Azar v Kathirgamalingan - [2012] NSWCA 429

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Azar v Kathirgamalingan [2012] NSWCA 429
Hearing dates: 30 August 2012
Decision date: 18 December 2012
Before: McColl JA at [1];
Basten JA at [2];
Campbell JA at [17]
Decision:
Appeal dismissed with costs.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
NEGLIGENCE - road accident cases - causation - where plaintiff disabled by psychological condition after accident - whether trial judge mistaken in finding condition pre-existed accident - whether trial judge mistaken in finding exacerbation of condition was not due to accident - no error demonstrated - no question of principle

COSTS - proceedings brought by tutor of legally incapable person - compromise of proceedings - indemnity costs - offer of compromise not accepted by tutor of incapable person - offers of compromise made to incapable person require the approval of the court in accordance with s 76 Civil Procedure Act 2005 - whether Uniform Civil Procedure Rules concerning offers of compromise and consequential costs orders apply to offers made to persons under legal incapacity - whether settlement subject to approval of the court creates binding agreement - approval provisions have the effect that an otherwise valid agreement does not create an actual compromise of proceedings instanter but does create a binding contract conditional on court approval - where agreement to compromise does not contain express requirement to apply for approval a term to that effect will be implied - UCPR applies with that proviso - normal costs consequences of unsuccessful party rejecting an offer apply

COSTS - proceedings brought by tutor of legally incapable person - compromise of proceedings - whether tutor brought into unacceptable conflict by personal liability for costs if legislation allows indemnity costs order to be made in respect of refusal of reasonable offer to compromise - tutors always at risk of personal liability for costs - risk of indemnity costs changes scope but not character of risk - not sufficient reason to reject correct interpretation of legislation

COSTS - proceedings brought by tutor of legally incapable person - compromise of proceedings - reasonable time - offer of compromise made within two months of hearing date - offer expressed to be open for 21 days - whether reasonable in the circumstances - onus on party rejecting offer to show why time not reasonable - no evidence advanced
COSTS - party under disability appealing by tutor - tutor's liability for costs
Legislation Cited: Civil Liability Act 2002
Civil Procedure Act 2005
District Court Rules 1973
Divorce Reform Act 1969
Family Provision Act 1982
Fatal Accidents Act 1846
Health and Other Services (Compensation) Act 1995
Interpretation Act 1987
Matrimonial Causes Act 1965
Matrimonial Causes Rules 1971
Supreme Court Rules 1970
Uniform Civil Procedure Rules 2005
Cases Cited: ACQ Pty Limited v Cook [2008] NSWCA 161; (2008) 72 NSWLR 318
Adamson v Ede [2009] NSWCA 379
Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth [2011] HCA 53; (2011) 86 ALJR 172
Arena Management Pty Ltd (Receiver & Manager Appointed) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 281 ALR 304
Bartlett v Coomber [2008] NSWCA 100
Brennan v ECO Composting Ltd [2006] EWHC 3153 (QB); [2007] 1 WLR 773
Brown v Heffer (1967) 116 CLR 344
Butts v O'Dwyer (1952) 87 CLR 267
Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109
Chen v Kevin McNamara & Son Pty Ltd [2012] VSCA 63
Coomber v Stott [2007] NSWSC 513
Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297
Dalma Formwork (Australia) Pty Ltd v Maricic (No 3) [2008] NSWCA 29
Dietz v Lennig Chemicals Ltd [1969] 1 AC 170
Drinkall v Whitwood [2003] EWCA Civ 1547; [2004] 1 WLR 462
Egan v Ross (1928) 29 SR (NSW) 382
Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373
Fisher v Marin [2007] NSWSC 1411
Fox v Percy (2003) 214 CLR 118
Ganter v Whalland [2001] NSWSC 1101; (2001) 54 NSWLR 122
Groser v Equity Trustees Ltd [2008] VSC 163; (2008) 19 VR 598
Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225
Hillier v Sheather (1995) 36 NSWLR 414
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
Jones v Dunkel (1959) 101 CLR 289
Manly Council v Byrne [2004] NSWCA 123
McWilliam v McWilliams Wines Pty Ltd (1964) 114 CLR 656
Mitchell v Osborne (Supreme Court of NSW, Young J, 20 May 1997, unreported)
Morgan v Johnson (1998) 44 NSWLR 578
Nominal Defendant v Rooskov [2012] NSWCA 43
Oxlade v Gosbridge Pty Ltd (No 2) [1999] NSWCA 165
Payne v Parker [1976] 1 NSWLR 191
Smallman v Smallman [1972] Fam 25
Strong v Woolworths Limited [2012] HCA 5; (2012) 86 ALJR 267
Yakmor v Hamdoush (No 2) [2009] NSWCA 284; (2009) 76 NSWLR 148
Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410
Category: Principal judgment
Parties: Nayla Azar (by her Tutor) Mr Pascal Ibrahim (Appellant)
Imaharan Kathirgamalingan (Respondent)
Representation: Counsel:
Ms S Norton SC; Mr M Daley (Appellant)
Mr KP Rewell SC (Respondent)
Solicitors:
Brydens Law Office (Appellant)
Sparke Helmore Lawyers (Respondent)

File Number(s): 2011/164620
Decision under appeal

Jurisdiction:

9101

Date of Decision:

2011-04-21 00:00:00

Before:

Williams DCJ

File Number(s):

564/06

Judgment

McCOLL JA: I agree with Campbell JA's reasons and the orders his Honour proposes.

BASTEN JA: I agree with Campbell JA that the present appeal must be dismissed; the appellant must pay the respondent's costs. Subject to the following observations, I also agree with the reasons given by Campbell JA for reaching that conclusion.

Causation

The primary issue on appeal was whether the appellant had demonstrated a causal link between a motor accident for which the respondent was responsible and the appellant's psychological condition. An overview of the evidence and findings of the trial judge (Williams DCJ) reveals the following factual premises:

(1) the appellant suffered from a pre-existing psychological condition, which was susceptible to deterioration;

(2) on 20 August 2003 the appellant was involved in the minor motor vehicle accident with limited physical injuries, which persisted for a period of months;

(3) at about the time of the accident and for a period of weeks if not months thereafter, the appellant suffered emotional trauma as a result of the breakdown of a personal relationship, and

(4) during the second half of 2003, the appellant developed a significant psychological condition.

The trial judge found that the evidence given by the appellant was unreliable. That finding covered both the evidence given in Court and the histories given on numerous occasions to medical professionals. That finding was challenged, but as Campbell JA demonstrates, there was ample material to support it and it was not shown to be erroneous.

The fact that the appellant suffered, at the time of her trial, a psychological condition which rendered her evidence unreliable need not have been fatal to her claim for damages. It was, in one sense, a facet of the psychological condition upon which she relied as a substantial part of her injury. There are numerous conditions (including amnesia) which prevent a plaintiff giving evidence of a critical aspect of his or her case. Nor is a finding that a plaintiff's account is unreliable a kind of moral judgment. In such a case, the determination of the claim will depend on what was known as to her mental state before and after the accident and the availability of evidence (almost certainly expert evidence) identifying a causal link.

The dismissal of the appellant as an unreliable witness extended to her account of symptoms at various times and the element of self-diagnosis as to the cause of her present condition. However, statements made by a person in her situation are not only to be assessed as true or false, plausible or implausible, but constitute facts to be assessed. For example, to the extent that they reveal her perceptions, they may be accepted as a true account of a false perception, which is in turn relevant to her mental condition.

The difficulty for the appellant was that the medical evidence, critical parts of which are set out by Campbell JA, did not identify with any degree of clarity that which caused the appellant, in the words of the trial judge, to decompensate in late 2003. (Given his finding that she suffered from a pre-existing condition, that language should be understood as referring to an exacerbation of her existing mental illness.)

Section 5D(1)(a) of the Civil Liability Act 2002 (NSW) requires, in the usual case, that the tortious event be "a necessary condition" of the harm for which damages are claimed. Cases of multiple contemporaneous (rather than sequential) causes are difficult to assess in terms of 'but for' causation. That is especially so where the events may be interlinked in the sense that one may provide a catalyst for the other (referred to in some contexts as a synergistic effect).

The evidence in this case demonstrated no clear theoretical or experiential basis for saying whether the physical injuries caused in the motor accident, or the accident itself, were implicated in the exacerbation of the appellant's mental illness. For that reason, s 5D(1)(a) was not satisfied and the trial judge was correct so to hold.

Two further observations are apposite. First, asking whether the accident "contributed" to the exacerbation of her condition is not to be treated as reducing the burden of proof in a case of uncertainty. That is, the "contribution" must be established on the balance of probabilities, before deciding whether it was a necessary condition of the harm suffered.

Secondly, there is a remark in the reasoning of the trial judge at [154] (set out more fully by Campbell JA at [132] below), which reads in part as follows:

"That the plaintiff de-compensated further after the motor vehicle accident and the alleged sexual assault may indicate that the two are inextricably linked but I do not think that they are. If they were, I would find that the necessary condition of the occurrence of the harm was not the motor vehicle accident but rather the relationship the plaintiff was in with Dr [E]."

