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

Most people who have a house sold by the lender will already be long into arrears with default compound interest and more. Lenders are patient and helpful up to a point. People can also obstruct and they suffer the consequence. They also may not be maintaining the lenders loan security leading to poor offers. Most lenders seek to sieze and evict before selling for this reason. If the borrower is co-operative they may be OK to stay. Banks will get the best they can for the condition...if its badly maintained then its the former owner who suffers as any equity they have left is reduced and the offer price is lower too.

Banks dont spend $$ on enhancing value for sale.

 

Interesting video on the promoter of the so called 'vesty' trust

The property spruiker selling advice around targeting grieving homeowners

 

It would still be interesting to compare the sale prices achieved.

If the bank sells it or these other people BUY it ..... I GUESS the bank would only let sale go ahead , if it covered their mortgage and costs ??? And I still observe the bank seems to not have much interest/try to hard in getting a higher price .... once their costs are covered.

 

The Council of the Law Society v Grubisa [2024] NSWCATOD 19
The Council of the Law Society v Grubisa - NSW Caselaw

 

The mortgagee will engage a registered agent to sell the property and it nearly all cases it would be sold by auction as selling something at an open and advertised auction is generally the definition of 'market value'.

If the market value is less than the amount secured by the mortgage they will still agree to discharge the mortgage and wear the loss.

 

The ACCC has sued the company promoting the so called Vestey Trusts and basically said that they don’t provide asset protection as claimed.


Here is a brief quote:

Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344



2. DG Institute, in trade or commerce and in connection with the supply or possible supply

of services in Australia, in the period April 2017 to November 2022:


(a) engaged in conduct that was misleading or deceptive or likely to mislead or

deceive in contravention of s 18 of the ACL;


(b) made false or misleading representations that the Master Wealth Control

(MWC) program had a benefit which it did not have, being the benefit of

equipping consumers with a strategy that was effective to protect all of their

assets in a way that would provide complete protection from creditors, in

contravention of s 29(1)(g) of the ACL; and


(c) engaged in conduct that was liable to mislead the public as to the nature,

characteristics or suitability for purpose of services, being that the strategy

taught would enable consumers to protect all of their assets in a way which

would provide complete protection from creditors, when it would not, in

contravention of s 34 of the ACL

 

Quote:
"During the Relevant Period, at least 1,800 consumers enrolled in the MWC program"
"
During the financial years ended 30 June 2018 to 30 June
2021, DG Institute earned revenue attributable to the MWC program in the total amount of
$9,223,457."
(both from paragraph 4)

 

This is in addition to the 'real estate rescue' program which was also part of the litigation

Quote:
"In the financial years ended 30 June 2018 to 30 June 2021, DG Institute earned revenue from
the RER program in the total amount of $8,876,025."

 

Oh there are multiple unicorn strategies it seems. What's that saying...something (?) pays.

Judgement as been issued today : Dominique Grubisa and DG Institute made misleading representations to students in wealth seminars
A hearing on the relief orders sought by the ACCC, including penalties, will be held at a later date. The ACCC is seeking injunctions, penalties, consumer redress, costs and an order against Ms Grubisa disqualifying her from managing corporations.

Specifically, the Court found that the following statements about the programs were false or misleading:

• Students of the RER program would be able to assist distressed homeowners to sell their home and retain some of the equity, whereas if a mortgagee was to repossess the property, the homeowner would lose any remaining equity in the property – including because “banks don’t give change”. In fact, a mortgagee is only entitled to amounts owed to it, plus any reasonable costs of recovery.
• Students of the MWC program could completely protect all of their assets from creditors by setting up a specific trust DG Institute called a ‘ Vestey Trust’ using transaction documents provided by DG Institute. In fact, the transaction documents provided did not provide the level of protection from creditors promised.
• the ‘Vestey Trust’ system promoted by DG Institute had been tested and upheld as effective by the Full Court of the Federal Court of Australia in the ‘Sharrment’ case, when in fact this was not the case.

Update approx fees paid by attendees $16.5m

I loved the family legacy explained here : Grubisa doubles down (again) after ACCC hearing
The Milat family must feel Ivan was a let down.

@Vestey should feel some relief to the decision.

 

Here is a link to the judgment
Australian Competition and Consumer Commission v Master Wealth Control Pty Ltd [2024] FCA 344

 

less relief and more disgust that this has allowed to continue for so long.

In what can only be descried as farcical.. the law firm that represented her and her company has ITSELF been flogging the same nonsense.

https://www.assurelawyers.com/wealthguard/

 

There are no indications that the new promoter of the scheme is making the same false and misleading statements. If you think they are you can make a complaint to the relevant law society who will surely take swift action.

But the prices listed are rather outrageous

"ENDURING GUARDIANSHIP HEALTH AND LIFESTYLE – VALUED AT $5,000"

when many lawyers would do these for free or a few hundred dollars.

 

another article
Hopeless regulators allowing deception to continue