Meier v Dorzan Pty Limited - [2010] NSWSC 664

No judgment structure available for this case.

CITATION: Meier v Dorzan Pty Limited & Anor [2010] NSWSC 664

HEARING DATE(S): 15/06/10

JUDGMENT DATE :
15 June 2010

JURISDICTION: Equity

JUDGMENT OF: Slattery J at 1

DECISION: 1. A declaration that the first defendant has remained the trustee of the Meier Superannuation Fund from 31 March 2000 to date.
2.A declaration that the Meier Superannuation Fund has not vested.
3.An order that RCL Superannuation Pty Ltd be appointed under Trustee Act s 70 as the trustee of the Meier Superannuation Fund in substitution for the first defendant, which shall cease to be a trustee of that Fund from the date of this order.
4.An order that the plaintiff be appointed under Trustee Act s 79 to transfer and that the plaintiff transfer the property [address and title details not published] to RCL Superannuation Pty Ltd as trustee of the Meier Superannuation Fund following its appointment as trustee of that Fund.
5.An order that the plaintiff be appointed under Trustee Act s 79 to transfer and that the plaintiff transfer the property [address and title details not published] to RCL Superannuation Pty Ltd as trustee of the Meier Superannuation Fund following its appointment as trustee of that Fund.
6.The plaintiff pay her own costs of these proceedings.

CATCHWORDS: EQUITY - trusts and trustees - appointment of new trustee - superannuation fund - prior appointment of natural persons as trustees ineffective as the trust deed - requires a corporate trustee - property held in the name of trustees de son tort is trust property - HELD: new trustee appointed - order that trust property be conveyed to the new trustee pursuant to Trustee Act 1925 s 79.

LEGISLATION CITED: Conveyancing Act 1919 (NSW)
Family Provision Act 1982 (NSW)
Trustee Act 1925 (NSW) ss 70, 71, 78, 79

CATEGORY: Principal judgment

CASES CITED: General Investment Pty Ltd v Tyson [1967] Tas SR 96
Jasmine Trustees Limited and Ors v Wells and Hind & Anor [2007] All ER (D) 112 (Jan); [2008] Ch 194
Pearce v Pearce [1856] 22 Beav 248, 52 ER 1103

TEXTS CITED: J D Heydon & M J Leeming, Jacob’s Law of Trusts of Australia (2006) LexisNexis Butterworths 7th ed

PARTIES: Plaintiff- Anne Shirley Meier
First Defendant- Dorzan Pty Limited
Second Defendant- Judith Ann Meier

FILE NUMBER(S): SC 2009/290639

COUNSEL: Plainitff- Mr Richmond SC

SOLICITORS: Plaintiff- Brian David Thornton, Cragg, Braye & Thornton

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

SLATTERY J

TUESDAY, 15 JUNE 2010

2009/290639 ANNE SHIRLEY MEIER v DORZAN PTY LTD

EX TEMPORE JUDGMENT

1 HIS HONOUR: The late Mr Robert Darryl Meier conducted a successful business as an electrician in the Upper Hunter Valley with a friend of his, Mr Robert Modinger. In 1993 Mr Meier left a position as an electrical supervisor with the local electricity supply authority, Hunter Electricity to set up a small business with Mr Modinger using the name RCB Electrical. Mr Meier and Mr Modinger used the corporate vehicle, Dorzan Pty Ltd, as the trading entity through which they conducted their business.

2 Dorzan employed both Mr Meier and Mr Modinger. Mr Meier and Mr Modinger were directors and shareholders of Dorzan. Mr Modinger's wife, Leanne, and Mr Meier's wife, Anne Shirley, were also shareholders of Dorzan.

3 In 1996 Mr Meier had the foresight to set up a superannuation fund, the Meier Superannuation Fund ("the Fund"). The trust deed constituting the fund and appointing Dorzan as trustee was made on 9 February 1996. Mr Modinger also set up a superannuation fund at the same time, but the present application concerns only Mr Meier's superannuation fund, the Fund.

4 Mr Meier died in August 2007. Before his death he made a will in which he left his entire estate to his widow Anne Shirley Meier, the plaintiff in these proceedings.

5 In November 2006 Mr Meier exercised a power available to him under the trust deed to give a binding direction to the trustee of the Fund nominating the person to whom any death benefit would be paid under the fund upon his death. He nominated the plaintiff, Mrs Meier, as the person who would receive 100 % of the total death benefit payable.

6 After Mr Meier's death some of his children of his previous marriage brought proceedings in this Court under the Family Provision Act 1982 (NSW) against Mrs Meier, the executrix of Mr Meier's estate: Proceedings 2400/2008 in the Equity Division.

