C v. B

HCMH 19/2016

[2018] HKCFI 467

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MENTAL HEALTH CASE NO. 19 OF 2016

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JUDGMENT

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1.  This is an inquiry for the appointment of a committee under Part II of the Mental Health Ordinance, Cap 136 (“MHO”) to investigate whether certain dispositions and documents were executed by a mentally incapacitated person, Mrs A, with sufficient mental capacity and free from undue influence. There is also another application for leave to adduce some documents in the present proceedings for use in a related high court action involving Mrs A (“the Leave to Adduce Documents Application”).

2.  This inquiry involves two important issues:

(i) Under what circumstances should the court appoint a Part II committee under the MHO to manage the affairs of a mental incapacitated person (“MIP”) if that MIP had previously executed an enduring power of attorney (“EPOA”) appointing someone else to manage his affairs?

(ii) In the absence of an application to set aside the EPOA, under what circumstances should the court appoint a Part II committee to investigate whether some previous dispositions or documents (including the EPOA) were executed by the MIP with sufficient mental capacity and free from undue influence?

3.  According to the Applicant, the value of Mrs A’s estate, with the setting aside of the deed of gift in favour of her sister, may amount to $22 billion, a figure which is disputed by the Intervener.  This case therefore involves a MIP with substantial assets.

4.  For easy reference, I would use the term “Mental Health Court” as referring to the Court of First Instance in exercising the jurisdiction under the MHO.

A.   BACKGROUND

A.1   The family  

5.  This case has a chequered history.

6.  Mr A and Mrs A married in 1949.  They have 2 daughters: the elder daughter B (the Intervener) and the younger daughter C (the Applicant).  Mrs A is now aged 93.

7.  Mr A was a successful businessman who had built up substantial wealth throughout the years.

8.  Mr A was diagnosed with prostate cancer in September 1999.

9.  From around late 1999, various Hong Kong assets of Mr A were transferred to a limited company CHL, the sole shareholder of which was C, for estate duty planning purposes.  The parties refer this as “the CHL Exercise”.

10.  Prior to 2002, Mr A’s family was harmonious and B and C were in rather good terms.  By that time, C was mainly responsible for helping Mr A to run his businesses in Hong Kong, whilst B resided mainly in the United States helping her father to run his overseas businesses.

A.2   The deterioration of the relationships within the family and the execution of the 2004 and 2008 wills

11.  Unfortunately, things began to happen in 2003 which ultimately caused a breakdown in the relationships within the family.

12.  In 2003, Mr A told Mrs A that he had gifted a lot of his assets to C but could not recall what they were or why he had done so.  The division of family assets started to become a major cause for mistrust within the family.

13.  There was also an incident about the addition of sedative to Mr A’s drink which caused considerable concern to Mrs A.  In around the same period, there was also disagreement within the family as to kind of medical treatment that should be received by Mr A.

14.  It is fair to say that Mrs A took aside with B in the dispute. Mrs A, rightly or wrongly, was of the opinion that B had been unfairly treated and C had manipulated Mr A in the handling of his assets.

15.  Starting from early 2003, there were some discussions in the family as to the distribution of Mr A’s assets held under CHL as well as some of his United States assets to Mrs A, B and C in order to buy peace in the family. Ultimately, there were some arrangements made as reflected in a number of proposals.  These arrangements were the subject matters in a subsequent High Court action.

16.  On 27 October 2004, Mrs A executed a will (“the 2004 Will”) under which, in broad terms, B and C were beneficiaries of her estate in equal shares.

17.  In May 2005, there was an unwinding of the CHL Exercise and CHL was returned to Mr A.  During the unwinding process, Mr A confirmed C’s status as his successor for his substantial businesses in Hong Kong.

18.  There was an incident in September 2005 where Mrs A was denied entry into a property in Robinson Road owned by the family (“the Robinson Road Property”).  Mrs A, rightly or wrongly, took the view that C was the person who denied her access to the Property.  C clarified that the whole incident was the result of a misunderstanding.  Mrs A was later allowed access to the Robinson Road Property and C claimed that the matter was resolved.

19.  In September 2006, Mrs A executed a general power of attorney (“GPOA”) in favour of B.  According to C, such document was only disclosed to her when B filed her 4^th affirmation in the present proceedings in May 2017.

20.  In around 2006 or 2007, B returned to live in Hong Kong.

21.  On 15 February 2008, Mrs A executed another will (“the 2008 Will”) with B as the sole executor and beneficiary of her estate. According to C, she was first aware of the existence of the 2008 Will when she was so informed by B’s solicitors in April 2016.   She only knew the full terms of the 2008 Will when B disclosed it in her 4^th affirmation in the present proceedings in May 2017.

22.  C refers this as a departure from the “equality principle” that Mrs A had all along adopted even in light of the dispute between the sisters.  C alleges that the 2008 Will was made by Mrs A under undue influence from B.

23.  There is no serious dispute that the relationships within the family were far from harmonious in the period from 2006 to 2008.  B complained that C had asked Mr A to sign complicated proposals, and Mrs A took the view that C had continued to abuse Mr A by taking advantage of his deteriorating mental condition.  On the other hand, C complained that B had been taking aggressive steps to exert her control over Mr A’s businesses in Hong Kong.  Facing such situation, Mrs A asked a former apprentice of Mr A, WW, to conduct mediation between the sisters but without any success.

24.  Mrs A was hospitalised urgently twice in April and May 2008.

A.3   The mental health proceedings relating to Mr A and the divorce petition

25.  In July 2008, B commenced mental health proceedings in respect of Mr A with the support of Mrs A.  During the proceedings, serious allegations were made against C.  B, with the support of Mrs A, applied for herself to be appointed as Mr A’s committee.  C did not oppose the appointment of a committee but objected B to be in the proposed committee.

26.  In around September 2008, there was further dispute between C and Mrs A about the use of fund of TRL, a company owned by Mrs A, to rent two units in the Robinson Road Property for B’s children.

27.  On 21 November 2008, Mr A was declared as a MIP by the Mental Health Court and an independent committee was appointed to manage Mr A’s affairs.

28.  Unfortunately, the disputes did not end with the appointment of the committee.  There were a few incidents upsetting Mrs A which increased the antagonism between the parties, including the “handyman” incident, the “orange” incident, the “monthly allowance of Mr A” incident and the “use of car” incident.

29.  In December 2009, Mrs A petitioned for divorce. C claims that the divorce was engineered by B for her own benefit with only trivial grounds in support of the petition.

30.  After that, there was another dispute in the family relating to TRL.  C did not return TRL to Mrs A because she believed that B would indirectly benefit from it.

31.  On 22 December 2009, there was another confrontation between the sisters in a meeting of Mr A’s Foundation, during which B was removed as a trustee of the Foundation.  Mrs A attended the meeting in support of B and there were some hostile exchanges between Mrs A and C.

32.  In January 2010, C applied to the Guardianship Board for appointment of legal guardian for Mr A.

33.  On 20 August 2010, Mrs A issued a protective writ against C in relation to Mr A’s asset distribution exercise.  That action was not pursued.

34.  There were heated arguments between Mrs A and C in the family home on 15 September 2010.

A.4   Mrs A’s minor strokes in 2010 and the commencement of the High Court action

35.  Mrs A suffered a minor stroke in October 2010.

36.  On 22 November 2010, Mrs A commenced a High Court action (“the HC Action”) against C to set aside certain cash distribution agreement and distribution arrangement made in 2004 on the ground of breach of fiduciary duties, non-disclosure in family arrangement, undue influence, misrepresentation and unilateral mistake, with the effect that C remained liable to transfer to Mrs A 1/3 in the value of the properties she received under a proposal dated 21 August 2004 approved by Mr A.  Mrs A is and has been represented by the solicitors’ firm, CC, in the conduct of the HC Action.

37.  Mrs A collapsed in her hospital on 2 December 2010 and she suffered another stroke on 5 December 2010.

38.  According to B, Mrs A was of the view that her confrontations with C and her daughter was the trigger of her strokes.  There is no serious dispute about the occurrence of these confrontations, and so there is reason for the court to believe that that was the view of Mrs A by that time.

39.  Starting from December 2010, there was a series of correspondence between C’s solicitors and the solicitors’ firm acting for Mrs A, WH, whereby C made various requests to visit Mrs A.  In the reply letters (at least before June 2014), WH indicated that their solicitor, DW, had paid a number of visits to Mrs A and conveyed to her C’s requests.  Yet Mrs A did not agree to see C.

40.  The trial of the divorce petition was scheduled to commence on 19 April 2011.  On the same day, the parties reached a settlement for divorce under which Mrs A received, among other things, [X].

