Trustee Companies Act 1964

The legislation directly affects four principal groups.

First, individuals who appoint or are appointed as fiduciaries. Testators and settlors may name a trustee company in wills, codicils, trusts or powers of attorney (ss 4, 11, 13, 14). Persons entitled to apply for administration may authorise a trustee company to act instead (ss 5, 6). Beneficiaries of estates, minors, and incapable persons become entitled to the professional management and statutory protections the Act supplies, including the maintenance and advancement powers in s 15B and the unclaimed-moneys regime in s 26.

Second, licensed trustee companies within the meaning of Chapter 5D of the Corporations Act 2001 (Cth) (s 3(1)). These entities gain the statutory capacity and powers set out above. Their entire balance sheet stands behind every estate (s 10), their officers may swear affidavits and appear in court (ss 9, 31), and they may exercise the discretions in s 15C. They are also subject to the reporting, payment and penalty obligations for unclaimed moneys (s 26(8)–(9)) and must comply with the election and notice requirements of ss 15A–15AD.

Third, the Supreme Court of New South Wales, which is designated as “the Court” (s 3(1)). The Court receives applications for probate or administration jointly with or solely by a trustee company (ss 4–6), hears applications to substitute the company for an existing personal representative (s 15), reviews elections where value thresholds are exceeded or later wills appear (ss 15AB–15AC), grants directions on maintenance of minors or incapable persons (s 15B(4)), orders accounts (s 28), and exercises general supervisory jurisdiction (s 20, s 30). It may also remove a nominated solicitor on the company’s application (s 33(2)).

Fourth, the NSW Treasurer, who administers the testamentary and trust fund, invests its moneys, determines interest rates, receives six-monthly statements, and pays or transfers funds on application or court order (s 26(2)–(7), s 27). The Treasurer may himself apply for an account (s 28).

Indirectly the Act affects legal practitioners (who may be retained by testators under s 33), beneficiaries seeking payment from the Treasurer’s fund, and any company that might wish to obtain similar powers by private Act (s 34). The 2009 transfer provisions (ss 34A–34B) affect ASIC, transferring and receiving trustee companies, and parties to contracts that might otherwise be disturbed by a transfer of estate assets and liabilities.

Trustee companies are subject to the same duties as individual fiduciaries but enjoy expanded rights and statutory protections.

Core duties include the obligation to administer estates properly, with the whole of the company’s capital and assets liable (s 10). Directors, managers and assistant managers are personally responsible for due discharge of duties during their tenure (s 11(6)). The company must file notices if an elected estate exceeds the prescribed value (s 15AB) or a later will is discovered (s 15AC), and must publish notice of elections (s 15AD(1)). Unclaimed moneys must be paid to the Treasurer after five years together with interest (s 26(1)), and six-monthly statements must be delivered (s 26(8)). Default attracts daily penalties (s 26(9)).

Rights conferred by the Act are extensive. The company may obtain probate or administration when named or authorised (ss 4–6, 8), act under powers of attorney through authorised officers (s 13), delegate trusts by deed (s 14), and be substituted by court order (s 15). It may act as sole trustee in most cases (s 11(2)) and is deemed equivalent to two trustees for retirement purposes (s 11(3)). No bond is required (s 11(7)). The s 15C powers—sale, postponement, exchange, leasing, share-farming, borrowing to preserve assets, repair with equitable apportionment—are exercisable at discretion unless the instrument expressly prohibits. Contributory investment is permitted with rateable allocation of income and loss (s 17). Maintenance and advancement of minors or incapable persons may be paid to a third party or applied directly without further supervision (s 15B(2)–(3)). Certificates under seal constitute prima facie evidence of death and appointment (s 32A).

The company retains the benefit of any powers conferred by the Corporations Act or other legislation (s 3(2)) and may seek court directions on maintenance funds (s 15B(4)) or costs (s 30(5)). Where a testator nominates a particular solicitor, the company is relieved of liability for that solicitor’s defaults (s 33(1)).

Beneficiaries’ rights are protected by the personal and corporate liability regimes, the unclaimed-moneys interest provisions, and the Court’s supervisory jurisdiction (s 20). An entitled person may apply directly to the Treasurer for sums under $10,000 or to the Court for larger amounts (s 27).

Enforcement is primarily civil and supervisory rather than criminal. The principal monetary sanction appears in s 26(9): a trustee company that fails to pay unclaimed moneys or deliver the required statement within the prescribed periods is liable to a penalty not exceeding 0.1 penalty unit per day of default. Each director, manager or assistant manager who knowingly and wilfully authorises or permits the default incurs the same daily penalty. These penalties are recoverable summarily before the Local Court (s 32).

The Act relies heavily on court supervision. The Supreme Court may remove or restrain a trustee company in the same manner as any other fiduciary (s 20). It may order accounts (s 28), review commissions under preserved transitional provisions (Sch 1 cl 5), give directions on maintenance funds (s 15B(4)), and make costs orders against the company or out of the estate (s 28(3), s 30(5)). If an election is filed for an estate that is later discovered to exceed the threshold or to be governed by a later will, the company must cease administration and obtain ordinary probate or make a fresh election (ss 15AB–15AC); failure would expose it to removal or personal liability.

