Smith v NRMA Insurance Ltd

In *Smith v NRMA Insurance Ltd*, the Court of Appeal of the Supreme Court of New South Wales considered an application for a protective costs order. The appellant, a brain-damaged child, was pursuing a motor vehicle accident claim against the respondent insurer. The child's previous tutor had been removed, and an independent solicitor had consented to act as tutor only on the condition that she be protected from personal liability for any costs orders made against the child. The absence of any other willing tutor meant that without such protection, the appeal would remain indefinitely stayed.

The central legal issues before the Court were whether it had the power to make a protective costs order in these circumstances, and if so, from what source that power derived. Specifically, the Court examined the scope of the Uniform Civil Procedure Rules 2005 (UCPR), including rules 2.1 and 7.18, and the inherent jurisdiction of the Supreme Court. The Court also considered the applicability of section 46(2) of the Supreme Court Act 1970 (NSW) and whether a protective costs order constituted a determination or decision of the appeal itself.

Gleeson JA reasoned that the appointment of a tutor for a child litigant is a matter of procedure and that the court has broad powers to manage its proceedings in the interests of justice. The Court found that the power to make a protective costs order was available under the court's inherent jurisdiction, as well as potentially under the UCPR, to ensure the child's right to access justice was not frustrated by the inability to secure a tutor willing to assume personal costs liability. The Court emphasised that the purpose of appointing a tutor is to protect the interests of the infant, and this purpose would be defeated if no tutor could be appointed due to the risk of personal liability for costs.

Consequently, the Court ordered that Ms Geraldine Daley be appointed as tutor of the appellant, with the respondent precluded from seeking any recourse against Ms Daley for the payment of any costs orders made in its favour. Ms Daley was therefore not to be held personally liable for any such costs.