Rowe v Chamberlain
[2025] NZHC 765
•1 April 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2024-409-000631
[2025] NZHC 765
UNDER the Trusts Act 2019 IN THE MATTER
of a removal of trustee
BETWEEN
TANIA LEE ROWE in her personal capacity and in her capacity as trustee of the SUMO FAMILY TRUST
Plaintiff
AND
ADAM FRANCIS CHAMBERLAIN
Respondent
Hearing: 1 April 2025 Appearances:
M P Davis and M K Thomas for the Plaintiff No appearance for Respondent
Judgment:
1 April 2025
JUDGMENT OF EATON J
This judgment was delivered by me on …….. at ……… pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
ROWE v CHAMBERLAIN [2025] NZHC 765 [1 April 2025]
Introduction
[1] Ms Rowe was in a long-term de facto relationship with Mr Chamberlain. Both are trustees of the Sumo Family Trust (the Trust). The Trust owns a property at 126 Kainga Road, Christchurch (the property).
[2] Ms Rowe and Mr Chamberlain separated in around October 2022. Mr Chamberlain has continued to reside in the property. The relationship of the parties has completely broken down. In her statement of claim Ms Rowe seeks an order that Mr Chamberlain be removed as a trustee and ancillary orders allowing the plaintiff to sell the property, that the sale proceeds be held in the plaintiff’s solicitor’s trust account pending agreement as to distribution and an order that the EQC settlement funds tied to the property be paid to the ANZ Bank towards satisfaction of the mortgage.
Procedural steps
[3] Mr Chamberlain was served with the proceeding on 2 December 2024. He then applied for and was granted an extension of time to file a statement of defence. He has failed to file a statement of defence or otherwise engage with the proceedings. Consequently, the application was set down for a formal proof hearing. Affidavit evidence has been filed by Ms Rowe in support of the orders sought. I did not consider it necessary to require Ms Rowe to give additional evidence.
[4] Mr Davis confirmed that prior to the formal proof hearing Ms Rowe had spoken with Mr Chamberlain who advised he would not be appearing at the hearing.
Amended statement of claim
[5] On 31 March 2025, Ms Rowe filed an amended statement of claim. The amendment seeks an order pursuant to s 114 of the Trusts Act 2019 that Shontelle Robb be appointed as a replacement trustee for Mr Chamberlain. The amended statement of claim is supported by an affidavit of Ms Robb confirming that she is the plaintiff’s daughter, that she agrees to being appointed as a replacement trustee of the Sumo Family Trust and to being bound by the directions made by the Court and to act in the best interests of the beneficiaries.
Evidence
[6] Ms Rowe’s affidavit confirms that she and Mr Chamberlain entered into a relationship around 1996 and separated in October 2022. They have a daughter born on 11 November 2011 and who is primarily in Ms Rowe’s care.
[7] The Trust was settled on 19 September 2007. Ms Rowe and Mr Chamberlain are the sole trustees of the Trust. The final beneficiaries are the settlors and the child or children of the marriage or relationship of the settlors born or adopted before the vesting day.
[8] In November 2007, the Trust purchased the property. Homes.co.nz estimates the property to be worth around $520,000. There is a mortgage secured over the property with ANZ bank. The amount owing on the mortgage at the separation date was approximately $184,012. Since the separation date, Mr Chamberlain has not made any mortgage or interest payments. Ms Rowe first raised concerns with Mr Chamberlain in January 2023 and proposed to place the property on the market for sale. Mr Chamberlain has refused to engage. For 12 months following the separation date, Ms Rowe continued to meet expenses associated with the property. She ceased making these payments in September 2023 due to financial pressure resulting from funding alternative accommodation for herself and their daughter and reducing her hours at work to care for their daughter. The amount owing on the mortgage as at 12 March 2025 was $220,458.77 and continues to increase.
[9] The Trust holds two bank accounts, one is overdrawn by $3,711.86 due to rates arrears, the other has a balance of 0.79 cents.
[10] In early to mid-2023, the Trust reached a resolution with EQC relating to earthquake damage at the property, however Mr Chamberlain declined to consent to release the settlement money to ANZ towards satisfaction of the mortgage. ANZ is seeking these funds as a matter of urgency. This meant the earthquake damage at the property could not be repaired.
[11] Following an altercation at the end of 2023, a police safety order was issued against Mr Chamberlain. Around September 2023, Ms Rowe engaged legal counsel
to act for her in relationship property matters. Her solicitors sent letters to Mr Chamberlain on her behalf seeking to resolve the division of relationship property matters and for his consent on the urgent release of the EQC settlement funds to ANZ. Mr Chamberlain again failed to engage.
[12] After being served with these proceedings, the relationship between the parties has grown more hostile as evidenced in a series of highly offensive and abusive messages. Around November 2024, Ms Rowe was contacted by police to advise they were investigating Mr Chamberlain and his network for drug dealing. She is concerned the property is being used for these activities and there is a risk of damage to the property.
