Dear Australian Securities and Investments Commission,

I am lodging a request for documents pursuant to the Freedom of Information Act 1982 (Cth) that relate to the statutory obligation of the Australian Financial Complaints Authority (AFCA) to comply with subsection 1052E(1)(b) of the Corporations Act 2001 and ASIC Regulatory Guide 267 – Oversight of the Australian Financial Complaints Authority

    (1)  If AFCA becomes aware, in connection with a complaint under the AFCA scheme, that:
                     ……….
(b) a contravention of the governing rules of a regulated superannuation fund or an approved deposit fund may have occurred; ………….

AFCA must give particulars of the contravention, breach, refusal or failure to one or more of APRA, ASIC or the Commissioner of Taxation.

The “governing rules” of a Regulated Superannuation Fund consist of the original Trust Deed that constituted and established the fund and all valid amending Deeds read as “one legal document” and include statutory provisions such as Sections 52 and 52A of the Superannuation Industry (Supervision) Act 1993 {SIS Act} {Duty of act honestly) and relevant State legislation.

A trustee should not accept the office of trustee if the retiring trustee is unable to hand over a counterpart of the original Trust Deed (or a copy of the executed Deeds) that constituted and established the trust (fund).

A trust may fail for uncertainty if the trustee is not in possession of the original Trust Deed.

Furthermore, every action taken by the trustee may potentially be a contravention of the governing rules, if a trustee administers a superannuation trust without having possession of the original Trust Deed.

If the original Trust Deed has been “lost”, then a trustee has a duty to have the terms of the origial Trust Deed reinstated by a Court Order based on available extrinsic evidence.

Background

The Senate Economics Reference is currently conducting and inquiry Australian Securities and Investments Commission investigation and enforcement and AFCA has made a submission to this inquiry and included a document titled “Systemic issues insights report Financial year 2021-22” in which case studies related to compliance with the SIS Act and/or SIS Regulations are included.

These case studies related to relatively minor contraventions such as overcharging of insurance premiums and a delay in processing rollover requests by fund members.

This raises a question for the Senate Committee as to whether AFCA is selective in compliance with Section 1052E of the Corporations Act 2001, only referring relatively minor contraventions to ASIC (and/or APRA) and not more serious contraventions that might give rise to a Parliamentary Inquiry as was the case with the Trio Capital Superannuation Fraud.

In recent proceedings in the Federal Court where AFCA was the First Respondent, AFCA became aware that NULIS Nominees (Aust) Ltd (Second Respondent) has been administering a particular Defined Benefit superannuation fund since 1 July 2016 without having possession of the original Trust Deed made on 23 December 1913 that constituted and established this particular Defined Benefit fund that has had several ‘names of convenience’ over the last century.

The provisions of the original Trust Deed that provide a pension benefit to qualifying fund members were amended by an Act of the Parliament of South Australia.

The Attorney-General’s Department of South Australia has confirmed that the Department has sufficient extrinsic evidence on file to allow a Court Order to be obtained to reinstate the terms of the original Trust Deed.

NULIS was requested to given an undertaking to the Court to seek a Court Order to have the terms of the “missing” Trust Deed reinstated, where the cost of doing so would be taken from the fund and would not be a cost to NULIS.

NULIS has refused to seek such a Court Order to protect the welfare of the beneficiaries (members) and such conduct should be sufficient for the Australian Prudential Regulation Authority (APRA) to cancel the RSE Licence of NULIS pursuant to its powers undert Part 17 of the Superannuation Industry (Spervision) Act 1993 – Suspension or Removal of a Trustee of Superannuation Entity.

In this matter, AFCA was provided with a copy of a legal opinion of a former Attorney-General of South Australia that confirmed that male members of a particular Defined Benefit fund constituted and established by a Trust Deed made on 23 December 1913 in the State of South Australia were and are entitled to a life pension if they completed at least 15 years of service while a fund member, with their widows entitled to a survivorship pension.

In Paragraph 35 The Chairman (Attorney-General) states:

“If a man had been 15 years in the company’s service and was retired say, for redundancy, he would be entitled to a pension under these rules, but if he left on his own accord, say, to go to another job he would simply get back his own contributions plus interest.”

In Paragraph 46 The Hon. S.C. Beven asks:

“Where he has been there for 15 years or more and the company retires him because they did not want him for some reason he would immediately become entitled to a pension?

In Paragraph 47 The Chairman responds:

“Irrespective of his age? ---Yes. That is covered by pararaph (d) {In Regulation 29}.

There are male fund members who retired before 1 July 2016 before the Trust Estate (fund assets) were transferred to the control of NULIS and there are male fund members who retired or were retired by the company on or after 1 July 2016.

For the purpose of this request for documents it is only necessary for AFCA to had considered the benefits paid by NULIS to male fund members on or after 1 July 2016 when NULIS had accepted the office of trustee.

NULIS does not pay a pension to these male fund members as required by Regulation (Rule) 29. Instead, NULIS pays a lump sum benefit worth approximately 20-25% of the value of the pension benefit based on average male life expectancy.

NULIS should comply with Section 29QB of the SIS Act and SIS Regulation 2.38 and make a copy of the original Trust Deed and copies of all amending Deeds available for download on the public section of its website so that male fund members and their widows can check on their superannuation entitlements, however, for the last decade NULIS has not complied with these public disclosure requirements.

NULIS is unable to comply with Section 29QB of the SIS Act and SIS Regulation 2.38 since NULIS does not have possession of a counterpart of the original Trust Deed made on 23 December 1913 (or a copy of the executed Deed).

The purported lump sum benefit formula first appears in a set of purported Rules dated 18 August 1985, that were attached to a purported amending Deed dated 28 August 1986 that bears the signature of only one Director of the company, instead of bearing the signatures of a majority of the Directors as required by the Power of Amendment reserved in the original Trust Deed.

Therefore, the purposed “Rules” dated 18 August 1985 are invalid. They are also invalid for other reasons.

The opinion of a former Attorney-General of South Australia should be sufficient justification for APRA to conclude that a contravention of the governing rules may have occurred with respect to the payment of benefits by NULIS on or after 1 July 2016.

The document or documents I seek is/are any correspondence from AFCA to ASIC that makes mention of NULIS Nominees (Aust) Ltd not having possession of a counterpart of the original Trust Deeed (or an executed copy) made on 23 December 1913. The correspondence may or may not make mention of the refusal of NULIS to given an undertaking to the Federal Court to seek a Court Order to reinstate the terms of the original Trust Deed based on extrinic evidence held by the Attorney-General’s Department of South Australia.

The search period is from 20 May 2021.

Yours faithfully,

P.C. Sweeney