Jagot clears IOOF, nails APRA
Justice Jayne Jagot lined APRA's members up for a whipping in a harsh judgment that let IOOF and its former CEO Chris Kelaher off from allegations of misusing members money and disregard for the Superannuation Industry (Supervision) Act 1993."None of APRA's claims of contraventions of the SIS Act against the respondents are sustainable," Jagot concluded in a judgment oozing disdain for APRA's legal arguments and preparation of its case.APRA had sought disqualification orders against directors and three responsible officers of IOOF, dealing with material already probed differently by last year's banking royal commission.APRA had contended that the IOOF and Kelaher contravened various covenants imposed on them by the SIS Act, "in effect, to exercise the requisite degree of care, skill and diligence, to act in the best interests of the beneficiaries of the super funds, and to give priority to the interests of the beneficiaries in the event of a conflict of interest. "These contraventions were said to have occurred in the course of five incidents affecting the super funds known as CMT, Pursuit, Sweep, Bendigo and Optus."APRA, Jagot explained "sought to prove its case relying solely on documents brought into existence by the respondents in connection with the incidents … As will become apparent APRA relied on the IOOF documents as containing admissions against the respondents including, as I would understand it, admissions of contravention of the statutory covenants."For a number of reasons I have found APRA's approach unpersuasive. The documents were all produced with the benefit of hindsight."Jagot ruled that "it was for APRA to prove its case of contraventions by such evidence as it saw fit. "The fact that it has chosen to run a purely documentary case means that it must take the documents as it finds them - as documents brought into existence for specific purposes, mostly by authors whose qualifications and experience are unknown, using the benefit of hindsight, often expressed at a high level of generality, and assuming otherwise unproven knowledge of IOOF 's systems, policies and procedures."Piling on the scorn, Jagot wrote that "in treating the facts as if they automatically bespeak liability, APRA has effectively cast the trustees in the role of insurer to the beneficiaries, which is contrary to principle."