Royal Commission into the banks - Advice to Trustee
Phillip Sweeney made this Freedom of Information request to Australian Prudential Regulation Authority
This request has been closed to new correspondence from the public body. Contact us if you think it ought be re-opened.
Dear Australian Prudential Regulation Authority,
The first duty of any trustee is to obey the terms of the trust. If the trustee is a corporate trustee, then it is a duty of every director to acquaint themselves with the terms of the trust and to ensure the corporate trustee executes the trust.
If the corporate trustee administers more than one trust, then the directors must acquaint themselves with the terms of each trust.
This is a duty that cannot be delegated.
If a trustee or a director of a corporate trustee is unsure of how to interpret the terms of a trust (Regulations of the Fund) , then judicial advice should be obtained to resolve any uncertainty.
In the last decade the High Court of Australia has made some important rulings that every director of a superannuation fund trustee should be aware of.
The High Court in Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254 stated at [35]:
“The government considers that the taxation advantages of superannuation should not be enjoyed unless superannuation funds are operating efficiently and lawfully.”
The lawful operation of a superannuation fund requires a trustee to seek judicial advice if there is any uncertainty as to the terms of the trust (Regulations of the Fund}.
Seeking such advice allows the Court to relieve a trustee of a personal liability for a breach of trust action.
This has been confirmed by the High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand[2008] HCA 42; (2008) 237 CLR 66.
If a member or a beneficiary of a superannuation fund in a compulsory superannuation system raises a concern about the interpretation of the terms of a superannuation trust or what class of persons has a beneficial interest in the trust, then the High Court and lower courts have ruled that the onus of proof does not lie with the fund member or beneficiary to substantiate their claim for a benefit, the onus of proof lies with the trustee to repudiate the claim if the trustee honestly believes that the member or beneficiary is misconceived as to their entitlement.
A trustee and a director of a trustee has a statutory duty to act in the best interests of a member or beneficiary of the superannuation trust and seeking judicial advice in cases of doubt is part of this statutory duty.
The cost of obtaining judicial advice can be taken from the fund itself and not out of the trustee’s own pocket.
Therefore any adversarial litigation between a trustee of a regulated superannuation fund must be a last resort and not a first resort.
These ruling by the High Court of Australia are clearly significant for both trustees and fund members.
The document I seek is a copy of an information bulletin or similar letter or document that APRA has circulated to Trustees with a RSE licence advising them of the need not to participate in adversarial litigation with members or beneficiaries without first having sought advice and directions from a court of competent jurisdiction.
This information bulletin may or may not make specific reference to the High Court cases mentioned above.
This FOI request and response may be tendered as evidence to a Royal Commission into the banks.
Yours faithfully,
Phillip Sweeney
Dear Mr Sweeney
I acknowledge your FOI request as set out below. We are processing your request and will respond to you soon.
Kind regards
Ben Carruthers
FOI Officer
-----Original Message-----
From: Phillip Sweeney [mailto:[FOI #1929 email]]
Sent: Monday, 9 May 2016 4:02 PM
To: Freedom of Information <[email address]>
Subject: Freedom of Information request - Royal Commission into the banks - Advice to Trustee
Dear Australian Prudential Regulation Authority,
The first duty of any trustee is to obey the terms of the trust. If the trustee is a corporate trustee, then it is a duty of every director to acquaint themselves with the terms of the trust and to ensure the corporate trustee executes the trust.
If the corporate trustee administers more than one trust, then the directors must acquaint themselves with the terms of each trust.
This is a duty that cannot be delegated.
If a trustee or a director of a corporate trustee is unsure of how to interpret the terms of a trust (Regulations of the Fund) , then judicial advice should be obtained to resolve any uncertainty.
In the last decade the High Court of Australia has made some important rulings that every director of a superannuation fund trustee should be aware of.
The High Court in Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254 stated at [35]:
“The government considers that the taxation advantages of superannuation should not be enjoyed unless superannuation funds are operating efficiently and lawfully.”
The lawful operation of a superannuation fund requires a trustee to seek judicial advice if there is any uncertainty as to the terms of the trust (Regulations of the Fund}.
