Re The Financial Sector Union of Australia; Ex parte Financial Clinic (Vic) Pty Ltd & Ors; Sun Alliance Australia Limited v Finance Sector Union of Australia

[1992] HCATrans 159

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne	No M54 of 1991
In the matter of -

An application for a writ of

prohibition and a writ of

certiorari against THE

HONOURABLE JOSEPH MARTIN
RIORDAN and THE HONOURABLE
JUSTICE RUSSELL JOHN

PETERSON, Deputy Presidents

of the Australian Industrial

Relations Commission and

GREGORY ROBERT SMITH and

PETER IAN NOLAN, Commissioner

of the Australian Industrial

Relations Commission·

First Respondents

THE FINANCIAL SECTOR UNION OF

AUSTRALIA

Second Respondent

Ex parte -

Financial 1 28/5/92

FINANCIAL CLINIC (VIC) PTY LTD, ANTHONY WELLS PTY LTD

and CLAPTON BENEFITS PLANNING

PTY LTD

Prosecutors

Office of the Registry

Melbourne No M56 of 1991

B e t w e e n -

SUN ALLIANCE AUSTRALIA LTD

Applicant

and

FINANCE SECTOR UNION OF

AUSTRALIA

Respondent

Case stated pursuant to

section 18 of the Judiciary Act

1903

MASON CJ
BRENNAN J
DEANE J

DAWSON J

TOOHEY J

GAUDRON J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 28 MAY 1992, AT 10.17 AM

Copyright in the High Court of Australia

Financial 2 28/5/92

MR R. MERKEL, QC: If the Court pleases, I appear with my

Sun Alliance Australia Ltd.

learned friend, MR L. KAUFMAN, for the prosecutors. resolved, for

(instructed by Phillips Fox)

MR A.M. NORTH, QC:  If the Court pleases, I appear with my

learned friend, MR W.L. FRIEND, on behalf of the

Finance Sector Union of Australia, the second

respondent in the first matter. (instructed by

Maurice Blackburn & Co)

MR G. GRIFFITH, QC, Solicitor-General for the Commonwealth:

If the Court pleases, I appear with my learned friend, MR T.J. GINNANE, intervening for the

Attorney-General of the Commonwealth. We intervene

really in the interests of constitutional power.

(instructed by the Australian Government Solicitor)

MASON CJ:  The Deputy Registrar has certified that he has

been informed by the Australian Government

Solicitor who acts for the first respondent that

the first respondent does not wish representations
to be made on their behalf and will abide by any

order of the Court save as to costs. Yes,

Mr Merkel?

MR MERKEL:	If the Court pleases, could I seek an order by consent in the second matter involving Sun Alliance
that the proceedings in the Federal Court, VI No 65
of 1991, which previously removed to the High Court
of Australia, be remitted in their entirety to the
Federal Court of Australia. There is no order
sought as to costs.
MASON ·c·J:	Very well, there will be an order by consent in

those terms.

MR MERKEL: If the Court pleases. If I could hand up to the

Court the outline of the prosecutor's submissions

in the first matter. Could I also hand up with the

outline copies of the memorandum and articles of	the trustee, that is, Insuper Limited, which was
not part of the case stated, but which by consent
we would ask to be part of the material before the
Court.

MASON CJ: Yes.

MR MERKEL: Also, could I hand up a copy of the decision of

the High Court which is not on our list of

authorities, of Scott v The Commissioner of

Taxation.

If the Court pleases, we have annexed to the

outline a chronology which we hope will be helpful to the Court. The application, in our submission,

Financial 28/5/92

concerns the questions which were not decided by

the decision of this Court in the Manufacturing

Grocers case, and indeed, even though the first

demand and the first award made pursuant to the
demand initially delivered is the subject of review

under the order nisi, the substantive application

concerns the effect of the award as varied, and

that order appears in the application book at

page 149.

There are three major areas of concern which

we say were left open in the Manufacturing Grocers

case which all arise for decision in the present

case. They are interrelated and, in our

submission, each standing alone would have the

present matter as ultimately determined in the
award as varied as not an industrial matter, but we
rely on the cumulative effect of each of these

areas.

The first relates to the incorporation of the

terms and conditions of the superannuation trust

deed which declares the rights and obligations of

the trustee and the employees as beneficiaries.

That is directly incorporated by the effect of the

award as varied.

The second area relates to the specification

that a particular trustee, which was jointly

controlled by nominees of the Union and of the
employers' organization, be the trustee of the

particular fund into which contributions were to be
paid. And the third is the specification that the
particular fund was the only fund into which

contributions were to be paid in respect of the

respondents who constituted some 850 employers in

the insurance industry, and that that was a fund

pominated by the Union and that that outcome was to

be so irrespective of the preferences or

circumstances of the particular employers or
employees and the existing funds into which

superannuation contributions had previously been
paid.

To appreciate how those issues have come to

arise, if I could just very briefly take the Court

to the chronology, which is annexed to the last

page of our outline, and to the background which

gave rise to the present applications. In

December 1985 the Commonwealth Government, in

anticipation of an award of superannuation,

announced the draft operational standards.

Subsequently, after the decision of this Court in

Manufacturing Grocers', the superannuation

principle was adopted as part of the national wage
principles, and then in the industrial arena

disputation, which had previously related to

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whether or not superannuation was to be paid at

all, quickly moved to disputation about the choice

of schemes and, in particular, the question of

trustee, it being contended by employer

organizations that the trustee should be an
employer controlled or nominated body, the employee

organization saying it should be an employee

nominated or controlled body. The resolution of

that was that neither would have control and they

would share control.

That led to the letter of demand which was

sent by the Union in the present case for

contribution to an insurance industry union

superannuation scheme and that is dealt with in the

case stated in paragraph 9 of the application book,

page 12, where the representatives of the trustee

were to be those nominated by the Union and they
would constitute 50 per cent of the board of the

trustee. The demand also sought an industry scheme

and that be the scheme into which contributions
were to be paid.

As a consequence there was a finding of dispute which is at the application book page 61,

and in anticipation of an award the Insuper trust

deed was established. That was on the joint

enterprise of the relevant Union and the employers

and that trust deed appears at page 76 of the

application book and if I could just take the Court

briefly to it in the recitals.

Recital No II at page 76 shows that the

sponsors were the "Insurance Employers Industrial

Association", which is an unregistered organization

which represented a number of employers, and the

"Australian Insurance Employees' Union", which was

a registered organization and that deed set up the

Insurance Industry Superannuation Fund, which

contain very detailed provisions which I will take

the Court to later, which specified the details and

obligations and privileges arising in respect of

both employees who became beneficiaries and the

role of trustee which was to be a body controlled

and administered by nominees of both industrial

organizations.

