The Original Trust Deed

The Deed that established this occupational pension fund was made on the 23 December 1913. This document is referred to as the “Trust Deed” and any later Deeds that purport to vary the terms of the original Deed are referred to as Deeds of Variation or Amending Deeds.

The original Trust Deed was drafted by Sir John Downer who co-drafted theAustralian Constitution {see below}.

ASIC has made dishonest representations that the original Trust Deed may no longer have any relevance however this is just nonsense.ASIC is attempting to “re-write the law”.

ASIC’s position is refuted by the New South Wales Court of Appeal in Re Dion Investments Pty Ltd [2014] NSWCA 367. More information on the importance of the original Trust Deed can be found here.

The original Trust Deed determines if a valid trust was established in the first place and who are the class of persons entitled to receive a benefit under the trust (ie the beneficiaries) {In this case “certain male officer, their wives widows and dependants“}.

The original Trust Deed determines the “authorised purpose” of the trust and the type of benefit provided {In this case a pension for life fr a male officer who had completed at least 15 years of service with the sponsoring Employer}.

The original Trust Deed also determines if a power has been provided to amend the terms of the original trust Deed and who has been provided with that Power of Amendment and if any conditions and restrictions have been attached to the Power of Amendment.

The Laws of Australia {Thompson Reuters) at [15.14.1450] states under the section “It is the trustee’s plainest duty to obey the terms of the trust” the following is stated:

“Where the trust instrument confers a power of amendment, the conditions and restrictions imposed on its exercise must themselves be strictly observed.”

If a purported amending instrument does not comply with the conditions and restrictions imposed by the Power of Amendment, that instrument will be void and ineffective.

The original Trust Deed provided the Board of Directors of the sponsoring Employer with the Power of Amendment, subject to the consent of a majority of the Trustees (who by law must be lawfully appointed to the office of Trustee).

It is important to note that the legal person (ie “the company“) was not provided with the Power of Amendment.

Therefore a Deed of Variation has to be executed by a majority of the natural person Directors with their signatures witnessed and not by a single Director acting on behalf of the company and executing the Deed under the Common Seal of the company with the Company Secretary being a co-signatory.

The Pension Benefit

Regulation 8 in the Deed made on the 23 December 1913 provided a life pension for a male officer who had completed at least 15 years of service with the sponsoring Employer – Elder Smith & Co Limited.

The Pension formula was a common formula used by many pension funds:

[1/60] times [Years of Service] times [Pensionable  Salary]

 where [Pensionable Salary] was initially the salary averages over all years of service.

 

More details on the history of the lawful benefit can be found here


  Sir John Downer
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