A.5   The execution of the EPOAs and various other documents in favour of B and the death of Mr A

41.  On 21 April 2011, Mrs A executed two EPOAs appointing B as her attorney in the presence of a solicitor, AH, and a registered doctor, Dr W.  She also executed a GPOA in favour of B on the same day.  The only difference between the two EPOAs is the number of companies covered by them: one has 10 companies and the other 6.  Mrs A signed both EPOAs to allow B to choose which one to register if necessary, depending on whether the transfer of the 4 additional companies listed in one of the EPOAs but not the other had been completed by then.  Each of the EPOAs covers all of Mrs A’s investments in the companies listed in them and all bank accounts, trust fund accounts, stocks and other assets held under Mrs A’s name.

42.  Again, C complains that she was only aware of these documents when B disclosed the same in her 4^th affirmation in these proceedings in May 2017.

43.  On 7 June 2011, Dr W sent a letter to Mrs A’s solicitors in the HC Action (i.e. CC), confirming that Mrs A had the mental capacity to understand the nature of the claims in the HC Action and to give instructions for the prosecution of the claims.

44.  In early 2012, the committee of Mr A made an application to the Mental Health Court to make a statutory will for Mr A.  It is common ground that the application was made with a view to remove B as a beneficiary of Mr A’s estate.  B claims that such event led to Mrs A’s eventual decision to pass most of her assets to B by way of inter vivos disposition, as she did not want a committee to interfere with her testamentary wishes or have C restored as a beneficiary of her estate.

45.  Mr A passed away on 17 June 2012.

46.  On 12 December 2012, Mrs A executed a Deed of Gift (“the Deed of Gift”) gifting all her estate to B.  On the same day, Mrs A executed: (i) another GPOA in favour of B; and (ii) a declaration on the Deed of Gift.  On 20 December 2012, Mrs A executed another document known as the Deed of Assignment of Payment Obligations of Companies.   Each of these documents were witnessed by the solicitor, DW, and Dr W, and I will refer these documents collectively as “the Gift Documents”.  Again, C complains that she was only aware of the Gift Documents when B disclosed the same in her 4^th affirmation in these proceedings in May 2017.

47.  According to B, in the period from 2012 to June 2014, Mrs A returned home almost on a daily basis on hospital home leave.  From March to December 2013, Mrs A, through her solicitors, made various complaints to a company WDL, which was the owner of the property resided by Mrs A, about the proposed inspection and demolition works to remove the unauthorised structures in the property.  Mrs A complained that such works would disturb her stay in the property, and she took the view that C had deliberately caused such works to be done with a view to harass her stay at home.

48.  On 2 May 2014, Mrs A made a declaration that she was extremely upset by C’s conduct and she would not leave anything for C and her children and grandchildren (“the 2014 Declaration”).  The 2014 Declaration was witnessed by DH and Dr W.

49.  On 5 May 2014, Mrs A made an advance directive on medical care and health (“the Advance Directive”), naming 6 persons who may singly (in the case of B) or jointly (in the case of the other persons) make decisions for her on medical and healthcare matters when she cannot do so by herself.  Mrs A also indicated that C, her children and grandchildren cannot participate or involve in making any such decision for Mrs A’s welfare.  Again, C complains that she was only aware of these documents when B disclosed the same in her 4^th affirmation in these proceedings in May 2017.

A.6   Mrs A’s major stroke in 2014

50.  Mrs A suffered a major stroke on 7 June 2014.

51.  In July 2014, C and her daughter paid unannounced visits to the ICU ward where Mrs A was hospitalised and demanded to obtain Mrs A’s medical records.

52.  There was also correspondence between C’s solicitors and WH (Mrs A’s solicitors) reinstating C’s request to visit Mrs A. WH replied to C that if there was any change in Mrs A’s attitude, WH would inform C accordingly.

53.  On 18 July 2014, the treating doctors of Mrs A issued a joint letter strongly advising that Mrs A should be provided with a quiet and private environment and she had to avoid stress and stressful stimulation.

54.  On 22 March 2016, one of the treating doctors of Mrs A, Professor C, issued a certificate advising against any detailed medical examination on the mental capacity of Mrs A because of the stress and pressure involved posing a significant risk of causing another major stroke.

55.  On 23 March 2016, Mrs A’s solicitors in the HC Action (i.e. CC) wrote to the court stating that it had come to their knowledge Mrs A was unfit to give further instructions in respect of the conduct of the case.  On 19 April 2016, the court appointed an independent solicitor, RL, as the next friend for Mrs A in the HC Action.

A.7   The commencement of the present mental health proceedings and the development of the HC Action

56.  On 12 April 2016, C took out the present application for medical examination of Mrs A under s 9 of the MHO and the appointment of an independent committee to manage her affairs.  By that time, C could not obtain the two requisite medical certificates relating to the mental condition of Mrs A under s 7 of the MHO.  C complained that B did not allow her access to see Mrs A and so she could not obtain the necessary certificates.  By that time, there was a question as to whether the Mental Health Court can order medical examination under such circumstances.

57.  In the same month, B’s solicitors informed C about the existence of the 2008 Will.

58.  In July 2016, C went to the hospital to see Mrs A on two occasions and stood outside the room.

59.  This case first came before me on 9 September 2016.  By that time, B was not notified of the application.  I ordered a hearing on preliminary issue to be held to determine whether the Mental Health Court has power to order a s 9 medical examination without the two medical certificates required under s 7.  I also directed the papers to be served on all interested parties including B.

60.  On 30 September 2016, the Court of Appeal handed down the judgment of CKKK v CKB[1], which supports the proposition that the Mental Health Court can in appropriate cases order s 9 medical examination for the purpose of Part II inquiry in the absence of the two medical certificates.  The hearing on preliminary issue was therefore no longer necessary.

61.  Trial of the HC Action commenced on 21 September 2016.

62.  According to B, Mrs A suffered sustained ventricular tachycardia in mid-November 2016.

63.  After being served with the papers in the mental health proceedings, B appeared before me in the hearing on 21 November 2016.  I granted leave for B to be joined as Intervener in the proceedings.

A.8   The dispute between B and C relating to s 9 medical examinations

64.  Though jurisdiction was no longer an issue, there was still a question as to whether the Mental Health Court should make an order for medical examinations in the circumstances of this case.  I therefore directed a hearing to be held on 25 January 2017 to determine such issue.

65.  On 29 November 2016, A Chan J handed down the judgment in the HC Action.  The judge ruled in favour of Mrs A and set aside “the Disputed Agreements” and awarded her equitable compensation or an account for profits at her choice.  It was also found that C was in breach of fiduciary duty and failed to disclose some material information to Mrs A.

66.  After the appearance of B as the Intervener, she referred the court to the views expressed by the various treating doctors of Mrs A about the medical risk of Mrs A going through s 9 medical examinations. They were of the opinion that the examinations would necessarily induce stress and anxiety, which would be dangerous to the health of Mrs A considering her medical history.

67.  C disagreed and filed contrary expert medical evidence.

68.  Shortly before the hearing on 25 January 2017, one of Mrs A’s treating doctors wrote to C indicating that it might be possible for medical examinations to be conducted.  In the hearing, I was then exploring the possibility of whether certain doctors were prepared to provide s 7 medical certificates by studying the medical records without a physical examination of Mrs A.  I also tried to find out whether there were ways to conduct physical medical examinations without causing undue risk to her health.  I refer these matters as “the 2 Issues for the Experts”. I therefore adjourned the matter for a formal inquiry on these matters and for C to take out subpoenas against the treating doctors and hospital of Mrs A for the production of her medical records.  The formal inquiry was subsequently fixed to be held on 25 January 2018.

69.  On 16 May 2017, B registered one of the EPOAs executed by Mrs A in respect of 6 companies in 2011.

70.  On 26 May 2017, B filed her 4^th affirmation in these proceedings revealing the contents of, inter alia, the 2008 Will, the EPOAs and the Gift Documents.

71.  There was some dispute between B and C about the scope of the subpoenas and B made an application to set aside or vary the terms of the subpoenas.  On 1 June 2017, I amended the terms of the subpoenas limiting the disclosure of Mrs A’s medical records to the period from 1 June 2014 to 31 May 2017.  I also gave directions for the parties to try to agree on the experts to be appointed by the court to deal with the 2 Issues for the Experts.

72.  In the hearing on 19 June 2017, the treating doctors and hospital produced the medical reports of Mrs A.  The Mental Health Court also appointed two doctors as court-appointed experts to give evidence on the 2 Issues for the Experts, and they were at liberty to approach the treating doctors of Mrs A for such purpose. The medical records were kept by the Official Solicitor (“OS”).  Only the court-appointed experts would have access to the documents.

73.  There were two further hearings before me on 10 and 31 August 2017 to deal with the proposed medical examinations of Mrs A.  In late August 2017, B informed the court that the medical condition of Mrs A had changed and it might be possible for the doctors to work out ways to conduct the medical examinations.

