Westpac Securities Administration Ltd v Cooper - [2016] SASC 122

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
WESTPAC SECURITIES ADMINISTRATION LTD v COOPER
[2016] SASC 122
Judgment of The Honourable Justice Blue
8 August 2016
SUPERANNUATION - INDUSTRY SUPERVISION
SUPERANNUATION - PRIVATE SECTOR FUNDS - AMENDMENT OF TRUST DEED
SUPERANNUATION - PRIVATE SECTOR FUNDS - TRUSTEES - POWERS AND DUTIES
Application under section 59C of the Trustee Act 1936 to vary terms of a trust.
The plaintiff is the trustee of the Westpac Mastertrust – Superannuation Division, which was established in 1992. The defendant is a beneficiary of the trust appointed to represent the interests of actual and potential beneficiaries.
Clause 16 of the trust deed empowers the trustee to amend the trust deed, but the power of amendment is subject to limitations including that the proposed amendment is not in the opinion of the trustee adverse or likely to become adverse to the rights of members.
The plaintiff seeks variation of the trust deed to confer on the trustee a power to transfer members’ benefits in the trust to a successor fund without members’ consent. Clause 11.3 of the trust deed gives to the trustee power to transfer a member to a successor fund without the person’s consent if the member’s employer changes the superannuation fund to which it makes contributions. Clause 11.2 is ambiguous whether it confers any additional power to transfer members’ benefits without their consent.
Held (granting the application to vary the trust deed):
1.       There is uncertainty as to whether clause 11.2 confers power to transfer members’ benefits to a successor fund without their consent and on balance it is likely that the trustee lacks power to transfer members’ benefits to a successor fund other than in the limited circumstances referred to in clause 11.3 (at [52]-[59]).
2.       Subject to the inclusion of limitations and conditions, it is appropriate that the trust deed be varied to empower the trustee to transfer the benefits of members to a successor fund without members’ consent in four defined circumstances (at [68]-[71]).
3.       It is appropriate to exercise the discretion in favour of varying the trust deed (at [72]).
Trustee Act 1936 (SA) s 59C; Superannuation Industry (Supervision) Act 1993 (Cth) s 31, s 34; Superannuation Industry (Supervision) Regulations 1994 (Cth) s 1.03, s 6.29, referred to.
Faye v Faye [1973] WAR 66; In re Ker’s Settlement Trust [1963] 1 Ch 553; In re Paget’s Settlement [1965] 1 WLR 1046; Salkeld v Salkeld (No 2) [2000] SASC 296; Thomas Hare Investments Limited v Hare (2012) 34 VR 656, considered.

WESTPAC SECURITIES ADMINISTRATION LTD v COOPER
[2016] SASC 122
Civil: Application
BLUE J:

The plaintiff Westpac Securities Administration Limited seeks an order under section 59C of the Trustee Act 1936 (SA) varying the terms of the Westpac Mastertrust – Superannuation Division (the Trust) contained in its trust deed (the Trust Deed). The plaintiff seeks variation of the Trust Deed to confer on the trustee the power to transfer members’ benefits in the Trust…

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 Westpac Securities Administration Ltd v Cooper

Details

AGLC: Westpac Securities Administration Ltd v Cooper [2016] SASC 122
Case: [2016] SASC 122
Decision Date: 8 August 2016

CaseChat Overview and Summary

In the matter of Westpac Securities Administration Ltd v Cooper, the dispute centred around the amendment of a Trust Deed governing a superannuation fund, specifically addressing the Trustee's authority to transfer members' benefits to a successor fund without member consent under certain conditions. The parties involved were Anthony Cooper, a member of the Trust, and Westpac Securities Administration Ltd, the Trustee of the Trust. The dispute arose in the context of the Trust's operation and management, particularly concerning the Trust Deed's provisions and the Trustee's powers and duties.

The central legal issues before the court involved the interpretation and applicability of the Trust Deed's provisions, particularly those related to the Trustee's authority to amend the Trust and transfer members' benefits. The court had to determine whether the Trustee had the power to vary the Trust to allow for the transfer of members' benefits to a successor fund without their consent under specific circumstances. This required an examination of the Trust Deed's language, the legal framework governing superannuation funds, and the balance of interests between the Trustee, the members, and potential beneficiaries of the Trust.

