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High Court of New Zealand Decisions |
Last Updated: 26 May 2020
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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
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CIV-2020-409-000185
[2020] NZHC 1074 |
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IN THE MATTER
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of Part 19 of the High Court Rules and Rule 4.35
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IN THE MATTER
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of an application by PENELOPE JEAN CRON for appointment as litigation
guardian for Warner James Mauger
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Hearing:
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Determined on the papers
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Counsel:
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S P Rennie for Applicant
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Judgment:
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21 May 2020
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JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 21 May 2020 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
An application by PENELOPE JEAN CRON for appointment as litigation guardian for Warner James Mauger [2020] NZHC 1074 [21 May 2020]
[1] The applicant applies for orders:
(a) granting her leave to bring this proceeding by way of originating application; and
(b) appointing her as litigation guardian for her father, Warner James Mauger (Mr Mauger), in a proposed proceeding to be brought by Mr Mauger against Simon Michael Tucker and Louise Coranetta Hermansson.
Background
[2] Mr Mauger is an 85 year old widower. The applicant is his daughter. Pursuant to the Protection of Personal and Property Rights Act 1988 (PPPRA), Mr Mauger granted an enduring power of attorney:
(a) dated 31 August 2016 in relation to his personal care and welfare to the applicant as successor attorney (succeeding her mother who died in 2018); and
(b) dated 27 March 2019 in relation to property to the applicant and her brother Stephen Warner Mauger (Stephen).
[3] Mr Mauger has had a successful working life. However, he has suffered a significant deterioration in his mental health in recent years. Mr Mauger is suffering from a dementing illness that will continue indefinitely and he is incapable of managing his personal and property affairs. His memory and judgement are significantly impaired, and he lacks capacity to foresee the consequences of both making and failing to make decisions.
[4] Dr Colin Peebles, a psychiatrist specialising in elder persons’ mental health, has given certificates dated 3 November 2019 of mental incapacity under the PPPRA in respect of Mr Mauger.
[5] In January 2019, Mr Mauger made payments, purportedly as gifts, to Simon Michael Tucker and Louise Coranetta Hermansson in the sums of $550,000 and
$485,000 respectively. Mr Tucker and Ms Hermansson were employees of a company owned by Mr Mauger’s family interests.
[6] The payments were made after Mr Mauger was seen by a General Practitioner on 7 January 2019, who gave a certificate that Mr Mauger was of sound mind. Despite giving that certificate the doctor was aware of Mr Mauger’s deteriorating health but was not aware of the reason the certificate was being sought. He has written to the applicant that he would not have issued the certificate had he been so aware.
[7] The applicant intends that Mr Mauger shall take proceedings against Mr Tucker and Ms Hermansson to set aside the payments on the ground of unconscionability. A draft statement of claim setting out the claim that will be made has been filed.
[8] Because of a perceived lack of direct authority that the holder of an enduring power of attorney may conduct proceedings on behalf of an incapacitated person, the applicant has applied for appointment as Mr Mauger’s litigation guardian under r 4.35 (pt 4, sub-pt 7) of the High Court Rules 2016.
Application for leave to commence originating application
[9] Applications that may be made using the pt 19 originating application procedure are set out in rr 19.2 – 19.4 of the High Court Rules. An application for the appointment of a litigation guardian is not referred to.
[10] The applicant relies upon r 19.5(1) which provides that the court may, in the interests of justice, permit any proceeding not mentioned in rr 19.2 – 19.4 to be commenced by originating application. Permission may be sought without notice.1
[11] Part 19 is a procedure generally used for cases where it is not necessary to have full pleadings and interlocutory steps for the proper determination of the issues.2 It is
1 High Court Rules 2016, r 19.5(2).
2 Fisk v X [2014] NZHC 2797.
designed to be a speedier and less expensive mechanism than pt 18, although the pt 18 procedure is still more efficient and confined than a general proceeding.3 The use of the originating application procedure to apply for the appointment of a litigation guardian has been accepted in other cases.4 However, in my view, the application could more conveniently be dealt with as an interlocutory application under pt 7 sub- pt 2 of the High Court Rules.
[12] The definition of an interlocutory order is:5
Interlocutory order –
(a) means an order or a direction of the court that –
(i) is made or given for the purposes of a proceeding or an intended proceeding; and
(ii) concerns a matter of procedure or grants some relief ancillary to that claimed in a pleading;
[13] An order appointing a litigation guardian would fall within both paragraphs (a)(i) and (a)(ii) of the definition of interlocutory order.
[14] This might be considered moot, as many of the rules concerning interlocutory applications apply with necessary modifications to proceedings commenced by originating application.6 However, proceeding by way of interlocutory application is preferable as it is consistent with the scheme of the Rules and avoids the requirement to obtain leave under r 19.5(1).
[15] Mr Rennie submitted that in light of the authorities the applicant was justified in invoking the originating application procedure. I accept that there are such authorities. In those circumstances, I grant leave for the application to be brought by way of originating application.
