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[2022] HCA 21
respondent. Appeal dismissed with costs.
The High Court decided that the detailed rules in reg 6.17A for making binding death benefit nominations do not apply inside self-managed super funds. Those rules exist to support a part of the SIS Act that specifically says it does not cover SMSFs. Because SMSF members are also the directors who control the trustee, there is no real need for formal witnessed notices or three-year renewals. The Court also ruled that appeal courts should interpret Commonwealth laws for themselves rather than automatically following side comments (obiter dicta) made by other appeal courts, although such comments deserve respect. The Western Australian Court of Appeal had reached the right answer about SMSFs but for slightly the wrong reason by treating itself as strictly bound by an earlier South Australian observation. As a result Claire Hill's challenge to the nomination in her father's SMSF failed and the appeal was dismissed.
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2,651 words · generated 24/04/2026
3 cited instruments linked from this judgment.
Alec Kumar Sodhy and his de facto partner Jennifer Patricia Murray were the sole members and directors of Zuda Pty Ltd, which acted as trustee of the Holly Superannuation Fund, a self-managed superannuation fund (SMSF) established by deed in June 2000. On 13 December 2011 the trust deed was amended to insert a clause described as a "binding death benefit nomination". The clause directed the trustee that, on the death of either member, the whole of that member's account balance was to be paid to the surviving member.
Mr Sodhy died on 22 November 2016. His only child, Claire Elizabeth Hill, commenced proceedings in the Supreme Court of Western Australia against Zuda and Ms Murray. She sought declaratory and injunctive relief on the footing that the 2011 binding death benefit nomination was of no force or effect. The nomination, she argued, was a notice given under reg 6.17A(4) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) but failed to satisfy the witnessing requirements in reg 6.17A(6)(b) and (c) or the three-year duration limit in reg 6.17A(7)(a). It was common ground before the Master and the Court of Appeal, and remained common ground in the High Court, that the document did not meet those formal requirements.
The sole issue at every level was whether reg 6.17A applied to the Fund at all. Sanderson M held that it did not and summarily dismissed the proceeding. The Court of Appeal (Buss P, Murphy and Mitchell JJA) agreed, regarding itself as bound by seriously considered dicta to that effect in the Full Court of the Supreme Court of South Australia in Cantor Management Services Pty Ltd v Booth (2017) 16 ASTLR 489. Special leave to appeal was granted and the High Court heard the matter on 5 April 2022. On 15 June 2022 the seven-member Court delivered a single joint judgment dismissing the appeal with costs.
The High Court accepted that the binding death benefit nomination clause was valid according to the governing rules of the SMSF because the prescriptive standards in reg 6.17A simply did not apply to it. The Court also held that, while the Court of Appeal had reached the correct substantive conclusion, its methodological route was imperfect: it ought to have construed the regulation for itself rather than treating itself as bound by the earlier South Australian observation.
The Court's reasoning proceeds in two distinct but related streams: a straightforward exercise in statutory construction and a clarification of the principles that govern precedent between intermediate appellate courts.
On the substantive question the Court began with the architecture of the Superannuation Industry (Supervision) Act 1993 (Cth). Section 59(1) prohibits the governing rules of a superannuation entity other than an SMSF from permitting a person other than the trustee to exercise a discretion unless the trustee consents. Section 59(1A) creates a limited exception: the rules may permit a member to require the trustee to pay death benefits to the member's legal personal representative or dependants provided the member gives notice in accordance with the regulations. Regulations made for the purposes of s 59(1A) therefore cannot apply to an SMSF.
Regulation 6.17A was made for two complementary purposes. Subregulations (2) and (3) supply the machinery contemplated by s 59(1A). Subregulations (4) to (7) prescribe an operating standard for the purposes of ss 31(1) and 32(1). The standard in reg 6.17A(4) is, however, expressly conditional: it applies only "if the governing rules of a fund permit a member of the fund to require the trustee to provide any benefits in accordance with subregulation (2)". Because subregulation (2) has no operation in an SMSF, the condition is never satisfied and the standard in (4) is never engaged. Consequently reg 6.17A(1), which applies the standard to regulated superannuation funds, also has no application to SMSFs.
Contextual indicators reinforced this reading. The heading to reg 6.17A reads "Payment of benefit on or after death of member (Act, s 59(1A))". The 1999 Explanatory Statement that introduced the regulation described it as prescribing the standard "as an operating standard for the purposes of the Act" following the insertion of s 59(1A). The practical purposes of the regulation—ensuring members receive adequate information and can give formal, witnessed, time-limited notices—are "inapt to administration of an SMSF" because the members are the directors of the corporate trustee. Formal notice from a member to herself would be redundant.