74.  It is fair to say that the court and the parties had up to that stage only focused on the proposed medical examinations of Mrs A and s 7 medical certificates.  In the hearing on 31 August 2017, I first raised the issue relating to the EPOAs.  If the court were to be asked to revoke the EPOAs, the court would have to make factual findings relating to the mental conditions of Mrs A at various times and allegations about undue influence. For this purpose, pleadings might have to be filed and discovery would have to be made, with the result the formal inquiry scheduled to be heard in January 2018 would have to be adjourned.  By that time, Mr Ho SC, counsel for C, confirmed that, for the purpose of the Part II inquiry, C would not make an application to revoke the EPOAs, but she reserved the right to do so on some other occasion.

75.  On 18 September 2017, I ordered medical examinations of Mrs A by two court-appointed experts with full access by these experts to the disclosed medical reports.  In the same hearing, I ordered B, subject to some exceptions, to provide unsealed and unredacted copies of certain documents disclosed in her affirmations.

76.  The medical examinations were duly conducted, and both court-appointed experts certified Mrs A to be a MIP.  The OS filed the report enclosing the medical reports by the two experts (“the OS Report”) on 4 October 2017.  Subject to some redaction, the OS Report was disclosed to the parties.  After that, both parties accepted Mrs A to be a MIP.

A.9   The latest development

77.  C lodged an appeal against the judgment of A Chan J in the HC Action (“the Appeal”).  The Appeal was fixed for hearing on 24 October 2017.  Prior to the appeal hearing, C took out a summons before me for leave to adduce the Gift Documents in the HC Action and the Appeal.  I granted the application on 23 October 2017.

78.  By reason of the disclosure of the Gift Documents, RL (the next friend acting for Mrs A) applied in the Appeal to add B as a party to the proceedings.  The Court of Appeal adjourned the appeal pending the determination by A Chan J of, in light of the Gift Documents, the locus of Mrs A to pursue the claims in the HC Action and the joinder application of B as a co-plaintiff.

79.  C therefore took out the summons before A Chan J on the question of locus and for setting aside the judgment in the HC Action and stay of execution.  I am given to understand that A Chan J adjourned the application for the filing of evidence and for C to make the Leave to Adduce Documents Application in the present mental health proceedings.

80.  There was a further direction hearing before me on 27 November 2017.  I again raised the issue whether the appointment of a Part II committee would offend the terms of the EPOAs.  Mr Ho submitted that the Mental Health Court would only be asked to appoint a committee to investigate the circumstances leading to the making of the various documents including the EPOAs, and so the court does not need to make a factual finding relating to the validity of the EPOAs.  I therefore gave directions for the filing of the proposed order for final relief.  The function of the committee would depend very much on the order proposed by C.

81.  The formal Part II inquiry came before me on 25 January 2018.  The fact that Mrs A is a MIP is no longer an issue.  For the appointment of a Part II committee, C asks for the following relief:

(i)   The appointment of two professional accountants to the committee of the estate of Mrs A (“the Proposed Committee”).

(ii)   The Proposed Committee be empowered to take possession of the following documents and make such enquiries on behalf of Mrs A in her name as it deems fit as to the terms thereof, her instructions in relation thereto, any advice (including legal advice) given to her in relation thereto and the circumstances in which such documents were made, including: (a) all EPOAs and GPOAs executed by Mrs A; (b) all wills and codicils thereto executed by Mrs A; (c) the Deed of Gift and the other Gift Documents executed by Mrs A in December 2012; (d) the 2014 Declaration and the Advance Directives executed by Mrs A in May 2014.  I will refer these documents as “the Impugned Documents”.

(iii)   The Proposed Committee be authorised to consider, as it thinks fit, with leave of the court, to take action including commencement of litigation to set aside the Impugned Documents.

(iv)   The Proposed Committee be authorised to conduct legal proceedings, including but not limited to the HC Action and any appeal in relation thereto, in the name of Mrs A or on her behalf.

(v)   The Proposed Committee be remunerated for its services out of the estate of Mrs A subject to certain terms.

82.  It is against such chequered background that I have to determine whether to appoint a Part II committee with these specific functions. This is certainly not the usual kind of application before the Mental Health Court.

B   THE INTERPLAY BETWEEN THE EPOA REGIME AND THE PART II REGIME 

B.1   The power of the Mental Health Court to appoint a committee under Part II of the MHO

83.  The first complication in this inquiry is that the MIP had executed two EPOAs in favour of B.  The court therefore has to consider the interplay between such EPOAs and the function of the Mental Health Court in protecting Mrs A’s interests under Part II of the MHO.

84.  So far as the power to appoint Part II committee is concerned, the relevant provisions can be found in ss 7, 10, 10A and 11 of the MHO:

“S 7 Court may order inquiry

(1) The Court may, on application under this section, make an order directing an inquiry whether any person subject to the jurisdiction of the Court who is alleged to be mentally incapacitated is incapable, by reason of mental incapacity, of managing and administering his property and affairs.

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

…

(5) Despite subsection (4), the application referred to in subsection (3) shall be accompanied by 2 medical certificates and evidence of the relatives or next-of-kin and the property (if any) of the mentally incapacitated person, and such other documents or evidence as may be required by the Court.

…

S 10 Questions to be decided by Court

(1) At the 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 mentally incapacitated 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.

…

S 10A General functions of Court with respect to property and affairs of mentally incapacitated person

(1) The Court may, with respect to the property and affairs of a mentally incapacitated person, do or secure the doing of all such things as appear necessary or expedient-

(a) for the maintenance or other benefit of that person;

(b) for the maintenance or other benefit of members of that person’s family;

(c) for making provision for any other person or purposes for whom or for which the mentally incapacitated person might be expected to provide if he were not mentally incapacitated; or

(d)otherwise for administering the mentally incapacitated person’s property and affairs.

(2) In the performance of the functions under subsection (1) the Court shall have regard-

(a) as a paramount consideration, to the requirements of the mentally incapacitated person

…

S 11 Appointment of committees

(1) If the Court is satisfied that the person who is alleged to be mentally incapacitated is incapable, by reason of mental incapacity, of managing and administering his property and affairs, the Court may, if it shall think fit, appoint a committee of the estate, and for this purpose, the Official Solicitor may be so appointed of such person and may make such order, if any, as to the remuneration of the committee out of such person’s estate, and as to the giving of security by the committee, as to the Court may seem fit.

(2) A committee of the estate appointed under this Part shall do all such things in relation to the property and affairs of the mentally incapacitated person as the Court, in the exercise of the powers conferred on the Court under sections 10A and 10B, orders or directs the committee of the estate to do and may do any such things in relation to the property and affairs of the mentally incapacitated person as the Court, in the exercise of those powers, authorizes the committee of the estate to do.”

85.  The Mental Health Court has a discretion whether to appoint a committee to manage the affairs of a MIP under Part II of the MHO.  In exercising the discretion, the court will be guided by the following general principles:

(i) Under s 10(2)(a) of the MHO, the court is required to have regard, as a paramount consideration, to the requirements of the MIP in the performance of its functions with respect to his property and affairs.

(ii) These are not adversarial proceedings or the forum for complex disputes between family members to be resolved. Where the court is at the stage of considering the question of mental incapacity and whether a committee should be appointed, its primary objective is to determine what steps should be taken to safeguard the interests of the alleged MIP.[2]

86.  In the case of the appointment of a Part II committee, such committee may be given the power to investigate the financial affairs of the MIP, including the power “to take possession of all powers of attorney granted by [the MIP] and all wills and any codicils thereto made by [the MIP] and to make such enquiries on behalf of  [the MIP] in [his or her] name as it deems fit as to the terms of such powers of attorney, wills and codicils, [his or her] instructions in relation thereto, any advice (including legal advice) given to [his or her] in relation thereto and the circumstances in which such powers of attorney, wills and codicils were made.”[3]

B.2   The EPOA regime and its objectives

87.  The EPOA regime was first introduced in Hong Kong in 1997.

88.  The Enduring Powers of Attorney Ordinance, Cap 501 (“EPOAO”) was enacted as a response to the difficulties arising from the common law rule under which a power of attorney would be automatically revoked upon the mental incapacity of the principal.  This was an ironic legal result as it was contrary to the reasonable expectations of donors who expected assistance in precisely the situation which revoked the power of attorney at common law.

89.  In broad terms, EPOAs were introduced to:[4]

(i) give effect to individual choice and autonomy in the event the person is later incapable of managing his affairs; and

(ii) offer a practical and cost-effective alternative to applying to the Mental Health Court for relief in the event of mental incapacity.