It is the contingent remark which is open to criticism. If the two events were inextricably linked, it would appear that each has contributed to the harm. It may be that the trial judge was indicating that the contribution of the motor vehicle accident was, in his view, not material and that the harm would have occurred in any event, as a result of the breakdown in the relationship. However, as the medical evidence did not support a finding of concurrent linked causation, it did not provide a basis for assessing the distributive effect of the two causes, if it were possible to separate them. It is also possible that the contingent remarks were designed to invoke s 5D(1)(b), by holding it inappropriate for the scope of the driver's liability to extend to the psychological harm. If such a finding were intended (and the language used does not indicate that it was) further reasoning would be required to justify the result.

If "factual causation", as defined in s 5D(1)(a), is not satisfied, the next available step in the appellant's case may be to determine whether s 5D(2) would allow this to be treated as an exceptional case in which liability should be imposed. Such a conclusion may be accepted in a case where medical or other expert evidence is unable to establish a causal link between sequential events, but there is some theoretical basis for supposing that such a link exists. The application of that provision need not be pursued because, as explained by Campbell JA at [126], no such issue was raised at trial.

Indemnity costs - the offer to settle

With respect to the costs order, I agree with Campbell JA that the rules with respect to offers of compromise (Uniform Civil Procedure Rules 2005 (NSW), Pt 20, Div 4) operate where a party to the litigation is under a legal incapacity, subject to the constraint imposed by s 76 of the Civil Procedure Act 2005 (NSW). It follows that, in the event of an offer by a defendant which is not accepted, r 42.15, prescribing the ordinary costs order to be made in such circumstances, is engaged: see at [198]-[200] below. The offer in the present case allowed appropriately for the operation of s 76.

I agree with Campbell JA that the offer was open for a reasonable time: [206]-[207]. This was the only point raised before the trial judge that he did not expressly address: [179]. The trial judge refused to make a different order from that provided in the rule, because no justification had been made to satisfy him that he should order otherwise: see [220] below. That conclusion not having been shown to be erroneous, the challenge to the costs order should be rejected.

Accordingly, I agree that the appeal should be dismissed with costs.

CAMPBELL JA:

Nature of the Case

The Appellant was injured on 20 August 2003 when a car driven by the Respondent collided with the rear of her motor vehicle. The Appellant brought an action, by her tutor, against the Respondent in the District Court.

The Respondent admitted that he had breached his duty of care. He made no allegation of contributory negligence. Thus, the trial proceeded as an assessment of damages.

The Appellant's total physical and mental disabilities were assessed by the MAS assessors as less than ten percent whole person impairment, insofar as they were causally related to the accident. Thus the plaintiff had no entitlement to damages for non-economic loss. Apart from out of pocket expenses, and some physical injuries that prevented her from working for a limited period of time, her claim was based on a contention that her psychiatric condition made her totally incapable of performing any work, and was such that she needed a full time carer/companion. Her claim was that her psychiatric condition arose from the accident.

After a ten-day trial, a judgment was entered for the Appellant for $250,832.83.

The Respondent had made an offer of compromise on 11 February 2011 in an amount greater than the amount of the judgment that the Appellant ultimately recovered. The primary judge ordered the Respondent to pay the Appellant's costs up to 11 February 2011, and that thereafter the Appellant pay the Respondent's costs on an indemnity basis.

The grounds upon which the Appellant contends that she was entitled to a larger award of damages depend in large measure upon a close examination of the evidence. A significant issue is whether a psychiatric condition from which the Appellant now suffers was caused by the accident. There is a question of principle about whether the provisions of the Uniform Civil Procedure Rules 2005 relating to offers of compromise apply to a situation where a plaintiff is an incapable person who sues through a tutor, and a question about whether the trial judge's discretion concerning costs miscarried.

The Accident Itself

The accident occurred at approximately 8.00am, when the Appellant was driving to work. The primary judge accepted the Respondent's account:

""Well, I could remember the car in front of me suddenly applied a sudden brake, then my car went, and I would say, nudged - so that was the description of the impact I could give. Then I got down, and the other person also got down from the car, and we both looked at what the damage was, and at that time I could remember the other person was jumping 'Why should this happen to me? Why should this happen to me?' So I was all - looking at all the cars piling, so we exchanged details after that, and I went to work, and she went her way."

The judge also accepted, at [56], the Respondent's evidence, that the judge summarised at [50] as:

"He said it was peak hour traffic, that he was travelling below the speed limit and the impact was not severe .... The plaintiff got out of her vehicle when he got out of his. There was minor damage to both vehicles. There were no difficulties exchanging details. They spoke for about 5 minutes ... No emergency services attended or were called ..."

The judge rejected accounts that the Appellant later gave to medical practitioners. One such account was given to Dr Clark in March 2008:

"At the time of the car crash, she was terrified for her life and shocked, terrified of being left as an invalid. ...

In the accident, she was thrown forward from her seatbelt, which was not working. She thinks she lost consciousness for a while, since she woke up 'in the street'. She regained consciousness, trying to find out what had happened, then collapsed again.

The police and ambulance attended and she was picked up and taken to hospital."

He rejected that she had collapsed to the roadway when she got out of her vehicle.

The primary judge found that in the accident the Appellant had suffered a whiplash injury that made painful a pre-existing degenerative change in her cervical spine at C5/6 and C6/7. He found that the effects of that should have substantially settled in four to eight months. He also accepted the opinion of MAS Assessors that she had suffered a soft tissue injury to the forehead, a haematoma to the head, strain to the right shoulder, and contusion to the chest. The Appellant does not challenge the judge's findings about the extent of the physical injuries, or the quantum of damages attributable to them.

The Appellant Before the Accident

Some basic facts about the Appellant's history before the accident are uncontroversial, or were found by the Judge and are not challenged. She was born in Nigeria in December 1960 to Lebanese parents. She left school aged fifteen, and was married at sixteen. In 1978, she migrated to Australia. Her elder son, Pascal, who is also her tutor in the litigation, was born in 1980. Her younger son, Carlos, was born in 1982. Her first marriage failed in 1984. The divorce was acrimonious.

In the course of her evidence Appellant made allegations, of varying degrees of seriousness, against six medical practitioners. Only one of those medical practitioners has given evidence, and the focus of his evidence was not on the correctness of the allegations that the Appellant had made concerning him. In those circumstances, in fairness to the medical practitioners concerned, I will anonymise their names.

Around 1990, the Appellant commenced to work as a receptionist or practice manager with a Dr A. She married him in 1992. That marriage lasted until 1997. Dr A gave evidence of some behaviour of the Appellant during the marriage that might be seen as unusual, but the judge said that that evidence "was far short of establishing any psychiatrically relevant condition" ([20]).

After the Appellant separated from Dr A, she lodged complaints concerning him with the Medical Board, Medicare, and the Taxation Office, based upon documents that she had copied and retained from his practice.

The Appellant obtained employment with a city medical practice in Sydney in May 1997. The judge found that that employment ended apparently without incident.

The Appellant worked for another medical centre in the CBD, run by Dr B, from 20 July 1998 to 21 June 1999. That employment came to an end after she had complained that Dr B had abused her on many occasions.

On 9 June 1999, Dr Sochan, a consultant psychiatrist, saw her at the request of her GP. He reported:

"I basically listened to her account of what has happened and her response has been appropriate considering the alleged abuse, humiliation and failure to recognise her loyalty, dedication and selflessness.

...

My P.D. [ie, provisional diagnosis] is Adjustment Disorder. This is based on presentation and what I have been told. I did not do a formal symptom review nor have I obtained a background history.

On 15 June 1999, the Appellant made a workers' compensation claim in which she claimed that she had suffered, "very bad distress and acute depression" by reason of her treatment at Dr B's practice. She made a further workers compensation claim on 29 June 1999, claiming to be suffering from "severe depression disorder".

Dr Robert Gertler, consultant psychiatrist, saw the Appellant on 21 July 1999, at the request of the workers compensation insurer of the practice at which Dr B worked. Dr Gertler gave three reports in all concerning the appellant.

The judge set out extensive passages from Dr Gertler's first report:

"Ms A informed me that in July of 1998 she commenced working for a medical centre in the city. The work was long and stressful. She found that the practice had been poorly run prior to her arrival and that she had not experienced this in previous practices where she had been a manager. She found herself working longer than the usual eight hours per day, generally 12 hours. In the course of her work Ms A was frequently subjected to rudeness and aggressive behaviour by her employers. She was increasingly criticised 'for everything' including not only her work performance but also her manner of dress, her jewellery etc.

Despite this Ms A continued the job because she was reluctant to leave after only a short time. She committed herself to her work but continued to be criticised and called 'a liar'. She was also told she was a 'bloody hard worker'. At time she would be criticised and humiliated in front of patients at the centre. The criticism was also dealt out by the wife of the doctor whose centre it was. Ms A stated that in the course of her work at the centre there was a very high staff turnover but despite this she was able to improve the business of the centre and its financial situation. At times Ms A said that she was brought to tears by the behaviour of her employers. After several months she was run down and stressed. She had difficulty in sleeping and was started on an anti-depressant in small dosage at night.

Ms A found herself under unremitting and increasing stress and finally on 1.6.98 witnessed her employer drinking a large glass of whisky in front of her and then looking at her 'with really cruel eyes'. He then abused her, called her a liar, told her she had 'no idea' of what she was doing and in any case she 'can't speak English'. She was told to leave the practice.

