Hill v Zuda Pty Ltd as trustee for HOLLY Superannuation Fund - [2019] WASC 238

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   HILL -v- ZUDA PTY LTD as trustee for HOLLY SUPERANNUATION FUND [2019] WASC 238
CORAM:   MASTER SANDERSON
HEARD:   5 JUNE 2019
DELIVERED          :   4 JULY 2019
FILE NO/S:   CIV 1425 of 2019
BETWEEN:   CLAIRE ELIZABETH HILL
Plaintiff
AND
ZUDA PTY LTD as trustee for HOLLY SUPERANNUATION FUND
Defendant

Catchwords:

Practice and procedure - Application for pre-action discovery - Turns on own facts

Legislation:

Family Provision Act 1972 (WA)
Rules of the Supreme Court 1971 (WA)
Superannuation Industry (Supervision) Act 1993 (Cth)
Superannuation Industry (Supervision) Regulations 1994 (Cth)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff	:	Mr B W Ashdown
Defendant	:	Mr A P Hershowitz

Solicitors:

Plaintiff	:	Eastwood Law
Defendant	:	Lawton Gillon

Case(s) referred to in decision(s):

Nil

MASTER SANDERSON:

By this application the plaintiff seeks orders for discovery from the defendant pursuant to O 26A of the Rules of the Supreme Court 1971 (WA) (the Rules). The application is made on two separate but interrelated grounds. Under r 4 the plaintiff says she is a potential party to proceedings to declare a binding death benefit nomination invalid and to retrieve or to review or set aside the trustee's actual decisions as to the cashing, distribution, transfer or allocation of the member benefits of the late Alec Sodhy (the deceased) in the Holly Superannuation Fund (the Fund). Under r 5 she seeks documents relevant to the plaintiff's proceedings pursuant to the Family Provision Act 1972 (WA) (the Act).
The relevant facts are not in dispute and can be shortly stated. The defendant is the trustee of the Fund which is a self‑managed superannuation fund. The relevant terms of the Fund are contained in an amending deed dated 13 December 2011. A copy of this Amending Deed (the Deed) appears as annexure 'CEH4' to the affidavit of the plaintiff,[1] and is described in the plaintiff's outline of submissions as the '2011 Amending Deed'.[2]
[1] Affidavit of Claire Elizabeth Hill sworn 12 March 2019.
[2] Plaintiff's outline of written submissions filed 13 May 2019, par 3.
Immediately prior to his death the deceased was a member of the Fund. Clauses 5 and 6 of the Deed created a binding death benefit nomination with respect to the member benefits of the deceased. As at the date of death of the deceased Ms Jennifer Murray was his defacto spouse. She is also the executrix of his estate. Probate was granted to her on 3 February 2017. Ms Murray was at all relevant times, and still is, a member of the Fund.
The plaintiff is the only child of the deceased. As a child of the deceased she is a dependant within the meaning of that term in s 10 of the Superannuation Industry (Supervision) Act 1993 (Cth) (the SIS Act). Upon the death of the deceased his member benefits in the Fund were required to be cashed by reg 6.17(2) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (SIS Regs). Further, in accordance with reg 6.22 payment was then to be made to the legal personal representative or one or more dependants. All of this is subject to any valid binding death benefit nomination and reg 6.17A of the SIS Regs.
The plaintiff has commenced proceedings for relief pursuant to s 6(1) of the Family Provision Act 1972 with respect to the estate of the deceased.[3] In those proceedings the plaintiff sought to amend the originating summons in the following ways:
(a)to add the present defendant as trustee of the Holly Superannuation Fund as a party;
(b)to seek a declaration that the binding death benefit nomination purportedly created by cl 5 and cl 6 of the 2011 Amending Deed was invalid by reason of non‑compliance with reg 6.17A(6)(b) and (c) and (7)(a) of the SIS Regs;
(c)to seek an order that by reason of reg 6.22 of the SIS Regs and the position of Jennifer Murray as both a dependant and the executrix of the estate of the deceased the member benefits were to be held on behalf of and were to be paid to the estate.[4]
[3] Supreme Court action CIV 2255 of 2017 Hill v Murray.
[4] Plaintiff's application to amend originating summons filed 5 November 2018.
Ms Murray and the defendant opposed the plaintiff's application to amend the originating summons. The matter came on before Curthoys J on 24 January 2019. His Honour dismissed the application. He gave brief reasons for doing so (pages 12 to 16 of the transcript). Essentially his Honour was of the view there was not sufficient connection between the matters sought to be raised by the amendment and the Family Provision Act proceedings.
Against that background the plaintiff now seeks the following orders:
1.All documents, whether in written form or on computer disc or in other machine readable form, which are or have been in the possession, custody or power of the defendant recording or evidencing:
(a)The financial statements and any returns lodged with the Australian Taxation Office for the Holly Superannuation Fund for the financial years ending 30 June 2016, 2017 and 2018;
(b)Any member benefit statements or documents showing member account balances for all members of the Holly Superannuation Fund at the conclusion of the financial years 30 June 2016, 2017 and 2018;
(c)For the period from 1 June 2016 to the present day and trustee resolutions, records of trustee decisions or any other document or recording evidencing any act or decision of the trustee of the Holly Superannuation Fund, including by not limited to:
(i)The receipt or acceptance of any death benefit nomination (whether binding or not);
(ii)The payment, transfer or allocation of any member benefits or any other action upon any death benefit nomination (whether binding or not); and
(d)Any documents evidence the member benefits of the late Alec Sodhy in the Holly Superannuation Fund prior to his death such member benefits have been dealt with, whether by way of payment, transfer or allocation to another person or entity, or that such member benefits have not been dealt with.[5]
[5] Originating summons filed 12 March 2019.
(During the course of his submissions counsel for the plaintiff sought to amend par 1(c) by changing the date in the first line to 1 June 2011 and by omitting the words 'but not limited to' in the fourth line. No orders giving effect to that application were made. However, no objection was taken by counsel for the defendant. In any event, as I have determined that no orders should be made nothing really turns on the application. An order giving leave to amend ought be made simply to regularise the court record).
Order 26A r 4 and r 5 are in the following terms:
26A.Discovery etc, from non-parties and potential parties
(4)On the application the Court may order the non‑party, and if the non‑party is a body corporate, a person having the management of the body to do either or both of the following:
(a)to give discovery to the applicant of all documents that are or have been in the non‑party’s possession relating to the description of the potential party;
(b)to personally attend the Court to be examined in relation to the description of the potential party.
(5)If the Court orders a person to personally attend the Court, it may order the person to produce to the Court any document or object in the non‑party’s possession that relates to the description of the potential party.
It is convenient to deal first with the application made pursuant to r 5 – that is, documents sort in relation to the Family Provision proceedings. It is a longstanding principle that discovery will not be ordered in such actions. There are a number of reasons why that this so and the rationale has been explained in various different cases. But essentially discovery does not work to further the plaintiff's interests. To satisfy the jurisdictional question the plaintiff must establish adequate provision has not been made for him or her in the will. If the jurisdictional question is answered in the plaintiff's favour then the question is what distribution should be made. In relation to both issues, the important information is the position of the plaintiff, the size of the estate and the disposition of the estate set out in the will. The financial position of a beneficiary who may be affected by the order is of some relevance but it is not a primary consideration. If a beneficiary chooses not to disclose their financial position then they run the risk of an order being made to their disadvantage. But there is simply no utility in allowing discovery with all the difficulties that process entails when disclosure is effectively optional.
What this application under r 5 seeks to do is to allow the discovery process by another means. While that may not be an abuse of process it is not something which should readily be permitted. In addition Curthoys J, in dealing with the application brought by the plaintiff in the Family Provision proceedings, had the chance to consider whether or not discovery – even discovery in some limited form – was appropriate. His Honour concluded it was not. That is the end of the matter. Insofar as discovery is sought under r 5 I would dismiss the application.
Insofar as r 4 is concerned it would seem that the plaintiff is attempting to establish that payment of the Fund pursuant to the binding death benefit notice was invalid. Significant problems stand in the plaintiff's way. The Fund is a self‑managed super fund. The plaintiff's proposed cause of action is dependent upon the application of the provisions of the SIS Act and the SIS Regs. I have set out the relevant sections of the SIS Act and SIS Regs above. It is important to note that pursuant to s 59(1) the conditions of reg 6.17A do not apply to self‑managed superannuation funds. As submissions made by counsel on behalf of the plaintiff acknowledge (pars 51 – 54) the authorities are squarely against the plaintiff. There is nothing in the evidence or in the submissions that satisfies me the plaintiff 'may' have a cause of action against the defendant.
At this point it is worth pausing to consider just what the plaintiff is seeking by these orders. Essentially the plaintiff is seeking to attack the payment of money in the superannuation account to Ms Murray. The amount that was paid to Ms Murray is neither here nor there – it cannot be a relevant consideration in determining whether or not the payment was properly made. Moreover, the information presently available to the plaintiff is all that she needs to put the argument the funds have been improperly paid to Ms Murray. The argument is essentially a matter of contractual interpretation against the background of the SIS Act and the SIS Regs. It is difficult to see that in framing the cause of action in a pleading access to any documents other than those presently in the hands of the plaintiff is necessary.
For these reasons I would dismiss the plaintiff's application. The plaintiff ought pay the defendant's costs of the application including the reserved costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
Associate to Master Sanderson
4 JULY 2019