Application by RPW Services Pty Ltd

Before the Court is an application concerning the affairs of an employee superannuation fund known as the Riverina Plaster Works Superannuation Fund (“the Fund”). The Fund was established by a trust deed dated 1 June 1979. For many years, the plaintiff company (“RPW Services”) has acted as the Trustee. This application has been brought because questions have arisen as to whether the company was validly appointed as the Trustee.

The Fund operates as a superannuation fund for employees of a business headquartered in Wagga Wagga which is conducted under the name “Riverina Plaster Works”. Since the establishment of the Fund, there have been three companies which at different times have borne the name “Riverina Plaster Works Pty Limited”. The business is currently conducted by the third of those companies, which was incorporated in 2009 and changed its name to “Riverina Plaster Works Pty Limited” in 2010. The evidence before me suggests that in the early days there may also have been a partnership firm which operated the business part of it under the name “Riverina Plaster Works”.

The business was for many years owned and operated by a couple, Phillip Arthur Croker and Leanne Dawn Croker. It is now predominantly owned and operated by the next generation of their family. An affidavit in support of the application was made by Matthew James Croker, one of the Crokers’ children, who is one of the directors of RPW Services. According to Mr Croker, the current members of the Fund are his mother, himself, his two brothers, his wife and his sister-in-law. I was told from the Bar Table that Mr Phillip Croker has died.

Mr Matthew Croker has no direct knowledge of how his parents came to acquire the Riverina Plaster Works business. He was told by them that the business had previously been operated by another couple, Mr Chris Terry and Eileen Alice (Molly) Terry. And control of it was acquired by the Crokers following Mr Terry’s death in the 1970s. Mrs Terry, however, retained an interest in the business until about 1983.

A copy of the original 1979 Trust Deed for the Fund is in evidence (the original has apparently been lost). It takes the form of a declaration of trust by the first of the companies named Riverina Plaster Works Pty Limited to which I have referred. That company (“the First Company”) was incorporated under that name in March 1977. The Deed provided for one or more employers to establish and thereafter participate in the Fund. The only employer identified in the Deed was the First Company itself.

The Deed was executed by the First Company under seal. The affixing of the seal bears signatures which appear to be those of Mrs Terry and Mr Phillip Croker. The Deed fell into two parts. The Declaration consisted of nine clauses. The terms of the Trust incorporated a set of rules consisting of 21 clauses.

By cl 8 of the declaration, the Trustee was given the power, with the consent of a majority of the Employers, to amend both the Declaration and the Rules.

Clause 7 of the Rules dealt with the appointment and removal of the Trustee. It relevantly provided:

RPW Services has acted as the Trustee of the Fund since 1994. It was incorporated on 17 June of that year (under the name “RPW Superannuation Pty Limited”); it adopted its current name in December 1997. It is apparent that this was part of a restructuring of the Fund which took place at that time. The restructuring is evidenced, at least in part, by a number of documents which were produced to the Court.

The restructure involved both RPW Services and the second of the companies which used the name “Riverina Plaster Works Pty Limited” (“the Second Company”). The Second Company was incorporated in September 1980 and adopted that name on 23 October 1981. On the same day, the First Company changed its name to “Tarien Pty Limited”.

The first document in evidence is a minute of a meeting of the directors of the Second Company held on 24 June 1994. The minutes record a resolution that the Company resign as Trustee of the Fund “to be effective on” that date. The minute is followed in the minute book by a notice of appointment of trustee dated the same date and signed, it appears, by Mr Phillip Croker who was the chairman of the Company. By the notice, the Company purported, in accordance with the provisions of cl 21 of the 1979 Rules of the Fund, and as “principal employer named in the trust deed”, to give notice to RPW Services of its appointment as Trustee of the Fund “on the 24th day of June 1994”.

Next, on 22 July 1994, there is another minute of a meeting of the directors of the Second Company. The minute recorded the following resolutions:

The Deed of Amendment (to which I will refer as the “1994 Trust Deed”) referred to in the resolution is also in evidence. The parties were identified as RPW Services as the Trustee and the Second Company as the Employer. It is dated 22 July 1994 and was executed under seal by both companies. It provided that the Trustee should henceforth administer the Fund in accordance with a set of rules and schedules attached to the Deed. The recitals were as follows:

Schedule 4 referred to the 1979 Trust Deed as the “Original Deed”. It also referred to “Amending Deed(s)” dated 28 June 1990 and 24 June 1994. Neither of those deeds have been found.