That having been set in place, the award was made which appears at page 109 and that was the

"Insurance Industry Superannuation (Third) Award

1988". I should say the demand which created the

dispute was that there be a contribution to an

insurance industry union superannuation scheme and
this was the scheme that was intended to be the

subject of the demand.

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The award directed that the contributions be

parties bound were the Union - this is at

to the fund, which was the fund established by the the

page 110 -

its officers and members and on the

participating employer respondents in respect

of employees eligible to be members of the

Union, whether members.of the Union or not,

who are members of the Fund.

Then, the contribution obligation under 4(a) was

that, "Subject to the" particular "terms and

conditions", which are not presently relevant:

each employer which has been admitted by the

Trustees of the Fund as a participating

employer member, shall contribute to the
Trustees of the Fund in respect of each of its employees who are members of the fund on the

following bases -

and those bases are there set out.

Importantly, the effect of that award did not require payment to employees unless employees

wished to and, in fact, applied to become members

of the fund. So what happened in the field after

the making of the award is that employees who

wished to remain as members of a particular funds

such as one established by their employer or some

other organization were at liberty to do so but if

an employee wished to become a member of the

Insuper fund, then, on application, the employer

was obliged to and, in fact, paid the contribution

to-that fund.

As a result of that, the award did not work in the manner intended by the unions, namely to be the sole fund operative for the entirety of the

industry. There were a number of steps that

occurred thereafter. What is not set out in our
chronology, but appears in the exhibits, is the
next step, relevantly, was the letter of demand and

a log of claims of 25 January 1989. That demanded contributions to a superannuation scheme nominated

by the Union and the Union moved in two directions

at once. It created a new dispute by that letter

of demand which appears at page 114 and the actual

log in so far as it affects superannuation is at

page 118, clause 38 which demanded that:

The respondent shall pay to each employee a

superannuation contribution equivalent to 30

per cent of ordinary time earnings. The

contribution shall be to a superannuation

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scheme nominated by the union. This

contribution shall be to a superannuation

scheme nominated by the union. This

contribution will in no way affect employer

obligations in respect of any existing or

planned superannuation arrangements -

which, in effect, would have been over award

arrangements which were not a concern of the Union.

The two directions that the Union moved in

were: firstly, to rope in any of the parties who
were not respondents to previous awards and that

roping in came about as a result of orders by

Commissioners Nolan and Brown on 11 May 1989 and

26 October 1989; the first roping in which appears

at page 137 - and I do not need to take the Court

to it - roped in Ashman, which was the predecessor
to the first-named prosecutor and also roped in

Clayton. So that, under the first award one of the

prosecutors was a respondent and, then, under the roping in orders the other two prosecutors became respondents.

BRENNAN J:  Mr Merkel, I am just not following who is

becoming party to a dispute. If that is what you

are endeavouring to tell us, could you just go back

a little and tell us how parties became parties to

the dispute.

MR MERKEL:  Yes, Your Honour. What occurred under the first

award was that one of the respondents only was a

respondent to the award, then, as a result of many
respondents in the insurance industry not being

covered by the first award, a new notice of dispute

was given and as a result of that, additional

respondents, which became the second and third

prosecutors, then became respondents to the

Insurance Industry Superannuation (Third) Award, so

that they had, in effect, been roped in and some

850 employers had become respondents under that

procedure. But the critical event came about as a

result of the application by the Union to vary that

third award on 6 September 1990. That application was at page 145 and the order which has led to the

order nisi in the present case was that made by

Commissioner Nolan on 1 November and that appears

at page 149 and it is that document that I wanted

to take the Court to.

GAUDRON J: But the relevant log of claims for that award,

as it were, was also the log of claims that led to

the roping in award.

MR MERKEL:  Yes, Your Honour.

GAUDRON J: Thank you.

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MR MERKEL:	So that there were the two logs and therefore

the jurisdiction was founded on, we say, the second

log, but it may not matter ultimately.

GAUDRON J: Yes. It is not an ambit dispute, in any event.

MR MERKEL:  No, not as I understand it.

GAUDRON J: Thank you.

MR MERKEL:  The order was made at page 150 and - if I can

just explain the effect of what occurred - the

concern of the Union was that employees who had not

elected to become members of the Insuper fund, were

therefore not having their contributions paid to

that fund, but to another fund which they were

members of. The object of the variation was to

remove that entitlement of employee choice and

compel all contributions to be made to the Insuper

fund. The way that was done - and if I could take

the Court to page 150 - was to vary the award by

deleting from the definition the words
"participating employer", because to be a

participating employer the employer had to, in

effect, apply for membership as a participating
employer, and substitute for that, "any employer

respondent to the award", so it automatically bound

all respondents. Then in respect of "parties

bound", substituted for the previous requirement

which required a member to enrol as a member in the

fund, it said that:

This award shall be binding upon The

Australian Insurance Employees' Union (the

union), its officers and members and the

employer respondents in respect of employees

eligible to be members of the union, whether

members of the union or not.

So that it was binding upon all employees in the

industry who were eligible to be members but then,

critically, clause 4(a) was deleted and substituted

for it was the requirement that:

Subject to the following terms and

conditions, each employer respondent to this

award shall contribute to the trustee of the

fund in respect of each of its employees on

the following bases:

Under the trust deed which had been amended - and

the amendment had occurred on 18 May 1990, and I

should say that in the case stated and in the

index, the date of the amendment appears as

18 May 1991, which is erroneous. The correct date

is that which appears in our chronology.

Financial 28/5/92

On 18 May 1990 a significant amendment was made to the deed which I will come to later, but

its effect was to deem a payment by an employer of

a superannuation contribution to the trustee as an

application by the employee to be a member of the

scheme. So that the acceptance of the payment by

the trustee was intended to operate in law to make
the employee a member of the scheme and therefore

bound by its terms and undertaking obligations and

having benefits governed by the trust deed.

So that it removed the choice that employees

previously had to become members of the scheme and

made it automatically follow that a contribution by

an employer which was governed by and required by

the award was in effect a membership application of

the employee, and therefore no other schemes or

alternative funds were open to the employee or the

employer in respect of award superannuation.

BRENNAN J:  Mr Merkel, could I delay you for a moment and

take you back a little to page 150, clause 3,

Parties Bound. Do I understand that employers of

all "employees eligible to be members of the union,

whether members of the union or not" were employers

on whom a log of claims had been served?

