FNG v BCJ [2021] 1 HKLRD 1099, [2021] HKCA 160

Robert Whitehead SC and Madeleine Booth represented the defendant in the Court of Appeal in FNG v BCJ [2021] 1 HKLRD 1099, [2021] HKCA 160.

By an enduring power of attorney (the EPA), the donor appointed D, a daughter of his, as his Attorney. Within the donor’s lifetime, P, another daughter of his, brought an application under s.11(1) of the Enduring Powers of Attorney Ordinance (Cap.501) (the Ordinance) for audited accounts in respect of the donor’s estate. The Judge made an order that the Attorney produce such accounts or cause the same to be produced (the First Order). The donor passed away before an auditor was appointed. By operation of s.13(1)(f) of the Ordinance, the EPA was revoked on the death of the donor. Subsequently, the Judge made an order staying the First Order (the Second Order). By a will, the donor had named his wife, the Attorney and a long-time friend as executors. P appealed against the Second Order and sought an order that the First Order do stand notwithstanding the death of the donor. Before the Court of Appeal, P’s counsel made it clear that P would only seek audited accounts regarding the administration of the donor’s estate up to the time of his death. Counsel for the Attorney resisted the appeal and supported the Second Order.

Held, dismissing the appeal, that:

(1) The Judge held that the Attorney’s duty was owed to the executors rather than to P as “interested party”. Although the Judge erred when referring to the donor’s estate as “the Live Estate” and “the Death Estate”, her analysis was otherwise correct. And that reference was only made to emphasise that the Attorney ceased to have any authority to deal with property in the estate after death. It did not involve any error of law in the exercise of the Judge’s discretion. (See paras.19 – 21, 47 – 48.)

(2) While an application under s.11(1) of the Ordinance could be made by an interested party, such an application should be made for the purpose of serving the interests of the donor rather than the personal interests of an interested party. The discretion under the subsection must be exercised in the light of the circumstances of the case, always with due respect for the donor’s autonomy and by reference to his interests and, insofar as they could be ascertained, the donor’s wishes. (See paras.27 – 29.)

(3) It should be borne in mind that an exercise of the power under s.11(1) of the Ordinance was prima facie an interference with a previous decision of the donor as to the person to whom an unfettered power of management or administration of the donor’s property was to be entrusted. An order for production of records and accounts necessarily impinged upon the donor’s right to privacy. Such production to an interested party should generally be ordered only if it was necessary for the purposes of further action to be taken to safeguard the interests of the donor. It was not for the purpose of serving the interested party’s interests, which could not be assumed to be coterminous with the donor’s interests. (See paras.30 – 32.)

(4) The Judge was correct in holding that the demise of the donor had an impact on the First Order and that the Court should consider if the First Order should be implemented in the light of such development. It was a question not of whether the First Order had lapsed but of deciding how the donor’s demise affected its implementation. (See para.38.)

(5) It was only if the Judge’s exercise of discretion was flawed that it could be interfered with. The Judge’s exercise of discretion was not flawed. She did not fail to take into account the submission made on P’s behalf that the matter should not be left in the hands of the executors as the Attorney was one of them and the donor’s wife was mentally incapacitated. Making express reference to that submission, the Judge had rightly said that any dispute over the Attorney’s suitability as an executrix, and over whether there was a need for some other person to act for the estate, had to be resolved in the arena of probate and administration proceedings. There was no basis for disturbing the Judge’s decision. (See paras.45 – 46, 49 – 50.)

[The above is excerpted from the headnote to the report in HKLRD.]