TSUI YUEN (formerly known as HO WAI HUNG) v. HO TSE WAI, PHILIP LI & PARTNERS (A FIRM) (formerly known as HO, TSE & WAI & PARTNERS)

CAMP 257/2019

[2019] HKCA 1416

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 257 OF 2019

(ON AN INTENDED APPEAL FROM HCA NO 587 OF 2015)

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J U D G M E N T

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Hon Yuen JA (giving the Judgment of the Court):

1.  This is the Plaintiff’s renewed application by summons filed on 15 October 2019 for leave to appeal to the Court of Appeal from the decision of Marlene Ng J (“the Judge”) given on 13 June 2019 striking out the Plaintiff’s claim in HCA587/2015 (“the Strike-Out Decision”). The Judge had refused to give leave to appeal (out of time) on 4 October 2019 (“the Leave Decision”).

2.  In the Strike-out Decision, the Judge had dismissed the Plaintiff’s appeal (out of time) from the order of Master Ho dated 26 November 2018[1] striking out the Plaintiff’s claim.

3.  The Plaintiff, who acts in person, filed his supporting affirmation on 15 October 2019.  He also filed two statements dated 5 October 2019 and 15 October 2019.  The Defendants filed their affidavit in opposition and statement for costs on 18 November 2019.

4.  Having considered all the papers, we exercise our discretion under Order 59 rule 2A(5)(a) to determine this application without a hearing on the basis of written submissions only.

Background

5.  The following is a brief account of the background facts. 

6.  The Defendants were the former solicitors of the Plaintiff (assigned by the Director of Legal Aid) in the Plaintiff’s action against the Hospital Authority for damages for medical negligence in relation to a lung operation in HCPI 529/1998 (“the PI Action”).  The PI Action was pending when the following events occurred.    

7.  On 5 May 1999, the Plaintiff was admitted to the psychiatric unit of Tai Po Hospital.  He was discharged on 4 June 1999.  On 20 May 1999, the Defendants asked for a medical report on the Plaintiff to ascertain if he had mental capacity to give instructions.  A medical report dated 6 July 1999 was provided which said the Plaintiff was last seen on 4 June 1999 and had mental capacity.

8.  However, it would appear from Tai Po Hospital’s medical notes that on 18 September 1999, the Plaintiff was in a state of “paranoid psychosis”.  This was apparently not known to the Defendants.  On 22 September 1999, there was a meeting between the Plaintiff and the Defendants to discuss the offer of a settlement sum in the PI Action.  The Defendants say the Plaintiff accepted the offer, but later changed his mind. In any event, no binding settlement in the PI Action was made.  The Director of Legal Aid discharged the legal aid certificate on 14 December 1999.

9.  It would appear that meanwhile, on 13 November 1999 the Plaintiff had been diagnosed as suffering from continuous paranoid schizophrenia.  Between 13 January 2000 and 16 February 2000, he was again hospitalized for his mental condition.  On 25 March 2000, the follow-up psychiatric nurse reported that he was incapable of making plans for the future. 

10.  It would appear that the Plaintiff’s mental condition was not known to the Defendants who were re-assigned to represent the Plaintiff in the PI Action on 18 April 2000.  The Defendants did not ask for an updated report on the Plaintiff’s mental condition.  On 20 April 2000, after a meeting with the Defendants, the Plaintiff signed a Written Consent accepting a sum of $1.1m in settlement of the PI Action (“the settlement sum”).  On 17 May 2000, a Consent Order was made in the PI Action.  The settlement sum was paid to the Plaintiff personally.

11.  The Plaintiff claimed that after he received the settlement sum, due to his mental condition, he gave away money to strangers and he was exploited by his relatives, and he ended up exhausting the settlement sum without being able to use the money on medical and other expenses he needed for himself.  He says that he ceased to be mentally incapacitated in October 2009. 