MR MERKEL:  Yes, Your Honour, all employer respondents,

which I think in the case stated mentioned some 850

employers in the insurance industry.

BRENNAN J:  So they had all been served with the log of

claims.

MR MERKEL:  Yes, all employers had been served with the log of claims, and as a result became respondents. So

that although it does not embrace the entirety of the industry, I think in substance there would be few employers of any significance not bound by the

award. It was in this way that industry

superannuation was effected, there being one scheme

and no longer a question of individual choice in	for substantially all employees in the industry,
relation to trustee or scheme. That was brought
about by the amendment to the deed and the order at
page 150.

There was, as a consequence of that, an appeal

to the Full Bench which was dismissed. The reasons

for decision of the Full Bench are at page 152. After the dismissal, the prosecutors sought the

order nisi from Your Honour Mr Justice Dawson which

appears at page 2 of the application book.

Significantly, the order nisi seeks prohibition in

respect of the Insurance Industry Superannuation

(Third) Award as varied by Commissioner Nolan in

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that variation order I have just taken the Court

to.

By way of background I should indicate what

became of the guidelines which were issued by the

Commonwealth Government in 1985. It was clear from the decision in Manufacturing Grocers - and we

accept that superannuation in Australia has been,

in effect, a tax-driven exercise so that the

requirements of superannuation that were basically

those which were stipulated in the Income Tax

Assessment Act, and as such it was not well geared

to accommodate occupational superannuation as an

award matter.

To protect superannuation as an award matter,

the government announced the guidelines which dealt
with preservation, portability and a number of
matters, all of which were referred to in the

decision of this Court in Manufacturing Grocers.

When superannuation became the subject of

awards it was necessary to, in effect, adjust the

taxation requirements to accommodate the fact that

the government had taken a more extensive role in

protecting the rights and benefits of workers, and

that led to the occupational superannuation

regulations which set out the standards which are
required to be complied with before a complying

fund can get the benefit of the relevant taxation

concessions. We have referred to those concessions

briefly in our outline and the origin of them is

not presently important, but in substance, under
the Act, the income of a superannuation fund would

be taxed at the highest personal rates if it is a

non-complying fund.	If it is a complying fund it
is taxed at 15 per cent.	So that, in effect, it is

inherent in the nature of superannuation that one

must have a complying fund. Likewise, the taxation

of benefits paid out to employees is taxed at a

concessional or beneficial rate only in respect of

complying funds.

So our case in substance accepts two matters.

One is that it is of the essence of occupational

superannuation that it be paid to a fund which

complies with the standards that qualify for

taxation concessions. And apart from that, the

only other element which we say is inherent in the

nature of superannuation is that arising from the

necessity, again dealt with by this Court in

Manufacturing Grocers, that there be a payment to

be held on trust by a third party trustee.

But what we say - and this is the essence of

our case under which I identified as the first area

of concern - that once one travels beyond the

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matters required to comply with the standards and

that which is essentially inherent in the nature of

superannuation, the bringing into existence of a

relationship of trustee and beneficiary between a

third party and the worker, and gets into the

detailing of the respective rights and obligations

of the trustee to the beneficiary, we say that one

no longer has a direct connection with the

relationship of employer and employee as such, and

one has moved into a new relationship. It may be

consequential, but it is not direct, and that is of

trustee beneficiary.

We hope to make good that point by taking

Your Honours to the terms of the particular trust

deed to indicate how far removed they have become

from anything whatsoever to do with the

relationship of employer and employee, and indeed,

this trustee in this trust deed has conferred upon

itself the widest of discretions as to

administration of investments as to discretions

concerning how increments of the fund are to be

apportioned between beneficiaries, as to when and

in what circumstances beneficiaries may enjoy the

vesting rights that are apparently given and

otherwise rendered certain, so that ultimately a

whole set of quite new rights and obligations are

established.

We say as our first and primary point that

those rights and obligations, the ones specifically

or expressly adverted to by this Court in

Manufacturing Grocers, and their supervision by the
Arbitration Commission as it then was, and the

Industrial Relations Commission, are matters that are not industrial matters, and we say are matters

for agreement and choice between employee and

beneficiary.

So the consequence of our submission is that

the role of the Commission ceases when it

stipulates what may be objective criteria which

must be met by a fund which would be essentially

those requiring compliance with taxation

concessions which are the essential protections
conferred by the legislature and the regulatory

procedure of the employees' benefits. Thereafter,

any other obligations, rights and privileges as

between the beneficiary and the trustee, we say are

matters of choice for each employee who should not

be denied the choice of one fund as against

another, and that is a matter that the employee

then accepts or rejects by making an application

for a membership which qualifies as a fund into

which award superannuation may be paid.

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We say that the effect of the procedure followed in the present case is to deny altogether

the employee's right of choice and even worse, to

impose, under the terms of the deed, obligations on

an employee without that employee ever having an

opportunity, in any realistic sense, to accept or

reject those obligations. And those obligations go

a long way. They just do not go to basic

provisions such as the provision of information,
but they go to the rights and causes of action that
the beneficiary will have against the trustee for

negligence, for discrimination or preference of

some beneficiaries over others, and for unequal

distributions. So that when one goes to the trust

deed one can see how far away from the industrial

relationship this award has travelled.

The starting point of our analysis, in respect

of what we would say is inherent or necessary by
reason of the nature of superannuation, is the

discussion of superannuation by Mr Justice Windeyer

in Scott v Commissioner of Taxation, which was

handed up with our outline to the Court.

His Honour was discussing superannuation as used in

section 23(j) of the Assessment Act, and His Honour

discussed its nature at page 278. His Honour

commented, in the first column at point 6 at 278,

that:

There is no definition in the Act of a

superannuation fund. The meaning of the term

must therefore depend upon ordinary usage,

the attributes of a thing thus denominated

being those which things ordinarily so

described have. To say that all that one need

do to decide whether there was here a

superannuation fund of the required kind is to

study the deed is a mistake, because the deed

must be. read with a preconception of what such a fund is, otherwise reading it can provide no

answer. There are many books and many

articles in periodicals about employees'

superannuation and pension funds.

And His Honour then says he has read them.	And can
I go to the next column, about 12 lines down,
His Honour concludes:

I have come to the conclusion that there is no

essential single attribute of a superannuation

fund established for the benefit of employees

except that it must be a fund bona fide

devoted as its sole purpose to providing for

employees who are participants money benefits

(or benefits having a monetary value) upon

their reaching a prescribed age. In this

connexion "fund", I take it, ordinarily means

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money (or investments) set aside and invested,

the surplus income therefrom being

capitalized. I do not put this forward as a

definition, but rather as a general
description.

