Shimshon v MLC Nominees Pty Ltd [2020] VSC 640

TRUSTS AND TRUSTEES - Superannuation trust - Alleged breach of general law duties and statutory covenants by trustee - Whether actionable by individual fund member with expectant or contingent interest - Nature of available remedy considered.

1 The parties submitted the following question for preliminary determination, pursuant to r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules').

Were the proceedings validly commenced as a group proceeding under Part 4A of the Supreme Court Act 1986 (Vic), having regard to s 33B(2)(b)(ii)?

2 The question addresses the issue of whether the proceeding is, or can be, a group proceeding; that is, can the plaintiff's claim be properly commenced on behalf of group members.

3 Part 4A of the Supreme Court Act 1986 (Vic) ('Act') sets out the statutory provisions that regulate group proceedings in this court. The question turns on the proper construction of s 33B of the Act - specifically, s 33B(2)(b)(ii) ('provision') - that governs the application of Part 4A by specifying proceedings to which the Part does not apply. Section 33B states:

33B Application

(1) This Part applies to a cause of action whether arising before or on or after 1 January 2000.

(2) This Part does not apply to -

(a) a proceeding under sections 34 and 35 of the Act; or

(b) a proceeding concerning -

(i) the administration of the estate of a deceased person; or

(ii) property subject to a trust; or

(c) a proceeding commenced under Order 18 of Chapter I of the Rules.

4 There are two questions to be resolved. The first is a question of statutory construction. What is the meaning of 'a proceeding concerning property subject to a trust'? The second question is does the exclusion from Part 4A, properly construed, apply to the proceeding?

5 By way of background, in 2012 the Commonwealth Parliament passed legislation providing for default superannuation products called 'MySuper', which were aimed at providing simple and low cost default superannuation products.[1] Since 1 January 2014, superannuation funds have been required to offer a MySuper product to be eligible to receive default superannuation contributions for new employees. From 1 July 2017, all member accounts in default investment options were required to be invested in MySuper products.

6 The proceeding concerns accrued default amounts. An 'accrued default amount' (or 'ADA') for a member of a regulated superannuation fund is the amount of a member's superannuation interests where the member has not given the trustee of the fund any direction about the investment option to be applied, and/or that is invested in the 'default investment option'[2] under the current governing rules of the fund.[3]

7 The plaintiff brings the proceeding as a group proceeding pursuant to Part 4A of the Act on his own behalf and on behalf of the group members described in paragraph 3 of the amended statement of claim.

8 The proceeding concerns two superannuation trustees and two superannuation funds. In the relevant period prior to 1 July 2016, the first defendant ('MLC Nominees') was the trustee of The Universal Super Scheme ('TUSS'). From 9 May 2016, the second defendant ('NULIS') has been the trustee of the MLC Super Fund. Each of TUSS and the MLC Super Fund are trusts governed by a trustee and are superannuation funds regulated under the Superannuation Industry (Supervision) Act 1993 (Cth) ('SIS Act'). National Australia Bank Ltd ('NAB') is the ultimate holding company of the defendants.

9 Prior to 1 July 2016, MLC Nominees offered in TUSS a superannuation product called the MasterKey Business Super Product ('MasterKey'). Within MasterKey:

(a) MLC Nominees offered default investment options that could be nominated by employers; and

(b) any contributions invested in those default investment options were accrued default amounts ('NAB ADAs').

10 On 1 July 2016, MLC Nominees transferred the assets of TUSS to the MLC Super Fund, of which NULIS was the trustee, and members of TUSS became members of the MLC Super Fund.

11 On or about 3 December 2016 and 25 March 2017, NULIS transferred $6.3 billion and $563 million respectively in NAB ADAs attributable to MasterKey that had been held by members of TUSS to a MySuper product.

12 Group members are primarily defined as persons who at any time were members of TUSS and held NAB ADAs attributable to MasterKey that were transferred by NULIS in December 2016 or March 2017 to a MySuper product.

13 The principal allegation by the plaintiff and group members is that the defendants failed to transition the NAB ADAs into a MySuper product in a timely manner. They allege that by reason of the delay in these transfers, they have suffered harm in the form of increased fees and commissions and lower investment returns, which will reduce the amount they can expect to receive from TUSS and/or the MLC Super Fund. The plaintiff and group members allege that the defendants' conduct was a breach of their statutory duties under the SIS Act and/or breach of their general law duties.

14 The claims are based on obligations owed by MLC Nominees and NULIS as trustees. For present purposes, the questions arising in the proceeding can be identified by reference to the common questions of law and fact that have been pleaded by the plaintiff, which are:

(a) Did MLC Nominees' conduct, as pleaded in the statement of claim, contravene a covenant or covenants contained or taken to be contained in the Governing Rules[4] of TUSS?

(b) Did NULIS' conduct, as pleaded in the statement of claim, contravene a covenant or covenants contained or taken to be contained in the Governing Rules of the MLC Super Fund?

(c) If the answer to question (a) or question (b) is yes, did the plaintiff and group members suffer loss or damage by or resulting from each such contravention?

(d) Did MLC Nominees breach the general law duties owed by it to the beneficiaries of TUSS?

(e) Did NULIS breach the general law duties owed by it to the beneficiaries of the MLC Super Fund?

(f) If the answer to question (d) or question (e) is yes, did the plaintiff and group members suffer loss or damage by or resulting from the breach or breaches of general law duties?

(g) Are the covenants set out in s 52 of the SIS Act implied terms of the TUSS trust deed?

(h) Are the covenants set out in s 52 of the SIS Act implied terms of the MLC Super Fund trust deed?

(i) Is equitable compensation available for breach of the covenants set out in s 52 of the SIS Act as implied terms of the trust deed?

(j) What principles are to be applied in assessing any statutory compensation to be paid to the plaintiff or group members in these proceedings?

(k) What principles are to be applied in assessing any equitable compensation to be paid to the plaintiff or group members in these proceedings?

(a) notwithstanding that the statutory regimes for group proceedings/class actions, where they exist, in Commonwealth and State jurisdictions are substantially uniform, the provision has no equivalent in other Australian jurisdictions. It is unique to Victoria's regime;

(b) neither the explanatory memorandum nor the second reading speech shed light on the intended purpose or scope of the provision; and

(c) the only judicial consideration of the provision was in my decision in Sheppard v The Uniting Church in Australia Property Trust (Victoria).[5]

16 The plaintiff contended that the proceeding is not excluded from the application of Part 4A because it is not a proceeding concerning property subject to a trust in the sense intended by the provision. He developed three submissions in support of this conclusion.

17 First, the plaintiff contended that the other three exceptions contained in s 33B of the Act suggested the provision was intended to apply to situations where the law already provides for alternative means to determine proceedings affecting the interests of multiple persons. In the case of each other exception in s 33B, the evident legislative intention was to leave intact existing or alternative procedures facilitating 'grouped' or 'representative' claims. I did not understand the defendants to take issue with the proposition, which I accept.

18 Section 33B(2)(a) had a limited role: excluding the application of Part 4A to proceedings under ss 34 and 35 of the Act. Those sections - providing for a proceeding with certain conditions to be commenced as a 'representative proceeding' - were repealed when Part 4A was inserted into the Act. The purpose of the exclusion was to ensure orderly transition for proceedings already commenced under ss 34 and 35 when Part 4A commenced.

19 Section 33B(2)(b)(i) refers to proceedings 'concerning the administration of the estate of a deceased person'. There is a developed body of law and procedure for these proceedings that was not to be taken to be altered by the introduction of Part 4A, notwithstanding that such proceedings might fall within the inclusionary criteria for group proceedings in s 33C(1).

20 Section 33B(2)(c) excludes representative proceedings of a different form provided for by Order 18 of the Rules that, unless excluded, could also satisfy the criteria under s 33C(1).

21 In each case, the clear purpose of the exclusion was to make plain that the Part 4A regime did not apply to a specific category of proceedings. Those submissions may be accepted. In the case of the provision itself, the plaintiff submitted that the alternative form of procedure for proceedings concerning property subject to a trust was found in Order 16 of the Rules, considered below.

22 The plaintiff's second contention was that, consistently with that broader scheme, existing alternative procedures for grouped or representative claims concerning property subject to a trust were preserved. The legal owner of trust property is the trustee and, as a general proposition, beneficiaries do not have the right to take proceedings with respect to trust property.[6] A beneficiary only has rights against a trustee in relation to the performance of the trustee's duties and may only seek leave to sue in circumstances where the trustee inexcusably refuses to bring such proceedings.[7]

23 The duty of a trustee to take proceedings to redress a breach of trust is well-established, and as Brooking J (as he then was) observed in Young v Murphy ('Young'),[8] is founded on the duty to get in the trust estate or to obtain all of the property that belongs to the trust or to recover the trust fund. Proceedings for breach of trust are taken for the benefit of the beneficiaries of the trust. In such proceedings, there is no need for the trustee to make the beneficiaries parties to the action because 'the trustee sufficiently represents their interests for the purposes of proceedings to have a breach of trust redressed'.[9]

24 The plaintiff contended that the provision operates to ensure that trustees may continue to take action on behalf of beneficiaries in the traditional manner, without needing to adopt the Part 4A procedure. Similarly, it makes clear that Part 4A was not intended to give to beneficiaries the right to circumvent the prima facie obligation of the trustee to bring such proceedings, or to allow them to avoid the need to obtain leave to bring such proceedings if the trustee unreasonably refused to do so.[10]

25 The plaintiff's third contention, following closely on his second, is the rationale that underpins the provision is that Part 4A is not intended to effect any change to the general principle summarised by Brooking J in Young. Part 4A does not expand the circumstances in which a beneficiary might commence proceedings against third parties in respect of property the subject of a trust. The intention of the provision is that the interests of beneficiaries in trust property are vindicated through proceedings in those circumstances in which they are represented by the trustee, adopting the procedure found in Order 16 of the Rules.

