CAMPBELL v CAMPBELL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, MAHONEY AP and Cripps JA 23 June 1992, 9 July 1992 [1992] NSWCA 35 APPEAL from Equity Division — Testator's Family Maintenance and Guardianship of Infants Act 1916 — Superannuation benefits ($82,575) arising from employment of deceased paid to Public Trustee — Public Trustee administrator of deceased's estate Widow is beneficiary on intestacy up to $100,000 — Whether paid to Public Trustee as administrator of the estate or on behalf of widow — Held: Paid to Public Trustee as agent for widow in accordance with Superannuation Rules — Held: Not part of estate. Gleeson CJ I have had the benefit of reading in draft form the judgment of Mr Justice Mahoney. I agree with the orders proposed by his Honour and his reasons for those orders. Mahoney JA Gregory Paul Campbell is a son of the late James Thomas Campbell ("the deceased"). The deceased died on 28 July 1982. On 18 November 1982 Letters of Administration in his estate were granted to The Public Trustee. On 16 November 1983 the plaintiff, by his tutor the Protective Commissioner, commenced proceedings seeking an order for provision out of the estate of the deceased. On 20 September 1989 Powell J ordered that the plaintiff receive out of the estate a legacy of $20,000, the legacy to be charged "upon the sum of $82,575 paid by the Trustees of the Total Australia Limited Superannuation Fund to the Public Trustee". The estate of the deceased has been administered by the Public Trustee upon the basis that his widow Eunice May Campbell ("Mrs Campbell") was the sole beneficiary. She is or has been treated as a party in the proceeding. Mrs Campbell has appealed to this Court against his Honour's order. Miss Blackman, for Mrs Campbell, has made three substantial submissions: that there was no estate out of which the order could be made; that (if there was) the order should not have been made; and that the application made by the plaintiff was invalid. It is agreed between the parties and the hearing before the judge proceeded upon the basis that the plaintiff's claim is to be determined according to the Testator's Family Maintenance and Guardianship of Infants Act 1916 (as amended). It has been accepted that the Family Provision Act 1982 has no application to the present proceeding. 1. The estate of the deceased: In summary form Miss Blackman's submission is to the following effect. The deceased when he died had few personal assets and, had his personal assets represented his whole estate, no order would have been made. However, he was a member of a superannuation scheme conducted by arrangement with his 2 UNREPORTED JUDGMENTS employer. An amount of $82,575 was paid by the trustees of the superannuation scheme to the Public Trustee. The Public Trustee paid the net proceeds of that amount to Mrs Campbell. The learned judge made the order in favour of the plaintiff only because he concluded that the superannuation benefit was part of the estate of the deceased. But, Miss Blackman submitted, it was not part of his estate. Accordingly, the order should be set aside. The learned trial judge considered the matters relevant to, as I shall describe it, the ownership of the superannuation payment. His Honour referred generally to difficulties inherent in the determination of the issues posed in the proceeding and, I think, nonetheless this issue. I agree in general with the difficulties to which his Honour referred. And I differ from his Honour's conclusion only with hesitation. But this appeal is by way of rehearing: Supreme Court Act s75A; and accordingly, subject to such restrictions as may apply to an appellate court in such matters, the parties are entitled to have the opinion of this Court upon the matter and their rights determined accordingly. Ihave come to the conclusion that, sparse though the evidence is, the result for which Miss Blackman contends is the correct one. The terms of the superannuation scheme, as far as they are before the court, are contained in a trust deed and the rules appurtenant to it. It is not necessary to refer in detail to all of the deed and the rules. The deed bears the heading "Total Superannuation Fund" and contains provisions dealing generally with the constitution of, the administration of and the termination of the scheme. The rules provide, inter alia, for the admission of members, their contributions and the benefits payable to them upon retirement, disablement, death and the like. It is agreed that the provision most relevant for present purposes is R4. That rule provides for the amount payable from the fund as a lump sum benefit on death: R 4(1); and for the quantification of it: cf R4(4). Provision is made for entitlement to the benefit in the following terms: "4(5) Benefits payable upon the death of a Member while in the service of