D AND E LTD v A, B AND C [2022] NZCA 430

D AND E LTD v A, B AND C [2022] NZCA 430 [14 September 2022]ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES ORIDENTIFYING PARTICULARS OF ANY PERSONS OR ENTITIESCONNECTED TO THIS PROCEEDING.NOTE: HIGH COURT ORDER PROHIBITING PUBLICATION OF NAMES,ADDRESSES OR IDENTIFYING PARTICULARS OF APPELLANTS ANDRESPONDENTS REMAINS IN FORCE.IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA701/2021[2022] NZCA 430BETWEEN D AND E LIMITED AS TRUSTEES OFTHE Z TRUSTAppellantsAND A, B AND CRespondentsHearing: 15 March 2022Court: Kós P, Gilbert and Collins JJCounsel: M J Wenley for AppellantsM I S Phillipps for RespondentsJudgment: 14 September 2022 at 9.30 amJUDGMENT OF THE COURTA The appeal is allowed.B The respondents must pay the appellants costs for a standard appeal on aband A basis and usual disbursements.C The order for costs made in the High Court is quashed.D We make an order prohibiting publication of the names, addresses oridentifying particulars of any persons or entities connected to thisproceeding.____________________________________________________________________REASONSCollins J (dissenting) [1]Gilbert J [120]Kós P [152]COLLINS JTable of ContentsIntroduction [1]Background [7]Alice [10]Barry [23]Cliff [32]Rose [39]Phillipa [43]Estate planning [45]Litigation [53]High Court judgment [57]Options available in relation to civil proceedings [59]Criminal proceedings [63]Legal principles relevant to this appeal [64]Fiduciary duties [65]Fiduciary duties in a family context [73]Parents and adult children [79]Analysis [84]The nature of Robert's powers and responsibilitiesat the time he gifted his principal assets to the Trust [85]Whether Alice, Barry and Cliff were entitled to reposeand did repose trust and confidence in Robert to protecttheir interests when he gifted his principal assets to the Trust [87]Whether Robert was required to protect the interests of Alice,Barry and Cliff when he gifted his principal assets to the Trust [99]Remedy [105]Introduction[1] This appeal arises from a judgment in which the High Court granted a claimby the respondents against the trustees of a trust (the Trust) that the respondents' latefather settled.1 At the heart of the dispute is whether the respondents' father owedthem fiduciary duties not to transfer the bulk of his assets to the Trust.[2] In the High Court, the respondents successfully argued that:(a) Their father abused them egregiously when they were children, therebybreaching fiduciary duties he owed them at the time.(b) The abuse had an enduring adverse impact on the children when theybecame adults.(c) The father committed a further breach of fiduciary duty when,approximately 30 years after his children ceased to have contact withhim, he established the Trust for the benefit of another family and giftedhis principal assets to the Trust, thereby depriving the children of anymeaningful claim against their father's estate.(d) The trustees received the father's principal assets knowing that thetransfers breached the father's fiduciary duties to his children.(e) The trustees were deemed to hold the father's principal assets asconstructive trustees for the benefit of the father's estate, therebyexposing those assets to a related claim that the children have broughtagainst the father's estate under the Family Protection Act 1955.[3] The following key facts are now beyond dispute:(a) The father repeatedly raped and sexually abused his daughter when shewas between seven and 13 years of age. He also emotionally abusedhis daughter during her childhood and teenage years.(b) The father physically and emotionally abused his sons up until they lefthome when they were approximately 16 years of age.1 A v D [2021] NZHC 2997 [High Court judgment].(c) The father had virtually no contact with his children after they lefthome.(d) The children elected not to lay complaints with the police or commencecivil proceedings against their father.(e) Approximately 30 years after the children ceased to have contact withtheir father, the father gifted to the Trust his home and some sharesworth approximately $700,000 in total. The beneficiaries of that Trustare the children and grandchildren of a friend of the father.(f) The children were not named as beneficiaries in the father's will.(g) The father's remaining estate is worth approximately $47,000.(h) The children's claim under the Family Protection Act will be renderedmeaningless unless the property gifted to the Trust reverts back to thefather's estate.[4] In their appeal, the trustees now accept that the father owed fiduciary duties tohis children not to abuse them when they were children. The submissions before usfocused upon the following questions:(a) Did the father owe fiduciary duties to his adult children at the time hegifted his principal assets to the Trust?(b) If so, what were the nature and scope of those duties?(c) Did the father breach any fiduciary duties he owed his adult childrenwhen he gifted his principal assets to the Trust?(d) Did the High Court err when it decided the trustees held the father'sprincipal assets as constructive trustees on behalf of the father's estate?[5] In the High Court the names of the parties and the beneficiaries of the Trustwere anonymised. I can understand why the daughter should have the benefit of namesuppression. As I shall explain, she has endured significant psychological trauma asa result of the abuse she suffered as a child. Identifying her in this judgment is likelyto exacerbate her already fragile health. The High Court suppressed the names ofthe appellants and respondents in order to protect the identity of the daughter. I willcontinue to suppress the names of the parties and the beneficiaries of the Trust as wellas other persons and entities connected to the proceedings in order to protect theinterests of the daughter.[6] Rather than use alphabet letters when referring to those involved in thisproceeding, I shall use the following fictitious names. I place in parentheses the lettersthat were used to refer to the same people in the High Court judgment:Robert (Z) — the father;Rose (J) — Robert's former wife and mother of the respondents;Greg (G) — the eldest son of Robert and Rose;Alice (A) — the daughter of Robert and Rose;Barry (B) — the second son of Robert and Rose;Cliff (C) — the third son of Robert and Rose;Phillipa (Y) — a long-term friend of Robert and the mother of the principalbeneficiaries of the Trust established by Robert;Louise (L), Sally (S) and Mark (M) — the children of Phillipa and the principalbeneficiaries of the Trust;Don (D) — the husband of Louise and a trustee of the Trust; andKaren (K) — the child of Don and Louise and final beneficiary of the Trust.Background[7] Robert and Rose married in December 1958. They subsequently had fourchildren, namely Greg, born in 1960; Alice, born in 1961; Barry, born in 1963; andCliff, who was born in 1971. Greg died in 2015. His estate is not involved in thislitigation.[8] Robert and Rose separated in 1981, and although they made an attempt atreconciliation, their marriage ended in 1983. At about the time Robert and Rose'smarriage came to an end, Robert commenced a relationship with Phillipa, a widowwho had three children, namely Louise, Sally and Mark. Robert and Phillipa remainedclose friends until he succumbed to cancer in 2016.[9] During the period of the marriage Robert frequently abused Rose and theirchildren. Although Rose was made aware of the abuse that Robert inflicted on hischildren, they decided not to ask their mother to give evidence because of her age andpoor health.Alice[10] In the High Court, Gwyn J accepted that Robert had started to rape Alice whenshe was seven years old and that the sexual abuse continued until she was 13 years old,when she and her family moved to a house in which there was a lock on the bedroomdoor that prevented Robert from entering her room at night.2[11] By the time she was nine years old, Alice was frequently soiling herself andshe suffered urinary tract infections. By the time she was 11, Alice's self-esteem wasso low that she made attempts to end her own life.[12] In 1979, when she was about 18 years old, Alice left home to undertake tertiaryeducation. Even after she ceased living in the same house as her father, Alicecontinued to suffer emotionally and physically from the adverse influences of Robert.Alice explained that during this period she was bulimic and suffered depression.2 High Court judgment, above n 1, at [91].[13] After she completed tertiary training, Alice found it very difficult to maintainsteady employment and relationships. She attributed her challenges, including herprofound depression, suicidal thoughts and lack of self-esteem, to the abuse she hadsuffered from her father. Alice explained that she was never able to properly settleand "lived a transient lifestyle". She sought counselling for the first time in late 1985but was unable to achieve much progress. She moved overseas before returning toNew Zealand in 1987. On her return, Alice continued to live an impoverished andnomadic life.[14] In 1990, Alice sought assistance from the ACC Sensitive Claim Unit, whichaccepted her claim that she had been sexually abused by Robert, thereby enabling herto obtain financial and counselling support from ACC. It was at about this time Aliceconfided in her three brothers that their father had sexually abused her. Alice also toldher mother about the sexual abuse that she had endured. Rose wrote a letter to Robertin early 1992 saying that what he had done to their daughter was unforgiveable.Robert's response to Rose was a letter from a lawyer, saying that the allegations werefalse and defamatory, and that if the statements were repeated legal action would betaken. Alice also wrote to her father in 1992, reminding him of the abuse she hadsuffered. She received no response.[15] Between late 1992 and 1994, Alice and her brothers resolved not to initiatecriminal or civil proceedings against Robert. Instead, Alice explained "[w]e all agreedthat we would continue to have no contact with him, and we didn't".[16] In 1996, Alice gave birth to a child. She relied on the domestic purposesbenefit from 1996 to 2013, supplemented with income from childcare arrangements,part-time teaching and cleaning jobs. Towards the later stage of this period, Alice wasable to attend university. She obtained a bachelor's degree in 2014.[17] Alice explained in her evidence in the High Court that Robert knew about thebirth of her son and her very difficult circumstances. She said "family members sharedwith [Robert] news of [her] struggles" and that Robert knew Alice needed financialand emotional support. Alice's belief was reaffirmed when she became aware of thedetails of the seven wills executed by Robert between 2001 and 2015. As I explain at[45]–[47], apart from one exception, Alice was a beneficiary under those wills.[18] Alice has continued to suffer depression and stress, which she traces to theabuse and mistreatment inflicted on her by Robert. She continued to have no contactwith her father, although family members told him that his daughter and grandchildwere struggling financially.[19] When Alice learned in early 2016 that her father was dying, she wrote him aletter but she did not visit her father before he died.[20] When Alice discovered her father had deliberately structured his affairs so asto ensure that she and her siblings would not inherit anything from his estate or benefitfrom his Trust, her depression intensified. She was again granted cover by ACC toassist with her post-traumatic stress disorder (PTSD) and depression.[21] Alice left New Zealand in 2017 to try to work overseas. She returned to thiscountry in 2020.