CHU KWOK KEE KOOKIE v. MING CHOR PAO AND ANOTHER

HCMP 704/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 704 OF 2015

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DECISION

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I. INTRODUCTION

1.  The 1^st defendant (“D1”) is the mother of the plaintiff (“P”) and 2^nd defendant (“D2”).  On 27 March 2015, P commenced the present proceedings by way of originating summons against D1 and D2 (“OS”) for the following reliefs:

(a)   a declaration that the enduring power of attorney dated 5 January 2014 (“EPoA”) executed by D1 dealing with inter alia the property known as Flat C on 6^th Floor, No 14 Broadway, Mei Foo Sun Chuen, Kowloon, Hong Kong (“Property”) was null and void;

(b)   an order that the registration of the EPoA at the Land Registry by memorial no 15033001300019 (“OS Registration”) be vacated on the ground that it was invalid and void;

(c)   an order that D2 be forthwith removed as an attorney under the EPoA;

(d)   an order that D1 shall produce records/accounts of all sums belonging to D1 which had been dealt with by D2 pursuant to the EPoA.

2.  On 14 April 2015, D2 filed acknowledgment of service giving notice of intention to defend (“D2 AS”).  D2 was/is all along self‑ represented.

3.  On the same day, D1 filed acknowledgment of service allegedly as “lawful attorney of [D1]” (“D1 AS”).  By reason of the matters discussed in Part VII below, it is unclear whether the D1 AS is valid.

4.  On 13 May 2015, D2 filed a summons to (a) strike out the OS, and (b) vacate the OS Registration (“D2 Summons”).  On the same day, D2 filed his affirmation in support of the D2 Summons (“D2 1^st Aff”).  In the D2 1^st Aff, D2 pointed out that since the OS was served on him on 9 April 2015 and he filed the D2 AS on 14 April 2015, P should have but failed to file his supporting affidavit for the OS within 14 days thereafter.

5.  On 15 May 2015, P filed a summons to seek extension of time for 5 days from the date of the order to be made to file and serve his supporting affirmation for the OS (“P Summons”).  On 19 May 2015 (ie even before the hearing of the P Summons), P filed his affirmation in support of the OS (“P Aff”).

6.  The D2 and P Summonses were returnable before Master Lai on 20 May 2015.  After hearing P’s solicitor and D2 appearing in person, Master Lai granted the following orders (“Order”):

(a)   leave be granted for P to file and serve supporting affidavit for the OS out of time;

(b)   the P Aff filed and served on 19 May 2015 do stand;

(c)   no order was made in respect of the D2 Summons;

(d)   costs of the D2 and P Summonses be paid by P to D2 summarily assessed at $200 to be paid forthwith.

7.  On 20 May 2015, D2 filed a Notice of Change of Address of Service by himself and also purportedly as “lawful attorney for [D1]”.  Again, by reason of the matters discussed in Part VII below, it is unclear whether D2 could act on behalf of D1 in the present proceedings.

8.  On 21 May 2015, D2 filed Notice of Appeal to set aside the Order, and he sought the following orders (“Appeal”):

(a)   to strike out/dismiss the OS;

(b)   to vacate the OS Registration;

(c)   P to pay a sum of $2,000,000 into court as he had without good reason “failed to comply with a rule as mentioned, the money is security for any sum payable by that party to any other party in the proceedings as [the OS Registration] will hinder the completion of the Sale & Purchase of the Property on 28 May 2015 and compensation might be incurred (O 2, r 3)”;

(d)   leave to D1 and D2 to take any fresh step after the hearing of the Appeal.

9.  On the same day, D2 filed his affirmation in support of the Appeal (“D2 2^nd Aff”).

II.  LEGAL PRINCIPLES: APPEAL

10.  It is trite that an appeal from the master to judge in chambers is dealt with by an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time.  The judge will give the weight it deserves to the previous decision of the master; but he is in no way bound by it.[1]

11.  The D2 2^nd Aff was filed for the purpose of the Appeal after the Order was made.  Order 58 rule 1(5) of the Rules of the High Court (“RHC”) provides that “[no] further evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) may be received on the hearing of an appeal under this rule except on special grounds”. 

