Olesen v Parker

In the matter of Olesen v Parker, the applicant sought civil penalties against the respondents, the trustees of a self-managed superannuation fund (SMSF), for breaches of the Superannuation Industry (Supervision) Act 1993 (Cth). The breaches included failure to obtain payments on loans to related entities, exceeding the allowable market value ratio for in-house assets, and not preparing written disposal plans for in-house assets. The SMSF had investments in a company, Adzparadox, which was related to the fund, and loans to the company were not repaid, leading to further breaches of the Act. The Australian Taxation Office (ATO) conducted audits and found these contraventions, leading to the disqualification of the respondents as trustees.

The primary legal issues before the court were whether the contraventions identified by the ATO were serious enough to warrant civil penalties under the Act and whether the respondents acted honestly and ought to be excused for their actions. The court had to consider the seriousness of the contraventions, the respondents' awareness of their obligations, and whether they had a reasonable mistake or relied on information provided by another party. The court also needed to determine if the respondents' actions warranted a monetary penalty under the Act.

The court found that the contraventions were serious and that the respondents were aware of their obligations but chose to breach the Act. The court rejected the respondents' argument that they reasonably believed the investments were not in breach of the Act based on advice from an accountant. The court held that Adzparadox was a related party, and the loans to the company constituted in-house assets, which were in breach of the Act. The court concluded that the respondents did not act honestly or have a reasonable mistake and were not entitled to be excused. Therefore, the court ordered the respondents to pay monetary penalties and the applicant's costs. The First Respondent was ordered to pay $35,000, and the Second Respondent was ordered to pay $15,000. Both penalties were to be paid by 24 October 2011, or by such instalments as the District Registrar may allow. The respondents were also ordered to pay the applicant's costs of $5,000 by the same deadline.