RE CK

HCMH 77/2011 &
HCMH 81/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MENTAL HEALTH CASE NO. 77 & 81 OF 2008

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(Consolidated by the Order of Deputy High Court Judge L Chan
dated the 21^st day of October 2011)

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D E C I S I O N

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1.  These applications were instituted for appointment of committees for two mentally incapacitated persons (“MIPs”). The MIPs are mother and son. HCMH 77 and 78 were instituted on 14 October 2011 for the mother M and her son S respectively by M’s step-son C. HCMH 80 and 81 were instituted on 17 October 2011 also for M and S respectively by Y, the son of another step-son of M. The two step-sons had the same father but different mothers. Their relationship is not harmonious.

2.  On 21 October 2011, I ordered the consolidation of the applications and that the applicants should serve their papers on one another. 

3.  An accountant has now been appointed as the two committees for both MIPs with the consent of the applicants.  The outstanding question is the costs of these applications.  Both sides suggest and agree that all costs of the four applications should be borne by the estates of the MIPs.  They also agree that the estates of the MIPs should bear the costs of the Official Solicitor (“OS”).  I agree that the costs of the OS should be borne by the estates of the two MIPs, but I do not think it fair or just to require the two estates to bear all the costs of the four applications. 

4.  The Guardianship Board has on 12 October 2009 made a guardianship order appointing the Director of Social Welfare (“DSW”) as the guardian of the two MIPs.  The Guardianship Board also raised the need for mental health Part II applications for the MIPs.  The DSW in February 2010 advised the parties of his intention to take out such applications.  Both sides welcomed this idea and were agreeable to appoint the OS as the two committees.

5.  The MIPs had numerous landed properties, trust interest, inheritance, business interest and investments.  It took months for the case worker of the DSW to collect such information.  However, the DSW later thought that there was no urgency to mobilize the assets of the MIPs as they were then well taken care of.  The DSW therefore advised the parties in mid-August 2010 that he did not intend to proceed with the applications at that time.  C’s camp immediately showed interest and resumed the preparation to make the applications.  However, they encountered difficulties in obtaining the necessary medical certificates on the MIPs and were unable to make the applications then.

6.  Y’s camp was also willing to make the applications and had no difficulty in obtaining the medical certificates on the MIPs.  They however acted quite slowly.  They only came up with a concrete timetable of actions in May 2011.  C’s camp was impatient about the slow progress as there were business matters which had to be dealt with by the committees of the MIPs.

7.  Eventually the medical certificates on the MIPs were available sometime in September 2011.  C also obtained these certificates. He made the applications on 14 October 2011.  Y however also applied on 17 October 2011.  Both sides must have been preparing their applications in parallel. 

8.  Since there was no dispute that committees should be appointed for the MIPs, these applications should have been disposed of quickly and without incurring substantial legal costs.  Unfortunately that was not what happened.  C proposed to appoint a professional or the OS to act singly or jointly with his son as the two committees.  Y however proposed himself and his brother jointly or the DSW singly as the committees.  There was therefore an argument on the composition of the committees.

9.  M’s deceased husband was a very wealthy businessman. He left a rich and varied estate to M and S and all his other children.  The estate comprised of fixed assets and asset holding companies.  C and Y’s father are the executors of this estate.  Apart from their interests in the father’s estate, the estates of M and S also have lots of assets of various types.  In relation to the handling of these assets, there are allegations and cross-allegations made by the two sides of C and Y against one another. 

10.  C and Y, instead of quickly consenting to the appointment of an independent professional to be the committees of M and S, chose to ventilate some of their disputes in these proceedings.  Y even sought to use the applications as the forum for extracting detailed information from C on the assets and properties of M and S.  He even asked for the applications to be set down for a three-day trial for such purpose.  However, these applications are not the forum for resolving the disputes between the antagonistic applicants or for one to seek information on the assets of the MIPs from the other. 

11.  Y tried to justify the approach by relying on Re Madam A, HCMH 44 of 2004 where Lam J (as he then was) said:

“21. According to Section 7(6), information should also be provided in respect of the property and affairs of the mentally incapacitated person. Thorough investigations by an applicant and those advising him is necessary before they file an application. If there are difficulties encountered by them in that regard and if there are reasons for believing that some other parties are controlling or hiding assets of such a person or otherwise financially abusing or taking advantage of such a person, it should be brought to the attention of the court and appropriate directions and interim relief could be given.”

12.  However, the learned Judge was referring to Part II applications in general which are usually quite straightforward and do not involve antagonistic applicants as in the present case.  The learned Judge was also not referring to cases like the present one where there are numerous assets and properties of wide varieties the identification and quantification of which will take months and substantial resources to achieve.  For situations like the present one, the task of identification and quantification of the assets and affairs of the MIP should not be undertaken in a Part II application in particular as between antagonistic applicants or relatives who entertain one another with nothing but hostility. 

