Gallagher v Gallagher-Dekker
[2025] NZCA 421
•25 August 2025 at 10 am
IN THE COURT OF APPEAL OF NEW ZEALAND
I TE KŌTI PĪRA O AOTEAROA
CA460/2024
[2025] NZCA 421
BETWEEN OWEN ROE GALLAGHER AS EXECUTOR AND TRUSTEE OF THE ESTATE OF JAMES GALLAGHER First Appellant ALPHONSUS CUCHULLAIN TE KOOTI LAFOIA GALLAGHER AS EXECUTOR AND TRUSTEE OF THE ESTATE OF JAMES GALLAGHER Second Appellant AND SALAMINA ELAINE GALLAGHER-DEKKER Respondent
| Hearing: | 24 June 2025 |
| Court: | Mallon, Peters and Grice JJ |
| Counsel: | First and Second Appellants in person |
| G J Angus and S J Flett for Respondent |
REASONS OF THE COURT
(Given by Grice J)
Introduction
Elaine Gallagher-Dekker, the respondent, applied to the High Court to remove
her brothers, Owen and Alphonsus (known as Cuchullain) Gallagher, as trustees and
executors of their father’s estate. The Court granted the application in a judgment of
17 June 2024.[1] The order for removal is to be effective on the resignation of Elaine as
trustee and the appointment of a replacement trustee by the Court.[2]
[1] Gallagher-Dekker v Gallagher [2024] NZHC 1329 [judgment under appeal]. As in the judgment
[2] At [52(a)].
Owen and Alphonsus appeal against the High Court judgment on various
grounds including that, as family members, their removal is not in the best interests of
the estate.[3] Elaine opposes the appeal, saying that leaving the current parties to work
together as trustees of the deceased’s estate, which leaves a life interest to the
deceased’s elderly widow, Meletina Gallagher, is clearly untenable and not in the best
interests of the beneficiaries. The appellants also seek leave to adduce further
evidence on appeal.
Background
[3] The appellants filed and appeared in person in this Court on appeal. They were represented by
The High Court judgment sets out the background to the dispute.[4]
James Joseph Gallagher passed away in September 2019. He is survived by his wife
and five adult children.[5] Mr Gallagher’s last will was dated 28 October 1992. A
second codicil, dated 31 December 2015, named three of his children — Elaine, Owen,
and Cuchullain — as executors and trustees of his will. Probate was granted on
10 December 2019.[6] The will stipulates that the trustees are to hold the residue of the
estate on trust, paying the net income to Mrs Gallagher for her lifetime, with the residue to be divided equally among the five children after her death.[7] The estate
includes several properties.[8]
[4] Judgment under appeal, above n 1.
[5] At [1].
[6] At [4].
[7] At [5].
[8] At [8].
Some of Mr Gallagher’s properties had been distributed to the children in 2016
before his death. As a result, Owen and Cuchullain’s company now owns a property
adjacent to two of the estate properties.[9] Mrs Gallagher also received a property by
survivorship, where she currently lives with Owen.[10] Cuchullain occupies a flat on
the same site.[11]
The High Court judgment
[9] At [9].
[10] At [10].
[11] At [11].
In the High Court, Elaine contended that the relationship between the trustees
had deteriorated, making it difficult to manage the estate effectively.[12] Elaine raised
concerns about conflicts of interest, mismanagement, and the inability of the trustees
to work together.[13] She submitted that it was in the best interests of the beneficiaries
to appoint an independent trustee, given the complexity of the estate and the likelihood
of ongoing disputes.[14] Owen and Cuchullain countered that the trustees had acted
unanimously on key decisions and that the issues raised by Elaine were either
historical or trivial.[15] They argued that removing the trustees would incur significant
costs and was not what their mother, Mrs Gallagher, wanted.[16]
[12] At [12].
[13] At [19].
[14] At [20].
[15] At [13] and [40].
[16] At [14].