So with that as our starting point, although with the passage of time where His Honour's reference to a prescribed age, in effect, in present circumstances, would mean reaching retirement

because superannuation can now be taken upon
permanent incapacity, or someone leaving an

industry for good after 55, and such matters. But

His Honours description, we say, is a helpful

starting point.

The next point, we submit, is what led this

Court to regard superannuation as an industrial

matter in Manufacturing Grocers', (1986)

160 CLR 341, and I wanted to remind the Court, if I

might, of what was said at page 355, because the

end result of the present order shows again how far

removed we have gone from what were some of the

underlying industrial benefits seen to be provided

from occupational superannuation. The Court, in

the last paragraph at 355, said:

It may be observed generally that

superannuation benefits are commonly regarded

as being an aspect of the terms or conditions

of employment, being in many circumstances in

the interests of both employer and employee.

They provide a reward for long and faithful

service and afford security to an employee

which may be conducive to a stable and

productive relationship between him and his

employer. They encourage loyalty on the part

of an employee, although this will be a less

important consideration if the benefits are
"portable". Superannuation benefits are

frequently offered as part of the total

remuneration of a prospective employee as a

means of attracting his labour and, having

regard to the significant proportion of the

workforce now entitled to superannuation

benefits, no doubt in many instances as a

necessary means of doing so. Relief from

taxation arises from the provision of

superannuation benefits both in the case of an

employee and, where there are employer

contributions, in the case of an employer.

If I can just stop there, those underlying

industrial benefits or the interest of the employer

which certainly was a factor - I was going to say

the only factor - but a factor motivating this

Court in Manufacturing Grocers' has been entirely

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removed by the procedure followed in the present

case. It has removed the element from the employer

offering superannuation or award superannuation,

which this case was concerned with, as an incentive

to an employee in respect of loyalty and a

cooperation between employer and employee in

respect of a beneficial scheme.

And, indeed, the Sun Alliance case which has

been resolved, and the prosecutor's case in the

present case, is an ideal example of that. Sun

Alliance had a fund for its employees which

complied with all the standards which it contended

was a more attractive fund for the employees to

participate in. It made award and over award

payments to the fund. It wanted its fund, with its

administration, which it said would be more

efficient and less expensive, a marketing or

selling but a competitive point, to be available as

part of its relationship with its employees. The

current award in its final form has removed that

substratum altogether from having any relevance

whatsoever to do with superannuation. It is now

just a form of payment to a union and employer

organization controlled fund.

The other aspect that I wanted to mention is

the third leg of identifying what was inherent in

the nature of superannuation was the acceptance in

Manufacturing Grocers', particularly at page 354,

in the first clear paragraph where, in the

concluding words, the court said that the

requirement was that the fund comply with:

standards approved by the Commonwealth

government which it would be necessary to meet

in order to obtain taxation concessions.

·so we have no hesitation in accepting that

compliance with standards and, if I might add, any

disputation legitimately related to those standards

between employer and employee can be an industrial

matter, but - - -

McHUGH J:	Mr Merkel, does the course of proceedings in the Industrial Commission and the amendments of these
awards and the deed itself preclude what might be
called over award superannuation benefits, that is
to say, is there anything to stop your client and
non-union employees contributing to a scheme or
obtaining benefits over and above what is provided
for under this joint fund?
MR MERKEL:	As a matter of law, no, Your Honour. award payments are permitted. There are Any over
consequences elsewhere in respect of over award payments, but they are not matters I would really

Financial 14 28/5/92

rely upon. If an employer wants to pay an over

award payment to an existing scheme then that is

permitted and there is nothing that prohibits it.

But we would submit that entitlement is irrelevant to the considerations, for example, this Court had

in mind in Manufacturing Grocers', because it was

concerned solely with an award provision and the

award basis for superannuation and its industrial

origin being as a matter in the interest of

employer and employee. The effect of this scheme,

as now structured by the two organizations, the

employer and employee organizations, to remove that

factor as having any relevance whatsoever, leaving

the loyalty part entirely as a matter of over

award, which we say is inconsistent with the

rationale of the court in Manufacturing Grocers'.

McHUGH J:  Is the vice that you rely on that it compels a

relationship of trustee and beneficiary, or do you

go beyond that?

MR MERKEL: It does, Your Honour. It compels the

relationship of trustee and beneficiary, but we go

beyond that because it compels it at three levels.

It compels it upon terms and conditions which the

beneficiary has no role or participation in the

formulation of; it compels it with a particular

trustee which, when I take you to the memorandum of

articles, will demonstrate it is controlled by the

employee and employer organizations with the

members of the fund having no voting power or

rights whatsoever to influence the trustee and its

directors.

McHUGH J:	Can a member resign otherwise than by resigning his employment?
MR MERKEL:	No, the only way the member can - the member

cannot cease to become a member of the fund in

effect until he has received his benefit, because

there is a requirement of preservation which means

That is under the standard, so he remains a	the benefits are to be preserved until retirement.
beneficiary bound by the fund until in effect
ceasing to be a member which would be when he
receives his beneficial entitlement or if there is
a transfer to another fund, there is a
discretionary provision on the part of the trustee
to permit portability to another fund, but again,
that is a good example.
Whilst portability may not be necessary when a member who is an employee moves to another job in
the industry, there are many members who move to other jobs outside the industry, and portability
there is entirely within the discretion of the trustee. There is no right to have your benefit as

Financial 15 28/5/92

it has accrued to that point taken to be portable

to another fund without the consent of the trustee,

which may or may not be given for many reasons

which will have nothing to do with the vested

rights or interests of the particular beneficiary.

So that there are three levels, Your Honour, which we say are consequential upon a forced

relationship of trustee and beneficiary, because in

a sense the forced relationship is created by an

order that payment be made. The first is the terms

and conditions upon which that relationship is

governed. The second is the identity of the

trustee who is forced upon you, and the third is
the requirement that that be the only choice you

have. We say that that is transcended beyond

anything that could be said to be an industrial

matter.

BRENNAN J:  Do you challenge the validity of the award or

the provision of the award relating to

superannuation which was amended?