the Employer shall be payable by the Trustees to or for the benefit of such one or more Dependants of the Member or if there are no Dependants to the legal personal representatives of the Member to the exclusion of the other or others of them in such shares and proportions as the Trustees shall in their absolute discretion decide PROVIDED THAT if the Trustees after reasonable enquiry determine that the deceased Member left no Dependants and if after reasonable further enquiry the Trustees are unable to locate any legal personal representative of the Member or any person who is entitled to become such legal personal representative then at the expiration of such period of time as the Trustees shall from time to time determine the Trustees may in their absolute discretion forfeit to the Fund the benefit which would have otherwise been payable in accordance with these Rules in respect of such Member." It was, it has been accepted, pursuant to that provision that the superannuation benefit was paid to the Public Trustee. On a date after 14 January 1983, the trustees of the superannuation scheme paid to the Public Trustee the superannuation benefit of $82,575. The Public Trustee paid the net proceeds of that amount to Mrs Campbell. She subsequently disbursed it in the purchase of a house, a motor car and other assets. URJ CAMPBELL v CAMPBELL (Mahoney JA) 3 The dispute between the parties is whether, when the amount was paid to the Public Trustee, it was paid to it as administrator of the estate of the deceased and paid by the Public Trustee to Mrs Campbell pursuant to her entitlement as beneficiary in respect of the first $100,000 of the deceased's intestate estate; or whether it was paid to the Public Trustee not as administrator but as agent for Mrs Campbell pursuant to her entitlement under R4(5) of the superannuation scheme. In my opinion the proper conclusion is that the superannuation benefit was paid to the Public Trustee as agent for Mrs Campbell upon the basis that she was entitled to it under R4(5) of the superannuation scheme. Upon the proper interpretation of the superannuation scheme and in the events which occurred the estate of the deceased had no entitlement to the superannuation benefit and the trustees were not authorised to pay the benefit to the estate as such. Upon the basis of the material now before the court, the trustees were not entitled to pay any sum to the estate unless "there are no Dependants": R4(5). The term "Dependant" is defined by CL2(1) of the Trust Deed to include, inter alia, a spouse of a member and a child of a member. It is accepted that the deceased was at the date of his death a member of the scheme retained in the service of the employer or otherwise entitled under R4(5) and that he had dependants. That being so, the trustees had the right or duty to exercise the discretion given to them by R4(5) to determine which "one or more" of the dependants of the member should take the benefit and in what proportions. It appears that the trustees were made aware of the existence of dependants of the deceased prior to the exercise of their discretion. It also appears that in September 1982 the Public Trustee wrote to the superannuation fund trustees enquiring as to amounts payable to the deceased. By a letter dated 17 September 1982, Total Australia Limited informed the Public Trustee that some small amounts were payable in respect of undrawn wages, holiday pay and long service leave and "the amount payable from the Total Superannuation Fund is $82,575". The trustees' letter continued: "The Trustees of the Superannuation Fund require proof of death before deciding to whom the benefit is to be paid, usually to the Estate. They will also require proof of granting of authority by the court in order to release these monies." On 21 September 1982 the Public Trustee forwarded to Total Australia Ltd a copy of the death certificate of the deceased, asked to be advised to whom the superannuation benefit would be paid, and drew to the attention of the company the fact that "the above named had only recently remarried and was survived by a widow and six children, one of whom is aged nineteen years". Subsequently, on 24 September 1982 the Public Trustee wrote a letter in the following terms: "The Salaries and Benefits Controller, Total Australia Ltd, PO Box 618, NORTH SYDNEY 2060 Mr Craig - N.STO ARK/cc 24 September 1982 Dear Sir, Re: Estate of the late JAMES THOMAS CAMPBELL 4 UNREPORTED JUDGMENTS Further to our letter of 21 September 1982 it is desired to mention additional information which might assist your Trustees in reaching a decision concerning the Superannuation benefits. The only assets known to the Public Trustee in the above estate are the moneys payable in respect of his employment with your Company. If a person died Intestate on or after 1 January 1982, the