Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1149

Australian Securities and Investments Commission v Commonwealth Bank of Australia [2022] FCA 1149

The alleged benefits (promises under distribution agreements, cash transfers, journal entries) did not amount to 'conflicted remuneration' under s 963A, as they conferred no real commercial advantage and were intra-group allocations within the CBA Group relating to development and distribution of a single product,...

Source-derived case information.

Parties
Plaintiff: Australian Securities and Investments Commission; First Defendant: Commonwealth Bank of Australia (ACN 123 123 124); Second Defendant: Colonial First State Investments Ltd (ACN 002 348 352)
Jurisdiction
Australia
Judgment Date
29 September 2022
Procedural Posture
Civil Penalty Proceeding / Judgment at Trial (final Orders)
Outcome
Proceeding dismissed with costs
Legal Topics
Conflicted Remuneration, Financial Product Advice, Superannuation, Corporate Groups, FOFA Reforms
Corporations Law Financial Services Regulation Conflicted Remuneration Financial Product Advice Superannuation Corporate Groups FOFA Reforms

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Parties

Australian Securities and Investments Commission

Plaintiff

Commonwealth Bank of Australia (ACN 123 123 124)

First Defendant

Colonial First State Investments Ltd (ACN 002 348 352)

Second Defendant

Procedural Posture

Civil Penalty Proceeding / Judgment at Trial (final Orders)

Legal Issues

  1. 1 Whether benefits provided by CFSIL to CBA relating to distribution of Essential Super were 'conflicted remuneration' within s 963A of the Corporations Act 2001 (Cth)
  2. 2 Whether CBA contravened s 963E and CFSIL contravened s 963K by accepting or giving conflicted remuneration
  3. 3 Whether 'grandfathering exception' applies under s 1528 of the Act

Ratio Decidendi

The alleged benefits (promises under distribution agreements, cash transfers, journal entries) did not amount to 'conflicted remuneration' under s 963A, as they conferred no real commercial advantage and were intra-group allocations within the CBA Group relating to development and distribution of a single product, with no genuine conflict of interest or prospect of influencing advice. Even if they were conflicted remuneration, the grandfathering exception applies, exempting these benefits from the relevant provisions. ASIC failed to prove contraventions.

Court Disposition

Proceeding dismissed with costs

Orders

  • The proceeding be dismissed.
  • The Plaintiff will pay the First and Second Defendants' costs.