[22] After she returned to New Zealand, Alice has struggled to find accommodation.She has been "house-sitting" and staying with friends. Occasionally, she has beenforced to live in her car. She has had no fixed abode or permanent work. In herevidence, Alice said she continues to live in poverty and that she suffers from poorhealth associated with PTSD.Barry[23] In his evidence, Barry explained that his childhood revolved around the abuseperpetrated by his father. He said his father used to beat him "repeatedly andsadistically with the buckle end of a belt for even the most minor things". Barrydeveloped a tremor for which he was referred for medical care when he was about 11or 12.[24] Barry told the High Court that Robert would become most abusive after he hadbeen drinking and that he enjoyed humiliating Barry in front of other people. Barryleft home in 1980 after a physical fight with his father in which, for the first time,Barry defended himself by punching his father in the face. Robert told Barry to leavethe house, which he did. Barry never saw his father again.[25] Barry did not perform well at school. He started working when he was 16, andwhen he was 17, Barry became involved in a dispute with gang members whichresulted in him being stabbed and admitted to hospital with life threatening injuries.While his mother visited him, Robert never came to see his son in hospital.[26] Later in 1981, Barry went to Australia with his girlfriend. He got low-levelemployment. When Barry's girlfriend gave birth to their child, he "abandoned" them.[27] Barry moved to the United Kingdom in November 1985. There, he settleddown with the woman to whom he is now married. Together they established a family.[28] When he was 33, Barry started to work in England for a small company. He isnow the managing director of that company and has a steady income. Barry and hiswife also own a house in New Zealand and have a share in another property in whichRose lives rent-free.[29] Although Barry has enjoyed success in later life, he believes that the abuse andtorment he suffered when growing up resulted in him having a poor education and thathe never developed proper self-confidence or self-belief. He said that Robert wasinstrumental in causing him to waste his teenage years and to nearly lose his life as aresult of the gang stabbing. Barry also said that Robert's complete lack of moral andfinancial guidance played a role in him abandoning his girlfriend and their child inAustralia.[30] Barry confirmed that Alice told him and Cliff about the sexual abuse she hadsuffered at Robert's hands and that he agreed with her decision not to initiate courtproceedings against Robert.[31] Barry explained that he is aware of the effect of Robert's mistreatment on hissiblings and himself:The abuse [Alice] endured ruined her life. Despite being a beautiful youngwoman, she was unable to sustain any real relationships or maintain a career. [Alice] has neither house nor savings. She has many health problems.Cliff[32] Cliff, the youngest of Robert and Rose's children, suffered from and witnessedRobert's violence. Cliff was particularly disturbed by the way he saw Robert mistreatRose.[33] Cliff left home at 15 and effectively had no contact with his father from thenonwards.[34] Cliff lived for a period in Australia and in the United Kingdom from around1992 to 2011.[35] Cliff resorted to illicit drugs. While he was in the United Kingdom, Cliff's"drug use developed into a severe and prolonged drug addiction, resulting in a numberof near-death experiences from complications relating to [his extreme] drug use".Cliff attributed his abuse of drugs to the torment inflicted on him by Robert when hewas living at home.[36] Cliff returned to New Zealand in 2011 and endeavoured to sort his life out.He found employment and was able to purchase a modest home.[37] Cliff has continued to suffer serious depression and struggled to maintainmeaningful relationships, which he also attributes to the violence and emotionaltorment inflicted upon him by Robert.[38] When explaining his motives for commencing the proceeding, Cliff said thatRobert was aware of his obligations to his children and the effect his behaviour andmistreatment had on them. Cliff always expected that Robert would do somethingabout his appalling behaviour and make provision for his own children, particularlyAlice, "who[m] he treated horrifically". Cliff said that he has been: especially sad to see the impact [Robert's] mistreatment of us has had on[Alice]. The abuse has had a massive effect on her ability to formrelationships. The abuse we all suffered was bad enough, but [Alice's] wasfar, far worse. She has struggled in life with many ongoing health issues,some of which are attributable to the abuse she suffered.Rose[39] Although Rose was not a witness in the proceeding, the experiences that sheendured had an impact upon her children.[40] Alice detailed in her evidence how Robert physically abused and emotionallytormented Rose. The abuse of Rose would normally occur after Robert had returnedhome drunk. Alice said she saw Robert hitting Rose and that he threatened to shoothis wife and children. On one occasion, towards the end of their marriage, Robert"tried to pull [Rose's] finger nails out, and he gave her tablets which led to an overdosethen refused to take her to the hospital".[41] In her evidence, Alice said that, following his separation from Rose, Robert"sometimes stood outside and pointed his guns at the house knowing that [Rose],[Cliff] and [Alice] were inside. He would make threatening phone calls during thenight".[42] Barry and Cliff also described in their evidence how they witnessed their fatherinflicting physical and emotional abuse on their mother.Phillipa[43] Phillipa gave evidence in the High Court. She described the close bonds offriendship that developed between Robert and her daughter Louise, and Don, who isthe husband of Louise. Phillipa explained how Robert and her started theirrelationship in 1981 and that Robert lived with her for three years before he movedinto another home by himself. They remained close friends until Robert passed away.[44] Phillipa's three children lived in the same home as Robert and Phillipa from1981 till 1984. Phillipa said that although she was aware Robert was estranged fromhis children, she only became aware of Alice's allegations of sexual abuse after Robertdied. Phillipa said that Robert had tried to reconnect with his children, but his effortswere rebuffed. Phillipa also said that Robert was a caring friend and that she neverhad any concerns about Robert's association with her own children and hergrandchildren.Estate planning[45] Robert instructed his lawyers to prepare seven wills that were executedbetween 21 December 2001 and 21 December 2015. In the first of those wills, Robertbequeathed $25,000 to each of his children. He also made specific provisions forAlice, who was to have the option to live in Robert's home for the balance of her life.The trustees were also given the discretion to pay any of Alice's debts. This wasapproximately nine years after the issue of the sexual abuse of Alice had been raisedby Rose and Alice, and denied by Robert.[46] A change was made in the second will (executed on 12 September 2003) inwhich Robert provided that Alice's son was to receive Robert's home subject to a lifeinterest to a third party. Alice and her siblings were not included in Robert's third will(executed on 11 October 2004) but their children were named as beneficiaries.[47] Alice and her three brothers were included in wills that Robert executed on23 June 2009, 10 August 2010 and 21 June 2012.[48] On 22 October 2014, Robert instructed his lawyer that he wished to set upthe Trust. Two reasons were given by Robert for this decision, namely, to protect hisassets in the event he became ill and to "prevent any of his family [from] chasing" hisassets.[49] The Trust was settled on 22 December 2014. Robert was appointed as a trusteeas was Don. A trustee company was appointed an additional trustee on27 January 2016.[50] The beneficiaries of the Trust included Robert, Louise, Sally and Mark. As Ihave already explained, the latter three beneficiaries are the adult children of Phillipa.Also named as a beneficiary is Karen, the daughter of Don and Louise (Phillipa'seldest daughter). Any children or grandchildren of Louise, Sally, Mark and Karen aresecondary beneficiaries. If Karen is still alive when the Trust expires, then she is tobe the final beneficiary. If, however, Karen dies before the Trust concludes then anyof her children will be the final beneficiaries.[51] Robert gifted his home to the Trust on 22 December 2014. Robert also giftedsome shares to the Trust on 27 January 2016. It is accepted that at the time ofthe High Court hearing the assets transferred to the Trust were worth about $700,000.[52] After he established the Trust, Robert executed his final will. Alice and herbrothers were not named as beneficiaries under that will. Robert instructed hisexecutors, who included Don, to distribute Robert's furniture, books and photographsat their discretion with the residue of Robert's estate going to Phillipa's three adultchildren. Robert also instructed that a rocking horse, that was previously to bebequeathed to Alice's son, was to go to Karen. The estate was worth approximately$47,000 at the time Robert passed away.Litigation[53] In December 2016, Alice and her siblings commenced proceedings underthe Family Protection Act against the executors of Robert's estate. Those proceedingshave been placed in abeyance pending the determination of the current proceeding inwhich Alice and her brothers are endeavouring to unwind the gifting by Robert ofhis home and shares to the Trust.[54] The essence of the claim which is the focus of this appeal is that Robert owedAlice and her brothers fiduciary duties, which he breached when he gifted his homeand shares to the Trust in order to prevent his children from making any claim to thoseassets under the Family Protection Act.[55] It is argued by Alice and her brothers that, as Robert was a trustee of the Trust,his breaches of fiduciary duty are visited upon the remaining trustees. The pleadingsallege that the breaches of fiduciary duty by Robert vitiated the express trust and thatthe trustees hold the gifted assets as constructive trustees for the executors ofRobert's estate.[56] The claims were initially brought against the trustees as first defendants andRobert's former solicitors as second defendants. The claims against the formersolicitors were struck out in a summary judgment delivered byAssociate Judge Johnston.3 The trustees also endeavoured to obtain summaryjudgment in their strike-out application. The Associate Judge held, however, thatalthough the fiduciary duty asserted by the children was novel, it did not mean thatsuch a duty would never be recognised. In the context of a summary judgmentapplication, the trustees were unable to satisfy the Court that the claim by Alice andher brothers was bound to fail.4 The trustees' application for leave to appeal fromthe Associate Judge's decision was declined by this Court.5High Court judgment[57] After assessing Alice, Barry and Cliff when they gave their evidence, Gwyn Jconcluded they had honestly and accurately recalled the abuses that Robert hadinflicted upon each of them. The Judge was satisfied that Robert had behavedegregiously when assaulting and tormenting his children and that Alice had sufferedterribly from the sexual abuse that she had endured between the ages of seven and 13.6[58] When considering the claim for breach of fiduciary duty, Gwyn J adopted thefollowing analysis:(a) Robert's relationship with his children was "inherently fiduciary" whenthey were in his care.7(b) The abuse that Robert inflicted on each of his children was a breach ofthe fiduciary duty he owed them.8(c) Once Alice, Barry and Cliff became adults Robert ceased to have an"inherently fiduciary" relationship with them.93 A v D [2019] NZHC 992, [2019] NZFLR 105.4 At [40].5 D v A [2019] NZCA 585.6 High Court judgment, above n 1, at [91]–[92].7 At [107].8 At [113].9 At [133].