Ms A fled extremely humiliated and was very distressed. She had difficulty breathing, was distraught and in tears. She travelled to her home and saw a doctor at a nearby medical centre.

After being found to have a high blood pressure she apparently fainted in the practice. She was treated conservatively and told not to return to work. She was given a medical certificate and went home. She has not worked since that time and has been referred for psychiatric treatment. She has seen her treating psychiatrist on two occasions and has been maintained on the anti-depressant medication.

PAST HISTORY

Prior to the event described above Ms A had enjoyed good physical and emotional health. ...

PERSONAL AND SOCIAL HISTORY

Ms A was born in Nigeria where she grew up and then migrated with her family to Australia at the age of 15. She completed her Higher School Certificate in Sydney and went on to study at the University of Technology where she obtained a degree in business management and another related degree. ...

MENTAL STATE EXAMINATION

Ms A presented as an alert co-operative woman appearing her stated age. She was agitated and displayed pressure of speech. She appeared depressed.

There was no evidence of psychotic thought disorder, no delusions or hallucinations being present. She was fully oriented for time place and person and her memory for recent and past events was intact. Her capacity for insight and judgment seemed appropriate. Her general intellectual level was within normal limits.

IMPRESSIONS

Her condition is consistent with the stated cause.

Other information relevant to her complaints are the ending of her marriage, as well as the death of both parents within the past three years.

PREVIOUS HISTORY OF THE CONDITON'

There is no evidence that Ms A suffered from a similar condition to that which she presently experiences.

DIAGNOSIS

In my opinion Ms A is suffering from a depressive reaction which is part of an Adjustment Disorder. The signs and symptoms described above are consistent with that diagnosis. Her recent employment in the medical practice has been a substantial contributing factor to her depressive reaction.

THE WORKER'S PRESENT CAPACITY FOR EMPLOYMENT

...

She is not fit for her pre-injury work and the responsibilities which that entails. It is not possible at the present time to determine when Ms A will be able to resume her pre-injury work because of her lack of self-confidence.

Although Ms A's employment has been a major contributing factor to her depressive reaction she appears also to have been determined to stay at the job because of underlying insecurity. That insecurity would in my opinion have been reinforced by the ending of her marriage and her level of depression would also have been aggravated by the pre-existing feelings about the death of both her parents in a relatively short period of time.

...

PROGNOSIS

Ms A is currently receiving treatment from a psychiatrist. She has counselling every several weeks and also takes a small dose of anti-depressant medication. Her prognosis ultimately is good.

SECTION 66 ASSESSMENT

Ms A has not suffered a permanent loss of function.

She still needs ongoing treatment so that her condition is resolved, but she is not permanently affected. Her current disorder will lessen with the passage of time. Ms A does not in my opinion have a pre-existing underlying constitution condition. (emphasis added)

On 8 July 1999, the Appellant made a thirteen page typewritten statement, that the judge found was "apparently in support of some action by the Medical Board or HCCC against Dr [B]". In the statement she made complaints about Dr B always speaking to her abusively, including in front of patients, calling her a liar, accusing her of giving his patients to another doctor at the medical practice, and drinking whisky at the surgery. She also complained about Dr B's wife, who worked as a nurse at the surgery, harassing her, humiliating her, but being "jealous and obsessed with me". She says that she will report him to the Health Care Complaints Commission because of the way he abuses her, and also the way he abuses patients.

On 27 August 1999, Dr Gertler issued a supplementary report. He had perused the statement made by the Appellant, a statement made by Dr B, and some comments made by Brosnan's Insurance and Litigation Support Services. Dr Gertler's report was admitted into evidence without objection notwithstanding the absence of the statement made by Dr B, and the comments made by Brosnan's. Dr Gertler said:

"I perused the statements of Ms A and Dr [B] her former employer, as well as the comments made by Brosnan's.

As expected the two statements contradict one another in many respects. Ms Azar does appear to have a histrionic personality on the one hand and Dr [B] acknowledges that at times he lost his temper with her and that he also at times drank small amounts of alcohol in the surgery after hours. Unfortunately, statements have not been obtained from the other doctors employed by Dr [B] at the practice; statements by these doctors could help clarify the voracity [sic] of either or both of the statements of Ms Azar and Dr [B].

...

I should perhaps modify my opinion concerning a pre-existing underlying constitutional condition. Ms Azar may well have a pre-existing personality disorder which leads to difficulties in the inter-personal area, however, before the extent of those difficulties can be determined and the nature of the personality disorder fully understood, information must be obtained from other sources ie the doctors at the surgery, and previous employers if possible. (emphasis added)

On 5 October 1999, Dr Gertler prepared a further report, after receiving some unspecified "further information and statements from Ms Azar's work colleagues". He said:

"As a result of my perusal of those statements, it is my opinion that the history which I obtained from Ms Azar at the time of my psychiatric assessment on 21.7.99 was affected by what appears to be a long-standing personality disorder. As a result of that personality disorder which has supposed narcissistic and histrionic components, Ms Azar has tended to exaggerate and embellish her history.

It does appear that after my last report of 27.8.99 when I read the attached copy of the report of Rosalinds [sic] Insurance and Litigation Support Services, that the doubts which I had concerning Ms Azar's pre-existing underlying constitutional condition have been clarified. She does have a pre-existing personality disorder which could easily relate to difficulties in the interpersonal area.

As a result of your last report from Ms Azar's former work colleagues it does appear that her description of Dr [B]s' alcohol consumption is unreliable. He appears not to have abused alcohol in the fashion she implied.

As a result it would appear to me that the requests that Dr [B] made of Ms Azar during the time of her employment were reasonable and that as a result, Ms Azar's condition was not work-related. Dr [B's] management of Ms Azar in the workplace was reasonable in the circumstances owing to the fact that there were interpersonal difficulties related to Ms Azar's underlying personality type. Dr [B's] management of Ms Azar related to the issues of her work performance and conduct." (emphasis added)

Later in 1999 the Appellant obtained work at a medical practice at Crows Nest, run by Dr C.

The judge appears to have accepted evidence from Dr C that:

"...the plaintiff acted inappropriately on a number of occasions, assuming work she was not supposed to do, becoming over-personal with clients and not being accurate. A number of counselling sessions had no effect, so he decided to let her go." ([31]).

After the termination of that employment, the Appellant made a complaint to the Health Care Complaints Commission about Dr C. The judge found that that complaint was made only after the accident ([36]).

On 14 February 2000, the Appellant began working for another group of medical practices, with which Dr D had a connection. On 5 October 2001, the Appellant's GP, Dr Jiminez, issued a medical certificate certifying that she was unfit to work until 12 October 2001 by reason of "stress/anxiety disorder/depression". Dr Jiminez referred the Appellant to Dr Girgis, psychiatrist.

A Medicare patient history shows that the Appellant had eight consultations with Dr Girgis before the accident, in October 2001, in January to March 2002, and in June and July 2002. There is no report from Dr Girgis in the evidence. He has retired and was overseas and unavailable at the time of the trial.

In connection with a workers compensation claim against the practice at which Dr D worked, the Appellant was assessed by a consultant psychologist, Ms Carmelita Simonato. Ms Simonato gave a report dated 14 November 2001, on the basis of a consultation on 1 November 2001. In her report Ms Simonato said:

"She was born in Europe but refused to be more specific as to which country she was born. She came to Australia at the age of fourteen and a half years with her family. Ms Azar stated that she is the youngest in the family of three siblings. She has an older brother and sister, both her parents are deceased. Her father died seven years ago and her mother died three years ago. Ms Azar married a general practitioner eleven years ago and obtained a divorce three years ago. She has no children and was single at the time of this assessment. She has been working as Area Manager and Receptionist for [a medical practice] in Leichhardt for just under two years.

As far as her educational background is concerned, Ms Azar stated that she completed her HSC but was not specific as to which school she attended. She implied that she had completed University Education as a teacher ... Ms Azar stated that she had been working in the fashion industry since the age of fifteen when she was chosen for modelling as a result of, in her words 'her incredible beauty'. She stated that at the age of twenty-one she became a 'mature age student' and studied psychology and counselling as well as business development and computer based accounting. She also stated that she worked and studied, working as a medical secretary when she was married to her husband. She stated that she has been working in the medical industry for ten years and has managed many medical centres. In addition, Ms Azar stated that she spoke five languages including French, Arabic and other languages about which she was non-specific. In addition to the above mentioned qualifications Ms Azar also implied that she was, amongst other things, a beautician and a hairdresser.

Ms Azar's description of her educational and employment background was grandiose and chronologically the qualifications she alluded to would have required much more full-time study and would be unlikely to be achievable in the space of time to which Ms Azar was referring ... She stated that she worked at Crows Nest ... under Dr [C], however she left that employer because he was 'a bastard and an asshole' and treated her very badly. She has been working at [her current employer] for almost two years. Ms Azar stated that during this time she was working up to seventy hours per week or more for a salary of fifty thousand dollars. When I asked her what her view of her difficulties in the workplace [was?] Ms Azar stated 'people get very attracted to my beauty and then I get sexually harassed by men and victimised by jealous women'.