widow of the deceased person is entitled to the first $100,000. In New South Wales Death Duties have been abolished in respect of all persons dying after 30 December 1981 and thus S 122 of the Stamp Duties Act does not apply in regard to the estates of such persons. Yours faithfully, Senior Trust Officer" On 18 November 1982 Letters of Administration of the estate were granted to the Public Trustee. On 2 December 1982 the Public Trustee wrote to "The Manager, Total Australia Ltd" requesting him to "forward all funds held on behalf of the above named deceased to this office at your earliest convenience". On 14 December 1982 the company, in a letter signed "CA Coady, Salaries and Benefits Supervisor", forwarded a cheque for $2,560.77 "in respect of wages, annual and long service leave due to the above named deceased". Following a reminder addressed "The Manager, Total Australia Ltd" dated 14 January 1983 from the Public Trustee, the superannuation benefit was received. On 21 August 1985 a letter was written to Harris Wheeler, Solicitors of Newcastle, upon notepaper headed "Total Australia Limited", under the heading "Total Superannuation Fund" and signed "AG Harris, Secretary". This letter was in the following terms: "Dear Sirs, Re: Estate late James Thomas Campbell In reply to your letter of August 19, 1985 we advise that upon the death of a member of the Total Superannuation Fund any benefits are payable at the discretion of the Trustees as provided for in the Rules of the Fund. A copy of the relevant extract from the Rules, CL4(5) is attached. In the case of the late Mr Campbell, the Trustees decided that payment should be made to the legal personal representative, and on provision of evidence that Letters of Administration had been granted to the Public Trustee, the appropriate payment was made to the Public Trustee, Newcastle. The payment was made in January 1983, the cheque being paid by the Fund's bank on January 21, 1983." There appears in the evidence no other substantial evidence as to what the trustees did. It was submitted by Mr Coolahan for the plaintiff that it should be inferred that the payment which was made in fact to the Public Trustee was made to him as "the legal personal representative" of the deceased and not as agent representing Mrs Campbell. That submission is, I think, based substantially upon the terms of the letter of 21 August 1985. I do not think that that is the conclusion which should be drawn as to the manner in which the superannuation benefit was paid. As I have said, the evidence before the company clearly disclosed that there were dependants of the deceased. There is in terms no evidence to show that the company passed that information to the trustees of the superannuation fund. URJ CAMPBELL v CAMPBELL (Mahoney JA) 5 But it is, in my opinion, proper to infer that the company passed to the trustees not merely, eg, the copy of the death certificate of the deceased forwarded on 21 September 1982 and the other correspondence in question, but also the information as to the existence of dependants. Upon that basis, it is clear that under R4(5) the legal personal representative of the deceased had no claim as such to any amount under the superannuation scheme. For the trustees to have determined to pay the superannuation benefit to the legal personal representative as such would have involved them in a breach of the terms of their trust. I do not think that that conclusion should be inferred. Insofar as inferences may be drawn from the sparse material, it appears that the trustees were of the opinion that they had a decision to make ("decided that payment should be made to the legal personal representative") and that they therefore determined to make the payment to the widow of the deceased Mrs Campbell. However, as the argument for the plaintiff suggested, if that decision was made the payment should have been made to Mrs Campbell herself and not to the Public Trustee. That is correct. However, as Miss Blackman's argument suggested, the persons administering the superannuation scheme may well have taken the view that, in the light of the letter of 24 September 1982 from the Public Trustee, the Public Trustee was representing Mrs Campbell to the extent in any event that the moneys would be passed on to her. The view may have been taken that, whether she was entitled to the benefit as such or only to the first $100,000 of the estate, she would effectively receive the benefit and accordingly payment to the Public Trustee would be in a practical sense a payment to her. However this be, it is sufficient, in my opinion, to conclude that the terms of the letter of 21 August 1985 do not in all the circumstances require or warrant the inference that what the trustees did was, in breach of trust, to pay the benefit to the deceased's estate beneficially. If