RE NLS

HCMH 4/2020

[2021] HKCFI 2203

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MENTAL HEALTH CASE NO. 4 OF 2020

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JUDGMENT

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1.  This is an inquiry under Part II of the Mental Health Ordinance, Cap 136 (“MHO”) as to whether NLS is a mentally incapacitated person (“MIP”) who is incapable of managing his property and affairs within the meaning of Part II of the MHO.

2.  Unlike most of the other cases, NLS is separately represented by his own legal team and he vigorously opposes the application by the Applicants for the appointment of a committee to manage his finances.

HISTORY OF THE PROCEEDINGS

3.  This case has a chequered history and the court has adopted a slightly different method to interview NLS with a view to ascertain whether he is indeed a MIP.

4.  NLS is an elderly man of over 90 years of age.  There are some documentations showing that NLS is now 97 years old.  However, it was possible that NLS had overstated his age in the past, and his actual age should be about 92 or 93.  NLS’s wife has passed away.  He has 5 children: all sons except the second one who is a daughter.

5.  The proceedings started with an application under Part II of the MHO and an ex parte application for Mareva injunction to freeze the assets of NLS.  The Applicants of the Part II proceedings are the 3^rd and 4^th sons of NLS together with a certified public accountant.

6.  There is no serious dispute that a total sum of about $16.7 million had been withdrawn from the bank accounts of NLS in the period from October 2018 to November 2019.  According to the Applicants, NLS was already suffering from serious mental impairment at the time of these withdrawals and so an injunction had to be granted in the interest of NLS to preserve his assets.  I granted the ex parte application on 24 January 2020.  The injunction (“the Injunction”) was extended for 14 days by Toh J on 4 February 2020.  The case came before me again on 18 February 2020.  In that hearing, SN, NLS’s grandson, applied successfully to be joined as an intervener to oppose the Injunction application.  NLS was also legally represented to oppose the application.  The Injunction was allowed to continue and directions were given for NLS and the Intervener to file evidence for the Injunction application.

7.  By that time, there were medical reports or certificates from two camps of doctors, with one camp certifying that NLS was a MIP whilst the other camp saying the opposite.

8.  In the subsequent hearing on 17 July 2020, I allowed NCN, who is NLS’s eldest son and SN’s father, to be joined as the 2^nd Intervener in the proceedings.  Whilst the Injunction would continue, I allowed NLS's application to withdraw a sum of $1,103,000 from his bank account to pay for his legal fees.  In that hearing, I also had to deal with another summons dated 14 July 2020 taken out by the Applicants (“the 14 July Summons”) for discovery of various documents including, inter alia, NLS’s last will, the enduring power of attorney (“EPOA”) purportedly executed by NLS with SN as the donee dated 13 March 2020, medical records of NLS and various documents relating to the financial affairs of NLS.  In the same 14 July Summons, the Applicants also asked for NLS to attend a joint medical examination by the Applicants’ and the 1^st Intervener’s experts.  I adjourned the said summons for argument and gave directions for the filing of affidavit evidence.

9.  In that hearing, I was given to understand that the Applicants intended to challenge the validity of the EPOA executed by NLS. However, I had made it clear to the parties that, in the Part II application, the court would only be concerned with the mental condition of NLS at the time of the inquiry.  If the Applicants sought to challenge the validity of the EPOA, they had to take out separate proceedings to resolve the matter.

10.  The case came before me for another directions hearing on 28 October 2020, in which the Applicants and the 1^st and 2^nd Interveners were represented by senior counsel.  In that hearing, I directed that there be a 2-stage inquiry: the first stage to determine whether NLS is a MIP; and if the answer is in the affirmative, the second stage to determine whether a committee would be appointed to manage the financial affairs of NLS.  I was also given to understand that there were in fact 2 EPOAs executed by NLS.  The first stage of the inquiry would be heard in April 2021 and the 14 July Summons would be adjourned to be heard in the case management conference hearing (“CMC”) on 16 December 2020.

11.  In the CMC on 16 December 2020, I made a few decisions.  First, I decided to move the hearing earlier to March 2021. Second, the second stage of the inquiry and the validity of the EPOAs will be decided by the court after the first stage of the inquiry.  Third, in view of the strong objection of NLS not to undergo another medical examination or further Mini-Mental State Examination (“MMSE”) and the conflicting medical evidence, I decided to interview NLS myself to determine whether he is a MIP. In fact, NLS personally attended the hearing, and both his and the Interveners’ legal representatives had invited me to see NLS myself, as he was eager to show to the court that he had no mental impairment.  I agreed and spoke to NLS briefly, but I found it very difficult to communicate with him.  I had reminded myself that no weight should be attached to the performance of NLS in that hearing, as he might have difficulty in expressing himself in Punti dialect, in particular in a court setting.   The difficulty in communicating with NLS might not have anything to do with his mental condition.

12.  In that hearing, I also allowed: (i) NLS’s application for a sum of $2,200,000 be withdrawn from his bank account to pay for his legal expenses; and (ii) the Interveners’ application for a sum of about $1 million be paid out of NLS’s account for his daily expenses.  Since there is a danger that the parties may try to make use of the mental health proceedings to obtain documents for use in other proceedings such as future probate proceedings, I had indicated to the parties that the court would jealously protect the confidentiality of the documents used in these proceedings.  The court would not lightly grant leave for the disclosure of documents to be used for other purposes.

13.  In light of the difficulty in communicating with NLS experienced in the last hearing and the lack of experience or expertise of the court in communicating with very elderly person, I decided to appoint, with the assistance of the Official Solicitor (“OS”), an independent expert to conduct the interview and the court would observe the interview either in person or via video-link facility.  The court-appointed expert (“the Court Expert”) would also be asked to give his opinion on whether NLS is a MIP under Part II of the MHO after the interview.  The parties also agreed that the interview should be conducted in a place in which NLS would be most comfortable with.  Since NLS was by then staying in a hotel, the parties generally agreed that the interview should be conducted in a hotel room.  I also directed that a suitable Chiu Chow interpreter should be present in the interview.  These were the subjects of my order dated 22 December 2020.

14.  The case came before me again on 7 January 2021. I then gave directions as to how the interview should be conducted, including the disclosure of NLS’s medical records to the Court Expert, the venue of the interview and who should be present in the interview.  The court would also, after consulting the parties, draft the instructions to the Court Expert (“the Instructions”).  I granted leave to the Applicants to call one expert and NLS and the Interveners to call another expert to testify on the evidence of the Court Expert.  I also allowed NLS to withdraw a sum of $1,800,000 to pay for his legal expenses.

15.  The court eventually appointed Dr Chung See-yuen (“Dr Chung”) as the Court Expert.  In the Instructions to Dr Chung, I had made it clear that the object of interview was to ascertain whether NLS, at the time of the interview, was incapable, by reason of any mental incapacity, of managing and administering his property and affairs for the purpose of Part II of the MHO.  Dr Chung would be at liberty to ask NLS any questions as he thought fit.   I had also told Dr Chung that NLS had underwent a number of MMSEs before, and he had expressed strong view through his legal representatives against being tested on MMSE again.  Dr Chung was advised to take into account such view in conducting the interview, but his discretion in asking questions remained unfettered.  I also gave directions as to the documents and materials to be made available to Dr Chung for the preparation of the interview.

16.  To avoid the special procedures relating to the court sitting outside the court building, I decided to observe the interview via video link facility rather than physically in person.

17.  Following some disagreements between the parties, they came before me for the final directions hearing on 12 March 2021.  In that hearing, I gave further leave to NLS to withdraw an additional sum of $1,250,000 to pay for his legal expenses.  I also finalised the list of persons that were allowed to be present in the interview. 

18.  I had indicated to Dr Chung that he could conduct the interview freely.  I was afraid that too much interference by the court or the parties might disturb the flow of the interview and affect the rapport that Dr Chung was trying to establish with NLS.  Hence, the parties understood that they should not interrupt the interview.  I was also very conscious of such danger and tried not to ask any question myself during the interview.

19.  Upon the request of NLS’s legal team, the interview would not last for more than two hours in the morning so as to allow NLS sufficient time to rest before continuing the interview in the afternoon at 2 p.m.

20.  The interview took place as scheduled on 17 March 2021 (“the Interview”).  It started at about 10:20 a.m. and ended one hour later, with a break from 10:38 a.m. to 10:45 a.m.  The afternoon session started at 2:00 p.m. and ended at 2:52 p.m.

21.  According to my observation, the Interview proceeded smoothly. There was a break in the morning session to ensure that NLS would not be tired in talking with Dr Chung.  Though I myself could not hear every answer given by NLS clearly through the video link facility, Dr Chung appeared to have no problem in listening to NLS’s answers at the scene.  NLS also appeared to understand the questions.  Save as some of the pauses (sometimes long ones) before NLS answered some of the questions which may not be shown in the Live Note transcripts (“the Transcripts”), there were good interactions between Dr Chung and NLS.

