EG & Anor v AP & Ors (Headnoted version)
Jurisdiction – injunction – whether jurisdiction to make injunctions to prevent third parties from disposing of assets in which others allege a protected person has an interest
In the context of a dispute about the proceeds of sale of a house which had previously been owned by the donor of a power of attorney, an application was before a Deputy District Judge for an order under s.22 Mental Capacity Act 2005 (‘MCA 2005’). The Deputy District Judge held two Dispute Resolution Hearings, the first having been identified as ‘not effective.’ The Deputy District Judge further made a proceeds of sale injunction (a ‘freezing injunction’) preventing the disposal of the proceeds of the sale, and an order requiring disclosure by one of the parties explaining where his share of the proceeds of the sale were held. On appeal by the parties against whom the injunction had been granted, it was common ground between that the Court of Protection had no jurisdiction to determine the extent of the donor’s interest in the proceeds of sale.
Held – allowing the appeal and discharging the injunction and the disclosure order –
(1) Because the decision-maker under the MCA 2005 can only make the decision which P himself could make, the Court of Protection could not determine disputes about whether or not P had a beneficial interest in a property or the proceeds of its sale. If a capacitous person (‘X’) was in dispute with another capacitous person (‘Y’) about beneficial interest in a property, the forum for determination of that dispute was the County Court or the appropriate division of the High Court. The civil judge would hear the competing claims and decide the issues according to the evidence. Determination of the dispute was not a decision which X or Y can make for themselves (N v A Clinical Commissioning Group [2017] UKSC 22 applied) (see paras [35] and [76]).
(2) On the application formally before the court, orders had been sought pursuant to s.22 Mental Capacity Act 2005, not s.16. That section had no direct equivalent of s.16(5), providing that the court “may make such further orders or give such directions […] as it thinks necessary or expedient for giving effect to, or otherwise in connection with, an order or appointment made by it under subsection (2).” Instead, s22(4) MCA 2005 specified the court’s powers. It would stretch the s.47 MCA 2005 concept of giving the Court of Protection the powers of the High Court “in connection with” the s.22 MCA 2005 jurisdiction beyond what it could bear to suggest that a freezing injunction was so linked to a determination of the validity of lawful authority as to be ancillary to preventing frustration of the validity decision. Both of the powers of s22(4) MCA 2005 could be fully implemented irrespective of what happened to disputed assets (Re G (Court of Protection: Injunction) [2022] EWCA Civ 131 applied) (see paras [68] and [78]).
(3) If the Deputy District Judge had been granting authority to conduct proceedings on behalf of P in respect of the property dispute, then at least there had been potential for a s.16 order (as provided by s. 18(1)(k) MCA 2005 Act) so s.16(5) would apply. However, a freezing injunction was not “necessary or expedient” for giving effect to, or otherwise “in connection with” the granting of authority to conduct proceedings. Litigation could be properly conducted irrespective of what happened to disputed assets. A freezing injunction went materially beyond the conduct of litigation, into its determination. It was not within the realms of effectively conducting litigation to freeze disputed assets, even when the conduct of litigation had reached the point of enforcement; so such an order cannot be ancillary to preventing frustration of such authority. In substance and intent, a freezing injunction was ancillary to a power to determine the dispute, which the Court of Protection did not have (Re G (Court of Protection: Injunction) [2022] EWCA Civ 131 applied) (see paras [69] and [79]).
(4) The disclosure order had been to provide the court with evidence as to where the relevant party’s share of the proceeds of sale was being held. Clearly this was further to the Proceeds of Sale Injunction, with a view to determination of the property dispute and preventing frustration of any order which may be made upon such determination. If the injunction was improperly made, then the Disclosure Order should fall with it (see para [73]).
Per curiam
Once a judge has engaged in dispute resolution, whether successfully or not, that judge cannot properly engage in substantive decision-making in the case beyond what the parties agree. It would be procedurally unfair to do so because the judge has expressed views without any party having had the opportunity to give their evidence. Further, there was no provision in the Rules or Practice Direction for multiple dispute resolution hearings, and adopting such a practice would not serve the purposes for which such a hearing was devised, namely early conclusion of unnecessary litigation. The court was not a mediation service. If a dispute resolution hearing was unsuccessful, normal procedure should thereafter apply (see paras [62] and [64]).
Statutory provisions considered
Mental Capacity Act 2005, ss.1, 10, 15, 16, 18, 22, 23, 47
Cases referred to in judgment
- Aintree University Hospitals NHS Foundation Trust v James [2013] UKSC 67
- London Borough of Enfield v Matrix Deputies Limited [2018] EWCOP 22
- N v A Clinical Commissioning Group [2017] UKSC 22
- Re ACC [2020] EWCOP 9
- Re G (Court of Protection: Injunction) [2022] EWCA Civ 1312
- Re SF Injunctive Relief [2020] EWCOP 19
Faye Collinson (instructed by Stephensons Solicitors) for the appellants
John Buck (instructed by Topstone Solicitors) for the respondents
Full judgment available on The National Archives database here.
Reported by Alex Ruck Keene KC (Hon)