... She stated that she felt very betrayed by her current workplace stating that she was not sure whether she was still employed or whether she had been dismissed. She stated that part of her difficulties stemmed from the fact that she was 'in love with' and 'loved by' [Dr D]. Ms Azar stated that in her opinion she got on very well with other people, however they didn't like her because of her 'extreme beauty and high level capacity in the workplace'.

Relevant Medical and Psychiatric History

Ms Azar denied any pre-existing psychiatric or psychological problems. She stated that she has always been an 'amazing' person and that she has never ever experienced problems such as those she is currently experiencing as a result of being dismissed from her job. ... She denied any prior history of anxiety, depression or insomnia and stated that she had never been medicated for any of the above issues. She also denied ever having sought psychological or psychiatric assistance as a child or as an adult prior to the recent incident.

Claimant's Account of Precipitating Factors

... She stated that her problems began almost immediately after beginning work because other work colleagues were extremely jealous of her beauty and her ability. She stated that she was constantly being sexually harassed at work when I asked her to be more specific she stated that the doctors at the practice were constantly trying to touch her body. Ms Azar also stated that many doctors in the practice were very rude to her with Dr [D] in particular telling her that she should 'put her shoes in her mouth' on a number of occasions in front of staff and patients. In addition Ms Azar stated that one of the doctors at the practice had rung her at 6.00am at her home and told her that she was a 'fucking bitch and that he was going to cut her throat'. Ms Azar became extremely emotionally excited when speaking about these incidents, talking in a very loud voice. She evidenced a pressure of speech and began shaking and crying, stating that she thought she would vomit at any minute. However she soon settled and continued to give her account of precipitating factors.

Ms Azar stated that the major trauma of being sacked or dismissed was because she was told by Dr [D] that 'he didn't want to see her anymore'. Ms Azar stated 'we loved each other' and she felt that this was a betrayal. She stated that she was extremely shocked to be told that there was no job available for her. ...

I asked Ms Azar if she had made any other complaints during the course of her two years at the centre and she stated that she had made a number of complaints to the medical tribunal about her treatment. These allegations were not substantiated when I contacted her employer.

Ms Azar's interpretations of the incidents in the workplace were that she was exploited because of her ability and her beauty. ...

Current Symptoms

Ms Azar stated that she became suicidal after her dismissal from [the employer]. She stated that these suicidal thoughts arose out of the fact that she was in love with Dr [D]. She attended Dr Gurgis [sic], a psychiatrist, who prescribed Zoloft for her depressive symptoms. ...

Clinical Features and Diagnosis

A Mental State Examination revealed no evidence of hallucinations, however, throughout the interview there was evidence of delusional thinking, ideas of reference and a high level of bizarre thought indicating the possibility of severe underlying psychological/psychiatric disturbance in Ms Azar.

Ms Azar presents with some reactive symptoms of stress, however I consider these symptoms to be superficial to an underlying personality disorder.

review of Contributing Factors - recent or Concurrent Life Stressors

Ms Azar did not admit to any recent or concurrent issues that could be identified as impacting on her mood or coping levels.

Pre-existing Psychological Factors

Ms Azar's self-description and the description of her personal history and educational/employment background suggest that she is inclined towards grandiosity and to inflated judgements of her own accomplishments. Ms Azar denied the existence of any psychological or social factors which may have contributed to her current difficulties. She outlined prior difficulties in other workplaces, given similar reasons as those she gave for her difficulties in her current position. That is, being persecuted and harassed as a result of her beauty and brilliance. I consider that Ms Azar's personality disorder is a primary contributing factor in the current instance. It would seem that Ms Azar's current condition is an aggravation of pre-existing, psychological morbidity. I consider that the workplace events, whilst they may have been a minor contributing factor to the exacerbation of Ms Azar's current difficulties, I do not consider that they were causal to her psychological difficulties.

Review of the Relevant Information

The nature of the claimant's self reports suggest some significant psychological disturbance in this individual. It would appear that given Ms Azar's personality, she would be unlikely to cope well with any workplace stressors, including any workplace requirements that may contradict her own self concepts.

I consider that Ms Azar is suffering from a Narcissistic Personality Disorder (301.8) (DSMIV) which is characterised by a pervasive pattern of grandiosity in fantasy or behaviour, the need for admiration and lack of empathy beginning in early adulthood and present in a variety of contexts ...

In individuals with a Narcissistic Personality Disorder the self-esteem is almost invariably very fragile and they are unlikely to cope well with any incidents, for example redundancy, which would contradict their self-perception.

Summary and Opinion

...

... Ms Azar demonstrated a number of psychological indicators that suggest that her reaction to redundancy was as a result of a pre-existing personality disorder, namely Narcissistic Personality Disorder.

It is my opinion that whilst Ms Azar may have experienced some distress in reaction to the notification of redundancy her extreme reaction suggests that she has poor coping skills as a result of a pre-existing long standing psychological disorder.

Ms Azar's prognosis is poor in terms of what I consider to be a pre-existing psychological difficulty and I consider that she is likely to experience similar difficulties wherever she obtains employment. I consider that in regard to her rehabilitation I consider that ongoing psychiatric intervention will assist this woman in making some progress in workplace and personal relationships. ..." (emphasis added)

After setting out large parts of Ms Simonato's report, the judge noted that:

"... her ultimate diagnosis is the same as that of Dr Gertler made some two years earlier in remarkably similar circumstances, namely a perception on the part of the plaintiff, based on some fact or not, that she had been taken advantage of by her employer to her significant detriment." ([35])

Ms Norton SC, who appeared for the appellant, remarks that what the judge is here commenting on is not a diagnosis. I think, with respect, that is misconstruing what the judge is saying. The judge is remarking that the diagnosis of Ms Simonato, of a narcissistic personality disorder, is the same as Dr Gertler's ultimate diagnosis in his third report. What the judge identifies in the words following "namely" is the circumstances in which the two diagnoses were made, not the diagnoses themselves. The judge also observed that the Appellant "vocalised a resentment" of the behaviour of Dr C to Ms Simonato.

On 6 September 2002, the Appellant obtained employment with Dr E. He was her employer at the time of the motor vehicle accident that is the subject of this litigation, and continued to be her employer until the employment was terminated in December 2003.

The judge found, and it is not contested on the appeal, that the relationship between the Appellant and Dr E became one involving intense emotions on both sides, and ultimately an intimate relationship. However, in about May 2003, despite urgings from the Appellant to do otherwise, Dr E indicated that he was not going to leave his wife to be with the Appellant.

The judge then found:

"From this point things began to go seriously wrong for the plaintiff. Instead of ending the relationship Dr E kept it going. On 18/7/03 the plaintiff wrote a lengthy letter to Dr E's wife ... This letter floridly set out the plaintiff's view of her relationship with Dr E and in my view was intemperate and reflective of a person whose judgment was severely affected by what was going on in her life. Drs Clark and Smith were asked by me to look at the letter and comment on it at TP533. Dr Clark said the letter was 'extreme' and Dr Smith said it was 'destructive'. It is not appropriate to go into the details of that letter for the purposes of a public judgment but in my view it indicated a very disturbed personality in the writer."

The Appellant and Her Medical Treatment After the Accident

As mentioned earlier, the accident occurred on 20 August 2003. Dr S Rao is a general practitioner. The Appellant consulted him on the day after the accident. On 16 September 2003, Dr Rao provided a WorkCover medical certificate stating that the Appellant was unfit to work, in respect of her employment with Dr E, from 17 September to 26 September 2003. His diagnosis was "cervical brachialgia/lumbosacral sprain/contusion chest". His management plan was "rest/oral therapy/physiotherapy". He gave other certificates, in identical terms, (though adding contusion of the right shoulder girdle to the diagnosis) to cover the period to 30 March 2004. His certificate covering the period from 30 June 2004 to 30 July 2004 was the first to include post traumatic stress disorder in the diagnosis. In addition to the Appellant's physical disabilities, Dr Rao reported, on 21 October 2003:

"She has also shown signs of extreme anxiety and is visibly emotional, tearful and distressed.

These are symptoms consistent with post traumatic stress disorder and therefore she has been referred to Dr Moorthy (psychiatrist) for assessment and treatment."

The judge records, at [52]:

"In Dr Rao's report of 21/10/03 ... he states that the plaintiff had been attending his surgery on numerous occasions since the accident and in addition to physical complaints, was showing signs of extreme anxiety and was visibly emotional, tearful and distressed. There is nothing in Dr Rao's report to indicate that he was aware at any stage of the plaintiff's troubles with Dr [E], her employer, although I understand that Dr Rao occupied rooms close to Dr [E]."

On 7 October 2003, the Appellant wrote a 13-page letter, of single-spaced typing, to Dr E, that recounted in detail her version of the events of their affair. It told of his offering to buy a house for them to move in together, and of their planning to have a baby. It recounted how, at the time it became clear that Dr E was not going to leave his wife:

"You were not loyal and not faithful. Every one in the centre watched my distress and agony you have caused me. I developed sleepless nights. All my friends knew and warned me from you saying that you are using me. Everyone watched my intimidation and humiliation. It had lots of affect on me and reflected on my reputation also.

I have asked you to stop calling me and realized that you are using me. You refused to stop and continued your harassment non stop. You have brought me in a humiliation state. I felt the most helpless woman ever. I felt intimidated. I become very ill and sick. I have never taken sick in my entire life.

