The Queensland Supreme Court's decision in Williams v Robba [2025] QSC 203 provides insight into the Court's powers in reviewing a trustee's decision. In particular, it considers what is an adequate claim staking process and whether it will constitute real and genuine consideration by a trustee in a discretionary death benefit determination.
The Queensland Supreme Court upheld the determination of the self managed superannuation fund (SMSF) trustee, finding that there had been "no lack of real and genuine consideration". The Court, therefore, concluded that it was not permitted to review the trustee's decision.
The case affirms the courts' traditional reluctance to interfere with a discretionary trustee decision, provided the decision was made with real and genuine consideration and highlights the heavy onus on the party seeking such a review.
The case also confirms the vital importance of SMSF trustees conducting a proper claim staking process before making a superannuation death benefit decision.
Background
The applicants (Applicants) sought a review of a determination made by the trustees (the Trustees) of the Boosey Doherty Superannuation Fund (the Fund) regarding the distribution of the death benefits of a deceased member of the Fund (the Deceased).
Trustee's decision
The Trustees decided to distribute:
50% of the residual death benefit to the Deceased's second wife (Spouse); and
the balance to one of the Deceased's four children (Receiving Child).
Between September and December 2023, the Trustees gathered detailed information from each of the potential death benefit beneficiaries. This included:
financial status, assets, liabilities;
details of the Deceased's estate;
medical and professional evidence regarding the Receiving Child's schizoaffective disorder and long-term care needs; and
evidence of the Spouse's ovarian cancer and her financial dependence on the Deceased.
Applicants' submission
The Applicants submitted that the Receiving Child should have received at least 95% of all available benefits, if not 100%, and that the Trustees had failed to adequately consider his needs.
Issues before the Court
Two preliminary legal issues arose:
Whether the Court's powers of review under section 8 of the Trusts Act 1973 (Qld) (Trusts Act) are broader than the test at common law; and
Whether decisions made by superannuation trustees should be subject to higher scrutiny than trustees of a standard trust fund.
Substantively, the Applicants argued that:
the outcome of the determination was so unreasonable that it demonstrated a lack of "real and genuine consideration"; and
the Trustees failed to conduct adequate inquiries in the decision-making process.
Decision – claim staking and trustee decision upheld
Hindman J confirmed that the Court's powers of review under section 8 of the Trusts Act are not broader (or easier to satisfy) than that at common law. He further clarified that the Court's role is not to criticise the adequacy or scope of inquiries, but only to examine whether the inquiries undertaken demonstrated that the trustee exercised real and genuine consideration.
Hindman J rejected the suggestion that a higher duty applies to superannuation fund trustees, distinguishing the decision in Finch v Telstra Super Pty Ltd (2010) 242 CLR 254 on the basis that it concerned an obligation to form an opinion rather than the exercise of trustee discretion.
Although the determination made by the Trustees could have been made differently, Hindman J held that the Trustees had carefully considered all relevant material and had made conscious efforts, through their lawyers, to conduct targeted inquiries for all the potential recipients. Therefore, they had enough information to gather an adequate understanding and gave due regard to relevant information upon making their determination.
Take away message – claim staking processes are critical for death benefit decisions
This decision is consistent with the traditional decisions in relation to trustee discretionary decisions and the reluctance of Courts to disturb such decisions provided the trustees make the decision with real and genuine consideration (as compared to the decision of Re Marsella where it was found there had been a lack of real and genuine consideration).
It is also a timely reminder for SMSF trustees that the way a decision is made can be just as important as the outcome itself. The SMSF trustees here conducted a more thorough claim staking process than what is typically done in an SMSF death benefit decision context.
It is, therefore, a good example of the more modern (and recommended) way of making death benefit decisions and conducting claim staking processes. Particularly if there is any possibility that the decision may be disputed.
The practical lesson is clear: careful, thorough, well-conducted, and well-documented claim staking helps demonstrate real and genuine consideration, and significantly reduces the risk of a successful challenge to a death benefit decision.
Phil Broderick
Principal
T +61 3 9611 0163 l M +61 419 512 801
E pbroderick@sladen.com.au
Philippa Briglia
Special Counsel
T +61 3 9611 0174 | M +61 449 404 801
E: pbriglia@sladen.com.au
Jan Harnischmacher
Associate
T +61 3 9611 0158
E joh@sladen.com.au
Andrea Lin
Lawyer
T +61 3 9611 0189
E alin@sladen.com.au