In Re Rentis Pty Ltd [2023] QSC 252, the applicant was the corporate trustee for the Robert Stannett Superannuation Fund. It seeks a declaration as to the validity of binding death benefit nominations (BDBN) in respect of a self-managed superannuation fund
Background
Robert Stannett, the sole member of his self-managed superannuation fund had lost capacity as a result of a brain injury in late 2020. Before this injury, Robert had executed an Enduring Power of Attorney (EPA) in favour of his wife and his brother Peter.
Robert’s wife died in early 2021, leaving his brother Peter (the sole director of the corporate trustee of the superannuation fund) to manage Robert’s affairs under the EPA.
There were multiple BDBNs before the Court;
- On 13 June 2019, Robert nominated his wife as the sole beneficiary, if she did not survive, then $200,000 to each of Robert’s children and his wife’s children, and then the balance to Robert’s estate;
- On 23 October 2020, Robert nominated his wife to receive 50% and his children to receive 25% each;
- On 9 May 2022, Peter (as Robert’s attorney), nominated 40% each to Robert’s children, and 10%e ach to Robert’s step-children (his late wife’s children);
- On 17 May 2022, Peter (again, as Robert’s attorney), nominated 25% each to Robert’s children and the 50% balance to Robert’s estate.
The power was expressed in the EPA as follows
“I authorise my attorney/s to renew any binding death nomination made by me for any superannuation benefits or entitlement”.
The BDBNs were properly executed with the only question being whether the interpretation of the word “renew” in the EPA was sufficient to empower Peter as attorney to make a BDBN on behalf of Robert.
The matter
In Re Narumon Pty Ltd [2018] QSC 185 the Supreme Court of Queensland considered whether an Attorney appointed under an EPA had the power to “make, renew or extend” a BDBN on behalf of a Principal. Additionally, the Court considered issues of conflict.
The Court held that the Attorneys could make and renew BDBNs as:
1. such acts were within the scope of being a “financial matter” under the Powers of Attorney Act 1998 (Qld); and
2. The relevant Superannuation Deed did not contain any restriction against the Principal delegating the making, extending or renewing a BDBN to an attorney.
In Re Rentis, the Court upheld Re Naurmon but had to consider the interpretation of the word ‘renew‘ in the EPA.
The Court discussed the dictionary definition of the word renew being “restore to freshness”
Finding it a sensible and preferable interpretation in the sense of making a new BDBN that addresses fresh circumstances that have arisen since the last BDBN.
The decision
The Court agreed with Hammerschlag J in Spina v Permanent Custodians Ltd [2008] NSWSC 56
“If the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust.” at [107]
Spina v Permanent Custodians Ltd [2008] NSWSC 56 at [107]
Warning that a narrow construction would produce capricious, unreasonable and certainly inconvenient results for a principal who became incapacitated and whose circumstances had changed or where other circumstances had changed.
However, in adopting a broader construction the Court declared that the BDBN made by Peter, as Robert’s attorney, was within Peter’s power and valid. It is precisely the existence of changed circumstances that gave rise to the authority given to the attorney to renew any binding death benefit in the sense of making a fresh BDBN, that is, to make a new BDBN to address those circumstances or to renew the BDBN.
The Court ordered that the BDBN made on May 17 2022, nominating 25% each to Robert’s children and the 50% balance to Robert’s estate constitutes an effective binding nomination notwithstanding that it was executed by Robert’s enduring attorney.