26 A crucial distinction is said to exist between proceedings 'concerning property subject to a trust' and proceedings in which a beneficiary exercises the right to sue the trustee for alleged breaches of duty in relation to trust property. Every individual beneficiary has that right,[11] and does not advance any such claim in a representative capacity. However, all beneficiaries of the trust are necessary parties to that claim, because their interests may be affected by the orders sought by the aggrieved plaintiff beneficiary. The plaintiff submitted that the rationale of the provision was not to exclude proceedings of this kind, which as individual claims may be conducted as a group proceeding under Part 4A.

27 The plaintiff submitted his proceeding was of the latter kind. It was an individual claim for breach by a trustee of specific statutory and general law duties. It was not a proceeding concerning property subject to a trust. It was a claim for compensation for loss or damage suffered as a result of the defendants' conduct that was in contravention of the alleged duties. The right to claim compensation pursuant to the statutory causes of action was an individual right, as was clear from s 55(3) of the SIS Act. It is not possible for an individual beneficiary to bring such a claim on a representative basis on behalf of other beneficiaries except as a Part 4A group proceeding.

28 The defendants pointed to three characteristics of the proceeding:

(a) the plaintiff sues the defendants as trustees;

(b) the contravention and breaches alleged against the defendants concern their conduct as trustees; and

(c) at the heart of the proceeding are the transaction dealing in the NAB ADAs that are trust property.

29 The defendants contended the question must be answered by reference to the meaning to be given to the word 'concerning', which is to be construed in the context of the provision and having regard to the broader statutory context and purpose.[12] The defendants contended that the word 'concerning' is a word of broad meaning, ordinarily understood as 'relating to' or 'regarding'. Whether the word can be read more narrowly or more broadly is answered by the statutory context.

30 The ordinary meaning of the word is identified in the Oxford English Dictionary to be 'as regards, as relates to'. The Macquarie Dictionary defines 'concerning' as 'relating to; regarding; about'. The defendants submitted that the dictionaries demonstrate that, in its ordinary meaning, the word 'concerning' can be understood in a broader sense 'relating to', 'regarding' or, in a narrower way 'about'.

31 The defendants cited Minister of State for Immigration and Ethnic Affairs v Teoh,[13] as demonstrating the importance of context and purpose in construing 'concerning' where it appeared in the phrase 'action concerning children' in art 3 of the United Nations Convention on the Rights of the Child. Mason CJ and Deane J rejected a contention - that a decision that affected children was not a decision concerning them because it did not touch or relate to them - as unduly narrow, and concluded that giving the word 'concerning' a wide ranging application was more likely to achieve the objects of the convention.

32 In Australian Competition and Consumer Commission v PT Garuda Indonesia Ltd,[14] the Federal Court considered the word 'concerns' in the context of s 11 of the Foreign State Immunities Act 1985 (Cth). Jacobson J stated:

In my view, it is plain that the word "concerns" is a word of connection. It looks to the relationship between two subjects. The ordinary meaning of "concerning" (and "concerns") is given in W Little, HW Fowler, J Coulson and CT Onions, The Shorter Oxford English Dictionary, 3rd ed, Clarendon Press, Oxford, 1973 as "regarding, touching, in reference or relation to". The Macquarie Dictionary, Macquarie Library Pty Ltd, 1982 definition is to the same effect.

I do not see any relevant difference between that meaning and the term "relating to". Clearly enough, the meaning of "concerns" or "relating to" must be considered in its statutory context. The Court of Appeal of England recently observed, when construing the expression "relating to" in s 3(1) of the State Immunity Act that it is an expression which is capable of bearing a broader or narrower meaning as the context requires: ...

In my view, the same may be said of the word "concerns" in s 11 of the Act.

33 The defendants pointed to the following five features of the Act as warranting a broad construction of 'concerning':

(a) sub-paragraphs (a) and (c) of s 33B(2) are of a different character to sub-paragraph (b). The purpose of these sub-paragraphs is to ensure that a 'representative proceeding' commenced by way of a different statutory or procedural mechanism is not subject to additional or inconsistent requirements under Part 4A;

(b) unlike sub-paragraphs (a) and (c), sub-paragraph (b) is directed to proceedings concerning a particular subject matter, being the administration of a deceased estate and property subject to a trust;

(c) accepting the plaintiff's submission that the statutory purpose of the exclusions in s 33B(2) appears to be to ensure that Part 4A was not superimposed on situations where the law already provides for proceedings affecting the interests of multiple persons to be determined, identification of that statutory purpose does not answer the question of how broadly or how narrowly to read the provision;

(d) the word 'concerning' connects the subject matter with a 'proceeding', rather than connecting the subject matter to a 'claim' or 'relief sought in a proceeding'. While these alternative examples may have narrowed the reach of sub-paragraph (b), Parliament adopted a broader formulation for the provision, such that one must ask whether the proceeding as a whole (and not just the claims or the relief) concern the specified subject matter; and

(e) the statutory language does not sit well with the plaintiff's submission that the rationale for the provision is to ensure that Part 4A is not used to expand the circumstances in which a beneficiary might commence proceedings against third parties in respect of property the subject of a trust. More specific and narrow language would have been used if the provision was not intended to apply to proceedings by beneficiaries alleging breaches of a trustee's duties in relation to trust property. Such claims can be seen as 'representative', in the sense that a successful claim by an individual beneficiary against a trustee for breach of duty, will often benefit other beneficiaries.

34 Accordingly, using the word 'concerning' to connect to a 'proceeding' - rather than a claim or relief sought in a proceeding - demonstrates from the statutory context or purpose that the word has considerable breadth. This proceeding is excluded from the application of Part 4A by virtue of the provision, as it is a proceeding 'concerning' (meaning relating to and touching upon) trust property. To read the provision as having no application where a beneficiary sues a trustee for a breach of duty is to adopt an unduly narrow construction.

(a) the defendants' first and second contentions make the same point in different ways, but, properly understood, sub-paragraphs (a) to (c) of s 33B(2) can be seen as dealing with different kinds of 'grouped' or 'representative' claims. The distinction between proceedings commenced in a particular way and proceedings concerning particular subject matter is of no consequence. Courts have traditionally facilitated the resolution of disputes involving common or related interests of a number of individuals by particular, well-established rules of practice and procedure;

(b) responding to the third contention, identification of the purpose of s 33B(2) enables the identification of a construction of the provision that is sufficiently broad to achieve the purpose, without going beyond it and creating unintended consequences. Once identified, the purpose permits recognition of the fact that excluding trustee (or, in limited circumstances, beneficiary) claims in respect of trust property, as traditionally understood, from the operation of Part 4A would serve the statutory purpose; while simultaneously recognising the exclusion of individual claims of beneficiaries that have never been treated as representative would not serve that purpose;

(c) posing the question of whether the proceeding as a whole concerns property subject to a trust overlooks, if not erases, the well-established distinction in the law between proceedings with respect to trust property and proceedings involving trust property in some indirect manner. A construction that asks no more than whether the proceedings concerned trust property in some unspecified way is thus apt to overlook the very sort of distinction that Part 4A was trying to draw. The consequence would be that any proceeding that has any connection to the administration of estates or to trust property sufficient to justify the conclusion that the proceeding 'concerns' those matters would be caught by the exclusion; and

(d) an example of an undesirable consequence from such a construction might be a shareholder class action based on breach of continuous disclosure obligations, where the shares bought or sold by the plaintiff or some of the group members were held in a superannuation fund or a family trust and therefore property subject to a trust. The distinction contended for by the plaintiff, by reference to existing legal principles, identifies an appropriate limitation on the breadth of the connection required between the proceeding and the property subject of a trust. In contrast, the construction contended for by the defendants would exclude a very broad range of proceedings from Part 4A without principled reasons for such exclusion. Fundamentally, the construction advanced by the defendants is not based on there being a rational purpose or reason for the exclusions contained in s 33B(2)(b).

36 The plaintiff submitted that the narrow construction he propounded is consistent with the fact, context and purpose of Part 4A and adopts a principled basis for the exclusion in the provision. It is based on the settled distinction in trust law between proceedings against the existing trustee that concern breaches of trustee duties that must incidentally relate to trust property (or other proceedings in which trust property is involved, other than as the object of a trustee's action) and proceedings concerning property subject to a trust brought by a trustee in the discharge of its duties of the kind described in Young.

37 Where two alternative constructions of legislation are open, that which is consonant with the common law is to be preferred,[15] and in the context of the provision it is the narrower construction that satisfies this principle.

38 The plaintiff further contended that the construction he propounded not only gives effect to that longstanding distinction, but also serves the purpose of ensuring that the provisions of Part 4A do not supplant or override the existing, well-developed, principles for dealing with a particular, limited, kind of claim. When considered, the provisions of Part 4A would be peculiarly inapposite to a trustee action with respect of trust property. For example, how would a beneficiary meaningfully 'opt out' of a claim in relation to general trust property?

39 Finally, the plaintiff contended that the defendants blurred the distinction between proceedings which concern breaches of trustee duties in relation to trust property and proceedings concerning property subject to a trust, by submitting, as their fifth contention,[16] that because a claim by an individual beneficiary may benefit other beneficiaries, it is, in that sense, 'representative'. The fact that the outcome of an individual beneficiary's action may affect other beneficiaries' interests does not make it representative. It merely explains why other beneficiaries may need to be joined as defendants or otherwise be bound in the result on the basis that their interests may be affected.

