R was responsible for go-karting in NSW and the ACT, and a member of A: [14]

A’s constitution obliged its members to pay on the fees they collected from go-kart drivers in races A approved: [15], [16]

A was Tee of a fund for the construction of new go-kart tracks: [17]

The trust deed empowered A to distribute trust capital and income to benefs, who were its members: [24], [25]

A, as trustee, would loan funds for track construction to the relevant state body. The loans were 5 for 10 years with interest not charged if terms were complied with. On default, the loan was repayable in full plus the interest: [20]

From 2014 R queried A’s management asked for return of funds held on trust for it: [28]

In 2019 the members of A voted to expel R as a member, a default event: [14]

The net assets of the trust were recorded in the annual financial statements of the trust as $1: [33]

The trust’s financial statements were audited and approved by A’s board (and A’s predecessor’s management committee) in the relevant years: [35], [38]

A sought repayment of its loan plus interest. R cross-claimed seeking unpaid distributions: [2]

A lost on both points and appealed.

A said the money it recorded as held in a loan account for R showed what was to be paid to R (and other benefs in R’s position) when he trust vested, and so was not a distribution: [43]

The question or not it was a distribution was pivotal. If it was, it would have to be paid to R on demand: [44], [49]

The primary judge had found that the recording of the loans in R’s favour were distributions, held by A on bare trust and not as part of the track construction trust: [46]

Importantly, no estoppel by convention claim was raised at first instance, and so was not available on appeal: [56]

On appeal, A argued the loan were a liability contingent on the vesting of the trust, though this new argument was no available on appeal: [58], [64]

In any case, the audited accounts recorded the loans as actual liabilities, not contingent liabilities: [68], [69]

There was no evidence that the benefs intended to make a loan to A, and the financial records acknowledged debt to the benefs in the amount of the unpaid distributions: [70]

A’s argument that it intended to accumulate income was unfounded because of what the financial statements showed: (i) the P and L reflected income as distributed to benefs; (ii) the accounts reflected a corresponding liability; and (iii) the trust assets remained $1.00 rather than increasing: [108]

The resolution of A’s directors to approve the accounts in the relevant years gives rise to an inference A resolved to make distributions to the benefs (including R): [138]

There was no error by the primary judge. A’s appeal was dismissed. Costs followed the event: [144], [147]