Williams v Robba

In this matter Justice Hindman usefully clarified several questions of law concerning the duty imposed on trustees when making distributions of residual death benefits from self-managed super funds. Her Honour clarified that: s 8(1) Trusts Act 1973 does not confer a wider discretion to the courts to review the exercise of truly discretionary powers of trustees than is otherwise available at common law; courts cannot examine the substance of inquiries that are made in the exercise of such powers; and that the higher duties that usually attach to distributions of large super funds to contributing members do not attach to discretionary distributions of residual death benefits in small self-managed super funds to potential beneficiaries.

26 August 2025

Hindman J

Background

The applicants sought the review of a determination made by the trustees of a superannuation fund (“the Fund”) regarding the payout of the residual death benefit of the deceased under the Fund (“the Determination”). [1].

The trust deed (“the Deed”) conferred upon the trustees of the Fund (“the Trustees”), the second and third respondents, an absolute discretion to pay out the residual death benefit to one or more of the deceased’s dependants; four children, and the second wife of the deceased. [2].

The Trustees decided to pay half of the residual death benefit to Ms Williams, the deceased’s second wife (the third respondent), and the balance of the residual death benefit to one of the deceased’s children (Mr Williams). Two of the deceased’s children, who did not receive any payout, (the applicants), brought proceedings on the grounds that the Determination is subject to review by the Court because the Trustees failed to exercise real and genuine consideration in making the Determination, specifically by failing to properly consider the greater needs of Mr Williams, as compared to Ms Williams. [5].

Clauses 15.1 and 24.4 of the Deed indicated that the trustees had absolute discretion to decide how to distribute the residual death benefit. [35]–[37].

Does s 8 Trusts Act 1973 confer a wider discretion on courts to review determinations than otherwise available at common law?

Justice Hindman considered the common law extent of the power of courts to review determinations of trustees where the trustees are given discretionary power, citing the cases of Karger v Paul [1984] VR 161, (“Karger”), Attorney-General (Cth) v Breckler (1999) 197 CLR 83, Owies v JJE Nominees Pty (2022) 22 ASTLR 89 (“Owies”), and Gisborne v Gisborne (1877) 2 App Cas 300. Her Honour found in reviewing these cases that there are four grounds upon which courts can review the exercise of a trustee’s truly discretionary power, one of which is where there is a lack of real and genuine consideration in the exercise of that power. [47].

The applicants submitted, relying on Burns v Burns [2008] QSC 173 (“Burns”) that s 8(1) Trusts Act 1973 (“Trusts Act”) confers on a court a wider power to review a determination than is available at common law, arguing that a court may also set aside a determination where it is plainly unreasonable or unjust. In that case, the applicants cited, [37], where Chesterman J indicated that determinations may be set aside where “the result of the discretion is plainly unreasonable or unjust giving rise to an inference that the discretion has miscarried or been affected by some impropriety.” [56].

Justice Hindman found that the test under s 8(1) was not wider than the common law test, because: the cases interpreting s 8(1) reaffirm the tendency in common law of the reluctance of courts to interfere with discretionary determinations of trustees; [59]; the passage of Chesterman J in Burns must be read as a whole, and absent an inference that the decision has been miscarried or affected by impropriety, that a determination is merely unreasonable or unjust does not constitute sufficient grounds for a court to set aside a determination; [60]; and the balance of recent case law in Queensland, especially Hennessey v Perpetual Trustees Queensland Ltd [2000] QSC 311, suggests no departure from the common law test. [61].

Can the court, in determining whether real and genuine consideration was exercised, examine the substance of the inquiries made by the trustees relating to the exercise of that discretion?

The applicants promoted that the answer to this question was yes; that the Court could examine the substance of inquiries made, citing Owies in support of that contention. Justice Hindman distinguished the present case from Owies, indicating that in Owies, the trustees had not made inquiries about the circumstances of relevant beneficiaries. [70].

Justice Hindman found that a court could only consider whether inquiries were in fact made, not to criticise the inquiries which were made, nor identify with any specificity what inquiries should have been but were not made. [67]. The Court concluded that while further inquiries could have been made, this did not constitute grounds for the Court to set aside the decision. [96].

Is the absolutely discretionary power to make a determination in a self-managed superannuation fund subject to the higher standard of scrutiny that ordinarily attaches to distributions of funds of large superannuation funds to contributing members?

The Court accepted that the standard of real and genuine consideration to which trustees of a superannuation fund are held is generally higher than the standard for trustees of a standard trust, citing the cases of Finch v Telstra Super Pty Ltd (2010) 242 CLR 254, and Alcoa of Australia Retirement Plan Pty Ltd v Frost (2012) 36 VR 618. [77].

However, the Court found that although the fund was a superannuation fund, since the determination concerned a payout of a residual death benefit from the Fund to dependants as opposed to distributing a benefit to a contributing member, the higher standard did not apply. [79].

Justice Hindman provided four reasons for this. First, Finch was premised on the type of decision that was made in that case (the distribution of benefits of a large superannuation fund to contributing members). As the present case concerns a totally different type of decision, the distribution of a residual death benefit to dependents, it is distinguished from Finch. [80].

Second, in the present case, the decision to apportion residual death benefit to dependants was truly discretionary, whereas in Finch, the trustee, by construction of the trust, was required to form an opinion regarding the quantum of benefits to go to a particular contributing member with a prima facie entitlement to be paid. The Court reasoned that therefore, in the case of Finch, the decision of the trustees was not truly discretionary, and was hence potentially subject to greater scrutiny. [81]–[82].

Third, the policy considerations underpinning the higher duty espoused in Finch do not apply to the present case, as the present Fund was: not connected with a large, partly-publicly-owned employer; was “mere bounty, or the potential enjoyment of another’s benefaction” to the dependents, in the sense they themselves had not worked to earn it; and given the Fund was a self-managed fund with only two members, it was not a publicly significant fund in the same way as the large superannuation fund in Finch. [84]–[86].

Finally, that there was clear language in the relevant trust document which rendered the Determination largely immunised from judicial control, that language being the “absolute and unfettered” discretion contained in cll 15.1 and 24.4 of the Deed. [86].

Disposition

In the result, the Court dismissed the application, finding there were no proper grounds upon which the Court may review the Determination, given there was no lack of real and genuine consideration by the Trustees in making the Determination. [100].

S Robinson