Recent Cases

Australian Securities and Investments Commission v Commonwealth Bank of Australia [2023] FCAFC 135 (17 August 2023) (Moshinsky, O’Bryan and Jackman JJ)


CORPORATIONS – conflicted remuneration – Div 4 of Pt 7.7A of the Corporations Act 2001 (Cth) (Act) – where the first respondent (CBA) and the second respondent (CFSIL) entered into arrangements whereby CFSIL would develop and manage, and CBA would distribute, a superannuation product – where CFSIL agreed to pay a proportion of net annual revenue earned from the superannuation product to CBA and where cash transfers were effected between the entities in connection with the promise to pay – where CBA and CFSIL are related entities – whether the contractual promise to pay and the cash transfers constituted a “benefit” for the purpose of s 963A – whether the presumption in s 963L was applicable – whether, because of the nature of the impugned benefits and the circumstances in which they were given, the impugned benefits were capable of influencing and could reasonably have been expected to influence the choice of financial product recommended, or the financial product advice given, by CBA to retail clients – whether the appellant, the Australian Securities and Investments Commission, was required, and failed, to establish that CBA provided financial product recommendations and/or financial product advice to retail clients – whether the impugned benefits came within reg 7.7A.16 of the Corporations Regulations 2001 (Cth) with the result that the prohibition on conflicted remuneration did not apply – Div 4 of Pt 7.7A of the Act did not apply to the impugned benefits – appeal dismissed

STATUTORY INTERPRETATION – proper construction of s 963A of the Act – meaning of the word “benefit” – whether s 963A capable of application where a financial service licensee recommends a single financial product – whether s 963A capable of application where a benefit is given by one legal entity to another within a wholly-owned group of companies