RE BOND; EX PARTE RAMSAY

Judges:
Hill J

Court:
Federal Court

Judgment date: Judgment handed down 30 November 1992

Hill J

The applicant, Mr Robert Eastaugh Ramsay, is the trustee of the bankrupt estate of Alan Bond. He seeks a declaration that there is vested in him, pursuant to the provisions of s. 58 of the Bankruptcy Act 1966 (Cth) (``the Act''), a benefit arising from the rules of a

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superannuation fund known as the Investors Retirement Fund (``the fund''), constituted pursuant to a Trust Deed and Rules dated 9 February 1990. He seeks also an order that the trustees of that fund pay to him such benefit as is found to have vested in him.

The matter initially came before me on an interlocutory basis, and on 11 June 1992 I ordered that Ms Delores Jean Caboche and Mr Peter Nommel Gleeson (``the fund trustees'') be restrained, inter alia, from making an investment of the trust fund, from dealing with any assets of the fund otherwise than in the ordinary course of the day to day management of the fund and, without giving to Mr Ramsay seven days' notice in writing, from exercising any of the powers or discretions conferred upon them as trustees of the fund. I also ordered that there be joined as parties to the present proceedings, Mrs Eileen Bond (the seventh respondent), Mr Alan Bond (``the bankrupt'') (the eighth respondent) and John Bond, Craig Bond, Susanne Bond and Jody Bond (the third, fourth, fifth and sixth respondents respectively) who are the children of the bankrupt. The respondents, other than the fund trustees and the bankrupt, are all persons who might potentially benefit as beneficiaries under the fund Deed. These respondents are hereafter referred to as ``the Bond family''. I made consequential orders for the future disposition of the case. The bankrupt did not appear.

On 31 August and 1 September 1992, I heard an application brought by the Bond family supported by the fund trustees that the present application be heard in Perth. That application was opposed by Mr Ramsay. Ultimately, for reasons set out in a judgment delivered ex tempore on 1 September 1992, I acceded to the application. I did so, inter alia, as I said in that judgment, because counsel for the Bond family, on instructions, said that it was desired to cross- examine the deponents of affidavits filed by Mr Ramsay and in particular to put those deponents to strict proof of various matters in issue. It was said that these matters included particularly the time when the bankrupt ceased to be an employee of various companies and indeed whether he was at any time the employee of Dallhold Investments Pty Ltd (In Liquidation) (``Dallhold'').

Accordingly, the matter came on for hearing before me in Perth. No evidence was filed on behalf of the Bond family and no cross- examination was engaged in by counsel acting on their behalf, nor was there any attempt at all to put Mr Ramsay to strict proof. Indeed, by all parties the evidence was uncontested and, as was originally predicted by counsel appearing for Mr Ramsay on the application to move the hearing of these proceedings to Perth, the case was virtually entirely documentary.

The facts, indeed, turn out to be as they appeared in the interlocutory proceedings, subject to some evidence concerning certain acts of the bankrupt said to constitute acts of bankruptcy.

The parties to the fund Deed were Bond Corporation Holdings Ltd, therein referred to as ``the principal employer'' and Mrs Bond and Ms Caboche, therein referred to as the ``trustees''. The fund Deed recited, inter alia, that Bond Corporation Holdings Ltd had decided to establish an indefinitely continuing fund to be maintained solely for either or both of two purposes, being:

``(a) the provision of benefits for each Member of the Fund in the event of his retirement from any business, trade, profession, vocation, calling, occupation or employment in which the Member is engaged; and

(b) the provision of benefits for Dependants [sic] of each Member of the Fund in the event of the death of the Member,''