22.  There was no interruption by the court or counsel in the whole Interview.  Before the commencement of the afternoon session, I had ascertained from Dr Chung whether he would ask any questions relating to the money gifted by NLS to his family members in recent years, Dr Chung told me that this would be covered by his intended questions in the afternoon session.

23.  I would give my observations about the mental condition of NLS as shown in the Interview in the latter part of this Judgment.[1]

EXPERT REPORTS SUBMITTED AFTER THE INTERVIEW

(i)     The expert report of Dr Chung

24.  After the Interview, Dr Chung submitted his expert opinion promptly on 19 March 2021.   I had expressly told Dr Chung that he did not need to prepare a detailed report, and so his report was a concise one with only 6 pages.

25.  Before conducting the Interview and preparing his expert report, Dr Chung had studied the various documents and medical reports relating to NLS.  The parties had taken some video recordings about the conditions of NLS at various times and Dr Chung had also studied these video clips.  He had taken into account the background of the case in preparing the Interview.

26.  Having assessed NLS’s performance during the Interview, Dr Chung is of the view that NLS is a MIP within the meaning of the MHO.  NLS is suffering from multiple impairments in cognitive function without impairments in consciousness, and Dr Chung opines that NLS is suffering from dementia.  According to Dr Chung, NLS cannot live an independent life.  He needs supervision on his self-care and he cannot manage his financial affairs. Dr Chung cannot tell how long the present mental incapacity has lasted, but it is likely that the mental incapacity has lasted for more than one year.

(ii)     The expert reports of Dr Wong Chung Kwong

27.  The Applicants’ expert is Dr Wong Chung Kwong (“Dr Wong”).  He submitted two expert reports after the Interview.

28.  So far as the Interview is concerned, Dr Wong is of the view that Dr Chung has adopted a realistic approach in his assessment, and he asked realistic questions with a view to test the mental condition of NLS.  According to his observation, NLS understood the questions put to him and was able to produce answers, though the answers showed that his thinking was impaired.  He considered that Dr Chung had established a good rapport with NLS. NLS’s response was spontaneous and there was no sign of anxiety or tiredness.  He thinks that the interactions in the Interview “went smoothly”.

29.  From his observation of the Interview, Dr Wong is of the view that NLS is suffering from both short-term and long-term memory impairments and cognitive and memory abnormalities.  NLS displayed a propensity for confabulation, i.e. filling memory gaps with fabricated facts and reasoning, which is common in patients suffering from Alzheimer’s Disease and those suffering from long-term memory impairment.

30.  Further, he relies on certain results of the MMSEs conducted by NLS’s and the Interveners’ expert, Professor Helen Chiu (“Professor Chiu”), and the answers given by NLS during the Interview to show that NLS is suffering from impairment in executive function.  According to Dr Wong, NLS’s failure to copy two overlapping pentagons indicates a severe degree of constructional apraxia, which is an important feature of perceptual-motor impairment.

31.  According to Dr Wong, all these impairments adversely affect NLS’s ability to make decisions and his ability to manage his own finances.

32.  Dr Wong agrees with the psychiatric diagnosis of dementia made by Dr Chung.  NLS is probably suffering from either neurocognitive disorder (“NCD”) due to Alzheimer’s Disease or Vascular NCD or both (i.e. NCD due to Multiple Etiologies), all of which are irreversible.  Dr Wong opines that NLS is a MIP.

33.  In his supplemental report, Dr Wong listed out some “Negative Factors” (which are defined and listed out in the latter part of this Judgment[2]), which Dr Wong said are abnormalities which indicate that NLS lacks the mental capacity to manage his property and affairs.

34.  Dr Wong also added the following points:

(i)  NLS’s case is not one of either two extremes in his cognitive and memory functions, i.e. he is neither totally incapable nor totally capable.  Therefore, Dr Wong expects NLS is able to retain some degree of cognitive and memory functions.

(ii)  What NLS cannot do and the abnormalities displayed should carry more weight in the diagnosis and the assessment than what he can do.

(iii)  Cognitive and memory functions are interactive.  One impairment often leads to another impairment and one abnormality leads to another abnormality.

35.  In his supplemental report, Dr Wong also disagreed with certain observations made by Professor Chiu in her reports.

(iii)    The expert reports of Professor Chiu

36.  Professor Chiu prepared two reports on behalf of NLS and the Interveners.

37.  Unlike Dr Chung and Dr Wong, Professor Chiu had conducted medical examinations on NLS in person on a number of occasions.  She had conducted 4 MMSEs with NLS, and Professor Chiu was also the doctor witnessing the execution of one EPOA by NLS.

38.  Professor Chiu’s first report contains her opinion about the alleged deficiency of the Interview.  According to Professor Chiu, Dr Chung’s interview style is not appropriate to elderly people who are physically frail and have sensory deficits like hearing deficits.  The style was too confrontational and interrogative, which would generate anxiety on the part of NLS.  Insufficient allowance had been made for the fact that NLS is a physically frail elderly person who may have hearing impairment.  Dr Chung’s questions and statements were too long, and sometimes too many questions were asked at the same time.  Difficult, leading, vague and misleading questions were asked.  Inappropriate comparisons were sometimes made, and Dr Chung failed to probe into some of the issues relating to NLS’s capacity to manage his property and finances.  In her report, Professor Chiu tried to rely on different parts of the Interview to support these observations.

39.  According to Professor Chiu, NLS was tired in the morning session.  His performance improved in the afternoon session in which he was able to answer more difficult questions.  She also relied on some “Positive Factors” (which are defined and listed out in the latter part of this Judgment[3]) which indicate that NLS knew about his financial condition.

40.  Professor Chiu’s overall opinion is that there is no good evidence to show that NLS is incapable of managing his affairs and finances.  She disagrees with the diagnosis of dementia made by Dr Chung.  She also disputes Dr Chung’s opinion that: (i) NLS’s cognitive impairment has affected his activities of daily living; and (ii) NLS has unsatisfactory awareness of his living circumstances.  She nevertheless agrees that NLS is suffering from Mild Cognitive Impairment (“MCI”).

41.  In making the assessment, Professor Chiu relied on the results of the MMSEs she conducted.  As there might be a lot of factors affecting NLS’s performance in the Interview, she would rely more on the MMSE results in making her assessment.  Further, assessing mental capacity must be a decision-specific and time-specific question, and so even a diagnosis of dementia does not mean that a person has no capacity to manage his property and affairs.

42.  In the hearing, there was a dispute about the scope of the expert evidence.  According to Mr Jat, SC, counsel for the Interveners and who was present in some of the earlier hearings, the court only granted leave to the parties’ experts to give their opinions on the Interview only.  The Interview was not supposed to be a medical examination, and so Professor Chiu had only been instructed to give her opinion on the methodology of the Interview.  She had not been asked to give her own diagnosis and assessment as to whether NLS is a MIP as if the Interview itself was a medical examination.  Hence, NLS and the Interveners have been prejudiced as Dr Chung and Dr Wong had given their own diagnoses and assessments on such issue.

43.  I cannot quite understand the basis of such complaint.  Though I have respected NLS’s view that there should be no further medical examination or MMSE, one cannot avoid the fact that the object of the Interview is for the court to assess in person whether NLS has the mental capacity to manage his own property and affairs.  According to my understanding, that is actually what NLS wants, as his and the Interveners’ legal teams have repeatedly invited me to interview NLS myself.  Now that the Court Expert has been engaged to conduct the Interview, it would be desirability for such expert to give his assessment as to whether NLS is a MIP within the meaning of the MHO.  Just to be fair to all the parties who should be given the opportunity to question the opinion of the Court Expert, I allowed the parties to call one expert from each camp to testify on the assessment of the Court Expert.  Dr Wong did so in his reports.  To a certain extent, Professor Chiu also gave her opinion on such matter in her first report.

44.  However, just to clear any possible misunderstanding about the scope of the expert evidence, I allowed Professor Chiu to submit a supplemental report in which she gave her own diagnosis and assessment as to whether NLS is a MIP.

45.  In her supplemental report, Professor Chiu first gave an explanation as to nature of mental capacity.  She reinstated that it is a decision-specific and time-specific issue.  Incapacity cannot be assumed because of certain diagnosis like dementia, and many patients with mild to moderate dementia may continue to have capacity for various tasks.  In assessing mental capacity for a particular issue, there is no requirement for that person to have a good or normal memory.  Instead, one should focus on the memory relevant to the assessment of that particular task.

46.  Professor Chiu identified various Positive Factors in the Interview with a view to show that NLS has good memory for many things important and relevant to him and he has the capacity to manage his finances. She also dealt with some of the Negative Factors.  According to Professor Chiu, the clinical picture of NLS is consistent with a diagnosis of MCI.  However, due to the lack of a more detailed assessment of the cognitive function in the Interview, she cannot make any definite diagnosis.  Further assessment is therefore necessary.  According to the study of her research team, most people with MCI in Hong Kong have the capacity and ability to manage their finances.

47.  Overall, Professor Chiu opines that there is no good evidence that NLS is incapable of managing his affairs and finances. A person is presumed to have the mental capacity to do so.  Certifying someone as a MIP is a serious matter and both Dr Chung and Dr Wong made the assessments based on inadequate investigation and information.