Anderson J noted that the Court may remove and appoint trustees when it is
“necessary or desirable” to do so.[17] However, neither the conflicts of interest alleged
against Owen and Cuchullain, nor the issues raised by Elaine concerning property
maintenance work, including the cost of an aborted subdivision undertaken by the
brothers, were sufficient on their own to justify removing them as trustees.[18]
Nevertheless, the Judge concluded that there had been a breakdown in the relationship between Elaine on the one hand, and Owen and Cuchullain on the other, precipitated
by a disagreement about whether a real estate agent proposed by Elaine should handle
the sale of an estate property. The disharmony had hindered the administration of the
trust.[19]
[17] At [17].
[18] At [23], [33] and [37]–[38].
[19] At [38]–[44].
The Judge was satisfied that if the status quo remained, there would be an
ongoing inability for the trustees to make unanimous decisions on substantive
matters.[20] The removal of Owen and Cuchullain as trustees was necessary to prevent
further obstruction in the administration of the estate.[21] Accordingly, an order was
made removing the respondents, however this would not take effect until Elaine
resigned as trustee and a replacement trustee was appointed. The proceeding was
adjourned to enable time for the parties to discuss who to appoint as trustee, in view
of Owen and Cuchullain’s opposition to the appointment of Perpetual Guardian, the
replacement proposed by Elaine.[22]
Events following the High Court judgment
[20] At [46].
[21] At [47]–[48].
[22] At [49]–[51].
Since the High Court judgment, Mrs Gallagher has issued proceedings in the
Family Court under the Property (Relationships) Act 1976 (PRA) and Family
Protection Act 1955 (FPA), where she seeks an extension of time to bring the relevant
claims. The trustees are the defendants in those proceedings.
The High Court has adjourned the hearing on who to appoint as trustee to
replace the present trustees pending the outcome of this appeal.
Legal principles
The application for removal of Owen and Cuchullain as trustees was made
under the provisions of the Trusts Act 2019.[23] The operative sections are ss 112 and
[23] The removal of executors is provided for under s 21 of the Administration Act 1969, which allows
114, which relevantly provide:
112 Court may make order for removal
Whenever it is necessary or desirable to remove a trustee and it is
difficult or impracticable to do so without the assistance of the court,
the court may make an order removing a trustee.
… 114 Court may appoint or replace trustee (1) Whenever it is necessary or desirable to appoint a new trustee and it is difficult or impracticable to do so without the assistance of the court, the court may make an order appointing a new trustee. ...
The Judge set out the principles applying to the interpretation of “necessary or
desirable” in s 112 in the High Court decision.[24] No issue is taken on appeal with
[24] Judgment under appeal, above n 1, at [17].
those principles. The parties were unable to locate any authority of this Court dealing
with ss 112 or 114, however High Court authority and academic commentators have
observed that the principles developed in relation to the application of the predecessor
provision for removal of trustees apply to the 2019 provisions.[25] Section 51 of the
Trustee Act 1956 previously provided that the court “may” remove and replace a
trustee where “expedient” to do so, and it would be “inexpedient, difficult, or
impracticable so to do without the assistance of the court”. In comparison, both s 112
and s 114 of the Trusts Act provide that the Court “may”, as appropriate, remove and/or
appoint a trustee whenever it is “necessary or desirable” and where it is “difficult or impracticable to do so without the assistance of the court”. Under the formulation in
the Trusts Act, the Court is no longer required to replace the trustee it is removing.[26]
[25] K v K [2022] NZHC 3123, [2022] NZFLR 624 at [99]–[101]. See generally Lindsay Breach
[26] Nicola Peart (ed) Family Property (online ed, Thomson Reuters) at [TU112.01].
The High Court noted in K v K that this change in wording does not suggest
there is a lower threshold under s 112 than had been the case under s 51 of the
1956 Act.[27] This is supported by the commentary and the Law Commission’s view
that the court’s inherent jurisdiction to remove and replace trustees should not be
altered.[28] We agree, as did the Judge in the decision under appeal.[29] While necessity
is on its own a higher threshold than expedience, the overall effect of the “necessary
or desirable” threshold is to maintain the position under the 1952 Act. The Court’s
focus under s 112 continues to be the interests of the beneficiaries.
