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The applicant in this proceeding was a member of The Universal Superannuation Fund Scheme (TUSS) prior to 1 July 2016 and a member of the MLC Super Fund after 1 July 2016. The claim relates to allegations concerning the respondent’s decision to maintain grandfathered commission arrangements during and after the transfer of members from TUSS to the MLC Super Fund.

In its defence, the respondent draws a distinction between class members who were entitled to access their superannuation benefits at the relevant time (Vested Class Members) and those who were not so entitled (Non-Vested Class Members). In particular, the respondent pleads that Non-Vested Class Members have not suffered any loss or damage, and even if they have, that the appropriate remedy is restoration of the trust. The applicant is a Vested Class Member. 

The respondent sought the appointment of a sample class member to represent the Non-Vested Class Members. It argued that in the absence of such an appointment, the question of whether Non-Vested Class Members can have suffered relevant loss as a result of the respondent’s conduct could only be considered hypothetical and advisory in circumstances where the applicant is a Vested Class Member with no interest in the determination of that question. 

The applicant opposed the appointment, submitting that the Court could only make such an appointment, and generate additional costs in so doing, if it would assist the Court to determine a factual controversy not otherwise capable of being resolved. The applicant argued that the question of loss for Non-Vested Class Members was a matter of construction of the trust deed – a legal question to be considered as part of the applicant’s claim in any event. 

Justice Markovic determined that a sample class member who is a Non-Vested Class Members should be appointed. Her Honour provided five reasons for doing so:

  1. Her Honour agreed with the respondent’s submission that without such an appointment, there was a risk that the question of whether Non-Vested Class Members suffered loss could only be considered hypothetical or advisory as the applicant has no interest in the relevant question.

  2. Whether Non-Vested Class Members suffered loss was a mixed question of fact and law. 

  3. The appointment of a sample class member is not uncommon in representative proceedings.

  4. A sample class member is appointed pursuant to case management principles and does not carry liability for costs associated with the determination of issues common to the sub-group, unlike a sub-group representative appointed under s 33Q(3) of the Federal Court of Australia Act 1976 (Cth).

  5. The applicant owes a fiduciary duty to class members, requiring him to take all steps necessary to determine as many questions as possible that are common to all, or a subset of, class members.

Brady v NULIS Nominees (Australia) Ltd in its capacity as trustee of the MLC Super Fund [2021] FCA 999

Federal Court of Australia, Markovic J,
23 August 2021

Applicant’s Solicitors: William Roberts Lawyers;
Respondent’s Solicitors: King & Wood Mallesons;
Applicant’s Funder: Omni Bridgeway Ltd

Austlii Link: Accessible here

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