Tratter v Aware Super

In the case of Tratter v Aware Super, the appellant, who was the former partner of the deceased, appealed against the Australian Financial Complaints Authority's (AFCA) decision that upheld the trustee's determination to apportion the death benefit of the deceased member of a superannuation fund. The deceased had nominated the appellant as the beneficiary of the death benefit, but the nomination was non-binding according to the fund's trust deed. The deceased's former spouse contested the nomination, claiming they should receive the entirety of the death benefit. The trustee of the fund, Aware Super, decided to distribute the death benefit 70% to the former spouse and 30% to the appellant. Both parties objected to this decision, leading to the complaint being lodged with AFCA.

The legal issues before the court were whether AFCA erred in law in determining that the trustee's decision was neither unfair nor unreasonable, and if the trustee exercised its discretion in accordance with the relevant legislation and fund rules. The court had to consider the statutory context and the specific provisions of the Superannuation Industry (Supervision) Act 1993 (Cth) and the rules of the fund that defined "dependant" and outlined the process for determining the recipients of death benefits. The court also had to assess if the trustee's consideration of the financial dependence of the parties and the deceased's prior nomination aligned with the legal framework.

The court concluded that AFCA did not make an error of law in affirming the trustee's decision. It held that the trustee appropriately exercised its discretion by considering the statutory definition of "dependant," the non-binding nature of the deceased's nomination, and the financial dependence of both parties. The court found that the trustee's decision to distribute the death benefit 70% to the former spouse and 30% to the appellant was fair and reasonable, given the circumstances, and aligned with the statutory requirements and fund rules. The appellant's arguments did not establish any error of law on the part of AFCA. Consequently, the appeal was dismissed.

The final orders of the court were that the appeal be dismissed and that the appellant pay the first respondent's costs of the appeal. This decision underscores the importance of trustees adhering to statutory provisions and fund rules when determining the distribution of death benefits, and it reaffirms the role of AFCA in ensuring that these determinations are fair and reasonable.