Why changing trustees could be a crime in Western Australia and Queensland – and how Victoria fixed it

Many trustees and fund managers did not realise that they were committing criminal offences in Victoria when changing trustees. Two Victorian Supreme Court decisions, Diversa Trustees Ltd in its capacity as Trustee for the Future Super Fund [2023] VSC 279  and Re Guild Trustee Services (in its capacity as trustee for the Guild Retirement Fund)  [2023] VSC 629, made it clear that if an outgoing trustee received “valuable consideration” (including such innocuous things as an indemnity from future liability) without beneficiary or court approval, criminal offences were committed.  This problem has been solved by the passing of the Justice Legislation Amendment (Miscellaneous) Act 2025 (Vic) which took effect on 19 June 2025.

 However, the problem remains in Western Australia and Queensland.

 

The problem: inadvertent criminalisation of trustee acts

In the first case, Diversa Trustees Ltd (Diversa) was trustee of the Future Super Fund and intended to retire as trustee of that fund.  As part of the retirement, Diversa was to receive certain indemnities from the incoming trustee (and other parties) and its costs associated with the retirement would be paid by other parties. 

These provisions are usual in most retirements of professional trustees. 

However, Diversa sought court approval of these indemnities and cost recoveries because it was thought that they infringed section 180 of the Crimes Act 1958 (Vic). It provided:

Every person who offers or gives any valuable consideration to a trustee and every trustee who receives or solicits any valuable consideration for himself or for any other person without the assent of the persons beneficially entitled to the estate or of the Supreme Court as an inducement or reward for appointing or having appointed or for joining or having joined with another in appointing or for authorizing or having authorized or for joining or having joined with another in authorizing any person to be appointed in his stead or instead of him and any other person as trustee shall be guilty of an indictable offence, and shall:

(a)     be liable if a corporation to a level 5 fine and if any other person to level 5 imprisonment (10 years maximum) or a level 5 fine or both...

This section imposes a strict liability offence.  Valuable consideration for the purposes of section 180 is broadly defined in section 175 of the Crimes Act. 

In Diversa Trustees, Delany J held that the indemnities and cost recoveries fell within section 180 as offers of valuable consideration. He further held that there was no need for any corrupt purpose for the offence to be committed – the mere intent to offer the indemnities or cost recovery was sufficient to trigger the provision.  However, as the change of trustees was in the interests of the fund members, Delany J gave court approval to the change and its terms and no criminal offence was committed. 

In Guild Trustee Services, Waller J followed the approach in Diversa Trustees. 

Section 180 also allowed the “persons beneficially entitled to the estate” to consent to the giving or receiving of the “valuable consideration”. Where those beneficiaries are small in number, and agreeable, the problem could be dealt with by their assent being given. But for discretionary trusts, widely held managed funds or superannuation funds, with a large number of beneficiaries, obtaining such consent would be practically impossible.

 

The New South Wales and Victoria solution

In New South Wales, the problem was recognised and discussed in Application of MLC Investments Ltd [2022] NSWSC 1541. Subsequently, with effect from 20 September 2023, section 249E of the Crimes Act 1900 (NSW) was amended so that the offering, giving, receipt or solicitation of the “valuable consideration” needed to be done “corruptly” for an offence to arise. As such, the usual approach to retirement and replacement of trustees was no longer criminalised in New South Wales.

In Victoria, the Justice Legislation Amendment (Miscellaneous) Act 2025 (Vic) removed section 180 as outlined above with effect from 1 April 1959 and replaced it with five separate offences relating to change of trustee but with each requiring a “dishonest or otherwise corrupt purpose” before any offence is committed. Given the retrospective effect of the changes, many inadvertent criminal acts are no longer criminal offences.

 

The ongoing problems

Trustees and fund managers still face similar problems on changes and retirements of Trustees elsewhere. Similar provisions to section 180 exist, such as section 535 of the Criminal Code Act Compilation Act 1913 (WA) and section 442F of the Criminal Code Act 1899 (Qld).  These provisions still require beneficiary or court approval where indemnities or recoveries of costs are offered to existing trustees.

The question of jurisdictional nexus and which State laws actually apply also continues to be a vexed issue. This is particularly the case for trusts where the administration, unitholders and underlying assets can be spread across multiple jurisdictions.

We look forward to a future where all State laws can be harmonised with the updated regimes in Victoria and New South Wales.