[27] K v K, above n 25, at [99], citing Peart, above n 26, at [TU112.03(2)].
[28] Peart, above n 27, at [TU112.03(2)]; Breach, above n 25, at [20.12.5]; Mallon, above n 25, at 75;
[29] Judgment under appeal, above n 1, at [16].
We therefore agree with the existing commentary that the principles developed
under the 1956 Act (or under s 21 of the Administration Act 1969) are applicable to
ss 112 and 114. This Court adopted these principles in Tod v Tod, affirming those set
out by Heath J in Farquhar v Nunns:[30]
[30] Tod v Tod, above n 23, at [22], quoting Farquhar v Nunns, above n 23, at [13].
(a) The starting point is the Court’s duty to see estates properly administered and trusts properly executed.
(b) This jurisdiction involves a large discretion which is heavily fact-dependent.
(c) The wishes of the testator/settlor (evidenced by the appointment of a particular executor or trustee) are to be given consideration, but
ultimately the question is as to what is expedient in the interests of the
beneficiaries.
(d) Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct,
breach of trust, dishonesty, or unfitness need not be established.
(e) Hostility as between administrators/trustees and beneficiaries is not of itself a reason for removal, but hostility will assume relevance if and
when it risks prejudicing the interests of the beneficiaries.
…
[14] In cases of incompatibility and hostility between trustees, “[a]ny
incompatibility must be at such a level that the proper administration of the trust is
seriously adversely affected and it has become difficult for a trustee to act in the
interests of the beneficiary”.[31] While the court “will not readily replace an executor
selected by a deceased to manage his or her estate”, the ultimate question is what is
necessary or desirable in the interests of beneficiaries.[32] That is a forward looking
assessment that, as the High Court Judge held,[33] in this case requires assessing the
prospects of an improvement in the trustees’ relationship and ability to properly
execute the trust in the future.[34]
[31] Kain v Hutton [2007] NZCA 199, at [267]; and see Green v Green [2016] NZCA 486 at [146].
[32] Tod v Tod, above n 23, at [27(a)]; and see Kain v Hutton, above n 31, at [266].
[33] Judgment under appeal, above n 1, at [17(g)].
[34] See Letterstedt v Broers (1884) 9 App Cas 371 (PC) at 386–387, followed in Hunter v Hunter
The 2019 Act also introduced provisions relating to alternative dispute
resolution (ADR) processes, which give additional options to trustees aside from
seeking a court-imposed determination.[35] It is open to trustees to seek directions to
[35] Academic commentators noted that the ADR provisions in the Trusts Act 2019 were likely to be
refer a matter to ADR, or the court may do so of its own motion.[36] Such a reference
[36] Trusts Act 2019, s 145.
is consistent with two of the specified purposes of the Act, namely to restate and
reform trust law by providing for mechanisms to resolve trust-related disputes and by
making the law of trusts more accessible.[37] In addition, one of the express principles
governing the exercise of functions and powers under the Act is that the court must
have regard to a trust being “administered in a way that avoids unnecessary cost and
complexity”.[38] An ADR process, as defined under the Act, includes but is not limited
to mediation or arbitration. The process merely needs to be “designed to facilitate the
resolution of a matter”.[39] This enables trustees or the court to select a process which is appropriate to the circumstances and which may or may not involve counsel being
present.[40]
Approach on appeal
[37] Section 3(c)–(d).
[38] Section 4(b).
[39] Section 142 definition of “ADR process”.
[40] ADR has been described as a “broad church” able to be tailored to the needs of the dispute and
Ms Angus, for Elaine, submits that the appeal is an appeal against a discretion.
In Powell v Powell, this Court held that decisions under s 51 were aligned with the
approach in May v May, which related to appeals against the exercise of a discretion.[41]
The court’s discretion is heavily fact-dependent in this context.[42] As the majority of
the Supreme Court said in Kacem v Bashir: [43]
…a general appeal is to be distinguished from an appeal against a decision
made in the exercise of a discretion. In that kind of case the criteria for a
successful appeal are stricter: (1) error of law or principle; (2) taking account
of irrelevant considerations; (3) failing to take account of a relevant
consideration; or (4) the decision is plainly wrong.
