HSBC Bank Australia Limited v Chang

CASES CITED : Re P [2006] NSWSC 1082 Re SK (2005) All ER 421

PARTIES : HSBC Bank Australia Limited (ACN 006 434 162) (Plaintiff/Respondent) Ching Chih Chang (Defendant/Applicant)

COUNSEL : D R Pritchard SC (Plaintiff/Respondent) S Bell (Defendant/Applicant)

SOLICITORS : Blake Dawson Waldron (Plaintiff/Respondent) Lloyd Truman Sadiq (Defendant/Applicant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

JUDGMENT 1 HER HONOUR: Mr Bell, of counsel, moves for the orders claimed in the notice of motion filed on 13th September 2007, relevantly that Scheng-Ju Candice Chen be appointed as tutor for the defendant. He reads the affidavit of Ms Chen affirmed on 12 September 2007 and tenders two medical certificates relating to the defendant. 2 Mr Pritchard SC, who appears on the plaintiff's behalf, opposes the making of the order. He read the affidavit of his instructing solicitor, Ms Agius, which was sworn on 28 September 2007 and tendered a bundle of correspondence, which is exhibited to the affidavit, and a defence to a further amended statement of claim dated 9 September 2007 purporting to have been verified by Ms Chen as tutor of the defendant. 3 Turning to the evidence led in support of the motion Ms Chen is the daughter of the defendant. Ms Chen's native tongue is Mandarin, she speaks and reads English, although her English is not perfect. The defendant neither speaks nor reads English. The defendant left Australia and travelled to Taiwan in mid March 2007. At the time of her departure Ms Chen was aware that her mother was suffering from a kidney problem. Ms Chen travelled to Taiwan in late March 2007 to see her mother and stayed with her in her apartment in Thaichung. She visited her mother again in Taiwan in early September. 4 During the time that Ms Chen was in Taiwan she accompanied her mother to appointments at hospitals and with a heart specialist. Ms Chen observed her mother taking numerous medications daily. Her mother stays in bed, or indoors, most of the time and appears to be weak, dizzy and easily upset. She has observed her mother crying a lot and says that her mother has trouble sleeping. 5 Ms Chen states that she has attempted to discuss "this case" with her mother but that each time she does so her mother breaks down in tears and appears to be very distressed. Ms Chen says that she has not been able to have any meaningful discussion about the case with her mother since her mother's return to Taiwan in March 2007. 6 The medical evidence includes a certificate under the hand of the superintendent of the China Medical University Hospital, which records that the defendant suffers chronic renal failure stage V, "very close to end stage renal failure and dialysis stage". The defendant attended the hospital on a number of occasions as set out in the certificate. She also is diagnosed as anaemic, for which condition she requires medication. The author of the certificate states, "currently her medical condition is not suitable for an overseas flight". 7 Also in evidence is the certificate prepared by Dr Zu's Internal Medicine Hospital Clinic. This records that the defendant has been diagnosed with suspected angina pectoris. The certificate records medical advice in these terms: "Strong suggestion: avoid all stress and simulation otherwise patient may experience angina pectoris or myocardial infarction." 8 The proceedings are brought by the plaintiff, bank, as mortgagee against the defendant claiming an order for possession of certain land known as 34 Tindale Rd Artarmon together with a money judgment in the sum of $634,761.24 with interest and damages pursuant to s 68 of the Fair Trading Act. 9 The application is brought pursuant to the provisions of Pt 7 r 7.18 of the Uniform Civil Procedure Rules 2005 and, in the alternative, in the Court's inherent parens patriae jurisdiction. 10 The proceedings have a lengthy history, which is set out in Ms Agius's affidavit. It is sufficient to note that in recent months the issue of the failure of the defendant to comply with interlocutory orders has been the subject of correspondence between the parties. 11 Mr Bell draws to attention that a notice of motion filed by the plaintiff, is returnable on 16 October and seeks orders striking out the defence and cross-claim. He has pointed to the evidence of the defendant's serious health problems and laid particular emphasis on the medical advice concerning the avoidance of stress and on Ms Chen's observations of the defendant's distress when she has endeavoured to discuss the case with her. 12 Rule 7.18 of the UCPR provides:

"In any proceedings within which a party is or becomes a person under legal incapacity: (a) if the person does not have a tutor the Court may appoint a tutor...

4. Subject to any order of the court a notice of any motion under this rule is to be served on the person under legal incapacity if it proposes removal of the person's tutor.

5. In proceedings on a motion for the appointment of a tutor evidence in support of the motion must include: (a) evidence that the party for whom the tutor is appointed is a person under legal incapacity and (b) evidence that the proposed tutor consents to being appointed and does not have any interest in the proceedings adverse to the interests of the person under legal incapacity." 13 Mr Bell filed in court a consent to act as tutor signed by Ms Chen which includes a solicitor's certificate in these terms: "I certify that Scheng-Ju Candice Chen does not have an interest in the proceedings adverse to the interests of Ching Chih Chang, the defendant and Cross defendant, in these proceedings." 14 The certificate is signed by Ms Zadiq, the solicitor who appears for the defendant in the proceedings. 15 The provisions of the rules permit the court to make an order appointing a tutor in proceedings in which a party is or becomes a person under legal incapacity. That expression is defined in s3 of the Civil Procedure Act (2005), relevantly, as follows: "A person under legal incapacity means any person who is under a legal incapacity in relation to the conduct of legal proceedings... and, in particular includes:

