Brady v NULIS Nominees (Australia) Limited in its capacity as trustee of the MLC Super Fund

This appeal came out of a class action about legacy superannuation fees and adviser commissions. The lead applicant, Mr Brady, represented members of the MLC Super Fund whose memberships had been transferred from The Universal Superannuation Scheme, known as TUSS, by a successor fund transfer. The respondent, NULIS Nominees (Australia) Limited, was the trustee of the MLC Super Fund.

The commercial setting matters. For many years, parts of the retail superannuation market used commission-based remuneration for financial advisers. Those commissions were funded from member fees and were often embedded in the overall product cost. The Future of Financial Advice reforms changed that model from 1 July 2013 by banning conflicted remuneration for new products and new advice arrangements, but allowing certain older arrangements to continue under a grandfathering regime. So this was not a case about a plainly unlawful commission model continuing in defiance of the law. It was a case about legacy arrangements that the law still permitted to continue in some circumstances.

When NAB restructured its wealth business, TUSS members were proposed to be transferred into the MLC Super Fund. Many of those members held legacy products with embedded commission arrangements. NULIS then had to decide what to do with those arrangements at the point of transfer. Management and the board considered whether commissions should stop immediately, be replaced with fee-for-service arrangements, or continue on an interim basis. The Court said the primary judge found the board had been advised that immediate termination carried several risks, including adviser disengagement, member attrition from closed products, increased costs for remaining members, possible litigation, and delay or disruption to the transfer and associated product upgrades. On 10 June 2016, the board decided to maintain the current grandfathered commission arrangements following the proposed transfer.

The appeal focused on two principal contentions. First, the applicant argued that NULIS lacked power under the trust deed to charge the relevant fees to members' accounts insofar as those fees formed part of a pool used to pay commissions. Secondly, he argued that NULIS breached statutory trustee duties under section 52 of the Superannuation Industry (Supervision) Act 1993 (Cth) by making the 10 June 2016 decision and by paying or allowing commissions to be paid from fees charged to members.

The Court made clear that the first issue was a construction question about the deed. In other words, the Court had to ask what the deed actually authorised. The proceeding below had been determined by answers to common questions binding group members. A central question, Question 22, asked whether charging the relevant fees to members' accounts for the purpose of funding commissions was not authorised by the deed, in particular clause 3.7 of Schedule 1 and clauses 4.1 and or 4.2, and therefore amounted to a breach of trust.

The extract also shows an important analytical point that business readers should notice. There was a sharp debate about the role of product disclosure statements and member package terms. The applicant said the primary judge had wrongly treated fee disclosures in PDSs as if they supplied the content of the trustee's charging power. NULIS argued for a broader reading of the deed and relied on the structure of member packages and the way fees were recorded and communicated. That distinction matters because it goes to a common commercial misconception: recording or disclosing a fee is not always the same thing as having legal authority to impose it.

The available reasons are especially useful because they show the Court engaging directly with the source-of-power question. The extract records that the primary judge had accepted a broad reading of the deed and rejected the applicant's argument that the trustee's power to charge fees was confined to fees referable to the administration and operation of the fund. The primary judge had also treated the fees disclosed in PDSs as part of the terms of the relevant member package and therefore part of the amount the trustee was entitled to charge under the deed.

The Full Court then began its own construction analysis. In the portion available, Lee J said that clause 3.7 was the operative charging clause. The Court's reasons explain why that mattered. Clause 3.7 was described as the only provision in the relevant division expressly authorising the trustee to charge members. The extract says the clause authorised a charge for the administration and operation of the division, a member package or a class of members, and that this language was purposive rather than empty. The Court also contrasted clause 3.7 with other deed provisions, including clause 4.2 dealing with member package terms and clause 4.7 dealing with broader remuneration powers.

The extract further indicates that the Court saw clause 4.2 as serving a different function. It dealt with how member package terms were determined, recorded and made available. In the available reasoning, the Court treated that as machinery rather than a free-standing source of substantive authority to impose any fee the trustee chose to record in the package terms. That is a commercially important distinction. Businesses often assume that if a pricing term appears in a schedule, brochure, PDS or onboarding pack, that document itself creates the right to charge. The reasoning here suggests the Court was careful to identify the operative clause that actually did the legal work.