(d) Nevertheless, the relationship between Robert and his children carriedparticular fiduciary obligations at the time he transferred most of hisassets to the Trust.10(e) Robert breached the fiduciary obligations he owed each of his childrenwhen he transferred his house and shares to the Trust.11(f) The trustees are liable for knowingly receiving the property gifted byRobert because his knowledge is imputed to the Trust.12(g) The assets held by the Trust are held on a constructive trust for the estateof Robert.13Gwyn J said:14 at the time he gifted the property [to the Trust], [Robert] owed each of the[children] a duty to recognise them as members of his family and to providefor them from his wealth, due to the vulnerability his earlier breach offiduciary duties had caused them.The evidence showed that at least one of [Robert's] reasons for transferringthe property to the Trust was to prevent the [children] receiving his assets. Itwas a deliberate step to ensure that his estate would not be available to meetthe [children's] needs. I find the transfer was in breach of the fiduciary dutiesI have found [Robert] owed to the [children].Options available in relation to civil proceedings[59] When the Accident Compensation Act 1972 came into force on 1 April 1974,civil claims for compensatory damages arising out of personal injury were abolishedin New Zealand in exchange for injured persons receiving cover from the accidentcompensation regime.15 Similar provisions were enacted in the four subsequentiterations of the legislation governing accident compensation in New Zealand.1610 At [163]–[164].11 At [174].12 At [182].13 At [182].14 At [173]–[174].15 Accident Compensation Act 1972, s 5(1).16 Accident Compensation Act 1982, s 27(1); Accident Rehabilitation and Compensation InsuranceAct 1992, s 14(1); Accident Insurance Act 1998, s 394(1); and Accident Compensation Act 2001,s 317(1).Physical injuries arising from assaults have always been covered by the accidentcompensation scheme.[60] In 1982, this Court confirmed that the bar in the accident compensationlegislation to civil claims for personal injury did not prevent a plaintiff from suing forexemplary damages where they were the victim of an assault.17 The same principlewas subsequently held to apply for an exemplary damages claim based upon breachof fiduciary duty that gave rise to physical and emotional harm in a doctor/patientrelationship in which a doctor conducted medical research on patients without theirconsent.18 The ability of plaintiffs to sue for exemplary damages arising from physicaland mental injuries was affirmed by the Supreme Court in Couch v Attorney-General(No 2).19[61] Thus, had they wished to do so, each of the children could have sued Robert intort for the assaults they suffered and, in the case of Alice, for the sexual abuse sheendured. Such a claim could have been for both compensatory and exemplarydamages for injuries suffered before 1 April 1974. Any civil claim for assaultsinflicted after 1 April 1974 would need to have been confined to a claim forexemplary damages. As I demonstrate at [73]–[78], it is also possible Alice could havebased a claim upon breach of fiduciary duty in relation to the sexual assaults shesuffered. Any such claim would have been for compensatory and exemplary damagesfor events before 1 April 1974.[62] There are two qualifications to my summary of the options for civilproceedings to have been brought by the children against their father:(a) First, any proceedings would have had to comply with the time limitsset out in the Limitation Act 1950.(b) Second, had criminal proceedings been initiated against Robert then,prior to the passing of the Accident Insurance Act 1998, it would nothave been possible for exemplary damages to have been sought from17 Donselaar v Donselaar [1982] 1 NZLR 97 (CA).18 Green v Matheson [1989] 3 NZLR 564 (CA).19 Couch v Attorney-General (No 2) [2010] NZSC 27, [2010] 3 NZLR 149.him in relation to conduct that formed the basis of any criminalprosecution.20Criminal proceedings[63] Robert's children could have complained to the police at any time before hedied. I can understand, however, why they preferred not to take this very public courseof action at that time. In particular, it would have been very difficult for Alice to haveconfronted the man who abused her in such an appalling manner.Legal principles relevant to this appeal[64] I will now consider the legal principles relevant to the present appeal. I willbegin by providing an overview of fiduciary duties, before considering fiduciary dutiesin the family context and between parents and adult children.Fiduciary duties[65] The word "fiduciary" is said to have the following origins:21[It] derives from the Latin word "fiducia" the primary meaning of which istrust. Important secondary meanings are confidence and reliance.[66] The authors of Snell's Equity record:22The categories of fiduciary relationship are not closed. Fiduciary duties maybe owed despite the fact that the relationship does not fall within one of thesettled categories of fiduciary relationships, provided the circumstancesjustify the imposition of such duties. Identifying the kind of circumstancesthat justify the imposition of fiduciary duties is difficult because the courtshave consistently declined to provide a definition, or even a uniformdescription, of a fiduciary relationship, preferring to preserve flexibility in theconcept.20 Accident Insurance Act 1998, s 396, now Accident Compensation Act 2001, s 319. See Danielsv Thompson [1998] 3 NZLR 22 (CA) at 50; and W v W [1999] 2 NZLR 1 (PC).21 Estate Realties Ltd v Wignall [1991] 3 NZLR 482 (HC) at 492 per Tipping J.22 John McGhee and Steven Elliott Snell's Equity (34th ed, Sweet & Maxwell, London, 2020) at [7-005] (footnotes omitted).[67] In Dold v Murphy,23 this Court analysed three decisions of the Supreme Courtconcerning the nature and scope of fiduciary duties.24 Those cases concerned fiduciaryrelationships in a commercial context. Not all the principles that emerge from thosecases are able to be grafted onto other situations in which a fiduciary relationship mayexist, such as between a doctor and patient and where the fiduciary does not benefitfinancially or economically at the expense of the person to whom fiduciary duties areowed.25 Nevertheless, the three cases decided by the Supreme Court concerning thenature of fiduciary duties in a commercial context provide a starting point to examinethe law concerning fiduciary relationships and duties as it has evolved hitherto inNew Zealand. We shall refer to three observations about those cases that were notedby this Court in Dold v Murphy.[68] First, "fiduciary duties are assumed responsibilities. Fiduciary responsibilitymay be inferred where the relationship is one of assumed trust, confidence andloyalty".26[69] Second, in Chirnside v Fay, Tipping J explained that a relationship may giverise to fiduciary duties in two situations:27(a) where there is an inherently fiduciary relationship between the parties;or(b) when particular aspects of a relationship that is not inherently fiduciarynonetheless justify it being classified as such.23 Dold v Murphy [2020] NZCA 313, [2021] 2 NZLR 834 at [51]–[59].24 Chirnside v Fay [2006] NZSC 68, [2007] 1 NZLR 433; Paper Reclaim Ltd v AotearoaInternational Ltd [2007] NZSC 26, [2007] 3 NZLR 169; and Amaltal Corp Ltd v Maruha Corp[2007] NZSC 40, [2007] 3 NZLR 192.25 Right 2 in the Code of Health and Disability Services Consumers' Rights proscribes "exploitation"of a patient by a health care provider. Exploitation is defined to include "breach of a fiduciaryduty" by a health care provider. See Health and Disability Commissioner (Code of Health andDisability Services Consumers' Rights) Regulations 1996. See also Duncan v MedicalPractitioners Disciplinary Committee [1986] 1 NZLR 513 (CA) (disclosure of patientinformation); L v Robinson [2000] 3 NZLR 499 (HC) (sexual misconduct with a patient);Norberg v Wynrib [1992] 2 SCR 226 (sexual abuse of a patient by a doctor); and Peter Skegg andRon Paterson (eds) Health Law in New Zealand (Thomson Reuters, Wellington, 2015) at[6.2.6(2)].26 Dold v Murphy, above n 23, at [52].27 Chirnside v Fay, above n 24, at [73] and [75].[70] Tipping J observed:28No single formula or test has received universal acceptance in decidingwhether a relationship outside the recognised categories is such that the partiesowe each other obligations of a fiduciary kind.But that:29[A]ll fiduciary relationships, whether inherent or particular, are marked by theentitlement of one party to place trust and confidence in the other. Thatparty is entitled to rely on the other party not to act in a way which is contraryto the first party's interests.[71] The same point was expressed in a slightly different way by Blanchard J inPaper Reclaim Ltd v Aotearoa International Ltd:30A fiduciary relationship will be found when one party is entitled to repose anddoes repose trust and confidence in the other. The existence of an agreement,express or implied, to act on behalf of another and thus to put the interests ofthe other before one's own is a frequent manifestation of a situation in whichfiduciary obligations are owed. Partners are the classic example of parties inthat situation. Their position is different from that of parties to a contract whomay have to cooperate but are doing so for their separate advantages.[72] Third, in summary:31Some relationships are inherently fiduciary in nature, involving trust,confidence and a degree of dependence, such as solicitor and client and trusteeand beneficiary. In other cases a fiduciary relationship is only likely to beinferred when the legal relationship between parties involves: (1) the conferralof powers in favour of the alleged fiduciary, which may be used to affect theproprietary rights of the beneficiary; (2) the apparent assumption of arepresentative or protective responsibility by the alleged fiduciary for thebeneficiary (for example, to promote the beneficiary's interests, or to preferthe interests of the beneficiary over those of third parties); and (3) the impliedsubordination (although, not necessarily, elimination) of the allegedfiduciary's own self-interest.Fiduciary duties in a family context[73] The relationship between a parent and child has, in New Zealand and Canada,been recognised as having the hallmarks of a fiduciary relationship.3228 At [75].29 At [80].30 Paper Reclaim Ltd v Aotearoa International Ltd, above n 24, at [31] (footnote omitted).31 Dold v Murphy, above n 23, at [55].32 See Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington,2009) at [17.3.13].[74] Those hallmarks include the actual or implied responsibility of a parent not toact in a way that is contrary to the child's interests and, conversely, the actual orimplied trust and confidence that a child has in a parent to not act contrary to the child'sinterests. These hallmarks mirror the statements of Tipping J in Chirnside v Fay,which I have cited at [70].