40 Thus, in the present proceeding, the beneficiaries caught by the group definition are those that held NAB ADAs attributable to MasterKey. Broadly, their claims relate to the time taken by the defendants to transfer the NAB ADAs to (the more beneficial) MySuper products. The resolution of the proceeding will leave unaffected the interests of the balance of the beneficiaries to the trusts, as the group members each have individual claims with individual issues, such as causation and loss, that nonetheless satisfy the commonality requirements in s 33C of the Act.

41 For the following reasons, the narrow construction of 'concerning' propounded by the plaintiff is the proper interpretation of the provision.

42 Starting with the broader statutory context and purpose in which the provision sits, it is convenient to look at the legislative history of the rules of court in respect of representative actions. Although representative proceedings generally have a long history in the common law, I can begin with the limited procedure specified by s 35 of the Act. By s 34, that procedure applied where three or more persons had the right to the same or substantially the same relief against the same person, and if separate proceedings were brought by each of them against that person in respect of that right, some common question of law or fact would arise in all the proceedings. Those sections, repealed in 2000, did not prove attractive to litigants. Rules of Court also applied that I will come to after explaining the history of the statutory provisions.

43 In 1997, the judges of the court suggested to the Attorney-General that Parliament should introduce a class action regime consistent with that in Part IVA of the Federal Court of Australia Act 1976 (Cth) ('FCA Act'),[17] which had its origins in the Australian Law Reform Commission's report 'Grouped Proceedings in the Federal Court'.[18] While the court's suggestion was described as having 'seemed to be well received', no action was taken by the government.[19]

44 On 9 December 1999, the judges of the court amended the Supreme Court (General Civil Procedure) Rules 1996 (Vic) to insert a new Order 18A (titled 'Group Proceedings') that commenced on 1 January 2000.[20] Order 18A in its substance replicated in the Rules much of Part IVA of the FCA Act.

45 Relevantly for present purposes, r 18A.02 stated:

18A.02 Application

(1) This Order applies to a cause of action whether arising before or after 1 September 1999.

(2) This Order does not apply to -

(a) a proceeding under sections 34 and 35 of the Act;

(b) a proceeding concerning -

(i) the administration of the estate of a deceased person; or

(ii) property subject to a trust;

(c) a proceeding commenced under Order 18.

46 On 24 January 2000, Schutt Flying Academy (Australia) Pty Ltd commenced a proceeding in the court against Mobil Oil Australia Limited, relying on the procedure set out in Order 18A.[21] Almost immediately after the commencement of the proceeding, the defendant challenged the validity of Order 18A, contending that the introduction of a class action regime was beyond the rule-making power of the court. The question was referred to a five bench Court of Appeal.[22]

47 On 8 June 2000, and by a majority of 3 to 2,[23] the Court of Appeal, finding that Order 18A was within the rule-making power of the Court, dismissed the defendant's application.[24] The defendant applied successfully to the High Court for special leave to appeal from the decision,[25] but before the proceeding reached the High Court that particular question fell away.

48 On 28 November 2000, Part 4A of the Act was inserted by s 13 of the Courts and Tribunals Legislation (Miscellaneous Amendments) Act 2000 (Vic).[26] Sections 34 and 35 of the Act were repealed. Order 18A in substance became Part 4A of the Act, which is substantially uniform with Part IVA of the FCA Act except for, relevantly for this application, s 33B. Section 33B of the FCA Act governs the application of Part IVA, but is in different terms.

49 The government stated that the Court of Appeal's decision in Mobil Oil, and the defendant's subsequent application to the High Court, was the primary basis for its decision to introduce the legislation, to dispel any lingering concerns and to place the validity of the procedure beyond doubt.[27] Neither the explanatory memorandum nor the second reading speech provide any insight into the statutory purpose of s 33B. Its origin lay in the Rules of Court, and assessment of the relevant rules applicable at the time of enactment is instructive as the procedural framework for group proceedings in Victoria and as to the purpose of s 33B(2).

50 The rules that regulated procedure in representative actions prior to the introduction of Part 4A were Orders 16, 18 and 18A.

16.01 Representation of unascertained persons

(1) This Rule applies to a proceeding relating to -

(a) the administration of the estate of a deceased person;

(b) property subject to a trust; or

(c) the construction of an instrument, including an Act.

52 Rule 16.01 provides that the court may appoint a personal representative on behalf of a person (or class of persons) interested or affected in a proceeding, including those having a beneficial interest in the estate or under the trust. If a representative is appointed, it is not necessary to join as a party any of those persons,[28] and a judgment or order in the proceeding shall bind those persons as if they were each a party.[29] Further, where a party sues or is sued as trustee, it is not necessary to join any of the persons having a beneficial interest under the trust, and a judgment or order in the proceeding binds the beneficiaries.[30]

53 When Part 4A commenced, the application of Order 18 was defined by r 18.01:

18.01 Application

This Order applies where numerous persons have the same interest in any proceeding, but does not apply to -

(a) a proceeding under sections 34 and 35 of the Act;

(b) a proceeding concerning -

(i) the administration of the estate of a deceased person; or

(ii) property subject to a trust;

(c) a proceeding commenced under Rule 18A.03.

54 Likewise, r 18A.02 imposed a limitation on the application of Order 18A:

18A.02 Application

(1) This Order applies to a cause of action whether arising before or after 1 September 1999.

(2) This Order does not apply to -

(a) a proceeding under sections 34 and 35 of the Act;

(b) a proceeding concerning -

(i) the administration of the estate of a deceased person; or

(ii) property subject to a trust;

(c) a proceeding commenced under Order 18.

55 It is convenient to pause at this point to reflect carefully on the reasoning in Young, which was referred to by the parties in submissions and was earlier discussed in that context. In that proceeding, a trustee company was replaced as trustee of an investment trust. The new trustees brought proceedings for breach of trust against the former trustee, which by then was in liquidation. Proceedings were also brought against other parties connected with the former trustee, including its directors, its parent company, the partners of a solicitor who was a director of the former trustee, the trust's auditors and, in a separate proceeding, the former trustee's professional indemnity insurers. The defendants (other than the former trustee) appealed the primary judge's ruling that the new trustees had standing to sue.

56 Importantly for present purposes, Brooking J (as his Honour then was) noted that the questions that arise in a proceeding where a claim is brought by a beneficiary for breach of trust did not arise in that appeal.[31] However, the defendants submitted that, in respect of each claim in which the standing of the new trustee was in contest, Brooking J's distillation of the following principles from his analysis of the authorities[32] was relevant:

(a) a trustee who has committed a breach of trust may be sued in respect of that breach, either by a beneficiary (including someone representing their estate) or by a co-trustee or successor trustee;

(b) proceedings to have a breach of trust redressed may be taken by a beneficiary against a trustee, a former trustee or the estate of a former trustee, or a stranger to the trust who has become liable to redress that breach. Such proceedings may also be taken by a trustee against a co-trustee, a former trustee or the estate of a former trustee, or against a stranger to the trust who has become liable as mentioned. The standing of a trustee to take proceedings to have a breach of trust redressed against such persons is well recognised;

(c) it is the duty of each trustee to recover the trust fund, for the benefit of its objects. Their obligation to take proceedings to do so (unless they would be futile) is part of their duty to get in the trust estate, which includes rights of action against co-trustees, former trustees and strangers to reimburse the trust estate for losses sustained through breach of trust;

(d) in general, if the trustee takes proceedings to have a breach of trust redressed, they need not make the beneficiaries parties, as the trustee sufficiently represents their interests for that purpose. This right is well established;[33]

(e) that said, beneficiaries should be made parties if their interests may not be properly represented by the trustee. If it can be said, that for any reason, the trustee should not be regarded as a party who will properly represent the interests of all beneficiaries, then they should not be regarded as able to sue without joining any beneficiary; and

(f) a distinction is drawn between proceedings in which the trustee seeks merely to get back the trust fund and proceedings that seek the execution or administration of the trust (or, in addition, seek to have the breach of trust redressed). The beneficiaries will or may be necessary parties, since their interests inter se or their rights against the trustee may conflict and have to be determined. This is not so if in the proceedings the trustee seeks only to get in the trust fund, or seeks in addition only any account necessary for that purpose. The former can be maintained by the trustee without joining the beneficiaries; the latter are or may be incapable of being so maintained.

57 Young defines circumstances where the provision operates to exclude proceedings from Part 4A. Where a cause of action arises or accrues in relation to property that is held on trust - such that it is the trustee and not the beneficiaries that have standing to bring that claim - the proceeding will be one concerning property subject to a trust in the sense required by the provision. That is because the remedy received for successful prosecution of the cause of action will be part of the trust corpus, legally owned by the trustee and held on trust for the beneficiaries.

58 Although in exceptional circumstances a court may permit a beneficiary to prosecute causes of action that are properly held on trust, those circumstances are usually based on the absence of appropriate action by the trustee.[34] For present purposes, such exceptional circumstance may regarded as falling into the category of actions by a trustee concerning trust property. The relevant distinction is between causes of action that are property subject to a trust and vindicated by a trustee, and personal causes of action held by a beneficiary in their own right, vindicated by personal proceedings. The nature of the proprietary right in the cause of action is defining, since in the former category the recovery by the prosecuting beneficiary will be property subject to a trust and can only be dealt with in accordance with the terms of the trust.

59 The purpose for the provision emerges more clearly from examination of the Rules of Court from which it was derived. That examination shows that the broader statutory context and purpose does not support the defendants' contention that the word 'concerning' ought to be given the broad meaning of 'relating to' or 'regarding'; rather, the word is intended to be understood in its narrower context, 'about'. To interpret the provision, which is an exclusion, narrowly is consistent with giving broad application to Part 4A.