(e) an incommunicate person being a person who has such a physical or mental disability that he or she is unable to receive communications or express his or her will with respect to his or her property or affairs." 16 In Mr Bell's submission, when the evidence of the defendant's physical incapacity is viewed in conjunction with that of her daughter and the medical advice to which I have referred, it is open to conclude that the defendant is a person under legal incapacity within the meaning of subparagraph (e) above. 17 I consider that there are a number of obstacles in the way of the endeavour to bring the present application within the provisions of r 7.18. The evidence falls short of establishing that the defendant is a person under legal incapacity. There is clear evidence that the defendant suffers significant health difficulties but this does not establish that she is an incommunicate person whose physical disability is such that she is unable to receive communications or express her will with respect to her property or affairs. 18 There are further difficulties with the application identified by Mr Pritchard in his written submissions. These include the absence of evidence that the present motion has been served on the defendant. 19 Mr Bell noted that the defendant is overseas and does not speak or read English. In the circumstances he submitted it was appropriate for the court to dispense with the requirement of the rules that the notice of motion be served upon her. Service of the motion seeking to appoint a tutor is a significant step in the litigation and in my opinion the court should be reluctant to dispense with the requirement particularly in the case of an adult who does not suffer intellectual or other mental incapacity. 20 Mr Pritchard submitted that the consent to act as tutor signed by Ms Chen did not comply with the requirements of r 7.18(5)(b) in that it did not constitute any evidence that Ms Chen does not have any interest in the proceedings adverse to the interests of the defendant. It is not entirely clear that the solicitor's certificate constitutes evidence of the fact but I am prepared to accept for present purposes that it is some evidence that the proposed tutor does not have an interest in the proceedings adverse to that of the defendant. 21 I am not of the opinion that the defendant has been shown to be a person under legal incapacity and in the absence of evidence that she has been served with a copy of the motion, I do not consider that the foundation has been established for the appointment of a tutor pursuant to the UCPR. 22 I turn now to the alternative basis upon which the matter was advanced by Mr Bell. He referred me to the judgment of Young CJ in Eq in Re P [2006] NSWSC 1082. In that case his Honour dealt with an application for the appointment of a tutor in proceedings that were part heard in the District Court. His Honour noted the definition of "person under legal incapacity" in s 3 of the CPA sub paragraph (e) and went on to observe: [5] The report of Dr Dunn really does not go as far as to say that the defendant has a mental disability, that he is unable to express his will with respect to his property or affairs. The evidence suggests that the defendant may have some mental illness of probably a temporary type and may be depressed but he now has a mental problem in continuing with the litigation that is pending in the District Court. He has not got a disability that he is unable to express his will with respect to his property or affairs, but he has got a problem which stops him from giving proper instructions to his lawyers and the lawyers would have difficulty in doing what they were instructed by the client because they could not be assured that his mind was preceding his mouth.

[6] It is, accordingly, a situation where I do not think the rule applies. However, there is a very real problem here. It is not the first time the Court has met this sort of problem in various guises. I remember once in the Barristers Admission Board course, a gentleman, I think, had failed his taxation law examination a number of times and had a mental block about sitting again. He was not mentally ill, but it was quite obvious that there was a mental problem which stopped him from proceeding further. We granted him exemption from taxation law and all was well.

[7] What can the Court do in the situation where a litigant has got himself into a mental state where he cannot give meaningful instructions?

[8] Once upon a time the Court's protective power under the parens patriae jurisdiction was thought to be confined to minors and to mentally ill people. Recent English decisions involving "Asians" who are kidnapped to have arranged marriages in India or Pakistan have attracted the parens patriae jurisdiction of English Courts even though they are adults, see Re SK [2005] 3 All ER 421. It seems to me that there is inherent power in this Court under its parens patriae jurisdiction to deal with situations such as the present. 23 It is to be noted that in Re P his Honour considered the evidence pointed to the defendant as a person with "a mental problem in continuing with the litigation". There is no evidence that the defendant suffers any mental condition or any psychological difficulty. I accept Mr Pritchard's submission that the parens patriae jurisdiction is one not lightly invoked and in respect of which one might expect proper and sufficient evidence to be adduced particularly in a case in which, as the correspondence between the parties shows, the issue has not arisen in urgent circumstances. 24 It is relevant to observe that Mr Bell's instructing solicitor speaks Mandarin. There is no evidence from the solicitor of dealings with the defendant which would support the making of the order that is sought. I consider that this case is to be distinguished from that which Young CJ in Eq was concerned in that there is no evidence that the defendant is in a mental state in which she is not able to give instructions to those acting for her. The circumstances of this case are, in my view, very far removed from those with which the court was concerned in Re SK (2005) All ER 421 to which reference was made in Re P. 25 I proceed upon an acceptance that the court has inherent jurisdiction to authorise Ms Chen to act in all respects as if she had been appointed the defendant's tutor under the new UCPR but in my opinion evidence falls short of establishing a proper basis for making such an order.

The defendant is to pay the plaintiff's cost of the motion.

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