There follow, in cl. 1(1), a series of definitions. Relevant to the dispute between the parties are the following:

```Associated Company' means a corporation deemed to be associated with the Principal Employer within the meaning of the Standards Act as amended from time to time and any Act in substitution therefor;

...

`Benefit' means any amount paid or payable by the Trustees out of the Fund pursuant to this Deed or the Rules to or in respect of a Member;

...

`Employee' means any person who is in the full-time employment of an Employer other than a person who, in the opinion of the Principal Employer, is employed in a temporary or casual capacity, and, where an

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Employer is a company, includes a director of that Employer;

`Employer' means any one or more of the following:

(a) the Principal Employer;

(b) any company which:

(i) in relation to the Principal Employer, is an Associated Company; and

(ii) has applied to the Trustees to become, and has been accepted by the Trustees as, a participating employer; and

(c) any partnership or association combining any two or more of the companies referred to in paragraphs (a) and (b) above.

...

`Member' means:

(a) an Employee who has been admitted as a Member of the Fund as provided in Rule 1; or

(b) a person in respect of whom a Benefit is payable;

...

`Principal Employer' means the person party hereto as the Principal Employer and his successors and assigns;''

Clause 1(7) then provided:

``Notwithstanding anything express or implied to the contrary in this Deed and the Rules, the Trustees shall at all times in the execution and administration of the provisions of this Deed and the Fund comply with the provisions of the Assessment Act and the Standards Act and the Regulations and all requirements of the Commissioner (whether having statutory force or not) so as to ensure that, to the maximum extent possible, the income, profits and gains of the Fund are taxed on a concessional basis. In the event of any inconsistency between the provisions of this Deed and the Rules on the one hand and the provisions of the Assessment Act, the Standards Act, the Regulations and the requirements of the Commissioner on the hand [sic], the latter shall take precedence and shall, to the extent of the inconsistency, be deemed to be incorporated in this Deed or the Rules (as the case may be) to the exclusion of the inconsistent provision contained in this Deed or the Rules (as the case may be).''

Thereafter follow various provisions not relevant to the present proceedings. Clause 8(7) provided:

``The Trustees shall determine all questions relating to:

(a) the interpretation of this Deed or the Rules;

(b) the rights of Members under this Deed and the Rules;

(c) the management and administration of the Fund; and

(d) the execution of the trusts contained in this Deed.''

Clause 16 of the fund Deed was concerned with the forfeiture of entitlements in certain circumstances. Relevant to the present proceedings, and in its original form, it provided relevantly:

``(1) A Benefit payable out of the Fund shall not be assignable at law or in equity.

(2) If a person to whom a Benefit is or may be payable under this Deed and the Rules does or permits to be done any act or thing or some event happens whereby the whole or any part of that Benefit may become payable to or vested in any other person then that Benefit shall be forfeited to the Fund.

(3) If a person entitled to a Benefit under this Deed or the Rules becomes bankrupt or insane or in the opinion of the Trustees becomes incapable of managing his own affairs then that Benefit shall immediately be forfeited to the Fund.''

As is customary, the fund Deed contained as well ``Rules''. These Rules concerned essentially the most important matters such as the criterion for admission of membership, the contribution of amounts on behalf of members and the entitlement of members to benefits. Relevant for immediate purposes are Rules 9 and 14 which provide:

``9. RETIREMENT BENEFITS

(1) If a Member retires from the employment of an Employer and from the workforce on or after his Normal Retirement Date then, subject to the Deed and these Rules, the Trustees shall pay to that Member a lump sum Benefit equal to his Member Account Balance.

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(2) If a Member retires from the employment of an Employer but not from the workforce then, subject to the Deed and these Rules, the Member shall become entitled to:

(a) a lump sum Benefit equal to such portion of his Member Account Balance,

as is permitted under the Standards Act or the Regulations; and

(b) a Preserved Benefit equal to the remaining portion of his Member Account Balance.

...

14. BENEFITS ON TERMINATION OF EMPLOYMENT

(1) Subject to the Deed and these Rules if a Member ceases to be in the employment of an Employer before his Normal Retirement Date otherwise than as provided in Rules 9, 11, or 13 or sub- rule (2) that member shall become entitled to:

(a) a lump sum Benefit equal to the aggregate of:

(i) his Member Account Balance;

(ii) a Preserved Benefit equal to the amount standing to the credit of his Preserved Benefit Account;

(iii) the percentage of his General Account Allocation as may be determined by the Trustees,

as is permitted under the Standards Act and the Regulations PROVIDED THAT the amount payable shall not exceed the amount permissible in accordance with the reasonable benefit limits under the Standards Act and Regulations; and

(2) Subject to the Deed and these Rules if a Member ceases to be in the employment of an Employer due to Retrenchment or Ill Health that Member shall become entitled to a Benefit determined in accordance with Rule 9 as if the Member had retired on the date he ceased employment. If the Member has attained the age of fifty-five (55) years and retires from the workforce upon ceasing to be in the employment of the Employer, the Benefit shall be determined in accordance with Rule 9(1); otherwise it shall be determined in accordance with Rule 9(2).''

Rule 15, bearing the heading ``Preserved Benefit Accounts'' is in the following terms:

``(1) The Trustees shall in respect of each Member who becomes entitled to a Preserved Benefit:

(a) establish a Preserved Benefit Account in the name of the Member upon his becoming entitled to that Benefit; and

(b) in the manner provided in this Rule and Rule 8 maintain a record of the Preserved Benefit Account of the Member.

(2) The amount of the Preserved Benefit to which the Member becomes entitled shall be added to his Preserved Benefit Account Balance.

(3) If the Member: -

(a) retires from the workforce on or after his fifty-fifth (55th) birthday; or

(b) retires from the workforce prior to his fifty-fifth (55th) birthday as a result of illness or incapacity and has furnished to the Trustees a certificate of the kind referred to in Rule l3(4)(a); or

(c) dies; or

(d) departs the Commonwealth to reside permanently overseas; or

(e) requests the payment of his Preserved Benefit Account Balance in such circumstances as are approved from time to time under the Standards Act,

the Trustees shall pay to the Member or in the case of his death to his Dependants or his legal personal representative in the manner provided in Rule 12 his Preserved Benefit Account Balance.

(4) The Trustees shall make no payment of a Preserved Benefit or any part thereof other than in accordance with the Regulations and the Standards Act.''

It would seem that the fund was established for the purpose of receiving from another superannuation fund, the Bond Corporation Group Superannuation Fund, of which Mr Bond was a member, a sum of money. There was transferred from the Bond Corporation Superannuation Fund the sum of $2,359,238 which, together with an amount of $66,874 shown in the accounts of the fund covering the

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period from 9 February 1990 to 31 March 1992 as ``contributions'', represents the corpus of the fund to which income and profits have been added. As at 31 March 1992 the balance sheet of the fund disclosed the net assets of the fund as $2,712,152.

On 31 August 1990, Mr Bond ceased to be an employee of Bond Corporation Holdings Ltd. He remained, however, a director of that company until 26 September 1990. On 8 October 1990, there was executed what is referred to as a ``Deed of Succession'' between Bond Corporation Holdings Ltd, Dallhold and the then trustees of the fund, Mrs Bond and Ms Caboche. That Deed of Succession contained the following recitals:

``WHEREAS

A. By a Deed dated 9 February 1990 (`Deed') and executed by the Retiring Principal Employer of the one part and the Trustees of the other part the `Investors Retirement Fund' (`Fund') was established to provide superannuation benefits for Members of the Fund.

B. Clause 20 of the Deed enables the Trustees to amend the terms of the Deed at any time by deed or resolution as long as the restrictions contained in clause 20(2) are observed.

C. The Trustees now wish to amend the terms of the Deed in the manner set out in this Deed.

