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Is a Tutor liable for costs in litigation?

Is a Tutor liable for costs in litigation?

Many cases come before the courts when a party to the litigation is unable to represent themselves due to being under legal incapacity, meaning that they cannot give instructions or understand the nature and effect of the proceedings.  An example is because of a catastrophic injury where a person has suffered a traumatic brain injury and they cannot maintain the proceedings in their own name without the assistance of another person. That person is referred to as the tutor under the Civil Procedure Rules.  By way of any example, in such proceedings you may see a party referred to as Smith by his Tutor Smith.  On other occasions during proceedings a person may fall with a person who is legal incapacited, not just at the commencement.

By way of background to what is a tutor in litigation in NSW, the Civil Liability Act (NSW) and its Uniform Civil Procedure Rules sets out when one is to be appointed, the role of a tutor and the tutor’s responsibilities. 

The definition of a tutor, and a ‘person under legal capacity’ are all set out in section 3 of the Civil Procedure Act (NSW) as follows:

  1. tutor, in relation to a person under legal incapacity, means a tutor appointed to represent the person (whether by the court or otherwise) in accordance with the uniform rules.
  2. person under legal incapacity, means any person who is under a legal incapacity in relation to the conduct of legal proceedings (other than an incapacity arising under section 4 of the Felons (Civil Proceedings Act 1981) and, in particular, includes:
    • a child under the age of 18 years
    • an involuntary patient, a forensic patient or a correctional patient within the meaning of the Mental Health Act 2007
    • a person under guardianship within the meaning of the Guardianship Act 1987, and
    • a protected person within the meaning of the NSW Trustee and Guardian Act 2009, and
    • an incommunicate person, being a person who has such a physical or mental disability that he or she is unable to receive communications, or express his or her will, with respect to his or her property or affairs.

There is no particular formality to being appointed a tutor, but the court has powers to appoint and to remove tutors.  There is a certificate to be filed by the solicitor which contains the consent of the tutor to act. 

Any consenting, unconflicted and disinterested person may be a person’s tutor.

The tutor is not a party to the action, but the appointment carries a wider responsibility to safeguard the interests of the plaintiff in connection with the proceedings.

Liability for Costs

Costs orders may be made against the incapable person directly, but if that occurs the tutor is personally liable for any costs orders made against the incapable person.  An order for costs may also be made against the tutor directly. But in respect of any such costs order against the incapable person (as opposed to the tutor personally) the tutor may be indemnified for those costs’ orders or payment of those costs that are properly incurred from the incapable person.  If that occurs any fund the incapable person has may meet the costs incurred. 

In the matter of Stokes v McCourt (Costs) [2014] NSWSC 63, two notices of motion came before the court, firstly one filed by the plaintiff who was the person under an incapacity for the removal of the tutor (her father), and secondly for ancillary orders filed by the defendant. With respect to costs incurred for the removal of the tutor, the Judge noted the question about the removal was excessively drawn out. His Honour noted at [7], [8] and [9] that the starting point is:

“…. that although as a matter of strictness a tutor may not be a “party”, he or she is nonetheless to be regarded as a party for the purpose of making costs orders. That follows (although in the context of costs between plaintiff and defendant, not between tutor and person under incapacity) from the decision of the Court of Appeal in Yakmor v Hamdoush (No 2) (2009) 76 NSWLR 148. See, in particular, Giles JA (with whom Ipp and Tobias JJA agreed) at [44], [45].

8. In any event, even if a tutor were not to be regarded as a “party” for the purposes of making costs orders (or if the decision in Yakmor is properly to be distinguished for the reason that I alluded to parenthetically in the previous paragraph), there is no doubt, and it was properly accepted for the tutor, that the Court’s powers under s 98(1) of the Civil Procedure Act 2005 (NSW) would extend to authorise it, if it thought fit to do so, to make the orders sought.

9.The question is one of very considerable difficulty. As I recorded yesterday, the tutor was appointed either effectively by consent, or perhaps more accurately without opposition. There were very good reasons indeed why the tutor was appointed. No-one says otherwise. The application was put not on the basis that the tutor should never have been appointed but, rather, on the basis that the condition of legal incapacity which justified the appointment no longer existed.

The tutor made the forensic decision to challenge his removal. In dealing with the costs, his Honour went onto say:

17. As between the tutor and the plaintiff, the tutor should pay costs because, the application having been drawn out so unnecessarily, the plaintiff was put to additional expense to vindicate her position, and because the ultimate outcome, in terms of UCPR r 42.1, was in her favour. [that is the tutor was removed]

18. As between the tutor and the defendant, the position is a little less clear. However, I take into account a number of considerations. One is that the defendant was, properly, named as a party affected by the plaintiff’s notice of motion. Another is that the defendant had to sit through the full time taken for the motions. Yet another is that when the matters were before Hallen J on 15 October 2013, and His Honour ordered that both notices of motion be referred to the Registrar for allocation of a hearing date, His Honour warned the tutor expressly (and, it appears, not for the first time) “that the costs associated with the present issues, are costs that he may be liable to bear, personally, depending upon the result of [the plaintiff’s] Notice of Motion”. See [27(d)] of his Honour’s reasons for judgment given on 15 October 2013.

19. In those circumstances, it seems to me, the tutor pressed his opposition to the plaintiff’s notice of motion at his own risk as to costs, in circumstances where it was clear that the defendant would be represented.

20. For the reasons I have indicated, I do not think it appropriate to make any order for costs for what might be regarded as reasonably helping the Court to come to a conclusion by drawing relevant material to the Court’s attention and by relevant (and limited) cross-examination of the experts. But in my view, the way in which the application was conducted for the tutor went well beyond that.

21. As a result, the defendant has been put to the expense of three days in court rather than one, waiting for his notice of motion to be dealt with, in circumstances where it is self-evident (and the defendant’s notice of motion in any event makes it clear) that resolution of the defendant’s notice of motion necessarily had to await resolution of the plaintiff’s notice of motion.

22. The stay of the orders that the defendant’s notice of motion seeks had to be agitated once the plaintiff’s notice of motion had been dealt with because the stay ordered by Hallen J on 15 October 2013 ([27(b)] of his Honour’s reasons) extended only up until the determination of the plaintiff’s notice of motion.

23. In those circumstances, I conclude that the defendant should have his costs for the second and third days.

24. That leads to the question of indemnity costs. A vast amount of material was referred to in the course of submissions. The relevance of most of it is not apparent. I do not propose to waste time by referring to it. The simple point seems to me to be that the very same reasons that justify making costs orders in respect of the second and third days likewise justify making the order that those costs be assessed on the indemnity basis and that they be assessed and payable forthwith.

Takeaway

The decision is an example of the broad width of the court’s powers under section 98 of the Civil Procedure Act when it comes to costs.  Even as a tutor, if you do not conduct yourself in a proper manner and resolve the dispute with a view of a quick and just resolution of the issues, you can be exposed to a personal costs order.  

It may have been more appropriate in this instance for the tutor to have abided by any decision of the court save for costs. The exercise proved expensive for the tutor, as the tutor was ordered to not only pay his daughter’s costs of the motion for removal, but also the defendant’s costs who had to sit through the motion which occupied two of the three days.

In these circumstances, the tutor could seek no indemnity from any other party and was forced to pay the costs personally.