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Beneficiaries, breach of trust, trust, Trusts

Well intended

Grammarist states that “The road to hell is paved with good intentions” means that it is not enough to simply mean to do well, one must take action to do well. A good intention is meaningless unless it is followed by a good action. 

It would be difficult to find a more comparable case as an example proving this observation than Hingston v Hingston. The background is set out at [1] to [4] of Gwynn J’s judgment as follows:

Keith made a number of claims against David including undue influence, unconscionable bargain, breach of fiduciary duty and unjust enrichment.

Keith was in his early 70s when the matters that lead to the proceedings arose. With respect to the claims of undue influence and unconscionable bargain the diffence between these causes of action is set out at [63] as follows:

With respect to undue influence, as set out at [65] and [66]:

Gwyn J found that although Keith was not particularly elderly or suffering from any medical condition affecting his capacity at the relevant time, he was vulnerable. There was an education gap between Keith and David. Keith was not financially astute and was suffering from anxiety. Gwyn J held that Keith placed trust and confidence in David and in believed that he would act in his best interests. Accordingly, Keith was vulnerable to David’s influence. David was not able to rebut the presumption that the transaction was brought about as a result of his influence.

Editor’s note: the transaction, which was intended initially to be a sale of a property subject to a life interest was unnecessarily complicated. Accordingly, the finding of undue influence appears correct to explain the unnecessary variances. Hingston v Hingston serves as a sad reminder that well intended family solutions can become far less than the sum of their parts. Careful legal guidance is essential to ensure a balanced and appropriate record of such arrangements.

Gwyn J found a breach on the part of the trust (through David) of the agreement to occupy. Keith’s other claims failed.

References:

  • Hingston v Hingston [2021] NZHC 3621

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