CHAN KA YI v. DBS BANK (HONG KONG) LTD

DCEC 1631/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

EMPLOYEES’ COMPENSATION CASE NO. 1631 OF 2006

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DECISION

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1.  This application raises one question: in an application for an appointment of a next friend to act for a mentally incapacitated person, how should the court deal with the situation if the opposite party objects on the ground that the relevant party is, as a matter of fact, not a person under mental disability?

Background

2.  This case concerns a claim for employees’ compensation in respect of an accident on 21 April 2005.  The Applicant was at the relevant time working as a customer service ambassador for the Respondent.  According to the Applicant’s case, on the day of the accident, she was walking down the staircase from the Mezzanine Floor to the Ground Floor of the Kwun Tong Branch of the Respondent’s bank when she fell down the staircase and sustained injury to her knees.

3.  After the granting of legal aid, the Applicant commenced the present application for employees’ compensation on 24 November 2006.  The claim proceeded rather slowly in the year 2007 and 2008.  In early 2009, the Applicant’s solicitors received a medical report dated 22 December 2008 from the Applicant’s treating doctor, Dr. Leung Chi Ming (“Dr. Leung”), who was of the view that the Applicant was a mentally incapacitated person who was unable to manage and administer her property and affairs within the meaning of the Mental Health Ordinance, Cap, 136 (“the MHO”).  Dr. Leung is the Consultant Psychiatrist of the Department of Psychiatry of the Chinese University of Hong Kong.  The Applicant then took out a summons dated 14 February 2009 applying for an order to appoint her brother, Mr. Chan Chi Keung, as the next friend.  A few days later on 18 February 2009, the Respondent took out another summons objecting the appointment of the next friend on the ground that the Applicant was not a mentally incapacitated person.  Further medical expert reports and surveillance video tapes were filed as evidence for these summonses.

4.  Subsequently on 31 August 2009, HH Judge Chow made a consent order in the following terms relating to the hearing of these summonses (“the Consent Order”):

“(1) The following questions and issues of fact be tried as preliminary issues before all the other questions or issues in this action, namely:-

(a) whether the Applicant is and was incapable, by reason of mental incapacity as defined in [the MHO], of managing and administering her property and affairs including the present proceedings, and hence she is and was a person under disability within the meaning of Order 80 Rule 1 of the Rules of District Court;

(b) if the first issue is affirmative, when such mental incapacity began and whether such alleged mental incapacity persisted at the time of the Applicant’s summons filed on 14 February 2009 and thereafter;

(2)    in the meantime all further proceedings in this action relating to other such questions or issues be stayed until the trial of the said preliminary issues or until further order;

    ………”

5.  Before me is therefore the trial of these preliminary issues.  The hearing is fixed for 2 days.  Leave has been granted earlier for the Applicant’s and the Respondent’s respective psychiatric experts, namely Dr. Chung Wai Sau and Dr. Law Wun Tong, to give oral evidence in this hearing.  Writ of Subpoena Duces Tecum has also been issued against Dr. Leung to attend this hearing as a witness.

6.  Initially, the parties’ respective psychiatric experts had different views about the genuineness of the Applicant’s mental condition.  Subsequently, the Respondent engaged private investigator who took some surveillance tapes about the daily routines of the Applicant.  After viewing such tapes, the Applicant’s psychiatric expert states in the latest joint medical report that he cannot “make a definite psychiatric diagnosis and a reliable assessment on [the Applicant’] impairment as a result of the injury”.  However, the Applicant’s treating doctor, Dr. Leung, maintains his view after viewing the surveillance tapes.

Whether it is desirable to proceed with the hearing of preliminary issues?

7.  For myself, I have grave reservation as to whether the court should proceed with the trial of preliminary issues.  My reasons are two fold.

8.  Firstly, unlike a decision made in interlocutory proceedings, all findings made in a trial of preliminary issues will be final and binding.  The parties have only arranged the psychiatric experts to testify in the hearing.  But so far as I understand it, at least one orthopaedic expert, Dr. Daniel Yip, is of the view that there is malingering on the part of the Applicant in respect of the physical injury as well.  Obviously, whether there is any malingering of physical injury would be a very relevant factor for the court to determine the genuineness of the Applicant’s mental condition.  Without the expert evidence from the orthopaedic experts, the court is deprived of such important piece of evidence in making the final decision.

9.  Secondly, it is trite law that trial on preliminary issues should only be ordered if it can save costs and conveniently dispose fairly of certain issues of the case.  The court should avoid two trials on the same issue.  Complication and embarrassment may also arise if the court were to accept the evidence of a particular witness in the trial on preliminary issues but reject his evidence on other related issues in the main trial.  In my judgment, it is because of these particular reasons why a trial on preliminary issues is not appropriate in the present case.

