Dalle-Molle v Manos

DAMIEN GUY DALLE-MOLLE
BY HIS NEXT FRIEND PUBLIC TRUSTEE
v
GEORGE MANOS & GLENN ANTHONY JOHN McCULLOCH
[2004] SASC 102
Civil

DEBELLE J. The issue in this application is whether the plaintiff is at liberty to prosecute this action himself or must prosecute the action by his next friend. I set out the facts which lead to this action and to this application.
A Serious Motor Vehicle Accident
The plaintiff is now aged 38 years. On 27 August 1984, when he was aged eighteen years, he was involved in a motor vehicle accident when the motor vehicle he was driving was struck by a semi-trailer. The plaintiff suffered serious head injuries and serious brain damage. In addition he suffered a fracture of the right clavicle, pneumothorax, a fracture of the jaw, and a fracture of the pelvic girdle. He underwent neuro-surgery at Queen Elizabeth Hospital. As a result of his head and brain injuries, he suffers extensive neurological impairment causing epilepsy and a loss of intellectual and cognitive ability, he has lost sight in his right eye, and he suffers from a range of emotional and personality changes. He takes anti-convulsive drugs in order to prevent epileptic seizures from which he has suffered from time to time as well as other forms of medication.
One of the doctors who treated the plaintiff for his head injuries was Dr G McCulloch.
A Protection Order
The plaintiff issued proceedings to recover damages for the injuries he received in the motor vehicle accident. The action was settled. The plaintiff recovered damages in the sum of $756,156.00. Of that sum $641,467.57 was the subject of a protection order made on 20 June 1990. It was further ordered that Public Trustee manage that sum pursuant to the Aged and Infirm Persons’ Property Act 1940.
The Protection Order is Revoked
In October 1992 the plaintiff instructed Mr George Manos, a solicitor, to act on his behalf. On 3 November 1992 Mr Manos filed an ex parte application in this Court seeking an order to rescind the protection order made on 20 June 1990. Affidavits in support of the application were sworn by the plaintiff, his father, Dr McCulloch, and the plaintiff’s social worker. On 27 November 1992 a Master of this Court made an order rescinding the protection order.
A Second Action
The plaintiff has lost a considerable amount of the funds the subject of the administration order in unwise investments. On 3 July 2002 this action was commenced in order to recover damages for the losses he had incurred. For convenience, I will call it “the second action”. The defendants in the second action are Mr Manos and Dr McCulloch.
The plaintiff claims that Mr Manos was guilty of negligence, breach of contract and breaches of his fiduciary duties as the plaintiff’s solicitor in advising the plaintiff and in securing orders releasing the funds from the protection order. It is alleged that he failed to obtain all appropriate medical evidence including psychiatric and psychological assessments of the plaintiff before making the application; that he failed to have sufficient regard to concerns expressed by a solicitor in the office of Public Trustee concerning the plaintiff’s capacity to manage large sums of money and as to the wisdom of a proposed investment; and that he knew or ought to have known both that a proposed transaction was not in the plaintiff’s best interests and that the plaintiff was under the influence of his brother. The transaction referred to was the purchase by the plaintiff of a property owned by his brother David. I will be referring to this transaction in more detail later in these reasons.
The plaintiff’s claims against Dr McCulloch are that he was guilty of negligence and in breach of contract in failing to take due care in preparing medical reports in respect of the application to rescind the administration order. It is further alleged that he failed to advise that it was in the plaintiff’s interest to undertake further psychiatric and psychological tests, that he failed to make a proper assessment of the plaintiff, and that he failed to take into account sufficiently or at all the available psychiatric and psychological evidence.
A Change of Next Friend
The second action was commenced on behalf of the plaintiff by his wife acting as his next friend. Very soon after the second action had been instituted, the plaintiff’s wife decided that she could no longer act as his next friend. One of her reasons was that she and the plaintiff had recently separated. On 2 October 2002 an order was made substituting Public Trustee as the plaintiff’s next friend. The appointment of Public Trustee as next friend was made notwithstanding that the plaintiff did not consent to that appointment.
During 2002 Griffins were acting as solicitors for the plaintiff in respect of the second action. Notwithstanding that, on 23 December 2002, the plaintiff himself purported to file two documents. The first was a notice that he was acting on his own behalf. The second was a notice discontinuing the action. No one has acted on those notices and the second action continues notwithstanding the purported notice of discontinuance. In early 2003 the plaintiff instructed Bourne Lawyers as his solicitors to bring this application. On 3 March 2003 the plaintiff applied for an order that he be at liberty to prosecute the second action himself and for an order removing Public Trustee as his next friend.
Defences have been filed in the second action by both defendants. On 30 September 2002 an application was made on behalf of Dr McCulloch to strike out the statement of claim. That application has not yet been heard because of the uncertainty that exists as to the plaintiff’s capacity to give instructions and because of this application that the plaintiff be at liberty to prosecute the action on his own behalf without a next friend.
Rule 35
Rule 35.01 provides, among other things, that “a person under a disability shall commence proceedings by his next friend”. The rule is expressed in mandatory terms. A person under a disability may not act on his own behalf except with leave of the Court: Rule 35.04. Thus, if a plaintiff is in fact the person under a disability, the plaintiff has no alternative but to prosecute the action by his next friend unless leave of the Court has been obtained pursuant to Rule 35.04. The predecessor of Rule 35.01 is the former Order 16 Rule 15 which, though not expressed in mandatory terms was held to be mandatory in operation: Hutchinson v Gaitazis (1980) 25 SASR 30 at 33-34. The only exception to that rule is where the court is conducting an inquiry into the question whether the plaintiff is under a disability: Hutchinson v Gaitazis (supra) at 34. Thus, there is no bar to the plaintiff making this application.
This application is made pursuant to Rule 35.09 which authorises the Court to remove, appoint or substitute a next friend where it is in the best interest of a person who is under a disability. Rule 35.09 applies where a person is under a disability. The plaintiff says that he is not a person under a disability. As the application is to remove a next friend, the rule is wide enough to include the plaintiff’s application: Hutchinson v Gaitazis (supra). There is no suggestion of improper conduct on the part of Public Trustee. The application is grounded only on the contention that the plaintiff is not a person under a disability.
The question which must be determined on this application is whether the plaintiff is a person under a disability. Rule 5 defines a person under a disability in these terms:
“Person under disability” means an infant, and any person, who by reason of physical weakness or intellectual or mental impairment or other condition whether temporary or permanent, is unable to give sufficient instructions to take, defend or compromise proceedings.”
