Australian Prudential Regulation Authority v Holloway [2000] FCA 579

Australian Prudential Regulation Authority v Holloway [2000] FCA 579

Respondents, by orchestrating and directing a series of schemes whereby employer contributions to superannuation funds were immediately invested in unit trusts (controlled by the same parties) and in turn advanced as loans or investments back to the employer-sponsor, did so with the intention that those actions would artificially reduce the market value ratio of in-house assets and thereby avoid the operation of s 83 of the Superannuation Industry (Supervision) Act 1993 (Cth). Such acts constituted contraventions of s 85(1) as the unit trust arrangements fell within s 71(2) and the intention to avoid Pt 8 consequences was inferred from the structure and conduct, despite the respondents’...

Parties
Applicant: Australian Prudential Regulation Authority; First Respondent: Anthony Philip Holloway; Second Respondent: Holloway & Co Pty Ltd
Jurisdiction
Australia
Judgment Date
12 May 2000
Procedural Posture
Civil Penalty Proceeding / Reasoned Judgment After Final Hearing
Outcome
Declaration of contravention: Respondents have contravened s 85(1) of the Superannuation Industry (Supervision) Act 1993 (Cth) in relation to nominated funds and dates; Orders to be determined after further submissions.
Legal Topics
In House Assets, Civil Penalties, Superannuation Fund Regulation, Statutory Interpretation, Market Value Ratios, Taxation Avoidance Schemes
Superannuation Law Administrative Law In House Assets Civil Penalties Superannuation Fund Regulation Statutory Interpretation Market Value Ratios Taxation Avoidance Schemes

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Parties

Australian Prudential Regulation Authority

Applicant

Anthony Philip Holloway

First Respondent

Holloway & Co Pty Ltd

Second Respondent

Procedural Posture

Civil Penalty Proceeding / Reasoned Judgment After Final Hearing

Legal Issues

  1. 1 Whether respondents contravened s 85(1) of the Superannuation Industry (Supervision) Act 1993 (Cth) by entering into or carrying out schemes with the intent to artificially reduce the market value ratio of in-house assets to avoid the application of Part 8 of the Act; Whether investments in units in unit trusts by superannuation funds were 'in-house assets' under s 71(2); Whether s 83 of the Act (acquisition of in-house assets where market value ratios are exceeded) applied to the relevant financial years; Proper construction and application of ss 71(2), 83, and 85

Ratio Decidendi

Respondents, by orchestrating and directing a series of schemes whereby employer contributions to superannuation funds were immediately invested in unit trusts (controlled by the same parties) and in turn advanced as loans or investments back to the employer-sponsor, did so with the intention that those actions would artificially reduce the market value ratio of in-house assets and thereby avoid the operation of s 83 of the Superannuation Industry (Supervision) Act 1993 (Cth). Such acts constituted contraventions of s 85(1) as the unit trust arrangements fell within s 71(2) and the intention to avoid Pt 8 consequences was inferred from the structure and conduct, despite the respondents’...

Court Disposition

Declaration of contravention: Respondents have contravened s 85(1) of the Superannuation Industry (Supervision) Act 1993 (Cth) in relation to nominated funds and dates; Orders to be determined after further submissions.