Case D2011/54

Dossier Case D2011/54

Agency: ASIC

Legal Rights

The Trustee of a Government Regulated Superannuation Fund is required to provide copies (or allow copies to be photocopied) of the Trust Deed and Governing Rules and associated Deeds of Amendment to Members and Beneficiaries of that Fund.

If a Member or Beneficiary of the Fund (a “concerned person”) has lodged a request in writing, the Trustee must provide copies “free-of-charge” under subsection 1017C(5) of the Corporations Act 2001 and Regulation 7.9.45 and Schedule 10A 11.1 of the Corporations Regulations 2001.

Since a “concerned person” has a pecuniary interest in the Fund, it is a criminal offence if a Trustee contravenes subsection 1017C(5) of the Corporations Act 2001.

Schedule 3 of the Corporations Act 2001

Item 297B [Subsection 1017C(5)] 100 penalty units or imprisonment for 2 years or both

It is a condition of every Trustee’s RSE Licence issued by the Prudential Regulator APRA for a Trustee of a Government Regulation Superannuation Fund to comply with the Trustee’s Disclosure Obligations under both subsection 1017C(5) of the Corporations Act 2001.

Background

A Member wrote to the Trustee of his Government Regulated Superannuation Fund in January 2007 and requested copies of the Trust Deeds and Governing Rules of the Fund extant immediately before the Member accepted an Offer of Employment on 25 March 1985.

Representations had been made to this Member as what his Superannuation entitlements would be if the Member accepted the Offer of Employment.

The Member wanted to check what promises had been made to him and whether the Trust Deed and Governing Rules had been properly amended in accordance with the Governing Rules and Superannuation Law up until the date of that Member’s retrenchment by the Employer-Sponsor of this Fund.

The Trustee ignored this and further requests for copies of these prescribed Trust Documents.

After a year of being ignored by the Trustee, the Member contacted the Prudential Regulator APRA and asked APRA to intervene. It is a condition on every Trustee’s RSE Licence issued by APRA for the Trustee to comply with the Trustee’s disclosure obligations under subsection 1017C(5) of the Corporations Act 2001.

APRA reminded the Trustee of the Trustee’s obligation to comply with subsection 1017C(5) of the Corporations Act 2001. The Trustee just ignored this “reminder” from APRA, even though compliance is a condition of the Trustee’s RSE Licence.

The Member again contacted APRA about the Trustee’s failure to comply with subsection 1017C(5) and APRA advised the the Member to contact ASIC since ASIC had jurisdiction over subsection 1017C(5) of the Corporations Act 2001.

So two years after first requesting a copy of the Trust Deed and Governing Rules of the Fund the Member contacted ASIC hoping that ASIC would enforce compliance with subsection 1017C(5) of the Corporations Act 2001, given that it is a criminal offence for a Trustee of a Government Regulated Superannuation Fund.

With some reluctance ASIC contacted the Trustee and the Fund Secretary then sent a letter to the Member dated 21 August 2009 stating:

“We have conducted an extensive search of the archives of the previous administrators and lawyers to assist you The earliest executed Trust Deed we have located is dated 26 August 1986 and it contains the Rules of the Fund dated 19 August 1985″

Now the Fund in question was established in 1913, so the Fund Secretary is claiming in the letter dated 21 August 2009 that the Trustee does not have possession of the founding Trust Instrument nor any subsequent Deeds of Amendment until late 1985!

Furthermore the version of the Governing Rules extant six months earlier that the Member had sought had gone “missing“!

Fortunately the Member realised that if the Fund Secretary was telling the truth, this would be a Prudential Matter of Concern for the Prudential Regulator APRA, since the founding Trust Instrument plus all subsequent Deeds of Amendment for the set of Trust Documents known as the “Governing Rules” of the Fund.

The Member therefore contacted APRA and asked APRA to investigate.

In a letter of response dated 24 June 2010 marked “Strictly Confidential” , the then CEO of the Trustee confirmed to APRA that the Trustee did indeed have possession of the founding Trust Instrument plus all subsequent Deeds of Amendment.

The Member obtained a copy of this letter from APRA under the Freedom of Information Act 1982.

Armed with this knowledge the Member then contacted ASIC and asked ASIC to enforce subsection 1017C(5) of the Corporations Act 2001 and “give a direction” to the Trustee to provide a copy of the version of the Governing Rules extant on 25 March 1985.

ASIC refused to “give such a direction” (a 5 minute task) to the Trustee of this Government Regulated Superannuation Fund.

The Member contacted the Responsible Minister and the Minister advised the Member to lodge a Complaint (Approach) with the Commonwealth Ombudsman.

The Member followed the Minister’s advice and lodged a Complaint over the failure of ASIC to force the Trustee of a Government Regulated Superannuation Fund to provide relevant copies of the Governing Rules of that Fund to a Member or a Beneficiary of that Fund as required by subsection 1017C(5) of the Corporations Act 2001 and Regulation 7.9.45 of the Corporations Regulations 2001.

On this occasion much to the relief of the Member the Commonwealth Ombudsman did decide to investigate this Member’s Complaint (Approach).

In an email dated 6 June 2011 the Investigating Officer requested the following information from an Officer of ASIC who was acting on behalf of the Chairman of ASIC:

–          (i)“I am requesting ASIC provide me with a response that addresses Mr X’s complaint. Essentially, does s 1017C of the Corporations Act operate to provide a means for Mr X to be provided with a copy of the Trust Deed extant as at 25 March 1985? And if so, does ASIC have the power to compel the Trustee to provide Mr X with that document?”

–          (ii)”I would also be grateful if you could provide me with other information that may provide a more complete picture of Mr X’s issue, particularly on ASIC’s past interaction with him. To that end please include copies of any correspondence ASIC may have sent Mr X”.

Now under Section 1017C of the Corporations Act 2001 the Trustee of a Government Regulated Superannuation Fund must provide copies of prescribed Trust Documents to Members and Beneficiaries of the Fund who are described as “concerned persons” under subsection 1017C(9) of the Corporations Act 2001 to distinguish them from other “persons” who are not Members or Beneficiaries of the Fund.

Now the ASIC Officer assumed the Complainant was a “Beneficiary” of the Fund in question and was no longer a Member, since the Trustee had made a benefit payment (This assumption would later turn out to be incorrect).

Therefore in contravention of subsection 13(1) and 13(9) of the APS Code of Conduct (Public Service Act 1999), the Officer of ASIC falsely claims in the submission to the Commonwealth Ombudsman dated 5 July 2011 that a “concerned person” was only a Member or recent Member of the Fund and since the Complainant was no longer a Member of the Fund, the Complainant was therefore not entitled to have access to the Governing Rules of the Fund!

On the basis of the false information provided by this Officer of ASIC, the Ombudsman then decided to terminate the investigation.

Given the long history of disclosure violations by the Trustee in question and the fact that the Member had been denied Natural Justice by the former Chairman of ASIC who had an undisclosed direct pecuniary interest that Chairman had failed to disclose to two Responsible Ministers, this Member initiated legal proceedings against the former Chairman in the Federal Count of Australia under the Administrative Decisions (Judicial Review) Act 1977 {VID 323 of 2011}.

Following these proceedings, the Member was finally able to obtain a copy of the version of the Governing Rules and associated Deeds of Amendment that the Member had first requested some four and a half years earlier.

And why had the Fund Secretary and Officers of ASIC including the former Chairman of ASIC, sought to deny this Member access to the Governing Rules of his own Government Regulated Superannuation Fund?

The Fund in question in the early 1980s had a large surplus and so Member Benefits and Protections were increased by way of a Deed of Amendment executed on the 20 December 1982. This Deed of Amendment deleted the “Retrenchment Rule” and converted the Fund to a Deferred Benefits Fund so that Members whose Contracts of Employment were terminated by the Employer through no fault of the Member could remain a Member of the final salary Defined Benefit Fund until they attained the Normal Retirement Age of 65 or until another valid Condition of Release event occurred such as:

  • the Member died
  • the Member became totally and permanently disabled,or
  • the Member decided to voluntarily take early retirement an leave the fund at any time after the Early Retirement Age of 55

The Trust Document that both the Fund Secretary and Officers of ASIC, including the former Chairman, sought to deny this Member access to, confirmed that the Membership of this Member had been unlawfully terminated by the Trustee in Breach of Trust of the Governing Rules of the Government Regulated Superannuation Fund.

This Member was entitled to remain a member of this final salary Defined Benefit fund for another decade, with his benefit continuing to accrue.

This Member now has a claim for this specific Breach of Trust that now runs into the Hundreds of Thousands of Dollars against the Trustee and those parties who have knowingly assisted in this Breach of Trust or have otherwise been negligent in their administrative duties whilst acting on behalf of the Trustee.

This Member may also have a large claim for the Tort of Misfeasance in Public Office against ASIC and its former Chairman, Mr Tony D’Aloisio, who contravened Section 123 and 124 of the ASIC Act 2001 and attempted to deny this Member access to a very important Trust Document. A Trust Document that this Member was lawfully entitled to have and for which it is a criminal offence for the Trustee to attempt to conceal.

Do you believe that your Super is Safe if you might be placed in a position of having to initiate legal action against the very person who is supposed to be protecting your superannuation – the Chairman of ASIC in order to obtain the very Trust Documents that might confirm that you have been a victim of Super Fraud and which might establish a claim for Breach of Trust that could run into the Hundreds of Thousands of Dollars?

If you would like to learn how to check your superannuation entitlement or benefit payment then become of Member of Australian Guardians today.

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