2 to 1

D and E Limited v A, B and C relates to the appeal of the High Court decision in A v D and E. See Breach of parental fiduciary duties.

Simply put, the Court of Appeal (by a majority decision) allowed an appeal against the ground breaking decision of Gwyn J holding that a parent can owe fiduciary obligations that survive into adulthood and that property transferred in breach of this duty will be required to be accounted for. In a carefully constructed dissent Collins J was of the view that Robert (the father’s pseudonym) owed on-going fiduciary duties to his daughter (who he had sexually abused for a large part of her childhood) after she left home, and that he breached these duties when he transferred his assets to a trust.

The majority of the Court of Appeal, who allowed the appeal, acknowledged the “incalculable and ongoing harm” [Robert] caused to his daughter by sexually abusing her when she was a child.

Nevertheless the majority of the Court of Appeal found that equity could not supply the remedy sought, which was to allow a reversal of assets that were transferred to a trust to defeat any claim Robert’s children had against his estate.

Kós P (as he then was) was of the opinion that any duty owed by the father ended when he ceased to care for his children. Meaning that once the children escaped their abuser, his responsibility ended.

It is useful at this juncture to consider the place of equity in law.

The Court of Chancery was a court of equity in England and Wales that established rules intended to avoidpossible harshness (or “inequity”) of the common law. The Chancery had jurisdiction over all matters of equity, including trusts.

Editor’s note. It is often said, hard cases make for bad law. That said, if equity cannot aid the respondents in such a case, is it time to ask if not now, when? In Donoghue v Stevenson (the snail in the bottle case) Lord Atkin famously asked “Who, then, in law, is my neighbour?” This was a question for the law of tort.

However, if equity cannot ask “Who, then, in the name of equity, are the vulnerable who must be protected?” who can?

The writer is a director of Vicki Ammundsen Trust Law Limited, who acted for the respondents.

References:

• A v D and E Limited as Trustees of the Z Trust [2021] NZHC 2997
• Louie v Lastman [2002] O.J. No. 3521
• A v D [2019] NZHC 992
• M (K) v M (H) [1992] 3 SCR 6
• D and E Limited v A, B and C [2022] NZCA 430
• Donoghue v Stevenson[1932] UKHL 100