Positions of the parties
[41] Powell v Powell [2015] NZCA 133, [2015] NZAR 1886 at [52], citing May v May (1982)
[42] Tod v Tod, above n 23, at [22]. See also Kain v Hutton, above n 31, at [266].
[43] Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32], citing May v May, above n 41, at
In their synopsis of argument on appeal, Owen and Cuchullain set out detailed
reasons as to why the High Court judgment is flawed and their removal as trustees is
not in the best interests of the beneficiaries. In particular, they say the Judge relied on
incomplete facts, misinterpreted the evidence, and relied on misleading information
provided by Elaine.
In a document listing the issues on appeal, Owen and Cuchullain ask whether
Elaine and the estate lawyer “deliberately” misled the High Court, “committing
perjury”, and attempted to “subvert the Court of Appeal process”. They also refer to
issues including whether Elaine acted in “bad faith”, “in breach of Trusts Act 2019,
sections 25 and 38”. In addition, Owen and Cuchullain ask whether the High Court
had full information about Elaine’s health issues, and whether she failed as a trustee by not informing the Court of potential litigation by the main beneficiary against the
estate. They suggest a further issue is whether the High Court erred in failing to direct
the parties to attend ADR.
Elaine submits that the Court correctly concluded that the orders were in the
best interests of the beneficiaries. She says that neither she, nor the estate lawyer, nor
her trial counsel, committed perjury or misled the Court. The Judge made no error in
finding that seeking directions to mediate was not realistic in the circumstances.
Further evidence on appeal
In support of many of their allegations, Owen and Cuchullain rely on an
“updating affidavit” of Cuchullain dated 10 June 2025, for which they seek leave to
admit as further evidence on appeal.[44] The respondent opposes the application to
admit the further evidence, saying it is largely irrelevant and is in the nature of
submissions, not evidence, or is hearsay.
[44] In addition to the affidavit of 10 June 2025, an affidavit of Cuchullain dated 14 November 2024,
The well-established test for determining whether leave should be granted for
the admission of further evidence on appeal is whether the evidence is fresh, credible
and cogent.[45] This test operates in addition to the basic requirement that the evidence
must be relevant and otherwise admissible.[46]
[45] Court of Appeal (Civil) Rules 2005, r 45. See Erceg v Balenia Ltd [2008] NZCA 535 at [15];
[46] Evidence Act 2006, ss 7–8.
Several High Court decisions have doubted whether it is appropriate for the
court to admit further evidence in the context of an appeal against the exercise of a
discretion. The High Court in Zimmerman v Director of Proceedings noted that “it is
difficult to see how further evidence can properly affect the correctness or otherwise
of a discretionary decision made without such evidence”.[47] We are of the view that
further evidence may be admitted in appeals against the exercise of a discretion, but the barrier is high. For instance, the court may consider it appropriate to admit
updating material.
[47] Zimmerman v Director of Proceedings HC Wellington CIV-2006-485-761, 29 May 2007 at [41]–
As Ms Angus submits, much of the affidavit is made up of submissions and
highly inflammatory allegations. We agree that the material in the affidavit does not
meet the test for leave, apart from the updating material in relation to the Family Court
proceedings.
Cuchullain’s June 2025 affidavit is largely made up of: material from the court
file, such as the transcript of legal argument from the High Court hearing; submissions,
bare allegations and conjecture; material which is not fresh and could have, with
diligence, been discovered and produced for the High Court hearing; and hearsay
relating to third parties, such as what Mrs Gallagher has said about Elaine. Even
allowing some latitude for the fact that the appellants are self-representing on appeal
(having been represented by counsel in the High Court), the material contained in the
June 2025 affidavit is variously not fresh, credible and/or cogent.
