Former addict ‘capable’ to manage funds

A Queensland Supreme Court judge has ruled a recovering heroin addict is capable of managing $1 million in damages despite “wasting” a previous insurance settlement on drugs.

Justice Duncan McMeekin, sitting in Bundaberg, was asked to appoint an administrator to manage Matthew Frederick Hewitt’s funds or, alternatively, officially sanction the settlement under Queensland’s Public Trustee Act.

Mr Hewitt was seriously injured in a February 26, 2006, car accident and sued the other driver, Melissa Leone Bayntun, and her insurer, Allianz, for damages. The parties reached a pre-trial $1 million settlement.

But the Supreme Court was asked to decide whether an administrator was needed after two physiatrists suggested Mr Hewitt may not have the psychological capacity to manage the money.

Justice McMeekin said Mr Hewitt, now 36, was a former cannabis, heroin and amphetamine user who had relapsed in the past and “squandered” a large 1996 insurance payout on illicit drugs.

Despite not using drugs since 2008 and being on a methadone program, the psychiatrists believed Mr Hewitt could start reusing if he had easy access to $1 million in cash.

Justice McMeekin said, while he understood the doctors’ concerns, the Guardianship and Administration Act 2000 required Mr Hewitt to be mentally incapacitated or otherwise incapable of managing his money before a court could appoint an administrator or guardian. What existed in Mr Hewitt’s case was a “potential impairment not an actual one”.

“The definition [in the Act] of ‘impaired capacity’ is written in the present tense, not the future tense,” he said. “The potential to be subjected to undue influence is one of the relevant concerns here but again, under the legislation, that needs to be predicated on a present taking, not a past taking, of drugs.

“In this case, taking or using narcotic drugs is apparently [more than] six years in the past, so it is difficult to see how the definition of impaired capacity is met. I think it is deliberately couched in the present tense [to prohibit] an incapacity finding on past excesses.”

He said Mr Hewitt’s present condition because of the second car accident did not meet the requirements for a guardian. Mr Hewitt “suffered severe physical injuries” in the accident, but no intellectual impairment.

Justice McMeekin said he believed Mr Hewitt could manage his money now, making it unnecessary for the court to sanction the settlement before payment was made.

“There is no suggestion his ability to give instructions or otherwise understand the proposed compromise is in any way impaired,” he said.

“That Mr Hewitt might at some future time, and in the grip of an addiction, not understand the nature of what he is doing, or not in any meaningful way be able to freely make decisions, is irrelevant.”

Despite that, it was important for Mr Hewitt to recognise issues the psychiatrists had raised.

“That those concerns have some reasonable basis cannot be doubted,” Justice McMeekin said. “Mr Hewitt’s settlement for damages [in 1996], was wasted substantially on illicit drugs. As one psychiatrist said, the receipt of the lump settlement sum appears to have fuelled his addiction.”

Justice McMeekin advised Mr Hewitt to “put the settlement in the hands of a trusted person, and beyond his reach, to guard against his past predilection to narcotics”.

But that was strong advice, not an order, and taking the advice of the court, his doctors or financial advisers to enter a compromise arrangement to manage his affairs was solely a matter for Mr Hewitt.

“That an impairment might, but not necessarily must, manifest itself in the future is not sufficient to justify making an order [for an administrator].

“As Justice [William] Lee said in H v Nominal Defendant [1997] QSC 223 in reference to the pre-conditions of making a protection order: ‘The welfare state still permits a man to waste or give away his substance unless [the impairment and incapacity conditions] are fulfilled’. So here,” Justice McMeekin said.

(Hewitt v Bayntun & Allianz Australia Insurance Ltd [2015], QSC 250, 26/08/2015)