60 In r 16.01 of the Rules, specifying how that Order applied to a proceeding, the phrase 'relating to' was used. In rr 18.01 and 18A.02, in specifying a proceeding to which those Orders did not apply, the word 'concerning' was used.

61 The different language adopted when moving from defining when a procedure does apply to a proceeding to when one does not apply is significant. The application of a procedure is affirmatively specified by using the broader term 'relating to' in Order 16, which is consistent with the applicable rules at law for a proceeding where the cause of action is property subject to a trust. On the other hand, excluding a proceeding from a beneficial process or procedure being provided to litigants through amendment to the rules of procedure or the statute warrants a more restrictive interpretation.

62 One of the intended purposes of Part 4A is to facilitate access to justice where a number of individuals have claims against a defendant. As Gleeson CJ observed in Mobil Oil Australia Pty Ltd v Victoria, the purpose of the regime:

is to avoid multiplicity of actions, and to provide a means by which, where there are many people who have claims against a defendant, those claims may be dealt with, consistently with the requirements of fairness and individual justice, together.[35]

63 In the early leading case of Wong v Silkfield Pty Ltd,[36] the High Court was presented with an issue of construction of s 33C of the FCA Act. The court observed that Part IVA created new procedures and conferred upon the Federal Court new powers in relation to the exercise of its jurisdiction. The court noted that like other provisions conferring jurisdiction upon or granting powers to a court, Part IVA is not to be read by making implications or imposing limitations not found in the words used; and that approach applied even if the evident purpose of the statute was to displace generally understood procedures. The court stated:

In particular, the scope of s 33C is not confined by matters not required by its terms or context; however, the terms must be construed and the context considered. Section 33C attempts to resolve issues which bedevilled representative procedures as they had been developed, particularly by courts of equity. This is apparent from the terms of s 33C(2).[37]

64 A like approach to statutory construction is also warranted by reference to the longstanding principle that a remedial or beneficial provision should be construed so as to give the fullest relief which the fair meaning of its language will allow. For example, in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act, the High Court said:

It has been said that remedial or beneficial legislation should be accorded a "fair, large and liberal interpretation", rather than one which is literal or technical. At issue in R v Kearney; Ex parte Jurlama was whether a claim could be made under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) with respect to land which could only acquire the necessary character of being "traditionally owned" by reference to land which lay outside that which was available to be claimed. Gibbs CJ (with whom Brennan, Deane and Dawson JJ agreed) said:

"If the section is ambiguous it should in my opinion be given a broad construction, so as to effectuate the beneficial purpose which it is intended to serve."

The statute in that case left the question open and provided the Court with choices in its approach to the statute's construction. In such a circumstance the Court was clearly justified in adopting a broader approach on the basis of the beneficial purpose of the statute.[38]

The principle that beneficial legislation is to be construed beneficially is a manifestation of the more general principle that all legislation is to be construed purposively. Application of that more general principle to New South Wales legislation is mandated by the requirement of s 33 of the Interpretation Act 1987 (NSW) that a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not. Neither in its general application nor in its particular manifestation can that principle be applied other than on the understanding that legislation "rarely pursues a single purpose at all costs" and that "[u]ltimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling".[39]

66 Gaegler J's observation has equal application in relation to Victorian legislation by reference to s 35(a) of the Interpretation of Legislation Act 1984 (Vic).

67 In accord with the principle that remedial legislation should be construed beneficially where more than one construction is open of provisions that restrict or are an exception to a remedial or beneficial provision, the narrower construction may be preferred so as to give full operation to the remedial or beneficial provision.[40]

68 Consistently with these principles, the defendants' contention that the broad meaning of 'concerning' - that is, 'relating to' or 'regarding' is the proper construction - cannot be accepted. The word should be read more narrowly in the sense of 'about', so as to give full effect to the remedial or beneficial construction of the section defining the application of Part 4A.

69 This construction is supported by the change of language evident in the Rules from 'relating to' for inclusionary application provisions such as Order 16, to 'concerning' for exclusionary application provisions such as Orders 18 and 18A.

70 For these reasons, I am satisfied that the Parliament intended that in the provision, the word 'concerning' should be construed in the narrower sense and proceedings that are excluded from the application of Part 4A of the Act are proceedings about property that is subject to a trust. Commonly, such proceedings will be based on causes of action where the relevant trust property is not merely general or incidental, but rather turns on the fact that the chose in action - the right to relief in the proceeding - is, or is about, trust property, and therefore that chose in action properly belongs to the trustee. In such cases, the law and procedure relating to the administration of trusts and estates has a settled procedure for representation of the interests of beneficiaries in Order 16 that Parliament intended not be affected by the new process by Part 4A for representative proceedings.

71 Applying the broad construction of 'concerning' will have unintended consequences. Parliament cannot have intended that incidental involvement with a trust not significant to the elements of the cause of action would exclude a proceeding from the application of Part 4A.

72 The common example of a group proceeding commenced on behalf of shareholders alleging breach by a publicly listed corporation of provisions of the Corporations Act to not engage in misleading or deceptive conduct or to comply with the continuous disclosure regime is instructive.[41] If the broad construction were adopted, the fact that a representative plaintiff or a group member acquired or disposed of shares in their capacity as trustee for a family trust or superannuation fund would mean that the proceeding was one concerning property subject to a trust and excluded from the operation of Part 4A. By comparing the circumstances of that group member with a group member who held title to the shares in their own names absolutely, the notion of property subject to a trust is completely tangential to or remote from the subject matter of the proceeding.

73 Conversely, it is nonsensical to contemplate an action brought by a trustee by the procedure under Part 4A to recover trust property or to seek restoration for the loss of trust property on behalf of the beneficiaries of the trust proceeding. Aside from it being unnecessary for a trustee to rely on a 'representative' regime when it takes action on behalf of beneficiaries,[42] the use of that procedure would enable any beneficiary to opt out of the proceeding under s 33J of the Act. Such a person would be taken to have never been a group member, but otherwise remain an object of the trust, resulting in irreconcilable duties for the representative plaintiff/trustee.

74 To answer the preliminary question, it is necessary to now examine the essence of the claims made in this proceeding and then apply to such claims the provision as construed. The plaintiff broadly characterised the claims as of a personal nature, made by individual beneficiaries of superannuation trusts against the trustee, seeking remedies for breaches of duties owed to them. If that be so, the proceeding will not be about trust property in the narrow sense, although it may be said in a general and incidental sense to be a proceeding relating to trust property. The consequence would be that the proceeding would not be excluded from the application of Part 4A.

75 I have not been persuaded to accept this submission.

76 The preliminary question is being determined on the assumption that the plaintiff can establish the pleaded case at trial and it is necessary to return to an analysis of the pleading. The plaintiff in submissions emphasised that his claim for compensation was pursuant to s 55 of the SIS Act. However, that is not the only claim the plaintiff makes.

77 The pleading is complicated by amendments made to s 52 of the SIS Act from 1 July 2013 and the interrelationship between the claims pursuant to that Act and claims made under the general law. For present purposes, it is sufficient to note that the Governing Rules of TUSS were taken, by force of s 52, to contain covenants by MLC Nominees that are described as a 'care and skill covenant' and a 'best interests covenant' that MLC Nominees was bound to observe prior to 1 July 2013. From that date, the care and skill and best interests covenants were reformulated and a 'no conflicts covenant' was added.

78 To illustrate, the care and skill covenant from 1 July 2013 was included in the Governing Rules of TUSS (binding MLC Nominees) and from 9 May 2016 in the Governing Rules of the MLC Super Fund (binding NULIS), by which they covenanted:

to exercise, in relation to all matters affecting the [fund] of which it is trustee, the same degree of care, skill and diligence as a prudent person, whose profession, business or employment is or includes acting as a trustee of a [superannuation entity] and investing money on behalf of beneficiaries of the [superannuation entity], would exercise in relation to an entity of which it is trustee and on behalf of the beneficiaries which it makes investments.[43]

The best interests covenant was a covenant by each of MLC Nominees and NULIS (the trustee):

to perform its duties and exercise its powers in the best interests of the beneficiaries.[44]

The no conflicts covenant was a covenant by each of the trustees that:

where there is a conflict between its duties to the beneficiaries, or the interests of the beneficiaries, and its duties to any other person or the interests of it or an associate of it:

(i) to give priority to the duties to and interests of the beneficiaries over the duties to and interests of other persons;

(ii) to ensure that the duties to the beneficiaries are met despite the conflict;

(iii) to ensure that the interests of the beneficiaries are not adversely affected by the conflict; and

(iv) to comply with the prudential standards in relation to conflicts.[45]

79 The general law obligations are pleaded as overlapping. The statutory covenants are pleaded as implied terms of the relevant trust deeds and further duties are alleged to arise from the relationship of trustee and beneficiary. These duties are:

(a) to carry out the terms of the trust of which it is trustee;

(b) to deal with the assets of the fund of which it is trustee in the best interests of the beneficiaries of the fund;

(c) to exercise care, diligence and skill of a prudent professional trustee in the management and investment of the assets of the fund of which it is trustee;

(d) to avoid, in performing its role as trustee of a fund, conflicts between its duties to beneficiaries and the interests of beneficiaries, on the one hand, and its personal interests or interests of associated third parties; and further or alternatively, engagements with associated third parties which are inconsistent with its duties to beneficiaries and the interests of beneficiaries; and

(e) to avoid obtaining, and to avoid associated third parties obtaining, unauthorised profits by reason of acting as trustee of a fund.

