KCA Super Pty Limited as Trustee of the Superannuation Fund Known as 'KCA Super' (No 2) [2011] NSWSC 1301

Supreme Court New South Wales

Medium Neutral Citation: KCA Super Pty Limited as Trustee of the Superannuation Fund Known as 'KCA Super' (No 2) [2011] NSWSC 1301 Hearing dates: 13 October 2011 Decision date: 02 November 2011 Jurisdiction: Equity Division Before: Brereton J Decision: Advise that KCA Super Pty Ltd as trustee of KCA Super would be justified in giving its consent under clause 47 of the Trust Deed to determinations of Kimberley-Clark Australia Pty Limited that give effect to the proposed reclassification of all members of the Defined Benefit Division of KCA Super to become members of the Accumulation Division from 1 December 2011, substantially in accordance with the letter from the Company to the Trustee dated 30 September 2011. Catchwords: TRUSTS - Trustees - Application for judicial advice - Trustee of superannuation fund seeks judicial advice as to whether it would be justified in consenting to reclassification of members of fund in line with determinations made by Company - Trustee's consent to reclassification required under Trust Deed - reclassification would result in members of particular division being detrimentally affected - Company proposes to dissolve fund pursuant to power in trust deed - question whether consent to transfer is a course reasonably open to a prudent trustee - trustee bound to act honestly and for proper purposes, taking into account the interests of members - trustee must act impartially and fairly in relation to the different classes of members and avoid benefiting one class over another - Company's proposal will result in detriment to class of members - subject to countervailing consideration trustee should not accept proposal - countervailing consideration that if Trustee does not consent Company proposes to dissolve fund - if fund dissolved members will be worse off than under Company's proposal to reclassify and provide compensation - issue as to whether Company can lawfully dissolve trust - express power provided in Trust Deed untrammelled by express limitations - Company not a fiduciary - whether exercise of power moderated by implied obligation of good faith - even if had to exercise power honestly and in good faith would not preclude Company exercising power as proposed given purpose of power to provide mechanism for Company to free itself from onerous obligations under trust deed - Trustee justified in consenting to proposed reclassification of members. Legislation Cited: (CTH) Superannuation Industry (Supervision) Act 1993, s 52 (NSW) Trustee Act 1925, s 63 Cases Cited: Cowan v Scargill [1985] 1 Ch 270 KCA Super Pty Limited as Trustee of the Superannuation Fund Known as 'KCA Super' [2011] NSWSC 1204 Imperial Group Pension Trust Ltd and Others v Imperial Tobacco Ltd and Others [1991] 1 WLR 589 Lock v Westpac Banking Corporation and Others (1991) 25 NSWLR 593 Nestle v National Westminster Bank (Chancery Division, Hoffman J, 29 June 1988, unreported) Re Brockbank [1948] Ch 206 Re Mulligan (Deceased) [1998] 1 NZLR 481 Tanti v Carlson [1948] VLR 401 Category: Principal judgment Parties: KCA Super Pty Limited as Trustee of the Superannuation Fund Known as 'KCA Super' (applicant) Kimberley-Clark Australia Pty Ltd (interested party) Representation: Counsel: Mr Fernon SC with Mr Drew Mr F Gleeson SC with Mr Izzo Solicitors: Freehills (applicant) Herbert Geer (interested party) File Number(s): 2011/305970