Splp v. Guardianship Board and Another

HCMH 78/2018

[2019] HKCFI 1680

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MENTAL HEALTH CASE NO. 78 OF 2018

____________

____________

BETWEEN

____________

Before: Hon Lok J in Chambers (Not open to public)

Date of Hearing: 26 March 2019

Date of Judgment: 26 March 2019

Date of Reasons for Judgement: 4 July 2019 (Handed down in public)

_____________________________

REASONS FOR JUDGMENT

_____________________________

1.This is an appeal brought under s 59W of the Mental Health Ordinance (Cap 136) (“MHO”) in respect of the orders of the Guardianship Board (“the Board”):-

(1)  appointing the 2^nd Respondent, the Director of Social Welfare (“the Director”), to be the new guardian of the subject mentally incapacitated person, SPY, in place of the Appellant on 12 June 2018 (“the Renewal Order”); and

(2)  refusing to a conduct a review of the Renewal Order pursuant to s 59U of the MHO as communicated by letters dated 20 July 2018 and 7 August 2018 (“the Refusal Order”).

2.The Board has indicated that it would not appear in this appeal. The Director, through Government Counsel at the hearing, has also indicated that she would adopt a neutral stance in this appeal.

3.In the hearing on 26 March 2019, I allowed the appeal by setting aside the Renewal Order and reappointed the Appellant as the guardian for SPY for a period of 1 year.  I now give my reasons.

Background

4.The orders of the Board were made in the context of its review of a previous guardianship order dated 14 June 2017 (“the 2017 Order”), whereby the Appellant was appointed as the guardian of SPY.  SPY has only 2 half-siblings in Hong Kong and the Appellant is one of them.

5.The 2017 Order was valid for a period of 1 year commencing on 14 June 2017.

6.On 2 May 2018, in anticipation of the hearing for a review of the 2017 Order, the Director, through the caseworker, submitted a Progress Social Enquiry Report (“the Report”).  In the “Recommendation” section of the Report, the Director recommended the Appellant to continue her appointment as the private guardian of SPY for a term of 3 years:

“In sum, [SPY], being a mentally incapacitated person, was in need of a guardian to make decisions on her welfare, health and financial matters on her behalf. During the review period, [SPY]…received adequate support and concern from [the Appellant], who dutifully performed the role of a guardian and was assessed to be a suitable person to attend to [SPY’s] needs and welfare. Hence, it is recommended to Your Board that [the Appellant] be appointed as the private guardian of [SPY] continuously with the same six powers granted for a period of 36 months.”

7.It was observed in §18 of the Report that:

“[The Appellant] was observed to be cooperative and reliable in managing [SPY’s] finance according to the requirements of the Order. She managed to prepare the monthly financial records with receipts and other supporting documents tidily and update the bank books balance regularly. There is no doubtful transaction identified during the review period.”

8.On 31 May 2018, the Board issued a “requisition form” to the relevant caseworker of the Social Welfare Department (“the Department”), directing the Director to submit a supplementary report on various issues.  One of the questions asked by the Board was as follows:

“5. …you need to state precisely if the guardian has submitted monthly account to you for checking at monthly interval without default.”

9.The Director prepared a supplementary report dated 7 June 2018 (“the Supplementary Report”).  In the Supplementary Report, it was noted at §3 that:

“All the monthly expenditure accounts were checked in order and [the Appellant] had submitted the monthly account (i.e. the updated bank book records and receipts) without default for our checking.”

10.The caseworker also apologized in §7 of the Supplementary Report for having “misunderstood the ways of making record on the monthly accounts”. 

11.Despite the favourable recommendations made by the Director, at the review hearing conducted on 12 June 2018, the Board refused to re-appoint the Appellant as the guardian of SPY, and instead appointed the Director to be such guardian.

12.In reaching such decision, the Board gave the following reasons:

“13. As it is clear that the guardian has totally failed in preparing monthly accounts during the review period, the Board is left with no alternative but to change the appointment to Director of Social Welfare.

14. The Board is gravely disappointed by the performance of the case social worker and the guardian in this case. Plainly, the Board finds that it was not only all 9 monthly accounts were wrong, but actually it can be taken as no monthly accounts were ever submitted and checked because most of the so-called monthly accounts contained no expenses (yet an amount to carry forward did appear) or just an amount of total expenses of unexplained amounts or an amount excessive of the monthly permitted sum. It is shocking to see for the first time in these 20 years or so that such a state of affairs occurred. It is not possible to be explained by saying that a so-called “balance sheet” approach was adopted. It is because a balance sheet is a control tool in accounting and nothing of this sort was required by the Board. In fact, none of a feature of balance sheet has appeared in the monthly accounts submitted at the first instance. The Board is also disappointed to see that, as usual, supervision over the case social worker was only a claimed façade and countersigning was only a formality than a substance. Social Welfare Department should, heeding to the previous Obiter dictums issued by the Board, seriously consider ways and means to improve the supervision system over case workers. It is disheartening to see despite putting in place of tools like Checklist for progress social enquiry reports, Samples of monthly accounts continuous, additions of explanatory footnotes to monthly account forms and the tirelessly efforts of the Board (out of its very limited resources) to conduct training classes, serious mistakes, like the present case, always emerge from time to time.”

13.By way of the Refusal Order, the Board refused to conduct a review of the Renewal Order.  Dissatisfied with both the Renewal and Refusal Orders, the Appellant lodged an appeal to this court.

The Appeal

14.An appeal may be brought under s 59W(1) of the MHO in respect of any decision of the Board:-

(a)  on a question of law; or

(b)  with the leave of the court, on any other question.

15.S 59W(2) of the MHO further provides that an appeal under this section shall be instituted:

(a)  within the period of 28 days after the day on which any document setting out the terms of the decision of the Board is sent to the person; or

(b)  within such further period as the court may allow.

16.The Renewal Order and the Refusal Order were made on 12 June and 20 July 2018, and so the 28-days’ periods for the appeal expired on 10 July and 17 August 2018 respectively.  As the Notice of Originating Motion for the appeal was only issued on 3 September 2018, the Appellant need to obtain leave to extend the time for the appeal against both orders. 

17.In deciding whether or not to grant such extension of time, the court should consider the following 4 factors[1]:-

(a)  the length of the delay;

(b)  the reason for the delay;

(c)  the merits of the appeal; and

(d)  the prejudice to the respondent if an extension of time to appeal is granted.

18.Having considered these factors, I agreed to extend the time for the appeal by reason of the following:

(i)  The Appellant had all along acted in person when dealing with the Board.

(ii)  After the Appellant had instructed solicitors, her solicitors promptly made a request to the Board for all underlying documents for proper advice to be rendered, and renewed an application for review.  Her solicitors also promptly instructed counsel to draft the Notice of Originating Motion for the appeal.

(iii)  Based on the merits of the appeal, as I will further elaborate in the latter part of this Reasons for Judgment, it would cause serious prejudice to the Appellant in denying the opportunity to have the wrong corrected.

(iv)  On the other hand, given the stance taken by the Director, no prejudice is suffered by any party if a slight extension of time is granted for the Appellant to lodge this appeal.

Merits of the appeal

19.Having heard the submissions advanced on behalf of the Appellant, I am satisfied that the Renewal Order is wrong for the following reasons.

20.As submitted in her two reports, the Director was of the opinion that the Appellant: (i) dutifully performed the role of a guardian; and (ii) had duly and timely submitted the monthly accounts of SPY without default, which were checked to be “in order”.

21.As the relevant caseworker acknowledged in the Supplementary Report, the Department had itself “misunderstood the ways of making record on the monthly accounts”.  If there was any error in the submission of the accounts, such error was, to a great extent, caused by the misunderstanding on the part of the Department.

22.After all, not all lay guardians appointed would be acquainted with accounting or bookkeeping knowledge.  In most cases, lay guardians would depend on the assistance and instructions given by the Department as to how to discharge their duties.  If there are misunderstandings between the Department and the lay guardians as to how the accounts should be prepared, the lay guardians should not take all the blame in the absence of wrongdoings on their part.

23.In the present case, the Director is of the view that the Appellant is a suitable guardian.  During the time when she was the guardian, she “dutifully performed the role of a guardian”, and SPY had “received adequate support and concern” from the Appellant.  No wrongdoing on the part of the Appellant was found.  Under such circumstances, the inadequate preparation of the accounts can only be regarded as an oversight or ignorance on the part of the Appellant and not a deliberate neglect of her duty as the guardian for SPY.

24.Much has been said by the Board being dissatisfied with the internal practice and operation of the Department relating to the submissions and supervision of financial accounts.  These criticisms have nothing to do with the Appellant.  On the contrary, if the Board is of the view that the criticisms made against the Department, in particular its mistake on how the accounts should be prepared, are valid, I have problem with the Board’s decision to appoint the Director as the guardian, given that in practice, this would mean that future accounts of SPY would be prepared by the Department directly.

