Anthony Grant
The Supreme Court has delivered its decision in A B & C v D & E [2024] NZSC 161. This is the much-awaited ruling on the law concerning fiduciary obligations.
A father, ‘Robert’, treated his children “in a most shocking way” and they have “suffered as a result of his abuse on an ongoing basis” [1], the court said.
He “repeatedly raped and sexually abused” his daughter when she was aged between seven and 13 and there was “no dispute that she was emotionally abused by Robert during her childhood and her teenage years.” [9].
Robert physically and emotionally abused his sons until they left home when they were about 16 years old. He also abused his wife appallingly.
Of the gravity of his behaviour, the five judges in the Supreme Court said unanimously: “It is not possible to overstate the adverse impact [the father’s] abuse has had on [his children] both during their childhood and as adults.” [10].
In short, the facts of the case were about as bad as could be conceived.
The result? Nothing.
Reworking the law?
The court says the children should have sued their father when they were young – as if children who grow up in such disadvantaged circumstances would have the money to instruct lawyers and the knowledge and expertise to engage in serious litigation. The judges acknowledge this and say the children did not sue for “understandable reasons” [33].
All five judges say the children suffered a “great wrong” but they have done nothing to restore to Robert’s estate the moneys he deliberately hid from it so his children could not sue him while he was alive or his estate after he was dead.
Why? Because the law of fiduciary obligations would have to be “reworked”, and this would lead to “great uncertainty” [83].
The critical sentence in the decision is this: “The developments the appellants seek in the law would require a reworking of the fundamental concepts of fiduciary relationships, which is disconnected from their doctrinal underpinnings and would be incautious, creating great uncertainty in the law.”
The judges in the Supreme Court can announce major developments about the applicability of a third legal regime in New Zealand – tikanga – which is essentially unknown to the legal profession and the community, but they cannot work out how to modify the law concerning fiduciary obligations that will redress “great wrongs” that “it is not possible to overstate”.
The decision, distilled to its essence, can be summarised in three simple statements:
- the wrongs that were committed were about as terrible as can be imagined and deserve a remedy;
- the existing law does not provide an appropriate remedy; and
- the judges in our highest court are not capable of devising an appropriate remedy.
And it took almost a year and a half for them to reach that conclusion.
Anthony Grant is an Auckland barrister and trustee, specialising in trusts and estates
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