SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 - SECT 55 Recovering loss or damage for contravention of covenant

SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 - SECT 55

Breach of covenant may result in action to recover loss or damage

  (3)   Subject to subsection   (4A), a person who suffers loss or damage as a result of conduct of another person that was engaged in in contravention of subsection   54B(1), 54B(2) or 54C(1) may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

  (4)   Unless an action under subsection   (3) is of a kind dealt with in subsections   (4A) to (4D), it may be begun at any time within 6 years after the day on which the cause of action arose.

Leave of court required where directors' covenants contravened

  (4A)   If:

  (a)   the person who is alleged to have contravened subsection   54B(2) or 54C(1) is or was a director of a corporate trustee of a registrable superannuation entity; and

  (b)   it is alleged that the contravention is of a covenant that is contained, or taken to be contained, in the governing rules of the entity, and is:

  (i)   a covenant of the kind mentioned in subsection   52A(2); or

  (ii)   a covenant prescribed under section   54A that relates to the conduct of the director of a corporate trustee of a registrable superannuation entity;

an action under subsection   (3) may be brought only with the leave of the court.

  (4B)   A person may, within 6 years after the day on which the cause of action arose, seek the leave of the court to bring such an action.

  (4C)   In deciding whether to grant an application for leave to bring such an action, the court must take into account whether:

  (a)   the applicant is acting in good faith; and

  (b)   there is a serious question to be tried.

  (4D)   The court may, in granting leave to bring such an action, specify a period within which the action may be brought.

Defences in actions to recover loss or damage

  (5)   It is a defence to an action for loss or damage suffered by a person as a result of the making of an investment by or on behalf of a trustee of a superannuation entity if the defendant establishes that the defendant has complied with all of the covenants referred to in sections   52 to 53 and prescribed under section   54A that apply to the defendant in relation to each act, or failure to act, that resulted in the loss or damage.

  (6)   It is a defence to an action for loss or damage suffered by a person as a result of the management of any reserves by a trustee of a superannuation entity if the defendant establishes that the defendant has complied with all of the covenants referred to in sections   52 to 53 and prescribed under section   54A that apply to the defendant in relation to each act, or failure to act, that resulted in the loss or damage.

  (7)   Subsections   (5) and (6) apply to an action for loss or damage, whether brought under subsection   (3) or otherwise.