12.  The phrase “special grounds” is the same expression as in Order 59 rule 10(2) of the RHC and requires the conditions laid down in Ladd v Marshall[2] to be satisfied.[3] The Ladd v Marshall conditions are: (a) the evidence could not have been obtained with reasonable due diligence for use at the hearing below, (b) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive, and (c) the evidence must be such as is presumably to be believed.

13.  DHCJ Au-Yeung (as she then was) in Bank of China (Hong Kong) Limited v Certain Aim Limited[4] said as follows:[5]

“… Order 58, rule 1(5) was introduced to curb the undesirable practice before the Civil Justice Reform when parties sought to adduce a further round(s) of evidence on appeal after an unfavourable decision from a Master. Rule 1(5) aims at effecting a change of culture so that parties should prepare their application properly at the earliest possible opportunity and lay all cards on the table prior to the hearing before a Master. The spirit of this rule will be defeated if a party is allowed to revert to the pre-CJR practice. …”

14.  However, having considered the contents of the D2 2^nd Aff, it did not appear to contain new factual assertions.  Rather, it set out D2’s view of the legal basis in support of the D2 Summons.  Ms Ko, solicitor for P, had no objection for D2 to rely on the D2 2^nd Aff for the purpose of the Appeal.  In the circumstances, I grant retrospective leave for D2 to file/serve the D2 2^nd Aff, and to rely on the same at the Appeal.

III.  LEGAL PRINCIPLES

15.  The following provisions of the RHC are relevant:

(a)   Order 28 rule 1A of the RHC provides that:

“(1) In any cause or matter begun by originating summons (not being an ex parte summons) the plaintiff must, before the expiration of 14 days after the defendant has acknowledged service, or, if there are two or more defendants, at least one of them has acknowledged service, file with the Court the affidavit evidence on which he intends to rely.

……

(3) Copies of the affidavit evidence filed in the Court under paragraph (1) must be served by the plaintiff on the defendant, or, if there are two or more defendants, on each defendant, before the expiration of 14 days after service has been acknowledged by that defendant.

……”

(b)   Order 2 rule 1 of the RHC provides that:

“(1) Where, …… at any stage in the course of or in connection with any proceedings, there has, by reason of any thing …… left undone, been a failure to comply with the requirements of these rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.

(2) …… the Court may, on the ground that there has been such failure as is mentioned in paragraph (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings or any document, judgment or order therein or exercise its powers under these rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit.

……”

(c)   Order 2 rule 2 of the RHC provides that:

“(1) An application to set aside for irregularity any proceedings, any step taken in any proceedings or any document, judgment or order therein shall not be allowed unless it is made within a reasonable time and before the party applying has taken any fresh step after becoming aware of the irregularity.

(2) An application under this rule may be made by summons or notice of motion and the grounds of objection must be stated in the summons or notice of motion.”

(d)   Order 2 rule 3 of the RHC provides that:

“(1) The Court may order a party to pay a sum of money into court if that party has, without good reason, failed to comply with a rule or court order.

(2) When exercising its power under paragraph (1), the Court shall have regard to-

(a) the amount in dispute; and

(b) the costs which the parties have incurred or which they may incur.

(3) Where a party pays money into court following an order under paragraph (1), the money is security for any sum payable by that party to any other party in the proceedings.”

(e)   Order 3 rule 5 of the RHC provides that:

“(1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorized by these rules, or by any judgment, order or direction, to do any act in any proceedings.

(2) The Court may extend any such period as is referred to in paragraph (1) although the application for extension is not made until after the expiration of that period.

(3) The period within which a person is required by these rules, or by any order or direction, to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order of the Court being made for that purpose.”

(f)   Order 1A rule 2 of the RHC provides that:

“(1) The Court shall seek to give effect to the underlying objectives of these rules when it-

(a) exercises any of its powers (whether under its inherent jurisdiction or given to it by these rules or otherwise); or

(b) interprets any of these rules or a practice direction.

(2) In giving effect to the underlying objectives of these rules, the Court shall always recognize that the primary aim in exercising the powers of the Court is to secure the just resolution of disputes in accordance with the substantive rights of the parties.”

IV.  P AFF

16.  By the P Aff, P condescended upon the merits and evidence of her case in respect of the OS.  It was P’s case that D1 was mentally incapacitated prior to 31 December 2013 (ie before the date of the EPoA), which date was the day he commenced HCMH83/2013 for an order that a committee be appointed to handle D1’s assets under the Mental Health Ordinance Cap 136.  P claimed he realised D1 had mental problems since 2012, and indeed P as next-of-kin had to sign a Hospital Authority consent form dated 11 October 2012 for D1’s medical procedure because the treating doctor assessed D1 “因為未能明白院方建議的手術/醫療程序/治療的性質和影響而未能作出同意”. 

17.  The P Aff also claimed D2 turned a blind eye towards D1’s mental incapacity and stonewalled P’s request for medical examination of D1 with a view to take control of D1’s assets and to sell the Property, and had D1 been of sound mind she would not have given the EPoA because D2 was a habitual gambler and substantially in debt.[6] P claimed that in 2004 D2 had to leave Hong Kong for Shanghai (and he stayed away in the PRC for 8 years) to avoid being dunned by creditors and banks.  Since his return to Hong Kong in 2013, D2 had occupied the Property.

18.  The P Aff further claimed that D2 had no affection for their parents, and only returned to Hong Kong a day before their father (and husband of D1, “Father”) passed away on 12 February 2013.  P was appointed the sole executor under the Father’s will dated 22 November 2010, which was kept in the safe deposit box in the joint names of D1 and the Father.  P claimed his application for grant of probate was delayed because D1 (who was mentally incapacitated) could not consent to the opening of the safe deposit box.  However, it transpired in the course of HCMP891/2015 commenced by D2 (allegedly as attorney of D1) against P that letters of administration in respect of the Father’s estate had been granted to D1 on 1 November 2013 (“Father LA”).  P was concerned whether D2 had caused D1 (who was mentally incapacitated) to apply for such grant, and claimed he would apply to set aside the Father LA.

19.  The P Aff went on to say that D2 applied to intervene in HCMH83/2013.  Eventually, pursuant to court directions, D1 was examined by psychiatrists respectively nominated by P and D2, and such psychiatrists issued their respective certificate in July 2014.  The court in HCMH83/2013 called upon the Official Solicitor to give their views, which the Official Solicitor rendered on 18 May 2015.  On 19 May 2015, L Chan J called for an urgent hearing in HCMH83/2013, which I understand will be heard on 15 June 2015.

20.  The P Aff stated that in the meantime on 13 February 2015, D2 commenced HCMP389/2015 for an order to vacate the registration of the originating summons in HCMH83/2013 at the Land Registry against the Property.  In March 2015, P agreed and took steps to vacate such registration.  But at the end of March 2015, P discovered D2 had registered the EPoA at the Land Registry against the Property, so P commenced the present proceedings on 27 March 2015.  It also transpired that by relying on the EPoA P purported to sell the Property pursuant to a provisional agreement for sale and purchase dated 14 March 2015 and a formal agreement for sale and purchase dated 27 March 2015, both of which were registered at the Land Registry on 13 April 2015 after the OS Registration was made on 30 March 2015.

21.  P claimed that the certificates by the psychiatrists obtained in HCMH83/2013 demonstrated that D1 was mentally incapacitated as at July 2014, and that there was basis to say such mental incapacity had lasted for at least five years, which contradicted the certificate by Dr Shirley Ip (a witness to the EPoA) dated 15 January 2014 that suggested D1 was mentally sound on that day.  It was P’s case that the certificates in HCMH83/2013 were more reliable than Dr Ip’s certificate.

