Michael Hallinan
An application by the Trustee of a public offer fund that a non-lapsing BDBN made by a member of the fund was not binding on the Trustee due to the subsequent occurrence of a disqualifying event has been upheld by the NSWSC.
The trust deed specified that the nomination was only binding if the Trustee consented to the nomination. However, if certain specified events subsequently occurred, the consent of the Trustee ceased to apply – so the nomination ceased to be binding.
The decision of the Court is interesting for two reasons:
- First, the Court accepted the drafting technique used in the trust deed that upon receipt of the nomination the consent was “conditional” but only became “absolute” once the trustee was certain that no disqualifying event had occurred – which could only occur after the death of the member
- Second, the Court held that as the nomination operated under s59 (1) and not 59(1A) of the SIS Act, the 3 year rule did not apply: despite the trust deed requiring the nomination to comply with “Relevant Law” i.e. the SIS Act. [2017] NSWSC 45
By Michael Hallinan, Special Counsel Superannuation