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Category: Procedural rulings

Parties: Allan Paisley bht Leanne Paisley (plaintiff)
Gordon Dandie (defendant)

Representation: Solicitors:
Turner Freeman Lawyers (plaintiff)
HWL Ebsworth (defendant)

File Number(s): 2022/00100992

Publication restriction: Nil

JUDGMENT

Introduction

1. These reasons deal with an application (filed 30 April 2026) seeking, in substance, a declaration that Allan Paisley (‘the plaintiff’) is not “under a legal incapacity”.

2. A declaration in the terms sought would have two immediate consequences: first, it would result in the plaintiff being entitled to finalise the proceedings in his own name and right – without the involvement of a tutor (the current constitution of the proceedings); and, secondly, it would entitle him to have the money paid into Court, following the settlement of the claim and judicial approval of that settlement, be paid out to him or as he directs.

3. The plaintiff relies upon written submissions dated 15 May 2026 and an affidavit from his solicitor, Angela O’Reilly, sworn 29 April 2026 in support of the orders sought. Annexed to that affidavit are a number of medical and neuropsychological reports, spanning the period 2022 to the present, that address the plaintiff’s “capacity” to conduct legal proceedings and to “manage” the settlement monies.

4. Based upon that evidence, the plaintiff essentially argues that whilst, at the time of commencing the proceeding and its resolution, he was – consistent with the medical and neuropsychological evidence then available – “under a legal incapacity”, that is no longer the case: it is submitted that, given the progress that he has made and the more recent medical and neuropsychological assessments of him, the Court should find that he is no longer “under legal incapacity”.

5. That submission should be accepted. The declarations and related orders sought by the plaintiff should be made.

Background

6. I will briefly outline the background facts and procedural history – across three parts: first, the plaintiff and the surgery to treat his aneurysm; secondly, the proceedings commenced by the plaintiff seeking damages for professional negligence; and, thirdly, the events post-approval.

The plaintiff and the surgical clipping of an aneurysm

7. The plaintiff was born in 1957 and is currently aged 68.

8. In November 2018, it was discovered that the plaintiff had a broad-based aneurysm at the left middle cerebral artery bifurcation. At that time, the aneurysm was not clinically significant and not implicated in any of the symptoms that the plaintiff was experiencing at this time.

9. The plaintiff was referred to a neurosurgeon, Dr Gordon Dandie (‘the defendant’), for the management or treatment of that aneurysm.

10. In March 2019, the plaintiff underwent, and the defendant performed, the surgical repair of the aneurysm – a left craniotomy and clipping of the aneurysm.

11. Post-operatively, the plaintiff was slow to wake up, and it was determined that he had suffered a right hemiplegia. An MRI brain scan confirmed ischemia of the left frontal and temporal lobes adjacent to the clip.

12. The plaintiff has been, and continues to be, significantly impacted by the hemiplegia: he has suffered cognitive impairment and physical and emotional sequelae.

The plaintiff’s proceedings for damages for professional negligence

13. In 2022, the plaintiff, by his tutor, commenced proceedings against the defendant alleging that his injuries and disabilities were caused by the negligence of, and breach of duty by, the defendant – essentially in two respects: first, there was a failure to warn of the magnitude of the risks associated with clipping the aneurysm; and, secondly, that the defendant negligently performed the procedure by placing a surgical clip across the perforator vessels of the M1 segment of the middle cerebral artery, thereby occluding them, resulting in ischemia to parts of the brain and the right sided hemiplegia.

14. The defendant disputed his liability, contending that the plaintiff was appropriately warned of the risks of the procedure and, further, that there was no intraoperative negligence in the clipping he performed.

15. The matter was listed for hearing in December 2024, but resolved in advance of that hearing. Given the plaintiff was “under a legal incapacity”, judicial approval of the settlement was necessary.

16. On 10 May 2024, I approved that settlement following which, on 27 June 2024, the settlement monies were paid into Court (O’Reilly affidavit, par 15). The settlement sum was, it should be noted, inclusive of any funds management costs.