48.  Finally, Professor Chiu pointed out certain problems with Dr Wong’s approach, in particular his opinion on NLS’s loss of executive function and that NLS has constructional apraxia, short-term and long-term memory impairments.

RELEVANT LEGAL PRINCIPLES

49.  Having outlined the background of this case, I now address the relevant legal principles.

50.  S 10(1) of the MHO provides that at a Part II inquiry, after receiving such reports and hearing such evidence and arguments as it may think fit, the court shall decide whether the person who is alleged to be a MIP is incapable, by reason of mental incapacity, of managing and administering his property and affairs and shall also decide any other questions as to which an inquiry has been directed.

51.  S 2 defines a “mentally incapacitated person” for the purpose of a Part II inquiry as “a person who is incapable, by reason of mental incapacity, of managing and administering his property and affairs”. That section also defines “mental incapacity” to mean either “mental disorder” or “mental handicap”.  In the present case, we are concerned only with “mental disorder”, and more specifically one of its meanings, i.e. “mental illness”.

52.  There is no dispute that NLS is suffering from mental disorder. On Dr Chung’s and Dr Wong’s evidence, NLS is suffering from dementia (or its more modern name of NCD), which is a form of mental illness.  Professor Chiu, who has diagnosed NLS as probably suffering from MCI, also agrees that NLS is suffering from some kind of mental disorder.

53.  Hence, the real question in this case is whether NLS’s mental incapacity caused by the mental disorder is serious to the extent that he is incapable of managing and administering his property and affairs.

54.  There are a few matters that need to be clarified about such assessment exercise.

55.  First, for the purpose of the Part II inquiry, the test of whether a person is “incapable of managing and administering his property and affairs” applies only to business matters, legal transactions and other dealings of a similar kind, but does not extend to physical care or treatment.[4] In other words, even if a person is physically incapable of taking care of his daily living or personal affairs, provided he has the ability to manage his property and financial affairs perhaps with the physical assistance provided by others, that person is not a MIP for the purpose of the Part II inquiry.

56.  Second, when considering a person’s capacity to manage and administer his property and affairs, it is necessary to have regard to the complexity and importance of that person’s property and affairs.[5]

57.  Third, causation between the mental capacity and the inability to manage properties and affairs has to be established.[6]

58.  Fourth, a person’s ability to manage his property and affairs requires an ability to make and communicate, and where appropriate give effect to, all decisions required in relation to them.  Hence, the mental abilities required include the ability to recognise a problem, obtain and receive, understand and retain relevant information including advice, the ability to weight the information (including that derived from advice) in the balance in reaching a decision, and the ability to communicate that decision.[7]

59.  There is an issue here as to what extent the delegation of management of finances would affect one’s capacity to manage his property and affairs.  It is quite common for a person, in particular wealthy person, to delegate the task of managing his wealth to other persons, on most occasions professional financial advisers, and it is also common for one to receive advice from others in making financial decisions.  However, that person must have a general understanding as to how his wealth is managed, and he must have the sufficient mental capacity to understand and to make decisions based upon, or otherwise give effect to, such advice as he may receive.

60.  In Masterman-Lister v Brutton & Co[8], one of the issues there was whether the plaintiff was capable of managing unaided a large sum of compensation for her injuries.  Kennedy LJ quoted with approval[9] the following passage in Well v Fell[10]:

“The expression ‘incapable of managing her own affairs and property’ must be construed in a common sense way as a whole. It does not call for proof of complete incapacity. On the other hand, it is not enough to prove that the plaintiff is now substantially less capable of managing her own affairs and property than she would have been had the accident not occurred. I have no doubt that the plaintiff is quite incapable of managing unaided a large sum of money such as the sort of sum that would be appropriate compensation for her injuries. That, however, is not conclusive. Few people have the capacity to manage all their affairs unaided … … … It may be that she would have chosen, and would choose now, not to take advice, but that is not the question. The question is: is she capable to doing so? To have that capacity she requires first the insight and understanding of the fact that she has a problem in respect of which she needs advice … … … Secondly, having identified the problem, it will be necessary for her to seek an appropriate adviser and to instruct him with sufficient clarity to enable him to understand the problem and to advise her appropriately … … … Finally, she needs sufficient mental capacity to understand and to make decisions based upon, or otherwise give effect to, such advice as she may receive.”

61.  Hence, a person is a MIP if he simply delegates the task of making all the decisions relating to his finances to others, without the ability of knowing or understanding how his finances are being managed or the basis upon which such decisions are made.

62.  Fifth, it is the mental capacity and not the wisdom of the person that counts.  A person can make foolish or unreasonable decision, or prejudice and personal character may have strongly influenced one’s decision.  Yet the court has to respect the personality and dignity of the individual and cannot intervene unless that person does not have the mental capacity to make the decision.[11]

63.  Sixth, even if an alleged patient may be vulnerable to exploitation or at risk of making rash or irresponsible decision, that per se does not justify a finding of incapacity.[12]  A person cannot be regarded as lacking mental capacity even where that person is subject to another person’s influence where there is no evidence he is being taken advantage of financially.[13]

64.  Seventh, mental capacity to manage one’s affairs is a different concept from mental capacity to make isolated decisions. In A, B, C v X, Z[14], Hedley J made the following insightful observation:

“In the light of Dr Poz’s evidence, I am satisfied, on balance, that he lacks capacity to manage his own affairs. In so finding, I acknowledge, as I have done in relation to other matters, that there would be times when a snapshot of his condition would reveal an ability to manage his affairs, but the general concept of managing affairs is an ongoing act and, therefore, quite unlike the specific act of making a will or making an enduring power of attorney. The management of affairs relates to a continuous state of affairs whose demands may be unpredictable and may occasionally be urgent. In the context of the evidence that I have, I am not satisfied that he has capacity to manage his affairs.”

65.  In other words, one’s capacity to manage his property and finances may be different from his capacity to execute a will or an EPOA at a particular point in time.  For example, if NLS seeks to appoint SN as his donee under an EPOA to manage his finances, his knowledge and memory at the time of the execution of the said document may not be required to be that extensive.  NLS may only need to know who are his family members, their relationships and whom he trusts.  He may not be required to understand the details of all his assets and whether he should lease one of his properties at a certain rent.

66.  On the other hand, the requirement as to one’s capacity to manage his property and affairs may be higher because “the general concept of managing affairs is an ongoing act”, and it “relates to a continuous state of affairs whose demands may be unpredictable and may occasionally be urgent”.[15] A person who may have a mental capacity in a snapshot to do a specific act does not mean that he has the requisite mental capacity to manage his own finances.  In the case of NLS, he must have a general understanding of the operation of the companies in which he is a main shareholder, the nature of the businesses operated by him and the rental market for shops before he can make decisions on these financial matters.

67.  Mr Tong, SC, counsel for NLS, and Mr Jat submit that assessment of mental capacity must be a decision-specific and time-specific question. Professor Chiu also echoes such observation.  They rely on the provisions in the United Kingdom’s Mental Capacity Act 2005 (“MCA 2005”) and authorities such as Masterman-Lister v Brutton & Co^[16] to support such proposition.

68.  However, one must understand that there are substantial differences between the statutory regime in the United Kingdom (“UK”) and that in Hong Kong.  S 2 of the MCA 2005 provides the following meaning as to “people who lack capacity”:

“(1) For the purpose of this Act, a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain.

(2) It does not matter whether the impairment or disturbance is permanent or temporary.

(3) A lack of capacity cannot be established merely by reference to –

(a) a person’s age or appearance, or

(b) a condition of his, or an aspect of his behaviour, which might lead others to make unjustified assumptions about his capacity.

(4) In proceedings under this Act or any other enactment, any question whether a person lacks capacity within the meaning of this Act must be decided on the balance of probabilities.

     … … …”

69.  S 4 specifies the considerations that should be taken into account by the court in assessing what is in the best interest of the MIP.  It requires the court to consider whether it is likely that the MIP will at some time have capacity in relation to the matter in question.

70.  However, the statutory regime in the UK is different from that in Hong Kong.  The MCA 2005 has been enacted to cover all sorts of situation when the MIP cannot make decisions for his own welfare and benefit, which include decisions relating to medical treatment and various matters concerning the personal welfare (for examples, decision as to where he lives and who should visit him) as well as property and financial affairs of the MIP.  In the case that a person is found to be a MIP, the court then has various powers to deal with his welfare matters, including the powers to make declaration and decision on behalf of the MIP and to appoint a deputy to make decision on his behalf.[17]

71.  For various decisions relating to medical treatment and personal welfare of the MIP, these are usually decision-specific and time-specific.  But the same cannot be said about one’s capacity to manage his property and finances.  Under Part II of our MHO, the court has to make a decision as to whether a person has the capacity to manage his property and finances.  It must relate to “continuous state of affairs” concerning the MIP’s finances, as the MIP would have to make all sorts of decision relating to his finances in the future.  Hence, the dicta of Hedley J must be applicable in the assessment exercise.  If a person cannot make a decision relating to the management of his finances if the needs arise, the court may exercise the parens patriae jurisdiction to protect his interest.  This is the case whether that person does not have the necessary knowledge or memory to make the decisions, or he simply cannot understand or comprehend the implications of the decisions concerned.