It recounted how, at a time in September 2003 when he reiterated that he would not leave his wife:

"I felt totally ill. I was suffering the accident injuries and on top I suffered severe anxiety, distress, depression, I have gone on sleeping pills trying to gain my health back I couldn't. I desperately needed comfort and had no one to comfort me. You left me alone shattered without support."

It refers to an occasion, on 26 September, when "you knew so well about my health that has tolerated so badly you offered to come and give me some comfort."

It also says:

"Since you have caused me lots of cost especially my health, I am going to teach you the good way of punishing a bastard and show you the lesson of your life.

...

Since you have caused me to lose my health in a distressful way and left me suffering with such agony and left me struggling with my health condition with [out?] help. Since you have destroyed me like that also destroyed my career to the fact this will be the last time I would work ever again in the medical industry.

I am going to give you only 28 days to compensate me for all this. The cost and the penalty for all this I am demanding that you pay me $50,000 dollars compensation to my agony, stress, sleepless nights, migraine, depression, anxiety, overall grieving for six months as a result to your humiliation and intimidation that you have caused me.

...

What happened to my accident was certainly a punishment of god for you and not for me. Look what happened to your business. It is closed."

It threatened to send the documents she had to the medical board, and to have interviews with "the antidiscrimination board of NSW, the media and newspapers around Australia".

While the accident receives passing mention in this letter, the Appellant does not relate her psychological distress to it causally or even temporally.

The Appellant's letter of 7 October 2003 prompted a reply, dated 17 October 2003, from Dr E's solicitors. It denied the Appellant's entitlement to receive compensation, warned that blackmailing by threats to publish was a criminal offence, required her not to attend the surgery under any circumstances, and stated that Dr E had grounds to terminate her employment, which he might exercise.

On 20 October 2003, the Appellant wrote to a complaints officer at the Medical Board of NSW concerning how Dr E had treated her. Her letter said, in part:

"Please find step by step my 13 months of distress and agony, also reasons and facts for my complaints.

I have been working in the medical industry for many years but this has been one of the most distressing stories of my life.

I am prepared to go as far as I can till I receive justice over this matter, even if I have to contact 'A Current Affair.'

...

I certainly want justice regarding this matter. It has pushed me far enough that I have taken legal action and seeking, compensation, following this. I am attending psychiatry treatments following the distress that I have developed as a result of this matter. From the moment I started to settle in my job I started to cope with continuous harassments.

Physically I am totally destroyed, I have become a prisoner in my home refusing to go out and meet people. I am totally depressed and on sleeping pills because I can not sleep at night. I am suffering severe distress following 13 months of constant harassment and abuse.

In relation to my employment. This ordeal I feel will be ending 16 years of hard work that I have put in into this industry. I also feel that my whole medical career has ended.

Being continuously harassed for 8 months, sexually abused for six months, betrayed and dumped, stabbed and totally destroyed has put me in a position where I am today."

It went on to give detail of Dr E encouraging her, then vacillating about ending the affair. The letter is written in a tone of high emotion, referring to Dr E as a "cunning man" "coward", and "rat", and making derogatory allegations about his wife. It gives the precise date of various events in the relationship between the Appellant and Dr E. It annexes copies of numerous documents, including affectionate e-mails that Dr E sent to the Appellant, and letters that the Appellant sent to Dr E's wife. It makes reference to Dr A, "with whom I had to undergo a nasty divorce because of a similar condition had given me enough shock that I still have not recovered from it till today". It makes reference to Dr D, "who sexually abused me for two years following my employment with him was also another shock that I had to suffer".

Ms Norton correctly points out that the judge was wrong in saying that the car accident was not referred to in that letter. The reference occurs on the fifth page, where the Appellant says:

"Following my car accident on the way to work on the 20th of August 2003. It was the only way that kept me away from the most distressing situation of my life, seeking help from doctors for my agony, anguish, distress over all the most intimidation and humiliation situation of my life. Not knowing what my future employment which is totally destroyed is going to lead me. Knowing well, that I have lost it all."

I do not read that as the Appellant attributing any of her current distress to the car accident. The judge's error is inconsequential.

Dr Rondas Moorthy first saw the Appellant on 31 October 2003. It was never Dr Moorthy's opinion that the Appellant suffered post traumatic stress disorder. While there was still some dispute in the court below about whether the Appellant suffered from post-traumatic stress disorder, and some medical opinion that she suffered from schizophrenia, the judge held that she had neither condition. His findings in those respects are not disputed in this Court.

Dr Moorthy's preliminary diagnosis was (a) chronic pain and (b) major depressive disorder with anxiety features with a psychotic component.

Dr Moorthy came to know of the letter to the Medical Board for the first time when he was in the witness box. He accepted that that letter, written ten days before he first saw the Appellant, indicated that the Appellant's affair with Dr E was far more significant emotionally and psychologically to her than he had been led to believe.

On 28 October 2003, Dr E's solicitors wrote again to the Appellant, concerning an incident when she allegedly had attended at Dr E's house on a Sunday morning seeking to speak to Dr E and his wife. In relation to a remark that the Appellant allegedly had made to some of Dr E's colleagues that they should "look at the front page of the Telegraph tomorrow", the solicitors required details of all organisations to whom allegations similar to those in the Appellant's letter had been sent, and threatened proceedings for preliminary discovery if those details were not provided.

On 10 December 2003, the Appellant was given notice of the termination of her employment with Dr E. On 31 December 2003, she began an unfair dismissal action in the Industrial Relations Commission concerning that loss of employment. Dr Moorthy gave evidence that the first complaint the Appellant made to him about her relationship with Dr E was on 21 January 2004.

Dr Moorthy, in a report dated 22 November 2004, expressed the view:

"The most appropriate diagnosis from a psychiatric point of view would be a major depressive disorder with anxiety features. She also shows some psychotic features of auditory hallucinations. She also complained of paranoia particularly relating to her previous employment.

She also suffers from chronic pain secondary to the injuries sustained.

The diagnosis is major depressive disorder with anxiety features. The differential diagnosis would be a severe adjustment disorder with depressive and anxiety features associated with regression to brief reactive psychosis under stress.

The diagnosis is applicable for post accident history. I did not find any pre accident history that is relevant to the diagnosis or treatment."

Even though Dr Moorthy was the Appellant's treating psychiatrist, he was not primarily concerned with diagnosis. The judge accepted the following evidence from Dr Moorthy:

"I often wondered as to what my role was in this because there wasn't anything psychiatrically manageable, other than being a source of comfort, the traditional role the psychiatrist plays, supporting the patient in their distress without making any judgments, accepting her complaints. Just being there whenever things get too much for her. Prevent her from taking some overdose of tablets or doing anything bizarre. So in that sense, my presence was constant. I was available, as much as I can. Except not knowing there was anything particularly clearly I was managing there, other than her distress and whichever way the roller coaster went. I was just there as a clinician helping her to sustain her life and then continue with whatever battle she was carrying on. So I wasn't managing her mental illness, psychosis or anything. Kind of an overall management of the individual as a person. Basically, I mean traditionally people would say the strengthening of the ego, supporting the ego, to make sure it's there."

The judge also noted Dr Moorthy's evidence that:

"... there wasn't much I was able to offer her and basically there are psychiatrists who are forensically trained and who deal with these complex matter of, you know, workplace difficulties, accidents, like emerging illnesses in terms of anxiety, depression and psychosis. So my impression was that someone else may be more qualified to manage these complex features other than myself and I did find it extremely difficult, going - going all the way, managing it."

Dr Moorthy was not aware, until it was put to him in the witness box, that the Appellant had alleged that she had previously been sexually harassed by Dr D, that she had reported Dr C to the Medical Board or the Health Care Complaints Commission for alleged medical malpractice, and that she had reported Dr A to the Medical Board, the Health Care Complaints Commission and the Taxation Office. He accepted that they were a significant part of her psychiatric history. He accepted that for Dr E to lead the Appellant to believe that they would have a permanent relationship, but then to abandon her abruptly, would be a significant stressor.

In cross-examination, Dr Moorthy was taken through, one by one, the criteria identified in DSM-IV text revision 2000 for borderline personality disorder, and accepted that they applied to the Appellant. He agreed that that diagnosis "may have to be applied", and that if that was the correct diagnosis it would have nothing to do with a motor accident. However, in re-examination, he said "strictly speaking she must have it according to the books, yeah, but I don't see her as a borderline personality". His reason for that was that

"... they are far more difficult to handle, in general ... they are extremely difficult, unpredictable, dangerous to themselves and others and in my dealings with her ... since 2003 I've never felt afraid or frightened or that she'll do something drastic ...that I did not encounter as a clinician personally in dealing with her. In the end it's entirely a clinical approach."

The judge did not regard the fact that Dr Moorthy agreed that the Appellant exhibited the diagnostic criteria for borderline personality disorder identified in DSM-IV was the end of any argument about whether indeed she suffered borderline personality disorder. The judge accepted that DSM-IV diagnostic criteria were just a guide to the ultimate clinical judgment that is involved in a diagnosis.

On 4 January 2004, the Appellant wrote an eight-page letter to the New South Wales Police (with a copy to the Human Rights and Equal Opportunity Commission), complaining that Dr E had come to her home and raped her on 27 September 2003, about his conduct during the affair, and about the circumstances in which he terminated it. The alleged rape had not been mentioned in the Appellant's letter to Dr E of 7 October 2003, nor in her letter to the complaints officer of the Medical Board on 20 October 2003. In the letter she sent to the police on 4 January 2004 she concluded by saying:

"In my previous employment with [Dr D's practice] I had to suffer two years of trauma following the severe sexual harassment by [Dr D] I have a full dairy [sic] about the incidents. Previous to that I had to go through a very nasty divorce with my ex-husband Dr [A] for his indecent misconduct with his patients. I am suffering today severe psychology problem which may and have already affected my well being and damaged my life totally. I wake at night and cry and get very distraught. I become scared and feel very insecure, I feel hopeless, I fell [sic] weak, I have lost confidence of myself. I feel vulnerable, I feel victimized and traumatized by these incident[s]. I am providing every document I could to prove my case thus any further documents are required I will dedicate myself to provide it. Dr [E] even degraded my employment refusing to pay the requested monetary payment. He denied my overtime, did not pay the promised bonus. I have filed my application for unfair dismissal."

On 7 January 2004, the Appellant was assessed by Ms Diane Whiting, a clinical psychologist. Ms Whiting's report says:

"Ms A reported that she suffered an injury to her neck in a car accident on 20 August 2003 when travelling to work. She has been diagnosed with cervical brachialgia (right side of her neck and right shoulder). Ms A reported that she feels extremely distressed and took an overdose of medication three times over the Christmas break. She stated that she often feels suicidal and violent toward her ex-employer. Ms A reported that she commenced working with Dr [E] in September 2002 as his secretary/office administrator. She stated that she managed the [location] office and Dr [E] attended there one day per week. Ms A alleged that from her first day she experienced sexual harassment from Dr [E]. She stated that he constantly complimented her, stood very close and stared at her and then would ask her to go out with him. According to Ms A this behaviour persisted until May 2003 when they commenced an affair. She stated that by July she ceased the relationship but Dr [E] would not leave her alone. She stated that things became quite difficult at work with him leaving her letters and sending her emails.

According to Ms A when she had the car accident on 20 August 2003, she did not take time off work even though her neck and shoulders were very painful. She stated that she continued working until she ceased work on 3 October 2003 due to increased pain and stress. Ms A reported that Dr [E] contacted her the following day and they spoke for about 45 minutes. She stated that they eventually argued and she hung up on him. Ms A reported that on 8 October 2003, she took the medical certificate into work and she was subsequently sent a letter from Dr [E's] solicitor advising her that she should not come in to the office when she was on workers compensation. Ms A reported that she eventually returned to work on 21 November 2003, but was terminated on 10 December 2003.

Comments

Ms A presented as extremely emotional. She sat physically very close to me during the assessment and disclosed personal information rapidly. The assessment involved discussions mostly about the affair between her and Dr [E] rather than her physical injuries as Ms A appears to be overwhelmed by this issue. Ms A reported that she has placed a complaint about Dr [E] to the medical board (which has been rejected as it is not the appropriate forum), has lodged a complaint with the anti discrimination board and has instituted legal action all against Dr [E]. Ms A also reported that she is filing a complaint with the police. Her psychological distress appears to be a result mainly regarding the relationship with Dr [E] and his behaviour, rather than her physical injury. She also presents as extremely histrionic and emotional.

Ms A's personality style and the litigation involving Dr [E] are major impediments to her recovering from her physical injuries. Until this issue is resolved for Ms A, it is anticipated that the ongoing stress of the whole situation will continue to exacerbate her pain and discomfort. Ms A reported that she wants compensation for the way she has been treated by Dr [E].

... Ms A will not stabilise until her issues with Dr [E] are resolved, some cognitive work is recommended to assist Ms A with the adjustment to her situation. Her suicidal behaviour also needs monitoring." (emphasis added)

The judge said, at [74], concerning that report:

"This report confirms my preliminary view that it was the problems with Dr [E], and not any injury sustained in the motor vehicle accident, that was the cause of the plaintiff's mental problems at the time."

Ms Norton points out that Ms Whiting's conclusion that the Appellant's psychological distress "appears to be a result mainly" of the relationship with Dr E does not lead to the judge's conclusion that it was the problems with Dr E that were "the cause" of the Appellant's mental problems.

The Appellant obtained employment working in the practice of Dr F, a female GP in the Western Suburbs, commencing on 16 September 2004. She was dismissed from that employment in late August 2005. She began proceedings against Dr F before the Industrial Relations Commission of NSW on 29 August 2005, alleging unfair dismissal. The Appellant's principal complaint related to failure to pay her amounts that the Appellant claimed to be entitled to receive, but as well there were some allegations of arrogance on the part of Dr F, and of Dr F harassing and humiliating her in front of patients and staff. There was some correspondence between the Appellant and Dr F from as early as 10 June 2005, which the judge, in my view fairly, described as being "couched in a similar emotional tone to much of the plaintiff's correspondence when she has been affected by some sort of personal crisis" ([114]).

The Appellant's leaving Dr F's employment coincided with a change in her psychiatric condition. On 13 August 2005, Dr Rao reported that her current conditions included recurrent nightmares, major depression with suicidal thoughts, delusional thoughts, and adjustment disorder. He reported that:

"During the past 2 weeks her condition has worsened, necessitating immediate referral for review to her psychiatrist Dr Moorthy.

As a result of her review she may require hospitalisation for her major depression/adjustment disorder in Wesley Private Hospital during the coming weeks, ..."

Dr Moorthy reported that she developed symptoms of psychosis from 2005, hearing voices, including of her parents and people who died years ago, hearing knocks on the door and finding no one there, and hearing telephones ring and finding no one on the phone.

The judge concluded that the employment with Dr F assisted neither party. He said:

"... if the plaintiff is suffering from [borderline personality disorder] then her behaviour whilst working for Dr [F] provides evidence of some of the manifestations of that illness. The pattern of work and behaviour issues confronting Dr [F] were not dissimilar to those confronting Dr [C] 10 years earlier."

The Appellant's proceedings in the Industrial Commission against Dr E ended unfavourably to the Appellant on 4 October 2005.

Another distressing period for the Appellant followed her being diagnosed as suffering from breast cancer. She had a mastectomy in 2006, following which she spent a number of weeks in a psychiatric clinic.

Abandoned Grounds of Appeal

Of the twenty five grounds of appeal identified in the Amended Notice of Appeal, some were either not pressed at all, or pressed only if certain other of the grounds of appeal succeeded. Those grounds of appeal are numbered 6, 8, 9, 10, 16, 17, 18, 19 and 20.

Ground 1

The judge took the view that to a major extent the case depended upon whether the Appellant was accepted as a credible, reliable and consistent witness. The judge at [5]-[6] did not so regard her:

"... the plaintiff's evidence is such that it is completely unreliable and in the absence of some objective support for her various physical and psychological conditions, it cannot be relied on to the extent that I would be able to be satisfied on the balance of probabilities as to any of her assertions as to fact or as to her complaints of physical and psychological disability.

At best the plaintiff suffers from such a psychological impairment such as to render her unable to determine fact from imagination. At worst she is prepared to manufacture circumstances to suit her view of what has happened to her as a result of the accident and indeed in regard to the many other traumatic events in her life."

The first ground of appeal is that the judge's finding concerning the credibility of the Appellant was erroneous. It was common ground that the Appellant has come to suffer from a serious mental illness. The Appellant's written submissions state that "in those circumstances [the judge] should not have made credit findings based on her evidence or on things she had said or done after developing that condition."

I do not see what alternative the judge had. Inevitably, a judge must make factual conclusions, including assessments of witnesses, on the basis of material before him or her. There was a period, beginning in 2005, when the Appellant's condition was more disabling than it was at the time of the trial, and caution would be needed before basing a conclusion concerning her credibility or reliability on inconsistencies between statements that the Appellant made when her illness was in a fairly florid state, and known facts. However, the inconsistencies in evidence to which the judge specifically pointed, in annexures to the judgment, were in evidence that the Appellant gave at the trial, that could justifiably cause a judge concern about whether a statement made by a witness should be accepted. At [104], the judge gave other examples of inconsistencies in evidence that the plaintiff gave, at times when her condition did not have the degree of seriousness it had in the period commencing in 2005:

"... there are small things about the past that she has divulged over the years that give cause for some concern and are difficult to explain rationally. For example the plaintiff says she was born in Nigeria and yet she told Canterbury Hospital on the night of the motor vehicle accident that she was born in Azerbaijan and had never married. In evidence it came out that apart from being born in Nigeria, she had also spent a number of years living in ... Lebanon. She told Ms Simonato in November 2001 that she was born in Europe and described educational qualifications that she could not have completed in the time frame specified. In that regard she told Dr Gertler in 1999 that she had done the HSC in Sydney and has two degrees from the University of Technology Sydney, one in business management. I note that in regard to all the courses she has done, some of the certificates are simply ones of attendance rather than evidence of passing examinations or the level of the pass."

The conclusion that the judge came to concerning the Appellant's credibility was not far removed from a written submission of the Appellant's counsel at the trial:

"11. It is submitted that little can be placed upon the plaintiff's oral evidence and the behaviours upon which she was cross-examined by reason of her psychiatric condition.

