Causer v Causer HC Whangarei CIV 2008-488-830

[2010] NZHC 1812

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2008-488-000830

BETWEEN  EDNA DOREEN CAUSER Plaintiff

ANDGARY CHARLES CAUSER First Defendant

ANDCAUSER FARMS LTD Second Defendant

Hearing:         13 September 2010

Appearances: S L Robertson for Plaintiff

B MacLean for Defendants

Judgment:      13 September 2010

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors/Counsel:

Rice Craig (J Sieprath), PO Box 72440, Auckland

Town & Country Law (D Rolfe), PO Box 20, Wellsford

S L Robertson, PO Box 854, Shortland Street, Auckland

B MacLean, PO Box 6400, Auckland

E D CAUSER V G C CAUSER AND ANOR HC WHA CIV-2008-488-000830  13 September 2010

[1]      The matter before the Court today is an application to appoint a litigation guardian for the plaintiff, Edna Doreen Causer.  She is an 86 year old woman living in a rest home at Maungaturoto.   She brings the proceeding against her son, Gary Charles Causer, and the family farming company, Causer Farms Ltd.

[2]      In general terms, the background to the litigation is that the family farmed on a farm in Causer Road, Maungataroto.  The farm had originally belonged to the late husband of Edna Causer.   He had formed a company.   In the course of various transactions,  the  father  retained  a  controlling  A  share  and  sold  the  remaining ordinary shares to his son, Gary.  On his death, the controlling A share passed to his widow.

[3]      During the 1990s, under the new Companies Act legislation, companies incorporated under the Companies Act 1955 were automatically re-registered under the Companies Act 1993.  The son, Gary, was the director of Causer Farms Ltd.  He took no steps to preserve the rights of the controlling A share in the company and the re-registration  went  through  so  that  the  company  was  deemed  to  have  the constitution as provided under the Companies Act 1993 with equal voting rights for all shares.  That effectively meant that the special voting rights attaching to the A share had now disappeared.  It is that matter which is the main basis for complaint in the present proceeding.

[4]      There have been attempts at settlement in the past but the litigation remains ongoing.  What I am saying today is not intended to reflect any views at all as to the success or otherwise of Mrs Causer’s claim.

[5]      Mrs Causer has three daughters.  One of the daughters, Julie Antunovich, is proposed to be the litigation guardian.   The appointment of litigation guardians is provided for under Part 4, Subpart 7 of the High Court Rules.  Rule 4.30 says:

(1)An incapacitated person must have a litigation guardian as his or her representative in any proceeding unless the Court otherwise orders; and

(2)If a person becomes an incapacitated person during a proceeding, a party  must  not  take  any  step  in  the  proceeding  without  the

permission of the Court until the incapacitated person has a litigation guardian.

[6]      Rule 4.35 deals with the appointment of a litigation guardian:

4.35(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 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 be a litigation guardian.

[7]      In turn, the definition of “incapacitated person” in r 4.29 is:

An  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 will be required as a litigation guardian conducting proceedings;  or

(b)unable to give sufficient instructions to issue, defend or compromise proceedings.

[8]      The evidence before me includes affidavits sworn by Gary Causer, the first defendant, by Julie Antunovich, by Dr Mitchell, Mrs Causer’s general practitioner, by Mrs Causer, the plaintiff.  In addition I have been provided with a report by Dr Jane Casey, who is a psychiatrist and psychogeriatrician.

[9]      The evidence I have placed most weight on is the report of Dr Casey.  Her report was obtained under instructions given by counsel for both parties in this case. Both counsel agreed that I should read that report and could take that into account in my decision.  Obviously, as she is a psychogeriatrician, Dr Casey’s report is entitled to considerable weight.

[10]     The report discloses that Mrs Causer has lived in the retirement house for the last 10 years.   It appears from the report that Mrs Causer spent most of her life farming and she describes herself as “an unsophisticated farming girl”.  She does not

appear to have had an extended education.  Dr Casey refers to Mrs Causer’s mental state examination and says that she presented as a casually but tidily groomed 86 year old woman who looked well for her  years.   She greeted appropriately but nervously and there was good eye contact and rapport. Her speech was spontaneous with a normal amount, volume and tone.  Mrs Causer acknowledged she was upset by the discord between her children.  Dr Casey said there was no suicidal ideation and no perceptual abnormalities.