V.  DISCUSSION

22.  Order 28 rule 1A(1) and (3) of the RHC requires P to file and serve the supporting affidavit for the OS within 14 days after D2 filed the D2 AS.  D2 filed the D2 AS on 14 April 2015, so P should have filed his supporting affidavit for the OS (ie the P Aff) on or before 28 April 2015 (“Prescribed Deadline”).  P did not do so, and was therefore out of time in filing/serving the P Aff.  Further, P did not file the P Summons before the expiry of the Prescribed Deadline to ask for extension of time to file/serve the P Aff.

23.  But under Order 3 rule 5(1) of the RHC, the court may by order extend the period within which P was required by the RHC to do any act in the proceedings (which act would include filing/serving the P Aff within the time prescribed under the RHC).  Further, Order 3 rule 5(2) of the RHC also permits the court to so extend time even though the application for extension of time is not made until after the expiration of the prescribed period for such act. 

24.  In the circumstances, even though P was out of time in filing/serving the P Aff and did not apply to court for time indulgence to do so until after the expiry of the Prescribed Deadline, there was jurisdiction under the RHC for P to file the P Summons after the Prescribed Deadline, and for Master Lai to grant the Order to extend time for P to file/serve the supporting affidavit for the OS and (pursuant to such order) to direct that the P Aff (that had been filed/served on 19 May 2015) do stand.  It was well within the jurisdiction and discretion of Master Lai to grant the Order. 

25.  D2 complained there was no court order that extended time for P to file/serve the P Aff out of time, so Order 3 rule 5(3) of the RHC would not assist P.  But the Order by Master Lai was in fact the very court order that extended time for P to file/serve the P Aff, and once the Order was granted any delay on P’s part was regularised and had no further effect.  Further, in light of Order 3 rule 5(1)-(2) of the RHC, it did not matter that (a) the P Summons was filed and/or (b) the Order was granted after the Prescribed Deadline.

26.  D2 pointed out that Order 3 rule 5(3) of the RHC also would not aid P because he did not grant any consent in writing to allow P to file/serve the P Aff out of time.  However, there was no need for P to resort to Order 3 rule 5(3) of the RHC to seek D2’s consent in writing because pursuant to Order 3 rule 5(1)-(2) of the RHC, P applied directly to the court by way of the P Summons and obtained the Order (which is a court order) that granted leave for him to file/serve the P Aff out of time.

27.  Having established there was jurisdiction for granting the Order, the next question was whether in the exercise of its discretion the court should (a) grant the time indulgence that P sought by way of the P Summons to extend time for P to file/serve the P Aff (which would remove the underlying basis that D2 put forward for the D2 Summons to strike out the OS and to vacate the OS Registration), or (b) refuse the extension of time P sought (which would mean P would not be allowed to rely on the P Aff).  If this court was minded to accede to D2’s position in (b) above, this court would have to go on to consider whether to grant the reliefs sought in the D2 Summons under Order 2 rule 1(2) and rule 2(1)-(2) of the RHC to strike out the OS and to vacate the OS Registration based on P’s irregularity in failing to file/serve the P Aff within the Prescribed Deadline.

28.  Here, D2 only made a procedural complaint for he had not filed any affidavit on the merits of his defence (if any).  This is at a very early stage in the proceedings, and the delay up to 19 May 2015 was only 3 weeks. D2 complained there had been delay on P’s part in issuing the present proceedings.  However, there was no suggestion that P’s claim was time-barred, and according to the P Aff, despite previous and/or other litigation between the parties, P discovered D2 registered the EPoA at the Land Registry against the Property in March 2015.  I am not persuaded that there was any significant delay.

29.  Further, P had since filed the P Aff which condescended upon the substantive merits of his case.  In view of the contents of the P Aff and in the absence of factual evidence from D2, the P Aff demonstrated arguable basis that would support P’s contention that D1 was at the material time and is now mentally incapacitated, and arguably the EPoA was therefore null and void.

