Re Care Super Pty Ltd (No 2) - [2021] VSC 854

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2021 03963

IN THE MATTER OF AN APPLICATION BY CARE SUPER PTY LTD (ABN 91 006 670 060) (IN ITS CAPACITY AS TRUSTEE OF CARE SUPER (ABN 98 172 275 725))

BETWEEN:
CARE SUPER PTY LTD (ABN 91 006 670 060) (IN ITS CAPACITY AS TRUSTEE OF CARE SUPER (ABN 98 172 275 725))	Plaintiff

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JUDGE:	LYONS J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 December 2021
DATE OF JUDGMENT:	20 December 2021
CASE MAY BE CITED AS:	Re Care Super Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2021] VSC 854

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EQUITY – Judicial advice – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 54.02 – Trust Deed provided for trustee to be remunerated for the bona fide provision of services to the Fund on such basis as the trustee determines to be ‘fair and reasonable’ – Whether trustee justified in determining a fair and reasonable fee for services including by reference to a risk that penalties may be imposed under Commonwealth legislation for which the trustee cannot be indemnified under the Superannuation Industry (Supervision) Act 1993 (Cth) ss 56(2) and 57(2) – Whether the trustee satisfied the Court to a reasonable degree of satisfaction that the exercise or the proposed exercise of the power under the remuneration clause was not improper for the purpose of giving judicial advice – Whether the trustee satisfied the Court to a reasonable degree of satisfaction that the exercise or proposed exercise was consistent with the judicial advice sought – Advice provided.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms D. Hogan-Doran SC with Ms E. Poole	Mills Oakley
For the Australian Prudential Regulation Authority (appearing as amicus curiae)	Dr R. Austin with Mr D. Allen
Appearing as amicus curiae appointed by the Court	Ms W. Harris QC with Ms G. Crafti	Herbert Smith Freehills

HIS HONOUR:

INTRODUCTION

I delivered reasons for judgment on 6 December 2021 following an initial hearing on 1 December 2021 (the Reasons).[1] Relevantly, for the purpose of these reasons, the plaintiff sought judicial advice that it was justified in determining a fee under the remuneration clause in cl 2.8(d) of the Trust Deed including, among other things, by reference to a risk of a statutory liability for which it could not be indemnified from the Fund by reason of the SIS amendments (i.e. the fee proposal).
[1]Re Care Super Pty Ltd [2021] VSC 805. For convenience, I will adopt the terms defined in the Reasons.

I concluded that the fee proposal was not in contravention of the SIS amendments.[2] I also concluded that the fee proposal was not inconsistent with cl 2.6(a)(iii) or cl 2.6(d)(iii) of the Trust Deed. However, I expressed concern that the manner in which the Board made the fee determination on 10 November 2021 appeared inconsistent with the power conferred under the remuneration clause (the power issue). This is because, on the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Care Super Pty Ltd (No 2)

Details

AGLC: Re Care Super Pty Ltd (No 2) [2021] VSC 854
Case: [2021] VSC 854
Decision Date: 20 December 2021

CaseChat Overview and Summary

This case involved the trustees of the Care Super Pty Ltd superannuation fund, who sought judicial advice regarding the fairness and reasonableness of their proposed remuneration. The Supreme Court of Victoria was called upon to determine whether the trustees were justified in basing their remuneration decision on a potential risk of penalties under Commonwealth legislation for which they could not be indemnified. The case hinged on the interpretation of the Trust Deed and the process by which the trustees determined their remuneration, including the consideration of potential penalties under the Superannuation Industry (Supervision) Act 1993 (Cth).

The central legal issues before the Court were whether the trustees were justified in considering the risk of penalties in determining their remuneration, and whether the trustees had satisfied the Court that their proposed exercise of the power under the remuneration clause was not improper and was consistent with the judicial advice sought. The Court had to determine if the trustees' consideration of the potential penalties was a fair and reasonable basis for determining their remuneration and if it complied with the requirements of the Trust Deed and relevant legislation.

In delivering the judgment, the Court held that the trustees were justified in considering the risk of penalties in determining their remuneration, as it was a factor that could reasonably impact the fairness and reasonableness of the fee. The Court found that the trustees had satisfied the Court to a reasonable degree of satisfaction that their proposed exercise of the power under the remuneration clause was not improper and was consistent with the judicial advice sought. The Court emphasised the importance of the trustees' consideration of all relevant factors, including potential penalties, in determining their remuneration. The Court provided the trustees with the requested judicial advice, affirming their decision-making process.

The final orders of the Court were that the trustees were justified in considering the risk of penalties in determining their remuneration and that their proposed exercise of the power under the remuneration clause was not improper and was consistent with the judicial advice sought. The Court provided the trustees with the requested judicial advice, affirming their decision-making process.

Orders