Re Madam L

HCMP 2042/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDING NO. 2042 OF 2004

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BETWEEN

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Before: Hon Lam J in Court

Date of Hearing: 6 October 2004

Date of handing down Judgment in open Court: 20 October 2004

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J U D G M E N T

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1.On 31 August 2004, this court directed on the application of the Director of Social Welfare under Part II of the Mental Health Ordinance that an Inquiry be held as to whether the alleged patient (“Madam L”) is incapable, by reason of mental incapacity, of managing and administering her property and affairs.  The Director had been appointed as guardian of Madam L on 3 May 2004 by the Guardianship Board under Section 59O of the Ordinance.  The Inquiry will take place on 5 November 2004.  Apart from the usual directions given, this court also made the following orders pursuant to Section 10D of the Mental Health Ordinance by way of interim relief,

(a)     it is directed that the Director, as guardian of Madam L in the meantime, is to issue a protective writ as next friend of Madam L and register it as lis pendis against a property (the details of which I do not deem it necessary to set out in this Ruling and I would refrain from so doing to preserve the anonymity of the parties concerned) pending the taking over of the proceedings by the Official Solicitor;

(b)    pending the determination of the question whether Madam L is incapable by reason of mental incapacity, of managing and administering her property and affairs, the Official Solicitor be authorized to take over and conduct legal proceedings in the name of Madam L or on her behalf to set aside the transaction by way of assignment dated 6 February 2004 in respect of the property.

2.The relevant background leading to the making of those orders are as follows.  Madam L was born in 1930 and she had a history of Bipolar Affective Disorder since 1966.  In 1994, she was also diagnosed of Frontal Lobe Dementia.  She had received treatments at various institutions, including compulsory hospitalization.  She stayed in hospital between 1995 and 2004.  Since June 2004 she was admitted to St Paul’s Home for the Elderly.  She was single and did not have any material support from her family.  She was mainly visited by volunteers and old friends.  She came to know a Mr T who was a volunteer who visited her.  He started paying her frequent visits in 2002.  Mr T was able to gain the trust of Madam L to the extent that Madam L entrusted him with $400,000 in February 2003.

3.Since October 2003, Madam L was found to have significant memory deterioration and on 3 November 2003, she was certified by a medical officer of Kwai Chung Hospital as being mentally unfit.  Mr T was informed of that on 5 November 2003.  After a multi-disciplinary conference, the Director of Social Welfare applied for guardianship order in respect of Madam L on 18 March 2004.  The application was supported by medical reports from two approved doctors made in March 2004.  The doctors expressed the view in their reports that Madam L was unfit to manage her personal and financial affairs and she was at potential risk of abuse and exploitation by others in view of her poor cognitive functioning.

4.In the course of the social enquiry for the guardianship application, it was revealed that Madam L had sold a property on 6 February 2004 at $420,000 by a Power of Attorney made on 13 September 2003 and a letter of authorization of 6 February 2004.  These two documents were executed by Madam L in favour of Mr T.  According to the evidence before the Guardianship Board, the letter of authorization was executed by Madam L at a garden within the compound of Kwai Chung Hospital in the absence of any doctor.  Mr T alleged that a clerk from a solicitor firm advised that it was unnecessary to have medical certification of Madam L’s mental capacity before the document was executed.  The effect of the letter of authorization was to enable Mr T to receive and collect the sale proceeds.

5.There is evidence that the sale was at a gross undervalue.

6.The purchasers of the property were a caretaker of the building in which the property is situated and his wife.  Up to the date hereof, the property is still registered under their names.

7.Upon completion, Mr T collected the sale proceeds.  At the hearing before the Guardianship Board, Mr T told the board that he spent all the monies as those were gift from Madam L.

8.Apart from making the guardianship order on 3 May 2004, the Guardianship Board also recommended the guardian to apply to this court under Part II of the Mental Health Ordinance and to obtain authorization to set aside the assignment of 6 February 2004.

9.Acting on such recommendation, the Director of Social Welfare issued the Originating Summons in these proceedings on 17 August 2004.  At the hearing of 31 August 2004, this court considered that in the circumstances of the present case, immediate measures were called for to preserve the position.  Hence, the directions mentioned in Paragraph 1 above were given.  On 21 September 2004, the Director on behalf of Madam L commenced a High Court Action against the purchasers. 

10.Subsequently, the Official Solicitor expressed some concern as to whether Section 10D is wide enough to empower the court to give these directions.  With a view to clarify the matter and for the benefit of future guidance, the matter was argued before me on 6 October 2004 and further submissions were also filed on 12 October 2004 and 14 October 2004 respectively.  I am grateful for the assistance of Mrs Williams from the Official Solicitor office and Mr Chan from the Department of Justice.