72.  Both Mr Tong and Mr Jat have repeatedly emphasised that the court should exercise the jurisdiction under Part II cautiously.  By making an order under Part II, the court is taking away the civil right of a person to manage his own property and finances which would have grave consequences to that person.[18] Further, Mr Tong submits that the such kind of order would deprive that person of human dignity and it would be devastating to his self-esteem.  His personal image and identity would also be demolished by the label.  Hence, cogent evidence and a high threshold are needed to find a person to be a MIP under the MHO.

73.  Obviously, the court is very conscious of the fact that, in exercising the Part II jurisdiction, the court is taking away the autonomy of an individual in managing his own property and finances.  The procedure under Part II has also been described as “stringent”.[19]  However, if that person is incapable of doing so, the court has to step in to protect his interests. The burden is still on the applicant to show that that person is a MIP on the balance of probabilities.  At least, that is the task of the court under the existing regime.

74.  Further, even if NLS is found to be a MIP, it is an exaggeration to say that his dignity is not respected.  In fact, there are various ways for the finances of NLS to be managed in order to give effect to his “wishes”.  If the relevant EPOA is found to be validly executed, the court can allow the donee of the EPOA to manage NLS’s financial affairs giving effect to his wish.  Even if the court were to appoint a committee to manage his finances, the court can supervise the operation of the committee to ensure that its decisions are made in the best interest of NLS and in accordance with his personal circumstances.  In case of disagreement, the court may have to ascertain the notional wish and view of NLS as if he has not lost his mental capacity in making the relevant decision, or if he can express his view at a snapshot moment.  In exercising the Part II jurisdiction, the court always has to respect the dignity of the alleged MIP and his welfare and interests are the paramount consideration.  It is only when that person has lost his mental capacity to manage his financial affairs that the court would intervene.

75.  Having addressed these legal principles, I turn to determine the main issue in the first stage of the inquiry: given the existing mental disorder suffered by NLS, whether such disorder is serious to the extent that NLS is incapable of managing his property and finances?

THE INTERVIEW

(i)     Observations on the conduct of the Interview

76.  The starting point must be the Interview.  On such occasion, I was able to observe in person the condition of NLS.  Through the exchanges between Dr Chung and him, I was able to ascertain from NLS’s answers as to whether he has mental capacity to manage his own property and finances.

77.  Despite the criticisms of Professor Chiu, I am of the view that the Interview was well conducted.  Dr Chung himself is a well-qualified and experienced psychiatrist.  He has much experience in court works and he knows exactly what the court is looking for in the Interview.  As he was conscious of the fact that NLS did not want to undergo another medical examination or MMSE, Dr Chung had to improvise and adopt an approach different from a conventional psychometric assessment.  In my judgment, the questions were well designed and were most relevant to the specific issue as to whether NLS (and not other persons) has the mental capacity to manage his own property and finances (and not other persons’ property and finances).

78.  Dr Chung was well aware that good rapport is essential to a good interview.  During the Interview, I was able to observe how Dr Chung had tried to establish rapport with NLS, and Dr Chung managed well in this regard.  He was trying to put NLS at ease without causing him any anxiety.  He was also conscious of the fact that NLS is a very elderly person, and allowances were made in the Interview for such factor, such as offering the opportunities for break and making necessary prompts to NLS with a view to help him to recall his memories.

79.  Dr Chung was very well prepared for the Interview having studied the relevant background materials.  With his experience, he was well aware that certain facts relating to NLS’s conditions are subject to dispute between the parties, and it is for the court to decide whether the disputed facts are true or not.

80.  I do not accept Professor Chiu’s criticism that the Interview was too confrontational or interrogative.  After all, the object of the Interview is to ascertain whether NLS has the mental capacity to manage his property and finances, and the only way to do so is by asking questions to test the mental ability of NLS.  That is also the approach of other kinds of examination such as MMSE, under which the patient has to perform certain tests including answering questions.  As I see it, the most important matter is not that NLS was put in a situation that he had to answer questions, rather it was whether the Interview was conducted in a way that there was good rapport between the interviewer and interviewee.  In my judgment, Dr Chung was able to establish good rapport and the Interview was not conducted in a hostile or confrontational manner.

81.  Most of the questions were simple ones, such as what are the months preceding and following March, where does he live, how many children he has and whether he has used or gifted large sums of money in the last few years, and yet NLS had difficulty answering the questions.  On some occasions, Dr Chung might lay the foundations before asking the questions. Obviously, this was for the purpose of establishing rapport with NLS and helping him to understand the relevant questions.

82.  Dr Chung had allowed NLS sufficient time to think about his answers.  It was not the case that Dr Chung was pressing NLS for answers.

83.  Dr Chung asked open-ended questions if possible.  However, prompts would sometimes have to be made in order to help NLS to recall his memories.  These were not leading questions.

84.  According to my observation, the Interview proceeded smoothly and there were good interactions between Dr Chung and NLS. It occurred to me that NLS was able to understand Dr Chung’s questions most of the time.  If there were indications that NLS was not able to understand the questions, Dr Chung would either repeat or rephrase the questions so as to ensure that NLS understood the questions.  Though I might have some problems listening to a few NLS’s answers due to his weak voice and the limitation of the video-link facility, it was clear to me that Dr Chung understood the answers in the conduct of the Interview.  In any event, there were detailed transcripts prepared in respect of the Interview.

85.  Both camps have tried to rely on different factors in the Interview to support their respective case.  I would refer the factors supporting that NLS is not a MIP as the “Positive Factors”, and the contrary as the “Negative Factors”.

(ii)     The Negative Factors

86.  I would start with the Negative Factors.  As it is the Applicants’ application and they bear the burden of proving that NLS is a MIP, I first deal with the factors in support of their case.

87.  The main Negative Factors are:

(i)  NLS was unable to tell the year and the month (though he was able to tell the year in the afternoon session), and he was not able to tell the months both preceding and following March.

(ii)  NLS had problem telling his home address (he could only say he lives in Kowloon after long pauses) and how long he stayed in a hotel.

(iii)  NLS had difficulty telling the court that he had 4 sons and 1 daughter.

(iv)  NLS had difficulty telling what he had eaten during the lunch break of the Interview, and he only remembered he ate something light.

(v)  NLS could not remember that he had spent or given large sums of money to his children or grandchildren in recent years.

(vi)  NLS had little idea how much legal fees were purportedly being spent on his behalf in these proceedings.

(vii)  NLS repeatedly mentioned that he still had $60 million in the bank without paying regard to the respective amounts of $2,139,244 withdrawn for his living expenses and $6,353,000 withdrawn for his legal expenses.

(viii)  NLS was unable to explain why he said his monthly expenses were in the sum of $200,000.  This amount was quite different from the sum of about $125,000 supplied by the Interveners.  Further, NLS was unable to say how he spent the $200,000 apart from paying the salaries of his two nurses.  His recollection of the amount of salaries of his two nurses is also incorrect.

(ix)  NLS gave conflicting answers as to whether he is indebted to anyone.

(x)  NLS had difficulty telling the court what happened in the current rental market and how he could manage his properties.

(xi)  NLS gave conflicting answers as to whether SN needed his prior authorisation before using his money and he failed to appreciate the effect of the authorisation he had purportedly signed, e.g. EPOA.

(xii)  NLS had little insight into his illness, medical conditions and medications.  He forgot about his hospitalisation in critical condition (caused by pneumonia) in October 2019, which required admission to the intensive care unit and long convalescing period, and he could not tell that he was taking medication for his high blood pressure.

(xiii)  NLS was not able to tell how he could instruct his solicitors without the assistance of others.

(iii)    The Positive Factors

88.  On the other hand, the main Positive Factors are as follows:

(i)  NLS was able to do subtractions relating to his expenses, such as $200,000 minus $20,000 and $500,000 minus $200,000.

(ii)  NLS knew about his assets, including about $60 million in his bank account in Bank of China, his 8 landed properties including the name or location of the shops and the rough rental income and monthly expenses.

(iii)  NLS was able to tell that he paid about $1 million in tax in the previous year.

(iv)  When Dr Chung mentioned Warren Buffet, NLS responded with a sense of humour that he does not have as much money as Warren Buffet does.

(v)  NLS was able to express his displeasure as to how he was treated by the Applicants and the litigations they brought about, including the making of the allegation that he is suffering from dementia, the incident in December 2019 and the application of the Injunction against his assets.  He even used the term “robbery” to describe these incidents.  He understood that the nature of the proceedings is to determine whether he is a MIP, and he was able to remember the surnames of his lawyers and myself.

(vi)  NLS was able to tell the court that, after his money is unfrozen, he would repay the money owed to others and keep the balance in the account to earn interest.

(vii)  NLS was able to tell the court that he can rely on the assistance of the Interveners to assist him in managing his finances.

