by David H.C. Wan, Associate Solicitor

Take this scenario..... Mr. Chan Tai Man is self employed and owns a business in Hong Kong. He has a wife and young family. Mr. Chan meets with a road traffic accident and suffers serious injuries. He recovers from the physical injuries but is mentally incapacitated and is not able to manage his affairs. This article will discuss what options are available to Mr. Chan and his family under current Hong Kong legislation.

Appointment of a Guardian
Generally in Hong Kong, to ensure Mr. Chan’s immediate needs are met, that is housing and medical treatment, someone can apply to become his Guardian pursuant to Part IV B of the Mental Health Ordinance, Cap 136 Laws of Hong Kong (“the Ordinance”). The applicant can be a relative, social worker or medical practitioner. However, having said this, it is not in every case that a Guardianship Order is needed. Where Mr. Chan’s needs are being met and he is being looked after by his family, a Guardianship Order is not normally required.

There is a statutory body called the Guardianship Board which is responsible for making Guardianship Orders. This is a multi-disciplinary Board consisting of the Chairperson and a panel of 56 part-time persons, including members who have personal experience of mentally incapacitated persons; lawyers, doctors, social workers, and psychologists.

If appointed, a Guardian has the legal power to make important personal decisions in support of an adult who is mentally incapacitated, such as decisions about his/her accommodation or consenting to medical treatment. The Guardian may also manage a limited amount of that person’s money, which currently is a maximum of HK$10,000 per month.

In the case of The Hospital Authority v C, HCMP 479/2003, the Hospital Authority applied to the High Court for a declaration to authorize doctors to carry out an emergency caesarean section on a pregnant patient who had been in a deep coma for the previous 4 months. This was necessary because the father of the patient, against medical advice, objected to the caesarean section being carried out immediately because his spiritual guide, a person who was not named, had urged that to ensure the health of both mother and child, the operation be delayed by 10 - 14 days. According to the spiritual guide time was required to bring together metaphysical healing powers. Due to the urgency of the matter no Guardian was appointed for the patient and the declaration was granted resulting in the delivery of a healthy baby girl. The Judge dealing with the case, Mr. Justice Hartmann, decided that it was in the best interest of the patient to have the caesarean and that her best interest included what she would have wished, i.e. for her baby to be born alive.

Appointment of a Committee of Estate

Returning to our Mr. Chan. As mentioned, he has a business to run. His wife or other family members may be appointed to act as a committee of his estate to run the business as an on-going concern. A committee has more powers than that of the Guardian. The committee may also be authorized to deal with other financial interests of Mr. Chan including bank accounts, securities accounts and landed properties. The basis of their authority to act would come from a court order.

The procedure for applying to appoint a committee is governed by Part II of the Ordinance. In the matter of appointment of a committee of the estate of Madam A, in HCMP No.44 of 2004, Mr. Justice Lam of the High Court gave his views on how such an application should be made:

• There is a two stage process. The first stage is to seek directions for an inquiry to be held. This is to define the scope of the inquiry that could encompass inquiries concerning the nature of the property belonging to the mentally incapacitated person (“MIP”), the MIP’s relatives and other questions. The second stage is for the enquiry to take place. If satisfied that the person is in fact a MIP, the court can then make an order regarding the affairs and property of the MIP, including but not limited to the appointment of a committee.
  
• The author has been involved in a case where the directions and inquiry took place at the same time. Mr. Justice Lam’s interpretation of Part II of the Ordinance is that it should be a two stage process.
  
• The application can be made on an ex parte basis. There is often no respondent. Notice of the proceedings should be given to the relatives of the MIP.
  
• Evidence in the form of an affidavit needs to be filed on the relatives of the MIP and his property.
  
• There is a requirement for two medical reports to be filed, one of which must come from a doctor approved by the Hospital Authority in the diagnosis and treatment of mental health patients. The reports should mention that the MIP is incapable by reason of their condition of managing and administering his property and affairs. The author has been involved in a case where this requirement was not met by the other side and the application was dismissed by the Court partly for this reason.
  
• With regard to the committee, the Court will need to have information about the suitability of the proposed appointees having considered the affairs and properties of the MIP that they are going to administer.
  
• Finally, it is good practice to give a set of the application papers to the Official Solicitor to ascertain whether he has any views on the intended applications. If there are any complications, e.g. no suitable candidates to act as the MIP’s committee, then the Court will have the power to direct that the Official Solicitor be notified or joined as a party.

In addition to the appointment of a committee, the Court has powers to direct that an asset of the MIP be used for the maintenance of the MIP and his family. This could also be an alternative to the appointment of a committee. For example, the Court could decide that the business of Mr. Chan should be sold if it considers for example that it is not viable to continue running it in his absence. The proceeds of sale could be used to maintain Mr. Chan and his family.

Therefore the range of options open to the Court are wide.

Enduring Powers of Attorney

Enduring Powers of Attorneys are usually completed by those who wish to prevent future problems with financial and health management. This would avoid relatives having to make time consuming and stressful applications outlined above in order to have power to manage the MIP’s business, income and bank accounts.

Under the Enduring Powers of Attorney Ordinance, Cap 501, an Enduring Power of Attorney must be executed before a doctor, preferably a specialist who can certify that the patient has sufficient capacity to execute such a document.

An Enduring Power of Attorney continues to have legal effect even if the client becomes mentally incapable of making financial decisions and generally managing his affairs. The form of wording can specify when the powers are to begin - immediate on a particular date or on a particular occasion. If the client does not specify a date or event then it takes effect from the day the client signs it. It will be the duty of the solicitor who receives instructions from a relative of a client to draft an Enduring Power of Attorney to maintain objectivity and interview the client on his or her own to rule out undue influence. The solicitor must ensure that this is the client’s wish and not that of the relative.

In conclusion, to avoid the worry and stress for relatives in the event a person becomes mentally incapacitated and being unable to manage his own affairs, and in the light of Hong Kong’s ageing population, the focus should be on planning for this unexpected event. The author takes the view that Enduring Powers of Attorneys will become more prevalent and rightly so for the reasons given above.