[75] It has also been accepted in Canada that an action for breach of fiduciary dutycan arise in circumstances where a parent abuses their child. In M (K) v M (H),33 anadult daughter sued her father for sexual abuse he inflicted on her when she was achild. The plaintiff's claims for assault and breaches of fiduciary duty were upheld bythe Supreme Court. Writing the principal judgment for the Court, La Forest J said:34It is intuitively apparent that the relationship between parent and child isfiduciary in nature, and that the sexual assault of one's child is a grievousbreach of the obligations arising from that relationship. Indeed, I can think offew cases that are clearer than this. For obvious reasons society has imposedupon parents the obligation to care for, protect and rear their children. The actof incest is a heinous violation of that obligation. Equity has imposedfiduciary obligations on parents in contexts other than incest, and I see nobarrier to the extension of a father's fiduciary obligation to include a duty torefrain from incestuous assaults on his daughter.[76] It has been explained that, in Canada, the fiduciary relationship between aparent and child arises from the vulnerability of the child and the power and authorityof the parent.35 Accordingly, when identifying fiduciary duties in a family context,Canadian courts have adopted an approach that is wider than that followed inNew Zealand in relation to fiduciary duties in a commercial context. For example, inFrame v Smith, Wilson J said that fiduciary duties generally arose where:36(1) The fiduciary has scope for the exercise of some discretion or power.(2) The fiduciary can unilaterally exercise that power or discretion so asto affect the beneficiary's legal or practical interests.(3) The beneficiary is peculiarly vulnerable to or at the mercy of thefiduciary holding the discretion or power.33 M (K) v M (H) [1992] 3 SCR 6.34 At 61–62. See also DM v RL 2014 BCSC 1061, [2014] BCJ 1186, where this fiduciary duty wasextended to a mother for failing to protect her daughter from a step-father's sexual abuse.35 Brooks v British Columbia 2000 BCSC 735, [2000] BCJ 909 at [108]–[109].36 Frame v Smith [1987] 2 SCR 99 at 136.Although Wilson J was in the minority in that case, her observations about the scopeof fiduciary duties in Canada were adopted with approval by La Forest J when hewrote the leading judgment for the Supreme Court in M (K) v M (H).37[77] There is no prior authority in New Zealand concerning the scope of a fiduciaryrelationship between a parent and child. The same principles identified bythe Supreme Court of Canada in M (K) v M (H) were, however, applied by theHigh Court in B v R, the case of an uncle sued for breaching the fiduciary duties heowed his niece when he sexually abused her when she was a child.38 The niecefrequently stayed at her uncle's home while her mother was at work, and she was inher uncle's care and control when the abuse occurred. It was not disputed in that casethat B's uncle owed her a fiduciary duty "not to take advantage of her and exploit herfor his own gratification".39 That case was distinguished by this Court in Jay v Jay,where the relationship between niece and abusing uncle was far more intermittent anddid not give rise to a fiduciary duty.40[78] As we have noted, Gwyn J held Robert's relationship with each of his children,while they were living in his home, was inherently fiduciary and that "[Robert's]proven sexual abuse of [Alice] and his proven physical abuse of [Barry] and [Cliff]was a breach of the fiduciary duty he owed to each of them as children".41 Mr Wenley,counsel for the appellants, has not challenged those aspects of Gwyn J's reasoning.Parents and adult children[79] Mr Wenley submitted that once a child becomes an adult, then the relationshipbetween the parent and the child ceases to be inherently fiduciary. Gwyn J acceptedthat proposition. It is my view, however, that in some circumstances, the inherentlyfiduciary relationship between a parent and a child may continue after a child becomesan adult. For example, it could not be disputed that a severely disabled child who isdependent upon their parents for care and support as a child may continue to be thebeneficiary of an inherently fiduciary relationship after the child becomes an adult.37 M (K) v M (H), above n 33, at 63.38 B v R (1996) 10 PRNZ 73 (HC).39 At 75.40 Jay v Jay [2014] NZCA 445, [2015] NZAR 861 at [67].41 High Court judgment, above n 1, at [113].Such cases are best thought of as instances of a continuous relationship that isinherently fiduciary.[80] Two cases have indirectly touched upon the central issue in this appeal, namelywhether a parent can owe a fiduciary duty to an adult child to provide for the economicinterests of the adult child.[81] In Rule v Simpson, the High Court declined to strike out a claim by an adultillegitimate child of the deceased when the latter settled his assets in a trust for thebenefit of persons other than the plaintiff.42 The High Court said that it was notprepared to strike out the claim without hearing the evidence.43 As this was only astrike-out application and did not involve any positive finding of a fiduciaryrelationship, it provides little meaningful guidance to the questions we have to answer.[82] In Louie v Lastman (No 1),44 two adult plaintiffs claimed to be the illegitimatechildren of Mr Lastman, the Mayor of Toronto. It was alleged Mr Lastman had anaffair with the plaintiffs' mother and that he failed to care and provide for the plaintiffsas children. The Ontario Court of Appeal held Mr Lastman did not owe any fiduciaryduties to the plaintiffs when they were children because he never acted as a parent tothe plaintiffs during their childhood. In the present case, Robert also ceased to playany role as parent in the lives of Alice, Barry and Cliff once they left home. Robertdid, however, play a role as parent while Alice, Barry and Cliff were children, and itis accepted that he breached his fiduciary duties during that time. The facts ofLouie v Lastman are therefore different from those before us.[83] The absence of any authority that is directly on point means I must considerthe issues posed at [4(a), (b) and (c)] by assessing whether the recognised indicia of a42 Rule v Simpson [2017] NZHC 2154, (2017) 4 NZTR 27-017.43 At [74].44 Louie v Lastman (No 1) (2002) 61 OR (3d) 459 (ONCA).fiduciary relationship apply in the circumstances of this case. In my view, thoseindicia exist when:(a) the fiduciary had actual or inferred responsibilities to the beneficiary;(b) the fiduciary had a discretion to exercise their powers so as to affect theinterests of the beneficiary;(c) the beneficiary was entitled to and did have trust and confidence in thefiduciary not to adversely affect the beneficiary's interests; and(d) the beneficiary was particularly vulnerable and dependent upon thefiduciary to exercise their discretion in a way that did not underminethe interests of the beneficiary.Analysis[84] I will analyse the indicia of a fiduciary relationship in the circumstances of thiscase by focusing upon the following topics:(a) the nature of Robert's powers and responsibilities at the time he giftedhis principal assets to the Trust;(b) whether Alice, Barry and Cliff were entitled to repose and did reposetrust and confidence in Robert to protect their interests when he giftedhis principal assets to the Trust; and(c) whether Robert was required to protect the interests of Alice, Barry andCliff when he gifted his principal assets to the Trust.The nature of Robert's powers and responsibilities at the time he gifted his principalassets to the Trust[85] At the time Robert gifted his principal assets to the Trust, he and his childrenhad been estranged for approximately 30 years. The assets that Robert gifted tothe Trust were solely his and had been acquired by him long after Alice, Barry andCliff ceased to have any contact with Robert.[86] However, when he decided to transfer his principal assets to the Trust inlate 2014, Robert was, in part, exercising his powers so as to frustrate any claims hischildren might have under the Family Protection Act. To this extent Robert wasdeliberately exercising his discretion so as to adversely affect the interests of Alice,Barry and Cliff. Robert was effectively depriving his children of any meaningfulopportunity to have the courts determine their rights under the Family Protection Act.Whether Alice, Barry and Cliff were entitled to repose and did repose trust andconfidence in Robert to protect their interests when he gifted his principal assets tothe Trust[87] Alice and her two brothers appear to have had different subjective expectationsas to whether they would benefit from their father's estate.[88] The evidence shows that, during Robert's lifetime, neither Barry nor Cliffthought that they would be beneficiaries of their father's estate. They hoped that hewould recognise them in his estate but realised he was unlikely to do so. Barry andCliff were, however, concerned that Alice benefit in a meaningful way from theirfather's estate.[89] Alice thought she would benefit from Robert's estate. Although Alice acceptedthat Robert was not willing, during his lifetime, to acknowledge the harm he causedher, Alice believed that Robert would likely atone for his wrongdoing by providing forher in his will. The contents of most of Robert's wills executed between 2001 and2015 showed that Alice's expectation was realistic.[90] The assessment as to whether or not an alleged beneficiary has the requisitedegree of trust and confidence so as to satisfy the indicia of a fiduciary relationshipmust, however, be undertaken objectively and not on the basis of the claimant'ssubjective expectations.[91] In the present case, I am far from satisfied Barry and Cliff had the requisitetrust and confidence in Robert to advance their interests when he transferred hisprincipal assets to the Trust.[92] Barry and Cliff ceased to rely on their father for anything once they left home.Nor did they have any basis for assuming that their father would provide any supportfor his sons. Although both had difficult and challenging lives in the years after theyceased to live under the direct control of their father, both matured into relativelysuccessful and independent men. When assessed objectively, neither Barry nor Cliffcould have trusted their father to provide for them in his estate or had confidence thathe would do so.[93] Unlike her brothers, Alice has not enjoyed any degree of economic or personalsuccess since leaving home and her life to date has been ruined because of theegregious nature of the abuse that Robert inflicted on her during her younger years.[94] While Barry and Cliff have enjoyed far better adult lives than Alice, I do notthink this fact in itself determines whether Robert owed Alice fiduciary duties whenhe transferred his principal assets to the Trust.[95] Robert's abuse of Alice has caused her profound and enduring psychologicaltrauma throughout her life. Although Alice did not directly depend on Robert aftershe became an adult, Alice's trauma meant that it was impossible for her to liveanything remotely resembling a normal and independent life. In principle, I considerAlice's situation to have strong similarities with the example of a disabled adult childI have set out at [79].[96] For Alice to have any semblance of a normal and independent life, she requiredeconomic and emotional support from Robert. I am satisfied that, when assessedobjectively, Alice was entitled to expect Robert to atone for his abuse and to provideher with the economic and emotional support that she needed to live a normal andindependent life, including by providing for Alice in his will. Robert's egregiousabuses of the trust and confidence that Alice was entitled to have in her father to "dothe right thing" were compounded when Robert deliberately chose to deprive Alice ofany meaningful claim against his estate.