80 Until 29 November 2013, MLC Nominees offered default investment options in MasterKey, such that an employer could nominate the default option into which the contributions paid on behalf of its employees who were TUSS members were invested (absent a direction from any of those employees). If neither the employer nor employee nominated, MLC Nominees determined the default investment option.[46]

81 From 1 January 2013, a member to whom a NAB ADA was attributable continued, by default, to have that entitlement, unless and until the NAB ADA was transferred to either a MySuper product or another investment option or fund at the direction of the member ('ADA Transfer').[47]

82 The plaintiff alleges that until a NAB ADA was transferred, remuneration was paid, from the fees charged to members, to financial services licensees or their representatives that could reasonably be expected to have been influential in the choice of financial product advice recommended to the member or the employer, and therefore amounted to conflicted remuneration. Some conflicted financial advisers who received or continue to receive conflicted remuneration are or were associated with the NAB group of companies ('NAB Group').

83 MLC Nominees applied to the Australian Prudential Regulation Authority ('APRA') for authority to offer a MySuper product within TUSS. By 29 November 2013, MLC Nominees had received approval, established a MySuper product in TUSS called 'MLC MySuper', and began receiving contributions into that product. Soon after, it determined that MLC MySuper was the product into which it would transfer the NAB ADAs.

84 MLC Nominees developed a MySuper transition plan and identified all members with a NAB ADA and its value. MLC Nominees determined that members who held the MLC MySuper product were not disadvantaged in comparison to the beneficiaries of other funds who held a MySuper product. It determined to transition NAB ADAs to products in TUSS and it segregated the majority of the assets attributable to NAB ADAs within products known as 'transition investment options', whose features included higher fees that MLC MySuper and deductions from the segregated assets to pay the conflicted remuneration.

85 Then, between June 2015 and June 2016, for MLC MySuper, MLC Nominees bought and sold assets to bring the underlying investment strategy and asset allocation for each transition investment option into line.

86 On 1 July 2016, MLC Nominees transferred the assets of members of TUSS, including the NAB ADAs (which remained in the transition investment options), to the MLC Super Fund, the successor fund established in May 2016. NULIS was the trustee of the successor fund, assuming all rights and liabilities of MLC Nominees in its capacity as trustee of TUSS. Upon transfer, members of TUSS became members of the MLC Super Fund.

87 NULIS had also made an application to APRA for authority to offer a MySuper product within the MLC Super Fund. By 1 July 2016, the application had been approved and NULIS was receiving contributions into the 'NULIS MySuper' product.

88 The strategic asset allocation in NULIS MySuper was the same as in MLC MySuper. NULIS then determined that NULIS MySuper was a suitable MySuper product that would promote the financial interests of the members with NAB ADAs and it effected the transfers already noted above.[48]

89 After these transfers, member fees charged by NULIS and the revenue derived by the NAB Group declined, the payment of conflicted remuneration ceased, as did the charging of fees to NAB ADA members in respect of that conflicted remuneration.

90 The plaintiff alleges that MLC Nominees failed to make the relevant ADA Transfers as soon as reasonably practicable, in breach of the alleged duties (covenants) of care, skill and diligence, whether as an ordinary prudent person or as a professional trustee, and the alleged best interests covenant.

91 The plaintiff further alleges that MLC Nominees and NULIS each breached the no conflicts covenant. There was conflict between the interests of members with NAB ADAs in having the ADA Transfers occur earlier (leading to lower fees for members), and both the revenue interests of the NAB Group and the trailing commission interests of conflicted financial advisers in having those transfers occur at a later time. This caused the trustee to fail to give priority to the duties to and the interests of beneficiaries, over the interests of others, by not making the transfers as soon as reasonably practicable.

92 The plaintiff next alleges, further or alternatively, that by the conduct relied on in respect of the contravention of covenants, each trustee breached the general law obligations set out above.

93 The plaintiff, who was born on 6 November 1961, alleges that:

(a) from at least 1 July 2014, he had a NAB ADA invested in the 'MLC Horizon 4 - Balanced Portfolio' investment option;

(b) from at least 30 June 2015, he had a NAB ADA invested in a transition investment option named 'TF Transition - MLC Horizon 4';

(c) from 1 July 2016, he was a member of the MLC Super Fund, and from that date, had a NAB ADA invested in a transition investment option within the MLC Super Fund named 'TF Transition - MLC Horizon 4'; and

(d) he did not, at any material time, provide a direction to MLC Nominees or NULIS as to the investment of his NAB ADA.

Plaintiff's characterisation of loss and damage

94 The plaintiff alleges that by reason of the breaches of the SIS Act and general law obligations in respect of his NAB ADA, higher fees and commissions have been charged, investment returns have been lower, and he has suffered consequential losses. The particulars assert that the amount he has received from his interest in TUSS and/or the MLC Super Fund has been reduced. The same allegation has been made in respect of group members, although the group definition only alleges receipt of payment in respect of deceased NAB ADA members. The particulars of loss for group members are in slightly different terms. The plaintiff does not plead that he has received funds, while that allegation is made on behalf of group members.

95 The plaintiff submitted that loss is pleaded as having two different, albeit interrelated dimensions:

(a) the impairment of their account balances by reason of the charging of higher fees and the achieving of a lower investment return; and

(b) a consequential reduction in the amount which he and group members have received or can expect to receive from their interest in the funds.

96 Assuming the allegations of trustees' breach of duty are proved, the net value of the corpus of trust funds will be said to be less that it ought to have been when the time comes to calculate the value of a group member's entitlement. The plaintiff submitted that the existence of a future expectation demonstrates why a present-day diminution in a member's account balance constitutes loss or damage.

97 The plaintiff accepted that the expectancy is a presently unknowable amount that a fund member will be entitled to withdraw at some future point, in accordance with the rules of the funds and the conditions of release set out in the Superannuation Industry (Supervision) Regulations 1994 (Cth) ('SIS Regulations'). A future withdrawal may occur because the member has become absolutely beneficially entitled to the funds in their member account on attaining retirement age or some other recognised circumstance (such as becoming incapacitated or suffering extreme hardship). The plaintiff also submitted that an entitlement to 'roll over' or transfer funds into a different complying superannuation fund was also relevant.

98 The plaintiff contended that the crystallisation of a member's entitlement to realise the value of their interest in the funds was not merely contingent on the occurrence of a prescribed event ('contingency event'), but is capable of occurring at any time on the member's election, pursuant to their rights under the trust deed and the statutory regime, and loss following from such an election falls within the particularised loss and damage claim. I note however that the plaintiff has not crystallised his entitlement by a 'roll over' request, and no material facts in relation to this particular type of transaction are alleged.

99 The plaintiff contended that once a fund member's entitlement to withdraw some or all of the balance of their account in these various ways is analysed, present day fluctuations in their account balance constitutes loss or damage to them, as opposed to the trustee. The plaintiff drew a distinction between a defined benefit fund and a contribution fund as demonstrative of this proposition. He further submitted that the measure of his damage is the amount required on the day of judgment to compensate him for any future impact of the past breaches that are alleged, because the certain fact of a future difference means the plaintiff has suffered loss immediately upon the trustee's breach of duty.

100 Emphasising that once a crystallisation event occurs the trustee has no discretion as to withdrawal and the consequence that the member's entitlement is a certainty, a member's present interest in a regulated superannuation fund is 'more than a mere spes, but rather... an interest in a technical sense'.[49]

101 By reason of this analysis, the plaintiff submitted that the pleaded loss is suffered by the fund member rather than the trustee. He contended that the absence of evidence of exercise of any immediate right to payment (for example, on roll over) does not alter the fact that the pleaded breaches produce an immediate, actual loss to the plaintiff and group members in terms of the value of the expected realisation of their 'equitable proprietary interest in the fund'.[50]

102 The plaintiff contended that this analysis was supported by other characteristics of a member's interest in a superannuation fund, which included:

(a) the capacity to direct the trustee to invest all or part of a member's account in one or more investment options; and

(b) the transition process under s 387(1)(a)(i) of the SIS Act by which a member's benefit is identified as an ADA and transitioned to a MySuper product. The plaintiff contends that it was the amount specifically attributable to each fund member that was lower than it ought to have been, by reason of the trustee's breach of duty, when transferred to the MySuper product.

103 Accordingly, the plaintiff contended that the pleaded losses are actual losses brought about by reason of the trustee's breach of statutory and equitable duties.

104 The relief sought by the plaintiff and group members is:

(a) declarations that MLC Nominees and/or NULIS engaged in contraventions of the SIS Act;

(b) declarations that MLC Nominees and/or NULIS engaged in breaches of duties at general law; and

(c) orders for statutory compensation pursuant to s 55(3) of the SIS Act, alternatively, equitable compensation for general law breaches, alternatively, equitable compensation for the general law breaches by restoring the MLC Super Fund.

Breach of covenant may result in action to recover loss or damage

(3) Subject to subsection (4A), a person who suffers loss or damage as a result of conduct of another person that was engaged in in contravention of subsection 54B(1), 54B(2) or 54C(1) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

106 The plaintiff submitted that the concept of 'loss or damage' in s 55(3) should be broadly construed, such that the loss identified comfortably falls within its scope.[51] A narrow application of the words 'loss or damage' is capable of defeating the protective purpose for which the SIS Act was enacted, which would be entirely frustrated, a contention that is further discussed later in these reasons.