Much of the material in the affidavit is directed at showing that Elaine has been
acting in bad faith, in breach of her trustee duties and/or is incompetent. That evidence
is not cogent in this appeal, given that it is proffered to support a case for the removal
of Elaine as a trustee, which is an entirely different case to that run by the brothers in
the High Court. While there were criticisms of Elaine’s actions, the brothers there
argued that there were no major issues between the three trustees. Their case was that
all three trustees should continue in place and not be removed. Mr Bond, who acted
for the brothers at the hearing, did suggest towards the end of his submissions that
Elaine might resign as she was unable to work with her brothers, but that Owen and
Cuchullain should continue as trustees. However, the primary argument advanced by
Owen and Cuchullain was that all of the trustees should continue in their roles, and
they could seek directions from the Court, including a direction to mediate, if issues
arose in future that the three of them could not agree upon.[48]
[48] Judgment under appeal, above n 1, at [46].
In any event, we can see no evidence to support the allegations now made of
bad faith or breach of trustee duties by Elaine, nor of perjury or lying by her or by
Ms Angus.
Some of the allegations in the affidavit are based on a misunderstanding of the
nature of the submissions-only hearing which was held. There was no evidence called
in the High Court and none of the deponents were required for cross-examination. The
hearing was conducted by way of submissions made by the parties’ legal counsel,
Ms Angus and Mr Bond. Therefore the comments upon which the brothers base their
“perjury” allegations are in fact submissions or made in exchanges with the Judge.
They cannot be perjury as they were not made under other oath.[49]
[49] Perjury is the making of a statement on oath, knowing it to be false and intending to mislead a
For instance, in the appellants’ written submissions under the heading
“New Evidence that Elaine and her counsel Ms Angus committed perjury at the
High Court hearing”, an allegation is levelled at Ms Angus of perjury and lying in
relation to whether she had “received the costs from Perpetual Guardian”. Ms Angus
had, in answering a question from the Judge, responded that the there was no evidence
as to the costs of the suggested replacement trustee, Perpetual Guardian. Ms Angus
was correct in her response as the cost information had not been adduced in evidence.
Other allegations by the brothers relate to peripheral matters such as whether or not
Ms Angus was correct in a submission made concerning an easement, the state of
Elaine’s health, and who arranged a health assessment for their mother.
Other allegations are not relevant to the appeal. For example, the issue of who
should be appointed as a replacement trustee was not dealt with by the High Court.
Therefore, the issues raised relating to that appointment, including likely costs and any
alleged conflicts of interest Elaine might have, are matters to be considered following
a further process, including hearing from the parties. They are not matters relevant to
the appeal.
A further set of allegations in the affidavit is grouped under the title in the
written submissions “Evidence that Elaine Gallagher Dekker does not act in the best
interests of the beneficiaries”. One allegation relates to a disagreement between the
brothers and Elaine over which real estate agent should be appointed to sell one of the
estate properties. The brothers point to their resistance to the appointment of the agent
used by Elaine for the sale of her property, as evidence of their acting in the best
interests of the beneficiaries. This is not fresh evidence. This issue was before the
High Court and the Judge referred to it as being the catalyst for Elaine bringing the
present proceedings.[50]
[50] Judgment under appeal, above n 1, at [40]–[43].
Finally, under the heading, “Elaine has not acted in good faith, made decisions
on her own and has not informed her fellow trustees”, Owen and Cuchullain point to
a number of emails between Elaine and the estate’s lawyer to which the brothers were
not privy. They also point to various actions by the estate’s lawyer and its accountants
about which they have made complaints to the relevant professional bodies. It is
difficult to see the relevance of this material to the appeal. In addition, the material is
not fresh and could have with reasonable diligence been obtained for the High Court
proceedings.
We also note that the June 2025 affidavit was only filed and served two weeks
before the hearing and is a lengthy document containing significant detail.
In conclusion, apart from the evidence relating to the fact of Mrs Gallagher
making applications to the Family Court and the update on the High Court
proceedings, leave to admit the evidence in the June 2025 affidavit is declined.
Our assessment
The grounds of appeal fall into three main headings. The first relates to the
allegations of misleading the Court, perjury, and bad faith made against Elaine, her
counsel, and the estate advisors. Those allegations have been dealt with in the
discussion above concerning the further evidence sought to be adduced. The allegations are misplaced, not supported by the evidence, and do not give rise to
grounds for a successful appeal. The appeal fails on those grounds.
