DAIMLER AG v. HELGE HERBERT LEIDUCK AND ANOTHER

HCA 4089/1994

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 4089 OF 1994

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REASONS FOR DECISION

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1.  On 5 November 2013, I appointed Mr Helge Leiduck (“Mr Leiduck Jr”) as the next friend of Mr Herbert Leiduck (“Mr Leiduck”) (who was until his death on 23 March 2014 the 1^st defendant in this action) upon the application by summons dated 25 September 2013 on Mr Leiduck’s behalf (“Next Friend Application”). I now give my reasons and rule on costs. As this matter has long ceased to be contentious, I hope I will be forgiven for being brief.

2.  The events leading to the Next Friend Application have been set out in detail in paragraphs 2 to 15 of my earlier Decision dated 22 April 2014 (“22.4.2014 Decision”),[1] which I shall not repeat.

3.  By a letter dated 23 October 2013 from Baker & McKenzie, the plaintiff’s then solicitors, to the court (“B&M Letter”), the plaintiff indicated that, while it would not oppose, or file evidence in relation to, the Next Friend Application, it made no admission to (1) the necessity of appointing a next friend for Mr Leiduck or (2) the suitability of Mr Leiduck Jr as next friend, the burden of proof of which is on the applying party.  The B&M Letter then set out in four pages what were in effect submissions on these 2 issues.

Whether Mr Leiduck was in need of a next friend

4.  On the first issue, the following medical reports on Mr Leiduck (“Reports”) were placed before the court:‑

(1)   a report dated 12 June 2013 by Dr Albrecht Stein who was appointed by the Superior State Court in Augsburg, Bavaria, Germany; and

(2)   reports dated 11 June and 16 August 2013 by Dr Klaus‑Dieter Pfeffer.

5.  I have in paragraphs 8 to 12 of the 22.4.2014 Decision set out the circumstances in which each of the Reports came to be commissioned; the questions addressed by them; the conclusions reached on such questions by the doctors and how the Reports came to be placed before this court, which I shall not repeat.

6.  There is no dispute that mental capacity is “issue specific” and that the test applicable to the appointment of next friend under Order 80 rule 1 for a party to legal proceedings who is under disability is whether such party is capable of understanding, with the assistance of such proper explanation from legal advisers, the issues on which his consent or decision is likely to be necessary in the course of the proceedings.  The focus of the enquiry is on the litigation under consideration rather than the whole of that person’s property and affairs.  See Ng Hong Ki v Leung Fong Kiu [2012] 1 HKLRD 435 (CA), per Kwan JA at §34.

7.  The plaintiff considered the said medical evidence to be “somewhat inadequate” as it did not report on Mr Leiduck’s competence or otherwise as a party to these proceedings but were dealing with his competence or otherwise to participate in court proceedings as a witness.

8.  My attention was specifically drawn by those acting for the plaintiff to:‑

(1)   paragraph 3.1 of Dr Stein’s said report which stated that Mr Leiduck understood for the most part his advice that he had the right to remain silent and that Dr Stein was not subject to the obligation of confidentiality usually owed by a physician to a patient and that Mr Leiduch was able to grant a valid confidentiality waiver; and

(2)   the statement in the letter dated 16 October 2013 from Robertsons, solicitors for the defendants, to the court that Mr Leiduck was able to provide them with relevant instructions in relation to the resolution of the issue regarding his competence.

9.  The plaintiff further reserved the right to make further submissions on this issue after having sight of the medical expert evidence to be filed for determining Mr Leiduck’s competence to give evidence on various dates during the period from 7 January 2008 to 22 August 2013 and to continue to give evidence thereafter.

10.  Although Mr Leiduck was not specifically assessed with reference to the test applicable for the appointment of a next friend, I was satisfied on the materials that were available to me as at the hearing on 5 November 2013 that he had become in need of a next friend:‑

(1)   Firstly, although Dr Stein and Dr Pfeffer were expressing views on Mr Leiduck’s fitness to be questioned in court, they had in their said respective reports set out in detail their primary findings of Mr Leiduck’s mental state upon which they based their conclusions of his incompetence as a witness.  I was entitled to, and I did, take into account those findings, which showed considerable and pervasive cognitive decline on the part of Mr Leiduck.

(2)   Secondly, I had before the hearing on 5 November 2013 reviewed the transcript of Mr Leiduck’s testimony on 16, 19, 21 and 22 August 2013 to remind myself of Mr Leiduck’s performance in the witness stand on those dates, which was largely taken up by Mr Horace Wong SC, counsel for the defendants, attempting to re‑examine Mr Leiduck.  I was entitled to, and I did, take into account, the manner in which Mr Leiduck testified.  It was a laborious exercise, to put it mildly.  One would have particularly noticed, in Mr Wong SC’s words, “the deteriorating condition of [Mr Leiduck], the drifting states that he frequently exhibited, the confusion with the timing and sequence of events, the difficulties that he encountered in comprehending questions of counsel and appreciating the significance of those questions affecting his interest, and the delusional and illogical evidence that he gave”. 

(3)   It is in my view a matter of common sense that there is an appreciable risk that a party to proceedings of the nature and complexity such as this one and suffering and exhibiting the cognitive deficits recorded in the Reports and manifested in court would be incapable of understanding, even with the assistance of proper explanation from legal advisers, the issues on which his consent or decision is likely to be necessary in the course of the proceedings.

