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The board of the Australian Turf Club has claimed Racing NSW has lost its way as an industry regulator as the warring parties went head-to-head in a Sydney courtroom.
The ATC, which owns and operates major racecourses in Sydney, launched legal action in the Supreme Court after racing’s controlling body announced on Monday it was removing the club’s board and placing its affairs into the hands of administrator.
Racing NSW chairwoman Saranne Cooke, chief executive Peter V’landys and ATC chairman Tim Hale.Credit: Australian Financial Review
The directors are fighting their dismissal, arguing in court on Thursday that Racing NSW, whose chief executive is Peter Vlandys, had acted beyond its authority in moving to unseat them.
“This is a regulator that has lost its way,” said Scott Robertson SC, appearing for the four remaining members of the ATC board including chairman Tim Hale, who was in court.
“This regulator has taken it upon itself to effectively act as a supervisor for the decisions of my client”, Robertson told the court, saying the dispute seemed to have at least started as a disagreement over the proposed $5 billion sale of Rosehill Gardens racecourse.
The ATC board was split over selling the track, which is owned by the club, with former chairman Peter McGauran having been the most prominent advocate for the plan and Hale and others on the ATC board resisting it.
McGauran stepped down in July, two months after the sale was voted down by club members, and was followed out the door by the resignations of two other directors in September days after the sacking of ATC CEO Matt Galanos.
Racing NSW said it intervened due to serious financial and governance concerns and a breakdown in trust with the leaders of the race club and an erosion in confidence in them to perform their duties.
It opposed the ATC board’s request to suspend the instalment of an administrator until the case can be heard in full in February.
Racing NSW’s counsel, Oliver Jones SC, told the court it was concerned about the ATC meeting its financial obligations during that period and it was “having to prop up the club with tens of millions of dollars of funds”.
“Racing NSW is the most exposed financially to the affairs of the ATC,” Jones said. “Our concern is that this club, under its board directors, has allowed itself to get into a position where it cannot maintain solvency unless large amounts of money are guaranteed by Racing NSW.”
Of particular issue according to the V’landys-led organisation is a $30 million loan the club has with the Commonwealth Bank, which is due in late 2026 and for which Racing NSW is the guarantor.
Jones told the court Racing NSW had a broad suite of powers under the NSW Thoroughbred Racing Act including the authority to appoint an administrator to a race club.
The ATC directors have maintained the club is solvent, with $22 million in the bank and $350 million in property assets, according to its 2024-25 annual report.
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The club is a company limited by guarantee under corporation law and Robertson said Racing NSW had “proceeded under a misapprehension of the scope of its powers”.
“This is a regulator with regulatory functions, not commercial functions,” he said.
He told the court the funding received from Racing NSW was “money earned from my client’s racecourses”.
“It’s not right to say this money is purely voluntary or a matter of largesse from the regulator,” he said.
He rejected as “scurrilous” any suggestion the ATC would conduct a “firesale” of its assets if the board remained in charge until February.
The hearing will resume on Friday.
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