MR MERKEL:  No, Your Honour, we do not have to challenge the

validity of the first award, although it may itself

have been an award resulting from a notice of

dispute which was not an industrial dispute, because the first notice of dispute required
payment to the insurance industry superannuation
scheme. Our arguments would say that a demand for
payment to a particular scheme would offend the

principles which we are enunciating as opposed for

a demand for payment to a scheme which satisfies

certain objective criteria which are within the

ambit of an industrial matter.

But we do not have a difficulty with the first

award in its effect, because it left the right of

choice to an employee. So that if an employee of
each of the insurance brokers, who are the

prosecutors, said, "I want to be a member of that

particular fund" - and this came about basically

because the employees of the brokers in evidence at

the Commission said they did not want to be a

member of Insuper, but anyone who wanted to be a

member could then have the obligation on the

participating employer effected because they are

then members of the fund and the award could

operate on employee choice.

So we do not wish in the end to have to

challenge that, although we say that our arguments,

if correct, would find the original notice of

dispute was also bad as not creating an industrial

dispute, but it is the award as varied which has

given rise to the vice that in effect brings the

prosecutors to Court.

Financial 16 28/5/92

BRENNAN J:	Do you not have to define how far Manufacturing Grocers goes?
MR MERKEL:	Yes, Your Honour.
BRENNAN J:	How far do you say it does go?
MR MERKEL:	We say, Your Honour, it goes no further than

what we endeavoured to specify in the first

paragraph of our outline of. submissions and we

emphasize the demand was for no more than

superannuation in lieu of a wage increase, but we

say Manufacturing Grocers' goes no further than

holding that a demand for payment in lieu of wage

increases of contributions by employers to a

superannuation fund established by a trust deed in

accordance with the standards approved by the

Commonwealth Government, which it would be

necessary to meet in order to obtain taxation
concessions, was a demand relating to an industrial

matter, which was capable of being the subject of

an industrial dispute.

BRENNAN J: Well, you mean by "a superannuation fund", any

superannuation fund?

MR MERKEL:  Yes, Your Honour, and we say that if one goes to

Manufacturing Grocers', the Court, we say, stressed that that was so. Indeed, if one goes to page 355,

the Court emphasized, in the middle paragraph that:

What is important for the purposes of

this case is that the claims made are, as we

have said, no more than demands for the

payment during the currency of an award of

employer contributions to superannuation

schemes which will take an approved form. It

is because the claims are in this limited form

that it is, in our view, impossible to sustain

the argument that they are not made with

respect to industrial matters, whatever may

have been the position had the claims been

made in a more elaborate form.

And it is that elaborate form which we say arises

directly in the present case. And also, the form

of the claims, as set out at page 347 to 348, and

one can see that they were framed in the most

general terms.

GAUDRON J: Well now, your statement in paragraph 1 must be

modified, must it not, to take account of a fund to

which the employer concerned is eligible to

contribute and the employees concerned are eligible

to belong, otherwise it is at large. I mean, for

example, you could not say, "Very well, we will

Financial 17 28/5/92

meet a demand by signing you all up in the Meat

Industry Superannuation Fund", for example.

MR MERKEL:  Yes, Your Honour. There are clearly

jurisdictional limitations by reason of coverage

matters, but we are concerned to not go so far as

to say that it can operate in a way that in effect

denies the right of an employee ultimately to

choose to become a member of a particular fund.

GAUDRON J: Yes, well does that involve reconsideration of

Burwood Cinema?

MR MERKEL:	No, Your Honour, because the consequence of our submission in the present case is that the
compulsion to become a member of a fund involves,
as a direct consequence, the assumption of rights
and obligations in a contractual relationship with
a third party, and it is the rights and obligations
created by that contractual relationship that has
removed this from being an industrial matter. That
is how we put it.

GAUDRON J: But does not that same vice attend to

Burwood Cinema, in a sense, that it imposes a

contract, conforming with certain terms, upon an

employer who is not a member of the Union and that

particular employer?

MR MERKEL:	As I understand it, Your Honour, the vice in the present case is that it imposes a contractual
obligation, not as between employer and employee,
but between an employee and a third party, which
does not directly or indirectly involve any role
whatsoever by the employer, and it is there that we
have transcended away from, what I will call, the
industrial aspects of the matter, to what I would
prefer as the non-industrial aspects. And that is
why we say that kind of question, in that way, does not arise in the present case.
GAUDRON J: Well, the vice must go back to the original log

of claims.

MR MERKEL:  It starts with the original log, Your Honour,

but it consummated - - -

GAUDRON J: But it becomes manifest.

MR MERKEL:  Yes, at all times, looking at the matter as one

of substance, it was clearly the intent and the

purpose of the Union and the employer organization

to establish Insuper as the sole scheme in the

industry, and when that failed under the first

award, it was then effectuated under the award as

varied, and that was, in effect, the rounding off

of the circle, and it is that closing off of any

Financial 18 28/5/92

other alternative, which we say has offended the

requirements, because there there was no longer a
choice, and it is the imposition of the contractual

relationship with the third party, and I say a very

complex contractual relationship, which removes it

from the area of the industrial matter.

That is how we put it. We say that

Manufacturers Grocers was, in our submission,

conscious of the problem because we now find if the

terms and conditions of this deed can become an

industrial matter then the Commission really starts

to get into investment policy, into the manner of

deduction of expenses, into, in effect, the

administration as an ongoing investment of a fund

in respect of which the employer has absolutely no

interest.

GAUDRON J: That has not necessarily followed from that

proposition. Undoubtedly, there are questions left

open by Manufacturing Grocers' as to where one

draws the line between what is industrial and what

is not. But your central proposition, if I

understand you correctly, does not necessarily

involve problems of drawing that line?

MR MERKEL:  No, Your Honour.

GAUDRON J: And to the extent that you put it on that basis,

it has got nothing to do with the questions left

open by Manufacturing Grocers', has it?

MR MERKEL:	In the sense that we say that the line has been so clearly traversed by the terms of this deed, one
does not really have to ask where the line may
otherwise be and, in that sense, we, with respect, agree with Your Honour. I think the force of our
argument would really be determined ultimately by
taking the Court to the regulations which prescribed the standard for complying funds.
DAWSON J: But at a fundamental level, if you had, for

instance, a provision in an award that the

employees' wages be paid to a bank, that would not

even be an industrial matter, would it, but

certainly, if you had an award which said be paid

to a particular bank, one in which the employer had

shares, for instance - - -

MR MERKEL: That was, indeed, one of the analogies we were

going to use, in effect, for the second leg of our

areas of concern which is the stipulation you enter

into a contract with a particular person. We were

going to use, as an analogy, that, if, for example,

there was an industrial dispute about electronic

fund transfer as a mode of payment of salary and,

accepting just for the moment for the purpose of

Financial 19 28/5/92

the argument that that was capable of being an

industrial matter, we say -

DAWSON J: There is a difference, is there not, because in

that example the employer, once the wages have been

earned, is simply a debtor, really, and the

employee/employer relationship has ceased in

relation to those wages. But Manufacturing

Grocers' seems to be a bit equivocal in that it

says that the contributions are part of the

remuneration of the employee but it also suggests

in some places that the actual payment of the

benefits are deferred remuneration? If that is so,
then the relationship has not ceased as it has in

the case of a simple wages earned and paid to a

particular person.

