RE IWY

HCMP 1192/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1192 OF 2005

______________________

______________________

_________________________________

REASONS FOR DECISION

_________________________________

1.  The late IWY was a mentally incapacitated person and by an order of Chu J made on 23 October 2002, the Official Solicitor was appointed as the Committee for her estate.

2.  IWY recently passed away in December 2007.

3.  By reason of Section 27(4), upon the demise of IWY the Committee is discharged.  The court ceases to have general jurisdiction under Part II of the Mental Health Ordinance to deal with the estate of IWY.  It only has jurisdiction to deal with residual matters pertaining to or arising from the management or administration of her estate during her lifetime, see Re KKC HCMP 3843 of 1998, 28 December 2005.

4.  Usually the residual jurisdiction involves this court giving directions for final account to be lodged and approved, for remuneration (if any) to be fixed and paid to a professional committee.  The court may also be required to give directions regarding the transfer of assets or funds belonging to the estate to the proper authority.  Heywood & Massey sets out a list of matters that may be dealt with by way of residual jurisdiction in para. 5-021.  However, one must not treat that list as exhaustive.  Given the infinite possibilities that a committee appointed under Part II may have acted in respect of the administration and management of the properties and affairs of a mentally incapacitated person, the court has to consider each case on its own facts to decide whether an act falls within the scope of the residual jurisdiction as a matter of principle.  If it does, it is the duty of the court to give directions even though there is no precedent for the same in the past.

5.  In the present case, a point arose as regards the disposal of certain legal proceedings that have been conducted by the Committee as the next friend of IWY.  The Committee took the view that upon the demise of IWY, no further action could be taken on behalf of IWY in those proceedings.

6.  As a general proposition, I agree that upon the demise of a mentally incapacitated person a committee ceases to have authority to continue with the prosecution or defence of a piece of litigation.  However, it does not mean that a committee could invariably neglect what will happen to the litigations after the demise of the mentally incapacitated person.

7.  Until the court gives a direction otherwise, the committee remains as a next friend on the record.  In an ordinary case where no committee has been appointed, a next friend of a deceased person would have no authority to carry on with the litigation as next friend.  Accordingly, the solicitors on the record also have no authority to continue with the prosecution or defence of the case.  What the next friend should do, if he or she intends to continue with the litigation, is to instruct the solicitors to apply for an order under Order 15.  If the next friend does not wish to continue to be involved, he or she should seek directions from the court for the removal of his or her name as the next friend on the record.

8.  Likewise, the solicitors acting for the next friend should apply to court if the firm wishes to cease to be the solicitors on the record.

9.  There may be personal costs exposure on the part of the next friend in respect of costs order made against the estate prior to the next friend going off the record, especially if the estate does not have the means to indemnify him or her, see Hong Kong Civil Procedure 2008 Para. 80/9/2.  I only put it on a tentative basis because the point has not been argued before me and I only highlight it in this judgment.

10.  Coming back to the facts of the present case, IWY was involved in three sets of litigation in the High Court: as plaintiff in two sets and as defendant in another set.  The Committee acted as her next friend in all the proceedings.

11.  Through considerable efforts in terms of negotiations, parties to all three sets of proceedings reached a compromise.  This court authorized a Deed of Settlement to be executed and the Deed was duly executed.  In accordance with the terms of the Deed of Settlement, monies were paid by the other parties to the proceedings to the Committee.  All these happened before the death of IWY.

12.  Under the Deed of Settlement, the Committee has to perform certain acts upon full payment of the monies.  Such acts included the discontinuance of the three sets of proceedings by consent with no order as to costs.  As a matter of procedures, the settlement has to be approved under Order 80 in the context of the respective set of proceedings.  However, given this court’s sanction for the Deed of Settlement in the Part II jurisdiction, such approval should not be difficult to obtain.

13.  Unfortunately, before the discontinuance of the proceedings could be effected, IWY passed away.

14.  There is a time frame under the Deed providing for the discontinuance of the proceedings after full payment is received.  This must be borne in mind in considering whether one should leave everything in abeyance pending the grant of probate regarding the estate.  Based on what I have been told, there could be complications in the application for grant.

15.  As far as I can see, it is certainly in the interest of the estate to have the Deed implemented in full, including the discontinuance of the three sets of proceedings, as soon as possible.

16.  However, given the Committee’s view with regard to the effect of death, nothing was done to discontinue the proceedings notwithstanding that all parties in the proceedings are eager to achieve that.

17.  In my judgment, the Committee has taken an unduly narrow view with regard to the residual authority.  The question is whether the acts in question can be regarded as residual matters pertaining to or arising from the management or administration of IWY’s estate during her lifetime.  Given that the Committee was appointed with authority to act as next friend in the litigations, it must necessarily be residual to such appointment to take proper steps to apply to the court for the removal of the Committee as next friend on the records in those proceedings upon the demise of IWY.

18.  Given the circumstances of the present case, it is my view that the Committee should inform the court in those substantive proceedings that the Deed of Settlement had been executed and partly implemented.  This would be relevant to what directions the court should give on the future conduct of the proceedings: either appointing a neutral person to represent the estate under Order 15 or directing the proceedings be carried on in the absence of any such representative.

19.  Thus, on 14 February 2008 I directed the Committee to take out a summons in the substantive proceedings seeking directions from the court as regards the future conduct of the proceedings and the removal of the Committee as a next friend on the record.

20.  The Committee should also bring this judgment to the attention of the court hearing the substantive proceedings.

21.  I also give other directions regarding the residual matters that have to be dealt with.  It is not necessary to set out those in this judgment.

22.  I intend to release this judgment for circulation.  If any parties have any comments, they should be lodged with this court within 5 days.