90.  These policy considerations have received considerable judicial endorsements.   In Re E (Enduring Power of Attorney),Arden J emphasised that the wishes of a donor of an EPOA should be upheld if reasonably possible.[5]  In Re A; D v B, Senior Judge Lush held that the donor’s choice of the attorney should carry considerable weight.[6]In Miles v The Public Guardian, Nugee J reinstated that it was the policy of the EPOA statutes to “to give autonomy to those who are in a position where they can foresee that they may in the future lack capacity to specify who it is that they wish to act for their affairs”.[7]

91.  The authors of the leading text on EPOAs, Cretney & Lush on Lasting and Enduring Powers of Attorney[8], have also identified the advantages of EPOAs, including the provision of “a relatively cheap, simple procedure whereby the donor is able to prepare in advance for the possibility that he might become mentally incapacitated at some time in the future”; “respect” for “the donor’s autonomy by allowing him to choose the person or persons he wishes to manage his affairs”; allowing “a smooth and seamless transition in the management of the donor’s affairs from the time when he is fully in command of his faculties, through the twilight stage when he is becoming incapacitated, to the time when he is incapable of managing his affairs”; avoiding “the stigma of having a formal assessment of capacity, and the bureaucracy, delay, and expense of court proceedings”; and giving “greater freedom of action to the attorney”.[9]

92.  S 3 of the EPOAO specifies that, in order to take effect as an EPOA, the EPOA must be in the prescribed form, was executed in the prescribed manner by the donor and the attorney and contained at the time of execution by the donor the prescribed explanatory information.  S 5 provides that the donor must sign the EPOA before a registered medical practitioner and a solicitor, and the EPOA must be signed by the donor before the solicitor either at the same time when it is signed before the registered medical practitioner or at any time after that signing but before the expiry of the period of 28 days after the day on which it is so signed.  Both the solicitor and the registered medical practitioner have to certify the mental capacity of the donor and that the EOPA is executed by the donor voluntarily.

93.  S 4(2) of the EPOAO provides for the registration of the EPOA:

“If the attorney has reason to believe that the donor is or is becoming mentally incapable he must, as soon as practicable, apply under section 9 for registration of the instrument creating the power.”

94.  S 9 specifies that the registration has to be made to the Registrar of the High Court, who shall keep a register of the instruments and can allow any person to inspect the register and the instruments concerned.

95.  It is interesting to note that the Hong Kong legislature had made a conscious decision to depart from the 1985 United Kingdom’s Enduring Power of Attorney Act (“the UK 1985 Act”) so far as the registration system is concerned.[10] There was a more complicated registration system under the UK 1985 Act which required notification be given to the relatives about the registration.  There was also an obligation on the Registrar of the court to determine the validity of the EPOA.

96.  As demonstrated in the later part of this Judgment, whether a less stringent registration system should be adopted is very much a debatable issue.

97.  The attorney’s duties and liabilities are provided for in s 12 of the EPOAO.  Further, under s 11(1)(a), the court can require the attorney to produce records and accounts and make an order for their auditing.

B.3   The co-existence of a Part II committee and an EPOA and the interplay between the two regimes

98.  S 13(1) of the EPOAO defines the circumstances when an EPOA is revoked:

“An enduring power is revoked-

(a) if the donor revokes it when he is mentally capable, or where the donor becomes mentally incapable after the grant and the instrument is registered, if the donor revokes it after his recovery and the court makes an order under subsection (2) confirming the revocation;

(b) on the bankruptcy of the attorney;

(c) if a court makes an order for its revocation under section 11(1)(b) or for the removal of an attorney under section 11(1)(c);

… … …

(e) on the appointment of a committee pursuant to Part II of the Mental Health Ordinance (Cap 136), if the court gives a direction revoking the enduring power;

(f) on the death of the donor or the attorney; or

(g) subject to this Ordinance, on any ground on which a power of attorney is revoked at common law”.

99.  S 11(1), which is referred to in s 13(1)(c), sets out the powers that the court may exercise “on the application of an interested party”, namely:

“(a) require the attorney under an enduring power to produce records and accounts and make an order for their auditing;

(b) revoke an enduring power or vary an enduring power; or

(c) if satisfied that the interests of the donor of an enduring power so require it, remove the attorney”.

100.  It is clear from the provisions in the EPOAO that the court has the jurisdiction to appoint a Part II committee to co-exist with an unrevoked EPOA.  S 13(1)(e) gives the court the power to appoint a committee without revoking the EPOA, and it is only when the court also gives a direction of revoking the EPOA that the latter would cease to have effect.

101.  The position would be much clear in the United Kingdom when s 2(11) of the now repealed UK 1985 Act, upon which EPOAO s 13(1)(e) is based, provided that:

“An enduring power shall be revoked on the exercise by the court of any of its powers under Part VII of the Mental Health Act 1983 if, but only if, the court so directs.”

102.  As to when the court should exercise the power to appoint a committee to co-exist with an unrevoked EPOA, it is necessary to take into account certain specific characteristics of the EPOAO in Hong Kong, which are different from the legislations on EPOAs in other jurisdictions.  In particular, the scope of an EPOA is limited and there are restrictions on conferring a general power in an EPOA.

103.  First, an EPOA is limited to the property and financial affairs of the donor and must not confer on the attorney any other authority.[11] In contrast, the powers which may be conferred upon a Part II committee are not so restricted.[12]

104.  Second, under the EPOAO, the particular matters, property or affairs in relation to which the attorney is authorized to act must be specified in accordance with the subsidiary regulations.[13] Accordingly, the donor of an EPOA cannot confer upon the attorney a general power to act on the donor’s behalf, failing which the EPOA may not be effective even if the donor becomes mentally incapacitated.[14]

105.  As stated in the Hong Kong Law Reform Commission’s (“LRC”) 2011 Report on Enduring Powers of Attorney: Personal Care[15], none of the other jurisdictions examined by the LRC, including Australia, Canada, Ireland, New Zealand and the United Kingdom, adopted the position in Hong Kong. Where there was specific provision on the point in the jurisdictions studied by the LRC, it was to the effect that the donor may delegate authority to the attorney generally or in respect of specified areas.

106.  Since in Hong Kong the authority conferred by an EPOA is limited to financial and property matters that must be specified by the donor and cannot be in the form of a general power, there may well be residual matters which are not covered by the EPOA which need to be dealt with by a court-appointed committee.  In that situation, the Mental Health Court may be required to exercise its powers under Part II of the MHO to supplement the EPOA.

107.  In view of the wide powers conferred under s 11 of the MHO, the Mental Health Court can then decide whether to appoint a committee to exercise the powers conferred on the court under ss 10A and 10B to manage the residual matters that were left out in the EPOA and that would go beyond the realm of the EPOA’s powers.  Such a “concurrent” power may be more important in Hong Kong as compared with other jurisdictions which permit general powers to be included in an EPOA.[16]

108.  In the case of an appointment of committee under such circumstances, the Mental Health Court has to ensure that there should be no conflict or inconsistency between the power given to the committee and the power conferred by the EPOA.

109.  However, this is not the scenario in the present case.  I am given to understand that the two EPOAs executed by Mrs A cover nearly all her assets, and so the court is not asked to appoint a committee to fill in any “gap” in the EPOAs.

110.  There may be another scenario that the court may have to act in the interest of an MIP to appoint someone other than his chosen attorney to take care of his affairs, perhaps on an interim basis, without first revoking an EPOA.  Where there are serious allegations made about the conduct of an attorney under an EPOA in respect of the actual management of the MIP’s affairs (as opposed to allegation of undue influence against the attorney in procuring the EPOA), there is judicial support in Western Australia for an interim appointment of an administrator by the mental health court with powers of investigation against the conduct of the attorney.  The authority is CS v JS[17] which was decided by the State Administrative Tribunal of Western Australia.

111.  The Mental Health Court therefore remains the ultimate safeguard for the interests of a MIP.  As observed by the Law Commission of England in its report The Incapacitated Principal (July 1983), it was not intended that the EPOA statutes should restrict the power of the court to intervene in appropriate cases in the interest of the MIP concerned:[18]

“We must emphasise that at no stage in our consideration of this subject has it ever been suggested that anything now done by way of modifying the law about powers of attorney should diminish the existing jurisdiction of the Court either by preventing applications to it by interested persons or by inhibiting the exercise of the Court’s inherent right to intervene in proper cases. The introduction into the law of the [EPOA] might reduce somewhat the need to call upon the Court to exercise its jurisdiction; but the jurisdiction itself would not thereby be prejudiced. Throughout, the existence of the Court would be and would remain the ultimate safeguard. Once the donor had become incapable the Court would be able to deal with any cases of abuse by terminating the [EPOA]. This it could do by, for example, appointing a receiver”.

112.  Whether the court should intervene depends very much on the facts of each individual case.  It would be counterproductive for the court to provide an exhaustive list as to when the court should appoint a Part II committee to co-exist with an EPOA.  On the one hand, the Mental Health Court should give due weight to the wishes of the MIP as expressed in his EPOA.  On the other hand, there may well be other circumstances which require the court to intervene to protect the interests of the MIP.  Ultimately, the interests and the requirements of the MIP, not those of the other family members, remain the main considerations.  The Mental Health Court should guard against any attempt by the family members of the MIP to make use of the mental health proceedings to advance their own personal interests.

C.   EXERCISE OF THE DISCRETION

113.  Having addressed the interplay between the two regimes, I then have to decide whether the Mental Health Court should exercise the discretion to appoint a Part II committee in the interests and requirements of Mrs A.

114.  Apart from B’s objection, the OS also expresses concern about the appointment of a Part II committee under the circumstances of the present case.  The OS is afraid that the appointment would intrude the privacy of Mrs A, undermine the objectives of the EPOA regime, offend Mrs A’s views expressed in the EPOAs and become a dangerous precedent for the future.

115.  After hearing the persuasive submissions from all the parties, I decide to exercise my discretion against the appointment of such committee.  In making the decision, I have taken into account the following considerations.

C.1   What is in the best interests or the requirements of Mrs A?

116.  There is no serious dispute that the prime consideration in a Part II application is always the best interests or the requirements of the MIP.  For this particular case, one can be sure that there would be no shortage of litigations between the two sisters after the death of Mrs A, where the court will investigate matters and circumstances leading to the making of the Impugned Documents.  Hence, there is an additional consideration as to whether the court should, in the best interests and requirements of Mrs A, act now by appointing a committee to investigate these matters instead of leaving them for adjudication in later litigations.

C.1.1   C’s arguments  

117.  Mr Ho has made a powerful plea for the court to act now.  First, the appointment of the Proposed Committee with limited powers would not be inconsistent with the terms of the EPOAs.  Unless and until the matters have been fully investigated and the EPOAs are revoked by the court upon an application to be made by the Proposed Committee, B can still act as Mrs A’s attorney under the EPOAs.

118.  According to Mr Ho, the present case bears all the hallmarks of a classic case of undue influence:

(i) After B returned to live in Hong Kong in 2006 or 2007, she took aggressive steps to exert her control over Mr A’s businesses.

(ii) On B’s own evidence, Mrs A had placed considerable trust and confidence in her after she returned to live in Hong Kong.

(iii) Mrs A had all along maintained her attitude that she would treat both sisters equally, as reflected in the 2004 Will and what she told WW in September 2008.  Even after the bitter disputes relating to the CHL Exercise in 2003, Mrs A still adopted the “equality principle” in making the 2004 Will.  Surprisingly, Mrs A suddenly changed her mind and made the 2008 Will leaving B as the only beneficiary of her estate.

(iv) Since 2007, Mrs A had expressed many times that B had been unfairly denied of her promised portion of Mr A’s assets, and it must be B who had planted this false idea in the mind of Mrs A.

(v) Despite their age and long marriage, Mrs A, with the support of B, surprisingly petitioned for a divorce in 2009 on the ground of some trivial matters, and yet Mrs A maintained to live in the family home with Mr A after the presentation of the divorce petition.

(vi) C has been denied access to see Mrs A starting from October 2010, and Mrs A has been “isolated” ever since.

(vii) Mrs A has been in very poor medical condition and in vulnerable position since the two strokes in 2010.

(viii) It was extremely dubious that Mrs A executed the Deed of Gift in 2012 gifting all her estate to B.

(ix) There is evidence from Mrs A’s domestic helper that B had not taken proper care of Mrs A and Mrs A had expressed her wishes to see C.

(x) Despite her clear knowledge of Mrs A’s incapacity in June 2014, B did not register the EPOAs contrary to the provision in s 4(2) of the EPOAO.

(xi) It was dubious that DW (the solicitor from WH) claimed himself as being able to take instructions from Mrs A after her major stroke in June 2014, when one of the court-appointed experts is of the opinion that Mrs A was unable to speak or recognise people after June 2014.

119.  Mr Ho also relies strongly on the following unusual features in the conduct of the litigation in the HC Action in supporting that: (a) Mrs A had all along been acting under undue influence of B; and (b) B had actually conducted the litigation on behalf of Mrs A:

(i) There is no satisfactory explanation as to why Mrs A or her next friend did not disclose the Gift Documents in the HC Action.

(ii) B concealed her interests in Mrs A’s estate by not revealing the EPOAs and the Gift Documents in the HC Action.

(iii) Despite the conflict of interests between Mrs A and B, the next friend of Mrs A still engaged B’s senior counsel to advise him in the conduct of the HC Action.

120.  In this regard, Mr Ho also relies on the comment made by Lam VP in the Appeal of the HC Action.  The judge expressed concern why DW, the solicitor acting for Mrs A, would have informed B that the Deed of Gift did not include Mrs A’s claim in the HC Action.

121.  Finally, Mr Ho relies on B’s conduct of the present mental health proceedings to show that she had something to hide:

(i) B had all along tried to obstruct the medical examinations of Mrs A and the production of her medical records.

(ii) The EPOAs would be very important documents in the Part II application and yet B only disclosed the same very late in the proceedings (i.e. in her 4^th affirmation filed in May 2017).

122.  Mr Ho argues that the Impugned Documents had been executed in dubious circumstances.  As there is a real risk that Mrs A’s wishes and feelings may in fact have been overborne by undue influence, the ostensible wishes and feelings should be accorded little weight.  As observed by Munby J (as he then was) in Re M (Statutory Will)[19], the weight to be attached to MIP’s wishes and feelings will always be case specific and fact-specific, and that factors other than the MIP’s wishes may have “magnetic importance”.  As the evidence does disclose a real risk that the Impugned Documents were tainted by undue influence and breach of fiduciary duty, the court should appoint an independent committee to investigate the matter, which is a “serious, justiciable” issue to Mrs A’s welfare.

123.  As to why C does not carry out the investigation herself, Mr Ho submits that C would be handicapped in doing so as she cannot have access to the private confidential information of Mrs A including her medical records and privileged communications.  Only the Proposed Committee can obtain these documents.  Further, only the Proposed Committee would have the locus to set aside the inter vivos gift made by Mrs A under the Deed of Gift.

124.  Mr Ho also submits that, had Mrs A known that she had been misled and abused in the aforesaid manner, Mrs A, if she is of sound mind now, would certainly like the matters to be investigated and the wrongs against her be redressed.  After all, it should be her wish to be remembered as doing the right things.

125.  In this regard, Mr Ho refers me to the dicta of Munby J in Re M (Statutory Will)[20], where the judge approved the following passage in In re P (Statutory Will)[21] in respect of the “best interest” test in the statutory will context:

“There is one other aspect of the ‘best interests’ test that I must consider. In deciding what provision should be made in a will to be executed on P’s behalf and which, ex hypothesi, will only have effect after he is dead, what are P’s best interests? Mr Boyle stressed the principle of adult autonomy; and said that P’s best interests would be served simply by giving effect to his wishes. That is, I think, part of the overall picture, and an important one at that. But what will live on after P’s death is his memory; and for many people it is in their best interests that they be remembered with affection by their family and as having done ‘the right thing’ by their will. In my judgment the decision-maker is entitled to take into account, in assessing what it is in P’s best interests, how he will be remembered after his death.”

C.1.2   Weight to be given to the views and wishes of Mrs A

126.  Despite the powerful and able submissions of Mr Ho, I do not accept that the court should appoint a Part II committee at this stage to investigate the propriety of the Impugned Documents.

127.  In considering whether to appoint a Part II committee to manage the affairs of a MIP, the paramount consideration must be the “best interests” and “requirements” of the MIP.  In determining these matters, the court should give proper weight to the views and wishes of the MIP when they can be ascertained.  In such context, the court would take into account the views and wishes of a MIP before he became mentally incapacitated.

128.  It is an undisputed fact that the relationship between Mrs A and C had deteriorated starting from 2003.  There is also no serious evidence to suggest that Mrs A had suffered any mental incapacity, or was in a vulnerable position or under any undue influence prior to 2010.

129.  The evidence shows that, starting from at least 2003, Mrs A, rightly or wrongly, took the view that: (i) C had abused her position in Mr A’s businesses; (ii) C had manipulated Mr A and took advantage of his poor health; and (iii) B had not been fairly treated in the asset distribution exercise.  After the confrontation started, Mrs A was offended by a number of incidents, where Mrs A, rightly or wrongly, took the view that C was the one behind orchestrating all such “mistreatments” against her.  Mrs A had already taken side with B.  As early as 2006, she made a GPOA in favour of B in the presence of a solicitor which was not involved in the present dispute.  Based on the existing evidence, it is difficult for C to establish that Mrs A was under any mental incapacity or undue influence by that time.

