By Joe Hildebrand

The Smith family were driving home in their station wagon when, out of nowhere, a Toyota van came flying through the air towards them.

It ploughed into the driver's side of their Mitsubishi - but that wasn't the worst part. The worst part was that the impact pushed the car into the path of a Kenworth prime mover which slammed into the rear right-hand side of the station wagon. And that was where their 2-year-old son was sitting.

Layton Smith suffered horrific injuries that day and yet the van driver's insurance company NRMA has never been forced to pay out a cent because of a bizarre legal loophole.

Layton Smith was just 2 years old when he was involved in a serious car crash that left him with lifelong injuries.
Layton Smith was just 2 years old when he was involved in a serious car crash that left him with lifelong injuries.

Even though the van was swerving out of control, mounted a median strip, became airborne and landed in oncoming traffic, the van's driver was not legally at fault.

And the reason he was not at fault is because he wasn't conscious. In fact he was possibly already dead.

The driver had suffered a heart attack behind the wheel, meaning the accident was not as a result of his negligence and therefore, under the law at the time, his insurer was not liable to pay compensation to Layton Smith and his family - despite the fact they were utterly blameless themselves.

Since then the law has been changed so compulsory third party insurance does not require a driver to be at fault, however the legislation was not made retrospective to cover freak cases like this.

Layton Smith is the child the law forgot.

The accident that left Layton with lifelong brain and physical injuries occurred at noon on September 7, 2004. Last week his family came to what could be the end of the road in their quest for justice, when the NSW Court of Appeal found that their case against NRMA Insurance had no legal basis, even though the judges themselves acknowledged that this was grossly unfair.

In the very first sentence of their decision Justices Ruth McColl, Carolyn Simpson and Ronald Sackville stated:

"This tragic case is an illustration that the unmodified common law is capable of operating arbitrarily when applied to personal injury claims arising out of motor vehicle accidents."


The judgment concluded:

"It is impossible not to feel sympathy for the appellant and his family. Nonetheless a careful review of the evidence does not disclose any error in the critical findings of fact made by the primary judge ... It follows that the appeal must be dismissed."

While Layton's legal team is now considering whether to take it to the High Court, that avenue is unlikely to succeed given the Court of Appeal's finding that there is no error in law but rather that the law, as it was then, was effectively in error.

The Smith family's Mitsubishi was destroyed in a 2004 crash that left their then 2-year-old son Layton with permanent injuries. Photo / Facebook
The Smith family's Mitsubishi was destroyed in a 2004 crash that left their then 2-year-old son Layton with permanent injuries. Photo / Facebook

His father Troy Smith is now begging the NSW government to extend the law back to cover cases like this, saying that being forced to blame someone in order to get a payment was unnecessary and cruel.

"It's not the person I am, to go attacking, but this is my son. This is my son here and I had to put up every fight possible," he told

"Never did I ever think I would have to prove something or that we would have to blame someone or something.

"We trusted the system but the system failed. There needs to be change. They need to reform this."

Layton's lawyer Joshua Dale said the case proved the law was absurd.

"This judgment is a reminder of the arbitrary and unjust way in which the Motor Accident Compensation Act can operate to exclude a catastrophically injured child from receiving compensation," he told

"If Layton were injured after 1 October 2007 then he would arguably have been compensated under the blameless accident provisions in light of the current judgment.

"It is extraordinary that we have a NSW government that is content to apply laws retrospectively taking compensation rights away from injured workers in NSW but for those that need it most in the motor accident sphere, like Layton, there is no retrospective application of the blameless accident provisions to allow him to be compensated."

It is estimated that were it not for the legal loophole they could be awarded as much as $5 million, which is not considered a huge amount for a lifetime of medical and personal care.

The NRMA told that an offer of between $1m and $2m is still on the table and it is happy to sit down with the family.

There is no suggestion NRMA has done anything illegal. In fact it paid for Layton's medical expenses prior to the family initiating legal action. It previously offered a $1.2m-plus package but the family rejected this out of fears it could compromise their access to the National Disability Insurance Scheme.

NSW Finance Minister Victor Dominello's office would not commit to fixing the legislation when contacted by A spokesman for the State Insurance Regulatory Authority instead merely said it was pleasing that the NRMA was willing to assist despite the decision of the court.

Sometimes accidents don't just happen on the roads. They also happen in the law.