Australian Karting Association Ltd v Karting (NSW) Incorporated [2021] NSWSC 1075

Supreme Court New South Wales

Medium Neutral Citation: Australian Karting Association Ltd v Karting (NSW) Incorporated [2021] NSWSC 1075 Hearing dates: 16 August 2021 Decision date: 25 August 2021 Jurisdiction: Common Law Before: Adamson J Decision: (1) Judgment for the defendant on the plaintiff's claim. (2) Judgment for the cross-claimant on the cross-claim, together with interest calculated from 11 October 2018 to the date of these orders. (3) Direct the parties to provide short minutes of order within seven days which set out the judgment sum together with interest calculated by reference to order (2) above. (4) Unless either party makes a written application to my Associate for a different order within seven days, order the plaintiff to pay the defendant's costs of the proceedings, including the cross-claim. Catchwords: CONTRACTS — Whether accelerated payments and back-dated interest clauses of loan agreement amount to a penalty — Alleged default that the defendant ceased to be an Ordinary Member of the plaintiff — Provisions used to punish the defendant — Terms unenforceable as penalty CONSUMER LAW — Unconscionable conduct — s 21 of the Australian Consumer Law — Plaintiff using powers to remove defendant who challenged its administration of trust — Trustee's persistent misrepresentation of the legal position to defendant unconscionable EQUITY — Trusts and trustees — Discretionary trust — Trustee's powers to pay out capital and make distributions of trust property — Trust recorded income from interest and driver levies which it credited to the beneficiaries' loan accounts — Allocation of trust property to the beneficiary's loan account created a bare trust in favour of the beneficiary in the amount set out in loan account — Repayable on demand by the beneficiary — Beneficiary can bring a common law action for money had and received when a trustee admits a debt to the beneficiary in its financial statements COMMERCE – money claims – money had and received — Defendant claimed the return of monies standing to its credit in loan accounts recorded in the plaintiff's financial statements — Plaintiff contended that monies remained part of the trust property – Defendant's cross-claim established CORPORATIONS — Meeting of members — Validity of Special General Meeting — Not necessary to decide whether the Special General Meeting complied with requirements in the Constitution Legislation Cited: Corporations Act 2001 (Cth), ss 203D, 249F, 1305 Australian Consumer Law, s 21 Cases Cited: Adams v Alemite Lubrequip Pty Ltd [1994] NSWCA 1 Arab Bank Australia Ltd v Sayde Developments Pty Ltd (2016) 93 NSWLR 213; [2016] NSWCA 328 Australian Competition and Consumer Commission v Medibank Private Ltd (2018) 267 FCR 544; [2018] FCAFC 235 Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; (2009) 236 FLR 1 B.P. Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Chianti Pty Ltd v Leume Pty Ltd (2007) 35 WAR 488; [2007] WASCA 270 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24 Edwards v Lowndes (1852) 1 El & Bl 81; 118 ER 367 Fischer v Nemeski (2016) 257 CLR 615; [2016] HCA 11 H L Bolton (Engineering) Co Ltd v T J Graham & Sons Ltd [1957] 1 QB 159 Hawkesley v May [1956] 1 QB 304 Hawkins v Clayton (1988) 164 CLR 539; [1988] HCA 15 Kellas-Sharpe v PSAL Ltd [2013] 2 Qd R 233; [2012] QCA 371 MYT Engineering Pty Ltd v Mulcon Pty Ltd (1997) 140 FLR 247 Olsson v Dyson (1969) 120 CLR 365; [1969] HCA 3 Roxborough v Rothmans of Pall Mall Australia Limited (2001) 208 CLR 516; [2001] HCA 68 Saunders v Vautier (1841) 49 ER 282 Category: Principal judgment Parties: Australian Karting Association Ltd (Plaintiff / Cross-Defendant) Karting (NSW) Incorporated (Defendant / Cross-Claimant) Representation: Counsel: J Gooley (Plaintiff / Cross-Defendant) S Snow (Defendant/ Cross-Claimant)