TONSTATE GROUP LIMITED v EDWARD WOJAKOVSKI AND 11 ORS

Where a serious issue arises as to a party’s capacity to participate in proceedings, the court should manage closely related proceedings consistently while that issue is investigated. An open-ended stay is inappropriate where proceedings, particularly contempt proceedings, should be dealt with without delay. The court should instead impose a clear timetable and make any stay proportionate to the capacity inquiry.

Capacity is generally issue-specific, but closely related proceedings involving similar underlying facts may justify a report whose scope extends beyond the proceedings in which it was commissioned. A purported litigation-friend notice filed after the relevant procedural stage cannot take effect under CPR 21.5; appointment must then be made by the court under CPR 21.6.

The claimants had made a contempt application against Mr Wojakovski alleging breaches of proprietary and freezing injunctions and the making of a false statement. The application was originally listed for directions following an order by Zacaroli J, who had dismissed Mr Wojakovski’s application for a stay as totally without merit.

Mr Wojakovski later obtained legal representation. His solicitor raised a serious concern about his mental capacity, both to participate in the current proceedings and potentially at the time of the alleged contempts. Related bankruptcy proceedings included an imminent application concerning suspension of his discharge and a possible application to annul the bankruptcy.

The central issue was how the contempt and bankruptcy proceedings should be managed pending expert evidence on capacity.

1. Case management and capacity. The court directed that the issue of Mr Wojakovski’s current capacity should be investigated before substantive applications in the contempt and related bankruptcy proceedings proceeded. It would be improper and wasteful to stay one set of proceedings on capacity grounds while allowing closely related proceedings to continue on an inconsistent basis.
2. Balance between expedition and fairness. Contempt applications should be dealt with without delay. Nevertheless, the court rejected an open-ended stay and imposed a clear timetable for obtaining a forensic psychiatric report. The report commissioned for the contempt proceedings was permitted to address capacity in the related proceedings, subject to the claimants’ opportunity to consider it and, if necessary, obtain their own report.
3. Issue-specific capacity. Capacity is ordinarily issue-specific, so a person may have capacity for one set of proceedings and not another. That possibility was acknowledged, although the close relationship between the proceedings and similarity of the underlying facts made it a largely theoretical concern on the facts before the court.
4. Litigation friend. On the court’s reading of CPR 21.5, the notice purporting to appoint Mr Marx as litigation friend could not take effect because it was filed too late, after he had already been actively involved in the bankruptcy proceedings. Any litigation friend therefore required appointment by the court under CPR 21.6. The certificate also could not resolve the underlying question whether Mr Wojakovski had capacity.
5. Orders. The court stayed the relevant proceedings for the limited period needed to address capacity, with provision for the court to manage any dispute concerning the expert evidence. The order in the bankruptcy proceedings was made in Mr Wojakovski’s absence but included a right to apply to set it aside or vary it.