Super Cases
Super cases as reported in the Super & Financial Advice News 2020-23 editions.
Trustee for the Kitchen Unit Trust and Commissioner of Taxation (Taxation) AATA
The Administrative Appeals Tribunal has affirmed a decision by the Commissioner of Taxation to disallow an objection in a case which found a worker was an employee for the purposes of superannuation guarantee payments.
Reported in Super & Financial Advice News - Edition 34 / 21 September 2023
Oliver Hume Property Funds (Broad Gully Rd) Diamond Creek Pty Ltd v Commissioner of State Revenue (Review and Regulation)
The Victorian Civil and Administrative Tribunal has upheld the decision of the Victorian Commissioner of State Venue imposing stamp duty on a property acquired by a number of sophisticated investors following their combined acquisition of the property through a wholesale trust.
Reported in Super & Financial Advice News - Edition 31 / 31 August 2023
Aston and Commissioner of Taxation (Taxation)
The Administrative Appeals Tribunal has affirmed a decision of the Commissioner of Taxation to not reallocated a fund members’ excess concessional contributions from one financial year to another financial year to avoid exceeding the concessional contributions cap.
Reported in Super & Financial Advice News - Edition 31 / 31 August 2023
Parton and Secretary, Department of Social Services (Social services second review)
The Administrative Appeals Tribunal has affirmed a decision of the Department of Social Security which excluded a residue of funds from a property sale from inclusion in a couple’s exempt assets for Aged Pension calculation purposes and downsizer requirements.
Reported in Super & Financial Advice News - Edition 31 / 31 August 2023
Stern and Commissioner of Taxation (Taxation) [2023] AATA 2010
Commissioner determined the taxpayer’s transfer balance account exceeded the cap. The Commissioner made this determination in January 2018 which referred to the balance in the period 1 July 2017 – 20 December 2017. Commissioner issued an excess transfer balance determination with a default commutation notice. The taxpayer wrote to his super fund instructing not to commute the pension and then lodged an objection against the determination arguing that pensions he received should not have been included in his transfer balance cap. The AAT rejected this argument and affirmed the ATO’s assessment.
Reported in Super & Financial Advice News - Edition 30 / 24 August 2023
Mackinlay v Holliday (2023) NSWSC 949 (15 August 2023)
NSW Supreme Court Judge ruled that a deceased had testamentary capacity in respect of a codicil at the time he signed it. Accordingly, the presumption has risen that the deceased knew and approved of the content of the codicil at the time he signed it.
Reported in Super & Financial Advice News - Edition 29 / 17 August 2023
BPFN and Commissioner of Taxation (Taxation) (2023) AATA 2330
The applicant is the corporate trustee of a SMSF, which derived income as the beneficiary of a unit trust of which it was the sole unit-holder. Through a series of loan agreements, the Unit Trust lent money through two related entities which was lent to independent third parties. The key question was whether the amount of the income was more than the amount that the SMSF ‘might have been expected to derive if those parties had been dealing with each other at arm’s length.’
Reported in Super & Financial Advice News - Edition 28 / 10 August 2023
Nextgen Financial Group Pty Ltd v WJ & V Drakoulis Super Pty Ltd
The Federal Court of Australia has found in favour of a SMSF in case in which AFCA determined the fund’s adviser must pay an amount suffered by loss and damage when financial advice was provided to the SMSF to invest an amount of cash into a certain fund which was later wound up.
Reported in Super & Financial Advice News - Edition 26 / 27 July 2023
AATA - Dwyer and Secretary, Department of Social Services
The Administrative Appeals Tribunal has handed down a decision in a case concerning the overpayment of the Age Pension to two SMSF beneficiaries. The overpayments arose due to the incorrect categorisation of SMSF pension payments as “market linked income streams”
The AATA found that the Commonwealth was entitled to recover a part of the overpaid pensions, but part should be waived on the basis of a sole administration error.
Reported in Super & Financial Advice News - Edition 25 / 20 July 2023
Supreme Court of Queensland - Williams v Williams & Anor
The court held that ‘the machinery provisions of the Deed envisage the giving of notice to all of the trustees’. As such the applicant failed in her attempt to uphold the validity of the BDBN, where BDBN was made and executed by a member of the fund who was also a trustee, where a second trustee has not been served with the binding death benefit nomination.