[97] The majority have used the absence of contact between Robert and Alice toreason that Robert could not have owed fiduciary duties to Alice. I do not, however,consider the absence of contact between Alice and Robert to be a barrier to Alice'sexpectation that Robert would provide for her. The absence of contact between Aliceand Robert was the direct consequence of Robert's abuse. Alice could not have beenexpected to continue contact with Robert, but Alice could expect Robert to provideher with the support that she needed as a result of the abuse. It would, in any event,be perverse if Robert could avoid being held to be a fiduciary by relying on his earlierbreaches of fiduciary duty.[98] I am therefore satisfied that, notwithstanding the absence of contact betweenAlice and Robert, Alice was entitled to expect Robert:(a) to provide for her during her adult years, including by providing for herin his will; and(b) not to deprive her of any meaningful claim against his estate.Whether Robert was required to protect the interests of Alice, Barry and Cliff when hegifted his principal assets to the Trust[99] The assessment of Robert's duties is also to be undertaken objectively.This assessment asks whether a father, who abuses his children when they are livingin his care, and then ceases to have any relationship or contact with his children for 30years, assumes a responsibility 30 years later to provide for his children in his estateor to not deplete his estate so as to frustrate any claim his children may make againstthe estate.[100] The nature of the relationship between Robert and Barry and Cliff weighsheavily against a conclusion that Robert assumed the duties they have pleaded.The imposition of fiduciary duties on Robert at the time he transferred his principalassets to the Trust would be the antithesis of the very independent and autonomouslives they have lived.[101] As I have explained at [95]–[98], Alice's case is significantly different fromthat of her brothers. In her case, Robert should be held to have had a continuing dutyto take steps to remedy, as best he could, the enormous harm he inflicted on Alice, notjust when she was living in his care, but during her adult life.[102] Alice's case is one in which the profound and egregious harm she has sufferedin her adult life, which was compounded when Robert resolved to deprive her of anymeaningful claim against his estate, was a continuation of the harm she sufferedbecause of Robert's conduct when she lived at home. Alice was and always has beenparticularly vulnerable and at the mercy of Robert to atone for his offendingagainst her. I would therefore have found that, throughout her adult life, Alice wasowed fiduciary duties by Robert.[103] I acknowledge that this would have recognised a fiduciary relationship in novelcircumstances. However, as previously stated, the categories of fiduciary relationshipsare not closed, and it is a strength of equity that it can respond flexibly to the needs ofjustice. It is not an adequate response to argue that finding a fiduciary duty in thecircumstances of this case is unprincipled and outcome driven. Rather, it is an exampleof equity responding to an unprecedented situation by applying the established indiciaof a fiduciary relationship. In the exceptional circumstances of this case, I considerthe needs of justice require the recognition of a fiduciary relationship between Robertand Alice, and that Alice was the beneficiary of an inherently fiduciary relationshipwith Robert that continued throughout Robert's life.[104] The fiduciary obligations Robert owed Alice would have included takingreasonable steps to provide a modicum of economic security for her. This duty wouldhave been discharged if Robert had, at the very least, provided for Alice in his will orleft sufficient funds in his estate for Alice to make a claim against the estate.The adequacy of any economic assistance that Robert might have provided Aliceduring his lifetime could have been assessed in the Family Protection Act proceedings.For these reasons, I am satisfied Robert's transfer of his principal assets to the Trust todeprive Alice of any meaningful claim against his estate was a breach of this fiduciaryduty.Remedy[105] I now proceed to consider what remedy would have been appropriate if Roberthad breached his fiduciary duties to Alice in the way I have suggested. As noted at[58], Gwyn J held:(a) The trustees were liable for knowingly receiving the property gifted byRobert because his knowledge that he was breaching his fiduciaryduties to his children was able to be imputed to the Trust.(b) Consequently, the assets held by the Trust were held on a constructivetrust for the estate of Robert.[106] There are difficulties with the approach taken by the Judge when she held thetrustees were liable for knowingly receiving the gift from Robert to the Trust.[107] First, the High Court did not find that Robert held his own property on trust forthe children before he gifted that property to the Trust. Although there is authority forthe proposition that a claim in knowing receipt may arise when a third party receivesproperty that is the subject of fiduciary obligations (as opposed to property held ontrust), the law on this point is far from certain.45 As I shall explain, however, it is notnecessary to resolve this particular challenge.[108] Second, the doctrine of knowing receipt only gives rise to a personal and not aproprietary remedy, such as a constructive trust:46Defendants [liable for knowingly receiving] are required to hold property asif they were constructive trustees and not actually as constructive trustees –the point being merely that they are personally liable to account for the value45 See Butler, above n 32, at [18.1.1] and the authorities cited therein. See also Sandman v McKay[2019] NZSC 41, [2019] 1 NZLR 519 at [100] n 67, where the Supreme Court declined to decidewhether a breach of fiduciary duty (as opposed to a breach of trust) could be the basis for a claimin dishonest assistance.46 Butler, above n 32, at [13.4.4] (footnote omitted).of the receipt and make good any loss suffered by the beneficiaries; not thatthe property received is held on trust by the defendant for the plaintiff.[109] Third, the logical consequence of knowing receipt being a personal claim isthat any payment would go to Alice rather than be transferred to Robert's estate. As isimplicit in my judgment, I am in no doubt Alice should ultimately receive a significantportion of the property owned by Robert before he transferred his principal assets tothe Trust. I am equally satisfied, however, that it would be wrong for Alice to receiveall of the property that Robert transferred to the Trust. In principle, the extent ofAlice's entitlement should be resolved under the Family Protection Act proceeding.[110] My conclusion that Gwyn J erred in her approach to the concept of knowinglyreceiving is, however, not fatal to Alice's position because the equitable principlesgoverning rescission are available where property is transferred in breach of thetransferor's fiduciary obligations.[111] At common law, rescission was treated as a narrow remedy that was onlyavailable where it was possible to return the parties to their original position (restitutioin integrum). Equity, however, views rescission through a broader lens than thecommon law:47Equity provided additional relief in cases of undue influence, innocentmisrepresentation, breach of fiduciary duty, some cases of mistake, and thatclass of transactions known as unconscionable bargains. Equity's approach torestitution is more flexible, so that relief will not be denied if restitutio inintegrum is not possible, provided such a result can be more or less achievedwith compensation and account of profits or the like.[112] Where the transaction was between a fiduciary and a third party, it appears thatthe transaction could either be rescinded or would simply be ineffective in equity.As the authors of The Law of Rescission note:48Where the fiduciary's contract [with a third party] is unauthorized becauseit involves a breach of his duty of loyalty, the contract may be valid andbinding at common law, but any disposition of assets made under it will beineffective in equity.47 Butler, above n 32, at [28.1.3] (emphasis added). Recission for misrepresentation and mistake hasnow been superseded by the Contract and Commercial Law Act 2017.48 Dominic O'Sullivan, Steven Elliott and Rafal Zakrzewski The Law of Rescission (2nd ed, OxfordUniversity Press, Oxford, 2014) at [1.68].[113] The authorities I have cited at [111] and [112] lend support for my conclusionthat, once it is recognised Robert's transfer of his principal assets to the Trustconstituted a breach of the fiduciary obligations he owed Alice, the transfer is able tobe rescinded.[114] I consider rescission to be available against the Trust because the trustees andbeneficiaries received the property as volunteers. Furthermore, while the othertrustees were likely unaware of Robert's breaches of his fiduciary obligations to Alicewhen he transferred his principal assets to the Trust, Robert's knowledge can beimputed to the other trustees. I draw support for this conclusion from the judgment ofthe Supreme Court in Regal Castings Ltd v Lightbody, in which one trustee,Mr Horrocks, was unaware of the intention of another trustee, Mr Lightbody, todefraud a creditor when transferring assets to the Trust:49[70] It is contended for the trustees that the trust acted in good faith inreceiving the transfer of the property as the trustees collectively did not have,at that time, notice of Mr Lightbody's intention to defraud any creditor. Thatis no doubt true in respect of Mr Horrocks who was not aware of the Regaldebt until some years later. But his unawareness of the intent of Mr Lightbodycannot immunise the trust when Mr Lightbody himself was also a trustee and,of course, was the very person who was alienating the property with thatintent. Mr Lightbody's knowledge taints the receipt by the trustees of theproperty. They received it as a unity. They did not have separate interests init. [115] By rescinding the transfer by Robert of his principal assets to the Trust, thetransfer is treated as having never been effected. As has been explained,"a constructive trust arises [in relation to the transferred property] as a consequence ofeffective avoidance or rescission of the transaction".50 This means the assets wouldbe held on constructive trust for the transferor, which is now Robert's estate.[116] The consequence of this conclusion is that all of the assets transferred byRobert to the Trust would be available to be contested under the Family Protection Actproceedings. A collateral consequence of Alice's success would be that Barry andCliff could, if they wish, continue their claim under the Family Protection Act against49 Regal Castings Ltd v Lightbody [2008] NZSC 87, [2009] 2 NZLR 433.50 Malcom Cope Equitable Obligations: Duties, Defence and Remedies (Thomson Legal andRegulatory, Sydney, 2007) at [8.300].those assets because all of the assets that Robert gifted to the Trust would vest in hisestate, and therefore be subject to all extant Family Protection Act claims.[117] I also prefer this outcome because I am satisfied that allowing all of the assetstransferred to the Trust to be contested under the Family Protection Act proceedingswould be the most equitable solution to this difficult case. The Family Protection Actproceedings would provide the best forum for determining what benefit Alice, Barryand Cliff should receive from Robert's estate.[118] Furthermore, if, following the determination of Alice, Barry and Cliff'sFamily Protection Act claims, any of those assets were still remaining in Robert'sestate, those assets could revert back to the Trust for the benefit of the beneficiaries ofthe Trust.