12. The plaintiff was more of an exhibit than a witness in this case. It is submitted that it would be apparent from her evidence, her manner in the witness box, her answers and general demeanour that:

a. The plaintiff remains significantly disordered despite apparent improvement and better control due to her medications over the last couple of years.

b. Much of the plaintiff's evidence was irrational and unable to be controlled by the questioners.

c. The plaintiff's condition is genuine ..."

Even though the Appellant's submissions refer to Fox v Percy (2003) 214 CLR 118, they do not point to any "incontrovertible facts or uncontested testimony" that shows that any of the judge's conclusion concerning the Appellant's credibility is wrong, nor do they identify why any of the judge's conclusions are "glaringly improbable" or "contrary to compelling inferences in the case": (See generally Nominal Defendant v Rooskov [2012] NSWCA 43 at [91]-[92].) I would not uphold this ground of appeal,

Grounds 2 and 3

The nub of these grounds is that the judge was mistaken in concluding that the Appellant suffered from a pre-existing condition of borderline personality disorder.

An important element in the judge's conclusion that the Appellant had been suffering from a borderline personality disorder was that the judge accepted the opinion of Dr Patricia Jungfer, an MAS assessor who interviewed the Appellant, and gave a certificate and accompanying reasons on 30 July 2010. Dr Jungfer reported:

"On specific questioning as to whether or not she had previously seen a psychiatrist, counsellor or psychologist, she answered to the negative.

She was asked to consider her answer and again answered to the negative. She reported being a healthy, happy woman, who despite working many years managing medical centres, had never needed to see a medical practitioner.

Dr Jungfer's diagnosis included that the Appellant:

"... presents as a woman with a complex psychiatric diagnosis. There is substantial evidence of pre-existing psychiatric illness and dysfunction predating the time of the subject accident.

...

There are substantive concerns regarding the credibility and consistency of her history. Ms Azar contradicted herself on multiple occasions in the time of the MAS assessment. She provided history that was contradictory from the start to the finish. She provided information that was contradictory to the documents provided, and when provided with opportunities to clarify that history, provided unsatisfactory explanations, including impairment of memory or explanations that appeared to justify those statements.

The explanations she gave were not reasonable and were not satisfactory. She appeared to be finding answers on the run. It also raises the question of her presentation within the clinical context. She did not have the demeanour, behaviour, nor characteristics of a person with a serious anxiety or depressive disorder. ...

She made multiple allegations regarding various members of medical practice and defamatory statements, and did not appear to recognise the inappropriateness of her conduct. She has multiple paranoid belief systems and hallucinatory and delusional ideas. She is on psychotropic medication but very unfamiliar with the dosages which has to question whether or not she is taking such medication.

There is also a history of multiple somatic concerns, multiple presentations to doctors. Of course, she attributes all these to the subject accident. In clinical practice, it is not surprising to see individuals who attribute their impairments, their problems and daily struggles to a motor vehicular accident. But is this a reasonable link and is it a causal link?

She describes an anxiety when driving and fear for being in another accident. This would be a reasonable causal link. She attributes the breast cancer as being related to the accident, and I understand from the documentation that there is no causal link. She relates the rape as being related to the accident, although there is no evidence that such an event occurred; that it in fact was a consensual sexual relationship, and many other facts that she relates to the conduct of Dr [E] has not been supported.

...

... almost certainly her clinical presentation is not consistent with the symptom complaints that she reports.

Therefore, on the basis of the fact that she sustained an accident that caused her to feel anxiety and that she continues to restrict her driving, I continue to accept that she has an adjustment disorder with anxious mood related to the subject accident. While she may report severe depression and Post Traumatic Stress symptoms, I can find no evidence that the subject accident was of the nature, type and severity that would cause a Post Traumatic Stress Disorder.

The Diagnostic Statistical Manual is clear that the nature of an accident to cause a Post Traumatic Stress Disorder must be a severe one that is life-threatening, where people sustain life-threatening injuries, there is death or actual or real harm to an individual. The accident that she sustained did not meet these criteria.

...

In terms of other diagnostic possibilities, she presents with paranoia and delusional thinking consistent with that of a psychotic process. My underlying hypothesis is that she has borderline personality disorder with episodes of brief psychoses. There is ample evidence that she had a pre-existing personality disorder at times of psychosocial stress and almost certainly the litigation and the lack of success in the litigation would be viewed as psychosocial stressors that may be associated with psychotic symptomatology. She also has a somatisation disorder. This is unrelated to the accident and is not a rateable impairment.

The only psychological injury that Dr Jungfer found had been caused by the accident was an adjustment disorder with anxious mood. One of the comments she made concerning the Appellant's degree of whole person impairment was:

"She currently does not work. She however does collect large numbers of documents, has legally represented herself in a number of matters although not successfully because of her style of interaction which is based on underlying personality rather than psychiatric symptomatology. Her psychiatric symptoms, her adjustment disorder with anxious mood related to the accident would however restrict the types of work opportunity she would have."

Overall, Dr Jungfer found a four percent whole person impairment due to the motor vehicle accident.

As well, Dr Smith (about whose evidence the judge had some reservations) had diagnosed that she suffered from a borderline personality disorder.

One of the diagnostic criteria for there to be a borderline personality disorder, in accordance with DSM-IV, is that the illness presents in early adulthood. The Appellant submitted below, and submits in this Court, that there was no evidence of a borderline personality disorder having manifested itself by that time. However, the judge accepted that there was sufficient basis for holding that she had had long-standing psychiatric difficulties.

The judge set out at length, at [106]-[110], passages from the joint evidence of two psychiatrists, Dr Clark and Dr Smith, that I infer he accepted, notwithstanding that he was critical of some other aspects of their evidence:

"Perhaps I'll address this to you, Dr Smith, and then ask Dr Clark for his comment. Would it be fair to say that one of the purposes, in attempting to arrive at a psychiatric diagnosis, is to formulate an appropriate cause of treatment?

WITNESS SMITH: Yes.

REWELL: You agree, no doubt, Dr Clark?

WITNESS CLARK: Yes, yes, indeed.

REWELL: In particular, in a forensic psychiatric exercise such as this, is another important purpose of arriving at a diagnosis that a diagnosis may assist at looking at what caused the particular psychiatric condition? Dr Smith.

WITNESS SMITH: Yes.

REWELL: Dr Clark?

WITNESS CLARK: Yes.

REWELL: In fact, trying to unravel causation is all but impossible without first arriving at a diagnosis, is it not, Dr Smith?

WITNESS SMITH: Yes.

REWELL: Dr Clark?

WITNESS CLARK: Yes.

REWELL: Now, when a psychiatrist interviews a disturbed patient, is it a common experience that history, particularly history of events many years ago, is either impossible to obtain or apt to be very unreliable? Dr Smith?

WITNESS SMITH: Not infrequently the case.

REWELL: Dr Clark?

WITNESS CLARK: Yes, it could, sure.

REWELL: When a psychiatrist suspects on current clinical presentation that a certain diagnosis is satisfied, is it a legitimate clinical process then to look back at what is known of past behaviour in order to see whether that that diagnosis is likely to have been longstanding. Dr Smith?

WITNESS SMITH: Yes.

REWELL: Dr Clark?

WITNESS CLARK: Yes.

REWELL: If one gets to the stage that one has found evidence of a particular disorder extending over a number of years is it then a legitimate forensic and clinical technique to assume, depending on the nature of the disorder, that the disorder has probably existed since early-adulthood, if that's a relevant matter?

WITNESS SMITH: Yes.

WITNESS CLARK: Yes.

REWELL: I mean, that's the retrospectivity, I think, you talked of, Dr Clark.

WITNESS CLARK: Yes, yes.

REWELL: And that's a legitimate psychiatric process for a psychiatrist who would commonly be faced with gaps in a person's life history or be unable to rely on the person themselves to give an accurate account. Do you agree, Dr Clark?

WITNESS CLARK: I agree.

REWELL: And Dr Smith? All right. A borderline personality disorder is very unlikely indeed to suddenly afflict a middle-aged person involved in a minor car accident. Would you agree, Dr Smith?

WITNESS SMITH: Yes.

REWELL: Dr Clark?

WITNESS CLARK: Yes.

REWELL: However, a person who has long suffered a borderline personality disorder may show more florid signs of - signs and symptoms when affected by a major stressful event. Would that also be correct?

WITNESS SMITH: Yes.

REWELL: Dr Clark?

WITNESS CLARK: It depends on the age of the person.

REWELL: Well, let's assume the person is in their 40's.

WITNESS CLARK: Personality disorders tend to mature out and stabilise when you get older.

REWELL: Now, does that mean, Dr Clark, that the stressfulness of an event that is likely to make the symptoms more florid would be greater for a person, say, in their 40s, than a person in their 20's.

WITNESS CLARK: That's - you mean, if they suffer from a borderline personality disorder first of all?

REWELL: Yes.

WITNESS CLARK: It certainly would - could reawaken borderline personality disorder.

REWELL: But for a person in their 40s it would take a - it would be likely to take a much more stressful event than for a person in their 20s.

WITNESS CLARK: Well, yeah, it would have to be almost life threatening, I would have thought.

REWELL: Or, in their perception, at least, life destroying?

