2. The substantive appeal is against a decision of Master Sanderson in Hill v Zuda Pty Ltd

1. The Holly Superannuation Fund was created by Deed (Trust Deed) dated 14 June 2000. This Deed was amended by an amending Deed dated 13 December 2011.[8]
2. Clause 5.2 of the amending Deed provides that a member may give the trustee a binding death benefit nomination.[9]
3. 'Binding death benefit nomination' is defined in the Trust Deed and the amending Deed as follows:[10]

• directs the trustee to pay the whole or part of a benefit payable on the Member's death to one or more Dependants or the legal personal representative in specific proportions; and
• may include instructions as to the manner of payment (eg lump sum or pension).

1. Clause 1.5 of the amending Deed constitutes a binding death benefit nomination. By this clause, the deceased directs that, upon his death, Zuda Pty Ltd as trustee of the Holly Superannuation Fund pay to Ms Murray any benefit that the deceased is entitled to under the Holly Superannuation Fund.[11]
2. The direction under a binding death benefit nomination is subject to any 'government requirements'. 'Government requirements' is defined as follows:[12]

[M]eans any requirements under laws relating to superannuation funds:

(a) imposed on the Trustee; or

(b) that the Fund must satisfy to qualify for the most favourable taxation treatment available to superannuation funds.

Primary decision[13] Ms Hill's primary argument

1. In the primary proceedings, Ms Hill contended that the binding death benefit nomination arising from the amending Deed was not valid because it did not comply with s 31 and s 55A of the Superannuation Industry (Supervision) Act 1993 (Cth) (Superannuation Act) and reg 6.17A(6)(b) and (c) and reg 6.17A(7)(A) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (Superannuation Regulations).[14]
2. Regulation 6.17A of the Superannuation Regulations sets out the conditions for the payment of benefits on or after the death of a member under s 59(1A) of the Superannuation Act. Regulations 6.17A(6) and (7) of the Superannuation Regulations prescribe certain requirements that must be met for a payment of a benefit on or after the death of a member to be effective.[15]
3. Section 59 of the Superannuation Act is in the following terms:
   1. Exercise of discretion by person other than trustee

(1) Subject to section (1A), the governing rules of a superannuation entity other than a self managed superannuation fund must not permit a discretion under those rules that is exercisable by a person other than a trustee of the entity to be exercised unless:

(a) those rules require the consent of the trustee, or the trustees, of the entity to the exercise of that discretion; or

(b) if the entity is an employer-sponsored fund:

(i) the exercise of the discretion relates to the contributions that an employer-sponsor will, after the discretion is exercised, be required or permitted to pay to the fund; or

(ii) the exercise of the discretion relates solely to a decision to terminate the fund; or

(iii) the circumstances in which the discretion was exercised are covered by regulations made for the purposes of this subparagraph.

(1A) Despite subsection (1), the governing rules of a superannuation entity may, subject to a trustee of the entity complying with any conditions contained in the regulations, permit a member of the entity, by notice given to the trustee of the entity in accordance with the regulations, to require a trustee of the entity to provide any benefits in respect of the member on or after the member's death to a person or persons mentioned in the notice, being the legal personal representative or a dependant or dependants of the member.

(2) If the governing rules of a superannuation entity are inconsistent with subsection (1), that subsection prevails, and the governing rules are, to the extent of the inconsistency, invalid. (emphasis added)

1. Section 55A(1) of the Superannuation Act provides that the governing rules of a regulated superannuation fund must not permit a fund member's benefit to be cashed after the member's death otherwise than in accordance with the standards prescribed for the purposes of s 31. Section 31 of the Superannuation Act provides that the regulations may prescribe standards applicable to the operation of regulated superannuation funds.[16]
2. The respondents submitted that s 59(1) of the Superannuation Act does not apply to a self-managed superannuation fund and neither does the exception to s 59(1) under s 59(1A).[17] Accordingly, a self-managed superannuation fund is not required to comply with reg 6.17A of the Superannuation Regulations unless the terms of the constituent deed expressly provide to that effect. Further, it was not in dispute that that the Holly Superannuation Fund is a self-managed superannuation fund.[18]
3. The respondents submitted that there is authority to support the position that a self-managed superannuation fund is not required to comply with reg 6.17A unless the terms of the constituent deed expressly provide to that effect. The respondents relied on Munro v Munro,[19] Re Narumon Pty Ltd[20] and Cantor Management Services v Booth.[21]
4. Ms Hill, on the other hand, argued that the three cases relied on by the respondents had been wrongly decided. Ms Hill relied on the authority of Retail Employees Superannuation Pty Ltd v Pain.[22]

Findings as to the validity of the binding death benefit nomination

1. The master considered Munro, where the question for determination was whether the relevant binding death benefit nomination had to comply with reg 6.17A of the Superannuation Regulations.[23] The master cited the comments of Mullins J who said:[24]

As s 59(1) of the [Superannuation] Act does not apply to a self managed superannuation fund, the exception to the application of s 59(1) found in s 59(1A) also does not apply to a self managed superannuation fund. Regulation 6.17A sets out the conditions for the purpose of s 59(1A) for the payment of a death benefit after the death of a member, but in view of the exclusion of a self managed superannuation fund from the operation of s 59(1), those conditions do not apply by virtue of either the [Superannuation] Act or the [Superannuation] Regulations to a self-managed superannuation fund.