10.  Obviously, the issue I have to decide in the trial on preliminary issues is a narrow one, that is whether the Applicant has been suffering from a mental illness during the period between the issuance of the Applicant’s summons for the appointment of next friend on 14 February 2009 and the existing moment.  In the event that the court finds that the Applicant is a mentally incapacitated person, the psychiatric experts will still have to testify at the subsequent main trial on the following issues: (i) the cause of the mental illness and the possible causal link between the accident and the illness; and (ii) the seriousness and the extent of such illness.  This will result in duplication of evidence, and it will unnecessarily prolong and increase the costs of the proceedings.  As mentioned above, it may also result in embarrassment if, say, the court favours the evidence of a particular psychiatric expert on the existing mental condition of the Applicant but rejects his evidence at the main trial on the cause and the extent of the illness.

11.  Another problem is that mental illness can be a fluctuating health condition.  It is a well known fact that a mental patient may be well today but the condition may deteriorate sharply the next day.  In the event that the court, after an elaborate trial on preliminary issues, finds that the Applicant is not now a mentally incapacitated person, there is a danger that the Applicant’s condition may deteriorate before the main trial and as a result a further application for appointment of next friend may be necessary.   Obviously, the Applicant’s solicitor will have no hesitation in making such application, as he will be personally liable for costs of the Respondent in the case of a finding that he has no authority to continue the proceedings on behalf of a mentally incapacitated client (see the case of Yonge v Toynbee as mentioned in paragraph 18 below).  If that happens, does it mean that there should be another trial on preliminary issues?

12.  According to Dr. Leung, the Applicant has been taking medication for her mental illness for a period of about 2 years.  It is also common that litigants, with the date of the main trial approaching, may find it more difficult to cope with the pressure of litigation.  If that happens and the mental condition of the Applicant deteriorates, a further hearing will still be necessary to the determine the then mental condition of the Applicant which is a complete waste of time and costs.

13.  One can therefore immediately see the disadvantages of proceeding with the trial on preliminary issues.  In fact, the Respondent’s challenge is very much based on the surveillance tapes of the Applicant taken by the private investigator.  I understand that the duration of the tapes would last for about 2.5 hours.  If there are separate trials, it is likely that the tapes will have to be viewed twice and this alone adds unnecessary costs to the proceedings.

14.  Despite such observations, Mr. Chan, counsel for the Respondent, still urges the court to proceed with the trial on preliminary issues.  According to him, there is clear evidence to support malingering on the part of the Applicant.  If the court so finds, it would facilitate the negotiation for the settlement of the claim.  However, it is not the main objective of the trial on preliminary issues to facilitate negotiation between the parties, otherwise the court may face with a lot of unnecessary applications for such kind of trial.  Further, as the court is only required to make a determination on a very narrow issue, there is a real risk that the parties may refresh their challenge to the evidence of the psychiatric experts at the main trial.  In such case, it undermines the benefit of having a trial on preliminary issues, and the court should therefore avoid such trial if possible.

How should the court deal with the situation without a full trial on preliminary issues?

15.  The next question then arises: how should the court deal with the application for appointment of next friend if it wants to avoid a full trial on preliminary issue as whether the Applicant is now a mentally incapacitated person?

16.  In answering such question, one needs to examine the nature of the appointment of next friend under O. 80 of the Rules of the District Court, Cap. 336.  In taking out the summons to challenge the appointment of the next friend, the Respondent is relying on the following passage in Hong Kong Civil Procedure 2010, vol. 1, para. 80/2/2:

“If the defendant desires to challenge the authority of the next friend to sue, contending that the plaintiff is not under a disability, his proper course is to apply in a summary way for the stay or dismissal of the action, as in cases in which the authority of the plaintiff’s solicitor to bring the action is challenged (Richmond v Branson [1914] 1 CH. 968)”

17.  The case of Richmond v Branson has been cited in support of the proposition.  In that case, Warrington J said the following relating to the appointment of next friend:

“……… The action, in whatever form it is brought, is the action of the plaintiff.  If a solicitor is acting without authority in an action brought by a plaintiff who is not alleged to be of unsound mind, either the plaintiff or the defendant is entitled to have that action summarily stayed, and to an order that the solicitor should pay the costs of the action as between solicitor and client.  There is really, in principle, no distinction between an action brought by a plaintiff of unsound mind, or alleged to be of unsound mind, by her next friend, and an action brought by an ordinary plaintiff.  In both cases the real question, if there is any question at all, is that of the authority of the solicitor. ………”  (at p. 974)