30.  In my view, given the above matters and bearing in mind that P’s failure to file/serve the P Aff within the Prescribed Deadline was merely an irregularity and not a nullity,[7] it would be inappropriate to adopt a rigid mechanistic approach to the exercise of the discretion.  Order 1A rule 2(2) of the RHC made clear that the court shall always recognise that the primary aim in exercising case management powers is to “secure the just resolution of disputes in accordance with the substantive rights of the parties” (my emphasis).  To strike out the OS and to dismiss the whole of P’s claim for a procedural delay of 3 weeks is plainly disproportionate.  It would be a penalty that did not fit the crime, and also it would not meet the underlying objectives in Order 1A rule 1(c)-(d) of the RHC of promoting a sense of reasonable proportion and of ensuring fairness (which included substantive fairness) between the parties.

31.  Moreover, I am unable to see any prejudice that D2 would suffer that could not be compensated by costs.  Of course, the grant of time indulgence in favour of P to file/serve the P Aff out of time must have been a disappointment to D2; but I cannot think that this should count for anything.  The more substance there is to the contents of the affidavit in support of the OS (and I consider there is arguable basis in the P Aff in support of the reliefs sought in the OS), the greater the disappointment to D2 if it is allowed and the greater the injustice to P if it is not.  What the court must strive is to avoid injustice, not disappointment. 

32.  Having considered all the circumstances, I consider that Master Lai was entirely correct in granting leave to P to file/serve the supporting affidavit for the OS out of time and in directing that the P Aff already filed/served on 19 May 2015 should stand. 

33.  However, D2 suggested that in granting such time indulgence I should (pursuant to Order 2 rule 3 of the RHC) impose a condition that P shall pay $2,000,000 into court because P had without good reason failed to file/serve the P Aff on or before the Prescribed Deadline and because the OS Registration would hinder completion of the sale and purchase of the Property on 28 May 2015 “and compensation might be incurred”. 

34.  Neither D2 nor Ms Ko addressed this point at the hearing of the Appeal, but I shall proceed to deal with such application since D2 had not abandoned the same.  In the circumstances, it is necessary to consider the relevant principles for the exercise of discretion under Order 2 rule 3 of the RHC, and in this respect I refer to my decision in Lee Wai Man v Chan Che Ming & anor[8] on Order 2 rule 3 of the Rules of the District Court which is effectively the same as Order 2 rule 3 of the RHC. 

35.  In that case, I noted the similarity between the Hong Kong rules and the English provisions (in Part 3.1(5)-(6A) of the Civil Procedure Rules (“CPR”), and drew assistance from several English authorities discussed in paragraphs 36-39 below.

36.  In Mealey Horgan plc v Horgan & anor,[9] Buckley J said as follows :

“……I think all are agreed that I have jurisdiction in an appropriate case to impose further sanction including a payment into court …… It may be appropriate if …… there is a history of repeated breach of timetables or of court orders or if there is something in the conduct of the party that gives rise to suspicion that they may not be bona fide and the court thinks the other side should have some financial security or protection. Again those are matters or examples that come to mind as it were off the cuff. I am sure there are many others. But to my mind this is a straightforward case in which both parties did not adhere to the original timetable for witness statements. …… that default has not prejudiced the trial and has not significantly prejudiced the Claimants to my mind. There is no suggestion here of deliberate manoeuvring or that the Defendants are not likely to be good for the claim. Indeed such evidence as I have seen is rather to the reverse; …… so scouting around quickly I cannot see any reason other than pure punishment to order a payment in and …… I do not myself read the new rules as encouraging the court to punish this type of default by ordering payments into court. I think that the position can otherwise be dealt with conveniently.” (my emphasis)

37.  In Olatawura v Abiloye,[10] the court considered the jurisdiction to make a conditional order, which was tantamount to an order for security for costs outside the provisions of Part 25.  The English Court of Appeal held that when exercising such jurisdiction the court should be alert and sensitive to the risk that, by making such an order, it might be denying the party concerned the right of access to the court.  Other relevant considerations would be the party’s conduct in the proceedings, including in particular his compliance or otherwise with any applicable rule, practice direction or protocol (or any applicable rule or court order for the Hong Kong provision).  Simon Brown LJ at p 910 endorsed Mealey Horgan plc and went on to say that the court should not ordinarily penalise breaches of the rules and the like by making orders for payment into court under Part 3.1(5):

