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Catchwords: CIVIL LAW – personal injury – legal capacity of plaintiff – application for appointment of tutor – where superficial conflict between expert witnesses – factual issue resolved – tutor appointed – no question of principle
CIVIL LAW – substituting insurer for impecunious defendant corporation – no question of principle

Legislation Cited: Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), ss 4, 5
Civil Procedure Act 2005 (NSW), s 3
Uniform Civil Procedure Rules 2005 (NSW), r 7.18(1)(a)

Cases Cited: N/A

Texts Cited: N/A

Category: Principal judgment

Parties: Khaliqdad Zahidi (Plaintiff)
ACON Projects Pty Ltd (Defendant)

Representation: Counsel:
L Del Monte (Plaintiff)
Solicitors:
W.D. Hunt & Associates (Plaintiff)
JTA Law (Defendant)

File Number(s): 2024/00241365

Publication restriction: N/A

EX TEMPORE JUDGMENT (REVISED)

1. Khaliqdad Zahidi is the plaintiff in proceedings commenced by statement of claim filed on 1 July 2024 in which the named defendant is ACON Projects Pty Ltd. The circumstances lying behind that claim are set out in the statement of claim itself, but also in other evidentiary material provided in Ex A, and material annexed to the affidavit of the plaintiff’s solicitor, Ms Hunt.

2. During the course of the litigation, Ms Hunt has become concerned that the plaintiff lacks the legal capacity to instruct her appropriately and comprehensively in the proceedings. The plaintiff, by notice of motion filed on 12 December 2025, seeks the appointment of a tutor. That nominated tutor is the plaintiff’s wife.

3. At the same time, or during the period since the proceedings were instituted, the situation of the defendant has been shown to be that the company itself is, first, impecunious, and secondly, covered by a relevant insurance policy. By a separate notice of motion, the plaintiff seeks an order pursuant to ss 4 and 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW) (“the Third Party Claims Act”) whereby the insurer is, in effect, substituted as the defendant in the proceedings.

4. The defendant – I am calling the insurer “the defendant” perhaps precipitously – is represented by Mr Churcher, and the position of the defendant is neither to consent nor oppose the making of both orders.

5. It is nevertheless necessary for the Court to reach a state of satisfaction in respect of both notices of motion before it makes the orders sought. In that regard, I find myself greatly assisted by the written submissions filed by counsel for the plaintiff, Mr Del Monte, who sets out with admirable clarity the issues that arise on each notice of motion and the evidence upon which the plaintiff relies in seeking the orders sought therein.

6. In the circumstances, I find it unnecessary to provide extensive reasons, but I should at least put some of them on the record.

7. The test for legal incapacity is well established. It is defined non-exhaustively in s 3 of the Civil Procedure Act 200**5 (NSW) and receives further definition in the Uniform Civil Procedure Rules 2005 (NSW). It has been subject to decisions of this and other courts over many years. I do not propose to reproduce the various things that have been said about that test.

8. In the present case, the issue is not completely uncontroversial because there are two different experts whose reports are before the Court. One of them – the report of Dr Charlotte Morgan – if read on a superficial basis, might suggest that the plaintiff “does have the capacity to understand the general nature of the legal proceedings he is involved in”.

9. However, when one examines that opinion more closely and considers the opinion of Dr Stephen Buckley, one can reasonably comfortably conclude that the plaintiff lacks legal capacity to properly instruct his solicitor and engage in the proceedings. Dr Buckley has provided a number of reports:

10. A report dated 18 February 2025;

11. A supplementary report addressing the plaintiff’s capacity dated 21 March 2025;

12. A supplementary report addressing the plaintiff’s rehabilitation requirements dated 21 March 2025; and

13. A further report addressing the plaintiff’s capacity dated 1 August 2025.

14. In providing the more recent reports, Dr Buckley addressed the opinion I have just referred to from Dr Morgan. He is of the view that the plaintiff does lack capacity and lists the reasons for that in some detail.

15. The injuries that the plaintiff received arose when he was working as a tiler and essentially fell through a first floor onto the ground below and suffered what is described as a “catastrophic” brain injury. There are times nowadays where he is able to “parrot” or mimic words that have been said to him. For example, it is recorded in one of the reports that he indicated that he had “prospect[s] of receiving a multi-million dollar settlement”. However, when that was subject to further interrogation, it appeared that the plaintiff had no idea what that actually meant or was. Dr Morgan, who had extracted that parroted response, had not, to use an unfortunate expression of our times, “drilled down” on that statement.

16. I will set out in the final version of the judgment – rather than read it onto the record here and now – some of Dr Buckley’s reasoning and parts of his reports that are relevant. [1]

17. In the second supplementary report dated 21 March 2025, Dr Buckley stated:

“Mr Khaliqdad Zahidi suffered severe injuries in an accident at his work place, including a traumatic brain injury in the ‘very severe’ range. Imaging (MRI) reported widespread severe structure brain damage and bilateral subdural haematoma. He also sustained facial fractures and skull fractures. He now demonstrates deficits of cognition, emotion, and behaviour.”

