TONSTATE GROUP LIMITED (IN LIQUIDATION) & Ors v EDWARD WOJAKOVSKI

Capacity to conduct proceedings is both time-specific and issue-specific. The court must apply the two-stage test in the Mental Capacity Act 2005: first, whether there is an impairment or disturbance of the mind or brain; secondly, whether it causes inability to make the relevant decision. Difficulty, confusion, an unwise decision, or a need for assistance does not itself establish incapacity. The statutory presumption of capacity remains unless all practicable steps to assist the person have been taken without success. A person may have capacity to conduct contempt proceedings while requiring procedural adjustments as a potentially vulnerable party. Contempt proceedings should also be progressed promptly.

The claimants sought to pursue contempt proceedings alleging breaches of injunctions, disclosure orders and a freezing order, together with knowingly false statements. The defendant’s legal team raised whether he had capacity to conduct those proceedings. Expert evidence was divided: Dr Deo considered that he lacked capacity, while Dr Warner considered that he retained it. The issue before the court was whether, applying the Mental Capacity Act 2005 and Civil Procedure Rules 1998, the defendant presently had capacity to conduct the contempt proceedings.

1. The court concluded that the defendant had capacity to conduct the contempt proceedings. The application for a stay based on alleged incapacity therefore failed.
2. Under CPR 21 and the Mental Capacity Act 2005, capacity required a two-stage analysis: whether there was an impairment or disturbance of the mind or brain, and, if so, whether it rendered the defendant unable to make the relevant decisions. The assessment was specific to the time and issue in question.
3. The court generally preferred Dr Warner’s evidence. His assessment included cognitive testing, a detailed interview and consideration of the actual contempt allegations. Dr Deo had not been given sufficient detail of those allegations and had been materially influenced by an inaccurate impression that the proceedings were highly complex.
4. The evidence could support a finding of some impairment or disturbance under section 2(1), particularly in relation to memory and concentration. That did not establish inability to make decisions. The statutory presumption of capacity under section 1(2), and the requirement under section 1(3) to take all practicable steps to assist the person, had not been displaced.
5. Confused emails, disjointed thoughts, difficulty following complex matters and the need for assistance demonstrated difficulty rather than inability. The defendant had been able, with assistance, to understand and approve documents dealing with complex matters. A failure to appreciate the seriousness of the allegations, or a decision contrary to his interests, did not establish incapacity because an unwise decision was not enough.
6. The finding was confined to the contempt proceedings and did not automatically determine capacity in the bankruptcy proceedings. The contempt proceedings were to be progressed without undue delay, but directions should provide appropriate adjustments, including breaks, carefully structured cross-examination and other measures under Practice Direction 1A.

First-instance decision. No appellate history was stated in the judgment.