Westpac Securities Administration Ltd & Anor v Australian Securities and Investments Commission

Westpac Securities Administration Ltd and another appealed to the High Court of Australia against a decision of the Full Federal Court concerning the interpretation of provisions within the Corporations Act 2001 (Cth) relating to superannuation fund trustee duties. The dispute centred on whether the appellants, as responsible entities of superannuation funds, had breached their obligations by failing to take reasonable steps to ensure that the fees and costs charged to members were reasonable. The Full Federal Court had found that the appellants had contravened these provisions.

The High Court was required to determine whether the Full Federal Court had erred in its construction of section 96(1) of the Superannuation Industry (Supervision) Act 1993 (Cth) and section 1017E(2) of the Corporations Act 2001 (Cth). Specifically, the appeal concerned the standard of conduct required of a trustee in relation to the reasonableness of fees and costs, and whether the appellants' conduct met that standard. The central question was whether the appellants had discharged their duty to act in the best interests of members by ensuring that the fees charged were reasonable.

The High Court, in its joint judgment, clarified that the duty to ensure fees and costs are reasonable is an objective standard, requiring trustees to take all reasonable steps to achieve that outcome. It was held that the Full Federal Court had correctly applied this standard and that the appellants had failed to demonstrate that they had taken all reasonable steps to ensure the reasonableness of the fees charged to members. The Court emphasised that the onus was on the trustee to establish that the fees were reasonable, and that mere compliance with contractual terms or regulatory requirements was not, in itself, sufficient to discharge this duty. The appeal was dismissed.