A party in a Queensland Supreme Court lease dispute tried to use ChatGPT’s answer to
“What is the ordinary meaning of the phrase ‘medical centre’?” as evidence. The Court
rejected it outright.
It’s a small case, but it highlights a much bigger trend. AI tools are now a normal part of how
Gold Coast business owners research problems, draft documents and prepare for disputes,
and this decision is one of the clearest signals yet from a Queensland court about where that
can be useful and where it isn’t.
What happened in the case?
The dispute in Inspired Medical Pty Ltd v S Mohindra Pty Ltd [2026] QSC 78 centred on a
registered lease and what the term “medical centre” actually meant under it. Inspired Medical
tried to support its position by putting before the Court answers generated by ChatGPT in
response to questions, including what the phrase ordinarily means.
The judge rejected this evidence entirely, noting that “medical centre” has no fixed technical
meaning and is open to different interpretations depending on context, so an AI-generated
answer wasn’t any more helpful than pulling a definition from a dictionary, a method courts
have long treated with caution for exactly this kind of composite phrase.
More importantly, the Court was concerned that the accuracy of an AI-generated answer
was unknown and that, without checking the sources behind it, the answer could be
unreliable. Ultimately, interpreting the lease was a task for the Court, applying established
principles of contract law.
Why does this case matter for Gold Coast business owners?
This isn’t an isolated warning. Queensland’s courts have been building formal guidance on
generative AI for a while. The Supreme Court’s Practice Direction Number 5 of 2025
requires accuracy checks on references used in submissions, and Queensland Courts have
published separate guidelines for both judicial officers and non-lawyers on responsible AI
use. The Queensland Civil and Administrative Tribunal (QCAT) has issued similar guidance
after several matters involving fabricated case citations or “hallucinated” legal references.
The message across the guidance is consistent: using AI does not remove responsibility for
what is put before a court or tribunal. References to cases, legislation and other authorities
must be checked, while factual evidence and legal arguments still need to satisfy the
ordinary rules that govern court proceedings.
In a matter of Reece Hoverd v. M & JD Pty Ltd [2026] FWC 1013 we acted for the employer
in submissions successfully making a jurisdictional objection to a general protections claim
where the applicant’s inappropriate reliance on AI led to his arguments relying on terms of
the contract and provisions of the award that did not exist. As a result, the Commission
invited a costs application to be made against the applicant.
Where does AI actually help, and where does it create risk?
For Gold Coast business owners handling contracts, leases and the occasional dispute, the
practical question isn’t “should I use AI” but “for what”. Here’s a rough guide:
Where AI tools can help
- Drafting a first version of a routine email or letter, provided you review it before sending.
- Getting a general, plain-English explanation of a legal concept, treated as background only rather than advice.
Where AI tools create risk
- Interpreting the meaning of specific contract or lease wording – this is exactly what the Court rejected in this case.
- Finding or citing case law, legislation or legal authorities. AI tools can fabricate citations that look entirely real.
- Preparing evidence or submissions for a court or tribunal, as this case shows directly.
- Using AI for research without going to the source documents to make sure the material and context is correct.
The common thread is that AI can be useful for preliminary work, but its output should not be
assumed to be accurate simply because it sounds confident and authoritative.
What should Gold Coast businesses do differently?
If you’re negotiating a commercial lease, reviewing a contract or heading into any kind of
dispute, treat an AI tool the way you’d treat a well-read but unqualified friend. It’s fine for a
first impression, but it is not a substitute for a Gold Coast business lawyer who can be held
to their advice.
A commercial lawyer Gold Coast businesses actually rely on will tell you the same thing this
judgment does: the wording of your specific contract, read in its specific context, is what a
court will look at, not a general answer pulled from the internet.
A few common scenarios show why:
If you’re a tenant or landlord and a lease term is genuinely ambiguous, that’s a job for a Gold
Coast property lawyer or property litigation lawyer, not a chatbot. A court decides the
meaning by weighing the specific wording, context and legal principle, exactly the kind of
judgement this case confirms AI can’t be trusted with.
If you’re assigning, exiting or negotiating a lease, commercial lease solicitors can assess
those issues in the context of your specific building, the wording of the particular clause and
the way courts have interpreted similar provisions, rather than relying on a general AI-
generated response.
If a disagreement is heading towards QCAT or the courts, a civil litigation lawyer needs real
evidence and a real legal argument, not something generated by AI that you can’t stand
behind or verify if it’s challenged.
What happens next?
As AI tools get better at sounding confident, Queensland courts are making clear that
confidence isn’t the same as accuracy. For Gold Coast businesses, the lesson isn’t to avoid
AI altogether, it’s to know which jobs it’s actually suited for and to bring in a Gold Coast
lawyer before an AI-assisted assumption becomes the basis of a decision you can’t undo.
Early advice often provides the clearest path forward.
Whether you’re negotiating a lease, reviewing a contract or already in a dispute,
contact the team at QBM Lawyers to speak with an experienced commercial lawyer on
the Gold Coast.
Frequently Asked Questions
Not on its own. In Inspired Medical Pty Ltd v S Mohindra Pty Ltd [2026] QSC 78, the Supreme Court rejected ChatGPT answers a party tried to rely on to argue what a lease term meant, because there was no way to check whether the answers were accurate. AI- generated material isn’t automatically ruled out, but it can’t be treated as reliable just because an AI tool produced it.
Yes, using AI for general legal research is not illegal, and it can be a starting point for background reading or drafting. The risk is relying on it for anything that needs to be accurate and verifiable, such as case citations, legislation or contract interpretation, without checking it against a real source.
Yes. AI tools have been found to generate (“hallucinate”) case citations, legislative references and legal authorities that look genuine but don’t actually exist or don’t say what the AI claims. Queensland courts and tribunals, including QCAT, have issued formal guidance after matters involving fabricated AI-generated references, and both self- represented litigants and lawyers are expected to check every reference against a real source before relying on it.
Have it checked by a lawyer before you rely on it. A lawyer can quickly verify whether any facts, citations or interpretations are accurate, and confirm whether what you’ve prepared actually supports your position under Queensland law.