D. The Principal Employer has indicated its intention to retire as the principal employer of the Fund.

E. The New Principal Employer has agreed to act as the principal employer of the Fund in accordance with the provisions of the Deed.

F. The Beneficiary is the sole member of the Fund and ceased to be employed by the Retiring Principal Employer and has accepted employment with the New Principal Employer.''

In the operative part of the Deed, so far as is relevant, it was noted that Bond Corporation Holdings Ltd agreed to retire as the Principal Employer and that it assigned to Dallhold the rights attaching to the Principal Employer as and from 5 October 1990. It provided also that the trustees and Mr Bond, by their respective executions, acknowledged and consented to this change of Principal Employer. The Deed of Succession thereafter amended the fund Deed by substituting Dallhold for Bond Corporation Holdings Ltd as the Principal Employer.

There is no suggestion that Mr Bond was, in fact, an employee of Dallhold. He was, however, a director of that company. On 5 July 1991, an order was made by this Court that Dallhold be wound up. Two Deeds were thereafter executed on 19 July 1991. The first is referred to as a Deed of Amendment and Appointment, the second as a Deed of Succession. The Deed of Amendment and Appointment made various amendments to the fund Deed. Relevant to the present case is an amendment made to cl. 16, which inserted certain words into that clause with the result that sub-cl. 16(2) thereafter read:

``If a person to whom a benefit is or may be payable under this Deed and the Rules does or permits to be done any act or thing or some event happens including any act of bankruptcy whereby the whole or any part of that Benefit may become payable to or vested in any other person then that Benefit shall be forfeited to the Fund.''

Clause 16(3) of the fund Deed was also amended by inserting, at the beginning of it, the words ``without limiting the generality of sub- clause (2)''. It might perhaps be mentioned that on 26 March 1991, proceedings had been commenced by the HongKongBank of Australia Ltd, the HongKong and Shanghai Banking Corporation Ltd, Tricontinental Australia Ltd and the Bank of New Zealand (``the banks'') against, inter alia, Dallhold and Mr Bond, which proceedings sought, inter alia, an order that Mr Bond pay to the plaintiffs US$194,644,433.97 plus other amounts.

The Deed of Succession substituted as the Principal Employer, in place of Dallhold, Metals Exploration Ltd. It recited:

``WHEREAS:

A. By a Deed dated 9 February 1990 (`Deed') and executed by Bond Corporation Holdings Limited (`Former Principal Employer') of the one part and the Trustees of the other part the `Investors Retirement Fund' (`Fund') was established to provide superannuation benefits for Members of the Fund.

B. By a deed dated 5 October 1990 the Deed was amended and Dallhold Investments Pty

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Ltd (`Retiring Principal Employer') succeeded the Former Principal Employer as the principal employer under the Deed.

C. The Trustees now wish to amend the terms of the Deed in the manner set out in this Deed.

D. The New Principal Employer has agreed to act as the principal employer of the Fund in accordance with the provisions of the Deed.

E. The Beneficiary is the sole member of the Fund and ceased to be employed by the Retiring Principal Employer and has accepted employment with the New Principal Employer.''

Mr Bond resigned as a director of Metals Exploration Ltd on 5 December 1991. Whether or not he was ever an employee of that company, any employment he had with it ceased also on that date.

Between July and August of that year, Mr Lord, a Chartered Accountant practising in Sydney and the liquidator of Dallhold, had a number of conversations with Mr Bond, some of which related to the possibility of Mr Bond reaching a settlement with all his creditors. It appears, from a letter written by Mr Bond on 7 August 1991 to Mr Lord, that an agreement had been reached between Mr Bond and Mr Lord that any settlement of the claim that had been made by Dallhold against Mr Bond would have to be a settlement reached with all of his creditors. To this end Mr Bond had instructed a firm of accountants to prepare for him a confidential report.

On 26 September 1991, Mr Bond was served with a bankruptcy notice, judgment having been obtained in the meantime by the banks on 23 September 1991. That bankruptcy notice was subsequently set aside: see
Re Bond; Ex parte HongKongBank of Australia Limited (1991) 33 FCR 426. It is agreed, between the parties, that Mr Bond was unable to pay his debts as they fell due from at least 23 July 1991.

On 27 September 1991, Messrs Parker and Parker, Solicitors of Perth, acting for Mr Bond, wrote to Mr Iceton who worked for Mr Lord enclosing a draft schedule listing creditors of Mr Bond and referring to a proposed Part X arrangement. The document was said to have been provided in the context of negotiations to settle proceedings currently on foot between Mr Bond and Dallhold. The attachment showed that at that time Mr Bond had estimated that he owed his creditors $655,000,000, of which $151,200,000 was unsecured and that he proposed offering to them an amount of $5,000,000 payable over a period of time. On 15 October 1991, Mr Bond paid to American Express International Inc a cheque in the sum of $1,549.90 in part payment of his then outstanding balance. Likewise on 21 August 1991, Mr Bond forwarded a cheque to solicitors for West Australia Newspapers Ltd, which company conducted a travel agency business known as Western International Travel, for $2,472.63.

The payment made to American Express International Inc was ultimately refunded to the trustee upon Mr Bond becoming bankrupt on a petition filed in the Court on 9 March 1992 based upon an act of bankruptcy committed on 6 March 1992 when he failed to comply with the provisions of a second bankruptcy notice that had been served upon him.

The issues between the parties

Mr Ramsay's case is that on 31 August 1990, or alternatively 26 September 1990, or alternatively 5 July 1991, as a result of Mr Bond ceasing to be employed by or a director of Bond Corporation Holdings Ltd, Dallhold, or Metals Exploration Ltd, he became absolutely entitled to a benefit payable to him under the fund, pursuant to either r. 14 or r. 9, and on being made bankrupt on 14 April 1992, that benefit, which had not been paid to him by that date, vested in Mr Ramsay as trustee of Mr Bond's bankrupt estate. It was further said that in the event that Mr Bond had not ceased to be a director of Dallhold when that company went into liquidation, he certainly ceased to be so at the very latest upon his being made bankrupt, having regard to the provisions of s. 224(1)(c) of the Corporations Law and as and from that moment of time the benefit which thereupon arose vested upon Mr Ramsay pursuant to s. 58 of the Act.

An issue, said to be relevant to these submissions, was whether, having regard to the proper construction of the definition of ``employee'' in cl. 1(1) of the fund Deed, a Member of the fund retired from his employment (cl. 9) or ceased to be in the employment (cl. 14) of an employer under the fund Deed when he ceased to be an employee in the ordinary sense of that word, or whether in the case of an employee such as Mr Bond, who

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was also a director of an employer, the provisions of cll. 9 and 14 only became operative on the last to happen of his ceasing to be an employee and his ceasing to be a director.

Although Mr Ramsay's case rested both on rr. 9 and 14, it is clear that which, if either, of rr. 9 and 14 applied depended upon whether, on the facts, Mr Bond had ``retired'' from employment or had ceased to be in the employment of a relevant employer. It was said that Mr Bond's status as an employee (in the ordinary sense) of Bond Corporation Holdings Ltd was in fact terminated with the result that the relevant rule to apply would be r. 14. On the other hand, if the relevant event qualifying Mr Bond for a benefit was his ceasing to be a director of that company, then the relevant rule would be r. 9. For present purposes little turns upon this distinction.

Counsel for the Bond family submitted that both rr. 9 and 14 should be interpreted so that there was no right to payment of a benefit by a member otherwise qualifying, unless and until that member demanded payment. On this basis it was said the time had not yet arisen when Mr Bond's entitlement was due for payment. This argument, which on its face would seem simple enough to counter by the making of a mere demand, was, however, put in aid of a submission that Mr Bond's benefit was forfeited by the operation of cl. 16 of the Deed in its original form or in its amended form.

Senior counsel for the fund trustees also submitted that cl. 16 operated to forfeit Mr Bond's benefit, but did not support the construction, put by counsel for the Bond family, that rr. 9 and 14 should be construed so as to require a demand for payment. Rather, he submitted that as rr. 9 and 14 were expressly made subject to the fund Deed including cl. 16, Mr Bond never became absolutely entitled to a benefit because cl. 16 intervened to work a forfeiture of it.