Finally, there is a deed styled “Deed of Retirement and Appointment of New Trustee” dated 15 September 1994. The parties were the Second Company and RPW Services, the Second Company being described as the Retiring Trustee and RPW Services described as the New Trustee.

The recitals stated, among other things that the Second Company had been the Trustee of the Fund; and that on 24 June it had retired as Trustee, with RPW Services being appointed as the new Trustee and having accepted such appointment. The operative provision was:

Since 1994, the Rules of the Fund have been amended on a number of occasions pursuant to the provisions of the 1994 Trust Deed. Most recently, in December 2021 a replacement trust deed was adopted. The Trust is currently being administered in accordance with that Deed.

The problem which has led to the present application is this. On the face of it, when the Trust was established in June 1979 the original trustee was the First Company. The documents which I have just summarised proceed on the basis that by 1994 the First Company had been replaced as both Trustee and Employer by the Second Company. But there is no evidence to confirm that this ever happened. Hence there is a doubt about whether the Second Company was entitled to exercise the powers of the Trustee and Employer for the purpose of appointing RPW Services as Trustee and adopting the new terms in the 1994 Trust Deed.

It should be pointed out that there are some technical difficulties with the form of the relevant resolutions. In particular, the reference in the resolution of cl 21 should, on the face of it, have been cl 7 of the 1979 Trust Deed. The resolution of 22 July 1994 also appears to proceed on the assumption that the power to amend the Fund’s trust deed lay with the Employer rather than the Trustee. But both the 1994 Trust Deed and the Deed of Retirement were executed by both the Second Company and RPW Services. If the Second Company had indeed previously been validly appointed as both the Trustee and the Employer, the two deeds would have been executed by all parties with authority to effect the amendment to the Fund’s Trustee and the substitution of a new Trustee.

I return to the question of the Fund’s Trustee and Employer at the time of its restructuring in 1994. The starting point, I think, is that from the inception of the Fund in June 1979, its administration would have involved specific and continued attention to the ownership of the Fund’s assets. It is the obligation of a trustee to ensure that trust assets are held in the trustee’s name and separated from non-trust assets: Heydon JD and MJ Leeming, Jacobs’ Law of Trusts in Australia (LexisNexis, 8th ed, 2016) at [17-02], [17-20(4)]; see also Superannuation Industry (Supervision) Act 1993 (Cth) s 52B(2)(d). In the present case, it is safe to assume that the Fund’s assets would have included cash, requiring a separate bank account for the Fund in the name of the First Company as Trustee. Other investments acquired as assets of the Fund would likewise have needed to be acquired in the name of the First Company.

A trustee is also obliged to keep proper records of the administration and affairs of the trust: Jacobs at [17-13]; see also Div 3 of Pt 4 of the Superannuation Industry (Supervision) Act 1993 (Cth), including, for example, ss 35AE(2)(a) and 35B(4), which require the retention of accounting records, accounts and statements for prescribed periods. In the present case, cl 3 of the Rules under the 1979 Trust Deed imposed express obligations on the Trustee to maintain minutes (cl 3(a)(i)); financial statements and accounts (cl 3(a)(ii)); and records of contributions by the Employer and the entitlements of the employee Members (cl 3(b)). There would also have been tax obligations to comply with. Those responsible for the management and administration of the First Company’s affairs (who presumably would have included the Crokers’ external accountants) must have been aware of the separate status of its operations as the Fund’s Trustee and Employer.

As already noted, the evidence before the Court shows that the name “Riverina Plaster Works Pty Limited” was surrendered by the First Company and assumed by the Second Company on the same day, 23 October 1981. Presumably this can only be because the Second Company took over the operation of the plaster works business at that time.

Such a transfer of the operations of the business from the First Company to the Second Company would have required corporate actions, such as the passing of resolutions by the Companies and the lodgement of notifications with ASIC. It would also have required the assignment of business assets from the First Company to the Second Company, and the novation from the First Company to the Second Company of contractual arrangements with customers and suppliers of goods and services. Fresh taxation arrangements would have been necessary. Again, these tasks would most likely have required professional assistance, from accountants or lawyers or both.

It is difficult to accept that, in the course of the takeover, no-one would have noticed the need to take the formal steps necessary to make the Second Company the Trustee and Employer for the Fund, and to transfer the assets of the Fund to the Second Company. It is much more likely that this task was undertaken in 1981 along with the other steps taken to transfer the business operations from the First Company.

