Such obligations arise from ongoing relationships of trust and control
The Supreme Court dismissed an appeal by three siblings who claimed their father's abusive conduct created a fiduciary duty obligating him to provide for them into adulthood, ruling that such duties ended when they became adults and could not be retroactively imposed to address past wrongs.
In A v D [2024] NZSC 161, the appellants endured significant abuse during their childhood, including sexual and physical abuse by their father. After leaving home as teenagers, they had no further contact with him. Decades later, the father established the trust, naming his long-term friend’s family as beneficiaries. None of his children were included in the trust or his final will.
The case centred on whether the father breached fiduciary duties when, decades after his children left home, he transferred assets worth approximately $700,000 into a trust to prevent them from making claims under the Family Protection Act. The father’s estate, excluding the trust assets, was worth only $47,000.
The siblings initially succeeded in the High Court, which ruled that their father’s abuse created a fiduciary relationship that extended into adulthood, requiring him to provide for them. The Court of Appeal later overturned this decision, and the Supreme Court upheld the Court of Appeal’s ruling.
The Supreme Court concluded that while the father owed fiduciary duties to his children during their minority, those obligations ended when they became adults. The court emphasized that fiduciary duties are based on relationships requiring ongoing trust and control, which did not persist into adulthood in this case.
The appellants argued that their continued vulnerability, stemming from their father’s abuse, justified an ongoing fiduciary duty. However, the court rejected this argument, stating that fiduciary duties cannot be imposed retroactively to provide a remedy for past wrongs.
The court concluded that the imposition of fiduciary obligations based on peculiar vulnerability alone, untied from a subsisting relationship, is inconsistent with established legal principles.
The appellants’ broader claim, which sought to invalidate the asset transfers as a means of circumventing the Family Protection Act, was not addressed as it was not pleaded in the lower courts. The court suggested that such issues might require legislative intervention.