1. The master also considered the decisions of Re Narumon Pty Ltd and Cantor Management, both of which affirmed the decision of Mullins J in Munro.[25]
2. In respect of Pain, the master said:[26]

The difficulty for [Ms Hill] in placing reliance upon the decision of Pain is that while the case sets out the arguments in favour of [Ms Hill's] position it is not actually a decision on point. That is made plain by [511]. Furthermore, the decision of the South Australian Full Court in Cantor Management was delivered some 12 months after Blue J's decision in Pain. There is no mention in the Cantor Management decision of the Pain decision. The case may or may not have been cited. It is difficult to imagine why it was not. Either way Blue J's reasoning was not adopted by the Full Court.

1. The master concluded the following:[27]

The position then is this: The authorities are all one way and favour the defendants. As the law stands in Australia at the moment, the plaintiff's claim cannot succeed. While the argument detailed in Blue J's judgment in Pain is of interest it cannot provide a basis upon which the plaintiff's action can succeed. Accordingly, the defendants are entitled to an order for summary judgment.

1. The appellant filed an appellant's case on 7 May 2020.
2. Ground 1 alleges that the master erred in law in finding that s 31 and s 55A of the Superannuation Act and reg 6.17A(4), (6) and (7) of the Superannuation Regulations did not apply to the Holly Superannuation Fund.
3. Ground 2 alleges that further, or in the alternative to ground 1, the master erred in law in finding that there was no serious question to be tried as to whether s 31 and s 55A of the Superannuation Act and reg 6.12A(4), (6) and (7) of the Superannuation Regulations applied to the Holly Superannuation Fund.

Respondents' application for security for costs Affidavit of Ms Murray in support of the respondents' application for security for costs

1. The respondents' application for security for costs is supported by an affidavit of Ms Murray sworn 6 May 2020.
2. Ms Murray deposed that there are three outstanding costs orders against Ms Hill in relation to proceedings commenced by the appellant:
   1. In the Family Provision Proceedings (CIV 2255 of 2017), in relation to the dismissal of the application to amend her originating summons and to obtain discovery of certain documents. The costs provisionally assessed by the court are in the sum of $9,279. This assessment has been objected to by Ms Hill and must now be taxed before a registrar.[28]
   2. In CIV 1425 of 2019, in relation to the dismissal of Ms Hill's application for pre-action discovery. The costs of the application have been provisionally assessed in the sum of $14,134. This assessment has been objected to by Ms Hill and now must be taxed before a registrar.[29]
   3. In the primary proceedings (CIV 2767 of 2019), in which Ms Hill was ordered to pay costs provisionally assessed in the sum on $9,821. Ms Murray stated that, as at the date of swearing the affidavit, the time for objecting to the provisional assessment has not expired.[30]
3. Ms Murray said, in her affidavit, that she would seek leave to rely on an affidavit sworn on 22 October 2019 by Ms Hill in the Family Provision Proceedings deposing to her assets and liabilities.[31] Ms Murray stated, in effect, that Ms Hill's affidavit of 22 October 2019 indicated that she does not have sufficient assets available to satisfy any of the outstanding costs orders in the primary proceedings or any adverse costs orders in the appeal.[32]
4. Ms Murray also annexed a letter from her solicitors to Ms Hill dated 24 April 2020, enquiring whether she would provide $17,500 as security for costs.[33]
5. Ms Murray also attached a copy of each of the provisionally assessed bills of costs and an itemised draft bill of costs for the appeal. The draft bill itemised costs totalling $29,146.