It is also relevant that the 1994 restructuring was again a complicated exercise which evidently involved assistance from professional advisors. It is recited in the 1994 Deed of Appointment that the Second Company was, as at that date, the Trustee of the Fund. Likewise, the 1994 Trust Deed recites that Second Company was the Employer as at 22 July 1994. It is reasonable to suppose that those responsible for the drafting of the Deeds would have satisfied themselves that this was the case before including recitals in such terms. If, contrary to my supposition, the transfer from the First Company to the Second Company had not been undertaken by then, it could readily have been done before the Deeds were executed. The First Company was still in existence and, it appears, under the control of the Croker family.

These circumstances give rise to an inference that at some point before the 1994 restructuring the Second Company formally took over from the First Company as Trustee and Employer under the 1979 Trust Deed. That inference is also, I think, supported by the presumption of regularity. I refer in particular to Re Thomson [2015] VSC 370, where, in circumstances not unlike the present, McMillan J applied the presumption (at [12]-[25]).

There are, however, gaps in the evidence before the Court. These include the following:

When the present application came on for hearing, counsel sought orders in alternative forms. Counsel’s primary submission was that I should make orders under ss 70 and 71 of the Trustee Act 1925 (“TA”) formally appointing RPW Services as Trustee of the Fund and vesting the assets of the Fund in it. By way of fallback, counsel sought an order for judicial advice to the effect that RPW Services would be justified in continuing to administer the Fund on the basis that the 1994 restructuring (and, accordingly, subsequent amendments to the Trust Deed) had been legally effective.

I was reluctant to proceed by making orders under TA ss 70 and 71. There were a number of reasons for this.

First, if the Second Company was indeed validly appointed as Trustee and Employer to replace the First Company at some time before the 1994 restructuring, no such orders would be necessary. The appointment and vesting would already have been legally effected in 1994. At most, therefore, any orders the Court might now make would have to be expressed as applying only if the 1994 restructuring had been ineffective. In my view this would not be satisfactory. It would not dispose of the question fully and finally, as it would remain unclear when RPW Services actually became the Trustee.

A further consideration concerned the way in which the proceedings have been constituted. Orders under TA ss 70 and 71 would, to the extent that they were necessary, have a substantive effect. If the First Company was still the Trustee and Employer in 1994, then, in equity, ownership of the Fund’s property remained with it up until it was deregistered and has now passed to the Commonwealth (Corporations Act 2001, s 601AD(1A)). An order should not be made which would have the effect of altering those property rights without hearing from the Commonwealth or restoring the First Company to the register. And, as a party to the 1994 Trust Deed and 1994 Deed of Appointment, the Second Company would also be an interested party, at least potentially.

Most importantly, I was uncomfortable with making a final finding on the evidence before the Court. That evidence may justify the inference that the Second Company was validly appointed as Trustee and Employer to replace the First Company at some time before the 1994 restructuring. But it is not impossible that further information could emerge, which might either confirm the inference or rebut it.

In these circumstances, I thought the problem was better dealt with by the giving of judicial advice which would allow the Trustee to continue to proceed with confidence in administering the Fund on the current basis, but would also permit the issue to be reconsidered if further information emerges in future. That is the approach usually taken in similar cases where trust deeds or other records of the trust cannot be found: see, for example my judgment in Sutton v NRS(J) Pty Ltd [2020] NSWSC 826 and the judgment of Meek J in Deemhire Pty Ltd [2026] NSWSC 318.

When I put this view to counsel, he accepted it. Although there are gaps in the evidence, I do not consider it necessary to adjourn the proceedings to allow further enquiries to take place. The evidence presented is a sufficient basis to proceed. But those responsible for managing RPW Services’ affairs may wish to consider whether, if further lines of enquiry remain open, it might be desirable to pursue them now.

One question remains. Before I can make an order for judicial advice under TA s 63, I must be satisfied that RPW Services is a “trustee” for the purposes of that provision. On the evidence, RPW Services has been justified in acting as Trustee. But the validity of its appointment has not been determined beyond doubt. The advice must leave open the possibility, remote though it may seem, that the appointment was not valid. In these circumstances, is RPW Services a “trustee” for the purposes of TA s 63?

TA s 5 contains the following definitions of the terms “trustee” and “trust”:

As already mentioned, RPW Services has acted as Trustee of the Fund for over 30 years. It holds assets on behalf of the Fund and claims no beneficial interest in those assets. Even if not validly appointed as Trustee in 1994, it would be a trustee de son tort. As such, the assets in question are impressed with the terms of a trust which if not expressly binding would operate as a constructive one. In my view this fits within the TA definition of the term “trust”, and thus, the TA definition of the term “trustee”.

The order of the Court is: