NSW Court Cites “Unconscionable” Behaviour

The Supreme Court of NSW has made decisions in favour of Karting NSW in matters heard last week relating to funds owed to and from Karting Australia.

Karting Australia had made claim on monies said to be outstanding on three loans with Karting NSW, while Karting NSW made a cross-claim for the return of monies (driver levies) it was obliged to collect for the Track Development Fund prior to its expulsion from Karting Australia.

The court ruled in favour of Karting NSW on both claims, and ordered KA to pay KNSW’s costs of the proceedings, including the cross-claim.

The outcome flags potential danger for Karting Australia. Under the current trust structure, it seems that other states could also lay claim to their share of monies contributed to the Track Development Fund.

The court was critical of Karting Australia in a number of areas. Extracts from the Judgment are below.

  • the full judgment can be found on the NSW Case Law website HERE

“Karting Australia obviously regarded Karting NSW as a troublemaking dissenter and appeared to want to make an example of it to other Ordinary Members so that others would not follow. Karting Australia’s desire to ostracise and punish Karting NSW so as to deter others can be inferred from… Karting Australia’s letter of 17 September 2018.”

“By expelling Karting NSW as an Ordinary Member (whether the expulsion was valid or not), Karting Australia was using its powers to get rid of the one voice which was challenging its legal errors.”



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“By persistently misrepresenting the legal position to Karting NSW, Karting Australia behaved in a manner which I am satisfied was unconscionable.”

It should be noted these observations are aimed at the organisation, not the people within it.

“This is not to say that any individual involved behaved unconscionably” the Judgment continued.

“…the individuals through whom Karting Australia acted were not malevolent or consciously engaging in trickery or deception or active thwarting of Karting NSW’s legal entitlement.”

“Karting Australia may be found to have acted unconscionably, even though the humans through whom it acted, may have honestly believed in the correctness of their stated legal position.”



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