Gerard Malouf and Partners Pty Ltd v NSW Trustee and Guardian

Gerard Malouf and Partners Pty Ltd, the first defendant, filed an application in the Supreme Court of New South Wales to have the settlement money paid into court. The second defendant, who had previously settled proceedings in the District Court of New South Wales, was under a legal incapacity. The application arose from a dispute between the second defendant and his solicitor over the costs of the District Court proceedings. The first defendant sought to have the settlement money paid into court pending the resolution of the costs dispute between the second defendant and his solicitor.

The court was required to decide whether the second defendant was still under a legal incapacity and, if so, what sum from the settlement money should be paid into court and what sum should be paid to the second defendant. The court considered the legal principles surrounding parties under legal incapacity and the appropriate distribution of settlement funds in such circumstances.

The court found that the second defendant remained under a legal incapacity and therefore could not be party to the costs dispute. It was determined that the entire settlement sum should be paid into court, to be held for the second defendant until the legal incapacity was resolved. The court held that this was the most prudent course of action to ensure the protection of the second defendant's interests.

The court made orders that the entire settlement sum be paid into court pending the resolution of the legal incapacity and the costs dispute. This decision ensured that the second defendant's interests were protected while the dispute over costs was resolved.