[119] For these reasons, I would have found that Robert owed fiduciary duties toAlice after she left home, and that Robert breached his duties when he transferred hisassets to the Trust. Furthermore, I would have found the appropriate remedy to berescission, which would have allowed the assets to revert back to Robert's estate to becontested in the Family Protection Act proceedings.GILBERT JTable of ContentsSummary [120]The pleaded claim [123]High Court judgment [128]My assessment [136]Summary[120] I agree with Kós P and Collins J that the appeal in respect of the claims broughtby Barry and Cliff must be allowed. I also agree with Kós P that the appeal should beallowed in respect of the claim brought by Alice. My reasons can be explained byfocusing primarily on Alice's claim.[121] While no one would quarrel with the desire to provide redress forthe incalculable and ongoing harm Robert caused Alice by sexually abusing her whenshe was a child, I cannot agree that equity can supply the remedy sought in this casefollowing Robert's death. In particular, I do not consider there was any fiduciaryrelationship between Robert and his adult children at the time he gifted his assets tothe Trust, more than 30 years after all contact between them had ceased. Robert didnot in any sense undertake to act for or on behalf of his adult children when dealingwith his assets. The central and distinguishing obligation of a fiduciary — to act withundivided loyalty in the interests of the beneficiary in a particular matter — wasabsent. The respondents had no proprietary claim to Robert's assets, and he was freeto deal with them as he wished.[122] I also consider the fiduciary duty proposed by Collins J — to take "reasonablesteps to provide a modicum of economic security for [Alice]"51 — is not only novel,but unprincipled. This asserted duty finds no support in the authorities and does notprovide a justiciable standard against which performance of fiduciary duties can bemeasured and strictly enforced. I disagree with the results-based approach taken ofidentifying "the needs of justice" and calling on equity through the law of fiduciaryobligation to "respond flexibly" to meet these needs.52 Such an approach opens upthe possibility of a vast expansion of the circumstances in which claims for breach offiduciary duty can be advanced, without a sound foundation in principle.The pleaded claim[123] The pleaded claim was that Robert owed life-long fiduciary duties to hischildren. These duties commenced from the time he had care and responsibility forthem and continued until the relationship was terminated by his death. We werereferred to no authority to support the proposition that parents owe their childrenlifelong fiduciary duties of any kind.[124] The fiduciary duties allegedly owed by Robert were to:(a) care for, protect and rear his children;(b) refrain from sexually or physically assaulting them;51 At [104].52 At [103].(c) protect their economic interests; and(d) recognise them as members of his family and provide for them from hiswealth.[125] Robert was alleged to have breached his fiduciary duties in three respects:(a) by sexually and/or physically assaulting his children;(b) by failing to make any provision for them under his will; and(c) by gifting the assets to the Trust to ensure that his assets would go tothe beneficiaries he had chosen and not to them.[126] As a result of these breaches, the respondents claimed to have suffered loss,"being the opportunity to make a claim under the Family Protection Act against[the assets]". They sought an order that the appellant trustees hold these assets asconstructive trustees for Robert's estate.[127] It can be seen that the alleged breach of fiduciary duty causing the loss claimedwas that set out in [125(c)], not (a) or (b). A critical issue on the pleadings wastherefore whether, given the unremedied harm caused by the alleged breach offiduciary duty in (a), Robert owed a fiduciary duty to the respondents not to gift hisassets to the Trust.High Court judgment[128] Gwyn J found that an inherently fiduciary relationship existed between Robertand his children, while they were children. This gave rise to a fiduciary duty not tosexually or physically assault them, but the Judge found that none of the other pleadedfiduciary duties existed.53 The Judge was satisfied that Robert breached his fiduciary53 High Court judgment, above n 1, at [107].duty by sexually and/or physically assaulting the respondents when they werechildren.54 In Alice's case, the abuse occurred between 1968 and 1973.55[129] The Judge then turned to consider whether there was a fiduciary relationshipbetween Robert and the respondents at the time he gifted most of his assets to the Trustsome 40 years later, in December 2014 and January 2016. While recognising thatthe relationship of an adult child to their parent is generally of a non-fiduciary kind,the Judge considered aspects of the relationship could engage fiduciary obligationsdepending on the circumstances.56[130] The Judge applied Wilson J's dissenting judgment in Frame v Smith in whichthree general characteristics of a fiduciary relationship were identified:57Relationships in which a fiduciary obligation have been imposed seem topossess three general characteristics:(1) The fiduciary has scope for the exercise of some discretion or power.(2) The fiduciary can unilaterally exercise that power or discretion so asto affect the beneficiary's legal or practical interests.(3) The beneficiary is peculiarly vulnerable to or at the mercy ofthe fiduciary holding the discretion or power.[131] The Judge found that "[a]ll the classic characteristics of a fiduciary relationshipwere present" at the time Robert gifted his assets to the Trust.58 In particular, whenexercising his right to gift his house and shares, she considered that Robert wasunilaterally exercising a discretion or power.59 The exercise of that discretion or poweraffected the respondents' interests by removing the prospect of a meaningful claimbeing made under the Family Protection Act following his death.60 The respondents,especially Alice, were "peculiarly vulnerable as adults, as a result of [Robert's] abuseof them as children".6154 At [113].55 At [18].56 At [133].57 At [136], citing Frame v Smith, above n 36, at [60].58 At [150].59 At [149].60 At [149].61 At [150].[132] Alternatively, the Judge considered the matter from the perspective of whetherthere was a legitimate expectation:62[151] Framed another way, the [respondents] had an actual expectation that,when [Robert] came to consider the disposition of his property, he would makeamends for the damage caused to them through his earlier breaches offiduciary duty. Their expectation that he would act in a way that was notcontrary to their interests was reasonable and legitimate.[133] The Judge considered there was no reason in principle why fiduciary principlesshould not be extended to cover the present circumstances.63 Nor were there anypolicy reasons pointing against a finding that a fiduciary relationship existed betweenRobert and his adult children.64 The Judge did not consider the case concernedtestamentary freedom, rather, "it is about property rights and the ability to deal withproperty during one's lifetime, subject only to pre-existing legal constraints".65[134] The Judge concluded that there was a fiduciary relationship between Robertand the respondents at the time he gifted the assets to the Trust.66 As a consequenceof this fiduciary relationship, Robert was obliged to act in their interests.67The specific fiduciary duties were to recognise the respondents as members of hisfamily and to provide for them from his wealth:[173] Although the [respondents] had hoped for some acknowledgementfrom [Robert] of what he had done to them and their resulting situation,realistically, by the time [Robert] gifted the property to the Trust, the only wayin which he could have addressed the vulnerability he had created was byproviding for them financially, and in that way acknowledging them.I conclude that, at the time he gifted the property, [Robert] owed each ofthe [respondents] a duty to recognise them as members of his family and toprovide for them from his wealth, due to the vulnerability his earlier breach offiduciary duties had caused them.[135] The Judge found that Robert's knowledge — that he was gifting his assets inbreach of his fiduciary duties to the respondents — was imputed to the other trustees.The Judge concluded that the assets were held by the trustees on constructive trust for62 Citing Chirnside v Fay, above n 24, at [80].63 High Court judgment, above n 1, at [155].64 At [156]–[163].65 At [158].66 At [164].67 At [165].the respondents.68 However, in the result, the Judge made an order that the assets wereheld by the trustees on constructive trust for Robert's estate.69My assessment[136] There is no challenge on this appeal to the Judge's findings that there was afiduciary relationship between Robert and the respondents while they were childrenand that he owed a fiduciary duty not to physically or sexually abuse them. For thisreason, and because the issue does not need to be resolved on my analysis of this case,I make no comment on whether this is a correct statement of the law in New Zealand.I simply note that no such fiduciary relationship or fiduciary duty has been recognisedin Australia70 or in England.71 Having expressed that reservation, I proceed onthe assumption that the Judge was correct in finding that Robert owed a fiduciary dutyto his children not to physically or sexually assault them.[137] There is also no challenge on this appeal to the Judge's findings as to the sexualand other physical abuse Robert inflicted on the respondents as children andthe consequences of that for them. There is no reason to doubt these findings and, ofcourse, Robert was not able to contest them.[138] It follows from the Judge's findings that the respondents could havesuccessfully pursued claims against Robert in tort for assault and battery and forbreach of fiduciary duty. Because these causes of action arose prior to 1 April 1974,the date the Accident Compensation Act 1972 came into force, the respondents couldhave sued Robert for both compensatory and exemplary damages in respect of hisegregious breaches of obligation. However, for their own understandable reasons,the respondents chose not to pursue any claim against Robert and agreed in about 1990that they would continue to have no contact with him. Any claim in tort was longsince statute-barred by the time Robert gifted his assets to the Trust in 2014 and 2016.68 At [182].69 At [201].70 Paramasivam v Flynn (1998) 90 FCR 489 at 504–508.71 We were not referred to any English authorities by the parties, and our own research also disclosedno relevant authorities.Similarly, any claim for breach of fiduciary duty arising out of Robert's abuse wouldby then have been precluded by analogy or, perhaps, by the doctrine of laches.72[139] It is clear that the present claim seeks redress for the harm stemming fromthe pre-1974 breaches of fiduciary obligation. I do not consider the legal and practicalproblems that would now be faced by such a claim — delay and divestment of assets— can be overcome by asserting that the fiduciary relationship continued (despitethe cessation of all contact for some 30 years) and that a new fiduciary duty aroserequiring Robert to provide redress for the harm caused by his breaches offiduciary duty decades earlier. To illustrate, a tortfeasor is liable for the foreseeableloss caused by the breach of tortious duty but does not commit a new tort by failing tocompensate for the loss caused by the earlier breach. There is no such tort. I considerthe same applies to the tortfeasor who, as here, is liable in tort and for breach offiduciary duty arising out of the same acts. The breaches of fiduciary duty causing theloss were the acts of physical and sexual abuse. The subsequent failure to providecompensation for that loss did not amount to a new breach of fiduciary duty.