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Shimshon v MLC Nominees Pty Ltd

Shimshon v MLC Nominees Pty Ltd

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Case Copied 20 December 2021 72 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2021 0027

DAVID SHIMSHON	Applicant
v
MLC NOMINEES PTY LTD (ACN 002 814 959)	First Respondent
and
NULIS NOMINEES (AUSTRALIA) LTD (ACN 008 515 633)	Second Respondent

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JUDGES:	SIFRIS, WALKER and WHELAN JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	27 September 2021
DATE OF JUDGMENT:	20 December 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 363
JUDGMENT APPEALED FROM:	[2020] VSC 640 (John Dixon J)

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PRACTICE AND PROCEDURE – Group proceeding under Part 4A Supreme Court Act 1986 – Determination of preliminary question – Whether proceeding concerns property subject to a trust and is thereby excluded from Part 4A by s 33B(2)(b)(ii) (‘the exclusionary provision’).

STATUTORY CONSTRUCTION – Whether the word ‘concerning’ in the exclusionary provision should be given a narrow or broad construction – Construction of beneficial legislation – Narrow construction adopted – Exclusionary provision applies to proceedings about property subject to a trust – Young v Murphy [1996] 1 VR 279, Occidental Life Insurance Co of Australia Ltd v Bank of Melbourne (1993) 7 ANZ Ins Cas 61–201, discussed.

SUPERANNUATION – Trustees – Superannuation fund – Proceeding against trustees alleging breaches of general law and statutory duties under the Superannuation Industry (Supervision) Act 1993 (Cth) – Proceeding not about property subject to a trust – Exclusionary provision not applicable – Proceeding properly commenced as a group proceeding under Part 4A.

SUPERANNUATION – Nature of member’s interest in superannuation fund prior to entitlement to a benefit – Member has equitable proprietary interest in the fund but no proprietary interest in specific assets – Interest best described as ‘prospective’ rather than ‘contingent’ – Nature and extent of available remedies for breach of duty by trustee – Finch v Telstra Super Pty Ltd (2010) 242 CLR 254, Commonwealth Bank Officers Superannuation Corporation Pty Ltd v Beck [2016] NSWCA 218, Caboche v Ramsay (1993) 119 ALR 215, Commonwealth v Cornwell (2007) 229 CLR 519, Re Coram; Ex parte Official Trustee in Bankruptcy v Inglis (1992) 36 FCR 250, Permanent Trustee Australia Ltd v Perpetual Trustee Co Ltd (1994) 15 ACSR 722, TargetHoldings Ltdv Redferns (a firm) [1996] AC 421, Benson v Cook (2001) 114 FCR 542, considered.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr J T Gleeson SC with Mr N J Owens SC, Ms M Szydzik and Ms S Chordia	Maurice Blackburn
For the Respondent	Mr M J Darke SC with Ms K E Foley	Allens

TABLE OF CONTENTS

SIFRIS and WALKER JJA

Introduction

1

Explaining the relationship between this judgment and that of Whelan JA

7

The statutory landscape for superannuation

8

Understanding proposed grounds 1(a) and 2 of the appeal as argued

10

Proposed ground 1(a): do the beneficiaries have individual claims against the trustees?

11

Submissions on proposed ground 1(a)

11

Analysis of proposed ground 1(a)

14

Proposed ground 2: the significance of the appropriate remedy

19

Submissions on proposed ground 2

19

Analysis of proposed ground…

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: [2021] VSCA 363
Decision Date: 20 December 2021

CaseChat Overview and Summary

Shimshon and others brought a proceeding against MLC Nominees Pty Ltd, the trustee of a superannuation fund, alleging breaches of both general law and statutory duties under the Superannuation Industry (Supervision) Act 1993 (Cth). The defendants claimed the proceeding was invalid because it concerned property subject to a trust, thereby falling outside the scope of a group proceeding under Part 4A of the Supreme Court Act 1986 (Vic) due to section 33B(2)(b)(ii). The Supreme Court was required to determine whether the proceeding was about property subject to a trust and, if so, whether it was excluded from Part 4A by the exclusionary provision.

The court examined the interpretation of the word 'concerning' in the exclusionary provision, concluding that a narrow construction was appropriate in line with the principles of statutory construction in Young v Murphy and Occidental Life Insurance Co of Australia Ltd v Bank of Melbourne. The court found that the proceeding did not concern property subject to a trust because the members had an equitable proprietary interest in the fund but no proprietary interest in specific assets. Their interest was described as 'prospective' rather than 'contingent'. The nature and extent of the available remedies for breach of duty by the trustee were also considered, drawing on authorities such as Finch v Telstra Super Pty Ltd and Commonwealth Bank Officers Superannuation Corporation Pty Ltd v Beck.

Consequently, the court ruled that the proceeding was properly commenced as a group proceeding under Part 4A. The defendants’ application to strike out the proceeding was dismissed.

Orders