Reported in Super & Financial Advice News - Edition 20 / 15 June 2023
Federal Court of Australia – Gale v Australian Financial Complaints Authority
The Federal Court of Australia has overturned a decision of the Australian Financial Complaints Authority which upheld a decision of the fund trustee, both of which found a member was not entitled to a pension payable from their superannuation fund.
The Court ruled that the Authority erred in finding that the pension benefit was commutable and that the Authority did not properly consider the plan rules for the superannuation fund, which only allowed commutation of the benefit on the approval of the Trustee.
Reported in Super & Financial Advice News - Edition 18 / 1 June 2023
AATA - WZWK and Commissioner of Taxation
The Administrative Appeals Tribunal has upheld a decision by the ATO to issue assessments for payments made to a SMSF member which were made prior to the member meeting a condition of release and, further, upheld the decision to disqualify the individual from acting as a Trustee of a SMSF.
Reported in Super & Financial Advice News - Edition 16 / 18 May 2023
Federal Court of Australia - Jamsek v ZG Operations Australia Pty Ltd (No 3)
Reported in Super & Financial Advice News - Edition 14 / 4 May 2023
Supreme Court of Western Australia - Deputy Commissioner of Taxation V Ziccardi
Reported in Super & Financial Advice News - Edition 7 / 9 March 2023
Victorian Supreme Court - Application by Ellasil Pty Ltd
Reported in Super & Financial Advice News - Edition 6 / 2 March 2023
Federal Court of Australia – Do (Trustee), in the matter of Andrew Superannuation Fund v Sijabat
The Federal Court of Australia has allowed an appeal to a decision of the Federal Circuit and Family Court of Australia and dismissed a claim that payments made to a superannuation fund by, or on behalf of, a member were void under the Bankruptcy Act 1966 (Cth).
Administrative Appeals Tribunal – Campbell and Secretary, Department of Social Services
The Administrative Appeals Tribunal has upheld a decision of the Department of Social Security to deem $20,000 withdrawn from a superannuation fund under the Covid superannuation release program as liquid assets and apply the liquid assets waiting period in relation to an application for Jobseeker payment.
Campbell v Campbell – Supreme Court of Queensland
The Supreme Court of Queensland has dismissed an appeal over whether the deceased had sufficient testamentary capacity when he made his last will and, in particular, whether his dementia precluded proof of testamentary capacity.
Marks v Evans – Supreme Court of Victoria
The Supreme Court of Victoria has ruled on eight questions in the case of a deceased estate including whether an executor and trustee of the estate should be removed and replaced with another, whether the executors are justified in entering a proposed deed, whether certain clauses of the deceased’s will are valid and whether the executors are justified in spending an amount of up to $50,000 in performing their duties under a clause of the of the will, as amended by the codicil.
Sydney Subdivision Pty Ltd (in liq) v Chow – Federal Court of Australia
The Federal Court of Australia has dismissed an application to amend a statement of claim in a case where arrangements were put in place that part of a scheme to allow a family trust to have the benefit in Australia of superannuation contributions and for the trustee to claim tax deductions in Australia for purported interest payments, thereby reducing the personal income tax liability of the recipients of distributions from the Trust.
The arrangements were made to conceal the superannuation funds from the Commissioner and to evade, alternatively avoid, income tax liability. This is another case involving clients of Mr Vanda Gould who provided accounting, tax, financial and investment advice.
Victorian Supreme Court - In the matter of W & C Broadhurst Pty Ltd
The Victorian Supreme Court has ordered the reinstatement of a company which was the corporate trustee of a SMSF but deregistered before the proceeds of a life insurance policy, of which it was the owner, became payable to it upon the death of a fund member.
The court ruled that the proceeds, which had been vested in the Commonwealth, be paid to the reinstated company and subsequently paid to the executor of the deceased’s estate and his former wife.
Federal Court - Australian Securities and Investments Commission v Gilliland
The matter is to be remitted to the AAT to be heard again and determined according to law.
Reported in Super & Financial Advice News - Edition 44 / 8 December 2022
Federal Court - Wan v BT Funds Management Limited
The Federal Court has dismissed an appeal over a decision made by AFCA to reaffirm a decision by the Trustee of a superannuation fund whereby a deceased member’s benefit was paid out to their estate but challenged by others who considered themselves dependents.