130.  Mrs A later executed the 2008 Will.  She supported B in taking out the Part II application for the management of Mr A’s affairs.  Again, there is no evidence to suggest that Mrs A was suffering from any mental incapacity by that time.  Further, she was not then subjected to any “isolation”, and so the evidence in support of undue influence over Mrs A in the making of the 2008 Will is rather weak at least at this stage.

131.  In addition, there is some evidence to suggest that Mrs A, over the years and when she was not under any kind of “isolation”, formed a negative view of a Part II committee and she did not want a stranger to take care of her affairs if she were to lose her mental ability.  All the incidents in 2009 involved actions apparently taken by Mr A’s committee against her, and she was of the view, rightly or wrongly, that C was behind orchestrating all these “mistreatments” against her in the name of Mr A’s committee.

132.  The recognition of the need to consider a person’s best interests from his point of view and the right to autonomy and self-determination is in line with the development of human rights jurisprudence in mental health contexts in some jurisdictions.

133.  In Re Harcourt: The Public Guardian v A[22], a case about the revocation of an EPOA, the English Court of Protection stated that:

“In the absence of appropriate safeguards, the revocation by the court of [an EPOA], which a donor executed when they had capacity and in which they chose a family member to be their attorney, would be a violation of their Article 8 rights. For this reason the Mental Capacity Act has been drafted in a labyrinthine manner to ensure that any decision by the court to revoke [an EPOA] cannot be taken lightly”.

134.  Article 8 of the European Convention on Human Rights deals with the right of an individual to, inter alia, respect for his private and family life, the terms of which are similar to those in Article 14 of s 8 of the Hong Kong Bill of Rights Ordinance, Cap 383 (“HKBORO”).

135.  Apart from the human rights perspective, there is also judicial support for the proposition that, when the court is asked to determine issues relating to the best interests of a MIP, the court has to pay due regard to his views and wishes.  Unless they are plainly contrary to the well-being of the MIP, the court cannot substitute its own view with that of the MIP as to what is in his best interests.

136.  In Aintree University Hospital NHS Foundation Trust v James and others[23], there was an issue as to whether the court should adopt an objective or subjective approach in assessing the best interests of a patient who lacked the capacity to consent to or to refuse treatment.  The United Kingdom Supreme Court held that “in so far as it is possible to ascertain the patient’s wishes and feelings, his beliefs and values or the things which were important to him, it is those which should be taken into account because they are a component in making the choice which is right for him as an individual human being”.[24]

137.  The courts also applied the same approach in a statutory will context.  In Re Jones[25],  Deputy Judge Eldergill observed that:

“As Baroness Hale made clear in Aintree, the purpose of the best interests test is to consider matters from the particular individual's point of view. Occasionally there may be circumstances such as those referred to by the President or the avoidance of post-death litigation which justify departing from a person's clear past and present wishes and beliefs. However, in the ordinary case the Mental capacity Act is not a vehicle for imposing on people views, wishes and feelings that clearly are contrary to those they held before losing capacity, do not hold now and would not hold if they regained capacity, however right those views may be, and however unworthy P's views are according to most people's standards.”

138.  The significance of a person’s wishes and feelings was also echoed by Munby J in an earlier statutory will case of In re M (Statutory Will)[26], in which the judge said that “[the MIP’s] wishes and feelings will always be a significant factor to which the court must pay close regard”. However, Munby J also recognized that the weight to be attached to the MIP’s wishes and feelings will always be case-specific and fact-specific.  They may carry preponderant weight in some cases but not the others.  It also depends on the individual contexts and circumstances of each particular case.  The court must have regard to: (a) the degree of incapacity; (b) the strength and consistency of the views expressed; (c) possible impact on MIP’s knowledge that her wishes and feelings are not being given effect to; (d) the extent to which the MIP’s wishes and feelings are, or are not rational, sensible, responsible and pragmatically capable of sensible implementation in the particular circumstances; and (e) crucially, the extent to which the MIP’s wishes and feelings, if given effect to, can properly accommodated within the court’s overall assessment of what is fair in his best interests.

139.  In a way, such kind of approach is also reflected in the application for statutory will in the case of Mr A.  His committee made the application with a view to remove B as a beneficiary of Mr A’s will.  The committee took the view that B’s then conducts would have offended Mr A if he still had the mental capacity.  Hence, the subjective views and feelings of the MIP will always be relevant in considering the question of best interests and requirements of the MIP.

140.  Although some of the authorities mentioned above are related to the choice of medical treatments and the making of statutory wills, I cannot see why the same principles should not be applied in the present context.

C.1.3   The importance of findings of fact in the present context

141.  I do not think that Mr Ho can seriously challenge these established principles.  However, he argues that there was a “risk” that the Impugned Documents were tainted with undue influence and breach of fiduciary duty, and so the court should appoint a Part II committee to investigate the matters.  For the purpose of the inquiry, C is not asking the court to make any factual findings relating to these allegations.  He also relies on some authorities such as Re AG[27] , Re THM[28] and Re A (Mentally Incapacitated Person: Committee)[29] with a view to establish that the Mental Health Court should take a broad-brush approach in such kind of inquiry without being embroiled in factual issues, and any resolution of disputed factual issues would only be to the extent that is necessary to the decision as to what is in the patient’s best interests.

142.  However, whether a broad-brush approach should be adopted without findings of fact depends on the contexts and the circumstances of each individual case.  Where there is no EPOA executed by the MIP and the issue relates only to who should be appointed as committee to manage the properties of the MIP, there may not be any need to investigate the history of the family.  It would be very different if the applicant is relying on some past conducts to undermine the validity of an EPOA.  If the views expressed by Mrs A in the EPOAs were genuine, then the court would be interfering with her view and wish to have her own affairs to be handled by her chosen attorney and not a stranger.  This would hardly be in her interest.

143.  This is also a case different from CS v JS[30], where the court may be compelled to act upon serious allegations made about the conduct of the attorney under an EPOA in respect of the actual management of the MIP’s affairs as opposed to allegations of undue influence against the attorney in procuring the EPOA.

144.  As explained earlier, the policy objectives behind the EPOA regime are to give deference to the wishes of the donor and to avoid the need for committeeship.  It would be running contrary to these objectives, as well as contrary to the donor’s rights under Article 14 of s 8 of the HKBORO, if a committee is to be appointed at the instigation of the applicant in mental health proceedings, without any positive finding by the court that a case of abuse has been made out against the existing attorney.  Likewise, the said policy objectives, and a donor’s Article 14 rights, would be eroded if the court were to appoint a committee for the very purpose of investigating matters involving her chosen attorney, when this should properly be the function of the court itself. This would also allow an applicant in mental health proceedings to bypass the statutory mechanisms for revocation of an EPOA.

145.  In Re AG, Sir James Munby (when he was the President of the Court of Protection) had reminded us that the exercise of judicial discretion is evidence based.  On the question of “the extent to which (if at all) it is necessary, for the purposes of exercising the jurisdiction and deciding which course of action is in the best interests of [the patient], to make findings of fact relating in particular to disputed historical issues”, he agreed with the dicta of Wall J in Re S (Adult’s Lack of Capacity: Carer and Residence)[31]:

“Whilst I acknowledge that in a relatively untried jurisdiction there are dangers in too relaxed an approach to historical issues, I am unable to accept the proposition that the approach to best interests is fettered in any way beyond that which applies to any judicial decision, namely that it has to be evidence based; that it excludes irrelevant material; and that it includes a consideration of all relevant material. In a field as complex as care for the mentally disabled, a high degree of pragmatism seems to me inevitable. But in each case it seems to me that the four essential building blocks are the same. First, is the mental incapacity established? Second, is there a serious, justiciable issue relating to welfare? Thirdly, what is it? Fourthly, with the welfare of the incapable adult as the court’s paramount consideration, what are the balance sheet factors which must be drawn up to decide which course of action is in his or her best interests?”

146.  Hence, the court should be very cautious in deciding whether to intervene in the management of the affairs of a MIP without specific findings of fact relating to some past conducts which would affect the validity of an EPOA executed by him.

147.  The evidence at this stage is not conclusive either way.  Mrs A might be in a more vulnerable position after she suffered the minor strokes in 2010.  There is also no serious dispute that C was not able to see Mrs A after October 2010.  Despite these facts, there is no evidence to suggest that Mrs A had suffered any mental incapacity before that time.  Neither is there any evidence to show that she was subjected to any “isolation” before 2010.  On the contrary, Mrs A had consistently expressed her views, rightly or wrongly, that she did trust B and it was C who abused her position in the family and mistreated B and her.  The court cannot ignore such views and values held by Mrs A before she became mentally incapacitated.

