Foran v. Jalbao Pty Ltd & Anor [2001] QSC 42 (9 March 2001)

Supreme Court of Queensland|2001-03-09|Before: Moynihan J

O'Mara Patterson & Perrier Solicitors for the First Defendant

Jensen McConaghy Solicitors for the Second Defendant

[2] The plaintiff's solicitors have issued this application seeking a direction that the sanction of the settlement is not necessary or alternatively that it be sanctioned. On the hearing of the application, the plaintiff's ability to manage the funds payable on the settlement was canvassed although that gives rise to separate considerations.

[3] The defendants appeared and made useful submissions essentially directed to ensuring their effective discharge from liability on payment of the settlement monies.

[4] The plaintiff was born in September 1955. At the time of the assault giving rise to the cause of action on 3 April 1994 he was qualified and employed as an electrical mechanic.

[5] As a consequence of the assault the plaintiff suffered head injuries which have adversely effected his cognitive faculties and his eyesight. His ability to function as a member of the community as effectively as he did prior to the accident is diminished. He is no longer employable in his trade and he is probably commercially unemployable although he may be able to work at his own pace in some occupations.

[6] The plaintiff has been rendered a vulnerable person as a consequence of his organic brain damage, its physical consequences and the personality changes associated with it. His cognitive processing is slow, aspects of his memory are impaired, he has difficulties with planning and organisation and is easily stressed. He has had epileptic episodes but this condition is under control.

[7] A large volume of medical reports are in evidence on the application. With one exception these are essentially directed to damages issues rather than those with which I am concerned. The plaintiff gave evidence which was not challenged. There were also affidavits by the plaintiff's sister who has been supporting her brother, who attended the mediation, read over counsel's opinion recommending the settlement which she explained and discussed with her brother. The plaintiff's solicitor has also sworn an affidavit.

[8] There are apparently conflicting medical opinions on the plaintiff's ability to handle a large sum of money.

[9] In a report of 10 October 1997 Dr Lee Atkinson, a neurosurgeon, expressed the view that the plaintiff was a vulnerable person and that he did not believe the plaintiff should be in control of large amounts of money. Dr Wilde, a consult psychiatrist treated the plaintiff on a number of occasions in September 1998. He provided a medico-legal report on 18 December 1998 and on 6 December 2000 swore an affidavit of his examination and consideration of various medical reports directed to the issue of the plaintiff's ability to manage his finances. He concluded that there was no evidence of significant current or ongoing impairment of financial judgment relevant to the use of the settlement funds. These witnesses were not cross-examined.

[10] There is no expert opinion directed specifically to the issue of the plaintiff's ability to give instructions to his lawyers although the material in general provides a legitimate basis for that issue arising.

[11] On the other hand the plaintiff, so far as the evidence reveals, has been successful in living independently and supporting himself from his disability support pension. He has given consideration to the best use of the settlement fund and his plans are sensible and practical. He has sought and taken advice in respect of the conduct of his affairs including the action and plainly has the valuable assistance of his sister and her husband.

[12] He seems to have a reasonable appreciation of his limitations consequent on the injury.

[13] The relevant legislation is the Public Trustee Act 1978 and the Guardianship Administration Act 2000.

[14] As a consequence of the amendment of s 65(1) of the Public Trustee Act 1978 by the Guardianship and Administration Act 2000 a protection order under the former Act is no longer available in the case of an adult. As Mullins J points out in Welland v Payne and Anor (Unreported [2000], QSC 431, delivered 28 November 2000), if an adult seeking to settle a personal injuries action was caught by s 65(1)(a) of the Public Trustee Act a protection order under s 67 of that Act could not be made without a sanction pursuant to s 59. As a consequence of the introduction of the Guardianship and Administration Act it does not necessarily follow that there needs to be a sanction of a settlement in the case of a plaintiff with an impaired capacity for a financial matter. That follows from the scheme of the Guardianship and Administration Act.

[15] Section 59 of the Public Trustee Act 1978 subsection (1) relevantly provides:

"`court' means a court within whose jurisdiction an amount or damages are claimed by or for a person under a legal disability suing either alone or with others, and includes a judge or magistrate of the court.

(1) In any cause or matter in any court in which money or damages is or are claimed by or on behalf of a person under a legal disability suing either alone or in conjunction with other parties, no settlement or compromise or acceptance of money paid into court, whether before, at or after the trial, shall, as regards the claim of such person under a legal disability, be valid without the sanction of a court or the public trustee, and no money or damages recovered or awarded in any such cause or matter in respect of the claims of any such person under a legal disability, whether by verdict, settlement, compromise, payment into court or otherwise, before or at or after the trial, shall be paid to the next friend of the plaintiff or to the plaintiff's solicitor or to any person other than the public trustee unless the court otherwise directs."

Section 59(1A) of the Act provides that a "person under a legal disability" means:

"(b) a person with impaired capacity for a matter within the meaning of the Guardianship and Administration Act 2000".

[16] The Guardianship and Administration Act defined "impaired capacity" (see Schedule 4) in terms of:

"`Impaired capacity', for a person for a matter, means the person does not have capacity for the matter."

The definition of "capacity" is also found in Schedule 4:

"`Capacity', for a person for a matter means the person is capable of-

(a) understanding the nature and effect of decisions about the matter; and

(b) freely and voluntarily making decisions about the matter; and

[17] Section 18 of Schedule 2 of the Guardianship and Administration Act defines a "legal matter" relevantly for present purposes to include:

(d) bringing or defending a proceeding, including settling a claim, whether before or after the start of a proceeding."

[18] There is an extensive definition of "financial matter" in s 1 of Schedule 2 which includes:

* receiving and recovering money payable to the adult;

* investing for the adult in authorised investments;

* undertaking an authorised real estate transaction for the adult;

* with the tribunal's approval, undertaking a real estate transaction for the adult that is not an authorised real estate transaction;

* undertaking an authorised security transaction for the adult;

* with the tribunal's approval, undertaking a security transaction for the adult that is not an authorised security transaction;

* a legal matter relating to the adult's financial or property matter.

[19] In the circumstances, I am satisfied that the plaintiff has the capacity for a matter relating to settling his claim against the first and second defendants. As I have said, the settlement sum represents a significant but justifiable discount taking into account the litigation risk involved in the action being pursued to judgment. The discount reflects conflicting accounts of events and the consideration that establishing the defendants were under and breached a duty of care is not without difficulty.

[20] I accept that the plaintiff will use the bulk of the settlement money to build a dwelling on land some of which he may use to commence a nursery. In that sense he will not have the day to day management of the fund.

[21] An issue about impaired capacity regarding a financial matter relevant to receiving, investing and managing the settlement fund would require the application to be transferred to the Guardianship and Administration Tribunal under s 241(1) of the Guardianship and Administration Act.

[22] On the view I take of the evidence that course is not justified. I therefore declare that the plaintiff is not a person under a legal disability so as to require a sanction of the settlement.

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Judgment (41 paragraphs)