7 In the course of Mrs Meier's administration of the estate and in preparation for the Family Provision Act proceedings, it emerged that errors had been made in the administration of the Fund. These errors resulted in a purported appointment of trustees of the fund that was not authorised by the trust deed. The errors have also resulted in certain real property of the Fund in the Singleton district (“the Singleton land”) being held other than by the trustee of the Fund.

8 Mrs Meier now brings these proceedings to regularise the affairs of the Fund so that they conform with the trust deed and the general law. Dorzan, the original trustee of the Fund, is the first defendant in these proceedings. The second defendant is Judith Anne Meier, a child of the previous marriage of Mr Meier, and one of plaintiffs in the Family ProvisionAct proceedings.

9 Ms Judith Meier lodged a caveat against the title to the Singleton land. As originally constituted, these proceedings also sought removal of that caveat. Ms Judith Meier has removed that caveat before the hearing of these proceedings. No relief is now sought against her. She has not appeared at the hearing.

10 The Family ProvisionAct proceedings have not yet been resolved. Indeed, they have been case managed by the registrar in equity in conjunction with these proceedings. It was decided that it was more efficient to have these proceedings determined first. I am satisfied that proper notice of the hearing of these proceedings has been given to the plaintiffs in the Family Provision Act proceedings.

11 Mr Richmond SC, on behalf of the plaintiff, tendered to the Court correspondence (Exhibit ASM 3) which demonstrates that Maclarens Lawyers, for the plaintiffs in the Family Provision Act proceedings, were notified that these proceedings would be heard before the Family Provision Act proceedings. The same correspondence also invites Messrs Maclarens to consider whether their clients intend to take an active part in these proceedings, and, if so, whether they will seek orders for the filing of a defence and any evidence.

12 Maclarens Lawyers have on behalf of their clients not sought to take up the invitation to take any active part in these proceedings.

13 This is a matter of some importance because the effect of the orders sought by the plaintiff today will be to appoint a new corporate trustee of the Fund and to transfer the Singleton land now held by Mrs Meier to that trustee.

14 It might be argued in the future that as a result of this transfer the Singleton real estate is less amenable to order under the Family Provision Act than it might in its present ownership. I am not here making any evaluation of the merits of such an argument, but merely to observe that it might be put.

15 I am satisfied on the evidence that proper notice of these proceedings has been given to the plaintiffs in the Family Provision Act proceeding. Apart from the correspondence in ASM 3, the joint case management of the two proceedings together would have had the same effect of giving notice to the plaintiffs in the Family Provision Act proceedings.

16 I now turn to the two questions that are presented for the Court's consideration today. The first relates to the appointment of trustees of the Fund. The second relates to the trust property.

Trustees of the Fund

17 The trust deed made on 9 February 1996 was made between Dorzan Pty Ltd, described as the "employer", and Dorzan Pty Limited as the Trustee of the proposed fund and called the "trustee" of the other part.

18 The deed relevantly provides as follows:

TRUST DEED

^th

BETWEEN

^ST

OF THE ONE PART

AND

^ST

OF THE OTHER PART

WHEREAS:

A. It is the desire of the Principal Employer to establish and maintain an indefinitely continuing fund to be known as the MEIER SUPERANNUATION FUND (hereinafter called ‘the Fund’) for the purpose of providing retiring allowances and other benefits for such of the present and future employees of the Principal Employer and of any subsidiary or associated Employer as shall be eligible and elect to participate in the Fund and obtain the benefits thereof for themselves and in the event of their death for their Dependants.

B. The Trustee has agreed to act as Trustee of the Fund in accordance with the provisions of this Trust Deed.

C. The Fund is established and maintained solely for the purpose of providing superannuation benefits for Members (as herein defined) in the event of retirement or in other circumstances approved by the Insurance and Superannuation Commissioner pursuant to the Superannuation Industry (Supervision) Act 1993 or for the Dependants of Members in the event of the death of a Member whilst in the employ of the Member’s Employer.

NOW THIS DEED WITNESSETH

^th

(B) The Rules mean the Rules attached hereto as amended from time to time as therein provided.

(C) The Rules are divided into Division A and Division B:

Division A: shall govern the management and administration of the Fund and

Division B: shall govern the amount of the Benefits payable out of the Fund.

(D) The Rules and provisions and conditions contained therein shall have the same force and effect as if set out in the body of this Deed.

(E) The Trustees shall administer the Fund according to the Rules.

(F) The Deed and Rules may from time to time be amended by the Trustees with the agreement of the Employer by Supplemental Deed or Deeds or Minute or Resolution or Oral Resolution in accordance with Clause 35.