(viii)  NLS was able to confirm that he does not owe any mortgage debts.

(ix)  NLS was able to recall his decision to stay in Royal Garden Hotel and the related details including the name of the hotel and the area in which the hotel is located, his granddaughter arranged his stay there and she was able to obtain a discount by reason of her relationship with Sun Hung Kai (the owner of the hotel), the monthly accommodation costs and why he preferred to stay in the hotel.

(x)  NLS knew how his income is being handled, including the monthly expenses of $200,000, the handling of the accounting matter by his accountant Ms Cheung, his checking of the bank statements, his signing of the cheques for withdrawals of money, the payment of salaries to his nurses and helper through SN.  Despite he allowed SN to handle his financial affairs, SN needed to obtain his approval for using his money.  He also recalled an EPOA executed by him with SN as his attorney.

(xi)  NLS was able to remember matters such as he made a report to the police, he retired at the age of 80, Dr Ban’s clinic was in Tsimshatsui and the names of his granddaughter and her husband.

FINDINGS ON THE MENTAL CONDITION OF NLS

89.  There was confusion on some factual matters such as who gave NLS his daily medications and the details of his visits to Dr Ban.  As the answers given by NLS are open to different interpretations and there are factual disputes about these matters, I do not propose to attach a lot of weight to these answers.

90.  Quite as expected, all counsel and the parties’ experts have gone into each of these factors in length with a view to advance their respective case.  They also attack the Court Expert (not from the Applicants) and the expert of the counter-party for failing to pay sufficient weight to or simply ignoring the counter-factors.   In order to keep this Judgment to a reasonable length, I do not propose to discuss each factor in details. However, in deciding whether NLS is a MIP, I have fully considered all the factors advanced by the parties.  The fact that I have not dealt with some factors does not mean that I have not taken those factors into account, but I just consider those factors mentioned below to be more important.

91.  As I had the opportunity to observe the Interview myself and seeing the condition of NLS in person, I should be in a good position to assess whether NLS is a MIP or not.  I was able to see how NLS answered the questions and also his interactions with Dr Chung, which gave me a good picture of his mental condition.  It is the duty of the court to make the assessment, and the experts are only there to assist the court in making such assessment.

92.  NLS is an old man of at least 92 years of age. He used to be a successful businessman running a chain of Chiu Chow restaurants.  In his business career, he also invested in properties and he now has about 8 shops under the names of 4 of his companies.  He is the main shareholder and director of these 4 companies and another company which operates the restaurant business.  Due to the fluctuation in the retail property market, there is great uncertainty about the existing total value of NLS’s estate.  The estimates range from about $300 million to $800 million.  In determining whether NLS is a MIP under Part II of the MHO, I have to consider whether he has the capacity to manage the assets and finances of this size and complexity.

93.  Being an experienced businessman, NLS is sensitive to figures.  That can also be reflected in some of the answers given by him during the Interview, such as his ability to make simple calculations, and his ability to remember his ownership of the 8 shops, the amount of tax paid in the previous year and the discount he obtained in staying in the Royal Garden Hotel. 

94.  On the other hand, it is clear that NLS relies very much on SN to take care of his finances and some of his personal matters. However, whilst he may be able to recognise his need to seek assistance from others to help him to manage his finances, NLS has very little idea as to how his money was managed, including the breakdown of his monthly expenses and the withdrawals of substantial amounts of money in recent years.

95.  During the Interview, NLS made a plea to me to unfreeze his bank accounts, and he just wants to earn interests from his deposit in the bank.  He gives me the impression that he is a man who does not need to spend a lot of money and there is no plan for him to use substantial sums of money in the future.  Yet he could not explain (because he could not recall) why substantial sums of money had been withdrawn in recent years.  On the one hand, NLS is prepared to spend substantial legal costs to protect his autonomy in running his own finances, but all he wants is a humble plan to keep the money in the bank to earn interests.  The two certainly do not sit well together.

96.  NLS remembered my surname during the Interview.  He has trust in the court.  When Dr Chung asked NLS whether he thinks he is mentally capable to manage his own property, NLS gave inconsistent answers.  NLS first replied unequivocally that he is not mentally capable and then said he is mentally capable but he wants the judge to help him.  When Dr Chung asked him to elaborate, NLS confirmed that he does not have the ability to manage his own property and he hopes that someone will help him.^[20]

97.  As I see it, these answers show that NLS has doubt about his own ability to manage his finances and that is why he welcomes the assistance of the court.  Because of the difficulty in doing so, he now relies on others to make the relevant decisions on his behalf.  These answers also bring out the question as to why, under such circumstances, NLS was prepared to spend substantial legal costs to protect his “autonomy” to manage his finances.

98.  Whilst it is quite natural for an elderly person to delegate the task of managing his finances to his family member, it is quite another that he leaves his family member to make all the decisions relating to his finances and he does not have the capacity to understand what is going on. Unfortunately, I find NLS to fall within the latter category.

99.  After observing NLS in the Interview, it is clear that he has retained some degree of cognitive and memory functions, otherwise he would not have been able to remember some specific details as to who had assisted him to manage his financial affairs and the details relating to the leasing of the hotel room.  Hence, as opined by Dr Chung and Dr Wong, NLS’s case is certainly not one of either two extremes in his cognitive and memory functions, i.e. he is neither totally incapable nor totally capable.

100.  One of the main differences between the experts is that, according to Dr Chung and Dr Wong, one has to focus on what NLS cannot do and the abnormalities displayed.   There may be a possibility that a patient may still retain some degree of cognitive and memory functions, for example the patient can remember well what assets he owns, but he does not know his wife and how many children he has.  The latter may speak volume about his mental condition.  On the other hand, Professor Chiu has invited the court to look at how well NLS had answered some of the questions in the Interview (as demonstrated by the Positive Factors identified above) with a view to show that NLS has retained the necessary cognitive and memory functions to manage his finances.

101.  It is clear from the Interview that NLS has great difficulties with some of the facts in life, for examples, what are the months preceding and following March.  He also has little insight about his medical condition, for examples, he was not able to tell the court that he has been taking medication for high blood pressure for quite some time and he was hospitalised in 2019 in critical condition.  Though he was able to identify one of his sons (i.e. “大頭仔” (big head boy)) who applied for the Injunction against him, NLS was not able to answer the simple question as to how many children he has.

102.  Despite that NLS was able to provide the answers as identified in the Positive Factors, I have no doubt in my mind that NLS lacks the mental capacity to manage his own financial affairs.  What worries me the most is that NLS, being an experienced businessman in the past who is sensitive to figures, has very little idea about or cannot even remember: (i) the money that he gifted away in the past few years; (ii) how his monthly expenses were spent; and (iii) the amount of legal expenses that he has incurred in the present proceedings.

103.  The money that he gifted away in the past few years is most important.  In a way, that is the crux of the case.  The present proceedings started when the Applicants applied for the Injunction freezing NLS’s assets.  The Injunction was made on the basis that large sums of money in the total amount of about $16.5 million had been withdrawn from NLS’s bank accounts.  Before that, a sum of $8 million was gifted by NLS to his grandson SN. In SN’s own evidence, he had received at least $15 million from NLS between October 2018 and November 2019.  It is common ground that this “favourable treatment” was the main reason for the building up of the tension within the family.

104.  It is either a case of severe impairment of memory or that NLS was giving away substantial sums of money without even knowing it.  In either case, this is strong evidence that NLS lacks mental capacity to manage his own finances.

105.  Indeed, even Professor Chiu accepted that if NLS really did not know that he had given such a large sum of money to his grandson, it is a “red flag” about his mental condition.  If a person had severe memory loss, that would make him more vulnerable.  Even on her evidence, NLS would not be capable of making a decision on gifting money unless a third party prompts him with all the relevant information.  This is itself confirmatory opinion that NLS is vulnerable and lacks the capacity to manage his own finances.  Even if the risk of the patient being subject to influence by another person may not by itself justify a finding of incapacity, vulnerability of a person is a matter that should be considered when assessing mental capacity.^[21]

106.  Further, it is clear that NLS has no appreciation of the situation that he is presently faced with in these proceedings, and in particular that the Applicants are concerned because large sums of money were inexplicably paid out of NLS’s bank accounts to SN.  If NLS has the requisite mental capacity, he ought to have been able to tell this court, even without any prompting, that he made the payments of his own volition and the Applicants should not worry or should not question his decision.

107.  One of the tasks facing NLS in the management of his own finances is perhaps planning for the distribution of his wealth after his own demise.  I wonder how he can do so without even knowing how many children he has or the money that he had already gifted to particular family members in recent years. Any decision he makes may not reflect his “true wishes”.

108.  Hence, this is not a case about protecting the autonomy of NLS in managing his financial affairs.  Neither is the court penalizing NLS for his poor memory or his love for his grandson as suggested by Mr Jat.  Given his present condition, if he is not provided with sufficient prompting or background information (since he cannot remember gifting money to particular family members in the past), he may continue to make further gifts without knowing that he has done so on previous occasions.  This may not be the true wish of NLS, and his act may unintentionally cause further tension and division within the family, which NLS, if he is not suffering from mental incapacity, may not wish to see.  Under such circumstances, the court has to intervene in his interest.