148.  Mr Ho points out that despite the bitter dispute which started in 2003, Mrs A still adhered to the “equality principle” when she made 2004 Will.  The incidents before 2008 were only trivial matters.  Unless under undue influence, Mrs A would not have departed from the “equality principle” when she made the 2008 Will.

149.  Despite such argument, the court, without a full investigation, is not able to assess how these so-called “trivial incidents” would have affected the views or values of Mrs A.  Quite on the contrary, the evidence suggests that Mrs A was deeply offended by these incidents.  As written by C in her email dated 19 June 2009, Mrs A had used the term “趕盡殺絕” (wiping out or annihilation) to describe the “mistreatments” she received and the feelings she held against C.  In fact, the views expressed by her against C before 2010 had all along been consistent.

150.  The views held by Mrs A may be prejudiced, biased or unfair, but it is not the role of the court to “correct” such views or values.  By respecting the autonomy of Mrs A in executing the EPOAs, the court has to pay due regard to her views and values no matter how biased or unfair they may seem.  So long as Mrs A had the requisite mental capacity and was not in any vulnerable position subjected to undue influence, the Mental Health Court has to pay due regard to the negative views Mrs A had held against C and the trust she placed on B before 2010.

151.  With the deterioration of health, I agree that the views expressed by Mrs A after October 2010 should carry lesser weight. Nevertheless, that should not affect the weight of the views or values held by her before such date.

152.  One must also bear in mind that the statutory requirements for the execution of an EPOA are different from those of other documents such as a will or a GPOA.  It requires the attestation and certification of a solicitor and a registered medical practitioner.   These measures are taken to ensure that an EPOA is executed by the donor with full mental capacity, and the view expressed by the donor is genuine so far as the appointment of the attorney is concerned.  Under such circumstances, unless the EPOA is revoked, the court cannot ignore the prima facie views and wishes expressed by the donor in an EPOA.  Without a positive finding about the propriety of the EPOA, the court should be cautious in deciding whether to intervene in the interests of the MIP.

C.1.4   The relevance of B’s conducts after the execution of the EPOAs

153.  In support of the contention that the views expressed by Mrs A were not genuine ones, Mr Ho is relying heavily on the non-registration of the EPOAs, the “concealment” of the Impugned Documents, B’s obstructive and uncooperative stance in the Part II application and the unusual development in the conduct of the HC Action with a view to show that B must have something to hide.

154.  Some of these complaints may not be justified. For example, there were concerns expressed by the treating doctors about the risk of Mrs A undergoing any kind of medical examinations.  Taking into account the past confrontations before Mrs A suffered the strokes and the bitter experience with previous litigations, one cannot wholly disregard the concerns of the treating doctors.

155.  There may be some weight in the other complaints.  One would certainly query why B had not registered or disclosed the EPOAs earlier.  However, B should have known that these documents would have to be disclosed some time in the future.   Without a full investigation, it would be difficult for the court to conclude whether B was mala fide in not disclosing these documents, or whether she only wanted to delay the evil or refused to disclose for other tactical reasons.  With the likelihood of future litigations, I am sure that these matters will be fully canvassed before the court at a later stage.

156.  In my judgment, whether B was mala fide in concealing the Impugned Documents is a matter that has to be fully investigated on some other occasions.  For the present purpose, even assuming that B was mala fide in “concealing” the EPOAs and the Impugned Documents, that should not affect the weight of the views and values held by Mrs A before she suffered the strokes in 2010.

157.  The same observation can be made about the other complaints, including, inter alia, the advice given by DW to B that the Deed of Gift did not include Mrs A’s claim in the HC Action.  They relate to much more recent events and they need to be properly investigated in the future.

158.  For the above reasons, without specific findings of fact relating to the propriety of the EPOAs, there is insufficient reason for the Mental Health Court, in the interest or for the requirement of Mrs A, to intervene now in appointing a Part II committee to investigate the propriety of the Impugned Documents.

C.2   Problems arising from multiplicity of proceedings

159.  There is also a further consideration that the appointment of a Part II committee may adversely affect Mrs A’s interest in the HC Action.  No matter how one dresses up the purpose of the application, C is hopeful that the Proposed Committee can dig out some materials which can suggest that the HC Action had been conducted under the manipulation of B, which would in turn affect the propriety of Mrs A’s claim against her.

160.  According to C, the appointment of a Part II committee may help to find out the truth.  The result of the investigation may reveal that Mrs A had been conducting the HC Action under the manipulation of B.  If that was the case, one cannot say that the appointment of the Proposed Committee would adversely affect Mrs A’s interest in the HC Action.

161.  However, so far as this court is concerned, Mrs A’s claim had been adjudicated by a competent court of law.  Further, A Chan J had appointed an independent solicitor, RL, to conduct the litigation on behalf of Mrs A.  The HC Action therefore proceeded on the basis that the next friend had been conducting the litigation in the interest of Mrs A.  If that was not the case, C should have raised the necessary challenge in that action and, if necessary, to apply for discovery there to substantiate her allegations.

162.  Further, in deciding the case in the HC Action, A Chan J had to deal with matters such as the mental conditions of Mrs A at various stages of the proceedings including the time when she made her witness statements.  If a Part II committee is appointed, the Mental Health Court and the Proposed Committee would have to carry out similar if not identical investigation relating to the mental conditions of Mrs A.  Apart from duplication of effort, inconsistent findings by different courts is also a serious concern.

163.  Even worse, the Mental Health Court should not serve as a forum for a litigant to obtain ammunition to challenge the findings made by another court in earlier proceedings.  The history of this case shows that C was relying on materials revealed in these proceedings to challenge Mrs A’s claim in the HC Action.  Again, if C was of the view that the HC Action had been conducted under the manipulation of B, C should have made the necessary challenges in the HC Action.  In fact, C’s allegations may go so far to the extent of impeaching the propriety of the divorce proceedings, in which Mrs A had been represented by proper solicitors on record.

164.  The problem about multiplicity of proceedings is also highlighted by the fact that, in the proposed order for final relief, C asks for an order that the Proposed Committee be authorised to conduct the HC Action in the name of Mrs A.  This is certainly an interference with the decision made by A Chan J relating to the appointment of next friend.

165.  The court cannot ignore these problems arising from multiplicity of proceedings.  As C’s complaints will certainly be fully investigated by the courts in future litigations, I do not see the necessity of appointing a Part II Committee at this stage to add further complications to the existing proceedings.

C.3   Who should be in the driving seats to resolve all the relevant disputes?

166.  Even if I am wrong in the aforesaid analysis and there is a genuine cause for investigation, I have grave reservation as to whether it is in the interest of Mrs A to put her, through the Proposed Committee, in the driving seat for the investigation and the prosecution of the possible claims.

167.  Looking at the history of this case, it is clear that B and C are the key players in all the disputes within the family.  This is obvious because they are the ones who would benefit from the estates of their parents.  It is also certain that there will be no shortage of litigations between them in the future, in particular after the death of Mrs A.

168.  According to Mr Ho, it would be in the interest of Mrs A for her to be remembered as doing the right things.  However, with B and C in the driving seats for the litigations, the circumstances leading to the execution of the Impugned Documents will be fully investigated in the future.  The truth will certainly be revealed.  In such case, why should the Mental Health Court put Mrs A, through the Proposed Committee, in the driving seat to resolve all the disputes now?

169.  The immediate interests of Mrs A have been well taken care of, and I have no doubt that Mrs A will continue to receive the highest level of medical care.  Even taking into account the interest of Mrs A of being remembered as doing the right things, I do not see any reason or necessity as to why a Part II committee has to be appointed now to investigate something which will certainly be litigated in the future.

170.  Mr Ho complains that C would not be able to challenge the Impugned Documents because she cannot obtain the personal and confidential documents of Mrs A, in particular her full medical records and privileged communications.  As I see it, C certainly has an arguable case to apply for disclosure of Mrs A’s medical records in the HC Action.  Even if she cannot obtain these documents now, C may still apply for discovery of these documents in some future litigations.  I do not quite accept the argument that the truth cannot be ascertained unless the Mental Health Court were to act now in appointing a Part II committee to investigate the matters.

171.  I agree with Mr Ho to the extent that C may not have the right now to set aside the inter vivos gift made by Mrs A. However, it is always open to C to make the challenge after the death of Mrs A.  Again I do not see the need to act now by putting Mrs A in the driving seat for the investigation.