17. At the time of the approval, although it was contemplated that a private trustee would be appointed to manage the fund, the appointment of the plaintiff’s wife (who is also his tutor) as his financial manager was also being considered. Given no decision had been made about how the fund was to be managed, orders were made for the settlement sum to be paid into Court pending further order.

The events post-approval

18. Since the approval, and the payment of the money into Court, there has been some delay – which, I infer, at least in part, has revolved around how the settlement fund should be managed, given the plaintiff has progressively shown signs of improvement in his cognitive functioning.

19. On 10 March 2026, my Chambers was contacted seeking a re-listing of the matter, and it was foreshadowed that an order for the release of funds held in Court would be sought.

20. The matter was relisted on 20 March 2026. At that time, I indicated that an application would need to be filed seeking orders of the kind now sought and, further, that my preliminary view was that medical evidence addressing the plaintiff’s “capacity” at the present time would be needed. On that day, I made orders for the filing and service of a notice of motion. I also indicated, rather than ordered (given it was contemplated that expert evidence was most likely necessary), that evidence in support should also be served.

21. The matter returned for directions on 5 May 2026. The plaintiff’s solicitor confirmed that all evidence had been served and, subject to the filing of a short outline of submissions by 15 May 2026, sought to have the matter listed for hearing. The matter was fixed for hearing on 29 May 2026.

22. At the listing, I indicated that if, following receipt of the submissions, I formed the view that the matter could be dealt with in Chambers, I would deal with it in that way. The plaintiff consented to that approach.

23. Having reviewed the material and the submissions filed, I am satisfied that the matter can, and should, be dealt with without a further hearing.

Persons under legal incapacity: the statutory provisions and principles

24. A person under legal incapacity “may not… carry on proceedings except by” a tutor: r 7.14(1) of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’).

25. Rule 7.13 of the UCPR provides that a “person under legal incapacity”, for the purpose of Division 4 of the Rules, “includes a person who is incapable of managing his or her affairs”.

26. The phrase a “person under legal incapacity” is also defined in s 3(1) of the Civil Procedure Act 2005 (NSW). That definition provides:

“person under legal incapacity means any person who is under a legal incapacity in relation to the conduct of legal proceedings (other than an incapacity arising under section 4 of the Felons (Civil Proceedings) Act 1981) and, in particular, includes—

(a) a child under the age of 18 years, and

(b) an involuntary patient, a forensic patient or a correctional patient within the meaning of the Mental Health Act 2007, and

(c) a person under guardianship within the meaning of the Guardianship Act 1987, and

(d) a protected person within the meaning of the NSW Trustee and Guardian Act 2009, and

(e) an incommunicate person, being a person who has such a physical or mental disability that he or she is unable to receive communications, or express his or her will, with respect to his or her property or affairs.”

27. Although the plaintiff does not fit within any of the sub-paragraphs of s 3(1), the definition may be satisfied if he is within the chapeau – namely, a “person who is under a legal incapacity in relation to the conduct of legal proceedings”: Azar v Kathirgamalingan [2012] NSWCA 429; (2012) 62 MVR 462 at [168] (‘Azar’); Rappard v Williams [2013] NSWSC 1279 at [71] (‘Rappard’). Section 3(1) also emphasises that the incapacity is in relation to the conduct of legal proceedings.

28. As noted earlier, whether the plaintiff is under legal incapacity includes a consideration of whether he is incapable of managing his affairs: r 7.13 of the UCPR; Mahmoud v Ghahreman [2026] NSWCA 52 at [28] (‘Mahmoud’).

29. The following principles inform this inquiry.

30. First, whether a person is to be assessed as being under legal incapacity is task and time specific; a person may be able to carry out a range of tasks involving their “daily life, but still lack the capacity to understand and evaluate the matters involved in the conduct of legal proceedings, and for that reason fall within the definition of ‘person under legal incapacity’”: Azar at [168]; Rappard at [76]-[79]; Mahmoud at [28].