14. As to the plaintiff’s financial and legal capacity, Dr Buckley concluded:

“I believe that Mr Zahidi is, and will be, incompetent to manage any funds arising from a settlement, and therefore requires administration of his funds via an arrangement dictated by the NSW Trustee and Guardian Act 2009. I believe that such administration could either be by the Protective Commissioner, or alternatively, an appropriately constituted and insured private trust with accounting oversight by the Protective Commissioner as ordered by a Supreme Court Judge.

It is also my opinion that, in line with his financial incapacity, Mr Zahidi lacks legal capacity, and that his capacity to adequately understand the general nature of the proceedings, and to adequately understand the ‘general purport’ of legal advice provided to him in respect of the proceedings, and provide fluid instruction in the proceedings which is rational and in his best interests, is lacking as a result of his marked cognitive impairment.”

15. In his 1 August 2025 report, Dr Buckley highlighted a number of factors relevant to his determination as per the “NSW Capacity Tool Kit” including:

16. The “enormous importance” of the proceedings which will affect the plaintiff’s future financial security and the “high stakes” series of legal decisions that would need to be made throughout the proceedings.

17. The likelihood that the plaintiff would sense some form of time pressure in making decisions which will affect his capacity to make those decisions.

18. The “clear cut and severe risk” that the plaintiff will be overloaded with and misunderstand information, citing the example where it seemed the plaintiff had a realistic comprehension of his prospects of receiving a “multi-million dollar settlement” despite it becoming apparent he had no idea what that meant. This may lead to a situation where the plaintiff “agrees to something he doesn’t understand.”

19. The plaintiff’s difficulties with communication which may be explained not only by cognitive reasons but by language and cultural barriers.

20. The likelihood that the plaintiff, who has no experience of the court, would find the court environment an overwhelming experience.

21. The “extremely high stress” the plaintiff is likely to feel in the courtroom especially given the gravity of the outcome.

22. The plaintiff’s severely impaired cognition and difficulty with concentration and with identifying similarities and differences, which places him at a serious risk of erroneous decision making.

23. Dr Buckley concluded:

“In my opinion, despite very careful consideration, Mr Khaliqdad Zahidi does indeed lack legal and financial capacity. This is primarily based upon his severe cognitive impairment identified in the Forensic Neuropsychological Assessments, and in my opinion backed up by the data provided by Dr Morgan in her last interview.

…

I would reiterate that if a person does have financial capacity, then it is most likely, in my opinion, that they will have legal capacity. It would, however, be very unusual in my experience, to identify a person who lacks financial capacity but retains legal capacity.”

17. Ultimately, I am satisfied to the necessary standard that the plaintiff lacks legal capacity. His wife has provided the appropriate consent form.

18. I should just add that not only have I taken into account the medical opinion on this subject and the objective findings of various tests done on the plaintiff, but I have also considered the opinion of Ms Hunt who has worked in this field for decades, including on the panel of solicitors for the New South Wales Trustee and Guardian for patients with brain injuries. I have given significant weight to her opinion in reaching the conclusion that I have just stated.

19. Accordingly, in due course I will make the orders sought in the first notice of motion.

20. The second motion ventures into an area with which I confessed to counsel I was not familiar. It raises issues under ss 4 and 5 of the Third Party Claims Act. In essence, the defendant company has gone into liquidation and is unable to meet its debts. It was insured at the time of the incident that gave rise to the injury. Therefore, pursuant to s 4, there is potentially insured liability.

21. As Mr Churcher helpfully reminded me, all there needs to be is an arguable case in that regard. The matter is something that does require leave, but the criteria provided in the Third Party Claims Act does not present a particularly high obstacle and allows the Court to deal with the party, if you like, that is ultimately going to be paying the money, that is, the insurer.

22. I am satisfied that the orders in the second notice of motion should also be granted.

23. For those reasons, I make the following orders:

24. Order that pursuant to r 7.18(1)(a) of the Uniform Civil Procedure Rules 2005 (NSW), the Court appoint Sedigheh Asghari as the plaintiff, Khaliqdad Zahidi’s tutor.

25. Order that, pursuant to ss 4 and 5 of the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), the plaintiff be granted leave to continue these proceedings against the insurer, AIG Australia Limited (ABN 93 004 727 753), with the corresponding policy number AP-46339, in place of the named defendant.

26. The plaintiff file an amended statement of claim reflecting the orders made today on or before 29 May 2026.

27. I note the matter is before the Registrar on 3 June 2026 and the Registrar should be invited to fix a filing date for the amended defence responding to the amended statement of claim.

28. Costs be costs in the cause.

**********

Endnote

[13]-[16] were added in revising this judgment.