From the Horse’s Mouth
The following comments of Justice Martin illustrate the legal issues involved and how easy it was for Mrs Burgess to find herself to be caught up in such a mess without even trying:-
1. The facts underlying the present application are relatively commonplace, but the problem they present is legally complex.
13. This application throws up an issue concerning the likely conflict of interest between the position of a widow seeking that her late husband's superannuation funds all be paid to her in the capacity as the spousal dependant of the fund's deceased member - in contrast to the fiduciary duties the widow is bound by and must observe in her capacity as the administrator (ie, trustee) of an estate, where that estate must be administered not only for her interests but also in the interests of her two young children as the other beneficiaries of the intestate estate.
15. At the outset, I observe that the unfortunate circumstances posed for resolution could have been avoided if the deceased man had done two things differently prior to his death. First, if he had executed a will, then the undesirable scenario for his surviving family of dealing with an intestacy situation would have been avoided. Preferably, his will would have said in explicit terms that there was no difficulty for his widow, if she was appointed as his executor, in acting exclusively in her own interests by applying to receive personally and receiving the full entitlement to any superannuation fund proceeds to which he might be or become entitled in the event of his death.
16. Secondly, if the man had signed and presented a binding nomination document to the trustees of the four superannuation funds in which he held entitlements (including any life benefits), then such an instruction would ordinarily have bound the trustee to distribute those funds, say, on a 100% basis to his widow (rather than to his estate) if so directed, rather than leaving the distribution decision wholly to the trustee's own discretion.
17. Regrettably, neither of those two events happened here. Hence, the present problems arise in rather adverse underlying factual circumstances, which might otherwise have been easily avoided. In a less than optimal factual scenario, I need to bear in mind the aphorism that 'hard cases make bad law'. The implications of any decision rendered towards these facts could carry wider implications later for less worthy facts.
24. I should note that there has not been the slightest suggestion of any misdealing conduct or misappropriation of any of the superannuation payment funds received by Mrs Burgess to date.
84. In an age of increasing moral ambivalence in western society the rigour of a court of equity must endure. It will not be shaken as regards what is a sacred obligation of total and uncompromised fidelity required of a trustee. Here, that required the administrator not just to disclose the existence of the (rival) estate interest when claiming the superannuation moneys in her own right from the fund trustee. It required more. It required her to apply as administrator of the estate for it to receive the funds in any exercise of the fund trustee's discretion.
85. On my analysis, the approach of Atkinson J taken in McIntosh cannot be faulted as a matter of law. I would respectfully apply it here, even though the underlying facts are different. The interests of a deceased estate require a 'champion' who cannot be seen (even if they are not) to be acting halfheartedly, or with an eye to achieving outcomes other than an outcome that thoroughly advances the interests of the estate - to the exclusion of other claimants.
91. The result is, of course, messy for the family and less clear cut than might otherwise have been desired. However, that is a result of wider trustee integrity policy principles of the law which take effect and prevail. They are of vital importance and are applicable to universal circumstances extending well beyond the present rather regrettable factual situation. The present is a situation, I reiterate, that might have been avoided by the two measures I earlier mentioned.