It is common ground the plaintiff does not suffer from any relevant physical weakness. The issue is whether he has an intellectual or mental impairment which affects his capacity to give sufficient instructions. Thus, the question for determination is whether the plaintiff has an intellectual or mental impairment which renders him unable to give sufficient instructions to take or compromise this action.
Not an Enquiry into Sanity
It is apparent that the plaintiff believes that the appointment of a next friend calls his sanity into question. It cannot be stressed too much that he is wrong to hold that belief. The inquiry I must make is not concerned with the plaintiff’s sanity. There is not the slightest suggestion that the plaintiff is insane or is exhibiting symptoms of insanity. The evidence led in this action indicates the contrary. Instead, the question I must decide is whether the severe brain injuries which the plaintiff suffered mean that he should have the assistance of a next friend in the prosecution of the second action. In other words, I must decide whether the severe brain injuries the plaintiff suffered in the motor vehicle accident have caused an impairment to his intellectual functioning which so adversely affects his capacity to understand the issues in this action that he is unable to give sufficient instructions to his legal advisers.
Relevant Principles
The law in Australia requires that a person who enters into a transaction or executes a document should have the mental capacity to understand the nature of that transaction or the effect of that document. If he does not, the transaction is not effective at law. Thus, a person must have the necessary mental capacity:
·to enter into a contract,
·to make a will or other testamentary disposition,
·to execute a power of attorney,
·to execute a deed,
·to enter into marriage,
·to consent to a degree of divorce, or
·to consent or refuse to consent to medical treatment.
With the exception of a contract entered into for consideration, the transaction or document is void and of no effect if the necessary mental capacity is lacking. In the case of a contract made for consideration by a person who lacks mental capacity, the contract is voidable against the other party but only if it is established that the other party knew of the lack of capacity: The Imperial Loan Company, Limited v Stone [1892] 1 QB 599 at 602-3; Gibbons v Wright (1954) 91 CLR 423 at 441.
All persons who have reached the age of majority are presumed to have the capacity to enter into contracts or other transactions so that those who assert the contrary bear the onus of proof: Borthwick v Carruthers (1787) 1 TR 648, 99 ER 1300. The principle applies with equal force where it is alleged that a person lacks the required mental capacity: Re Cumming (1852) 1 De GM & G 537 at 557, 42 ER 660 at 668; Masterman-Lister v Brutton & Co [2003] 3 All ER 162 at [17]. The plaintiff, therefore, has no onus of proof to discharge. The burden is on those who assert incapacity.
One question is what level of understanding is required if a person is to have the necessary capacity at law to enter into a transaction or execute an instrument of the kind listed above. That question is to be answered by reference to the transaction in which the person proposes to engage. The principle is expressed in Gibbons v Wright (supra) at 437-438 in these terms:
“The law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation… [O]ne test of the requisite capacity the jury was at liberty to consider [is] whether the person concerned was capable of understanding what he did by executing the deed, when its general purport was explained to him. The principle…appears to us to be that the mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument, and may be described as the capacity to understand the nature of that transaction when it is explained.”
See also Re Beaney, Decd [1978] 1 WLR 770 at 774, Masterman-Lister (supra) at [23] and at [58].
It will have been noticed that there are two aspects of the principle. The first is that the mental capacity is directed to the particular transaction into which the person proposes to enter. The second is that the person must have the capacity to understand the nature of that transaction when it is explained. Immediately following the passage quoted above, the High Court adopted the remarks of Hodson LJ in Re Estate of Park, Decd [1954] P 112 at 136:
“One cannot consider soundness of mind in the air, so to speak, but only in relation to the facts and the subject-matter of the particular case.”
Thus, the enquiry must be directed to the particular transaction. In that sense the test is “issue-specific”, as Kennedy LJ and Chadwick LJ noted in Masterman-Lister at [27] and at [62].
Rule 35, when read with the definition of “person under a disability”, spells out the required capacity for a party to litigation. The question is whether the person has a condition which renders him unable to give sufficient instructions to take, defend or compromise legal proceedings. Two aspects of that definition of a person under a disability must be noticed.
The first is that it is necessary that the person must have the capacity not only to give sufficient instructions to prosecute or defend the action but the capacity also to give sufficient instructions to compromise the proceedings. The latter requirement reflects the common law rule that a contract made by a person who lacks mental capacity is voidable against the other party if the other party knew of the incapacity. It is as important for contracts which compromise litigation to be as binding as any other form of contract. As Chadwick LJ said in Masterman-Lister at [65]:
“The pursuit and defence of legal proceedings are juristic acts which can only be done by persons having the necessary mental capacity; and the court is concerned not only to protect its own process but to provide protection to both parties to litigation which comes before it. A defendant is entitled to expect that he will not be required to defend proceedings brought against him by a person of unsound mind acting without a next friend.”
The protection to both parties includes an agreement to compromise. The defendant is entitled to expect it will be binding.
The second question is what is meant by the expression “sufficient instructions”. In ordinary usage “sufficient” means “of a quantity, extent or scope adequate to a certain purpose or object”: Oxford English Dictionary. When qualifying the noun “instructions”, it is signifying that the person is able, once an appropriate explanation has been given, to understand the essential elements of the action and is able then to decide whether to proceed with the litigation or, if it is a question of agreeing a compromise of the proceedings, to decide whether or not to compromise.
There is another aspect to this second question. Just as the general rule is that the understanding must be issue specific to the particular transaction or documents, so in the case of litigation, the understanding must, I think, be in relation to the facts and the subject matter of the particular case. Legal proceedings have a spectrum of complexity. They can extend from the most simple issues through a range of complexity to quite involved and complex litigation. As a general rule, an action to recover a debt or to recover damages consequent upon a motor vehicle accident are examples of more simple forms of litigation, although even proceedings of that kind might involve a degree of complexity. However, an action such as this action where there are two defendants, where the issues against each defendant differ, and where there are real issues as to the nature of the duty of care, the standard of care, whether there was a breach of the duty of care and questions as to causation is an example of more complex litigation. It may be necessary to compromise against one defendant but not the other which only adds complexity to the decision whether or not to compromise the action. Thus, the question whether the person has the capacity to give sufficient instructions must be examined against the facts and subject matter of the particular litigation and the issues involved in that litigation.
It must be noticed also that the definition speaks of a person unable to give sufficient instructions. That expression “unable” does not mean slow to give instructions. A person will not be under a disability if, after careful advice and explanation and time to consider the advice and explanation, he then gives instructions. After all, in many a complex matter, it may be necessary for careful advice and explanation and time for consideration.