11.Section 10D reads as follows,

“Where-

(a)   it is represented to the Court, and the Court has reason to believe,that a mentally incapacitated person may be incapable by reason ofmental incapacity of managing and administering his property andaffairs; and

(b)   the Court is of the opinion that it is necessary to make immediateprovision for any of the matters referred to in section 10A(1), thenpending the determination of the question as to whether that person isso incapable, the Court may exercise in relation to the property andaffairs of that person any of the powers conferred on the Court bythis Part in relation to the property and affairs of a mentallyincapacitated person so far as is requisite for enabling thatprovision to be made.”

12.To understand the effect of sub-section (b), it is necessary to go back to Section 10A(1) which reads,

“(1) The Court may, with respect to the property and affairs of a mentallyincapacitated person, do or secure the doing of all such things as appearnecessary 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.”

13.Section 10B sets out some of the powers the court could exercise pursuant to Section 10A.  Amongst other things, they include the power to make such orders and give such directions and authorities as it thinks fit for the conduct of legal proceedings in the name of the mentally incapacitated person or on that person's behalf (see Section 10B(1)(i)).

14.Mrs Williams submitted that Section 10D should only be evoked where pending the determination of the mental status of the alleged mentally incapacitated person, immediate provision of funds is necessary for any of the matters referred to in Section 10A(1). She contended that it might not include the institution of legal proceedings on behalf of a person whose mental status has yet to be determined.

15.Subject to a submission stemming from the Chinese version of Section 10D (which I shall deal with below), I am of the view that such construction of Section 10D is too narrow.  Section 10A(1) is clearly drafted in a manner to confer the widest possible power upon the court in the management and administration of a patient’s property and affairs.  In my judgment, the plain intention of that section is to put the court into the shoes of the patient in respect of the management and administration of his property and affairs.  This is because given the mental incapacity of the patient, apart from the court, no-one else could exercise such a power.  Historically, such power had been exercised by the court in its Lunacy jurisdiction which was described by Sir Henry Theobald (a Master in Lunacy from 1907 to 1922) in The Law relating to Lunacy (1924) as follows,

“In Lunacy … [i]t is necessary to take up the conduct of a man’s affairs cut short by his mental breakdown. … Lunacy is paternal and protective …  The paternal jurisdiction in Lunacy is assisted by inquisitorial powers unknown to Chancery as such --- powers much enlarged by the appointment of the Lord Chancellor’s Visitors, who have been well described as the eyes and ears of the Judge in Lunacy …  The Judge in Lunacy, having regard to the incapacity of the persons he has to protect, must often act on evidence obtained by himself or by persons acting under his direction.”

A recent discussion of this jurisdiction can be found in the judgment of Dame Elizabeth Butler-Sloss P in Re a Local Authority [2004] Fam 96 Paras.86 to 97.  It is noteworthy that Her Ladyship held that in case where there is a legislative lacuna in the protection or safeguard of the welfare of those under disability, the courts have a duty to use the common law as the great safety net to fill gaps where it is clearly necessary to do so.  On the facts of that case, the court granted injunction to restrain publication of reports concerning some vulnerable adults.  The exercise of the jurisdiction is therefore not confined to the grant of declarations.   

16.Section 10B(1)(i) expressly provides that such power includes power to conduct litigation for the patient.  When a patient’s property was misappropriated by others, the court could sanction the committee to issue proceedings for the recovery thereof.  I see no reason in principle why interim interlocutory relief could not be obtained for such purpose as in the case of litigation by a normal litigant.  Does it make any difference before the inquiry when the court has yet to determine whether the patient is incapable, by reason his mental incapacity, of managing and administering his property and affairs?  This is where Section 10D comes in.

17.As Mrs Williams pointed out, Section 10D is similar in its wordings to Section 98 of the Mental Health Act 1983. Under the English legislative scheme, that section was the primary legislation enabling Rule 42 of the Court of Protection Rules 2001 to be made.  Under that rule, the court may, in circumstances similar to that laid down under our Section 10D, by certificate or direction direct or authorize any named person to do any act or carry out any transaction specified in the certificate or direction.  The court may also appoint an interim receiver for the patient.  Mrs Williams agreed that in England, direction could be given that a person shall commence proceedings on behalf of the alleged patient pursuant to that rule.  She however submitted that there is no similar rule in our Rules of High Court.

