Bankside barristers Lady Deborah Chambers KC and Josie Beverwijk, with Isaac Hikaka of Mills Lane Chambers, appeared before the Supreme Court on the 13th and 14th June 2023 arguing that an abusive parent was in a fiduciary relationship with his children when he transferred his assets to trust to ensure that his children could never make any claim against those assets either in his life or upon death. Josie Beverwijk provides more background and detail about the case.
Robert had four children, born between 1960-1971. Robert sexually abused his daughter and physically and emotionally abused all of his children throughout their childhoods. This abuse had a profound traumatic impact on all of his children and in particular his daughter. Robert left his wife in 1983 and had little contact with his children in their adult lives.
Knowing full well what he did and the impact it had on his children throughout their lives, Robert then went to his lawyer in 2014 to put his house into a trust to prevent his family from being able to make any claim against that asset upon his death. He later transferred the only other assets of real value, his small share portfolio, into the trust. The beneficiaries of that trust are not his children, but unrelated third parties. It was not until Robert died that his children learnt of his final act of cruelty towards him.
The High Court was satisfied that Robert did owe his adult children fiduciary duties at the time he transferred his assets to his trust and that this transfer was in breach of those duties. The majority of the Court of Appeal did not agree and allowed the respondent’s appeal.
The appellants’ argument in the Supreme Court was that there is an inherent fiduciary relationship between parent and child and that, applying the analysis of the Canadian Supreme Court and in particular the judgment of Justice Wilson in Frame v Smith, this inherent fiduciary relationship never ended, or in the alternative, there was a particular fiduciary relationship arising on the facts of this case.
They say that Robert owed a fiduciary duty to act loyally, and not to put one’s own or others’ interests ahead of the child’s in a manner that abuses the child’s trust (again applying jurisprudence of the Canadian Supreme Court) and that Robert’s actions were clearly in breach of this duty.
The appellants accept that this is a development of the common law and say that this development is appropriate to ensure that equity protects not only commercial relationships but fundamental welfare-based human rights and interests. They say further that this development is consistent with the statements of the Supreme Court in Chirnside v Fay and the underlying principle has been tested and developed by the Supreme Court of Canada.
In light of the Supreme Court’s decision in Ellis v R, the development of the common law also includes tikanga. The appellants’ submission is that this development is consistent with the principles of tikanga.
This case raises questions about what the law of equity protects and who is entitled to that protection. It is the appellants’ submission that equity should not permit the law to be an instrument in the hands of a perpetrator of abuse to continue inflicting harm on those who remained vulnerable to his exercise of powers until his death.
The Court has reserved its decision.
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