Case: Asgard Capital Management Ltd v Maher [2003] FCAFC 156 ; (2003) 131 FCR 196
Outcome: applied
Not surprisingly, the Trustee submitted that the applicant should not be granted leave. Indeed, the Trustee submitted that even if there had been a breach of reg 6.22, that would not necessarily be a matter that the Tribunal was bound to determine (or ought to determine) having regard to the particular limited nature of its enquiry and the peculiar circumstances of this case. On the other hand, underlying my concern was that if, in the circumstances of this case, reg 6.22 prohibited the Trustee from doing what it did, that is, paying the applicant's benefits into a joint bank account in the names of himself and his wife, then why, on any view, would the decision of the Trustee not to reinstate the applicant's account not be one which raised the issue of whether it was 'unfair and unreasonable': Superannuation (Resolution of Complaints) Act 1993 (Cth), subs 14(2). So understood, review of that latter decision would be within the jurisdiction of the Tribunal: cf., Asgard Capital Management Ltd v Maher [2003] FCAFC 156 ; (2003) 131 FCR 196 at [5] . 10 In Asgard Capital Management Ltd v Maher a Full Court of this Court was called upon to construe the nature and scope of the obligation imposed on a trustee by reg 6.22 in the context of the facts which came before it. Those facts can be shortly stated. The respondent was a beneficiary of the Asgard Independence Plan Superannuation fund which had been established to provide retirement benefits to its members. As at late 1999, the respondent's investment in the fund was $280,000. He instructed his financial adviser to deal with this investment in the following way: $30,000 was to be credited to a joint bank account in the name of the respondent and his wife; $5,000 was to be applied to the purchase of shares in Coles Myer; the balance of $245,000 was to be transferred to a new investment with the trustee. To enable the adviser to carry out this instruction, the respondent signed a blank payment request form (which covered three pages) directed to the trustee. He gave the form to his adviser and left it to him to complete the form in the required manner. It was this act which put the adviser in the position where he could misappropriate the money. He completed the form so that the trustee was directed to pay the whole of the respondent's entitlement into a bank account maintained by the adviser. As directed, the trustee deposited $280,000 into the nominated account. The adviser then transferred $30,000 to his client's bank account. He also purchased $5,000 worth of Coles Myer shares on his client's behalf. He kept the rest of the money (together with $50.65 interest) for himself. 11 Following the discovery of the theft, the respondent lodged a complaint with the trustee alleging that by paying his superannuation entitlement to his adviser, the trustee had acted negligently or illegally. He demanded that the trustee make good his loss. The trustee rejected the complaint. The respondent took his case to the Superannuation Complaints Tribunal. The Tribunal determined to set aside the trustee's decision 'on the grounds that it was not fair and reasonable in its operation in relation to the [respondent] in the circumstances'. In substituting its own decision for that of the trustee, the Tribunal decided that the respondent should be paid a superannuation benefit of $245,050.46. The trustee then brought an 'appeal' on a question of law: see s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth). The question of law that arose was the meaning of the phrase 'must not be cashed in favour of a person other than the member' in reg 6.22(1). The judge who heard the appeal affirmed the decision of the Tribunal. 12 In the course of their reasons, the Full Court said (at [5]): 'Although he did not expressly say so, the judge must have construed the words "must not be cashed in favour of a person other than the member" as prohibiting the payment of a superannuation benefit by the trustee to a member by making that payment not directly to the member, but rather at the member's direction or to the member's authorised agent. The question raised by this appeal is whether this is the correct construction of reg 6.22.'