[11]     Another  part  of  the  report  deals  with  the  cognitive  testing.    The  report indicates, for example, that there was no impairment of registration or concentration. From that I infer that Mrs Causer was able to follow the conversation and react to what was said and respond to it.  The report indicates that she was able to record three unrelated objects after one minute, which shows some able short-term memory, but on the other hand required prompts to recall an address after five minutes.  The report says there was patchy recall on long-term memory and a decreased general knowledge.    There  is  said  to  be  no  impairment  of  writing  or  reading  and  no significant impairment in visuo-spatial function.  She was able to follow a three-step command  but  had  difficulty repeating  a  sentence.    There  was  decreased  verbal fluency and impairment in abstract thinking.   On the Folstein Mini-Mental State Examination the score was 26/30, and on the longer form Addenbrooke’s Cognitive Examination the score was 71/100.   Dr Casey said this was consistent with mild- moderate cognitive impairment and she says “Mrs Causer demonstrated some impaired   judgement   and   reduced   insight   but   she   was   compliant   with   the assessment”.

[12]     Then, under the heading “In Summary”, Dr Casey says this:

On Mental State examination the salient features were that the mood was euthymic and there were no delusions.  There was evidence of impairment in both  short  and  long-term  memory  and  a  decreased  general  knowledge. There  was  impairment  in verbal  fluency and  abstract  thinking.    This is indicative of both temporal and frontal lobe degeneration with a diagnosis of Dementia of a mild-moderate degree.

[13]     Dr Casey also adds her opinion that Mrs Causer does not demonstrate the capacity to understand the issues on which her decision would be required as a litigant conducting proceedings, nor would she be able to give sufficient instructions

to issue, defend or compromise proceedings.   This is on the basis of evidence for mental  and  intellectual  impairment  secondary to  a  Dementia.    She  says  it  is  a permanent  and  progressive  condition.   She  says  as  a  secondary issue,  that  Mrs Causer has a history of depression and a premorbid anxious and avoidant personality style.  She is concerned that participation in proceedings may make her vulnerable to re-emergence of significant anxiety and depressive symptoms.

[14]     I see no reason to question those findings by Dr Casey.  If anything, they are supported by the evidence which others have put before me as well.   I note, for example, that Mr Causer, who resists the application, says that he visits his mother on a regular basis and says she is alert, and he says she shows no signs of dementia and her memory is good.  But then he goes on to say she sometimes muddles names. He says:  “I have frequently spoken to her about these proceedings.  She claims to know nothing about them.”

[15]   The affidavit by the general practitioner, while not purporting to be a psychogeriatric assessment, is consistent with Dr Casey’s findings as well.

[16]     I accept that a lady suffering mild to moderate dementia, aged 86 years, who has led a life mainly living on a farm with limited contact with the outside world, would not have the ability to understand the issues on which her decision would be required as a litigant in this proceeding.  In particular, I accept that she would not be able to give instructions on the conduct of the proceeding.

[17]     Effectively, the ongoing conduct of this proceeding will rely on the solicitors giving advice, suggesting steps that could be taken in a proceeding.  The solicitors conducting the proceedings properly will need to have a client who can give considered decisions as to ongoing steps.  Those steps might include decisions as to witnesses to be called and as to any steps to be taken towards settlement.   The impression I have is that it would be quite beyond Mrs Causer to be able to make any decision as to these matters.

[18]     Accordingly, in terms of r 4.35(1), I find that the first step has been satisfied.

[19]     There is the question whether I should make an order that there should not be a litigation guardian because r 4.30(1) does allow the Court to decide that a litigation guardian should not be appointed.  This is not an appropriate case to dispense with a litigation guardian.  Lawyers trying to conduct the proceedings on Mrs  Causer’s behalf would be at a loss in terms of being able to deal with a client who could give them sensible instructions as to how to take the proceedings further.

[20]     Mrs Causer is now at an age and in a stage of health where these proceedings are obviously going to be a stress and a potential cause of ill-health to her.   It is better that she has someone to look after her in terms of the conduct of the proceedings.  It may be that there is a larger case for her to have someone to look after her interests generally, but I am not required to consider that today.

[21]     So the question then becomes who should be appointed to be the litigation guardian.  The choice is effectively between a stranger and a member of the family. Superficially,  the  appointment  of  a  stranger  has  attractions.    That  is  because  a stranger – and I am thinking of a professional, such as a  lawyer – would approach the matter with some objectivity and detachment and would conduct the case with a view to promoting Mrs Causer’s interests without any personal self-interest in the matter.  I have considered whether practitioners in the Wellsford or Dargaville areas could be appointed.

