Testimony from a cross-claim made by the former chairman of MTAA Super against the fund to recoup legal costs of an abandoned case has questioned the top-level links the fund has with the national peak body for motor trades workers.
Giving evidence during the hearing the in Federal Court of Australia in Sydney last week, John Rickus, the applicant in the cross-claim, said the documents he had refused to give MTAA Super held information revealing “some serious issues of governance and conflict” pertaining to the secretariat services provided by the Motor Trades Association of Australia (MTAA) to the fund.
“There were serious concerns among some directors that there was this issue of conflict between how the turns of the service contract was being negotiated,” he told the court.
Some directors were viewed by Rickus as “conflicted” due to their interests in both the association and the fund, whereas other MTAA Super directors, including Rickus, were regarded as “non-conflicted”. Four directors of MTAA Super were nominated by the association.
Michael Delaney, executive director of the MTAA, is also the principal executive officer of MTAA Super.
Mark Livesey QC, counsel for Rickus, alleged that a resultant divide emerged “which saw not all of the information go across to the conflicted directors”.
“There were separate meetings between the non-conflicted directors about the attitude that should be taken, for example, to the service agreement,” he said.
“This was a service agreement…worth some millions per annum and which is an open-ended agreement, without a finite termination date.
“That was the core of the problem – that a lot of money was being asked for services by the MTAA company, to be paid for by the trustee [MTAA Super] in circumstances where you would see the directors, such as Mr Rickus, saying, well, there [are] no checks and balances on whether this is an appropriate arrangement or not.”
In July MTAA Super abandoned its case against Rickus for not providing the fund with private documents that he gave to APRA in 2006 as part of a prudential review, stating that it had obtained the documents.
After the two-day hearing into the cross-claim, Justice Geoffrey Flick assigned separate timeframes for parties to the case to make submissions to the cross-claim: the Australian Prudential Regulation Authority (APRA) was given one week, John Rickus one fortnight and MTAA Super three weeks.
It is understood that no further proceedings will be made until Justice Flick delivers his judgment.