A trustee's resolution to 'distribute' an asset revaluation reserve to named beneficiaries constitutes a valid exercise of a power to 'advance or raise' and 'pay or apply' capital or income, even where the trust holds no cash and the distribution is effected solely by crediting a loan account. The availability of such a power does not depend on the trustee holding cash of the relevant amount. A covenant to pay on demand creates an immediate cause of action regardless of whether demand has been made, and clause 7(a)-type acceleration provisions in a deed of charge do not displace this rule. A directors' declaration in financial statements recording a debt constitutes an acknowledgment under s 54 of the Limitation Act 1969 (NSW) even where the creditor is a director, provided the declaration is signed by disinterested directors and the creditor-directors were precluded from voting. A general power of variation expressed to operate 'notwithstanding anything to the contrary' overrides a specific power to alter the vesting day, but a proviso protecting trusts relating to income derived before the date of variation precludes a retrospective alteration of the vesting day.
The full text is available to signed-in members, including the 12 later cases that cite this judgment.
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