CHEN CHERYL DEANNA AND ANOTHER v. CHEN PAK-YIN STELLA also known as STELLA LEE

HCA 59/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 59 OF 2011

________________________

_______________

D E C I S I O N
_______________

Introduction

1. The present applications are yet another round of interlocutory applications between the two sisters, 1^st plaintiff (“P1”) and the defendant Stella Chan Pak Yin (“D”).  P1 is the mother of the 2^nd plaintiff (“P2”).  They will be collectively referred to as Ps. 

2. Although in the original statement of claim, a Chen Chak Man Edward was stated to be “named as the 2^nd defendant under Order 15 rule 4 of the Rules of the High Court”[1], the statement of claim was subsequently amended on 31 May 2011 to delete any reference to a 2^nd defendant (“ASOC”), and D is the only defendant in the present action.

3. There are at present 3 applications before this court[2]:

(i) Ps’ summons filed on 13 October 2014 for leave to file a re-amended statement of claim (“Amendment Summons”);

(ii) Ps’ summons filed on 3 August 2014 for, among other things, consequential directions on the re-amended statement of claim and retrospective leave to serve a psychiatric report dated 26 December 2013 from a Dr Cheung Hung Kin (“Leave Summons”);

(iii) D’s summons filed on 25 February 2016 to seek summary assessment of a costs order made by this court on 23 September 2015 (“Costs Summons”).

4. The present action was related to a probate action HCAP 16/2008 taken out by P1 against D to challenge the validity of an alleged will of their deceased father (“Probate Action”). On 7 September 2011, the two actions were ordered to be tried together before the same judge.  Although the present action was ready to be set down in early 2014, there were interlocutory applications in the Probate Action which had to be dealt with before the Probate Action could be ready for trial.

5. Eventually on 18 November 2014, this court delivered a judgment in the Probate Action dismissing two applications, one by D to discontinue/dismiss the Probate Action and for an independent accountant be appointed the administrator for the estate of the father’s estate, and one by P1 to re-amend her statement of claim in the Probate Action (“19.11.14 Judgment”).

6. After the 19.11.14 Judgment, both P1 and D applied for leave to appeal.  P applied for leave against that part of the 18.11.14 Judgment against her dismissing her application to re-amend the statement of claim.  This court did not grant leave.  On 24 April 2015, P1’s subsequent application to the Court of Appeal for leave was also refused[3].

7. This court did, however, grant leave to D to appeal against that part of the 19.11.14 Judgment dismissing her Dismissal Summons.  D’s appeal was eventually allowed on 24 March 2016 and the Court of Appeal ordered that the Probate Action be discontinued and further appointed Mr Li Ka Sing, a professional accountant to be the administrator of the Deceased’s estate [4] (“Administrator”).

8. In the above circumstances, since 24 March 2016, the present action should be ready to proceed to a trial.

Background

9. The background to the sisters’ disputes have been set out in the 19.11.14 Judgment, which will not be repeated here.  For ease of reference, I shall adopt the same definitions in the 19.11.14 Judgment in the present decision, unless indicated otherwise.

10. The Amendment Summons was originally fixed for hearing before a Master.  For various reasons which it is not necessary to go into, the Amendment Summons was eventually fixed for a substantive hearing on 19 May 2016 before this court together with Ps’ Leave Summons, and D’s Costs Summons (“Hearing”).

11. Prior to the commencement of the Hearing, P1 suddenly telephoned the court to say there was a serious traffic jam and that she and P2 would both be late.  This court then waited for almost 45 minutes. Although P2 did eventually turn up, he told the court that P1 had pain in her legs after getting off the bus, and was thus not able to turn up at the Hearing.

12. P2 said as he was on an electric wheel chair, he could operate the wheel chair to come the court without his mother’s assistance.  There were very few details given by P2 as to the condition of P1, or why she was not able to come to the court after alighting from the bus.  I do not find P2’s explanation satisfactory, and indicated that the applications so far as P1 was concerned would be dismissed.  This court then proceeded to hear submissions from P2 and D on the 3 summonses.

13. After the Hearing, on 21 May 2016, P1 sent a letter to the court attaching a referral letter dated 19 May 2016 from Tuen Mun Hospital.  That letter was printed at 22:52 on 19 May 2016.  The referral letter referred P1 to a consultant for follow up for “Left Sciatica”.  There was nothing therein to explain why P1 was not able to attend the Hearing.  In any event, for reasons set out later in this judgment, Ps’ summonses will be dismissed. 

