CITATION: | H.E.S.T Australia Ltd v Attorney-General (Qld) & Anor; Mercy Super Pty Ltd v Attorney-General (Qld) & Anor [2022] QSC 221 |
PARTIES: | In proceeding No BS 10464 of 2022: H.E.S.T AUSTRALIA LTD (ABN 66 006 818 695) in its capacity as trustee for the HESTA SUPERANNUATION FUND (ABN 64 971 749 321) (applicant) v ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND (first respondent) AND ATTORNEY-GENERAL FOR THE STATE OF VICTORIA (second respondent) In proceeding No BS 10501 of 2022: MERCY SUPER PTY LTD (ABN 98 056 047 324) in its capacity as trustee for MERCY SUPER (ABN 11 789 425 178) v ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND (first respondent) AND ATTORNEY-GENERAL FOR THE STATE OF VICTORIA (second respondent) |
FILE NO/S: | BS 10464 of 2022 BS 10501 of 2022 |
DIVISION: | Trial Division |
PROCEEDING: | Originating Application |
ORIGINATING COURT: | Supreme Court at Brisbane |
DELIVERED ON: | 17 October 2022 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 13 September 2022 |
JUDGE: | Kelly J |
ORDER: | In proceeding 10464/22, the orders of the court are that:
(together, the Offence Provisions).
In proceeding 10501/22, the orders of the court are that:
(together, the Offence Provisions).
|
CATCHWORDS: | PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – DECLARATIONS – APPROPRIATE FORM OF RELIEF – DISCRETION OF COURT – where the applicants are both trustees for registrable superannuation entities, Mercy Super and the HESTA Superannuation Fund – where the applicants propose to effect a successor fund transfer of the members of Mercy Super Fund and their assets to the HESTA Superannuation Fund – where the proposed successor fund transfer involves the transfer of Mercy Super members, their benefits and matching assets to HESTA – where the transferred assets are not impressed with the first trust, but rather a new trust defined and constituted by the terms of the successor fund transfer deed and the governing rules of the successor fund – where neither trustee relies on a power of appointment in the transaction documents – where s. 442F of the Criminal Code (Qld) and s. 180 of the Crimes Act 1958 (Vic) prohibit secret commissions to trustees in return for substituted appointment – where the applicants seek a declaration that the proposed successor fund transfer is not a substituted appointment – where the applicants argue that the proposed successor fund transfer does not involve the replacement or substitution of a trustee – where the parties and APRA did not submit that the Court lacked jurisdiction to make the declaration sought – whether a declaration should be made that the proposed successor fund transfer is not a substituted appointment for the purposes of s. 442F of the Criminal Code (Qld) and s. 180 of the Crimes Act 1958 (Vic) EQUITY – TRUSTS AND TRUSTEES – APPLICATIONS TO COURT FOR ADVICE AND AUTHORITY – where the applicants alternatively seek assent or directions of the Court in respect of the proposed successor funds transfer – whether the Court should direct that the applicants are justified in effecting the proposed successor funds transfer Acts Interpretation Act 1954 (Qld), s 35 Crimes Act 1900 (NSW), s 249E Crimes Act 1958 (Vic), s 175, s 180Criminal Code (Qld), s 442A, s 442F Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic), s 4 Jurisdiction of Courts (Cross-Vesting) Act 1987 (Qld), s 9 Superannuation Industry (Supervision) Regulations 1994 (Cth), reg 1.03, reg 6.29 Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 54.01, r 54.02, r 54.03 Trusts Act 1973 (Qld), s 96Alcan (NT) Illumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27; [2009] HCA 41, cited Bass v Permanent Trustee (1999) 198 CLR 334, cited. Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297, considered Pharmacy Guild of Australia v Ramsay Health Care Ltd [2019] NSWSC 1045, considered Re BT Funds Management Ltd as trustee for Retirement Wrap Superannuation Fund [2022] NSWSC 401, considered Re Application by United Super Pty Ltd atf Construction and Building Unions Superannuation Fund [2021] NSWSC 1679, cited Sankey v Whitlam (1978) 142 CLR 1, cited X v Australian Prudential Regulatory Authority (2007) 226 CLR 630, cited |
COUNSEL: | AC Stumer for the applicant in BS 10464/22 D Hogan-Doran SC with T Glover for the applicant in BS 10501/22 GA Thompson KC with EL Hoiberg for the first respondent in both proceedings O Bigos KC with E Smith for the second respondent in both proceedings C Archibald KC with S MacKenzie for the Australian Prudential Regulation Authority, appearing with leave of the Court |
SOLICITORS: | Allens for the applicant in BS 10464/22 Ashurst for the applicant in BS 10501/22 Crown Law for the first respondent in both proceedings Victorian Government Solicitor’s Office for the second respondent in both proceedings Australian Prudential Regulation Authority, appearing with leave of the Court |
Matters of introduction and background
The Offence Provisions
“442F Secret commission to trustee in return for substituted appointment
Any person who offers or gives any valuable consideration to a trustee, or any trustee who receives or solicits any valuable consideration for himself or herself or for any other person, without the assent of the persons beneficially entitled to the estate or of a judge of the Supreme Court, as an inducement or reward for appointing or having appointed, or for joining or having joined with another in appointing, or for authorising or having authorised, or for joining or having joined with another in authorising, any person to be appointed in the person’s stead or instead of the person and any other person as trustee, commits a crime.
180 Secret commission to trustee in return for substituted appointment
Every person who offers or gives any valuable consideration to a trustee and every trustee who receives or solicits any valuable consideration for himself or for any other person without the assent of the persons beneficially entitled to the estate or of the Supreme Court as an inducement or reward for appointing or having appointed or for joining or having joined with another in appointing or for authorizing or having authorized or for joining or having joined with another in authorizing any person to be appointed in his stead or instead of him and any other person as trustee shall be guilty of an indictable offence, and shall—
trustee includes the public trustee, an executor, administrator, liquidator, official assignee, or trustee in bankruptcy, receiver, administrator appointed under the Guardianship and Administration Act 2000, person having power to appoint a trustee, or person entitled to obtain probate of the will or letters of administration to the estate of a deceased person, or any other person occupying a fiduciary position.
trustee includes trustee executor administrator liquidator trustee within the meaning of any Act relating to bankruptcy receiver director administrator or guardian under the Guardianship and Administration Act 2019 or attorney under an enduring power of attorney under the Powers of Attorney Act 2014 or person having power to appoint a trustee or person entitled to obtain probate of the will or letters of administration to the estate of a deceased person;
valuable consideration includes any real or personal property; also money, loan, office, place, employment, agreement to give employment, benefit, or advantage whatsoever, and any commission or rebate, payment in excess of actual value of the goods or service, deduction or percentage, bonus or discount, or any forbearance to demand any moneys or moneys’ worth or valuable thing; also some detriment, loss or responsibility given, suffered, or taken, or the refraining from carrying out or doing something which lawfully should be done; and the acceptance of any of the said things shall be deemed the receipt of a valuable consideration. The offer of any valuable consideration includes any offer of any agreement or promise to give, and every holding out of any expectation of valuable consideration. The receipt of any valuable consideration includes any acceptance of any agreement, promise, or offer to give, or of any holding out of any expectation of valuable consideration.
valuable consideration includes any money loan office place employment agreement to give employment benefit or advantage whatsoever and any commission or rebate deduction or percentage bonus or discount or any forbearance to demand any money or money's worth or valuable thing and the acceptance of any of the said things shall be deemed the receipt of a valuable consideration;
valuable consideration when used in connexion with the offer thereof includes any offer of any agreement or promise to give and every holding out of any expectation of valuable consideration;
valuable consideration when used in connexion with the receipt thereof includes any acceptance of any agreement promise or offer to give and of any holding out of any expectation of valuable consideration.
BTFM
“[BT] is concerned that [s. 249E of the Crimes Act 1900 (NSW) and similar provisions in Queensland, Victoria and Western Australia] apply to the solicitation from or payment by a potential transferee or Westpac of the costs, losses or indemnities earlier described. Accordingly, it sought the consent of this Court to the solicitation and payment of those amounts, and any agreement to pay those amounts by the potential transferees or Westpac.”
“It seems clear that [s 249E of the Crimes Act 1900 (NSW) and similar provisions in Queensland, Victoria and Western Australia] are broad enough to catch the payments or benefits which are in contemplation. Taking s. 249E as an example, [BT] holds the assets of the Plan as trustee for the members. It is contemplating appointing another trustee to hold those assets on trust for the members in its place. It is seeking to solicit payments and indemnities in connection with that transaction; and those payments and indemnities are sought and will be made as an inducement for the appointment, at least in the sense that [BT] intends to take into account, among other things, the extent to which a potential transferee is willing to pay or provide that indemnity in deciding whether and, if so, to whom it will transfer the business.”
The applicants’ primary argument
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”
Declaratory Relief
“The jurisdiction to make a declaratory order without consequential relief is a large and most useful jurisdiction. In my opinion, the present was an apt case for its exercise. The respondent undoubtedly desired and intended to do as he asked the Court to declare he lawfully could do. The matter, in my opinion, was in no sense hypothetical, but in any case not hypothetical in a sense relevant to the exercise of this jurisdiction. Of its nature, the jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law. Indeed, it is that capacity which contributes enormously to the utility of the jurisdiction.
…
I find no reason to criticise the form of the declaration made. Indeed I would endorse it as a most careful and precise exercise of the jurisdiction to make a declaratory order.”
“The power to make declaratory orders has proved to be a valuable addition to the armoury of the law. The procedure involved is simple and free from technicalities; properly used in an appropriate case the use of the power enables the salient issue to be determined with the least possible delay and expense. But the procedure is open to abuse, particularly in criminal cases, and if wrongly used can cause the very evils it is designed to avoid…[A] court will be reluctant to make declarations in a matter which impinges directly upon the course of proceedings in a criminal matter. Once criminal proceedings have begun they should be allowed to follow their ordinary course unless it appears that for some special reason it is necessary in the interests of justice to make a declaratory order.”
The Alternative Case: Assent or Directions
There would be no offence committed where the beneficiaries or a Judge of the Supreme Court authorised the transaction.
“54.01 Definitions
In this Order –
administration proceeding means a proceeding for the administration of an estate or the execution of a trust under the direction of the Court;
…
54.02 Relief without general administration
…
Orders
(together, the Offence Provisions).
(together, the Offence Provisions).
[1] Ex 1, Tab 5, [17].
[2] Ex 1, Tab 5, [18].
[3] Ex 1, Tab 5, [22].
[4] See Ex 1, Tab 5, [54] and Exh TMC-1, 318-361 (SFT Deed executed 26 July 2022).
[5] See Superannuation Industry (Supervision) Regulations 1994 (Cth) (SIS Regulations), rr. 6.29 and 1.03.
[6] A requirement of an SFT is an agreement between the transferring RSE licensee and the receiving RSE licensee that the successor fund will confer on the members ‘equivalent rights’ to those rights the member had in the transferring RSE in respect of their benefits: SIS Regulations, r. 1.03.
[7] Ex 1, Tab 13, Exh DJB-1, 239 (Successor Fund Transfer Deed) cl 10.1.
[8] Ex 1, Tab 13, Exh DJB-1, 226 (Successor Fund Transfer Deed) cl 3.1(d).
[9] Ex 1, Tab 13, Exh DJB-1, 226 (Successor Fund Transfer Deed) cl 3.1(e).
[10] Ex 1, Tab 13, Exh DJB-1, 238 (Successor Fund Transfer Deed) cl 9.2.