We now consider the remaining two main issues raised in the appeal: first,
whether the removal of the trustees is in the best interests of the estate; and secondly,
whether the High Court erred in not agreeing to a request by the brothers for an ADR
process.
Was removal of the trustees in the best interest of the estate?
Cuchullain and Owen submit that their removal as trustees was not necessary
or desirable under s 112 of the Trusts Act. They say that the Judge herself
acknowledged that the issues of mismanagement and conflict of interest alleged by
Elaine were not severe enough to warrant her brothers’ removal.[51] The appellants
believe the benefit of having family members as trustees, given their knowledge of the
properties and family requirements, outweighs Elaine’s allegations.
[51] At [38].
The Judge concluded that the alleged conflicts of interest, such as Cuchullain
being the property manager of the company maintaining the estate property for reward,
and the fact he had held estate funds in his own bank account, demonstrated poor
management of the estate. However, she was not satisfied there was a failure to
account nor a material conflict of interest in view of Cuchullain’s explanations.[52]
Further, in relation to the allegations of Cuchullain’s mismanagement due to wasted
subdivision costs expended on one of the estate properties, maintenance carried out on
a property without Elaine’s approval, and the retention of the estate funds in
Cuchullain’s bank account, the Judge found there was nothing of such significance
that would lead her to remove Owen and Cuchullain as trustees.[53] She noted, however,
that the subdivision difficulties might suggest that Cuchullain had “perhaps
overestimated his expertise in property management”.[54] Nevertheless, she concluded
that “regrettably, the issue that stands in the way of the present trustees remaining in
office is the inability of the trustees to work together”.[55]
[52] At [28].
[53] At [37].
[54] At [37].
[55] At [39].
The Judge, having reached that conclusion, stood back and assessed the issues
in light of the desirability of retaining the appointed family members as trustees. She
said:
[46] Unfortunately, this is a case where leaving the trustees to manage the
trust is not in the best interests of beneficiaries. I am satisfied there will
continue to be significant disagreement and inability to come to unanimous
decisions on substantive matters that will need to be addressed in managing
the properties. That is in the context that the parties agree the Estate is of a
relatively complex nature, and where there are going to need to be decisions
about which properties should be sold, which should be developed, and how.
The respondents’ suggestion that there is the ability to seek directions from
the Court and/or seek a direction that the parties mediate in the event of
disagreement is not a realistic answer to the current breakdown of
relationships.
[47] I acknowledge Mr Gallagher’s desire as executor that his three
children manage the Estate. This is also the wish of Mrs Gallagher. Frankly,
all parties including the applicant would prefer that to be the case. In principle
I agree that this would be the best outcome. However, I have formed the view
that it is unrealistic to consider the parties will work together in the future.
Nor do I consider that the blame for that should be placed at the applicant’s
door, such that she should effectively be forced to resign rather than continue
working with the respondents, as was a suggestion raised by counsel for the
respondents.
A further matter raised is the cost of a new trustee. The Judge was alive to that
issue, as well as the need for care in such an appointment if it were to be made. In the
course of submissions at the hearing, the Judge referred to the costly nature of a
corporate trustee such as Perpetual Trust, and the fact that it was “institutional”. With
that in mind, she provided for a process for the selection and appointment of such a
trustee with a view to hearing further from the parties.[56]
[56] At [52(c)].
The Judge made no error of law or principle in her decision. She correctly
applied the principles we have outlined above, and did not take into account irrelevant
considerations, nor did she fail to take into account relevant considerations. The
decision is not plainly wrong. The Judge reluctantly reached the conclusion that the
best interests of the beneficiaries were met by removing Owen and Cuchullain as
trustees, Elaine retiring, and a replacement trustee being appointed. We agree with
that conclusion. The tensions between the parties have not eased and were no doubt
exacerbated by the allegations made in the course of the argument on appeal.
The appeal fails on these grounds.