For Mr Ramsay it was submitted that cl. 16 did not have the effect of forfeiting Mr Bond's interest. This was said to be so either as a matter of construction or alternatively because cl. 16 was void and contrary to public policy. Counsel for all the respondents disputed that cl. 16 was void. They relied, as well, upon the amendment to cl. 16, if cl. 16 in its original form did not have the consequence of forfeiting the interest to which Mr Bond would otherwise have been entitled. In response to this submission, counsel for Mr Ramsay submitted that the amendment to cl. 16 was void as being an abuse by the trustees of the power to amend, having regard to Mr Bond's financial situation at that time. The only evidence relied upon for this submission was the evidence of the financial matters to which I have referred. It may be noted that neither of the fund trustees gave evidence or submitted themselves to cross- examination.

The act of bankruptcy, to which regard was to be had for the purposes of cl. 16(2), was said to be either the payment to American Express International Inc or to the travel agency. Alternatively, it was submitted that Mr Bond had given notice that he proposed to suspend payment to his creditors and, accordingly, in so doing he had committed an act of bankruptcy. It is not necessary to decide this point because the payments to American Express International Inc and the travel agency were each conceded by counsel for Mr Ramsay to be an act of bankruptcy on Mr Bond's part.

Counsel for the respondents submitted that, even if rr. 9 or 14 had the effect that, when Mr Bond ceased to be an employee or director of Bond Corporation Holdings Ltd, he became entitled to payment of a benefit, that consequence was denied by the Deed of Succession of 19 July 1991. It was submitted that the recitals of that Deed estopped Mr Bond from asserting that he was, as at that date, entitled to a benefit. The estoppel thus had the effect of negating any benefit arising under the fund Deed to Mr Bond, unless and until he ceased to be employed (as a director or otherwise) by Metals Exploration Ltd. So it was said that when Mr Bond committed one of the acts of bankruptcy relied upon earlier, his benefit was forfeited under cl. 16 prior to that benefit becoming vested in him.

In this event, counsel for Mr Ramsay submitted that the various Deeds of Succession, culminating in the Deed of 19 July 1991, constituted a settlement made by Mr Bond which settlement was void under s. 120 of the Act and accordingly should be set aside in favour of Mr Ramsay. This was not, however, a matter raised in the pleadings and accordingly counsel for Mr Ramsay sought leave to amend his pleadings accordingly. I reserved decision on this matter. By way of an alternative submission, the respondents relied also upon a determination made by the fund trustees on 30

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June 1992. That determination, which was in the form of a resolution of the trustees signed by them following a telephone discussion said to have taken place between them at 9.30 am on Tuesday, 30 June, provided:

``That no Benefit under the Investors Retirement Fund is payable to Robert Eastaugh Ramsay in his capacity as trustee of the bankrupt estate of Alan Bond.''

Counsel for Mr Ramsay submitted that this determination was void either as being outside the power conferred upon the fund trustees under cl. 8 pursuant to which it was apparently made, or alternatively as a fraud upon that power because the trustees, having an obligation to act impartially, instead had acted for an improper purpose and in breach of the court's injunction so that the termination had no legal effect.

There was a final matter which arose only if I found that Mr Ramsay, in place of Mr Bond, was entitled to receive, from the trustees, a benefit pursuant either to rr. 9 and 14.

It may be noted that each of these rules refers to certain accounts to be kept by the fund, being specifically a Member Account and a Preserved Benefit Account. The trustees, it is alleged by Mr Ramsay, did not keep those accounts. But that is not the only problem. Each of rr. 9 and 14 limits the amount that may be paid to a member to such amount as is permitted under the Occupational Superannuation Standards Act 1987 (Cth) (``the Standards Act'') and the regulations made under that Act.

It will be necessary to discuss the provisions of the Standards Act and the regulations made under it in relation to the questions of construction that arise in the present case. Suffice it to say for the moment that the provisions of the regulations relating to preservation of benefits apply if the benefits payable to Mr Bond arose from an agreement or arrangement made on or after 22 December 1986, but not if they related to an arrangement made prior to that date. A question of fact thus arises as to whether, on the facts, there was a relevant arrangement or agreement which takes the present circumstances out of the preservation of benefit requirements of the Standards Act. Senior counsel for the applicant sought to lead evidence on this matter in the form of affidavits not yet filed in the Court. Counsel for the respondents submitted that they would be unable to deal appropriately with these matters without instructions which they could not obtain in time. Ultimately, it was agreed that the better course would be to decide all matters but for these issues of fact and to stand the matter over until a later time, if necessary, to determine the factual questions that arise out of the Standards Act and the regulations pursuant thereto.

I turn now to deal separately with the issues raised.

The construction of rr. 9 and 14

As I have already indicated, counsel for the Bond family submitted that rr. 9 and 14 only entitled a person otherwise qualifying for a benefit to payment of that benefit after that person had actually called for it. It was said that this was so because where the Deed entitled a member to payment of a benefit without demand, the Deed said so. Thus, r. 9(1) obliged the trustee, when the member had retired from his employment and from the workforce, to payment of a lump sum benefit as there set out. Similarly, r. 15(3), concerned with preserved benefits, obligates the trustees in the circumstances there set out to pay a benefit, either to the member, his dependants or legal personal representative. Rule 11, concerned with death benefits, provides for a benefit from the fund of a particular amount to be payable in the event of the death of a member. The concept of death benefits payable is repeated in r. 12(1).

Reference was made also to r. 16, which provides, in certain cases, for benefits to be capable of being transferred in specie to members but only where these members are ``entitled to receive a benefit''. On the construction suggested by counsel for the Bond family, this would mean that cl. 16 would have applicability to all benefits which are payable but not to the benefits such as those referred to in rr. 9(2) and 14(1) where nothing is payable, at least until demand is made. The concept of benefit payable is repeated also in r. 13 dealing with total and permanent disablement benefits.

The difference in language of the various provisions, said to be critical, was said to arise in part out of the Standards Act and the regulations made thereunder. In these circumstances it is now necessary to consider, in more detail, the relevant provisions of that legislation.

The Standards Act commenced on 21 December 1987. It formed one of a number of

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Acts introduced in 1987 as part of the then government's national superannuation policy. It established, as the Minister for Employment, Services and Youth Affairs, and the Minister Assisting the Treasurer, the Honourable Mr Holding said, in his second reading speech:

``... the conditions and the supervisory requirements which superannuation funds and ADFs must meet in order to be eligible for concessional taxation treatment under the Income Tax Assessment Act.''

To be eligible for the relevant taxation concessions, superannuation funds had to comply with various operating standards. Those standards had been announced by the then Treasurer, the Honourable Mr Paul Keating, in press releases of 11 June, 30 July and 22 December 1986.

Critical to the then government's superannuation policy, was the provision of vesting of benefits arising from both employee and employer contributions and what is referred to by the Minister in his second reading speech as ``improved preservation requirements''. This was said by the Minister to represent:

``an important step in ensuring that taxation concessions made available to superannuation funds are directed towards the provision of genuine retirement benefits.''

Section 7 of the Standards Act authorises the prescription by regulation of standards applicable to the operation of superannuation funds as defined in the Standards Act. The definition of superannuation fund in s. 3(1) is in the following terms:

