The question as to back dating documents illegality is touched on in the following Case Study. It has been provided to us by professional colleagues at Cornwalls Law (formerly McKays Solicitors). The Case Study makes it clear that back dating documents is probably never a good idea. Expediency doesn’t exonerate the action. Following is their ‘warning’ to those who might be tempted into back dating documents…
They told us –
“Our client was a director of a corporate trustee for his late father’s self-managed superannuation fund.
Non-compliant fund
The background
Years before our client’s father died, he had the super fund buy what became a principal place of residence. It was occupied by himself and his defacto wife.
(ContinuumFP Note. As becomes obvious in this fact summary, such an asset holding/ use, renders a superannuation fund non-compliant. This is so, on a couple of grounds. If you have any concerns about such an asset, we would be happy to discuss with you at your convenience.)
The accountants for the estate and ourselves have advised the client of the consequences of the fund not being compliant, including significant, adverse financial consequences. Recently, our client became eager to explore other options and consulted another superannuation adviser.
Some sequential events
The second adviser suggested that as the returns had not been filed for the super fund for many years or for the estate (because the accountant who had the engagement to prepare and lodge those documents had not been paid), the problems could all be overcome by transferring the house from the super fund to the estate now and documenting it as if it happened years ago.
Naturally we advised our client that he could not do this and that the estate’s accountants and the superfund’s auditors would have anything to do with it either.
With that background in place as a salutary reminder to trustees and advisers in a very rapidly growing field, our lawyer colleagues go on with some Case Law to highlight the illegality of back dating documents.
This incident reminded me of a case a few years ago called R v Meares. Mr Meares owned shopping centres and oddly enough complained to his accountant that he was paying too much tax. His accountant, Mr Chesterton, advised him he could partially solve his tax problems by entering into a “management agreement” with a non related party under which the non related party provided management services to Mr Meares.
Backdated by two years
The agreement was signed and back dated by two years.
Then, Mr Meares paid the “management fees” to the third party and claimed the payments as a deduction. The third party kept a small proportion of the management fees and returned the balance to Mr Meares as a “loan”.
Both Meares and Chesterton were charged and convicted.
Whilst Meares went to jail Chesterton got off fairly lightly and escaped actually serving time because he helped the authorities (by dobbing in his client) and put in a very early plea of guilty.”
Recognising illegal conduct
Much of the time it is easy to recognise illegal conduct but sometimes it is not quite so clear. As professionals, we all need to remember that our reputation and integrity is the most valuable asset we have.
So, if you ever have any doubt about the legality of a transaction, seek legal advice right at the outset.
If you have any questions or would like assistance in relation to legal matters generally, or –
- self-managed superannuation fund asset ownership,
- or valid signing of documentation,
please contact Ian Heathwood at McKays Solicitors (now practising as Cornwalls Law).
Financial Planning guidance and assistance –
We remind our readers that our team of experienced financial advisers are available to discuss all of your wealth management strategies. To arrange an appointment with one of them –
- phone our office, on 07-3421 3456, or
- at your convenience, use the linked Book A Meeting facility.
Continuum Financial Planners Pty Ltd thank McKays Solicitors (now practising as Cornwalls Law) for allowing us to reproduce this article.
(This article was originally posted by us in May, 2011. We occasionally refresh/ update it, most recently in August 2025.)