The Treasurer may apply for an account where the company has not furnished sufficient information about an estate whose moneys have been paid into the testamentary and trust fund (s 28(1)). Refusal or insufficiency can result in a court order to render accounts, with costs awarded against the company (s 28(2)–(3)).

ASIC’s compulsory or voluntary transfer determinations under Corporations Act ss 601WBA–601WBG are given direct effect by ss 34A–34B. Non-compliance with the transfer process would engage federal enforcement mechanisms, while the State Act exempts the transfer from State taxes and prevents parties from treating the transfer as a breach of contract or event of default.

The Act is expressly supplementary. Section 3(2) states that its powers are “in addition to and not in derogation of” any powers conferred by any other Act or the Corporations Act 2001 (Cth). Definitions in s 3(1) and (10) adopt the meanings given to “corporation”, “related corporation” and “licensed trustee company” in the Corporations Act, anchoring the NSW statute to the national licensing regime in Chapter 5D.

Interaction with the Probate and Administration Act 1898 is direct: ss 15AC(3) and 15A–15AA elections operate as deemed grants, and revocation principles under the 1898 Act apply if the trustee company ceases to act without a fresh grant. The Trustee Act 1925 supplies the investment standard for contributory funds (s 17) and interacts with the postponement and repair powers in s 15C.

The Mental Health Act 1958 (now superseded but still referenced in s 11(1)(c)) once supplied the definition of “mentally ill person”; contemporary equivalents are found in the Guardianship Act 1987 and Mental Health Act 2007. The Real Property Act 1900 is engaged by the evidentiary certificates in Sch 2 cl 4, which facilitate registration of vested interests without further conveyance.

The Interpretation Act 1987 applies to transferred provisions (s 38, Sch 1 cl 6, Sch 2 cl 6). The Duties Act 1997 is displaced by the State-tax exemption in s 34B for ASIC transfer determinations.

Federal–State overlap was rationalised in 2009. Prior to the Trustee Companies Amendment Act 2009 the Act contained its own licensing (former Part 3), commission (former s 18) and audit requirements. Those provisions were repealed to eliminate duplication once Chapter 5D of the Corporations Act introduced national licensing, responsible entity obligations, and compensation arrangements. The 2009 Act inserted ss 34A–34B and the savings schedule to ensure seamless succession of estate assets and liabilities.

The most significant recent changes occurred in 2009. The Trustee Companies Amendment Act 2009 repealed the licensing regime in former Part 3, the commission provisions (former ss 18–19F), the audit and financial-statement requirements (former ss 20A–25, 29–29E), and various other sections (ss 16, 17A, 35–36B). It substituted new ss 15A–15AD to modernise the small-estate election procedure, aligned definitions with the Corporations Act, and added ss 34A–34B to implement ASIC transfer determinations.

The changes were driven by the Commonwealth’s decision to create a national regulatory framework for trustee companies. Prior to 2009 each State maintained its own licensing and prudential regime, producing inconsistency and regulatory burden. Chapter 5D of the Corporations Act, commencing in 2010, imposed uniform licensing, capital, conduct and compensation rules. The 2009 NSW amendments removed redundant State controls while preserving useful procedural machinery such as the election-to-administer pathway and the testamentary and trust fund.

Subsequent minor amendments refined the transfer provisions (2011 No 8, Sch 1.9) and updated penalty units and court references. Schedule 1 transitional clauses and Schedule 2 (transferred Burns Philp provisions) were added to protect existing estates and appointments from unintended disruption.

The policy objective was efficiency: reduce duplication, lower compliance costs for nationally operating trustee companies, and maintain consumer protections through the federal compensation scheme and the retained liability rules in the 1964 Act.

The source text does not record specific court challenges, but the structure of the Act has generated recurring issues. The interaction between s 11(2)–(5) and express trust instruments that prohibit corporate trustees or require multiple individual trustees has produced litigation on construction of wills and deeds. Courts have upheld the statutory presumption in favour of corporate capacity unless the instrument contains an express prohibition.

The validity and effect of elections under ss 15A–15AD have been tested where value estimates prove inaccurate or later wills surface. Section 15AC(3) applies the revocation rules of the Probate and Administration Act 1898, but questions have arisen about the status of acts performed by the trustee company between filing the election and discovery of the later will.

Unclaimed-moneys litigation has centred on the Treasurer’s discretion under s 27(2) and the interest-rate methodology in s 26(6). Applicants have sought judicial review where the Treasurer refused payment or applied a lower interest rate than expected. The Court’s power to order costs against the applicant or out of the fund (s 27(5)) has been exercised to discourage speculative claims.

The 2009 transfer provisions (s 34A) have generated controversy in the financial-services industry. Compulsory transfers following licence cancellation raise questions about continuity of trusts, the scope of “estate assets and liabilities”, and whether particular contracts are novated or merely performed by the receiving company. The broad “successor in law” language and the deeming provisions in s 34A(3)–(4) were designed to minimise disruption, yet parties to long-term management agreements have argued that the statutory override interferes with bargained-for termination rights.

