Background
MDJM was 25 years old when he sustained serious injuries, including a traumatic brain injury, in a motor vehicle accident on 31 March 2021. He pursued a damages claim against the Nominal Defendant, and at a mediated compulsory conference in November 2025 the claim resolved for $1.5 million plus standard costs. His solicitors, however, harboured genuine uncertainty about whether MDJM had capacity to settle, after he began exhibiting persecutory delusions in late 2024 — including fixed beliefs that private investigators were following him, causing road incidents, and accessing his electronic devices. Those beliefs were accepted by all parties to be delusional.
In April 2026, MDJM’s solicitors filed an originating application seeking a declaration that he had legal capacity to provide instructions to settle his claim. The court noted that framing was imprecise: the legally correct question under s 59 of the Public Trustee Act 1978 (Qld) was whether MDJM was “a person under a legal disability” requiring court sanction of the compromise. A settlement by such a person, absent sanction, is invalid, and the statute prohibits payment of damages to anyone other than the Public Trustee unless the court directs otherwise.
Three medical practitioners gave evidence — psychiatrist Dr Bawani Marsden, psychiatrist Dr Bradley Ng, and clinical neuropsychologist Ms Debbie Anderson. Their conclusions were nuanced and, at times, uncertain. Dr Marsden found that MDJM’s persecutory delusions (assessed as secondary to his acquired brain injury and likely permanent or chronic) raised significant concerns about whether his decisions about the claim were freely and voluntarily made rather than driven by delusional premises, while stopping short of finding incapacity outright. Ms Anderson, across three assessments, was unable to clearly demonstrate cognitive incapacity but agreed that significant psychiatric vulnerability remained. Dr Ng, by contrast, regarded the paranoia as a situational “state” issue that would likely resolve once the claim was finalised.
The Court’s Holding
Treston J declared that MDJM is not a person under a legal disability so as to require sanction of the settlement, and that he does not have impaired capacity regarding a financial matter relevant to receiving, investing and managing the settlement sum. The court began from the statutory presumption of capacity in s 11(1) of the Guardianship and Administration Act 2000 (Qld) and noted that capacity is decision-specific. On the critical question — whether MDJM could freely and voluntarily make the decision to settle — the court found the evidence of Ms Anderson most illuminating: MDJM demonstrated a genuine, calm and logical understanding of the settlement process, independent of his delusional thinking. He understood the risks of proceeding to trial, the importance of heeding legal and parental advice, and how to protect and manage money.
The court was not satisfied that the persecutory delusions had, in fact, compromised MDJM’s decision to settle his claim. His protective mechanisms — reliance on parents and solicitors, financial prudence, privacy awareness — reflected rational rather than delusional decision-making. Because MDJM was found not to be under a legal disability, the court declined to sanction the settlement; the court has no power to sanction where no legal disability exists, and MDJM was free to decide for himself whether to proceed with the settlement.
On the related question of administrator appointment, the court followed Hewitt (by his litigation guardian Hewitt) v Bayntun and another (2015) 72 MVR 416 in holding that, absent a sanction, the court has no jurisdiction under s 245 of the GA Act to appoint an administrator: that power only arises in a civil proceeding where the court sanctions a settlement and finds the adult has impaired capacity for the matter. Neither criterion was met. The Nominal Defendant was ordered to pay the applicant’s costs on a standard basis.
Key Takeaways
- The correct declaratory question in Queensland settlement-sanction applications is not whether a plaintiff “has capacity to give instructions” but whether the plaintiff is “a person under a legal disability” for the purpose of s 59 of the Public Trustee Act 1978 (Qld) — a negative declaration to that effect is the appropriate form of relief.
- Capacity under the Guardianship and Administration Act 2000 (Qld) is decision-specific and subject to a presumption of capacity; the presence of persecutory delusions arising from a brain injury does not automatically establish impaired capacity to settle a legal claim, particularly where the plaintiff demonstrates rational understanding and decision-making separate from the delusional content.
- A Queensland court has no jurisdiction to appoint an administrator under s 245 of the GA Act in a settlement context unless it both sanctions the settlement and finds the adult has impaired capacity for the matter; without those dual findings, the power does not arise.
- Where medical evidence on capacity is equivocal or inconclusive, the determination remains a question for the court, informed but not dictated by expert opinion.
Why It Matters
This decision provides a useful practical guide for Queensland plaintiff solicitors who encounter capacity concerns arising mid-litigation — particularly where a client has sustained a traumatic brain injury that gives rise to psychiatric sequelae. It confirms the precise statutory framing required for declaratory relief, reminds practitioners that the presumption of capacity is a meaningful starting point (not a formality), and reinforces that episodic or delusional thinking does not defeat capacity unless it can be shown to have actually compromised the specific decision in question.
The refusal to appoint an administrator also underscores the limits of the court’s parens patriae and statutory jurisdiction in this context: once a court declines to sanction a settlement on capacity grounds, it cannot then impose financial supervision through the back door of an administrator appointment. Practitioners advising insurers or defendants should note that capacity findings — even negative ones — carry immediate consequences for the validity of any compromise and the proper channel for payment of settlement funds.