The Court expressly rejected the submission that this construction deprives s 55A of operation in SMSFs. Section 55A prohibits the governing rules from permitting death benefits to be cashed otherwise than in accordance with standards prescribed for s 31. That requirement is satisfied by regs 6.17, 6.21 and 6.22, which the parties accepted do apply to SMSFs.
On the methodological question the Court reminded intermediate appellate courts of the precise limits of Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89. Farah contains two distinct principles. The first is that an intermediate appellate court should not depart from seriously considered dicta of a majority of the High Court. The second is that an intermediate appellate court should not depart from an actual decision (i.e. the ratio) of another intermediate appellate court on Commonwealth legislation unless convinced that decision is plainly wrong. The second principle does not extend to obiter dicta of other intermediate appellate courts. While such dicta should ordinarily receive great weight, they are not binding. The Western Australian Court of Appeal had therefore overstated the constraint upon it. It ought to have performed its own construction of reg 6.17A. That it reached the same conclusion as the South Australian dicta was fortunate but did not validate the method.
Before Hill v Zuda the law was unsettled and plagued by inconsistent first-instance pronouncements. A single judge of the Supreme Court of Queensland in Munro v Munro (2015) 306 FLR 93 had expressed the view that reg 6.17A had no application to SMSFs. A single judge of the Supreme Court of South Australia in Retail Employees Superannuation Pty Ltd v Pain (2016) 115 ACSR 1 appeared to take a tentative contrary view. The Full Court of the Supreme Court of South Australia in Cantor Management Services Pty Ltd v Booth (2017) 16 ASTLR 489 then expressed the opinion (whether ratio or obiter was debatable) that the regulation did not apply to SMSFs. Another Queensland single judge in Re Narumon Pty Ltd [2019] 2 Qd R 247 adopted that view. Trust deed drafters and SMSF administrators therefore operated in a climate of uncertainty. Many deeds continued to include clauses that attempted to comply with reg 6.17A "just in case", producing unnecessary formality and cost. Disputes about whether a nomination had to be renewed every three years or witnessed by two independent adults were common.
After Hill v Zuda the position is clear and uniform across Australia. Regulation 6.17A has no application to any SMSF. A binding death benefit nomination contained in the governing rules of an SMSF is effective according to its terms and the general law of trusts without the need to satisfy the witnessing or duration requirements of reg 6.17A(6) and (7). The three-year sunset period that applies to large APRA-regulated funds does not apply to SMSFs. Section 55A continues to constrain SMSF deeds through the separate payment standards in regs 6.17, 6.21 and 6.22. The decision has removed a significant compliance burden and litigation risk for the hundreds of thousands of SMSF trustees.
The High Court has also restated the Farah principles with greater precision. Intermediate appellate courts now know they must construe Commonwealth statutes for themselves and are not strictly bound by obiter dicta of their sister courts. This restores a measure of independent responsibility while preserving the practical expectation that seriously considered dicta will be given respectful consideration.
The joint judgment is unusually concise. Three passages are particularly important.
First, at the conclusion of the introductory section ([4]):
"Although the Court of Appeal ought to have reached the conclusion construing the regulation for itself, the Court of Appeal was correct to conclude that reg 6.17A has no application to an SMSF. The appeal must therefore be dismissed."
Plain English: The appeal judges took a shortcut by saying they were stuck with what the South Australian judges had said in passing. They should have read the regulation themselves. Luckily they reached the right answer anyway, so the daughter's appeal still fails.
Second, the pivotal construction paragraph ([20]):
"The alternative, and preferable, interpretation of reg 6.17A(1) is that it simply makes the standard set out in reg 6.17A(4) applicable to the operation of those regulated superannuation funds to which reg 6.17A(4) is in its terms applicable. The standard set out in reg 6.17A(4) in its terms applies only 'if the governing rules of a fund permit a member of the fund to require the trustee to provide any benefits in accordance with subregulation (2)'. Since reg 6.17A(2) has no application to an SMSF, neither does reg 6.17A(4). And since reg 6.17A(4) has no application to an SMSF, neither does reg 6.17A(1)."
