Cover image courtesy of The Image Is Everything
After two days of deliberation, on Friday the Australian Turf Club (ATC) successfully stalled the appointment of an administrator, after the NSW Supreme Court ruled there was no persuasive evidence the club faced imminent insolvency.
The decision followed a two-day hearing, culminating in a significant legal win for the ATC, with Justice François Kunc granting an injunction preventing Racing NSW from placing the club into administration until a full Supreme Court hearing scheduled for February 18 and 19, 2026.
Racing NSW’s case to appoint an administrator hinged on the belief that the ATC had not done enough to improve the club’s commercial performance or resolve serious financial issues, after issuing the club with a show-cause notice in September.
Earlier in the week Racing NSW announced they would remove the ATC board and install an administrator. In response, the ATC sought an injunction, arguing Racing NSW does not have the legal authority to force the club into administration.
Justice Kunc said he would extend the injunction that had been put in place earlier in the week, meaning the ATC’s directors will remain in control until the court hands down a final decision.
An overreach argument
In outlining the ATC’s position, ATC’s legal counsel Scott Robertson argued Racing NSW had exceeded its regulatory powers, suggesting the move was driven by a breakdown in the relationship between the two bodies following disagreements over the proposed sale of Rosehill racecourse. The sale was ultimately rejected by ATC members in May.
“We say this is a regulator that’s lost its way in that it’s failed to understand the scope of its functions,” Robertson told the court.
“It is principally a regulator, and this regulator has taken it upon itself to act as a supervisor of commercial decisions for our client… which goes beyond its scope.”
“It (Racing NSW) is principally a regulator, and this regulator has taken it upon itself to act as a supervisor of commercial decisions for our client (ACT)… which goes beyond its scope.” - Scott Robertson
Robertson further argued the decision to appoint an administrator had been made for an “improper purpose”.
“The purpose for which this power is purportedly exercised is foreign and beyond the powers conferred on this particular regulator… there is a fundamental misunderstanding on the part of this regulator as to the power and scope of its functions.
“The regulator is seeking to take (control) away from duly elected controllers.”
Scott Robertson | Image courtesy of University Chambers
Racing NSW make a case based on the Thoroughbred Racing Act
Counsel for Racing NSW, Oliver Jones SC, countered that the Thoroughbred Racing Act required the regulator to act “in the public interest and the interest of the horse racing industry as a whole in New South Wales”.
The Thoroughbred Racing Act 1996 is currently under the Hazzard review.
Jones argued Racing NSW differed from other regulators due to its broader statutory responsibilities.
He stated that Racing NSW was a regulator unlike others “in the sense that its statutory functions include not just a requirement to enforce the law or regulate what people are doing, but in fact to further the commercial aspects of the horse racing industry’ for its ‘betterment and welfare’.”
“... it's (Racing NSW) statutory functions include not just a requirement to enforce the law or regulate what people are doing, but in fact to further the commercial aspects of the horse racing industry’ for its ‘betterment and welfare’.” - Oliver Jones
Jones also raised concerns about Racing NSW’s own financial exposure, pointing to its role as guarantor on a $30 million loan the ATC must repay to the Commonwealth Bank by October 10 next year. He said refinancing talks had not advanced sufficiently.
Administration, he argued, was relevant because it “goes to how Racing NSW’s money is deployed”, considering the ATC received 77% of its revenue from the regulator - important to note that’s revenue from wagering largely generated by the ATC. When questioned on urgency, Jones told the court the club faced immediate financial risks.
He said the ATC had “financial obligations occurring… that may push it into insolvency”.
Jones also criticised the ATC’s $5 million annual capital expenditure budget as “grossly inadequate”, suggesting delays could expose the club to safety risks at its four racecourses due to sub-standard maintenance.
Oliver Jones | Image courtesy of Eleven Wentworth
He added that the proposed administrator, Morgan Kelly of Ernst & Young, brought extensive hospitality experience - an area accounting for the remaining 23% of the ATC’s revenue.
The ATC’s counsel Robertson rejected that characterisation, describing it as “misleading in several respects”.
“It’s not right to say that’s the regulator’s money being showered on the club,” Robertson said. “It’s money earned at my client’s events and my client’s racecourses.”
Racing NSW push for continuance
During Friday’s proceedings, Jones sought orders allowing Morgan Kelly access to the ATC’s financial records “to begin his work”, despite the injunction having been granted. That request was refused.
Racing NSW’s rationale for appointing an administrator centred on concerns about insolvency risk. Counsel for the regulator, Oliver Jones SC, told the court Racing NSW did not want to wait until the club became insolvent.
“What we don’t want to do is wait until this club is actually insolvent. The damage is being incurred now… we want our administrator in so this business can be fixed,” he said.
Justice Kunc also rejected Racing NSW’s attempt to make ATC directors personally liable for damages, as well as a request for the club to hand over its financial documents ahead of the February hearing.
The final summation
In his summary on Friday, Justice Kunc said he was satisfied the ATC could continue operating over the next nine weeks without an administrator. He noted the club had approximately $29 million in cash reserves and no immediate obligation to refinance a $30 million loan.
He also said he did not believe Racing NSW would withdraw its loan guarantee, given the regulator ultimately wanted the club to survive.
“There is no persuasive evidence that the club will not be able to hold those events... as opposed to if [the administrator] was in control,” Kunc said, noting the ATC will host around two race meetings per week between now and February.
Justice Kunc said the injunction was for a limited period only, but added the board’s ongoing efforts to improve the club’s financial position “should not be interrupted” by the appointment of an administrator at this stage.
In addition, the court ruled the ATC is permitted to fill a member-elected vacancy on its board.
“The Board of the Australian Turf Club welcomes today’s decision and will now continue to work diligently and collaboratively with all stakeholders to continue normal racing and Club operations,” ATC chairman Tim Hale said in a statement.
