Hill v Zuda Pty Ltd

The High Court of Australia considered an appeal by Ms Claire Elizabeth Hill against Zuda Pty Ltd, the trustee of the Holly Superannuation Fund, an SMSF. The dispute concerned the validity of a "binding death benefit nomination" (BDBN) clause inserted into the trust deed, which directed the trustee to distribute a deceased member's benefit to the surviving member. Ms Hill challenged the BDBN, arguing it failed to comply with specific requirements of regulation 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth). The central issue was whether regulation 6.17A applied to self-managed superannuation funds.

The legal issue before the High Court was whether regulation 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth) applied to self-managed superannuation funds (SMSFs). Ms Hill contended that the BDBN was invalid because it did not comply with the form and timing requirements stipulated by regulation 6.17A, assuming the regulation was applicable. Conversely, Zuda argued that regulation 6.17A did not govern SMSFs.

The High Court affirmed the decisions of the lower courts, holding that regulation 6.17A did not apply to SMSFs. The Court noted that the heading to regulation 6.17A indicated its purpose was the payment of benefits on or after the death of a member, referencing section 59(1A) of the relevant Act. However, the Court found that neither subregulation 6.17A(2) nor 6.17A(3) had any application to SMSFs. This conclusion aligned with previous judicial interpretations, including observations from intermediate appellate courts, which had consistently held that regulation 6.17A was not intended to apply to SMSFs.

The appeal was dismissed with costs.