Reported in Super & Financial Advice News - Edition 44 / 8 December 2022
Supreme Court of Victoria - Winter-Cooke v Winter-Cooke
The Supreme Court of Victoria has refused an application for leave to appeal a decision against approving an extension of time to the administration and probate period of an estate.
Reported in Super & Financial Advice News - Edition 44 / 8 December 2022
KPE Superannuation Fund Pty Limited v Two Tempe Holdings Pty Ltd [2022] NSWSC 1614
The New South Wales Supreme Court has dismissed proceedings, with costs, involving a dispute about whether an instrument dated 5 June entitled “Deed of Agreement” between parties in connection with a property joint venture is binding on the first and the second defendants.
Reported in Super & Financial Advice News - Edition 43 / 1 December 2022
Komlotex Pty Ltd v AMP Ltd [2022] NSWSC 1525
The NSW Supreme Court (Rees J) has held that various communications between AMP and its lawyers Clayton Utz (CU) in relation to ASIC's "fees for no services" investigation were protected by legal professional privilege (LPP).
Reported in Super & Financial Advice News - Edition 43 / 1 December 2022
Supreme Court of the ACT - Blow v Hill
The Supreme Court of the ACT has ruled on a case on whether an irrevocable authority vitiated or was liable to be rescinded by reason of alleged breach of fiduciary duty by executor of an estate.
Reported in Super & Financial Advice News - Edition 40 / 10 November 2022
Federal Court of Australia - Watson & Co Superannuation Pty Ltd v Dixon Advisory and Superannuation Services Ltd
The Federal Court of Australia has ruled on parts of a class action concerning the production of insurance documents pertaining to the retail clients of the financial advisory business carried on by Dixon Advisory and Superannuation Services Ltd who held or acquired interests in the property investment fund known as the US Masters Residential Property Fund.
Reported in Super & Financial Advice News - Edition 39 / 3 November 2022
New South Wales Supreme Court - Brown v Brown
The New South Wales Supreme Court has dismissed a claim by the adult stepson of the deceased after challenging the deceased’s biological son, and executor, finding that it was open for the deceased, acting as a wise and just testator, to provide for his biological son to the exclusion of his stepson.
Reported in Super & Financial Advice News - Edition 37 / 20 October 2022
NSW Supreme Court - Lucas v Salman
The NSW Supreme Court has handed down a decision regarding the application by step children and adult children of a deceased, under claims of estoppel and family provision orders.
The court found that the application under estoppel was successful in relation to the deceased’s superannuation, however, claims made under family provision orders were unsuccessful.
Reported in Super & Financial Advice News - Edition 35 / 6 October 2022
NSW Supreme Court - Energy Industries Superannuation Scheme Pty Limited as trustee of the Energy Industries Superannuation Scheme Pool A and Pool B (trading as EISS Super)
The Supreme Court of NSW has heard an application from EISS Super as to whether the trustee may insert amendments to the fund’s trust deed to give power to charge fee to enable the trustee to meet potential liabilities from recent changes to regulatory environment.
The Court found that the trustee would be justified in amending the trust deed of the funds inserting a new clause permitting the charge/fee.
Reported in Super & Financial Advice News - Edition 33 / 15 September 2022
NSW Supreme Court - Walter William Nespolon v Lindy van Camp
The NSW Supreme Court has ruled on a case where advice was sought in relation to two trusts with different trustees, one being a superannuation fund and the other being a deceased’s estate. The advice sought was in relation to whether the trustee and executors are justified in defending proceedings and prosecuting a crossclaim in other proceedings and whether they are entitled to pay their legal costs incurred in those proceedings from the trust fund and the deceased’s estate.
The Court found that both the deceased estate and superannuation fund were justified in paying their reasonable costs of these proceedings out of the trust/fund.
Reported in Super & Financial Advice News - Edition 33 / 15 September 2022
NSW Supreme Court - Hart v MetLife Insurance Limited
A superannuation fund member has lost her case against the TPD insurer of their superannuation fund in which they claimed the insurer had breached its duty and obligations in considering and declining the Plaintiff’s claim and further denying a request to reconsider the Plaintiff’s claims.
Queensland Supreme Court - JPD as Guardian v DMS as Trustee
A father has succeeded in having the trustee of a number of trusts benefitting his and his ex-wife’s children replaced with an independent party.
The trusts in question contained the assets of the estate of the children’s mother, including her superannuation benefits, following her passing.