The court concluded that the Trust Deed's variation power allowed for the Trustee to transfer members' benefits to a successor fund without their consent in limited circumstances, provided specific conditions were met. The court found that such a variation was in the best interest of the members, did not unfairly advantage one class of beneficiaries over another, and did not disturb the Trust beyond what was necessary to achieve the intended purpose. The court also noted that the variation was in line with the criteria set out in subsection 59C(3) and was consistent with the spirit of the Trust. Therefore, the court exercised its discretion to vary the Trust as requested by the Trustee, subject to the inclusion of the specified provisions.

The final orders will be determined after hearing the parties' submissions on the form of the order to give effect to the reasons outlined by the court.

Orders

Orders of the court

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Background

Background to the litigation

The defendant Anthony Cooper has been a member of the Trust since 2001. He was appointed to represent the interests of beneficiaries and potential beneficiaries of the Trust in the action.Background The Trust was established by execution of the Trust Deed on 27 March 1992. The plaintiff became trustee (the Trustee) of the Trust on 27 July 1994. The Trust Deed comprises a set of common provisions (the Rules) together with several Appendices. Clause 2.1 of the Trust Deed provides that the Trust is divided into three separate Plans:·the Business Plan, which in turn comprises the Business Super Sub-Plan (the subject of Appendix A) (the BT Business Super Plan);[1]·the Personal Plan (the subject of Appendix C) (the Westpac Plan); and ·the BT Personal Portfolio Service (the subject of Appendix F) (the PPS Plan).[2][1] Also known as the Executive Sub Plan and promoted as BT Business Super.[2] Appendices B, D and E are obsolete because their Plans have no members and no assets. Clause 2.1 of the Trust Deed provides that each Plan is to be administered in accordance with the Rules and the relevant Appendix. Clause 2.3 constitutes each Plan as a separate trust. It provides:In respect of each Plan (but not the sub-plans, if any, of a Plan), the Trustee shall:(a)administer the Plan as a separate trust fund; and(b)hold the assets of the Plan exclusively for the benefit of the Participating Employers (if applicable), Members and Beneficiaries of that Plan;and those assets shall only be available to meet the liabilities of that Plan and, for this purpose, the Trustee shall cause separate accounts, registers and other records of Participating Employers (if applicable), Members and Beneficiaries to be established in respect of each Plan. All funds of the Trust are invested in life insurance policies issued by Westpac Life Insurance Services Ltd (Westpac Life) for each Plan of the Trust. In turn, Westpac Life invests in underlying assets and earns income and incurs expenses which are reflected in the value of units issued by Westpac Life in favour of the Trust. The Trust issues to members matching units. Effectively Westpac Life is interposed and the insurance policies issued by it are interposed between the members and the underlying assets and each member’s funds are invested indirectly in diversified investments.PlansBT Business Super BT Business Super is the largest Plan, representing approximately 80 per cent of the assets of the Trust. It is known in the industry as a “corporate plan” and is designed to cater for employees whose employer selects the Plan for its employees (subject to the right of an employee to select another superannuation fund or another Plan within the Trust) and for self-employed persons. It also includes those who were so employed or self-employed but are no longer (who are transferred to the “Retained Benefits” section). The Trustee is authorised by APRA to offer a MySuper product. The Trustee offers the BT MySuper Lifestage Investment Option. Westpac Life invests in underlying assets comprising this investment option. The Trustee charges MySuper members an investment fee per annum of 0.50 per cent of the member’s account balance and an administration fee per annum of $60 plus 0.45 per cent of the member’s account balance.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Subject to inclusion of provisions referred to above, there is good reason to vary the Trust to give to the Trustee power to transfer the benefits of members to a successor fund without their consent in the limited circumstances and subject to the conditions above. Such a variation is in the interest of members. It does not result in one class of beneficiaries being unfairly advantaged to the prejudice of another class. It does not disturb the Trust beyond what is necessary to give effect to the reasons justifying the exercise of the power and accords as far as reasonably practicable with the spirit of the Trust. While it will confer power on the Trustee to transfer members’ benefits on a decision to terminate the Trust, this is consequential on a termination of the Trust under existing winding up powers already contained in the Trust Deed. It is in accordance with the subsection 59C(3) criteria.Conclusion All prerequisites are satisfied to exercise the power to vary the Trust. I am satisfied that I should exercise my discretion to vary the Trust in the manner summarised above. I will hear the parties as to the form of the order to give effect to the above reasons.

Ratio Decidendi

Legal Principle Established

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