At the same time, the final orders show that the Full Court did not accept the applicant's overall challenge. The Court varied the answer to Question 22 so that it expressly stated the fees were authorised to be charged by NULIS by clause 3.7 of Schedule 1 of the trust deed. So while the Court's reasoning appears to emphasise the need to identify the true source of authority, the result was still that the relevant fees were authorised under the deed.

The second limb of the case was not about the wording of the deed but about the quality of the trustee's decision-making. The applicant alleged that by deciding to continue the commission arrangements, NULIS breached statutory covenants concerning care, skill and diligence, best interests, conflicts, fairness and proper exercise of powers under section 52 of the SIS Act.

The extract says the primary judge rejected those claims because they were advanced by reference to the applicant's preferred outcome rather than the legal standard governing discretionary trustee decisions. The question was not whether another trustee might have made a different decision. It was whether the decision was one that no reasonable trustee, acting in good faith and after proper consideration, could have made.

On the evidence summarised in the extract, the board had considered detailed papers, obtained and considered legal advice on the continuation of grandfathered arrangements, engaged with regulatory risk, evaluated alternatives, and weighed the consequences of each option. The Court noted findings that abrupt cessation of commissions could lead to adviser disengagement, member attrition, loss of scale, increased costs for remaining members, litigation risk, and delay or derailment of the successor fund transfer and associated benefits. The primary judge also found that the best interests case failed because the covenant did not require the trustee to maximise immediate fee reductions for some members in isolation from the broader context. The board was entitled to conclude that preserving the status quo pending planned product trade-ups better protected members overall than immediate termination with significant downside risks.

The conflicts and fairness allegations also failed below. The extract says the evidence showed conflict-management arrangements and a conscious focus on member impacts. Maintaining existing arrangements for a defined cohort was treated as preserving intra-class consistency and avoiding disorderly outcomes for remaining members. The improper exercise of powers allegation failed because the trustee acted within the powers conferred by the deed and did not disable itself from revisiting commissions later as part of the planned trade-up process.

The Full Court made three practical orders of note. First, it varied Schedule A to the earlier orders so that the answer to Question 22 expressly read: "No: the fees referred to were authorised to be charged by NULIS by cl 3.7 of Schedule 1 of the Trust Deed". Secondly, the appeal was otherwise dismissed. Thirdly, the appellant was ordered to pay the respondent's costs.

The Court also stayed the earlier dismissal of the representative proceeding for 14 days so that any group member could apply to be substituted as representative applicant, or make another application consequential on the death of the representative applicant. That procedural point matters because it explains why the Court dealt with substitution timing even though the appeal itself failed overall.

For practical reading, the result is straightforward. The applicant did not succeed in overturning the primary judge's answers on the deed-authority issue or the trustee-duty issues. The only change was to make the answer to Question 22 more explicit by identifying clause 3.7 of Schedule 1 as the source of authority for the fees.

Although this case sits in a superannuation trust deed context, the commercial lessons travel well. Many businesses operate through layered documents: a master services agreement, pricing schedule, website terms, constitution, trust deed, platform rules, disclosure document, onboarding pack or member communications. Problems arise when a business assumes that because a fee appears somewhere in that document stack, the fee must be valid. This case shows that courts may ask a more precise question: which clause actually authorises the charge?

That is especially important if your business has inherited customers, migrated them to a new platform, acquired another business, restructured products, or preserved old charging arrangements during a transition. Those are the moments when disclosure and authority can drift apart. A fee may continue to appear in customer materials because it was part of the old product design, but the operative contract or deed may not clearly support it in the new setting.

The case also shows the value of a documented decision-making process. If a board or management team decides to keep a legacy charging arrangement in place for a period, it should be able to show what alternatives were considered, what legal and commercial risks were identified, what customer impacts were assessed, and why the chosen option was thought to be appropriate at the time. Courts are more likely to focus on whether the decision-maker acted within power, in good faith and after proper consideration than on whether the decision later proved controversial.

This page reflects the Full Federal Court judgment in Brady v NULIS Nominees (Australia) Limited in its capacity as trustee of the MLC Super Fund [2026] FCAFC 68, dated 21 May 2026. The available material clearly identifies the parties, the commercial background, the issues on appeal, the Court's orders, and substantial parts of the Court's reasoning.

However, the available reasons cut off during the Court's detailed construction analysis. Because of that, this page should be read as a careful public explainer of the result and the main legal themes, not as a complete substitute for reviewing the full judgment. Anyone wanting to rely on the case as a broader authority on fee clauses, disclosure documents or trustee powers should check the complete reasons first.