Goulopoulos and Commissioner of Taxation
Andrew Goulopoulos and his wife, Valentina Goulopoulos were disqualified on the basis that they had contravened the SIS Act on more than one occasion and the nature of seriousness of the contraventions.
Appears in Tax News AU: Edition 30
Prescott and Commissioner of Taxation
‘This matter concerns the different tax treatment of ‘pensions’ and ‘lump sums’ received by members of superannuation fund. Specifically, the operation of the now repealed regulation 995-1.03(b) of the Income Tax Assessment Regulations 1997.
Appears in Tax News AU: Edition 30
Karis v Digital CC Management Pty Ltd ( No 2)
The Federal Court of Australia decision on a dispute between cryptocurrency traders, the manner in which certain companies were established and their various roles and entitlements.
Appears in Tax News AU: Edition 30
Douglas and Australian Securities and Investments Commission
A SMSF auditor, Mr Donald Douglas, has failed in the Administrative Appeals Tribunal to gain a stay from his disqualification as an auditor by ASIC.
Reported in Super News - Edition 27 / 8 August 2022
Supreme Court of South Australia – R v Dent
The partner, named beneficiary and executor of a gentleman has been convicted of murder following a Supreme Court trial in South Australia.
The prosecution alleged that a Ms Dent administered a fatal combination of her prescription medication to the deceased in order to receive his superannuation and interest in an unencumbered property in which they lived.
Reported in Super News - Edition 23 / 7 July 2022
Victorian Supreme Court – Williams v Nugara
The Victorian Supreme Court has found in favour of the members of a SMSF who were encouraged to set the fund up to invest in property development opportunities.
The Court found that Mr Nugara had not invested any of the money from the SMSF in the proposed property developments and found that he and an associated business had deceived the SMSF members and engaged in misleading and deceptive conduct awarding damages.
Reported in Super News - Edition 22 / 17 June 2022 - Victorian Supreme Court – Williams v Nugara
High Court of Australia – Hill v Zuda Pty Ltd
The High Court of Australia has upheld a decision by the WA Court of Appeal that determined that it was possible for an SMSF’s trust deed to be drafted to enable a binding death benefit nomination to last for more than three years.
The High Court confirmed that regulation 6.17A of the Superannuation Industry (Supervision) Regulations 1994 did not apply to SMSFs meaning that a binding death benefit nomination for an SMSF can last indefinitely.
Reported in Super News - Edition 21 / 23 June 2022
Administrative Appeals Tribunal – SQQM and Commissioner of Taxation
The Administrative Appeals Tribunal has upheld a decision made by the Commissioner of Taxation to not disregard excess non-concessional contributions made by a fund member because the members superannuation balance meant the member had a cap of nil for the year in question.
Administrative Appeals Tribunal – FYYB and Commissioner of Taxation
The Administrative Appeals Tribunal has upheld a decision to impose penalties on an SMSF due to the fund breaching borrowing restrictions under the SIS Act which was not rectified, as agreed, over multiple years.
Reported in Super News - Edition 6 / 3 March 2022
Administrative Appeals Tribunal – Khanna and Commissioner of Taxation
The Administrative Appeals Tribunal has upheld an ATO decision to disallow a deduction for personal superannuation contributions as the taxpayer had not provided his fund with notice of intent to deduct in the required timeframe.
Reported in Super News - Edition 6 / 3 March 2021
2021
Administrative Appeals Tribunal - Coronica and Commissioner of Taxation
The Administrative Appeals Tribunal has set aside a previous decision to disqualify a person as an SMSF trustee.
It follows an undertaking by Mr Giuseppe Coronica that, amongst other things, he will not act as Trustee of any superannuation fund other than the G Coronica Superannuation Fund and all financial activities of the Fund will be transacted through the Fund’s own bank account rather than those of its member(s) and/or related parties.
Reported in Super News - Edition 19 / 27 May 2021 - Administrative Appeals Tribunal - Coronica and Commissioner of Taxation
Takes Court action to wind-up PE Capital Funds Management Ltd and managed investment schemes
ASIC has commenced proceedings in the Federal Court in Brisbane against PE Capital Funds Management Ltd alleging misconduct in relation to the operation of managed investment schemes.