31. Secondly, the question directs attention to the person’s capacity to conduct the legal proceedings. This was explained by Chadwick LJ in Masterman***-Lister v Brutton & Co [2003] 1 WLR 1511 at [75] (‘Masterman-***Lister’) in these terms:

“… the test to be applied, as it seems to me, is whether the party to legal proceedings is capable of understanding, with the assistance of such proper explanation from legal advisers and experts in other disciplines as the case may require, the issues on which his consent or decision is likely to be necessary in the course of those proceedings. If he has capacity to understand that which he needs to understand in order to pursue or defend a claim, I can see no reason why the law - whether substantive or procedural - should require the interposition of a next friend or guardian ad litem…”

32. The transposition of that test to r 7.13 of the UCPR has been repeatedly endorsed: see, for example, Farr v State of Queensland [2009] NSWSC 906 at [15]; Murray v Williams [2010] NSWSC 1243 at [26]; Rappard at [77]; Mahmoud at [29]. In Rappard at [78], Hallen J explained that “[t]he ‘conduct of legal proceedings’ refers to doing the various things that would need to be done in the course of the proceedings in which the party is involved”, and this includes:

“… seeking advice as to the nature of the proceedings… comprehending and evaluating that advice, and engaging in the continuing process of co-operation, interaction and decision-making that exists between lawyer and client in running any civil action. In other words, the sort of incapacity involved in the requirement for a tutor is incapacity to do the range of things that is involved in, not only starting, but also continuing, litigation and being able to give instructions and consider advice about settling the proceeding…”

33. In Mahmoud at [29], Kirk JA expressed the matter in similar terms (internal citations omitted):

“The task at hand here – the affair which must be managed – is the conduct of this litigation… Legal capacity to undertake that task involves the ability to understand, evaluate and make decisions about the issues involved in, and the possible consequences of, the conduct of the proceedings... The issue involves an evaluative assessment in which various factors may be relevant depending on the circumstances of the individual case…”

34. Thirdly, in relation to whether a person is incapable of managing their affairs, that phrase was explained by Powell J in PY v RJS [1982] 2 NSWLR 700 (in that case, the phrase was construed in the context of s 18 of the Mental Health Act 1958 (NSW)) at 702 (internal citations omitted) in the following terms:

“It is my view that a person is not shown to be incapable of managing his or her own affairs unless, at the least, it appears:

(a) that he or she appears incapable of dealing, in a reasonably competent fashion, with the ordinary routine affairs of man; and

(b) that, by reason of that lack of competence there is shown to be a real risk that either:

(i) he or she may be disadvantaged in the conduct of such affairs; or

(ii) that such moneys or property which he or she may possess may be dissipated or lost…; it is not sufficient, in my view, merely to demonstrate that the person lacks the high level of ability needed to deal with complicated transactions or that he or she does not deal with even simple or routine transactions in the most efficient manner…”

35. Although there may be a question about this formulation in other contexts (as noted in Mao v AMP Superannuation Limited [2017] NSWSC 987 at [144]), and also a question about whether the meaning of that phrase as construed in different contexts should inform the meaning of r 7.13 of the UCPR (as to which: see Doulaveras v Daher [2009] NSWCA 58; (2009) 253 ALR 627 at [156]-[157]; Rappard at [75]), it remains a useful guide and continues to be used as such: see, for example, Mary Perera by her tutor Marisa Perera v Alpha Westmead Private Hospital trading as Westmead Private Hospital [2022] NSWSC 571 at [48]; DD v AA; DD v Lewis; DD v PP [2023] NSWCA 140 at [57]; Sowmi v Master Electrical Services Pty Limited [2024] NSWSC 176 at [12]-[13]; and Youssef v Yousse**f [2026] NSWSC 472 at [26].

36. I turn now to address the plaintiff’s application informed by these principles. In doing so, it should be noted that I have approached the matter on the basis that the assessment of whether the plaintiff is “under legal incapacity” in relation to the conduct of legal proceedings directs attention to the underlying proceedings, and not simply the residue involved in the current application and the management of the settlement sum.

Discussion and consideration

37. As noted, the plaintiff’s essential submission is that he is no longer “under legal incapacity” given the progress he has made and, importantly, that opinion has been expressed in the medical and neuropsychological evidence he has obtained. Further, the plaintiff also relies upon the assessment of his “capacity” expressed by Ms O’Reilly, which aligns with the expert evidence.

