CATCHWORDS

SUPERANNUATION - monitoring of superannuation funds - notice to produce books - requirements of valid notice - whether notice gave reasonable time for compliance

Superannuation Industry (Supervision) Act 1993 ss 265(1), 269, 270, 289(3)

Income Tax Assessment Act 1936

Federal Commissioner of Taxation v Australia and New Zealand Banking Group Limited (1978-79) 143 CLR 499 Refd

Perron Investments Pty Ltd & Ors v DFC of T (1989) 89 ATC 5038 Refd

Insurance and Superannuation Commissioner v Leslie John Robertson

No QG12 of 1995

Kiefel J  Brisbane 9 March 1995

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION                                                                                     No. QG12 of 1995

BETWEEN:

                                       INSURANCE AND SUPERANNUATION COMMISSIONER

                                                                                                                                         Applicant

AND:

                                       LESLIE JOHN ROBERTSON

                                                                                                                             First Respondent

JUDGE MAKING ORDER:          Kiefel J.

DATE OF ORDER:                           9 March 1995

WHERE MADE:                               Brisbane

                                                        MINUTES OF ORDERS

THE COURT ORDERS THAT:

1.                The respondent produce any of the books relating to the affairs of each of the Stacey Family Superannuation Fund and the England Superannuation Fund in his custody or control to the applicant, such production to be 7th Floor, 102 Adelaide Street, Brisbane, in the State of Queensland between the hours of 9 am and 4 pm on any week day, such production to be effected within seven days of the date of service of this order upon the respondent.

2.                The application so far as it is concerned with matters referred to in paragraphs 3 and 4 of the application be adjourned to a date to be fixed.

3.                The respondent pay the applicant's costs of and incidental to the application, insofar as it concerns the relief referred to in this Order, to be taxed.

NOTE:        Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

GENERAL DIVISION                                                                                     No. QG12 of 1995

BETWEEN:

                                       INSURANCE AND SUPERANNUATION COMMISSIONER

                                                                                                                                         Applicant

AND:

                                       LESLIE JOHN ROBERTSON

                                                                                                                             First Respondent

CORAM:                                          Kiefel J.

DATE:                                               9 March 1995

PLACE:                                             Brisbane

                                                   REASONS FOR JUDGMENT

                   On 2 December 1994, the delegate of an inspector appointed under s.265(1) of the Superannuation Industry (Supervision) Act 1993 issued two notices under s.269 and two notices under s.270 of that Act addressed to the respondent.  Only those under s.269 relating to the production of the documents are presently pursued.  The notices were personally delivered to the respondent on 6 December 1994 at the offices of and in the company of his solicitor.  At that point a claim of legal professional privilege was foreshadowed and an arrangement was made for the investigators to be advised of a decision.  The following day the respondent advised a senior investigator that he had spent some time with the solicitor and it was decided not to release the documents at this stage "as we wish to go through them."

                   An arrangement was again made to advise the investigators of a decision concerning the documents, but since then and despite attempts to contact the solicitor
and correspondence forwarded to the solicitor and the respondent there has been no response to the notice.  This application, which contained a note that the application might be dealt with and judgment given or orders made on the return date, was served on the respondent personally, but the respondent did not appear on that date, 3 March 1995.  The applicant's solicitor again served the respondent with a letter advising of the adjournment of the matter and that the matter was listed for hearing.  The same letter was forwarded to his solicitor.  There was again no appearance.  Section 269 of the Act provides that:

                   "269.           For the purposes of an investigation of the whole or a part of the affairs of a superannuation entity, an inspector may, by written notice given to a person who,

                   (a)               is a relevant person in relation to the entity; or,

                   (b)               the inspector believes on reasonable grounds has the custody or control of any books relating to those affairs;

                                       require the person to produce all or any of those books to the inspector."

                   Section 289(3) provides that after certification of a failure to comply with a requirement made under the Act, which certification has here been given, the court may "inquire into the case and may order the person to comply with the requirement as specified in the order." 

                   The notices issued requiring production of documents were directed to the respondent.  They identified the source and extent of the inspector's powers (that is to say disclosing the inspector's entitlement to the documents), the fact of delegation under the Act and identified the particular superannuation fund in question.  The
notices went on to require that the respondent produce to the delegate all the books, which he had in his custody or control, relating to the "financial" affairs of the identified fund and whilst specifying classes of some documents the notice was clear that that was not to be taken as limiting the requirement to produce all such books.

                   Part 25 of the Act is concerned with monitoring superannuation funds and for that purpose facilitating investigations, in the nature of "roving inquiries" in the sense referred to by Gibbs ACJ (as he then was) in Federal Commissioner of Taxation v Australia and New Zealand Banking Group Limited (1978-79) 143 CLR 499 (Smorgen's case) (but there dealing with s.264 Income Tax Assessment Act ("ITAA") 1936).  The disclosure of the basis of the entitlement to production and that the notice limit production only to the class of documents referred to in the relevant Act, referred to by His Honour (525) are now satisfied.  Here the entitlement is with respect all or any of the books relating to the affairs of the superannuation entity.  The limitation expressed in the notices, namely that the books concern the "financial" affairs of the fund clearly falls within the broader class of books which may be required to be produced.

                   The notice remains however very broad, but that is not an objection to an otherwise valid notice:  per Mason J. Smorgen's case, 537 and Lockhart J. in Perron Investments Pty. Ltd. & Ors v. DFC of T (1989) 89 ATC 5038, 5041 and per Hill J. at 5065,6.  This Act, like the provisions of the ITAA with which their Honours were concerned, creates a "peculiar obligation" (Hill J. 5066).  In requiring the production of
all books relating to the affairs (financial) of the particular fund it places a burden on the recipient to decide which documents fall within the description, although in this case it is possible that every document relating to the fund does so.  Neither the notice nor a following order of the court, unlike other orders for production, proceeds upon the proved existence of any document or class of document, s.269(b) requiring only a belief as to its existence.  Later enforcement of an order may require more to be shown to establish non-compliance.

                   The notice here did not specify a time for compliance, but it was given in circumstances where a preliminary objection was to be first taken.  In any event that was three months ago and there is nothing to suggest that that is an insufficient time for production.

                   I also noted that here the notice did not give a time for compliance with the requirements of it, but there is no suggestion that it was unable to be complied with since the date of service some three months ago.  Further, the circumstances in which it was given would indicate that a reasonable time was to be allowed.  I propose to make orders, then, requiring the production of all documents relating to the two funds which are in the custody or control of the respondent.  The orders will be in the terms that I have indicated.

                   I certify that this and the preceding three pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel.

                   Associate

                   Date:          9 March 1995

Counsel for the applicant:                                       Mr R.J. Douglas

Solicitors for the applicant:                                     Australian Government Solicitor

Respondents:                                                         No appearance

Date of Hearing:                                                 8, 9 March 1995

Place of Hearing:                                                Brisbane

Date of Judgment:                                              9 March 1995