(4)   Thirdly, I also took into consideration Mr Leiduck Jr’s evidence in his 4^th Affidavit dated 23 September 2013 that he observed a clear deterioration in Mr Leiduck’s mental capabilities since the middle of May 2013 and that Mr Leiduck’s condition further worsened rapidly between June and August 2013 so much so that the said successive reports by Dr Pfeffer were commissioned.

11.  Against such evidence, the fact that Mr Leiduch may on odd occasions still be able to give instructions on limited matters was neither here nor there.  What I had to assess was his capability to understand, with the assistance of proper explanation from legal advisers, the whole range of remaining issues on which his consent or decision would be likely to be necessary as these proceedings progressed.

Whether Mr Leiduck Jr should be appointed

12.  The plaintiff was critical of Mr Leiduck Jr for this purpose on 2 broad grounds:‑

(1)   He was resident in Germany.  Therefore, he could not properly be subject to the control and supervision of this court.  Problems may also arise in the enforcement of orders that may be made against Mr Leiduck or Mr Leiduck Jr personally.

(2)   The plaintiff was doubtful if Mr Leiduck Jr was capable of acting with propriety and impartiality and of representing Mr Leiduck’s interests with fairness at all times.  Such doubt arose from the plaintiff’s suspicion that Mr Leiduck Jr had not been full and frank to the court as regards Mr Leiduck’s mental condition.

13.  As a result of its reservations about Mr Leiduck Jr, the plaintiff directed my attention to the court’s power to appoint the Official Solicitor as next friend to conduct proceedings on behalf of a mentally incapacitated person under section 4(1)(a) of the Official Solicitor Ordinance (Cap 416).

14.  In an ideal world, one would generally prefer appointing a next friend who can be more effectively controlled and supervised by the court and against whom orders of this court may be enforced as a matter of course by reason of his presence within the jurisdiction.

15.  However, the plaintiff’s concerns must be weighed against the reality of the situation facing the court and the parties as at 5 November 2013:‑

(1)   The trial before me came to an abrupt stop due to Mr Leiduck’s mental condition after over 35 days in court from 4 February to 22 August 2013, which trial was conducted with reference to over 20 bundles of documents disclosed by the parties. 

(2)   Mr Leiduck was resident in Germany where he would stay without any question of his coming or being brought to Hong Kong.

(3)   It was anticipated that there was going to be inquiry into Mr Leiduck’s competence as a witness which would most likely involve the examination of Mr Leiduck in Germany, the discovery of his medical records that went back many years, probably all written in German and to be obtained from multiple sources in Germany and the interview of family members, friends and carers who were also in Germany.

(4)   In these circumstances, one would logically have expected the expert to be appointed to assist in this inquiry to be one practising in the relevant disciplines in Germany.

(5)   Other than Mr Leiduck Jr, no other candidate having an existing connection, and hence familiarity, with the case, Mr Leiduck or Germany had been identified.

16.  In light of these circumstances, it would be wholly unrealistic to saddle the Official Solicitor or any other stranger with the responsibility and burden of continuing these proceedings on behalf of Mr Leiduck.  In any event, the Official Solicitor should be appointed only if there is no other person fit and willing to act, which was not the case here.  See section 4(1)(b) of the Official Solicitor Ordinance.

17.  Against this background, while it would have been apparent from the 22.4.2014 Decision that I was also not entirely satisfied with the timing in which Mr Leiduck’s potential incompetence was brought to light, I did not consider it worthwhile to hold off the appointment of Mr Leiduck Jr, which would have brought these proceedings to a complete halt, in order to get to the bottom of when exactly Mr Leiduck Jr acquired knowledge of Mr Leiduck’s loss of competence or should have been alerted to such possibility. 

18.  For the avoidance of doubt, I should add that there was no basis for the plaintiff to question Mr Leiduck Jr’s independence if independence is understood in the relevant sense, which is being at risk of being subject to the influence of the opposite party or anyone having interests adverse to those of Mr Leiduck.  See SX v LW, HCMC 8/2011, unreported, Mimmie Chan J, 30 July 2013, §§16, 20, 22 and 29.

Costs

19.  Although the arguments in favour of the appointment of Mr Leiduck Jr prevailed at the end of the day, I see no basis for the plaintiff to be visited with the costs of the Next Friend Application, the need for which cannot in any way be attributed to the plaintiff.

20.  On the other hand, while the Next Friend Application was not a matter on which the plaintiff should have had no say and the matters raised in the B&M Letter were not entirely invalid, I find the plaintiff’s stance of formally not opposing the application and then turning up with both leading and junior counsel to effectively oppose the application at the hearing to be disingenuous.  I would have been sufficiently assisted by the B&M Letter.

21.  In the circumstances, I am prepared to order the 1^st defendant to pay the plaintiff only the costs of the B&M Letter to be assessed summarily.  The plaintiff should file and serve a statement of costs within 14 days.  The 1^st defendant should file and serve a statement of objections (if any) within 14 days thereafter.  The plaintiff should have 14 days to respond to the 1^st defendant’s objections (if any).