Compliance Manual for Employer-Sponsors

 

Key Links for Employer- Sponsors

Prohibition on “giving direction” to Trustees and their agents, except as prescribed by the SIS Regulations.

Section 58 of the Superannuation Industry (Supervision) Act 1993

Regulation 4.03 of the Superannuation Industry (Supervision) Regulations 1994

Statutory Minimum Acceptance by Members for any Proposed Reduction to their Entitlements

{Note: The Governing Rules of the Fund may prescribed a higher minimum acceptance level}

Regulation 13.16 of the Superannuation Industry (Supervision) Regulations 1994

Case Law pertaining to where an Employer induces a Trustee to commit a Breach of Trust

If a third party, such as an Employer,  induces a Trustee (and the Trustee’s agents) to commit a Breach of Trust, then the Law treats that party as a “knowing inducer” {Fyler v Flyer (1841) 3 Beav 550; 49 ER 216; Alleyne v Darcy (1854) 4 I Ch R 199; Eaves v Hickson (1861) 30 Beav  136; 54 ER 840; Midgley v Midgley (1893) 3 Ch 282; Williams v Williams (1881) 17 Ch D 437;  Re Elders Trustee and Executor Company Limited v EG Reeves Pty Limited [1987] FCA 332; Farah Constructions v Say-Dee (2007) 230 CLR 89, 159 [2007] HCA 22 at [162](Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ)}

Knowing Inducement” is a form of accessorial liability that is generally termed the second limb of Barnes v Addy (1873-74) LR 9 Ch App 244.

If the Employer knowingly induces an innocent Breach of Trust the Employer is liable for the Breach ahead of the innocent Trustee. Where the Trustee is induced to commit a dishonest Breach of Trust by the Employer, the Trustee and the Employer are jointly and severally liable {Refer to Harum “The Stranger as a Constructive Trustee” 102 L.Q.R 114 at 144n}.

It is immaterial that the Employer’s object in inducing the Trustee was something other than to obtain some benefit for the Employer; the Employer’s motive is irrelevant to the question of liability { Eaves V Hickson (1861) 30 Beav. 136; 54 ER 840; Midgley v Midgley [1893] 3 Ch 282}

Refer Gurr, Alison — “Accessory Liability and Contribution, Release and Apportionment” [2010] MelbULawRw 16; (2010) 34(2) Melbourne University Law Review 481

 

 

 

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