Sent: 24-03-2009 12:21:01
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Helping Someone Breach the Superannuation Rules
During the SPAA Conference a paper was given which referred to two important Court cases.
One case involved an employee of a business which sought to advertise an alleged unlawful financial services business.
The employee was neither a director nor shareholder in the business. He had no responsibility for the wording of any advertisements and no role in the organization or production of the ads. He did meet a television station executive but only because another person was unavailable.
The Court found that the employee did confirm an advertising order to the television station.
However the Court decided that the employee was not knowingly concerned in a contravention of the law. He was not aware of the offence and didn't know his superiors didn't hold the required licenses.
Fortunately for this employee the Court dismissed the proceedings.
Paul Slattery QC in his notes to this session said that this case needs to be considered in the case of trusts, trustees, beneficiaries and advisers. Advisers will inevitably "become aware of breaches of trust, breaches of fiduciary relationship or mismanagement of trust property. The issue is: where do the advisers stand?"
Slattery provides an excellent outline of two other relevant cases and discussion points. He points out that it is not necessary to prove dishonesty in a case against an accessory of breach of trust or breach of fiduciary duty. It is necessary to prove that the accessory knew about the breach(es) and chose to be Sergeant "I know nothing, I know nothing" Schulz.
"This may include, for example, shutting one's eyes to the obvious or consciously abstaining from enquiry when you have received sufficient information to put you on enquiries."
He concludes with the following points:
1. "There is always a need for ongoing education about the rights, duties and responsibilities of trustees in an (sic) SMSF
2. "Advisors (sic) must be ever vigilant against an attitude that SMSF participants may have or develop that trust property is their own property
3. "In the context of 2 above, advisors (sic) must never become involved directly or indirectly in a breach of trust/fiduciary duty with an SMSF trust arrangement."
Presumably this has much wider application than SMSFs. Perhaps it also covers letting others provide dodgy advice or be in breach of their other requirements.
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