Poon Chi Fai v. Poon Chi Hung, William and Others

HCMP 1538/2023

[2024] HKCFI 3097

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1538 OF 2023

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DECISION

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INTRODUCTION

1.In the present proceedings, the Plaintiff, by way of his originating summons dated 14 September 2023 (the “Originating Summons”), seeks various relief from this Court, principally to declare that he was and is at all material times still a director and shareholder of the 2^nd Defendant. There is no dispute and, in fact, no one challenges the Plaintiff’s status as a shareholder of the 2^nd Defendant. What is in serious dispute is the validity of the shareholders’ resolution passed in an extraordinary general meeting of the 2^nd Defendant which was held on 14 June 2023 pursuant to which the Plaintiff was removed as a director of the 2^nd Defendant.

2.The Plaintiff, the 1^st Defendant, Poon Chi Lam Paul (“Paul”), Poon Chi Wing (“Wing”) and Poon Chi Wai (“Wai”) are five biological brothers of the Poon family (“the Brothers”).

3.The 2^nd Defendant is a limited company incorporated in Hong Kong on 30 November 2015. It was incorporated as a family trust to provide stable income for the Brothers. The 2^nd Defendant has five shareholders, which are also the Brothers. Each of them holds 20% of shares in the 2^nd Defendant. The 1^st Defendant is and was the chairman of the Board of the 2^nd Defendant and the Plaintiff was a director of the 2^nd Defendant. There is a present dispute as to whether he is still a director of the 2^nd Defendant.

4.On 30 March 2023, Wing requested to convene an extraordinary general meeting to pass a resolution to remove the Plaintiff as a director.

5.On 24 April 2023, the 1^st Defendant issued a notice to convene an extraordinary general meeting on 23 May 2023 for a resolution to remove the Plaintiff as a director (“the Removal Resolution”).

6.On 20 May 2023, Paul signed a proxy form to appoint the 1^st Defendant as his proxy in the extraordinary general meeting and gave an instruction to the 1^st Defendant to vote in favour of the Removal Resolution (“the Proxy Form”). Wing also signed a proxy form to appoint the 1^st Defendant as his proxy in the extraordinary general meeting to vote in favour of the Removal Resolution.

7.Article 8(a) of the Articles of Association of the 2^nd Defendant provides that:

“The quorum for the transaction of business of any General Meeting shall be the members holding 70% of shareholding present in person or by proxy. Notwithstanding any provision herein, if the Company has only one member, the decision of that member shall be taken by way of written resolution(s).”

8.Further, Article 19 specifically provides that:

“The Company may also by ordinary resolution remove any director notwithstanding anything in these Articles or in any agreement between him and the Company and may, appoint another person in his stead.”

9.On 23 May 2023, the extraordinary general meeting was held in the office of the 2^nd Defendant in a commercial building in Yuen Long. The Plaintiff, the 1^st Defendant and Wai were present in the said meeting. Since the 1^st Defendant was the proxy of Wing and Paul, the quorum of 70% was duly reached.

10.During the said meeting, the Plaintiff challenged the validity of the Proxy Form and reported the matter to the Police. The meeting was thus adjourned.

11.The extraordinary general meeting was resumed on 9 June 2023. The Plaintiff, the 1^st Defendant and Wai were present in the said meeting. The 1^st Defendant continued to be the proxy of Paul and Wing. During the said meeting, the Plaintiff complained about the validity of the Proxy Form again and reported the matter to the Police. The meeting was further adjourned.

12.The extraordinary general meeting was resumed on the next day. The Plaintiff, the 1^st Defendant and Wai were present in the said meeting. The 1^st Defendant continued to be the proxy of Paul and Wing. During the meeting, the Plaintiff maintained his challenge to the validity of the Proxy Form and called the Police again. The meeting was again adjourned.