ASIC alleges that PE Capital Funds Management operated a range of unregistered managed investment schemes in circumstances where these unregistered schemes should have been registered:
ASIC is seeking orders from the Federal Court to wind-up PE Capital Funds Management and its registered and unregistered schemes.
Reported in Super News - Edition 18 / 20 May 2021 - Federal Court in Brisbane against PE Capital Funds Management Ltd
ASIC v M101 Nominees Pty Ltd
The Federal Court of Australia has banned James Peter Mawhinney, of the Mayfair Group of companies, for 20 years from soliciting or receiving funds in connection with any financial product, advertising, promoting or marketing any financial product.
The ban follows the Court’s finding that Mr Mawhinney’s involvement in contraventions of the Corporations Act and the ASIC Act were of a very serious kind and warrant a very substantial period of restraint and that Mr Mawhinney had shown a total disregard for the Acts.
Additionally the Court found that Mr Mawhinney accepted funds from new investors for the purpose of making interest and redemption payments to old investors, when there was a real likelihood that the subsequent investors would lose some or all of their monies.
Reported in Super News - Edition 16 / 06 May 2021 - ASIC v M101 Nominees Pty Ltd
Rushton v Commonwealth Superannuation Corporation
The Federal Court of Australia has upheld a decision made by AFCA in relation to the finding that a husband, who was separated but still married to wife, was not entitled to a reversionary pension as he was not in a marital or couple relationship with the deceased at the time of her death, nor was he a dependant.
Reported in Super News - Edition 16 / 06 May 2021 - Rushton v Commonwealth Superannuation Corporation
Merchant and Commissioner of Taxation
The Administrative Appeals Tribunal has upheld a decision by the Commissioner of Taxation to disqualify two SMSF trustees from acting as trustees or responsible officers of corporate trustees of superannuation entities.
The disqualifications follow the finding that the trustees failed to give effect to a funds investment strategy, a fund was maintained for the collateral purpose of obtaining a tax benefit for a related trust and it used the fund’s resources for a member of the fund or their relatives.
Reported in Super News - Edition 16 / 06 May 2021 - Merchant and Commissioner of Taxation
Hill v Zuda Pty Ltd
The Supreme Court of Western Australia has dismissed an appeal over whether a binding death benefit nomination in a SMSF was valid after more than three years after the nomination was made.
Reported in Super News - Edition 16 / 06 May 2021 - Hill v Zuda Pty Ltd
NSW Supreme Court - Estate Rofe
The NSW Supreme Court has ruled on the validity of a will where the Testator was suffering from dementia assisted in the preparation of the will by interested persons. Of interest was that the superannuation death benefit (of approximately $5.9 million) was not contested.
Reported in Super News - Edition 13 / 15 April 2021 - NSW Supreme Court - Estate Rofe
Administrative Appeals Tribunal – Coronica and Commissioner of Taxation
The Administrative Appeals Tribunal has affirmed a decision to give the Trustees of the G Coronica Superannuation Fund a Notice of non-compliance for the 2009 income year in relation to the acquisition of in-house assets.
The Tribunal reserved its decision in relation to the disqualification of the Trustee, Mr Giuseppe Coronica, pending a further directions hearing.
Reported in Super News - Edition 12 / 8 April 2021 - Administrative Appeals Tribunal – Coronica and Commissioner of Taxation
Supreme Court of Queensland – Re RD
The Supreme Court of Queensland has ruled on application by the family of young man, who was severely disabled in a traffic accident at a young age, to have a will completed and executed on his behalf in relation to his substantial assets, received as compensation for his injuries. The Court was persuaded that the will proposed by the applicant is or may be a will that the young man would make if he had testamentary capacity.
Additionally, the Court authorised his administrator to execute on his behalf a non-lapsing nomination enabling 100% of his superannuation death benefits to be paid to his legal personal representative and be dealt with in accordance with the statutory will.
Reported in Super News - Edition 12 / 8 April 2021 - Supreme Court of Queensland – Re RD
Administrative Appeals Tribunal – Logic Accountants & Tax Professionals Pty Ltd and Tax Practitioners Board
The Administrative Appeals Tribunal has affirmed a decision by the Tax Practitioners Board to terminate the registration of Mr Hany Mina of Logic Accountants & Tax Professionals Pty Ltd. The termination followed repeated failures to comply with provisions of the Code of Professional Conduct.
