ASIC v CBA … “Grandfathering” and its origins … Exposition by Justice Jackman … An unfortunate connection to race-based voter restrictions in the US of A … Inappropriate use of the word in legal jargon … Other judicial history detours … Associate of judges Ginger Snatch reports 

We’re fortunate to have Justice Ian Jackman’s history lesson on the origin and evolution of the word “grandfathering”. 

It came to light in the Federal Court handling of ASIC’s appeal against the Commonwealth Bank and its subsidiary Colonial First State – where the corporate regulator has been claiming the revenue split between the two for flogging a superannuation product amounted to “conflicted remuneration”. 

The CBA was said to be pushing the policy through its retail branches and ASIC claimed there was an “impugned benefit” which influenced the choice of financial product recommended by the bank Johnnies. 

The case emerged from the banking and superannuation royal commission which found that the distribution agreement may have run foul of the conflicted payments provisions of the Corporations Act. 

Commissioner Ken Hayne referred to matter to ASIC, which ultimately bought the case against CBA and CFS. 

Needless to say, in keeping with the Federal Court’s tradition when it comes to cases involving government regulators, ASIC was largely unsuccessful in the appeal. 

Justice Michael O’Bryan did the heavy lifting, with Mark Moshinsky and Jackman mostly agreeing. 

Part of the complex thinking involved reference to the Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Act, 2019 and the benefits relevant to new clients and old clients.

“Finally, I wish to say something about the term ‘grandfathering’,” Jackman announced. 

In a detour from corporate law he delved into US post-Civil War period when some of the southern states enacted property, literacy and other voter restrictions. Limiting the right to vote has a long and meaningful history in the land of the free. 

The voter qualifications did not apply to men who had voted before 1867 or had served as soldiers in the Civil War, or descendants of those people. This was the “Grandfather Clause”. 

Readers of ASIC v CBA were intrigued to learn that the first Grandfather Clause was enacted in Louisiana in 1898 where certain categories of males were exempt from the literacy and property voting requirements. 

North Carolina, Alabama, Virginia, Georgia and Maryland followed up with similar provisions. 

Naturally, these laws were based on race, regardless of the 15th amendment prohibiting voting restrictions affecting people of colour and “previous servitude”. 

In 1915 US Supreme Court struck down grandfathering in Oklahoma but the following year the state had a new law that grandfathered the grandfather clause. 

Jackman J noted that twenty-three years later the Supreme Court invalidated the double grandfathering provisions. 

He went on to say that it is surprising that the term should be used in Commonwealth statutory drafting when it is associated “with one of the more regrettable episodes of US legislative history”. 

“In an age when seemingly innocuous language is frequently made the object of censure, it is ironic that this usage has passed uncritically into current legal jargon. A more literal term, such as ‘preservation’, might be considered more appropriate in contemporary Australia.” 

It seems HH has been struck by a bout of wokeness. 

Australian Securities and Investment Commission v Commonwealth Bank of Australia 

Not that we should discourage historical discourses in judicial reasons. 

In September, we reported Justice Matthew Howard from the WA Supremes making references to Romulus and Remus along with Cain and Able when dealing with disharmony over a family estate. 

And in the same month we shared with our readers Justice John Logan’s extensive elaboration of the relationship between the armed forces and the crown in the 17th century. 

There was much to consider – the regicide of Charles I, the military dictatorship of the Lord Protector Oliver Cromwell, the danger of anarchy following Cromwell’s death, the restoration of Charles II and his unlimited power to raise a standing army, and the arrival of William & Mary. 

All this is a case about an airman’s appeal against dismissal from the RAAF because of failure to pass fitness tests.