MR MERKEL:	We would say, Your Honour, that properly dissected the ambivalence can be identified as not
being that.  We would submit, Your Honour, that
what Manufacturing Grocers' accepts is that once
superannuation is paid it is paid, in effect, as
remuneration by the employer to the employee.
Whether or not there is an ongoing relationship may
depend on the employers' role, if any, after
payment.

In the scheme that is now before the Court,

whatever may be the case with an employer fund,

which we are not concerned with, in this fund, the

role of employer has ceased, but the deferred

benefit is governed strictly by the relationship
between the employee and the trustee created under

the trust deed, the employer having no role

whatsoever in the creation of the deed and no role

whatsoever in the administration of the trust fund.

So that, whatever may be said by the kind of

example that the Court had in mind in Manufacturing

Grocers' with an employers' fund, where the

employer and the employee may work, in a sense, in

a partnership towards enhancing the investment of

that fund, we have left that all by the wayside by

the industry superannuation scheme approach and we

would say, with respect, it is exactly the same as

Your Honour's first example, it is no more than a

payment of salary. They have reduced

superannuation, in this context, to a payment of

salary and the relationship of the employer to that

payment ceases upon its being made.

DAWSON J:  So that it ceases when the employer becomes a

debtor rather than an employer in relation to

the - - -

MR MERKEL:  Yes, Your Honour, and it discharges its

obligation under the award by making the payment to

Financial 20 28/5/92

the trustee and that is the end of the matter.	But
picking up Your Honour's other example, I used

electronic fund transfer just accepting whether or

not it would be an industrial matter, but if the

electronic fund transfer was required to be through

the Union nominated bank or a joint Union employer

organization enterprise bank, we would say that,

for the same reason we really stipulate on our

second area of concern, that would not be an

industrial matter. But that is exactly what has

happened here.

McHUGH J: But the critical feature in this case is that

there is a demand on you as employer to make a

contribution to a fund. That is the industrial

matter, is it not?

MR MERKEL:  Yes, Your Honour.

McHUGH J: Well, once that is said, is that not the end of

the matter?

MR MERKEL:  No, Your Honour. We say it begs the question,

because what is meant by the word a "fund"? If,

for example, the fund, Your Honour, in the terms of

the trust deed governed a relationship not of an

employee as such but the worker, for example, in a

totally different capacity - for example, if the

fund required or gave preference to employees who

were union members without wanting to buy into

whether a claim for union membership is an

industrial matter, but assuming for the purpose of

argument it is not - you cannot be at liberty in

the terms and conditions of the fund to deal with a

different relationship. We say that properly

understood, this trust deed does deal with a

different relationship.

McHUGH J: Well, maybe it does, and indeed that was	accepted, was it not, in the Grocers' case, that a
new relationship came? But the Court said, in
effect, "Well, that is beside the point".

MR MERKEL: Well, Your Honour, we say it is beside the point

that inherent in the nature of a superannuation

payment is the necessity to create a trust upon

which the money is to be held pending vesting. To

that extent, superannuation requires a trust fund

and a third party relationship. What the Court did

not consider and expressly left open is the terms

and conditions of that relationship and how far

those terms and conditions themselves are a direct rather than a merely consequential result from the

employee/employer relationship. We say the line

must be drawn somewhere, and we say that in this

trust deed and in this industry scheme, the line

has clearly been drawn in the way I have just put

Financial 21 28/5/92

to His Honour Mr Justice Dawson. The employer's

role is at an end upon payment, and thereafter a

new relationship and role comes into existence and

it is that between the employee and the trustee.	I
should really take the Court to the terms of the
deed, because when you go to that, one can see how
far removed it is from anything to do with the employee.

DAWSON J: Just before you do that, I suppose you can test

it by taking it further down the line or further to

the other side of the line, if there is a line. If
the Commission, for instance, wanted to insert in

an award a provision which dictated how the fund

should be invested by dictating the nature of the

fund in certain shares or whatever it might be, you would say that was clearly going too far, would you

not?

MR MERKEL:	Yes, Your Honour.
DAWSON J:	And if therefore it cannot dictate the nature of the fund in that respect why should it be able to
do so in other respects?
MR MERKEL:	Yes, Your Honour.

DAWSON J: That is the way you put it?

MR MERKEL:  We say, with respect, that is right, but that

question arises directly in the present case

because within this deed is an investment power

which would do credit to any family discretionary trust investment power. The fund can be invested
with or without income in any investment

whatsoever, not authorized investments, and there

is no liability for negligence. I will take

Your Honours to the deed, but these are the matters

which the Commission has directed shall be the rights and obligations between beneficiary and

trustee as a direct effect of the order it made
varying the award.	It is not merely consequential

upon the award. It is the relationship brought

into existence by compliance with the award.

GAUDRON J: But is that not the case in any superannuation

award? I mean there will always be terms and

conditions in the trust fund. There will always be

relationships outside the employer/employee

relationship that are created, and the relationship

with the employer, if you wish to go back to that
in so far as the employer is involved with the
fund, will not be a relationship as between

employer and employee at all, but will be a

relationship arising out of the fund.

Financial 22 28/5/92

MR MERKEL:  Yes, Your Honour, and we accept that, and we say

the consequence of that is that matters which are

necessarily inherent in the award of superannuation

as industrial matter, which means compliance with

the standards necessary to qualify for taxation

concessions, the necessity of a trustee beneficiary

relationship, we accept as necessarily inherent in

the nature of a grant of superannuation, but we say

thereafter - - -

GAUDRON J: Thereafter, it is exclusively for the employer

to determine the fund?

MR MERKEL:  No, Your Honour.

GAUDRON J: It must be.

MR MERKEL: Exclusively for the employees to determine the

fund, ultimately.

GAUDRON J:	The employees?
MR MERKEL:	Yes, Your Honour.  The point we make is

that - - -

GAUDRON J: It must be also for an employer, but I mean the

fact is that for many years employment, in a number

of places, has been made conditional upon

membership of a particular superannuation fund.

