Federal Court of Australia Australian Securities and Investments Commission v Retail Employees Superannuation Pty Ltd [2024] FCA 1081 File number: Judgment of: BEACH J Date of judgment: 18 September 2024 Catchwords: SUPERANNUATION — industry superannuation fund — rollover requests by members — Division 6.5 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) — sections 10, 19 and 42 of Superannuation Industry (Supervision) Act 1993 (Cth) — representations to members concerning rollover entitlements — limitation or restriction on members' ability to transfer their superannuation balance to other funds — misleading or deceptive conduct — sections 12DA and 12DB of the Australian Securities and Investments Commission Act 2001 (Cth) — section 1041H of the Corporations Act 2001 (Cth) — whether conduct or representations "in trade or commerce" — construction of superannuation trust deed and the SIS Regulations — meaning of "member's interest in the fund" — contingent equitable interest — mere expectancy Australian Securities and Investments Commission Act 2001 (Cth) ss 12BA, 12BAA, 12BAB, 12CB, 12DA, 12DB Corporations Act 2001 (Cth) ss 601RAC, 764A, 766A, 766C, 1041H Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 (Cth) Superannuation Guarantee (Administration) Act 1992 (Cth) ss 19, 32C Legislation: Superannuation Industry (Supervision) Act 1993 (Cth) ss 3, 10, 19, 30, 31, 34, 42, Superannuation Industry (Supervision) Regulations 1994 (Cth) Div 6.5 Explanatory Memorandum, Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009 Explanatory Statement, Superannuation Industry (Supervision) Amendment Regulations 2003 (No 5), Statutory Rules 2003 No 251 Explanatory Statement, Select Legislative Instrument 2005 No 142 Australian Securities and Investments Commission v TAL Life Ltd (No 2) (2021) 150 ACSR 224 Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) (2018) 127 ACSR 110; (2018) 266 FCR 147 Commissioner of Taxation v Everett (1980) 143 CLR 440 Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 Glorie v W A Chip & Pulp Co Pty Ltd (1981) 39 ALR 67 Horwood v Millar's Timber and Trading Company, Limited [1917] 1 KB 305 Kowalski v Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd (2007) 242 ALR 370 Cases cited: Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110 National Australia Bank Ltd v Norman (2009) 180 FCR 243 Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 Pallette Shoes Proprietary Limited (in Liquidation) v Krohn (1937) 58 CLR 1 Shepherd v Commissioner of Taxation (1965) 113 CLR 385 Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 Village Building Company Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 Williams v Pisano (2015) 90 NSWLR 342 Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 953 Date of hearing: 1 and 2 November, 18 December 2023 Counsel for the Plaintiff: Mr M Wise KC, Ms E A Bennett SC and Mr A Ounapuu Solicitor for the Plaintiff: Australian Securities and Investments Commission Counsel for the Defendant: Mr C M Caleo KC and Mr P G Liondas SC Solicitor for the Defendant: Allens ORDERS VID 94 of 2021 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff AND: RETAIL EMPLOYEES SUPERANNUATION PTY LTD (ACN 001 987 739) Defendant order made by: BEACH J DATE OF ORDER: 18 SEPTEMBER 2024 THE COURT ORDERS THAT: 1. The proceeding be dismissed. 2. Subject to order 3, the plaintiff pay 80% of the defendant's costs of and incidental to the proceeding to be taxed in default of agreement. 3. If either party within 7 days of the date hereof notifies the Court that they wish to contend for a different costs order than that provided for in order 2, then order 2 will not operate. 4. If any such notification contemplated by order 3 is given, the Court will then make directions for the resolution of any costs questions. 5. Liberty to apply. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT BEACH J 1. Retail Employees Superannuation Pty Ltd (REST) is the trustee of the Retail Employees Superannuation Trust (the Trust), which is an industry superannuation fund covering workers in the retail and hospitality sectors. 2. The present proceeding brought by the Australian Securities and Investments Commission concerns REST's former practices in response to rollover requests received from members for whom a major employer was required to make contributions to REST's superannuation fund (the fund) under a workplace determination or enterprise bargaining agreement; from time to time I will refer to such a member as a determination member. 3. Rollover requests are and have been governed by Div 6.5 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) made under the Superannuation Industry (Supervision) Act 1993 (Cth). 4. ASIC alleges that REST's rollover practices between 2 March 2015 and 2 May 2018 (the relevant period) had the effect of limiting or restricting determination members' ability to transfer their superannuation balance to other funds. 5. In that context, it is alleged by ASIC that REST made various categories of representations to more than 31,000 determination members, each of which was false or misleading or deceptive, in the scenario where members sought to transfer the whole of their superannuation balance to another fund. It is said that such conduct contravened s 12DA(1) and/or s 12DB(1)(i) of the Australian Securities and Investments Commission Act 2001 (Cth) and/or s 1041H of the Corporations Act 2001 (Cth). 6. First, it is said that REST represented that if a member remained employed by a REST employer and the REST employer was to continue to make contributions to the fund, then the member could only partially transfer their superannuation balance out of the fund (the partial transfer representation). 7. Second, it is said that REST represented that if a member continued to be employed by a REST employer, then they were required to maintain a minimum amount of $5,000 in their REST account (the $5,000 representation). 8. Third, it is said that REST represented that members were required to obtain a declaration from their employer that the member had choice of fund rights and of the date upon which the REST employer ceased making contributions to the fund, as a pre-requisite to effecting the transfer, and that a failure to provide that declaration meant that the transfer request could be refused by REST (the declaration requirement representation). 9. Fourth, it is said that REST represented that a request could only be processed where a member obtained a separation certificate from their employer or provided a date of termination (the certificate requirement representation). 10. One or more of these representations were said to be made to determination members in circumstances which I will set out in detail later. It is said by ASIC that such representations were representations of fact as distinct from statements of opinion or representations of law. And it is said that such representations were false or misleading or deceptive or likely to mislead or deceive. 11. More generally, ASIC says that in the relevant period, and as a consequence of REST's practices, REST prevented its members from transferring out their funds where the member was a determination member of the fund who continued to be employed by the same employer. And it did this by treating any whole of balance transfer request as a partial transfer request, by imposing a minimum balance amount of $5,000 and by requesting information beyond that permitted by the SIS Regulations. It is said that REST was wrong to treat determination members as incapable of transferring the entirety of their funds from REST to a superannuation provider of their choice. 12. Now REST has resisted ASIC's case on various grounds. Let me briefly summarise them. 13. First, it is said that because all determination members had an expectation of receiving further contributions, REST was justified in treating any transfer request as a partial transfer request. And as a corollary of this, it says that its practice complied with the requirements of Div 6.5 of the SIS Regulations. 14. Second, it is said that the representations alleged by ASIC were not made by reason of the statements on which ASIC relies. 15. Third, REST says that if the representations were made and had the character alleged by ASIC, then having regard to the proper construction of Div 6.5 of the SIS Regulations at the time, the representations were not false, misleading or deceptive. 16. Fourth, it is said that the representations, if made, were not representations as to the fact of the operation of Div 6.5 of the SIS Regulations, but were either statements of REST's practices as a matter of fact or, to the extent that the representations were statements as to what was required by Div 6.5, the statements were no more than representing REST's opinion of the law, which opinion was honestly and reasonably held. 17. And on that latter point as to whether REST's opinion was reasonably held, REST has relied upon its dealings with the Australian Prudential Regulatory Authority in the period 2007 to 2009, and external legal advice received in the period 9 September 2005 to 13 April 2018 to justify the reasonableness of the opinion held. I should say that before me there was no serious issue as to the fact of REST holding the relevant opinion or that it was honestly held. 18. Fifth, REST says that the claims under ss 12DA(1) and 12DB(1)(i) fail because the representations relied on were not relevantly made "in trade or commerce". I should say now that I have rejected REST's case on that legal point. 19. Sixth, it is said that the representations were not relevantly in relation to financial services or in connection with the supply of financial services, as required by s 12DA(1) and s 12DB(1)(i). I have also rejected REST's argument on that point. 20. Seventh, it was originally said by REST that the representations did not concern the existence, exclusion or effect of a "right" within the meaning of s 12DB(1)(i). But during submissions, Mr Christopher Caleo KC for REST abandoned the point. REST does not now contend that the representations, if made, did not concern the existence, exclusion or effect of a right within the meaning of s 12DB(1)(i). If I accept that the representations were made, then they did concern the existence, exclusion or effect of a right, being a determination member's right to transfer the whole of their superannuation balance to another fund. 21. Let me briefly say something about the evidence. 22. ASIC contends that the representations were made in REST's standard forms provided to determination members whenever they requested a balance transfer. ASIC also contends that the representations were made in telephone calls and written correspondence. ASIC relies upon the affidavits of former members of REST, being person A, person B, person C, person D and person E. It also relies upon the affidavits of an ASIC investigator and an ASIC data analyst. There was no cross-examination of any of these witnesses. 23. REST relied upon the affidavit of Mr Joseph de Bruyn, a director of REST during the relevant period. Ms Elizabeth Bennett SC for ASIC cross-examined Mr de Bruyn, and I will identify some of the highlights of this later. 24. The parties have also tendered voluminous documentary material and a further amended statement of agreed facts. 25. More generally, the parties have also agreed on the terms of an amended grouping document, which groups the many instances of oral and written representations in the schedules to the statement of claim. The effect of this agreement is that for the majority of representations, I need only make relevant findings about exemplar instances of representations. 26. In summary and for the reasons that follow, I have rejected ASIC's case. 27. In terms of my detailed reasons, it is convenient to divide the relevant topics into the following sections: 28. Some relevant background — [29] to [103]. 29. The SIS Act and the SIS Regulations — [104] to [124]. 30. The question of a "member's interest in the fund" — [125] to [264]. 31. Legal principles concerning ASIC's claims — [265] to [284]. 32. Was the relevant conduct "in trade or commerce"? — [285] to [321]. 33. Were the representations "in relation to" or "in connection with" financial services? — [322] to [369]. 34. Benefit payment rollover forms — [370] to [397]. 35. Exemplar determination member instances — [398] to [447]. 36. The partial transfer representation — [448] to [481]. 37. The $5,000 representation — [482] to [530]. 38. The declaration requirement representation — [531] to [575]. 39. The certificate requirement representation — [576] to [628]. 40. The question of characterisation — [629] to [667]. 41. Was REST's opinion reasonably held? — [668] to [810]. 42. ASIC's case concerning REST's opinion — [811] to [938]. 43. Were the representations false or misleading or deceptive? — [939] to [950]. 44. Conclusions — [951] to [953]. 45. Let me begin by setting out some of the relevant background. Some relevant background 1. REST is amongst the largest superannuation funds in Australia by membership, and is a profit-to-member fund. It is required to operate subject to the relevant provisions of the SIS Act and the relevant provisions of the SIS Regulations, as in force at the relevant time. I will elaborate on some aspects of this later. 2. During the relevant period, REST held net assets available for member benefits on behalf of members of the Trust as follows: Year Net assets Financial year ended 30 June 2015 $37b Financial year ended 30 June 2016 $40b Financial year ended 30 June 2017 $46b Financial year ended 30 June 2018 $52b 1. During the relevant period, REST's membership was as follows: Year Members Financial year ended 30 June 2015 Approximately 2m Financial year ended 30 June 2016 Approximately 1.9m Financial year ended 30 June 2017 Approximately 1.9m Financial year ended 30 June 2018 Approximately 1.95m 1. The Trust administered by REST is a complying superannuation fund for the purposes of s 42 of the SIS Act. Moreover, pursuant to s 52(2)(a) of the SIS Act, the governing rules of REST are taken to contain a covenant that REST will act honestly in all matters concerning the entity. 2. The Trust and REST's obligations thereunder are governed by a trust deed. REST membership 1. The rules of management, which are set out within the trust deed, detail the rules of the Trust. The rules in operation during the relevant period were set out in the trust deed amendment no. 39 (2013 rules) and the trust deed no. 41 (2016 rules). 2. Under the 2013 rules and the 2016 rules, the following people were eligible to become a member of the Trust. First, an employee, who was eligible to become an employer-sponsored member, and where a contribution was validly made in accordance with the rules. Second, a person, on receipt by REST of an amount transferred to the Trust in respect of the successor fund member from another superannuation fund. Third, a person, if the person was not eligible to become an employer-sponsored member, and applied in writing in such form as REST determined. 3. REST accepted contributions or other payments to the Trust in respect of members. Moreover, a member could hold one or more classes of beneficial interest in the Trust at any one time. 4. Now during the relevant period, REST permitted members to direct it to invest their superannuation balance in accordance with an investment option or investment options. 5. Further, REST was required under the 2013 rules and the 2016 rules to ensure that each member was notified in writing of, inter-alia, their right and the right of their dependents to receive benefits from the associated Plan, the conditions relating to those benefits and the method of determining those benefits, and such other matters as required by the SIS Act and, where applicable, the Corporations Act, and regulations made under those Acts. 6. Until 11 May 2018, REST had in place rules which recorded practices and operational requirements to be applied by Australian Administration Services Pty Limited (AAS), the administrator appointed by REST to administer the Trust, in performing administration services on behalf of REST and maintaining the register of members and their benefits. REST's rules and insurance 1. During the relevant period, new and returning members of REST were automatically provided with a default basic cover insurance package, which included death, total and permanent disablement and long-term income protection cover. 2. Unless the member notified REST to cancel their insurance, the insurance fees would be automatically deducted from their account. If a member's account balance was insufficient to cover the cost, their cover would cease. 3. Relevantly, the 2013 rules and the 2016 rules contained the following provisions. 4. Rule 2.13 of the 2013 rules and rule 2.19 of the 2016 rules provided that: (a) A Member's membership of the Plan ceases on the last to occur of the following; (i) when the Trustee has paid the benefits including any amount payable under any insurance cover to which the Trustee believes that the Member is entitled: and (ii) on any insurance cover as specified in the applicable insurance policy or in writing by the Trustee ceasing. 1. Rule 5A.2(c) of the 2013 rules provided that: The benefit of any insurance cover shall cease in accordance with the terms set out in the insurance policy or if rule 5A.3 [of the Rules of Management] applies, then the benefit of the insurance cover will cease in terms of rule 5A.3. 1. Similarly, rule 5.1(c) of the 2016 rules provided that: The benefit of any insurance cover shall cease in accordance with the terms set out in the insurance policy or, if rule 5.2 applies, then the benefit of the insurance cover will cease in terms of rule 5.2. 1. Rule 5A.3 of the 2013 rules and rule 5.2 of the 2016 rules provided that insurance cover would cease in the following scenarios: (a) in accordance with the terms contained in the policy of insurance with the Insurer and set out in the Member Information attached to the Member Application; (b) on written notice to the Trustee given by the Member; … (e) if the amount standing to the credit of a Member's Member Account is insufficient to pay the costs attributable to that Member of providing that cover. 1. Rule 5.3 of the 2016 rules detailed where insurance cover applying to a member may change. 2. In addition, REST's rules during the relevant period provided further detail as to the cessation and top-up of insurance cover. 3. Rule 10.2.9 of the rules defined an insufficient amount to pay the premium. A member's cover would cease on the earliest of circumstances including: … When a REST Corporate or REST Super member has an insufficient account balance to cover the premiums, the member will be given an opportunity to top up their account balance within 28 days (+ 7days to allow for postage). If no top-up is received, the member will lose their insurance cover from the last Friday in the month in which the balance becomes insufficient to cover that month's premium; When the member cancels cover; The date the member leaves REST Super; A member's date of death; For a member on continued cover, TPD and IP cease once the member's account balance falls below $3,000 (only for REST Super); Death cover will continue while the account remains above $1,200. Once their account balance drops below $1,200, all cover will cease without notice (only for REST Super). … Where an employed member's account balance is insufficient to cover insurance costs, the Administrator will write to the member to advise that cover has ceased and offer the member an opportunity to top up their account within 28 days (+7 days to allow for postage) of the account going negative… REST's member superannuation transfer processes 1. Now superannuation contributions are made by members directly or by employers to REST on behalf of members. 2. From at least October 2000, where a member sought to transfer their superannuation balance from the Trust, in circumstances where REST's records indicated that the member was employed by an employer which was required to make mandatory contributions into the Trust on behalf of a member under a workplace determination or an enterprise agreement, which as I say I will from time to time refer to as a determination member, REST required a minimum balance to be retained in that member's account (minimum transfer balance) unless satisfied that the employer would not be making further mandatory contributions into the Trust. 3. The minimum transfer balance was $1,000 from at least October 2000 to January 2003 and $1,200 from January 2003 to May 2005. 4. But on 26 May 2005 the board of directors of REST resolved to increase the minimum transfer balance from $1,200 to $5,000. 5. A REST board paper for the board meeting on 26 May 2005 stated that: The SIS Regulations allow a trustee to refuse an application for transfer where the fund has received an employer contribution in the last 6 months. Where this is not the case, and a member wishes to rollover or transfer, the legislation allows the fund to impose a minimum of $5,000 to remain in the fund unless the member rolls over or transfers their entire benefit. … Over $3.2 million was transferred out of REST. If a minimum of $5,000 was imposed, approximately $700,000 would have been retained, more than was retained with the $1,200 limit. 51 transfers would not have been processed at all. 1. Now in September 2005, REST's rules provided for various matters, some of which it is necessary to set out. 2. In rule 6.3.2 it was provided: Where a request for a partial transfer is received and the transfer would result in the member's account balance falling below $5,000, the transfer request will be refused and the administrator will write to the member to advise the member. A partial transfer applies where: … (b) if the member requests a transfer of their full account balance, where the employer has a contribution obligation, via legislation, industrial agreement or deed of application, to continue to make ongoing contributions to REST. 1. In rule 6.3.4 it was provided: Where a request for a transfer of the whole account balance, or it is unclear whether the member wishes to make a full or partial transfer, is received for a member for whom no termination date is received, the administrator will contact the member's employer to: * confirm the member's termination date (if applicable); or * confirm whether or not the employer will be continuing to make contributions to REST on behalf of the member. The administrator may accept the advice of the employer via telephone in this instance providing a file note is made on the member's record. 1. In rule 6.3.5 it was provided: Where the member has left employment, the administrator will send the member a Portability Notice. Unless a response is received from the member (either verbally or in writing) within 10 business days from the date of REST's letter, the administrator will action the transfer request and close the member's account. 1. In rule 6.3.6 it was provided: Where the member's employer advises that the member is still employed but that no further contributions will be made to REST, the administrator send [sic] to the Member for signature and return a Portability Acknowledgement containing an acknowledgement that the member understands the benefit entitlements for which the member will no longer be entitled upon closure of the account. Upon receipt of a signed Portability Acknowledgement, the administrator will transfer the amount in terms of the request and close the member's account. 1. In rule 6.3.7 it was provided: Where the member's account balance is above $5,000 and his or her employer advises that further contributions will be made to REST, the administrator will advise the REST Client Service Manager of the individual member's request to transfer out. 1. In rule 6.3.8 it was provided: Where the member's account balance is below $1,200 ($5,000 from 1 January 2006) and his or her employer advises that further contributions will be made to REST, the transfer request will be refused and the administrator will write to the member and transferring fund to advise of the refusal. 1. In rule 6.3.9 it was provided: The REST Client Service Manager is responsible for providing a report to the administrator on the reasons for transfer in respect of those transferring members employed by employers who: (a) have more than 9 employees in REST; and (b) are not on the automatic approval list. Or (c) a transfer request is made and ongoing contributions are expected as per 6.3.7. 1. In rule 6.3.10 it was provided: The administrator is responsible for finalising the transfer out within 5 days of all documentation being received provided that Trustee approval has been provided. 1. Now on 10 March 2006, REST amended rule 6.0 of its rules to define an "individual partial transfer" to be: Where a transfer request is made and either the member: * … the member's employer confirms that contributions will continue to be made to REST (as such, the member will have a continuing interest in the fund); or * the Trustee is aware of an industrial instrument that requires contributions to continue to be made to REST (ie a continuing interest). Where a partial transfer is requested, REST requires that the member leave a minimum balance of $5,000 in his or her account after the transfer is processed. 1. From February 2009, REST's benefit transfer form stated that: You can only transfer your entire account balance out of REST if your current employer will no longer be making super contributions into your account. If you select to transfer your entire account balance, your employer must complete section 5 [the employer declaration section] of this form, unless you have been promoted and are transferring into a corporate fund or your award has changed. 1. In August 2013, REST amended its rules to provide in rule 6.4.3.1 as follows: The Administrator must notify REST Operations of any member who is part of a major REST employer. REST will provide a database of enterprise agreements as negotiated by the SDA and / or REST's employers to REST Operations. Where a rollover to an APRA regulated super fund request is received from a member who is subject to an enterprise agreement specified in the database, the Administrator will notify REST Operations (Askops@Rest.com.au). The transfer out will not be actioned by the administrator without approval from REST Operations. 1. Let me at this point summarise some other matters. 2. The trust deed, and the rules which appeared at the end of the trust deed and formed part of the trust deed (clause 1.2), provided for the following matters. 3. First, it provided for the commencement of membership, which occurred only when REST received a contribution or transfer from another fund (rule 2.4.1 of the 2013 rules and rule 2.10 of the 2016 rules). 4. Second, it provided for the maintenance of member accounts, which recorded only dollar amounts (rule 4.1). 5. Third, it provided for the cessation of membership, which generally occurred when REST had paid out the benefits (including any amount under an insurance policy) to which REST believed the member was entitled and any insurance cover had ceased (rule 2.13 of the 2013 rules and rule 2.19 of the 2016 rules). 6. Fourth, it provided for transfers or rollovers out of the fund (clause 18 of the trust deed). 7. Further, in respect of transfers out, the trust deed provided that (clause 18.3(b) of the trust deed): Upon the transfer to another fund of the whole of the amount standing to the credit of a Member's Member Account, that Member will cease to be a Member and the Trustee shall be thereupon released and discharged from all liability whatsoever to or in respect of that Member. 1. Now ASIC says that, properly construed, the trust deed makes clear the following. 2. First, a person can only be a member if they have an amount in actual dollars standing to their credit in their member account. 3. Second, if, for any reason, a member's account balance reduces to nil, they will cease to be a member. 4. Third, if a member requests a whole balance transfer, being a transfer of the entire dollar amount standing to their credit in their member account, then upon that transfer they will cease to be a member. 5. On that construction, ASIC says that there can be no concept of a person remaining a member because they might receive further contributions at some future time from their employer. Further, ASIC says that the trust deed explicitly excludes the possibility that a person's possible future receipt of such contributions might constitute a present "interest in the fund". 6. I will return to these propositions shortly. But it is convenient to deal with another matter at this point. Obligation on employers 1. Clause 19 of the original trust deed dated 2 December 1987 required employers to complete and deliver a deed of adoption to participate in "the Plan", that is, the trust of which REST is the trustee, and be bound by the trust deed. 2. On 13 December 1988, REST amended the trust deed to include the following clauses: 13. ADMISSION OF EMPLOYERS 13.1 Application An Employer which desires to participate in the Plan shall apply to the Trustee for admission to the Plan in or to the effect of the form set out in Appendix "A" to this Deed or in any other form acceptable to the Trustee generally or in particular. 13.2 Acceptance or Rejection The Trustee may, after obtaining such advice as is necessary, accept or reject any such Application by an Employer. 13.3 Effect of Application The Application by the Employer for admission to the Plan shall, on being accepted as referred to in Clause 13.2 and until amended as hereinafter provided:- (i) set out in the terms and conditions under which the Employees of the Employer are admitted to the Plan, the contributions by and in respect of those Employees and the benefits to be provided: and (ii) be binding on the Employer and each of the Employees of the Employer who become a Member of the Plan. 1. At this time, the trust deed was also amended to include an "Application Form to become a Participating Employer of the R.E.S.T Superannuation Plan" at Appendix A. This form contained the following clause: The Participating Employer agrees to be bound by the terms and conditions of the Trust Deed 1. On 20 December 2012, REST deleted the existing clauses of the trust deed and inserted inter-alia new clauses and rules. Clauses 13 and 17.1 were inserted as follows and applied throughout the relevant period: 13.1 Application An employer which desires to participate in the Plan may apply to the Trustee for admission to the Plan in or to the effect of the form set out in Appendix "A" to this Deed or in any other form acceptable to the Trustee generally or in particular. 13.2 Acceptance or Rejection The Trustee may, after obtaining such advice as is necessary, accept or reject any such Application by an employer. 13.3 Effect of Application The Application by the employer for admission to the Plan shall, on being accepted as referred to in clause 13.2 and until amended as hereinafter provided: (a) set out the terms and conditions under which the employees of the Employer are admitted to the Plan and the contributions by and in respect of those Employees; (b) be binding on the employer and each of the Employees of the employer who become a Member of the Plan; and (c) operate as an amendment to the Plan. … 17.1 Withdrawal of Employer (a) An Employer may not terminate its contributions in respect of a Member employed by it unless it applies in writing to the Trustee giving reasons for the request to terminate its contributions and the Trustee gives its approval to the request; … (d) Permission to terminate contributions in terms of paragraph (a) will not be granted where to do so would to the Trustee's knowledge breach any legislation or Industrial Agreement; (e) An Employer's liability to cease paying contributions to the Plan will end on the earlier of the date specified in the Trustee's written approval or if no date is specified the date of the Trustee's written approval; (f) An Employer will remain liable to pay to the Trustee all contributions due before the date the Employer's liability to cease paying contributions to the Plan took effect. … 1. Further, clause 18 provided the following: 18. TRANSFERS TO OR FROM OTHER PLANS 18.1 If a Member becomes a member of another Complying Fund and the trustee of that other fund permits then, subject to clause 18.3(a) hereof, the Trustee shall, unless the Trustee decides otherwise, at the request of the Member transfer all or part of the amount standing to the credit of that Member's Member Account to that other Complying Fund. … 18.3 … (b) Upon the transfer to another fund of the whole of the amount standing to the credit of a Member's Member Account, that Member will cease to be a Member and the Trustee shall be thereupon released and discharged from all liability whatsoever to or in respect of that Member. (c) Upon the transfer to another fund of a portion of the amount standing to the credit of the Member's Member Account, the Trustee shall thereupon be discharged from all liability whatsoever in respect of the portion so transferred and may thereafter reduce or otherwise adjust any benefit to be provided for in respect of that Member under this Deed to such extent as it in its discretion considers to be appropriate having regard to the amount transferred. … 1. Appendix A was re-inserted with a note that "This form is no longer in use". 2. The employer guides in operation from April 2010 to February 2011 and from February 2011 to July 2013 contained a copy of the employer application. This application stated: We hereby agree to: (a) be bound by the terms and conditions of the trust deed and rules of REST (dated 2 December 1987) as amended from time to time (b) pay contributions: (i) monthly, or (ii) as required to reduce our superannuation guarantee obligation to nil and to meet our other legal obligations. (Cross out whichever is not applicable. If neither i or ii have been crossed out, i applies) (c) inform the Trustee of a terminating employee, or an employee for whom we will be ceasing to make contributions, within 30 days of the event. 1. The employer guides in the relevant period stated: It's important you let us know when your staff leave or join your company. It will help us ensure payments are correctly allocated, made on time and that members will not become 'separated' from their super. You'll also have up to date records which will help us provide you with meaningful and correct information. … We have an obligation to take reasonable steps to ensure contributions for members are paid on time. If you fail to make contributions, we will send you a reminder. If we still do not receive outstanding contributions, we will ask our arrears collection agency to look into the matter. 1. Now for a number of major REST employers, REST received participating employer applications. 2. So for example, in early 1989, REST received participating employer application forms from Woolworths (Q.L.D.) Limited in respect of Queensland employees, Woolworths Limited in respect of New South Wales employees, Woolworths Limited and Australian Safeway Stores Pty Limited in respect of Victorian employees, Woolworths (S.A.) Limited in respect of South Australian employees, and Woolworths Limited in respect of Western Australian employees. 3. In addition, Bunnings Building Supplies joined REST as a REST employer on 3 August 1993 and REST received an application on 23 August 1993. Officeworks joined REST on 26 April 1994 and REST received an application on 8 June 1994. 4. Let me by way of background say something more about REST's practice during the relevant period. REST's practice during the relevant period 1. Now as I have already indicated, from at least October 2000, where a member sought to transfer their superannuation balance from the Trust, in circumstances where REST's records indicated that the member was employed by an employer which was required to make mandatory contributions into the Trust on behalf of a member under a workplace determination or an enterprise agreement, REST required a minimum transfer balance to be retained in that member's account unless satisfied that the employer would not be making further mandatory contributions into the Trust. 2. Now practically speaking, during the relevant period when REST received a rollover request from a determination member for the whole of their withdrawal benefit, its practice was as follows. 3. If REST had not received notification from the employer that the member's employment had been terminated, REST would ask the determination member for a statement from their employer (or former employer) to confirm whether or not the determination member's employment had been terminated and, if it had not, whether the employer was otherwise not required to make any further contributions to the fund under the determination for the member. 4. Where the employer notified REST that the determination member's employment had terminated, or that the employer otherwise would not be making any further contributions for the member under a determination, REST would proceed to rollover the member's account balance in accordance with the member's rollover request. 5. Where the employer notified REST that the determination member's employment had not terminated and the employer's obligation to make contributions to the fund for the member under a determination continued, REST did not permit the member to rollover all of their account balance. REST required the member to retain in the fund the minimum transfer balance which, during the relevant period, was $5,000. 6. But REST would process the transfer without confirmation of whether the determination member's employment had been terminated if, prior to the request, 12 months had passed since the last contribution for a determination member. 7. Now it is convenient to deal with one other matter at this point. 8. Section 19 of the Superannuation Guarantee (Administration) Act 1992 (Cth) in essence makes an employer liable to a superannuation guarantee charge if mandatory employer contributions are not made in accordance with the "choice of fund" requirements. 9. The "choice of fund" requirements under that Act were satisfied if the employer contributed to a fund specified in an award or determination (s 32C(6)). Accordingly, if the employer was contributing in accordance with an award or determination, the employer was not required to offer choice of fund to the employees for whom such contributions were made. 10. Now there were "portability" provisions in the SIS Act and the SIS Regulations, which enabled members to rollover some or all of their superannuation to another fund and provided that trustees could decline a rollover request in certain circumstances. 11. Moreover, in general terms whilst members had the ability subject to certain qualifications to request a rollover of their superannuation withdrawal benefit, members' employers were obliged, in certain cases, to continue making contributions to the fund specified in an award or determination. 12. So, the practical outcome that prevailed during the relevant period was that a member could seek to rollover from the fund but the prospect existed where future employer contributions could continue to be paid into the fund. The SIS Act and the SIS Regulations 1. The main object of the SIS Act is to "make provision for the prudent management of certain superannuation funds … and for their supervision by APRA, ASIC and the Commissioner of Taxation" (s 3(1)). 2. A "superannuation fund" is defined in the SIS Act to include an indefinitely continuing fund (s 10(1)). A superannuation fund may be a "regulated superannuation fund" if, relevantly, it has a corporate trustee and it gives a notice to the Commissioner of Taxation electing that the SIS Act is to apply in relation to the fund (s 19(2), (3)(a) and (4)). Such a regulated superannuation fund is then a "superannuation entity" and a "registrable superannuation entity" (s 10(1)). It may also, from year to year, be a "complying superannuation fund" (s 42)). 3. The fund operated by REST at all material times has been a complying superannuation fund and therefore a regulated superannuation fund. 4. Part 3 of the SIS Act establishes a system of operating standards that apply to, inter-alia, regulated superannuation funds (s 30). Pursuant to s 31(1), the standards themselves are found in the SIS Regulations. Pursuant to s 31(2)(i), the standards may provide for "the portability of benefits arising directly or indirectly from amounts contributed to funds". 5. Part 6 of the SIS Regulations is headed "Payment standards" and sets out operating standards in relation to a number of matters. Relevantly for this proceeding, Div 6.5 deals with the rollover and transfer of superannuation benefits in regulated superannuation funds. 6. Div 6.5 of the SIS Regulations is entitled "[c]ompulsory rollover and transfer of superannuation benefits in regulated superannuation funds and approved deposit funds". Div 6.5 was amended in 2013 and again in 2014. It is the version of the SIS Regulations in force following those amendments that applied during the relevant period. 7. Regulation 6.33(1) of the SIS Regulations allows a member of a regulated superannuation fund (the transferring fund) to request, in writing, that the whole or a part of the "member's withdrawal benefit" in the transferring fund be rolled over or transferred to, among other entities, a regulated superannuation fund. 8. The term "withdrawal benefit" was defined to mean the total amount of benefits that would be payable if the member voluntarily ceased to be a member (reg 1.03(1)). 9. If a fund received a request to transfer a member's "withdrawal benefit" to another fund, the request was required to be complied with (reg 6.34(2)), subject to two matters. First, the necessary information had to be provided (regs 6.34(1)(b) and (c)). Second, it was required that none of the circumstances justifying refusal applied (reg 6.35). 10. Moreover, the requirement under reg 6.34 was subject to regs 6.35 and 6.38. 11. Now pursuant to reg 6.34(1)(b), if the request was to transfer the whole of the member's withdrawal benefit, the information that was required was that specified as mandatory in the relevant form. If the receiving fund was not a self-managed superannuation fund, schedule 2A was to be used. But in any other case, schedule 2B was to be used. 12. Pursuant to reg 6.34(1)(c), if the request was to transfer part of the member's withdrawal benefit, the information that was required was that which would be required by the form. So, if the receiving fund was not a self-managed superannuation fund, what was required was the information set out in schedule 2A and any other information that was reasonably required to give effect to the rollover or transfer. If the receiving fund was a self-managed superannuation fund, what was required was the information set out in schedule 2B and any other information that was reasonably required to give effect to the rollover or transfer. 13. The forms in schedules 2A and 2B required members to provide the following information. Personal details being title, name, date of birth, tax file number, sex/gender, phone number, current and previous residential addresses were required. Transferring fund details being the fund name, fund phone number, membership or account number, ABN and Unique Superannuation Identifier were required. Receiving fund details were also required. In this context, schedule 2A required fund name, fund phone number, membership or account number, ABN and USI and schedule 2B required SMSF name, fund phone number, ABN, SMSF bank details and certified copies of proof of identity documents. 14. Now reg 6.35 relevantly provided as follows: 6.35 When a trustee may refuse to roll over or transfer an amount (1) A trustee may refuse to roll over or transfer an amount under regulation 6.34 if: … (b) the amount to be rolled over or transferred is part only of the member's interest in the fund, and the effect of rolling over or transferring the amount would be that the member's interest in the fund from which the amount is to be rolled over or transferred would be less than $5,000; or (c) the trustee has, under regulation 6.34, rolled over or transferred an amount of the member's interest within 12 months before the request is received; … … (2) If a trustee refuses to roll over or transfer an amount under subregulation (1), the trustee must tell the member of the refusal in writing. 1. A fund was entitled to refuse a request for a transfer if, inter-alia, the amount to be rolled over or transferred is part only of the "member's interest in the fund", and the effect of rolling over or transferring the amount would be that the "member's interest in the fund" from which the amount is to be rolled over or transferred would be less than $5,000 (reg 6.35(1)(b)). 2. Now it is to be noted that rather than using the defined term "withdrawal benefit", reg 6.35(1)(b) used the term "member's interest in the fund", which is not defined. 3. As can be seen, under regs 6.34 and 6.35, a trustee must rollover a "withdrawal benefit" except that a trustee may refuse to rollover or transfer "an amount" if "the amount … is part only of the member's interest in the fund" and the rollover would cause the member's interest in the fund to be less than $5,000. 4. In these provisions, the SIS Regulations thereby utilise two (different) concepts: first, a member's "withdrawal benefit" from the fund; and, secondly, a member's "interest in the fund". 5. A member's withdrawal benefit is defined in reg 1.03(1) of the SIS Regulations as follows: withdrawal benefit, in relation to a member of a superannuation entity, means the total amount of the benefits that would be payable to: 1. the member; and 2. the trustee of another superannuation entity or an EPSSS in respect of the member; and 3. an RSA in respect of the member; and 4. another person or entity because of a payment split in respect of the member's interest in the superannuation entity; if the member voluntarily ceased to be a member. 1. The word "interest", and the phrase "interest in the fund", are not defined. 2. Before dealing with the conduct elements of ASIC's case against REST, it is necessary to deal with a point of construction and the lawfulness of REST's practices which have significance for the causes of action alleged concerning the falsity or misleading nature of any representations made to determination members and also the question of whether REST had reasonable grounds for the expression of any opinion if indeed any representation made to a determination member could be characterised as a statement of REST's opinion. The question of a "member's interest in the fund" 1. Let me begin with ASIC's arguments concerning the meaning of the phrase "member's interest in the fund". 2. ASIC says that reg 6.35(1)(b) appears in Div 6.5, and that the focus of the division, together with the meaning of the defined term "withdrawal benefit", is upon the amount in dollars that may be transferred. ASIC says that there are no provisions of Div 6.5 that suggest that a member might transfer non-monetary benefits. It is said that reg 6.35(1)(b) invites a comparison between the "member's interest in the fund" and the fixed amount of $5,000. 3. It is therefore said that a "member's interest in the fund" must be a monetary concept capable of being quantified in dollar terms. 4. Accordingly, ASIC says that a "member's interest in the fund" does not include the expectation of future contributions from the member's employer. 5. It says that the context in which superannuation portability was introduced, and the mischief to be addressed by the introduction of Div 6.5, was the immobility of retirement savings despite an increasingly mobile workforce. 6. It says that it should be assumed that the legislature was cognisant of the fact that in some industry awards and determinations, contributions by employers to a particular fund would be mandatory. 7. It says that were it the case that a "member's interest in the fund" could include the right to receive future contributions, and putting to one side the difficulty in valuing that entitlement, Div 6.5 would have no operation whenever a determination member who continued in their employment with a REST employer requested a transfer. It says that the effect of that construction would be that such members would have their superannuation locked in to REST and would be denied the portability that was the object of the Division. It says that there is no indication that the legislature intended that outcome. 8. ASIC says that the extraneous material suggests the opposite. 