While these principles are relatively easy to identify, the more difficult task is to determine whether a person does have the capacity to give sufficient instructions. In the case of a document or transaction, the person must understand its general purport when it has been explained to him: Gibbons v Wright (supra). But it may be necessary to explain also the implications of the transaction and its broader effects: Manches v Trimborn (1946) 174 LT 344 at 345, affirmed in Gibbons v Wright (supra) at 438-439 where there is an illuminating example of how extensive the explanation and understanding must be.
The level of understanding of legal proceedings must, I think, be greater than the mental competence to understand in broad terms what is involved in the decision to prosecute, defend or compromise those proceedings. The person must be able to understand the nature of the litigation, its purpose, its possible outcomes, and the risks in costs which of course is but one of the possible outcomes. In this respect, it is helpful to note the tests adopted in cases concerning the consent to or refusal of medical treatment such as Re C [1994] 1 WLR 290, Re K, Re F [1988] Ch 310 at 315-6. Although those cases deal with a different kind of issue, they provide further examples of how it is necessary to determine the nature and the extent of the explanation and understanding required. They also demonstrate that the test of mental capacity is issue-specific.
Two further matters must be identified. First, the question whether a person has the capacity to give sufficient instructions does not turn on whether or not the persons has the requisite mental capacity to make some other legally effective decision. In this respect I respectfully agree with Kennedy LJ and Chadwick LJ in Masterman-Lister at [17] and at [73]. Evidence of the capacity to make other decisions which have legal consequences and to conduct ordinary day to day affairs will of course be relevant but it must be weighed with such other evidence as is adduced. This is but a further aspect of the principle that the test is issue- specific. The second factor is, in effect, the obverse side of the same coin. If the condition which the person suffers renders him vulnerable to exploitation or at risk of making rash or irresponsible decisions, it does not necessarily follow that he is unable to give sufficient instructions. I respectfully agree with the observations of Chadwick LJ to this effect in Masterman-Lister at [78]. Again, the fact that the person is vulnerable to exploitation or prone to rash or irresponsible decisions may be relevant to a determination of the question whether he is able to give sufficient instructions but it must be considered with other relevant evidence.
In Masterman-Lister at [79] Chadwick LJ approved the use of certain recommendations made by the Law Commission in the United Kingdom in Part III of its report Mental Incapacity (Law Com. No. 232). He said:
“The judge found assistance in recommendations made by the Law Commission in 1995, in Pt III of its report Mental Incapacity (Law Com no 232). The report drew attention (at paras 3.16 and 3.17) to the need that a person should be able both: (i) to understand and retain the information relevant to the decision which has to be made (including information about the reasonably foreseeable consequences of deciding one way or another or of failing to make any decision), and (ii) to use that information in the decision-making process. I think that he was right to have regard to those recommendations. I think he was right, also, to have in mind the qualifications (expressed in paras 3.18 and 3.19 of the report) that a person should not be held unable to understand the information relevant to a decision if he can understand an explanation of that information in broad terms and simple language; and that he should not be regarded as unable to make a rational decision merely because the decision which he does, in fact, make is a decision which would not be made by a person of ordinary prudence.”
While I respectfully agree with the first part of that extract, I cannot agree with the last seven to eight lines, which I think are expressed too absolutely. As Mr Walsh, one of the neuro-psychologists called to give evidence, pointed out, a person suffering a mental or intellectual impairment may be capable of making a decision but that decision may have no logical or reasonable base. In my view, that last comment sounds a salutary warning that the barrier as to what constitutes a rational decision should not be raised too high. It should not have any further weight than that.

In Masterman-Lister Chadwick LJ described the issue when it was necessary to determine the capacity to give legal instructions 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.”
Although his Lordship was considering a different provision, it is a helpful test. The reference in the definition of person under a disability to “sufficient instructions” requires, I think, that those words be qualified only by adding the necessity for the explanation to be issue-specific and to emphasise that the expression “the issues on which his consent or decision is likely to be necessary in the course of those proceedings” includes issues concerning a possible compromise. An examination of the reasons of Chadwick LJ shows that they are implicit in the statement quoted above.
With these principles in mind, I turn to examine the evidence as to the plaintiff’s capacity to give sufficient instructions.
The Witnesses
The plaintiff gave evidence. In addition, evidence on his behalf was given by his accountant Mr A D Hill and by Mr Rothwell, a neuro-psychologist. The plaintiff’s brother Mr David Dalle-Molle also gave evidence. It was not originally intended to call him. After the evidence had closed, he was called by consent to explain financial dealings between himself and the plaintiff. The only witness called by Public Trustee was Mr Walsh, who is also a neuro-psychologist.
The plaintiff was clearly endeavouring to give his evidence truthfully. However, it was apparent that for quite understandable reasons, he was seeking to put the best possible face on his difficulties. Some of his evidence proved to be wrong. That is, in my view, the result of his mental impairment not of any dishonesty. His brother Mr David Dalle-Molle, whom for convenience I will call “David”, was at times quite defensive when giving his evidence. I had some concerns about the reliability of his evidence and these will be apparent in the reasons which follow. I accept the evidence of Mr Hill. Both neuro-psychologists gave their evidence impressively. I accept that both are experts in their field and that each is qualified to express an expert opinion. The difference between their opinions is, I think, an instance of two experts holding different opinions where reasonable minds might reasonably differ.
The evidence included an affidavit sworn by Ms Dudman who was a social worker assisting the plaintiff in 1992. Ms Dudman does not have the qualifications of the other experts whose evidence is more helpful. I do not rely on her evidence.
The Effect of the Brain Injury
It is common ground that the plaintiff suffered a very significant brain injury which has impaired his mental and cognitive skills and that it is a permanent impairment. The difference between the neuro-psychologists called in this case concerns the extent of the impairment and its effect upon the capacity of the plaintiff to give sufficient instructions.
Before examining the evidence of Messrs Rothwell and Walsh I will note the plaintiff’s evidence and the evidence concerning some of his financial dealings. In order to put the opinions of Mr Rothwell and Mr Walsh into context, it is necessary to examine reports of the plaintiff’s neuro-surgeon, psychiatrist and psychologist who treated him and whose reports were considered by Messrs Rothwell and Walsh.
The Plaintiff as an Employee
The plaintiff was educated to the second year of high school. He was an average student. He left school at the age of fifteen years to gain employment. At first he loaded trucks. Later he helped his father as a painter.
At the time of the accident, the plaintiff was employed by his brother David as a security guard. After the plaintiff had recovered from his injuries, his brother continued to employ him. David operates a business called Professional Dog Food Pty Ltd. That company now operates two businesses, each of which trades under a different registered name. One business is PD Security which provides security to commercial premises. The other is PD Dog Training Centre which operates kennels at Nairne.
Previously David had operated a third business called Pet Lo which manufactured and supplied pet food. It has ceased to operate. David has employed the plaintiff in the pet food business and in the security business. While employed in the pet food business, the plaintiff’s duties included preparing pet food and packing it, unloading trucks with a fork lift, packing and storing goods on shelves. He also used to set up the till and do the float at the end of each day. His brother’s wife also worked in the business. Both the plaintiff and his sister-in-law would at different times do the banking. There was no suggestion that the plaintiff did not adequately or properly discharge his duties.
The plaintiff has been employed by PD Security as a security guard since 1997. Currently he is working on a part-time basis. He has previously worked on a full-time basis for that company. There is no suggestion that he does not properly discharge his duties as a security guard.
As will shortly be noted, the experts who have treated the plaintiff have expressed doubts whether he has the capacity to be employed. It is obvious that the family and in particular his brother David have provided support and assistance to the plaintiff by employing him and they are to be commended for that.
Professional Dog Food Pty Ltd
There are two shareholders in Professional Dog Food Pty Ltd, the plaintiff and his sister-in-law. The plaintiff believed that the shareholders are his sister-in-law and her mother Mrs Leaney. The plaintiff believed that Mrs Leaney held the share in trust for him so that he had a one half interest in the company. However, his understanding is not correct. He in fact holds the share in trust for Mrs Leaney. Thus, although the plaintiff has a legal interest in half of the company, he has no beneficial interest whatsoever. It is apparent from his evidence that the plaintiff has an inadequate understanding of the affairs of the company.
The plaintiff gave evidence that the company had encountered financial difficulties because of what appears to be embezzlement by an employee. However, evidence from the company’s accountant indicates that the plaintiff entirely misunderstands the situation. The company is in financial difficulties but not for the reasons given by the plaintiff. Although the company did employ the person named by the plaintiff, that person did not defraud the company in any way. There are other causes of those financial difficulties. It is not necessary to examine the causes. It is sufficient to note that they existed in 1992 and still exist.
The Plaintiff Purchases Land at Nairne
In 1992, the plaintiff’s brother David and his wife owned land at Nairne. The land has an area of approximately 0.87 hectares (2.15 acres). In 1992, the improvements then comprised a dwelling and twelve kennels and kennel facilities. This was land on which David conducted the business of PD Dog Training Centre. He had been operating that business since 1988.
In 1992 the company was insolvent and that in turn caused financial difficulties for David and his wife. David said that he believed that it was a good investment opportunity for the plaintiff to purchase the property. In 1992, David and his wife sold the property at Nairne to the plaintiff for $195,000. It had been valued in 1992 to have a value for security purposes of $175,000. I will examine the circumstances of the sale in a moment. The property has recently been advertised for sale. The value of the land and improvements was valued in November 2002 in the sum of $450,000. The plaintiff hopes to be able to sell it for about that sum. The plaintiff understands that he will receive $195,000 from the proceeds in order to repay his investment. The land and improvements are now subject to a mortgage to a bank in a sum of approximately $175,000. The mortgage does not secure any debt of the plaintiff but secures debts of the company.
Since 1992 David and his wife have effected improvements to the land The number of licensed kennels has increased from twelve to 30. David gave evidence that he and his wife have spent about $100,000 over the past ten years improving the property. There was no documentary evidence of that expenditure. That evidence was qualified, if not contradicted, by the most recent valuation which shows that the value added by David and his wife was $80,000. David said that the arrangement with the plaintiff was that the plaintiff owned the land and improvements and that he (David) owned the business and the kennel licences. David said the kennel licences had a value of $5,000 each. The clear implication of his evidence was that he and his wife are entitled to $150,000 for the kennel business. That is contradicted by the valuation in November 2002 which values the land and improvements at $395,000 and the goodwill of the business at $55,000.
It will be recalled that in 1992, Public Trustee was managing the monies received by the plaintiff in his damages award. It had been appointed manager by a protection order made on 20 June 1990. On 6 November 1992, the plaintiff obtained an order releasing $195,000 to him and later obtained an order revoking the protection order. The circumstances and the timing of the release of funds to the plaintiff to enable him to purchase his brother’s property are a cause for concern. I now examine them in more detail. It will have been noticed that the order on 6 November was for the amount required to purchase the Nairne property. The contract of sale and purchase was proved on the application.
David Dalle-Molle and his wife were in significant financial difficulty in 1992. The company was insolvent. They knew it could not trade while insolvent. They had advice from chartered accountants that they would have to sell the property at Nairne. They sold it to the plaintiff. The evidence is the plaintiff paid slightly more for the property than valuation.
It appears from the statement of claim in this action that the plaintiff had asked Public Trustee if it would release sufficient funds to enable him to purchase the property but Public Trustee had refused. Whether he did or not is of no great moment because in October 1992, David Dalle-Molle introduced the plaintiff to Mr Manos who was David’s solicitor. The plaintiff did not know Mr Manos. David admitted in his evidence that he took the plaintiff to Mr Manos for advice as to how the plaintiff could gain access to his money to purchase the property. The plaintiff received no independent advice as to the wisdom of the transaction. On 3 November 1992 an application was made to release a portion of the money subject to the protection order. On 6 November 1992, a Master made orders releasing $195,000 to the plaintiff. On 26 November 1992 the transfer of the land to the plaintiff was produced for registration.
David and his wife have paid rent to the plaintiff as well as all outgoings. The rent represented a reasonable return on the plaintiff’s investment on the property in 1992. However, given the present value of the property, the rent of about $500 per week represents a nominal return only.
As already noted, the land is now subject to a mortgage in the sum of about $175,000 to a bank. The mortgage secures indebtedness of the company. The mortgage was registered on 12 February 1993, less than three months after the plaintiff had purchased the property. The mortgage then secured borrowings of $120,000. The amount secured has increased since. There is no benefit to the plaintiff in respect to the monies borrowed and secured by the mortgage. There is no suggestion that the plaintiff had independent advice as to the wisdom of allowing his land to be encumbered in this way.
