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Re HEST Australia Ltd

Re HEST Australia Ltd

Case [2021] VSC 809 7 December 2021

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IN THE SUPREME COURT OF VICTORIA Not Restricted
AT MELBOURNE
COMMERCIAL COURT
S ECI 2021 03668
IN THE MATTER of an application by HEST AUSTRALIA LTD (ACN 006 818 695) (as trustee of the Health Employees Superannuation Trust Australia) for judicial advice under rule 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 and orders under sections 63 and 63A of the Trustee Act 1958

HEST AUSTRALIA LTD (ACN 006 818 695) Plaintiff

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JUDGE:

Button J

WHERE HELD:

Melbourne

DATE OF HEARING:

18 November 2021

DATE OF JUDGMENT:

7 December 2021

CASE MAY BE CITED AS:

Re HEST Australia Ltd

MEDIUM NEUTRAL CITATION:

[2021] VSC 809

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TRUSTS AND TRUSTEES — Application by trustee of superannuation fund for judicial advice — Whether trustee justified in amending its trust deed to add a fee charging power — Whether proposed amendments were within power — Whether proposed amendments were inconsistent with ss 56 and 57 of the Superannuation Industry (Supervision) Act 1993 (Cth) — Whether proposed amendments were inconsistent with other clauses of the trust deed —Judicial advice given — Supreme Court (General Civil Procedure) Rules 2015 r 54.02.
CONFIDENTIALITY — Application for confidentiality order — Where documents contain risk modelling analysis and insurance policies — Where plaintiff operates in a competitive market — Whether disclosure would cause commercial prejudice — Confidentiality orders made — Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23) (2019) 58 VR 611.
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APPEARANCES:
Counsel Solicitors

For the Plaintiff Mr P H Solomon QC
Mr J A G McComish
Ms J R Wang Allens

For the Contradictor Ms W A Harris QC
Ms G Crafti Herbert Smith Freehills

For the Australian Prudential Regulation Authority (appearing as amicus curiae) Dr R P Austin
Mr D Allen Australian Prudential Regulation Authority
TABLE OF CONTENTS
Background......................................................................................................................................... 1
The Proposed Amendments and the SIS Act amendments.................................................... 3
Evidence....................................................................................................................................... 11
The submissions in overview.................................................................................................... 16

Order 54 application........................................................................................................................ 18
Principles and approach............................................................................................................. 18
Issues............................................................................................................................................. 19
HESTA’s power to amend the Trust Deed.................................................................... 20
Whether the Proposed Amendments are inconsistent with the SIS Amendments. 24
Whether the Proposed Amendments are inconsistent with other provisions of the Trust Deed......................................................................................................................... 40
Other considerations affecting whether to give the judicial advice sought............. 42

Conclusion on judicial advice application.............................................................................. 45

Application for relief under the Trustee Act.............................................................................. 46
Confidentiality................................................................................................................................. 47
Orders................................................................................................................................................. 49
HER HONOUR:
Background

1 The Plaintiff (HESTA) is the trustee of a large ‘profit-for-members’ superannuation fund[1] known as the Heath Employees Superannuation Trust Australia (the Plan). As at 30 June 2021, the Plan had in the order of $66.8 billion in funds under management. The Plan was established in 1987. It is governed by a set of rules, set out in a schedule to the Trust Deed establishing the Plan. I will refer to those rules as the Trust Deed.
[1]Also known as ‘industry’ (as distinct from ‘retail’) superannuation fund.

2 HESTA is a public company limited by guarantee. Its corporate members (referred to in…

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 HEST Australia Ltd

Details

AGLC: Re HEST Australia Ltd [2021] VSC 809
Case: [2021] VSC 809
Decision Date: 7 December 2021

CaseChat Overview and Summary

The case of Re HEST Australia Ltd involved an application by the trustee of a superannuation fund for judicial advice on proposed amendments to the fund's trust deed. The central issue was whether the trustee was justified in adding a fee charging power to the trust deed, and whether such amendments were within the power of the trustee, consistent with sections 56 and 57 of the Superannuation Industry (Supervision) Act 1993 (Cth), and with other clauses of the trust deed. The applicant, HEST Australia Ltd, sought confidentiality orders regarding certain documents, including risk modelling analysis and insurance policies, arguing that disclosure would cause commercial prejudice in the competitive market in which it operates.

The court examined the statutory framework governing superannuation funds, including the Superannuation Industry (Supervision) Act 1993 (Cth), and the specific provisions regarding the powers of trustees. It considered the nature and purpose of the proposed amendments, and whether they aligned with the overarching objectives of the superannuation legislation. The court also evaluated the interplay between the proposed changes and other clauses of the trust deed, ensuring that the amendments did not introduce inconsistencies or conflict with the existing legal framework. Furthermore, the court assessed the risk of commercial prejudice in the event of disclosure, taking into account the sensitivity of the documents and the competitive landscape in which the applicant operates.

In its decision, the court found that the trustee was justified in seeking to amend the trust deed to include a fee charging power, provided that the amendments were consistent with the Superannuation Industry (Supervision) Act 1993 (Cth) and did not conflict with other clauses of the trust deed. The court granted the confidentiality orders sought by the applicant, recognising the potential for commercial prejudice if the sensitive documents were disclosed. The court's ruling provided clarity on the trustee's powers and the conditions under which amendments to the trust deed could be made, while also protecting the applicant's commercial interests.

The court ordered that the applicant's request for judicial advice be granted, subject to the conditions that the proposed amendments to the trust deed were consistent with the Superannuation Industry (Supervision) Act 1993 (Cth) and did not conflict with other clauses of the trust deed. Additionally, the court made confidentiality orders in relation to the specified documents, preventing their disclosure to protect the applicant's commercial interests. These orders were made in accordance with the principles established in Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23).

Orders