Reported in Super News - Edition 12 / 8 April 2021 - Administrative Appeals Tribunal – Logic Accountants & Tax Professionals Pty Ltd and Tax Practitioners Board
Administrative Appeals Tribunal – McCarthy and Tax Practitioners Board
The Administrative Appeals Tribunal has varied a decision made by the Tax Practitioners Board to ban Mr Grant McCarthy from practising as a tax agent.
The Tribunal amended his prohibition period from four years to two years.
Reported in Super News - Edition 12 / 8 April 2021 - Administrative Appeals Tribunal – McCarthy and Tax Practitioners Board
AATA – Cross and Tax Practitioners Board
The Administrative Appeals Tribunal has upheld a previous decision to terminate the registration of two tax agents (with minor changes to the clause under which the terminations were made). Ashley Cross and Margaret Adamson were found, amongst other things, to have lodged 125 SMSF annual returns with false declarations.
Reported in Super News - Edition 09 / 18 March 2021 - AATA – Cross and Tax Practitioners Board
Commissioner of Taxation v Douglas et al
The Federal Court of Australia dismissed two appeals and allowed another in three cases appealed by the Commissioner of Taxation regarding whether superannuation invalidity benefits were superannuation lump sums or superannuation income stream benefits within the meaning of the Income Tax Assessment Act 1997 (Cth) for taxation reasons.
Two of the payments in question were made under the Military Superannuation and Benefits Act 1991 (Cth) and one under the Defence Force Retirement and Death Benefits Act 1973 (Cth).
Reported in Super News - Edition 48 / 10 December 2020 - Commissioner of Taxation v Douglas et al [2020] FCAFC 220 (4 December 2020)
2020
Federal Court of Australia – ASIC v Helou
The Federal Court of Australia has granted leave to a director, Gary Helou, of the corporate trustee of a SMSF to be able to continue as a director of that and other private companies after he was disqualified from managing corporations for 3 years.
The court found that Mr Helou is required by superannuation legislation to remain a director of trustee in order for the fund to continue to meet the definition of a self-managed superannuation fund and that if Mr Helou were not to remain a director but retain his interest in the fund:
- the fund would become “non-compliant”
- would be liable to have its taxable income taxed at the top marginal tax rate, rather than at 15% would be subject to the Australian Taxation Office issuing rectification or education directions.
- Mr Helou would need to move his superannuation out of the Fund to a public fund, which would likely result in administrative costs, financial losses consequent on selling down assets in the Fund at an inopportune time and possibly a capital gains tax event.
Reported in Super News - Edition 45 / 19 November 2020 - Australian Securities and Investments Commission v Helou (No 2) [2020] FCA 1650 (13 November 2020)
Etmekdjian and Commissioner of Taxation
The Administrative Appeals Tribunal has affirmed a decision to disqualify a Artin Etmekdjian from being a trustee of a self-managed superannuation fund following his conviction for dishonestly influencing a Commonwealth public official.
Mr Etmekdjian sought to have the decision overturned on the basis that the disqualification was not the product of a conviction for an offence involving serious dishonesty. His application was, however, not made within the required fourteen days of his conviction and the Tribunal found there were no exceptional circumstances that prevented Mr Etmekdjian from making the application within the required time frame.
Reported in Super News - Edition 39 I 8 October 2020 - Etmekdjian and Commissioner of Taxation (Taxation) [2020] AATA 3821 (1 October 2020)
Federal Court of Australia - Brown v Hannover Life Re of Australasia Ltd
The Federal Court of Australia has ruled in favour of an insurance payout recipient and ordered the insurer to pay an additional amount, covering interest, for the period of time the Court found it was unreasonable to withhold the original payment. The Court, however, found that interest was only payable for a period of just over three months rather than the, just over, two years claimed.
Reported in Super News - Edition 38 / 1 October 2020 - Brown v Hannover Life Re of Australasia Ltd [2020] FCA 1391 (28 September 2020)
Administrative Appeals Tribunal – Berges and Secretary, Department of Social Services
The Administrative Appeals Tribunal has affirmed a decision of the Tribunal not to grant an extension of time to lodge the income tax returns of Mrs Berges and her partner for the 2015-2016 financial year.