9. The explanatory statement that accompanied the introduction of reg 6.35 stated, inter-alia, relevantly (Explanatory Statement, Superannuation Industry (Supervision) Amendment Regulations 2003 (No 5), Statutory Rules 2003 No 251, at p 4): New Regulation 6.35 – When a trustee may refuse to roll over or transfer an amount The trustee may refuse to roll over or transfer an amount if the fund or retirement savings account (RSA) to which the member has requested the transfer or rollover will not accept the amount. The trustee may refuse to roll over or transfer an amount if the amount is only part of the member's benefit and the roll over or transfer would result in the member's residual interest in the fund being less than $5,000. This will allow funds to require a minimum balance to remain in the fund (provided the minimum balance is less than $5,000) in the case of part transfers. However, a member would still be able to move their entire balance (a full transfer) if they so desired. The trustee may refuse a request to roll over or transfer an amount if the trustee has rolled over or transferred an amount of the member's interest under Regulation 6.34 in the past 12 months. This will allow funds to develop rules so that regular contributions to a fund are not required to be transferred or rolled over every time they are made (e.g. every fortnight) avoiding the high administrative costs that may otherwise arise. Funds will still be able to allow more regular transfers or rollovers if they so wish. If the trustee makes a refusal on the grounds above, they must inform the member in writing. 1. And in an explanatory statement that accompanied a further set of amendments in 2005, it was stated that: "[t]he Government considers that individuals should have the right to determine who manages their superannuation and should be free to move their benefits when they choose without unnecessary restrictions." (Explanatory Statement, Select Legislative Instrument 2005 No 142, at p 1). 2. Moreover, and in any event, ASIC says that a right to receive future contributions is not trust property but a mere expectancy (Commissioner of Taxation v Everett (1980) 143 CLR 440 at 450 to 451). It says that the correct characterisation turns on whether the right to receive future superannuation contributions is uncertain or not; see Norman v Federal Commissioner of Taxation (1963) 109 CLR 9. 3. Further, it is said that this concept assumes importance when one considers the nature of the employment that many REST members undertake. They are often casual workers. It is said that future contributions being made on their behalf assumes that they will receive or be allocated further shifts by their employer, turn up to work and earn income for those shifts, and further, in the relevant period, earn sufficient income to exceed the minimum threshold for a superannuation contribution. But ASIC says that none of those conditions are certain to occur. 4. Accordingly, ASIC says that the right to receive such superannuation contributions as may be made if those uncertain conditions do occur in the future cannot form trust property, nor can it answer the statutory descriptor of "a member's interest in the fund". 5. But ASIC says that the contribution enforcement right is merely a future, rather than a present, chose in action and so does not have the proprietary character such as to form part of a "member's interest in the fund". And it is incapable of valuation in monetary terms. 6. Further, ASIC says that members of REST were employed by their employer. Most were casual or part time. There is no reason to believe that any of them could not resign their employment at any time on limited notice. Whether they chose to do so was outside the control of the employer and REST. 7. As such, ASIC says that any attempted assignment of their salary to be earned in the future would fail before the shift was actually worked because it was no more than a right which might thereafter come into existence and so could not be effectually assigned in equity without consideration. 8. In Everett, Barwick CJ, Stephen, Mason and Wilson JJ said (at 450 and 451): It is, of course, well established that an equitable assignment of, or a contract to assign, future property or a mere expectancy for valuable consideration will operate to transfer the beneficial interest to the purchaser immediately upon the property being acquired, but not before. … … For present purposes the point to be made is that an equitable assignment of present property for value, carrying with it a right to income generated in the future, takes effect at once whereas a like assignment of mere future income, dissociated from the proprietary interest with which it is ordinarily associated, takes effect when the entitlement to that income crystallizes or when it is received, and not before. (citations omitted) 1. ASIC says that following a whole of balance transfer, it may be that a REST member might earn wages in the future that could give rise to an obligation on the employer to remit superannuation contributions to REST. 2. But ASIC says that the possibility that they may earn those wages was a mere expectancy, and the entitlement to those future wages is not a present chose in action capable of assignment. Any attempted assignment would take effect in equity as a contract binding on the assignor only after the wages were actually earned. 3. Moreover, ASIC says that the contribution enforcement right which permits REST to enforce against the employer the payment of contributions in respect of a member can be in no better position. It is not a present chose in action. There is no present obligation on the employer to remit contributions. The existence of the contribution enforcement right as a chose in action is subject to a triple possibility. 4. First, that the member will be given shifts by their employer. 5. Second, that they will work those shifts and thus may acquire the right to receive a superannuation contribution from their employer. 6. Third, that they will earn the requisite minimum amount so as to give rise to a definite obligation on their employer to make superannuation contributions in the relevant period (usually, $450 per month). 7. ASIC says that only upon the happening of all three events does the member have a present entitlement to superannuation. If the right that then exists is not paid by the employer, only then can the contribution enforcement right be classified as a present chose in action. Any legal action commenced by REST against an employer prior to these events occurring would necessarily fail, there being no present obligation on the employer to remit superannuation contributions. This is an unequivocal indicator that there is no present chose in action. 8. ASIC says that because the possibility of earning future wages is not a present chose in action, the enforcement of a future obligation to remit superannuation contributions which is wholly dependent upon the uncertain event of those wages being earned similarly cannot constitute a present chose in action. 9. ASIC says that it follows that the contribution enforcement right is not a present chose in action, and cannot form part of the "member's interest in the fund" for the purposes of reg 6.35(1)(b). 10. Let me turn to another thread to ASIC's position. 11. ASIC says that support for its position is found in the contractual obligation on the employer to remit contributions. It is said that the relevant contractual obligation presupposes that a deduction has been made from the employee's salary that has already been earned and which must be remitted to REST. 12. In order to appreciate ASIC's arguments, further reference needs to be made to the trust deed. The trust deed 1. Clause 13 deals with the admission of employers. An employer must apply to REST using a form approved by REST. Once accepted, the terms of the employer application are binding upon the employer and each employee who becomes a member of the fund. By acceptance of their application, each employer agrees to be bound by the terms of the trust deed. 2. Clauses 10.1 and 10.3 of the trust deed are then relevant. They provided as follows: 10.1 Payments to Trustee Each Employer shall pay by the due date to the Trustee or as directed by it: (a) all contributions (if any) deducted from the Salary of each Member in accordance with the Rules; and (b) out of the Employer's own money (subject as provided below) the Employer's contributions in accordance with the Rules. … 10.3 Due date (a) For the purposes of this clause 10, "due date" for contribution is the date specified in the Employer Application or the date agreed to between the Trustee and the Employer and otherwise twenty-eight days after the end of each quarter in which the Salary the subject of contributions to the Plan was paid to the Member. (b) Interest is payable by the Employer on contributions which remain unpaid after the due date at the same rate charged by the Commonwealth Bank of Australia to its clients in respect of overdrafts of less than $100,000 together with any costs reasonably incurred by or on behalf of the Trustee in collecting these contributions. However, nothing in this Deed or the Rules shall impose an obligation on the Trustee to take any action to recover unpaid contributions or interest from an Employer where in the opinion of the Trustee it would be uneconomical to do so. 1. ASIC says that clause 10.1(a) makes clear, by use of the past tense "deducted" and by reference to the meaning of the defined term "Salary", that the employer's obligation arises only after an employee has earned salary from which contributions have been deducted. The definition of "Salary" is: … the ordinary earnings received, whether weekly or monthly or fortnightly for services rendered by the Member to the Employer or at which the Member is employed by the Employer but excludes any overtime or special or ex-gratia grant or allowance for residence, travelling or otherwise. 1. It is said that in terms, no such obligation exists before the happening of those events. 2. ASIC says that although clause 10.1 of the trust deed, which applies to "Members" (as defined), contains an obligation upon employers to pay by the due date to REST "all contributions (if any) deducted from the Salary of each Member in accordance with the Rules", that inchoate obligation, in and of itself, is not a chose in action. 3. ASIC says that the chose in action that might arise is premised upon a triple possibility, being a right arises only if the worker is given shifts, they work those shifts and acquire the right to a superannuation contribution, and the employee earns the requisite minimum amount to give rise to the obligation to contribute superannuation. Once the worker accrues the right to superannuation, and if the employer fails to make payment as required, then, and only then, does REST have an actionable right to enforce payment. ASIC says that until then, the potential chose in action is inchoate. In National Australia Bank Ltd v Norman (2009) 180 FCR 243 it was said by Graham J at [53]: A credit in a bank account is not a chose in possession. Rather it is an inchoate chose in action (inchoate because of the need to make demand before there is a cause of action that can be sued on). 1. Now ASIC says that the evidence is that REST's members were quite often employed in part-time or casual roles. There could therefore be no certainty, simply by virtue of their continued employment, that a member would receive a further superannuation contribution. 2. Further, ASIC says that when REST received a full transfer request from a determination member, it did not inquire whether they had worked any shifts in the last period, whether the threshold had been met and/or whether there were any unpaid superannuation contributions. Rather, it used the fact that the member was a determination member and perhaps that they were still employed with a REST employer as a proxy for those inquiries, and proceeded to deny them the ability to make a full rollover. 3. Further, ASIC says that the introduction by REST of the concept of a "non-Member beneficiary" does not advance REST's argument. Such a concept is difficult to reconcile with the terms of the trust deed, and in any event, cannot arise until after the triple possibility just discussed has been satisfied. 4. Further, ASIC says that clause 18.3(b) of the trust deed, which I have already set out, is also relevant. Again, for convenience, it provided: Upon the transfer to another fund of the whole of the amount standing to the credit of a Member's Member Account, that Member will cease to be a Member and the Trustee shall be thereupon released and discharged from all liability whatsoever to or in respect of that Member. 1. ASIC says that clause 18.3(b) makes clear that if, following a transfer to another fund, a member's account balance reduces to nil, then they cease to be a member of the fund. 2. Now ASIC says that the terms of the trust deed fasten upon the "amount standing to the credit" of the account, that is, the amount of actual dollars, to determine whether the person remains a member of the fund. "Cessation of membership" (rule 2.19) when read in combination with clause 18.3(b) provides that upon the transfer to another fund of the "whole of the amount standing to the credit" of the account, the member ceases to be a member, and REST is thereupon discharged from all liability whatsoever. 3. Now ASIC says that the significance of clause 18.3(b) is twofold. 4. First, properly construed, the trust deed does not contemplate and thereby excludes the possibility of a contribution enforcement right constituting an interest in the fund. Such an interest cannot be trust property. 5. Second, even if such a right could form an interest in the fund, the trust deed provides the mechanism whereby upon a full transfer out of the dollar amount standing to the credit of a member's account, REST would be released from any and all obligations in respect of that right. 6. ASIC says that both of those matters support the conclusion that the contribution enforcement right does not constitute an ongoing or subsisting "interest in the fund". 7. Let me address another point that ASIC has made. 8. ASIC says that in order to determine whether the member's interest in the fund left after the transfer out of the requested amount would be more or less than $5,000, reg 6.35(1)(b) requires that the member's interest in the fund be capable of valuation in money terms. Under reg 6.35(1)(b), this valuation must be done when the relevant officer or employee of the trustee is determining whether to grant or refuse the transfer request. 9. Now what is to be valued is the "member's interest in the fund". 10. ASIC says that upon REST's case, the only thing beyond the amount standing to the credit of the member's account is the alleged chose in action being the contribution enforcement right. But ASIC says that the exercise of valuing that alleged right, and before there is yet any accrued obligation to pay contributions in respect of that particular member, would require the valuation of some future opportunity. 11. ASIC says that this is a difficult exercise requiring a series of assumptions to be made and then quantified. It says that it is unlikely that the draftsperson contemplated that exercise. ASIC says that this is a strong textual indication that when using the expression "member's interest in the fund" the draftsperson was not directing themselves to the contractual right to enforce contributions against the employer. 12. ASIC also says that there is no evidence that REST ever carried out any valuation of the contribution enforcement right in working out whether the "member's interest in the fund", after transfer out, was worth more or less than $5,000. 13. ASIC says that it is clear enough that the only matter REST considered or would have considered was whether more or less than $5,000 would be left in the member's account. 14. Therefore, so ASIC says, to the extent that REST says that a "member's interest in the fund" included the value of the contribution enforcement right, REST never applied a process mandated by reg 6.35(1)(b) that accorded with that proposition. 15. But in dealing with the point of construction and principle that I am now addressing, ASIC's argument here has descended into little more than a jury point. 16. Let me return to the text of reg 6.35(1)(b). The statutory text – "member's interest in the fund" 1. ASIC says that the draftsperson's use of the expression "member's interest in the fund" rather than "member's withdrawal benefit" does not necessarily signify that some interest different to the amount standing to the credit of the member's account was contemplated by reg 6.35(1)(b). 2. ASIC says that regs 6.33 and 6.34 deal with a conceptual matter that has not yet crystallised. They contemplate the subject of the request for rollover as the total amount that would be payable if the member voluntarily ceased to be a member (see reg 1.03). ASIC says that at this point in the description of the rollover process, the draftsperson is describing the subject matter of the rollover request by reference to a category. That is the member's withdrawal benefit as defined. 3. ASIC says that reg 6.33 sets out that the request may be made to roll over the whole or part of the member's withdrawal benefit meaning the amount that would be payable if the member voluntarily ceased to be a member. 4. ASIC says that reg 6.34(1)(a) then sets out the application of that regulation. It deals with two separate steps. 5. Reg 6.34(1)(b) deals with a request to transfer or roll over the whole of the member's withdrawal benefit where certain mandatory information is provided. Reg 6.34(1)(c) deals with a request to transfer or roll over part of the member's withdrawal benefit where certain other information is provided. ASIC says that the draftsperson is dealing with categories of transfer requests. 6. Reg 6.34(2) then provides that where those earlier conditions are satisfied, the trustee must transfer or roll over "the amount" in accordance with the request unless reg 6.35 or reg 6.38 applies. 7. At this point, ASIC says that the draftsperson has shifted focus to dealing with a particular request that has satisfied the requirements for the categories described. The focus is therefore shifted so as to require the dollar amount requested to be transferred. 8. Reg 6.35 then focuses on when a trustee may refuse to make a transfer or to roll over as requested. 9. Accordingly, ASIC says that once the process being described in the SIS Regulations has reached the stage that the trustee is obliged to effect the transfer (reg 6.34(2)), the language shifts to deal with the particular transfer concerned with the request, and in that context, the draftsperson then speaks of the particular dollar sum to be transferred. 10. Further, ASIC says that where the trustee of a trust is obliged to pay a sum of money for the benefit of or, in the case of a superannuation fund, at the direction of a beneficiary, it is a natural use of language to describe the particular beneficiary's rights as an "interest in the fund". 11. Hence, so ASIC says, the language shifts to focus on whether the "amount" to be transferred is the whole or part only of the member's "interest in the fund". 12. ASIC says that the change in language is a product of the different stage in the rollover process under consideration from the hypothetical benefit (regs 6.33 and 6.34 (1)(b) and (c)) to the actual dollar amount that the trustee is obliged to transfer (regs 6.34(2) and 6.35(1)(a) and (b)). 13. ASIC says that it should also be noted that throughout reg 6.35, reference is made to amounts of money only. Further, even when considering the last words of reg 6.35(1)(b) being "member's interest in the fund", the regulation requires this "interest" to be reduced to a sum in dollars so as to determine whether it is more or less than $5,000. 14. Accordingly, ASIC says that the change in language does not signify that something beyond the balance in the member's account is contemplated. 15. Further, the word "interest" is used as part of the composite expression "interest in the fund". The use of the words "in the fund" means a regulated superannuation fund. Accordingly, so ASIC says, the statute thereby imports the technical legal concepts applicable to regulated superannuation funds to the concept of an "interest", which travel beyond any dictionary meaning or use of that word in other legal contexts. 16. ASIC says that the most powerful indicator of the meaning of the expression "interest in the fund" is the immediate context in which it is used. It says that the words of the same provision invoke the need to determine whether that interest "would be less than $5 000". ASIC says that the interest must therefore be monetary or capable of valuation in money terms. 17. ASIC makes one final point. Before the words "interest in the fund", the word "member's" is used. So, the word "member's" is singular. Further, it is used possessively in respect of the "interest in the fund". That excludes from the possible meaning a broader interest that belongs to all members or, if not all, some larger group of members of the fund collectively, but not individually. ASIC says that it also requires that the identified interest must, at the time under consideration, be a thing which belongs to the member. Analysis 1. Now I would reject ASIC's position on the construction and application of Div 6.5 of the SIS Regulations. 2. It is a well-established presumption or principle of interpretation of a statutory provision including sub-ordinate legislation that where a legislature could have used the same word but chose a different word or phrase, the intention was to change the meaning. 3. The context in which the different phrases, being "withdrawal benefit" and "interest in the fund", are used supports the operation of this presumption or principle in the present case. 4. The different terms are used in the same Division of the SIS Regulations, and indeed in adjacent provisions. 5. There is no textual or other reason why the words "withdrawal benefit" could not have been used in reg 6.35, instead of "interest in the fund", if the same meaning was intended. For example, reg 6.35 could have been drafted to read: "(b) the amount to be rolled over or transferred is part only of the member's withdrawal benefit interest in the fund". 6. It is evident that Part 6 of the SIS Regulations is carefully drafted. As REST points out, it can be noted that the specific defined term, "withdrawal benefit", is used 34 times in Part 6 of the SIS Regulations, and 25 times in Div 6.5, which specifically deals with the rollover and transfer of withdrawal benefits. Given the repeated use of the defined term "withdrawal benefit" throughout, it seems to me that the drafter was referring to a different concept when using the different and broader word "interest". 7. There is a distinction between a member's withdrawal benefit in a fund, and the broader interests that a member has in the fund. A member's interest in a fund is broader than the member's current account balance or withdrawal benefit. 8. Now for members who are not determination members, a full rollover or transfer of the member's withdrawal benefit would terminate their interest in the fund. But the position is different for a determination member. 9. First, under their existing award or determination and under the trust deed, a determination member's employer has an ongoing obligation to make contributions to the fund for the employee for so long as the member is an employee. Those participating employers (REST employers) agreed to be bound by the terms and conditions of the trust deed and to pay contributions on behalf of employees to REST on a monthly basis or as required to reduce their superannuation guarantee obligation in respect of the employee to nil. 10. In particular, clause 10 of the trust deed required employers to pay to REST all contributions. Further, clause 13.3(b) of the trust deed provided that the application by the employer for admission to the Plan would be binding on the employer and each of the employees, and operate as an amendment to the Plan. 11. Second, I agree with REST that this obligation is more than a mere possibility of future employer contributions. It is a right to those contributions for so long as the member is an employee of the REST employer. REST's right to receive contributions is held for the benefit of the member. And as a consequence, if the employer of a determination member did not make a required contribution to the fund, REST could on behalf of that member enforce the employer's obligation to contribute to the fund and would be required to do so. And that this may occur was not merely hypothetical. If, on a failure of an employer to meet its obligations, REST did not take action against the employer, the determination member, as a beneficiary of the Trust, could enforce its interest in the Trust and compel performance by suing the employer and joining REST as defendant. 12. Accordingly, where a determination member requests to rollover or transfer the whole of their withdrawal benefit, the amount to be rolled over or transferred is part only of the member's interest in the fund. 13. Now in its ordinary meaning, the word "interest" is a word of wide import. And in the present case the "interest" referred to is different and broader than the member's withdrawal benefit. As such, where the member's employer was subject to an obligation to make ongoing contributions to the fund for the member, the exception in reg 6.35(1)(b) applied and provided REST with a discretion. 14. And as I have said, the context in which the different phrases, being "withdrawal benefit" and "interest in the fund", are used supports the proposition that different words would normally be given a different meaning. Further, that conclusion is consistent with the principle of statutory interpretation that meaning be ascertained by examining the language used in the statutory instrument as a whole. 15. The phrase "interest in the fund" in reg 6.35(1)(b) is undefined. It is to be interpreted in accordance with its ordinary and natural meaning, consistent with the purpose of Div 6.5. Nothing in reg 6.35 or Div 6.5 operates to rebut this presumption. 16. Now ASIC contends that the reference in reg 6.35(1)(b) to a member's interest in the fund being less than $5,000 provides a textual indicator that the term "interest" is limited to the balance of a member's account with REST. But this fails to recognise that "interest" has a well-accepted meaning that was used in reg 6.35 instead of the narrower concept of "withdrawal benefit". I will return to this in a moment. 17. Further, the indirect textual indication that ASIC points to must be weighed against the more direct textual indication evident from the change of the words used in the SIS Regulations from "withdrawal benefit" to "member's interest in the fund". 18. Further, reg 6.35(1)(b) and REST's practice did not require a precise valuation of the member's interest, but just that it be ascertained whether it is less than $5,000. 19. Where a determination member requests the transfer of their whole withdrawal benefit then standing to their account, it is in practical terms unlikely that the value of any unpaid contribution rights could be more than $5,000. As such, no detailed valuation exercise is required, and it can readily be determined that the value of such contribution rights is less than $5,000. I agree with REST that ASIC's textual indication is not a strong indication as to the proper construction of reg 6.35. 20. Further, ASIC says that REST never applied a valuation process to assess a "member's interest in the fund", but this goes nowhere. REST's practice cannot control the proper construction of reg 6.35(1)(b). And there was no practical need for REST to seek to undertake such a valuation process. 21. Further, ASIC does not really identify any reason why the words "withdrawal benefit" could not have been used in reg 6.35, instead of "interest in the fund", if the same meaning was intended. 22. Further, both ASIC and REST accepted that the ordinary meaning of the term "interest" includes any right of ownership in property or commercial undertakings or a share in the ownership of property, in a commercial or financial undertaking, or the like. 23. The breadth of the ordinary meaning of the term "interest" and that it has intentionally been left undefined in reg 6.35(1)(b) are reasonable indicia that the term cannot be limited to a mere financial balance of a member's account as contended by ASIC. 24. In the context of reg 6.35, the phrase includes both the technical legal sense, including the proprietary interest of a member of a regulated superannuation fund, being an equitable proprietary interest in the fund, as well as the ordinary meaning. Such a construction is consistent with standard principles of interpretation and would extend beyond the narrow construction contended by ASIC. 25. Let me say something more on the question of interests and choses in action. How does the interest arise? 1. Now I accept that choses in action are rights of a proprietary or quasi-proprietary nature which are claimable or enforceable by action, such as a right to sue for debt, or for damages for breach of contract. Legal choses in action are those which can be recovered or enforced by action at law, such as a debt, bill of exchange and the benefit of a guarantee. Equitable choses in action are those which originally were recognised or enforceable only in equity suits. Equitable choses in action can be put to one side in this case as, if the contribution enforcement right gives right to a debt owed by the employer to the trustee once accrued, this would be a legal chose in action. 2. And I also accept that a present chose in action is one which is legally enforceable then and there by appropriate action. A mere expectancy or possibility of becoming entitled in the future to a proprietary right is not an existing chose in action. 3. So, an accrued debt, or a right to the payment of money dependent upon an existing contract, on the repudiation of which an action can be brought for anticipatory breach, is a present chose in action. An acknowledged debt, which by agreement is payable in the future, is a present chose in action. A vested right, the time for enjoyment of which or the precise extent of which (Shepherd v Commissioner of Taxation (1965) 113 CLR 385 at 396 per Kitto J) depends on a future contingency is also a present chose in action. And where there exists a vested right, for example, pursuant to an ongoing contractual relationship, the existence of that contractual right is unaffected even where the quantum of its product might be. As Kitto J said, the tree, though not the fruit, may exist as a proprietary right. 4. By contrast, a future chose in action can be described only as the prospect or possibility of becoming entitled in the future to a proprietary right. So, a right to dividends not yet declared, that may become payable in the future in respect of shares presently held, is not a present chose in action. 5. Insofar as a future chose in action is no more than a mere expectancy, it "has no existence in contemplation of law" (Norman at 16 per Dixon CJ). 6. Now the assignability of wages to be earned in the future was discussed by Warrington LJ in Horwood v Millar's Timber and Trading Company, Limited [1917] 1 KB 305 (at 314 and 315): … [T]he assignment with which we have to deal is not the assignment of an actual debt, not the assignment of a chose in action which is in existence, but the assignment of a chose in action, wages which a man is going to earn, which may hereafter come into existence. Now the effect of that is nothing more than to create a contractual obligation between the two parties. That was stated by Lord Macnaghten in his speech to the House of Lords in Tailby v. Official Receiver in these terms: "It has long been settled that future property, possibilities and expectancies are assignable in equity for value. The mode or form of assignment is absolutely immaterial provided the intention of the parties is clear. To effectuate the intention an assignment for value, in terms present and immediate, has always been regarded in equity as a contract binding on the conscience of the assignor and so binding the subject-matter of the contract when it comes into existence, if it is of such a nature and so described as to be capable of being ascertained and identified." In other words, the real effect of such an assignment where property is not in existence is that it is carried into effect not because it passes the property, but because it is a contractual obligation binding upon the assignor, and one which can be specifically enforced if the contract and the subject-matter of it are sufficiently definite. (footnote omitted) 1. Two points should be noted. 2. First, the entitlement to wages which may be earned in the future cannot form a present chose in action. It is merely a chose in action which may come into existence in the future. 3. Second, a purported assignment for value of wages that a person may earn in the future takes effect in equity as a contract binding on the conscience of the assignor and so binding the subject-matter of the contract when it comes into existence. Thus, the contract becomes binding at the time the wages are actually being earned, and not before. 4. In Norman, Menzies J discussed the purported assignment of interest to be earned on a loan repayable at any time without notice, such that the interest may or may not ever be earned, and said that what was assigned was not an existing right but was no more than a right which might thereafter come into existence and so could not be effectually assigned in equity without consideration. 5. Further, it is not until the expected property has actually come into existence that the equitable interest of the assignee arises; see Pallette Shoes Proprietary Limited (in Liquidation) v Krohn (1937) 58 CLR 1 at 26 and 27 per Dixon J. 6. The obligation of the member's employer to make a contribution to REST is in fact a present chose in action, and constitutes part of the member's "interest in the fund" under reg 6.35. 7. First, under the trust deed, the determination member's employer has an ongoing obligation to make contributions to the fund so long as the member is employed by that employer. 8. Second, REST has a contractual right to enforce the ongoing obligation of the determination member's employer to make contributions to the fund. Clause 13.3(b) of the trust deed also provides that the application by the employer for admission to the Trust is binding on the employer and each of the employees. 9. Third, REST holds the right to enforce the ongoing obligation of the determination member's employer to make contributions to the fund on trust for the benefit of members, and members had the power to compel REST, as trustee, to enforce that right. 10. Now ASIC has sought to characterise the contractual right of the member to be paid their superannuation guarantee contribution as a future chose in action, which is a mere expectancy or possibility of becoming entitled in the future to a proprietary right. But I do not accept this. 11. First, it is premised on an unsubstantiated and in many cases improbable assumption that members who request transfers have not worked since the last superannuation contribution was made by their employer. 12. As I have already indicated, under s 19 of the Superannuation Guarantee (Administration) Act 1992 (Cth) an employer is required at a minimum to make quarterly superannuation contributions to the employee's superannuation fund. Once an employee has earned the minimum amount in the relevant period to give rise to a superannuation contribution, the employer has an obligation to pay the relevant contribution to REST and the employee has a right to have a relevant contribution paid by their employer to REST; this is usually $450 per month. 13. Given that this threshold had previously been met for relevant members, as contributions had been made for them, it is unlikely that the threshold would not have been met, and there is no basis to infer that this was likely or common. And even if the actual payment of the contribution may not be due for a period of time, upon earning the minimum amount the employee's right to payment of the contribution is not properly characterised as being contingent. It is an accrued right, the payment of which is to occur at a specified future time. This amounts to a present chose in action. Accordingly, from this time, a determination member has a right to have a payment made to the fund. 14. Now ASIC's argument appears to be based on the unsubstantiated factual assumption that members would not have had any further shifts before the time of their transfer request for which contributions had not yet been paid. But there is no basis to infer that this is a common occurrence or that any material portion of members who made transfer requests may not have worked a further shift for which contributions remain outstanding. 15. Second, in any case, even in the absence of an employee not having worked since the last superannuation contribution was made by their employer, it does not properly characterise the effect of the contractual framework between REST, the member and the member's employer. 16. REST holds as trustee for the benefit of REST determination members the right to sue the determination member's employer in relation to superannuation guarantee contributions that, from time to time, the employer is obliged to pay REST on behalf of determination members. This right is a vested right. The right to payment of the contribution is tied not to the status of the person as a member of the fund, but to the determination member's ongoing status as an employee. That right exists as long as the determination member remains an employee of the employer. 17. Now ASIC has referred to the trust deed to support its characterisation of the right as a future chose in action. ASIC argues that the operation of clause 18.3(b) of the trust deed excludes a contribution enforcement right constituting an interest in the fund and, in any event, provides a mechanism where REST would be released from any related obligations. But I agree with REST that the operation of clause 18.3(b) does not take the matter far. 18. First, the clause does not operate in respect of determination members whose rollover request was rejected. During the relevant period, REST exercised its discretion under reg 6.35(1)(b) to require determination members who had an ongoing interest in the fund to maintain a minimum of $5,000. As such, determination members were not able to "transfer to another fund … the whole of the amount standing to the credit of a Member's Member Account" (within the language of clause 18.3(b)). As a result, clause 18.3(b) could not have been invoked for these determination members. 19. Second, even if clause 18.3(b) operates in respect of determination members, the employer's obligation exists irrespective of whether the employee is a "Member" of REST. 20. Under the trust deed, a "Member" is defined as: … an Employee or Successor Fund Member who has been admitted as an Ordinary Member or Deemed Member of Division I of the Plan or any other person who has been admitted as a Member of Divisions II, III or IV of the Plan and whose membership has not ceased in terms of rule 2.13. 1. It is apparent that the definition of "Member" under the trust deed captures employees admitted as a member of the Plan. It therefore follows that clause 18.3(b) operates to terminate the member's admission to the Plan and any allocation of funds held in the Plan. But it does not follow that clause 18.3(b) operates to terminate fiduciary or other duties that REST may hold in respect of that employee as a non-member beneficiary. 2. REST's contractual right to enforce the ongoing obligation of the determination member's employer to make contributions into the fund is held on trust by REST for the benefit of the employee for the duration of the employee's employment with their REST employer. This obligation exists irrespective of the employee's admission to the Plan and their membership status. 3. For example, if a REST employer did not pay the super contribution of a new employee who was expecting to receive their first superannuation contribution pursuant to the determination, REST still holds the right to enforce the obligation of the REST employer to make contributions to the fund on trust for the benefit of the new employee, and the new employee has the power to compel REST, as trustee, to enforce that right, even though the new employee is not yet admitted as a member of the Plan. 4. Now in support of its argument that the right is not a present chose in action, ASIC contends that the member's contribution enforcement right is incapable of valuation in monetary terms as there exists only the prospect or possibility that the member will become entitled to a future superannuation guarantee contribution. 5. But that contention is not correct if the employee has worked since the last contribution was made. That contention also ignores the fact that a contractual right is capable of existence regardless of the monetary value of the right. Even if, from time to time, the value of the right is zero, this does not affect the existence of the contractual right. 6. If the employer of a determination member did not make a required contribution to the fund, REST could, on behalf of the member, enforce the employer's obligation to contribute to the fund. And, if an employer failed to meet its obligations and REST did not take action against the employer, the determination member, as beneficiary of the Trust, could enforce its interest in the Trust and compel performance by bringing an action against REST, and joining the employer as defendant. 7. Accordingly, were the employer to repudiate its obligation to pay the determination member's superannuation guarantee contribution, REST either by its own volition or compelled by the determination member may bring an action against the employer for anticipatory breach. So, the right is a present chose in action. Other matters 1. ASIC contends that on REST's interpretation of reg 6.35, Div 6.5 would have no operation whenever a determination member continued in their employment with a REST employer requesting a transfer. Further, ASIC contends that the effect of that construction would be that such members would have their superannuation locked in to REST and would be denied the portability that was the object of Div 6.5. 2. I agree with REST that such contentions are overstated and do not reflect the more nuanced operation of the choice of fund and portability regimes. 3. Based on REST's construction of Div 6.5, determination members would be able to rollover the amount of their benefits exceeding $5,000, and could seek an annual transfer of any surplus over and above the minimum amount to be retained in the fund. 4. As such, the limitation on portability is narrow, and the contentions that members would be locked in to REST and that Div 6.5 would have no operation are wrong. 5. Indeed, it can readily be assumed that the draftsperson of Div 6.5 of the SIS Regulations was aware of the regulatory context in which those provisions would operate, including the fact that employers obliged to contribute to a fund specified in an award or determination were not required to offer choice of fund to their award or determination employees. 6. As such, it is apparent that the drafting in reg 6.35 was intended to avoid the inconvenient and largely pointless circumstance where determination members would repeatedly have accounts closed when new accounts would then need promptly to be created. 7. Closing an account, and then opening a new account for the same member, would involve, inter-alia, the provision of an exit statement to the member, collecting information for the member in order to open an account, providing the member with a product disclosure statement and a financial services guide, inviting the member to make a death benefit nomination, and providing the member with an insurance confirmation letter. 8. For determination members, this could be an ongoing cycle. 9. In summary, and although this is a tricky issue upon which reasonable minds could easily differ and have differed, as I will elaborate on later when considering the chronology of events concerning the legal advice received by REST and the position of APRA, I agree with REST's construction of "member's interest in the fund". It also follows that generally speaking its practices conformed with the statutory provisions and the trust deed. 10. Let me now turn to ASIC's case concerning the conduct aspects of the principal causes of action and the various representations allegedly made. Legal principles concerning ASIC's claims 1. ASIC alleges that REST contravened s 1041H of the Corporations Act and ss 12DA(1) and 12DB(1)(i) of the ASIC Act. 2. Section 12DA(1) provided at the relevant time: (1) A person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or deceptive or is likely to mislead or deceive. 1. Section 12DB(1)(i) provided at the relevant time: (1) A person must not, in trade or commerce, in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services: … (i) make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy (including an implied warranty under section 12ED); or … 1. Section 1041H provided at the relevant time: (1) A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive. (2) The reference in subsection (1) to engaging in conduct in relation to a financial product includes (but is not limited to) any of the following: (a) dealing in a financial product; (b) without limiting paragraph (a): (i) issuing a financial product; (ii) publishing a notice in relation to a financial product; … (vi) a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with a beneficiary of that entity as such a beneficiary; … (x) carrying on negotiations, or making arrangements, or doing any other act, preparatory to, or in any way related to, an activity covered by any of subparagraphs (i) to (ix). … 1. Now the three provisions have similar and overlapping requirements, but the precise elements of each are different. Nevertheless, central to each provision is that there is a representation that was misleading or deceptive or likely to mislead or deceive (s 1041H and s 12DA) or was false or misleading (s 12DB(1)(i)). 2. But one distinction between the provisions is that s 1041H and s 12DA(1) apply to conduct that is misleading or deceptive or likely to mislead or deceive. In contrast, s 12DB(1) only applies to representations that are false or misleading and not also to representations that are only likely to mislead. 3. The principles applicable to determining whether conduct including the making of a representation is misleading or deceptive, or false or misleading, are not controversial. 4. In Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) (2018) 266 FCR 147 and 127 ACSR 110, I said at [2259] to [2286]: Let me say the following concerning the elements of s 1041H. First, the concept of "engaging in conduct" is broad. It is defined inclusively by s 1041H(2)(a) of the Corporations Act to include "dealing in a financial product". Further, "this jurisdiction" is, relevantly, Australia (s 5(2)). Second, the expression "in relation to" is of wide ambit. Now it is trite to observe that its meaning will be determined by the context. The phrase signifies the need for there to be a relationship or correlation between the two subjects formally referenced. Moreover, an indirect or less than substantial connection may be sufficient. More generally, the relevant principles are largely the same as those which apply to s 18 of the Australian Consumer Law. In ACCC v Get Qualified Australia Pty Ltd (in liq) (No 2) [2017] ATPR 42-548 at [25]-[42], I summarised the relevant principles in the following terms which no party in the present proceeding contested. First, there is no meaningful difference between the words and phrases "misleading or deceptive", "mislead or deceive" or "false or misleading". Second, where the issue is the effect of conduct on a class of persons rather than identified individuals to whom a particular misrepresentation has been made or particular conduct directed, the effect of the conduct or representations upon ordinary or reasonable members of that class must be considered. This hypothetical construct avoids using the very ignorant (or gullible) or the very knowledgeable (or astute) to assess effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful. The objective characteristics that one attributes to ordinary or reasonable members of the relevant class may also differ depending on the medium for communication being considered. There is scope for diversity of response both within the same medium and across different media. Third, in considering the hypothetical ordinary and reasonable member of the relevant class, one considers the dominant message conveyed. The question is whether there is a real rather than a remote possibility of the member of the relevant class being misled or deceived by the relevant conduct or statement. In the present context, does the relevant conduct or statement have a tendency to lead persons of the relevant class into error? Fourth, conduct that exploits the mistaken views of members of the relevant class may be misleading or deceptive or likely to mislead or deceive and may not be corrected by any obscure fine print, whether in content, size or location, that sets out the true position. Fifth, for the purposes of the relevant provision, one must identify the relevant conduct and then consider whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive. Such conduct is not to be pigeon-holed into the framework or language of representation. Sixth, conduct is misleading or deceptive or likely to mislead or deceive if it has the tendency to lead into error. But conduct causing confusion or wonderment is not necessarily co-extensive with misleading or deceptive conduct. Seventh, the question is whether there was a real but not remote chance or possibility that the relevant conduct was misleading or deceptive or likely to mislead or deceive. To assess this one looks at the potential practical consequences and effect of the conduct. Eighth, the words "likely to mislead or deceive" demonstrate that it is not necessary to show actual deception. Relatedly, it is not necessary to adduce evidence from persons to show that they were actually misled or deceived. Ninth, there must be a sufficient nexus between the impugned conduct or apprehended conduct and the consumer's misconception or deception. As was said in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at [51] (per French, Heerey and Lindgren JJ): The characterisation of conduct as "misleading or deceptive or likely to mislead or deceive" involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer's state of mind. Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation. Subject to one qualification, the error or misconception must result from the alleged wrong-doer's conduct and not from other circumstances for which it was not responsible. But conduct that exploits or feeds into and thereby reinforces the pre-existing mistaken views of members of the relevant class may be misleading or deceptive or likely to mislead or deceive. Tenth, conduct that is merely transitory or ephemeral where any likely misleading impression is likely to be readily or quickly dispelled or corrected does not constitute conduct that would infringe the relevant provision. Eleventh, and relatedly, it is one thing to say that the conduct must be more than transitory or ephemeral, but it is another thing to say that the conduct or its effect must endure up to some "point of sale" or contracting. There is no such requirement to establish a contravention. Even if the effect of relevant pre-contractual conduct is or is likely to be dispelled prior to any transaction being effected, it may still be misleading or deceptive. In Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [50] (per French CJ, Crennan, Bell and Keane JJ) it was noted that a contravention may occur, not only when a contract has been concluded under the influence of a misleading advertisement, but also at the point where members of the relevant class have been enticed into the marketing web by an erroneous belief engendered by an advertiser. Such a contravention may be established even if the consumer may later come to appreciate the true position before a transaction is concluded. The tendency of pre-contractual conduct to mislead is to be determined not by asking whether it was apt to induce consumers to enter into contracts, but by asking whether it was apt to bring them into negotiation. The question of whether conduct is misleading or deceptive is anterior to whether a person has entered into contractual relations. It is no answer that relevant consumers who signed up for the service or product could have been expected to understand fully the nature of their obligations by the time they contracted. Twelfth, terms or conditions of particular offers that have significant advantage for the alleged wrong-doer and disadvantage for the consumer require due notice. Further on this aspect, in assessing the effect and significance of conduct that diminishes or relegates to obscurity information that is necessary to qualify or correct any dominant message, one looks at the relevant course of conduct as a whole in light of the surrounding facts and circumstances. Thirteenth, in determining whether a contravention has occurred, the focus of the inquiry is on whether a not insignificant number within the class have been misled or deceived or are likely to have been misled or deceived by the alleged wrong-doer's conduct. There has been some debate about the meaning of "a not insignificant number". The formulation in Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 looks at the issue in a normative sense. The reactions of the hypothetical individual within the class are considered. The hypothetical individual is a reasonable or ordinary member of the class. Does satisfying the Campomar formulation satisfy the "not insignificant number" requirement? I am now inclined to the view that if, applying the Campomar test, reasonable members of the class would be likely to be misled, then such a finding does not necessarily carry with it that a significant proportion of the class would be likely to be misled. A finding of a "not insignificant number" of members of the class being likely to be misled is conceptually speaking an additional requirement that needs to be satisfied. Fourteenth, silence will be misleading or deceptive if "the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed" … … The test "requires close analysis of all the circumstances" (at [91] per Heydon, Crennan and Bell JJ). Let me make the following additional points concerning the relevant elements of s 12DA of the ASIC Act. First, s 12BA(1) of the ASIC Act provides that "conduct has the meaning given by subsection (2)" and that "engage in conduct has the meaning given by subsection (2)". Section 12BA(2)(a) defines "engaging in conduct" broadly as "a reference to doing or refusing to do any act". That paragraph goes on to define the term inclusively in the remainder of that paragraph. Second, the meaning of "trade or commerce" has been explained earlier in the context of ss 12CB and 12CC of the ASIC Act. The same principles apply under s 12DA. Third, the meaning of both the expression "in relation to" and the term "financial services" has been explained earlier in the context of s 12CA of the ASIC Act. The same principles apply under s 12DA. Fourth, the same principles which apply under s 1041H of the Corporations Act apply under s 12DA of the ASIC Act. 1. In relation to the thirteenth point concerning the "not insignificant number" question, I said in Societe Civile et Agricole du Vieux Chateau Certan v Kreglinger (Australia) Pty Ltd [2024] FCA 248 at [408] to [418]: Now Wigney, O'Bryan and Jackson JJ in their dicta in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2020) 381 ALR 507 at [23] and [24] criticised the "not insignificant number" formulation including my own use thereof, whether as an alternative or an addition. They said that such a test is "at best, superfluous to the principles stated by the High Court in Puxu, Campomar and Google Inc". And they said that such a test is "at worst, an erroneous gloss on the statutory provision". They concluded (at [24]): Consistently with our view that the "significant number" test is at best superfluous and at worst an erroneous and distracting gloss, we consider it appropriate to approach the ACCC's arguments on the basis of the principles stated by the High Court in Puxu, Campomar and Google Inc and to ignore the "significant number" test. Nevertheless, we note that our conclusion would not change even if we were to apply the "significant number" test. But as they said, "[n]o substantive argument was directed to the correctness of that test by the ACCC and our decision in this appeal does not turn upon it" (at [23]). How should one proceed in circumstances where there are at least three binding Full Court authorities prior to TPG, and importantly after Campomar, that perhaps justify applying such a test? Such Full Court authority prior to TPG did not accept the suggestion that Campomar displaced such a test. Three examples will suffice. In National Exchange Pty Ltd v Australian Securities and Investments Commission (2004) 49 ACSR 369, Jacobson and Bennett JJ said (at [67] to [71]): … Further, Dowsett J said (at [23]): … Now three points can be made. First, there was non-acceptance of the trial judge's doubts. Second, what is controlling is what Jacobson and Bennett JJ said. Third, the relevant formulation concerning "significant proportion of that class" was not seen as inconsistent with or superfluous to High Court authority such as Puxu and Campomar. And interestingly, but admittedly fleetingly, Campomar refers to 10th Cantanae Pty Ltd v Shoshana Pty Ltd (1988) 79 ALR 299 in footnote 145, which references Gummow J in 10th Cantanae at 324 to 325 (324 incorporates by reference aspects of 314 and 315), without any comment let alone criticism of 10th Cantanae. Further, in Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639, Greenwood J, with whom Tracey J agreed, said (at [206]): … Greenwood J (at [207]) then set out some of the passages of the Full Court in National Exchange of Jacobson and Bennett JJ that I have set out, and then a passage from Dowsett J. It would seem that he also considered what was said by Jacobson and Bennett JJ to be controlling. Then he said at (at [209]): In the absence of a decision of the High Court expressly concluding that the proper approach to the construction of s 52 does not involve normative considerations of whether a not insignificant number of persons within the group would be misled by the impugned conduct, it seems to me appropriate to apply the test of whether a not insignificant number of persons within the relevant section of the public would be misled or be likely to be misled by reason of the impugned conduct. Further, in Hansen Beverage Company v Bickfords (Australia) Pty Ltd (2008) 171 FCR 579, both Tamberlin J (at [46] and [47]) and Siopis J (at [66] to [72]) applied the "not insignificant number" or "significant number" test. As far as I am aware, until the dicta in TPG there has been no Full Court authority or High Court authority which casts doubt upon the authority of what was said by Jacobson and Bennett JJ in National Exchange, Greenwood J (supported by Tracey J) in Peter Bodum and Tamberlin and Siopis JJ in Hansen Beverage. Now in TPG it was said that such cases "did not resolve the question whether it was a different and additional test to the principles stated by the High Court" (at [23(d)]). That is true. But what such cases do resolve is, first, that it is not a test which is inconsistent with or superfluous to the principles stated in Campomar and Puxu for that matter, second, that to apply it is not to put an inappropriate gloss on the statutory provisions and, third, that such a test is not a symptom of tort law infection. My reading of Full Court authority prior to TPG is that the "not insignificant number" test is not being used to rewrite or gloss the words "likely to mislead or deceive". Rather, it is a formulation of the application of the statutory words. So, taking such words, which are of broad amplitude and enshrine the normative standard to be applied, the cases that I have referred to, which include Campomar itself, have been all about how such statutory words are to be applied and established in different types of circumstances. So in their application, different formulations have been used, the satisfaction of which has been found to have met the statutory requirement of "likely to mislead or deceive". The question then is whether the Campomar formulation is the only application test that should be used where conduct is directed towards the public or a class thereof rather than identified individuals. In other words, is it both a necessary and sufficient test in that context? Or is it a necessary application test but not sufficient, say, in passing off scenario cases? I do not consider, with respect to TPG, that Campomar defined away the second possibility. 1. It is not necessary at this point to elaborate on the further matters discussed in Kreglinger concerning this question in the passing off scenario. 2. Now ASIC asserts that REST made four false, misleading or deceptive representations to members, being the partial transfer representation, the $5,000 representation, the declaration requirement representation, and the certificate requirement representation. 3. Now there is no dispute as to the content of the various relevant oral and written statements made by REST. Rather, the issue is whether the content of these statements support the representations alleged by ASIC, including their characterisation. 4. Now as I said at the outset, the parties have agreed that certain instances of oral or written statements should be treated as exemplar instances for various other statements. As such, if I find that those exemplars did, or did not, make the representations alleged by ASIC, then extrapolation to the field so to speak will follow. 5. Now a distinction is to be drawn between conduct directed to the public or a section of the public and conduct directed only to an identified individual. In each case, the test is objective. In the former case, the likely characteristics of the persons who comprise the relevant class of persons to whom the conduct is directed must be considered and the likely effect of the conduct on ordinary or reasonable members of that class must then be addressed. But in the latter case, one assesses whether the conduct is likely to mislead or deceive in light of the objective circumstances, including the known characteristics of the relevant individual. 6. Now REST's statements were often made to REST's members, in particular determination members, at large. The defining characteristics of the persons forming part of the class of recipients of the statements were: 7. members of REST; 8. employed by an employer who was obligated to make contributions to REST; 9. largely from the retail or fast food industries; 10. quite often employed on a part-time or casual basis; and 11. with relatively small superannuation balances. 12. Accordingly, if REST's statements were made not to individual persons but to a broader group, those are the relevant objective characteristics of the members of that group. 13. Now there may be a number of different, equally reasonable, responses to conduct. The test of reasonableness involves considering the boundaries of the range of those responses. Further, a representation capable of multiple meanings may still be misleading or deceptive if the offending meaning is one that would be reasonably open and might be drawn by a significant number of people to whom the representation was made. 14. And as for those of REST's statements that were made to individual members, such as those in telephone calls and in letters, because of the grouping approach urged upon me by the parties, those statements should likewise be considered as if they were made more broadly. Given those statements are relied upon as exemplars of all of the relevant instances, the section of the public approach should be adopted. 15. I will return to the detail of this later. 16. Before proceeding further it is necessary to address two preliminary questions. Was the relevant conduct "in trade or commerce"? 1. In order to establish a contravention of s 12DA(1) or s 12DB(1)(i) of the ASIC Act it must be shown that REST was acting in trade or commerce. 2. The requirement is direct in both sections, but also indirect. ASIC has alleged that REST provided a financial service within the meaning of s 12BAB(1)(g), which refers to "[p]roviding a service". "Services" is defined in s 12BA(1) to include "any rights … benefits, privileges or facilities that are … provided, granted or conferred in trade or commerce …". 3. ASIC contends that REST's conduct in making written or oral statements to members in relation to the transfer of their withdrawal benefit to another fund was conduct in trade or commerce. 4. In Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594, the plurality held that it was insufficient that the conduct be conduct in the course of the myriad of activities that are undertaken in the course of carrying on an overall trading or commercial business. Rather, "in trade or commerce" is limited to "conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character" (at 603). 5. One is concerned with the central concept of trade or commerce and not with the "immense fields of activities" in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business (at 603). 6. Further, as Toohey J succinctly put it (at 614): … The question is not whether the conduct engaged in was in connexion with trade or commerce or in relation to trade or commerce. It must have been in trade or commerce. … 1. In the present case, the conduct complained of by ASIC comprises statements made by REST to members in relation to the transfer of their withdrawal benefit to another fund. 2. In that context, REST says that the "in trade or commerce" aspect has not been made good. 3. First, it is said that the conduct in issue concerned REST's relationship with its members and its performance under clauses 7(a) and 18.1 of the trust deed, where such provisions afforded REST the power to do any act to comply with the SIS Regulations and to pay benefits to persons entitled. It is said by REST that the conduct itself concerned a mechanical process or procedural matter, which was responding to and processing requests by members to transfer their withdrawal benefits to another fund. REST says that such conduct did not concern the promotion or advancement of any commercial interest of REST. It is said that the transfer of a member's withdrawal benefits from one fund to another fund is not an activity of a trading or commercial character. Further, it is said that the impugned conduct is not the performance by REST of the "transfer obligation". It is one step removed. On ASIC's case it related to statements concerning a member's legal entitlements under the SIS Regulations. 4. Second, it is said that REST is a profit-to-member fund and that the conduct in question did not in any way involve REST seeking to advance its own commercial interests. It is pointed out that none of the objects of REST as set out in the trust deed concerned REST making a profit or advancing its commercial interests in any way. 5. Third, REST says that the present situation can be contrasted with the scenarios dealt with in Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 and Glorie v W A Chip & Pulp Co Pty Ltd (1981) 39 ALR 67. 6. In Tobacco Institute the Institute was formed to promote the interests of members of the tobacco industry, and the impugned conduct was engaged in for the dominant purpose of seeking to protect the commercial interests of the members of the Institute, who were cigarette manufacturers and distributors, in peddling cigarettes. 7. In Glorie, the relevant association, in respect of whom the first respondent was sued as representing the association's corporate members, was established for the object of promoting the interests of the timber industry in Western Australia, and the conduct in question was aimed at protecting the commercial interests of members of the association. Further, it is pointed out that Glorie pre-dates the more restrictive view of "in trade or commerce" adopted in Concrete Constructions. 8. Fourth, it is said that many of the statements on which ASIC relies were contained in letters responding to complaints from members and setting out an explanation of the position taken by REST. 9. Fifth, it is said that even if the impugned representations were found to have been designed to or to have had the effect of advancing REST's commercial interests in some way, this is insufficient to render the representations in trade or commerce. It is said that the impugned activity must be within the central conception of trade or commence. It is not enough to satisfy the test for the activity simply to be protective or promotional of a company's business interests (Village Building Company Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 at [52], [55] and [59] per French, Sackville and Conti JJ). 10. Sixth, it is pointed out that ASIC relies on the context within which the procedural task of transferring a member's funds pursuant to a request took place and it has referred to this context as involving a competitive and diverse superannuation fund marketplace and also referred to the competitive environment extant in the marketplace. But it is said that this attempt to link the conduct to this broader context demonstrates that the conduct in issue, being the making of representations as to a member's rights, is, at its highest, conduct which is incidental to the carrying on of an overall trading or commercial business, and not conduct which is itself of a trading or commercial character. 11. Seventh, it is said that even if it be assumed that the conduct is in relation to or in connection with the supply of financial services, that is not sufficient to provide the necessary trading or commercial character to the conduct. The words "in trade or commerce" in s 12DA(1) and s 12DB(1) require something additional in order not to be otiose. 12. Eighth, it is said that the making of the impugned statements did not have the necessary commercial character because they were not conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character. It is said that the performance by REST of its obligations to members, as distinct from its conduct in making investments, was not conduct "in trade or commerce". 13. Finally, it is said that ASIC's position ignores the requirement that the conduct be in trade or commerce, and not simply in relation to or in connection with trade or commerce. 14. But I would reject REST's position. 15. Clearly, the relevant phrase has a restrictive operation. The expression refers only to conduct with the character of an aspect or element of trading or commercial activities or transactions. And not every act or omission in which a person might engage in the course of, or for the purpose of, the overall trading or commercial business of that person is conduct in trade or commerce (Williams v Pisano (2015) 90 NSWLR 342 at [36] and [37] per Emmett JA). 16. Now REST made written statements in forms and correspondence sent to members, and made oral statements to members. And such statements were made in circumstances where the members had sought or were enquiring about a transfer of their withdrawal benefit to another fund. 17. That conduct took place in the context of a competitive and diverse superannuation fund marketplace. Employees had rights to choose their superannuation fund and to transfer their funds at will, that is, portability. 18. Now the management of funds, whether contributed by employers or rolled in by new members, was REST's predominant commercial concern. And it was intrinsic to REST's business as trustee of a superannuation fund that it responded to and processed requests by its members to transfer their funds. 19. Moreover, the statements REST made to members were statements made in the context of REST facilitating the process mandated by Division 6.5 of the SIS Regulations. 20. Accordingly, I agree with ASIC that the relevant statements made in that context cannot be divorced from the business of holding, investing and, after retirement, disbursing members' funds to them. 21. It also cannot be divorced from the competitive environment extant in the marketplace in which the attraction and retention of members and their funds is likely to be affected by commercial considerations, such as likely returns, security of funds, ease of use, and the nature of ancillary benefits such as life and TPD insurance and their relative costs. 22. In that context, statements made that tend to affect members' conduct in retaining their funds in one trust or rolling them out to another are likely to bear a trading or commercial character. 23. Further, the fact that REST is a profit-to-members fund does not mean that its conduct in any particular instance does not bear the requisite trading or commercial character. 24. Further, it is clear that conduct of a corporation not engaged in profit generating activities may still be "in trade or commerce". 25. Moreover, the services provided by REST to its members are not gratuitous. 26. Let me at this point say something about Kowalski v Mitsubishi Motors Australia Ltd Staff Superannuation Fund Pty Ltd (2007) 242 ALR 370. In Kowalski Finn J considered an application to dismiss proceedings brought under the Trade Practices Act 1974 (Cth) by a member against the trustee of a superannuation fund. The applicant sought to be paid an amount in respect of alleged total and permanent disability suffered during his employment. His Honour dismissed the claim as having no reasonable prospects of success. The allegations related to whether the respondent had properly discharged its obligations to the applicant as a member of the trust in accordance with the provisions of the trust. His Honour held that such conduct was not, relevantly, "in trade or commerce". His Honour said (at [52]): In this matter it can properly be said that MAAL had its own commercial interests and purposes in mind in having a superannuation fund established for its employees that was to be administered by MAA Super. But what it did in constituting the trust was to facilitate the bringing about of the relationship of trustee and beneficiary between MAA Super and the funds members. That relationship was not intrinsically a commercial relationship nor did the conduct complained of otherwise bear a trading or commercial character … This is not to say that, in the management of the fund, MAA Super may not have engaged in conduct that was in trade or commerce as, for example, in the making and management of the trust's investments. The relevant conduct in question here related simply to MAA Super's performance of the obligations it had to Mr Kowalski under the trust. That conduct, in the context of their relationship, was not an aspect of an activity or transaction that bore a trading or commercial character. It related simply to the provision by MAA Super of such entitlements as Mr Kowalski had under the trust instruments by virtue of his membership of the fund to which he had had access in virtue of his employment with MAAL. 1. But Kowalski is not authority for the proposition that a superannuation fund trustee's conduct vis-à-vis beneficiaries' entitlements is not in trade or commerce. Further, if it is, Kowalski can be distinguished. Finn J noted that the claim under s 52 of the Trade Practices Act 1974 (Cth) was a means by which the plaintiff, who was a self-represented litigant, had sought to bring what was essentially a trust matter within the Court's jurisdiction. Finn J was, in effect, considering the question of trade and commerce at a level of abstraction far removed from the present case. Contrastingly, in the present case ASIC pleads and particularises the multiple particular instances of four different representations, made orally and in writing. Those representations were disseminated widely to many members of REST. If relied upon, the representations had the capacity to cause members to act one way or another. But in Kowalski the alleged conduct related to the determination of the question of whether a TPD benefit was payable to the applicant. Given that it is the conduct in question that must bear the trading or commercial character, the conduct in Kowalski is quite different to that alleged in this case, even if it be accepted that the conduct in Kowalski was not in trade or commerce. 2. In the present case the relevant conduct was the making of written statements in forms and correspondence sent to members, and the making of oral statements to members, all of which were made in circumstances where the members had sought, or were enquiring about, a transfer of their superannuation funds. 3. I reject REST's attempts to characterise that conduct as mechanical or procedural, and therefore not commercial in character. The representations were the communication of REST's practices, recorded in its business rules and elsewhere, adopted in response to legislative changes. And in many cases, the representations were made in writing on the form produced and provided by REST by which members could or would seek to exercise their portability rights. 4. Finally, as was noted by the plurality in Concrete Constructions at 604: In some areas, the dividing line between what is and what is not conduct "in trade or commerce" may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character. 1. On this aspect, REST is on the wrong side of the dividing line. I am satisfied that the "in trade or commerce" requirement has been met in the present case. Were the representations "in relation to" or "in connection with" financial services? 1. Sections 12DB(1) and 12DA(1) require that the impugned representations in this case be "in connection with the supply … of financial services" (s 12DB(1)) or "in relation to financial services" (s 12DA(1)). 2. Relevantly, ASIC contends that REST provided a financial service because it issued financial products to its members, with the issuing consisting of acting as trustee of a superannuation fund, collecting, managing and disbursing employer contributions made on behalf of employees. 3. Section 12BAB(1)(g) stipulates that a person provides a financial service if they "provide a service … that is otherwise supplied in relation to a financial product". 4. Moreover, s 12BAA(7)(f) provides that a financial product means "a beneficial interest in a superannuation fund (as defined by section 10 of the Superannuation Industry (Supervision) Act 1993 (Cth))"; see also the definitions of "financial product" and "financial service" in s 5(1) which relevantly cross-reference ss 12BAA and 12BAB. 5. ASIC contends that when REST carried out the statutorily mandated function of receiving and processing members' transfer requests, it was providing a service that was otherwise supplied in relation to members' beneficial interests in the fund. 6. Accordingly, when REST in the course of that service made the representations, it was engaging in conduct in relation to financial services (s 12DA(1)) and/or in connection with the supply or possible supply or financial services, or in connection with the promotion by any means of the supply or use of financial services (s 12DB(1)). 7. But as to this, REST makes a number of points. 8. First, it is said that collecting, managing and disbursing employer contributions is not "issuing" a financial product. Section 761E of the Corporations Act deals with when a financial product is issued to a person. For a superannuation product, that is when the person becomes a member of the fund concerned. 9. Second, it is said that the proposition that providing superannuation benefits to members is not relevantly a financial service is supported by the definition of "financial service" in the ASIC Act. 10. Now the definition of "financial service" has recently been amended and now expressly includes "provide a superannuation trustee service" in s 12BAB(1)(ea). But previously, and relevant to the time frame of ASIC's allegations, REST says that the definition only extended to traditional trustee services (s 12BAB(1A)), which was expressly defined to exclude the provision of superannuation trustee services (s 601RAC(3)(e) of the Corporations Act). 11. REST says that the legislature appears to have intentionally included traditional, but not superannuation, trustee services as financial services. It says that this is consistent with an intention that the obligations of superannuation trustees should generally be governed by the SIS Act rather than the ASIC Act. 12. REST says that this is also confirmed by s 12BAB(14)(c), which excludes the operation of a fund by superannuation trustees, in the context of defining custodial services, which are otherwise covered by s 12BAB(1)(e). 13. Now as I have said, ASIC puts a case that as a member's interest in a superannuation fund is a financial product, what a trustee is required to do to manage a regulated superannuation fund is a "service … that is otherwise supplied in relation to a financial product" (s 12BAB(1)(g)). 14. But REST says that if this is correct then it would also follow, for example, that all conduct of companies in compliance with their obligations to shareholders would be "financial services", because a share is a financial product. 15. REST says that the alternative and preferable interpretation of these provisions is that a distinction needs to be drawn between conduct "in relation to" a financial product and conduct "under" that product. That is, the obligations of companies to their shareholders, and of trustees to their members, are not services "in relation to" the shares or beneficial interests held by those shareholders or members respectively. 16. REST says that this distinction not only sits more comfortably with the natural meaning of the language used but also the history of the relevant provisions. 17. But of course I reject the argument that because "superannuation trustee services" were expressly included for the first time in 2020, I should infer that such services were previously not covered by the definition of when a person provides a financial service. 18. Now REST says that before 2020, the scope of services covered by s 12BAB expressly only extended to traditional trustee services (s 12BAB(1A)), which are specifically defined to exclude superannuation trustee services (s 601RAC(3)(e) of the Corporations Act). 19. REST says that this drafting reflects a conscious decision that only traditional trustee services were necessarily financial services. 20. REST says that a sound reason for this distinction is that the obligations of superannuation trustees were governed by different legislation. It says that if the words "in relation to" have the wide meaning for which ASIC contends, then this deliberate distinction between traditional and superannuation trustee services would be rendered almost meaningless. 21. But I would reject REST's position on this question. 22. Section 12DA applies to conduct "in relation to financial services". Pursuant to s 12BAB, the definition of "financial service" and "dealing" are relevantly the same as under the Corporations Act. 23. Section 1041H applies to conduct "in relation to a financial product or a financial service". The expression "in relation to" is wide to say the least, and an indirect or less than substantial connection may be sufficient. 24. A "financial product" was defined at the relevant time to include a "superannuation interest" as defined in the SIS Act (s 764A(1)(g)), which under the SIS Act means a beneficial interest in a superannuation entity. 25. By s 1041H(2)(b) the meaning of engaging in conduct in relation to a financial product expressly extends to: (a) issuing a financial product; (b) publishing a notice in relation to a financial product; and (c) a trustee of a superannuation entity dealing with a beneficiary of that entity as such a beneficiary. 26. Now the members to whom REST made the representations all had an interest in the fund of which REST was trustee. Those interests were each a financial product. REST's conduct was "in relation to" that financial product because it constituted the publication of a notice in relation to that financial product and/or dealings with beneficiaries as such. 27. A "financial service" is defined to include dealing in financial products; see s 766A(1)(b). The term "dealing" is defined to be constituted by, inter alia, issuing, varying or disposing of a financial product; see s 766C(1). And arranging for a person to engage in such conduct is also dealing in a financial product; see s 766C(2). 28. By acting as the trustee of the fund, collecting, managing and disbursing employer contributions made on behalf of employees, REST was engaged in the issuing of financial products to its members. It thereby provided a financial service. REST's conduct was likewise in relation to that financial service. 29. Section 12DB applies to conduct "in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services". Financial services has the meaning given above. The expression "in connection with" may require that the impugned conduct accompany or be involved in the supply of services. 30. In ASIC v Westpac, I commented on the phrase "in connection with" in the context of s 12CB of the ASIC Act. I considered that whilst the specific degree of connection required understandably varies with the statutory context, a narrow or technical approach was not warranted. I said (at [2172]): As to the requirement that conduct be "in connection with" the supply or acquisition, or possible supply or acquisition, of financial services, an analogous requirement in s 51AC of the Trade Practices Act was considered in Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110. Heerey J held that the expression required that "the conduct impugned 'accompany, go with or be involved in' the supply of goods or services" (at [74]). That observation does not support a narrow or technical approach to the expression. It was made in the context of distinguishing conduct directed at the recipient of the relevant goods or services, and conduct directed at (and only said to be unconscionable in relation to) an unrelated third party. Of course, the expression "in connection with" requires a relation between one thing and another, but the specific degree of connection required understandably varies with the statutory context. But a causal relationship is not required. And no narrow approach is warranted having regard to the protective objects of the provision. In particular, I agree with ASIC that there is no basis for implying into the expression "in connection with" a requirement that conduct said to be unconscionable must have occurred prior to the relevant supply or acquisition of financial services. Such a temporal constraint would be artificial and inconsistent with the following matters. First, the generality of the statutory text directs attention to "all the circumstances". Second, the list of factors expressly identified as relevant to whether s 12CB (or s 12CC) has been breached includes "any conduct that the supplier [or acquirer] or the service recipient [or business supplier] engaged in, in connection with their commercial relationship, after they entered into the contract"; see ss 12CC(2)(j)(iv) and 12CC(3)(j)(iv) (prior to 1 January 2012), and ss 12CC(1)(j)(iv) and s 12CC(2)(j)(iv) (post 1 January 2012). Third, the terms of s 12CB(3)(a) prohibit a court from considering "any circumstances that were not reasonably foreseeable at the time of the alleged contravention". Such a provision implicitly permits prospective matters to be taken into account. Further, the reference time is not the time of entry into of a dealing but the time of the alleged contravention. Fourth, the very terms of s 12CB(4)(c)(ii) state that "in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract … is not limited to consideration of the circumstances relating to formation of the contract". 1. Given the similarities between ss 12CB and 12DB, the same approach applies equally to the latter provision. REST's conduct was likewise in connection with a financial service. 2. Now REST does not appear to take issue with the requirement in s 1041H of the Corporations Act that the conduct be in relation to a financial product or a financial service. Rather, REST focuses upon the requirements of ss 12DA and 12DB of the ASIC Act. 3. There can be no dispute that a beneficial interest in a superannuation fund is a financial product (s 12BAA(7)(f)). There can similarly be no dispute that the actual issuing, dealing or creation of an interest in a superannuation fund is the provision of a financial service (s 12BAB(1)(b)). Likewise, there is no dispute that REST's conduct in collecting, managing and disbursing employer contributions was not the issuing, dealing or creation of that financial product. 4. But a person also provides a financial service when they "provide a service … that is otherwise supplied in relation to a financial product" (s 12BAB(1)(g)). 5. It is in that sense that REST's conduct was the provision of a financial service. REST provided a service that was otherwise supplied in relation to a financial product, that is, a beneficial interest in a superannuation fund. That service takes in all of the things that a trustee of a regulated superannuation fund is required to do to manage the fund in accordance with its legal obligations. Relevantly, that service included the whole of balance transfer of the amount standing to the credit of the member's account to another complying fund pursuant to a request made by the member. 6. Further, I agree with ASIC that in relation to s 12BAB(1A), the fact that services supplied by a superannuation trustee could not amount to financial services under that specific subsection says nothing about the balance of s 12BAB. 7. Section 12BAB(1A) serves a deeming or inclusionary purpose. It was introduced by the Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 (Cth). That Act was introduced to nationalise the regulation of trustee companies and introduce a new Ch 5D to the Corporations Act. There was a stated desire to avoid overlap where trustee companies also provided superannuation trustee services; see the Explanatory Memorandum to the Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009 at [2.25]. That is why s 12BAB(1A) exists in the terms that it does. That context illustrates why REST's broader proposition that there was a conscious decision is problematic. 8. The effect of s 12BAB(1A) is to say that traditional trustee company services supplied by a trustee company will always be financial services. But it says nothing about the inverse scenario, that is, where non-traditional trustee company services are supplied. The note to the provision makes that clear. 9. Moreover, and in any event, ss 12DA and 12DB do not require that the offending conduct actually constitute the issuing or dealing in financial products that is the financial service in question. Rather, they extend to any and all conduct that is "in connection with the supply of" and/or "in relation to" that issuing or dealing. 10. REST's conduct in collecting, managing and disbursing employer contributions and making whole of balance transfers of a member's funds was sufficiently connected with and/or in relation to its issuing or dealing with financial products to be caught by ss 12DA and/or 12DB. 11. Now it may be that the phrase "in relation to" is broader than "in connection with". Regardless, the relevant level of relation or connectedness is satisfied. Following the introduction of choice and portability, the interest of a member in a superannuation fund was subject to statutory rights including the right to transfer in whole or in part to another fund. It would be artificial to divorce the superannuation interest itself from those rights. 12. Finally, REST's argument that because the ASIC Act was amended in 2020 to specifically include the provision of superannuation trustee services (s 12BAB(1)(ea)), the Act should be construed as if it previously did not, is problematic. It is problematic to look to later versions of the Act and then, by a process of reverse engineering with hindsight bias, conclude that the earlier legislature's intention did not extend to the matters the subject of the later amendments. 13. When REST carried out the statutorily mandated function of receiving and processing members' transfer requests, it was providing a service that was otherwise supplied in relation to members' beneficial interests in the fund. 14. Accordingly, when REST in the course of that service made the representations, it was engaging in conduct in relation to financial services (s 12DA(1)) and/or in connection with the supply or possible supply of financial services, or in connection with the promotion by any means of the supply or use of financial services (s 12DB(1)). 15. Now I do not need to determine that everything that REST, as a trustee of a regulated superannuation fund, did in relation to a member's beneficial interest in the fund was a "service … that is otherwise supplied in relation to a financial product" and, therefore, a financial service. Rather, I need only find that REST's conduct in receiving and processing members' transfer requests was a "service … that is otherwise supplied in relation to a financial product". 16. For that reason, the argument raised by REST about the conduct of a corporation in respect of its shareholders being financial services does not arise. Moreover, and in any event, the position of a superannuation trustee vis-à-vis its beneficiaries is readily distinguishable from the position of a corporation vis-à-vis its shareholders. 17. Further, and in any event, REST ignores the fact that when REST received and processed a member's transfer request, that conduct may have resulted in the member acquiring an interest in another financial product, being an interest in another superannuation fund. It is for that reason that the distinction drawn by REST between conduct "in relation to" and "under" a financial product is problematic. 18. Having rejected REST's threshold legal arguments, let me now turn to the detail of the evidence concerning the representations and begin with the relevant forms. Benefit payment rollover forms 1. From May 2014 until the end of September 2015 REST made available to members its "Benefit Payment Rollover to Another Fund" form. The form relevantly provided as follows: 2. Between May 2014 and September 2015 REST provided this form to 3,318 members. 3. Further, from October 2015 to the end of January 2016, REST made available to members another version of this form. The content of sections 3, 4 and 5 were substantially the same as the previous form. The content of section 9 was substantially the same as section 12 in the previous form and the content of section 8 was substantially the same as section 11 of the previous form. Between October 2015 and January 2016, REST provided this form to 2,141 members. 4. Further, from February 2016 to the end of the relevant period (at the least), REST made available another version of this form if a member contacted the call centre and specifically requested the form, or generally queried how they could transfer from the Trust. In the event of the latter, the contact centre consultant would either direct the member to the ATO SuperSeeker website to consolidate their superannuation accounts or provide them with copy of this form. The form was also given to members who sent an email to contact@rest.com.au with a request. The content of sections 3, 4, 5, 8 and 9 were substantially the same as the previous form. During the relevant period REST provided this form on 161,823 occasions. 5. Further, in July 2018 REST made available on its website a further version of this form. 6. Let me say something about the context of the forms and the context in which the statements were made. 7. During the relevant period, members of superannuation funds had a statutory right to transfer their superannuation balance to another fund (s 31(2)(i) of the SIS Act and reg 6.34(2), subject to regs 6.35 and 6.38, of the SIS Regulations). The legislation contained standard forms, prescribing mandatory and non-mandatory information (Sch 2A and Sch 2B of the SIS Regulations). But the use of those forms by superannuation funds was not compulsory (reg 6.33(2)). Funds were at liberty to design their own forms. 8. Now in the present case, each of REST's forms was entitled "Benefit payment – rollover to another fund" or "Benefit payment – transfer to another fund". The first sentence on page 1 was identical: "[p]lease complete this form to transfer / rollover part or all of your super to another fund". In the paragraphs immediately following on page 1, there appeared a list of "[t]hings to consider when rolling your money into another fund". 9. Now ASIC says that the forms constituted part of the conduct by which REST engaged in competition with other industry and retail funds and also those promoting self-managed superannuation funds. ASIC says that the list of things it urged members to consider were intended to prompt the reader to consider whether it was better to roll their funds out of REST or to leave them there. 10. ASIC says that it would appear that REST was also conscious that, by providing blank forms, receiving completed forms and transferring members' funds, it might be engaging in conduct covered by Pt 7.9 of the Corporations Act. That is one reason why the form contained the usual disclaimer that members should, "[b]efore making any decision regarding our products, download a copy of the REST Product Disclosure Statement". 11. Now as to the words themselves, they were brief and expressed in mandatory language. In section 3, a member was asked "[h]ave you finished work with your REST employer?" and, if the answer was 'no', "[w]ill your REST employer continue to make contributions to REST?" If the answer to that second question was, in turn, 'yes', it was stated that "[y]ou may only make a partial transfer^". 