Reviewing Trustee Decisions – Claim Staking Process: Williams v Robba [2025]
The decision in Williams v Robba [2025] QSC 203 provides important guidance on the extent to which courts will review discretionary decisions made by trustees of self-managed superannuation funds (SMSFs) when distributing death benefits; reinforcing two well established principles:
Courts remain reluctant to interfere where trustees are empowered to make discretionary decisions, and such decision has been made with real and genuine consideration; and
The greatest protection against a successful challenge to a death benefit determination is a properly conducted claim staking process being undertaken by the trustee.
Background
The applicants sought to review the determination made by the trustees of the Boosey Doherty Superannuation Fund, to distribute the death benefits of the deceased member:
50% of the residual death benefit to the deceased’s second wife (Spouse); and
the remainder to one of the deceased’s four children (Receiving Child).
Prior to making its determination, the trustees gathered detailed information from each potential death benefit beneficiary, namely:
financial status, assets, liabilities of the potential death benefit beneficiaries;
details of the deceased’s estate;
medical and professional evidence of the Receiving Child’s long-term care needs; and
evidence of the Spouse’s medical history and dependence on the deceased.
Additionally, the trustees sought specific information, engaging legal advisors to ensure they understood each potential beneficiaries competing claims before making their determination.
The applicants submitted that the Receiving Child should have received at least 95% of the death benefits, if not all, and that in making its determination, the trustee failed to adequately consider the Receiving Child’s needs.
Court’s Decision
The decision raised both procedural and substantive questions. The applicants argued that the trustees had failed to make adequate enquiries and as such, had failed to give real and genuine consideration to the beneficiaries’ circumstances. On that basis, the applicants sought that the determination be reconsidered.
Two broader legal issues also were brought before the Court, being whether:
section 8 of the Trusts Act 1973 (Qld) (Act) provides a broader power of review than the common law principles; and
superannuation trustees should be subject to a higher degree of scrutiny than trustees of non SMSF trusts.
Hindman J rejected the applicants’ arguments and upheld the determination of the trustees, confirming that section 8 of the Act does not extend the Court’s supervisory power beyond the traditional well-established common-law principles. Further, clarifying that the Court’s role is not to determine whether a better decision could have been made, nor whether standing in the trustees’ shoes, it would have reached the same decision. Rather the Court will limit its inquiry to whether the trustees exercised the discretion conferred upon them genuinely and for a real and proper purpose.
Given the breadth of the trustees enquiries prior to making their determination, the Court held that there was “no lack of real and genuine consideration”. As a result, the Court had no basis on which it could interest with the determination of the trustees as to the distribution of the members death benefits.
Key Takeaways
For trustees of SMSF, the decision highlights the importance of:
undertaking comprehensive claim-staking processes where they are required to exercise their discretion in relation to the payment of death benefits; and
maintaining records of information requested and received, factors considered and advice obtained during the claim-staking process.
A beneficiary who is seeking to challenge a trustees determination must establish a failure in the exercise of the trustees discretion, not merely that an alternate outcome would have been more preferrable.
For more information, please contact:
Alasdair Woodford
Principal
T: 03 5225 5217 | M: 0436 456 144
E: awoodford@ha.legal
Joseph Flanagan
Senior Associate
T: 03 5226 8504 | M: 0491 307 550
E: jflanagan@ha.legal
Tayla Berger
Senior Associate
T: 03 5226 8559 | M: 0407 825 365
E: tberger@ha.legal
This article was prepared with the assistance of Philippa Duniam, Law Clerk.