13.  The relevant parts of section 7 of the Mental Health Ordinance, Cap. 136 provide:

“(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. (Replaced 81 of 1997 s. 6)

(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. (Amended 81 of 1997 ss. 6 & 58)

…

(5) … the application … 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. (Added 81 of 1997 s. 6)

(6) In this section-

“evidence of the relatives or next-of-kin and the property” (關於親屬或最近親及財產的證據) means a certificate made and signed by the applicant or, if the Court so orders in a particular case, an affidavit, giving particulars of the mentally incapacitated person’s relatives or next-of-kin, property and affairs and of the circumstances giving rise to the application;

…” (emphasis added)

14.  Section 7 thus requires evidence of the property and affairs of the MIP to be furnished in the application.  However, it does not mean that the applicant in every case and regardless of the actual circumstances should furnish detail and exhaustive evidence of the property and affairs of the MIP. 

15.  In the usual case where the estate of the MIP comprises of one or two real properties, some bank balance and a small portfolio of stocks and shares, then the applicant should conduct a thorough investigation and provide as much information of such properties as possible in the application.  Such information is important for the court to consider what is the appropriate financial arrangement that should be made for the maintenance and upkeep of the MIP.  In such a case, if the applicant should encounter difficulty in ascertaining the property and affairs of the MIP, the court may direct under section 7(2) inquiries concerning the nature of the property belonging to the MIP to be conducted.   

16.  However, where the estate is affluent and varied and the relatives squabbling, then care must be taken not to allow the application to become their battle ground.  That is counter-productive to the interest of the MIP.  In such case, if detailed evidence on the properties and affairs of the MIP can still be collected and provided to the court without the need to incur much time and resources, then the evidence to be provided should be in detail.  If not, then the evidence on the properties and affairs should contain sufficient pointers for the committee to be appointed to investigate and locate the properties.  Otherwise, the enquiry in the application to identify and quantify the assets and properties will incur substantial costs and the appointment of committee delayed.  For the battle will be tough when the trust is slight.  The identification and quantification of assets and properties in such case is best left to the committee who is usually a neutral professional in whom the parties are more ready to confide.  There is always power in the order of appointment for the committee to investigate and trace the properties and assets of the MIP.  He is also empowered to engage professionals for assistance.  It is likely that the committee can accomplish such task more efficiently and at much less costs.

17.  In the present case, Y, the step-grandson of M, wants to rely on Lam J’s words to turn the four Part II applications into a forensic exercise to extract financial information of M and S from his antagonist C.  His purported reliance on Lam J’s words is to turn the words of the learned Judge into an inflexible creed to pray in aid regardless of the need.  Such attitude demonstrates an inability to think and design a reasonable and practical solution to tackle a problem in its actual dimensions.

18.  Another issue that delayed the appointment of committees for M and S was the parties’ failure to have a timely appreciation of the wisdom of appointing an independent professional as the committees which should not involve the OS as a member.

19.  The medical certificates show clearly that M and S are incapable by reason of mental incapacity of managing and administering their properties and affairs.  The complexity of their properties and affairs and the antagonism between the camps of C and Y dictate that an independent professional should be appointed as the committees.  These applications, if devoid of the fuel between the camps of C and Y and with the verification and quantification of the assets be left to the committees, would have been very simple and straightforward.  The appointments could have been made much earlier and the properties and affairs of the MIPs placed in the good hands of the committees sooner.

20.  These applications have now become elaborate and counsel have been brought in because of the animosity of the opposing camps of relatives.  The bill of costs of one camp is over HK$600,000 and the bill of the other is over HK$800,000.  I see no reason why the two estates of M and S should pay for the unnecessarily inflated parts of the costs.  If the parties should have conducted the applications properly, the matters would have been concluded at the beginning of this year and without the need to incur so much costs or to engage counsel.

21.  Looking at the matter in the round, I consider that the estates of the MIPs should only bear parts of the costs incurred in the applications.  I order that the estates together should bear the costs of all the applications up to their filing in court and service on one another plus a lump sum of HK$60,000 for each side.  The costs are to be summarily assessed by me. 

22.  In addition, the hearing on 16 April 2012 for directions, which was attended to by counsel, was necessitated by Y’s insistence on a three-day hearing to identify the assets and properties of M and S.  That was a wrong move.  That hearing should have been obviated.  I therefore order Y to pay C the costs of that hearing to be summarily assessed by me.

23.  I further order Y to pay C half of C’s costs for preparing, filing and service of the bundles for this hearing and such costs should also be assessed by me summarily.

24.  Finally, I order the estates of M and S to bear the costs of the OS and DSW to be summarily assessed by me on an indemnity basis.