Ps’ Amendment Summons

14. Ps were legally represented at the time when their writ was issued.  Both the statement of claim and the ASOC were drafted by their then Counsel. 

15. Currently, in the ASOC, Ps are seeking the following reliefs:

(i) A declaration that the Enduring P/A was invalid;

(ii) A declaration that the Deceased did not have the mental capacity required for creating an enduring power of attorney and/or any power of attorney on 24 January 2005;

(iii) A declaration that the acts performed by D relying on the Enduring P/A were invalid;

(iv) Any relief under section 11 under the Enduring Powers of Attorney Ordinance, Cap 510 (“Ordinance”);

(v) Damages;

(vi) Further or other relief;

(vii) Costs.

16. As seen from the ASOC and the reliefs claimed as set out above, the key issues in the present action are thus (i) the mental capacity of the Deceased at the time of his executing of the Enduring P/A on 24 January 2005, and whether he subsequently became mentally incapable, and if so, when (“Capacity Issue”), and (ii) the validity of the Enduring P/A and if valid, whether it ended subsequently by reason of D’s failure to register it pursuant to sections 4(2) and (3) of the Ordinance (“Validity Issue”).

17. In the ASOC, Ps had pleaded certain of D’s acts pursuant to the Enduring P/A in relation an insurance policy taken out by the Deceased on 24 August 2004 with Sun Life Financial, policy number 382257225 (“Insurance Policy”) including altering the names of the beneficiaries and further terminating the Insurance Policy, and withdrawing the funds thereof, the whereabouts of which were unknown.  It was pleaded in the ASOC even if the Enduring P/A were held to be valid, D did not exercise the powers granted to her honestly and in good faith[5].

18. Ps first took out a summons on 3 March 2014 for leave to file a re-amended statement of claim with a draft attached.  This draft was what I understood to be referred to by Ps as the 1^st draft of the re-amended statement of claim[6]. Thereafter, Ps filed the Amendment Summons on 13 October 2014 for leave to re-amend the ASOC as per another draft which had been referred to by Ps as the “2^nd Draft Re-Amended Statement of Claim dated 6 October 2014” (“2^nd RASOC”).  There was at one stage confusion as to which was the correct version of the 2^nd RASCO. 

19. Subsequently, 9 months later, Ps filed a “Re-Amended statement of claim” on 30 July 2015 purportedly pursuant to leave granted by Master Ho on 26 November 2014[7].  After objection from D, and upon reading the transcript of the hearing before Master Ho, this court found that no leave had in fact been granted by Master Ho as alleged by Ps, and that the document filed was then ordered by this court to be expunged from the court record on 3 March 2016.  I understand that the expunged document was the 2^nd Draft RASOC which Ps are now seeking leave to file under the Amendment Summons.

20. First of all, on the 2^nd Draft RASOC, there were “deletions in black” and “additions in green”.  I am unable to see that there has been any formal order allowing Ps leave to make those“deletions in black”.  I shall therefore ignore them. 

21. The proposed “additions in green” can be generally grouped as follows:

(i) To add and elaborate what have already been pleaded in the ASOC in providing further details/particulars, which are mainly matters of evidence, namely those in paragraphs 7, 9, 20, 24, 25(i) and (v), 25A, 27, 29, 30, 35 (“1^st Group”);

(ii) To add allegations and evidence of no less than 20 paragraphs under sub-heading “A. Particulars on the Insurance Policy”, no less than 19 paragraphs under a sub-heading “B. Particulars of the Deceased Stocks and Share” and 16 and more paragraphs under a sub-heading “C: Particulars of the Deceased Bank accounts and safety deposit box”, and further sub-paragraphs under headings “On Health Care” and “On Property”, all under the main heading “Acts of Stella as the Attorney relying on the Purported Enduring Power of Attorney” to plead further alleged acts of D pursuant to the Enduring P/A (“2^nd Group”);

(iii) To add various allegations under 5 sub-paragraphs under a new heading “Acts which Stella did not perform as the Deceased purported appointed Attorney” (“3^rd Group”);

(iv) To add under the heading “Attorney’s acts invalid due to mental incapacity of the Deceased at the time of the acts”, a new paragraph 31A, and elaborations under paragraphs 32, 33, and 34 (“4^th Group”);

(v) To add a new heading “Psychiatric Illness of Andrew caused by Stella”, and to add some 6 pages of allegations of  psychiatric illness allegedly suffered by P2 by reason of D’s wrongful acts and events in 2005, claiming damages for pain, suffering and loss of amenities suffered by P2, to be assessed by the court (“5^th Group”);

(vi) To add a new heading “Consequential Loss” and new paragraphs 41, 42, 43 and to plead D’s knowledge and intention for Ps to use their entitlement under the Insurance Policy for the operation of a convenience store in order to generate income for payment of P2’s medical and miscellaneous expenses, claiming that loss and damages suffered by Ps, to be assessed (“6^th Group”).

