ASIC Assists in Concealing Genuine Deeds

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.

ASIC 2 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?

ASIC File Note

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.

ASIC 10 Nov 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.

No Deeds  

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.