13.The extraordinary general meeting was resumed on 14 June 2023. The Plaintiff and the 1^st Defendant were present in the said meeting. The 1^st Defendant continued to be the proxy of Paul and Wing. In other words, the members holding 80% of shareholding present in person or by proxy in the EGM on 14 June 2023. During this meeting, the 1^st Defendant, Paul and Wing voted in favour of the Removal Resolution, consisting of 60% of the shareholdings in the 2^nd Defendant. The Plaintiff and Wai voted against. Accordingly, the Removal Resolution was passed as an ordinary resolution.

14.The whole case therefore turns on the validity of Paul’s Proxy Form. The Plaintiff’s case is that Paul was and is mentally incapacitated or that he did not have the mental capacity to execute the Proxy Form at the relevant time. As such, his vote should be discounted. In such circumstances, the Removal Resolution was not passed and the Plaintiff continues to be a director of the 2^nd Defendant.

15.This matter first came before this Court on 19 October 2023. This Court reminded the Plaintiff that he carries the burden of proof to show that Paul did not have the mental capacity to execute the Proxy Form and the Court would require proper and solid medical evidence in order to satisfy itself that Paul did not have the requisite mental capacity to execute the Proxy Form.

16.The Plaintiff acts in person in this case. He submitted that he was prevented by the 1^st Defendant from having access to Paul to conduct any medical examination. As this is a dispute amongst siblings, I urged the parties to see if they could explore ways to resolve the dispute amicably by allowing a medical examination to be conducted. That would have resolved the issue in this case. The 1^st Defendant, on the other hand, complained that the Plaintiff’s conduct in the present case has led to the freeze of the 2^nd Defendant's bank account. I should say that on the status of the evidence before this Court on 19 October 2023, I would have dismissed the Plaintiff’s Originating Summons as there is no cogent evidence on Paul’s mental status other than a passing comment by the 1^st Defendant well before Paul’s execution of the Proxy Form.

17.To strike a balance and with the hope that the parties could resolve the dispute amicably, on 19 October 2023, this Court made an order that, inter alia, (i) the Plaintiff undertakes to the Court that he would use his best endeavour to assist the 2^nd Defendant in unfreezing its company bank at Hang Seng Bank Limited (“the 2^nd Defendant’s Bank Account”); (ii) the 1^st Defendant undertakes to the Court that he would not prevent the Plaintiff from arranging their brother, Poon Chi Lam Paul to visit a psychiatrist with Paul’s consent; and (iii) these proceedings be adjourned sine die with liberty to apply (the “the October 2023 Order”).

18.On 22 December 2023, this case came back before this Court. It was ordered by this Court that, inter alia, upon the undertaking given by the Plaintiff to the Court that he would unconditionally assist the 1^st Defendant and the 2^nd Defendant in unfreezing the 2^nd Defendant’s Bank Account, the 1^st and 2^nd Defendants should, with Paul’s consent, arrange Paul to visit a registered psychiatrist to ascertain Paul’s mental capacity (the “December 2023 Order”).

19.After the December 2023 Order, the 1^st Defendant did endeavour to seek Paul’s consent in visiting a psychiatric doctor in compliance with the December 2023 Order. The 2^nd Defendant has also produced a copy of the December 2023 Order to Paul. Despite the Defendants’ efforts, Paul repeatedly and firmly refused to visit a registered psychiatrist. Paul also confirmed his unwillingness to visit a registered psychiatric doctor by three written confirmations signed by him.

20.In all of the three confirmations signed by Paul, he repeatedly said the following:

“我必須指出我還未有傻到同意見精神醫生來證明我有行為能力的程度。

若我無行為能力，我定期看的 “政府精神科醫生”，早就應該作出相關的決定。但，到目前為止 “明顯沒有”。”

21.Due to Paul’s unwillingness, he did not visit any registered psychiatric doctor.

22.As Paul is not a party to these proceedings, there is no way this Court could have made any order to compel Paul to conduct any medical examination.

23.Out of abundance of caution, this Court has also invited the parties to file written submissions on the need to join Paul as a party to these proceedings as the determining factor in this case turns on Paul’s mental capacity. However, the Plaintiff submitted that there is no need for Paul to be joined as a party to these proceedings. In such circumstances, the avenue to seek evidence on Paul’s mental capacity medically had come to an end.