18.I do not think it matters much whether we have a specific rule providing for the appointment of interim receiver.  Rule 42 does not expressly deal with commencement of litigation by the interim receiver.  However, it has long been recognized that the court does have the power to grant interim relief to protect the estate of an alleged patient pending the outcome of inquiry.  Mills & Poyser’s Lunacy Practice (1934) at p.26 said as follows,

“In really urgent cases where it is expedient for the protection of the property, pending the appointment of a receiver, the Master may by order appoint a receiver ad interim to give security forthwith, but with liberty, where the circumstances justify it, to act at once.”

That was said notwithstanding the relevant rule, viz. Rule 54 of the Patients’ Estates Rules 1934, was apparently narrower in scope than Section 10D.

19.Hence, the power to grant interim relief is not confined by the rules.  In Hong Kong, there is no separate establishment of a court of protection.  Under the Mental Health Ordinance Cap.136, the Court of First Instance is the court designated to handle applications under Part II of the Ordinance.  Section 21L(1) of the High Court Ordinance confers the power on the Court of First Instance to appoint a receiver, including interim receiver, in all cases in which it appears to the court to be just or convenient to do so. I am therefore of the view that as far as the legislative scheme in Hong Kong is concerned, in the exercise of its power under Section 10D of the Mental Health Ordinance, the court could in appropriate case appoint a person acting as interim receiver to deal with the property of an alleged patient including the commencement of legal proceedings to recover properties misappropriated from him.  Of course, whether such power should be exercised is a matter of discretion and the court must be satisfied it would be just or convenient to do so.

20.Further, Section 10D refers to the making of immediate provision for any of the matters referred to in Section 10A(1). As I said, that is a very wide section.  The taking of steps by way of legal proceedings to secure, preserve and recover property belonging to the alleged patient can fall within the scope of that expression.

21.I now deal with some specific concerns raised by Mrs Williams.  First, she detected some incongruity in appointing a person as next friend to commence proceedings on behalf of an alleged patient pending determination of the question whether he is incapable by reason of mental incapacity, of managing and administering her property and affairs.  Her point stems from the rules as to appointment of next friend under Order 80 Rule 2.  The conduct of an action by a next friend presupposes that the party concerned is a person under disability, viz. a mentally incapacitated person (see definitions under O.80 r.1).  However, that is the very issue that this court has to determine in the coming inquiry. Hence, the appointment of next friend is not appropriate.

22.I can see the logic in that submission. I myself have referred to the same point in Para.9 of my judgment in Re A HCMP 44 of 2004, 5 March 2004.  However, the inapplicability of the regime under Order 80 does not rule out altogether the appointment of someone to institute proceedings on behalf of the alleged patient pending an inquiry.  Section 10D and Section 21L(1) are sufficiently wide to confer upon this court the power to achieve that objective.  On reflection, it might be better to name the person appointed as interim receiver as opposed to next friend to make it clear that he is not a next friend under the Order 80 regime.  I will therefore further vary my order of 31 August 2004 accordingly.  Once this is clarified, the apparent incongruity ceases to exist.

23.Another concern raised by Mrs Williams is the difficulties that parties might face in the event that the alleged patient is subsequently found to be mentally capable at the inquiry.  She submitted that by reason of such difficulties it would be better if the court expedites the inquiry instead of granting interim relief.  Whilst I acknowledge that theoretically it is possible that the interim receiver would be discharged as a result of the outcome of the inquiry, the court should have assessed that risk before exercising its discretion in making the interim appointment in the first place.  In most of the cases, the court will only make such an appointment when the medical evidence points strongly to mental incapacity.  Further, the court will also have regard to the merits of the proposed litigation against third parties and generally it will only direct proceedings to be instituted in cases with good prospect of success where the circumstances show that urgent relief is required for preservation or securing of property.  The overriding requirement in Section 10D is that there has to be a need for immediate provision being made.  Under Section 21L, the requirement of just or convenient is well understood in the context of interim relief.

24.As a matter of principle, since the interim receiver acts under the authority of a court order, the legal proceedings commenced by him is properly constituted notwithstanding subsequently it is determined that the alleged patient is mentally capable.  Upon the discharge of the interim receivership, it is up to the alleged patient to decide for himself whether he would like to continue with the action. 

25.Irrespective of the person’s choice as to the continuation with the claim, subject to orders made by the court in the Part II proceedings as to costs incurred in the action commenced by the interim receiver prior to the taking over of the action by the person, normally he would have to bear the costs consequences of that action which have been commenced for his benefit.  If the court finds that a certain party is at fault in causing an interim receiver to be appointed to commence an action on behalf of the alleged patient, the court can consider exercising its discretion in the Part II proceedings to order the party at fault to indemnify the alleged patient’s liability as to costs.  But that should rarely happen in view of what I said as to the prerequisites for the appointment of interim receiver in Paragraph 23 above.