There is no document recording what will be paid to the plaintiff upon the property being sold. The plaintiff believes he will recover his investment of $195,000. David’s evidence was that the plaintiff would receive more than his initial investment of $195,000. However, he was quite vague and at times defensive about the amount which the plaintiff will receive out of the proceeds of sale. It is clear that no final decisions have been made. David and his wife have not yet resolved what should occur. David admitted that the whole of the proceeds should be paid to the plaintiff once the mortgage had been discharged. However, his wife may have other views. An important fact is that any increase in value of the property in consequence of expenditure by David and his wife is offset by the amount of the mortgage. Clearly, the plaintiff is entitled to recover more than his initial investment. There is no evidence as to who paid stamp duty when the plaintiff purchased the property. It is reasonable to infer that the usual practice was adopted and the plaintiff paid the stamp duty. He is therefore entitled to recover at the very least his initial investment as well as the stamp duty and a proper return on his investment. On the face of the matter, he should be entitled to all of the proceeds after the mortgage has been discharged.
Although canvassed at the hearing, these issues were not explored in any depth. There is no accounting evidence. There may be other relevant evidence. It is not, therefore, appropriate to make any finding, particularly as there may be other circumstances which have not been mentioned in evidence. In any event, a finding as to how much should be repaid is not necessary for the purpose of determining this application. The significance of the evidence as to the sale of this land and the subsequent mortgage lies in the fact that it establishes that the plaintiff is subject to influence by members of his family and that he yields to that influence and that he does not receive independent advice. I accept that members of his family have given the plaintiff a great deal of support and assistance. His brother David has supported him by employing him. However, I find that self interest has prevailed and at a cost to the plaintiff. David believed that it was a prudent investment for the plaintiff to purchase the property at Nairne. If the land sells for $450,000 and the plaintiff were to receive all of the proceeds after the discharge of the mortgage, the investment would have been quite sound. There has been a substantial capital appreciation over some 10 to 11 years. However, that will not be the position. The proceeds will be reduced by the amount required to discharge the mortgage. There can be little doubt that self interest has been present in the past and it is likely that it will continue. I find the plaintiff has no proper understanding of these financial issues.
All that needs to be determined for the purposes of this application is that the plaintiff has not demonstrated any financial acumen in relation to larger levels of financial dealing. He has been generous to his brother and his wife. He does not seem to understand that he has a reasonable entitlement to recover more out of the proceeds of sale than his initial investment. In addition, he either does not understand or he has been misinformed as to the nature of his interest in the company. The plaintiff is clearly influenced by his family and yields to their influence.
Day to Day Transactions
The plaintiff handles his own financial affairs. He used to have credit cards but no longer does so. The reason for the change was not explained. He keeps his own personal business records. He receives some general advice from a chartered accountant, Mr Hill, who also prepares his income tax returns. Mr Hill has been the plaintiff’s accountant for the past ten years. Mr Hill’s evidence was that, when the plaintiff first consulted him, he kept good, well maintained financial records but in more recent years his commitment to maintaining good records has fallen. Quite often some records are missing. The plaintiff is aware of these more recent shortcomings. He says that the plaintiff has a grasp of his financial responsibilities and understands his taxation obligations. I find that the fall in the standard of record keeping by the plaintiff coincides with his marriage and subsequent separation. Mr Hill has not given the plaintiff any independent advice.
Mr Hill is also the accountant for David Dalle-Molle and the accountant for the company Professional Dog Foods Pty Ltd. He would be willing to act as the plaintiff’s next friend but acknowledges that there is a potential conflict of interest. That conflict plainly prevents him from acting as the plaintiff’s next friend.
The plaintiff has a sound grasp of the fact that Mr Du Bois has been convicted of criminal offences in respect of his fraudulent conduct. The plaintiff correctly stated that Mr Du Bois had been sentenced to imprisonment for twelve years with a non-parole period of eight years. He knew that Mr Du Bois had appealed against the sentence.
The plaintiff has little ability, as he admits, to read a complex document. There is the combined result of the loss of sight in one eye and his brain injury which leads to an inability to concentrate and absorb something complex.
Other Investments
In October 1994 the plaintiff purchased a house at Nairne as an investment property.
A little earlier and before his marriage the plaintiff purchased another house at Collinswood and renovated it. The renovations included re-wiring, re-roofing, re-painting, salt damp eradication and construction of a pergola and decking. The plaintiff lived in that house doing his own cooking, cleaning, shopping, household chores and maintenance. In the first years of his married life he and his wife lived in the house at Collinswood. In 1999 they were forced to sell that house to meet liabilities caused by the advice of Mr Du Bois. They moved to the house at Nairne.
There are two children of the plaintiff’s marriage. Following his separation, proceedings were instituted in the Family Court. At first the plaintiff was represented by a next friend. He instructed another solicitor to act for him in his own right without a next friend. The plaintiff has displayed a capacity to make arrangements concerning custody and access to the children.
The Instructions for the Second Action
The evidence as to how instructions were given to commence this action is not at all clear. The only oral evidence was that given by the plaintiff. In addition, an affidavit from Ms Simeone, a solicitor in the employ of Griffins, was tendered. The evidence of the plaintiff was confused and confusing on this question. I prefer the evidence of Ms Simeone which is based on file notes. I make the following findings.
In September 1998, the plaintiff and Ms Tania Peressin, whom he later married in 1999, consulted Griffins seeking advice whether proceedings should be instituted against Mr Manos and others in respect of the monies which had been lost by the plaintiff. Ms Simeone took over the file in 2000. She obtained the file held by the solicitors who had acted for the plaintiff in the motor vehicle accident claim. She read the reports of the neuro-surgeon, psychiatrist and psychologist who had treated the plaintiff. She formed the view that the plaintiff should be examined by an independent neuro-psychologist to determine whether the plaintiff had the capacity to handle large sums of money in 1992. She arranged for the plaintiff to be examined by Mr Anthony Walsh. He informed her that, in his opinion, the plaintiff continued to suffer from significant mental impairment and did not have the capacity to manage his own affairs.

In July 2001, Ms Simeone met the plaintiff and his wife to discuss the content of Mr Walsh’s report. She informed the plaintiff that, because of the opinion expressed by Mr Walsh, she could not take instructions from him and that she believed a protection order should be obtained. With the consent of the plaintiff and his wife an application was made to the Guardianship Board in August 2001. The application was unsuccessful. Ms Simeone was instructed to draft these proceedings. Notices of the claim had already been given to the defendants. On 3 July 2002 Ms Simeone again conferred with the plaintiff and his wife. Among other things, she advised them that it was necessary to appoint a next friend. The plaintiff and his wife went away to consider her advice. Later that day, the plaintiff’s wife telephoned Ms Simeone with instructions that she would act as next friend. On 3 July 2002 the action was instituted.
