CHAO NYI YA TSUNG AND ANOTHER v. CHAO SZE BANG FRANK AND OTHERS

CACV 53/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 53 OF 1998

(ON APPEAL FROM HCMP NO. 439 OF 1997)

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J U D G M E N T

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Rogers, J.A.

1. This is an appeal from a decision of Mr. Justice Pang given on 2nd March this year in these proceedings. The history of these proceedings is that an Originating Summons was issued on 12th February 1997 seeking first that there be an inquiry as to whether Chao Tsao-yee is of unsound mind and incapable of managing himself and his own affairs within the meaning of Section 7 of the Mental Health Ordinance, Cap. 136. Secondly, for directions consequential upon such inquiry. Thirdly, in the event the patient is found to be of unsound mind and incapable of managing himself and his affairs, an order appointing a committee of the estate of the patient consisting of the Applicants and the Respondents, or such other fit and proper person as the Court may deem fit. There was then consequential and the supplementary relief sought.

2. The application was taken out by the wife and one son of Mr. Chao. The Respondents were 2 other sons and the daughter of Mr. Chao.

3. The application therefore comes under Section 7 and 11 of the Mental Health Ordinance. Section 7 reads:

"(1) The Court may, on such application as is hereinafter mentioned, make an order directing an inquiry whether any person subject to the jurisdiction of the Court who is alleged to be a mentally disordered person is of unsound mind and incapable of managing himself and his affairs.

(2) Such order may also contain directions for inquires concerning the nature of the property belonging to the person alleged to be mentally disordered, the persons who are his relative or next-of-kin, the time during which he has been of unsound mind or such other questions as to the Court shall seem proper.

(3) Application of such inquiry may be made by any person related by blood of marriage to the person alleged to be a mentally disordered person, or any public officer nominated by the Chief Secretary."

4. I can omit reference to the intervening sections but Section 11 reads:

"(1) If the Court finds the person who is alleged to be a mentally disordered person of unsound mind and incapable of managing himself and his affairs, the Court may, if it shall think fit, appoint a committee of the person and estate of such person and may make such order, if any, as to the remuneration of the committee either out of such person's estate, and as to the giving of security by the committee, as the Court may seem fit."

5. After 12th February, nothing transpired until 16th September. On that day the Respondents to the Originating Summons themselves took out an application for appointment to hear the Originating Summons.

6. In their application, they asked, first of all, for the hearing date to be fixed and then that leave be given to serve notice of cross-examination on the deponents of any affidavit or affirmations filed in the application with consequential directions as to non-compliance with any notices given.

7. The matter came before the Court on 16th October and was then adjourned until 21st October when the Court ordered medical reports to be obtained as to the soundness of mind of Mr. Chao and as to his capacity to manage his affairs. That was duly obtained and as a result of that, the matter became quite clear.

8. The matter came back before the Court again on 5th December of last year. On that occasion the Court ordered that there should be valuation reports of some of the shares owned by Mr. Chao, and also of the antiques. Those reports were then obtained and the matter came before the Court again on 18th February.

9. The judge in his Decision then dealt with the application which was made by the Respondents in the Originating Summons, who were the Appellants here, and he referred to the application to cross-examine and he said this:

"The stance adopted by the Respondents is that there is substantial dispute as to the true ownership of the patient's assets and the extent of the legal and beneficial ownership. The purpose of cross-examining the Applicants was an essential step to ascertain the true ownership of the patient's assets. Without such knowledge, it was argued, any committee appointed under the Ordinance would be confronted with an impossible task when discharging its duties."

The judge then went on to say:

"The fact remains that the patient has assets of substantial value. In this respect, it is my view that no amount of cross-examination of the Applicants, however searching or detailed it may be, will or alter the fact that the patient, by reason of his mental disability, is presently unable to look after his own assets. It is for this reason that I dismiss the Respondent's application to cross-examine the Applicants.

Having disposed the Applicants' summons, I ordered that a date is to be fixed for the determination of whether a committee should be appointed pursuant to Section 11 of the Ordinance. The costs of the Respondents' summons be costs in the cause."

10. It is clear from the judge's own decision that what he was considering was cross-examination as to the ownership and value of the assets.

