The “Jarrett Deed”

  • Slide3
  • Slide4
  • full screen slider
  • Slide2
image carousel by WOWSlider.com v7.4
 

After examining how the terms of the occupational pension trust established on the 23 December 1913 can be lawfully amended it is easy to determine that document dated 26 August 1986 that has been misrepresented as the “Trust Deed” of the fund is in fact void and ineffective and in fact fraudulent.

A complete copy of this document which bears the signature of the well known white-collar criminal Ken Jarrett can located on the following link:

Purported Deed of Variation 26 Aug 86  

Structure of a Deed

A well drafted Deed of Variation should follow a well established structure.

The document should state  on its face it is a deed  using words like “This Deed” or “executed as a deed”.

Recitals

The original Trust Deed that established the trust should be identified as well as any consolidation Deed of Variation that revoked the terms of the original Trust Deed and replaced them with an amended version of the terms of the trust. {Note: The original Trust Deed must be retained by a trustee even if its provision have been revoked by a consolidation Deed of Variation so as to confirm that the terms of the original Trust Deed have not been fraudulently amended.}

The Power of Amendment provided in the original Trust Deed should be recited to confirm that it is legally possible to execute a Deed of Variation and who has been provided with the Power of Amendment.

The Parties

The parties to the Deed should be identified, since the parties will need to execute the Deed in the proper manner.

Testatum

The Testatum is a command to witness the operative part of the Deed , which usually begins with “DO BY THIS DEED” or in earlier times “NOW THIS DEED WITNESSETH

Operative Part

This is the part of the Deed of Variation that includes the clauses to amend the terms of the trust.

Testimonium

The Testimonium attest to the due execution of the Deed. In well drafted Deed the Testimonium should be at the end of the document so as to minimised the opportunity to later tamper with the provisions of the Deed of Variation.

The Testimonium typically commences with the word s “IN WITNESS whereof..”

The words SIGNED SEALED and DELIVERED should also be used by each person executing the instrument to confirm the instrument is being executed as a  Deed.

 

Purported “Trust Deed” dated 26 August 1986

If a “successor trustee” or a “Regulator” or a “Law Enforcement Agency” examined the instrument dated 26 August 1986, a striking feature of this document associated with a superannuation fund is that it bears the signature of a well known white-collar criminal – Mr Ken Jarrett.

Mr Jarrett and his associates were the subject of several investigations by the former National Crime Authority (NCA) which are covered in more detail here.

An outcome of one of these investigations, known as Operation Albert, was that Mr Jarrett served a term of imprisonment for dishonest conduct.

This document bearing the signature of a convicted felon may not necessary be fraudulent, however any purported Deed of a superannuation fund that bears the signature of a person convicted for dishonest conduct must certainly be classed as a “Red Flag” document.

Red Flag The components of the “Jarrett Deed” are identified with highlight arrows as follows:

Something Missing?

The “Jarrett Deed” purports to amend the terms of an occupational pension trust established on the 23 December 1913, however no Power of Amendment is recited in the “Jarrett Deed“, to determine what party  has been provided with the Power of Amendment and what  conditions and restrictions have been imposed by the Power of Amendment.
  • Has a Power of Amendment been provided to the legal person of “the Company“, subject to the consent of “the Trustee“?
  • Has the Power of Amendment been provided to “the Trustee“, subject to the consent of “the Company“?
  • Or is the Power of Amendment jointly held?
However in fact none of the above apply. The original Trust Deed provided the Power of Amendment to the Directors of the sponsoring Employer, Elder Smith & Co Limited. The Elder Smith & Co Limited Provident Funds Act 1963 (SA) amended the terms of this trust and the Power of Amendment was provided to the Directors of any “successor company“, the first of which was Elder Smith Goldsbrough Mort Limited. On 3 February 1982 the name of Elder Smith Goldsbrough Mort Limited as changed to Elders IXL Limited, a fact recited in the “Jarrett Deed” at Recital C.

The original Trust Deed provided the Power of Amendment to natural persons, the Directors of the company, and not to the legal person of  “the Company“. Furthermore the Power of Amendment requires a majority of the trustees to give their consent in writing to any proposed amendment to the terms of the trust.

