Southgate v Cameron
[2025] NZHC 1968
•17 July 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2025-485-160
[2025] NZHC 1968
UNDER the Administration Act 1969 and Parts 19 and 27 of the High Court Rules 2016 IN THE MATTER OF
the estate of Thomas Edrich Southgate
BETWEEN
JANENE HELEN SOUTHGATE and TODD EVAN SOUTHGATE
Applicants
AND
ANNE STEWART CAMERON and ROGER GERARD DOWNEY
Respondents
Hearing: 1 July 2025 Counsel:
J J Pietras for Applicants
No appearance for Respondents
Judgment:
17 July 2025
JUDGMENT OF GRAU J
(Application to replace executors)
[1] This is an originating application seeking orders that letters of administration with Will annexed be granted to Bryce John Williams (or another appropriately qualified solicitor) instead of the named executors. An order is also sought for the production of the original Will to enable the replacement executor to apply for administration.
[2] The application is made by the children of Thomas Southgate (Thomas), who passed away in February 2024. Under Thomas’ last known Will of 6 September 2021, the respondents, Anne Cameron (Annie), Thomas’ surviving de-facto partner, and Roger Downey (Roger), Thomas’ former solicitor, were appointed as executors.
SOUTHGATE and v CAMERON and [2025] NZHC 1968 [17 July 2025]
[3] The application has been made because Thomas’ children, Janene and Todd, consider that Annie and Roger have an incurable conflict of interest, both in terms of administering the estate and in exercising the power of appointment under the Trust Deed for the Tom Southgate Family Trust (the Trust).
[4] The two respondents were both served with the application on 28 March 2025. Roger’s response was to indicate he wished to renounce as executor immediately. Annie originally indicated she wished to oppose the application. However, she confirmed, via her counsel on 28 April 2025, that she would abide the decision of the Court.
[5] Accordingly, Radich J directed that the matter would proceed by way of formal proof.
Background to the application
[6] On 5 December 2002, Thomas settled the Trust as part of his overall succession planning and to ensure that his children would be provided for after he died.
[7] The discretionary beneficiaries of the Trust included Thomas, his children, Janene and Todd, and Todd’s children, as well as any other person appointed by Deed. Janene, Todd and Todd’s children are still beneficiaries of the Trust.
[8] The Trust Deed vests the power of appointment and removal in Thomas’ executors upon his death and it requires a minimum number of two trustees. Before Thomas died, the two trustees were Thomas and his accountant, Robin Barrie. Mr Barrie is presently the sole trustee.
[9] Not long after setting up his Trust, Thomas purchased his home at 63 Convent Road, Otaki (63 Convent Road), which was later transferred to the Trust.
[10] The following year, Thomas met Annie. She later moved in with him at 63 Convent Road.
[11] In 2005, the Trust transferred ownership of 63 Convent Road to Thomas and Annie as joint tenants. According to the settlement statement, Thomas and Annie each contributed $70,000 to the purchase price of $140,000, however Janene understands that no money changed hands. The purchase price appears to have been recorded as a loan owed by Thomas to the Trust. It is said that this loan was never repaid.
[12] Over the following years, the Trust acquired further assets after Thomas sold his shares in the family-owned engineering business and a rental property in Otaki.
[13] On 6 September 2011, Thomas made his last known Will, appointing Annie and Roger as executors, and Annie as the sole beneficiary of his estate.
[14] On 18 July 2016, Thomas and Robin Barrie signed a trustee resolution titled “Variation of the Tom Southgate Family Trust”, adding Annie as a discretionary beneficiary. However, there was no supporting Deed of Appointment as contemplated by cl 1 of the Trust Deed, raising questions about the validity of Annie’s appointment as a discretionary beneficiary.
[15] The latest financial statements for the Trust (for the year ending 31 March 2023) record that the Trust had assets of $938,644: consisting of sums of $56,451 and
$661,897 in two bank accounts, the loan owed by Thomas to the Trust of $220,296; and shares valued at $2,206.
[16] In mid-2023, Thomas’ health deteriorated, resulting in multiple hospital admissions over the following nine months.
[17] Janene and Todd allege that, between 2023 and 2024, Annie made various transfers from the Trust’s bank accounts to herself, totalling $67,151.25. The co- trustee has deposed he did not know about, or authorise, these distributions. Over the same period, it is alleged that Annie appears to have made various transfers and withdrawals from Thomas’ personal bank account, totalling $14,800.
[18]On 12 February 2024, Thomas passed away in Levin.