12. According to ASIC, those three sentences amount to the partial transfer representation. 13. Further, the '^' symbol referred the reader to the following text: "[i]f you are transferring or withdrawing a partial amount you must leave a minimum of $5,000 in your account." The same statement was repeated at the foot of the next page. 14. According to ASIC, those words amount to the $5,000 representation. 15. ASIC says that each of those statements was about what a member could, and could not, do. They were statements made in the form provided on the occasion on which the member would seek to exercise his or her portability rights. In context, ASIC says that they would only be understood by the relevant section of the public as conveying representations about what members were entitled to do or not do. 16. Section 4 of the form was headed "Employer declaration". Members were asked to complete that section "only if you ticked 'No' in Section 3 and would like to transfer the total amount of your REST account". In the second paragraph, it was emphasised that: [I]f you have requested to transfer your entire account balance and this section is not completed, this form will be returned. Your transfer cannot proceed until we receive this confirmation. If your employer does not complete this section, you will only be able to transfer part of your account balance. 1. ASIC says that the effect of the foregoing was to convey that it was mandatory for determination members to obtain the declaration before making a whole of balance transfer request. There was no option to submit the form without the declaration completed and, perhaps, complete it later. Section 12 entitled "Checklist" made that clear. 2. ASIC says that REST thereby made the declaration requirement representation. 3. In section 3, a member was requested to provide their "[t]ermination date". In section 11, entitled "Declaration", a member was asked to state that they understood that: "REST may not be able to pay my benefit until they have received confirmation of my employment status from my employer or receive a final contribution to my REST account (if applicable)." 4. ASIC says that REST thereby made the certificate requirement representation. 5. More generally, ASIC says that each of the declaration requirement representation and certificate requirement representation were representations about information that REST required before it would process a member's transfer request. 6. In respect of the former, the consequences of a failure to provide the information were express. It was stated that: "if you have requested to transfer your entire account balance and this section is not completed, this form will be returned. Your transfer cannot proceed until we receive this confirmation." 7. In respect of the latter, the consequences were likewise express, although in slightly less direct terms: "REST may not be able to pay my benefit until they have received confirmation of my employment status or receive a final contribution to my REST account (if applicable)." 8. Nonetheless, in context, ASIC says that those statements would be understood by the relevant section of the public as conveying representations about what information REST required, and the consequences that REST was legally entitled to impose for non-compliance. 9. Now I agree with REST that ASIC mischaracterises the content of REST's forms as competitive behaviour, rather than behaviour which was simply to provide typical risk warnings to members and comply with its obligations under the SIS Regulations. 10. Under reg 6.34(5), before REST does a rollover or transfers an amount on behalf of a member, REST must reasonably believe that the member is aware that they may ask the trustee for information including the effect of the proposed rollover or transfer on any benefit entitlements the member may have. Therefore, in prompting members to consider that "[a]ny insurance cover you have will cease once your REST account is closed" REST was ensuring that members understood the impact of their rollover request on any insurance benefit held with REST and that they were aware that they "have the right to ask REST for information on how withdrawing [their] super will affect [their] entitlements". 11. Finally, REST and ASIC have agreed an approach by which I may proceed on the basis that the form was used on 161,823 occasions in the relevant period. 12. Before proceeding further, let me now say something about the case studies which have been used as exemplar instances to support ASIC's case concerning the making of various oral and written representations. Exemplar determination member instances 1. Let me now address in more detail the case studies. Person A case study 1. Person A worked at Masters and was employed by Woolworths Supermarkets by 31 July 2015 and became a member of REST on 1 August 2015. During person A's employment, Woolworths Supermarkets made contributions on her behalf to her REST account. 2. On or about 14 December 2015 person A requested to transfer her REST superannuation balance to HESTA. 3. Person A received a letter from REST dated 17 December 2015 stating: we are unable to process your request as there are some important details missing … Termination date is required from Woolworths Supermarket. 1. On or about 7 January 2016 person A telephoned REST and spoke to someone who identified themselves as 'Jessica'. Jessica said: I can see here that we've got continuing contributions from Woolworths. … So, we need confirmation from Woolworths that they will no longer be making any more contributions to REST. … Yep. So, the end date's also known as the termination date, so we just need to confirm that they'll no longer be making contributions. Once they give us that date, we'll be able to - - - Okay, so Woolworths still have you active on their superannuation accounts, so they need to deactivate you from that to confirm it --- … Yep. So, you don't have to resign. We need a termination date to confirm they won't pay any more into REST. 1. Person A received a letter from REST dated 21 January 2016 which stated: By way of explanation why employment clarification is requested, prior to transferring a benefit to another fund, we need to ensure that all contributions owing have been received on the account and are up to date following the receipt of written confirmation from the employer of the termination date, or we have received an employment separation certificate. It is not practical to close an account until the final contribution has been received from the employer and in some cases, a full transfer cannot be actioned unless a member is terminated from employment. Usually, when a member has been terminated by the employer from the account, we can be sure that all contributions for the member have been received. We understand that employees of Woolworths Supermarkets fall under an enterprise bargaining agreement that obligates Woolworths Supermarkets to pay contributions to REST and therefore we are required to confirm your employment termination date prior to processing a rollover to another fund unless you chose to transfer your funds under portability by retaining a minimum account balance of $5,000 which is not an applicable option for you at this point. We refer you to Woolworths Supermarkets to clarify the terms of your employment with them and hope the explanation above has addressed your concerns. 1. On or about 21 April 2016 person A again requested to transfer her REST superannuation balance to HESTA. 2. Person A received a letter from REST dated 26 April 2016 stating: we are unable to process your request as there are some important details missing … We require an employment separation certificate or a termination date in writing. 1. On or about 21 September 2017 person A telephoned REST and spoke to someone who identified themselves as 'Duncan'. Duncan said: So there was a rollover request and it was done on the 26th of April 2016 but it wasn't processed, and the reason for that would've been , is um, so your external fund, so HESTA, um couldn't receive the funds because you were working at Woolworths at the time … And so, what happens with Woolworths they have an enterprise bargaining agreement. So, what that means is they exclusively use REST as their fund. Person B case study 1. Person B worked at Big W and was employed by Woolworths Supermarkets from 5 September 2011 and became a member of REST on the same date. During person B's employment, Woolworths Supermarkets made contributions on her behalf to her REST account. 2. On or about 25 June 2016 person B requested to transfer her REST superannuation balance to AustralianSuper. 3. In or about late June or early July 2016 person B received a letter from REST dated 29 June 2016 stating: We are unable to process your request right now as there are some important details missing. The following information is required: We require an employment separation certificate or a termination date in writing from Woolworths. 1. On or about 7 July 2016 person B telephoned REST and spoke to someone who identified themselves as 'Joe'. Joe said: Ok so, the reason for the call was due to the fact that Woolworths are still an active employer on the account. Are you still employed with them? … Ok, unfortunately, because Woolworths have an enterprise bargaining agreement with REST, unless a member is a full time, or manager or supervisor worker with Woollies, they will only pay to a REST Super account. So, that's the reason we can't process the rollover request for you and that was the reason for the outbound call that was made to you yesterday. … There is, you can do a partial rollover by leaving $5,000in your REST account and transferring the remaining to Australian Super. Ok, so your best option is actually contact them and tell them to put the request through once again as a partial not a full rollover. 1. On or about 11 July 2016 person B telephoned REST and was told: Person B: I actually wanted to transfer out to Australian Super and I was made aware I can't transfer the whole lot out but I want to transfer as much as I can out. Call operator: Yeah. Definitely. Let me just have a quick look. So, are you still working for Woolworths? Person B: Yeah. Call Operator: Yeah. That's – that's – that'd be why. 1. On 14 July 2016 person B received an email attaching a letter from REST which stated: Following a review of your concerns, our records indicate that on 25 June 2016 we received an e-rollover request to transfer your whole account balance to Australian Super. As you are aware, the transfer was rejected due to your active employment status with Woolworths Supermarkets as explained in your telephone call to REST on 7 July 2016 along with the minimum account balance requirements of a portability claim whereby funds over $5,000 can be transferred. … For a partial transfer, you will need to complete Part B of section 5 specifying the amount of funds over $5,000 you would like to transfer. Person C case study 1. Person C was employed by Bunnings Building Supplies Pty Ltd on 14 February 2017 and became a member of REST on the same date. During person C's employment, Bunnings made contributions on her behalf to her REST account. 2. On or about 19 December 2017 person C requested to transfer her REST superannuation balance to HESTA. 3. In or about late December 2017 person C received a letter from REST dated 21 December 2017 stating: Please provide an employment separation certificate or a termination date in writing from Bunnings Building Supplies. If you have not terminated employment with Bunnings Building Supplies, and they will cease contributions to your REST account, please ask Bunnings Building Supplies to complete Part 4 of the enclosed form. 1. In or about mid-January 2018 person C received a letter from REST dated 11 January 2018 stating: We are unable to process your request right now as there are some important details missing … Rest require proof from Bunnings Building Supplies either by email or letter that they agree to your choice of fund selection. 1. On or about 15 January 2018 person C telephoned REST and spoke to someone who identified themselves as 'Lorena'. Lorena said: Lorena: … So, they're asking for a separation certificate and you've provided that, have you? Person C: I don't have to 'cause I'm not separating, I'm just moving – I want it – move it across to HESTA and I wrote them a letter and said that's what I was doing. Lorena: Okay then. Now, normally – and let me see what I've got here. So, you're currently with Bunnings, correct? Person C: Yes. Lorena: Okay. Now … just – I don't know whether anyone has explained this to you before, but with regards to Bunnings and REST they do actually have some sort of an agreement wherein REST is their chosen super fund that Bunnings has agreed to actually contribute. Now, there's no problem with making contributions to another super fund as long as the initial contribution goes to REST first and then if you want to, of course, you have the option to partially contribute to another super fund of your own choice, but it's part of the compulsory agreement between Bunnings and REST that's the reason why there is a delay and that's the reason why they're asking if there was a termination date or a separation certificate. Person C: the legalisation that I can choose any industry any fund I like. Lorena: Of course. Now, there is also depending on Bunnings, Bunnings would need to give you special permission to actually start contributing to a different fund, but that's – that's up to Bunnings to actually fill in the form. Normally, their payroll manager needs to actually fill in the form for you, has that happened already? Has your payroll manager filled in the application form? … Oh, through MyGov, oh ok, sure. This is just a background reason why there is a delay, because of that enterprise bargaining agreement. So, in that case, the form, if you've done it through MyGov, we do have a Rest form that I can email or post out to you and then you just need to get payroll permission to actually fill it in. So, payroll needs to fill it in, not your manager, but someone from payroll has to fill it in advising that they are agreeing somehow releasing you and giving you permission to actually contribute to a different super fund, that's all, so that depends on Bunnings' payroll manager. … So, you can simply printout the form and then get the payroll manager to fill it in as well on your behalf, I believe that be on section four. 1. On or about late January 2018 person C requested to transfer her REST superannuation balance to First State. 2. On or about 2 February 2018 person C telephoned REST and spoke to someone who identified themselves as 'Jus'. Jus said: we just need a confirmation from Bunnings just to say that we're not going to pay into this account any more. … We did receive the paperwork, we did try to process it. But we were unable to process it because we do – we're waiting on a term date from the employer. So that's all you need to give to us for that to go through. … We just need an authorisation from your employer because Bunnings is affiliated with REST, in order to make this account inactive, we need a letter from Bunnings just to say, an email even, from Bunnings, just to say we're not going to pay into this account, we're going to start paying into [person C's] First State Super account, and once we receive that confirmation from them, just because they are affiliated with us, it's compulsory for Bunnings to pay into REST. Once we receive a confirmation from them for that and this goes into as a terminated employer, then we'll be able to transfer the funds. 1. Person C received a letter from REST dated 2 February 2018 stating: The following information is required. Please …. Provide an employment separation certificate or a termination date in writing from Bunnings Building Supplies. If you have not terminated employment with Bunnings Building Supplies, and they will cease contributions to your REST account, please ask Bunnings Building Supplies to complete Part 4 of the enclosed form. 1. On or about 21 February 2018 person C telephoned REST and spoke to persons who identified themselves as 'Mara' and 'Mel'. Mara said: Ok, unfortunately, we do need a termination date from Bunnings. … Ok, you need to get authority from Bunnings. … Ok, and did anyone advise you that you needed the last working day with Bunnings? … You do, I'm so sorry but with Bunnings and REST, you do need to have that – well, Bunnings need … to release you from the – from REST, that's all I'm trying to say. … I understand the legislation however, with Bunnings, they have used REST as their preferred super fund and they will not allow for, I'm sorry we can't release your funds unless they provide a termination date … I'm following what the process is and unless Bunnings release you from REST, we can't roll it out. … However, we can't release it without their – without their authority. You need to contact Bunnings … we can't do anything about it, you need to talk to Bunnings about it. 1. Mel said: So, with regard to the legislation, I just want to point out that choice of fund does exist that is accurate; however, under Fair Work legislation there are such things as what's called enterprise bargaining agreements and unfortunately with Bunnings they do have an enterprise bargaining agreement in place which means that they do not offer choice of fund. Now, with regards to that, it's a little bit confusing because they do have notes on the account that Bunnings appear to have told you that they would pay your contributions elsewhere, but when we initiated contact with them they came back and said that wasn't the case, so it seems to be a little bit conflicting there. Do you mind me asking have you had conversations with them about it? … So with regard to this the reason we keep prompting you with the termination date and I'll just clarify that a little bit. It is a templated letter, so apologies for that, but with regard to the reason for that request is because if Bunnings will only pay your contributions to REST and they're not paying them elsewhere we in effect can't close your REST account because it's still active and they're still using it. So, the initial conversation needs to occur before you – between yourself and Bunnings where they need to be redirecting your contributions. I don't know under what circumstances they make an exception, but ultimately they can make that decision. If that just simply advise us – the date of the last payment to REST well then we're free and clear to close the account for you, we just need to know that it's all finalised. … … I know on that particular form there is a question there that pertains to your employment and there is an employer declaration on there and specifically what it states is, it asks the question, have you ceased employment with your Rest employer. Now by Rest employer what we mean is the employer using your Rest account. So have you ceased employment, yes or no? And if you say, no, you have not, then there's an employer declaration for your employer to complete, advising us the date of the last contribution. Again, the purpose of that is for us to know when the payments to your Rest account have stopped so again we're free and clear to close it for you. So the purpose of that employer declaration that would need to be something completed by a member of payroll or similar at Bunnings. … So that employer declaration where we have a space for the employer to complete it, that's for you to take to your employer to a payroll officer or similar, for them to make the declaration so that the information gets to us.…What we've done is that we've contacted Bunnings to confirm that the contributions have ceased and they've told us the contributions are ongoing to Rest. … Yes, I understand and as mentioned, once we know that Bunnings have redirected your contributions, we will happily do a roll over, but the issue needs to be that the account with Rest is no longer active as such so if Bunnings is still paying into it, how can we close it? So do you see what I mean? … The issue with that is the Enterprise Bargaining Agreements are actually covered by the Fair Work Act so it is still legislated, but when an Enterprise Bargaining Agreement is in place, that the employee doesn't have to give you choice of fund. … So, as mentioned, look, Bunnings do have the potential and ability to make exceptions to this rule. It really made me worth your time just engaging with them and having that conversation. 1. Person C received a letter from REST dated 27 February 2018 stating: The following information is required. Please provide an employment separation certificate or a termination date in writing from Bunnings Building Supplies. If you have not terminated employment with Bunnings Building Supplies, and they will cease contributions to your REST account, please ask Bunnings Building Supplies to complete Part 4 of the enclosed form. Person D case study 1. Person D was employed by Officeworks from 23 December 2013 and became a member of REST on 1 January 2014. During person D's employment, Officeworks made contributions on his behalf to his REST account. 2. On or about 13 October 2015 person D requested to transfer his REST superannuation balance to Commonwealth Essential Super. 3. Person D received a letter from REST dated 16 October 2015 stating: Unfortunately we are unable to process this request due to the following outstanding requirements: Certified proof of name change and termination date from employer are required. 1. On or about 30 November 2015 person D again requested to transfer his REST superannuation balance to Commonwealth Essential Super. 2. Person D received a letter from REST dated 3 December 2015 stating: we are unable to process your request as there are some important details missing: … Termination date required from Officeworks. 1. On or about 29 November 2017 person D again requested to transfer his REST superannuation balance to Commonwealth Essential Super. 2. On or about 1 December 2017 person D telephoned REST and spoke to someone who identified themselves as 'Thomas'. Thomas said: So, the reason why it's not letting you, you know, rollout from REST to CBA Super there is because we need a term date from your employer … … The reason why is because Officeworks is a major client of REST… just for our compliance that we need either the employer to call us of that, or you can provide us a separation certificate so…. One or the other. … If you haven't received a contribution for 12 months, we can add [a termination date]. But we're assuming you're still technically working form them so either… the employer needs to call in or you provide us with a separation certificate. … You can't tell me over the phone. As I mentioned, Officeworks is a major client of REST's so we can't… So, either the employer calls us or you can obtain a separation certificate from Officeworks so you can release your benefit. … We can put a request to contact them for you if you like… I'll put a request to get in touch with them and once that's been added to your account, we can release your funds, okay? 1. Person D received a letter from REST dated 1 December 2017 stating: We are unable to process your request right now as there are some important details missing. … Please provide an employment separation certificate or a termination date in writing from Officeworks. If you have not terminated employment with Officeworks, and they will cease contributions to your REST account, please ask Officeworks to complete Part 4 of the enclosed form. 1. In or about mid-December 2017 person D received a letter from REST dated 7 December 2017 stating: Please be aware that prior to transferring a benefit to another fund or making a claim payment, REST's requirement is that contributions on the account are up to date and there has been advice from an employer of the termination date of the member (if applicable). This assists REST to determine the type of withdrawal or transfer that is applicable and ensure the transfer/withdrawal is correctly actioned. For administration purposes, it is not practical to close an account until the final contribution has been received from the employer and in some cases a full transfer cannot be actioned unless a member is terminated from employment. Usually, when a member is terminated, REST can be sure that all contributions owed to a member have been received. REST relies on the employers contributing to the fund to provide us with up to date information about the employment status of our members and if they do not communicate employment termination status, in order to process a transfer, we may ask our members to provide an employment separation certificate. In our efforts to assist you, we are pleased to advise that we contacted your former employer Officeworks who confirmed that you had terminated employment and that REST received your full contribution entitlement. This information allowed your transfer to be finalised on 7 December 2017. Person E case study 1. On 1 December 2008, person E became a member of REST. In 2009 or 2010 and mid to late-2016 person E was employed by Woolworths Supermarkets. During his employment, Woolworths Supermarkets made contributions on his behalf to his REST account. 2. On or about 20 April 2015 person E requested to transfer his REST superannuation balance to Commonwealth Essential Super. 3. On or about 25 April 2015 REST sent a letter to person E stating: we are unable to process your request … The following information is required: Termination date required for Woolworths and certified proof of name change… 1. On or about 21 September 2015 person E requested to transfer his REST superannuation balance to Accumulate Plus. 2. On or about 26 September 2015 REST sent a letter to person E which stated that: we are unable to process your request … The following information is required: Please provide an employment separation certificate or a termination date in writing from Woolworths Supermarkets. If you have not terminated employment with Woolworths Supermarkets, and they will cease contributions to your REST account, please ask Woolworths Supermarkets to complete Part 4 of the enclosed form. 1. On or about 6 October 2015 person E telephoned REST and spoke to someone who identified themselves as 'Alicia'. Alicia said: Okay. In order for a rollover to happen we need to know from the company that you're working for what the last day is they're gonna be putting money into the account. … That's why we need the last contribution date because if they put more money in when the account is closed, it's gonna start up a new account. 1. On or about 13 October 2015 REST sent a letter to person E which stated that: Please provide an employment separation certificate or a termination date in writing from Woolworths Supermarkets. If you have not terminated employer with Woolworths Supermarkets, and they will cease contributions to your REST account, please ask Woolworths Supermarkets to complete Part 4 of the enclosed form. 1. On or about 13 January 2016 person E telephoned REST and spoke to someone who identified themselves as 'Shane'. Shane said: So, we'll either need a phone call from Woolworths or a letter from Woolworths to let us know that no one will be paying any contributions into your account anymore. 1. On or about 1 February 2016 person E telephoned REST and spoke to someone who identified themselves as 'Nick'. Nick said: Nick: Okay. Just one question as well regarding the amount we're transferring. Person E: Yeah. Nick: Is this intended to be just for a partial amount or the full amount? Person E: The full amount. Nick: Okay. And, I'm wondering, are you still working for Woolworths, by any chance? Person E: Yes. I am. Nick: Okay. I may have come across another issue. I'm hoping I'm not the first person to bring this up to you but, of course, I just want to make sure you're the most informed so rather that we don't run into any surprises in the future. Person E: Yeah. Sure. Nick: Are you aware that Woolworths will only pay Superannuation to REST? 1. On or about 18 February 2016 REST sent a letter to person E which stated that: Prior to transferring a benefit to another fund, we need to ensure that the member is terminated from employment or eligible for choice of fund. Please note that Woolworths employees fall under an Enterprise Bargaining Agreement (EBA) that obligates Woolworths to only pay contributions to REST and therefore we are required to confirm your employment termination date prior to processing a rollover to another fund. In an effort to assist you, we contacted Woolworths on 5 February 2016 and they advised that you are still actively employed and that under the terms and conditions of your employment, The National Beer Wine and Spirits Agreement, you are not eligible for choice of fund. On 11 February 2016 we received your email including an email from Woolworths dated 31 December 2015 advising you have choice of fund. Given the discrepancy of conflicting information, we contacted Woolworths again on 16 February 2016 and we were advised once again that you did not have choice of fund. … On 26 September 2015 we wrote to you requesting a termination date from Woolworths or confirmation that they will cease making contributions to REST on your behalf … A third transfer request was received on 9 October 2015 and 14 October 2015 we wrote to you requesting your employment termination date from Woolworths or confirmation that they will cease making contributions to REST on your behalf. … You are permitted to do a portability transfer for part of your account balance. Under Australian Portability Legislation, the maximum a superannuation fund can request to have as a minimum in account for Portability claims is $5000, and this is the amount REST Trustees have set down as the minimum. Under the rules of the fund, portability transfers are limited to once every 12 months. We have enclosed a Benefit payment – rollover to another fund form should you wish to make a portability claim and enclose a reply paid envelope for your convenience. 1. There are no documents in the case files of the members above in which their employer wrote to REST applying to terminate their contributions pursuant to the Trust Deed. Relevance of case study witnesses' subjective understanding 1. The question of whether conduct is misleading or deceptive or likely to mislead or deceive is objective. 2. Whilst evidence that a person was in fact misled is neither necessary nor determinative of whether conduct was misleading or deceptive, evidence that a person understood the statements in a particular way or was or was not misled is relevant. 3. I should also note that REST did not seek to cross-examine any of persons A to E. 4. Let me now turn to discuss aspects of the alleged representations. The partial transfer representation 1. ASIC alleges that the partial transfer representation was made orally on six occasions. The exemplar instances are person B and person C. 2. Now in each case, the call centre operator stated that because person B and person C remained employed by their REST employers, and the relevant employers were subject to enterprise bargaining agreements that mandated contributions to REST, they could only make a partial transfer out of REST. 3. The context for the statements was the following. Person B and person C were determination members who remained employed by their REST employers. They sought to transfer the whole of their superannuation balance. They received letters stating that "[w]e are unable to process your request right now". As a consequence they called REST. 4. The statements made to them were consistent with a call centre script developed by REST which was in evidence. 5. Further, I should note the case of person G, who also provides an example of the oral representations made by REST, although not treated by the parties as an exemplar instance to be extrapolated. 6. Person G explained that he wanted to transfer his superannuation into another fund, and that while he had not resigned he was "not doing any shifts whatsoever." He was told "...to do a full rollover, we won't be able to do that because Woolworths is still an active employer on your account…" and that "…the only thing that we can for you at this point in time would be to do a partial rollover…". 7. Further, ASIC alleges that the partial transfer representation was made in writing in 11 letters. The exemplar instances concern person A, person B and person E. 8. In each case, the letters stated that because person A, person B and person E remained employed by their REST employers, and the relevant employers were subject to enterprise bargaining agreements that mandated contributions to REST, they could only make a partial transfer out of REST. In person A's case, because her balance was less than $5,000, the letter stated that: "we are required to confirm your employment termination date prior to processing a rollover to another fund unless you chose to transfer your funds under portability by retaining a minimum account balance of $5,000 which is not an applicable option for you at this point." 9. The statements were consistent with a template letter in use by REST. 10. The letter sent to one member stated that: Under the rules of the Fund, you are permitted to transfer the entire balance of your account upon confirmation that no further contributions are to be received from your employer. We contacted your employer, Woolworths Supermarkets, to clarify your employment status, and they advised that you are still currently employed with them and that you do not have the ability to exercise choice of fund… You are only permitted to transfer your account, provided a minimum of $5,000 is retained in REST. 1. The letter goes on to refer to "Australian portability legislation" and states that "we are unable to action a Portability claim for you, however, should your employment circumstances change, please contact us and we will happily settle your transfer request." To similar effect, person B was told that: the transfer was rejected due to your active employment status with Woolworths Supermarkets…the minimum balance requirements of a portability claim whereby funds over $5,000 can be transferred. 1. Further, ASIC says that the written representations had a number of manifestations. 2. The "Benefit Payment – Rollover to Another Fund" form was generally provided if a member queried how they could transfer their funds, or if they wrote to a particular email address and requested it. 3. The language of the form is mandatory. A member is told "you may only make a partial transfer" in circumstances where it is REST alone that decides whether or not such a transfer was a partial transfer. The form was provided to 178,893 members. The form in use from May 2014 until September 2015 was provided to 3,318 members, the form in use between October 2015 and January 2016 which was in substantially the same form was provided to 2,141 members in that period, whilst the form in use from February 2016 until June 2018 was in substantially the same form and was provided to 173,434 members. 4. ASIC says that at no stage was the proposition that only a partial transfer was permissible in the circumstances of a determination member the subject of doubt from REST employees. It says that no member of the class to which the representations were directed could have been expected to understand anything other than the rules applied to them as explained by REST. It is said that no one was directed to obtain legal advice, and nor was it suggested that further persuasion could alter the position, being, so ASIC said, a core component of an opinion or of a recitation of mere practice. Analysis 1. Now when ASIC alleges that REST represented that a member "could only" partially transfer their balance out of the Trust, I agree with REST that ASIC's case is that REST was making a representation about what was required by the SIS Regulations. This is because if "could only" meant "could only because of the requirements of REST's rules …", the representation would not be misleading. It would accurately state the effect of REST's business rules. 2. ASIC's case, despite its denial, is that in essence REST was making a representation as to what was required by the SIS Regulations. ASIC's case assumes that what is meant by "was able to do" and "had to provide" is a reference to the legal requirements in the SIS Regulations, rather than the requirements of REST's practice under its rules. 3. So, the alleged representation is, in substance, a representation that the member could only partially transfer their superannuation balance out of the Trust because of the requirements of the SIS Regulations. 4. Let me now say something about REST's forms. 5. There was no representation of fact as to the requirements of the SIS Regulations, as opposed to a statement of REST's practice or of its opinion, a point which in my view can be made concerning all of the four types of representations made, and whatever the mode, if indeed they were made. 6. Further, any representation made by the specific parts of the form relied on by ASIC was made only to members who ticked "No" in section 3 of the form in response to the question: "Have you finished work with your Rest employer". Members who ticked "Yes" in section 3 were directed to section 5 of the form and were not required to read or complete the balance of section 3. Furthermore, the form would not have been used by members who requested their rollover through the "receiving fund". 7. Further, as to ASIC's case that the partial transfer representation was made in writing in 11 letters, although the representations in these letters were consistent with REST's practice, it does not follow that they contain the partial transfer representation. 8. ASIC provides as an exemplar instance the written statement made to person B on 14 July 2016 that: Following a review of your concerns, our records indicate that on 25 June 2016 we received an e-rollover request to transfer your whole account balance to Australian Super. As you are aware, the transfer was rejected due to your active employment status with Woolworths Supermarkets as explained in your telephone call to REST on 7 July 2016 along with the minimum account balance requirements of a portability claim whereby funds over $5,000 can be transferred. … For a partial transfer, you will need to complete Part B of section 5 specifying the amount of funds over $5,000 you would like to transfer. 1. But the statement does not satisfy the necessary elements to convey the partial transfer representation for the following reasons. 2. First, the statement does not convey that the member could only make a partial transfer if the member remained employed by a REST employer. In this instance, the statement refers only to the member's active employment status with Woolworths Supermarkets. 3. Second, the statement does not convey that the member could only partially transfer their superannuation balance out of the Trust. In this letter, there is no statement of any legal limitation on transfer rights. Rather, the letter makes a positive statement as to the funds that the member is permitted to transfer. 4. Let me say something about the alleged oral representations. 5. ASIC alleges that the partial transfer representation was made orally on six occasions, but although oral representations were made that were consistent with REST's practice, it does not follow that they constitute the partial transfer representation as alleged. 6. Now the oral statement made to person B on 11 July 2016 was the following: Person B: I actually wanted to transfer out to Australian Super and I was made aware I can't transfer the whole lot out but I want to transfer as much as I can out. Call operator: Yeah. Definitely. Let me just have a quick look. So, are you still working for Woolworths? Person B: Yeah Call operator: Yeah. That's – that's – that'd be why. 1. This statement does not satisfy the necessary elements to convey the partial transfer representation for the following reasons. 2. First, the statement is merely a general statement that the reason the member was unable to complete a rollover for the whole of their withdrawal benefit is that they were still working for a REST employer. 3. Second, the statement does not convey any representation regarding contributions made by the member's REST employer or that the member could only partially transfer their superannuation balance. The statement also does not contain any representation that there was a legal limitation on the member's transfer rights. 4. Indeed, the statement does not convey any of the elements of the partial transfer representation in the form pleaded by ASIC. 5. In summary, I agree with REST that REST's statements only constituted representations as to REST's practices, which statements were quite accurate. But if they could constitute representations as to any legal requirements then at most they conveyed REST's opinion on such a question. The $5,000 representation 1. ASIC's case is that the $5,000 representation follows from the partial transfer representation. Determination members were told that their request for a whole of balance transfer was to be treated as a partial transfer request. Members were then told that because their request was to be treated as a partial transfer request they were required to leave a $5,000 minimum balance. ASIC says that the use of mandatory language suggestive of an objective state of affairs is inconsistent with a characterisation of the statements as matters of mere practice or legal opinion. 2. ASIC alleges that the $5,000 representation was made orally on four occasions, including to person B on 7 July 2016. 3. On that occasion, a call centre operator told person B that: "you can do a partial rollover by leaving $5,000 in your REST account and transferring the remaining to Australian Super." The context for that statement was as described earlier. 4. Further, ASIC alleges that the $5,000 representation was made in writing in 11 letters. There are three varieties. 5. First, one has an example of one variety where REST told person A that, unless she was terminated by Woolworths, she was limited to a partial transfer leaving $5,000 behind in her REST account which was not applicable to her. There is one other instance in that category. 6. Second, one has an example of another variety where REST told person E that: "[u]nder Australian Portability Legislation, the maximum a superannuation fund can request to have as the minimum in account for Portability claims is $5000, and this is the amount REST Trustees have set down as the minimum.". There are nine other instances in that category. 7. ASIC says that the linking between the legislative entitlement and the rejection of the member's request to wholly transfer their superannuation are part of the context that makes clear that the statement is a statement of fact which lacks any of the subjectivity or uncertainty inherent in an opinion. 8. Third, one has a case of another variety where REST told person B that her whole transfer request was rejected, but that she could make a partial transfer if she completed Part B of section 5 of the form and specified the funds over $5,000 that she wished to transfer. 9. Further, when person H sought to have her superannuation transferred, she explained that Safeway "…will not take me off the books…" because of a Court case, although she had not worked a shift in two years. Person H was told that "…you can't actually go through that [whole balance transfer] because you've still got that working date so Safeway won't let you go through with that…". The REST staff confirmed that she would be required to quit her job to access a whole of balance transfer. Person H was then told she could only make a partial rollover, and that "…you have to leave a minimum of $5,000 in your account to keep your insurances active…" 10. ASIC says that the mandatory nature of the requirements, and the lack of any options being identified as possible are all indicia that the statements were matters of presently existing fact, that fact being that the member was required to maintain a balance of $5,000 simply because they had not ceased their employment relationship with a determination employer. Analysis 1. Again, when ASIC alleges that REST represented that a member was "required to" maintain a minimum amount of $5,000 in their REST account, its case is that REST was making a representation about what was required by the SIS Regulations. The alleged representation is, in substance, an alleged representation that members were required because of the requirements of the SIS Regulations to maintain a minimum amount of $5,000 in their REST account. 2. Now ASIC relies on the statement in REST's forms that: "if you are transferring or withdrawing a partial amount you must leave a minimum of $5,000 in your account". But there is no dispute that this statement accurately represents REST's practice and concerns a practice of requiring a minimum balance of $5,000 for partial transfers that was lawful. 3. I agree with REST that ASIC's true complaint concerns earlier statements as to when REST would only permit a partial transfer, which is the subject of the partial transfer representation case of ASIC which I have just discussed. The statement in the form does not support the pleaded representation. Further, the representation was not a representation of fact as to the requirements of the SIS Regulations. Rather, it was a statement of REST's practice or of its opinion. 4. Now ASIC alleges that the $5,000 representation was made in writing in 11 letters. Within the grouping, ASIC separates the $5,000 representation into three categories. 5. The first category is exemplified by the written statement made to person A on 21 January 2016. But this was not a representation of fact as to the requirements of the SIS Regulations or that there was a limitation on the member's transfer rights under the SIS Regulations, as opposed to a statement of REST's practice or of its opinion. 6. Of the second category within the grouping, ASIC's exemplar of the alleged $5,000 representation is the statement made to person E on 18 February 2016, which I have already set out, which does not satisfy the necessary elements to convey the $5,000 representation for the following reasons. 7. First, the statement does not convey that the member is unable to transfer the whole of their superannuation balance out of REST because they continued to be employed by a REST employer. Rather, the statement conveys that the member is unable to transfer the whole of their balance to another fund because they do not have choice of fund. Accordingly, the statement does not make any representation that continuing to be employed by a REST employer was the reason the member was required to maintain a minimum balance of $5,000. 8. Second, the statement does not contain any representation that there was a limitation on the member's transfer rights under the SIS Regulations. 9. The third category is the single instance of the written statement made to person B on 14 July 2016. This was not a representation of fact as to the requirements of the SIS Regulations or that there was a limitation on the member's transfer rights under the SIS Regulations, as opposed to a statement of REST's practice or of its opinion. 10. Now ASIC alleges that the $5,000 representation was made orally on four occasions. ASIC's exemplar instance is the oral statement made to person B on 7 July 2016: There is, you can do a partial rollover by leaving $5,000in [sic] your REST account and transferring the remaining to Australian Super. Ok, sso [sic] your best option is actually contact them and tell them to put the request through once again as a partial not a full rollover. 1. But this statement does not satisfy the necessary elements to convey the $5,000 representation. First, the statement does not convey any representation regarding continued employment by a REST employer leading to a requirement to maintain a minimum amount of $5,000 in the member's account. Second, the statement does not contain any representation that there was a limitation on the member's transfer rights under the SIS Regulations. 2. Before turning to the declaration requirement representation it is convenient at this point to say something further on a broader extrapolation question. Broader extrapolation questions in relation to the making of representations 1. ASIC says that from data supplied to it by REST two conclusions can be drawn. 2. First, it says that for the 1,109 members who sought to transfer their whole superannuation balance from their REST account but ultimately left some amount behind, I should infer that those members did so because they were the subject of the $5,000 representation and/or partial transfer representation. 3. Second, it says that I should infer that the 31,261 letters REST sent to members who requested to transfer their whole superannuation balance contained the certificate requirement representation. 