The Power of Amendment was renumbered to Regulation 50 and is referenced by the Elder Smith & Co Limited Provident Funds Act 1963 (SA). A transcript of Regulation 50 can be found here.

The Power of Amendment cannot be exercised so as to defeat the provisions of the Power of Amendment.

At [25.20] under Power of variation in the trust instrument, in Equity and Trusts in Australia (4th Edition) , GE Dal Pont and DRC Chalmers state:

“There are further general law restrictions on the scope of an even apparent unfettered power to vary, Firstly, a power to vary will not permit a variation removing a restriction of that power, secondly, its exercise cannot affect any vesting that has already taken place…..Thirdly, a power to vary a trust deed arguably does not extend to a variation that would alter the substratum of the trust {Lock v Westpac Banking Corp (1991) 25 NSWLR 593 at 602}

So the “Jarrett Deed” is void and ineffective for at least one reason – the wrong party executed the purported Deed of Variation. However the “Jarrett Deed” is void and ineffective for multiple reasons as discussed further below.

First Page of the purported “Trust Deed” {Shown below}.

 

{Arrow A}

The purported instrument  dated 26 August 1986 describes itself on its face as a Deed and has been duty stamped. However this document cannot be a “Trust Deed” that establishes a trust, since the document recites an earlier dated original Trust Deed that was made on the 23 December 1913. Therefore at best this document could only be a Deed of Variation (Amending Deed).  

{Arrow B}

One of the parties to the instrument described as a Deed is the company then known as Elders IXL Limited, which prior to 1982 had been known as Elder Smith Goldsbrough Mort Limited. A company is a “legal person“.

However the Power of Amendment  provided in the original Trust Deed made on the 23 December 1913 had been provided to the Board of Directors of the company then known as Elder Smith & Co Limited.

The Directors are natural persons whereas the company is a “legal person“.

The Elder Smith & Co Provident Funds Act 1936 (SA) amended the terms of original Trust Deed (as amended by the consolidation Deed of Variation dated 6 May 1958) so that the Board of Directors of any “successor company” would assume the obligations and powers of the the Board of Directors of Elder Smith & Co Limited.

The first “successor company” was Elder Smith Goldsbrough Mort Limited, that acquired the South Australian company Elder Smith & Co Limited as well  as the Victorian company Goldsbrough Mort & Co Limited in 1962.

So the “Jarrett Deed” is void and ineffective for Reason #1 – the wrong party executed the purported Deed of Variation.

The Power of Amendment, renumber to Regulation 50, and referenced by the Elder Smith & Co Limited Provident Funds Act 1963 (SA), also imposed a condition that a majority of the Directors of the sponsoring Employer had to execute any Deed of Variation.

So the “Jarrett Deed” is void and ineffective for Reason #2 – only one Director executed the purported Deed of Variation instead of a majority of the Directors.

{Arrow C}

The other party to the purported “Deed” is the corporate Trustee then known as Elders Superannuation Ltd (ACN 005 027 707). Only a lawfully appointed trustee can exercise the power to amend a Trust Deed or exercise the power to consent to the amendment of a Trust Deed.

However on the 20 December 1982, the five natural person trustees resident in South Australia were unlawfully removed from office and replaced by a purported sole corporate Trustee resident in Victoria in breach of the provisions of the Trustee Act 1936 (SA).

Elders Superannuation Ltd was in fact a Trustee de son tort.

More details on a Trustee de son tort can be found here.

So the “Jarrett Deed” is void and ineffective for Reason #3 – the document was not executed by lawfully appointed Trustees but was instead executed by a Trustee de son tort.

A Trustee de son tort retains the liabilities of lawfully appointed trustee, however is unable to exercise the powers of a lawfully appointed  trustee including the power to consent to any amendment to the terms of the trust.

{Arrow D}

Recital A confirms that the trust was established by a Deed made on the 23 December 1913 by the company then known as Elder Smith & Co Limited and that the name of the Fund had been changed to the Elders IXL Superannuation Fund.

 

{Arrow E}

Recital B  confirms the “successor company”  to be Elder Smith Goldsbrough Mort Limited and reference is made to the Elder Smith & Co Limited Provident Funds Act 1963 (SA).

{Arrow F}

Recital C confirms the name of the sponsoring Employer has been changed to Elder IXL Limited.  