```superannuation fund' means a fund that:

(a) is an indefinitely continuing fund; and

(b) is maintained solely for one or more of the following purposes:

(i) the provision of benefits for each member of the fund in the event of the retirement of the member from any business, trade, profession, vocation, calling, occupation or employment in which the member is engaged;

(ii) the provision of benefits for each member of the fund in the event of the member attaining a particular age (being an age not less than the age prescribed by the regulations) without having retired from any business, trade, profession, vocation, calling, occupation or employment in which the member is engaged;

(iii) the provision of benefits for dependants of each member of the fund in the event of the death of the member, being a death occurring before:

(A) the member's retirement from any business, trade, profession, vocation, calling, occupation or employment in which the member is engaged; or

(B) the member attains a particular age (being an age not less than the age prescribed for the purposes of subparagraph (ii)) without having retirement from any business, trade, profession, vocation, calling, occupation or employment in which the member is engaged;

whichever is earlier;

or for one or more of those purposes and for such ancillary purposes as the Commissioner approves in writing;''

The standards are contained in the Occupational Superannuation Standards Regulations being Statutory Rules Number 322 of 1987. The standards relevant to the present case include regulations 9 to 12 dealing with preservation. These standards provide, in effect, that certain benefits ``must be preserved''. The effect of that preservation is that, except or to the extent that, benefits are payable on the retirement of the member before attaining the age of fifty-five years in the form of a non- commutable pension or annuity, no benefits may be paid to a member until the member retires from the workforce and attains an age of not less than fifty-five years, or the benefits become payable in one of a number of circumstances set out in reg. 11(1)(a)(iii) as follows:

``(A) the retirement of the member from the workforce before attaining the age of 55 years on the ground of permanent incapacity or permanent invalidity;

(B) the death of the member;

(C) the permanent departure of the member from Australia;

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(CA) because of the operation of paragraph 5AC(2)(a), (b) or (c);

(D) such other circumstances (if any) as the Commissioner approves.''

In other circumstances, the preserved benefits, if otherwise an entitlement to them arises, may be rolled over into another superannuation fund, an approved deposit fund or into a deferred annuity.

The matters relating to which standards may be prescribed under s. 7 include the vesting in members of funds of benefits, the preservation and portability of those benefits, the payment of those benefits and the level of the benefits which may be provided.

The Standards Act and the regulations proclaimed under it are clearly important in construing the fund Deed. As has already been noted, cl. 1(7) of the Deed specifically so provides. It is obvious enough that rr. 9 and 14 have been drafted with an eye to the provisions of the Standards Act and regulations. Both limit the entitlement of a member to a benefit of such amount as is permitted under the Standards Act and regulations and is otherwise a reasonable benefit for the purposes of that Act and the regulations thereunder. Thus, on retirement, or ceasing to be in employment, as the case may be, a member may become entitled to two amounts. One amount may be an amount not needing to be preserved. The other amount, however, would be an amount which is required to be preserved and, in this event, that amount is required to be posted to an account referred to as a preserved benefit account. Then r. 15 sets out the trusts which will be applicable to the amount in the preserved benefit account. Amounts not in the preserved benefit account may be paid immediately.

This having been said, it seems to me that rr. 9 and 14 are drafted in terms of entitlement because they cover not only amounts to which a member may be entitled to payment, but also amounts which have to be preserved until the circumstances in r. 15(3) arise. I do not think, however, that there is anything in rr. 9 and 14, or for that matter in the rules or the trust Deed read as a whole, which requires the conclusion that in respect of an amount not required to be preserved, that amount may only be paid to a member otherwise qualifying by way of entitlement to it until that member has made demand. Indeed, such an interpretation would produce somewhat strange results. For example, r. 24(3) provides that where a person entitled to a benefit is, in the opinion of the trustees, unable, by way of incapacity, to manage his own affairs, that benefit may be dealt with in a particular way. On the construction suggested by counsel for the Bond family, that provision could not be accessed in a case where the rules provided for payment to a member, but only in a case of r. 9(2) or r. 14(1). That seems hardly to be the intention.

In my view, rr. 9 and 14 do not have the construction submitted by counsel for the Bond family.

It follows, therefore, that, at the very latest when Mr Bond ceased to be a director of Bond Corporation Holdings Ltd, he having ceased to be an employee of that corporation at an earlier date, Mr Bond became, subject to the terms of cl. 16, a matter to which I will return, absolutely entitled to payment to him of the amount standing to the credit of his member account plus so much of the preserved benefit to which he was otherwise entitled (if any) as was permitted to be paid to him under the Standards Act and regulations and would not, by reference to that Act and regulations, exceed the reasonable benefit limits established under the standards.

I do not think it matters, in the present case, to differentiate between rr. 9 and 14 and although in opening counsel for Mr Ramsay posed as a question for decision the issue whether Mr Bond became entitled to the benefit on ceasing to be an employee or merely upon ceasing to be a director after he had already ceased to be an employee, no party submitted to me that it would make a difference in the present case and accordingly I do not feel it necessary to decide that issue.

Estoppel and the Deeds of Succession

The principles applicable to estoppel by deed were not in dispute between the parties. They are set out, inter alia, in
Offshore Oil NL v Southern Cross Exploration NL (1985) 3 NSWLR 337 per Clarke J and in
Re Patrick Corporation Ltd and the Companies Act [1981] 2 NSWLR 328. Sir Alexander Turner in Spencer, Bower and Turner, Estoppel by Representation, (Butterworths, 3rd Ed, London 1977) at 157, in a passage cited with apparent approval by Everleigh LJ and Brandon LJ in
Amalgamated Investment & Property Co Ltd (In Liquidation) v Texas Commerce

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International Bank Ltd [1982] QB 84 at 126, 130 said:

``When the parties have acted in their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped against the other from questioning the truth of the statement of facts so assumed.''

The estoppel, however, will only operate in proceedings which in fact arise out of the transaction into which the parties entered upon the basis of the assumed facts and not in proceedings arising out of some other transaction: Offshore Oil at 341. The difficulty is what is meant by ``the transaction'' in a particular case, a difficulty illustrated by the judgment of Clarke J in Offshore Oil.

