COVID-19 FOI Request - Extracts from Deeds in ASIC's Possession

Phillip Sweeney made this Freedom of Information request to Australian Securities and Investments Commission

Currently waiting for a response from Australian Securities and Investments Commission, they must respond promptly and normally no later than (details).

From: Phillip Sweeney


Dear Australian Securities and Investments Commission,

Warren Day, Executive Director, Assessment and Intelligence, testified before the Joint Parliamentary Committee on Corporations and Financial Services on 15 July 2020.

Mr Day testified in response to a question from Senator Pratt:

“None of ASIC’s investigations are on pause because of COVID or pandemic issues.”

Mr Day also provided written testimony to the former Chair of the House of Representatives Standing Committee on Economics in a letter dated 5 September 2018 {ASIC Ref CCU-18\0397} which is now relevant to the COVID-19 pandemic.

The former Committee Chair was seeking information from the ASIC Chairman following revelations of serious misconduct by the incumbent Trustee of this fund, NULIS Nominees (Australia) Ltd during the superannuation hearings of the Hayne Royal Commission

Prior to 1 July 2019 ASIC staff were subject to the Public Sevice Act 1999 and subsection 13(9) states:
“ (9) An APS employee must not provide false or misleading information in response to a request for information that is made for official purposes in connection with the employee's APS employment.”

Instead of responding to the question posed by the former Chair of the Standing Committee on Economics to James Shipton, the ASIC Chairman, Mr Day responded to this own ‘straw man’ complaint.

In his written testimony Mr Day stated:

“Mr Sweeney’s primary concerns were first reported to us in March 2009 regrading his defined benefit superannuation fund payout which he believes was lower than what he was entitled”.

This statement is false and misleading as is confirmed in a letter dated 22 April 2009 {ASIC Ref 1576/09} where Greg Hackett, Misconduct and Breach Reporting states:

“In your letter of 31 March 2009, you request ASIC’s assistance to compel the Trustee to provide you with a copy of the Trust Deed that was in place on 25 March 1985. You state that you will then be able to obtain independent legal advice about your entitlements.”

The “Trust Deed” in place on 25 March 1985 is the original Trust Deed and all amending deeds executed on or before 25 March 1985 read as ‘one legal document’.

It is the trustee who has the legal obligation to pay the correct benefits to the correct beneficiaries.

Mr Day correctly identifies this particular superannuation scheme as a Defined Benefit fund.

In a Defined Benefit fund members do not have individual investment accounts. Instead, the trustee uses formulae contained in the original Trust Deed and any VALID amendments to determine the correct benefit type and quantum.

In a Defined Benefit fund the sponsoring employer’s legal obligation is limited to making periodic employer contributions into the fund’s common asset pool in accordance with the recommendation of the fund actuary.

Under the general law, a trustee must not act under the dictation or direction of a third party and this includes the sponsoring employer { Re Brockbank [1948] 1 All ER 287}.

Section 58 of the Superannuation Industry (Superannuation) Act 1993 provides a limited number of statutory exemptions to the general law.

The sponsoring employer cannot give a direction to the trustee as to the definition of “superannuation salary.”

The trustee must obey the “governing rules” of the fund and the definition of “salary” for superannuation purposes contained in those rules as properly construed.

In attacking his own “straw man” Mr Day should have directed the incumbent trustee to provide extracts from the original Trust Deed that confirm the benefit type and the formulae and definitions to be used to determine the benefit payment or payments and extracts from any amending Deed that varies the formulae and/or definitions.

Instead Mr Day seekings information from the sponsoring employer to the effect as to what direction has the employer given the trustee on what “salary” is to be used for superannuation purposes.

Mr Day states:

“Superannuation Salary was defined in the relevant policy document as gross cash plus voluntary before-tax superannuation tax contributions”.

However this employer definition of “salary” is not the definition of “salary” for superannuation purposes to be found in the original Trust Deed or any VALID amending Deed.

The trustee must obey the Trust Deed and any VALID Amendments and not what the employer directs the trustee to use – which is a much lower amount!

The trustee has a duty to seek judicial advice if there is a conflict between the definition of “salary’ in the governing rules of the fund and what the sponsoring employer believes the definition should be.

That is a trustee must act in the 'best interests' of the beneficiaries and not in the 'best interests' of the sponsoring employer.

Furthermore, Mr Day provides further misleading information to the former Chair of the Standing Committee on Economics by claiming that the benefit was a “payout” (ie a lump sum benefit) when the actual lawful benefit is a life pension with a reversionary pension for the widow if the male fund member dies before his wife.

A reversion pension {survivorship pension} is an important and valuable entitlement during a pandemic that is most lethal to males over the age of 60.

Mr Day also claims that there was “insufficient evidence”.

If there was “insufficient evidence” that was because the purported trustee was criminally concealing the original Trust Deed and all VALID amending deeds for fund members, their wives and widows. This was the subject of the original complaint to ASIC on 31 March 2009.

Over the last decade, ASIC has refused to investigate the actual complaint made to ASIC on 31 March 2009 despite an undertaking made before the Honourable Justice Kenny in the Federal Court in which Warren Day was a respondent {VID 323 of 2011}.

Mr Day also failed to inform the former Committee Chair of this undertaking and his role as a respondent in these proceedings.

However, the VALID amending deeds have been obtained with the assistance of the Attorney-General’s Department of South Australia along with other supporting evidence.

Relevant amending deeds have now been provided to ASIC.

The documents I seek are extracts from these deeds that Mr Day should have obtained a DECADE AGO.

The documents I seek are:
(i) Pages from the Consolidated Deed of Variation dated 6 May 1958 that cover Regulation or Rule 29 which contain the improved formula for the pension benefit and the definition of “salary” for superannuation purposes;
(ii) Pages from the Deeds of Variation dated 3 July 1961, 3 August 1965 and 3 September 1970 that cover amending the definition of “salary” for superannuation purpose in Regulation 29.

Copies of the deeds have been provided to Joanna Bird, Executive Director, Wealth Management and should still be in ASIC’s possession unless this evidence that should have been obtained by Warren Day a DECADE AGO has been destroyed.

These are the formulae and definition of “salary” for superannuation purposes that a trustee MUST use and not the purported “definition” of “salary” that is only to be found in a “policy” document of the sponsoring employer.

I note that Mr Day worked for the ATO before joining ASIC and that Mr Day has no qualifications in trust law or superannuation law.

Ignorantia juris non excusat.

Yours faithfully,

Phillip Sweeney

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