25.I therefore respectively disagree with the decision of the Board.  The Appellant has performed her duty reasonably well, and the inadequate preparation of the accounts is far from a sufficient reason to remove her, who is one of the two remaining family members of SPY, as SPY’s guardian.

26.The Board refused to reappoint the Appellant solely on the ground that she had not submitted proper financial accounts.  I understand that the Appellant has also made an application under Part II of the MHO for her to be appointed as the committee for SPY.  In the event that the application is successful, the court can also supervise the Appellant as to whether she would discharge her duty as SPY’s financial manager in a responsible manner.  As the mental health court is responsible for handling the Part II application, it would be in a better position to assess whether the Appellant should be appointed as the person to manage SPY’s financial affairs.

27.Second, it is an established principle of procedural fairness that the tribunal must allow the person affected to have a fair opportunity to make representations before the decision is taken, “[s]ince the person affected usually cannot make worthwhile representations without knowing what factors may weigh against his interests fairness will very often require that he is informed of the gist of the case which he has to answer”[2]. 

28.In the present case, the Appellant, who was all along unrepresented at the hearing below, was not given a proper opportunity to answer the Board’s criticisms on her rendering of the monthly accounts.  She went to the review hearing conducted on 12 June 2018 on the assumption and expectation that the Board would accept the very favourable recommendations made by the Director in her favour.  On the other hand, it would appear that the Board’s requisition form dated 31 May 2018 was never sent to the Appellant. As documented in the contemporaneous letter issued by the Appellant on 9 July 2018, she was only informed of the Board’s criticisms at the hearing on 12 June 2018.

29.In my judgment, the failure of the Board to forewarn the Appellant of its criticisms, and to provide sufficient time for the Appellant to formulate a proper response, including giving her the opportunity to consider instructing legal representatives to answer the complaint, offend the principle of the procedural fairness.

30.For the above reasons, the Renewal Order should be set aside.  I can remit the case back to the Board for reconsideration. However, since this court, in an appeal from the Board, has the power to make any order as it thinks fit under s 59W(3) of the MHO, I decided to make a fresh order reappointing the Appellant as the guardian for SPY for a term of 12 months.  Taking into account the available evidence in the present case, it is clear that the Appellant is the most suitable person to be the guardian for SPY. Further, reconsideration by the Board takes time and it will only create more uncertainty as to who should take care of SPY in the interim period.

31.Due to such ruling, it is not necessary for me to consider the other arguments of the Appellant, such as whether the Board had given sufficient reason to appoint the Director as the guardian and whether the Board was right in failing to conduct a review of the Renewal Order.

Observations about the inadequacies of the existing system

32.This case has brought out some of the problems and inadequacies of the present system relating to the welfare of mentally incapacitated persons (“MIPs”).  Being the judge in charge of the Mental Health List in the High Court for some time (M Ng J has taken over the management of the Mental Health List on 6 May 2019), I had come across many cases that the committees appointed under Part II of the MHO, in particular those being old-aged parents of the MIPs, had great difficulty in complying with the obligations imposed by the court in discharging their duties, in particular the preparation of annual accounts and the opening of bank accounts in the name of MIPs.  In most cases, the court had sympathy with the committees as they usually had to bear the burden of taking care of the daily maintenance of the MIPs.  Nonetheless, the court must require the committees to comply with these obligations for the protection of the interests of the MIPs.  As a matter of public interest, proper assistance and support should be provided to the committees and the family members of the MIPs as to how to discharge their duties as financial managers.

33.I understand that certain voluntary organization has taken the initiative to provide assistance to the family members of MIPs.  Apart from such effort from the community which should be greatly encouraged, the Government has taken very little initiative in such area.   In my opinion, the Government should take a more proactive approach in helping such sector of the community.

34.Secondly, the existing system does not provide an effective and efficient mechanism to supervise the operation of the committees or how the financial managers discharge their duties.  Under the current practice, the court, in the orders for the appointment of committees, would require them to submit annual financial accounts to be vetted by the court.  Some committees, perhaps due to their ignorance or the heavy burden in taking care of the MIPs, just neglected such duty without deliberate wrongdoing on their part.  It would not be easy for the court to police the submissions of these accounts.

35.The Mental Health Masters, with the assistance of the staff of the Judiciary Administration, would vet the reports submitted by the committees.  They may seek clarifications from the relevant committee if necessary.  In the case that the Master finds the accounts unsatisfactory, the matter would be referred to the Mental Health Judge in charge of the case for directions.  After considering the report from the Master, the Mental Health Judge may refer the matter to the Official Solicitor’s Office (“OSO”) for investigation.  The OSO would then make a report to the Mental Health Judge, who would then be in a position to make further directions relating to management of the financial affairs of the MIPs.  The whole process is time-consuming and inefficient involving many referrals.