So, in truth, what you are talking about is the right of the employer to determine all those

matters over and above those that are set by the

occupational standards?

MR MERKEL:  No, Your Honour, we would not say that. We

would say, Your Honour, that the effect of what we

are putting, and indeed the factual scenario that

has led to this case coming here, is quite the

opposite, that the Commission has power to award

the employers pay occupational superannuation to a

fund which meets specified criteria, putting it at

its simplest, a complying or approved fund. We say

that the role of the Commission is to specify the

criteria which are industrial matters; we say,

thereafter, it becomes a matter - and one of those

criteria may legitimately be a fund which the

employee nominates as a member of. We would have

no difficulty with the Commission awarding

superannuation, provided it is the employee that

has chosen to accept the rights and obligations,

they have not been forced upon the employee because

that employee choice is exercised in the area of

what I will call the non-industrial aspect of

superannuation. It has not been imposed on the

employee.

Financial	23	28/5/92
McHUGH J:	I just have some difficulty following this: is an employee bound by this arrangement?	how

MR MERKEL:  Your Honour, under the award as varied?

MCHUGH J: Yes.

MR MERKEL:  It is simply this, Your Honour, that the deed

was varied before the award to provide that a

payment of superannuation by an employer shall be

deemed to be an application by the employee to be a

member of the fund, then upon the payment being

accepted by the trustee the employee becomes a

member of the fund and bound by its terms and

conditions.

McHUGH J: That is what I want to understand. What doctrine

binds the employee?

MR MERKEL: Trust law, Your Honour, because the money is

paid on trust, held for the benefit of the
employee, the terms and conditions of the trust are
set out in the trust deed and, therefore, if the

beneficiary wishes to get the benefit its only

vehicle for getting the benefit is to sue for it

under the terms of the trust deed and he will then

be -

McHUGH J: If he comes in and takes the benefit, then that

is one thing, but how otherwise does he become

bound. You talk about obligations and so on of the

employee, but there are no obligations unless he

exercises his right to take advantage of his rights

as a beneficiary.

MR MERKEL:	No, Your Honour, it is not the way the deed works, but I will have to take you to the deed.
_The deed goes much further than that, Your Honour,
and really it may be helpful if I took the Court to
the way the deed works to make good the point, because, in effect, if he does exercise his rights
he will be met by a brick wall which, in effect, is
a wall that protects the trustee from any cause of action or any claim whatsoever.
McHUGH J: No doubt you will help me, but I am curious.	If

somebody sets up a superannuation fund for my

benefit and provides that a payment will deem me to

be a member of the fund, I mean it has no effect

whatever, as far as I am concerned, unless I do

something to acknowledge that I have got some

rights under the fund.

MR MERKEL:  Your Honour, as a practical matter, the

consequence of Your Honour not complying with the
obligations imposed would be you lose, as a matter

of law, your legal entitlement to the benefit.

Financial 24 28/5/92

McHUGH J: Then it is a voluntary choice on my part, if I

take advantage of it.

MR MERKEL:	Yes.
McHUGH J:	I am exercising it, there is no element of

compulsion.

MR MERKEL:  It depends on how one interprets the deed,

Your Honour, but I would suggest that if an

employee's salary is paid under the award, and the

employee does not renounce the benefit there and

then and allows it to continue, he would be taken,

as a matter of law, to have accepted the

relationship as having been created. In other

words you have to take the step of renouncing your

position as a beneficiary, otherwise you are deemed

to be a beneficiary with whatever rights and

obligations flow. But short of an employee saying,

"I refuse to have this money stand to my credit,

and therefore I am not a beneficiary", in which

case the law could not compel him to be that, the
employer will still have to pay the money to his

credit and it will no doubt go to the augmentation

of the fund. But we say that is not really what

the Commission has created here.

DAWSON J: And if he did that he would be foregoing part of

his remuneration.

MR MERKEL:  Yes. He would be required to forego part of his

remuneration and give it away to other employees.

That is the effect of what is created here. So we

say that, Your Honour, it is not so much whether

the trustee could issue an action for specific
enforcement of an obligation of an employee; we say

the consequence is created by this relationship as

a whole set of obligations and rights which exist

as a matter of law between the beneficiary and the

trustee in the absence of a renunciation of the

beneficial entitlement which it is always open to a

would be a fairly extreme circumstance. beneficiary of any trust to do, but we say that

McHUGH J: But what is the difference between this case,

then, on that hypothesis and the case of the

scheme, the sort that was approved in the

Manufacturers case? If the employee does not take advantage of his rights; if he does not join up, he has to forego his benefits. What is the

difference?

MR MERKEL:  The difference, Your Honour, is that the

employee was able to apply to become a member of a

fund. The Manufacturing Grocers' case - - -

Financial 25 28/5/92

McHUGH J: Well, even on your hypothesis, he can apply to

opt out of it, because he just renounces his right.

I do not see any distinction between the two cases

at the moment.

MR MERKEL:  The distinction, Your Honour, we say is simply

that Manufacturing Grocers' merely said that it is

within the jurisdiction of the Commission to award

superannuation and in going no further than

awarding superannuation in favour of an employee by

requiring an employer to contribute to a fund to

the credit of an employee, that can be a matter the

subject of the award. What it did not consider,

Your Honour, is the next step and that is, what are

the steps that could be taken to oblige employees

to become bound by particular legal relationships

with third parties? Your Honour, we say that is

the question and there must be a line drawn
somewhere. Taking His Honour Mr Justice Dawson's

example: could the Commission enter into the area

of what investment policy the trustee should embark

upon?

McHUGH J: Well, perhaps there is another problem that maybe

is my real problem and that is what interest you

have got in this. I can understand it if some

non-unionist came along and was challenging.

MR MERKEL:	Your Honour, the interest is simple, that the - I think the staff of the three prosecutors are not
members of the Union; were members of, in effect,
staff funds and wished to continue that membership.
The Sun Alliance case was where the employees wanted to have the choice between the company superannuation fund, which offered benefits and
terms and conditions quite different to those of
the Union fund and some were members and some were
not members of the Union and, ultimately, what we say underlies the issue in this case is, in effect, the policy which I identified in Manufacturing
Grocers'.  Many employers wish superannuation to be
able to be utilized as something that enhances the
relationship between employer and employee by
offering benefits that may not be available under
these union employer organization funds.

McHUGH J: Yes, but you are not precluded from doing that.

