Legal Tip 319: What is a ‘Vestey’ Trust?

Discussion in 'Legal Issues' started by Terry_w, 4th Dec, 2020.

Join Australia's most dynamic and respected property investment community
  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Hope this applies to all states. The uniform application across states seems a major concern with the way Law Societies operate.

    I noted articles yesterday that suggested some associated companies are changing names.
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    A solicitor needs to have a practicing certificate to practice so unless a solicitor has one somewhere they can no longer practice. If one state refuses to renew they could try to apply in another state but it may be unlikely they would be accepted.
     
    consumerrights and Paul@PAS like this.
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    There appears to be a court case happening about this topic.
     
  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    Dominique Grubisa and DG Institute in court for alleged misleading representations

    "
    Further, between April 2017 and November 2022, in the promotion, sale, and delivery of the Master Wealth Control program, DG Institute represented that by setting up a type of trust called a ‘Vestey Trust’, using a suite of documentation provided by DG Institute said to be legally binding, any assets in the trust would be completely protected from creditors. DG Institute said the Vestey Trust was “bulletproof”, “impenetrable” and would result in students being "unable to be effectively pinned down by creditors".

    The ACCC alleges that this was misleading as the Vestey Trust did not provide that complete protection.

    Further, DG Institute represented that the Vestey Trust structure had been tested and upheld as effective by the Full Federal Court of Australia. The ACCC alleges that this is misleading as the referenced court judgment, Sharrment, did not concern a Vestey Trust and does not provide authoritative precedent or support for the legitimacy or effectiveness of the Vestey Trust structure in protecting assets from creditors.

    “Students paid significant sums of money for the Master Wealth Control program based on information we allege is misleading,” Ms Rickard said.

    “We allege that students of DG Institute could have faced significant financial harm by relying on the advice of, and using materials provided by, DG Institute and Ms Grubisa, to set up what was represented to be a Vestey Trust which would completely protect their assets, when that was not the case” Ms Rickard said.
    "
     
    Perp, marty998, thatbum and 1 other person like this.
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    If a barrister could argue murder is legal i suggest they will never be charged with conspiracy to commit an offence.

    Its time the legal system had laws imposed so legal advice can also be a criminal act. But better still lets allow PI insurers to be liable for these acts. Then insurers will limit crap advice
     
    Scott No Mates likes this.
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Took a long time for them to say the obvious that some apparent legal structures can be ****ing useless and the attempts to use a smsf really a joke. The apparent legal advise by the struck off practitioner had been shared with the smsf regulator...and ignored too long . The scheme issue was more to exploit stupidity in return for huge fees than true asset protection.
     
    Last edited: 27th Dec, 2022
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
  10. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,100
    Location:
    Sydney or NSW or Australia

    When will we find her foot in a running shoe on a south coast surf beach or is she too slick for that?
     
    craigc and Terry_w like this.
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    Anyone that has any involvement with a 'vestey' trust should seek legal advice from a solicitor with a practicing certificate.
     
    consumerrights likes this.
  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    The concern i have is took the ATO a long long time to issue this view. Its what i told them and others have told them. They were sent information. Its not even clever advice. Its just stupid advice. How a super regulator could just ignore this is beyond comprehension. Maybe they thought it so obviously illegal ? I dont know. As a guardian of smsf assets they should have acted earlier.

    Why do our regulators and laws not provide protection?. Negligent inaction should be made a issue in law suits. ATO as a regulator should be responsible. They Never are.

    Perhaps apra need to be given some powers over smsfs.
     
    Terry_w likes this.
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    I cannot believe how long it has taken for the various regulators to act on this. It is disgusting and has caused many to suffer financial and other losses.
     
  14. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    The new Peter Foster of property wealth seminars and strategies is back. Seems until they change laws and jail people the QLD Govt tolerates continued misuses of "justice"". Both white collar and home invasion.

    Dominique Grubisa: Still making fools of her followers
     
  15. Gill Bates

    Gill Bates Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    126
    Location:
    Brisbane
    I'm curious if its been proven , the supposed distressed sellers get a bettor or worse outcome by selling to the potential buyers from these training courses. I understand banks just want their loans and cost back and are NOT very motivated from achieving higher prices to leave more $ for the owner. The banks sure do pile on the default interest and other charges. Banks have been also found to act ibn very poor manner in certain situations in recent other enquiries. Hence my wonder about the actual outcome for the seller - is it proven or not they get a worse outcome - it should be interesting About people not responding - they probably not living there any longer. ( Consider if a person buys property directly , no RE agent fee or marketing fee, how much would this be? )
     
  16. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    There is a massive difference between preying on vulnerable sellers and banks who hold security. Anyone distressed will know and consider their options. They are not stupid throwing away equity. The very worst case someone is negative equity. They have no option to sell without lender approval. Lenders may choose not to sell. Its their choice. There are bank teams tgat manage this. A predator cannot change this
     
  17. consumerrights

    consumerrights Member

    Joined:
    16th Oct, 2015
    Posts:
    19
    Location:
    melbourne
    I don't know the answer, you're unlikely to get enough detail to tell in most cases, but there's an actual case example here that suggests the owners didn't know the value of their property and were taken advantage of Are you a “vulture” if you deal with distressed property?
     
    Terry_w likes this.
  18. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    They masquerade as being there to help. They dont. A distressed seller may get a better deal through their lender selling under mortgage in a public auction. Banks must be honest in their dealings where vutures can lie and give a illusion of help but in the end they dont actually do that.... Its a major reason why these matters are seeing those involved subject to sanctions. Its unethical, unprofessional and contrary to court rules etc. All for money.
     
  19. Gill Bates

    Gill Bates Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    126
    Location:
    Brisbane
    Here is comments in media , supporting my previous comment that banks will sell to cover their losses and do not care much about getting more. I commented on this previously in this thead in relationship to my question has it been proven or not that a distressed seller gets a better outcome or not letting the bank sell house rather than selling to one of the people who locate the property via the court list .......
    FROM article ( selected PARTS only of article. I do not know if article is paywalled or NOT - it is a long article )
    https://www.couriermail.com.au/prop...s/news-story/48b543dba1a1060c26f3a53155629a18

    <snip>

    The Advantage Property boss said the reality of a mortgagee sale was that banks didn’t need to get top doll
    ar for a home, they just had to cover the loan — typically 80 or 90 per cent of the true value, and sometimes even less.

    For buyers that could mean a home last sold for $1m might have a bank willing to sell for $800,000, and a seller trying to get in before their lender took control might well sell for $950,000.

    <snip>

    But Ms Pascoe noted that it was almost always better for sellers to get a home onto the market before the bank seized it, and a good agent would do what they could to ensure the home sold for the best price — potentially avoiding revealing their vendor’s distress.

    <snip>
    END
     
    MWI likes this.
  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,670
    Location:
    Australia wide
    If must be true then!

    I would say this is the case. You are best to control the sale of your own property and sell it before the banks do.