[11] Ex 1 Tab 13, [42]-[44].
[12] Ex 1 Tab 13, Exh DJB-1, 208 (Letter of Intent) cl 10.
[13] Ex 1 Tab 9.
[14] Ex 1 Tab 1.
[15] Orders of Jackson J dated 5 September 2022.
[16] [2022] NSWSC 401 [1].
[17] Ibid [13].
[18] Ibid [1], [19]-[22].
[19] Criminal Code (Qld), s. 442A(2); Crimes Act 1953 (Vic), s. 175(2). See too Criminal Code (WA), s. 546(8).
[20] [2002] NSWSC 401 [1].
[21] Ibid [10].
[22] Ibid [13].
[23] Ibid [18].
[24] Ibid [13].
[25] T 1-54 ll 1-10.
[26] (2009) 239 CLR 27, 46-47 [47] (Hayne, Heydon, Crennan and Kiefel JJ).
[27] T 1-46 l 45-T 1-47 l 5.
[28] Victoria, Parliamentary Debates, Legislative Assembly, 25 July 1905, 511, 515 (J Mackey).
[29] See Acts Interpretation Act 1954 (Qld), s. 35C(1) (heading forms part of the provision to which it is a heading).
[30] Paul Finn, Fiduciary Obligations (The Federation Press, 40th Anniversary Republication with Additional Essays, 2016) 300 [footnotes omitted].
[31] Ex 1, Tab 17 [12]-[18].
[32] JD Heydon and MJ Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis Butterworths, 8th ed, 2016) (Jacobs’ Law of Trusts) [15‑01].
[33] See eg Trustee Act 1958 (Vic), Parts III and IV; Trusts Act 1973 (Qld), Part 2 (Appointment and discharge of trustees—devolution of trusts).
[34] Trustee Act 1958 (Vic) s. 41(1); Trusts Act 1973 (Qld) s. 12(1).
[35] Trustee Act 1958 (Vic) s. 41; Trusts Act 1973 (Qld) s. 12.
[36] 11 G.4 & 1 W.4 c.60; consolidated and enlarged in The Trustee Act 1850 (UK) 13&14 Vic c.60 and The Trustee Act 1852 (UK) 15&16 Vic c.55.
[37] 16 Vic No 19; extended in The Trustee Act 1853 (NSW) 17 Vic No 4.
[38] 19 Vic No 20.
[39] 31 Vic No 19; consolidated in Trustee and Executors Acts 1897-1964 (Qld).
[40] Trustee Act 1958 (Vic) ss. 44(3), 45, Trusts Act 1973 (Qld) ss. 15, 16.
[41] Perry Herzfeld and Thomas Prince, Interpretation (Thomson Reuters, 2nd ed, 2020) [8.280], [8.290].
[42] Ex 1, Tab 5, [57(a)], referring to Exh TMC-1, 157 (Mercy Super Trust Deed) cl 19.3 (the Mercy Super Trustee may transfer the whole or part of a member’s benefit to another superannuation fund without the request or consent of the member where the superannuation fund is a “successor fund”).
[43] Ex 1, Tab 5, [57(b)], referring to Ex 1, Tab 13, Exh DJB-1, 170 (HESTA Consolidated Trust Deed) cl 22.1 (the HESTA Trustee may accept moneys from another superannuation fund in respect of a person’s interest in that superannuation fund and shall apply the same to HESTA for the purpose of providing benefits for or in respect of that person and admit the person as a member of HESTA). See also Ex 1, Tab 13, [20].
[44] SIS Regulations, reg. 1.03(1).
[45] The power may be expressly conferred by the trust instrument or conferred by statute. The Court also has an inherent jurisdiction. See Jacobs’ Law of Trusts, 490-493 [20-57]-[20-59], 496-497 [20-62]. See e.g. Pilkington v Inland Revenue Commissioners [1964] AC 612; Fischer v Nemeske Pty Ltd (2016) 257 CLR 615.