Seeking such advice allows the Court to relieve a trustee of a personal liability for a breach of trust action.
This has been confirmed by the High Court in Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand[2008] HCA 42; (2008) 237 CLR 66.
If a member or a beneficiary of a superannuation fund in a compulsory superannuation system raises a concern about the interpretation of the terms of a superannuation trust or what class of persons has a beneficial interest in the trust, then the High Court and lower courts have ruled that the onus of proof does not lie with the fund member or beneficiary to substantiate their claim for a benefit, the onus of proof lies with the trustee to repudiate the claim if the trustee honestly believes that the member or beneficiary is misconceived as to their entitlement.
A trustee and a director of a trustee has a statutory duty to act in the best interests of a member or beneficiary of the superannuation trust and seeking judicial advice in cases of doubt is part of this statutory duty.
The cost of obtaining judicial advice can be taken from the fund itself and not out of the trustee’s own pocket.
Therefore any adversarial litigation between a trustee of a regulated superannuation fund must be a last resort and not a first resort.
These ruling by the High Court of Australia are clearly significant for both trustees and fund members.
The document I seek is a copy of an information bulletin or similar letter or document that APRA has circulated to Trustees with a RSE licence advising them of the need not to participate in adversarial litigation with members or beneficiaries without first having sought advice and directions from a court of competent jurisdiction.
This information bulletin may or may not make specific reference to the High Court cases mentioned above.
This FOI request and response may be tendered as evidence to a Royal Commission into the banks.
Yours faithfully,
Phillip Sweeney
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #1929 email]
Is [APRA request email] the wrong address for Freedom of Information requests to Australian Prudential Regulation Authority? If so, please contact us using this form:
https://www.righttoknow.org.au/change_re...
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If you find this service useful as an FOI officer, please ask your web manager to link to us from your organisation's FOI page.
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This e-mail is intended solely for the person or organisation to whom it is addressed, and may contain secret, confidential or legally privileged information.
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Dear Mr Sweeney
Could you please clarify whether you seek:
1. a bulletin or letter that may have been circulated by APRA to all
trustees at the same time (i.e. an industry bulletin); or
2. a bulletin or letter that may have been sent by APRA to
individual trustees at various times.
Kind regards
Ben Carruthers
FOI Officer
-----Original Message-----
From: Phillip Sweeney
[mailto:[FOI #1929 email]]
Sent: Monday, 9 May 2016 4:02 PM
To: Freedom of Information <[email address]>
Subject: Freedom of Information request - Royal Commission into the banks
- Advice to Trustee
Dear Australian Prudential Regulation Authority,
The first duty of any trustee is to obey the terms of the trust. If the
trustee is a corporate trustee, then it is a duty of every director to
acquaint themselves with the terms of the trust and to ensure the
corporate trustee executes the trust.
If the corporate trustee administers more than one trust, then the
directors must acquaint themselves with the terms of each trust.
This is a duty that cannot be delegated.
If a trustee or a director of a corporate trustee is unsure of how to
interpret the terms of a trust (Regulations of the Fund) , then judicial
advice should be obtained to resolve any uncertainty.
In the last decade the High Court of Australia has made some important
rulings that every director of a superannuation fund trustee should be
aware of.
The High Court in Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242
CLR 254 stated at [35]:
“The government considers that the taxation advantages of superannuation
should not be enjoyed unless superannuation funds are operating
efficiently and lawfully.”
The lawful operation of a superannuation fund requires a trustee to seek
judicial advice if there is any uncertainty as to the terms of the trust
(Regulations of the Fund}.
Seeking such advice allows the Court to relieve a trustee of a personal
liability for a breach of trust action.
This has been confirmed by the High Court in Macedonian Orthodox Community
Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian
Orthodox Diocese of Australia and New Zealand[2008] HCA 42; (2008) 237 CLR
66.
If a member or a beneficiary of a superannuation fund in a compulsory
superannuation system raises a concern about the interpretation of the
terms of a superannuation trust or what class of persons has a beneficial
interest in the trust, then the High Court and lower courts have ruled
that the onus of proof does not lie with the fund member or beneficiary to
substantiate their claim for a benefit, the onus of proof lies with the
trustee to repudiate the claim if the trustee honestly believes that the
member or beneficiary is misconceived as to their entitlement.