AS WITNESS

was hereto affixed in the presence of: )

Robert Stanley Modinger signature (Director)

Robert Darrell Meier signature (Director)

Robert Stanley Modinger signature (Director)

19 The rules provided for under the deed which govern in Division A the management and administration of the Fund are the source of the difficulty that brings this matter before the Court.

20 The relevant parts of Division A to which the Court's attention has been drawn and which are relevant to the matters in issue are certain definitions in that Division and the following rules:

“’Constitutional Corporation’ means a body corporate that is a trading corporation or a financial corporation formed with the limits of the Commonwealth (within the meaning of paragraph 51(xx) of the Constitution)

‘Eligible Person’ means a person engaged in any business, trade, profession, vocation, calling occupation or employment.

‘Employer’ means the Principal Employer, where applicable or any Participating Employer and in relation to an Employee or Member means the Employer of such Employee or Member.

‘Principal Employer’ means the Employer named in the Schedule hereto or any Employer carrying on business in succession to or in amalgamation with the Principal Employer as aforesaid which elects to assume by deed the obligations of the Principal Employer under this Deed in accordance with Clause 30 hereof and where the Principal Employer is the same person as the Trustee means that person acting in its capacity as Principal Employer.

4. REGULATED SUPERANNUATION FUND STATUS

(a) The Trustee of the Fund must be a constitutional corporation.

(b) The Trustee must give to the Commissioner the prescribed notice of election that the Superannuation Industry (Supervision) Act 1993 applies in relation to the Fund.

FUND TRUSTEE – COMPOSITION, VACANCY, APPOINTMENT

(a) The Fund shall be vested in the Trustee upon the terms and conditions and subject to the trusts, powers, authorities and discretions contained in this Deed and shall be managed, administered and applied by it in accordance with the provisions of this Deed.

(b) Appointment of Trustee – The Principal Employer shall have the right to with the approval of all members appoint a constitutional corporation to act as Trustee or Trustees either in place of any constitutional corporation who has ceased to be a Trustee or as an additional Trustee. Such appointment shall be in writing and shall take effect seven days after the date of the notice.

(c) Vacancy in office – The Office of Trustee, or a director of a corporate Trustee where the director is appointed pursuant to clause 9.1 or 9.5 shall become vacant:

(i) if the Corporate Trustee or a director of the Corporate Trustee resigns his office by notice in writing;

(ii) if he is disqualified from office by operation of the Act or the Corporations Law

(iii) if he dies; or

(iv) if the company is wound up.

(v) if he becomes bankrupt or makes an assignment to or composition with his creditors.

(d) Continuity of office – A Corporate Trustee, on ceasing to be a Trustee, pursuant to Clause 9(c) shall do everything necessary to vest the Fund in the new Trustee and shall deliver all records and other books held by such Trustee in relation to the Fund to the new Trustee.

(e) Principal Employer to act as Trustee – The Principal Employer shall endeavour to keep the office of Trustee filled at all times but if, for any period, there is no Trustee, the duties of the Trustee shall be performed by the Principal Employer.
…
15. MEMBERSHIP OF FUND

(a) Any Eligible Person may make application in writing to the Trustees by completing an Application for Membership in the form of Schedule A annexed hereto or in such other form as the Trustee shall from time to time determine.
…
(e) Cessation of Membership – A person shall cease to be a Member on the happening of the first of the following:

PAYMENT OF BENEFITS AT DEATH

(a) Benefit payable on the death of a Member leaving Dependants – where this Deed provides for the payment of a benefit to such person or persons as have been nominated by that Member and in the event that there is no nominee or the Trustee considers it inappropriate to pay the benefits to any nominee the Trustee shall pay the benefit to such one or more of the former Member’s Dependants in the manner, at the times, by the instalments and in such proportions between them, if more than one, as the Trustee may from time to time in its discretion determine.

Benefit payable on the death of a Member leaving no Dependants

35. VARIATION OF TRUST DEED

The provisions of this Deed may be added to, amended, altered, deleted, modified or varied (hereinafter called ‘variation’) from time to time only with the Trustees consent except where the amendment relates to:

(i) voluntary employer contributions;
(ii) the termination of the Fund;
(iii) the admission and categorisation of members; and
(iv) the admission of additional employers

Administration Variation

Limitation on Variation

(v) result in a change to the requirement of having a constitutional corporation as trustee.”

21 Certain clauses in the deed bear closely upon the issues for determination today. They are clauses 4, 9 and 35.

22 Clause 4 (a) requires that the trustee of the Fund must be a “constitutional corporation”, which is a trading or financial corporation formed within the limits of the Commonwealth. The provision of the trust deed requiring this was presumably crafted to conform with superannuation law at the time the trust deed was created.

