A significant number of superannuation disputes are outside the jurisdiction of the Superannuation Complaints Tribunal and the Financial Ombudsman Service. In such cases, it may be necessary to consider civil court action.
For other superannuation claims, civil court action may be preferred for other reasons. For example, dispute resolution schemes have poor settlement rates compared with most civil courts.
Attitude of the courts
Most superannuation trust deeds give trustees broad discretionary powers, and the courts have traditionally been reluctant to interfere with the exercise of trustee discretions. A court will not set aside a trustee’s decision simply because it would have reached a different decision on the evidence.
When the court will review a trustee’s decision
Generally speaking, the courts will only review a trustee’s exercise of a discretion if the trustee:
- acted in bad faith
- acted for an improper purpose
- did not give genuine consideration to the exercise of the discretion
- gave reasons for a decision and the reasons were not sound
- acted in a manner or made a decision that no no reasonable trustee would have done
Even if a civil court does review a trustee’s decision, it will not always substitute its own decision. Rather, it may refer the matter back to the trustee for reconsideration.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.