Affidavit of Ms Hill in opposition to the respondents' application for security for costs

1. Ms Hill filed an affidavit on 19 May 2020 in opposition to the respondents' application for security for costs. Ms Hill stated, in effect, that she has lodged an objection to each of the provisional assessment of costs made in CIV 2255 of 2017, 1425 of 2019 and CIV 2767 of 2019. She stated that the costs in each matter are yet to be assessed by taxation.[34]
2. Ms Hill, without annexing any documentary evidence, also made the following statements in her affidavit dated 18 May 2020 and filed 19 May 2020:[35]
   1. She is currently employed by the Graduate College of Dance, earning approximately $1,466 net per fortnight for 40 weeks per year (after superannuation contributions and tax);
   2. She also earns $90 net per week (after the deduction of tax) working part time for Hartrey Legal;
   3. She has a business called Bits & Blooms which is not currently operating due to COVID‑19. For the financial year ended 30 June 2019, she expects to made a monthly gross average profit of $1,408.33;
   4. She has received one JobKeeper payment of $3,000 for April 2020. She is informed by her accountant that the regular monthly JobKeeper payment going forward will be $3,000.
   5. Her husband earns $2,212 net per fortnight (after superannuation contributions and tax have been deducted) for 52 weeks per year from his work with the Graduate College of Dance;
   6. She and her husband are also in receipt of Family Tax Benefit in the sum of $106.46 per month;
   7. She and her husband jointly own a property at 4A York Street, Inglewood, which Ms Hill estimates to be valued at $535,000. $453,645.60 is owed on a mortgage secured against the property;
   8. (a) She has $9,153.39 in her personal bank account;

(b) her husband has $2,269.19 in his personal bank account; and

(c) they have $96,924.98 in a joint bank account - which has increased due to an inheritance received by her husband.

1. Ms Hill's affidavit of 19 May 2020 also attached a letter from Ms Hill's solicitors dated 7 May 2020 responding to a letter sent by the respondents' solicitors on 24 April 2020 regarding security for costs for the appeal. The letter stated, in effect, that whilst Ms Hill opposed the respondents' application for security for costs, she would (without admission) be willing to pay a sum of $5,000 into the court with the costs of the application being costs in the cause of the appeal.[36]
2. Ms Hill also deposed that her solicitors are acting in the appeal on the basis that they will only recover their fees in the event a favourable costs order is made and to the extent that costs order provides.[37]

Respondents' submissions in support of application for security for costs

1. The respondents filed submissions on 19 May 2020. The respondents relied on the proposition that a respondent to an appeal who applies for security for costs is in a stronger position than a defendant at first instance to the extent that the judgment in the respondents favour is presumed to be correct until displaced.[38]
2. The respondents submitted, in effect, that there is a sufficient basis for the court to order security for costs because:[39]
   1. On the available evidence, Ms Hill would likely have difficulties paying the costs of the appeal if unsuccessful;
   2. The respondents are not responsible for Ms Hill's financial position;
   3. It is doubtful that Ms Hill would be able to pay the provisionally assessed costs orders, even if they are taxed at two thirds of the total;
   4. Ms Hill had not provided any evidence of her ability to satisfy an order of costs in the appeal;
   5. Regardless of the outcome of the appeal, Ms Hill would still be required to pay the taxed costs of the other proceedings;
   6. Ms Hill has not provided any evidence that an order for security for costs would render the appeal nugatory;
   7. It is not simply a question of Ms Hill's impecuniosity - on three occasions she has attempted to run legal argument in support of her claim where the case law does not support such a claim; and
   8. There has been no delay by the respondents in commencing the application for security for costs.
3. In general terms, the respondents submitted that the appeal has no merit for the reasons given by the master. The respondents also submitted that, in the event that the appeal was successful, it does not necessarily follow that Ms Hill would be successful in the action below.[40]

Appellant's submissions in opposition to the respondents' application for security for costs

1. The appellant filed submissions on 21 May 2020, to the effect that:
   1. The court's discretion was unfettered.
   2. Impecuniosity, whilst it may be an important consideration, is not conclusive and will not solely, or of itself, result in an order for security.
   3. The costs orders made against the appellant are yet to proceed to taxation.
   4. The appellant is not a 'nominal' appellant.
   5. The appeal has some good prospects of success.
   6. The appeal raises an important question of law or public interest.
   7. If security were to be ordered, where an appellant is impecunious, the amount of security should be no greater than is absolutely necessary.
2. There was no mention in the appellant's written submissions that the provision of security would stultify the appeal. However, in oral submissions, counsel for Ms Hill submitted that it may be inferred that any order for security in an amount exceeding the amount of money in her bank account, referred to in [34.8(a)] above (ie, an amount exceeding $9,000), would have the effect of stifling the appeal. Counsel for Ms Hill also said that as her solicitors and counsel were acting on the basis that their costs would not be paid unless Ms Hill obtained a costs order in the appeal, the sum of $9,000 in her account would not be eroded by her legal costs.