23 The requirement for a corporate trustee is then carried through in the deed to govern changes of trustee and changes or variations to the form of the trust deed.

24 Clause 9 (b) of the deed requires the appointment of a new trustee in place of a retiring trustee to be an appointment of a constitutional corporation.

25 Clause 35(c)(v) requires that to the extent that there is to be an addition, amendment, deletion, modification or other variation of the deed, that one limitation of the power to so vary is a requirement that the variation shall not result in "a change to the requirement of having a constitutional corporation as trustee".

26 The combined effect of these provisions is that the original scheme under the 1996 trust deed for the appointment of a corporate trustee cannot be changed by subsequent appointments of trustee or by subsequent variations to the trust deed. It is a failure to observe the strictures of that particular requirement that has led to the need to make this application to Court today.

27 It is evident from an examination of documents created in the course of administration of the trust during the last decade, that Mr Meier became a member of the trust. A membership form signed by him conforming with Schedule A of the trust deed was brought into existence.

28 The first of the series of errors in the administration of the trust commenced with a deed of variation and appointment of new trustee dated 31 March 2000 made between Dorzan Pty Ltd and Mr Meier.

29 I should say when going to this first document demonstrating this error that it is plain from the course of events in the administration of this trust that Mr Meier was acting on the advice of others and these errors are in no way to be attributed to any intention on his part to avoid the requirements of the original trust deed or to circumvent the proper administration of the trust. The errors that have occurred appear to have been inadvertent omissions by his professional advisers.

30 The deed of variation and appointment of new trustee of 31 March 2000 relevantly provided as follows:

“DEED OF VARIATION AND APPOINTMENT OF NEW TRUSTEE

THIS DEED is made the 31 ^st day of March 2000

BETWEEN: DORZAN PTY LIMITED of 1 ^st Floor, 572 Pacific Highway, Belmont, New South Wales (‘Dorzan’);

AND ROBERT DARRELL MEIER of 1 Cedar Close, Muswellbrook, New South Wales (‘Meier’).

WHEREAS

1. Dorzan is trustee and the Principal Employer of the Meier Superannuation Fund (‘the Fund’).

2. The Fund was established by Deed (‘the Deed’) dated 9 February 1996.

3. Dorzan wishes to replace the rules of the Fund with those Rules (‘the Rules’).

4. Dorzan wishes to retire as trustee of the Fund.

5. Meier has agreed to accept appointment as trustee of the Fund and by execution of this deed evidences his consent to that appointment.

6. Dorzan is satisfied that the amendments to the Deed to be made by this deed (including replacement of the rules of the Fund with the Rules) will satisfy the requirements of Part 9 of the Superannuation Industry (Supervision) Act 1993 concerning equal representation of employees and members.

NOW THIS DEED WITNESSETH

1. Paragraph C of the Deed is deleted.

‘(a) The sole or primary purpose of the Fund is the provision of old age pensions as required by the Superannuation Industry (Supervision) Act 1995 in the case of non-corporate trustees.

(b) Subject to the Rules the purpose of the Fund is to provide individual personal benefits, pensions or retiring allowances upon the death or retirement of a Member, provided that:

3. The Trustee hereby appoints Meier as a trustee of the Fund.

4. The Trustee hereby retires as trustee of the Fund.

31 The purported appointment in clause 3 of the deed of variation and appointment of 31 March 2000 of Mr Meier, rather than a constitutional corporation as trustee of the Fund was an appointment in breach of both clauses 4 (a) and 9 (b) of the trust deed.

32 The result of those breaches was that the purported appointment of Mr Meier was ineffective and Dorzan remained the trustee of the trust fund. Further errors of a similar character were made in subsequent years.

33 At a date in 2002 which is unclear on the evidence, a form of deed of variation was brought into existence to which Mr Meier and his son, Peter William Meier, were parties. They, by this document, purported to act as trustees of the Fund to vary the rules of the Fund in ways that are not presently material.

34 This document is ineffective on several grounds. The first ground relates to formalities. The document does not comply with the requirements under the Conveyancing Act 1919 (NSW) for execution of a deed. Neither the signature of Mr Meier nor that of Mr Peter Meier as purported trustees is witnessed. But that formality is of less significance than the fact that neither Mr Meier nor Mr Peter Meier could validly be authorised to act as trustees of the Fund conformably with the provisions of the trust deed.

35 This document is the first occasion on the evidence that Mr Peter Meier appears to take a role in the administration of the Fund, purporting to act as trustee of the Fund.

36 Diligent searches have been undertaken but it has not been possible to identify any instrument purporting to appoint Mr Peter Meier as a co-trustee with Mr Meier. No document, like the instrument of 31 March 2000 appointing Mr Meier as trustee, has been found which appoints Mr Peter Meier as trustee.