3 Public Trust v Kain [2018] NZHC 1547 at [15].
5 High Court Rules 2016, r 1.3.
6 Rule 19.10.
Appointment of a litigation guardian
[16] Consistent with the scheme of the High Court Rules, the applicant has applied for appointment as Mr Mauger’s litigation guardian as a precursor to the proposed proceeding.7
[17] An incapacitated person must be represented by a litigation guardian in any proceedings unless the court otherwise orders.8
[18] An incapacitated person is defined as:9
incapacitated person means a person who by reason of physical, intellectual, or mental impairment, whether temporary or permanent, is –
(a) not capable of understanding the issues on which his or her decision would be required as a litigant conducting proceedings; or
(b) unable to give sufficient instructions to issue, defend, or compromise proceedings
[19] For reasons given in [3] and [4] above, I am satisfied Mr Mauger is an incapacitated person in terms of the High Court Rules.
[20] A litigation guardian is defined as:
litigation guardian
(a) means –
- (i) a person who is authorised by or under an enactment to conduct proceedings in the name of, or on behalf of, an incapacitated person or a minor (but only in a proceeding to which the authority extends); or
- (ii) a person who is appointed under rule 4.35 to conduct a proceeding; and
(b) has the same meaning as the expression “guardian ad litem”
7 L v Chief Executive of the Ministry of Social Development (2008) 27 FRNZ 328 at [6]; C v S
(2007) 27 FRNZ 399 at [30].
8 High Court Rules, r
4.30(1).
9 Rule 4.29.
[21] Rule 4.35 deals with the grounds for the appointment of a litigation guardian as follows:
4.35 Appointment of litigation guardian
(1) This rule applies if an incapacitated person does not have a litigation guardian within the meaning of paragraph (a)(i) of the definition of litigation guardian in rule 4.29.
(2) The court may appoint a litigation guardian if it is satisfied that –
- (a) the person for whom the litigation guardian is to be appointed is an incapacitated person; and
- (b) the litigation guardian –
- (i) is able fairly and competently to conduct proceedings on behalf of the incapacitated person; and
- (ii) does not have interests adverse to those of the incapacitated person; and
- (iii) consents to being a litigation guardian.
(3) In deciding whether to appoint a litigation guardian, the court may have regard to any matters it considers appropriate, including the views of the person for whom the litigation guardian is to be appointed.
(4) The court may appoint a litigation guardian under this rule at any time
–
(a) on its own initiative; or
(b) on the application of any person, including a person seeking to be appointed as litigation guardian.
[22] A question that arises is whether an attorney, with general authority under the PPPRA to act on a donor’s behalf in relation to the whole of the donor’s property, is a litigation guardian pursuant to (a)(i) of the definition of litigation guardian under r 4.29. I sought further assistance on this issue from Mr Rennie and in recognition of his helpful submissions I will briefly address it, although it is not determinative of this application.
[23] Mr Rennie submitted there is a lack of direct authority on the point and referred to Chick v Blackwell.10 There, the plaintiffs sued the defendant for specific performance of an option to purchase the defendant’s farm property under lease agreements. The defendant’s brothers, in the exercise of an enduring power of attorney, filed a statement of defence pleading the defendant’s lack of capacity. The
10 Chick v Blackwell [2011] NZHC 842; (2011) 20 PRNZ 812.
plaintiffs applied for orders to determine whether the defendant’s brothers were validly appointed litigation guardians for the defendant and, if so, for their removal.
[24] Associate Judge Faire noted there were commentators who had suggested that perhaps an enduring power of attorney under the PPPRA may not authorise the taking or defending of proceedings. As he considered the brothers suitable to be the defendant’s litigation guardians, he took a pragmatic approach and made an order pursuant to r 4.35 that the defendant’s brothers be appointed as litigation guardians for the purpose of defending the proceeding.11
[25] In B v Waitemata District Health Board, Katz J held that a welfare guardian under the PPPRA was the person authorised to conduct proceedings on behalf of an incapacitated person.12 Her Honour also stated that under r 4.35 the court may appoint a litigation guardian “only where the incapacitated person in question does not already have a person authorised by an enactment to conduct proceedings in their name or on their behalf.”13 She said the most obvious enactment under which this may arise is the PPPRA. Katz J was dealing with a case where a welfare guardian had been appointed by a court under the PPPRA whose powers were defined by the scope of the court’s order and is distinguishable from the present case on that basis. Here, the applicant does not have court-sanctioned powers to represent Mr Mauger in court proceedings.
[26] There is authority that is more directly on point. In Warin v Warin, the court had appointed a litigation guardian for one of the plaintiffs and later revoked the appointment when it was discovered an enduring power of attorney had been granted to the plaintiff’s son.14 Associate Judge Smith considered the son’s appointment as an attorney under pt 9 of the PPPRA qualified him as a litigation guardian within the meaning of r 4.29.