172.  One must also not forget that C has an existing right to challenge the EPOAs.  C is an interested party so far as the EPOAs are concerned.  By challenging the EPOAs, the court would obviously examine the mental condition of Mrs A in around 2011 and 2012 and whether she was subjected to any undue influence by that time.  If necessary, C can apply for discovery of the personal documents of Mrs A.  I assume there will also be an independent person appointed to act on behalf of Mrs A who would certainly review all her personal documents and conduct the proceedings in Mrs A’s best interests.

173.  On C’s own case, the present case bears all the hallmarks of a classic case of undue influence.  Even without access to the full medical records of Mrs A and the privileged communications, there is nothing to prevent C from making the application to set aside the EPOAs.  If C does not take the initiative to do so, there is very little justification for the Mental Health Court to act now in appointing a Part II committee which, without proper findings of fact, may or may not go against the wishes of Mrs A as expressed in the EPOAs.

174.  At some point of the hearing, it was mentioned that the Proposed Committee can make an application to the Mental Health Court to make a statutory will on behalf of Mrs A.  Again, since Mrs A is a MIP, there is nothing to prevent C from making the same application before the court now.  Such application takes time, but I cannot see how the appointment of a committee can speed up the process when the Proposed Committee would have to undertake extensive investigation before bringing the matter to the Mental Health Court.

175.  Hence, it would not be in the interests of Mrs A nor necessary to put her in the driving seat for the investigation.

C.4   The possibility of collateral use of the documents obtained by the Proposed Committee

176.  The possibility of collateral use of documents is another concern.  As the Proposed Committee will be acting for the interest of Mrs A only and there may be conflicts of interests between Mrs A and the two sisters, B and C should not be allowed to have access to the documents obtained by the Proposed Committee in the course of its investigation.  Even assuming that the documents may be relevant in later litigations, I take the view that, after the death of Mrs A, C cannot apply for discovery of these documents against the Proposed Committee.  This is to prevent parties from making use of the present mental health proceedings, which should only concern the interests and requirements of Mrs A, to advance their own personal interests in later litigations.

177.  Short of an undertaking by C not to apply for discovery against the Proposed Committee, there is always a danger that C may do so in the future.  In my judgment, the court should not allow that to happen.

C.5   The practical problems relating to the operation of the Proposed Committee

178.  Another consideration is the practical problems relating to the operation of the Proposed Committee.

179.  First, it would take considerable time for the Proposed Committee to carry out the investigation.  Assuming that the Proposed Committee were to conclude that the Impugned Documents had been executed by Mrs A under undue influence, it then has to make an application to the court to set aside the Impugned Documents.  Since the operation of the Proposed Committee would cease upon the death of Mrs A, the investigation would become futile unless the court is able to hear the claim and make a finding about the propriety of the Impugned Documents during Mrs A’s lifetime.  Unless someone else is permitted to have access to the papers obtained by the Proposed Committee, which the Mental Health Court should not allow that to happen, there is a real risk that all the effort spent on the investigation will be wasted.

180.  Mr Ho submits that the court should not speculate on the life expectancy of Mrs A.  I agree.  But in determining whether to exercise the discretion in setting up a Part II committee, the Mental Health Court is entitled to take into account all the circumstances of the case including the age of the MIP.  As C is asking the court to appoint a Part II committee with the specific function of investigating the propriety of the Impugned Documents, the court should have regard to the possible practical result in exercising the discretion.

181.  Second, although cost is not a serious concern taking into account the potential size of Mrs A’s estate, it would still require Mrs A’s estate to incur substantial costs in carrying out the investigation works, seeking legal opinion from senior lawyers and directions from the Mental Health Court.  Apart from the costs of the investigation, the Mental Health Court also has to devote precious judicial resources to supervise the operation of the Proposed Committee.  As the Mental Health Court is serving as a court of protection for the weak and vulnerable patients, the use of judicial resources is always the least relevant consideration.  However, as the two sisters will jealously protect their own interests in future litigations, I have grave reservation as to whether this court should allow further duplication of efforts in the investigation about the propriety of the Impugned Documents, in particular C has not taken up the initiative of challenging the EPOAs herself.

182.  I would like to emphasise that these practical problems alone are not sufficient to negate the appointment of the Proposed Committee, but they certainly weight against the exercise of the discretion.

183.  For the above reasons, I exercise the discretion against the appointment of a Part II committee at this stage.  I therefore dismiss C’s application.  Such kind of application is obviously a time-sensitive one. If there is new development in the case which warrants C to make another application, C would be at liberty to do so.

D.   THE LEAVE TO ADDUCE DOCUMENTS APPLICATION

184.  I then turn to C’s Leave to Adduce Documents Application.

185.  Mental health proceedings are private and confidential in nature.  As Lam J (as he then was) stated in Re TCM:[32]

“Part II proceedings are not open to the public and materials disclosed to the court for the purpose of such proceedings are confidential and not to be reported without leave. Unauthorized publication of such information constitutes contempt of court, see Section 5(1)(b) of the Judicial Proceedings (Regulation of Reports) Ordinance Cap. 287. In other words, third parties have no right to such information.”

186.  The section provides for serious consequences to be attached to unauthorised publication because it serves to protect the privacy of persons in proceedings that concern their intimately private and confidential affairs.

187.  As mentioned earlier, on 23 October 2017, I had granted leave to C to adduce the Gift Documents in the HC Action and the Appeal.  As a result of the disclosure of these documents, it had derailed the Appeal hearing which had been adjourned pending a determination by A Chan J as to the question of Mrs A’s locus to bring the claim in the HC Action and the joinder of B as a party to the proceedings.  C is now seeking leave from this court to adduce further documents in order to assist the court in the HC Action to determine such issues.

188.  Mr Yu SC, counsel for B, does not object the disclosure of some documents.  The only remaining dispute is whether this court should grant leave to adduce the OS Report which enclosed the medical reports of the two court-appointed experts.  In one of the reports, the expert expressed the view as to when Mrs A became a MIP.  C now seeks to rely on such opinion given by the expert.

189.  Apart from B’s objection, Mr Pao, counsel for the OS, also expresses serious concern about the disclosure and use of the OS Report in other proceedings.

190.  Having heard the submissions from the parties, I decide to exercise the discretion against disclosure.

191.  Firstly, taking into account the development of this case and other related legal proceedings, the Mental Health Court should now take a firmer stance against collateral use of documents disclosed in these proceedings.  It is clear that the two court-appointed experts have been asked by the Mental Health Court to give medical reports on the current condition of Mrs A.  The reports were expected to be used solely for the present proceedings in determining whether Mrs A is a MIP or not.  It is not right for the reports to be used in other proceedings, in particular against the interests of Mrs A in the HC Action.  It is also not fair to the two court-appointed experts that their opinion would be subjected to challenge and scrutiny in other proceedings.

192.  If the court were to take a more relaxed approach, it would encourage parties to make use of mental health proceedings to advance their own interests in other present or future litigations.  This cannot be right.

193.  Secondly, as the court-appointed experts were not the treating doctors of Mrs A at the material time, their views on when Mrs A became a MIP would be based on the medical records of Mrs A at earlier times. In my judgment, their medical opinion is no better than the medical records themselves.  If C is of the view that Mrs A’s medical reports are relevant in the HC Action, she should make a proper application to the court in that case for the disclosure of such reports.  C should not be allowed to get the documents through the backdoor.

194.  The OS Report is different from the Gift Documents, the latter of which I had earlier granted leave for use in the HC Action and the Appeal.  It is clear that the Gift Documents exist irrespective of the mental health proceedings.  As I see it, the overall justice may justify the disclosure and use of the Gift Documents.  However, since the court-appointed experts have been asked by the Mental Health Court to give medical opinion for the purpose of the present proceedings only and their opinion as to when Mrs A became a MIP is no better than the primary medical records themselves, balance tips in favour of a firmer stance against disclosure of the OS Report.

195.  I therefore reject leave to adduce the OS Report. For the other undisputed documents, I grant leave accordingly.

196.  Finally I come to the issue of costs.  The hearing on 31 August 2017 may be seen as a dividing line.  It was the first time that the court had to deal with the implication of the EPOAs.  Prior to that hearing, C was acting reasonably in taking out the Part II application without knowing the EPOAs and the Gift Documents.  I therefore make the following costs order nisi in respect of the application and the inquiry:

(i) there be no order as to costs between B and C up to and including the hearing on 31 August 2017;

(ii) C do pay to B the costs of this application after the said hearing with certificate for 2 counsel;

(iii) OS’s costs up to and including the hearing on 31 August 2017 be paid by B and C in equal shares; and

(iv) OS’s costs after the said hearing be paid by C.

197.  For the Leave to Adduce Documents application, I make the order nisi that there be no order as to costs vis-à-vis B and C and the costs of the OS be paid by B and C in equal shares.

198.  The orders nisi shall be made absolute 14 days after the date of the handing down of this Judgment.

199.  I am grateful to counsel for their assistance.