Sequeiros v Garate

[2018] NZHC 128

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2501 [2018] NZHC 128

IN THE MATTER

Of an application to appoint litigation

guardians

EDUARDO SEQUEIROS AND GABRIEL SEQUEIROS

Applicants

BETWEEN

CIRILO EDUARDO SEQUEIROS MOSQUEIRA AND FLOR SEQUEIROS Intended Plaintiffs

AND

JORGE SEQUEIROS GARATE Intended Defendant

Hearing:	On the papers
Counsel	B Murray for Applicants Intended Defendant in person
Judgment:	14 February 2018

JUDGMENT OF WHATA J

This judgment was delivered by me on 14 February 2018 at 11.00 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors:           Vallant Hooker & Partners, Auckland

SEQUEIROS v GARATE [2018] NZHC 128 [14 February 2018]

[1]      I have before me an application to appoint litigation guardians for the intended plaintiffs in intended proceedings.   In short, the applicants are the children of the intended plaintiffs, who they claim are incapacitated. The applicants want to commence proceedings on their behalf, seeking an order setting aside a transfer of their family home to the applicants’ brother, the intended defendant.

[2]      The proceedings were commenced on a without notice basis. In a minute dated

20 October 2017, Downs J sought further submissions on the desirability of the applicants being appointed as litigation guardians as against persons independent of the family.   The solicitor for the applicants responded that a requirement for the litigation guardian to be independent, in the sense of having no personal interest in the conduct or outcome of proceedings, was not accepted by this Court in Re Goldman.1

I was not convinced by this.2 I directed the applicants to either appoint an independent

person or serve the proceedings on the brother. They choose the latter.

[3]      The positions of the applicant and the defendant can be stated succinctly. There is no dispute that the parents are currently incapacitated. However, the intended defendant submits the brothers are not acting in their parents’ interests, and if this matter is to proceed, the litigation guardian should be independent of the brothers.

Mr Murray, for the applicants, however, emphasised that complete independence is not required. Rather, the proper test is whether they have an adverse interest, citing (among other authorities) Re Goldman and JJC v Fairfax New Zealand Ltd.3    He further emphasised that the appointment of an independent litigation guardian unnecessarily increased the cost of the litigation. A lawyer approached by him required costs in advance, including in respect of any costs order.

Assessment

[4]      Rule 4.30 states:4

1            Re Goldman [2016] NZHC 1010, [2016] 3 NZLR 331 at [26]-[29].

2            Recorded in my minute dated 6 November 2017.

3JJC v Fairfax New Zealand Ltd HC Auckland CIV-2011-404-5605, 15 September 2011 at [12]- [13].

4            High Court Rules 2016, r 4.30.

4.30     Incapacitated person must be represented by litigation guardian

(1)       An incapacitated person must have a litigation guardian as his or her representative in any proceeding, unless the court otherwise orders.

(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.

[5]      Rule 4.35 sets out the criteria for appointment, namely:

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.

[6]      It is necessary first to record my finding on incapacity. Having read the report of Dr Jane Casey, I find that Mr Sequeiros suffers from cognitive impairment due to dementia, such that his capacity to understand the issues that may be raised by the proceedings  is  substantially  impaired.    The  position  is  less  clear  in  relation  to

Mrs Sequeiros but, as there is agreement about this between the parties, I am satisfied the intended plaintiffs are incapacitated.

[7]      Turning to  the  criteria  for appointment, Toogood  J  in  Goldman  was  not departing from the settled requirement for independence.5    Rather, the Judge was dealing with and rejecting the complaint that the litigation guardian was acting too aggressively as an advocate. But I accept that, on the plain language of r 4.35, the litigation guardian may have an interest in the proceeding, if that interest is not or is not likely to be adverse to the interests of the intended plaintiffs.

[8]      The present claim involves, in short, a dispute between brothers about the ownership of the family home. Among other things, undue influence by the intended defendant is alleged. The intended plaintiffs seek the transfer of the home to the intended defendant set aside. If granted, the home will then become available for, among other things, transfer to the brothers. This is not a case, therefore, where the likely interests of the proposed litigation guardians are inconsequential, as was the position in the further case cited by the applicants, JJC v Fairfax New Zealand Ltd.6

[9]      However, I am satisfied that the course adopted by Judge Bell in Causer provides sufficient protection against the litigation guardians’ interests  adversely affecting the intended  plaintiffs’ position.7  This  involves  an  order requiring any withdrawal, abandonment or settlement of the proceedings to be approved by the Court. I also propose to make an order requiring the litigation guardians to agree to indemnify the intended plaintiffs for any costs award made in favour of the intended defendant. This will incentivise the brothers to conduct the proceedings in a sensible manner and not expose the parents to inappropriate risk.

[10]   For completeness, I see no conflict with r 4.41. This rule states that representation is to be disregarded by the Court in making a costs award. The object

of the rule is to make clear that the usual rules for awarding costs apply.8

5     Erwood v Glasgow Harley HC Auckland CP179-SD02, 17 March 2003 at [19]. See also the comments in JJC v Fairfax New Zealand Ltd, above n 3, at [12].

6      JJC v Fairfax New Zealand Ltd, above n 3, at [13].

7      Causer v Causer HC Whangarei CIV-2008-488-830, 13 September 2010 at [27].

8      Broadbent v Chief Executive of the Ministry of Social Development [2017] NZHC 2123 at [2]-[6].

[11] Accordingly, I make the orders as sought, subject to the conditions noted at [9]. The proposed litigation guardians are to file the proposed indemnity for approval prior to taking the next step in the proceeding. The proceeding will then otherwise commence in the usual way.