The Colin Maurice Superannuation Fund was established on the 17th of September 2009. The original trustees were a father and daughter named Colin Maurice and Sonia Perry with Maurice (Deceased) as the sole member of the fund. Maurice had a de-facto spouse named Ms Nicholson.
The issue was whether the applicant (Perry), a trustee of the superannuation fund, was validly removed in 2015, whether the respondent was validly appointed at that time as a trustee and whether a Binding Death Benefit Nomination (BDBN) dated 4 January 2017 is invalid.
Maurice met with his solicitor on 28 December 2016 and received advice that if his superannuation fund was distributed to his estate, there would be potential for the children to make a claim on his estate. The solicitor advised that the superannuation fund was outside his estate and that if he made a BDBN it would be less likely to be challenged. The solicitor noted that Maurice wished to provide for Nicholson after his death by distributing to her the entire contents of the superannuation fund.
The solicitor prepared and had executed a Will providing for his two children and the respondent. A consultant neurosurgeon at the hospital on that day considered him to be of sound mind to make such decisions. Maurice died in March 2017 after undergoing brain surgery.
On 23 April 2015, the deceased arranged for his accountants to prepare a number of documents. Those documents were minutes of a meeting of the trustees of the Fund, which were subsequently signed by the deceased, the applicant and the respondent, a confirmation of resignation as trustee, signed by the applicant, an application to become a member, signed by the respondent and a consent to appointment as trustee, signed by the respondent.
The minutes of meeting were in the following terms:
“The trustees of the fund refer to the deed of the fund dated 17 September 2009.
It is decided to remove Sonia May Perry as a trustee of the fund.
It is decided to appoint Jennifer Mary Nicholson as a trustee of the fund.”
The confirmation of resignation as trustee read:
“I confirm my resignation as a trustee of the Colin Maurice Superannuation Fund.”
The consent to appointment as trustee read:
“I consent to being appointed as a trustee of the Colin Maurice Superannuation Fund.”
Those documents were then returned to the accountants office who inserted the date 23 April 2015.
On 4 January 2017, Maurice signed a BDBN where he directed 100% of the fund be paid to Nicholson. The form was signed at the accountant’s offices and witnessed by staff members. In February 2017, Maurice, Perry and Nicholson signed a “Change of Trustee Deed for Self-Managed Superannuation Fund” which was dated 23 April 2015.
Perry submitted that she was still a trustee, and that Nicholson had not been correctly appointed arguing that clause 183 of the Deed had not been properly followed. Further she challenged the BDBN on the basis that it was invalid because the BDBN was not given by the member to the trustee in accordance with regulation 6.17A of the SIS Act.
Clause 183 provided that:
The trustee will determine who acts as trustee in accordance with this deed and superannuation law for the fund to continue as a self managed superannuation fund and will take the necessary steps to appoint or remove the persons or body to or from the office of trustee. The trustee may accept the trustee’s resignation in writing for this purpose.
* The appointment or removal of a trustee must be in writing and must immediately be advised to any other trustee.
* Where the trustee is unable or unwilling to determine who will act as trustee then the majority of members of the fund will determine who will act as trustee. If there are no members in the fund, the former members of the fund (or their legal personal representatives) will determine who acts as trustee of the fund.
The Court held that:
Whilst it may well have been the intention of the parties that the resignation be accepted by the Trustees, the resolution recorded in the Minutes is consistent with the trustees not accepting that resignation;
However, the Deed does not specify how the removal should be put into writing and the court held that the minute meetings signed by Maurice, Perry and Nicholson satisfied clause 183; and that
by signing the documents that they had been notified immediately;
The outcome here was highly dependant on the specific wording of the trust deed. In the matter of Moss Super Pty Ltd v Hayne [2008] VSC 158 a change of trustee in the context of a BDBN was challenged and the court favoured the applicant as the change in trustee was not in the proper form.
You may wish to consider removing the requirement for a BDBN to be provided to the trustees from your Super Fund Deeds to ensure that issues such as this do not arise.
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