107 It is well accepted that superannuation funds are different in nature from traditional trusts.[52] As each of TUSS and the MLC Super Fund are trusts constituted and governed by a trustee and are regulated under the SIS Act, subject to the provisions of that Act and to the governing rules of the trusts, the general law of trusts - particularly the general law on the duty of trustees - applies.[53]

108 Under the general law of trusts, all trust property is legally vested in the trustee. A trustee's primary obligation is to preserve the trust property.[54] In Maguire v Makaronis ('Maguire'), the plurality stated:

the objective of an action to recover loss upon breach of trust is the restoration of the trust fund. The right of the beneficiaries is to have the trust fund reconstituted and duly administered, rather than to recover a specific sum for the sole use and benefit of any beneficiary.[55]

109 Section 62(1) of the SIS Act provides that trustees of regulated superannuation funds must ensure that the fund is maintained solely for, inter alia, one or more of the core purposes, which include provision of benefits for members of the fund on retirement, attainment a certain age, or death.

110 As Young (discussed above) makes clear, the standing of a trustee to take proceedings to have a breach of trust redressed against a trustee, former trustee or a stranger who has become liable to redress a breach of trust is well established.[56] It is recognised by the procedure under Order 16 of the Rules. Importantly, it is irrelevant to the trustee's title to sue whether the remedy sought is specific restitution of trust property or monetary compensation for loss or damage.

111 Permanent Trustee Australia Ltd v Perpetual Trustee Co Ltd ('Permanent Trustee')[57] is also instructive. Permanent was the trustee of two unit trusts, TF1 and TF2. Each trust engaged the same manager, the second plaintiff. Permanent, as trustee of TF1, purchased units in TF2. Holders of a substantial number of units in TF1 claimed that TF1 unit holders had incurred a substantial loss as a result of this purchase. Permanent sought declarations that it did not breach the trust and that TF1 suffered no loss. The Australian Securities Commission ('ASC') was joined as a defendant, as was Perpetual, who had been appointed trustee in place of Permanent. Each of ASC and Perpetual alleged that Permanent breached the terms of the trust, and Perpetual further claimed a general breach of trust.

112 Perpetual sought equitable damages payable to it as the trustee of TF1. ASC sought orders that the plaintiffs pay damages to the unit holders, as at the time of the purchase of the units, for losses sustained by reason of the investment in TF2. Permanent settled the claims against it on the basis that it pay $4.5 million to such fund or account as agreed by ASC and Perpetual, or as directed by the court. Agreement could not be reached and the question of a direction by the court came before Cohen J. ASC contended that fairness dictated restitution to individual beneficiaries, rather than an order for repayment to the trust. It did so as a total of over 13 million units in TF1 were redeemed or transferred between July 1990 and the time of the settlement and would not benefit from any reconstitution of the trust corpus.

113 Cohen J observed that as it is the duty of a trustee to get any trust assets for the purposes of the trust, Perpetual on becoming aware of breaches by Permanent, was required to recover the assets that were lost or such damages as would recompense the trust for the loss. The new trustee's remedy was an order for the restoration to the trust of the assets that have been wrongly taken from it. It was unnecessary for the beneficiaries of the trust to be made parties to the new trustee's proceeding against the former trustee. Although it is open to a beneficiary to bring a claim against a defaulting trustee, the remedy will be the return to the trust of its property or of damages by way of compensation. The claims by either the new trustee or the beneficiary are, in effect, for the same purpose, namely to require the defaulting former trustee to give full restoration to the trust.

114 While Cohen J saw no reason to doubt that beneficiaries could bring proceedings for breach of trust against a defaulting former trustee, notwithstanding that a new trustee had been appointed, that question did not arise. Perpetual brought the proceeding for the purpose of seeking the restoration of the trust. The issue that was raised was ASC's application, in the exercise of statutory power, to distribute the settlement sum as damages, or as restitution, to individual unit holders.

115 In rejecting the ASC's application, Cohen J followed Young, noting that Phillips J had rejected the contention that restoration of the trust was unfair to the unit holders who sought and obtained a redemption of their units, as it would be a 'windfall' for current unit holders. The distinguishing factor was that the ASC had a statutory entitlement to claim damages on behalf of other persons, requiring Cohen J to consider whether the arguments of fairness and equity, as propounded by the ASC, warranted consideration afresh. Accepting that there was an essential sense of fairness in the proposal that, because many of the unit holders had redeemed or transferred their units, at least as far as former unit holders were concerned a distribution to beneficiaries rather than a repayment to the trust might be justified, Cohen J concluded:

The principles of the recovery of trust assets and the requirement that the defaulting trustee should make full restitution to the trust itself are strongly entrenched in the law relating to trusts. In my opinion one should start on the basis that prima facie the new trustee should be entitled to have restitution of the trust fund from the former trustee. That well-established principle should only be displaced by another established principle to the contrary or by clear statutory intention.[58]

116 Cohen J was not persuaded that there should be any particular variation of general principles because some unit holders who had redeemed were not able to share in the settlement sum. Unit holders would benefit from the restoration of the trust and the ASC's application was rejected. The court ordered that the fund be paid to Perpetual as trustee of TF1.

117 Both Young and Permanent Trustee confirm that loss or diminution in the value of the corpus of a trust caused by breaches of the trustee's duties constitute a loss of trust property. The obligation of a defaulting trustee is essentially one of effecting restitution to the trust estate.[59] In Target Holdings Ltd v Redferns ('Target Holdings'), Lord Browne‑Wilkinson said:

The equitable rules of compensation for breach of trust have been largely developed in relation to such traditional trusts, where the only way in which all the beneficiaries' rights can be protected is to restore to the trust fund what ought to be there. In such a case the basic rule is that a trustee in breach of trust must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach or compensation for such loss. Courts of Equity did not award damages but, acting in personam, ordered the defaulting trustee to restore the trust estate: ...[60]

118 In Canson Enterprises Ltd v Boughton & Co, a decision to which Lord Browne-Wilkinson referred, McLachlin J said that in equity:

the losses are to be assessed as at the time of trial, using the full benefit of hindsight.[61]

119 In the circumstances pleaded in this proceeding, there is not any specifically identifiable trust property to which the plaintiff or any group member can claim to be entitled prior to the occurrence of a contingency event. Returning to Maguire, the plurality observed:

Indeed, no one particular beneficiary may have sustained a present and individual loss. This may be so if the trust is a discretionary trust or no interest vests, either in interest or possession, before the termination of a prior interest.[62]

120 As Lord Browne-Wilkinson said in Target Holdings:

If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed. ... Even if the immediate cause of the loss is the dishonesty or failure of a third party, the trustee is liable to make good that loss to the trust estate if, but for the breach, such loss would not have occurred.[63]

121 The circumstances of the claims in this proceeding are not of a kind that might envisage specific restoration of trust property by the defendants if the claims of breach of trust are ultimately proved. Any liability so established would be to pay compensation.

122 Section 56(2) of the SIS Act provides that the governing rules of regulated superannuation funds cannot exempt a trustee from, or indemnify a trustee out of the assets of the entity against, liability for a breach of trust if they failed to act honestly, or intentionally or recklessly failed to exercise the required degree of care or diligence.

123 Prior to becoming eligible to a benefit in accordance with the governing rules of a regulated superannuation fund, a member has no proprietary interest in the assets out of which the benefit is to be paid. A member's right is to receive the benefit is provided for by the governing rules. Like the right of a residuary beneficiary of an unadministered estate, the member's right is to have the superannuation fund duly administered,[64] which is, in other words, a right to have the trust administered according to its terms and without breach of duty by the trustee.[65] In its inherent jurisdiction, the court may remove a trustee where the continuance of their administration of the trust will prevent its proper execution and will not safeguard the welfare of the beneficiaries or the trust fund (estate). Where there are a number of beneficiaries, as here, it has been suggested that the only right of the beneficiaries is to have the trust reconstituted.[66]

124 There is no doubt that the general law claims made in this proceeding are claims to enforce causes of action to restore trust property diminished through breaches of duty by the trustee. It cannot be sensibly contended that any equitable compensation ordered for general law breaches, or alternatively, any orders for restoration of the MLC Super Fund, would not flow from causes of action that are about trust property, in the narrow sense discussed above. The cause of action is about the proper administration of the trust and the proper protection of the corpus of the trust fund, having regard to the breaches of trustee's duties that are alleged.

125 The relief sought in the proceeding cannot be about the individual entitlements of the beneficiaries, because there are none that can be or have been alleged. That is because the terms of the governing rules under which a member may become entitled to a payment have not yet been satisfied. The plaintiff does not, and cannot, allege a present entitlement to an interest in either superannuation fund and must be treated as a member whose interest remains contingent upon the occurrence of a future event. Put another way, the plaintiff's interest has not yet vested in him. I should say more about the nature of a member's entitlements in a superannuation fund.

Entitlements of members of superannuation funds

126 Superannuation trusts are distinguished from traditional trusts because they are now based in statutory regulation of an arrangement by which both the employer and the employee contribute to the assets of the fund.[67] Those contributions, plus the surplus funds earned from investment activities, less expenses, are notionally allocated to member accounts. Member accounts are correspondingly reconciled to the value of the fund's net assets and may, depending on a range of factors, be greater or lesser that the sums contributed by or in respect of that member.

