Court of Appeal Upholds Decision on Mental Capacity in Kei Kin Hung v Hua She Asset Management: Fresh Evidence Admissibility Scrutinized

Introduction

The recent judgment of the Court of Appeal in Kei Kin Hung v Hua She Asset Management (Shanghai) Company Limited [2023] EWCA Civ 1483 provides a significant analysis of the principles relating to a person’s capacity to conduct litigation under the Mental Capacity Act 2005. The case notably scrutinizes the admissibility of fresh evidence on appeal and the interpretation of existing evidence. This article aims to dissect the legal principles applied in the case to provide clarity to legal professionals practicing in the UK.

Key Facts

The case revolves around the respondent, Hua She Asset Management, who obtained freezing orders against the appellant, Mr. Kei Kin Hung, and subsequent orders for disclosure of assets. The central issue concerns whether Mr. Kei lacked the mental capacity to conduct proceedings as claimed, warranting the appointment of his brother-in-law as a litigation friend. Previously, the High Court had concluded that Mr. Kei did not lack capacity under the Mental Capacity Act 2005. Mr. Kei appealed this decision, challenging the reasons provided by the High Court Judge and introducing fresh evidence, allegedly demonstrating incapacity.

Legal Principles

Mental Capacity Act 2005

The judgment reaffirms the principles under the Mental Capacity Act 2005 (the 2005 Act), specifically Sections 1, 2, and 3 which outline the presumption of capacity, the diagnostic and functional elements of capacity, and the necessity to employ all practicable steps to aid decision-making before concluding incapacity. The appeal decision hinged largely on the interpretation of this legislation, with the court evaluating whether the appellant possessed the ability to make decisions based on understanding, retaining, using, or weighing pertinent information related to the litigation.

Evidence Evaluation and the Role of Expert Opinion

The court thoroughly reviewed the expert opinion of the psychiatrist Dr. Choi against the actual functioning evidence presented in UBS bank documents. Emphasising that expert evidence is not conclusive, the judgment underlined the court’s role in assessing capacity, considering not only the expert’s opinion but also the quality and reasoning behind it.

Admissibility of Fresh Evidence on Appeal

The court examined the admissibility of fresh evidence according to the test in Ladd v Marshall [1954] 1 WLR 1489. The fresh evidence consisted of the appellant’s reactions during a video conference call with his solicitor. The court considered whether this new evidence could not reasonably have been obtained earlier, whether it would probably have had an important influence on the outcome, and whether it was credible.

Remedial Measures

A key point of analysis involved the consideration of remedial measures that may assist an individual in making decisions. The court highlighted that the availability of such measures must be taken into account when determining whether a person lacks the capacity under the 2005 Act.

Outcomes

The Court of Appeal upheld the High Court’s decision, concluding that Mr. Kei failed to establish, on a balance of probabilities, his incapacity. Despite the reluctance to admit the fresh evidence, the court included it in the assessment de bene esse, ultimately determining that it did not alter the outcome. The court found the fresh evidence insufficient to demonstrate incapacity while also finding the UBS Documents to be suggestive of Mr. Kei’s capacity to conduct his financial affairs and, by extension, the litigation itself.

Conclusion

The decision in Kei Kin Hung v Hua She Asset Management serves as a meticulous application of the functional approach outlined in the 2005 Act, setting a high threshold for establishing incapacity to conduct proceedings. It cautions against reliance on conclusive expert opinions without robust reasoning and underscores the consideration of remedial measures in the assessment of capacity. The ruling solidifies the court’s evaluative role in interpreting evidence related to mental capacity and the cautious approach toward admitting fresh evidence. The case thereby provides valuable reference points for future proceedings involving similar concerns over a party’s capacity to conduct litigation.