11. Turning to Section 7(2), all that section refers to is that the order may contain directions for enquiries concerning the nature of the property belonging to a person alleged to be mentally disordered.

12. In this case as the judge below pointed out it was perfectly clear that there were a large number of assets and their nature had in general been ascertained.

13. It is not necessary under Section 7(2) of the Ordinance for the exact identification of all the assets still less the assessment of their value to be made before a committee is appointed, if a person is declared to be of unsound mind and incapable of managing his own affairs. Indeed, I would go further. In proceedings under Section 7, it seems to me to be totally unsuitable that what could be complicated trust actions should be embarked upon. Proceedings under Section 7 of the Mental Health Ordinance are not suitable for expensive litigation, or litigation that may well become highly complex and extended. The purposes of the Mental Health Ordinance are to look after the interests of the person alleged to be mentally disordered and if extensive litigation is to be embarked upon the matter may only become worse and years may pass by before matters are finally resolved.

14. If issues come up as to the ownership of assets and whether certain assets are held in trust on behalf of the person alleged to be mentally disordered, that can be dealt with as and when they come up and such litigation as is necessary can be embarked upon and a guardian ad litem can be appointed and so forth.

15. Before us Mr. Huggins outlined two further issues which he said had to be resolved. Firstly, he said that the question had to be resolved as to whether a committee should be appointed. The stance apparently taken by the two sons and daughter who are Respondents to the Originating Summons, the Appellants here, is that it is unnecessary to appoint a committee of inspection although it is clear beyond doubt on the medical evidence that Mr. Chao is incapable of conducting his own affairs.

16. The other question which Mr. Huggins has argued has to be determined is as to what the composition of that committee should be.

17. In my view, the judge had not embarked upon those questions and when considering the question of whether there should be examination or not had not dealt with those issues. He was simply considering the question of the ownership and extent of the assets.

18. In any proceedings that come before the Court, even if they are founded upon affidavit evidence, no doubt the Court will, if and when it considers necessary order cross-examination. Doubtless it would do so in these proceedings should it become necessary. But that stage, in my view, had not been reached.

19. For those reasons, I would dismiss this appeal but I would go on to say this: Mr. Wong who appeared on behalf of the Respondents to the appeal, the Applicants on the Originating Summons, has indicated before this Court that in relation to the issues as to whether a committee should be appointed and the composition of that committee, his clients will not rely on their affidavits either as to the appointment of the committee, or as to whether they themselves should be appointed to the committee, or as to whether the Respondents to the Originating Summons and the Appellants in this Court should be appointed to the committee. He has, however, indicated that he would be relying on the affidavits as to whether an independent person, specifically an accountant, should be appointed to the committee.

20. In my view, for the reasons which I have given, this appeal should be dismissed.

Liu, J.A.

21. I agree.

Nazareth, Acting C.J.H.C.

22. I also agree. I would add the following.

23. As to whether a committee of the estate can be appointed before the estate is fully identified, I have no doubt that the answer must be in the affirmative for the reasons which Rogers JA has given. It would be absurd if a committee of the estate could not be appointed where there are significant assets in an estate which should be managed simply because there might be some assets which have not yet been identified or the ownership of which may be disputed. That is not to say that the court might not be entitled to defer the appointment of a committee pending the determination of the extent of the estate in particular circumstances if that were considered necessary or appropriate, a fortiori if such disputes or determination may be protracted.

24. Turning to another and perhaps the more important question in this appeal, whether a committee of the estate should be appointed, I do not read the judge's decision as other than that he saw no reason to order cross-examination upon the position before him as he saw it, i.e. one concerned with disputes as to the true ownership of some possible assets, questions of legal and beneficial ownership and also the question as to the father's mental state and his ability to look after his own assets. I do not see the judge's ruling as precluding him from allowing cross-examination if he comes in the future to regard that as appropriate in relation to statements or affirmations if such are sought to be relied upon in further hearings of the matter, or as to the composition of any committee, which seems to be the real bone of contention. Nor do I think that the judge had any intention of making any sort of general ruling as to future cross-examination in the trial as it develops.

25. The appeal is dismissed.