[46] Re Clore [1982] Ch 456.
[47] Re Hastings-Bass [1975] Ch 25.
[48] (1972) 126 CLR 297.
[49] Ibid 305.
[50] (1999) 198 CLR 334, 356 [47] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).
[51] (1978) 142 CLR 1.
[52] Ibid 25-26.
[53] (2007) 226 CLR 630, 637 [17].
[54] Gleeson CJ, Gummow, Hayne, Callinan, Heydon and Crennan JJ.
[55] [2019] NSWSC 1045.
[56] Ibid [157], [160].
[57] [2004] 1 AC 357 [23].
[58] Pharmacy Guild of Australia v Ramsay Health Care Ltd [2019] NSWSC 1045 [161].
[59] Ibid [162].
[60] Ibid [164]; see also Brightwater Care Group (Inc) v Rossiter (2009) 40 WAR 84, 90 [19].
[61] Ibid [166].
[62] Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, 437-438 (Gibbs J), quoting Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438, 448 (Dunedin LJ).
[63] T 1-39 ll 20-25.
[64] Ex 1, Tab 13, Exh DJB-1, 226 (Successor Fund Transfer Deed) cl 3.1(b).
[65] Ex 1, Tab 13, [34].
[66] Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378, 387 [30] (Greenwood, Logan and Yates JJ).
[67] [2022] NSWSC 401 [17] (Ball J).
[68] As to the meaning of “criminal” generally see Western Truck Towing Pty Ltd v Magistrates’ Court of Victoria [2014] VSC 88 [31]-[38] (Ginnane J) (judicial review proceedings in context of a prosecution not a “criminal” proceeding).
[69] Brackenridge v New Zealand [2000] 1 Qd R 1 [8] (Pincus JA), [9]-[15] (Thomas JA), [18] (Ambrose J) (extradition a “criminal” proceeding under s. 9(2) of the Jurisdiction of Courts Cross-Vesting Act 1987 (Qld)).
[70] COA v HAT [2013] QCA 272 (McMurdo P) “…it is by no means certain that the Cross-vesting Act is intended to apply to quasi-criminal matters of the kind with which her application for leave to appeal is concerned, in light of the Act’s definition of ‘proceeding’” (in the context of an application to transfer an appeal from a domestic violence order).
[71] Morice v Bishop of Durham (1804) 9 Ves Jun 399, 404-405; Palmer v Ayres; Ferguson v Ayres (2017) 259 CLR 478, [84] (Gageler J).
[72] New South Wales, Parliamentary Debates, Legislative Council, 21 November 1919, 2906 (J Garland, Attorney-General). See too New South Wales, Parliamentary Debates, Legislative Assembly, 1 December 1919, 3272 (D Storey).
[73] Secret Commissions Prohibition Act 1920 (SA). See s. 9 (‘Secret Commission for trustee in return for substituted appointment’).
[74] South Australia, Parliamentary Debates, Legislative Council, 28 September 1920, 822-3 (J G Bice).
[75] It has been held that the NSW Supreme Court has power to give directions to foreign trusts under s. 63 of the Trustee Act 1925 (NSW): BTA Institutional Services Ltd v BNY Trust (Australia) Registry Ltd [2009] NSWSC 1294; Re Dion Investments Pty Ltd [2013] NSWSC 1941. However, there is some debate about the correctness of that position: Application of Rinehart (2020) 104 NSWLR 274 [111]-[113] (Parker J); Application by United Super Pty Ltd atf Construction and Building Unions Superannuation Fund [2021] NSWSC 1679 [58] (Henry J).
[76] Application by United Super Pty Ltd atf Construction and Building Unions Superannuation Fund [2021] NSWSC 1679 [61] (Henry J).
[77] [2021] NSWSC 1679 [55]-[64].
[78] Ex 1, Tab 5, [30]-[58].
[79] Ex 1, Tab 13, [27]-[31].