Did the High Court err in refusing the request for an ADR process?
Owen and Cuchullain say that they proposed an ADR process to resolve trustee
disagreements. That process would be facilitated by a court-appointed mediator with
legal counsel present. They argue that the Judge erred in dismissing this suggestion
without giving it a chance to work, as it could have avoided the need for trustee
removal and further litigation.
However, as Elaine points out, there was no proposal made by the brothers to
seek directions for mediation from the High Court. At best, the submission was that,
in the event of disagreements arising, there was an option of seeking ADR and/or
directions from the Court. The response by Owen and Cuchullain to Elaine’s
application to the High Court was that there were no issues or disputes requiring
resolution. Mr Bond reiterated in oral submissions that the parties were “dealing with
routine matters perfectly adequately emailing back and forth for approval of invoices
and so on”. He noted that there were options for mandatory ADR processes or
directions applications in extreme circumstances, saying: “the remaining value of the
trust’s assets may well warrant an application like that if it came to it, which … there’s
no reason to think it will”.
Elaine also says that the Judge was correct in saying that ADR was not a
realistic answer to the breakdown of relationships in this case.[57]
[57] At [46].
The Judge was alive to the possibility of directing that the parties engage in
those processes. The difficulty was that Owen and Cuchullain were not seeking such
a direction and they did not even acknowledge there were matters requiring
resolution.[58] They had also refused to attend trustee meetings, including meetings
requested by the estate’s solicitor. A formal meeting with the estate’s solicitor was
proposed by Elaine, but met with no response from the brothers. Such resistance itself does not present an insurmountable bar to ADR. However, in the present case not only
was there a failure to recognise a problem, but Elaine had also expressed concern about
such a process occurring without her lawyers present, whereas Owen and Cuchullain
were reluctant to meet with lawyers present due to cost.
[58] In S v N [2021] NZHC 2860, [2021] NZFLR 756 at [14], Wylie J suggested that the more
In the circumstances, the Judge made no error in determining that the
complexity of the estate and desirability of moving past the inter-trustee difficulties to
enable the trust to be properly administered in the best interests of the beneficiaries,
demanded that the present trustees be removed (or in Elaine’s case resign) and an
independent trustee be appointed. That trustee would be free of the involvement of
the family members, all of whom were beneficiaries, as well as free from conflicts of
interest, although the existing conflicts were not of themselves disqualifying.
The Judge predicted that the dysfunction between the trustees would continue.
That has proved to be the case. The beneficiaries appear to be factionalised now,
supporting one party or the other, leading to further tensions.
Mrs Gallagher, the life tenant, is dependent on the income generated by the
trust properties. The parties advised us that no trustee annual accounts have been
finalised since year end 2022, due to the inter-trustee disputes and the complaints
lodged against the trust accountants. That is a clear indication that the interests of the
beneficiaries are not being met and that position is unlikely to improve with the present
trustees involved.[59]
[59] Cuchullain, who took carriage of the argument on appeal for the brothers, advised us that the trust
In addition, the developments since the hearing, in particular the issuing of the
Family Court proceedings, has added to that complexity and the need for trustee
independence.
The Judge made no error in not directing the parties engage in ADR, including
mediation. The appeal fails on those grounds.
Costs
Elaine seeks increased costs on appeal. She points to the belated application
by the brothers to adjourn the hearing in order to adduce the further evidence. Elaine
also submits that the appellants pursued arguments lacking in merit. Owen and
Cuchullain also seek costs.
First, we note that while it was apparent to us that all the trustees were doing
their best, in the circumstances, their combined efforts were not effectively directed at
the best interests of the beneficiaries.
The usual position is that costs follow the event, and Elaine is the successful
party on appeal. We have considered whether Elaine’s costs and disbursements should
be met by the estate or by Owen and Cuchullain personally, given that their further
evidence was largely irrelevant and inadmissible, and Elaine was required to respond
to it on an urgent basis, thus adding to her costs.
Ultimately, we have decided that Elaine’s costs should be met by the estate,
given that the issues raised on appeal have not previously been dealt with by this Court.