24.Accordingly, on 20 March 2024, this Court made an Order that, inter alia, (i) these proceedings be restored and paragraph 1 of the December 2023 Order be set aside. It is imperative that this Court determines this case on the existing evidence adduced by the Plaintiff and the Defendants.

25.At the substantial hearing which took place on 29 April 2024, the Plaintiff also sought to adduce new evidence. Despite the 1^st Defendant's objections, this Court allowed the evidence to be filed as I am of the view that it is better for this Court to consider all available evidence and it would not cause any prejudice to the Defendants.

LEGAL PRINCIPLES

26.To allege that someone is mentally incapable is a serious matter and one must only do that with cogent evidence. In To Lee Wah Samuel v Yum Huin Ming [2019] HKCFI 144 at §§10-15, Linda Chan J held that the burden of proof lies on the plaintiff who alleges a person does not have the mental capacity when signing an instrument:

“THE BURDEN OF PROOF

10. Mr Tim Wong, counsel for P submitted that the burden of proof is on the Ds at the outset and remain on Ds throughout to prove that D1 had the necessary mental capacity at the material times to execute the EPoAs. He referred to Chui Kwok Ying v Chui Siu Kiu Kim & Anor [2016] 2 HKC 296 for support. The Chiu Kwok Ying case is not on the validity of the execution of an EPoA but on the validity of a deed revoking an enduring power.

11. Mr Tai and Ms Rosa Lee, counsel for Ds, disagreed with Mr Wong. They submitted that under the common law, everyone is presumed to have mental capacity unless it is shown otherwise (see Heywood & Massey, Court of Protection Practice at §4-003 and Assessment of Mental Capacity (4^th Ed) at §§4.2.1 and 4.2.3). Since an adult is presumed to have mental capacity to make decisions, the burden rests on those asserting otherwise to prove that that person has no such capacity. Therefore, the burden of proof in the present case lies on P to prove on a balance of probabilities that D1 did not have the requisite mental capacity to execute the two EPoAs at the times when they were executed. Mr Tai also referred to Szozda v Szozda [2010] NSWSC 804at §26; Scott v Scott [2012] NSWSC 1541 at §§237-239; Court of Protection Practice at §4-005; and Assessment of Mental Capacity (4^th Ed) at §4.2.4.

12. In Szozda v Szozda, Barrett J rejected a submission that it is for the party upholding a power to prove capacity and stated at §26:

‘I accept the submissions made on Barbara’s behalf on this matter. Mark, Anna and Gregory, as plaintiffs, seek declarations of invalidity in respect of the September 2006 power of attorney. Mark, Anna and Gregory, in pursuing a claim of that kind, must affirmatively displace the “presumption of sanity”. This is consistent with the recent observations of Harrison J in Lake v Crawford [2010] NSWSC 232 at [13]. Barbara’s claims are predicated on the operation of the “presumption of sanity”. The fate of those claims will follow from the conclusions reached regarding the contention of the plaintiffs that Mrs Szozda lacked capacity at the relevant time.’ (emphasis supplied)

13. In Scott v Scott at §§237-239, Lindsay J also observed:

‘237 That said, in the circumstances of the current proceedings, I incline towards acceptance of Barrett J’s analysis in Szozda v Szozda.

238. In principle, it seems to me, the practical utility of a power of attorney would be severely diminished if, in all cases or even most, a donee were required to prove that the donor had the requisite mental capacity to grant it. The nature of such an instrument requires that, in general, parties dealing with an attorney in circumstances in which the instrument appears to be regular on its face, should be able, in the ordinary course, to act upon an assumption that the instrument is valid. Whether such a conclusion is reinforced by reference to a “presumption of sanity” or some other form of presumption (such as a “presumption of regularity”), it is grounded upon the character of the instrument and the purpose it serves in the community served by the law.