[13] The property is currently uninsured as Mr Chamberlain has not been paying the insurance premiums while occupying the property. On 18 March 2025, Mr Chamberlain texted Ms Rowe “Hope house doesn’t catch fire with no insurance”. Ms Rowe is also concerned if anything happens to the house, she will have no recourse against Mr Chamberlain as he does not appear to have any other significant assets to fund any adverse award made against him.
[14] Ms Rowe believes that Mr Chamberlain has failed to act in the interests of the beneficiaries or for the security of the trust assets while dealing, or failing to deal, with the property.
Legal principles
[15] The Court may order the removal of trustees under s 112 of the Trusts Act 2019:
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.
[16] This exists alongside the Court's power to remove trustees under its inherent supervisory jurisdiction to ensure the proper execution of trusts.1
1 Trusts Act 2019, s 8.
[17]The relevant principles were outlined by the Court of Appeal in Tod v Tod:2
(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.
[18]The interests of the beneficiaries must always be the focus:3
… if [the Court is] satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.”
Submissions
[19] Mr Davis, on behalf of the plaintiff, has filed two supporting memoranda. Essentially, he submits that the evidence of the plaintiff comfortably establishes that it is necessary to remove Mr Chamberlain as a trustee of the Sumo Family Trust.
[20] Relevant to the amended statement of claim, Mr Davis invites the Court to consider either appointing Ms Robb as a trustee or alternatively making the orders as originally sought but expressed as conditional upon Ms Rowe appointing a replacement trustee in accordance with cl 12.4 of the trust deed.
2 Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145 at [22], quoting Farquhar v Nunns [2013] NZHC 1670 at [13]. See also Frickleton v Frickleton [2016] NZCA 408, [2017] 2 NZLR 154 at [29].
3 Letterstedt v Broers (1884) 9 App Cas 371 (PC) at 386 per Lord Blackburn, delivering the Privy Council’s opinion, as cited in Frickleton v Frickleton, above n 2, at [33]. See, as to conflicts of interest, Chris Kelly and Greg Kelly Garrow and Kelly Law of Trusts and Trustees (8th ed, LexisNexis, Wellington, 2022) at [17.84]; and Tod v Tod, above n 2, at [27(c)].
Analysis
[21] I am satisfied there are good grounds to remove Mr Chamberlain as a trustee of the Trust.
[22] Following their separation in October 2022, Ms Rowe and Mr Chamberlain’s relationship has deteriorated significantly. Since September 2023 when Ms Rowe ceased making payments relating to the property and engaged legal counsel, communications between the parties have been limited or abusive and Mr Chamberlain has not engaged in any meaningful way about the Trust or the property.
[23] The effect is that since September 2023 Mr Chamberlain has dealt with the property by way of refusing consent to settle the EQC claim, refusing to provide these settlement monies to ANZ, failing to make mortgage and interest payments and failing to pay insurance premiums for the property. Those dealings are not in the interests of the beneficiaries of the Trust.
[24] I am satisfied that the proper execution of the Trust is frustrated. It is in the interests of the beneficiaries that Mr Chamberlain be removed as a trustee.
[25] Pursuant to cl 12.4 of the trust deed, except where a corporation is the sole trustee, if at any time there is only one trustee of the Trust, no power or discretion conferred on the trustees by law or by the deed other than the appointment of a new trustee can be exercised by the surviving trustee until an additional trustee has been appointed. Pursuant to cl 12.6 of the deed, all powers and discretions of the trustees must be exercised with the unanimous approval of the trustees.
[26] It follows that a substitute trustee will need to be appointed before the further orders sought by Ms Rowe can be either made by the court, or by the trustees.
[27] Mr Davis invites the Court to appoint Ms Robb as a substitute trustee pursuant to s 114 of the Trusts Act 2019. Section 114(1) provides as follows:
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.
[28] No evidence has been offered by the plaintiff to support a finding that it is difficult or impractical to appoint a new trustee without the assistance of the Court. Mr Davis frankly acknowledged that to be the position. There is no jurisdiction for the Court to appoint Ms Robb as a trustee.
[29] Further, I am not satisfied that it is appropriate to make the alternative conditional orders proposed by Mr Davis. To do so would, in effect, usurp the function of the yet to be appointed substitute trustee.
[30] In my view, it is appropriate that the Court remove Mr Chamberlain as a trustee, but otherwise decline to make the orders sought. It will then be for Ms Rowe to appoint an appropriate trustee. That person will be required to bring independence to the role to ensure that decisions are made that are in the best interests of all beneficiaries of the Trust. I understand Ms Robb presently cares for the parties’ daughter so will be familiar to Mr Chamberlain. It will be for the newly appointed trustee to consider whether it is appropriate for the property to be sold, for the sale proceeds to be held in the plaintiff’s solicitor’s trust account and to settle the claim with EQC. On the face of it, those proposed measures seem appropriate.
Costs
[31] In anticipation of the plaintiff being successful in the application to remove Mr Chamberlain as a trustee, Mr Davis has filed a discrete [] in support of an award of costs of $2,703.77. Mr Davis says the award sought is a lower level that would have been awarded if costs were quantified 2B. I agree a costs award in that sum is appropriate and make an order accordingly.
...................................................
Eaton J
Solicitors:
Taylor Shaw, Christchurch
Copy to:
A F Chamberlain
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