Re Legal Super Pty Ltd - [2023] VSC 545

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S CI 2022 04286

IN THE MATTER of an Application by Legal Super Pty Ltd (ABN 37 004 455 789) (in its capacity as trustee for Legalsuper (ABN 60 346 078 879))

LEGAL SUPER PTY LTD (ABN 37 004 455 789) (IN ITS CAPACITY AS TRUSTEE FOR LEGALSUPER (ABN 60 346 078 879))

Plaintiff

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JUDGE:	Lyons J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 February and 16 August 2023
DATE OF JUDGMENT:	20 September 2023
CASE MAY BE CITED AS:	Re Legal Super Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 545

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EQUITY – Judicial advice – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 54.02 – Whether trustee justified in amending trust deed to add discretionary power to charge a fee for provision of services to the fund – Whether proposed amendment is within power to amend in the trust deed – Whether trustee would not be acting improperly in amending trust deed – Superannuation Industry (Supervision) Act 1993 (Cth) ss 56(2) and 57(2) – Advice provided.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms C Harris KC with Mr L Molesworth	Mills Oakley
Appearing as amicus curiae appointed by the Court	Ms G Crafti	Clyde & Co
For the Australian Prudential Regulation Authority (appearing as amicus curiae)	Mr B Doyle KC with Mr D Allen	APRA

HIS HONOUR:

1. INTRODUCTION AND SUMMARY

This proceeding relates to the superannuation fund known as Legalsuper (ABN 60 346 078 879) (the Fund). The Fund is a regulated superannuation fund within the meaning of s 19 of the Superannuation Industry (Supervision) Act 1993 (Cth) (the SIS Act). The Fund was established by a deed of trust dated 6 March 1989 with the current terms of the trust deed consolidated by a deed of consolidation dated 4 July 2016 (the Trust Deed).

The plaintiff is the trustee of the Fund (the plaintiff or the Trustee). The Trustee seeks judicial advice from the Court pursuant to r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules). The principal issue on which advice is sought is whether the Trustee is justified in exercising its powers under cl 50.2 of the Trust Deed to amend the Trust Deed in a way that gives the Trustee the power to determine a fee payable from the Fund for acting as trustee and which the Trustee determines is fair and reasonable (proposed amendment). The need for such a fee (and the purpose of the proposed amendment) arises as a result of:

(1) the fact that to date, like many industry superannuation fund trustees, the Trustee has not charged fees for services and has not built up any capital reserve to meet liabilities that may be imposed on the Trustee or its directors; and

(2) amendments to ss 56(2) and 57(2) of the SIS Act (which came into effect on 1 January 2022) (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.

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Details

Case: [2023] VSC 545
Decision Date: 20 September 2023

CaseChat Overview and Summary

In the matter of Re Legal Super Pty Ltd, the dispute revolved around the trustee's authority to amend the trust deed to introduce a discretionary power to charge fees for services provided to the fund. The case was heard and determined in the Supreme Court of Victoria. The primary issue before the court was whether the trustee was justified in amending the trust deed to include this discretionary power, and if such an amendment was within the permissible scope of the trust deed's amendment clause. Additionally, the court had to consider whether the trustee would be acting improperly if they proceeded with the amendment.

The court undertook a detailed examination of the trust deed's terms, specifically focusing on the amendment clause and the powers granted to the trustee. It was established that the trustee had the authority to amend the trust deed in accordance with the terms specified therein. The court found that the proposed amendment to introduce a discretionary power to charge fees was within the scope of the powers granted under the trust deed. Furthermore, the court concluded that the trustee would not be acting improperly by making this amendment, as it was consistent with the overarching purpose of the trust and did not contravene any statutory provisions under the Superannuation Industry (Supervision) Act 1993.

Consequently, the court advised that the trustee was justified in amending the trust deed to include the discretionary power to charge fees for services provided to the fund, provided that the amendment was executed in accordance with the terms of the trust deed and did not contravene any statutory requirements. The court's decision provided clarity on the trustee's ability to modify the trust deed in this regard, ensuring that the trust could continue to operate effectively while adhering to legal and regulatory obligations.

Orders