In September 2002, the plaintiff telephoned Ms Simeone to say that he and his wife had separated and asked her not to discuss the action with his wife. Ms Simeone received other calls from the plaintiff, the plaintiff’s wife and the plaintiff’s brother David, all confirming the fact of the separation but each asserting their own view as to how the proceedings should continue. On obtaining advice, Ms Simeone applied for an order that the Public Trustee be substituted as next friend for the plaintiff’s wife. The order was made in October 2002.
The plaintiff’s evidence differs in some respects. He said that he and his wife initially consulted Griffins to obtain advice on the prospects of successfully recovering from Mr Du Bois the money which the plaintiff had lost when investing on the advice of Mr Du Bois. He said that they were advised to initiate this action because of the difficulties that might be encountered in seeking to recover from Mr Du Bois. It is impossible to make any finding whether the evidence is correct. I do, however, accept the plaintiff’s evidence that he did not instruct Griffins to proceed against either Mr Manos or Dr McCulloch.
Counsel’s opinion has not been obtained on the prospects of the success of the second action either before the commencement of the action or since. Notwithstanding the absence of such advice, the plaintiff expressed a wish to discontinue the action. Later in his evidence, he indicated a willingness to seek advice. In my view, the plaintiff has a pre-determined view which he will implement whatever advice is given to him. At one stage he said he would discontinue the action even if he had not received advice. He has an idée fixe on this issue. I will return to this issue after considering the medical and other expert evidence.
It is obviously necessary that, at the earliest opportunity, advice be obtained from experienced counsel on the several issues in this action, the prospects of success, the possible outcomes and the risks faced by the plaintiff.
The Medical and Psychological Evidence
There are reports from three specialists, the plaintiff’s neuro-surgeon Dr McCulloch, his psychiatrist Dr Furze, and a psychologist Mr Quinton.
In a report dated 29 May 1989, Dr Furze expressed the view that it would have been difficult for any person to have come to terms with the major disabilities the plaintiff suffered in the motor vehicle accident in the form of blindness in one eye, epilepsy and a degree of paralysis. He said that the fact that the neurological impairments are added to the plaintiff’s disabilities meant that his ability to come to terms with the profoundly altered state of his existence is greatly reduced. Although Dr Furze concluded that it is prudent for the substantial award of damages to be managed by a trustee on behalf of the plaintiff, he believed that the plaintiff could give instructions in respect of his claim for damages. He examined the plaintiff one year later and had no cause to alter his opinion.
Mr Quinton conducted a series of neuro-psychological assessments between 1985 and 1990. In February 1986 he reported that the plaintiff was not able to read or do simple mental arithmetic. He said that the plaintiff was mentally slow, had impaired adaptive skills but had an average intellectual ability. Because of his impaired adaptive skills he was not capable of looking after himself. He did not believe the plaintiff could understand and manage his personal finances. He expressed the view that the plaintiff was, nevertheless, able to instruct solicitors because he would understand if all the possibilities were explained to him. If everything was explained, Mr Quinton said, the plaintiff was capable of appreciating the nature of the proceedings and could make rational decisions. Mr Quinton’s assessment at that time was unduly negative. The plaintiff has demonstrated a capacity to look after himself and manage the more simple aspects of his personal finances.
In September 1988 Mr Quinton reported a general improvement but he believed that the plaintiff still had problems with reading and reading comprehension, he was mentally slowed, he had problems integrating information and with adaptive behaviour, he had problems with sequences and his mental arithmetic skills had declined. He expressed the view that the plaintiff was very slow and found it very hard to learn new matters. He did not believe he could secure employment in the open market. He was best fitted to simple repetitive tasks and he believed the most suitable working environment was in a sheltered workshop. As to that last matter, it is relevant to note that the only employment which has been provided to the plaintiff is by members of his family.
In 1990 Mr Quinton again assessed the plaintiff. He found little change in the plaintiff’s condition and he did not believe any significant improvement was likely. He had conducted tests which showed that the plaintiff had bilateral frontal lobe deficits. In his view the most important finding was that, in spite of normal intelligence, the plaintiff continued to experience learning difficulties.
Dr McCulloch was the neuro-surgeon who treated the plaintiff. In April 1989 he reported that the plaintiff suffered significant neurological deficits. He said that he was not capable of handling large sums of money but was able to deal satisfactorily with day to day spending. That has proved to be the plaintiff’s experience. In June 1989 Dr McCulloch confirmed his earlier opinion. He also expressed the view that the plaintiff will be able to live a life in which he can fully care for himself in a sense of providing his own food, clothing and shelter and take care of his physical needs. However, Dr McCulloch was doubtful as to whether he would be able to provide for himself in a sense of being able to obtain employment producing a sufficient income to provide the finances necessary for an independent life. That view was consistent with the view expressed by Mr Quinton.
In June 1990 Dr McCulloch expanded his opinion on the plaintiff’s capacity to handle his personal finances. He said that his injuries were sufficiently severe to impair his judgment and intellectual function to the point where he could be easy prey to unscrupulous persons who may wish to influence him in respect of his financial investments. While he was capable of making reasonable decisions regarding settlement of his affairs, a good degree of counselling and guidance from trusted persons was required. He said that the plaintiff should not be considered as a young man of 24 years (his age at the date of the report) but as a child of approximately thirteen years who is still somewhat dependent on his parents for guidance and protection.
In 1991 and 1992 Dr McCulloch made quite extensive qualifications to these views. In September 1991 he said that he would agree with the suggestion made by a member of the plaintiff’s family that the plaintiff was capable of managing his own financial affairs in association with his father who could perhaps act as trustee. He expressed the same view in a letter dated 24 November 1992 and in an affidavit sworn on 30 October 1992 in support of the application terminating the appointment of Public Trustee to act as manager of the plaintiff’s estate. He believed that it was sufficient if either of the plaintiff’s parents assisted in the management of his affairs. What is significant is that Dr McCulloch believed that the plaintiff needed assistance in the management of his financial affairs. The evidence indicates that that assistance was not forthcoming, notwithstanding the revocation of the appointment of Public Trustee. Dr McCulloch did not give any explanation for the change in his views. It is quite a remarkable change and in the absence of any explanation, I place little weight upon it. As this change of advice is part of the subject matter of this action, it is not appropriate that I comment further.
