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Superannuation binding death benefit nomination – mental capacity and unconscionable conduct challenge

Superannuation legislation and many superannuation trust deeds permit a member of a super fund to sign a binding death benefit nomination (BDBN) in favour of their dependents or the legal personal representative of the member’s estate.

A valid BDBN needs to be correctly signed, witnessed by two independent adults and be legally compliant in form.

A valid BDBN in favour of a dependent will operate after the member’s death to direct the superannuation death benefits to the dependent and outside of the deceased’s member’s estate.

The recent case of van Camp v Bellahealth Pty Ltd [2024] NSWSC7 examined a legal challenge to the validity of a BDBN.

Current legal position

Notwithstanding their method of execution (similar to a Will), a BDBN is not a Will and the law relating to Wills does not apply to a BDBN. A BDBN is the exercise of a contractual right by a super fund member. The gift of the superannuation death benefits stems from the lifetime exercise of contractual rights by the member and not from their death. A BDBN is, in effect, succession post-mortem and not testamentary succession.


On 26 July 2020, the day he died from cancer at the age of 57, Dr Harry Nespolon signed a BDBN in relation to his self-managed super fund, the Nespolon Super Fund (Fund). The Fund trustee was Bellahealth Pty Ltd (Bellahealth). Dr Nespolon was the sole member of the Fund and the sole director and secretary of Bellahealth. Dr Nespolon signed his last Will on 23 July 2020. He received advice in relation to his Will and his BDBN.

The BDBN signed by Dr Nespolon directed his superannuation benefits to his de facto partner, Cindy van Camp (Ms van Camp). The superannuation benefits had an estimated value of $4,722,000. The relationship between Dr Nespolon and Ms van Camp commenced in June 2014 and they commenced living together in January 2015. They have two daughters, one born in July 2015 and the other in December 2017. They lived together in Dr Nespolon’s Cremorne property.

The Superannuation Fund trustee was not controlled by Ms van Camp after Dr Nespolon’s death. The trustee did not pay the $4,722,000 to Ms van Camp.

Ms van Camp commenced legal proceedings against the trustee Bellahealth and two of its directors. She sought, amongst other things, a declaration that the BDBN was valid and for an order that Bellahealth pay the Fund benefits to her. The defendants cross-claimed for orders and declarations that the BDBN was effectively invalid.


The hearing focussed on two issues:

  1. Whether Dr Nespolon had capacity to make the BDBN on the day he died?

  2. Whether the BDBN should be set aside because of unconscionable conduct by Ms van Camp.


The evidence was extensive in a Court hearing over four days. There were numerous witnesses of which seven were cross-examined at the hearing. The parties jointly engaged a tax expert in the area of deceased estates who provided an opinion on the tax consequences of the payment of the superannuation benefits to Ms van Camp, Dr Nespolon’s estate or pursuant to Dr Nespolon’s Will. There was also expert evidence from a professor of pharmacology, relied upon by the defendants on the issue of capacity.

There was important evidence that Dr Nespolon described the BDBN as something that would prevent Ms van Camp from “being taxed out of her brains”.


The Court declared that the BDBN signed by Dr Nespolon on the day he died from cancer was valid and binding. The Fund trustee was ordered to pay the $4,722,000 to Ms van Camp within 21 days.

On Dr Nespolon’s capacity to make the BDBN, the Court determined the issue on the basis of accepted case law principles on the nature and degree of the required mental capacity to enter into a lifetime transaction where the transaction has been explained. Interestingly, the Court rejected the submission for the defendants that by analogy the legal tests for determining testamentary capacity should be applied. The BDBN was a short and straightforward document.

On unconscionable conduct by Ms van Camp, the Court also determined the issue on the basis of accepted case law principles. The Court said at [238] that the defendants were required to prove:

“…..Dr Nespolon was at a special disadvantage vis-à-vis Ms van Camp in the sense that the disadvantage adversely affected her ability to make a judgment about the BDBN: that Ms van Camp had actual or constructive knowledge of the existence and effect of Dr Nespolon’s special disadvantage; and that Ms van Camp unconscientiously took advantage of Dr Nespolon’s special disadvantage, with the BDBN being the product of the unconscionable conduct.”

On the basis of the evidence, including the advice Dr Nespolon received about the BDBN, the Court found there was no unconscionable conduct by Ms van Camp.

Lessons and future direction

The correct facts and evidence addressing the legal issues, as aways, are essential in the determination of any legal dispute.

Independent and arm’s length legal and financial advice are important, especially in the cases of advanced age and/or life threatening illness. Medical opinions should always be obtained where capacity may be an issue.

Close family members who may benefit from lifetime transactions that affect post-mortem gifts or who may benefit from a Will should always be at arm’s length from the independent legal and financial advice and from the medical opinion. In the case of Dr Nespolon, this assisted his de facto partner Ms van Camp.

Finally, the legal dispute about Dr Nespolon’s BDBN raises questions about what succession law rules should be made to apply to lifetime transactions that result in succession post-mortem.

Author: Gerard Basha