this conclusion be correct then the superannuation benefit was never part of the estate of the deceased but was the asset solely of Mrs Campbell. It follows that the order made by the learned judge should be set aside. Miss Blackman submitted that, even if this conclusion be wrong and the superannuation benefit became part of the estate of the deceased for the purposes of the Act, no order should have been made. She referred, inter alia, to the fact that the estate had been totally administered by the payment of the amounts to Mrs Campbell in or about February 1983: the present proceeding was not commenced until 16 November 1983. It was submitted that there was no power, under s11(3) of the Act or otherwise, to make an order when or as the present order was made. In view of the conclusions I have reached on the primary matter, it is not necessary to pursue these alternative arguments. The argument in this regard has assumed that, if the intention of the superannuation fund trustees was to pay the sum to the Public Trustee upon the basis that he was entitled to it as legal personal representative of the deceased, the payment would have been part of the "estate" of the deceased for the purposes of the Act. It is, I think, arguable that a payment made to the legal personal representative under such a superannuation scheme would not form part of the estate of the deceased in the ordinary sense but would constitute a payment to the estate not as representing assets of the deceased but as the result of a contract or arrangement made by the deceased prior to his death. Matters of this kind have been referred to in cases in which courts have considered the liability to death or estate duty of superannuation benefits. 6 UNREPORTED JUDGMENTS However, it is not necessary to pursue this aspect of the matter or the consequences of it. 2. The merits of the Plaintiff's application: The plaintiff is a person who is mentally retarded. His affairs are under the care of the Protective Commissioner. The court has been informed that, having been in hospital at various times, he is now living, as it was described, under the Richmond Scheme in a house where with others he is cared for. His assets are only personal assets and a small sum of money held for him by the Protective Commissioner. It was submitted that a sum such as $20,000 would provide additional and appropriate benefits for him. It was submitted for Mrs Campbell that, if she were obliged to pay $20,000 to the plaintiff, it would be necessary for her to sell her present home and that it was inappropriate that she should do so. Were the facts as the learned judge found them, there would, I think, be difficulty in interfering with his exercise of the discretionary power given to him by the Act. However, as in my opinion the superannuation benefit did not form part of the deceased's estate I am relieved of the necessity to consider this aspect of the matter further. 3. Validity of the Proceeding: Miss Blackman submitted that the application to this Court was invalid and that it was not possible for a fresh application to be made or any amendment to be made to it because the time for making an application had long since expired. The ground for the submission that the application was invalid was because the claim made in the summons filed on 16 November 1983 was a claim for maintenance, education and advancement "pursuant to s7 of the Family Provision Act 1982 out of the estate of...", whereas it should have been a claim for such pursuant to s3 of the abovementioned Act. It is not necessary to determine this submission. In my opinion the order made by the learned judge should be set aside. If such is the result of the appeal, it has not been submitted that any order can be made in favour of the plaintiff. The court should therefore, in my opinion, order that the appeal be upheld, that the judgment of Powell J be set aside, and that the plaintiff's application be dismissed. The plaintiff should pay the costs of the proceeding before the learned judge and before this Court. He should, if otherwise entitled, have a certificate under the Suitors' Fund Act in respect of the costs of the appeal. Cripps JA I have read the judgment of Mahoney AP. I agree with his reasons andthe orders he proposes. ORDERS 1. Appeal allowed. 2. Judgment below set aside. 3. Plaintiff's application dismissed. 4. Plaintiff to pay costs of the proceeding below and before this Court. If otherwise entitled, plaintiff to have a certificate under the Suitors' Fund Act in respect of the costs of the appeal. Counsel for the Appellant: JHH BLACKMAN Solicitors for the Appellant: BILBIE WHITFORD and DAN Counsel for the 1st Respondent: R COOLAHAN URJ CAMPBELL v CAMPBELL (Cripps JA) 7 Solicitors for the Ist Respondent: HARRIS WHEELER WILLIAMS and McKENZIE No appearance for the 2nd Respondent