The Neuro-Psychiatrists
As already mentioned, the plaintiff consulted Mr Walsh at the request of Ms Simeone in November 2000. Mr Walsh reported by letter dated 25 June 2001. Mr Walsh had examined the reports to which I have already referred. He had also conducted his own tests. He reported that the plaintiff’s immediate memory was mildly impaired, that he had performed some tests well below expectation which indicated continuing significant brain dysfunction. He concluded that the plaintiff suffers significant cognitive and intellectual deficits and does not have the capacity to manage his own affairs. His opinion was primarily directed to the question whether the protection order should have been revoked in November 1992. He had not been asked to express a view in respect of the capacity of the plaintiff to give sufficient instructions.
In a report dated 6 May 2003, he addressed the plaintiff’s capacity to give sufficient instructions. He said that in his view the plaintiff does not have the intellectual or mental capacity to decide whether it is prudent to proceed with this action and to give sufficient instructions to his solicitors in relation to that issue. In his view there was no distinction between the ability of the plaintiff to manage his own affairs and the ability to instruct solicitors.
In his oral evidence Mr Walsh maintained these views. He repeated his opinion that there was no distinction between the ability to manage his personal affairs and his capacity to provide instructions to legal advisers, particularly if a degree of complexity existed in the litigation. He was concerned that the plaintiff is easily influenced by others and especially by members of his immediate family. In his view, while the plaintiff could make a decision, he could not reach a decision based on a reasonable level of cognitive intellectual and emotional competence. While he would perform reasonably well if calm, he was likely to perform badly if there was pressure because the required decision was more difficult to reach.
The plaintiff did not, he said, have the ability to make difficult decisions involving a degree of complexity. That was a consequence not only of his intellectual capacity but also of his changed personality and difficulty in handling his emotions. He had an impaired capacity to keep together several factors which have different weight. What distinguished the plaintiff from others in the community who have modest intellectual abilities was the damage to his brain, which causes specific deficits so that the overall level of functioning is not the same as someone who has not suffered these brain injuries. For all of these reasons, he concluded that the plaintiff does not have the metal or intellectual capacity to decide whether it is prudent to proceed with this action and to give sufficient instructions to his solicitors in relation to it.
Mr Rothwell had a more confident view of the plaintiff’s capacity. He too had seen the earlier reports as well as the report of Mr Walsh dated 25 June 2001. He based his opinion on those reports and on tests he had conducted himself. The tests performed by Mr Rothwell showed that the plaintiff has an average capacity to deal with basic logical concepts. The plaintiff’s performance of the tests was better than that recorded by Mr Walsh. He believed that the difference between the results he obtained and those obtained by Mr Walsh was caused by a lack of sleep and possibly stress being suffered by the plaintiff in late 2000. In his view, there was a distinction between a person’s ability to manage his financial affairs and large sums of money on the one hand and the ability to give instructions in respect of litigation. While each requires the same cognitive ability, he said, there is a difference in the way those skills are applied in the hustle and bustle of life. If the individual concerned is given time, proper instructions can be given. I do not accept that view for reasons I will give in a moment. Mr Rothwell did not assess the plaintiff’s capacity to manage his personal affairs. He expressed the view that he might cope with small but not large amounts of money. He believes that the plaintiff’s decision-making processes would be influenced by members of the family. The plaintiff’s actual experience confirms those views.
In Mr Rothwell’s view the plaintiff had the capacity to understand relatively complex, ethical and moral dilemmas. He said that he could understand right from wrong, had the capacity to hold a number of important concepts in mind and process these so that he could then use the information to form a reasonable argument and opinion based in logic. Notwithstanding the cognitive impairment suffered in consequence of his severe brain injuries, Mr Rothwell believed that the plaintiff was able to understand legal proceedings and give instructions on his own account if given sufficient time for processing information given to him and to form his opinions.
Conclusion
Mr Rothwell suggested that his tests are more consistent with those undertaken at the earlier stages of the plaintiff’s recovery from his injuries. Mr Walsh does not agree. I prefer the opinion of Mr Walsh to that of Mr Rothwell. His tests produced the same results as earlier tests, albeit that the plaintiff performed less satisfactorily. That is explained by the plaintiff’s stress and lack of sleep at the time. The fact that the plaintiff was under stress at that time only serves to indicate the plaintiff will have difficulty when he is required to make decisions whether to prosecute or compromise this action which involves complex issues. I accept Mr Walsh’s evidence that the plaintiff’s impairment continues to be of the same order as when he was first assessed. In addition, both Mr Walsh and Mr Rothwell agree that the plaintiff may be swayed by emotional factors. That is borne out by the plaintiff’s emotional views about the propriety of this action.
There is one other topic on which both Mr Walsh and Mr Rothwell agree. It is that the plaintiff is susceptible to undue influence from members of his family. That opinion is borne out by the events which have happened. It is an opinion borne out also by Ms Simeone’s experience of her dealings with the plaintiff.
Other factors support Mr Walsh’s opinion. They include the plaintiff’s poor capacity to understand more complex financial transactions. I do not accept the basis for Mr Rothwell’s distinction between giving instructions and engaging in more complex financial transactions. While different factors must be considered when entering into an important financial transaction and when giving instructions in litigation, the factor which is constant to both is that each involves a major decision made after a detailed explanation where there is time to reflect. Decisions in respect of the major financial transactions into which the plaintiff has entered were not, as Mr Rothwell believed, made quickly or in circumstances where there is no sufficient time for explanation or for the processing of new information. The plaintiff’s major financial dealings have been of a kind where there was ample time for explanation and consideration.
The plaintiff gave his evidence carefully. It was quite apparent that he was able to deal very adequately with ordinary day to day issues. However, it was also quite apparent that his understanding of complex issues and his memory were inadequate. He displayed a confusion about some financial issues involving his brother David. One clear example concerned payments of rent and repayments of a loan to his brother to purchase a truck. The plaintiff believed that his brother David and his wife had vacated the property at Nairne. That is incorrect. His evidence was that Mr Hill was his accountant before the accident but that was not so. He had a clear misunderstanding as to the effect of his shareholding in his brother’s company. It is apparent that the plaintiff has a limited insight into the extent of his mental impairment. I have already referred to his almost obsessive view that the action should discontinue. It is plain that he has this view for emotional rather than logical reasons. His emotional reasons are not irrelevant but the decision to discontinue this action must primarily be made for logical and not emotional reasons.
There was evidence that the plaintiff had made a number of loans of reasonably substantial money to at least two if not three members of his family. The evidence about them was not clear. While they might be further instances of family pressure, I do not rely on them.