239. Such a conclusion is also reinforced, in the case of an Enduring Power of Attorney, by the fact that a statute requires that such an instrument be witnessed and certified by a “prescribed person” from whose participation in the process the Court, and all who rely upon his or her certification of the instrument, might reasonably be expected to draw some comfort.’ (emphasis added)

14. Regarding the case of Chui Kwok Ying as relied on by Mr Wong that is a case where the donor sought a confirmation of the validity of a deed of revocation of an EPoA. It is distinguishable from the present case. Section 13(2) of the EPoAO places the burden of proof on the donor to show that he was mentally capable at the time when he revoked the EPoA. There is no similar requirement for the execution of an EPoA. Section 13(2) of the EPoAO provides: -

‘13(2). Where the enduring power is registered, on application made for the purpose, by or on behalf of the donor, the court shall confirm the revocation of the power if satisfied that the donor has done whatever is necessary in law to effect an express revocation of the power and was mentally capable of revoking a power of attorney when he did so.’ (emphasis added)

15. I agree with Mr Tai’s submissions. I hold that the burden of proof of the invalidity of the two EPoAs executed by D1 rests on P.” (Emphasis added.)

27.In Chan Chun Hei David v Ma Tung Lily (executrix of Tao Shu Yau, deceased), HCA 16978/1999, unreported, 6 March 2002, Kwan J (as she then was), in applying the English case Re K (Court of Protection) [1988] 1 Ch. 310 and In re Beaney, decd. [1978] 1 WLR 770 held that the test of mental capacity to perform a juristic act is whether a person understood the nature and effect of the particular transaction. The learned judge further held that the degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. If the subject matter and value of a gift are trivial in relation to the donor’s other assets a low degree of understanding will suffice.

28.At §§63-64, Kwan J. (as she then was) held:

“The law relating to the requisite mental capacity

63. It would be convenient to start with this dictum of Hoffmann J. (as he then was) in Re K (Court of Protection) [1988] 1 Ch. 310 at 313F to G:

‘It is well established that capacity to perform a juristic act exists when the parties who purported to do the act had at the time the mental capacity, with the assistance of such explanation as he may have been given, to understand the nature and effect of that particular transaction: see In re Beaney, decd. [1978] 1 WLR 770.’

64. So what should the deceased have understood about the nature and effect of the Notice of Severance for it to be held that she did or did not have the requisite mental capacity? Some guidance on this is found in the following dicta of Mr. Martin Nourse, QC, then sitting as a deputy judge of the Chancery Division, in Re Beaney:

‘The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration of a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor's other assets a low degree of understanding will suffice. But, at the other extreme, if its effect is to dispose of the donor's only asset of value and thus, for practical purposes, to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of.’ (at 774E to F)

65. In that case, the transaction that was being challenged was the transfer of a property by the donor by way of gift to her eldest daughter, the property being the only asset of value of the donor. It was held that even if the donor did understand that she was making an absolute gift of the property to her daughter, the transfer was void because the degree of understanding required was as high as that required for the execution of a will. The donor did not understand she was in effect disposing of the whole of her estate by the transfer, thus pre-empting the devolution of her estate on intestacy, nor was she explained the claims of all potential beneficiaries in her estate. Further, it was held that on the evidence the donor was not capable of understanding and did not understand that she was making an absolute gift to her daughter, so the transfer was void on that ground as well.” (Emphasis added.)