A trustee and a director of a trustee has a statutory duty to act in the
best interests of a member or beneficiary of the superannuation trust and
seeking judicial advice in cases of doubt is part of this statutory duty.
The cost of obtaining judicial advice can be taken from the fund itself
and not out of the trustee’s own pocket.
Therefore any adversarial litigation between a trustee of a regulated
superannuation fund must be a last resort and not a first resort.
These ruling by the High Court of Australia are clearly significant for
both trustees and fund members.
The document I seek is a copy of an information bulletin or similar letter
or document that APRA has circulated to Trustees with a RSE licence
advising them of the need not to participate in adversarial litigation
with members or beneficiaries without first having sought advice and
directions from a court of competent jurisdiction.
This information bulletin may or may not make specific reference to the
High Court cases mentioned above.
This FOI request and response may be tendered as evidence to a Royal
Commission into the banks.
Yours faithfully,
Phillip Sweeney
-------------------------------------------------------------------
Please use this email address for all replies to this request:
[FOI #1929 email]
Is [APRA request email] the wrong address for Freedom of Information requests
to Australian Prudential Regulation Authority? If so, please contact us
using this form:
https://www.righttoknow.org.au/change_re...
This request has been made by an individual using Right to Know. This
message and any reply that you make will be published on the internet.
More information on how Right to Know works can be found at:
https://www.righttoknow.org.au/help/offi...
If you find this service useful as an FOI officer, please ask your web
manager to link to us from your organisation's FOI page.
-------------------------------------------------------------------
--------------------------------------------------------------------------
IMPORTANT NOTICE:
This e-mail is intended solely for the person or organisation to whom it
is addressed, and may contain secret, confidential or legally privileged
information.
If you have received this e-mail in error or are aware that you are not
authorised to have it, you MUST NOT use or copy it, or disclose its
contents to any person. If you do any of these things, you may be sued or
prosecuted.
If you have received this e-mail in error, please contact the sender
immediately.
Dear Freedom of Information,
This is an example of a Bulletin or brochure published by APRA.
file:///D:/AAAAAAA%20Communication%20Pack/AAAA-%20Royal%20Commission/APRA/APRA%20Publications/APRA_Brochure.pdf
In this document it is stated that APRA promotes safety and
soundness in business behaviour and risk management.
Advising trustees of regulated superannuation funds on the need for
trustee Directors to acquaint themselves with the terms of the
superannuation trusts under their stewardship would be an important
aspect of such promotion. This is a fundamental aspect of the role
of a trustee Director.
The "Insight" documents are bulletins which provides information on
APRA’s main policy initiatives and on key developments in the
financial industries that APRA supervises.
APRA also publishes "Information Papers". For Example
http://www.apra.gov.au/Super/Documents/I...
APRA publishes Standards such as SPS 520 which requires that
Directors have "competence".
An item on any "competence" list would be the need of a
Director to understand the duty of a Trustee to seek judicial advice if there is any doubt as to how to interpret the trust instrument or to how to administer the trust. If a trustee seeks judicial advice then the the Court is able to protect the trustee from a liability for breach of trust.
Therefore the document(s) I seek would be a document published by
APRA such as those listed above as general advice which would apply
to all trustees and not a document that may have only been sent to
one particular trustee or a few trustees at different times
Yours sincerely,
Phillip Sweeney
Dear Mr Sweeney
Please see attached, APRA's Notice of Decision dated 3 June 2016.
Kind regards
FOI Officer
[1]http://www.apra.gov.au/PublishingImages/...
--------------------------------------------------------------------------
IMPORTANT NOTICE:
This e-mail is intended solely for the person or organisation to whom it
is addressed, and may contain secret, confidential or legally privileged
information.
If you have received this e-mail in error or are aware that you are not
authorised to have it, you MUST NOT use or copy it, or disclose its
contents to any person. If you do any of these things, you may be sued or
prosecuted.
If you have received this e-mail in error, please contact the sender
immediately.
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