Decision impact statement

Interhealth Energies Pty Ltd as Trustee of the Interhealth Superannuation Fund v Commissioner of Taxation

Venue: Federal Court of Australia
Venue Reference No: QUD 187 of 2012
Judge Name: Greenwood, McKerracher and Katzmann JJ
Judgment date: 17 December 2012
Appeals on foot: No.

Impacted Advice

Relevant Rulings/Determinations:

• N/A

Subject References:
Raising new point on appeal
Self managed superannuation fund
Enforceable undertaking pursuant to s 262A Superannuation Industry (Supervision) Act 1993 (Cth)
Breach of undertaking
Statutory and common law duties by trustee
Award of compound interest
Commissioner of Taxation as 'Regulator' under Superannuation Industry (Supervision) Act

Précis

Outlines the ATO's response to this case concerning the trustee's application that the Commissioner was not the Regulator and whether the trustee complied with its undertaking under section 262A of the Superannuation Industry Supervision Act 1993 (SISA).

ATO view of Decision

The Full Court applied established case law in refusing Interhealth's application to advance a ground on appeal that was not raised at first instance. While not needing to decide the matter, the Full Court's observations that the Commissioner was the correct Regulator pursuant to subsection 10(4) of the SISA are consistent with the Commissioner's views on the application of this provision.

The decision of Logan J at first instance is also consistent with the Commissioner's views on the operation of section 262A of the SISA. His Honour confirmed that the Commissioner may apply to the Court for enforcement of undertakings provided by trustees of superannuation funds regulated by the Commissioner and that the provision has broad application.

The comments of Logan J that Interhealth had not collected payments of unpaid distributions owed to the ISF by the Greenhaven Unit Trust, through the acquisition of additional units in that trust, need to be considered in the context of the enforceable undertaking under consideration and in light of the specific facts of this case. His Honour emphasised at [58] that the collection requirement in the enforceable undertaking was not to be read in isolation from the other principal requirement of the undertaking, which was to pay out in full Mr Wilson's entitlements by 30 May 2008, which required liquid funds. Consequently, the Commissioner does not consider that this decision impacts on the views expressed in SMSFD 2007/1 and SMSFR 2009/3.

Administrative treatment

Implications for ATO precedential documents (Public Rulings & Determinations etc)

N/A

Implications on Law Administration Practice Statements

N/A

Court citation:
[2012] FCAFC 185
(2012) 209 FCR 33
(2012) 91 ATR 582

Legislative References:
Superannuation Industry (Supervision) Act 1993 (Cth)
6
10
10(4)
17A
40
42
42A
262A

Case References:
Alexander v Perpetual Trustees WA Limited
(2004) 216 CLR 109
[2004] HCA 7

Association of Quality Child Care Centres of New South Wales v Manefield
[2012] NSWCA 123

Coulton v Holcombe
(1986) 162 CLR 1
[1986] HCA 33

Cowan v Scargill
[1985] Ch 270
[1984] 2 All ER 750

Hussain v Minister for Foreign Affairs
(2008) 169 FCR 241
[2008] FCAFC 128

Liftronic Pty Ltd v Unver
[2001] HCA 24

Metwally (No 2) v University of Wollongong
[1985] HCA 28

Re Speight
(1883) 22 Ch D 727

R v Kidman
(1915) 20 CLR 425

Repatriation Commission v Warren
(2008) 167 FCR 511
[2008] FCAFC 64

Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd
[2012] WASCA 50

Water Board v Moustakas
(1988) 180 CLR 491
[1988] HCA 12