127 A fund member's interest in a superannuation fund is often described as an expectancy, because the right to a benefit depends on satisfying some condition identified in the trust deed, trust rules, or the SIS Regulations. The precise nature of the interest varies according to the particular circumstances.[68]

128 In Re Coram; Ex parte Official Trustee and Bankruptcy v Inglis, O'Loughlin J described the present right of a member of the Amcor 1970 Superannuation Fund as:

no more than an expectancy. His entitlements are all in the future and are all dependent upon the happening of a prescribed event...[69]

129 In Caboche v Ramsay,[70] Gummow J described the interest of a sole member of a superannuation fund as an equitable proprietary interest in the fund, but one which carried no immediate right to payment.[71]

130 In Finch v Telstra Super Pty Ltd, the High Court described the interests of a member of the Telstra Superannuation Scheme as a beneficial interest, the precise form and quantum of which was contingent on particular events. The court stated:

The applicant was not the object of a discretionary power of appointment. He was the beneficiary of a trust, and although the precise form and quantum of his beneficial interest was contingent on particular events, he did have a beneficial interest.[72]

131 A different form of retirement benefit was considered in Macoun v Commissioner of Taxation.[73] The issue before the High Court was whether the appellant's monthly pension payments from a retirement fund established by an international organisation, in the context of Federal legislation that exempted from taxation salaries and emoluments received from such an organisation, were taxable once he ceased to hold that position. The court observed:

Contrary to Mr Macoun's submissions, his right to receive the pension was not a vested right which existed when he was an office holder. During his time as an officer of the IBRD, Mr Macoun's right to the pension was not an accrued obligation; it was "at best an inchoate [right] in process of accrual but subject to a variety of contingencies". The right to the pension did not arise until Mr Macoun ceased to hold office and ceased to be a participant in the SRP. Indeed, when he ceased to hold an office, the inchoate right could mature into one of a number of different forms, payable to different people. Those forms included a disability pension, a death benefit as a pension payable to a surviving spouse or in a lump sum, or a withdrawal benefit.[74]

132 This characterisation was adopted by Bathurst CJ (Gleeson JA agreeing) in Commonwealth Bank Officers Superannuation Corporation Pty Ltd & Anor v Beck.[75] The Chief Justice was describing the interests of a member who had not retired and had no right to be considered for an early retirement benefit from the Commonwealth Bank Officers Superannuation Fund.

133 I agree with the defendants' submission that what consistently emerges from these authorities is the emphasis on a fund member's interest being contingent upon particular events occurring in the future, such that the fund member otherwise has no present or immediate right to payment. A fund member, on the basis of the analysis preferred in the cases, cannot be said - prior to the occurrence of a contingency event - to have an interest in an identifiable portion of the superannuation fund.

134 A member's account is an accounting allocation of that member's entitlement to a share of the trust assets in accordance with the governing rules. It is an expression of a legitimate expectation to an interest in trust property. Thus, under the SIS Regulations, individual members are described as having 'benefits in the fund',[76] and trustees of regulated superannuation funds are obliged to allocate contributions to members.[77]

135 The absence of attachment of any rights in equity to specifically identifiable parts of the corpus of the fund is significant. The causes of action against the trustee affect the value of the corpus of trust assets available to be notionally allocated to the member's account. It is only through the diminution of the corpus of the fund by the breaches of duty alleged that the calculation of the individual member's entitlement is affected, because the allocations to member's accounts is formulaic. There is no other direct causal relationship alleged between the proper quantum of the plaintiff's member account and the trustee's breaches of duty.

136 Having regard to the pleading and the trust deeds that are in evidence, there are no special characteristics of these funds that might put them outside the discussion of the nature of a member's interest in these authorities. However, in this context, I need say a little more about the implications of a member's entitlement to roll over transfers, because it is this right that the plaintiff contended demonstrated that his interest is not merely contingent on a future event, but may crystallise at any time by exercise of his immediate right to an election to roll his entitlement over to another fund.

137 The defendants' response to this submission is correct. First, any possible relevance of the right to elect to transfer the member's entitlement is hypothetical, because it is not pleaded that the plaintiff or any group member crystallised an entitlement by a roll over election. More significantly, a roll over does not change the nature of the exiting member's interest, all that is affected is a change in the trustee as the member's interest transfers into a different trust fund. The member's interest following transfer must remain subject to similar contingency events, as determined by the governing structure of the recipient fund.

138 Accordingly, this is a proceeding concerning property of a trust within the meaning of the provision.

139 The rule that beneficiaries should be made parties if their interests may not be properly represented by the trustee does not, in any practical sense, render the procedure under Part 4A more appropriate than that under Order 16 of the Rules. If it can be said that, for any reason, the trustee should not be regarded as a party who will properly represent the interests of all beneficiaries, then it should not be regarded as able to sue without joining any beneficiary. Further, there may be exceptional circumstances where the trustee declines to seek redress and a beneficiary may seek leave of the court to do so.[78] Because the beneficiary is, by leave, standing in the trustee's shoes, the procedural consequences are the same. Alternatively, a beneficiary may seek orders to have the trust properly administered. In these forms of proceedings, the remedy remains the restoration of the trust. No question arises on this application or (presently) in the proceeding whether the plaintiff, as a beneficiary, might be appointed as representative of a sub‑class of beneficiaries of the funds interested in NAB ADAs, pursuant to r 16.01 of the Rules.

140 Next, I turn to the question of whether the provisions of the SIS Act and the distinctive features of superannuation funds require a different outcome in respect of the statutory cause of action.

141 The structure of the cause of action is that s 55(1) provides that a person must not contravene a covenant contained, or taken to be contained, in the governing rules of a superannuation entity. Section 52 of the SIS Act sets out rules that are taken to be covenants in the governing rules of a registerable superannuation entity that do not otherwise contain them.

142 The nature of the covenants, identified in s 52 of the SIS Act as general covenants and set out below, do not by the statutory text suggest that a trustee's duties are fundamentally different from a trustee's duties at law:

52 Covenants to be included in governing rules - registrable superannuation entities

Governing rules taken to contain covenants

(1) If the governing rules of a registrable superannuation entity do not contain covenants to the effect of the covenants set out in this section, those governing rules are taken to contain covenants to that effect.

General covenants

(2) The covenants referred to in subsection (1) include the following covenants by each trustee of the entity:

(a) to act honestly in all matters concerning the entity;

(b) to exercise, in relation to all matters affecting the entity, the same degree of care, skill and diligence as a prudent superannuation trustee would exercise in relation to an entity of which it is trustee and on behalf of the beneficiaries of which it makes investments;

(c) to perform the trustee's duties and exercise the trustee's powers in the best interests of the beneficiaries;

(d) where there is a conflict between the duties of the trustee to the beneficiaries, or the interests of the beneficiaries, and the duties of the trustee to any other person or the interests of the trustee or an associate of the trustee:

(i) to give priority to the duties to and interests of the beneficiaries over the duties to and interests of other persons; and

(ii) to ensure that the duties to the beneficiaries are met despite the conflict; and

(iii) to ensure that the interests of the beneficiaries are not adversely affected by the conflict; and

(iv) to comply with the prudential standards in relation to conflicts;

(e) to act fairly in dealing with classes of beneficiaries within the entity;

(f) to act fairly in dealing with beneficiaries within a class;

(g) to keep the money and other assets of the entity separate from any money and assets, respectively:

(i) that are held by the trustee personally; or

(ii) that are money or assets, as the case may be, of a standard employer-sponsor, or an associate of a standard employer-sponsor, of the entity;

(h) not to enter into any contract, or do anything else, that would prevent the trustee from, or hinder the trustee in, properly performing or exercising the trustee's functions and powers;

(i) if there are any reserves of the entity - to formulate, review regularly and give effect to a strategy for their prudential management, consistent with the entity's investment strategies and its capacity to discharge its liabilities (whether actual or contingent) as and when they fall due;

(j) to allow a beneficiary of the entity access to any prescribed information or any prescribed documents.

Superannuation trustee

(3) In paragraph (2)(b), a superannuation trustee is a person whose profession, business or employment is or includes acting as a trustee of a superannuation entity and investing money on behalf of beneficiaries of the superannuation entity.

143 The plaintiff and the group members, as defined by paragraph 3 of the amended statement of claim, are beneficiaries of a trust, within the meaning of that term in the SIS Act. That definition is:

a person (whether described in the governing rules as a member, a depositor or otherwise) who has a beneficial interest in the fund, scheme or trust and includes, in relation to a superannuation fund, a member of the fund despite the express references in this Act to members of the funds.[79]

144 In Cowan v Scargill, Megarry V-C said that where the question is whether the trustee of a trust whose objective is to confer financial benefits on beneficiaries has sufficiently pursued these financial interests:

the starting point is the duty of trustees to exercise their powers in the best interests of the present and future beneficiaries of the trust, holding the scales impartially between different classes of beneficiaries.[80]

Trustees must do the best they can for the benefit of their beneficiaries and not merely avoid harming them.[81]

145 To the reference 'present and future beneficiaries' might be added a reference to future entitlements of present beneficiaries. As I have noted, the existence of a duty in such terms does not entitle a beneficiary to claim compensation for loss or damage, in the circumstances described in the pleading, simply because the statutory covenants reference the interests of beneficiaries.[82] A beneficiary is not entitled to enforce proper discharge of those duties by an action against the trustee, in anticipation of loss and damage in the form of a diminished value of the member's account when it vests in the member due to a contingency event.

146 What s 55(3) of the SIS Act provides is that a person who suffers loss or damage as a result of conduct of another person, in contravention of ss 55(1), may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. The plaintiff has not suffered loss or damage, notwithstanding that his expectation - that he may suffer loss or damage in the future - could be legitimate.

147 However, the plaintiff contended that this expectation loss fell comfortably within s 55(3) of the SIS Act. Applying established statutory construction principles,[83] I accept the defendants' contention that the plaintiff's submission - that 'loss or damage' in s 55(3) should be read more broadly than those concepts are understood at general law - cannot be correct. The text of the section, using the word 'suffers' rather than 'will suffer', does not admit of an expectation. Loss and damage does not extend to prospective loss.[84]

148 To so construe s 55(3) does not deprive it of meaningful operation. Assuming breach of relevant covenants, two examples of plaintiffs who might seek compensation under s 55(3) are:

(a) a member of a superannuation fund whose interest in their member's account has vested through the occurrence of a contingency event, but was lost or in a diminished sum, suing the trustee for compensation for the loss; and

(b) a proceeding by a new trustee against a former trustee for restoration of the loss suffered by the trust fund.

