A very important decision re legal personal representatives and how their duties interact with superannuation.

The applicant was the mother of the deceased and the administrator of his estate. The respondent was the deceased’s father.

The deceased died intestate. As he had no spouse, his parents were to share his estate equally under the intestacy rules.

The estate was only valued at $80,000. He also had E$450,000 in death benefits in three different superannuation funds.

The applicant was the nominated beneficiary in relation to each fund, although none of them were binding nominations. The applicant applied for payment of the super death benefits to her personally, on the basis that she was in an interdependency relationship with the deceased. All three funds paid the death benefits to her,

The respondent submitted that the applicant, as personal representative, had a positive duty under s52 of the Succession Act to get in the assets of the estate. She also had a fiduciary duty not to allow a conflict of personal interest and duty to occur. It was submitted that seeking a payment of the superannuation death benefit to herself personally, without also doing so on behalf of the estate or, otherwise, not informing the respondent so that he could do so, breached both those duties.

Atkinson J agreed. She found that there was a clear conflict of duty and interest contrary to her fiduciary duties as administrator. When the applicant made application to each of the super funds for the moneys to be paid to her personally rather than to the estate, she was preferring her own interests to her duty as LPR to make an application for the funds to be paid to her as LPR. She was in a situation of conflict which she resolved in favour of her own interests. As such she acted not only in breach of her fiduciary duty as administrator of the estate but also in breach of her duty under s52 of the Succession Act 1981.

Her Honour said:

[73] It is axiomatic that the legal personal representative would, if he or she did not have a conflict, make an application for the payment of the superannuation to the deceased member’s legal personal representative. That application would be made as part of the administrator’s duty to get in the estate. Unless the application is made and is successful the funds do not become part of the estate.

[74] The trustee of the superannuation fund may make the payment to either or both of the legal personal representative or the member’s dependants. This discretion resides in the trustee but is one which the deceased member’s personal representative must be under a duty to call on the trustee to exercise.

The applicant was ordered to account to the estate for the amount of superannuation received by her personally.

Read McIntosh v McIntosh here.

3 thoughts on “Fiduciary and Super don’t mix?

  1. Would it be a fair reading of that case that, if the applicant hadn’t been appointed as Administrator, but had applied for the Super Funds to be paid to her as an “interdependant”, the Super funds might in fact have been paid to her on that basis?

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    1. They were actually paid on that basis. Had she not been administrator, then there would have been no conflict of interest and she would not have been ordered to account to the estate for the money she received.

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      1. Just goes to show, not always wise to rush in and be an administrator… would have been better off getting the Public Trustee (if they would have done it) to act – at least then she would have kept the funds (although I’m not entirely convinced that all the funds were paid to her as an interdependant: I think that perhaps there is a suggestion that at least one of the funds were paying the death benefit to her on the basis that she would distribute to the persons entitled in the estate. If that is so, then maybe some of the funds would have been paid to an independent Administrator). It really is an interesting case…. thanks for bringing it to attention.

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