[19] Consequent on the death of Thomas, Annie acquired the property at 63 Convent Road by survivorship. Annie put 63 Convent Road on the market in April 2024 and sold it for $660,000 in June 2024. She also acquired $93,592.98 in a joint ‘Holidays’ bank account by way of survivorship. All of the funds in the Holidays Account are said to have derived from drawings from the Trust’s bank accounts.
[20] Between April 2024 and February 2025, Janene and Todd say they attempted to resolve with Annie the issues about the payments and withdrawals made from the Trust and Thomas’ bank accounts. Annie was also invited to step down as executor so that an independent executor could be appointed to administer the estate and appoint a second trustee to the Trust.
[21] Annie denied ever accessing the Trust or Thomas’ bank accounts. She proposed instead that Roger be appointed as sole executor and co-trustee of the Trust. Janene and Todd opposed that course.
[22] Given the impasse, Janene and Todd filed the present application in the High Court.
The application
[23]Janene and Todd say that the application is necessary because:
(a)an independent executor needs to be appointed to administer the estate and consider whether any steps need to be taken to recover any funds withdrawn by Annie from Thomas’ personal bank account and repay the loan to the Trust; and
(b)an independent executor needs to be appointed to exercise the power of appointment under the Trust Deed so that the two trustees can investigate any unauthorised withdrawals of Trust funds by Annie and consider whether the Trust should be wound up.
[24] Janene and Todd’s position is that Annie cannot administer the estate properly, nor can she exercise the power of appointment under the Trust Deed without putting
her own conduct in the spotlight. They say there is cogent evidence to support unauthorised withdrawals and transfers made from the Trust’s bank accounts to Annie, without the knowledge and approval of the two trustees. When Mr Barrie has confirmed he had no knowledge of the transactions in question, even had Thomas approved the transactions (which is denied), the distribution of trust funds would be ultra vires, as the Trust requires its trustees to act unanimously.
[25] The current situation is that the estate appears to be insolvent; when there is only approximately $25,000 remaining which cannot satisfy the liability to the Trust.
Originating application
[26] The applicants, Janene and Todd, sought leave under r 19.5 of the High Court Rules 2016 (HCR) to commence the proceeding by way of originating application. I am satisfied that course is in the interests of justice as it will secure the just, speedy and inexpensive determination of this matter which is straightforward and is unopposed.
Legal principles
[27] Section 6 of the Administration Act 1969 provides the Court with a discretion to grant administration to a person, other than a person who has been appointed as executor, or who would by law, be entitled to a grant of administration. The discretion to bypass the person who would normally be entitled to appointment applies if the Court thinks it is “expedient” to do so, because the estate is insolvent or there are “special circumstances”.1
[28] Special circumstances have been held as meaning circumstances of sufficient significance to justify appointment of a person other than a named executor.2 The Court takes much the same approach as it takes to applications to remove trustees under s 21 of the Administration Act 1969.3
1 Administration Act 1969, s 6(2).
2 Kang v Perpetual Trust Limited [2023] NZHC 1501 at [14].
3 Harvey v Harvey [2021] NZHC 1771 at [39]–[40]; Kang v Perpetual Trust Ltd, above n 2, at [12]– [15].
[29] Before the Court makes a determination to bypass a person who would otherwise be entitled to administer an estate, s 6(4) requires consideration of that person’s competency and solvency, their ability to administer the estate effectively, the rights of all persons’ interests in the estate and any changes in circumstances between the making of the will and the time when the Court is asked to make the grant.
Discussion
[30] I am satisfied that the orders sought should be granted. It is clear the Court’s intervention is required. This case shares similarities with other cases in which the Court has removed a named executor in circumstances where the executor’s conduct has put them in a position of inherent conflict.4
[31] In the present case, the estate appears to be insolvent and there are serious questions raised about the use Annie has made of Thomas’ personal funds, and the Trust’s funds, prior to Thomas’ death. Evidence has been obtained that would appear to support unauthorised withdrawals and transfers from the Trust’s accounts to Annie’s account or to her joint account with Thomas, without the knowledge or approval of the trustees. Annie, as executor of Thomas’ estate, would be responsible for investigation and recovery of any such unauthorised payments. She would also have the power to appoint a new trustee for the Trust who would need to investigate the Trust’s transactions and the appointment of Annie as a beneficiary. Self-evidently a position of inherent conflict arises, and it is difficult to see how Annie could discharge her duties as executor to call in the estate assets and repay the estate debts, in particular, the debt owed by Thomas to the Trust which relates to her and Thomas’ purchase of their home.
[32] This is also a case where the estate may need to apply to the Family Court for leave to divide the relationship property of Annie and Thomas to enable repayment of Thomas’ loan from his insolvent estate to the Trust.5 That too places Annie in a situation of conflict.