18.  Based on the aforesaid dicta, it is clear that the provisions contained in Order 80 are purely procedural in nature.  Order 80 enables a plaintiff who is unable to give instruction to his solicitor by reason his mental incapacity to commence legal proceedings with a next friend.  With the instruction given by the next friend, it provides authority to the solicitor to conduct the proceedings in the name of the patient.  In substance, it is still a claim by the mentally incapacitated person himself.  It is also important for the solicitor to invoke such procedure in the case of doubt as to mental capacity of his client.  As laid down in the case of Yonge v Toynbee [1910] 1 KB 215, a solicitor would be personally liable for the costs of the opposite party if he has no authority to conduct the proceedings in the name of a mentally incapacitated client even if he is ignorant that his client is a person of unsound mind.

19.  In the present case, the main concern of the Respondent is not to challenge the authority of the Applicant’s solicitor.  Instead, the Respondent seeks to have an early determination on the issue with a view to establish that the Applicant is and was a malingerer.   In my judgment, this matter should be left for final determination in the main trial so that the trial judge can resolve this issue in one go after considering all the relevant evidence presented at the trial.

20.  As the appointment of next friend is procedural in nature and the real issue at this stage is not about the authority of the Applicant’s solicitor, I am of the view that the court is entitled to deal with this interlocutory application for the appointment of next friend in a summary manner.  In other words, for the limited purpose of dealing with this particular interlocutory application, I accept the evidence of Dr. Leung and find that the Applicant is a person with mental disability.  Since this is only an interlocutory decision dealt with in a summary way, it should not be regarded as a final decision and the Respondent can still maintain the challenge as to the mental capacity of the Applicant in the main trial (see: Chu Hung Ching v Chan Kam Ming & Ors. trading as Ming Lee (International) Trading Co. [2001] HKC 396).

21.  As I see it, this should be the most appropriate decision taking into account the particular facts and the positions of the parties in the present case.  Firstly, the Applicant’s solicitor is protected so far as the issue of authority is concerned.  Even if the condition of the Applicant fluctuates and worsens in the later part of the proceedings, the Applicant’s solicitor would not be held personally liable for costs of the Respondent for want of authority.

22.  Secondly, there is no prejudice to the Respondent for appointment of the next friend.  Even if the court in the main trial concludes that: (i) the Applicant is a malingerer and she is not a mentally incapacitated person; and (ii) the appointment of the next friend is wrongly made, it is then quite impossible for the Applicant to issue a fresh claim against the Respondent on the ground that she has the right to conduct the proceedings herself.  As the appointment of the next friend is necessitated by the Applicant’s apparent condition as a mental patient, it is certainly an abuse of the process of the court if the Applicant is later allowed to benefit from the malingering on her part.  Further, the next friend is now legally aided, and so there is some protection to the Respondent if it succeeds in its defence and it has to enforce a costs order in its favour.  On the other hand, if the appointment of next friend is refused, there is a danger that legal aid may be discharged on the ground that the Applicant’s solicitor is not able to obtain instruction from the Applicant herself.  In the event that the Applicant is forced to continue the proceedings without legal aid, it would only complicate the proceedings and the Defendant cannot enforce any costs order in its favour against the Director of Legal Aid.  These are certainly not in the interest of the Defendant.

23.  By reason of the aforesaid, I grant leave for the appointment of the next friend and make the following order:

(i)    the order for the trial of preliminary issues as stated in paragraph 1 of the Consent Order be set aside;

(ii)  the stay of proceedings as provided for in paragraph 2 of the Consent Order be lifted;

(iii)    order in terms of paragraphs 1 to 4 of the Applicant’s summons dated 14 February 2009;

(iv)    the Respondent’s summons dated 18 February 2009 be dismissed; and

(v)  the Applicant’s own costs to be taxed in accordance with Legal Aid Regulations.

24.  In order to give maximum flexibility to the trial judge to deal with the issue of costs after making a finding as to the mental condition of the Applicant, I make an order nisi that: (i) the costs of the Applicant’s summons dated 14 February 2009 and the Respondent’s summons dated 18 February 2009, including the costs of the trial of preliminary issues, be reserved; and (ii) there be certificate for counsel for the hearing of preliminary issues.  The order nisi shall be made absolute 14 days after the date of the handing down of this Decision.

25.  During the hearing, counsel for both parties have informed me that the case is now very much ready for trial.  I therefore direct the parties to make a joint written application to the court within 42 days from the date hereof to set down this case for trial, and such written application shall comply with all the relevant provisions contained in the Practice Directions 18.2 relating to the Employees’ Compensation List.