4. Let me say something about how the data was requested, provided and ultimately analysed by ASIC. 5. On 9 January 2020 ASIC issued a notice to REST under s 912C of the Corporations Act. The notice sought responses to questions concerning requests made by determination members to transfer their full superannuation balance during the period 1 January 2014 to 2 May 2018. 6. The s 912C direction required REST to give a statement addressing matters which included the following data. 7. First, the total number of determination members who made rollover requests in the period 1 January 2014 to 2 May 2018 (category 6). 8. Second, of the total number provided under category 6, the number of determination members whose requests in each case were allowed in part or refused or not processed (category 7). 9. Third, of the total number provided under category 7 who were allowed in part, the number of determination members whose request was initially refused because the determination member did not complete a section of the form or the determination member did not obtain written confirmation from their employer that they had ceased employment or that their employer would no longer make contributions to the fund (category 9). 10. Fourth, of the total number provided under category 7 who were refused or not processed, the number of determination members where REST determined the request did not meet the requirements for a full rollover and requested further information (category 10). 11. On 14 February 2020 REST sought clarification of ASIC's request. REST proposed not to examine the individual items of correspondence between REST and each and every member covered by the request. Instead, REST proposed to provide a high-level breakdown into subcategories with a reasonable degree of accuracy. REST volunteered that examples of standard correspondence could also be provided. ASIC indicated that it was content with this approach. 12. On 18 March 2020 REST provided its response including the relevant data which was provided in a Microsoft Excel spreadsheet. REST's response to ASIC's 9 January 2020 request was premised upon the proposition that there was in use a form of standard correspondence wherein the member was requested to provide a termination date. REST subsequently explained its approach to processing rollover requests in greater detail. 13. REST's response makes it clear that REST used template letters, and that where a determination member requested a rollover and a termination date was not recorded in the system, they received a letter from REST that asked them to provide an employment separation certificate or employment termination date in writing from the employer, or confirmation from the employer that it would not be making further contributions to REST. This reflected the template in general use by REST. 14. The data was voluminous, complex and required specialist knowledge to manipulate. ASIC relied upon an affidavit of a data analyst to adduce evidence as to the significance and conclusions that could be drawn from the spreadsheet. The $5,000 representation and/or partial transfer representation - 1,109 members 1. Now ASIC seeks to have me infer that the alleged $5,000 representation and/or the partial transfer representation were made to 1,109 determination members. 2. ASIC's data analyst's evidence is that 1,109 members were determination members who made a full rollover request, which was declined. It is said that they received a template letter from REST during the relevant period and ultimately transferred an amount out whilst leaving some amount behind. 3. To support the inference that those determination members were the subject of the $5,000 representation and/or partial transfer representation, ASIC relies upon REST's admitted practice that if a determination member made a full transfer request, its practice was to require a minimum balance of $5,000 and to only permit a partial transfer. ASIC says that consistent with that practice, if a member did not supply a termination date, something would have been said orally or in writing to them about that. 4. ASIC has referred to a relevant call centre script which stated: 5. I am prepared to infer that this call centre script was adhered to by REST. 6. Now ASIC's argument is that because these 1,109 members made an initial request to transfer their whole superannuation balance but ultimately left some amount behind, it is to be inferred that they did so because of one or both of the partial transfer representation or the $5,000 representation. ASIC's case is essentially that by their conduct in making a partial transfer it can be inferred that the member must have been the subject of the $5,000 representation and/or partial transfer representation. 7. Now the data analyst's evidence is that REST sent within the relevant period 1,109 letters to determination members who made rollover requests for full rollovers, where the member then made a partial rollover. And REST accepts that 1,109 members who made rollover requests for full rollovers were sent a letter within the relevant period, and those members made a partial rollover. But it is problematic to draw an inference that the members were sent a communication containing the $5,000 representation and/or partial transfer representation. 8. First, ASIC has adduced no evidence as to the content of the communications to any of these 1,109 members. 9. Second, the data analyst's analysis shows that the vast majority of the 1,109 members referred to left behind an amount other than $5,000 when they completed a partial transfer. Indeed the majority retained an amount in excess of $5,000. Of these, a substantial number retained amounts well in excess of $5,000, including for a number of members an amount of more than $50,000 being retained. 10. So, the evidence does not support an inference that the majority of these members received the partial transfer representation or the $5,000 representation. If they did, then one would have expected a transfer to then be processed and the minimum amount of $5,000 to be retained. 11. Third, a member could have chosen not to rollover in full after making an initial request for a number of reasons. For instance, they may have been informed that they would lose their insurance cover. Further, they may have been informed that as a determination member, future contributions would be made to their REST account. And there are other possibilities. 12. I agree with REST that the fact that most of the members retained an amount other than $5,000 suggests that the explanation for their partial transfer was likely to be one other than that suggested by ASIC. 13. I will deal with the broader extrapolation question concerning the certificate requirement representation later. The declaration requirement representation 1. ASIC alleges that the declaration requirement representation was made orally on 16 occasions. Two instances are disputed. The exemplar instances for the balance of the 14 occasions concern person C. 2. In each case, the call centre operator told person C that, if she wished to transfer her whole balance while she remained employed by her REST employer, she had to get that employer to complete the employer declaration section of the transfer form. The context for those statements was as described earlier. 3. REST contends by reference to two documents in evidence that the relevant statements ought not be included as oral representations because they are instances of written conduct. 4. But the first document being REST's letter to a member dated 6 June 2016 refers to a telephone call: As discussed in our telephone call on 6 June 2016, we have enclosed a Benefit payment - rollover to another fund form as you requested for your employer to complete Part 4 if you are eligible for choice of fund or alternatively, have ceased employment with Woolworths Supermarkets. 1. Further, the second document being REST's letter to a member dated 11 January 2018 also refers to a telephone call: Following a review of your concerns, our records indicate that we initially received your transfer request on 7 March 2017 and as we had not received advice from your employer that you had terminated employment and that REST had received all contributions owing to you prior to the closure of your account, we wrote to you on 10 March 2017 requesting that your employer provide a termination date in writing; complete the employer declaration on section four of the enclosed form or for you to provide a separation certificate. As we received no response to this request, a follow up letter was sent to you on 18 March 2017 however, we did not receive a reply from either request. On 28 March 2017, we placed a telephone call to you to personally explain this requirement. 1. Having regard to the content of each letter, ASIC says that it may be inferred that a telephone call took place in which the call centre operator stated that, if the member wished to transfer their whole balance while they remained employed by their REST employer, they had to get that employer to complete the employer declaration section of the transfer form. 2. Further, ASIC alleges that the declaration requirement representation was made in writing in 51 letters. Six of those instances were disputed but ASIC now only presses one of these. The exemplar instances for the remaining 45 letters are person C, person D and person E. 3. In person C's case, on three occasions, and in person D's and person E's cases, they received letters with identical text: If you have not terminated employment with Bunnings Building Supplies, and they will cease contributions to your REST account, please ask Bunnings Building Supplies to complete Part 4 of the enclosed form. 1. On the other occasion, person C received a letter stating that: "Rest require proof from Bunnings Building Supplies either by email or letter that they agree to your choice of fund selection." 2. In each case, ASIC says that the meaning of the text was clear. ASIC says that it was to the effect that if the member's employment had not terminated, but they wanted to complete a whole of balance transfer, they needed to get a declaration from their employer in the form of section 4 of the transfer form. It is said that the reference in the later email to person C to "proof … either by email or letter" ought to be understood as referring to that requirement. 3. Let me deal with one other instance. REST's letter to a member dated 11 January 2018 states: "we wrote to you on 10 March 2017 requesting that your employer provide a termination date in writing; complete the employer declaration on section four of the enclosed form or for you to provide a separation certificate". ASIC says that it may be inferred that the 10 March 2017 letter contained a statement to the effect that if the member wished to transfer their whole balance while they remained employed by their REST employer, they had to get that employer to complete the employer declaration section of the transfer form. 4. Finally, as to the relevant form, ASIC points out that the transfer out form included section four headed "Employer Declaration". The REST member is told that: If you have requested to transfer your entire account balance and this section is not completed, this form will be returned. Your transfer cannot proceed until we receive this confirmation. If your employer does not complete this section, you will only be able to transfer part of your account balance. 1. It is said that the mandatory nature of the direction given to the member was reinforced by the checklist at section 12 of the form. That checklist told members that it was important that they had all the required information and that the "relevant requirements" had been complied with. One of the listed requirements was that the declaration in section 4 "must be completed and signed by your employer". 2. ASIC says that the form embodies or reflects the declaration requirement representation. Analysis 1. Now again, when ASIC alleges that REST represented that a member was required to obtain a declaration, and that a failure to provide the declaration meant that the request could be refused by REST, its case in essence is that REST was making a representation about what was required by the SIS Regulations. 2. ASIC has submitted that the representation conveyed that it was mandatory to obtain a declaration, by which ASIC's case is that what was conveyed is that it was mandatory under the SIS Regulations. Accordingly, the alleged representation is, in substance and as REST has correctly submitted, an alleged representation that members were required because of the requirements of the SIS Regulations to obtain a declaration and that a failure to provide that declaration meant that the request could be refused by REST under the SIS Regulations. 3. Let me say something about the form(s) used by REST. 4. The declaration requirement representation, being a representation in the precise terms alleged and bearing the characterisation alleged by ASIC, was not conveyed in the form. In particular, there was no representation of fact as to the requirements of the SIS Regulations or as to what they permitted, as opposed to a statement of REST's practice or of its opinion. 5. Further, any representation made in the specific parts of the form relied on by ASIC was only made to members who ticked "No" in section 3 of the form to both the following questions: 6. "Have you finished work with your Rest employer"; and 7. "Will your Rest employer continue to make contributions to Rest". 8. Members who ticked "Yes" to either of these questions in section 3 were directed to section 5 of the form, not section 4. 9. Now ASIC says that no employer who properly understood their obligations under the relevant award or industrial instrument would sign a declaration that employees were eligible for choice of fund. 10. But there were a number of circumstances in which a determination member's employer might make such a declaration. For example, an employer might sign this declaration where the determination or enterprise bargaining agreement had been varied so that the member was eligible for choice of fund or where the employee was promoted to a position with the same employer that excluded them from the operation of the particular determination or enterprise bargaining agreement. 11. Now ASIC alleges that the declaration requirement representation was made in writing in 51 letters. But I disagree. 12. An exemplar instance is the statement made to person C on 21 December 2017: Please provide an employment separation certificate or a termination date in writing from Bunnings Building Supplies. If you have not terminated employment with Bunnings Building Supplies, and they will cease contributions to your REST account, please ask Bunnings Building Supplies to complete Part 4 of the enclosed form. 1. Subject to variation of the employer listed in the statement, this statement is identical in substance to other statements made to person C, and also to person D and person E. 2. This statement and the analogous statements do not satisfy the necessary elements to convey the declaration requirement representation for the following reasons. 3. First, the statement does not convey that a pre-requisite to effecting the transfer was to obtain a declaration that the member had "choice of fund" rights and of the date upon which the REST employer ceased making contributions to REST. 4. Second, the statement communicated to the member was that there was an alternate means of effecting a full rollover by providing either an employment separation certificate or a termination date, such that it was not represented that the declaration was a pre-requisite to effecting the transfer because there was another way of effecting a transfer. 5. Third, the statement does not contain any representation that a declaration was a requirement under the SIS Regulations. 6. Now ASIC says that the statement made to person C on 11 January 2018 ought to be understood as referring to the requirement that the member obtain a declaration from their employer in the form of section 4 of the form. But the statement neither refers to section 4 of the form nor any type of declaration, merely a "letter" or "email'" from the member's employer. Further, the statement does not refer to a date upon which the REST employer ceased making contributions to REST. As such, this statement does not satisfy the requirements to convey the declaration requirement representation. 7. Further, the declaration requirement representation was not made in REST's letter to a member dated 11 January 2018 as this, first, refers to a separate letter which is not in evidence and, second, does not satisfy the elements of the alleged "requirement". The statement requests that the member's "employer provide a termination date in writing; complete the employer declaration on section four of the enclosed form or for you to provide a separation certificate". In this statement, there are three separate means of effecting a transfer being termination date, an employer declaration or a separation certificate. And so, the statement does not satisfy the requirement that it conveyed to the member that an employer declaration was a requirement and pre-requisite to effecting a transfer. Other options were made available to the member. 8. Let me say something about the alleged oral representations. 9. ASIC alleges that the declaration requirement representation was made orally on 16 occasions. But the declaration requirement representation is not made out. 10. For example, the statement made to person C on 15 January 2018, which I have set out earlier, does not satisfy the necessary elements to convey the declaration requirement representation because of the following matters. 11. First, the statement does not include a reference to any type of "declaration". The references to a "separation certificate" or a "termination date" do not amount to a representation that a declaration was required from the member's REST employer. 12. Second, the statement does not refer to "choice of fund rights". 13. Third, there is no reference to a declaration of the date upon which the REST employer ceased making contributions to REST being required. 14. Fourth, there is no statement that any declaration was a pre-requisite to effecting a transfer. 15. Fifth, the statement does not contain any representation a declaration was a requirement under the SIS Regulations. 16. ASIC's case is that this oral statement is also an exemplar instance of the certificate requirement representation as the statement conveyed that the member could only have obtained a full rollover if they provided REST with a separation certificate or termination date. But this is inconsistent with the form of the declaration requirement representation pleaded by ASIC, as it concedes that the statement communicated to the member was that there was an alternate means of effecting a full rollover other than providing the alleged declaration. As such, the statement could not have conveyed to the member that an employer declaration was a requirement and pre-requisite to effecting a transfer, because there were other options available to the member. 17. It is convenient to note at this point that this reasoning similarly applies to the certificate requirement representation allegation in relation to this statement. As REST points out, in submitting that alternative means of effecting a transfer were communicated to the member, ASIC's case is inconsistent with a contention that the statement conveyed that the member's request could only be processed where they obtained a separation certificate from their employer or provided a date of termination. 18. Finally, let me say something about two of the instances on which ASIC alleges the declaration requirement representation was made orally, being instances of telephones calls referred to in written statements. ASIC says that the content of the telephone calls can be inferred from the content of each letter. But the content of each letter does not provide sufficient context to infer that the phone calls contained the declaration requirement representation. 19. REST's letter to a member dated 6 June 2016 refers to a telephone call during which the member requested REST's form. The content of the phone call relied on does not include information such as whether REST represented to the member that the form was required or if the member independently contacted REST to request the form. 20. REST's letter to a member dated 11 January 2018 states that REST "placed a telephone call to you [the member] to personally explain the requirement". But the content of the letter does not record whether the member received the telephone call placed by REST. 21. Accordingly, I am not prepared to draw any inference that on these occasions telephone calls took place in which a REST call centre operator made the declaration requirement representation. The certificate requirement representation 1. ASIC alleges that the certificate requirement representation was made orally on 16 occasions. Two of those instances are disputed. The exemplar instances for the balance of 14 are person A, person C, person D and person E. 2. According to ASIC, the various statements follow a pattern. REST's call centre operators used a script. Having confirmed that the relevant member was still employed by their REST employer (ie, "I can see here that we've got continuing contributions from Woolworths"), the member was told that REST "need[s] confirmation" of the date after which no further contributions would be made or needed a "termination date". 3. ASIC says that the impression given to the member was that their whole transfer request had been refused, as REST was entitled to do, on the basis that a termination date was not supplied. In some cases, the call centre operator expressly suggested that the source of the obligation was external to REST, ie: "Officeworks is a major client of REST's so we can't". ASIC says that this only served to reinforce the fact that REST's stated requirements were mandatory and not simply a matter of REST's preference or view. 4. ASIC alleges that the certificate requirement representation was made in writing on 110 occasions. 5. According to ASIC, there are eight sub-groups as reflected in the following table: Exemplar Relevant text Group 1 Person A, person B, person D and person E "We are unable to process your request as there are some important details missing … Termination date is required" or "[w]e require an employment separation certificate or a termination date in writing" Person A "We are required to confirm your employment termination date prior to processing a rollover to another fund" Group 2 Person C, person D, and person E "We are unable to process your request as there are some important details missing. The following information is required: Please provide an employment separation certificate or a termination date in writing" Group 3 Person D "in order to process a transfer, we may ask our members to provide an employment separation certificate" "Please be aware that prior to transferring your benefit Group 4 RET.0013.0001.0566 to another fund, we needed to ensure that you had (TAB 353) terminated employment with Coles Supermarkets or eligible for choice of fund." Group 5 RST.0127.0001.0321 "Please be aware that prior to transferring a benefit to (TAB 324) another fund, we need to ensure that you have terminated employment with Coles or eligible for choice of fund." Group 6 RET.0013.0001.0740 .(TAB 394) "Please be advised that we are unable to complete your request as we require your employer (Coles Supermarkets) to confirm that you have either ceased employment or have approved to pay contributions into your nominated fund." Group 7 RST.0127.0001.0035 (TAB 412) "Unfortunately we are unable to process this request due to the following outstanding requirements: We require an employment separation certificate or a termination date in writing from employer." Group 8 RET.0013.0001.0944 (TAB 413) "On 3 April 2017 we received your transfer request and as our records indicated that you were still employed by Coles Supermarkets, on 6 April 2017, we wrote to you requesting either an employment separation certificate or a termination date in writing from your employer as assurance that you had received your full contribution entitlement prior to transferring your funds." RET.0013.0001.0778 (TAB 404) "we wrote to you on 10 March 2017 requesting that your employer provide a termination date in writing; complete the employer declaration on section four of the enclosed form or for you to provide a separation certificate." RET.0011.0002.0478 (TAB 414) "Prior to transferring a benefit to another fund or making a claim payment, the fund rules at the time required Rest to ensure that we had received advice of your termination date from your employer MacDonald's to ensure that the final contribution had been received. We wrote to you on that same date to advise we were unable to proceed with your request as we required a termination date from your employer." RET.0013.0001.0351 (TAB 317) "Prior to transferring a benefit to another fund, we need to ensure that all contributions have been received following the receipt of written confirmation from the employer of the termination date, or that we have received an employment separation certificate. This is to help us ensure that all contribution entitlements have been received prior to the closure of the account. It is not practical to close an account until the final contribution has been received from the employer and in some cases a full transfer cannot be actioned unless a member is terminated from employment. Usually, when a member is terminated, REST can be sure that all contributions for the member have been received." 1. ASIC has made the following points. 2. First, groups 1 and 2 are similar. In each case, the statements are brief, pro forma and expressed in mandatory language. In each case they are preceded by a refusal to complete the member's prior request to transfer their full superannuation balance. ASIC says that the reader is left with the conclusion that their request was refused because of the absence of the information that was sought and that REST positively requires or needs that information. 3. Second, groups 4, 5, 6 and 7, despite their minor variations, would be understood by the reader in the same way. The mandatory language remains the same, as does the context. 4. Third, groups 3 and 8 are different. Although the language is more expansive, ASIC says that the context dictates that to an ordinary and reasonable member of the fund, the statements would be understood as connoting a mandatory requirement in order to process the transfer request. 5. Now according to ASIC, the certification requirement representation was often made alongside the declaration requirement representation. That is because if a member did not obtain a declaration in accordance with the declaration requirement representation then they were required to provide either a separation certificate from an employer, or a date of termination. They were effectively presented as alternative methods of establishing that the REST employer was no longer required to make contributions in respect of that member. 6. And like the declaration requirement representation, ASIC says that the certification requirement representation was communicated in mandatory terms. On the form, under section 3, where the person said that they had completed their employment, the form required that they provide a termination date. And once again, so ASIC says, the checklist in section 12 emphasised the requirement that all sections be completed. 7. Further, ASIC says that the written representations made in the form to all REST members considering a rollout of their entire account balance were reinforced orally. For example, person A spoke to a REST employee, and said that she understood she was "legally entitled to do that". She was told that confirmation was required from her employer that no further contributions would be made. ASIC says that this was put in absolute terms, and was not put as a matter about which reasonable minds could differ or which was merely a matter of REST's practice. She was told in addition that REST required a "termination date to confirm they [the employer] won't pay any more to REST". 8. Similarly, according to ASIC, person C was told by a representative of REST that REST received the paperwork but "were unable to process it because we do – we're waiting on a term[ination] date from the employer. So that's all you need to give to us for that to go through." 9. Further, ASIC says that the same statements or statements to similar effect were made on other occasions. Analysis 1. Now ASIC has pleaded that REST made representations to its members who sought to transfer the whole of their superannuation balance out of the Trust that their request could only be processed where they obtained a separation certificate from the member's employer or provided a date of termination. 2. Now again, and in essence, when ASIC alleges that REST represented that a member's transfer request could only be so processed, its case is that REST was making a representation about what was required by the SIS Regulations. The representation is said to convey information about what REST required before it would process a member's transfer request. ASIC's case is that the representation was that this information was required or at least that the request was permitted under the SIS Regulations. 3. Let me say something about ASIC's case concerning the forms. 4. ASIC alleges that the certificate requirement representation was conveyed in the form at sections 3 and 11. But the statements in these sections do not convey the alleged representation. 5. The statements do not refer to a separation certificate. Rather, the statement refers to "confirmation of [the member's] employment status". The phrase "employment status" does not necessarily refer to a separation certificate as "employment status" may refer to a status of employment that is current and ongoing. 6. Further, the statement relied on by ASIC refers to both "confirmation of [the member's] employment status from [the member's] employer or receive a final contribution to [the member's] REST account (if applicable)". The reference to a final contribution provides an alternative means of effecting the transfer request. And if that is correct, then there is no representation that the provision of a separation certificate or date of termination was the only way to effect the transfer. 7. Further, the statement that REST "may not be able to pay my benefit …" represents that there is the possibility that REST may not be able to pay the benefit if one of the identified types of information is not received. It is not a representation that a request could only be processed where a separation certificate or a termination date was provided. 8. Now ASIC alleges that the certificate requirement representation was made in writing on 110 occasions and divides these occasions into eight sub-groups. 9. Now as to the statements in groups 1 to 8, they do not satisfy the necessary elements to convey the certificate requirement representation, largely for the reasons advanced by REST. 10. First, the statements in group 1 did not convey the certificate requirement representation. The statement made to person A on 17 December 2015 refers only to a termination date being required from the employer. It does not say that another option was to obtain a separation certificate from the member's employer. Accordingly the representation as alleged by ASIC, which has the alternative of a separation certificate as an element, is not made out. 11. Second, the statements in group 2 do not convey that the member's transfer request could only be processed where they obtained a separation certificate or provided a termination date. Not only is this not conveyed in the relevant text relied on by ASIC, but the subsequent text requests that the member ask their employer to complete part 4 of the form. As such, the statement communicates to the member that there is an alternate means of effecting a rollover (the employer declaration). 12. Third, the statement in group 3 refers to the fact that REST has contacted the member's former employer and confirmed termination of employment. Further, the statement only refers to a termination date and does not refer to the alternative element of a separation certificate. 13. Fourth, the statement in group 4 does not convey that a termination date or separation certificate was required from the member. Rather, the letter states that REST confirmed with the member's employer the termination date or that a final contribution had been received, and that the full transfer was processed without the member providing this information. Further, the letter states that REST would have processed the member's rollover if they were eligible for choice of fund. 14. Fifth, the letter containing the statement in group 5 states that REST would have processed the member's rollover if they were eligible for choice of fund. As such, there is no representation that provision of a separation certificate or date of termination was the only way to effect the transfer. 15. Sixth, the statement in group 6 does not refer to either a separation certificate or termination date. Rather, the statement is a general request for information from the member's employer that the member has ceased employment or that the employer has approved payments to an alternate fund. 16. Seventh, the letter containing the statement in group 7 was sent to the superannuation fund that the member was seeking to transfer into. As such, the statement was not conveyed to the member. 17. Eighth, the first two statements in group 8 include a request that the member provide "the employer declaration" as an alternate to providing a termination date or separation certificate. So, there is no representation that the provision of a separation certificate or date of termination was the only way to effect the transfer. Further, the second letter states that "as 12 months have passed since your last contribution from Liquorland was received, we have processed your transfer". This provided a further circumstance in which the transfer process could be effected. 18. Ninth, the third statement in group 8 is contained in a letter dated 22 January 2019. Even if it was accepted that the statement in the letter contains the certificate requirement representation, the statement in the letter was made outside of the relevant period. But in any event the statement refers to the fund rules. 19. Tenth, the fourth statement in group 8 was in a letter sent to the member's financial advisor after the member's request for the whole of their superannuation balance to be transferred was processed. The statement that REST needs to ensure "that all contributions have been received following the receipt of written confirmation from the employer of the termination date, or that we have received an employment separation certificate" relates to the member's outstanding contributions from their employer. This was the reason cited by REST for refusing to process the transfer request at the time. 20. Now ASIC says that the context of the statement would be understood as connoting that the certificate requirement representation was a mandatory requirement in order to process the transfer request. But such a conclusion is not warranted given the broader context of the letter. 21. Let me turn to the alleged oral representations. 22. ASIC alleges that the certificate requirement representation was made orally on 16 occasions. 23. Now the certificate requirement representation is not made out in ASIC's exemplar instances. For example, the statement made to person A on 7 January 2016, which I have set out earlier, does not satisfy the necessary elements to convey the certificate requirement representation because of the following matters. 24. First, the statement does not refer to a separation certificate and, as such, the statement does not convey that the member's request to transfer the whole of their superannuation balance out of REST could only be processed where they obtained a separation certificate from their employer. 25. Second, the references to "termination date" do not convey that a request could only be processed where the member provided a termination date. 26. Third, the statement communicated to the member that there was an alternate means of effecting a full rollover by providing "confirmation from Woolworths that they will no longer be making any more contributions to REST". As such, there was no representation that obtaining a separation certificate from the REST employer or providing a termination date were the only ways the member's request could be processed. 27. Further, as to the statement made to person C on 15 January 2018, I have addressed this earlier when I discussed the declaration requirement representation. 28. Let me turn to the broader extrapolation question. Inference that 31,261 letters to members contained the certificate requirement representation 1. ASIC points out that generally speaking a template response to rollover requests was sent by REST to members. 2. ASIC contends that an inference should be drawn that REST sent 31,261 such letters to members who requested to transfer their whole superannuation balance which contained the certificate requirement representation. 3. But nothing in the material before me including the evidence from ASIC's data analyst provides a proper basis to draw an inference as to how many letters were sent containing the certificate requirement representation, assuming that it was made. 4. Further, the data analyst did not review any of the 31,261 letters to which he referred to determine whether they contained the so-called certificate requirement representation. His more general evidence was that during the relevant period REST sent 31,261 letters to determination members who requested to transfer their whole superannuation balance. 5. Now ASIC seeks to infer that all such letters included statements that the member's request could only be processed where they obtained a separation certificate from the member's employer or provided a date of termination. But this is problematic. 6. First, an examination of some of the letters within the 31,261 letters referred to by the data analyst shows that those letters did not necessarily follow the form of the template letter. There are letters included within the 31,261 letters referred to by the data analyst which make no reference to an employment separation certificate or a termination date. 7. In the letter of 7 December 2016 to person F, REST refers to having recently received person F's benefit payment request form, and says that in order to process such request she needs to "provide a certified linking document as proof of your name change from …". No reference is made at all to an employment separation certificate or a termination date. 8. Further, in the letter to person C dated 26 July 2016, nothing is said about an employment separation certificate or a termination date. Rather, in this letter REST refers to having received person C's benefit payment request, and says that it is unable to process the request before the following information is received: "certified name change from … in the form of a decree nisi, deed poll or marriage certificate. Also we require a certified copy of Identification". 9. Further, there are letters that were not sent to a member but rather to the member's new fund. The new fund is not an agent of the member, and so any representation was not made to the member. Further, as REST points out, it is also unlikely that a letter sent to another superannuation fund would be likely to mislead that fund as to the requirements of the SIS Regulations. 10. Further, there are letters that do not follow the template, and which request that the member ask their employer to complete the employer declaration form. 11. Second and in any event, it is apparent that the s 912C request and the data analyst's analysis would have captured letters which did not make the so-called certificate requirement representation as REST correctly points out. The question of characterisation 1. Let me turn to the question of characterisation. 2. In Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486, the plurality said (at [33] and [69]): … While it is to be doubted that the proposition which ASIC identified is accurately, or at least sufficiently, described as a statement of "fact", it is ultimately unprofitable to attempt to classify the statement according to some taxonomy, no matter whether that taxonomy adopts as its relevant classes fact and opinion, fact and law, or some mixture of these classes. It is necessary instead to examine more closely and identify more precisely what it is that the impugned statements conveyed to their audience. … … What message is conveyed to the ordinary or reasonable member of the intended audience cannot be determined without a close and careful analysis of the facts. In this, as in so many other areas, the facts of and evidence in the particular case are all important. 1. In Australian Securities and Investments Commission v Dover Financial Advisers Pty Ltd (2019) 140 ACSR 561, after referring to Forrest, O'Bryan J said (at [112] and [113]): If a statement is likely to be understood by recipients as one of opinion, it follows that the recipients would understand that the statement only reflects the speaker's belief in the statement, not that the matter stated is necessarily true. In some circumstances, a statement of opinion might also convey an implied representation that the speaker had reasonable grounds for making the statement, but that will not always be the case … In an abstract sense, a wide range of statements might be characterised as opinions, not facts. This includes statements about scientific matters, where a statement may reflect a widely accepted view about a matter but, strictly speaking, the statement is one of opinion. It is equally true that, at a certain level of abstraction, every statement about the law or legal rights can be characterised as an opinion. Ultimately, though, the relevant question for the purposes of the prohibition against misleading and deceptive conduct is: what would be understood by the recipient of the communication? In my view, clients receiving the Client Protection Policy would be likely to understand the Introductory Clause as a statement of fact for the following reasons: (a) the statement is made in emphatic terms, and is not qualified by express words of opinion or belief; (b) the statement is contained in a contractual or quasi-contractual document, not in an advisory document; (c) the statement is made by a commercial supplier of financial services, not by a lawyer; and (d) the statement is received by a retail client seeking financial advice. 1. ASIC says that the representations are to be characterised as unqualified factual statements. ASIC rejects REST's characterisation that the representations (if made) were statements of REST's practice or its opinion. 2. ASIC says that each of the relevant statements conveyed a reason for declining the member's transfer request, and a statement about what the member was entitled or required to do. REST's relevant form was expressed in determinative, authoritative language. 3. ASIC says that none of the statements contained any express suggestion that they were statements of REST's practices or opinion. It is said that none of the hallmarks of a statement of opinion were present. ASIC says that they were not, in their terms, statements of judgment or belief of something as probable, though not certain or established. ASIC says that REST's statements were likely to be understood by members as statements of fact. 4. Further, ASIC says that there was nothing to suggest that REST's statements were constrained or qualified as being limited to a summary or description of REST's practices. 5. Further, ASIC says that the distinction between a representation as to REST's practices and the law is illusory. It is said that a reasonable person would assume that REST's practices would be informed by and consistent with the law. Accordingly, ASIC says that a statement about REST's practices is tantamount to a statement about the law. It is a distinction without a difference. 6. As a fall-back position ASIC says that, in any event, representations are capable of multiple meanings. A representation capable of multiple meanings may still be misleading or deceptive if the offending meaning is one that would be reasonably open and might be drawn by a significant number of people to whom the representation was made. 7. Further, ASIC says that even a statement of belief or opinion may convey that there is a basis for it. A statement of belief or opinion may be found to be misleading notwithstanding that maker's honest belief in its truth because to the target audience that statement has been presented as one of fact, and not of opinion or belief. 8. ASIC says that in the cases of the partial transfer representation and the $5,000 representation, they were statements as to the limited things a determination member was able to do if they wanted to complete a full rollout but remained employed by a REST employer. 9. Further, ASIC says that in the case of the declaration requirement representation and the certificate requirement representation, they were statements as to what information or declarations a determination member had to provide to REST to complete a full rollout of their superannuation. 10. Further, ASIC says that, ultimately, the representations were false on a proper analysis of the SIS Regulations. But it says that it does not follow that each representation could properly be understood as being about the SIS Regulations. 11. Further, ASIC says that in this instance, identifying what would be understood by the recipient of the communication involves considering whether members of REST would have understood the representations as being either a statement of something as probable, although not certain, or of no more than a practice with no implications for the ability of the member to rollover their superannuation. 12. And ASIC says that it is relevant to this analysis that REST members disproportionately included young people who had commenced their working life with retail or service employers, often in a part time or casual role, and individuals on a low income, with a relatively small superannuation balance. 13. Now I should say here that I accept that I can proceed on the basis that members of REST were not financially or legally sophisticated, and were dependent in many respects upon the information provided to them by the fund to advise them as to when and how they could access the funds held by REST. 14. I also accept broader contextual matters that are relevant to the characterisation of the representations. REST is the trustee and those to whom it provided information were members of the fund. It effectively controlled the circumstances in which members could access their funds. A member was not provided with any alternative views. And REST would be the determiner of whether the member would be permitted to transfer their funds out of their REST account. 15. ASIC says that such context makes it more likely that a member would regard REST's statements about what the member could and could not do in order to roll over their superannuation as authoritative, and not merely expressions of its opinion or statements of its practice. 16. ASIC also says that the proposition that each representation was proffered merely as a statement of REST's practice rather than as a mandatory requirement with which the member had to comply does not withstand scrutiny. It says that members were not concerned to know what REST's practices were as a matter of theoretical interest. They wanted to know what the requirements were for them to effect the rollover of their funds. REST in turn was interested in telling members what they were obliged to do to effect this rather than merely to inform them as a matter of hypothetical interest as to its practices. ASIC says that that is the only reasonable way that the representations would have been interpreted by members. 17. Further, ASIC says that it is relevant that persons B to D understood that they were being told about what they could or could not do with their superannuation. Person B understood she "could not move all of my money out of REST unless I was not working for Big W anymore". Person C understood that the reason that she could not complete her whole of balance transfer was that her employer, Bunnings, had not taken all the steps that were required. She gave evidence that "REST seemed to be so confident and caused me to question myself and my rights". Person D received a letter telling him that he was required to supply a termination date from his employer. He believed he was not entitled to make a full transfer because he was still working at Officeworks. 