Mrs Berges and her partner were eligible for Family Tax Benefits of $18,442.74 but were not entitled to some $7,733.58 due to the late lodgement of personal and SMSF tax returns. The Tribunal found that the cause of the applicant’s failure to lodge the tax returns by the deadline was not special circumstances, it was that she and her partner did not give sufficient weight to timeliness in relation to the requirement that their tax returns needed to be submitted by 30 June 2017 for FTB purposes.
Reported in Super News - Edition 35 / 10 September 2020 - Berges and Secretary, Department of Social Services (Social services second review) [2020] AATA 3507 (11 September 2020)
Federal Court of Australia – ASIC v MLC Nominees Pty Ltd
The Federal Court of Australia, following admitted contraventions of the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), has imposed penalties on MLC Nominees Pty Ltd and NULIS Nominees (Australia) Limited.
MLC Nominees will pay a pecuniary penalty of $22.5 million for its contraventions of s 12DB of the ASIC Act in respect of no-adviser members and a penalty of $27 million for its contraventions of 12DB in respect of linked members. NULIS will pay a pecuniary penalty of $8 million for its contraventions of s 12DB in respect of linked members.
AATA – Farag and Farag and Secretary, Department of Social Services
The Administrative Appeals Tribunal has affirmed a Tribunal decision from 2019 in which Centrelink reduced the age pension payable to a couple after they had transferred their account-based pensions from one superannuation fund to another. The transfer meant that the new pension accounts were not eligible for grandfathered treatment under the asset test and were subject to the deeming provisions of the Social Security Act 1991. The Tribunal noted that the circumstances of the applicants were “difficult” but the Tribunal had no discretion to take a different approach than otherwise mandated by the legislation.
Reported in Super News - Edition 32 / 10 September 2020 - Farag and Farag and Secretary, Department of Social Services (Social services second review) [2020] AATA 2961 (17 August 2020)
Administrative Appeals Tribunal of Australia – Gilliland and ASIC
The Administrative Appeals Tribunal of Australia has set aside a decision which disqualified John William Gilliland from being an approved SMSF auditor.
Mr Gilliland had acted as auditor to a fund of which he was member, albeit holding what he believed was an immaterial interest which did not disqualify himself from performing the fund’s audit.
The Tribunal accepted that the applicant had held a genuine but erroneous belief for a period of time that he was entitled to conduct the audits and noted that there was no evidence that the audit was in any fashion dishonest.
Reported in Super News - Edition 31 I 13 August 2020 - Gilliland and Australian Securities and Investments Commission [2020] AATA 2660 (5 August 2020)
G v G (No. 2) – Supreme Court of NSW
The Supreme Court of NSW has made orders confirming the powers of the NSW Trustee to invest, or authorise the investment of, a protected estate in a Regulated Superannuation Fund.
The orders were sought after doubt arose as to whether the investment by the NSW Trustee, as trustee of the protected estate, into a superannuation fund is an “investment” of trust property because the trustee has thereby divested itself of trust property, loses control of that property and puts the property beyond the protective control of the Court.
Reported in Super News - Edition 29 / 30 July 2020 - G v G (No. 2) [2020] NSWSC 818 (1 July 2020)
Dental Corporation Pty Ltd v Moffet – Federal Court of Australia
The Full Federal Court of Australia has heard an appeal to a 2019 case and upheld a finding that a Dentist, who had sold his practice but kept working for the purchaser, was eligible for superannuation guarantee contributions.
The Court also upheld findings that the dentist was not an employee in relation to his claim for accrued annual and long service leave.
Reported in Super News - Edition 29 I 30 July 2020 - Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118 (16 June 2020)
Hohnen v Hopkins – District Court of Western Australia
The District Court of Western Australia has dismissed a claim for damages for losses suffered as a result of tax advice given by former accountant.
The Judge found that the plaintiffs had not satisfied the Court that on the balance of probabilities that the advice was given.
Reported in Super News - Edition 29 / 30 July 2020 - HOHNEN -v- HOPKINS [2020] WADC 98 (2 July 2020)
Sutton v NRS(J) Pty Ltd – NSW Supreme Court
The NSW Supreme Court has “re-instated” a trust after the original Trust Deed could not be located and only a photocopy of what was presumed to be the original could be found.
The Court gave advice under the Trustee Act 1925 (NSW) to enable the trustees to treat the photocopy Trust Deed as the Trust's constituting document.