[27] In Blows v McDonald, Mrs Blows had cognitive deterioration and her niece and nephew successfully brought summary judgment proceedings in her name, in both
11 At [46].
12 B v Waitemata District Health Board [2013] NZHC 852 at [17].
13 At [21].
14 Warin v Warin [2017] NZHC 786.
her personal capacity and as the sole executor and trustee of her late husband’s will, under the authority of an enduring power of attorney to manage her property.15
[28] Enduring powers of attorney under the PPPRA remedy the deficiency at common law that powers of attorney are valid only so long as the donor retains capacity. Under the PPPRA, an enduring power of attorney relating to property may come into effect either immediately or when the donor becomes mentally incapacitated.16 The powers conferred may be general in terms or may be limited to particular aspects of property or particular areas of authority.17 In either case, the attorney’s powers may be subject to conditions and restrictions.
[29] Section 97(2) of the PPPRA provides that the attorney authorised to act generally in relation to the whole or a specified part of the donor’s affairs in relation to property has authority to:
... do anything on behalf of the donor that the donor can lawfully do by an attorney, but subject to sections 100 and 107 and to any conditions or restrictions contained in the enduring power of attorney.
[30] Section 100 deals with the circumstance where an enduring power of attorney has been given by a person who subsequently becomes subject to a personal or a property order (which is not the case here). Section 107 provides that an attorney must not, at any time while the donor is mentally incapable, act to the benefit of the attorney or of a person other than the donor except as provided in that section.
[31] It follows from s 97(2) that, subject to ss 100 and 107 of the PPPRA and any conditions or restrictions contained in the enduring power of attorney, a donor of an enduring power of attorney in relation to property may do by his attorney anything that may lawfully be done by an attorney but not anything which may not be lawfully done by an attorney.18 This, in my view, will include the bringing or defending of proceedings in the name and on behalf of a donor.19 It follows that an attorney with
15 Blows v McDonald HC Auckland, CIV 2007-404-1050, 7 November 2007.
16 Protection of Personal and Property Rights Act 1988, s 97(4).
17 Section 97(1).
18 Davis v Anthony [1995] EWCA Civ J0705-5 at [7].
general authority under the PPPRA to act on a donor’s behalf in relation to the whole of the donor’s property is a litigation guardian, pursuant to (a)(i) of the definition of litigation guardian under r 4.29.
[32] The position will be different where the court proceeding relates to property held on trust by a donor of an enduring power of attorney which is not his or her property as defined by s 2 of the PPPRA. It was held in Godfrey v McCormick that the PPPRA is best understood as precluding trustee powers from the scope of enduring powers of attorney.20
[33] There is a further complicating factor. On the evidence there is serious doubt Mr Mauger had capacity to grant the applicant and Stephen an enduring power of attorney in relation to property. The evidence and draft court proceedings plainly put Mr Mauger’s capacity in issue at that time and earlier. I cannot be satisfied that the enduring power of attorney was validly granted.
[34] I therefore must consider whether it is appropriate to appoint the applicant as Mr Mauger’s litigation guardian under r 4.35 of the High Court Rules. I am satisfied that it is appropriate to do so. I am satisfied that the proposed claim against Mr Tucker and Ms Hermansson is certainly arguable. I am satisfied that the proposed court proceeding is being taken for Mr Mauger’s benefit. Mr Mauger is not capable of conducting litigation on his own behalf.21 The applicant is a suitable person to be appointed as Mr Mauger’s litigation guardian. Mr Mauger had a high degree of trust in her and deemed her suitable to manage his personal affairs. The applicant has business experience and would be able to conduct litigation fairly and competently in Mr Mauger’s name.22 I am satisfied that the applicant does not have interests adverse to those of Mr Mauger.23 The applicant has consented to her appointment as a litigation guardian.24 The requirements of r 4.35(2) for appointing the applicant Mr Mauger’s litigation guardian are therefore met.
21 Corbett v Patterson [2014] NZCA 274, [2014] 3 NZLR 318 at [39].
22 High Court Rules, r 4.35(2)(b)(i).
23 Rule 4.35(2)(b)(ii).
24 Rule r 4.35(2)(b)(iii).
[35] Under r 4.36(1), an application to appoint a litigation guardian may be made without notice but, unless the court otherwise orders, must be served upon the person for whom the litigation guardian is to be appointed. Mr Mauger has suffered from his dementing illness for some time and does not have the capacity to foresee the consequences of making or not making decisions about his own care or property affairs. There is evidence that he has suffered from depression also, and the applicant is concerned he would respond to being served with court proceedings with confusion and anxiety. Importantly, it is the applicant who is entrusted to look after Mr Mauger’s personal care and welfare and she is the very person making this application. I note also and rely upon counsel’s certificate that all relevant information has been provided to the court and that the grounds for making the order sought are made out. In those circumstances, I dispense with service of this application upon Mr Mauger.
Result
[36] I grant leave to the applicant to commence this proceeding by way of originating application.
[37] I appoint the applicant to be Mr Mauger’s litigation guardian under r 4.35(2) of the High Court Rules 2016 to take and conduct court proceedings in his name and on his behalf against Simon Michael Tucker and Louise Coranetta Hermansson.
[38] I reserve leave for the applicant to further apply in respect of any matter arising from this judgment.
O G Paulsen Associate Judge
Solicitors:
Rhodes & Co, Christchurch
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