22. Ps further proposed to add further claims including the following:

(a) To add further elaboration under the present claim for the declaration that D’s acts relying on the Enduring P/A were invalid, to include the particulars of the acts;

(b) To add a “Further or alternative” claim that the Enduring P/A was determined by reason of the Deceased’s subsequent mental incapacity, and all acts performed by D relying on the Enduring P/A were done without authority;

(c) To add a claim for “Consequential Damages” suffered by P2 to be assessed;

(d) To add a claim for “Restitution of the original designated beneficiaries of the Insurance Policy”;

(e) To add a claim for a declaration for tracing the Deceased’s assets which had been “converted or fraudulently embezzled” by D under the Enduring P/A for the benefit of the Deceased’s estate;

(f) To add a claim for restitution of the dividends and interest from the Deceased stocks and shares which were wrongfully taken by D.

23. Ps had filed an affirmation in support of the Amendment Summons[8]. In this affirmation, Ps claimed that the ASOC was on the issue of the validity of the Enduring P/A which was admitted by both parties to be void (sic), and that the Draft RASOC was on challenge of the Enduring P/A in that the Deceased had lacked mental capacity at the time[9].

24. I am not sure what Ps were trying to say, but in any event, as I have said earlier, the two key issues in the present action are the Validity Issue and the Capacity Issue, and they are both live issues.

25. Ps went on to say in their affirmation that they had discovered further acts of D relying on the Enduring P/A after the ASOC, and that they wanted to add further claims for relief on “consequential damages” and “personal injury” against D for her acts pursuant to the Enduring P/A.

26. D opposed P’s Amendment Summons, and to summarise, her grounds of opposition are:

(i) The proposed amendments have no merit;

(ii) The amendments, if allowed, will result in further delay in this action;

(iii) D will be severely prejudiced if there is any further delay to the trial, as D’s husband, against whom allegations in the proposed amendments have been made, has passed away, and also banks will not keep records for over 7 years, and D’s expert witnesses are approaching retirement;

(iv) The main issue is the Deceased’s mental capacity at the time of the execution of the Enduring P/A;

(v) Further, as for Ps’ allegations in relation to D’s intermeddling of the Deceased’s assets, the Administrator will be able to investigate and/or recover any assets of the estate, if necessary.

27. So far as the 1^st Group of proposed amendments, I do not find them necessary, in that they either will not add to what was pleaded and/or they are really matters of evidence.  

28. As for 2^nd to the 4^th Groups, if it is found that the Deceased lacked mental capacity to execute the Enduring P/A resulting in the Enduring P/A being invalid, or if the Enduring P/A is to be found invalid or had ended under the Enduring Power of Attorney Ordinance, it will follow that any acts by D as the attorney purportedly pursuant to the Enduring P/A would not have been valid.

29. In such circumstances, as pointed out by D, the Administrator will have the duty to investigate into whether any sums/assets which should have formed part of the Deceased’s estate, had been withdrawn prior to his death pursuant to the Enduring P/A, and if so, the purpose of such withdrawals, the whereabouts of such sums/assets withdrawn, and whether such sums/assets should be recovered for the Deceased’s estate.

30. I agree with D’s submissions, and thus, the proposed amendments in the 2^nd Group to the 4^th Group, in so far as they relate to the two new claims proposed to be added, namely for tracing assets and for restitution of dividends and interests are really matters for the Administrator to deal with, after the court’s determination on the Validity Issue.  In any event, Ps have also sought relief under section 11 of the Ordinance, and under this section, if deemed necessary and fit , this court also has the power to order D to produce records and accounts and make an order for their auditing.

31. As for the allegations in the 3^rd Group, the 5^th Group and the 6^th Group of amendments, it would appear that Ps are trying to plead various wrongful acts/omissions of D relying on the Enduring P/A, and to add a claim for damages suffered by Ps due to D’s acts in relation to the Insurance Policy to add a claim for damages for P2’s psychiatric illness due to D’s wrongful acts and seeks damages for pain, suffering and loss of amenities.  These appear to be new tortious claims, as Ps had mentioned in their supporting affirmation their new claims for “consequential damages” and “personal injury”.  I understand that the acts alleged were in 2005, some 11 years ago.  There was no evidence when Ps found out the Deceased’s intention regarding a convenience store and P2’s alleged psychiatric illness, and why it had taken Ps 11 years to make these allegations.  The merits of these claims will in any event have to depend on the Validity Issue and/or Capacity Issue.  