“…… [A] party only becomes amenable to an adverse order for security under r 3.1(5) …… once he can be seen either to be regularly flouting proper court procedures (which must inevitably inflate the costs of the proceedings) or otherwise to be demonstrating a want of good faith – good faith for this purpose consisting of a will to litigate a genuine claim or defence as economically and expeditiously as reasonably possible in according with the overriding objective.”[11]

38.  In CIBC Mellon Trust Co and ors v Mora Hotel Corp NV and anor,[12] the English Court of Appeal held that the judge fell into error when requiring the defendant companies to pay to the claimant trustees security in respect of past costs orders as a condition for allowing them to pursue the application to set aside default judgments by failing to consider (a) there could be injustice when the defendant could not make such payments out of his own resources and the only source of funding was a third party against whom no order for costs had been made, and (b) the proposed order would retrospectively improve the position of the claimant trustees in relation to past orders.  Peter Gibson LJ (with whom Mance LJ and Hale LJ agreed) said Olatawura “suggests that it is only appropriate for the court to exercise its power under Pt 3 to require a payment into court in limited circumstances and should not do so in the absence of want of good faith on the part of the party against whom the order is sought.  ……”[13]

39.  In Ali v Hudson (t/a Hudson Freeman Berg),[14] Clarke LJ cited Olatawura and CIBC Mellon Trust Co with approval and held that Part 3.1(5) gave the court a separate and free-standing power to order a party to pay a sum of money into court if that party had, without good reason, failed to comply with a rule, practice direction or a relevant pre‑action protocol.  Clarke LJ went on to summarise the correct general approach as follows :

“i) it would only be in an exceptional case (if ever) that a court would order security for costs if the order would stifle a claim or an appeal;

ii) in any event,

a) an order should not ordinarily be made unless the party concerned can be shown to be regularly flouting proper court procedures or otherwise to be demonstrating a want of good faith; good faith being understood to consist (as Simon Brown LJ [in Olatawura] put it) of a will to litigate a genuine claim or defence (or appeal) as economically and expeditiously as reasonably possible in accordance with the overriding objective; and

b) an order will not be appropriate in every case where a party has a weak case. The weakness of a party’s case will ordinarily be relevant only where he has no real prospect of succeeding.”[15]

40.  Recently, in Huscroft v P & O Ferries Ltd,[16] the English Court of Appeal considered the jurisdiction to make an order for security for costs under Part 3.1(3) of the CPR.  Moore-Bick LJ (with whom Elias and Sedley LLJ agreed) considered Olatawura and Ali, and explained that “…… the existence of r 3.1(5) …… is clearly intended to give the court power to punish a party who without good reason fails to comply with the established procedural code, …… Although such an order may well have a beneficial influence on the future conduct of the litigation, it is directed more to what has gone on in the past than what will go on in the future”.[17]

41.  Even more recently in Allen v Bloomsbury Publishing Ltd,[18] the defendants to copyright proceedings sought summary judgment against the claimant or, in the alternative, a conditional order for their costs of defending the claim pursuant to Part 24.6 of the CPR.[19] Kitchin J considered Olatawura, Ali and Huscroft, and Part 3 of the CPR under which the court might impose conditions on parties to proceedings when making an order concerned with the management of the case.  The learned judge found the claim had not been pursued in good faith and its prospects of success were so poor that the court was justified in exercising its discretion to make a conditional order. 

42.  The above authorities clearly showed that Order 2 rule 3 of the RHC gives a power to impose conditions on a party in limited circumstances.  It is only in an exceptional case where there have been repeated breaches of the rules and/or court orders or otherwise demonstration of want of good faith as explained in Mealey Horgan plc, Olatawura and Ali that the court will consider penalising the relevant party by making an order for payment into court.  Here, D2 could only point to a single breach of the rules on P’s part (ie P was late in filing/serving the P Aff) without any regular flouting of proper court procedure.  There is no basis to suggest (and D2 did not suggest) that there was any want of good faith on the part of P in the sense of not having a will to litigate a genuine claim as economically or expeditiously as possible.  After all, P had already filed the P Aff, which condescended on the merits of his case.