149 The defendants are alleged to be the persons whose conduct was in contravention of s 55(1) of the SIS Act. Accepting that contention to be capable of being proved, it does not follow that the plaintiff and group members are the persons who suffers loss or damage. What has been diminished is trust property, namely the corpus of funds, both contributed and accumulated through investment activity. The trustee is the legal owner of that trust property, and it is the trustee who suffers the loss or damage in the sense to be understood from the statutory text and context of s 55.

150 Accordingly, no different result will flow from the cause of action under the SIS Act. The proceeding is a proceeding concerning property subject to a trust.

151 Assuming, as I have for the purposes of this ruling, that the defendants breached general law duties and statutory covenants owed to members of the superannuation trusts, it will be evident from the above discussion that the members of those trust funds will not be left without a remedy, although the proper remedy is not that presently claimed in the proceeding by the plaintiff.

152 I am satisfied that the proceeding is caught by the application of s 33B(2)(b)(ii) and that Part 4A of the Act cannot apply to it.

153 The answer to the preliminary question posed for determination is: 'No'.

[1] Superannuation Legislation Amendment (MySuper Core Provisions) Act 2012 (Cth).

[2] The investment option that would apply for a new member if no direction were given: see s20B of the Superannuation Industry (Supervision) Act 1993 (Cth) ('SIS Act') for the full definition.

[3] By way of example, a worker who commenced employment with a new employer, was automatically enrolled in that employer's nominated (default) superannuation fund, and took no steps to direct their contributions made on their behalf to or the investment option within the fund, or to a different superannuation fund, would have their superannuation contributions invested in that fund's 'default investment option'. The superannuation contributions paid by their employer on their behalf would be 'accrued default amounts'.

[4] The Governing Rules are defined to mean the trust deed of TUSS or the MLC Super Fund.

[5] [2020] VSC 12.

[6] Hayim v Citibank NA [1987] 1 AC 730, 748; Randa Lee Investments Pty Ltd v Ballan [2015] VSC 178, [38] ('Randa Lee'); Alexander v Perpetual Trustees [2004] HCA 7; (2004) 216 CLR 109, 129 [55].

[7] Ramage v Waclaw [1988] 12 NSWLR 84 ('Ramage'); Randa Lee, [37]-[44] (n 6).

[8] [1996] 1 VR 279, 282 ('Young').

[10] Deutsch v Deutsch [2012] VSC 227 ('Deutsch'); Randa Lee (n 6).

[11] Young, 281 (n 8); National Trustees Executors & Agency Co of Australasia Ltd v Barnes [1941] HCA 3; (1941) 64 CLR 268, 277-8; Australian Special Opportunity Fund LP v Equity Trustees Wealth Services Ltd [2015] NSWCA 225; (2015) 323 ALR 570, 598 [156] ('Australian Special Opportunity Fund LP').

[12] Citing Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 264 CLR 1, 14-15 [34].

[13] [1995] HCA 20; (1995) 183 CLR 273.

[14] [2010] FCA 551; (2010) 269 ALR 98, 112 [114]-[116] (citation omitted).

[15] Balog v Independent Commission Against Corruption [1990] HCA 28; (1990) 169 CLR 625, 635-6.

[16] See above [33(e)].

[17] Conveniently, the history of the Part is essayed in Schutt Flying Academy (Australia) Pty Ltd v Mobil Oil Australia Ltd [2000] VSCA 103; (2000) 1 VR 545, 548-9 [8]-[10] ('Mobil Oil').

[18] Australian Law Reform Commission, Grouped Proceedings in the Federal Court (Report No 48, 9 December 1988).

[19] Mobil Oil, 549 [9] (n 17).

[20] Supreme Court (Chapter I Amendment No. 11) Rules 1999 (Vic).

[21] Mobil Oil, 549 [10] (n 17).

[23] Ibid (Ormiston, Phillips and Charles JJA; Winneke P and Brooking JA dissenting).

[25] Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 ('Mobil Oil v Victoria').

[26] On 3 October 2000, the government introduced the Courts and Tribunals Legislation (Miscellaneous Amendments) Bill 2000 (Vic), which passed the Legislative Council on 26 October 2000 and the Legislative Assembly on 21 November 2000, and received royal assent on 28 November 2000.

[27] Victoria, Parliamentary Debates, Legislative Assembly, 31 October 2000, 1252 (Rob Hulls, Attorney-General).

[28] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 16.01(2) ('Rules').

[31] Young, 281 (n 8).

[34] Randa Lee (n 6) and Deutsch (n 7) are both examples.

[35] Mobil Oil v Victoria, 24 [12] (n 25). See also Timbercorp Finance Pty Ltd (in liq) v Collins [2016] FCA 44; (2016) 259 CLR 212, 233 [43].

[36] [1999] HCA 48; (1999) 199 CLR 255.

[37] Ibid 261 [12] (citation omitted).

[38] (2016) 260 CLR 232, 255-6 [32] (citations omitted).

[39] Ibid 270-1 [92] (citation omitted).

[40] Rose v Secretary, Department of Social Security [1990] FCA 59; (1990) 21 FCR 241, 244.

[41] Corporations Act 2001 (Cth) ss 674, 1041H.

[42] Rules, r 16.02; Young, 283 (n 8).

[46] As defined earlier in these reasons, any investment in a default investment option is referred to as a 'NAB ADA'.

[47] The member could give the trustee a retention direction to remain in the default investment option and the NAB ADA would remained invested accordingly.

[49] Citing Graham Hill, 'The True Nature of a Member's Interest in a Superannuation Fund' [2002] JlATax 1; (2002) 5(1) Journal of Australian Taxation 1, 9.

[50] Citing Caboche v Ramsay [1993] FCA 611; (1993) 119 ALR 215, 230; CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; (2005) 224 CLR 98, 110 [17]; Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254.

[51] Citing Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, 407 [45]; Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494, 515 [54]; Explanatory Memorandum, Superannuation Industry (Supervision) Bill 1993 (Cth), 1.

[52] Commonwealth Bank Officers Superannuation Corporation Pty Ltd v Beck [2016] NSWCA 218; (2016) 334 ALR 692, 711 [89] ('Beck').

[53] J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia (LexisNexis Australia, 7th ed, 2006) [2905], citing Cowan v Scargill [1985] Ch 270, 290 ('Cowan'); Lock v Westpac Banking Corporation (1991) 25 NSWLR 593, 609-10.

[54] Westpac Banking Corporation v Bell Group Limited (in liquidation) (No 3) [2012] WASCA 157; (2012) 44 WAR 1, 153 [834]; Young, 282 (n 8).

[55] [1997] HCA 23; (1997) 188 CLR 449, 473 ('Maguire').

[56] See also Australian Special Opportunity Fund LP, 598 [156] (n 11).

[57] (1994) 15 ACSR 722.

[59] Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449, 469.

[60] [1995] UKHL 10; [1996] AC 421, 434 ('Target Holdings').

[61] [1991] 3 SCR 534, 555, cited in Youyang Pty Limited v Minter Ellison Morris Fletcher [2003] HCA 15; (2003) 212 CLR 484, [35] ('Youyang').

[62] Maguire, 473 (n 59) (citation omitted).

[63] Target Holdings, 434 (n 60).

[64] Kennon v Spry [2008] HCA 56; (2008) 238 CLR 366, 417-8 [160]-[161]; Beck, 712 [94] (n 52).

[65] Youyang, 498 [32] (n 61).

[66] Target Holdings, 434 (n 60); AIB Group (UK) plc v Mark Redler & Co Solicitors [2014] UKSC 58; [2015] AC 1503, 1536 [100]; Australian Special Opportunity Fund LP, 598 [155] (n 11).

[67] Finch v Telstra Super Pty Ltd [2010] HCA 36; (2010) 242 CLR 254, 271 [33]-[34] ('Finch').

[68] For example, whether the superannuation scheme is a defined benefits or contributory scheme.

[69] (1992) 36 FCR 250, 254. See also Re Espasia Pty Ltd [2009] FCA 1559; (2009) 181 FCR 555, 556 [5], 564-5 [45].

[70] [1993] FCA 611; (1993) 119 ALR 215, 230.

[71] This conclusion was adopted by the Full Federal Court (in the context of the retirement fund in issue) in Benson v Cooke [2001] FCA 1684; (2001) 114 FCR 542, 551 [20]-[21], 561 [80], 572-3 [141].

[72] Finch, 270 [30] (n 67).

[73] [2015] HCA 44; (2015) 257 CLR 519.

[74] Ibid 535-6 [55] (citations omitted).

[76] SIS Regulations, regs 5.02 and 5.03.

[77] SIS Regulations, reg 7.08. See also Part 5, particularly Divs 5.2 and 5.3.

[78] See, eg, Randa Lee (n 6) and Ramage (n 7).

[80] Cowan, 286-7 (n 53), followed in Victoria in Invensys Australia Superannuation Fund Pty Ltd v Austrac Investments Limited [2006] VSC 112; (2006) 15 VR 87, 108 [107].

[81] Cowan, 295 (n 53).

[82] Compare Manglicmot v Commonwealth Bank Officers Superannuation Corporation Pty Ltd [2011] NSWCA 204; (2011) 282 ALR 167.

[83] R v A2 [2019] HCA 35; (2019) 373 ALR 214, 223-5 [31]-[37], 242-3 [124]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362, 368 [14].

[84] Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514, 526-7; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, 407-8 [46]. See also my discussion of the concepts of harm, risk, loss and prospective loss in the context of negligence in Gunnersen v Henwood [2011] VSC 440, [212]-[269].