Last week the Federal Court (Markovic J) published judgment in Brady v NULIS Nominees (Australia) Ltd in its capacity as Trustee of the MLC Super Fund [2024] FCA 1374. The case is an important decision in fees for no services class actions in the financial services sector and is the first to consider superannuation trustee compliance in a class action context.
NULIS is the Trustee of the MLC Super Fund. National Australia Bank is the ultimate holding company of NULIS. The class action made three allegations. First, it alleged NULIS lacked power under the trust deed to charge fees insofar as they represented revenue to NULIS that may ultimately form part of a pool of funds used to pay commissions. Second, it alleged that NULIS breached its duties as trustee under the Superannuation Industry (Supervision) Act 1993 by charging fund members fees to fund commissions to financial services licensees following a transfer of the relevant fund to a successor fund. Third, it alleged that NULIS breached s 963K of the Corporations Act 2001 (Cth) by paying commissions after 1 July 2016 with the consequence that the charging of fees to fund the payment of those commissions was a breach of the Trust Deed because those fees were not for the “administration and operation” of the MLC Super Fund.
The Court dismissed each of the claims. Markovic J held at held at [476] that decisions of a superannuation trustee would “only be examined or reviewed by a court for the purpose of determining whether the discretion has been exercised in good faith, upon real and genuine consideration and in accordance with the purposes for which the discretion was conferred.”
Fiona Roughley SC appeared for NULIS, together with David Thomas SC and Celia Winnett (6 Selborne), and Eliza Forsyth (12 Wentworth). They were instructed by King & Wood Mallesons.