Plain English: Don't read reg 6.17A(1) as automatically slapping the strict rules onto every super fund in Australia. The strict rules only turn on if the fund's deed lets a member use the special notice system described in reg 6.17A(2). That system only exists for non-SMSFs because of the way s 59 is worded. No system, no rules. It's that simple. The heading and the explanatory memorandum confirm this.
Third, the explanation of purpose ([23]):
"That the requirements of reg 6.17A(4) concerning the giving of notice by a member of a regulated superannuation fund to the trustee of that fund do not apply to an SMSF is not surprising given that an SMSF is, by definition, a superannuation fund in which members of the fund are also directors of the corporate trustee of the fund. In the context of an SMSF, giving notice of the kind envisaged by reg 6.17A(4) as expounded in reg 6.17A(6) and (7) would be at best an exercise in formality and at worst redundant. The two purposes of reg 6.17A—enabling members to compel trustees to distribute death benefits in accordance with their wishes and ensuring that members have sufficient information—are inapt to administration of an SMSF."
Plain English: SMSF members wear two hats—they are both the beneficiaries and the bosses of the trustee company. Sending a formal witnessed notice to yourself is pointless paperwork. The whole point of reg 6.17A is to protect members from trustees who might ignore their wishes and to make sure members understand their rights. In an SMSF those protections are unnecessary.
Hill v Zuda is engaged whenever a dispute arises about the validity of a death benefit nomination inside an SMSF and one party asserts that the nomination is invalid for failure to comply with reg 6.17A(6) or (7). Typical triggers include:
The precedent does not affect APRA-regulated funds. Those funds must still comply with reg 6.17A if they wish to offer binding death benefit nominations. The decision is also confined to the specific regulation; it says nothing about the separate obligation under reg 6.17 and regs 6.21–6.22 to cash death benefits as soon as practicable after death.
Because the reasoning rests on the conditional structure of reg 6.17A(4) and the express exclusion of SMSFs from s 59(1), the principle will apply to any future amendment of the regulation unless Parliament clearly extends the standard to SMSFs.
As a unanimous decision of the full High Court delivered in a single joint judgment, Hill v Zuda is authoritative. The Court expressly approved the substantive conclusion reached in Cantor Management Services Pty Ltd v Booth while correcting the methodological over-reach of the Western Australian Court of Appeal. Lower courts are therefore likely to treat the South Australian observation as having been elevated to binding High Court authority on the substantive point, even if it began life as obiter.
The clarification of the Farah principles has already altered how intermediate appellate courts approach earlier decisions of their sister courts. The judgment draws a bright line between ratio decidendi and obiter dicta of intermediate courts. Later decisions can be expected to cite [9]–[11] of Hill v Zuda for the proposition that, while seriously considered dicta deserve great respect, they do not create the same presumptive barrier as an actual decision of another intermediate appellate court. The Court’s insistence that each intermediate appellate court must construe Commonwealth legislation for itself reinforces the independent responsibility of those courts and reduces the risk of error being perpetuated simply by repetition.
No part of the judgment casts doubt on the continuing authority of the Farah principles themselves; rather it confines their operation to the precise propositions for which Farah stands. Courts will therefore continue to apply the "plainly wrong" test when an earlier intermediate appellate decision (as opposed to passing observation) on uniform national law is challenged, but will treat obiter as persuasive only.
Although Hill v Zuda resolves the central controversy, several narrower questions remain.
First, the precise boundary between "seriously considered dicta" and ratio decidendi in intermediate appellate judgments is not further illuminated. The High Court noted that there "may be some debate" whether the observation in Cantor was ratio or dicta but found it unnecessary to resolve that debate. Future cases will still require careful analysis of the structure of earlier judgments to decide which side of the Farah line they fall.
Second, the interaction between reg 6.17A and the general law of trusts in SMSFs is not exhaustively mapped. While the regulation does not apply, the Court did not discuss whether equitable doctrines (fraud on a power, improper purpose, or the rule in Saunders v Vautier) might still limit a trustee’s ability to give effect to a death benefit nomination that appears arbitrary or capricious. The judgment leaves that for another day.
Third, the Court expressly left untouched the operation of regs 6.21 and 6.22 in SMSFs. Exactly how those payment standards interact with a deed that gives the trustee an ostensibly absolute discretion remains to be worked through in future litigation, especially where a nomination directs payment to a non-dependant.
Finally, the judgment assumes that an SMSF deed can validly contain a binding death benefit nomination clause. It does not explore the outer limits of such clauses—whether they can bind the trustee to pay to a non-dependant, whether they can be amended after a member’s death, or whether they survive a change of trustee. These questions, which arise regularly in estate planning practice, will require separate analysis informed by, but not answered by, Hill v Zuda.