37 Some attempt does seem to have been made to regularise the situation so far as Peter Meier was concerned about three years later when the plaintiff, Mrs Meier was sought to be appointed as trustee with Mr Meier. In a document, to which I will come shortly, that change was sought to be effected.

38 Mr Peter Meier executed a consent to act as trustee shortly before the proposed appointment of Mrs Meier as trustee. But apart from that consent there is nothing that can be found that explains Mr Peter Meier's appointment as trustee. His purported appointment is as ineffective as that of Mr Meier for the same reasons. It is a breach of clauses 4 (a) and 9 (b) of the trust deed.

39 This is no mere technicality. The requirement that the trustee of the Fund be a constitutional corporation at the time that the trust deed was made was an endeavour to ensure the Fund remained a compliant Fund under federal superannuation legislation.

40 The next step in relation to the appointment of the new trustees was a deed made on 1 July 2005 when Mr Meier's son Peter and the plaintiff, Mrs Meier, joined in a deed which provided for Mr Peter Meier's retirement as a trustee of the Fund and Mrs Meier's appointment as a trustee. Mrs Meier is described by her previous name before her marriage to Mr Meier in this deed as Anne Shirley Kingdom. This deed provided as follows:

“DEED OF VARIATION AND APPOINTMENT OF NEW TRUSTEES

^st

BETWEEN: ROBERT DARRELL MEIER of [address suppressed], MUSWELLBROOK, New South Wales

.

AND ANNE SHIRLEY KINGDOM of [address suppressed], MUSWELLBROOK, New South Wales

1. Robert Meier and Peter Meier are trustees of the Meier Superannuation Fund (“the Fund”).

2. The Fund was established by Deed (“the Deed”) dated 9 February 1996.

3. Peter Meier wishes to retire as trustee of the Fund.

4. Anne Kingdom has agreed to accept appointment as trustee of the fund and by execution of this deed evidence their consent to that appointment.

5. Robert Meier and Peter Meier are satisfied that the amendments to the Deed to be made by this deed will satisfy the requirements of Part 9 of the Superannuation Industry (Supervision) Act 1993 concerning equal representation of employees and members.

NOW THIS DEED WITNESSETH

1. Robert Meier hereby appoints Anne Kingdom as joint trustee of the Fund.

2. Peter Meier hereby retires as trustee of the Fund.

EXECUTED AS A DEED

signature signature

Robert Darrell Meier Witness

signature signature

41 This deed repeats the same breach of clauses 4 (a) and 9 (b) of the trust deed as the previous forms of appointment.

42 A final step in the Fund administration was an attempt on 26 October 2006 by Mr and Mrs Meier to amend the rules of the original deed in ways that are not of present relevance.

43 All that is of present relevance is that at the time this deed of amendment was entered into on 26 October 2006 that neither Mr Meier nor Mrs Meier were validly appointed as trustees of the Fund and the document was ineffective. Mrs Meier, and Mr Meier when he was alive, had purported to act as trustees by these documents when not authorised to under the trust deed to do so. Mrs Meier now seeks relief to appoint a corporate trustee in conformity with the provisions of the trust deed.

44 The proposed corporate trustee is RCL Superannuation Pty Ltd. Mrs Meier, has tendered a consent by RCL Superannuation Pty Ltd to its appointment as trustee of the Fund.

45 The effect of what has occurred is that the purported appointment of Mr Meier as a trustee in place of Dorzan was not authorised under clauses 4 (a) and 9 (b) of the trust deed which requires the trustee for the time being and any new trustee to be a constitutional corporation.

46 Where the appointment of a new trustee is invalid the former trustees remain as trustees and the persons purportedly appointed as trustees will, if they act as such, be treated as trustees de son tort: Pearce v Pearce [1856] 22 Beav 248, 52 ER 1103; Jasmine Trustees Limited and Ors v Wells and Hind & Anor [2007] All ER (D) 112 (Jan); [2008] Ch 194 at 209.

47 Although it is true that rule 9 (c)(i) permits a corporate trustee to resign its office by notice in writing, I agree with the submission propounded by Mr Richmond SC for the plaintiff that this must be read in conjunction with clause 9 (d) which assumes the resignation is effective in conjunction with the appointment of a new trustee; and this is also consistent with the view that a power to retire as trustee is subject to a retiring trustee making effective arrangements for the appointment of a successor or trustee: General Investment Pty Ltd v Tyson [1967] Tas SR 96 at 101, 102.