43.  As regards D2’s complaint of the missed completion date for sale and purchase of the Property on 28 May 2015, it is neither here nor there.  Even if P had filed/served the P Aff within time, the present proceedings would not have been concluded before 28 May 2015, so in any event completion would not have taken place on or before that date. 

VI.  CONCLUSION

44.  In the circumstances, I dismiss the Appeal.  I also grant extension of time until 21 days from the date herein, ie until 3 July 2015, for D2 to file and serve his affirmation in opposition to the OS.

45.  There is no reason why costs should not follow event.  I grant a costs order nisi that D2 shall pay P costs of the Appeal to be taxed if not agreed.

VII.  POSTCRIPT

46.  It is P’s case that D1 is at present a person under disability, ie a mentally incapacitated person (“MIP”).  Indeed, there is arguably material in the certificates by the psychiatrists engaged by P and D2 in HCMH83/2013 to support this.  If D1 is a MIP, then she could not have acknowledged service of the present proceedings except by her guardian ad litem,[20] and all steps in D1’s conduct of the proceedings would have to done by her guardian ad litem when appointed.[21] Thus, if D1 is a MIP, given that the present proceedings had already begun and no documents in Order 80 rule 3(8) of the RHC had been filed, an application would have to be made to the court for the appointment of a guardian ad litem for D1.[22]

47.  A guardian ad litem is not the same as an attorney.  If D1 is an MIP, then as explained above, it is improper for D2 to file acknowledgment of service and/or to take any step in the present proceedings on behalf of D1 merely in his capacity of alleged “lawful attorney” of D1.  In any event, in view of the nature of the claim and the specific allegations in the P Aff against D2, there is doubt whether it is appropriate for D2 to act as D1’s guardian ad litem in view of the potential conflict of interest between D1 and D2 such that it is unlikely he will be able to confirm he has no interest in the cause or matter in question adverse to that of D1.[23] Further, if D1 is a MIP, then except where the Official Solicitor is acting as the guardian ad litem, any guardian ad litem appointed to act for D1 must act by solicitor and cannot be self‑represented in the present proceedings.[24]

48.  If D1 is not a MIP, it is useful to note the following in Hong Kong Civil Procedure 2015:

“An unqualified person, other than the defendant himself, cannot lawfully acknowledge service on behalf of the defendant (see Re Ainsworth [1905] 2 K.B. 103), but the defendant need not attend personally in order to acknowledge service. The acknowledgement of service must be signed by him, and, if it complies with this rule, the acknowledgment of service is good although delivered to the Registry by a third person……. But a third person so acting as agent for a defendant acknowledging service in person is not entitled to take any other step on behalf of the defendant. To do so would be a breach of the Legal Practitioners Ordinance (Cap.159), s.45 and, therefore a contempt of court (Re Ainsworth [1905] 2 K.B. 103).”[25]

In light of the above, question arises as to whether a defendant who is sui juris can defend legal proceedings by having an attorney sign the acknowledgment of service form and/or take steps in the proceedings on his behalf.  But even if this is permissible (which I doubt), it must be remembered that an enduring power of attorney (a) must not confer on the attorney any authority other than authority to act in relation to the property of the donor and his financial affairs, and (b) subject to (a) above, must specify the particular matters, property or affairs in relation to which the attorney has authority to act.[26] There is also doubt as to whether the EPoA expressly specified that D2 as attorney could handle and defend litigation on behalf of D1. 

49.  In the circumstances, the validity D2’s purported representation of D1 is unclear, and it is inappropriate to grant any directions for D1 to take further steps in the proceedings until the above matters in relation to her capacity and representation are resolved.

50.  I am informed by D2 that there is a hearing in HCMH83/2013 before L Chan J on 15 June 2015. I hereby direct P’s solicitors to forthwith draw the attention of the Official Solicitor to this Decision, and I further direct my clerk to provide a copy of this Decision to L Chan J’s learned clerk for His Lordship’s attention.