It is said by the respondents that, by executing the various Deeds of Succession containing the recitals to which reference has already been made, Mr Bond was estopped from claiming that he was entitled to receive a benefit under the fund. That estoppel was said to arise out of the recital which provides that he is the sole member of the fund as well as the relationship of that recital to the appointment of a new principal employer.

It is, however, trite law that the representations relied upon must be clear and, for there to be an estoppel, unambiguous;
Onward Building Society v Smithson [1893] 1 Ch 1;
District Bank, Ltd v Webb & Ors [1958] 1 All ER 126. However, when one turns to the Deed of Succession there is nothing in it which contains any representation at all that Mr Bond is not entitled to payment of any benefit. One would have expected a representation to this effect to be in the clearest of all possible terms.

If there had been a clear and unambiguous representation, then a question would have arisen as to whether Mr Ramsay, in attempting to obtain the benefit from the fund trustees, was relying upon the same transaction as was involved in the Deed of Succession. There is much to be said for the view that Mr Ramsay was relying upon the original trust Deed itself and not the Deeds of Succession which occurred subsequently to it. It is also difficult to see, to the extent that the modern law of estoppel is to be unified and seen as dependent upon unconscionable conduct, that there is anything unconscionable about Mr Bond proceeding to recover a benefit to which he was absolutely entitled under the fund Deed, despite entering into the Deeds of Succession.

Counsel for the respondents submitted that the only point in the Deed of Succession was to continue the non-vested status of Mr Bond's benefit, notwithstanding that otherwise he would have been entitled to receive it under rr. 9 and 14. With respect, this is not necessarily so.

Under the provisions of rr. 9 and 14, in the event that there were any benefit to be preserved, that benefit would be preserved and held by the trustees subject to the trusts contained in r. 15. The trust has not come to an end and the principal employer continues to have significance to the operation of the trust deed. For example, cl. 24(1) provides that a copy of the Deed is to be kept at the office of the principal employer; cl. 18 is concerned with the termination of the fund in the event that a resolution is passed for the winding up of the principal employer; new members may be admitted to the fund provided that those members are employees of the principal employer; new trustees are to be appointed, in the event that a trustee ceases to hold office, by or with the agreement of the members and the principal employer, cl. 4(3). In short, there are many reasons why it would be desirable for the Deed of Succession to be entered into without postulating that it was entered into for the rather astonishing purpose of divesting from Mr Bond that to which he was otherwise absolutely entitled and bringing about a situation where the benefit previously vested in him was no longer vested.

It follows also that I have no need to consider the question whether, in the circumstances, if an estoppel had arisen against Mr Bond, it would be proper to have said that Mr Bond had settled property, within the meaning of s. 120 of the Bankruptcy Act, such that that settlement should be declared void as against the trustee in bankruptcy.

Although the matter does not arise, I propose to grant leave to Mr Ramsay to amend his statement of claim to the effect that any settlement created as a result of the execution by Mr Bond of the Deeds of Succession involves a settlement void against Mr Ramsay. Although the application to amend came only after evidence was concluded in the present proceedings in Perth, the situation remains that there will still be need for further evidence to be

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taken in the proceedings and, in that event, there can be no prejudice to any of the parties in granting leave. I do this notwithstanding that, in my view, the matter is academic. Should the matter go on appeal, then the respondents will have had the ability to lead, when the matter resumes, such evidence, if any, as they believe appropriate, to counter the suggestion that Mr Bond made a settlement void under s. 120. So far as Mr Ramsay's case is concerned, no further evidence is, of course, required, since his case depends solely upon the execution by Mr Bond of the Deed of Succession and the consequences which an estoppel would have in the event that there was an unequivocal representation operating to divest from Mr Bond a benefit in him to which he was absolutely entitled.

Clause 16 - its proper construction and validity

An initial question of construction arises as to whether cl. 16(2), in its unamended form, should be construed as extending to a case where a member does or permits to be done any act or thing or some event happens which is an act of bankruptcy. The argument that it should not be so construed, flows out of the provisions of cl. 16(3) which relates specifically to the case where a person entitled to a benefit became bankrupt. Under the provisions of the Act, a person may be made bankrupt either on a creditor's petition or on his own petition. A creditor's petition must be founded upon an act of bankruptcy. It follows, therefore, at least in the case of a creditor's petition, that if the act of bankruptcy itself operates to forfeit a benefit, then that benefit will already have been forfeited by the time the actual petition is filed and a sequestration order made. A debtor's petition, on the other hand, may be presented at any time. There is no statutory requirement that a debtor have committed an act of bankruptcy before he presents his petition. The bankruptcy arises by force of s. 55 itself.

It follows, therefore, that there would still be work to be performed by cl. 16(3), even if cl. 16(2) concerned acts of bankruptcy in that, albeit that no act of bankruptcy had occurred, the act of filing the petition would operate by force of law to bring about a bankruptcy and cl. 16(3) to forfeit the member's benefit.

Not without some doubt, therefore, I am of the view that cl. 16(2), in its original form, properly construed, contemplates a case where an act of bankruptcy has been committed by a member and that it is unnecessary to consider the amendments made thereafter to cll. 16(2) and (3) when Mr Bond's financial situation was, to say the least, perilous.

Two questions then arise. The first is whether cl. 16(2) is, as senior counsel for Mr Ramsay submits, void. The second, which is related to the first, is whether, having regard to the fact that the benefits payable under rr. 9 and 14 are made subject, inter alia, to the Deed, cl. 16 operates validly to forfeit Mr Bond's interest to a benefit under the rules by ensuring that that interest is not absolutely vested in him.

The first question may be considered as one of principle.

Jacobs' Law of Trusts (Butterworths 5th Ed, Sydney 1986) deals with the question of the validity or otherwise of gifts over in the event of bankruptcy under the general rubric of ``restrictions on alienation and remoteness of vesting''. The principle applied by the courts is that any condition divesting the donee of an interest previously given absolutely to him is void. However, where the interest itself is defeasible on bankruptcy and so automatically ceases on the happening of the determining event, the gift will be valid.

The principle can be illustrated by the cases to which I was referred. In
Re Smith [1916] 1 Ch 369 a will provided for the forfeiture of a remainder interest in the event of bankruptcy. The actual forfeiture clause was in the following terms:

``Provided always, that if, by reason or virtue of bankruptcy or any other act or deed of any beneficiary under this my will, or by operation of law, any share, interest, legacy, income or any other benefit given by this my will, or any part thereof, if his or her own absolute property, in the absence of this proviso to the contrary would become vested in or payable to or for the benefit of any assignees or assignee, creditors or creditor of such beneficiary, then, as to the whole or such part or parts of the said share, interest, legacy, income or other benefit as shall or but for this proviso would be so vested in or payable to any assignees or assignee, creditors or creditor of the said beneficiary, the trusts or trust hereinbefore declared in favour of such beneficiary shall thenceforth cease and determine...''

