Menu
We remain open and continue to serve our communities during the COVID-19 pandemic. Click here for more info
Home › Which case won? › Brother sues sister who pocketed 100% of their dad’s superannuation fund – which case won?

Which case won?

Brother sues sister who pocketed 100% of their dad’s superannuation fund – which case won?
28 Jun | Which Case Won

Brother sues sister who pocketed 100% of their dad’s superannuation fund – which case won?

by Tony Mitchell, Tweed Heads

The Facts

Will divides estate equally between two siblings

A case heard in the NSW Supreme Court concerned a battle between two siblings over a self-managed superannuation fund which had been established by their late father.

When the father died, the fund had approximately $1 million in assets. In his will, the father left his estate to be divided equally between his two children, who were an adult daughter and a young son.

The father’s will appointed his adult daughter the sole executor of his estate, as his son was too young to be a co-executor.

Daughter distributes assets of fund to herself, excluding her brother

Before his death, the father also appointed his daughter as the sole trustee of his self-managed superannuation fund. Despite her late father’s wish that his wealth be shared equally between his daughter and his son, the daughter distributed all of the $1 million in the self-managed superannuation fund to herself, to the exclusion of her young brother.

Was the daughter entitled to do this?

casea
The case for the daughter
  • I was the sole executor of my father’s estate, and as such, controlled the trustee of the self-managed superannuation fund.
  • The trust deed for my father’s self-managed superannuation fund conferred a discretion on me as trustee to determine how my father’s death benefit was to be distributed.
  • My father did not leave a binding death benefit nomination directing the trustee to distribute the death benefit equally between myself and my brother.
  • This meant that I could distribute the whole of the $1 million death benefit to myself and did not have to distribute any to my brother.
caseb
The case for the son
  • My father’s appointment of my sister as a trustee of the self-managed superannuation fund was invalid because he did not have the capacity to make that appointment.
  • My father’s will clearly stated that all of his estate was to be divided equally between my sister and myself.
  • Therefore, the death benefit payable from my father’s self-managed superannuation fund should be divided equally between my sister and myself.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case A won. You were right!

How people voted
a32%
b68%

Expert commentary on the court's decision

Tony MitchellLawyer
“The outcome of this case would have been avoided if the father had left a binding death benefit nomination providing that his death benefit should be divided in the same manner as stated in his will, that is, equally between his two children.”
Daughter legally able to exercise trustee’s discretion in distributing death benefit

The decision in Katz v Grossman [2005] NSWSC 934 is one which may seem to defy notions of justice and common sense. The NSW Supreme Court decided this case in favour of the daughter.

The court determined that despite the father’s will stating that his two children were to share equally in his estate, the daughter who was executrix of her father’s will and who controlled the trustee of her father’s self-managed superannuation fund was indeed legally able to exercise the trustee’s discretion given in the trust deed and distribute the whole of the $1 million death benefit to herself, to the exclusion of her brother.

Appointment of daughter and her husband as trustees held to be valid

The court held that under section 6(4)(b) of the Wills, Probate and Administration Act 1898, the father was entitled to appoint his daughter as a new trustee following the death of his wife, who was a trustee of the fund from September 1983 until she died in July 1998. The court also found that the daughter, in turn, was entitled to appoint her husband as an additional trustee of the fund.

The son had argued that the original deed setting up the fund in 1965 specified that it was for the benefit of employees of the father’s company and because his sister had never been an employee of any of the companies which contributed to the fund, she was not eligible to be a member of the fund.

The daughter’s counterargument – which was upheld by the court – was that the original deed had been amended in 1995 and under the new deed it was no longer a requirement for a fund member to be an employee.

Making a binding death benefit nomination to avoid unintended consequences

The outcome of this case would have been avoided if the father had left a binding death benefit nomination providing that his death benefit should be divided in the same manner as stated in his will, that is, equally between his two children.

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information.
Send case to a friend Get in touch with an expert Send me more cases
Have your say

Other cases

Is it casual employment because the worker’s contract says it is? Which case won?
24 Mar 2020

Is it casual employment because the worker’s contract says it is? Which case won?

A man was engaged by a labour hire company that supplied labourers for mining companies.
Read More
Father’s estate left to charity – but what about the son? Which case won?
10 Mar 2020

Father’s estate left to charity – but what about the son? Which case won?

A NSW man died in September 2018, leaving an estate of about $2.5 million. His will left
Read More
Were the operators of the leisure park to blame for the child’s quad bike accident? Which case won?
24 Feb 2020

Were the operators of the leisure park to blame for the child’s quad bike accident? Which case won?

The appellant was an 11-year-old child. Her mother phoned the leisure park to arrange a
Read More
Could the buyer terminate the property sale contract due to mental illness? Which case won?
11 Feb 2020

Could the buyer terminate the property sale contract due to mental illness? Which case won?

A seller and a buyer entered into a contract for the sale of land near Grafton in NSW in
Read More
Does smacking children create an unacceptable risk of harm? Which case won?
28 Jan 2020

Does smacking children create an unacceptable risk of harm? Which case won?

The husband and wife had two children, born in 2010 and 2014, before they separated in
Read More
Cross border workers compensation claims in NSW and Queensland – which state’s insurer has to pay? Which case won?
13 Jan 2020

Cross border workers compensation claims in NSW and Queensland – which state’s insurer has to pay? Which case won?

The employee was a delivery driver working from his employer’s warehouse in Tweed Heads,
Read More
If a worker refuses biometric fingerprint scanning, is it unfair dismissal to sack them? Which case won?
06 Dec 2019

If a worker refuses biometric fingerprint scanning, is it unfair dismissal to sack them? Which case won?

A company introduced a biometric fingerprint scanning system as part of its new site
Read More
Was the employee who failed to follow her employer’s instructions to blame for her own injuries? Which case won?
26 Nov 2019

Was the employee who failed to follow her employer’s instructions to blame for her own injuries? Which case won?

In 1974 a woman secured an office job in a large Australian organisation. Her duties
Read More
Was it unfair dismissal to sack an employee for breaching the company’s social media policy? Which case won?
12 Nov 2019

Was it unfair dismissal to sack an employee for breaching the company’s social media policy? Which case won?

A man had been employed by a company for about fifteen months when he was dismissed for an
Read More
Was the email defamatory? Which case won?
29 Oct 2019

Was the email defamatory? Which case won?

The chairperson of the strata committee and the tenant lived in the same strata building.
Read More
Is it OK if you’re just a bit late applying to set aside a statutory demand? Which case won?
15 Oct 2019

Is it OK if you’re just a bit late applying to set aside a statutory demand? Which case won?

In late June 2017, a government department (the ‘creditor’) instructed a process
Read More
Was the victim of a phishing scam liable for his losses? Which case won?
02 Oct 2019

Was the victim of a phishing scam liable for his losses? Which case won?

The case of a man who fell victim to a phishing scam reads as a textbook example of cyber
Read More
Get more cases
Find an office Find a lawyer Live chat

Fill out this form and one of our local law professionals will be in contact

By submitting this form you agree to the terms of our Privacy policy