There are real difficulties in determining whether the plaintiff is unable to give sufficient instructions. There are a number of factors which point to his capacity to be able to give sufficient instructions. They are as follows:
1The plaintiff has held his job as a security guard for seven years, albeit he has been employed by his brother who is no doubt a more sympathetic employer than others might be. The plaintiff has worked satisfactorily in his brother’s pet food business. In that business he had contact with clients.
2The plaintiff sticks at his employment which indicates a degree of perseverance and discipline.
3The plaintiff is able to organise himself around his matrimonial and family problems. For example, he is able to make new arrangements with respect to custody of the two children.
4The plaintiff is able to give instructions in the Family Court proceedings and was formerly able to give them in relation to his motor vehicle accident claim.
5The plaintiff can organise his basic day to day financial affairs.
6The plaintiff is able to live independently.
7The plaintiff has an ability to reason about fairly basic issues.
On the other hand, there are other factors which call into question his capacity to give sufficient instructions. They include:
(a)The fact that the plaintiff’s memory is poor.
(b)The fact that the plaintiff has a very poor recollection of his financial dealings and some major misunderstandings of some important transactions.
(c)The fact that the plaintiff has entered into financial transactions where there are real questions as to the wisdom of the financial dealings.
(d)The fact that the plaintiff is subject to influence from his family and responds to that influence and does not get independent advice.
(e)The plaintiff appears to be unable to reason the implications of major financial transactions in which he enters. The dealings in respect of his brother’s land at Nairne is a clear example.
(f)The plaintiff has an imperfect understanding of what is being sold at Nairne, his entitlement to the proceeds of the sale and as to the effect of his shareholding in Professional Dog Food Pty Ltd.
(g)While the plaintiff has ability to deal with basic financial issues he is not capable of assessing implications of more complex financial transactions.
(h)The fact that the plaintiff has an emotional instability and that, when under stress or has lacked sufficient sleep, his mental capacities are inadequate.
This second list of factors are more relevant to the determination of the plaintiff’s capacity to give sufficient instructions in respect of this action. They are exemplified in the events which led to the orders made in November 1992 to release funds to enable the plaintiff to purchase the Nairne property from his brother. It is apparent that the real beneficiaries were the plaintiff’s brother and his wife. The fact that his land is security for the debts of his brother’s company is startling. While it is possible to understand the plaintiff’s willingness to purchase his brother’s land to assist him out of financial difficulty, it is quite another thing to allow the land to be security for a debt of the order of $175,000. The fact that the plaintiff has allowed that to occur indicates a very low level of understanding of basic financial matters in circumstances where, I repeat, there was ample time for explanation and consideration.

I do not rely only on the plaintiff’s lack of capacity in respect of important financial dealings. I regard them as but one of a number of factors to which regard must be had. Those other factors include the plaintiff’s emotional instability, his lack of capacity to reach a logical decision, the ready manner in which he responds to influence by members of his family in matters where the family advice is not entirely objective, and his inability to read a more complex document. The plaintiff’s mishandling of his financial affairs might in part be explained by family pressures or influence. However, it also indicates a lack of capacity to understand and deal with more complex issues.
The fact that there was a consensus of opinion amongst the medical and psychological experts in the 1980s that the plaintiff could give adequate instructions in respect of his motor vehicle accident claim does not, in my view, lead to the consequence that he has the capacity to give instructions in this action. The issues in that claim were quite straightforward. It was an example of single issue litigation. After pleadings had been exchanged and discovery and interrogatories had occurred, the defendant admitted liability. The only issue was the assessment of damages. There is a great deal more complexity in this action. Similarly, the proceedings in the Family Court involve more straightforward issues than those which exist in this action. The fact that the plaintiff is directly instructing his solicitor in those proceedings is relevant but not I think persuasive in deciding whether the plaintiff should be permitted to prosecute this action without a next friend.
I have carefully considered whether the plaintiff has a capacity to comprehend the issues in this action once they have been explained to him and then to give sufficient instructions whether to prosecute or compromise the action. In examining this issue, it is necessary to take care that the Court is not overly paternalistic. It must not raise the barrier of understanding too high. In addition, any decision must not be unduly coloured by the fact that the plaintiff has been imprudent in his financial dealings.
I find that the plaintiff is unable sufficiently to understand the complex issues in this action after they have been explained to him to be in a position to give sufficient instructions. In reaching this conclusion I have had regard to the fact that the plaintiff has difficulties in reading documents which have a degree of complexity. Thus, it is unlikely that, if all the issues were set out in a letter, the plaintiff would be able to read and understand those issues. I have had regard also to the fact that the plaintiff has, I think, what is almost an obsession that this action should be discontinued. The plaintiff is entitled to his view. My concern is that he has reached that view by an emotional rather than a logical process. The plaintiff’s mishandling of his financial affairs might in part be explained by family pressures or influence. However, it also betrays a lack of capacity to understand and deal with more complex issues. This action is more complex than the legal proceedings in which the plaintiff has so far been involved. There is a need for the instructions to be consistent. The plaintiff is both liable to respond to influence by members of his family as well as to make a decision on emotional instead of logical grounds. This serves to underline the need for a next friend.
I find that the plaintiff has suffered brain damage in the motor vehicle accident in 1984. Those injuries have caused significant brain damage and hence intellectual and mental impairment of a permanent kind. The impairment is of such a kind that it affects the plaintiff’s cognitive and intellectual skills to such an extent that the plaintiff is unable to give sufficient instructions to take or compromise these proceedings.
It is important for the plaintiff that I repeat that the inquiry in this case is not an inquiry into his sanity. Equally, the conclusions I have reached do not imply that he is insane. I have already listed a number of factors which do indicate that there is not the slightest suggestion that he is insane. All that is in question is his ability to understand the issues involved in what are relatively complex legal proceedings.
It is apparent that the plaintiff is irritated by the fact that Public Trustee administers some aspects of his business affairs which the plaintiff believes he can adequately manage himself. He obviously finds dependence on Public Trustee irksome. The plaintiff was willing for Mr Hill to be appointed his next friend. However, as already mentioned, Mr Hill also acts for the plaintiff’s brother David and his company so that Mr Hill has a manifest conflict of interest and could not act as his next friend. If it is at all possible for Public Trustee to be able to appoint a chartered accountant or a legal practitioner to act as next friend that would no doubt remove a lot of the plaintiff’s concerns.

[2004] SASC 102

7 April 2004