18. ASIC says that whilst not determinative, the understanding of these individuals is relevant to the proposition that ordinary members of the class would have understood the representations in the manner contended for by ASIC. 19. Further, ASIC says that REST's approach does not engage with the reality that REST made the representations in circumstances where it had adopted a competitive position that it would not permit a whole of balance transfer where the person remained employed by a REST employer. 20. Further, ASIC says that whether a literal or more contextual approach to the statements is warranted depends upon the characteristics of the class of persons to whom they were made. It is said that in the context of the characteristics of REST's membership, the statements made by REST were likely to be understood as statements about what members could and could not do. 21. Further, ASIC says that the fact that the interpretation of a statement is a matter about which reasonable minds could differ is not to the point. A statement will be misleading or deceptive if any reasonable interpretation of it would lead into error a member of the class who can be expected to receive it. Analysis 1. I do not accept ASIC's case on characterisation. 2. But in any event ASIC's case fails at the threshold as the interpretation that it puts forward in relation to reg 6.35 is not the correct one. 3. But even if REST's practice was not compliant with the SIS Regulations, the following points may be made. 4. The alleged representations to the extent that they were made were statements in respect of REST's practice as a matter of fact. So, ASIC's case fails because even if REST's understanding of the law was incorrect, the representations would not be false, misleading or deceptive. They accurately reflected REST's rules and practice at the time. 5. Alternatively, to the extent that the alleged representations were a statement as to the law, that is, what was required by Div 6.5 of the SIS Regulations, the statements were no more than a statement of REST's opinion of the law, that is, the application of Div 6.5 of the SIS Regulations, which opinion was honestly and reasonably held. I will elaborate on the factual matrix relevant to this latter aspect later. 6. Now in order to succeed, ASIC had to establish that the statements on which it relies conveyed a representation about the member's rights under the SIS Regulations, as opposed to conveying a representation about how REST dealt with requests under the applicable provisions of its rules. But the statements on which ASIC relies did not refer to Div 6.5 of the SIS Regulations or more generally to them. 7. First, a number of the documents on which ASIC relies referred to REST's business practice, rules or administrative practicality, for example, "REST's requirement", "the fund rules at the time required", REST's "administration purposes", it being "not practical", and "our business practice". 8. Second, although ASIC relies on REST's forms, those forms are consistent with REST setting out its practice and position under its rules, as opposed to making an implied representation about external legal standards imposed by legislation. In that regard, the statements relied on by ASIC are quite different from those in Dover Financial where the document in issue was headed "Client Protection Policy" and where it expressly stated that it set out "a number of important consumer protections designed to ensure every client gets … the maximum protection available under law", in circumstances where the document in fact included a significant number of "limiting clauses" which purported to remove mandatory consumer protections. That is not comparable to the context that I am considering. 9. Third, insofar as the statements did relate to the legal position under the SIS Regulations, the statements were no more than a statement as to how REST understood and applied those regulations. And of course, if any statement by REST is considered to be a statement of its view of the law, that is, its opinion, then such statements will only be relevantly misleading or deceptive if it did not hold that view honestly and reasonably. And in the present case there can be little doubt that REST did hold its view as to the operation of the SIS Regulations in the context of its practice both honestly and reasonably. I will discuss this matter in more detail shortly. 10. Fourth, ASIC refers to the language used being mandatory. But this says nothing about whether what is being referred to is mandatory as a matter of REST's rules, in which case it was not misleading, or was mandatory as a matter of external legal requirements, being the SIS Regulations. 11. Now as part of its submission about the use of mandatory language, ASIC refers to a letter which expressly says: "Under the rules of the Fund, you are permitted to transfer the entire balance of your account upon confirmation that no further contributions are to be received from your employer." The letter then goes on to advise that the member was "only permitted to transfer your account, provided a minimum of $5,000 is retained in REST". But given the express statement about the "rules of the Fund", this letter would convey to the member that the statements made were representations about REST's practice under its rules. 12. Fifth, ASIC contends that its characterisation of the statements is supported by the fact that the witnesses who gave evidence understood that they were being told about what they could or could not do with their superannuation. But ASIC has not adduced evidence that members understood that when they were told what they could or could not do with their superannuation, they understood this to be a statement of external legal requirements under the SIS Regulations rather than a statement of REST's rules. 13. I will return to some of these themes again. 14. But at this point I should say that I am against ASIC on the question of characterisation in terms of how a reasonable member would have understood the statements being made to them. The statements were as to REST's practices under its rules. Moreover, if they could be construed as a statement concerning the legal requirements under the SIS Regulations, then they could only reasonably be understood as a statement of REST's opinion, which was reasonably held. 15. Let me now turn to that question. Was REST's opinion reasonably held? 1. Now in my view and as I have indicated, the statements made by REST were factual statements as to its practices, which statements were correct. 2. But if one goes further, such that the representations are properly to be characterised as statements of REST's opinion of the law, then the question is whether its opinion was honestly and reasonably held. 3. Now as ASIC has put it, the relevant opinion was to the effect that a member who continued to be employed by a REST employer had an ongoing interest in the fund, such that the member could only ever make a partial transfer request whilst that employment was ongoing. ASIC refers to this as the ongoing interest argument. I will not quibble with the label, although REST challenges this formulation in relation to ASIC's pleaded case. 4. Now ASIC says that REST's opinion of the law was not reasonably held. 5. First, it says that in order to assess the reasonableness of an opinion held by a corporation, it is necessary to identify the individual or individuals whose knowledge is to be attributed to REST. ASIC says that only the knowledge of the board is relevant, and that members of the board did not hold the relevant opinion, let alone reasonably. 6. Second, ASIC says that REST had to adduce evidence of facts known to the relevant knowledge holder which were sufficient to induce that state of mind in a reasonable person. ASIC says that REST failed to adduce such evidence. 7. Third, ASIC says that prior to April 2018, the advice received by various people within REST was ad-hoc, haphazard and perfunctory and displayed no analysis of the trust deed or critical engagement with the ongoing interest argument. As such, ASIC says that any opinion of the law formed on that basis could not be reasonably held. 8. I will return to the detail of these arguments later, but before proceeding further I should say something more concerning the relevant factual chronology, including the legal advice received by REST and REST's dealings with APRA. The relevant chronology - dealings with APRA and external legal advice 1. REST commenced its preparations for the introduction of choice and portability in April of 2005 by convening what has been described as a choice committee. It met several times, and concerned itself in part on each occasion with the approach which REST could take to reduce the competitive impact of each of choice and portability on REST's member retention and its funds under management. 2. On 15 April 2005 there was a meeting of the choice committee chaired by Mr de Bruyn. This was its first meeting. There was a general discussion about choice of fund. There was a heightened awareness of industry competition, which could potentially give rise to a significant outflow of funds from REST given the portability of benefits envisaged. 3. On 12 May 2005 there was a further meeting of the choice committee again chaired by Mr de Bruyn. There was discussion concerning increasing the $1,200 transfer limit. It was recommended that "the limit be raised to $5,000 at the earliest practicable opportunity". This was all in the context of members who were all attached to a REST employer. 4. I note that the relevant recommendation to the board stated that in the 12 month period prior to March 2005, 227 members had partially transferred over $3.2 million out of REST, and it had been calculated that had a minimum of $5,000 been imposed rather than $1,200, approximately $700,000 would have been retained and 51 of those transfers would not have been processed at all. 5. On 26 May 2005, the board of directors resolved to increase the limit to $5,000. 6. On 5 September 2005, Ms Sue Brown, special counsel at Phillips Fox, emailed Ms Brenda Mills, the legal & compliance manager of REST, copying in Mr Peter Charteris, a partner at Phillips Fox. The email referred to REST's request for a brief summary of the fund's legal obligations in relation to portability, following the changes to the SIS Regulations effective 1 July 2005. 7. The following written advice was given: In summary: * previously, the Fund's obligation to make a transfer payment following a member request did not apply in respect of a member until no employer contributions had been received for his or her benefit for 6 months. * after 1 July 2005 the above restriction ceased to apply, so, subject to the paragraph below, the Fund is obliged to make a transfer payment on receipt of a request from any member. * however, the trustee may still refuse to make a transfer payment if: * the intended receiving scheme will not accept the transfer payment; or * the amount to be transferred is part only of the member's interest in the fund and the transfer would leave an account balance of less than $5,000*; or * the trustee has made another transfer payment in respect of the member in the 12 months before it received the request. * *for this purpose, where there is an ongoing employer contribution obligation in respect of a member, we take the view that any transfer request can be treated as a transfer of part only of the member's interest in the fund. In practice, this means that, where a request for portability transfer is received in respect of an employment sponsored member and there have been no recent contributions and no notice of leaving employment, you will need to institute procedures to determine whether the employer's obligation to contribute in respect of the employee continues. The above summarises the position under division 6.5 of the SIS Regulations, and sets the outer limits of the Fund's obligations in this respect. However, the Fund may decide to formulate business rules which are less restrictive than the above. For example, they may set a lower threshold for partial transfers - I believe you mentioned an amount of $1,200. This is acceptable. It may decide not to impose a "one-a-year" restriction, or may only do so in respect of partial transfers. This is also acceptable. Note that in our comments on 'Zest', and on the Industry PDS, we assumed that you would apply the statutory $5,000 floor. This should be addressed in the next drafts (and in the draft Personal PDS) depending on what business rules you have adopted or decide to adopt. 1. In her email, Ms Brown also provides example scenarios to show the operation of the rules, including the following scenarios: Member A has an account balance of $4,000. He requests a transfer of $4,000, leaving a balance of zero. There is no ongoing employer contribution obligation in respect of the member. The Fund must pay the transfer amount requested. Member B has an account balance of $4,000. He requests a transfer of $4,000, leaving a balance of zero. There is an ongoing employer contribution obligation in respect of the member. The Fund need not pay the transfer amount requested. 1. The summary did not call for a review or analysis of REST's practices under the choice and portability regime, nor any analysis of the compatibility of the proposed rules with REST's trust deed. 2. The ongoing interest argument was set out as follows: … where there is an ongoing employer contribution obligation in respect of a member, we take the view that any transfer request can be treated as a transfer of part only of the member's interest in the fund. In practice this means that, where a request for portability transfer is received in respect of an employment sponsored member and there have been no recent contributions and no notice of leaving employment, you will need to institute procedures to determine whether the employer's obligation to contribute in respect of the employee continues. 1. On 8 September 2005, there was an article published in the Australian Financial Review. It reported that there were allegations that people were being unlawfully blocked from switching their contributions to a new fund. 2. On the same day, Ms Mills emailed Mr Charteris stating: Could you urgently review the business rules – note we got page 1 in the Fin Review this morning re portability. Also advise the $1200 rule is in until 1 January 2006 when it will go to $5,000. therefore need to change annual report accordingly. 1. The email attached a draft mark-up of certain provisions of REST's business rules. 2. On 9 September 2005, there was a meeting of REST's board of directors. The minutes to this meeting refer to a report by Mr Damian Hill, the administration manager of REST, in the following terms: Mr Hill reported that some funds, including REST, had been mentioned in a Financial Review article in relation to the difficulty in transferring out of these funds. He confirmed that there was no substance to the article and that Phillips Fox had confirmed that REST's portability practices were correct. REST's portability rules were already more relaxed that many in the industry. The article would be circulated to Directors with the usual "media clips" release 1. The issue of the newspaper article was the fourth substantive matter canvassed by the board in its 20 minute meeting. The minutes record only that REST had been mentioned in relation to difficulty in transferring out of the fund. Mr Hill gave the report. He was not called to give evidence. In the circumstances, ASIC says that I should draw the inference that any evidence Mr Hill might have given about this issue would not have assisted REST. I will return to this topic later. 2. ASIC says that the board were not specifically informed that there were allegations of unlawful conduct by REST. ASIC says that this would have called for closer consideration of the issue. 3. Given the timing, and the way that the issue was raised, ASIC says that I can be satisfied that the board did not undertake an analysis of the ongoing interest argument, nor was it presented with enough information to allow it to do so. ASIC says that the legal advice relied upon by REST in its particulars was not provided until after the board meeting, and there is no suggestion that this document was itself provided to the board. 4. On 9 September 2005, Mr Charteris emailed Ms Mills with a copy of a letter of advice. The letter of advice stated: Part rollover/transfer is not limited to mandatory contributions, it applies wherever the employer has a contribution obligation – award etc or deed of application. … Please let me know if you would like me to redraft the business rules or whether I should simply review the revised draft. 1. This did not expressly concern the newspaper article. This letter was sent after the board meeting. 2. The instructions underpinning the letter are not before me. The letter itself includes only one line about portability: "Part rollover / transfer is not limited to mandatory contributions, it applies wherever the employer has a contribution obligation – award etc or deed of application." ASIC says that once again, there is no analysis of the ongoing interest argument, and no consideration of the terms of the trust deed or the tension between the terms of the trust deed and the ongoing interest argument. 3. The legal advice permitted REST to continue an approach to portability which it had adopted. 4. ASIC also says that a trustee under an express trust has an obligation to be aware of the terms of the trust deed and to observe these terms. It is said that trustees are obliged to form their own view about their actions and that REST singularly failed to do so in this context. 5. On 12 September 2005, Mr Charteris prepared mark-ups of the business rules. There was, inter-alia, the following new drafting: Ongoing employer contribution obligation means the employer ahs [sic] an ongoing obligation to contribute to REST of the member either under an award or registered industrial; agreement; agreement or under a Participation deed. 1. On the same day a memorandum was sent to the administration committee, including Mr de Bruyn and Mr Stan Moore, which enclosed a draft of section 6.0 of the business rules. The draft business rules stated inter-alia: 6.1 Definitions … For individual transfer out where employer contributions will continue to be paid into REST on the member's behalf, REST requires that the member leave a balance of $5,000 in his or her account after the transfer is processed (or such lower amount as the Trustee may approve). This requirement must be communicated to the member at the time the member makes the request to transfer out. … 6.3 Individual Transfers Out … 6.3.2 Where a request for a partial transfer is received and the transfer would result in the member's account balance falling below $5,000, the transfer request will be refused and the administrator will write to the member to advise the member. A partial transfer applies where: (a) the member requests only part of their account balance to be transferred to another superannuation entity; and or (b) if the member requests a transfer of their full account balance, where the employer has a contribution obligation, via legislation, industrial agreement or deed of application, to continue to make ongoing contributions to REST. 6.3.3 Where a request for a partial transfer is received and the transfer would not result in the member's account balance falling below $5,000, the administrator will action the transfer request in accordance with 6.3.9 (where applicable). 6.3.4 Where a request for a full transfer of the whole account balance, or it is unclear whether the member wishes to make a full or partial transfer, is received for a member for whom no termination date is received, the administrator will contact the member's employer to: * confirm the member's termination date (if applicable); or * confirm whether or not the employer will be continuing to make contributions to Rest on behalf of the member. The administrator may accept the advice of the employer via telephone in this instance providing a file note is made on the member's record. … 6.3.8 Where the member's account balance is below $1,200 ($5,000 from 1 January 2006) and his or her employer advises that further contributions will be made to REST, the transfer request will be refused and the administrator will write to the member and transferring fund to advise of the refusal. … 1. Now in addition, some of the pages in the draft business rules contain a footer as follows: "V:I\Client Partnerships\REST\Business Rules\ Industry Fund\Business Rules May 2005.doc\\sydsvrO1\userhomes\peter charteris\My Documents\Business rules - portability Sept 0SDVII.doc". Clearly, Mr Charteris had a hand in the drafting and I can infer that he considered that they were legally compliant. I should also say that there was a page missing from the copy document provided to me which the parties could not locate. 2. I should say at this point that ASIC complains that there is no evidence of the task that Mr Charteris was asked to carry out, and that it cannot be inferred that he undertook an analysis of the rules, the trust deed or the SIS Regulations. 3. Further, ASIC says that none of this retrospectively validates the approach taken by REST, and does not assist it to establish that it held its opinion reasonably in all of the circumstances. 4. Now as I say, the mark-up prepared by Mr Charteris made its way to the papers before the administration committee. Mr Charteris' changes were all accepted. 5. The minutes record that: "[t]he amendment reflected a required change in procedure as a result of the changes to the portability rules that came into effect from 1 July 2005." ASIC says that this was not an accurate description of why the changes were being made. Moreover, the minutes do not disclose any discussion of the rationale for the changes, being the ongoing interest argument, or the advice apparently received up to that point. 6. On 14 September 2005, there was a meeting of the administration committee. The minutes to this meeting state: A proposal to amend Section 6.0 – Transfers Out of the REST Business Rules was considered by the Committee. The amendment reflected a required change in procedure as a result of the changes to the portability rules that came into effect from 1 July 2005. After discussion, the Committee then: RESOLVED TO approve the changes to Section 6.0 – Transfers Out of the REST Industry Business Rules. Proposed: J de Bruyn Seconded: S Moore This resolution was passed unanimously 1. On 15 September 2005 at 12:13pm, Ms Joanna Pelc, a communications compliance specialist at REST, emailed Mr Charteris and Ms Deirdre Nhan, a solicitor at Phillips Fox, noting that the draft product disclosure statement (PDS) had the following revised wording: You may transfer your benefits out of REST at any time. If your employer continues to make contributions to REST, you can still transfer your benefits to another fund, but you must maintain a minimum account balance of $1,200 in REST. From 1 January 2006 this minimum balance will increase to $5,000 1. On the same day at 2:15pm, Ms Nhan responded that "we confirm that the revised wording…is appropriate for use in the PDS". 2. On 16 September 2005, Ms Pelc requested unconditional sign-off of the PDS. 3. On 19 September 2005, Ms Nhan confirmed by email that "[w]e have reviewed the revised REST Industry PDS" and "[w]e have no further comments and now attach a pdf copy of our sign off in respect of the PDS". There were two documents attached to the email. 4. First, there was a copy of the REST PDS, which included the following statement: You may transfer your benefits out of REST at any time. If your employer continues to make contributions to REST, you can still transfer your benefits to another fund, but you must maintain a minimum account balance of $1,200 in REST. From 1 January 2006 this minimum balance will increase to $5,000. 1. Second, there was a copy of the REST/Acumen Approval Stakeholder sign off form executed by Mr Charteris. Page 1 of the document indicates that it is "[t]o be completed by internal and external stakeholders". Page 3 of the sign off form refers to the obligations of stakeholders and states "[p]rovides legal sign off on the document including… [c]onfirmation that there is no misleading or deceptive statement in the document or material omission. In that regard the lawyer may place reliance on the verifications of the other stakeholders." 2. Let me move forward in the chronology. 3. On or around 1 March 2006, Phillips Fox reviewed a draft letter to determination members and made amendments in mark-up. The letter as amended by Phillips Fox states: Your employer has advised that contributions will continue to be made to REST on your behalf. Because your employer will continue to make contributions to REST on your behalf, your transfer request will be treated as a partial transfer of your account balance. Where there is a partial transfer, then we our rules require you to maintain a minimum account balance of $5,000 in REST after the transfer is processed into which future contributions will be added. To finalise this for you, we will require that you complete the attached REST Transfer out form and return it to us. The form must be fully completed, noting that a minimum $5,000 must be kept with REST. Why not just transfer your benefits? This is not an unreasonable question for you to ask! We appreciate that you've filled in paperwork and hoped that would be all you'd need to do. REST is not deliberately trying to hold up your transfer – we don't want to ruin your relationship with REST by making your decision to transfer some of your benefit unduly difficult. The current legislation sets out that a trustee may refuse to roll over or transfer an amount if the amount to be rolled over or transferred is part only of the member's interest in the fund and the effect of rolling over or transferring the amount would be that the member's interest in the fund from which the amount is to be rolled over or transferred would be less than $5,000. As your employer is still contributing to REST this means you still have an interest in REST. REST considers it appropriate having regard to the various interests of members that where an employer continues to make contributions to REST the partial transfer rules set out above should apply. 1. I have not been provided with any evidence about the request which led to the amendments to the letter. There is no suggestion that the mark-up was considered by anyone of any seniority at REST. 2. There is no evidence that there was any further analysis of the position reflected in the template. 3. On 21 June 2007, Ms Leanne North on behalf of Mr Charteris, now a partner at DLA Phillips Fox, emailed Ms Mills, attaching a PDF of various forms annotated by hand relating to Acumen, a division of REST designed for employers who want to tailor their superannuation offering for employees. These forms included the following: Superannuation Rollover and Withdrawal - Acumen form. This form states 'if you have left your employer you should complete this form to roll your superannuation out of Acumen into another fund'. Request for Partial Transfer of Superannuation – Acumen form. This form states: If you are still employed with an Acumen employer you should complete this form to transfer part of your superannuation out of Acumen into another fund. If no further contributions will be made for you to Acumen and you wish to transfer your entire benefit you will need to complete the government's request to transfer whole balance of superannuation benefits form… You may transfer a part of your account balance at any time providing you maintain a minimum account balance of $5,000 with Acumen. Please note that if your Acumen employer will continue making superannuation contributions to Acumen, you can only transfer part of your superannuation benefit out of Acumen. … I understand that if it is intended that mandatory contributions continue to be paid into Acumen on my behalf after I transfer out, Acumen will only transfer that part of my account in excess of $5,000. In these circumstances Acumen requires that at least $5,000 remains in Acumen in an account in the transferring member's name… 1. These sections were not annotated. 2. On 7 December 2007, APRA sent REST a letter addressed to REST's directors with attention to Mr de Bruyn and Mr Shaw, confirming arrangements for its prudential review with a detailed attachment concerning the information and documents to be addressed by REST. 3. To prepare for this review, APRA requested that REST provide it with 72 pieces of information and documentation, including an "[u]pdate on the Trustee's plans with regard to the requirements for superannuation portability within 30 days – effective from 1 July 2007" (item 69). 4. Mr de Bruyn gave evidence that he did not recall having received it, despite his evidence that it was REST's practice to obtain board approval for a formal response to APRA. There is no evidence of any board consideration or approval of this response. A draft was ultimately prepared by unknown people within REST and settled by Phillips Fox. 5. The response ultimately provided to APRA described a trial by which REST was approving whole of balance rollovers in response to a request made with a Schedule 2A form. It does not appear that the ongoing interest argument was any barrier to REST carrying out full rollovers upon request in 2007. 6. On 14 January 2008, Ms Mills emailed Mr Charteris informing him of APRA's request and requested that he review the attached document titled "Transfers Out". 7. On 16 January 2008, DLA Phillips Fox through Mr Charteris reviewed and marked up the document. As amended by Mr Charteris, the draft stated: Legislative background Transfer of the whole account balance where the member is not retaining an interest (via an employer contribution arrangement (reg 6.35)) must be completed within 30 days after receipt of all information required by the Schedule 2A Form (reg 6.34(5)). … Current procedure upon receipt of a Schedule 2A form Currently REST is trialling the payment of the member's entire account balance from REST upon receipt of a completed Schedule 2A form. This is to meet the intention of the introduction of an industry standard form to simplify the process for members wanting to transfer benefits between funds. This has potential effects on REST which we are monitoring for significance. As the form does not contain any reference to employment, REST cannot determine whether or not employer contributions (and, therefore, the member's interest in REST) will be continuing. We understand that we are REST is entitled to refuse to rollover the whole account balance is there is an employer sponsor arrangement that will be continuing and transfer only the excess balance above $5,000 in accordance with Reg 6.35(1)(b) of the SIS Regs. However, whilst we have the option under the legislation to request information from the member to clarify this, we appreciate that this level of complexity may not be understood by the average superannuation fund member. It is for this reason that have taken the path of transferring the member's whole balance as requested until we can quantify the potential impact on other members. This will include monitoring the number of members who have further employer contributions made to REST after their balance has been transferred and the potential impact on insurance cover for members as a result of transferring benefits. Current procedure upon receipt of a transfer request on another fund's form or other written request (a) Where we have received advice from the member's employer of the member's termination of employment and receipt of the member's final contribution from that employer (ie a rollover rather than a transfer), it is expected that the member's benefit will be processed within service standards (three days). (b) Where we have no advice that the member's interest in the fund will not be continuing via their employer sponsor, we mail to the member a REST transfer out form generally within three days. The need for the member to complete the REST Form serves two purposes: 1. Advise the member that they have the right to request information from REST for the purpose of understanding any benefit entitlements the member may have that may be affected by transferring their benefit under Reg 6.34(4) of the SIS Regs. The Schedule 2A form includes detailed information regarding the type of benefit entitlement that a member may be giving up as a result of the transfer and the right the member has to request information from the transferring fund. Not all funds include such information on their form nor can the REST Trustee be satisfied that this information has been provided by the receiving fund. Therefore, REST has an obligation to be satisfied that the member is aware of his or her rights to request this information at the time of transfer – this appears to be a potentially conflicting obligation for Trustees wishing to transfer benefits for members as quickly and seamlessly as possible. Please note that REST no longer uses its own branded form for transfer protocol requests into REST but issues the Schedule 2A form to assist members and other funds to meet the spirit of the legislation. (2) Request information to determine whether or not the member's interest in the fund will be ongoing. Where it is intended that employer contributions will continue to be made to REST on the member's behalf, REST may transfer that part of the member's interest in the fund exceeding $5,000 under Reg 6.35(1)(b) of the SIS Regs. As mentioned above, the consequences for transferring a member's full entitlement to the fund and then opening an account to accept future contributions where the member's interest in the fund will be continuing would result in additional costs to remaining REST members. The results of the trial for Schedule 2A form whole balance payments may allow REST to reconsider the minimum $5,000 requirement in future. However, this would still not reduce the obligation to contact the member again before transferring the benefit under Reg 6.34(4). REST does not consider it appropriate to contact the member's employer to determine this information. The member's employment status does not remove the member's right to transfer a part of his or her benefit. REST considers it inappropriate to request information unrelated to the member's ability to transfer part of his or her benefit from a party other than the member. 1. REST subsequently provided the "Transfers Out" written statement to APRA, which had also gone to the administration committee. 2. On ASIC's case there were various errors in the document. 3. First, it was said that the following statement was wrong: Transfer of the whole account balance where the member is not retaining an interest (via an employer contribution arrangement (reg 6.35)) must be completed within 30 days after receipt of all information required by the Schedule 2A Form 6.34(5)). 1. Second, it was said that the following statement was wrong: This has potential effects on REST which we are monitoring for significance. As the form does not contain any reference to employment, REST cannot determine whether or not employer contributions (and, therefore, the member's interest in REST) will be continuing. REST is entitled to refuse to rollover the whole account balance if there is an employer sponsor arrangement that will be continuing and transfer only the excess balance above $5,000 in accordance with Reg 6.35(1)(b) of the SIS Regs. 1. In late 2008, APRA queried REST's transfer out practices. 2. On 8 December 2008 at 12:11 pm, Ms Maria Li of REST's legal, risk and compliance team emailed Mr Stuart Watson of APRA, copying Ms Mills and Mr Paul Sayer, attaching a copy of the REST member guide PDS. 3. Later that day, Ms Li and Mr Watson had a telephone call. At 12:34 pm, Mr Watson replied to Ms Li's earlier email with a summary of their discussion. In his email, he requested details from REST relating to how the operational requirements of the portability rules are implemented. 4. At 4:45pm and 4:50pm, Ms Li forwarded Mr Watson's email and a separate email she had circulated internally, to Mr Charteris. 5. On 10 December 2008, Mr Charteris sent Ms Li a letter of advice. This letter of advice contained a draft response to Mr Watson to provide some further detail and elaboration to accurately reflect REST's procedures. 6. On the same day, Mr Rohan Jeffs, director, Mr Hill, then chief executive officer, and Mr Chris Stevens, chief financial officer, met with Mr Watson and Mr Kevin Dent from APRA. A draft document prepared by REST and amended by Mr Hill titled "Notes of Meeting" states that REST and APRA discussed: 10. Portability requests * APRA stated that they had now centralised the feedback loop within APRA, and had received feedback from financial planners in regards to blockages for portability and that among other funds, REST had been mentioned. * Areas of specific concern included the requirement to use a fund specific form, and unnecessary delays in processing transfers. * REST confirmed that it does not force people to use a REST form, as long as all the mandated information is included (e.g. identity checks). * However REST noted that approximately 40% of forms were returned due to incorrect or incomplete information. * REST also noted that due to the award system relevant industrial instrument, members needed to get confirmation from their employers that there would be no future contributions to REST, which obviously adds a delay to the process. * Also if it is a full transfer, REST will may wait until all pending contributions are received (primarily where REST is aware that choice is not available to the member). * Subject to the above, once a valid rollover instruction is received, then REST processes this within 5 business days. * REST noted that it would be happy to respond to any specific queries or complaints received in writing, and could provide statistics to show the general history of rollover information if requested. 1. On 19 December 2008, Mr Stevens emailed Mr Watson, copying Ms Mills, Ms Li and Mr Hill. This email stated, inter-alia: * There are circumstances in respect of REST Industry members where a written statement is required from a member's employer confirming that they have ceased contributing to REST in respect of the member. This will occur where REST's records indicate the employer has contribution obligation to REST in respect of that member. This is to establish whether or not the member has an interest in REST apart from the member's account balance - the benefit of an employer contribution obligation. REST applies a minimum $5,000 account balance where the amount to be rolled over or transferred is part only of the member's interest in the fund, as is permitted by Reg 6.35(1)(b). * If the member after transfer will continue to receive employer contributions into the fund, there is a requirement for a $5,000 minimum balance to be left in the fund. * In circumstances where REST's records indicate that an employer contribution is still to be paid and it is a request for full payment, the transfer request may be placed on hold until the outstanding contribution has been received. The member's interest in the fund, in addition to account balance, is not extinguished until payment (or it is established there is no further right to payment or payment is unlikely, notwithstanding the right to payment). 1. On 12 January 2009, Mr Watson replied to Mr Stevens, copying Ms Mills, Ms Li, Mr Hill and Mr Dent. In this email, Mr Watson stated that: APRA has become aware of details of a complaint regarding delays in the rollover of benefits from the REST fund, which may be at odds with the procedures explained below and cause APRA concerns regarding whether the portability rules under SIS Regulation 6.34 have been satisfied. The actual cases relate to the members; X and Y (sorry no mbr no provided). In both cases the information provided to APRA indicates that staff at AAS asserted that REST rollover forms had to be completed and that the Fund could not accept any other forms. After this advice it appears that REST forms were completed and submitted by the members to the Fund. However further delays were experienced when they were notified (on several occasions) that they had completed the incorrect forms (despite the fact that each time they had completed the ones that had been sent to them). In the case of Y, the member (and their representative) were incorrectly informed that a $2,000 minimum applied where a partial payment was being made. My understanding is that in the case of X, from the time of first receipt of the members' rollover request until payment from the Fund, a period of up to 4 months had elapsed. APRA requests that the Trustee provide confirmation on whether in its opinion it met the portability requirements under SIS Regulation 6.34, in respect to these cases mentioned above. This confirmation should include details of how the Trustee believes that the regulations were met and how it complied with its own policies and procedures in relation to the processing of the benefits, particularly those relating to the receipt and actioning of the rollover request forms. APRA has been advised that an employee of AAS, the team leader of the Transfer Team, specifically advised these members' representative that it was the Fund's policy to only accept REST Rollover forms. APRA recommends that the Trustee confirm with AAS the policies being implemented on the Fund's behalf in this regard, especially in light of the comments in the below email dated 19/12/08. APRA would appreciate a response in relation to this enquiry as soon as possible, but by no later than close of business 16/1/09. 1. On 19 January 2009, Mr Watson emailed Mr Hill copying Mr Dent stating: As we have previously stated to you and the Trustee, APRA is interested in establishing how the Trustee has established a policy and procedure relating to the portability requirements and applied this to the Fund. APRA is using the current examples where problems were experienced, as a means of understanding this policy and procedure. To this end, as stated in our email of 8 December 2008, we would appreciate it if you could confirm if there is a copy of the current policies and procedures relating to the Trustee's application of the portability rules that you were able to now provide. 1. On 21 January 2009, Mr Hill replied to Mr Watson, copying Mr Dent, Ms Mills and Mr Stevens, stating that: Thank you for your email. As discussed the other day, in your email of 12 January, you requested that the trustee provide confirmation on whether in its opinion it met the portability requirements under SIS Regulation 6.34. The Trustee obviously has had to undertake an investigation into the 2 cases raised by APRA. However the question of the Trustee's opinion is one that only the Trustee itself can determine. Ordinarily, that would be at the next meeting of the Trustee which is occurring on 20 February 2009. REST acknowledges that that timing is quite long and not generally in line with the "spirit" of our ongoing communications/relationship as discussed in our meeting of 8 December 2008 (as related to APRA's previous request in respect to DB fund ratios). Consequently, REST is looking to deal with this particular issue using a shortened governance framework at the next Audit Risk and Compliance Committee (ARCC) meeting on 12 February 2009. This shortened process has been determined following discussions with Rohan and confirmed with Joe de Bruyn. We will correspond with APRA following that meeting expressing the Trustee's opinion as well as outlining the facts, the relevant timelines and the procedures that are in place in respect to portability. Following our meeting on 8 December 2008, REST undertook a process to better document communications protocols with the various regulators with which REST has contact. Brenda completed the first draft on her return from holidays and it has been updated following comments by REST Management and Rohan. It is intended that this will be considered by the ARCC at its meeting on 12 February and referred to the Board for approval at its meeting on 20 February. Subject to that approval, we'll then have a governance framework for communicating with regulators that will be largely risked based and more reflect our discussions on 8 December 2008. Please note that there may still be regulator communications that require the full Board to consider before release (as appropriate). Until that approval we continue to engage with APRA on a day to day basis in the following ways: * Statutory statistical information (annual and quarterly returns) * Ad-hoc statistical requests (currently for example, the incidence of investment switching) * Breach reporting as required * Industry liaison groups * Compassionate benefit requests * Statutory notices Rohan is currently in Queensland (and will be until early February) and is contactable periodically. If you wish to speak to him, please let me know (including times that would suit you) and I will try and arrange for him to contact you during those times. 1. REST engaged Mr Charteris' advice on its draft response to APRA on 14 January 2009 and 27 January 2009. 2. On or around 14 January 2009, 16 January 2009 and 29 January 2009, DLA Phillips Fox reviewed and amended in mark-up REST's draft response to APRA. 3. On 29 January 2009, Ms North on behalf of Mr Charteris sent Ms Mills an email enclosing two documents. 4. One document was a draft letter to Mr Watson. This letter refers to APRA's request for a response in relation to two portability complaints made by REST members and stated: As both members were receiving employer contributions, contact needed to be made with the employers confirming that either the member was still employed or in X's case, a written statement from his employer was required to confirm that it would cease to contribute to REST fund in respect of the member. Once this was received, then the full rollover could be processed. Y was still a Woolworths employee working under a certified agreement. As such those employees are not offered choice of fund, however they can partially transfer monies but must keep a REST account with a minimum account balance of $5,000 open to receive further Woolworths contributions. … We note that regulation 6.33(3) of the SIS regulations requires that if a trustee requires further information in relation to a full or partial transfer then the trustee must within 10 working days after receiving the request, ask the member for the information and if the trustee has not received the information within 10 working days after making the request, the trustee must make reasonable further enquiries of the member to obtain the information. Except for two occasions, additional information was sought by the Trustee within the required timeframe. … SIS regulation 6.34(5) (b) sets out that a trustee must rollover or transfer the amount as soon as practicable and in any case within 30 days after the trustee has received all further information requested. Background Information – X … Fund records showed that X was still employed and receiving contributions from an employer and accordingly, his rollover must be partial (unless employer contributions were to cease). On 13th November 2008, X was sent a letter requesting either a separation certificate or termination date from his employer. On 25th November 2008, the member's adviser called our contact centre advising that the member had not ceased employment. As a result he was advised we would need to have confirmation that the employer had accepted the member's choice of fund nomination and confirm to REST details of final contributions being paid to REST. … Background Information – Y Y is a Woolworths employee and as Woolworths employees are employed pursuant to a certified agreement they are not offered choice of fund… On 13th November 2008 Woolworths confirmed via email that Y was still employed by them, so any rollover requested by Y could only be partial… Further she was advised that a $5,000 balance must be kept in her account, since she was still receiving employer contributions. The $5,000 balance requirement for a partial transfer is disclosed on the information accompanying the partial transfer form. 1. The draft letter had the footer "117930228\0382495\PHC01". "PHC" is a reference to Mr Charteris. 2. Further, attached to the email was also a letter of advice from Mr Charteris addressed to Mr Hill, the CEO, concerning APRA's complaint investigation. 3. On 12 February 2009, the audit, risk and compliance committee convened a meeting. Mr de Bruyn was present. The papers for this meeting included, among other things, paper 7.2 titled "APRA Portability matter". This paper stated: We have prepared a draft response, attached. … We note that regulation 6.33(3) of the SIS regulations requires that if a trustee requires further information in relation to a partial transfer then the trustee must within 10 working days after receiving the request, ask the member for the information and if the trustee has not received the information within 10 working days after making the request, the trustee must make reasonable further inquiries of the member to obtain the information. 