38. I discuss this evidence in what follows. Before doing so, the following three matters should be emphasised. First, as noted earlier, it was not suggested that, at the time of judicial approval, the plaintiff was anything other than “under legal incapacity”. Secondly, the expert neuropsychological evidence from that time – the report from Dr Ilana Hepner dated 19 July 2022 – affirmed as much: in short, her opinion was that the plaintiff’s “significant cognitive impairments, particularly involving… executive function… raise significant concerns as to his ability to provide clear instructions, reliably express his will and properly consider pertinent information related to his legal matter”, leading Dr Hepner to conclude that he “should be declared as a person under legal incapacity…” (2022 report, page 14). Thirdly, to the extent that expert medical and neuropsychological evidence addressing the question of the plaintiff’s legal incapacity is available from assessments of the plaintiff conducted during 2024, that evidence post-dated the judicial approval.

The reports from Dr Ilana Hepner, clinical neuropsychologist

39. Dr Hepner has prepared three reports following her assessments of the plaintiff in 2022 (report dated 19 July 2022); in 2024 (report dated 3 October 2024); and in 2026 (report dated 14 April 2026). On each occasion, her clinical assessment included performing cognitive testing to determine the plaintiff’s cognitive functioning.

40. Given the conclusion she reached in the 2026 report (and that she canvassed her earlier opinions in that report), what follows has that report as its focus.

41. The key opinions expressed by Dr Hepner may be summarised as follows:

42. Based on her interview of the plaintiff and his wife, and the cognitive (and other) testing performed, she considered that the plaintiff “has the cognitive capacity to understand legal advice and give instructions” (2026 report, page 5). She gave detailed reasons for this, including: her assessment of the plaintiff’s functioning and ability; his understanding of risk; what she considered were the “sustained improvements in aspects of his cognitive function (i.e., concentration, memory, planning and organisation) …” (2026 report, page 5); her “observations of sustained improvements in his presentation, including his ability to concentrate, express himself and recall pertinent information” (2026 report, page 5); “his ability to consistently demonstrate insight” (2026 report, page 5); “the absence of concern” expressed by the plaintiff or his wife about his decision making; and “the relatively simple and straightforward nature of his current legal circumstances”, given the resolution of the underlying proceedings.

43. Even though the plaintiff “has some ongoing cognitive impairment (e.g., involving complex problem solving…”), he:

“… demonstrates sound performance in many other areas of cognitive function (e.g., verbal intellectual function, attention and concentration, learning and memory) that will serve him well in terms of his ability to understand, recall and consider legal advice, and then provide instructions in a simple legal matter. This is supported by his adequate understanding and recall of his current legal circumstances…” (2026 report, pages 5-6).

3. Based on her interview of the plaintiff and his wife, and the cognitive (and other) testing performed, Dr Hepner considered that the plaintiff “…has the capacity to manage his own financial affairs, and he does not require a Financial Manager…” (2026 report, page 6). She gave detailed reasons for this, including her assessment that largely aligned with her reasons for why she concluded the plaintiff had the cognitive capacity to understand legal advice and give instructions.

4. Dr Hepner’s report, like her earlier reports, was detailed and thorough, and I accept her opinions and conclusions.

The reports from Dr John Obeid, consultant geriatrician

43. Dr John Obeid has prepared three reports following his assessments of the plaintiff in 2022 (report dated 21 September 2022); in 2024 (report dated 18 November 2024); and in 2026 (report dated 24 April 2026). On each occasion, he undertook a clinical assessment of the plaintiff, which included performing cognitive testing to assist with an assessment of the plaintiff’s cognitive functioning.

44. As with Dr Hepner, I will focus on the most recent report from Dr Obeid.

45. The key opinions expressed by Dr Obeid may be summarised as follows:

46. Serial testing of the plaintiff’s cognition confirmed “no worsening of cognition over the past 4 years (and perhaps suggestive of improved cognition over that time)” (2026 report, par 1.10). He concluded that the plaintiff “demonstrates normal cognitive function” (2026 report, par 2.1).