[140] Contrary to the Judge's view, I do not accept that all the classic characteristicsof a fiduciary relationship existed between Robert and his adult children. With respect,I consider the Judge misinterpreted the three characteristics or indicia she purportedto apply.[141] A fiduciary stands in a relationship of trust and owes a strict duty to act withundivided loyalty to the beneficiary in respect of a particular matter. The fiduciary isdisabled from acting in situations of conflict of interest and must not gain unauthorisedprofits, such as by exploiting an opportunity arising out of the fiduciary position.A "power or discretion" in this context is therefore one conferred on or held bythe fiduciary for the benefit of the beneficiary. Such a power can only be used forthe purpose for which it was conferred. The proper exercise of the power is strictlyenforced in equity. It is therefore vitally important to identify the particular power ordiscretion conferred, the purpose for which it was conferred, and the person or personson whose behalf it is held and for whose benefit it may be exercised.72 Johns v Johns [2004] 3 NZLR 202 (CA) at [78]–[85]; and No 68 Ltd v Eastern Services Ltd [2006]2 NZLR 43 (CA) at [61].[142] At issue in this case was Robert's "power or discretion" to deal with his ownassets in December 2014 and January 2016. I do not consider this was a power ordiscretion in the relevant sense. These were his assets, accumulated over the courseof his life, and he was entitled to deal with them as he pleased. Robert did not acquireor hold the assets for the benefit of his adult children. They did not contribute tothe assets and they had no proprietary claim in respect of them. Robert did notundertake or assume any obligation by contract, agreement, unilateral undertaking orotherwise to deal with his assets for their benefit. I do not see how it can be suggestedthat Robert was entrusted to hold his assets on behalf of his adult children and"empowered" to act for and on their behalf in respect of them. He did not, and wasnot required to, relinquish his self-interest in respect of these assets or excludeconsideration of the interests of others, including any creditors and his second family,when dealing with them. In my view, the legal power Robert exercised when dealingwith his personal assets was the very antithesis of the other-regarding fiduciary poweror discretion exercised in the classic fiduciary relationship between trustee andbeneficiary. The essential underpinning of a fiduciary duty in respect of these assetswas absent.[143] The second characteristic referred to by the Judge was the legal or practicalinterests of the beneficiary that may be affected by the fiduciary's unilateral exerciseof the power. The legal or practical interest at issue must link to the fiduciary power.It is therefore necessary to identify the purpose for which the power was conferred andconsider the legal or practical interest of the beneficiary to be protected or furtheredby the exercise of that power. Here, the relevant interest was an economic interest —the enhancement of the value of a moral claim under the Family Protection Act thatwould be realised by Robert retaining all his assets to maximise the value of his estate.However, when Robert dealt with his own assets, he was not exercising a powerconferred for the purpose of protecting or furthering the respondents' interestsgenerally, let alone for the purpose of facilitating claims they might make against hisestate for breach of his moral duty. That the respondents' practical interests may havebeen affected is not sufficient to satisfy this characteristic without these interests beingrelated to the purpose for which the alleged power was conferred.[144] As to the third characteristic, the element of vulnerability, this too must link tothe relevant discretion or power. It is the beneficiary's vulnerability to the wrongfulexercise of the power that is relevant. Absent a fiduciary power, the question ofvulnerability does not arise. Robert was not entrusted to exercise a power on behalfof the respondents with respect to his assets and they were accordingly not vulnerableto the wrongful exercise or abuse of that power.[145] Collins J finds that the element of vulnerability is made out because Alice hasalways been "particularly vulnerable and at the mercy of Robert to atone for hisoffending".73 This is not a vulnerability indicative of a continuing fiduciaryrelationship, namely vulnerability to an abuse of fiduciary power. The respondentscould have pursued Robert before the expiry of the limitation period but chose not to.They were only "vulnerable" and "at his mercy" in terms of any atonement for hisoffending because of their freely informed decision not to pursue any remedy againsthim until after his death.[146] For these reasons, I conclude that there was no fiduciary relationship betweenRobert and the respondents in December 2014 or January 2016 when he gifted hisassets to the Trust. I turn now to consider the particular fiduciary duty found to existby the High Court Judge and which Collins J would have recognised.[147] The fiduciary's central obligation of loyalty to the beneficiary is strictlyenforced by the court of equity. Some precision is therefore required. What isdemanded of the fiduciary in the given circumstances in complying with the duty ofloyalty must be clear. It is the discretion inherent in a power which the duty ofundivided loyalty seeks to control. In my view, this is not present in the duty asconceptualised by the Judge or Collins J.[148] The fiduciary duty propounded by the Judge — "to recognise [the respondents]as members of his family and to provide for them from his wealth" — does not paysufficiently close attention to the fundamental obligation of loyalty in play.The formulated duty does not respond to an obligation of loyalty at all; if there wassuch a duty, the question of loyalty would be irrelevant. Further, it is implicit in the73 At [102].imprecise formulation of the proposed duty that Robert was not required to actselflessly when dealing with his assets and without regard to any interests other thanthose of the respondents. The fiduciary duty found to exist manifestly did not requireRobert to deal with his assets solely for their benefit, only that he was required to makesome provision for them from his overall wealth. The fiduciary duty found byCollins J — "to provide a modicum of economic security for [Alice]" — demonstratesthe point even more acutely.[149] For these reasons, I would allow the appeal in full.[150] Costs should follow the event. The respondents must pay the appellants costsfor a standard appeal on a band A basis and usual disbursements. The costs order madein the High Court is quashed. If the parties are unable to agree on costs in the HighCourt, then the issue of costs in that Court should be determined by the High Court.[151] I agree with Collins J in suppressing the names of the persons and entitiesconnected to this proceeding.KÓS PTable of Contents1. The father owed a fiduciary duty [153]2. The father breached that duty [162]3. The remedy is equitable compensation [163]4. The duty ended when the father ceased to care for the children [166]5. The transfer to the Trust is not a breach of fiduciary duty andcannot be rescinded [167]Result [169][152] I agree with Collins J that the relationship between the children and their fatherwas fiduciary in nature, at least for so long as they lived with him or were cared for byhim. I agree also that sexual and violent physical abuse amounted to a breach of thatfiduciary duty. Assuming their claims for breach are not barred by limitation or laches,the appropriate remedy is, and remains, equitable compensation. No property of thechildren being held by the father, there is no basis for a proprietary remedy.But, agreeing with Gilbert J, the fiduciary duty ceased when the father no longer livedwith, or cared for, the children. It follows that his transfer of personal assets tothe Trust to defeat a future claim by the children does not involve a further breach offiduciary duty.1. The father owed a fiduciary duty[153] I agree with Collins J's analysis at [73] to [78] above. The relationship betweenparent and child is — or should be regarded as — inherently fiduciary in nature, atleast for so long as the parent undertakes care of the child.74 It is difficult to imaginea context in which greater trust and confidence is reposed. That the relationship is notprimarily economic does not alter that reality or analysis. And even if notinherently fiduciary, it would meet the general tripartite criteria expounded bythis Court in Dold v Murphy — and evolving from Chirnside v Fay, Paper ReclaimLtd v Aotearoa International Ltd and Amaltal Corp Ltd v Maruha Corp75 — for therecognition of a fiduciary relationship:76(1) the conferral of powers in favour of the alleged fiduciary, which maybe used to affect the proprietary rights of the beneficiary; (2) the apparentassumption of a representative or protective responsibility by the allegedfiduciary for the beneficiary (for example, to promote the beneficiary'sinterests, or to prefer the interests of the beneficiary over those ofthird parties); and (3) the implied subordination (although, notnecessarily, elimination) of the alleged fiduciary's own self-interest.[154] Those criteria coordinate well enough with those set out by Wilson J inFrame v Smith, cited at [76] above, and approved by the Supreme Court of Canada inM (K) v M (H).77 The reference in the first criterion to "which may be used to affectthe proprietary rights of the beneficiary" does not of course mean that an economicrelationship is a sine qua non for the inference; rather that the power may be used in aproprietary sense if it has that dimension. Vulnerability is stated expressly inthe Canadian formulation, but is inherent in its New Zealand counterpart. It is not tobe over-emphasised, however; it refers to vulnerability arising from the relationshipitself, rather than existing apart from it. For instance, in many principal/agent74 By "child" I refer to a person less than 20 years of age: Age of Majority Act 1970, s 4(1).75 Chirnside v Fay, above n 24; Paper Reclaim Ltd v Aotearoa International Ltd, above n 24; andAmaltal Corp Ltd v Maruha Corp, above n 24.76 Dold v Murphy, above n 23, at [55].77 Frame v Smith, above n 36, at 136; and M (K) v M (H), above n 33, at 63.relationships, the principal will be the far stronger party economically; the principal'svulnerability arises from the act of empowering the agent to manage its affairs.[155] It follows that in reaching this conclusion I prefer the reasoning of theSupreme Court of Canada in M (K) v M (H) and in EDG v Hammer to that of theFull Court of the Federal Court of Australia in Paramasivam v Flynn.78 In particular,I do not consider the potential availability of a tortious remedy justifies excludingfiduciary liability, when the interests protected, and remedies allowed, may differ.79Rather, the better course is to proceed with caution in defining what will amount to anactionable breach of fiduciary duty in this particular context.