{Arrow G}

Recital D purports that the corporate Trustee, Elders Superannuation Limited, became the purported Fund Trustee on the 20 December 1982. {and so replaced five natural person Trustees}.

The loss of prudent governance of the fund was a key enabling factor of this fraud and more details of this loss of governance can be found here.

Recital E makes no mention of the “Regulations” of the Fund being repealed or revoked. This is important.

Recital E states:

The Fund is governed and administered in accordance with rules or regulations which were originally adopted by the said Deed made on 23rd day of December 1913.

The inference is that the “regulations” are still in effect and that any purported “rules” are supplementary to the original “regulations”.

 

{Arrow H}

A set of purported “Rules” were attached to the “Jarrett Deed“, however the purported “Rules” have not been otherwise identified, such as a particular version of the “Rules” being recited.

  Jarrett Deed P1  

Second & Third pages of the “Jarrett Deed” {Shown below}.

 

{Arrow I}

The instrument is again expressed to be a “Deed” on its face, with the parties confirmed to be the “Principal Employer” and “the Trustee“.

{Arrow J}

Ken Jarrett is the only Director of the sponsoring Employer whose signature appears on this document, and he is executing the purported Deed of Variation, on behalf of a party that does not hold the Power of Amendment, the legal person (the Company) instead of in is capacity as a natural person Director. A minimum requirement for a valid Deed of Variation in 1986 would be for at least nine Directors of Elders IXL Limited to have signed this document {See list of Directors below}.

 

{Arrow K}

The purported corporate Trustee, Elders Superannuation Limited, resident in Victoria has executed the “Jarrett Deed“, instead of five natural person Trustees resident in South Australia.

    Jarrett Deed P2

First Page of Purported “Rules” attached to the “Jarrett Deed” {Shown below}.

{Arrow L}

A set of purported “Rules” dated 19 August 1985 (ie a year earlier) was merely attached to the purported “Deed” signed by Ken Jarrett.

However the purported “Deed” did not identify any particular set of “Rules” by date so any version of purported “Rules” could have been been appended to the “Jarrett Deed“.

This set of purported “Rules” was drafted a year before the date when the “Jarrett Deed” was executed?

This begs the question of why was no Deed of Variation executed in August 1985 if there was an intention to give effect to this version of the purported “Rules“?

The purported “Deed” could there be impugned under “Pigots Rule“, since the attached schedule could have been tampered with after the execution of the purported “Deed“.

  Jarrett Deed P3

In Summary

Even if the “Jarrett Deed” was a valid legal document, the recitals make no mention of the “Regulations” being repealed or revoked by a previous Deed of Variation and the “Jarrett Deed” and attached purported “Rules” do not themselves purport to repeal of revoke the “Regulation” in effect from the execution of the consolidation Deed of Variation dated 6 May 1958, which had repealed an earlier version of the Regulations.

At best the Jarrett Deed” would merely add new provisions to the terms of the trust without repealing any existing provisions.

However the “Jarrett Deed” is void and ineffective for a number of reasons. The Power of Amendment {Regulation 50} provides and amending power to the Directors of the sponsoring Employer, that is to natural persons and not to the legal person of “the Company“. The Power of Amendment requires a majority of the Trustees to give their consent in writing and the law requires trustees to be lawfully appointed to the office of trustee.

The “Jarrett Deed” is void and ineffective for the following reasons:

  • Reason #1: The wrong party executed the document – the legal person of “the Company” executed the document instead of a majority of the Directors (natural persons)
  • .
  • Reason #2: Only one Director executed the the document and not a majority
  • Reason#3: A Trustee de son tort executed the document instead of lawfully appointed Trustee
  • Reason #4: The document is poorly drafted and the attached schedule has not been properly identified in the operative part of the Deed, so any version of purported “Rules” could be attached to the “Jarrett Deed“.
  • Reason #5: The attached actuarial certificate is unsigned and refers to a differently dated set of purported “Rules”.

Even if the “Jarrett Deed” had been properly executed, the purported “Rules” themselves are fraudulent which is covered separately here.

Why the Jarrett Deed id Void  
 

Director of Elder IXL – 1986

 Directors 1986
facebooktwittergoogle_plusredditpinterestlinkedinmailby feather