109.  Mr Tong and Mr Jat submit that the questions put to NLS on this particular issue are ambiguous.  Professor Chiu criticized Dr Chung for not providing a time frame as to the gifting of the money.  I disagree.

110.  Dr Chung asked NLS three times and each time the question was clear.  On the first occasion, Dr Chung specifically asked NLS whether he had used a large sum of money in the last few years to which NLS (according to the Nurse’s Transcript) answered “no” unequivocally.  When asked a second time, NLS talked about something else.  But when asked a third time, NLS (according to the Nurse’s Transcript) said he did not try to make any gifts of money to his children or grandchildren.

111.  It has been suggested that Dr Chung should have followed up on the questions with specific prompts or specific questions as to whether he had gifted money to SN or in respect of specific withdrawals from the bank accounts.  I disagree.

112.  First, Dr Chung is an experienced psychiatrist and the court should allow him to conduct the Interview without interruption if possible.

113.  Second, I am of the view that Dr Chung had given sufficient prompts to NLS on this specific issue.  According to NLS himself, he understands the nature of the proceedings and he has spent considerable legal costs to “protect” his right.   NLS must have known, or must be taken to have known, that the underlying cause of these proceedings was that large sums of money had been withdrawn from his bank accounts and paid to SN for no apparent reason.

114.  In NLS’s 1^st affirmation dated 28 May 2020, in which he purportedly asked this court to dismiss these proceedings on the basis that he is mentally capable, NLS purportedly said this about the substantial funds that he claimed to have gifted to SN:

“18. In relation to the sums of money paid voluntarily to [SN] by me, I will leave it to [SN] to deal with the matter and provide the necessary details relating to those sums of money in his Affirmation, all of which I can confirm were paid with my consent and full knowledge beforehand.

19.  I can confirm that all the subject sums withdrawn from my bank accounts and paid by me to [SN] were all my conscious decisions and choices made with a sound mind.  My other children and grandchildren have no right whatsoever to question my said decisions and choice.”

115.  If NLS is not a MIP, it would be very difficult for me to accept that, under the circumstances of the Interview and in response to the express questions asked by Dr Chung, he could not remember any substantial amounts of money that he had gifted to his family members.  Unlike what NLS claimed in his affirmations and contrary to Professor Chiu’s opinion[22], it is clear that NLS is mentally incapable of appreciating the situation he is faced with in these proceedings.

116.  Further, NLS had little idea as to how much legal fees are purportedly being spent on his behalf in these proceedings. This is evident in NLS repeating to this court time and again that he has $60 million in the bank, utterly oblivious of the fact that the balance had been substantially reduced because considerable sums had been paid out, on applications made supposedly with his knowledge and approval, to pay for the legal costs.  Notably, before the Interview, I had already allowed withdrawals in the total sum of $6,353,000 for his legal expenses.[23] As NLS had substantially less than $60 million as at the time of the Interview, I have reasons to doubt whether NLS really understands what happen around him in these legal proceedings.

117.  NLS’s complete oblivion in this regard is most troubling given that his solicitor Mr Woo claims to have given him details as recent as 26 February 2021 about the legal fees spent so far as well as the future costs and disbursements.  An affirmation was made purportedly on behalf of NLS confirming that Mr Woo had told him the same.  Under such circumstances, I agree with Mr Yu, SC, counsel for the Applicants, that NLS is extremely vulnerable as his memory is seriously impaired such that he cannot keep track of and retain information concerning his expenses and affairs.

118.  Further, NLS’s repeated utterances that he still has $60 million in the bank pay no regard to the fact that the Interveners had applied, purportedly with NLS’s knowledge and approval, and had been given permission to withdraw $2,139,244 to pay, or reimburse themselves, for NLS’s living expenses.  Taking into account the legal costs withdrawn before the Interview ($6,353,000), a total sum of $8,492,244 had been withdrawn.  Hence, at the time of the Interview, he was completely oblivious to the fact that his bank balance had been depleted by around 15%.  This shows NLS has no clue about and is unable to keep track of: (a) his outgoings; and (b) how much money is actually left in his bank accounts.

119.  NLS’s mental inability to manage his own expenses and affairs is also demonstrated by his repeated failure to explain why he said his monthly expenses were $200,000 and how this sum of money was spent.

120.  Due to the composition of his assets, NLS has to make various decisions relating to his finances, for examples, whether he should rent out a property at a certain rent or whether he should vote in a particular manner relating to the management of his companies.  In view of the mental condition of NLS as demonstrated in the Interview, I have serious doubt as to whether he can make decisions on these matters.

121.  In fact, there is little dispute between the experts on such issue.  They more or less agreed that NLS has no mental capacity to make decisions on his rental business.  Notably, according to Professor Chiu, NLS is mentally incapable of making independent decisions concerning his rental and restaurant businesses, which are presently held by private companies of which he is a director and shareholder.  More specifically, she told the court that NLS would have to depend entirely on the advice and information given to him by his fellow directors, as she was unsure whether NLS has the mental capacity to independently seek out and process market information from elsewhere including the media.  Therefore, on her opinion, NLS does not have the requisite mental capacity to manage his own business affairs as he is vulnerable and at the mercy of others.

122.  Mr Tong and Mr Jat submit that NLS is not alone and he can always rely on the advice given to him by other members of the boards of his companies in dealing with the rental and restaurant businesses. However, as I have mentioned above, it is one thing that NLS is seeking advice from others in running his businesses, it is another that NLS just leaves all his business and financial decisions to be made by others without the ability to understand what is going on or the basis for the making of these decisions. Further, NLS himself has to run the boards.  There is difference of views between the two camps in the family as to how the companies should be run, and NLS must be able to understand the circumstances relating to each decision he has to make in the boards.  

123.  There are conflicting medical reports and certificates submitted by various parties before the Interview.  There is an issue as to whether the court should also consider these reports and certificates in determining whether NLS is a MIP.  Both Mr Tong and Mr Jat argue that one should not pay too much emphasis on the performance of NLS in the Interview (in particular they allege that the Interview was poorly conducted and NLS might be tired during the Interview), and the finding on mental incapacity should not be lightly made save on very solid grounds based on clinical history and mental state examinations.

124.  Obviously, these reports and certificates are relevant and the court should consider all the available evidence in the assessment exercise.  However, one should also recognise the fact that the performance of NLS in the Interview should carry more weight in deciding whether NLS is a MIP.  Apart from the dispute between the parties as to the circumstances of the conduct of the previous medical examinations, these examinations were conducted some time ago and so the Interview should provide the most updated information about NLS’s mental condition.  Further, the court would be able to observe NLS in person in the Interview which should provide the best evidence about his mental condition.

125.  As I understand it, this was also the purported intention of NLS himself, as he was not prepared to undergo another medical examination and he was eager to show it to the court in person that he is not mentally incapable of handling his financial affairs.  Therefore, great care had been taken to ensure that the Interview was conducted fairly and in a manner which would be least stressful to him.  Effort had also been made to ensure that NLS was comfortable and not tired during the Interview.  No one had made any suggestion that the Interview should not have been conducted on that day due to his personal circumstances.  Opportunities had also been given to the parties to adduce medical evidence on the conduct of the Interview and the diagnosis or assessment as to whether NLS is a MIP based on the existing available materials.  Indeed, I cannot think of any other fairer or better way to conduct the assessment exercise in light of the previous conflicting medical assessments.

126.  In my judgment, it would be unnecessary and indeed counter-productive for the court to conduct microscopic analysis as to how each of these previous medical examinations was conducted.  With so much conflicting diagnoses made by various doctors, I maintain the view that the Interview, which was conducted in a controlled and comfortable setting, should provide the best clue about the mental condition of NLS.

127.  Nevertheless, all the experts, in particular Dr Wong and Professor Chiu, had relied on the previous MMSE results in support of their assessments, and so the court has to consider these results in the assessment exercise.[24]

128.  One of the features of these results relied heavily by NLS and the Interveners in support of their case is that NLS’s MMSE scores as assessed by Professor Chiu had been rising steadily from 10 March to 28 April 2020.[25] As dementia is a disorder with progressive deterioration, NLS cannot be suffering from such illness.  They also criticise Dr Chung and Dr Wong for failing to take such matter into account in their assessments.

129.  I agree that NLS’s MMSE scores did improve over a period of time: 17/30 on 10 March 2020, 20/30 on 13 March 2020 and 24/30 on 28 April 2020.  Whilst I accept that Professor Chiu is an experienced psychiatrist specialised in old age psychiatry, one cannot ignore the fact that NLS had attended 7 MMSEs over a short period of 5.5 months.  As NLS is a person who retains some degree of memory functions, I am not sure how repeated examinations would affect the scores in these tests.  In any event, 17/30 is a poor score for the examination on 17 March 2020.