29.Further, in Tam Po Kei v ED Forces Trading Co Ltd and others [2011] 1 HKLRD 537 at §112, Harris J. observed that:

“112. “Patient” in the Mental Health Ordinance means “a person suffering or appearing to suffer from mental disorder”. “Mental disorder” means “mental illness” a “psychopathic disorder” or “any other disorder or disability of mind which does not amount to mental handicap”. In her submissions Ms Chan submitted that Po Yuen was a “mentally incapacitated person” which means (see section 2) “a person who is incapable, by reason of mental incapacity, of managing and administering his property and affairs”. Ms Chan’s argument as formulated in her submissions, as opposed to the way the matter is put in the petition, is that by reason of mental incapacity Po Yuen did not have the capacity to execute the instrument of transfer. It was not argued that by virtue of the provisions of the Mental Health Ordinance if I was satisfied that Po Yuen satisfied the definitions of patient or mentally incapacitated person it followed that he was deemed not to have the necessary capacity to transfer his property. I have not had cited to me any law that suggests that simply because a person suffers from a mental illness he is treated as not having the mental capacity to transfer his property. It would seem to me that whether or not this is the consequence of a mental illness will depend on its severity and whether its symptoms are intermittent or not.” (Emphasis added.)

30.I agree with Mr Chu for the 1^st and 2^nd Defendants that simply because a person is suffering a mental illness does not mean he does not have the mental capacity to execute a particular instrument. It is the severity and whether the symptoms are intermittent or not that matter.

31.Mr Chu also helpfully pointed that that although the decision by Harris J in Tam Po Kei was subsequently overturned by the Court of Appeal, the said observation made by Harris J was not an issue in the appeal and is therefore persuasive for this Court’s consideration.

32.I do agree and have repeated myself many times to the Plaintiff that this Court will require cogent evidence to conclude that someone has no mental capacity to execute a particular instrument and the burden rests squarely on the Plaintiff. This is particularly so when the Plaintiff consciously chooses not to join Paul as a party to these proceedings.

ANALYSIS

33.Having carefully considered the facts and evidence of the present case and the applicable legal principles, I am of the view that the Plaintiff has not discharged his burden of proof with cogent evidence to show that Paul did not have the mental capacity to execute the Proxy Form at the material time.

34.First, there is no medical report to prove the same. That would normally be the starting point. This Court has tried its best to assist, but this Court could not force an unwilling Paul to attend a medical examination against his wishes. There is no direct evidence to support the Plaintiff’s assertion.

35.Secondly, the Plaintiff relies on two interview minutes prepared and signed by himself to support that Paul did not understand the nature of “three documents”. However, Mr Chu is correct that these interview minutes were not signed by Paul but by himself only and is therefore self-serving. Although the two minutes purported to contain a confirmation from two independent parties (one Mr. Choi and one Ms. Wu), both of them did not sign in the minutes. There is no evidence from any person who is currently taking care of Paul or someone independent.

36.Thirdly, the Plaintiff also asserts that the 1^st Defendant once told the Plaintiff in an email that Paul was a “精神病患者, 沒有行為能力”. However, Mr Chu for the Defendants submitted that first, the email was dated 10 November 2021. Any statement contained therein is unrelated to Paul’s mental condition on 20 May 2023 when he signed the Proxy Form, which was 1.5 years after the said email. Further, the email was just a partial conversation between the 1^st Defendant and the Plaintiff. There is no record of what “documents” they were referring to. Further, the 1^st Defendant is not a medical professional. He has no medical qualification to give medical opinion on Paul’s mental capacity in 2021. His statement was at most his own observation at that time only.

37.Fourthly, Mr Chu submitted that according to the legal principles set out in Chan Chun Hei David at §§63-64 and In re Beaney, decd., when considering the degree or extent of understanding required in respect of the signing of the Proxy Form relative to the Removal Resolution, the required degree of understanding in the present case must be low for the following reasons:

(1)  The Proxy Form does not concern any transfer of personal assets of Paul. It concerns only the exercise of his shareholder’s right;

(2)  The matter in the Proxy Form i.e. the Removal Resolution, did not affect Paul’s any interest or right in the 2^nd Defendant. It is a matter concerning a director of the 2^nd Defendant, namely, the Plaintiff.

(3)  Accordingly, the degree of understanding required for the execution of the Proxy Form should be low.

