ASIC first became involved in
Australia’s Worst White Collar Crime in March 2009 when
ASIC
was advised on criminal conduct by Responsible Persons of the purported
corporate trustee CCSL limited, who had refused to provide access to
any Deeds of the fund over the previous two years despite repeated
written requests for access.
A fundamental right of any person with a beneficial interest in a
trust is the right to have access to the Deed that established the
trust, known as the “
Trust Deed” and any other instrument that purports to vary the terms of the original
Trust Deed.
This right under the general law of trusts is confirmed
here.
In the case of trusts established in South Australia, there is also a right of access pursuant to
Section 84B of the
Trustee Act 1936 (SA). More details on this statutory right can be found
here.
The legal definition of a “
Trust Deed” can be found
here.
Because superannuation is
COMPULSORY and because
superannuation funds hold large amounts on trust for the provision of
retirement benefits, the Parliament of Australia has made it an
indictable offence for a Responsible Person of a Trustee of a large
superannuation fund to wilfully conceal the original Trust Deed and any
subsequent instruments that purport to vary the terms of the original
Trust Deed. These legal documents form part of the set of documents
known as the terms of the trust or the “
governing rules” of the fund. The legal definition of the “
governing rules” can be found
here.
It is an indictable offence to conceal any of the documents that form the set of documents known as the “
governing rules” from a person with a beneficial interest in the trust (which includes wives and widows) pursuant to
subsection 1017C of the
Corporations Act 2001 and
Regulation 7.9.45. The maximum penalty as prescribed under
Item 297B in
Schedule 3 of the
Corporations Act 2001 is a fine and up to two years imprisonment.
It is also an offence pursuant to
Section 84B of the
Trustee Act 1936 (SA) and
Regulation 5 of the
Trustee Regulations 2011(SA) to refuse to produce the Deeds to a person with a
beneficial interest in a trust established in South Australia.
A trustee of a trust established in South Australia is required to
produce for inspection when a request is made by a person with a
beneficial interest in the trust:
“each
deed, agreement or other instrument varying distribution of the trust
property or a stamped duplicate of any such deed, agreement or
instrument;“
Attempt to Gain Access to the Genuine Deeds
One member of the fund specifically requested a copy of the documents
that determine the terms of the superannuation trust as they stood on
25 March 1985 when a PROMISE of a retirement benefit was made before the
member accepted an offer of employment.
The member’s contract of employment included the right to be
appointed and object of the superannuation trust after completing a
qualifying period of employment (ie the employee had a right to become a
member of the fund).
The request to
ASIC was confirmed in a letter dated 22 April 2009.
{Note: Mr Hackett used the wording “.
.a copy of the Trust Deed that was in place on 25 March 1985“, when the correct wording would have been “
…copies of the documents that determined the terms of the trust as of 25 March 1985“. The original Trust Deed made on the 23 December 1913 is always a component of the terms of the trust.}
Mr Hackett makes specific reference to obtaining documents so that “
you will then be able to obtain independent legal advice about your entitlements“.
The request was not merely to “
inspect” the documents.
Now the fact that Responsible Persons of a superannuation fund
Trustee had been engaged in criminal conduct by wilfully concealing the
Deeds of the superannuation trust over a two year period should have
been a matter of concern for the
ASIC Officer, Mr Greg Hackett, in the Misconduct and Beach Reporting Division of
ASIC.
ASIC as a “
Regulator” under the
Superannuation Industry (Supervision) Act 1993 has the power to “
give a direction” to a Trustee to comply with superannuation law and to produce record and documents.
Mr Hackett should have given a direction to the Trustee to provide a copy of the following documents to the complainant:
- a copy of the original Trust Deed that established the trust
- copies of any instrument executed on or before 25 March 1985 that purport to amend the terms of the original Trust Deed
- a copy of the relevant State Trustee Act
- a copy of any court order or Act of Parliament specific to the trust
- a copy of or a reference to any relevant Commonwealth Legislation related to the Trust {eg Section 52 of the Superannuation Industry (Supervision ) Act 1993}
If Mr Hackett had given such a direction in April 2009, the the
complainant should have been in possession of the set of documents
listed above by the 30 June 2009.
However instead of giving a direction to the Trustee to provide
copies of the documents listed above Mr Hackett in a phone call on the 7
May 2009 only mentions “
seeking our assistance to gain access to the “Trust Deed”“. How can legal advice be obtained without having copies of the relevant documents to show a lawyer?
Now the purported Trustee (who was not even lawfully appointed to the
office of trustee} had no intention of disclosing the genuine “
Trust Deed” made on the 23 December 1913.