[22]     In the end, I have rejected that idea, not because I do not have confidence that such lawyers are available and would be able to do a good job for her, but more because they are unlikely to be able to establish a rapport with Mrs Causer and also because the appointment of a litigation guardian also carries the risk of an exposure to costs.  That is something that most lawyers would not willingly take on.

[23]     The  alternative  is  her  daughter,  Mrs  Antunovich.    Initially,  I considered whether it was wise to appoint one of the daughters to be the litigation guardian. That is for the reasons which are highlighted by Mr McLean.  This case is effectively not a contest between mother and son, but between three sisters and the son.  The appointment  of  Mrs  Antunovich  means  that  the  conduct  of  the  litigation  is

effectively in the hands of one of the daughters who, I understand, will be acting in concert with her two sisters.

[24]     That has certain risks attendant to it.   However, on weighing matters up, I think that those risks can be managed with appropriate conditions.   In terms of r 4.35(2)(b), I am satisfied that Mrs Antunovich is able fairly and competently to conduct the proceedings on behalf of her mother.  That is because the litigation to date shows evidence that the proceeding has been competently conducted.   In particular,  competent  lawyers  have  been  appointed  to  conduct  the  case  for Mrs Causer.

[25]     The next question is whether Mrs Antunovich has interests adverse to those of the incapacitated person.   Case law, such as Wise v Scott (1989) 2 PRNZ 670, indicates that a person appointed litigation guardian may have an interest in the outcome of the litigation.  The only caveat is that it must not be adverse to that of the incapacitated person.  Here, I accept that Mrs Antunovich, with her sisters, would be motivated to try and obtain a good outcome in the case for her mother.  That, in my view, does not make her interests adverse to those of her mother.   Finally, I am satisfied, of course, that, from her affidavit, Mrs Antunovich consents to being the litigation guardian.

[26]     When I spoke about risks, the potential risks that I saw in the case would be the possibility that Mrs Antunovich and her sisters might press for relief which might be calculated to benefit them more directly than their mother.  It is not unknown for cases to be conducted by the younger generation, osensibly for the benefit of the older generation, but in fact the older generation see little of the outcome.

[27]     That  risk  can  be  addressed  by  requiring  that  any  withdrawal  of  the proceeding, abandonment of the proceeding, or any settlement of the proceeding must be subject to the prior approval of the Court.  That will ensure that the terms of any settlement receive judicial scrutiny and are seen to be in the interests of Mrs Causer rather than the interests of her daughters.

[28]   I address matters raised by Mr MacLean.   He made the point that no appointment for litigation guardian was made at the outset of the litigation and he pointed out that cases such as C v S [2007] NZFLR 583, Heath J at [30], made it clear that when there is a lack of capacity, then there must be an appointment of a litigation guardian, even before the litigation has started.   That was said in the context of litigation by a minor where it was patently clear to all involved that the litigant did not have capacity.

[29]     In cases of elderly people, it is less clear-cut.  Effectively, I am not required for this application to revisit history and to address whether Mrs Causer did or did not have capacity when the proceeding was started.  What is important is that there is now a finding that she does not have capacity.  That finding is available because of the report given by Dr Casey on 18 August 2010.  That requires the appointment of a guardian now.  It does not mean that proceedings have been invalid from the outset.

[30]     Mr MacLean also queried why a manager had not been appointed under the PPPR  Act.    It  might  well  be  the  case  that  that  would  be  an  alternate  way of addressing matters but in this case there is a focused application directed at this litigation to have a litigation guardian appointed by this Court so that the litigation guardian would be responsible to this Court for the conduct of the litigation.  That is sufficient for the purpose of this proceeding and  I am not required to consider whether there should be some other manager for Mrs Causer for wider purposes than this litigation.

[31]     Accordingly,  there  is  an  order  appointing  Julie  Antunovich  as  litigation guardian of Edna Causer in this proceeding.  It is a condition of this order that the proceeding is not to be withdrawn, abandoned, or settled without the prior approval of this Court.

[32]     I award the plaintiff costs of $3,008 on the application, plus disbursements as approved  by  the  Registrar.  The  disbursements  are  to  be  the  filing  fee  on  the

application and the sealing fee on the order made.

R M Bell

Associate Judge