1. It also enclosed, inter-alia, a draft letter to APRA and also Mr Charteris' letter of 29 January 2009. 2. The minutes to this meeting state that the CEO provided an update in relation to item 7.2. Following a discussion of this item, which Mr Charteris attended, the committee resolved that "the draft response to APRA, as amended, be approved and signed by the CEO and sent immediately to APRA and advised to the board for endorsement of such action". 3. On 13 February 2009, Ms Mills emailed Mr Watson attaching a letter signed by Mr Hill in relation to the two portability complaints. 4. On 19 February 2009, Mr Watson emailed Ms Mills, copying Mr Dent, proposing some amendments to REST's proposed agenda for their meeting scheduled for 23 February 2009. 5. On 20 February 2009, REST's board convened a meeting. The papers for this meeting included paper 10.6 titled "APRA portability matter", which enclosed an unsigned copy of the letter to APRA with "117930228\0382495\PHC01" in the footer, and a signed copy without that footer. 6. The board approved the response to APRA, upon the recommendation of the audit, risk and compliance committee. The committee and the board sought the benefit of written legal advice in relation to an unrelated timing issue. 7. On 23 February 2009, Mr Jeffs, Mr Hill, Mr Stevens and Ms Mills met with Mr Watson, Mr Dent and Ms Lily Peng from APRA in relation to 10 different matters, including portability requests. The minutes to this meeting state that "APRA said that [portability requests] was a key issue and would respond to REST with a request for further information". 8. On 3 March 2009, Ms Peng emailed Ms Mills stating: As discussed in the meeting on Monday last week, we would like you to provide the following documents. 1. a copy of REST benefit claim form for transfer payments 2. a copy of the benefit transfer scripts used by AAS staff working in the REST contact centre 1. On 6 March 2009 at 10:46am, Ms Mills emailed Ms Peng with a copy of the REST benefit claim form for transfer payments and a copy of the benefit transfer script used by AAS staff working in the REST contact centre. 2. The script said the following: Portability/Choice of fund: Q: Are you still working for (employer listed on account?) A: Yes = I can send you the relevant forms (the R214) and once you complete your details, your employer will need to complete and sign section 5. This section allows them to declare that they are willing to pay into another fund and will no longer be paying into REST on your behalf. OR YES, and they will continue to pay into REST = As you are still employed with (employer listed on account) and they will be continuing to pay into REST on your behalf, we can only allow a portability/partial transfer in which you are required to leave a minimum of $5000 in this account. I can send you out the relevant form (R214), simply complete the relevant sections, ignoring section 5 and return to us. OR NO = Ok, well we need your employer to supply REST with the date you ceased working for them, (depending on admin team). Our administration team can contact your employer for this date and once it has been added to your account we can send you a roll over form (R187). You simply need to complete this and return to us with certified Identification and we will process this roll over for you. 1. At 11:46am Ms Mills emailed Ms Peng with a copy of the superannuation rollover and withdrawal form. 2. On 9 March 2009, Ms Mills emailed Ms Peng with a document titled "Action Items" relating to the meeting with APRA on 23 February 2009 as noted above. 3. On 28 April 2009 at 12:34pm and 2:31pm, Ms Mills emailed Ms Peng asking whether there were any documents or outstanding items that REST needed to provide APRA regarding portability following from the meeting on 23 February (see above). At 12.44pm, Ms Peng emailed Ms Mills stating "I think Kevin will mention it during the meeting. If he will request for anything, I will let you know as soon as possible". 4. On 20 May 2009 Mr Jeffs, Mr Hill, Mr Stevens, Ms Mills, Mr Watson and Ms Peng attended a meeting. A list of the action items arising from the meeting prepared by REST included the following: 3.7 PORTABILITY REQUESTS (APRA update) APRA advised it has no further issues related to this matter and it is now closed. 1. On 10 August 2009, APRA and REST had another meeting. Item 3.7 of the action items to that meeting states: ACTION ITEMS FROM 20 MAY 2009 MEETING - FURTHER DISCUSSION … 3.7 PORTABILITY REQUESTS APRA advised it would be examining this issue for the REST Prudential Review. APRA also examined portability during the AAS review. 1. On 6 November 2009, APRA's prudential review report was issued but did not take issue with REST concerning the question of portability. But it did state the following: The report may identify aspects of the operations of the Trustee and the Fund that in APRA's view require further consideration or action by the Trustee Board. The Trustee should not, however, rely on APRA's views or findings without making its own inquiries or (where appropriate) seeking independent advice or confirmation. In particular, the Trustee, in discharging its duties and obligations, should not rely on the information provided, conclusions reached or recommendations made by APRA in discharging the Trustee Board's duties and obligations without independently satisfying themselves about these matters. 1. Let me now move some years forward. 2. On 23 January 2013, Ms Harvey on behalf of Mr Charteris emailed Ms Mills with a letter of advice titled "New Portability Rules in Division 6.5 of the SIS Regs and AML". The letter of advice stated: The transfer of part only of the member's interest in the fund provisions in Reg 6.35 remain unchanged. Accordingly where the transfer is part only of the member's interest in the fund, then the transfer of part withdrawal benefit rules apply rather than transfer of the whole of the withdrawal benefits rules. A member's interest in the fund includes an employer sponsor contribution arrangement. … Where Reg 6.35 applies and the request is a transfer for the whole of the withdrawal benefit, then in accordance with Reg 6.35 the trustee may refuse to transfer the amount and the member must reapply for a partial transfer. Unlike the position for a full transfer of withdrawal benefit, there is no restriction on the information that may be sought for a partial transfer of withdrawal benefit so long as it is information that is reasonably required to give effect to the transfer request – Reg 6.34(1)(c). 1. This advice was provided following changes to the legislative scheme that commenced in 2013. ASIC takes issue with the accuracy of this legal advice. 2. On 15 July 2014, Mr Paul Howard, general counsel & company secretary of REST, emailed Mr Charteris, noting that REST had refused to comply with a member's request "to take their money out of the fund and move it across to his own self- managed superfund … based on the terms of the [member's] EBA and [REST's] Business Rules". He stated: We have been through a conciliation and the SCT are wanting us to make further submissions to them as to why we are correct in not agreeing to the member's wishes. As you are aware under Division 6 of the SIS Regulations deals with compulsory rollover and transfer of superannuation benefits and states that it is an operating standard for the purposes of section 31(1) of the SIS Act. Whilst there are some exceptions, the general requirement set out in Reg 6.34 is that a trustee must comply with a member's request to rollover or transfer part or all of their withdrawal benefit to another regulated super fund. The exceptions include a limitation of 1 transfer every 12 months and that partial transfers must leave a balance of at least $5,000 in the transferring fund ( see SIS Reg 6.35). In this case the member is seeking to transfer their entire balance which would terminate his membership of the fund but we could choose to re-admit him as a member after his whole balance was transferred if his employer sought to make future contributions to REST in compliance with the EBA. The EBA states that the ability to opt in and out of the fund for SG Act purposes shall not apply. However, the SG Act only deals with opting in for the purposes of making contributions to a fund, it does not require that such contributions must remain in a particular fund. So there is a question as to whether it would override the requirement to transfer benefits under Division 6.5 of the SIS Regs. On one view, the requirements of the EBA and the SG(A) on the one hand and the requirements of Division 6.5 of the SIS Regulations can operate together. That is, the employer must make contributions to REST and the Member is entitled to transfer their benefits to another fund, including his SMSF. If this view is correct, REST may be in breach of the SIS operating standard prescribed by Division 6.5. It is possible that we could argue that we could refuse to accept future employer contributions after a transfer of the member's whole balance. However it is likely that we can can re-admit the member on receipt of these future contributions and a refusal to do so may well be a decision which could be reviewed by the Superannuation Complaints Tribunal. All this leads to the following questions: 1. are we validly exercising our discretion under the Business Rules not to agree to the member's wishes given the apparently conflicting terms of the EBA vs SG and SIS Acts/Regs? … 1. Mr Howard enclosed a copy of Coles Supermarkets Australia Pty Ltd & AMIEU Victorian Meat Enterprise Agreement 2011. 2. On 21 July 2014, Mr Charteris emailed Mr Howard with a letter of advice. The letter of advice stated: … the employer is required to pay their contributions to a fund nominated in the EBA, in this case REST. The employer would be in breach of the EBA if it did not do so. This employer obligation to pay to REST means the member has an interest in REST being the benefit of this contribution right. Accordingly SIS Reg 6.35(1)(b) applies and REST may decline a rollover request where the amount left in the fund would be less than $5,000. I note there is nothing stopping the member transferring the balance of his account balance so that the amount remaining is not less than $5,000, as there is nothing in the enterprise agreement that would prevent this. … QUESTION 1 * Is REST validly exercising its discretion under the Business Rule not to agree to the member's wishes? The answer is yes. REST is entitled to refuse his request. You should note that if the member requested a partial transfer that met your partial transfer rules, you would be obliged to comply with it. 1. On 22 July 2014 at 7:55am, Mr Howard responded to Mr Charteris by email stating: I have read your advice. You seem to be relying on the fact that the member wants to do a part rollover in which case I agree that 6.35 would apply. The issue we have as I pointed out in my earlier email is that they want to do a full roll over not a part roll over which would see the full amount paid across to an SMSF and their account closed only to then have to add them as a new member when the next amount is received from Bilo. The member could continue to make such requests endlessly and there is no savings under the regs because they are seeking a full roll over. This would present an administrative nightmare for us and the regs do not as far as I can tell provide for the same limits as partial roll overs. Please reconsider and respond ASAP. I have to attend a conciliation this Friday and need to tell the SCT something. 1. Clearly, Mr Howard was interrogating aspects of the advice given. 2. At 9:46 am, Mr Charteris emailed Mr Howard with a draft revised letter of advice setting out in more detail REST's right to reject the member's request. The attached draft letter of advice was amended to include the following wording: Accordingly SIS Reg 6.35(1)(b) applies and REST may decline a rollover request where the amount left in the fund would be less then $5,000. REST is entitled to decline the request to transfer his entire account balance to his own self-managed fund. Where a trustee applies Reg 6.35, it overrides the right to full transfer (under reg 6.34). The fact that REST could close their account and then add them as a new member when the next amount is received from Bilo is not relevant. 1. At 10:51 am, Ms Harvey on behalf of Mr Charteris emailed Mr Howard with a signed copy of the letter of advice. 2. At 11:50am, Mr Howard circulated the letter of advice from Mr Charteris to the REST legal and compliance mailing list. He noted that: Division 6 of the SIS Regulations deals with compulsory rollover and transfer of superannuation benefits and states that it is an operating standard for the purposes of section 31(1) of the SIS Act. Whilst there are some exceptions, the general requirement set out in Reg 6.34 is that a trustee must comply with a member's request to rollover or transfer part or all of their withdrawal benefit to another regulated super fund. The exceptions include a limitation of 1 transfer every 12 months and that partial transfers must leave a balance of at least $5,000 in the transferring fund (SIS Reg 6.35). In this case the member is seeking to transfer their entire balance which might otherwise terminate his membership of the fund although we could choose to re-admit him as a member after his whole balance was transferred if his employer sought to make future contributions to REST in compliance with the EBA. You will see from Peter's advice that the member retains a contribution benefit by virtue of the EBA and as such even though they are wanting to rollover their entire balance this would essentially be deemed to be a partial rollover until such time as the contribution right is extinguished (i.e. he is no longer covered by the EBA) and therefore 6.35 and our Business Rules (which are in alignment) would operate. To the extent that it did not operate as set out above the administrative burden on us and other funds would be huge. 1. On 21 October 2014, Ms Viktoria Augustynowicz on behalf of Mr Charteris emailed Ms Mills with a letter of advice. The letter of advice stated: REST is entitled to refuse a rollover or transfer of an amount where the amount to be rolled over or transferred is part only of the member's interest in the fund and the effect of rolling over or transferring the amount would be that the member's interest in the fund after the rollover or transfer would be less than $5,000 — reg. 6.35(1)(b). Where the member is employed by a Participating Employer, the Participating Employer will have an obligation to contribute in respect of its employees who are members. This means the member's interest in the fund is not limited to the account balance, the member's interest in REST includes the benefit of the contribution obligation. This interest is an interest for the purposes of reg 6.3 5(l)(b). Accordingly in these circumstances reg. 6.35(1)(b) applies and REST is entitled to refuse the rollover or transfer. The member is required to provide all the information necessary for REST to establish that they no longer have an interest. The three day time limit only runs from the time REST is given the relevant information. 1. ASIC says that for the first time, legal advice was challenged by a REST employee, being Mr Howard, REST's general counsel and company secretary. Mr Charteris provided a response to Mr Howard's question, but did not engage with the substance of the issue or analyse the trust deed. 2. Further, on a date unknown, DLA Piper reviewed and annotated by hand a number of REST forms. The request for partial transfer of superannuation form dated June 2007 stated: Please note that if your current REST employer will continue making superannuation contributions to Rest, you can only transfer a portion of your superannuation balance out of Rest. If you select to transfer part of your account balance, please note that: * you are required to leave at least $5,000 in your Rest superannuation account… 1. Let me move forward to 2018. The issue was not revisited substantively again until 2018. 2. On 16 February 2018, Ms Jane Phielix of APRA emailed Ms Mills copying Mr Warren Staley and Mr Gerry Brophy from APRA. Ms Phielix informed REST that APRA would like to establish whether REST's rollover practices had changed to ensure compliance with the current legislative framework, and in particular, obligations under Division 6.5 of the SIS Regulations. APRA requested that "REST comprehensively assess es [sic] its current rollover practice s [sic] against current legislative requirements with the aim of identifying any areas of non-compliance". 3. Interestingly, APRA asserted that the reason for the request was "the substantial changes in the Superannuation environment since [2008/2009]", when APRA had previously looked at REST's practices. But I note that there had been little in the way of relevant changes concerning the issue in question. 4. Around this time, a specialist commercial lawyer in this field was engaged by REST being Ms Michelle Levy, a partner at Allens. The precise circumstances detailing her engagement are not clear from the limited evidence adduced before me, but this does not matter for present purposes. 5. On 10 March 2018, Ms Levy emailed Ms Mills enclosing a marked up letter to APRA. In the email, Ms Levy stated: I have convinced myself now that you are right. I am not sure that you will convince APRA. But there is a very good argument in your favour. I have made quite a few markups sorry, but please feel free to reject some or all … 1. On 12 March 2018, in response to some further amendments proposed by REST, Ms Levy emailed Ms Mills, stating: Looks fine Brenda. You have to tell your other legal adviser that this legal adviser thinks you have a pretty decent argument. 1. On 29 March 2018, Ms Mills and Mr Brophy discussed by telephone REST's rollover processes. 2. On 9 April 2018, Mr Brophy issued a letter addressed to Ms Mills. In this letter, APRA confirmed its position regarding outward rollover processes. APRA stated that it is of the view that "REST's practice of requesting non-mandatory information for whole of account rollover requests and the failure to process compulsory rollovers or transfers within 3 business days are not compliant with Division 6.5 of the [SIS Regulations]". APRA requested a formal response from REST, which set out among other things, how REST "considers that it is in line with legislative requirements including any external advice on which REST's position is based". 3. On 10 April 2018, Ms Levy sent an email to Ms Mills, enclosing a revised draft letter to APRA. 4. In the email, Ms Levy stated: I attach a revised letter to APRA from you which takes into account APRA's last letter and all of the comments from yesterday. Let me know if you would like to discuss. I know John referred to a separate legal advice from me, but I wonder whether it is better to just include it (as I have done) in the letter, then there is nothing further that APRA to call for. … 1. On 13 April 2018, in a letter to APRA, REST detailed legal advice it had received from Ms Levy. Given that there may be an appeal from my judgment, it is convenient to all if I set this out. REST stated: Based on legal advice, we respectfully disagree [with APRA's opinion]. That said, in addition to taking into account APRA's view, we are in the process of reviewing the basis for the current business rule … In doing so, we are taking into account the best interests and outcomes for members requesting a transfer and the best interests and outcomes for the members of the Fund at large, especially the impact on the administrative costs for the Fund, borne by all members, should the business rule be changed… Rest has sought legal advice on its current practice. That advice is that Rest's current practice with respect to Determination Members who continue to be Determination Members when they make a rollover request is consistent with Division 6.5 of the SIS Regulations. Further, the advice notes that the SuperStream objectives that 'rollovers can be processed faster, more efficiently and with fewer errors' is not relevant to whether a rollover is required to be made under Division 6.5. They are only relevant when the SIS Regulations require Rest to rollover a member's benefit. … The legal advice is set out below. Division 6.5 of the SIS Regulations Regulation 6.33 of the SIS Regulations allows a member of a regulated superannuation fund (the transferring fund) to request, in writing, that the whole or a part of the member's withdrawal benefit in the transferring fund be rolled over or transferred to, among other things, another regulated superannuation fund (the receiving fund). Under regulation 6.34, if the transferring fund receives a request to rollover or transfer the whole or part of a member's withdrawal benefit from the transferring fund to a receiving fund and: * for a request to rollover or transfer the whole of member's withdrawal benefit – the transferring fund receives all information that is mandatory information in the form in Schedule 2A or Schedule 2B; or * for a request to roll over or transfer part of the member's withdrawal benefit – the transferring fund receives the information that would be required by the form specified in Schedule 2A or Schedule 2B and any other information that is reasonably required by the trustee of the fund to give effect to the rollover or transfer, the trustee must, subject to regulations 6.35 and 6.38, rollover or transfer the amount in accordance with the request in the time prescribed by the SIS Regulations. Regulation 6.38 is not relevant in the immediate circumstances. Regulation 6.35(1) provides an exception to a trustee's obligation to rollover a member's withdrawal benefit. Regulation 6.35(1)(b) allows a trustee to refuse to roll over or transfer an amount where: the amount to be rolled over or transferred is part only of the member's interest in the fund and the effect of rolling over or transferring the amount would be that the member's interest in the fund from which the amount is to be rolled over or transferred would be less than $5,000. If the regulation applies, regulation 6.35(1)(b) allows the trustee to require a member to retain a minimum balance of $5,000 in the fund. Regulation 6.35(1)(b) applies if two conditions are met: * first, the amount to be rolled over to another fund is only 'part of the member's interest in the fund'; and * following the rollover, the amount of a member's interest in the fund would be less than $5,000. Request for information from employer When Rest receives a rollover request from a Determination Member, Rest requests a written statement from the Determination Member's employer confirming whether the employer has ceased contributing in respect of the Determination Member. This is to establish whether the Determination Member would continue to hold an interest in the fund following the rollover of the member's withdrawal balance. Rest requires this information in order to determine whether the exception in regulation 6.35 applies. Rest does not ask for this information because it considers that it does not have the mandatory information prescribed by regulation 6.34. That is a separate question for Rest each time it receives a rollover request from any member. If the exception applies, Rest requires a minimum account balance to remain in the Fund for the Determination Member. If the exception does not apply, Rest rolls over the member's balance to the receiving fund. This practice is not inconsistent with regulation 6.34. While that regulation requires Rest to rollover a withdrawal benefit within the prescribed period if it has the relevant information, it does not prohibit Rest seeking information from an employer to determine whether the rollover would apply to part only of the member's interest in the Fund and therefore whether the exception in regulation 6.35 applies. Withdrawal benefit and interest in the Fund Under regulation 6.34 a trustee must rollover a 'withdrawal benefit' within a prescribed period except that a trustee may refuse to rollover or transfer 'an amount' if 'the amount …is only part of the member's interest in the Fund' and the rollover would cause the member's interest in the Fund to be less than $5,000. The regulations thereby distinguish between a member's withdrawal benefit and a member's interest in a fund. Taking into account the rules of statutory construction, the legal advice is that these concepts are not synonymous. A member's withdrawal benefit is defined in the Superannuation Industry (Supervision) Act 1993 (SIS Act) as follows: withdrawal benefit, in relation to a member of a superannuation entity, means the total amount of the benefits that would be payable to: (a) the member; and (b) the trustee of another superannuation entity or an EPSSS in respect of the member; and (c) an RSA in respect of the member; and (d) another person or entity because of a payment split in respect of the member's interest in the superannuation entity; if the member voluntarily ceased to be a member. In effect, the member's withdrawal benefit is the value of their interest in a fund at any time, and that is determined by reference to the amount that could be cashed or rolled over at the relevant time. A member's interest in the Fund is not defined in the SIS Act. Rather, it takes its meaning from trust law and is the term used to describe all of the terms and conditions, and entitlements of a member. It includes things like the member's entitlement to be considered for an allocation from a reserve in a fund or to be covered by a group life policy held by the trustee or relevantly, an employer's continuing obligation to contribute to the Fund in respect of the member. That obligation would be an asset of the Fund for so long as the obligation exists. Hence, a member's interest in a fund is more than their withdrawal benefit. Ceasing to hold an interest in the Fund This raises the question of when a member ceases to have an interest in a fund. Usually, a full rollover or transfer of the member's withdrawal benefit would also terminate the member's interest in the Fund. They would not only cease to have a withdrawal benefit but also cease to have other entitlements in the Fund – any right to be considered for a distribution from a reserve and any cover under the insurance policy held by the trustee would terminate. The member would cease to have any 'interest' in the Fund. In these cases, the first condition in regulation 6.35(1)(b) would not apply because at the time the withdrawal benefit is rolled over it would not be only part of the member's interest in the Fund. However, this is not the case for a Determination Member. A full rollover or transfer of the member's withdrawal balance would not terminate the member's interest in the Fund. This is because the Determination requires the Determination Member's employer to make contributions to the Fund in respect of the Determination Member. This is far more than the 'possibility of future employer contributions' referred to in the APRA's letter. It is an asset of the Fund held by the Trustee for the benefit of the member for so long as the member is an employee of the employer. If the employer did not make a contribution, Rest may well be required to pursue the employer for the contribution. The Determination Member's ongoing entitlement creates an interest in the Fund which survives the rollover of their withdrawal benefit. Accordingly, a request to transfer the member's withdrawal benefit is not a request to transfer the whole of the member's interest in the Fund. Therefore, the first condition in regulation 6.35(1)(b) applies. The second condition also applies if the value of that interest after the rollover would be less than $5,000. Consequently, SIS Regulation 6.35(1)(b) permits (but does not require) Rest to require a minimum balance of $5,000 to remain in the account of a Determination Member. In considering whether to reverse its current practice in relation to Determination Members wanting to roll over their withdrawal benefits, Rest will need to consider the effect on the Determination Member as well as the members as a whole. The current practice has benefits for both and changing that practice will affect them both. Insurance impacts If a member's whole withdrawal benefit is rolled over to another fund, the member will cease to be covered by Rest's insurance policies (death and total and permanent disablement and salary continuance). Under the current practice, the Determination Member will continue to be covered under their existing cover in the Fund for so long as they hold an account balance. If the Trustee rolls over all of their withdrawal benefit, that cover will cease. This is the case with any member leaving the Fund. However, the circumstances for a Determination Member are different because Rest will receive a further contribution for that member. When Rest receives the next contribution from their employer after their benefit has been rolled over, they will be treated as a new member of the Fund under the policy terms. As such they will receive default cover and be able to apply for additional cover. However, that cover will be subject to any exclusions applying at the relevant time and waiting periods in circumstances where those exclusions and waiting periods may not have applied had the member retained a balance in the Fund. The risks to a Determination Member of ceasing cover on rolling over their benefit and then recommencing cover when the next contribution is received can be mitigated by disclosure. However, Rest is mindful that disclosure is not always sufficient to protect a member from making a decision that is not in their interests. Administrative costs impacts Each time a member's withdrawal benefit is rolled over to another fund, Rest is required to provide an exit statement to each member. While that is not an overly burdensome obligation, it does have a cost and that cost is greater when a contribution will subsequently be made to the Fund for the same former member. In that case, the administrator would be required to establish a new account for the member, they would have to collect the information required for that member (including their TFN again) and provide the member with a PDS and invite the member to make a death benefit nomination. If they are covered by the Fund's life policy, there will also be additional costs in relation to insurance. All of these costs would be met from the members of the Fund as a whole. In practice, given the size of the Fund, these costs could be substantial. While these are not relevant considerations when Rest is required by legislation to do these things, they are relevant considerations when Rest is being asked to consider volunteering to do something it is not required by the law to do. 1. REST concluded the letter with the following statement: As noted above, Rest is currently collecting and analysing further information about the estimated costs of changing its current business practice in respect of the above and whether any of those costs can be reduced or avoided with a view to a decision being made at the Board meeting on 1 May 2018. 1. On 2 May 2018, the board considered a proposal to approve the removal of the business rules restricting full rollovers for determination members. Item 9.2 of the agenda included a late item titled "APRA rollover termination letters: Rest response". The accompanying paper stated: 4. Issues for Consideration 4.1 The Board to consider the below impact analysis regarding the removal of the current business rule in relation to treating requests for full rollovers and partial rollovers for Determination members. 4.2 Management recommends removing the rule as the preferred option. A comparison with removing the rule and re-engineering the system is shown below. Removing the rule can be done quickly and at minimal cost. Furthermore, it aligns the rules between Determination members and non-Determination Members. 4.3 Impacts of maintaining the business rule. Tangible benefits … Intangible costs and benefits … 5. Financials Cost of external legal advice, plus any costs set out above. 1. On 2 May 2018 the board resolved to: 2. APPROVE the removal of the business rules restricting full rollovers for Determination members and the implementation of disclosure warnings regarding possible gaps in insurance cover; and 3. Issue a letter to APRA (including correcting statements) and advise Minister O'Dwyer's office of the removal of the above business rules. 4. On 3 May 2018, Mr Howard issued a letter to Mr Staley. In this letter, REST informed APRA that the REST board had resolved to change the business rule in relation to determination member rollover requests. It stated: In line with what we anticipated during that discussion, the Rest Board resolved yesterday to change the business rule in relation to Determination Member rollover requests so that for any member who requests the rollover of the whole of their withdrawal benefit, Rest will give effect to that request within the time required in line with APRA's view as to the operation of the Division 6.5 of the Superannuation Industry (Supervision) Regulations 1994 (SIS) even where their employer has an ongoing obligation to contribute to Rest. REST will no longer seek information about a Determination Member's employment or retain any part of a Determination Member's account balance in the fund following receipt of a rollover request. This change in the business rule is effective immediately. As also discussed at the above meeting, we wish to correct an error in my letter of 13 April 2018 which confirmed Rest's business practice in relation to rollover requests received from Determination Members. In that letter I stated that when a request for a rollover is made, Rest requests a written statement from the Determination Member's employer. This was an honestly held understanding by the Rest officers who contributed to the authorship of the letter. The statement suggested that Rest contacts employers directly. However, it has subsequently been identified that the request is made to the member, asking that the member seek a statement from the employer. … You also acknowledged the legal complexity of the relevant provisions. In a similar vein, Rest wishes to reserve its position in respect of past rollover requests received from Determination Members for whom an employer has a continuing obligation to contribute to the fund. While Rest has amended the business rule to treat rollover requests from Determination Members in the same way as it treats rollover requests from other members including by giving effect to all current rollover requests, Rest is undertaking further investigations to determine the number of Determination Members who had ceased to be an employee covered by a Determination or for whom Rest was not able to confirm whether they continued to be covered by a Determination at the time the rollover request was received. Summary — REST's dealings with APRA from late 2007 to late 2009 1. From the above detail it is apparent that from late 2007, APRA commenced a process of prudential review of REST, including requesting details of REST's implementation of portability requirements. 2. Around this time, REST informed APRA of its view that a member who had an ongoing employer contribution arrangement retained an interest in the fund for the purposes of reg 6.35, and so REST was entitled to refuse to rollover the whole account balance and transfer only the excess balance above $5,000. 3. APRA requested further specific information in relation to REST's implementation of the portability rules. It informed REST that it considered portability requests to be a key issue and that it would be examining the issue as part of its prudential review. 4. APRA also conducted a more specific review into rollover practices as a result of a complaint that it had received. 5. Now as part of the process of this review, REST set out in written communications and orally at meetings with APRA its view as to the operation of reg 6.35 and its practice in relation to rollover requests where the member retained an interest in the fund by reason of an employer contribution obligation. As part of this, REST provided APRA with its forms as well as scripts used by staff in dealing with rollover requests. 6. On 20 May 2009 APRA advised REST that it had no further issues in relation to portability requests. 7. On 6 November 2009 APRA provided REST with its prudential review report which did not raise any issues in relation to portability. 8. I agree with REST that it is appropriate to infer that at this point in time APRA shared REST's views as to the operation of Div 6.5 of the SIS Regulations. And at the least one can infer that it did not disagree with such views. Summary — external legal advice received by REST from 2005 to 2014 1. In my view, the chronology that I have set out demonstrates that REST's practice and its view as to the operation of regs 6.34 and 6.35(1)(b) of the SIS Regulations was based upon and consistent with external legal advice over an extended period from Phillips Fox, DLA Phillips Fox and DLA Piper. 2. The advice received in and after September 2005 consisted of the following elements. 3. First, REST may refuse to make a transfer payment if the amount to be transferred is part only of the member's interest in the fund and the transfer would leave an account balance of less than $5,000. Further, where there is an ongoing employer contribution obligation in respect of a member, any transfer request can be treated as a transfer of part only of the member's interest in the fund. 4. Second, the advice recommended that REST institute procedures to determine whether the employer's obligation to contribute in respect of the employee continues. 5. Third, the advice provided example scenarios to show the operation of the rules, which were consistent with how REST then subsequently applied them. 6. Further, the board was informed that REST's practice was based on external legal advice and, based on this advice, was compliant with legal requirements. 7. Further, REST's responses to APRA were provided having regard to external legal advice provided on these responses. 8. Further, in mid-2014, REST sought advice after a complaint was received from one its members, at which time REST sought to test with REST's external legal advisors the position under Div 6.5. And the advice given at the time was to the effect that REST's practice was in accordance with the requirements of Div 6.5. Summary — REST's dealings with APRA and legal advice received in 2018 1. In early 2018, APRA contacted REST to discuss its rollover process. APRA expressed a concern that REST's practice may not be compliant with Div 6.5 of the SIS Regulations. As is apparent from the chronology that I have set out, this was the first time that APRA had expressed such a view. For almost 10 years, APRA had not taken issue with REST's practice. 2. On 9 April 2018, APRA subsequently stated that it considered REST's practice to be non-compliant with Div 6.5. 3. REST sought and received advice from an external and specialist legal advisor, Ms Levy of Allens, who advised that REST's practice was consistent with Div 6.5 of the SIS Regulations. 4. But notwithstanding that advice, and in response to the views held by APRA as the entity with relevant responsibility for regulation of the superannuation industry, on 2 May 2018 the board of REST approved a proposal to remove the rules restricting full rollovers for determination members. 5. On 3 May 2018 REST informed APRA that the business rules had been changed with immediate effect. ASIC's case concerning REST's opinion 1. Now the following discussion proceeds on the assumptions, first, that the statements made by REST were as to its opinion and, second, that REST's opinion was incorrect, the latter assumption being hypothetical only given my views on the phrase "member's interest in the fund" which I have discussed earlier and found in favour of REST. 2. If I proceed on those assumptions for present purposes, ASIC says that if the alleged representations are properly characterised as statements of REST's opinion of the law, which for the sake of the present argument has been assumed to be incorrect, then the opinion was not reasonably held, and that it therefore was misleading or deceptive or likely to mislead or deceive. ASIC says in summary the following. 3. First, ASIC says that REST bears the burden of proof in relation to the reasonableness of its opinion as to the law. I should say now that I disagree with that assertion. 4. Second, ASIC says that adverse inferences should be drawn against REST because it did not call certain individuals who it could reasonably be expected would have been called to give evidence. I disagree. 5. Third, ASIC says that it is only the knowledge or conduct of the board that can be attributed to REST and which is relevant in assessing the reasonableness of any opinion of the law. Relatedly, ASIC seeks to characterise REST's position as involving an impermissible aggregation of the knowledge of various people contrary to authority. I do not agree with these assertions. 6. Fourth, ASIC says that even if REST's knowledge can extend beyond the board, the fact that the knowledge of other individuals is not universally coextensive and synonymous prevents their knowledge being relevant. Again, this assertion is incorrect. 7. Fifth, ASIC says that although advice was received, it could not form the basis for a reasonably held view as to the law because it was not sufficiently rigorous. I disagree. 8. ASIC accepts that the advice provided by Allens in early 2018 was comprehensive, elevated to the board and at least attempted to engage with the ongoing interest argument even if it did not engage with the trust deed and was, as ASIC contends, wrong. 9. Contrastingly, it is said that the previous advice received from Phillips Fox was first received by Ms Mills after the relevant changes to the rules had already been made. Further, it is said that in large part it was not communicated to the board. 10. Further, ASIC says that the earlier advice was ad-hoc, that is, obtained in response to legislative changes that had already occurred. Further, ASIC says that it was haphazard, that is, taking a variety of disjointed forms, being letters, mark-ups to the rules, mark-ups to template letters, mark-ups to responses to APRA and email correspondence. It is said that nowhere were all the threads and concepts drawn together in a comprehensive analysis. Further, ASIC says that it was perfunctory in that it only answered the specific question that was asked and was devoid of any meaningful analysis of the broader issues, including the trust deed. 11. Generally speaking, in my view the advice received was sufficient to demonstrate reasonable grounds for the opinion held. 12. Sixth, ASIC says that APRA's apparent acquiescence to REST's practice is irrelevant because correspondence in this regard was not escalated to the board of REST. Again, I disagree with ASIC. 13. Seventh, ASIC says that the 2018 advice from Allens could not justify REST's practice and representations made prior to when it was received. Generally speaking I agree with ASIC, but it has its broader relevance. 14. Accordingly, ASIC says that the representations were therefore misleading. 15. Let me further develop some of ASIC's arguments as specifically put by it. Jones v Dunkel and adverse inferences 1. Now REST filed and served an affidavit of Mr Damian Hill, REST's administration manager, and later its CEO during part of the relevant period. But REST did not call Mr Hill. 2. ASIC says that there were various topics on which it could reasonably be expected that Mr Hill might have been able to give evidence being whether he was familiar with REST's trust deed, what legal advice he had received before he drafted a paper for the board recommending the minimum balance amount be increased from $1,200 to $5,000, what legal advice he had received from Phillips Fox before he told the board on 9 September 2005 that there was no substance to the article and that Phillips Fox had confirmed REST's portability practices were correct, and what legal advice he had received from Phillips Fox before the administration committee meeting he attended approved changes to REST's rules on 14 September 2005. 3. ASIC says that those are matters relevant to the reasonableness of the opinion as to the law held by REST. Given REST's unexplained failure to call Mr Hill, ASIC says that I should draw an adverse inference that Mr Hill's evidence on those topics would not have assisted REST. 4. It is said that I should more readily draw the following inferences. 5. First, REST's board members were not familiar with REST's trust deed. 6. Second, Mr Hill had not received any legal advice before he drafted the board paper. 7. Third, neither Mr Hill nor Mr de Bruyn had received any legal advice from Phillips Fox before the administration committee, at a meeting they both attended, approved changes to REST's rules on 14 September 2005. 8. Further, REST did not adduce any evidence from Ms Mills, REST's head of legal, regulatory and commercial during the relevant period, or Mr Howard, REST's general counsel and company secretary during the relevant period. 9. Further, it is said that there were a number of topics on which it could reasonably be expected that Ms Mills might have been able to give evidence being what prompted the advice received from Ms Brown on 5 September 2005 and whether that advice was circulated to any member of REST's management or board, whether the letter of advice received from Phillips Fox on 9 September 2005 after the board meeting that day was circulated to any member of REST's management or board, what prompted the advice received from Mr Charteris on 23 January 2013 and whether that advice was circulated to any member of REST's management or board, whether the exchange in mid-2014 between Mr Howard and Mr Charteris and the resulting advice was circulated to any member of REST's management or board beyond the legal and compliance mailing list, and what prompted the advice received from Mr Charteris on 21 October 2014 and whether that advice was circulated to any member of REST's management or board. 10. Further, it is said that Mr Howard could reasonably be expected to have given evidence in respect of the penultimate topic just mentioned. 11. ASIC says that given REST's unexplained failure to call Ms Mills and Mr Howard, I should draw an adverse inference that their evidence on those topics would not have assisted REST. 12. It is said that I should more readily draw the following inferences. 13. First, Ms Mills did not circulate the advices received on 5 September 2005, 9 September 2005, 23 January 2013 and 21 October 2014 to the board. 14. Second, neither Ms Mills nor Mr Howard circulated the exchange in mid-2014 between Mr Howard and Mr Charteris, and the resulting advice, to the board. Mr Howard sent the advice to members of the legal and compliance mailing list. The members of that mailing list included Mr Howard, Ms Mills and Mr Noel Daniell. None of them were members of REST's board. 15. Now I am not prepared to draw many of these inferences. But even if I were to draw these inferences, none of this satisfies me that REST did not have reasonable grounds for its opinion. Corporate attribution 1. ASIC says that there is a distinct lack of specificity as to precisely whose knowledge is to be attributed to REST. 2. ASIC says that REST seems to assume that provided it can point to one or more individuals within REST who received each piece of advice, it can aggregate all of that knowledge together in support of REST's overall allegedly reasonably held opinion. Now that is not an accurate assessment of REST's position, but I will pass over that for the moment. 3. In Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) (2018) 127 ACSR 110; 266 FCR 147, I said that it is necessary to interpret the relevant rule of responsibility, including its context and purpose, in order to determine whose state of mind was to count as the knowledge or state of mind of the corporation. 