38.Mr Chu also submitted that the subject matter in the Proxy Form i.e. the Removal Resolution, was a straightforward and simple matter. It did not require a detailed and thorough explanation for one to understand the implication of the Removal Resolution. Moreover, there have been many occasions that Paul was explained as to the effect and nature of the Proxy Form:

(1)  The notice which set out the Removal Resolution were in simple language. The notice was brought by the 1^st Defendant to Paul personally.

(2)  After the December 2023 Order was made, the 1^st Defendant endeavoured to explain to Paul why he was asked to visit a psychiatric doctor (to examine his mental capacity when signing the Proxy Form). 1^st Defendant also brought the December 2023 Order to Paul for his perusal. Despite 1^st Defendant’s, Paul expressly rejected to visit a psychiatric doctor and expressly indicated in all of his three confirmations that he had the mental capacity when signing the Proxy Form (我必須指出我還未有傻到同意見精神醫生來證明我有行為能力的程度。若我無行為能力，我定期看的 “政府精神科醫生”，早就應該作出相關的決定。但，到目前為止 “明顯沒有 ” ).

39.Mr Chu further submitted that as a highly educated person (graduated from St. Stephen College and was a student of Boston University), and considering that the required degree of understanding is low and that the Removal Resolution was a simple and straightforward matter that could be easily understood, Paul must have understood the effect of the Proxy Form and the Removal Resolution. He must have the requisite mental capacity when signing the Proxy Form.

40.Fifthly, I agree that one who has a history of psychiatric problems does not mean that he does not have the mental capacity to execute a particular document. Whether or not any psychiatric problem did affect Paul’s mental capacity would depend on its severity and whether its symptoms are intermittent or not. What is important is the proof of his mental condition i.e. a medical report suggesting that he does not have the mental capacity. There is no such medical evidence. This Court is thus not going to pass a judgment that Paul did not have the mental capacity to execute the Proxy Form.

41.Sixthly, I note Wai asserts that Paul is a “精神病康復者”. There is, hence, evidence, that Paul has recovered from his mental illness. Paul has been living in Beautiful Life (Kwu Tung) Hostel (康樂園(古洞)宿舍) (“the Hostel”) since 2010. The Plaintiff suggests that Paul resides in the Hostel due to his mental illness and he is restricted from leaving the Hostel. However, Mr Chu submitted that the Hostel is a medium care level facility. The conditions for residing in the Hostel are (i) male who is able to take care of himself; (ii) stable emotion; (iii) no contagious disease; (iv) willing to live with others and (v) no behavioural problem (男性，有基本自我照顧能力、情緒穩定、無傳染病、願意與人合住及無嚴重行為問題). Paul is also free to leave the Hostel as he wishes. This suggests that residents in the Hostel cannot be mental incapacitated persons. Indeed, if a person is considered mentally handicapped person, he would reside in other hostels such as Caritas Chan Chun Ha Hostel or Caritas Jockey Club Lok Wo Hostel but not the Hostel.

42.Seventhly, there are also other objective evidence suggesting that, on balance, Paul is not a mentally incapacitated person:

(1)  Although Paul was admitted in Castle Park Hospital before, he has never been declared as “mentally incapacitated” person throughout his treatment. He also visits a psychiatric doctor at public hospital regularly but he has never been classified as “mentally incapacitated” person; and

(2)  Paul was acting normally in the video taking by the 1^st Defendant on 2 February 2024 during which Paul was reading newspaper and cooperated with other customers.

43.Mr Chu for the Defendants submitted that taking into account, amongst others,

(1)  The degree of Paul’s understanding of the Proxy Form is low in view of the nature of the transaction in the Proxy Form i.e. the Removal Resolution;

(2)  The Removal Resolution is written in the notice for the extraordinary general meeting and the Proxy Form in simple language and the implication and effect thereof should be easily understood;

(3)  There is no medical evidence suggesting that Paul did not have the mental capacity when signing the Proxy Form; and

(4)  Objective evidence also suggests that Paul acts like a normal person and live in a normal life;

Paul must have the mental capacity when signing the Proxy Form and must have understood what he signed for.

