BUSSQ loses legal bid to overturn additional licence conditions

Industry superannuation fund BUSSQ has lost its legal challenge against APRA, with the Federal Court dismissing its bid to overturn additional licence conditions.

Last August, APRA imposed additional licence conditions on BUSSQ's trustee over concerns about fitness and proprietary processes and fund expenditure management.

At the same time, APRA cracked down on Cbus' trustee in response to allegations of "serious misconduct" within the Construction, Forestry and Maritime Employees Union (CFMEU), which has three directors on the fund's 14-member board.

Notably, the three CFMEU-appointed directors at Cbus - Rita Mallia, Dave Noonan, and Jason O'Mara - were removed in the weeks that followed. In November, they were replaced by Maritime Super chair Paddy Crumlin and lawyer Lucy Weber, while O'Mara was reappointed by the CFMEU administrator - the union was put into administration.

The administrator also removed BUSSQ board directors Jacqui Collie and Michael Ravbar last September, replacing them with the CFMEU's head of finance Hemal Patel and industrial officer Paul Dunbar.

While Cbus supported APRA's directive for an independent review of its board governance and expenditure arrangements, BUSSQ opted to challenge the licence conditions, steadfast that it had already undergone extensive scrutiny by the regulator over the past two years "without any adverse findings."

BUSSQ chair Chris Taylor previously said the proposed licence conditions were "unnecessary" and "potentially impractical."

Last Friday, the Federal Court rejected BUSSQ's judicial review application, upholding APRA's decision to impose the additional conditions. The ruling means BUSSQ must engage an independent expert to assess its processes for evaluating the fitness and propriety of its responsible persons and ensure fund expenditure aligns with members' best financial interests. The findings of the review must also be made public.

Judge Sarah Derrington suggested BUSSQ may have pursued a judicial review as a tactical move rather than the most appropriate legal avenue, potentially to prevent APRA from addressing procedural flaws.

BUSSQ said it was disappointed with the Federal Court's decision and is reviewing the judgment while considering its next steps.

"The trustee maintains that APRA is best placed to undertake any review of BUSSQ and that the licence conditions are not necessary. We'll be reviewing the decision and looking at our options noting that the court hasn't ruled that the licence conditions are valid," Taylor said.

APRA deputy chair Margaret Cole said the regulator took action to support improved member outcomes and will now move "expeditiously" to ensure the requirements under the additional licence conditions are met.