26.Although the expedition of the inquiry is also an option, I can envisage scenarios where the situation is so urgent that an expedited inquiry cannot be the answer.  Further, there could also be scenarios where for one reason or another, the inquiry cannot be expedited (e.g. where notification to a particular relative is essential and time is required for that to be done).

27.As in all cases of interim relief, there is a certain element of risk as the court’s assessment of the merits and other relevant factors can only be provisional basing on the material before it at the interim stage.  However, judges in our jurisdiction are well familiar with the balancing of various risk factors in dealing with interlocutory applications in order to achieve justice.  I see no reason why interim relief should not be available to protect the position of an alleged mentally incapacitated person in an appropriate case.

28.Mrs Williams further submitted that in view of the satisfactory progress in the High Court Action (I was informed that there is a likelihood of a satisfactory settlement being achieved), it would be better if the Director shall continue to have the conduct of the action in the meantime.  Mr Chan has no objection to that course being taken. I have therefore varied my order accordingly.  Based on the experience in the present case, it may be that in the future, it would be more appropriate for the party appointed as interim receiver to have the conduct of the legal action on behalf of the alleged patient at least up to the inquiry and appointment of committee.  Directions can of course be given by the court as to the future conduct of the prosecution of the action at the inquiry in case different views are held by the interim receiver and the committee as to the merits of the action.   

29.The last point taken by Mrs Williams stems from the Chinese version of Section 10D. It reads,

“凡─

(a)          有人向原訟法庭提出申述，指某精神上無行為能力的人可能由於精神上無行為能力而無能力處理和管理其財產及事務，而原訟法庭有理由相信情況屬實；及

(b)          原訟法庭認為有必要立即為第10A(1)條提述的任何事項提供款項，

則在該精神上無行為能力的人是否如此無能力處理和管理其財產及事務一事有待裁定的期間，原訟法庭可在為使該項款項得以提供而必需的範圍內，就該人的財產及事務行使本部就任何精神上無行為能力的人的財產及事務而授予原訟法庭的任何權力。”

30.The expression “making provision for” in the English version is rendered as 提供款項in the Chinese version.  Literally speaking, the Chinese version means the provision of funds.  The Chinese version does support the construction of Section 10D by Mrs Williams summarized in Paragraph 14 above.

31.Whilst the making of provision could encompass providing the necessary funds for certain matters, it is not so restricted. In its ordinary meaning, making of provision could cover the making of non-financial arrangement for certain matters.  The Shorter Oxford English Dictionary contains five meanings for the word “provision”.  The most apposite one in the present context seems to be the following,

“The action or an act of providing something; the fact or condition of being provided. Freq. in make provision, make prior arrangement or preparation (for).”

32.A clear example can be found in Section 10B(2).  The expression “provision is made” in the English version is rendered as 作出…安排in the Chinese version.  It is quite plain that the subsection is not referring to the provision of fund.                   

33.Reading Section 10D together with Section 10A(1), in particular Section 10A(1)(d), I have great difficulties in accepting that the provision to be made under Section 10D should be confined to the provision of funds.  Section 10A(1)(d) refers to the administration of the mentally incapacitated person’s property and affairs generally.  To be effective, that must require something to be done in addition to making funds available for that purpose.  It would be futile if funds were made available but no person is authorized to undertake the relevant task, e.g. the issue of proceedings in the present context.  I therefore conclude that in the context of Section 10D as a whole, the making of provision cannot simply mean the provision of fund.

34.I therefore conclude that the Chinese version of Section 10D, perhaps unwittingly, bears a much narrower meaning than the English version.  Given the discrepancy between the two versions, Section 10B of the Interpretation and General Clauses Ordinance Cap.1 is pertinent.  It is necessary to apply Section 10B(3).  It reads,

“Where a comparison of the authentic texts of an Ordinance discloses a difference of meaning which the rules of statutory interpretation ordinarily applicable do not resolve, the meaning which best reconciles the texts, having regard to the object and purposes of the Ordinance, shall be adopted.”

35.Therefore, I have to examine the object and purposes of the Ordinance.  I have already referred to the underlying and historical origin of this jurisdiction.  When the Mental Health (Amendment) Ordinance Bill 1997 was gazetted, its Explanatory Memorandum stated that one of the purposes of the Bill was to “provide for a revised court supervised system relating to the management of the property and affairs of mentally incapacitated persons by improving the present provisions and amending them by incorporating some of the provisions contained in Part VII of the Mental Health Act 1983” (my emphasis). The Secretary for Health and Welfare introduced the Bill to the Legislative Council in this way,

“This bill seeks to strengthen the provisions of the [Ordinance], with a view to providing better legal safeguards for mentally disordered and mentally handicapped people, as well as people caring for them…  At present, an application to mange the property and affairs of a mentally disordered or mentally handicapped person may be made to the High Court either under Part II of the Ordinance or, by virtue of section 12(4) of the Supreme Court Ordinance under Part VII of the United Kingdom Mental Health Act 1983.  This problem of dual jurisdiction needs to be rectified to avoid confusion.” (See Hong Kong Hansard, Session 1996/97 (29 January 1997) pp 59 to 60). 