48 As a consequence of the ineffectiveness of the attempt to first appoint Mr Meier as a trustee, all subsequent attempts to amend the trust deed and to appoint new trustees are equally ineffective. A person invalidly appointed as a trustee cannot exercise powers given to the trustee under the trust deed. Furthermore, none of the subsequent attempts to appoint trustees were attempts to appoint a trustee in conformity with the trust deed.

49 Mr Richmond SC has raised the issue of whether it might be argued that the Fund has vested on the appointment of Mr Meier as trustee by reason of the fact that Mr Meier as the sole beneficiary of the Fund became sole trustee of the Fund and that a merger occurred when the Fund vested. The invalidity of the appointment of Mr Meier as a trustee is the answer to this concern. Dorzan never ceased to be the trustee of the Fund so any questions of merger of beneficial and legal estates through Mr Meier's holding of both does not arise.

The Trust Property

50 The initial trust property was Mr Meier's entitlement under the New South Wales Electrical Superannuation Scheme Fund. This was a capital sum of $12,157.52 which was rolled over into the Fund. Shortly after that Mr Meier rolled over other entitlements in the sum of $3,268.51 that he had with the Westpac Superannuation Investment Fund into this Fund. Contributions were made to the Fund over the following years, which were mainly invested in Australian shares.

51 A rather familiar story of stock market reverses in 2001 saw Mr Meier take advice and decide that the Fund should invest in local real estate in Singleton, a form of investment with which he was more familiar. This then resulted in decisions to purchase two properties. The first was a property in Singleton Heights and the second was a property in Singleton.

52 This Court has a policy of reducing the risk of identify theft through its published judgments. The precise address of these properties will not be published in this judgment. If more precise information about either of them is required an application can be made for access to the Court file.

53 The evidence demonstrates that Mr Meier intended both the Singleton Heights property and the Singleton property to be trust property. With the exception of an insignificant sum of money in relation to the scale of the funds applied for the purchase and development of these two properties, the funds for their acquisition and development were sourced from the Fund.

54 Confirmation that that was Mr Meier's intention also appears from the contemporaneous records of decisions in relation to the administration of the Fund.

55 It is necessary to shortly survey the evidence that relates to the acquisition of these two properties, because one of the orders sought in these proceedings is that those two properties be conveyed to the new trustee, RCL Superannuation Pty Ltd.

56 I will deal first with the Singleton Heights property and then the Singleton property. Contracts were exchanged for the purchase of the Singleton Heights property on 16 May 2002. Mr Meier is described as the purchaser of the "trustee for the Meier Superannuation Fund". He was plainly acting in the belief that the deed of 31 March 2000 had been effective to appoint him as trustee.

57 Mr Meier and Mrs Meier also signed a contract for the construction of a house at the Singleton Heights property on 24 August 2002. The property was developed, a house was constructed and the site is now tenanted and generating income for the Fund.

58 The moneys that were applied to provide for a deposit on the acquisition of the land and a deposit on the building contract together with all payments by way of settlement of the purchase, incidental purchase expenses and building costs are conveniently summarised in the schedule below. With the single exception of the $1,000 paid as a deposit on the building contract to the home builder, Valley Homes, all the funds were sourced from Dorzan's St George Bank account, as the following schedule shows:

Date of Receipt/invoice Amount Money was used for? Bank
Account

04/04/2002 $1,000.00 Deposit paid to Valley Homes Westpac/ RD Meier

06/05/2002 $4,100.00 Deposit paid to LJ Hooker for land St George/
Dorzan

09/07/2002 $38,683.28 Settlement of purchase St George/
Dorzan

25/09/2002 $21,000.00 1^st progress payment to Valley Homes St George/
Dorzan

05/11/2002 $26,250.00 2^nd payment to Valley Homes St George/
Dorzan

05/11/2002 $26,250.00 3^rd payment to Valley Homes St George/
Dorzan

16/12/2002 $253.00 Hunter Valley Fast Glass Security Door St George/
Dorzan

13/01/2003 $21,000.00 4^th payment to Valley Homes St George/
Dorzan

04/02/2003 $890.00 AVA gates St George/
Dorzan

07/02/2003 $10,842.70 Final payment to Valley Homes St George/
Dorzan

07/02/2003 $460.00 Singleton Landscaping St George/
Dorzan

17/02/2003 $210.00 AVA gates

59 The minutes of the meeting of the trustees for the Meier Superannuation Fund held in Newcastle on 31 March 2004 under the heading "business" clearly described the acquisitions of the Singleton Heights and Singleton properties as acquisitions during the previous financial year in the following terms:

“MINUTES OF THE MEETING OF MR R MEIER & MR P MEIER AS TRUSTEES FOR MEIER SUPERANNUATIO FUND HELD AT 125 BULL STREET NEWCASTLE ON 31 MARCH 2004 AT 11.00AM

BUSINESS

ACQUISITIONS

DISPOSALS

Disposal of Asguard investment for approximately $100,000.00

The trustees confirm that the above decisions were in accordance with the documented investment strategy.