The Retainer Action  

12.  In 2015, the Plaintiff commenced the action in HCA 587/2015 (“the Retainer Action”) against the Defendants.  In his statement of claim (“SOC”) which was drafted by counsel, he claimed, amongst other things, that the Defendants were negligent and in breach of contract in having failed: (a) to inquire whether he was under disability pursuant to the Mental Health Ordinance Cap. 136 at the time the PI Action was compromised by the acceptance of the settlement sum; (b) to seek approval from the court for the settlement under Order 80 rule 10 Rules of the High Court (compromise by a disabled person); and (c) to seek directions from the court under Order 80 rule 12 for management of the settlement sum for his benefit (eg by payment into court, directions for investment, etc.).    

13.  Paragraph 22 of the SOC pleaded that “since 2002, because of the Plaintiff’s aforesaid mental conditions, unbeknown to the Plaintiff, the compensations of the settlement, if he received any, were dispatched by himself under abnormal behaviours, namely, by giving out money to the strangers near him, emptying wallet to strangers on the street, throwing money on the streets”.  Paragraph 23 pleaded that in 2003, the Plaintiff withdrew some of the settlement sum on the request of his 3^rd wife who divorced him when that sum was exhausted.  Paragraph 27 pleaded that “as a result of the Defendant’s breach of the Retainer, the Plaintiff was exploited by his relatives financially and he could not maintain himself and reimburse medical expenses from the recovered money of the settlement of the PI Proceedings”.  Paragraph 28 pleaded “by reason of the matters pleaded from paragraphs (1) to (26) [presumably a typographical error for (27)] hereinabove, the Plaintiff has suffered loss and damage to be assessed”.

14.  The Defendants sought further and better particulars of, among other things, para. 22.  The particulars given (drafted by counsel) were that since the Plaintiff was incapacitated by mental illness and under adverse effects of medications at the material times, he had limited ability to recollect the particulars sought.  However, he asserted that when he went shopping with his wife, he would carry around $3,000 to $5,000 with him, and before he returned home, he would give out the money to strangers standing near him for no reason. Further, in the particulars, it was alleged that “the total amount dispatched by the Plaintiff under abnormal behaviours since 2002 amounted to over HK$130,000; and (2) the amount ‘further withdrawn from the Plaintiff’s account’ since 2003 amounted to around HK$200,000 to HK$500,000” (“the 1^st F&B”).

15.  The Plaintiff started to act in person on 6 March 2017.  On 5 January 2018, the Defendants sought further and better particulars of para. 28, the request being “(1) state the precise amount of the ‘loss and damage’ which the Plaintiff claims to have suffered and identify the relevant heads of loss and damage; (2) provide full particulars as to the computation of each such head of loss and damage; and (3) in respect of each such head of loss and damage, identify the material facts upon which the computation is based”.

16.  On 15 January 2018 and 2 February 2018, the Plaintiff provided to the Defendants (but did not file with court) the following (“the 2^nd F&B”) :

“1 我由1998 年起已成為精神分裂症長期病患者。20 年來打針吃精神葯物，以後也需要每晚吃藥。本人要求這項補償$1,200 萬元。

2 我由1996 年起至本人65 歲都無法工作，損失工作年期29 年，每年損失工資48 萬元，合共$1,392 萬元。

3 家庭上的損失，本人要求補償300 萬元。

4 本人要求補償本人已支付的律師費及醫生費，合共60 萬元，合共$2,952 萬元。

5 何韋鮑律師行要支付法庭費用。”

The Defendants’ application to strike out the Retainer Action

17.  The Defendants applied to strike out the Retainer Action on all grounds under Order 18 rule 19 and the inherent jurisdiction.  As mentioned earlier, they were successful before Master Ho on 26 November 2018.  The Plaintiff filed a notice of appeal from the master’s order on 21 December 2018, which was 11 days late.

The Strike-Out Decision   

18.  The matter came before the Judge in March 2019. Whilst noting the Plaintiff’s delay, the Judge did not consider it caused the Defendants any prejudice: Strike-Out Decision, para. 44. 