47. He considered that the plaintiff “has sufficient cognitive capabilities that would allow him to be able to understand advice and give instructions to his legal representatives” – giving detailed reasons for that conclusion (2026 report, par 3.3). He summarised the position in these terms (2026 report, par 3.5):

“… [the plaintiff] appeared to have a reasonably good understanding of legal matters, including how a solicitor might be of assistance, the general idea that he should give instruction, and receive and evaluate advice. He generally understands court processes, how proceedings are prosecuted, and the possible outcomes. Such mental capacity would be consistent with understanding legal advice and providing instructions to his legal representatives”.

3. In relation to the question of whether the plaintiff has the cognitive capacity to manage his affairs, Dr Obeid considered that, like his assessment in 2024, the plaintiff “had a strong understanding of financial matters and that there was nothing to indicate he required the appointment of a financial manager” (2026 report, par 4.2), and continued “to be of the opinion that [the plaintiff] has sufficient cognitive capabilities that would allow him to be able to manage his financial affairs” (2026 report, par 4.3), giving detailed reasons for that conclusion.

4. Dr Obeid considered that the plaintiff had a “high level of financial literacy” and a “strong understanding of financial matters” (2026 report, pars 4.5.1 and 4.5.2).

5. Dr Obeid’s “clinical findings suggest that there is no cognitive deficiency likely to impact on his financial capacity. The only issues likely to impact on his capacity are not strictly ‘cognitive’ in nature” – namely, “mild word finding difficulties” and deficits in “his gait and mobility” (2026 report, par 4.6).

6. I accept Dr Obeid’s opinions and conclusions, which were detailed, thorough and based upon his successive assessments in 2022, 2024 and 2026.

7. To sum up: each expert considered the plaintiff to have no cognitive deficiency likely to impact on his financial capacity, and that he had sufficient cognitive capabilities to allow him to be able to understand advice and give instructions to his legal representatives. As I have indicated, I accept these opinions.

8. Although I do not have direct evidence from the plaintiff and his wife, there is nothing to suggest that the histories that each of them gave (relating to the above matters) to Drs Hepner and Obeid during their recent assessments of the plaintiff were anything other than a reliable account of the plaintiff’s cognitive functioning over, and at the present, time. In this respect, I note the evidence from Ms O’Reilly, based on her interactions with the plaintiff since January 2026, that she assessed him as being “capable of understanding legal advice and providing instructions and, as such, does not require a litigation tutor” (O’Reilly affidavit, par 28). I regard this as important evidence in the present context, given her duty to the plaintiff.

9. For completeness, I note that the orders sought by the plaintiff are “supported by the tutor” (plaintiff’s written submissions at [25]).

10. Given the above, I am satisfied that the plaintiff has, and has had since late 2024, the capacity to understand and evaluate the matters involved in the conduct of his substantive proceedings in the sense discussed in the authorities earlier referred to. I am also satisfied that the plaintiff has, and has had since 2024, “financial capacity”, as Drs Hepner and Obeid have described.

11. It follows, therefore, that the plaintiff is not “under legal incapacity”. He is entitled to the orders sought by him, including that his tutor be removed under r 7.18(1)(b): see Malin v Sydney Local Health District t/as Royal Prince Alfred Hospital [2019] NSWSC 1765 at [13]-[14], [33]; Malouf bht Malouf v Davoren-Whereat [2024] NSWSC 861 at [6]-[7].

Orders

52. For the above reasons I make the following orders:

53. Declare that the plaintiff is not under a disability for the purposes of r 7.14 of the Uniform Civil Procedure Rules 2005.

54. Order that, pursuant to r 7.18(1)(b) of the Uniform Civil Procedure Rules 2005, Leanne Paisley be removed as the plaintiff’s tutor.

55. Vacate the hearing of the plaintiff’s notice of motion on 29 May 2026.

56. Make no order as to costs of, and incidental to, the plaintiff’s notice of motion filed 30 April 2026.

57. Grant liberty to apply in respect of further orders necessary to give effect to these reasons, including for the payment out of monies to the plaintiff or as he directs. Any exercise of the liberty conferred by this order must be exercised in writing to the Associate to Justice Chen by 22 May 2026, 4pm.

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