1. The principles in relation to security for costs were not in dispute. They were outlined in George 218 Pty Ltd v Bank of Queensland Limited.[41] In summary:
   1. The power to order security is exercised to serve the interests of justice.
   2. The discretion to order security is unfettered but must be exercised judicially. 'Special circumstances' do not have to be shown before an order for security for costs is made against an appellant.
   3. An appellant's inability to satisfy a costs order should the appeal fail is generally a significant factor in favour of an order for security for costs. However, if the respondent has caused the appellant's impecuniosity, that may be a relevant countervailing factor.
   4. Impecuniosity is not in itself generally the sole ground for the making of an order for security. Even where the appellant is impecunious, in all the circumstances, the interests of justice may properly be served by not making such an order.
   5. Other factors generally include the appellant's prospects of success, whether the appellant would be shut out of the appeal if security for costs were ordered, and whether there has been any delay in the respondent filing the application for security for costs.
   6. Ultimately, each case will turn on its own circumstances, and it is not possible to set out an exhaustive list of the relevant considerations.
   7. Where security is ordered against an impecunious appellant, the amount ordered should not be greater than is absolutely necessary.
2. There was no objection to the court receiving Ms Hill's affidavit of 22 October 2019 sworn in the Family Provision Proceedings. The affidavit was received as exhibit 1 in the application. The affidavit indicated that (1) her joint monthly income with her husband totalled $9,164.79, and her joint monthly expenses totalled $7,674.05, (2) she expected those expenses to increase in the future, (3) she is a casual employee, and (4) whilst the assets she jointly owns with her husband exceed the liabilities jointly owed with her husband, the only available asset in her own name, in which her husband has no interest, is that of a bank account standing to the credit of $7,925.27.
3. Based on Ms Hill's 22 October 2019 affidavit, there was a substantial risk that Ms Hill would not meet an adverse costs order if the appeal fails. That affidavit is effectively an admission against interest, and was supported by financial records.
4. On the other hand, Ms Hill's affidavit of 19 May 2020 was expressed in general terms, and did not annex any relevant financial records in relation to the matters to which she referred. In that regard, it generally lacked cogency, although I accepted that the amount standing to her credit in her bank account was now in the sum of approximately $9,000.
5. Also, the correspondence referred to in [35] above from Ms Hill's solicitors, and counsel's submissions referred to in [41] above, tended to indicate that it was not so much the grant of security, but the amount which was in issue.
6. In all the circumstances, it appeared to me that it was in the interests of justice to order security for costs as sought. The matters that I had particular regard to were:
   1. The substantial risk that Ms Hill would not meet an adverse costs order against her in the appeal if the appeal failed.
   2. I assumed that the appeal was arguable.
   3. The application was brought in a timely way.
   4. The amount of $17,500 was reasonable in terms of the potential costs of the appeal, in light of the draft bill of costs in evidence.
   5. I was not satisfied that an order for security in that amount would stifle the appeal. In particular, I was not satisfied that, as a practical matter, Ms Hill could not obtain, by loan or otherwise, including from her husband, the additional $8,500 needed to meet a security for costs order beyond the $9,000 in her bank account.
   6. There has been no relevant delay in the respondents bringing the application for security for costs.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[6] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, par 4.

[7] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, par 7.

[13] The following sets out the master's principal findings in the primary decision.

[19] Munro v Munro [2015] QSC 61; (2015) 306 FLR 93.

[20] Re Narumon Pty Ltd [2019] QSC 185; (2019) 2 Qd R 247.

[21] Cantor Management Services v Booth [2017] SASCFC 112; (2017) 106 ATR 615.

[22] Retail Employees Superannuation Pty Ltd v Pain [2016] SASC 121.

[24] Primary decision [14], citing Munro [36].

[28] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, pars 3 - 6.

[29] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, pars 7 - 11.

[30] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, pars 12 ‑ 15.

[31] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, par 23.

[32] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, pars 20 ‑ 22.

[33] Affidavit of J Murray sworn 6 May 2020 in support of the respondents' application, par 18.

[34] Affidavit of C Hill sworn 18 May 2020 in opposition to the respondents' application, pars 9 ‑ 15.

[35] Affidavit of C Hill sworn 18 May 2020 in opposition to the respondents' application, par 16.

[36] Affidavit of C Hill sworn 18 May 2020 in opposition to the respondents' application, annexure CEH‑1.

[37] Affidavit of C Hill sworn 18 May 2020 in opposition to the respondents' application, par 19.

[38] Respondents' written submissions in support of the respondents' application, par 15; citing Kennedy v McGeechan [1978] 1 NSWLR 314, 315; Dodds v Kennedy [2011] WASCA 32.

[39] Respondents' written submissions in support of the respondents' application, pars 17 - 24.

[40] Respondents' written submissions in support of the respondents' application, par 32.

[41] George 218 Pty Ltd v Bank of Queensland Limited [2016] WASCA 56 [41] ‑ [48]; Oze‑Igiehon v Rasier Operations BV [2017] WASCA 107 [13].