The Supreme Court recently issued its much-anticipated ruling in A, B and C v D and E Limited as Trustees of the Z Trust known as the Alphabet case. It concerns the extent of fiduciary duties owed by a parent to an adult child. ⚖️
The case involves a father, who transferred most of his assets to a trust during his lifetime, leaving his adult children without any entitlement to those assets. The children argued that due to past abuse they suffered at their father’s hands, including physical, emotional abuse and sexual abuse, their father owed them fiduciary duties that extended into adulthood. They believed his actions in transferring assets breached those duties, and the assets should revert to his estate to satisfy their Family Protection Act claims to be provided for from his estate.
While the Court agreed that fiduciary duties exist between a parent and minor child, it ruled that those duties generally end once the child reaches adulthood or the caregiving responsibility ends. The Court rejected the notion that such duties continued into adulthood, despite the children’s vulnerability due to the abuse they suffered during childhood. Importantly, the Court noted that imposing fiduciary duties in this case would create legal uncertainty and “reverse engineer” a remedy for past wrongdoing.
The Court also ruled against treating the trust assets as part of the father’s estate. However, it acknowledged the need for legal reform in this area and pointed to the Law Commission’s 2022 proposal to allow courts to unwind property transactions that intentionally defeat claims under succession law.
While the Court was sympathetic to the appellants, it ultimately found that the law could not support their claim in this case. The ruling highlights the need for further reform in this area of law, which the Law Commission’s proposals may address in the future.