Obligations And Powers Of Superannuation Trustees Concerning Situations Of Actual Or Possible Conflict
(2020) 49 Aust Bar Rev 1
51 Pages Posted: 1 Dec 2020
Date Written: March 12, 2020
Part 1 summarises the present status as a matter of precedent in Australia of the general law rule that a fiduciary not be in a situation of conflict, the meaning of being “in a situation of conflict”, and the recognised circumstances in which there is an exception to the rule. It also criticises the application of the rule to a superannuation trustee in Jones v AMP Perpetual Trustee Co NZ Ltd . Part 2 considers the relationship of the pre-existing general law and statute law governing trusts to the provisions of the Superannuation Industry (Supervision) Act 1993 (“SIS Act”). Part 3 considers the effect of the initial introduction of the SIS Act on the application of the no-conflicts rule to superannuation trusts. Part 4 considers how the replacement of the original statutory covenants in the SIS Act with a set that included express obligations concerning conflicts affects the possible application of the general law no-conflicts rule. It argues that it is still possible, in some circumstances, for the general law no-conflicts rule to apply, and considers the limitations on now amending a trust deed that did not already exclude the no-conflicts duty to amend or limit that duty. Part 4 also considers various aspects of the construction and practical application of the new covenants concerning conflicts, including the role of the prudential standards, and some other statutory amendments that came into operation in 2013 and 2019 that bear upon a trustee’s actions in a situation of conflict. Part 5 provides several miscellaneous examples, discussed with particular reference to outsourcing, of principles that do not mention the word “conflict” but that could need to be taken into account when a superannuation trustee is in a situation of conflict.
Keywords: superannuation, trustees, fiduciary duties, trustee duties, exculpatory clauses, trustee covenants, prudential standards, primary obligations and secondary obligations, "governing rules", outsourcing
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