130.  Dr Chung and Dr Wong were not present when these MMSEs were conducted and so it would be difficult for them to comment on the reliability of the scores.  However, they relied on certain test results, such as the naming of the fruits and the drawing of the overlapping pentagons, to support their assessment that NLS is not capable of managing his property and affairs.  They adopted a holistic approach considering all the available materials, in particular the performance of NLS in the Interview, in arriving at the overall conclusions.

131.  The courts have dealt with the limitations of MMSE in numerous authorities.  They are not conducted for the specific purpose of ascertaining whether the relevant patient has the capacity to manage his finances.  Indeed, Dr Chung and Dr Wong have focused on certain parts of the test results to support their views, in particular those relating to the questions testing the executive functions which to them are relevant in assessing NLS’s ability to make decisions relating to the management of his property and affairs.  More importantly, I would attach more weight to what I have seen for myself in the Interview, which was designed with the specific purpose of ascertaining whether NLS is capable of managing his financial affairs, in order to determine whether he is a MIP within the meaning of the MHO.

132.  I have not ignored the Positive Factors in making the decision.  However, these only show that NLS may still retain some cognitive and memory functions.  The Negative Factors, in particular his inability to remember the money that he gifted away in recent years, the legal fees purportedly spent on his behalf in these proceedings and the number of children he has and his probable inability to make rental and business decisions relating to his properties and businesses, leave me with no doubt that NLS himself is incapable of managing his property and affairs.  In fact, even NLS is not certain whether he is able to do so and that is why he welcomes the assistance of the court.  With his present impairments, he has to leave it to others to make most if not all of the financial decisions, and he is not in a position to understand how his finances are being managed or the basis of the decisions made on his behalf.  Hence, despite the serious consequences of taking away his “autonomy” in managing his financial affairs, I have to make a finding that NLS is a MIP within the meaning of Part II of the MHO.

ASSESSMENT OF THE EXPERT EVIDENCE

133.  As the Interview itself speaks volume about the mental condition of NLS and I was able to observe the whole Interview in person, the court is well capable to make the assessment as to whether NLS is a MIP or not.  The court does not really need to rely on the opinions of the experts in the assessment exercise.  But since the parties have spent considerable time in dealing with the assessments made by the experts, I feel obliged to give my judgment on the reliability of the expert evidence.

(i)     The expert evidence of Dr Chung

134.  Dr Chung was nominated by the OS and appointed by the court as the Court Expert.  Dr Chung is an independent witness and his impartiality cannot be questioned.  He is an experienced and well-qualified psychiatrist. In particular, he has considerable experience in handling court cases, and so he has in-depth knowledge as to what the court is looking for in each individual case.  As the central issue here is whether NLS has the mental capacity in managing his property and affairs, he had designed the Interview with this specific purpose in mind.

135.  Dr Chung’s conclusion that NLS is, by reason of his mental incapacity, unable to manage and administer his property and affairs is supported by his observations of NLS at the Interview.  I agree with Mr Yu that Dr Chung’s impartiality, credibility and reliability are unassailable.

136.  Dr Chung relied on some of the Negative Factors as outlined in his report in making the assessment.  Being an experienced forensic psychiatrist, he treated the materials supplied to him with circumspect and caution as he appreciated that many of the matters are in dispute.  He also fully recognized that it is the task of the court and not the experts to resolve such factual disputes, and he had borne that in mind in giving his opinion.

137.  Dr Chung agreed with Dr Wong’s findings and conclusions.  In respect of NLS’s case, Dr Chung opined that three of the six domains are clearly and significantly impaired, i.e. executive functions; learning and memory; and perceptual-motor functions.  These impairments affect NLS’s ability to make decisions.  Dr Chung also relied on his observations of NLS’s conditions as shown in the video clips in making such assessment.

138.  I have no reservation in accepting that Dr Chung’s assessment is a reliable one.It is likely that NLS’s other three neurocognitive domains (complex attention; language; social cognition) are also impaired, but the available findings are insufficient for Dr Chung to give conclusive opinion on the last three domains.

139.  In his testimony, Dr Chung gave the opinion that NLS had been suffering from such impairment for more than a year.  Dr Chung, being an experienced forensic psychiatrist, might have anticipated that the medical history of NLS may be relevant for some other related purposes, and so he supplied such additional opinion to the court.  However, as the court, at this stage of the proceedings, is only concerned with the mental capacity of NLS at the time of the inquiry, I would ignore this part of the evidence by Dr Chung.

140.  NLS and the Interveners try to attack the qualification of Dr Chung by saying that he was first trained as a child psychiatrist.  However, as confirmed by Dr Chung in his oral testimony, he has considerable experience and practice dealing with elderly patients.

141.  They also challenge the reliability of Dr Chung’s evidence in that he made a false positive identification, i.e. there is a distinction between unwillingness and inability to make a decision. However, Dr Chung gave a very clear explanation why his diagnosis is inability instead of unwillingness.[26]

142.  It has been suggested that Dr Chung had placed insufficient weight on the Positive Factors.  There were also some examples showing that NLS is sensitive to money matters.  However, as Dr Chung explained:

“No, because dementia is very complicated. Just imagine a computer. There are many parts, say 100 parts. Dementia is like a damaged computer; it depends on which part of the computer is broken and then you develop what kind of symptoms. So [NLS] certainly has some memory of what has happened. If he has no memory at all it is easy. And the fact that sometimes he can appear all right, sometimes he’s worse, that makes his case so difficult and then requires so many doctors to see him and then we have different opinion or impression or diagnosis. So that is why the specific purpose of the interview is for the specific ability to deal with his activities of daily living, manage his money affairs and other things.”

143.  Dr Wong also gave similar opinion.[27] That is why both Dr Chung and Dr Wong are of the view that the court should focus on NLS’s abnormities and what he cannot do in making the diagnosis and assessment.  I accept their opinion in this regard.  As mentioned above, even if a businessman knows quite some details about his assets, he must be suffering from some kind of disorder if he cannot recognize his long-married wife or remember how many children he has, which may have considerable adverse impact on his decision making process.  

144.  In fact, if NLS is sensitive to money matters, the diagnosis that he is a MIP would be even stronger and clearer than it already is as he would (as a person who is sensitive to money matters) be more conversant than he had displayed during the Interview about questions concerning: (i) Whether or not he has paid or gifted substantial sums to his children or grandchildren? (ii) How much legal costs have been spent (purportedly on his behalf) so far in this action? (iii) Why is his monthly expense so high? (iv) Whether or not he has borrowed money? (v) How he manages his rental affairs?

145.  It has been suggested that Dr Chung had failed to verify some of the facts in support of his assessment, for example those relating to details for the provision of daily medication to NLS and the visits to Dr Ban. However, being an experienced forensic psychiatrist, Dr Chung had taken into account the possible disputes relating to some of these facts in making his assessment.  I therefore do not accept that this is a fair criticism.  There is also no basis for the suggestion that Dr Chung had reversed the burden of proof in making his assessment.

146.  It is also submitted that Dr Chung’s assessment was based on inadequate information, in particular Dr Chung had not conducted any MMSE to ascertain NLS’s mental capacity.  However, it was NLS who refused to undergo further MMSE in the first place.  In any event, it has been widely accepted that MMSE has its limitations and the result is by no means conclusive.  Under such circumstances, Dr Chung had to improvise and tried to find a different method to ascertain specifically whether NLS (not other persons) has the mental capacity to manage his property and affairs.  Dr Chung has not failed the court in completing the assignment.

147.  For the aforesaid reasons and having observed NLS in the Interview, I have no reservation in accepting that Dr Chung’s assessment is a reliable one.

(ii)     The expert evidence of Dr Wong

148.  The opinion of Dr Wong has been summarised in §§27 to 35   above and I do not want to repeat the same here.

149.  Having observed the condition of NLS in the Interview and considered the opinion of Dr Chung, it is quite unnecessary for the court to rely on Dr Wong’s assessment.  In any event, Dr Wong is an experienced psychiatrist and he had been the head of the Department of Psychiatry of the Chinese University of Hong Kong before Professor Chiu succeeded him.  With his credential and experience, I do not accept that Dr Wong was prepared to put his professional reputation at stake by falsifying his opinion with a view to advance the interest of his clients.  The same observation can also be made about the professional opinions of all the experts including Dr Chung and Professor Chiu.

150.  In his testimony, Dr Wong had gone into some length to explain why he considered the Negative Factors have shown that NLS has suffered from impairments in short-term and long-term memory and executive functions, which in turn affect his ability to make decisions relating to his financial affairs.

151.  It has been suggested that Dr Wong had only focused on the Negative Factors but ignored the Positive Factors in order to fit his pre-determined thesis.  This is not a fair criticism.  Dr Wong had repeated many times that NLS has retained the ability to do simple arithmetic and also some cognitive and memory abilities, but what remain of those abilities are insufficient to enable NLS to manage and administer his property and affairs. Further, by reason of the nature of NCD disorder, one should pay attention to the abnormalities and what NLS cannot do.  According to Dr Wong, the presence of some Positive Factors is very within his expectation and it does not affect his assessment at all.