CONFIRMATION

OF MINUTES

There being no further business the meeting was terminated.”

60 If there was any doubt about Mr Meier's intention in the acquisition of the Singleton Heights property, he sought to put it to rest by executing a statutory declaration on 14 July 2005 which provided the following:

“ STATUTORY DECLARATION

I, Robert Meier, do solemnly swear that the title deeds for the properties:

are currently in the name of Mr Robert Meier as trustee for the Meier Superannuation Fund.

Singleton

14

^th

July

05

Signature

Signature of person before whom declaration is made:

Signature

~~Solicitor~~

61 The second property, the Singleton property, was purchased on 27 February 2003 for a sum of $46,000 by Mr Meier described the purchased "as trustee for the Meier Superannuation Fund". A building contract in respect of that property was executed on 18 June 2003 on behalf of the “Meier Superannuation Fund”. The Fund’s exchanged copy of contract only contains the version signed by the builder.

62 As with the Singleton Heights property, the development of the Singleton property was funded from Dorzan’s St George bank account:

Date of Receipt/invoice	Amount	Money was used for?	Bank Account
28/3/2003	$ 2,500.00	Deposit to Jones Homes	St George/ Dorzan
20/02/2003	$4,600.00	Deposit paid to Max Bailey for deposit of land	St George/ Dorzan
02/04/2003	$43,344.05	Money required to settle on land-paid to Halletts	St George/ Dorzan
15/04/2003	$1,400.00	Air Conditioner	St George/ Dorzan
24/07/2003	$16,247.25	First payment for the house	St George/ Dorzan
12/08/2003	$21,663.00	Second payment for the house	St George/ Dorzan
25/08/2003	$27,078.75	Third payment for the house	St George/ Dorzan
04/09/2003	$189.98	Payments for Mail box	St George/ Dorzan
11/09/2003	$27,078.75	Fourth payment for the house	St George/ Dorzan
26/09/2003	$850.00	Roller Door Garage	St George/ Dorzan
08/10/2003	$207.60	Amber Tiles	St George/ Dorzan
11/11/2003	$311.00	Screen Doors from Hunter Valley Glass	St George/ Dorzan
21/11/2003	$16,117.25	Final Payment Jones Homes	St George/ Dorzan
27/11/2003	$113.24	Light	St George/ Dorzan
28/11/2003	$2,130.00	Supply of Vinyl and Carpet	St George/ Dorzan
17/12/2003	$241.00	Fence	St George/ Dorzan
18/12/2003	$2,579.50	Turf	St George/ Dorzan

63 One can readily infer that the $1,000 paid in respect of the Singleton Heights property as a deposit to the builder was a contribution to the superannuation fund on several grounds.

64 The statutory declaration and the minutes that Mr Meier created make it clear that he did not differentiate any sum of money applied to the acquisition and development costs of that property so as to isolate any interest associated with the Singleton Heights and Singleton properties outside the Fund.

65 Secondly, the way that the substituted proportion of the funds for the Singleton Heights property and all the funds for the Singleton property were sourced from Dorzan’s St George account makes it clear that funding of the acquisition and development of this Singleton land from the fund was the intention.

66 Thirdly, Mrs Meier explained in her evidence that the reason for Mr Meier's small amount of deposit on the building contract for the Singleton Heights property was that it was necessary to lock in a building contract at short notice and that the use of personal funds was a convenient way to achieve that result. The personal cheque involved should be treated as a contribution to the Fund by Mr Meier.

67 I am satisfied, therefore, that the Singleton Heights and the Singleton properties were funded from and intended to be properties of the Fund.

Relief

68 The currently irregular situation in which those properties are held by the plaintiff who is not a trustee of the fund and is not proposed to be a trustee of the fund should be regularised. Mrs Meier proposes that they be transferred to RCL Superannuation Pty Limited and she has indicated in her statement of claim that she is prepared to consent to an order that the plaintiff transfer each of those properties to RCL Superannuation Pty Limited.

69 The power the Court exercises to appoint a trustee is a power conferred by s 70 of the Trustee Act 1925 (NSW). RCL Superannuation Pty Limited will be appointed as the trustee. Incidental to that power the Court may make vesting orders upon the appointment of a new trustee (Trustee Act s 71) which have the effect described in Trustee Act s 78.

