the club, or to install an administrator in their place,” the board members said.

“Throughout the show-cause process, the ATC has engaged constructively and in good faith. The club has provided detailed written submissions, extensive financial and strategic material, and independent expert advice addressing the issues raised by Racing NSW.

“The board rejects any suggestion that it has failed to develop or present a coherent strategy to improve the club’s commercial performance or to address governance concerns and does not accept the characterisation of its response in Racing NSW’s statement.”

The ATC board members said they would ask the court to determine whether Racing NSW had any power to appoint an administrator in place of its board and scrutinise the way in which the decision had been arrived at “including questions of predetermination and independence”.

The club has previously defended its financial position, with ATC chairman Tim Hale telling the club’s 11,000 members in an October note that its “financial stability and operational capability are not in question”.

But Racing NSW said it was unconvinced.

It announced that the administrator would report to a committee based to be assembled based on expertise. In a curious twist, Racing NSW said the committee could include members of the board it sought to dismiss on Monday.

“This administration period will provide an opportunity for the ATC to improve its financial performance, address the serious financial issues and develop a robust and best practice long-term strategy for the club, using the best possible skills and expertise,” Racing NSW said.

Racing NSW has placed several other smaller race clubs into administration during the past decade but none the size of the ATC. It also operates Royal Randwick racecourse and the races held at its tracks account for half the state’s multibillion-dollar industry.

Gaming and Racing Minister David Harris said he had sought a meeting with Racing NSW “to understand their next steps”.

“Racing NSW, as the controlling body for thoroughbred racing in NSW, is responsible for registering, licensing and supervising the activities of race clubs,” he said. “As a result this is a matter for the ATC and Racing NSW, not the NSW government.”

ATC members in May voted against a controversial proposal to sell Rosehill for $5 billion and convert the land into a mini-city of 25,000 homes.

The club announced a loss of $2.6 million for the 2024-25 financial year but Hale said the result was impacted by $2 million in costs connected to the unsuccessful Rosehill sale.