Blessings And Burdens

17 July 2019

This recent High Court case sheds light on the difficulties associated with challenging the validity of an enduring power of attorney: To Lee Wah Samuel v. Yum Huin Ming and Another [2019] HKCFI 1441

This case concerned two enduring powers of attorney, the validity of which were  challenged by the Plaintiff.  This decision appeared to be the first ever reported decision where the Hong Kong court considered (a) the legal requirements of a donor’s mental capacity for executing an enduring power of attorney, and (b) the burden of proving such capacity or lack thereof.

Background

The 1st Defendant executed an enduring power of attorney on 3 November 2015 (“1st EPoA”), the execution of which was witnessed by a registered medical practitioner and a solicitor in accordance with the requirements of the Enduring Powers of Attorney Ordinance (Cap. 501) .  The 1st EPoA was registered on 18 July 2016.

On or around 24 July 2017,  the Plaintiff commenced Part II proceedings under the Mental Health Ordinance (Cap. 136) (“Part II Proceedings”) seeking, amongst other things, the appointment of a committee over the 1st Defendant’s estate. For the purpose of commencing the Part II Proceedings, the Plaintiff’s experts examined the 1st Defendant on a number of occasions.

In the meantime, the 1st Defendant executed an enduring power of attorney on 26 January 2018 (“2nd EPoA”), the execution of which was again witnessed by a registered medical practitioner and a solicitor.  The 2nd  EPoA was registered on 26 January 2018.

In light of the execution of the 1st EPOA and the 2nd EPOA (collectively “EPoAs”), the Court took the view that it would be unnecessary for a Committee to be appointed under the Part II Proceedings unless and until the EPoAs were set aside.  Accordingly, the Plaintiff commenced the present action in order to set aside the EPoAs.

Decision

The Hon. Mr Justice Louis Chan dismissed the Plaintiff’s claim and adjudged that the Plaintiff had failed to discharge the burden of proving that the 1st Defendant did not have the requisite mental capacity to execute the two EPoAs.  His Lordship also dismissed the Part II Proceedings. 

In dismissing the Plaintiff’s claim, his Lordship elaborated on a number of issues including (a) the legal test in deciding whether a donor has the requisite capacity to execute an enduring power of attorney and (b) the party who bears the burden of proving such capacity or lack thereof.

The legal test

As regards the requisite test for determining the issue of capacity, his Lordship summarized the effect of the relevant provisions of the Enduring Powers of Attorney Ordinance (Cap. 501) and the Powers of Attorney Ordinance (Cap. 31), and stated that a person is mentally incapable of executing an EPoA if he is suffering from a mental disorder or mental handicap and is either (i) unable to understand the effect of the power of attorney or (ii) by reason of his mental disorder or mental handicap unable to make a decision to grant a power of attorney.  Alternatively, even if a person is not suffering from a mental disorder or mental handicap, he is also incapable of executing an EPoA if he is unable to communicate to any other person who has made a reasonable effort to understand him, any intention or wish to grant a power of attorney.

The burden of proof

As regards the question of burden, his Lordship accepted the Defendants’ submissions that under the common law, everyone is presumed to have mental capacity unless it is shown otherwise. 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.  Accordingly, the burden is on the Plaintiff to prove on the balance of probabilities that the donor did not have the requisite mental capacity to execute the two EPoAs at the times they were executed.

His Lordship was critical of the Plaintiff’s evidence.  In particular, his Lordship highlighted the fact that the assessment and the report of the Plaintiff’s medical expert was prepared for the Part II Proceedings (i.e. to determine whether the 1st Defendant was incapable, by reason of mental incapacity, of managing and administering his property and affairs), and that the statutory criteria for deciding whether a person was incapable was different from the criteria for determining whether a person has the mental capacity to execute an EPoA.  As such, the Plaintiff’s expert evidence and examination were of no use in determining whether the 1st Defendant had the requisite capacity to execute the two EPoAs.

Actionable takeaways

 This case serves as a restorative reminder that capacity is issue specific and that it would be wrong to utilize a medical report and/or examination used for a specific purpose (e.g. in support of a Part II application) for another purpose (e.g. for challenging the validity of an enduring power of attorney).  By failing to have regard to the relevant issues, the value of a medical examination or a report will be severely curtailed.

 This case also highlights the importance of keeping a clear and contemporaneous record of any medical examination conducted (particularly in cases which are potentially contentious).  Such records will help refresh the memory of the medical practitioner conducting the examination and will let the Court know whether the relevant medical examination was properly conducted.

Terrence Tai and Rosa Lee acted for the Defendants in this case.

    

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