I mean you can offer over the award - - -

MR MERKEL: Well, that is the point, Your Honour. Over the

award is not the area of concern of the Commission,

or was not the area of concern, more importantly,

of this Court in Manufacturing Grocers', and we say

that one is really then dividing up and

proliferating that contribution. Under the Tax Act
it assumes that there will be or can be more than

and Arbitration has no power under its Act to

regulate the rights and duties of an employer

towards persons who are neither parties to a

dispute nor members of an organization at the

time of the dispute or subsequently.

Now of course this Court is concerned, not with the

rights and duties of an employer, but with the

rights and obligations between the employee and a

trustee which is the third party, arising after the

employer has discharged his obligation to pay

remuneration.

Mr Justice Dixon explained it in a way that

bears some resemblance to the way in which

Your Honour Justice Deane raised it. His Honour

started to discuss the problem at page 424, at the

bottom of the page, where His Honour said, four

lines from the bottom of the page:

The Court of Conciliation and Arbitration has

made a single comprehensive award dealing with

these and some other disputes, but it has not

yet included in the operation of the award

persons who are not members of any of the

organizations.

His Honour, at 425, said, in the first main

paragraph:

In my opinion the Court of Conciliation and

Arbitration has no jurisdiction to include the

proposed provision in its award. My opinion

is based upon the incapacity of the Court

under the Constitution to make an industrial

regulation unless it be appropriate for the

settlement of an industrial dispute.

Then, His Honour, further down the page, at about

point 8 said:

Financial 77 28/5/92

But I shall first deal with the grounds upon which I have reached the conclusion that in

the settlement of such a dispute as those
described in the special case, it is beyond

the power of that Court to make an award

governing the relations which employers who do

not employ members of the organization may

establish with strangers to the dispute.

Then His Honour, the last three lines, said:

What I do deny is that such a dispute can

arise between employers or organizations of

employers, on the one hand, and employees or

organizations of employees, on the other, who
are not and have not been in any state of

actual co-operation. It is one thing to say

that an organization of employees may, by a

paper demand, raise a dispute with employers,

who do not employ its members, about the wages

to be paid and the conditions to be afforded

to any of its members they may in future

employ. It is quite another to say that the

organization may raise a dispute with them on
the subject of wages and conditions upon which
they may continue to employ their workmen,
although they do not include members of the

organization and the employers have never

engage a single member of the organization.

Then His Honour identified the problem at the top of 427 where His Honour said:

It is not difficult to conceive of a demand

made upon their actual employers by a body of

employees acting in concert insisting that

they shall not take into their employment

workmen who receive less wages or less

favourable conditions of employment than they

do. The causes of such a demand, no doubt,

would include the fear that the maintenance of

existing wages and conditions was threatened

by the competition of non-unionists.

And then, importantly, at the bottom of that page,

about the last 14 lines, His Honour said:

An industrial dispute involves some

disagreement between the co-operators in

industry, whether individually, by groups, by

classes, or by representation, and in such a

case there is no co-operation. To me it seems

something like a contradiction in terms to

describe as an industrial dispute the failure

to comply with a demand made by a body of

employees upon an employer, who has never

employed any of them, as to the terms and

Financial 78 28/5/92

conditions upon which he shall employ

strangers to them. No doubt the conception of industrial dispute has, under the influence of judicial decision, undergone a process of

expansion or extension. But, in my opinion,

no decision that has been given, and no

principle that has been adopted so far,

warrants such a consequence. A brief

statement of the relevant steps in the

development is a fitting preface to the

reasons I shall give for deciding against the

jurisdiction -

and then His Honour also discussed the matter again

at the bottom of page 433 to the top of 434 and

His Honour said at the bottom of 433:

The disagreement as to industrial matters

which is essential to a dispute involves some

relation between the parties that calls for a

state of agreement or accord between them.

And then in the last sentence at the bottom of that

page:

But, when the subject is the terms and

conditions of employment of non-members of an

organization, it is difficult to see what

basis there can be for difference,

disagreement, or dissidence, unless some

circumstances exist which make agreement or

accord between the organization and the

employer a condition necessary or desirable

for the normal conduct of some industrial
operation.

We say the dispute in the present case,

involving as it does nothing to do with minimal
conditions but matters which really go to what we
have described as the non-industrial rights and

obligations arising after payment, but even if we

be wrong it is difficult to say on the reasoning of

His Honour that there is any prevention and

settlement of any industrial dispute between the

employees of the prosecutors and any fellow workers
or any union which is suggesting that is acting on

behalf of its members in extending the terms and conditions of superannuation to only one fund in the industry.

McHUGH J: Supposing this award did not seek to require the

employer to make contributions in respect of

non-unionists, would your argument be any

different?

MR MERKEL:	No, it would not be, Your Honour.
Financial	28/5/92
McHUGH J:	It does not seem to me that it would be.
MR MERKEL:	No, it would not be any different, but there are

steps, Your Honour. Its effect on non-disputants,

we say, is an additional ground, but even in

respect of unionists, the mere fact that they are a

member of the Union should not deny them the right

to choose in respect of a particular fund for the

other reasons we have mentioned. But we say the

point gets sharpened and exacerbated when you are

looking at a non-disputant who my learned friends

concede cannot be bound by the award, but yet we

say the effect for the reasons we have said are, in

fact, bound by the award.

The final matter relates to the consent order.

What, in fact, did occur was that two of the

prosecutors were not represented at the consent they all sought to appeal on the basis that really
order, and Ashman, which subsequently became

Ashman, in so far as it was represented, had not

appreciated the effect or consequence of the order and the other two prosecutors had not known of it, in fact, occurring; and as a result of that, that

gave rise to the appeal at page 153. So that

whatever consent may have been given was not in any

sense a real consent of the sort that may have any

relevance to the present case.

There were two very minor matters.

Regulation 16A was referred to as to in-house asset

investments. In fact, the standards limit

investment which is described as non-arms length to

some 10 per cent, we note that in the trust deed

there is no limitation on investment at all, but we

say that once one gets into those sorts of matters

it really only makes the point as to how

non-industrial this kind of problem of following

the money trail, once the employer has discharged

his obligations, can become. So that for those

reasons, in our submissions, our learned friend's

submissions to the Court do not answer the central

questions we have identified in our submissions.

If the Court pleases.

MASON CJ: Yes, thank you, Mr Merkel. The Court will

consider its decision in this matter.

AT 3.37 PM THE MATTER WAS ADJOURNED SINE DIE

Financial 80 28/5/92