19.  However, the Judge held there was no causal link between the Defendants’ allegedly negligent acts/omissions and the Plaintiff’s alleged loss and damage, because the alleged loss and damage in paras. 27 and 28 of the SOC were “contradicted” by the 2^nd F&B: Strike-Out Decision, paras. 47 – 48. 

20.  The Judge also held that the Plaintiff’s loss as a result of having been exploited by his relatives was too remote.  She said “in my view, the settlement monies in P’s hands at the material time merely provided the opportunity for the alleged harm to happen, but viewed objectively, the effective cause of the alleged harm was the conduct of P’s relatives.  The law does not impose indefinite liability, and the alleged loss in the SOC of being financially exploited by relatives was beyond the outer limit of the damage for which D would be held responsible.  In such circumstances, P could not seek such loss and damages as a matter of law”. Hence, the Judge upheld the strike-out on 13 June 2019.         

The Plaintiff’s leave application to appeal from the Strike Out Decision (out of time)

21.  On 3 July 2019, the Plaintiff filed a Notice of Appeal in CACV 305/2019 to appeal from the Strike-Out Decision.  However, since the Strike-Out Decision was an interlocutory decision (because it was an out of time application to appeal from the master), under s.14AA(1) of the High Court Ordinance Cap. 4, the Plaintiff needed leave to appeal before he could file such a Notice of Appeal.  He had not obtained such leave.  Accordingly, the Notice of Appeal in CACV 305/2019 was struck out by Kwan VP on 5 August 2019.

22.  Subsequently on 11 September 2019, the Plaintiff filed a summons for leave to appeal the Strike-Out Decision (out of time).  The summons came before the Judge on 26 September 2019.

23.  The Judge noted that the Plaintiff had failed to provide any explanation why he did not apply for leave promptly after the Notice of Appeal in CACV 305/2019 was struck out on 5 August 2019, and instead took a month to issue the summons for leave.  As for the merits, the Judge held that where the delay was substantial and not wholly excusable, the applicant must show a real prospect of success.  At the hearing before the Judge, the Plaintiff submitted that he would rely on the same grounds as those on which he opposed the Defendants’ strike-out application.  However, the Judge considered that those grounds had been canvassed and discussed in the Strike-Out Decision and she was not persuaded that the Plaintiff had raised any arguable basis to say that she had erred in that Decision.  Accordingly, the Judge refused to extend time and dismissed the Plaintiff’s application on 4 October 2019. 

The Plaintiff’s grounds of intended appeal

24.  As noted earlier, on 15 October 2019, the Plaintiff applied to this court in effect for leave to appeal the Strike-Out Decision (out of time).  His main complaints are that the Leave Decision is unfair; he did not have the chance to go to trial or to cross examine the witnesses in the Retainer Action, and hence the Leave Decision violated the Basic Law, “human rights” and the International Bill of Human Rights; and the Judge had not considered all the evidence.  With regard to his complaint about limiting his written submissions to 2 pages, this was in relation to CACV 305/2019 which had no relevance to the present application.

25.  In the Plaintiff’s supporting affirmation, he stated that he had been mentally unwell as he had just been discharged from the Tai Po Hospital in around November 1999, and he was confused and unable to make a sound judgment.  He was pressurized by Mr. Ho (a partner at the Defendants firm) to accept the settlement sum of HK$1.1 million at a meeting on around 22 November 1999, and he did not consent to the contents of the Written Consent he signed.  (As the date 22 November 1999 did not appear in the SOC, presumably this is a clerical error in the Plaintiff’s affirmation, and he meant the meeting on 22 September 1999, and/or the Written Consent he signed on 20 April 2000).  

26.  In the Plaintiff’s statement dated 5 October 2019, he stated that Mr. Clancey, a solicitor of the Defendants firm, was the first person who discovered his mental illness and had advised him to seek medical assistance.