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It was held that, because the forfeiture clause applied not only to interests while they were reversionary but also when they were absolute, the whole forfeiture clause was void and there could be no severance. Sargant J said (at 376):

``That gift to the children was an absolute contingent reversionary gift...

The question is... whether that has passed to his trustee in bankruptcy, or whether the forfeiture clause extends to and operates on that share...

The language of the will is perfectly clear; but it has been contended that the proviso for cesser of a beneficiary's interest on bankruptcy... is repugnant to what is said to be an absolute gift and is invalid. As to that clause it is said, and truly said, that, on the true construction of it, it applies to every gift made by the will and is not confined to the contingent gifts, nor to those while they are reversionary. And then it is said that, if that is the meaning of the clause, it is repugnant and void altogether - not only as to vested gifts, but also as to contingent gifts.

...

If the testator had intended that the clause should apply only to contingent gifts, he might easily have said so, but he has not.''

Another example is contained in the decision of the Court of Appeal in
Re Forder [1927] 2 Ch 291. That case, distinguished Re Smith and found a forfeiture clause not void for repugnancy because it was limited to cases where the bankruptcy had occurred before the beneficiary had become entitled to an absolute interest in capital. Sargant LJ, as by then his Lordship had become, expressed the principle in the following way (at 311):

``it is impossible to give the ownership of property to a person in possession, and at the same time to direct that he shall not have the ordinary rights and incidents of ownership, that he shall not be able to dispose of it, and that it shall not vest in his trustee in bankruptcy.''

The decision of Re Smith was applied by Schutt J of the Supreme Court of Victoria in
Re Williams' Settlement [1923] VLR 609 where the clause under consideration was held to be void and wholly nugatory because it operated to divest an interest which was indefeasibly vested.

Some of the cases seem to suggest that there may be differences depending upon whether there is a conditional limitation or an interest subject to defeasance: cf
Re Dugdale (1888) 38 Ch D 176. I do not think, however, that the principle is to be expressed in such a way as to require an analysis of real property limitations of the kind indulged in for purposes of death duties in cases such as
Re Kilpatrick's Policies Trusts [1966] Ch 730, a case to which I was referred for this purpose. As I read the cases, repugnancy, in the sense used in Re Smith, will be present only where the clause purporting to work a forfeiture operates to forfeit a property right to which a beneficiary is absolutely and inalienably entitled. The question arises as to whether that is the situation here.

Counsel for the fund trustees referred me, by way of example, to the cases of
Re Goulder [1905] 2 Ch 100 and
Re Solomon [1908] SALR 107, as illustrations of cases where the courts have held forfeiture clauses to be valid. In the former, Swinfen Eady J held that a clause that worked a forfeiture, at a point of time prior to actual payment, was valid. His Lordship said (at 103):

``There is no law to prevent a testator providing that a legacy is to be divested on a certain event. He may give property to a parent for life with remainder to his children, with a gift over of the share of any child who predeceases the parent. As long as the event can be properly ascertained, legal effect must be given to the gift over.

In the present case, as the act of bankruptcy happened before actual payment, the gift over took effect, and the children took their father's share.''

So too, a forfeiture clause was held valid by Homburg J in the Supreme Court of South Australia in
Re Solomon [1908] SALR 107; see especially at 119-120.

I am content to adopt the statement of principle appearing in Jacobs' Law of Trusts at para. 922 which is in the following terms:

``If a vested interest has been given either in fee-simple or for life, any proviso that it shall not pass to the donee's creditors on his bankruptcy or that it shall be free from the claims of his creditors will be void. Such a gift must, however, be distinguished from one where the interest given is defeasible on bankruptcy and so automatically ceases on

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the happening of the determining event, which gift would be perfectly valid. The former involves an attempt to make an absolute interest defeasible on breach of a condition subsequent; the latter merely involves the creation of a determinable interest. Generally speaking, what cannot be achieved by the former can be achieved by the latter.''

Clause 16, looked at on its own, operates to forfeit a benefit where the benefit is payable as well as in the case where the benefit may be payable. In other words, the clause postulates that a situation has arisen where the benefit has in fact become payable but nevertheless some further act has taken place which then operates to forfeit the benefit. In my opinion, the clause is, on its face, capable of operating to forfeit a benefit in a circumstance where that benefit has become absolutely and indefeasibly payable to the member and consequently, following the decision of Re Smith, should be held to be void.

Counsel for the Bond family submitted that a benefit payable under rr. 9(2) or 14 would not have vested in possession prior to a demand having been made, but merely vested in interest and thus cl. 16(2) had no application to such a benefit. To the extent that the clause was capable of being construed as operating to forfeit interests which are absolutely vested, then it was submitted that it was capable of severance and should be so severed. The first part of that submission depends upon the submission, which I have already rejected, that a benefit under r. 9(2) or r. 14 only became vested after the money was called for. The second part of the submission is, in any event, inconsistent with the decision of Re Smith and Re Williams' Settlement and should, accordingly, not be accepted.

Counsel for the fund trustees referred specifically to the language used in rr. 9 and 14, namely, that the benefits payable pursuant to each of these rules were only so payable ``subject to the Deed and the rules''. It was submitted that the words ``subject to the Deed'' made the benefits under rr. 9 and 14 subject to the power of forfeiture under cl. 16. So construed it was said that although the time for payment of benefits had arisen under cl. 9 or 14, the benefits were still subect to forfeiture under cl. 16.

Although there is some force in this submission, I have concluded that it should not be accepted. It is true that the benefits under rr. 9 or 14 are expressed to be subject to the rules and the Deed. That would probably have been the case, whether or not the words had been expressly used. I do not think, however, that those words were intended to or do qualify the nature of the interest of a member in a benefit arising under either r. 9 or r. 14 after entitlement to that benefit had arisen and where no forfeiture had been worked in the meantime. Rather, it seems to me, that the words ``subject to the Deed'' are to be explained in a different way. For example, cl.18 of the fund Deed is concerned with what is to happen where, inter alia, the members resolve, by three-quarter majority of members, that the fund be wound up. Assuming the fund had been wound up before the member ceased to be employed by his employer, then no benefit would arise to the member directly under either r. 9 or r. 14, but rather, the question would be resolved having regard to cl. 18.

It follows that I am of the view that cl. 16 is void and did not operate to forfeit the absolutely vested interest which Mr Bond had at the latest upon his ceasing to be a director of Bond Corporation Holdings Ltd.