[156] That a fiduciary duty should be recognised in a parent/child context issupportable by reference to cases involving more conventional fiduciary relationships:doctor and patient, and priest and penitent. I refer to these cases because they havetwo points in parallel with the present appeal. First, the relationship is often purelypersonal in nature, rather than proprietary. Secondly, the nature of the abuse at issuein a claim for breach of duty may be similar in nature, being sexual or otherphysical abuse.[157] It has long been accepted that a doctor is in a fiduciary relationship with apatient when dealing with their property. This acceptance comes through in a line ofcase law where doctors accept gifts from their patients in breach of their fiduciaryobligations.80 The remedy in these instances will ordinarily be proprietary (settingaside the transfer).81 Professor Grubb summarises the case law in this way:82Sometimes, however, the doctor will be dealing with the patient's property.When this has been so English law has long recognised that the doctor will bein a fiduciary position vis-à-vis her patient. Hence, a doctor who receivesproperty from a patient as an inter vivos gift will be held to do so in a fiduciarycapacity.As a consequence, a presumption of undue influence will be made against thedoctor because of the nature of the relationship being one of trust and78 M (K) v M (H) above n 33; EDG v Hammer 2003 SCC 52, [2003] 2 SCR 459; and Paramasivamv Flynn, above n 70.79 EDG v Hammer, above n 78, at [23].80 See, for example, Dent v Bennett (1835) 7 Sim 539, 58 ER 944 (Ch); and Mitchell v Homfray(1881) 8 QBD 587 (CA).81 See, for example, Billage v Southee (1852) 9 Hare 534, 68 ER 623 at 541.82 Andrew Grubb "The Doctor as Fiduciary" (1994) 47 CLP 311 at 314–315 (footnotes omitted).confidence. The court will set aside the gift unless the doctor can rebut thepresumption by, for example, proving that the gift was freely made after 'full,free and informed thought about it'. [158] A more contested issue is whether the doctor-patient fiduciary relationshipextends beyond these proprietary grounds. The proposition that it does has beeneffectively rejected in England and Wales and in Australia.83 But a different positionhas been reached in Canada. In Norberg v Wynrib, McLachlin J (as she then was) —in a judgment described by Professor Grubb as a "veritable tour de force" —recognised that fiduciary duties are capable of "protecting not only narrow legal andeconomic interests, but can also serve to defend fundamental human and personalinterests, as recognised by Wilson J in Frame v Smith".84 The case concerned a doctorwho prescribed and then gave an addict patient pain killers in exchange for sexualfavours. McLachlin J held that breached the doctor's fiduciary obligations.85L'Heureux-Dubé J agreed with McLachlin J; the remaining members of the Courtreasoned by reference to contractual principles. As in many instances, it is theminority position that has come to hold sway.86[159] In New Zealand, there are dicta that indicate that the doctor-patient relationshipis a fiduciary one.87 There is also a line of case law that deals with a doctor's use oftheir patient's confidential information. In these circumstances, a doctor's fiduciaryobligations have been held to extend to keeping the patient's medical confidences.8883 In the English and Welsh context, see Sidaway v Board of Governors of the Bethlem RoyalHospital [1985] AC 871 (HL) at 884, where Lord Scarman remarked that "there is no comparisonto be made between the relationship of doctor and patient with that of solicitor and client, trusteeand cestui que trust or other relationships treated in equity as of a fiduciary character". In theAustralian context, see Breen v Williams (1996) 186 CLR 71 (HCA) at 93, where Dawson andToohey JJ commented that "it is the law of negligence and contract which governs the duty of adoctor towards a patient", leaving "no need, or even room, for the imposition of fiduciaryobligations".84 Norberg v Wynrib, above n 25, at 289; and Grubb, above n 82, at 322.85 Norberg v Wynrib, above n 25, at 293.86 See, for example, Butler, above n 32, at 550.87 See, for example, Collie v Nursing Council of New Zealand [2001] NZAR 74 (HC) at [26], whereGendall J remarked that "[t]he relationship between doctor and patient is clearly a fiduciaryrelationship". This comment was made in the context of a proprietary dispute (the gifting of$25,000 by an elderly couple to a nurse). See also Patient A v Health Board X HC BlenheimCIV-2003-406-14, 15 March 2005 at [39], where Baragwanath J weighed the Australian approachwith the Canadian approach and commented that "[i]n the light of the New Zealand authoritiesand the powerful judgment of McLachlin J the case for recognition in New Zealand of a doctor'sgeneral fiduciary duty to a patient is in my view overwhelming". These comments were made inthe context of a failed sterilisation operation (i.e. a purely personal, rather than proprietary, issue).88 See, for example, Duncan v Medical Practitioners Disciplinary Committee [1986] 1 NZLR 513(HC) at 520–521, where Jeffries J observed, per obiter, that "[t]he platform support of a description[160] The priest-parishioner relationship has been accepted as fiduciary in somecommon law jurisdictions.89 This proposition is captured in a judgment of theNova Scotia Supreme Court: "[a] fiduciary relationship exists between the Diocese byits servant or agent, the parish priest and the parishioners".90 Unsurprisingly that isparticularly so when the priest undertakes to advise on property matters.91 But thereis also a branch of cases that deals with child abuse by priests in breach of theirfiduciary obligations. These claims are generally brought by adult claimants and haveoften been found to be time-barred.92[161] Turning now to content, and bearing in mind the cautionary note entered at[155] above, I would prefer to cast the relevant fiduciary duty in a familialenvironment in negative terms. Here the fiduciary responsibility is not a duty to actgenerally in the best interests of the child, in disregard of the parent's personalinterests. To cast it in such terms would be to invite claims based on contestedexercises of parental discretion where reasonable minds would disagree, such as onhousing, location, education, medical care and diet. Instead, as I see it, thefiduciary duty is to refrain from acts that fundamentally violate the relationship of trustinherent in a parent-child relationship. Foremost within a duty expressed in such termsis to refrain from sexually and physically abusing the child.93of medical confidence is to identify the doctor/patient relationship as a fiduciary one." In that casethe doctor had breached medical confidence because of concerns as to the fitness of his patient todrive a bus.89 See, for example, Illuzzi v Edwards (1997) 1 Q ConvR 54-490 (QCA) at 8–9; and FWM vMombourquette (1996) 145 NSR (2d) 360 (NSSC) at [65] [Mombourquette SC].90 Mombourquette SC, above n 89, at [65]. This judgment was overturned on appeal for limitationperiod reasons: FWM v Mombourquette (1996) 152 NSR (2d) 109 (NSCA) [Mombourquette CA].91 Clark v Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane [1998]1 Qd R 26 (QSC) at 31, where Williams J said "[i]n light of that [the emphasis on vulnerability infiduciary relationships] it is obvious why a spiritual adviser is deemed to be in a fiduciaryrelationship to those who seek advice – particularly as to property matters".92 See, for example, Mombourquette CA, above n 90, which upheld the trial Judge's finding that thelimitation period only started to run when the plaintiff had "awareness and appreciation" of theoffences (at 5–7).93 This approach replicates that of the Supreme Court of Canada in EDG v Hammer, above at 78, at[23].2. The father breached that duty[162] The Judge's findings on sexual and other physical abuse the father inflicted onthe children were unchallenged. As Gilbert J says — at [137] above — there is noreason to doubt these findings.3. The remedy is equitable compensation[163] In my view the ordinary remedy applicable for fiduciary's breach of duty viasexual or other physical abuse must be equitable compensation. In Norberg v Wynrib— the Canadian case where the doctor sexually abused his patient by procuringsexual favours in exchange for drugs — McLachlin and L'Heureux-Dubé JJconsidered that to be the appropriate remedy.94 Likewise that remedy has been appliedin priest/penitent cases, not time-barred, involving sexual abuse.95[164] The breach of duty here involved no misapplied stewardship of property of thebeneficiaries, or diversion of property that ought to be theirs in equity.96 There is nobasis here to invoke constructive trust principles. Equitable compensation is theappropriate remedy, calculated as far as possible to restore the plaintiff to the positionshe or he would have been in had the breach not occurred.97[165] It is unnecessary to consider here whether exemplary damages might also beawarded.98 But the consequence of this reasoning is that Alice, and probably the boys,had a personal claim for equitable compensation relating to the period prior tocommencement of the accident compensation legislation. I agree with Gilbert J thatany such claim is now long extinguished by laches.994. The duty ended when the father ceased to care for the children[166] On the view I take of the scope and content of the duty, it ended when the fatherceased to care for the children. Issues of majority do not arise on the facts; the children94 Norberg v Wynrib, above n 25, at 293–295.95 See, for example, WK v Pornbacher (1997) 32 BCLR (3d) 360 (BCSC).96 Such as in Attorney-General for Hong Kong v Reid [1994] 1 NZLR 1 (PC).97 Norberg v Wynrib, above n 25, at 295 per McLachlin J.98 Aquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] 3 NZLR 299 (CA) at 301.99 At [138] above.ceased to live with the father before then — leaving home at ages 18, 17 and 15respectively. The duty here was to refrain from acts that fundamentally violated therelationship of trust inherent in a parent-child relationship. That duty ended when theresponsibilities of parental care ended, on the children leaving home.5. The transfer to the Trust is not a breach of fiduciary duty and cannot berescinded[167] I agree with Gilbert J that the residual personal claim for equitablecompensation held by the children cannot be converted to, and preserved by, acontinuing proprietary claim to the father's property. The correct analysis is that thechildren were at best unsecured creditors of the father, subject to sustaining claimsagainst him. That Alice in particular suffered enduring vulnerability and disadvantageas a result of the breaches of duty when living with her father sounds in enlargeddamages, but it does not — for the reasons Gilbert J gives — sound in a new orsustained fiduciary duty to make proprietary provision during the long years in whichAlice and her father no longer lived together. To reach such a conclusion is tooverreach, and to make a purely personal claim into a proprietary one whereproprietary remedies have no place.[168] I agree with Gilbert J on costs. I agree with Collins J that the names of thepersons and entities connected to this proceeding should be suppressed.Result[169] The appeal is allowed.[170] The respondents must pay the appellants costs for a standard appeal on aband A basis and usual disbursements.[171] The costs order made in the High Court is quashed. If the parties are unable toagree upon costs in the High Court, then that issue should be remitted to the HighCourt for determination.[172] We make an order prohibiting publication of the names, addresses oridentifying particulars of any persons or entities connected to this proceeding.Solicitors:Willis Legal, Napier for AppellantsVicki Ammundsen Trust Law Ltd, Auckland for Respondents