Reported in Super News - Edition 29 / 30 July 2020 - Sutton v NRS(J) Pty Ltd [2020] NSWSC 826 (26 June 2020)
NSW Supreme Court – Various v Moylan Retirement Solutions Pty Ltd (and others)
Four self-managed superannuation funds have failed in three separate actions (heard together) against Moylan Retirement Solutions Pty Ltd. The SMSFs all advanced funds into various loan investments and corporate investment vehicles controlled by Mr Moylan which were in turn applied, on Mr Moylan’s advice, to other investment vehicles that mostly conducted property development and land subdivision.
These investment vehicles failed as a result of the global financial crisis and became worthless.
One of the funds also commenced action against Mr Moylan’s PI insurer.
The Court found in favour of all defendants noting, however, that all plaintiffs were “entirely to be believed that they were the innocent victims of Mr Moylan’s calculated deception over several years” and that “Mr Moylan’s grave misconduct left them suffering a grievous financial plight” but “the law does not provide them with a remedy against these particular insurer defendants”.
The Court did make findings of serious misconduct against Mr Moylan and has referred its judgment to the Attorney General of New South Wales to investigate whether breaches of law have occurred by Mr Moylan, which may result either in criminal or other regulatory prosecution against him.
Reported in Super News - Edition 19 / 21 May 2020 - Esined No. 9 Pty Limited v Moylan Retirement Solutions Pty Ltd; P&S Kauter Investments Pty Ltd ATF the Kauter Superannuation Fund v Moylan Retirement Solutions Pty Ltd; Graeme Manning v Arch Underwriting At Lloyds Limited on Behalf of Syndicate 2012 (No. 2) [2020] NSWSC 359 (8 May 2020)
Federal Court of Australia – Felix v NULIS Nominees (Australia) Ltd
The Federal Court of Australia has dismissed an appeal over a determination by the Superannuation Complaints Tribunal that dismissed a fund member’s total and permanent disability claim on the basis that the member did not satisfy the two tests required to qualify for total and permanent disablement under the policy terms and conditions.
Reported in Super News - Edition 17 / 7 May 2020 - Felix v NULIS Nominees (Australia) Ltd [2020] FCA 591 (4 May 2020)
Supreme Court of Victoria – Wareham v Marsella
The Supreme Court of Victoria, Court of Appeal, has dismissed an appeal by two ex-trustees of a self-managed superannuation who were removed by the court previously when they were found to have not considered the interests of dependants of the fund’s deceased member when distributing death benefits.
The appellants cited ten grounds on which the Court incorrectly removed them as trustees of the fund. The majority of arguments were directed at the trial judge’s conclusion that the trustees failed to give real and genuine consideration to the interests of those who might potentially benefit from the exercise of the discretion regarding payment of the death benefit.
Reported in Super News - Edition 15 / 23 April 2020 - Wareham v Marsella [2020] VSCA 92 (20 April 2020)
Federal Court of Australia – QSuper Board v Australian Financial Complaints Authority Limited
The Federal Court of Australia has rejected an appeal by QSuper that AFCA “impermissibly exercised the judicial power of the Commonwealth” in finding that a QSuper member was entitled to a refund of insurance premiums due to him being eligible to pay a lower premium on the basis that he fell within a new rating category.
The Federal Court upheld AFCA’s decision in finding in favour of the fund member.
Reported in Super News - Edition 14 / 16 April 2020 - QSuper Board v Australian Financial Complaints Authority Limited [2020] FCAFC 55 (9 April 2020)
Supreme Court of Queensland – Investors Exchange Limited v Australian Financial Complaints Authority Limited.
The Supreme Court of Queensland has found against an application by Investors Exchange to overturn a decision by AFCA relating to substantial loss of capital by an investor in one of Investors Exchange’s unlisted managed investment scheme.
The SMSF investor lost over 90% of their investment and lodged a complaint with the Financial Ombudsman Service Ltd (a predecessor of AFCA) which found that Investors Exchange had failed to comply with its compliance plan which included not obtaining independent valuations and that these failures caused the SMSF to suffer loss.
The Court ordered that Investors Exchange pay the SMSF $66,115 plus with interest calculated at 1.5 per cent per annum (compounding annually) from 24 November 2015 to the date of payment.
Reported in Super News - Edition 14 / 16 April 2020 - Investors Exchange Limited v Australian Financial Complaints Authority Limited & Anor [2020] QSC 74 (9 April 2020)
