The Victorian Supreme Court has found that the sole director of a family trust company had breached fiduciary duties owed to the company by facilitating the making of contributions to a super fund on behalf of individual members of the super fund.
The director had arranged for the company to borrow some $2.5m to make superannuation contributions to himself and family. The question was whether the director had breached fiduciary duties.
The Court said the receivers and managers of the plaintiff, Australasian Annuities Pty Ltd (in liq) (“AA”) brought a claim in AA’s name against the first defendant, Rowley Super Fund Pty Ltd (“RSF”) and the second defendant, Steven Rowley, the sole director of AA, to recover amounts allegedly diverted from AA in breach of the director’s fiduciary duties.
AA carried on a financial planning business. As the director had since been declared bankrupt, the Court noted the claim proceeded only against RSF. AA sought to recover only the payments which are alleged to have been diverted in breach of the director’s fiduciary duties and paid to RSF.
According to the Court, AA submitted that in the financial year ended 30 June 2007, the director effected payment of id=”mce_marker”.3m to the Super Fund as superannuation contributions comprising: (i) $225,560 transferred directly by AA into the Super Fund’s account; and (ii) id=”mce_marker”,115,968 being part of monies transferred by AA to the personal account of the director and Barbara Rowley. The sum of id=”mce_marker”,115,968 was immediately transferred to the Super Fund’s account [as undeducted member contributions]. AA also submitted that in the financial year ended 30 June 2008, the director effected payment of $372,296.99 from AA to the Super Fund.
The Court found that the director, in his capacity as a director of AA, breached fiduciary duties owed to the company by facilitating the making of contributions to the Super Fund either directly by AA or indirectly on behalf of individual members of the Super Fund.
(Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd [2013] VSC 543 (Supreme Court of Victoria, Almond J, 17 October 2013)
[LTN 207, 25/10/13]