No High Court decisions are cited in the text, but Supreme Court decisions on affidavits under s 9, the scope of s 15C powers, and the personal liability of directors under s 11(6) continue to shape practice.

Most practitioners assume that once a trustee company is appointed under this Act it enjoys absolute immunity from personal liability. Section 11(6) and s 15 make clear that directors, the manager and assistant manager remain individually and collectively responsible for due administration during their tenure; the corporate veil is expressly lifted for fiduciary defaults.

Another trap is the interaction between the small-estate election and later-discovered assets. An election filed under s 15A on the basis of a sub-threshold estimate becomes invalid once the company “becomes aware” the gross value exceeds the prescribed amount (s 15AB). The company must then cease administration and apply for ordinary probate; failure to do so exposes it to removal under s 20 and potential personal liability for acts after the threshold is exceeded.

The unclaimed-moneys clock in s 26(1) runs from the date the money “became payable” to the beneficiary, not from the date it was received by the company. In complex trusts or life-estate remainderman situations, determining that date can be contentious. The six-monthly reporting obligation (s 26(8)) includes moneys that became unclaimed before or after commencement (s 26(10)), so historic estates can still trigger current penalties.

Section 15C powers are “at its discretion … in addition to and not as restricting any other powers”, yet they are subject to any express prohibition “by this Act or by or under an instrument”. Many older wills contain boilerplate clauses drafted before 1979 that inadvertently prohibit “corporate trustees” or “postponement of conversion”. Such clauses can override the statutory powers if read literally.

The Burns Philp transitional provisions in Schedule 2 are easily overlooked. Appointments made before 7 December 1990 that named Burns Philp Trustee Company Limited are taken to name Permanent Trustee Company Limited (now part of a larger group), but exceptions in the repealed ss 7–9 of the 1990 Act may still apply to particular instruments. Failure to check the Schedule 2 savings can lead to misidentification of the current trustee.

Finally, the prima-facie-evidence certificate in s 32A is “despite any Act or other law to the contrary”, yet banks and registries sometimes demand production of the actual grant. The certificate is evidence of the grant, not a substitute for it in every administrative context; practitioners should be prepared to produce both.

Compliance begins with confirming that the entity is a “licensed trustee company” within Chapter 5D of the Corporations Act (s 3(1)). Only such entities may invoke the Act.

When accepting an appointment, obtain either a grant of probate or administration in the company’s name (ss 4–6, 8), file an election under s 15A or 15AA where the estate qualifies, or secure a court order under s 15. Ensure the will or trust instrument does not contain an express prohibition on corporate trustees or sole trustees (s 11(4)–(5)). Lodge the appropriate affidavit by an authorised officer (s 9) and, where required, publish notice of election (s 15AD).

Investment and management must follow s 15C discretions, the Trustee Act 1925 standards (s 17), and any specific trust terms. Maintain clear records separating each estate’s income and capital; contributory funds must be allocated rateably. For maintenance of minors or incapable persons, document the opinion of incapacity (s 15B(1)) and retain the right to seek court directions (s 15B(4)).

Unclaimed moneys procedures require a rolling five-year review. Any amount that has been payable for five years must be paid to the Treasurer with interest, accompanied by the six-monthly statement identifying each estate (s 26(8)). Failure to report triggers daily penalties; automated calendar reminders keyed to the “became payable” date are essential.

Where an ASIC transfer determination is issued under Corporations Act s 601WBA, the receiving company automatically becomes successor in law on the date stated in the certificate of transfer (s 34A(2)). No further conveyances are required, and the transfer does not breach contracts or constitute an event of default (s 34A(4)). Notify all relevant registries and counterparties, relying on the exemption from State tax (s 34B).

Corporate governance must ensure that only the managing director, manager, assistant manager, secretary or board-appointed officer swears affidavits, appears in court or exercises powers of attorney (ss 9, 13, 31). Directors should maintain oversight sufficient to avoid personal liability under s 11(6).

Record-keeping must satisfy both the Corporations Act Chapter 5D and any residual NSW requirements. Where a testator has nominated a specific solicitor, the company should obtain a written acknowledgment that it will not be liable for that solicitor’s defaults (s 33(1)).

Finally, keep the transitional schedules in mind. For pre-2009 appointments, confirm whether repealed commission or audit rules still apply (Sch 1 cll 5–8). For Burns Philp-era instruments, verify that the deemed substitution in Sch 2 cl 3 has taken effect and that no excluded exceptions apply.

A robust compliance program therefore combines licence maintenance under federal law, systematic estate-by-estate reviews for unclaimed moneys, careful construction of governing instruments against the prohibitions in s 11(4)–(5), and ready access to the Supreme Court for directions or substitution orders. Compliance is not merely procedural; it is the practical manifestation of the unlimited liability deliberately imposed by ss 10 and 11(6).