Obviously, however, there can be no expectation that the Court will require the estate
to bear future costs if it takes the view those costs ought not to have been incurred.
It follows from what we have said that the conduct of the appeal disentitles
Owen and Cuchullain to a reimbursement of their costs and disbursements. The
High Court costs are properly dealt with by that Court, as the respondent
contemplates.
Result
The application for leave to adduce further evidence on appeal is allowed in
part, but limited to the updating material concerning the filing and progress of the
Family Court proceedings. The application is otherwise declined.
The appeal is dismissed.
The respondent is entitled to her actual and reasonable costs and disbursements
incurred in this appeal to be paid from the estate.
Solicitors:
Morris Legal, Auckland for Respondent
| Judgment: | 25 August 2025 at 10 am |
JUDGMENT OF THE COURT
| A | The application for leave to adduce further evidence on appeal is allowed in |
| part, but limited to the updating material concerning the filing and progress | |
| of the Family Court proceedings. The application is otherwise declined. | |
| B | The appeal is dismissed. |
C The respondent is entitled to her actual and reasonable costs and
disbursements incurred in this appeal to be paid from the estate.
____________________________________________________________________
GALLAGHER v GALLAGHER-DEKKER [2025] NZCA 421 [25 August 2025]
under appeal, we use the forenames of the parties to avoid confusion.
counsel in the High Court.
the court to remove an executor if, among other reasons, it becomes “expedient” to do so.
Applications under s 21 are often dealt with concurrently with applications under ss 112–114 of
the Trusts Act 2019. The principles applying to the exercise of the discretion under ss 112–114
are equally applicable to those applying under s 21 of the Administration Act: Tod v Tod [2015]
NZCA 501, [2017] 2 NZLR 145 at [21]–[22]; Frickleton v Frickleton [2016] NZCA 408, [2017]
2 NZLR 154 at [36]; and Farquhar v Nunns [2013] NZHC 1670 at [13(f)].
Nevill’s Law of Trusts, Wills and Administration in New Zealand (14th ed, LexisNexis, Wellington
2023) at [8.6.2]; and Jillian Mallon “Removal of Trustees: The Old, the New, Friction and
Hostility, and Other Issues” (2022) 1 NZ Law Review 59 at 75.
and Law Commission Review of the Law of Trusts: A Trusts Act for New Zealand (NZLC R130,
2013) at [8.16] and [8.20].
[1938] NZLR 520 (CA), where the question is framed as being whether the continuance of the
trustees would prevent the trusts from being properly executed.
welcomed by trustees and beneficiaries as having several advantages over litigation: Rebekah
McCrae and Robin Palmer “An Overview of the Trusts Act 2019 — Revolutionary Change or
Much of the Same?” (2021) 28 Cant LR 133 at 158.
the parties: Shirley Shipman and others Brown and Marriott’s ADR Principles and Practice
(4th ed, Sweet & Maxwell, London, 2018) at [3-001]–[3-003].
1 NZFLR 165 (CA) at 169–170.
170; and Blackstone v Blackstone [2008] NZCA 312, (2008) 19 PRNZ 40 at [8].
also titled “updating affidavit”, was filed at the time the appeal was lodged. No application has
been made to admit the November 2024 affidavit and in any event most of the material in it appears
to be covered by the June 2025 affidavit.
Chen v Huang [2024] NZCA 38 at [177].)
[42], citing Television New Zealand Ltd v Southland Fuel Injection Ltd HC Wellington AP298/94,
16 March 1998 at 6–7. See also Brand v Registrar of Companies [2016] NZHC 2983 at [37].
court or tribunal. It is punishable by up to seven years’ imprisonment: Crimes Act 1961, ss 108
and 109.
appropriate process for seeking directions for ADR under s 145 is by way of a formal application.
However, failure to do so does not prevent the court from making such directions.
is in a strong asset position, despite the fact that recent valuations promulgated by the
Auckland Council indicated that the valuations of the trust properties had dropped considerably.
There was apparently no evidence before the High Court as to the value of the trust nor as to its
income position.
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