36.In some cases, the committee may request to purchase a property for the benefit of the MIP.  Again the court may have to refer the matter to the OSO for investigation as to whether this would be a good option.  In the case that such approval is granted, the committee usually has great difficulty as to how to purchase the property in the name of the committee, and as a result the court has to get involved in the whole process to facilitate the completion of the transaction.  I do not think that this is an efficient use of the scarce judicial resources.

37.In many jurisdictions, there are specific institutions such as Public Trustee’s office and Public Guardian’s office responsible for supervising such financial managers.  In England and Singapore, the courts can appoint deputies to manage the financial affairs of the MIPs.[3] In the case of such appointment, the deputies would have to submit financial reports and accounts to the Public Guardian for vetting.  The Public Guardian is supported by the staff of his or her office who would check the accounts.  Clarifications may be sought from the deputies, and they may also be requested to explain the decisions they made for the MIPs.  In the case of any irregularity, the Public Guardian’s office would conduct investigation.  Depending on the result of the investigation, the Public Guardian can take appropriate actions to protect the interests of the MIPs including making appropriate applications to the court.

38.The Public Guardian’s office would therefore be the designated authority directly responsible for supervising the financial managers.[4] Such kind of system can avoid unnecessary referrals between the court and the investigation authority, and the Public Guardian’s office would also be able to conduct the investigation and to communicate and provide the necessary assistance to the financial managers in a more flexible and efficient manner.  The drain of judicial resources can also be reduced to a minimum.

39.Thirdly, in my view, it does not make much sense that matters relating to the welfare of the MIPs should be handled under two separate regimes: matters relating to the general welfare of the MIPs be handled by the Board[5], and financial matters be handled by the court under Part II of the MHO.  First, by just focusing on a particular aspect of the welfare of the MIPs, the court and Board cannot adopt a comprehensive approach in determining all the relevant matters relating to the welfare of the MIPs.  Second, it creates additional burdens on the family members of the MIPs.  Apart from the costs involved, they have to go through two sets of proceedings causing further distress and anxiety.  Third, there is serious duplication of effort as the court and the Board will have to conduct separate inquiries into related matters about the welfare of the MIPs.  Further, the agencies mainly responsible for providing assistance to the adjudicating authorities are also different: the Department in the case of guardianship proceedings and the OSO in the case of Part II proceedings.  So far as I know, there is no established mechanism for communications between these two agencies for a particular case concerned.

40.According to my understanding, in New South Wales in Australia, both guardianship and financial matters relating to MIPs are heard by the same Guardianship Division of the NSW Civil and Administrative Tribunal (NCAT).  In the case that there is substantial dispute between the family members, NCAT can always refer the matter to the court for adjudication.  In my view, there is no reason why Hong Kong should not adopt a similar “one-stop” model.

41.As commonly occurred in other developed societies, Hong Kong is becoming an aging society.  Based on the 2016-based population projections published by the Census and Statistics Department, the pace of population ageing in Hong Kong will be ramping up in the coming 20 years or so. Between 2018 and 2038, the size and share of the elderly population will almost double from 1.27 million and 17.9% to 2.44 million and 31.9% respectively.  In other words, nearly one in every three persons will be elders in 2038.  Meanwhile, those aged 75 or above will increase even more noticeably from 0.57 million to 1.40 million (or from 7.9% to 18.3% of the total population).

42.Proper management of the properties of MIPs will therefore become a pressing issue.  Dementia and other health problems facing elderly people would make it more difficult for them to manage their own properties.  Though the introduction of the enduring power of attorney regime may help to solve some of such problems, the number of Part II applications will still increase at a significant rate in the future.  Unless something is done to provide assistance to the family members of the MIPs and to streamline the whole legal process for the appointment of guardians and financial managers for MIPs, the whole system will only cause more and unnecessary distress and anxiety to the family members of the MIPs.  Given the aging population of Hong Kong, these proposals deserve some serious considerations by the relevant policy bureaus of the Government.

43.I have obtained the consent of the parties for this Reasons for Judgment to be published in public.  I therefore now do.  I also direct the Department of Justice, the counsel of which appearing for the Director, to send a copy of this Reasons for Judgment to the policy bureaus responsible for social welfare and public health affairs and the OSO for consideration.

Ms Crystal Lai, instructed by Yau & Co, for the Appellant

The 1^st Respondent, in person, absent (attendance excused)

Miss Christine Wong, Government Counsel, for the 2^nd Respondent