44.The Plaintiff relies on the Powers of Attorney Ordinance, Cap. 31 (“the PAO”) This Court, however, agrees that the PAO has no application in the present action. An execution of powers of attorney requires an instrument to be signed and sealed (see section 2(1) of the PAO), yet a proxy form simply does not have such requirement. The Proxy Form is not an instrument applicable under the PAO.

45.Out of abundance of caution and for the sake of completeness, I also invited the parties to make further written submissions on the following issue:

“If P can prove a prima facie case that Paul did not have the requisite mental capacity when signing the Proxy Form, will the burden of proof of Paul’s mental capacity shift to D1 and D2?”

46.Again, I have carefully considered the parties’ submissions. Where a prima facie case of mental incapacity has been established i.e. proper grounds have been shown that the person lacked the relevant capacity at the relevant time, then the evidential burden shifts to those person(s) seeking to establish the relevant capacity was present (see Assessment of Mental Capacity – a Practical Guide for Doctors and Lawyers (5^th Edition), The Law Society at §4.2.3, Gorjat v Gorjat [2010] EWHC 1537 (Ch) at §139)

47.In Gorjat v Gorjat at §140, it is stated that:

“…………He [Counsel for the defendants] also submitted that what was necessary for the Claimants to make out a case that Jean [the deceased] lacked capacity to a sufficient degree to call into question the validity of the transaction in question. He said that it was not enough to bring the capacity into question generally. He emphasised that the lack of capacity must be material and relate to the transfer of the Credit Suisse accounts into joint names. In my judgment, this is inevitably correct. However, evidence as to a person’s mental capacity both before and shortly after the transaction in question may well shed light on that person’s capacity at the relevant time” (Emphasis added.)

48.In Gorjat v Gorjat, there were lay witnesses, professional witnesses and medical evidence (see §§28-44) before the Court to determine the mental capacity of the deceased. Despite the comprehensive evidence put forward by the parties, the Court still held the view that whether the claimants have done enough to put forward a prima facie case of lack of capacity, was indeed borderline. At the end, the Court held that, on balance of probabilities, the deceased had sufficient mental capacity to understand the nature of the transaction regarding the bank transactions.

49.In the present case, the Plaintiff basically relies on the following evidence to suggest that Paul did not have the requisite mental capacity when signing the Proxy Form:

(1)  Two interview minutes prepared and signed by himself which recorded that Paul did not understand the nature of “three documents” (which P did not specify what the three documents were);

(2)  The 1^st Defendant once told the Plaintiff in an email dated 10 November 2021 that Paul was a “精神病患者, 沒有行為能力”; and

(3)  Paul has been living in the Hostel since 2010 and the Plaintiff alleges that Paul resides in the Hostel due to his mental illness and he is restricted from leaving the Hostel.

50.From the analysis of the evidence above, I am of the view that there is no prima facie evidence that Paul lacked the required mental capacity to sign the Proxy Form at the material time. At best, there is a reasonable suspicion on the part of the Plaintiff. I can well understand that the Plaintiff has reasonable basis to entertain his suspicion. However, this Court cannot act on suspicions.

51.I am of the view that the Plaintiff has not discharged the burden of proof that Paul’s lack of mental capacity, if any, was material and related to the signing of the Proxy Form. No independent objective evidence was adduced to substantiate such claim.

DISPOSITION

52.For all the reasons stated above, the Plaintiff’s Originating Summons is dismissed.

53.I also make a costs order nisi the Plaintiff is to pay the costs of and occasioned by the Originating Summons to the 1^st Defendant and the 2^nd Defendant, to be taxed on a party to party basis, if no agreement can be reached. Such costs order nisi would be made absolute within 14 days herein unless an application to vary the same is taken out within the said period.

54.Finally, I thank Mr Poon and Mr Chu for the Defendants for their assistance to this Court.

The Plaintiff, in person, present

Mr. Ivan Chu instructed by Messrs Raymond Cheung & Chan for the 1^st and 2^nd Defendants

The 3^rd Defendant, attendance excused