Coronica and Commissioner of Taxation (Taxation)

This matter concerned an appeal by Mr Coronica against a decision by the Commissioner of Taxation to issue a notice of non-compliance and to disqualify him as a trustee of a self-managed superannuation fund. The dispute arose from Mr Coronica's alleged failure to comply with regulatory requirements concerning in-house assets and loans to related parties within the fund, as well as breaches of the sole purpose test. The proceedings were heard by K James SM in the Administrative Appeals Tribunal.

The Tribunal was required to determine whether Mr Coronica, as a trustee with extensive experience as a Certified Practising Accountant, had knowingly contravened provisions of the Superannuation Industry (Supervision) Act 1993 (SIS Act). Specifically, the issues included whether the acquisition of shares in Nominees and the loan of fund assets to himself constituted contraventions of the Act, whether the fund was maintained for a purpose other than the provision of retirement benefits, and whether his accounting practices met the required standards. The Tribunal also had to assess whether Mr Coronica was a fit and proper person to continue as a trustee, considering the nature, seriousness, and number of any contraventions.

The Tribunal found that Mr Coronica played a primary role in managing the fund's investments and accounts. It was held that he knew, or ought to have known, that acquiring shares in Nominees from a related party contravened the SIS Act. Furthermore, the Tribunal concluded that Mr Coronica mixed fund assets with his own, maintained the fund for his personal benefit, and used its assets as an undifferentiated source of personal funding, thereby contravening the sole purpose test and other provisions of the SIS Act. The Tribunal also found significant inaccuracies and inconsistencies in his accounting, demonstrating a serious lack of competency despite his experience.

The Tribunal affirmed the Commissioner's decision to issue the notice of non-compliance and upheld the disqualification of Mr Coronica as a trustee. The Tribunal reasoned that the contraventions were serious and numerous, rendering him not a fit and proper person to hold the position of trustee.