I should say that if I had not reached this conclusion, I would have held that an act of bankruptcy had occurred, that act of bankruptcy being either the payment to American Express International Inc or the travel agency, and that if cl. 16 were not void, that clause operated to defeat Mr Bond's interest under whichever of rr. 9 or 14 applied, with the result that Mr Ramsay, as his trustee, was not entitled to participate in any amount payable to him.

The determination of 30 June 1992

On its face, that determination purported to defeat any entitlement which Mr Ramsay might have to any benefit otherwise due to Mr Bond. To this argument, counsel for Mr Ramsay submitted that the determination was of no legal effect because the entitlement to Mr Bond had already vested. Secondly, it was said that that determination was not within the power of the trustees and thirdly, it was said to have been made on an incorrect construction or incorrect understanding of the trust Deed and Mr Bond's entitlement thereunder.

Although, in the course of argument, reference was made to the question of whether the determination was in breach of the orders made by me on 11 June 1992, I do not find it

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necessary to decide that question. Counsel for Mr Ramsay conceded that a finding as to whether or not the determination was in breach of my orders, would not affect any finding I would make as to its validity.

The first question to be determined is whether the so called determination was within power. That question involves construing sub- cll. 8(7) and (8) of the fund Deed. Those clauses provide:

``(7) The Trustees shall determine all questions relating to:

(a) the interpretation of this Deed or the Rules;

(b) the rights of Members under this Deed and the Rules;

(c) the management and administration of the Fund; and

(d) the execution of the trusts contained in this Deed.

(8) A determination by the Trustees in respect of any of the matters referred to in sub-clause (7) shall be binding on all interested parties.''

I do not think that sub-cl. 8(7) should be construed as widely as counsel for the respondents would submit. It could hardly be supposed that the settlor of the Deed would give to the trustees the power to determine, to the exclusion of the court, for example, the proper construction of the trust Deed in a way which would make the trustees' own interpretation (erroneous though it may be), binding on all interested parties. Sub-clause 8(7) is concerned with matters of mere administration. It is not concerned with the substantive rights of a beneficiary, vis-a-vis the trustees. In particular, in my view, it does not give power to the trustees to determine to exclude from benefit a person who otherwise is entitled to benefit. Nor does it give to the trustees a power to forfeit a benefit which is otherwise payable to a beneficiary. Rather, a decision of the trustees affecting a benefit would only be binding as between the trustees and the beneficiary if the trustees directed themselves to the correct question: cf Rapa v Patience (Supreme Court of New South Wales, McLelland J, 4 April 1985, unreported). A similar view of the law was taken by Kearney J in
Wilson v Metro Goldwyn Mayer (1990) 18 NSWLR 730 at 735.

Counsel for the fund trustees conceded properly that if the determination in fact operated to alter beneficial interests, then the determination would be ineffective and should be treated by me as void. In the view I take, this is precisely what the determination purported to do and, in my opinion, it was outside the power of the trustees.

If I were wrong in this matter, and accordingly if the trustees had power to make a determination that would operate to divest from a member a benefit which otherwise the member was entitled to, I would be of the view that the trustees in making the present determination acted in fraud of the power conferred upon them. No other possible conclusion can be drawn. The amendment was made after a claim had been made by the trustee in Mr Bond's bankrupt estate to the interest in the superannuation fund. An interlocutory proceeding had taken place and orders had been made by me restraining the fund trustees, inter alia, from exercising any powers without first having given notice to Mr Ramsay. The trustees did not give evidence. No suggestion was made that they were unavailable and, indeed, at least one of them was present throughout the entire proceedings in Perth. She did not, however, submit herself to cross-examination. Even without the absence of the trustees, I would have inferred that the purpose of the amendment was to do that which the amendment, in fact, did, namely, deprive Mr Ramsay of an entitlement to that which he was otherwise entitled. It cannot be a proper exercise of a power of a trustee arbitrarily to exclude from benefit a person who has become entitled to that benefit. That inference, drawn purely from the language of the determination itself, is able to be made more certain by the failure of the trustees to give evidence.

The principles relevant to deciding that the determination is void are not in dispute. The trustees, in exercising their powers, are obliged to act honestly and in good faith. They are required to act in what they consider to be the interests of the members and for proper purposes and upon relevant considerations. They must exercise their powers honestly and reasonably in the interests of contributors and not partially. An exercise of a power will need to be tested having regard to the purpose for which the power was conferred. An exercise of that power, other than for that purpose, may be held to be void. As to the obligations of a trustee of a superannuation fund, see
The

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Metropolitan Gas Company v FC of T (1932) 2 ATD 178 at 181; (1932) 47 CLR 621 at 633 and
Lock v Westpac Banking Corporation & Ors (1991) 25 NSWLR 593 at 609.

Costs

It follows from the above discussion that I am of the view that Mr Bond was entitled to a benefit under r. 9(2) upon his ceasing to be a director of Bond Corporation Holdings Ltd but that the quantum of that benefit is not yet able to be determined, having regard to the questions of fact relating to the Standards Act and regulations which have been reserved for a further hearing.

It seems not to be in doubt that some benefit at least must become payable to Mr Bond. The only question is whether some benefit needs to be preserved for payment to a later date. That benefit would then be held upon the trusts of r. 15 for payment, at the earliest, after Mr Bond's fifty-fifth birthday and his retirement from the workforce. However, earlier payment may be approved by the Insurance Commissioner, upon application to him. To date, no such application has been made.

Counsel for the Bond family submitted that in the event that his clients were unsuccessful, their costs should be paid out of the fund. This was resisted by counsel for the fund trustees, who submitted that the costs of the fund trustees should be paid out of the fund but not the costs of either of the other parties. The proper order, in my view, is that the unsuccessful party, in this case the Bond family, should pay the costs of the successful party, namely, Mr Ramsay. I have considered whether the costs of the fund trustees should be borne by the fund but have decided that this would not be in the interests of justice in the circumstances of the present case. Rather, the costs of the fund trustees should be borne by the Bond family respondents. I should say that had I not so decided, I would have ordered that the Bond family, in any event, pay all additional expenses incurred and fees charged by virtue of the hearing of the present matter in Perth. The application to have the matter heard in Perth was, as it turned out, totally unwarranted in practical terms.

I will stand the matter over to a date to be fixed by agreement with counsel, on which date counsel for Mr Ramsay should bring in a draft of short minutes of order to give effect to my reasons. A timetable will be set if necessary for the determination of the outstanding questions of fact.

THE COURT ORDERS THAT:

1. The matter be stood over for mention to a date to be agreed by counsel for the parties.

2. The applicant prepare and deliver to the Court, upon the agreed mention date, draft short minutes of order to give effect to the judgment of the Court.

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