32. Ps are also proposing to add a “further or alternative claim” namely that the Enduring P/A was determined by reason of the Deceased’s subsequent mental incapacity, and all acts performed by D relying on the Enduring P/A were done without authority.  If the Deceased was found to have the mental capacity to execute the Enduring P/A on 24 January 2005 and that the Enduring P/A was valid at the time of execution, under section 4(1) of the Ordinance, the Enduring P/A would not be revoked by reason of any subsequent mental incapacity of the Deceased.  However, if there was reason to believe that the Deceased was becoming mentally incapable, then D should have registered the Enduring P/A under section 4(2) of the Ordinance and should not carry out any acts until registration.  All this has already been pleaded in paragraph 35 of the ASOC.

33. As I have mentioned in the 18.11.14 Judgment, the present action was ready to be set down for trial in early 2014 but as the fixing of actual dates had to depend on the Probate Action, the fixing of trial dates had been delayed.  Ps’ then Counsel Mr Tony Ko in the present action had signed a certificate on 21 May 2013 indicating a time estimate of 16.25 hours on Ps’ side, and D’s Counsel Mr Nelson Miu had signed a certificate on 29 July 2013 with an estimate of 25 hours on D’s side.  The total estimated length of trial was some 10 days.

34. Apart from Ps themselves, Ps intended to call two other witnesses, David Lo and Dr KW Woo. On D’s side, apart from D, there were three witnesses, Chen Po Yin and Dr YL Yu, and Dr CK Au Yeong.

35. As D had submitted, if the proposed amendments were allowed, there would be a further round of amendment of pleadings, and possibly further expert evidence in relation to P2’s alleged psychiatric condition, and the trial will be considerably delayed.  I accept D’s submission that there will be considerable prejudice to D in the event of such delay, nor would it be fair for the witnesses who had to give evidence as to what happened some 11 years ago.  Even for Ps, I cannot see that any further delay of the trial could be of benefit to their case.

36. Having considered all the circumstances, in particular the prejudice to D, and the fact that there had already been a considerable delay in fixing dates for the trial for over 2 years, I really do not see why the trial should be delayed any further by the proposed amendments.  I see no reason to allow Ps to add new claims of a different nature in the ASOC at this late stage of the present action.  Now that the Probate Action has been discontinued, the present action should really proceed to a trial expeditiously, so that the key issues, namely the Validity Issue and the Capacity Issue, can be determined as soon as possible. 

37. In any event, the proposed amendments do not really affect these key issues.

38. In light of the above, I am not prepared to allow the Amendment Summons to grant leave for Ps to file a re-amended statement of claim at this stage.

Leave Summons

39. In the Leave Summons, Ps had sought, among others (i) consequential directions on the 2^nd RASOC, and also (ii) leave to the Ps to serve the psychiatric reports of Dr Cheung Hung Kin in relation to P2’s psychiatric condition.  As this court is not prepared to allow the Amendment Summons for leave for Ps to file the re-amended statement of claim, it will follow that Ps’ applications as set out are not allowed.

40. In the Leave Summons, Ps had sought (i) leave to withdraw two previous summonses issued by her and also (ii) retrospective leave to serve the Joint Statement of the experts.  I understand that (i) had already been dealt with previously.  If (ii) has not yet been dealt with, this can be dealt with during the directions hearing which I am going to fix.

The Costs Summons

41. In the Costs Summons, D had sought the costs ordered to her under the order dated 23 September 2015 to be summarily assessed.  D issued the Costs Summons about 4 months after the costs order.

42. D did not seek costs to be summarily assessed at the hearing.  The costs order was for costs to be taxed forthwith. It was not an order nisi and was a final order.  I do not propose to disturb the order I made.

Conclusion

43. In light of what I have said above, I order that:

(i) Ps’ summons filed on 13 October 2014 for leave to file a re-amended statement of claim be dismissed;

(ii) Paragraphs 1 and 4 of Ps’ summons on 3 August 2015 be dismissed;

(iii) D’s summons filed on 25 February 2016 be dismissed.

44. As neither side had succeeded with their applications and neither had legal representations, I make no order as to costs.

45. I direct that a directions hearing be fixed on 4 July 2016 at 10:00 am (1 hour reserved),for the purpose of giving further directions for the trial and for fixing the trial dates.