As a guardianship lawyer in Western Australia, I often receive questions regarding the powers and functions of administrators.
One issue that arises is whether a tribunal has the power to grant an administrator the authority to make a binding death benefit nomination (BDBN).
In this blog post, I explore this question, drawing on the decision in SM [2019] WASAT 22 and relevant legislation.
Background:
In the SM case, an individual (SM) was injured in a motor vehicle accident and later received compensation of $5,745,933, held in trust by Australian Executor Trustees Limited (AET).
The tribunal appointed AET as the administrator of SM's estate with the sole function to pay a portion of the funds into superannuation for the benefit of SM.
AET sought an additional function to make and renew BDBNs for any superannuation fund of which SM was a member.
Relevant Legislation:
The Guardianship and Administration Act 1990 (WA) (the Act) governs the powers and functions of administrators. Section 69(2) of the Act permits an administrator to do only those things necessary for the performance of the functions invested in him or her.
Analysis:
The purpose of an administration order is for the conservation of a person's estate during their lifetime for their own advantage and benefit, but does not extend to the conservation and preservation of their estate after death, when the person has ceased to have any needs [89].
A BDBN is solely for the purpose of enabling transmission on a person's death of their superannuation benefit [90]. An administrator's authority ends upon a person's death [91], as does their duty and obligation to the person subject to the administration order.
In the SM case, the Tribunal found that making a BDBN is not for the purpose of carrying out an administrator's purpose, namely the conservation of the estate of a person under an administration order for their own advantage and benefit [92].
Consequently, the Tribunal concluded that it does not have the power to grant the additional function of making a BDBN to a limited or plenary administrator.
Conclusion:
Based on the SM [2019] WASAT 22 decision and the Guardianship and Administration Act 1990 (WA), it appears that a tribunal does not have the power to grant an administrator the authority to make a BDBN.
This is because the primary purpose of an administrator is to manage the person's estate during their lifetime, and their authority does not extend beyond the person's death.