Practitioners should therefore treat the decision as conclusive on the inapplicability of reg 6.17A while recognising that the broader landscape of SMSF death benefit disputes still contains uncharted equitable and drafting territory. The "gotcha" for many advisers is the realisation that years of painstaking compliance with witnessing and renewal requirements in SMSF deeds was, in most cases, legally unnecessary. That realisation can be both liberating and expensive when clients discover they have been paying for formalities the High Court has now declared redundant.
On appeal from the Supreme Court of Western Australia
B W Ashdown for the appellant (instructed by Eastwood Law)
M D Cuerden SC with A P Hershowitz for the respondents (instructed by Lawton Gillon)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.
Superannuation - Self managed superannuation fund - Binding death benefit nomination - Where reg 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth) prescribed standards for, relevantly, regulated superannuation funds for payment of member's superannuation benefits to nominated person on or after member's death - Where trust deed for self managed superannuation fund amended to insert "binding death benefit nomination" clause directing trustee as to payment of member's benefits upon member's death - Where appellant challenged validity of binding death benefit nomination clause on basis it did not comply with requirements of reg 6.17A - Whether reg 6.17A applied to self managed superannuation funds.
Precedent - Intermediate appellate courts - Obiter dicta of intermediate appellate courts - Decision-making principles in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89.
Words and phrases - "binding death benefit nomination", "compelling reason", "intermediate appellate court", "obiter dicta", "plainly wrong", "regulated superannuation fund", "self managed superannuation fund", "seriously considered dicta", "SMSF", "superannuation".
Superannuation Industry (Supervision) Act 1993 (Cth), ss 31(1), 32(1), 34, 55A, 59, 353.
Superannuation Industry (Supervision) Regulations 1994 (Cth), regs 6.17, 6.17A, 6.21, 6.22.
"(1) The governing rules of a regulated superannuation fund must not permit a fund member's benefits to be cashed after the member's death otherwise than in accordance with standards prescribed for the purposes of section 31.
(2) If the governing rules of a fund are inconsistent with subsection (1):
(b) the governing rules are invalid, to the extent of the inconsistency."
"(1) Subject to subsection (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
(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 a 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."
"(1) For subsections 31(1) and 32(1) of the Act, the standard set out in subregulation (4) is applicable to the operation of regulated superannuation funds and approved deposit funds.
(2) For subsection 59(1A) of the Act, the governing rules of a fund may permit a member of the fund to require the trustee to provide any benefits in respect of the member, on or after the death of the member, to the legal personal representative or a dependant of the member if the trustee gives to the member information under subregulation (3).
(3) The trustee must give to the member information that the trustee reasonably believes the member reasonably needs for the purpose of understanding the right of that member to require the trustee to provide the benefits.
(4) Subject to subregulation (4A), ... if the governing rules of a fund permit a member of the fund to require the trustee to provide any benefits in accordance with subregulation (2), the trustee must pay a benefit in respect of the member, on or after the death of the member, to the person or persons mentioned in a notice given to the trustee by the member if:
(a) the person, or each of the persons, mentioned in the notice is the legal personal representative or a dependant of the member; and
(b) the proportion of the benefit that will be paid to that person, or to each of those persons, is certain or readily ascertainable from the notice; and
(c) the notice is in accordance with subregulation (6); and
(b) must be signed, and dated, by the member in the presence of 2 witnesses, being persons:
(ii) neither of whom is a person mentioned in the notice; and
(c) must contain a declaration signed, and dated, by the witnesses stating that the notice was signed by the member in their presence.
(7) Unless sooner revoked by the member, a notice under subregulation (4) ceases to have effect:
(a) at the end of the period of 3 years after the day it was first signed, or last confirmed or amended, by the member; or
(b) if the governing rules of the fund fix a shorter period - at the end of that period."
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151 [134]. ↑
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151-152 [135]. ↑
RJE v Secretary to the Department of Justice (2008) 21 VR 526 at 554 [104]. ↑
Superannuation Industry (Supervision) Regulations (Amendment) 1999 (No 3) (Cth), Explanatory Statement. ↑
Superannuation Legislation Amendment Act 1999 (Cth). ↑
Hill
Zuda Pty Ltd
[2021] WASCA 59
[2020] WASC 89
(2007) 230 CLR 89
(2015) 306 FLR 93
(2008) 21 VR 526
Appeal dismissed with costs.