Gregory v Nominal Defendant[2005] QSC 308

SUPREME COURT OF QUEENSLAND

1. WILSON J: This is an application that the compromise of a proceeding be sanctioned and that the Public Trustee of Queensland be appointed as the administrator of the settlement fund pursuant to ss 245 and 12 of the Guardianship and Administration Act 2000.

2. The plaintiff was injured in a motor vehicle accident outside Doomadgee on 5 December 1992, when he was aged almost 14 years. In June 1999 he commenced this proceeding for damages for personal injuries. It has been compromised on terms that the first defendant pay him $411,480-00 (inclusive of all statutory refunds, administration charges and other items), together with costs to be assessed on the standard basis.

3. The plaintiff sustained a closed head injury and bruising and abrasions. The injury was predominantly to the left hemisphere of his brain, and it caused significant speech and memory disturbance with impairment of right-sided function. He has residual cognitive and speech deficits and a minimal right hemiparesis. One neurosurgeon assessed him as having a 20% disability of the whole person, and another as having a 30% total body impairment.

4. The plaintiff belongs to the indigenous community at Doomadgee. He did not return to school after the accident. He has been in a de facto relationship since about 1998; there are 4 children of the relationship. He works under the Doomadgee CDEP Scheme, performing some light unskilled work in return for the unemployment benefit.

5. The Court was informed that the plaintiff understands the proceeding and that he is capable of consenting to the compromise, but that he is incapable of coping with financial matters. A written opinion of senior counsel for the plaintiff was put before the Court. No oral evidence was called, but a number of medical reports were tendered, along with affidavits by his de facto wife and his solicitor. The reports do not directly address his capacity for financial matters. Ms Briker-Bell, a speech pathologist, observed –

“11. Informal and formal assessment indicated ability to reason in a logical, sequential manner, difficulty changing mental set (seeing another perspective, suggesting some rigidity of thought processes) and severely diminished ability to explain, interpret, elaborate, describe, define and the like.

12. Significant impairment evident in performance on tests of language fundamentals precluded administering to him tests of higher cognitive-linguistic skill ability for instance: tests requiring the retention, manipulation and simultaneous analysis, synthesis and integration of syntax and semantics, comprehension of abstract linguistic material, to perceive innuendo, linguistic subtleties, connotation, and the identification and interpretation of concepts pivotal to ambiguity; and semantic associative tasks such as explaining brands, synonyms, giving definitions, and the like.

13. The social bonding often vital to successful personal relationships inherent in mutually understood communicative exchanges, humour and shared repartee is likely to elude Mr Gregory.  Anecdotal evidence suggests that Mr Gregory readily misunderstands and takes offence at humour. 

14. Mr Gregory was assessed as functionally illiterate.  Informal assessment indicated that he had understanding of the purpose of some of the signs and symbols in the environment. 

15. Further analysis of Mr Gregory’s literacy skills and subskills (for instance, understanding symbols) is recommended.  Skills in literacy could be of assistance to him to compensate for memory deficits and in speech/language rehabilitation. 

16. Test performance supports anecdotal evidence and neuropsychological report that Mr Gregory could have difficulty organising, planning remembering and executing activities of daily living of a linguistic nature.

17. Given the above findings it is highly likely that Mr Gregory would not be able to successfully execute tasks demanding critical and deductive thinking or make judgements with regard to plausibility suggesting that he could be socially and fiscally vulnerable.  Fiscal management is likely to be beyond his capabilities.”

6. The compromise which has been reached appears to be a reasonable one, and I am satisfied that it is in the best interests of the plaintiff.

7. Clearly the plaintiff will require assistance in the management of the settlement fund. His counsel Mr Dorney QC submitted that the Court can and should sanction the settlement, and that it should go on to appoint the Public Trustee of Queensland to administer the settlement fund. It is only in circumstances where the Court sanctions a settlement that it can make such an appointment; otherwise it must be made by the Guardianship and Administration Tribunal: Guardianship and Administration Act ss 245, 12.

8. The court’s power to sanction a compromise is found in s 59(1) of the Public Trustee Act 1978 which provides –

“59 Compromise of actions by or on behalf of persons under a legal disability claiming moneys or damages valid only with sanction of court or public trustee

…

(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.”

9. Subsection (1A) of s 59 contains the following definition –

“‘person under a legal disability’ means –

(a)  a child; or

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

10. Thus it is necessary to consider some of the provisions of the Guardianship and Administration Act. It “categorises matters” into personal matters, special personal matters, special health matters, and financial matters: s 10. A financial matter is a matter relating to the adult’s financial or property matters including, for example, a matter relating to one or more of the matters set out in s 1 of schedule 2. Those matters include “a legal matter relating to the adult’s financial or property matters”. A “legal matter”, for an adult, includes a matter relating to –

“(d) bringing or defending a proceeding, including settling a claim whether before or after the start of a proceeding”
(schedule 2 s 18).

