Supplementary NSW Supreme Court decision: Beck v Colonial Staff Super Pty Ltd (No.2)
July 2015 decision
In July this year, the NSW Supreme Court (Court) upheld a claim that the actions of the trustee of the Commonwealth Bank Officers’ Fund were void. In particular, the Court held that the deletion of a discretionary power to pay an increased benefit was invalid, not in members’ best interests and breached the SIS restriction against adverse alterations to accrued benefits. In addition, the Court held that the plaintiff’s employer, the Commonwealth Bank, should be estopped from relying on the express terms of his employment contract which otherwise enabled it to terminate his employment on the giving of notice alone. Instead, the Court held that the plaintiff, Mr Beck, was “entitled to relief (from the Bank) on the basis that he was entitled to a pension at age 55”. Despite these findings, the Court did not make any orders for final relief. Instead, the Court directed that there be a supplementary hearing.
September 2015 decision
On 28 September 2015, after a supplementary hearing, the Court:
- declared that the Fund’s rules always included the deleted power (ie, the attempted deletion was void);
- directed the trustee to give due consideration to the exercise of the power to pay the increased benefit to Mr Beck (with the Bank being estopped from denying its consent thereto);
- ordered the Bank to pay the relevant benefit to Mr Beck directly in the event the trustee decided not to exercise the power at all or to exercise the power only partially (with the payment being adjusted to avoid any doubling-up, eg, if the trustee paid some of the increased benefit but not its full reserve value);
- ordered the Bank to pay Mr Beck’s costs of the proceeding (40 per cent of which were to be on an indemnity basis, the remainder on the ordinary basis).
Certain further orders were made by the Court. However, these were stayed pending the expiry of the period for lodging of an appeal (ie, 19 October 2015). Given the stay, it is possible the Bank will appeal the decision, or at least some parts of it.
See Beck v Colonial Staff Super Pty Ltd & Ors (No.2)  NSWSC 1360 (28 September 2015). (Link is to NSW Caselaw)
To see my previous blog on the original decision, click here.