Court decides three children are not entitled to father’s assets after his death …

A father’s three children did not receive anything under their father’s Will, so they brought proceedings against the trustees of his Trust (created for the benefit of his friends).

The children did not have a good relationship with their father growing up, and were frequently abused by him, causing mental distress which endured into adulthood. After not being in contact with their father for over 30 years, they were shocked to find out their father had gifted all his assets to a Trust. The children felt as though they should have received some financial compensation for the tough life they had to endure as a result of their father’s actions and abuse.

The children argued that their father owed them a fiduciary obligation to provide for them under his Will. A fiduciary relationship is a relationship of trust and loyalty, where the person holding a degree of power has an obligation to act in accordance with the interests of the beneficiary, who may have less power. The relationship between a parent and child is a fiduciary relationship in nature, as a parent is required to act in accordance with their child’s interests, and a child is vulnerable to their parent’s actions, particularly while still minors.

While the High Court found that the fiduciary relationship between a parent and child continued into adulthood and the father breached this by not providing for his children, the Court of Appeal overturned this.

The Court of Appeal stated that the fiduciary relationship was only present while the children were living with their father, and under his care. The father breached his fiduciary duty at the time when he abused his children. However, once the children left home and chose to cease contact, the father was not under an enduring obligation to deal with his assets in accordance with his children’s interests.

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Shaun Cousins