152.  On the whole, I find that Dr Wong’s assessment is consistent with the performance of NLS at the Interview.

153.  One of the main attacks against Dr Wong relates to his opinion on the impairment of executive functions based on certain results of the MMSEs conducted by Professor Chiu in 2020, such as those about the naming of fruits and drawing of overlapping pentagons.  In my judgment, it would be quite unnecessary for the court to deal with the difference between Dr Wong and Professor Chiu as to whether these test results are indicative of impairment in executive functions or constructional apraxia.  It is clear that Dr Wong did not rely on these test results alone but on the “total clinical picture” in arriving at his conclusion.  In any event, it appeared that NLS was able to sign his Chinese name in his affirmation dated 28 May 2020, and so his difficulty in drawing the overlapping pentagons was apparently not caused by his physical disability.

154.  There have been attacks on the credibility of Dr Chung and Dr Wong as expert witnesses on the ground that their evidence had been rejected by the courts on a number of occasions.[28]  In the case of Dr Wong, the courts had made some harsh comments in the past that he was trying to advocate the cases on behalf of his clients thereby seriously undermining his credibility as an independent expert.  On the other hand, Professor Chiu had given evidence on only one occasion in court, and the judge made some favourable comment about her evidence.[29]

155.  I would not put any weight on these submissions.  Each case would have to be determined on its own facts.  There might be a lot of different reasons as to why the courts made certain comments about a particular expert.  Rather than relying on some judicial comments made in other cases, the court should focus on the facts of the particular case before it.  Indeed, due to the experience of Dr Chung and Dr Wong as expert witnesses, one would expect that their evidence had been subject to close scrutiny by the courts on numerous occasions.  On the other hand, there were also many cases in which the courts accepted their evidence.  Hence these judicial comments should carry very little if not no weight in assessing the credibility of the expert evidence.

(iii)    The opinion of Professor Chiu

156.  Professor Chiu is a well-known expert in old age psychiatry.  She has contributed to various publications on such subject and has extensive experience in dealing with elderly patients.  On the other hand, she has very little experience in forensic psychiatry and this is only her second time testifying in court.

157.  Despite her remarkable qualification and experience, I find that her criticism of the approach and methodology of which Dr Chung conducted the Interview unjustified.  As I see it, her lack of experience in forensic psychiatry and the nature of her daily works may have distorted her views about NLS’s case.

158.  As admitted by Professor Chiu herself, most of her patients are people who come from the general public who cannot afford private medical care.  These patients may not have a lot of wealth to manage and they only need to take care of their simple daily lives with modest means. NLS is no such person.  Further, it is apparent from Professor Chiu’s work that she is very concerned with the welfare of elderly patients, and she is prepared to give more allowance to them to protect their dignity.  Her wholesale adoption of the English approach also reflects this.   While I understand all her good intentions, I am afraid that she might not have given sufficient thought to the central question in this case, i.e. whether NLS (not her general patients) has the mental capacity to manage his property and affairs (not those of others).

159.  When Professor Chiu was asked in the witness box that NLS may have to make daily commercial decisions relating to his assets including his companies, restaurant and real property businesses, it seems that Professor Chiu had not given very much thought to these matters.  Whilst she replied that NLS can always rely on other people for advice and making decisions to handle his affairs, Professor Chiu had not given very much consideration as to whether NLS would be able to understand how his finances are managed.  As I have repeated many times in this Judgment, it is one thing that a person seeks advice and assistance from another person relating to the management of his financial affairs, it is another thing that that person cannot understand the rationale behind the decisions made on his behalf or the manner in which his finances are managed by others.

160.  I do not propose to deal with each observation made by Professor Chiu about the Interview.  I have already given my views on the conduct of the Interview and I do not want to repeat the same here.  With Dr Chung’s experience, he well understood the importance of building good rapport with NLS during the Interview and that NLS understood the questions put to him.  Dr Chung also appreciated that a lot of the factual matters are subjects of dispute between the parties, and he had taken that into account in conducting the Interview and making the assessment.

161.  The questions in the Interview were well designed specifically for the purpose of ascertaining whether NLS would have the mental capacity to manage his property and affairs.  Being a professional who is concerned with the general welfare of her elderly patients, I do not think that Professor Chiu had fully appreciated that the situations facing NLS are quite different from those facing the patients she generally treated in her daily works. 

162.  I also agree with Mr Yu that Professor Chiu had failed to give sufficient weight to the Negative Factors in making her assessment.  During the cross-examination, Professor Chiu was quite unable to provide a list of indicators that may suggest NLS is a MIP. She refused to accept what are plainly indicators or “red flags” that NLS is a MIP, and was only prepared to say one or two of them are “suspicious points” that require further investigation.  When pressed further, Professor Chiu seemed to accept that NLS is mentally incapable of independently making decisions on financial matters that reflect his own true wishes, which ipso facto means he is a MIP.

163.  On Professor Chiu’s own evidence, NLS is mentally incapable of independently deciding whether to make a disposition (or a gift) of money and, if so, to whom.  He would need to be prompted and given all the relevant information by a third party.  Whether a decision would reflect his true intention would depend on the quality of the information being provided to him. More importantly, Professor Chiu said that without any prompting, NLS would probably not remember having made a gift and might repeatedly gift money to the same person.

164.  Further, Professor Chiu accepted that NLS is mentally incapable of making independent decisions concerning his rental and restaurant businesses.  She said NLS would have to depend entirely on the advice and information given to him by his fellow directors as it is unclear whether NLS has the mental capacity to independently seek out and process market information from, say, newspapers or the radio.

165.  All these support that NLS is a MIP.

166.  Professor Chiu had also drawn the court’s attention to some empirical statistics or studies which suggest that over 50% of elderly with mild dementia are not MIPs and over 90% of those with MCI are not MIPs. However, I do not accept that these statistics or studies are of much assistance here, as the question before the court is whether NLS, and not others, is a MIP or not.  Further, the issue is patient-specific as the court has to consider the question in the context of the assets owned by that particular patient.

167.  I also agree with the observation that Professor Chiu was too readily willing to offer excuses to try to explain the Negative Factors.  On the issue of the gift to SN, she suggested, quite out of her own speculation, that since he had no large sum of money to spend because of the Injunction, NLS had not thought about gifting money away in the past few years.  She also offered some unsubstantiated excuses as to how NLS spent the monthly expenses of $200,000.  Further, her attempt to exonerate NLS by saying elderly people may not be aware of their medical conditions, particularly at the time when they were admitted to hospitals, and doctors might not have given them any substantial information misses the point.  Even supposing NLS were unaware of his conditions or reasons why he had been admitted to intensive care unit in 2019, and there is no evidence to that effect, the fact is that he spent a long time recovering and took (and still takes) medications and blood pressure tests regularly.  Therefore, had he had the necessary mental capacity, he would have remembered something about his illness, his recovery process and his conditions, which he failed to tell Dr Chung at all.

168.  Mr Yu also submits that there may be a conflict of interest for Professor Chiu to testify for NLS and the Interveners at the same time. However, as no one had raised any issue about possible conflict of interest when the court gave direction for only one expert to testify for NLS and the Interveners, I would not attach any weight on such submission.  In any event, as it was the direction of the court for one expert to be called for the NLS and the Interveners, it would be too much to expect Professor Chiu to appreciate that she might have been put in a conflict of interest situation.

169.  Looking at Professor Chiu’s evidence as a whole, she suggested that the Interview is not sufficient to show that NLS is a MIP which is very much an open verdict.  She made a suggestion that further examinations should be conducted for assessing whether NLS is a MIP.  However, numerous medical examinations had already been conducted and the Interview was specifically arranged for the court to assess NLS’s condition in person.  Apart from the fact that such suggestion goes against the “wish” of NLS, the court cannot prolong the assessment exercise indefinitely.

170.  Whilst I have every respect for Professor Chiu as a leading academic and expert in old age psychiatry, I am unable to accept her criticisms about the conduct of the Interview and her assessment about NLS’s mental ability to manage his own property and affairs.  Her opinion does not sit well with the performance of NLS in the Interview, and her views might have been distorted for the reasons mentioned above.

171.  For these reasons, if I have to rely on the expert opinions in making the assessment, I prefer to accept the expert opinions of Dr Chung (who is the Court Expert) and Dr Wong rather than that of Professor Chiu.  In considering all the available materials before the court, I find NLS to be a MIP within the meaning of the MHO.

172.  I understand that the parties will then have to decide on the future conduct of the proceedings in light of the findings in this Judgment.  There will be a direction hearing already fixed on 23 August 2021 for this particular purpose.  I also anticipate that there will be serious arguments on costs and so I am not prepared to make any costs order nisi at this stage.

173.  The court is amazed with the weight of the legal representations in this case.  Whilst the issues involved are not particularly complicated, the fact that the parties are prepared to spend so much legal costs for these proceedings only highlights the tension and the bitterness within the family.  As I see it, there are still a lot of ways to resolve the differences between the parties after the court makes the findings, and I only hope that the family members will have the wisdom to consider other options to settle their disputes and to avoid the substantial legal costs which may be incurred in the future.