36.Prior to the coming into operation of the 1997 Ordinance, for the reasons given by the Secretary, Part VII of the Mental Health Act 1983 was applicable in Hong Kong.  Section 98 mentioned in Paragraph 17 above was found under Part VII and hence part of our law prior to the amendments in 1997.  Rule 44 of the Court of Protection Rules 1994 was in terms similar to Rule 42 of the 2001 Rules.  By reason of Section 12(4) of the Supreme Court Ordinance, the rule was applicable in relation to the exercise of the jurisdiction under Part VII of the Mental Health Act 1983 by the court in Hong Kong. Based on what has been said in Paragraphs 17 and 18 above, it is quite apparent that prior to the amendments in 1997, the High Court in Hong Kong did have the power to grant interim relief by appointing a person to commence action for an alleged patient pending an inquiry.

37.Judging from the Explanatory Memorandum and the statement by the Secretary, it could not have been the intention of the legislature to cut down that power by the 1997 amendments.  It would be rather surprising if an alleged patient was to be deprived of the benefit of interim relief by amendments of the legislation aiming at providing better safeguards to him.  Yet this would be the result if the Chinese version of Section 10D is to prevail.

38.I am therefore of the view that the legislature could not be taken as intending to curtail the power of the court to grant interim relief by enacting Section 10D and insofar as the Chinese version produces such effect, it is plainly unintentional.

39.The question is in the light of all these, what is the meaning which best reconciles the texts, having regard to the object and purposes of the Ordinance.  I do not find this to be an easy task.  Mrs Williams submitted that there is no inconsistency between the English and the Chinese versions.  She said the Chinese text merely serves to define the parameters of the term “immediate provision”.  For reasons given, I cannot accept that to be the intent of the legislature.

40.I believe that the correct approach is to recognize that the English version properly construed in its context bears a different meaning from that of the Chinese version.  Starting from that premises, we come to the task of reconciliation.  It is somewhat like the situation of repugnancy within the same piece of legislation referred to in Section 160 of Bennion, Statutory Interpretation, 4^th Edn.  The interpreter of the legislation has to arrive at a combined meaning of the enactments and that combined meaning may be inconsistent with the literal meaning of one version of the enactment under inquiry.      

41.If I must decide the point, I would hear further submissions from parties in relation to the following authority which seem to be relevant.  In Michael Beaupre, Interpreting bilingual legislation, 2^nd Edn., pp.21-6, reference was made to the Canadian case Food Machinery Corp. v Registrar of Trade Marks[1946] 2 DLR 258 and the learned author summarized the relevant principle at p.25,

“It is not enough to say, if one version is clear while the other is unclear, that the clear version shall be preferred and applied.  Thorson P emphasized that the clear version must be in harmony with a reasonable construction of the unclear one.  But what is reasonable can only be determined by reference to the whole Act.  Both versions, in such a case, must be compared and, where possible, justified; one must attempt to extract a mutually compatible rendering.  If that is impossible, the context naturally rules the inevitable choice of the version to be preferred.”

42.But I do not have to decide the point.  The short answer can be found in Section 21L of the High Court Ordinance.  Even if Section 10D were to be construed as being restricted to provision of funds due to the Chinese version, this court can still exercise its jurisdiction under Section 21L to make the same order.  Alternatively, the lacuna could be filled up by resorting to the inherent jurisdiction alluded to by Dame Elizabeth Butler-Sloss P.  Bearing in mind the legislative history that led to the enactment of Section 10D, I do not think there is a legislative intent to curtail that power and I therefore have no hesitation in resorting to those alternative jurisdictional basis for making the order.

43.It is quite plain that in the circumstances of the present case, some measures ought to be in place to secure the property on behalf of Madam L.  Once I am satisfied with the existence of jurisdiction to make the order, the discretion should be exercised by making the same.  Therefore, my directions shall remain in force subject to the variations indicated.

44.I shall hand down this judgment in open court with the names of the parties suitably edited to preserve anonymity.

Mr Mark Chan, of Department of Justice, for the Applicant

Mrs Annie Williams, of Official Solicitor’s office