70 The Court is empowered either to make a vesting order under s 71 or, if it is more convenient, to appoint a person to convey the property having the same effect as a vesting order would have. The operation of s 79 is discussed in J D Heydon & M J Leeming, Jacob’s Law of Trusts of Australia (2006) LexisNexis Butterworths 7th ed at [2511] in the following terms:

"[2511] In all cases where a vesting order can be made, in all jurisdictions the court may, if it is more convenient, appoint a person to convey the property or release any contingent right, and a conveyance or release by that person in conformity with the order shall have the same effect as an order under the appropriate provision. The court has appointed a person to convey the entirety of an estate in which an infant held an undivided interest, the adult person interested being parties to the sale.”

71 Mrs Meier seeks an order that she convey the property to RCL. In this case it seems appropriate to make an order under Trustee Act s 79. That is how she has structured the order she seeks and has made arrangements for that conveyance. Thus it is more convenient to continue in that course. I will make orders under Trustee Act s 79 appointing her to convey the property to the new trustee.

Conclusion and Orders

72 In the result, therefore, I will make the following declarations and orders in these proceedings:

1. A declaration that the first defendant has remained the trustee of the Meier Superannuation Fund from 31 March 2000 to date.

2. A declaration that the Meier Superannuation Fund has not vested.

3. An order that RCL Superannuation Pty Ltd be appointed under Trustee Act s 70 as the trustee of the Meier Superannuation Fund in substitution for the first defendant, which shall cease to be a trustee of that Fund from the date of this order.

4. An order that the plaintiff be appointed under Trustee Act s 79 to transfer and that the plaintiff transfer the property [address and title details not published] to RCL Superannuation Pty Ltd as trustee of the Meier Superannuation Fund following its appointment as trustee of that Fund.

5. An order that the plaintiff be appointed under Trustee Act s 79 to transfer and that the plaintiff transfer the property [address and title details not published] to RCL Superannuation Pty Ltd as trustee of the Meier Superannuation Fund following its appointment as trustee of that Fund.

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Citations

Meier v Dorzan Pty Limited [2010] NSWSC 664

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CITATION:	Meier v Dorzan Pty Limited & Anor [2010] NSWSC 664
HEARING DATE(S):	15/06/10
JUDGMENT DATE :	15 June 2010
JURISDICTION:	Equity
JUDGMENT OF:	Slattery J at 1
DECISION:	1. A declaration that the first defendant has remained the trustee of the Meier Superannuation Fund from 31 March 2000 to date. 2.A declaration that the Meier Superannuation Fund has not vested. 3.An order that RCL Superannuation Pty Ltd be appointed under Trustee Act s 70 as the trustee of the Meier Superannuation Fund in substitution for the first defendant, which shall cease to be a trustee of that Fund from the date of this order. 4.An order that the plaintiff be appointed under Trustee Act s 79 to transfer and that the plaintiff transfer the property [address and title details not published] to RCL Superannuation Pty Ltd as trustee of the Meier Superannuation Fund following its appointment as trustee of that Fund. 5.An order that the plaintiff be appointed under Trustee Act s 79 to transfer and that the plaintiff transfer the property [address and title details not published] to RCL Superannuation Pty Ltd as trustee of the Meier Superannuation Fund following its appointment as trustee of that Fund. 6.The plaintiff pay her own costs of these proceedings.
CATCHWORDS:	EQUITY - trusts and trustees - appointment of new trustee - superannuation fund - prior appointment of natural persons as trustees ineffective as the trust deed - requires a corporate trustee - property held in the name of trustees de son tort is trust property - HELD: new trustee appointed - order that trust property be conveyed to the new trustee pursuant to Trustee Act 1925 s 79.
LEGISLATION CITED:	Conveyancing Act 1919 (NSW) Family Provision Act 1982 (NSW) Trustee Act 1925 (NSW) ss 70, 71, 78, 79
CATEGORY:	Principal judgment
CASES CITED:	General Investment Pty Ltd v Tyson [1967] Tas SR 96 Jasmine Trustees Limited and Ors v Wells and Hind & Anor [2007] All ER (D) 112 (Jan); [2008] Ch 194 Pearce v Pearce [1856] 22 Beav 248, 52 ER 1103
TEXTS CITED:	J D Heydon & M J Leeming, Jacob’s Law of Trusts of Australia (2006) LexisNexis Butterworths 7th ed
PARTIES:	Plaintiff- Anne Shirley Meier First Defendant- Dorzan Pty Limited Second Defendant- Judith Ann Meier
FILE NUMBER(S):	SC 2009/290639
COUNSEL:	Plainitff- Mr Richmond SC
SOLICITORS:	Plaintiff- Brian David Thornton, Cragg, Braye & Thornton