Separation, superannuation and evidencing the end of a de facto relationship

A recent decision of the Full Court of the Federal Court has highlighted the importance of updating documentation, such as binding death nominations in respect of superannuation entitlements, upon the breakdown of a relationship. In Nguyen v Australian Financial Complaints Authority¹ the Court was required to consider to whom superannuation entitlements should be paid following the death of the superannuation member, Mr Corbisiero. Mr Corbisiero, who died by suicide, had superannuation entitlements of $1,120,000 as at the date of his death. Prior to his death, he had made a binding death nomination in favour of his then de facto partner, Mr Nguyen, directing the trustee of the fund to pay 100% of his entitlement to Mr Nguyen in the event of his death.

On the morning of his death, Mr Corbisiero sent a text message to his sister purporting to be his last will and testament. It stated that he wished to leave all his property and assets to his family. He specifically noted that Mr Nguyen was not to receive anything "for he has put me in the position or stage of my life where I had enough."

The executor of Mr Corbisiero's estate was his mother. She alleged that as at the time of his death the relationship between her son and Mr Nguyen had broken down. Mr Nguyen however asserted that the relationship was an ongoing one. Whether or not the relationship had ended was an essential consideration for the Court given that the death benefit was payable to Mr Corbisiero's "spouse". The Court was therefore required to consider whether or not a text message could be sufficient to terminate a de facto relationship in circumstances where there was no evidence that the deceased had taken any other steps to let Mr Nguyen know, prior to his death, that he considered the relationship to be over.

The Full Court relied upon authorities from the Family Court in finding that a relationship between two people does not terminate merely because one person forms an intention to terminate it. The party who forms the intention must also act on it. This might in some cases involve communicating that intention to the other party; in other cases it might involve some other conduct consistent with the termination. Where the intention is not communicated to the other party there must be some other conduct, such as desertion, refusal to cohabit or refusal to communicate.

In this case the only conduct was the text message sent by the deceased to his sister stating his intention to take his own life. That was not held to be conduct sufficient to terminate the de facto relationship between Mr Nguyen and Mr Corbisiero, and therefore the Court found that Mr Corbisiero had not actually taken steps to end his relationship with Mr Nguyen prior to his death.

As the text message was insufficient in ending the relationship, Mr Nguyen was the deceased's spouse as at the date of his death, the non-lapsing binding nomination in favour of Mr Nguyen was valid, and the payment of the superannuation entitlement to him was reinstated.

The case is an important reminder of the various steps that may need to be taken at the end of a relationship, including the updating of wills and binding death nominations, particularly for those in a de facto relationship. Whilst the end of a marriage is easily identifiable from the date of divorce, proving the termination of a de facto relationship can be more difficult, and yet can have significant legal (and financial) considerations, as this case shows.

¹ [2024] FCAFC 77