11. Pursuant to schedule 4 of the Guardianship and Administration Act -

“‘impaired capacity’, for a person for a matter, means the person does not have capacity for the matter.

‘capacity’, for a person for a matter, means the person is capable of –

1. understanding the nature and effect of decisions about the matter; and
2. freely and voluntarily making decisions about the matter; and
3. communicating the decisions in some way.”

12. The compromise of a proceeding in which a plaintiff claims damages for personal injuries being a “matter” within the Guardianship and Administration Act, the Court has taken the view that it can sanction such a compromise only if the plaintiff has “impaired capacity” for that matter: Welland v Payne [2000] QSC 431; Foran v Jalbao Pty Limited [2001] QSC 042; Morris v Clair [2004] QSC 127.

13. Mr Dorney submitted that these decisions ought not be followed because they turn on an impermissible reading down of the definition of “a person under a legal disability” in s 59 of the Public Trustee Act. He submitted –

“5.That definition, by paragraph (b), ‘means’ a person ‘with impaired capacity for a matter’ (emphasis added) within the meaning of the Guardianship and Administration Act. The definition does not state that such impaired capacity has to be for a ‘legal’ matter.  Furthermore, s.59(1) applies in ‘any’ cause or matter in ‘any’ Court in which money or damages is or are claimed ‘by … a person under a legal disability’. For such a person, the section then provides that ‘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 a person under a legal disability, be valid without the sanction of a Court’ (emphasis added). There is nothing in those words which requires that the legal disability be with respect to an impaired capacity to understand a settlement, compromise or acceptance of money. 

6. Thus, an ‘impaired capacity’ for ‘a’ financial ‘matter’, provided it is within the matters set out in Schedule 2, is ‘impaired capacity for a matter’ within the definition in s.59(1A).

7. For the reasons set out in the Memorandum of Advice of Senior Counsel, it is submitted that it is clear that the plaintiff in this case does have such an impaired capacity for a financial matter.”

14. The definition in s 59(1A) is potentially very broad. It is not expressed in terms of a type or category of matter within the meaning of the Guardianship and Administration Act, and so unless read down in some way would include, for example, “special personal matters” such as exercising the right to vote in a Commonwealth, State or local government election and “special health matters” such as participation in special medical research or experimental health care. That cannot have been the intention of the Legislature. In part 1 of Schedule 2 there is a lengthy but non-exhaustive list of financial matters: it includes matters such as carrying on a trade or business and real estate transactions. I do not think it could have been the Legislature’s intention that incapacity for any “financial matter” be a sufficient basis for requiring the Court’s sanction of a compromise.

15. In short, I am unpersuaded of any relevant error in the line of authorities to which I have referred.

16. When a compromise is sanctioned and an administrator appointed, it is common not only to order the defendant to pay the plaintiff’s costs assessed on the standard basis, but also to order that the plaintiff’s costs be assessed on the indemnity basis and to direct the administrator to pay out of the settlement sum to the plaintiff’s solicitors the difference between the amount of costs recovered from the defendant and the indemnity costs. In oral submissions Mr Dorney submitted that unless the Court sanctioned the settlement and appointed an administrator, the recovery of the difference between the indemnity costs and costs on the standard basis would be in jeopardy, because the Guardianship and Administration Tribunal might decline to appoint an administrator. He must have meant the recovery of that difference in costs by the solicitors for the plaintiff.

17. The material presently before the Court does not deal comprehensively with the plaintiff’s incapacity for financial matters. He has the capacity to instruct his lawyers, to understand the compromise and to consent to it. That capacity may extend to finalising questions of costs as between him and his solicitors. If it does not, then in the circumstances of this case, it is a matter for an administrator appointed under the Guardianship and Administration Act.

18. There was also an issue as to the payment of an amount for pre-trial damages under the principle in Griffiths v Kerkemeyer to the care-giver, his de facto wife. The Court can, in an appropriate case, direct such a payment: Grevett v McIntyre [2002] QSC 106. But the first inquiry must surely be as to whether the plaintiff himself has to capacity to direct such a payment. If he does not have such capacity although he has capacity to consent to the compromise, then it is a matter for an administrator appointed under the Guardianship and Administration Act.

19. I am concerned about the plaintiff’s imminent receipt of a large sum of money which he may not be capable of managing. Accordingly, I propose making the following orders –

1. that the application for sanction of the compromise be dismissed;

2. that there be judgment for the plaintiff for $411,480-00 (inclusive of all statutory refunds, administration charges and other items);

3. that the first defendant pay the plaintiff’s costs of and incidental to the proceeding, including the costs of this application and including reserved costs if any, to be assessed on the standard basis;

4. that the application for the appointment of the Public Trustee of Queensland as administrator of the settlement fund be transferred to the Guardianship and Administration Tribunal;

5. that enforcement of the judgment be stayed pending the Guardianship and Administration Tribunal’s determination of the application for the appointment of an administrator;

6. that the opinion of counsel be placed in an envelope to be sealed and marked “Not to be opened without an order of the Court”;

7. that there be liberty to apply.