4 See for example, Kellerman v Kellerman-Thornton [2020] NZHC 2297 and Casse v Shih [2024] NZHC 1410.
5 Property (Relationships) Act 1976, s 88(2).
[33] In addition, it appears that no progress is able to be made as matters currently stand. The parties have reached an impasse. Annie has been invited to stand down as executor. She has been unwilling to do so and administration of the estate cannot otherwise proceed. She has denied any misuse of funds, yet the concerns of Janene and Todd need to be investigated.
[34] Although the wishes of Thomas in appointing Annie need to be considered, the starting point is the Court’s duty to see estates properly administered, and that appears impossible if Annie remains as an executor. Nor would it be appropriate to appoint Roger as sole executor when he has confirmed he wishes to renounce his executorship. He has also previously acted as Annie’s lawyer.
[35] A replacement executor, Mr Williams, is ready, willing and able to be appointed as an independent executor. He is an appropriately qualified independent person. He is aware of the insolvency of the estate. His appointment will enable the proper administration of Thomas’ estate. The status quo will not enable proper administration when there are matters requiring investigation and, potentially, action.
[36] There is no charging clause in the Will. Janene and Todd seek an order for reasonable professional fees and disbursements to be a first charge on the estate, given it is insolvent and will need to be administered under s 31 of the Administration Act and pt 6 of the Insolvency Act 2006. Janene and Todd have also agreed to be responsible for payment of the independent executor’s expenses, to the extent that the estate has insufficient funds to meet those expenses. The proposed executor, Mr Williams, will, however, retain his independence. It is important to record those matters when the Court of Appeal has noted very recently that the position of an independent trustee should be clear on the record, as to service, preparedness to act, and knowledge of insolvency.6
[37] Finally, the appointment of Mr Williams as an independent executor requires an order under s 54 of the Administration Act to produce the Will to enable Mr Williams to apply for letters of administration with Will attached. I agree such an order is necessary.
6 Lane v Goldson [2025] NZCA 36 at [77].
Result
[38]I make the following orders:
(a)permitting the proceeding to commence via originating application pursuant to r 19.5 of the HCR;
(b)granting administration of the estate to Mr Bryce John Williams;
(c)requiring the original copy of Thomas’ will to be uplifted by Annie and/or Roger from the office of Fitzherbert Rowe’s offices in Levin and delivered to Mr William’s office by hand or by courier by the end of five working days after their receipt of this decision; and
(d)for Mr Williams’ reasonable professional fees and disbursements to be a first charge on the estate.
Costs
[39] Janene and Todd ask for increased costs of 25 per cent against Annie for all steps taken up to, and including, the judicial conference on 28 April 2025, and 2B costs for all steps thereafter. The uplift is sought because they say Annie repeatedly refused to renounce as executor over a nine-month period before the proceedings were commenced and she refused to acknowledge she had withdrawn any funds from Thomas’ personal, or the Trust’s, accounts. As a result, Janene and Todd had to file more extensive evidence than would ordinarily be required for an application of this nature, given Annie opposed the application then eventually agreed to abide the decision of the Court.
[40] Costs are at the discretion of the Court.7 Rule 14.2(1)(g) of the HCR sets out the key principle that “so far as possible the determination of costs should be predictable and expeditious”. Pre-litigation conduct is not ordinarily a relevant factor.8 The Court is concerned with the conduct of the litigation itself.9 The Court of Appeal
7 HCR, r 14.1.
8 Lincoln v Attorney-General [2025] NZHC 49 at [13].
9 Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) at [160].
has, in a recent case, agreed with the proposition that a party who abides can still be liable for costs. The Court also said however, that an award of costs against an abiding party will be rare and the reason for the award must remain consistent with the costs regime overall.10
[41] I consider that, as the successful parties in this application which required a (formal proof) hearing, Janene and Todd are entitled to their costs. However, I do not consider this as such a rare case that would require an uplift, when most, if not all of the conduct by Annie that is complained of, has occurred before the proceeding commenced, and when Annie did eventually withdraw her opposition to the application and indicated she would abide the Court’s decision. The costs claimed, including for the filing of the affidavits, are significant, and that disposes of the argument that more evidence had to be filed than would ordinarily be the case.
[42] Accordingly, I make an order for Annie to pay costs of $16,338.92 in accordance with the schedule (without uplift) filed with the applicants’ submissions.
Grau J
Solicitors:
Duncan Cotterill, Wellington for Applicants
Wakefields Lawyers, Wellington for First-named Respondent
10 Belgiorno-Nettis v Auckland Unitary Plan Independent Hearings Panel [2024] NZCA 695 at [33].
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