27.  In the Plaintiff’s statement dated 15 October 2019, he explained that his delay was due to his not being familiar with drafting appeal documents.  He had sought legal advice and was advised that there was no problem even if he was late.  He thought this was true. 

Legal Principles

28.  As the Judge’s Strike-out Decision was made in the exercise of her discretion, this court will only interfere if it can be shown that the Judge did so under a mistake of law or in disregard of principle, or under a misunderstanding of the evidence, or had taken into account irrelevant matters, or failed to take into account relevant matters.  

Discussion

29.  As mentioned earlier, the Judge took the view that there was no causal link between the Defendants’ alleged acts/omissions and the Plaintiff’s alleged loss.  That view was taken after comparing the SOC with the loss alleged in the 2^nd F&B.  However, it seems that the Judge had not considered the loss alleged in the 1^st F&B.  There, it had already been alleged that the total amount given away by the Plaintiff when behaving abnormally because of his mental condition after 2002 amounted to over HK$130,000, and that the amount further withdrawn from the Plaintiff’s account (due to exploitation by his relatives) since 2003 amounted to around HK$200,000 to HK$500,000.  One of the points made in the SOC is that if the Defendants had, on behalf of their client the Plaintiff, sought directions from the court under Order 80 rule 12 for the management of the settlement sum, the Plaintiff would not have been able to give away part of the sum in the abnormal way that he did, which caused him loss.  In our view, the Plaintiff has a real prospect of success in arguing on appeal that there is a sufficient causal link from the pleaded case.

30.  As for the Judge’s view that the loss was too remote, she took the view that loss occurred because the settlement monies in the Plaintiff’s hands “merely provided the opportunity for the alleged harm to happen, but viewed objectively, the effective cause of the alleged harm was the conduct of [the Plaintiff’s] relatives”.  However, if directions had been obtained from the court on the management of the settlement sum, the relatives would not have had the opportunity to exploit him.  Directions under Order 80 rule 12 may include directions for payment into court, for investment, and directions as to how the settlement sum is to be applied, the purpose being that the sum should be applied for the benefit of the Plaintiff.  Thus, it is noted in Hong Kong Civil Procedure 2020 para. 80/12/12 that “in particular the High Court cannot direct a settlement of a minor’s (nor a fortiori, of a patient’s) damages on his relatives or the like”.  In our view, the Plaintiff has a real prospect of success in arguing on appeal that the loss caused to the Plaintiff by exploitation by his relatives was not too remote.

31.  These are substantial merits which outweigh the Plaintiff’s delay of one month between the time when CACV 305/2019 was dismissed for procedural reasons and the time when the Plaintiff issued the summons for leave to appeal the Judge’s Strike-out Decision.  It would also be noted that had the latter not been an interlocutory decision (as the appeal from the master was out of time), CACV 305/2019 would have been filed in time.   

32.  By reason of the above, leave is hereby given for the Plaintiff to appeal the Strike-Out Decision out of time.  Costs of the application will be in the cause of the appeal.      

33.  This judgment is unusually detailed for a judgment granting leave to appeal as it is hoped that consideration will be given to legal aid being made available to the Plaintiff.  As can be seen from the documents he has filed since acting in person (the 2^nd F&B and his witness statement), not only he, but also the Defendants, and the court would benefit from professional assistance being made available to him, so that a more consistent and more lucid case could be formulated and advanced. 

34.  In the meantime, the Plaintiff should apply for legal aid on the strength of this judgment as soon as possible.  It is hoped that he will make the most of the benefit of legal advice if legal aid is granted.  If legal aid is not granted, he can ask the court for a translation of this judgment if he so requires. 

35.  To take into account the time needed for the Plaintiff to apply for legal aid and for the Director to consider his application, we would extend the time under Order 59 rule 4(1) for him to file a Notice of Appeal to 28 days from the date of this judgment.