4. I said (at [1658] to [1662]): I have accepted ASIC's case that on the four occasions identified (6 April 2010, 20 May 2010, 1 December and 6 December 2010) Westpac traded for the dominant purpose of manipulating the BBSW. And in doing so I have attributed to the corporate entity an individual state of mind, ie that of the traders. Why is that so? Lord Thurlow in 1778 succinctly expressed the point that a corporation has "no soul to damn, no body to kick". Strictly, corporations are mindless. Accordingly an individual state of mind needs to be attributed to the corporate entity, particularly where one is focused upon the motivation or purpose for an action. But whose? I have said elsewhere that the conventional approach has been to identify the individual who was the "directing mind and will" of the corporation in relation to the relevant act or conduct and to attribute that person's state of mind to the corporation. But after the injection of flexibility into that concept by Lord Hoffmann in Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 506–11; [1995] 3 All ER 918 at 925; [1995] 2 BCLC 116 at 123 (Meridian), metaphors and metaphysics have had diminished utility. First, there are no longer the rigid categories for identifying the "directing mind and will" that may be perceived to have existed after Viscount Haldane LC's use of the phrase in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705 at 713 and indeed after Tesco Supermarkets Ltd v Nattrass [1972] AC 153; [1971] 2 All ER 127 until Meridian. Second, and relatedly, the appropriate test is more one of the interpretation of the relevant rule of responsibility, liability or proscription to be applied to the corporate entity. One has to consider the context and purpose of that rule. If the relevant rule was intended to apply to a corporation, how was it intended to apply? Assuming that a particular state of mind of the corporation was required to be established by the rule, the question becomes: whose state of mind was for the purpose of the relevant rule of responsibility to count as the knowledge or state of mind of the corporation? (see Bilta (UK) Ltd (in liq) v Nazir (No 2) [2016] AC 1; [2015] 2 All ER 1083; [2015] 2 WLR 1168; [2015] UKSC 23 (Bilta) at [41] per Lord Mance). The question is one of the interpretation of the relevant rule taking into account its context and purpose. Now once you have asked and answered that question and identified the individual in question, you may then apply the title of "directing mind and will". But so to proceed adds little to the analysis. The label "directing mind and will" is nebulous if not question begging. It also follows that if you use such a label, then it will have variable application even within the same corporation depending upon the particular context and function of the relevant rule of responsibility. And as soon as one admits of that variability, the advantages in using the label become illusory, except to distinguish such a person who can be identified with the corporation from a person for whose acts the corporation is merely vicariously liable (Bilta at [70] per Lord Sumption). I agree with Lord Walker of Gestingthorpe who suggested that it might be better if the label "directing mind and will" was allowed to fade away (see Moulin Global Eyecare Trading Ltd (in liq) v Commissioner of Inland Revenue [2014] HKCFA 22 at [106]). In the present context, the relevant rule of proscription that I have to consider is that enshrined, inter-alia, in ss 1041A and 1041B. Now, of course, they do not directly refer to questions of purpose let alone dominant purpose. Moreover no mens rea concepts need to be imported from elsewhere (see generally Australian Securities and Investments Commission v Whitebox Trading Pty Ltd (2017) 251 FCR 448; 345 ALR 424; 122 ACSR 141; [2017] FCAFC 100 (Whitebox)). Nevertheless, given the observations in DPP (Cth) v JM, concepts of dominant purpose loom large at least concerning s 1041A and in the way ASIC has framed its case. It is sufficient to say for present purposes that in terms of s 1041A and given its focus on a transaction(s), the relevant state of mind is that of the individual person who instigated and carried out the particular trade. Given the freedom of choice and discretion given to Westpac's traders, it seems to me that relevantly for present purposes it is the state of mind of each of Mr Roden and Ms Johnston in relation to their respective trading that should be so attributed to Westpac in relation to the trading in the Bank Bill Market on the contravention dates. 1. In the context now before me, the relevant rules of responsibility are the proscriptions against false, misleading or deceptive conduct contained in s 1041H of the Corporations Act and ss 12DA and 12DB of the ASIC Act. 2. Now in respect of the relevant provisions of the ASIC Act, s 12GH(1) provided during the relevant period that: If, in a proceeding under this Subdivision in respect of conduct engaged in by a body corporate, being conduct in relation to which the Division applies, it is necessary to establish the state of mind of the body corporate, it is sufficient to show that a director, employee or agent of the body corporate, being a director, employee or agent by whom the conduct was engaged in within the scope of the person's actual or apparent authority, had that state of mind. 1. But it is not alleged that Ms Mills, Mr Howard and/or Mr Hill were persons who made the representations, and that they did so within the scope of their actual or apparent authority. 2. I also note that in Australian Securities and Investments Commission v Diversa Trustees Limited [2023] FCA 1267 at [126], Button J considered that s 769B(3) of the Corporations Act, which is in similar terms to s 12GH(1), only operated to attribute to a body corporate the state of mind of the director, employee or agent who engaged in the conduct which is the subject matter of the proceeding. Reasonable grounds 1. Now the question of whether a particular state of mind was held reasonably is an objective matter which requires proof of the existence of facts which are sufficient to induce that state of mind in a reasonable person. 2. And I agree with ASIC that in the context of the present proceedings this requires proof that REST, as a trustee, acted in a manner consistent with the obligations of that office. So, REST had a duty as trustee to become thoroughly acquainted with the terms of the trust deed and all documents, papers and deeds relating to or affecting the trust property. REST's trust deed was a fundamental document. It contained provisions which on their face expressly related to transfers out. 3. But ASIC says that there is no evidence that anyone at REST whether at the board or management level considered the trust deed. 4. ASIC says that Mr de Bruyn gave evidence that the trust deed was an important document for the organisation and that he understood it to be part of his role as a director to be familiar with the trust deed. But despite that, ASIC says that his evidence was that he never referred to the trust deed in respect of any decisions he was involved in at REST. I will return to his evidence and cross-examination shortly. 5. ASIC says that it is difficult to see how Mr de Bruyn's opinion of the law could in those circumstances be reasonably held. Moreover, ASIC says that no other director or employee of REST gave evidence. 6. ASIC also says that REST's attempts to rely upon its dealings with APRA and receipt of legal advice similarly do not assist it. It says that those dealings and the legal advice rarely reached the board level where Mr de Bruyn and his co-directors might have become aware of them. 7. Moreover, ASIC says that in respect of the legal advice that did reach the board level, that advice did not provide a reasonable basis for an opinion that the ongoing interest argument was correct or even strong. 8. But ASIC does accept that the advice of Ms Levy of Allens provided a reasonable basis for an opinion of the law as set out in that advice on 10 April 2018. On that date, Ms Levy sent a revised draft, which took into account both APRA's 9 April 2018 letter and a conference with Ms Mills and Mr Edstein on that day. 9. But ASIC says that I should not draw the inference suggested by REST that unspecified advices of Mr Charteris were only consistent with him having undertaken a similar reasoning process to that more fully set out in the Allens letter. ASIC says that it is unclear what reasoning process informed the brief and unqualified advices of Mr Charteris. ASIC says that Mr Charteris' advice was perfunctory at best, and lacking in analysis of key legal and factual concepts. 10. ASIC says that it may be accepted that in appropriate cases reliance upon advice from professional advisors may be sufficient to provide reasonable grounds for the making of a representation of opinion. But it says that the character and quality of that advice is a key factual issue. And it says that the mere profession and qualifications of the advisor are not of themselves sufficient, no matter what advice that person gives. 11. Let me analyse some of these issues, although I will be relatively brief given my conclusion on the construction of the phrase "member's interest in the fund". Let me start with some legal propositions. Some general legal principles 1. In relation to cases of misleading or deceptive conduct concerning a statement of opinion, such a statement cannot be regarded as misleading or deceptive simply because the opinion turns out to be incorrect. 2. Where a statement of opinion is made, it will only be misleading or deceptive if it is not expressed honestly or if such an honest belief is not reasonably capable of being held or the maker did not have a reasonable basis for the belief or opinion. 3. But of course whether or not a statement of opinion may be misleading or deceptive on this basis ultimately depends on what, if any, implied representations are alleged and established to have been made in relation to the relevant statement of opinion. 4. Now generally speaking a statement of opinion may, but does not always, carry an implied representation that it is based on rational or reasonable grounds or is reasonably capable of being held. 5. In Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, French CJ said (at [25], [32] and [33]): Characterisation is a task that generally requires consideration of whether the impugned conduct viewed as a whole has a tendency to lead a person into error. It may be undertaken by reference to the public or a relevant section of the public. In cases of misleading or deceptive conduct analogous to passing off and involving reputational issues, the relevant section of the public may be defined, according to the nature of the conduct, by geographical distribution, age or some other common attribute or interest. On the other hand, characterisation may be undertaken in the context of commercial negotiations between individuals. In either case it involves consideration of a notional cause and effect relationship between the conduct and the state of mind of the relevant person or class of persons. The test is necessarily objective. … It is important in considering whether conduct is misleading or deceptive to identify clearly the conduct to be characterised. If the conduct is said to consist of a statement made orally or in writing, the first question to be asked is what kind of statement was made. Was it a statement of historic or present fact made on the basis that its truth was known to its maker? Was it a statement of opinion? That is to say was it a statement of "judgment or belief of something as probable, though not certain or established"? The term "estimate" itself, used as a verb, means the "act of valuing or appraising" or an "approximate judgement of the number, quantity, position, etc, of something". A statement of opinion may be a statement with respect to a future matter. It may take the form of a prediction. A forward estimate relating to the financial results of a business is a class of prediction. In strict logic there may be some category overlap between opinions and statements of fact. Opinions may carry with them one or more implied representations according to the circumstances of the case. There will ordinarily be an implied representation that the person offering the opinion actually holds it. Other implied representations may be that the opinion is based upon reasonable grounds, which may include the representation that it was formed on the basis of reasonable inquiries. In the case of a person professing expertise or particular skill or experience the opinion may carry the implied representation that it is based upon his or her expertise, skill or experience. (citations omitted) 1. Further, if there is a statement of opinion, in order to establish liability for misleading or deceptive conduct the plaintiff carries the onus of alleging and proving the following. 2. First, that there was a relevant implied representation, such as that the opinion was reasonably capable of being held or that it had a reasonable basis. 3. Second, that the opinion did not have a reasonable basis or was not reasonably capable of being held. 4. The onus of proof thus differs from cases involving the unique statutory provisions concerning representations with respect to any future matter, some of which place either evidential or legal onuses on the representor. 5. But even in the context of such statutory provisions, some such as s 769C of the Corporations Act, which does not apply here, do not involve the reversal of any onus. An applicant must plead and prove the absence of reasonable grounds. 6. In TPT Patrol Pty Ltd v Myer Holdings Ltd (2019) 293 FCR 29, I said (at [1316] to [1323]): Let me now address the "no reasonable grounds" claim. The claim has the following elements. It is said that the 11 September 2014 representation in relation to anticipated profit growth in FY15 was a representation with respect to a future matter, namely, that Myer expected to achieve an NPAT in excess of $98.5 million in FY15. But it is said that Myer had no reasonable grounds for making that representation, and accordingly it is taken to be misleading by reason of s 769C(1) of the Act. So, the 11 September 2014 representation was conduct by Myer in relation to a financial product that was misleading or deceptive or likely to mislead or deceive in contravention of s 1041H of the Act. Section 1041H provides: "A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive." Relevantly, s 769C provides: "(1) For the purposes of this Chapter, or of a proceeding under this Chapter, if: (a) a person makes a representation with respect to any future matter (including the doing of, or refusing to do, any act); and (b) the person does not have reasonable grounds for making the representation; the representation is taken to be misleading." The general position is that a representation involving the state of mind of the maker, for example, a prediction or opinion, ordinarily conveys that the maker had a reasonable basis for that state of mind. That representation will be falsified on proof of the absence of a reasonable basis for the state of mind. In determining whether a person held reasonable grounds for a representation of opinion, the relevant inquiry is into whether the facts possessed by him were capable of supporting the opinion that he held. A person will have had reasonable grounds for making a representation with respect to a future matter if there are facts which are sufficient to induce that state of mind in a reasonable person. The question whether there were reasonable grounds for the making of a profit forecast is to be resolved by looking at whether the relevant director had made a genuine assessment as to the appropriateness of the forecast. If such a genuine assessment had been made, there would be reasonable grounds to support the making of the forecast. Now in my view it is not in doubt that the 11 September 2014 representation was made and that it was a statement of opinion with respect to a future matter; further, let it be accepted that it impliedly represented that reasonable grounds were held. But the applicant has the burden of proving that Myer did not have reasonable grounds for making the representation. 1. Further, for present purposes I do not need to discuss s 12BB of the ASIC Act or compare it with s 769C. ASIC has not characterised the alleged representations in terms of being with respect to any future matter. Its characterisation concerned the question of the then present state of affairs and the then present entitlement or right of the relevant determination members. 2. Now more broadly, where the issue of reasonable grounds arises such as where there is an implied representation in connection with a statement of opinion, or where a representation is with respect to a future matter, two points may be noted. 3. First, the ultimate question is whether there are facts which are sufficient to induce that state of mind in a reasonable person. 4. Second, in the case of a corporate representor it is not necessary that the individual through whom the corporation made the representations in question should personally have knowledge of the reasonable grounds, but merely that the grounds be known to or relied on by those whose conduct and knowledge is attributable to the company. 5. More recently in Crowley v Worley Ltd (2022) 293 FCR 438, Jagot and Murphy JJ identified the question as being whether the company had reasonable grounds for the relevant representation, rather than whether the board acted reasonably or unreasonably. Matters known to the board were not the determinative consideration. One has to have regard to the knowledge properly attributable to the company, not merely the knowledge of the board. 6. Further, where a corporation relies on advice or information from a trusted source, that advice may provide reasonable grounds for the making of a representation. Inferences, standard of proof and other matters 1. Now in the present case, it was for ASIC to plead and prove both that there was a relevant implied representation and precisely what it was, and that the implied representation was false or misleading or deceptive or likely to mislead or deceive. 2. Now I do note that REST's defence pre-empted a case that ASIC might have made by pleading that if made, the alleged representations were a statement of REST's opinion of the law and that this opinion was honestly and reasonably held. 3. But ASIC merely joined issue with this allegation in its reply, and pleaded neither the existence of a relevant implied representation nor a positive case in support of an allegation that the representations, if statements of opinion, were not reasonably held. 4. Further, in its pleadings ASIC did not specifically allege that REST acted inconsistently with the trust deed, that REST should have but did not receive certain legal advice or give certain instructions to its lawyers, that REST did not act in a manner consistent with its obligations as trustee, including its duty to become thoroughly acquainted with the terms of the trust deed, and to administer the trust in accordance with its terms, and that no relevant internal or external legal advisor properly considered the trust deed in the particular context that I am considering. 5. In such circumstances, even if I allow ASIC, as I will, to advance an unpleaded case that REST made an implied representation as to any opinions of law being based on reasonable grounds, and that that implied representation was false or misleading or deceptive, it is problematic for ASIC to contend that REST ought to have adduced evidence responsive to matters that had not been pleaded or particularised, and that certain inferences should then be drawn from that failure. 6. But in any case, in my view such inferences are not central to the issue of whether REST's opinion of the law was reasonably held or at the least such inferences, if I was to draw them, do not establish that REST did not hold reasonable grounds for its opinion. 7. Further, a problematic aspect of ASIC's approach is its premise that only the knowledge of the board is relevant and can be attributed to REST. ASIC focuses only on information that went to the board, and contends that an assessment of whether an opinion expressed in a statement of a company was held on reasonable grounds is limited to consideration of the facts known to the board. But this lens is too narrow. 8. Now ASIC seeks to identify the representations as being the responsibility of the board, such that it is only the board's knowledge that is relevant. 9. But ASIC itself identifies that it was in fact REST's administration manager, AAS, that sent the various letters on which it relies, and that statements in the telephone calls on which it relies were made by call centre operators from AAS. 10. Now ASIC submits that because the board approved changes to REST's practices predicated on the ongoing interest argument, it should be taken to have authorised all of the representations in issue and as such there is a sound basis to infer that the relevant knowledge holder must be the board. But this is misconceived. The statements were made by REST. And the relevant knowledge does not necessarily need to be held by board members. 11. Further, and contrary to ASIC's assertion, REST has not engaged in any impermissible aggregation of knowledge such as would be involved in a case where knowledge is an element of the claim advanced and the plaintiff seeks to contend that the knowledge of various people can be aggregated to arrive at the aggregated knowledge of the corporation. 12. Rather, REST has just identified matters known and available to those within REST whose acts and knowledge were relevant to whether REST adopted or continued REST's practice. 13. Further, ASIC's submission that the advice received was not sufficiently rigorous ignores the fact that where a corporation relies on advice or information from a trusted source, that advice may provide reasonable grounds for the making of a representation. 14. Further, I agree with REST that where a legal issue is concerned, and a leading firm and practitioner were retained to advise on the issue, there is no proper basis to suggest that REST should have second-guessed what was clear and unqualified advice. 15. Further, although ASIC seeks to diminish the significance of APRA's review because correspondence in this regard was not escalated to the board, as I have already said it is not only matters known or available to the board that are relevant. Further and in any case, it is apparent that the audit, risk and compliance committee considered REST's response to APRA and in doing so received advice from Mr Charteris. 16. Further, as to the 2018 advice of Allens, of course this advice cannot per se provide the reasonable grounds for any statement of opinion for the period prior to when it was provided. But two points can be noted. 17. First, the advice of Allens was received by REST initially on 10 March 2018, and as such provided a reasonable basis at least for part of the relevant period, which runs from 2 March 2015 to 2 May 2018. 18. Second, the only substantive difference between the advices of Mr Charteris and that of Ms Levy of Allens that ASIC points to is that the latter was more detailed in terms of how it was presented. But I agree with REST that I can infer that it is likely that the analysis and conclusion of Mr Charteris in his advices is consistent with him having followed a similar chain of reasoning to that comprehensively set out in Ms Levy's advice. 19. And in any event, the fact that Mr Charteris' advice was relatively brief does not mean that REST was acting unreasonably in relying on it. And when did brevity turn into a perceived vice? When I was at the Commercial Bar, any counsel of perfection prizing or incentivising legalistic superfluity would have been condemned rather than condoned. Indeed in my experience, which admittedly is now out of date, for the best commercial silks there was usually an inverse relationship between the length of a written opinion and the level of the fee charged. 20. I agree with REST that the clarity and unqualified nature of Mr Charteris' advice and the fact that his advice was consistent over an extended period of time, if anything, would not have reasonably suggested to REST that the position he was advancing was contestable such that it could be said to be unreasonable for REST not to question it further. 21. Let me now turn and deal with the position of Mr de Bruyn and his evidence. Mr de Bruyn's evidence 1. In terms of the evidence of Mr de Bruyn, who was cross-examined by Ms Bennett SC with precision and momentum, I should make some brief observations. 2. First, he had little independent recollection of the detail of events. But this is unsurprising given his age and the fact that the relevant events occurred years ago. 3. Second, he did not test legal advice by himself reading the trust deed. But this is no criticism given that he correctly and rightly assumed that internal and external lawyers would have done this. He was reasonably able to assume that internal lawyers would have looked at the relevant requirements. 4. Third, Mr Charteris did attend meetings from time to time and gave verbal advice. Mr de Bruyn reasonably relied upon his expertise in this respect and assumed that if REST was doing something wrong then Mr Charteris would have said so. 5. Fourth, Mr de Bruyn assumed reasonably that external legal advice would have been and was obtained on matters of importance concerning the terms and application of the trust deed and the statutory regime. 6. Fifth, as far as reading the trust deed was concerned, Mr de Bruyn, who was not a lawyer, gave the following evidence: MS BENNETT SC: Yes. Okay. So you read the trust deed? MR DE BRUYN: I can't recall now, reading the trust deed, no. Q: Is it possible you never read the trust deed? A: I would be very surprised if I had never read it, but I honestly cannot recall any occasion when I sat down and read the trust deed. Q: Can you recall any occasion when you sat down and consulted the trust deed? A: Not now, no. Q: Did you get any training in the terms of the trust deed? A: Not that I recall. Q: What about updates in the operation of the trust deed? A: I don't recall. … Q: So as a director of the superannuation trust – a superannuation trust company, can I suggest to you that you never had regard to the terms of the trust yourself in executing any of your duties? A: This substantial document is not one that I had in front of me in my work as a director of REST except perhaps on occasions when there was a discussion about sponsoring organisations, but I can't see that in this document so that I don't even know that. Q: So the proposition I would like to test you there, Mr de Bruyn, is this: if you were ever testing a proposition put to you as a member of the board, if you were ever considering it, you, yourself, never did so by reference to the trust deed, did you? A: I did not have this document with me to consult in respect of any decisions I was involved with REST, to my recollection. Q: And so none of the decisions that you were involved with REST considered an analysis of whether – of conformity with the trust deed yourself; is that right? A: I can't answer that because I don't recall whether, in any presentation of material before us, there was ever reference to the trust deed. Q: So if there's no reference in any written material, you, yourself, never tested what you were told by reference to the terms of the trust deed; is that fair? A: Except only that there was in the early 2000s a discussion about sponsoring organisations, so that might have been an exception. Q: I see. Sponsoring organisations; that's unrelated to anything to do with choice and portability; is that right? A: Yes. Q: Yes. So save for that issue, it was never your practice to test any of the matters put to you by reference to the deed; is that fair? A: I never referred to this document in respect of any decisions I was involved in at REST. 1. Mr de Bruyn also gave the following evidence: MS BENNETT SC: Have you read that? MR DE BRUYN: No – well, I – I read it before. It's dated 29 January 2009. Q: It's the same document, isn't it? A: Yes. Well, it seems to be; yes. Q: Well, satisfy yourself, Mr de Bruyn? A: Yes. Q: All right. So what I want to suggest to you is that there was written advice provided in relation to the timing issue, but no advice of similar depth or formality was provided in relation to the portability issue that was the subject of REST – the complaint to APRA; would you agree with that? A: The only other advice from Mr Charteris was any verbal advice he provided to the audit, risk and compliance committee during its meeting where he was present. Q: Yes. And you didn't ask for that to be reduced to writing? A: I didn't. Q: And you didn't ask for any further analysis to be taken in respect of whatever it is he said at that meeting; is that right? A: There's no record of that in the audit, risk and compliance committee meeting. Q: And you don't recall doing so? A: No, I don't. Q: No. You didn't scrutinise his advice particularly, did you? A: I did scrutinise all his written advice. Q: Yes? A: Yes. Q: Well? A: And I also listened very carefully to any verbal advice he gave. Q: All right. You don't recall doing that on that occasion though, do you? You don't recall the advice he gave you on that occasion; do you? A: No. Q: So you don't remember what he said? A: No. Q: You don't remember if you scrutinised it or not? A: I always scrutinised legal advice. Q: Well, you? A: I always listened very carefully whenever legal advice was being given. Q: Well, you don't ask questions by reference to the trust deed, do you? A: I have not – recollections of talking about the trust deed on any regular basis. Q: And you never raised any questions or sought any clarification around how this advice interacted with the trust deed because you had never read it? A: I have, to my recollection, never read the entirety of the trust deed. Q: So you've never tested any of the propositions put to you by any lawyers, by reference to the trust deed, have you? A: I don't believe so. … Q: There had not been any consideration by you of the relationship between portability and the trust deed; would you agree with that? A: Yes. Q: Yes. And you do not recall any such being present in board meetings where the trust deed and portability were together discussed? A: I don't recall. Q: No. And can I suggest to you that the previous consideration of legal advice of portability and choice were cursory in nature? MR CALEO KC: I object, your Honour. Previous examination by whom? By Mr de Bruyn or by someone else? MS BENNETT SC: By you – your examination of these issues had been cursory; would you agree with that? MR DE BRUYN: There was a lot of consideration in 2009 of the issue of choice of fund and portability. It Q: I'm sorry, just this is – are you talking about by you? A: Yes. Q: Yes. Right, go on, sorry? A: Yes, in terms of my participation at various meetings. Having refreshed my memory, I think that the board meeting of February two thousand and – of 2005 was where consideration was occurring about the choice of fund legislation. There was the establishment of the choice committee. A lot of time and effort went into looking at the issues, and then concluding with decisions made by the board in May on the recommendation of the choice of fund committee, and then subsequently, the change to the business rules. Q: And one of the issues that you considered at that time was to increase the amount that a person had to retain in REST at $5000 from $1,200. Do you recall that? – A: From $1,200 to $5000, and that was a decision that was made at the board meeting in May 2005. Q: Yes. And that was in your evidence earlier. That was in part to maintain funds under management at REST? A: Yes. It was in the best interest of the members of REST. Q: And it was in the commercial interest of REST to do that? … Q: Well, I'd like to suggest to you that to the extent that legal advice was approving what you were doing, it was consistent with your commercial aims, and you didn't interrogate it in consequence. Would you agree with that? A: I think I looked very carefully at all the legal advice that was provided. We were concerned to make sure that everything that we did as a fund was consistent with the law, and in conformity with the law, as we were required to operate, and that it was in the best interest in the members of the fund. That's how we acted. 1. Now clearly Mr de Bruyn did not have recourse to the trust deed. But that is unsurprising given his position and that he could fairly and reasonably rely upon internal and external lawyers and senior management underneath him to have done so where necessary. 2. Clearly as part of his role he had access to legal advice where relevant from time to time and acted in accordance with it. 3. In summary, whatever opinions he held on the issues under consideration here, I am not able to conclude that he had no reasonable basis for such opinions simply because he did not turn to or read the trust deed. But in any event, the relevant legal issue ultimately turned upon the proper construction of Div 6.5 of the SIS Regulations. ASIC has not demonstrated that any statement of opinion lacked a reasonable basis 1. Clearly, REST sought and received legal advice on the operation of Div 6.5 of the SIS Regulations, as well as on the content of its rules and forms to members on numerous occasions before and during the relevant period. 2. Prior to the relevant period, that advice was sought from Mr Charteris, who at all times was a partner of a leading Australian law firm. The advice was clear and relevantly unqualified and did not suggest that the position set out in the advice was seriously contestable or open to question. 3. First, the Phillips Fox advice of 5 September 2005 was received by Ms Mills, who was the head of legal, regulatory and commercial. As the person at REST seeking advice as to REST's legal obligations in relation to portability under the SIS Regulations, Ms Mills' knowledge of that advice is attributable to REST, and the advice was a matter available to REST for the purpose of assessing whether any statement of opinion concerning the law was reasonably capable of being held. 4. Second, the Phillips Fox advice of 9 September 2005 was received by Ms Mills. Again, as the person at REST seeking advice as to REST's legal obligations in relation to portability under the SIS Regulations, Ms Mills' knowledge of that advice is attributable to REST, and the advice was a matter available to REST for the purpose of assessing whether any statement of opinion concerning the law was reasonably capable of being held. 5. Further, it can be inferred that this advice, or similar advice given orally by Mr Charteris around this time, was communicated to Mr Hill, who at the board meeting on 9 September 2005 said to the board that Phillips Fox had confirmed that REST's portability practices were correct. 6. Third, on 21 June 2007, Ms Mills of REST received advice from Mr Charteris as to the content of REST's rollover form. The advice was provided by means of Mr Charteris reviewing the form and providing his proposed amendments to it. 7. Fourth, in around January 2009, Mr Charteris provided advice to REST, by means of reviewing and marking up a response to APRA to be provided by REST in relation to its portability practices. This draft letter was received by at least Ms Mills, who directly received the email from Mr Charteris, the board, the audit, risk and compliance committee and Mr Hill who was present at each of the board and audit, risk and compliance committee meetings, and who ultimately sent the response to APRA. 8. Fifth, on 23 January 2013, Mr Charteris provided further advice to REST that was sent to Ms Mills in relation to the portability requirements in Div 6.5 of the SIS Regulations. The letter of advice dealt directly with the ongoing interest argument. 9. Ms Mills' knowledge of that advice is attributable to REST. There is no direct evidence as to who else at REST may have been provided with or informed of this advice, but it can be inferred that if advice had been received which indicated that REST's practice was not consistent with Div 6.5, this would have been elevated to more senior members of the management team and/or the board, and REST's practice would have changed. 10. Further, in July 2014, the general counsel and company secretary of REST, Mr Howard, sought and received advice from Mr Charteris as to REST's practice. In his exchanges with Mr Charteris, Mr Howard sought to test the advice that was received. The advice received in response was clear that REST's practice was in accordance with the requirements of Div 6.5. Mr Howard then forwarded this advice to others within REST, including Ms Mills and Mr Noel Daniell, in a way which indicated that he was of the view that REST's practice complied with Div 6.5. Mr Howard did not seek to take any steps to further question or stop the practice, and did not raise the issue to the board. Mr Howard was the general counsel and company secretary of REST, acting within the scope of his employment as the duly authorised servant and agent of REST in considering the issue of the compliance of REST's practice with the law. In these circumstances, Mr Howard's belief and knowledge is attributable to REST. 11. Further, on 21 October 2014, Mr Charteris provided further advice to REST that was sent to Ms Mills in relation to the portability requirements in Div 6.5. It is evident from the letter of advice that Mr Charteris and Ms Mills had also had discussions about this issue. Again, Ms Mills' knowledge of this advice is attributable to REST. 12. Further, on 10 March 2018, REST received initial advice from Ms Levy of Allens to the effect that REST's practice was compliant with the law. The advice, provided by way of mark-ups to a draft letter, was consistent with the previous advice of Mr Charteris, albeit that it set out in more detail why Ms Levy considered that REST's conduct in relation to rollover requests from determination members was consistent with the SIS Act and the SIS Regulations. 13. The final letter to APRA, incorporating and reflecting Ms Levy's advice, was then sent on 18 April 2018. It is clear that the content of what is set out in the letter is Ms Levy's advice, and not just a position stated to APRA. The position of APRA 1. Let me address again the position of APRA. It can be inferred that APRA shared the same view as REST up to 2018. 2. REST had specifically been asked by APRA about and had informed it of its practice in relation to rollover requests. APRA had informed REST that this was a key issue for it and that it would be examining this issue as part of a prudential review. Further, APRA had also conducted a more specific review into REST's rollover practices as a result of two complaints received by it. Further, REST had provided APRA with its relevant rollover form as well as scripts used by staff in dealing with rollover requests. 3. In summary and prior to 2018, APRA did not take any action in relation to REST's practice or suggest in any way that it was of the view that it was not compliant with the SIS Regulations. 4. I have dealt with the sequence of events earlier and do not need to repeat the detailed chronology. The SCT decision 1. Finally, REST says that the Superannuation Complaints Tribunal (SCT) decision of 2 October 2014, being D14-15/082, [2014] SCTA 226, was a determination that REST's practice was consistent with reg 6.35 of the SIS Regulations. 2. The SCT decision concerned a complaint under s 14 of the then Superannuation (Resolution of Complaints) Act 1993 (Cth). The SCT was required to affirm the decision if satisfied that it was fair and reasonable in the circumstances (s 37(6)). 3. Now although the hearing before the SCT was de novo (Mercer Superannuation (Australia) Limited v Billinghurst (2017) 255 FCR 144 at [32] per Flick and Kerr JJ), the task of the SCT was not judicial review. The SCT was not called upon to determine whether the decision under review was correct or to ascertain whether error had occurred. A determination to vary or set aside and substitute a new decision was neither a determination that the fund trustee misapplied the law to the facts, nor that such a trustee mistook its powers and obligations under the governing rules of the fund. Rather it was a determination by the SCT of its own opinion as to whether or not the trustee's decision was fair and reasonable in the circumstances. 4. Now in determining the complaint, the SCT was presented with REST's trust deed, REST's statements to the employee that it would require an "employment separation certificate" from the employer in order to process a rollover, REST's statement that if reg 6.35(1)(b) applied a minimum balance of $5,000 had to remain, and a contention by the member that this was not correct, the rules setting out REST's practice and REST's view of the legal position. 5. Having considered these matters, the SCT determined that REST's practice was consistent with reg 6.35 of the SIS Regulations. 6. REST says that it can be noted that the SCT chairperson was also obliged to raise any contraventions of the law with the appropriate regulator (s 64). 7. Now whilst the determination of the SCT is not binding or determinative of the proper operation of Div 6 of the SIS Regulations, REST says that it was an important matter known to REST prior to the relevant period. It was an indication that the statutory tribunal tasked with reviewing complaints in relation to compliance with the SIS Regulations by superannuation funds shared REST's view as to the operation of the law. REST says that this supports the fact that its opinion of the law had a reasonable basis. 8. But I agree with ASIC that in that context, REST ought to have drawn limited if any comfort as to the correctness of its alleged opinion of the law from the SCT decision, notwithstanding that the SCT affirmed the decision of REST. 9. In the absence of submissions on the point, the SCT proceeded on the basis that REST's minimum balance requirement was designed to ensure that there was always a sufficient balance to meet outgoings such as fees, charges, insurance, etc. 10. But in this proceeding, REST accepts that that was not the case. In the course of drafting the 13 April 2018 letter of Allens, any reference to a member's insurance benefits providing a justification for the minimum balance and partial transfer requirements was dropped. In the final letter as sent, REST relied only upon the alleged right to receive future contributions. 11. Now on one view the previous minimum balance of $1,200 was adequate for that purpose. The construction and operation of reg 6.35, and the notion that a member might have an interest in the fund in the sense asserted by REST, did not arise. 12. Moreover, there is no direct evidence as to who at REST received or read the SCT decision, although there is an available inference that Mr Howard read it. 13. In all the circumstances and contrary to REST's submissions, I do not consider that the SCT decision provides any adequate or partial foundation for the reasonable grounds asserted by REST. Summary 1. For the above reasons, in my view, even if I assume that REST was wrong on the relevant legal point, REST had a reasonable basis for the opinion that it expressed to determination members from time to time in any of the statements to such members. Were the representations false or misleading or deceptive? 1. ASIC says that each determination member's whole of balance transfer request should have been effected in full once REST received the mandatory information in schedule 2A. The schedule 2A form contemplates the possibility that the member may or may not have choice of fund and that they may need to engage with their employer on this issue. 2. Form 2A includes a warning on page 1 that: Using this form to transfer your benefits will not change the fund to which your employer pays your contributions and may close the account you are transferring your benefits FROM. If you wish to change the fund into which your contributions are being paid, you will need to speak to your employer about choice. 1. Now REST argues that it was entitled to request information such as a person's employment or termination date to determine whether the member requesting the rollover was a determination member or not and whether further contributions would be received from their employer. But ASIC says that where a request was made for a whole of balance transfer, it was irrelevant if it was made by a determination member or not. But of course, on my analysis of the law, ASIC is incorrect in these conclusions. 2. But let me assume for present purposes that ASIC's position is correct concerning the phrase "member's interest in the fund", and deal with the parties' cases on that basis. 3. Whether or not conduct is misleading or deceptive, or is likely to mislead or deceive, is to be determined by having regard to REST's conduct as a whole, viewed in the context of all relevant facts and circumstances at the time the conduct took place. 4. The phrase "likely to mislead or deceive" does not require proof that anyone was actually misled or deceived. The test is objective. 5. Conduct is likely to mislead or deceive if there is a real or not remote possibility of a person being misled as opposed to merely being confused. And when considering speech or other conduct, the central question is whether the impugned speech or other conduct, viewed as a whole, has a sufficient tendency to lead a person exposed to it to form an erroneous assumption or conclusion about some fact or matter. 6. Now If ASIC had established that REST made the representations, and they had the character alleged by it, ASIC contends that they were misleading or deceptive because they were false and/or had a sufficient tendency to lead the persons exposed to them into error. ASIC has provided the following tabulation: Representation True or correct position at law Partial transfer representation: if a member remained employed by a REST employer and the REST employer would continue to make contributions to the fund (known as a "determination member"), then the member could only partially transfer their superannuation balance out of the fund There was no basis to automatically and universally treat full transfer requests received from determination members as partial transfer requests. They did not have an entitlement to future contributions that was capable of being recognised as trust property, it was a mere expectancy. Alternatively, even if determination members had such a right, its value was unascertainable and did not enable comparison with the $5,000 threshold. As such, determination members were entitled to make a full transfer. $5,000 representation: if a member continued to be employed by a REST employer, then they were required to maintain a minimum amount of $5,000 in their REST account As above. Determination members requesting a full transfer were not required to leave a minimum of $5,000 behind. Declaration requirement representation: members were required to obtain a declaration from their employer: (i) that the member had "choice of fund rights"; and The information REST was entitled to request where a determination member requested a full transfer was limited to that specified as mandatory in Schedule 2A or 2B. A declaration from an employer that the member had "choice of fund rights" and of the date upon which the REST employer ceased making contributions to REST was not specified as mandatory in Schedule 2A or 2B. (ii) of the date upon which the REST employer ceased making contributions to REST, as a pre-requisite to effecting the transfer, and that a failure to provide that declaration meant that the request could be refused by REST Certificate requirement representation: a request could only be processed where a member obtained a separation certificate from their employer or provided a date of termination As above. A separation certificate or date of termination was not specified as mandatory information in Schedule 2A or 2B. 1. Now if the statements made by REST to its members did convey the representations alleged by ASIC, those representations were not false or misleading or deceptive or likely to mislead or deceive because they correctly reflected the legal position. But assume that this was not so. 2. In any event, I have accepted REST's position on characterisation that the statements, to the extent they were made, were not statements of fact as to the operation of Div 6.5 of the SIS Regulations. Rather they were statements of REST's practice, which statements were correct. Alternatively, to the extent that the alleged representations were express or implied statements of law, they were statements of REST's opinion of the law which was honestly and reasonably held. 3. REST accurately conveyed to members what its rules and practice were. Its factual statements about that to members were accurate. Moreover, any opinions expressed as to the law were based on reasonable grounds. 4. In summary, even if ASIC had been correct on the construction question concerning "member's interest in the fund", it still has not made out its case as to the falsity of the statements made or that they were misleading or deceptive or likely to mislead or deceive. Conclusion 1. ASIC has failed in its principal claims and so the proceeding must be dismissed. 2. Now normally REST should have all of its party/party costs, but I propose to discount them by 20% to reflect the fact that ASIC has had success on some questions. I will hear further from the parties on that question, if necessary. 3. I will make the necessary orders to reflect these reasons. I certify that the preceding nine hundred and fifty-three (953) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Beach. Associate: Dated: 18 September 2024