Background
Houda Asmar, acting through her son and tutor Adrian Chaghoury, sued Paplaw Pty Ltd, trading as Papantoniou Blake Lawyers, over its work on the 2020 sale of a Toongabbie property. Ms Asmar, who is over 70 and has dementia, cognitive impairment and language limitations, was said to hold half the property personally and the other half as trustee of her late father’s estate.
The sale settled in October 2020. Mortgage, caveat and creditor payments exhausted the proceeds, leaving no surplus for Ms Asmar or the estate. She alleged that the law firm failed to assess her capacity, arrange interpreting assistance, ensure she understood the transaction, and protect her from undue influence or exploitation. The firm denied liability, alleged contributory negligence and disputed both loss and whether Ms Asmar was under a legal incapacity.
The Court’s Holding
Elkaim AJ approved the parties’ settlement under s 76 of the Civil Procedure Act 2005 (NSW). The Court’s role was protective: to determine whether the compromise was beneficial to the person said to be under legal incapacity.
The Court held that settlement was in Ms Asmar’s best interests. The claim involved substantial factual and legal disputes on liability, capacity, causation, quantum and potential costs exposure. The deed provided a monetary payment, capped legal costs so that Ms Asmar would receive at least half of the agreed sum, mutual releases, and no admission of liability.
The proceedings were dismissed on terms preventing fresh proceedings seeking the same relief against the defendant under s 91. No order was made as to the costs of the approval process.
Key Takeaways
- A court approving a settlement under s 76 focuses on the protected person’s interests, not on deciding the underlying negligence claim.
- Material disputes over capacity, liability, causation and damages may make compromise appropriate.
- A dismissal under s 91 can bar a fresh proceeding seeking the same relief.
Why It Matters
The decision illustrates the protective function of the NSW Supreme Court when a litigant may lack legal capacity. A substantial settlement may be approved even where the claimant alleges serious professional failures, provided the compromise fairly accounts for litigation risk and protects the claimant’s net recovery.