SAS Trustee Corporation v Patterson

The SAS Trustee Corporation (the Trustee) appealed to the High Court of Australia against a decision of the Full Federal Court concerning the entitlement of Mr Patterson (the respondent) to a superannuation death benefit. The dispute arose from the Trustee's refusal to pay the full death benefit to Mr Patterson, who was the nominated beneficiary of the deceased, a member of the superannuation fund administered by the Trustee. The Trustee had instead paid a portion of the benefit to the deceased's dependants, arguing that it had a discretion to do so under the relevant superannuation legislation and the fund's trust deed.

The High Court was required to determine whether the Trustee had a discretion to pay a portion of the death benefit to dependants of the deceased, notwithstanding the deceased's nomination of Mr Patterson as the sole beneficiary. Specifically, the Court had to consider the interpretation of the relevant provisions of the *Superannuation Industry (Supervision) Act 1993* (Cth) and the terms of the superannuation fund's trust deed, particularly in relation to the Trustee's obligations when a member had made a valid nomination of a beneficiary.

Gummow and Heydon JJ held that the Trustee did not have a discretion to pay a portion of the death benefit to dependants when a valid and binding nomination of a beneficiary had been made by the deceased. Their Honours reasoned that the legislative framework and the trust deed conferred a primary obligation on the Trustee to pay the death benefit in accordance with the member's nomination, unless specific circumstances permitted the Trustee to exercise a discretion, such as the beneficiary not being a dependant or the nomination being invalid. In this instance, Mr Patterson was a dependant and the nomination was valid, thus precluding the exercise of discretion.

The appeal was allowed, and the orders of the Full Federal Court were set aside. The Trustee was ordered to pay the balance of the death benefit to Mr Patterson.