The purported Trustee had previously misrepresented a fraudulent document dated 26 August 1986 as the “
Trust Deed” of the fund when the Trustee had the fund registered with
APRA as a requirement of the
Superannuation Safety Amendment Act 2004 with amended the
Superannuation Industry Supervision Act 1993.
APRA granted Registration Number
R1004830 on the basis of a fraudulent “
Trust Deed” that had been submitted to
APRA instead of the genuine Trust Deed made on the 23 December 1913, plus copies of all subsequent genuine Deeds of Variation.
After Mr Hackett was reminded that an “
inspection” was not
what was requested, Mr Hackett finally responded some eight months after
the initial complaint of criminal conduct had been made with a letter
dated 10 November 2009.
Again here is an example of how complaints concerning the misconduct of superannuation trustees are dealt with by
ASIC Officers who have little of no understanding of the laws of trusts.
It is trite law that a trustee must obey the original trust deed as
lawfully amended.
Where the “
terms of the trust” includes the original “
Trust Deed” that established the trust plus all instruments that purport to vary the terms of the original
Trust Deed.
Palmer J in
Chang v Tjiong & Ors [2009] NSWSC 122 stated at [45]:
“ It is the duty of a trustee to ensure that beneficiaries are made aware of their rights: see
In re Emmet’s Estate (1881) 17 Ch D 142, at 149;
Hawkesley v May [1956] 1 QB 304,
at 322. A trustee can hardly comply with this duty unless he or she
keeps the terms of the trust readily available so that they may be
explained, or produced, to beneficiaries and made known to successor
trustees: see Ford & Lee
Principles of the Law of Trusts [9150].”
A trustee should always have the original counterpart of the
Trust Deed that
established the trust plus the original counterparts of all Deeds of
Variation held in a secure location with working copies kept close at
hand.
It is complete nonsense to claim that a trustee would be required to “
initiate a search of its records and archives of the previous trustee to locate any Deeds” related to the trust.
All the original counterparts of the Deeds of the trust must be
handed over by a departing Trustee to an incoming trustee as confirmed
by Palmer J.
Furthermore the complainant had requested the set of documents
that determined the terms of the trust as they stood on the 25 March
1985 when a PROMISE had been mad to the complainant before he accepted
an offer of employment.
A document that was not executed until a year and a half later on 26
August 1986 could not possibly be the basis of a PROMISE made on the 25
March 1986.
Another obvious question is why would a Deed executed on the 26
August 1986 relate to a purported set of rules drafted a year earlier?
{Note: The former
National Companies and Securities Commission {NCSC} commenced an investigation into the conduct of senior executives of
Elders IXL Limited in late 1986 and this coincides with the date that one of these senior executives signed the purported “
Trust Deed”
dated 26 August 1986.
That senior executive was Ken Jarrett who served a term of imprisonment
for dishonesty following a major investigation by the former
National Crime Authority (NCA) in relation to another matter.
A copy of the purported “
Trust Deed” dated 26 August 1986 can be found on the following link:
Purported Deed of Variation 26 Aug 86
Did ASIC Obtain a Copy of the Document dated 26 August 1986?
Here is a case where ha purported Trustee of a large superannuation
fund had criminally concealed the Deeds of the Fund for a two year
period before ASIC was contacted.
Instead of providing a copy of the genuine “
Trust Deed”
dated 23 December 1913 and copies of Deeds of Variation executed on or
before 25 March 1985 as requested, the Purported Trustee only provides a
copy of a documents that is misrepresent to be the “
Trust Deed” but which is dated 26 August 1986.
In these circumstances, one might have expected
ASIC to obtain a copy of the document dated 26 August 1986 to have on file for future reference?
However the following document confirms that Mr Hackett of
ASIC
never bother to obtain a copy of this document even though their had
been criminal conduct by the purported Trustee by concealing this and
other Deeds related to the fund.
ASIC Still Reuses to Enforce Disclosure of Genuine Deeds
It now approaching 5 years since
ASIC was
first alerted to criminal conduct involving the wilful concealment of
the original Trust Deed of a large Government Regulated Superannuation
Fund by a purported trustee that was not even lawfully appointed to the
office of Trustee, yet
ASIC has refused to “
give a direction”
to ensure that the members and beneficiaries of an occupational pension
trust established on the 23 December 1913 can have access to the
original Trust Deed and the genuine Deeds of Variation.
Instead Officers of
ASIC have just
“re-written the law”
so as to protect white-collar criminals. This dishonest conduct by
Australian Public Servants who are supposed to comply with the
APS Code of Conduct (
Section 13 of the
Public Service Act 1999) is covered in more detail
here.
Source Supplied