The rule made to give effect to that provision was clause 6 of the Matrimonial Causes Rules 1971. Apart from procedural matters such as parties and service, all that rule said was:

"On the hearing of an application under this rule the judge may express an opinion, should he think it desirable to do so, as to the reasonableness of the agreement or arrangement and may give such directions, if any, in the matter as he thinks fit." ((7) on page 1560 of Latey)

Thus, the statutory provisions that were relevant in Smallman said nothing about invalidity of settlements, nor did they impose a statutory requirement for approval of a settlement. The statutory provisions were purely enabling, and it was only the contract between the parties that made their agreement subject to the approval of the Court.

In Smallman, Lord Denning, at 31-2, stated:

"In my opinion, if the parties have reached an agreement on all essential matters, then the clause 'subject to the approval of the court' does not mean there is no agreement at all. There is an agreement, but the operation of it is suspended until the court approves it. It is the duty of one party or the other to bring the agreement before the court for approval. If the court approves, it is binding on the parties. If the court does not approve, it is not binding. But, pending the application to the court, it remains a binding agreement which neither party can disavow. Orr LJ has drawn my attention to a useful analogy. Many contracts for the sale of goods are made subject to an export or import licence being obtained. Such a condition does not mean that there is no contract at all. It is the duty of the seller, or the buyer, as the case may be, to take reasonable steps to obtain a licence. If he applies for a licence and gets it, the contract operates. If he takes all reasonable steps to obtain it, and it is refused, he is released from his obligation. If he fails to apply for it or to do what is reasonable to obtain it, he is in breach and liable to damages: see Brauer & Co (Great Britain) Ltd v James Clark (Brush Materials) Ltd. [1952] 2 TLR 349 and A V Pound & Co Ltd v M W Hardy & Co Inc [1956] AC 588. Similarly when a man agrees to buy property 'subject to the title being approved by our solicitor.' there is a binding contract. There is an implied promise by the buyer that he will appoint a solicitor and shall consult him in good faith, and that the solicitor shall give his honest opinion. If the solicitor honestly disapproves, the contract does not bind. But until he does disapprove, the contract binds: see Hussey v Horne-Payne (1879) 4 App Cas. 311, 322 and Marten v Whale [1917] 2 KB 480, 486. Branca v Cobarro [1947] KB 854 is on the same lines."

Smallman has been applied to agreements to compromise litigation under the Family Provision Act 1982. There is no statutory obligation to seek approval of an agreement to compromise such litigation, but if the settlement is to be implemented by court orders the court must satisfy itself that it has jurisdiction to make the order, and that the particular order is one that ought to be made in terms of s 7 of the Act: Bartlett v Coomber [2008] NSWCA 100 at [37], [72], [84]-[86]. Thus, an agreement to settle such proceedings by the making of orders is binding on the parties, insofar as it obliges them, either expressly or impliedly, to approach the court to seek the making of the orders: Mitchell v Osborne (Supreme Court of NSW, Young J, 20 May 1997, unreported); Groser v Equity Trustees Ltd [2008] VSC 163; (2008) 19 VR 598 at [24]-[26]; Coomber v Stott [2007] NSWSC 513 at [28] and [66] per Macready AsJ.

There is High Court authority concerning what contractual obligations arise when a statute prohibits a particular type of transaction (typically, a dealing in Crown land) from occurring without the consent of a governmental official, and a contract is entered for such a transaction, that makes no mention of obtaining the consent. Such a contract is construed as operating within the confines of this prohibition, insofar as it can. It is construed as containing implied terms binding the appropriate parties to do all things reasonable to seek the consent, binding both parties to do nothing to jeopardise the obtaining of the consent, and that if the consent is not obtained the contract goes off: Egan v Ross (1928) 29 SR (NSW) 382 at 387-8; Butts v O'Dwyer (1952) 87 CLR 267 at 279-280, 282-283, 285; McWilliam v McWilliams Wines Pty Ltd (1964) 114 CLR 656 at 660-661; Brown v Heffer (1967) 116 CLR 344 at 349-50.

In Fisher v Marin [2007] NSWSC 1411 Patten AJ at [83]-[89] followed Smallman concerning an agreement for compromise of litigation, made on behalf of a person under legal incapacity by her tutor. He held that the agreement for compromise was binding on the parties, and there was an implied term to bring the agreement to the court for approval. Consistently with the various authorities that I have discussed, that decision was correct.

It is possible for an offer of compromise to be made so that it is conditional upon some event, other than acceptance of the offer, occurring: Oxlade v Gosbridge Pty Ltd (No 2) [1999] NSWCA 165 at [7]. The effect of s 76 is to impose a condition on any agreement to settle proceedings that arises from acceptance of an offer of compromise. Thus, when a person under legal incapacity, by his or her tutor, accepts an offer of compromise, that acceptance does not itself give rise to a complete binding agreement for the settlement of the proceedings. However, it gives rise to some contractual obligations. In the absence of an express obligation to seek the approval of the court (which there would be if the offer in the present case had been accepted) there would be an implied obligation on the part of the tutor to seek the approval of the court. In the event that the court grants its approval, there is then a binding agreement in the terms of the offer of compromise. If the court were to not approve the compromise it would presumably be prudent to seek leave under UCPR 20.28(1)(b) to withdraw the acceptance of the offer, so that it was not left to implication of law that those contractual obligations that arose from acceptance of the offer had come to an end.

I would accept that UCPR 20.27(3) must be read down so that it operates only subject to s 76, but that does not mean that the entirety of the provisions concerning offers of compromise do not apply to litigation to which a person under legal incapacity is a party. Similarly, in the administration of UCPR 20.29(2), the court would, presumably, "order otherwise" if a plaintiff who had accepted an offer, but not obtained approval, sought to invoke UCPR 20.29(2). In that way, the rule is not inconsistent with the provisions concerning offers of compromise applying to persons under legal incapacity.

For these reasons, I do not accept the Appellant's submission that the rules concerning offers of compromise do not apply when an incapable person is suing through a tutor.

In what I take to be an invocation of the principle that legislation should not be interpreted to produce results that are absurd, extraordinary, capricious or irrational (Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 321; Ganter v Whalland [2001] NSWSC 1101; (2001) 54 NSWLR 122 at [35]-[36]) the Appellant submits that it would be unfair to impose upon a tutor who has no knowledge and can have no knowledge in most instances of all the relevant facts responsibility to form a view as to whether a particular offer is reasonable. The Appellant also submits that for the offer of compromise provisions to apply to a tutor would place the tutor in an intolerable position of conflict of duty and interest.

How this conflict arises requires some explanation. Even though in the present case the order for costs that was made was against the Appellant, such an order is enforceable against a tutor: Yakmor v Hamdoush (No 2) [2009] NSWCA 284; (2009) 76 NSWLR 148 esp at [24]. As well, it was held in Yakmor at [45] that there is jurisdiction for the court to make an explicit costs order against a tutor. That decision was reached on the basis that the tutor was a party to the litigation. Yakmor was decided at a time when UCPR 42.3 permitted costs orders against a non-party in only limited circumstances. Since then, the UCPR have been amended so that there is no longer a restriction on making costs orders against non-parties: Arena Management Pty Ltd (Receiver & Manager Appointed) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 281 ALR 304 at [24]-[25]. However, in accordance with the reasoning in Yakmor it would still be possible to make a costs order directly against a tutor.

I accept that at the time the offer of compromise in the present case was made, there was a risk that a costs order might be enforced, or sought, against the tutor. The Appellant submits that it would be unreasonable for the tutor to be placed in a position of conflict between his duty to act in the best interests of the plaintiff, and his interest in protecting his own assets as a consequence of an offer of compromise.

It is hard to see how these matters affect the construction of the relevant legislation and the principles of contractual construction that I have referred to. A tutor is always at risk that he or she might be liable to pay a costs order made against the person under legal incapacity, or that a costs order might be made against him or her directly. The tutor's personal liability is likely to arise if the person under legal incapacity loses the litigation, or loses an issue that is clearly dominant or separable: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [31]-[35]; Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 at [6]-[11]. The service of the offer of compromise changes the scope of the tutor's risk concerning costs, by bringing about a risk that the tutor might have to bear costs even if the person under legal incapacity succeeds in the litigation. However, it does not bring about such a radically different situation that Parliament could not have intended it. An anomaly arising from what, on all other tests of construction, is the correct construction of legislation must be a very serious one, before the court is justified in using that anomaly as a reason for rejecting what otherwise seems correct construction: Ganter at [36]; ACQ Pty Limited v Cook [2008] NSWCA 161; (2008) 72 NSWLR 318 at [127]; Chen v Kevin McNamara & Son Pty Ltd [2012] VSCA 63 at [33].

Offer Open for Only Twenty-One Days Makes it Invalid?

The Appellant points out that the offer was open for only twenty-one days. I take it that that is a submission that it was not a valid offer, because it was not open for "such time as is reasonable in the circumstances", as required by UCPR 20.26(7)(b).

When a litigant seeks an indemnity costs order by reason of failure to accept an offer of compromise, the onus of proving that it was an offer in accordance with the rules lies on that party. However, if all that is shown is that an offer, that is open for twenty-one days, is made after a mediation, and five weeks prior to the hearing being due to start, I would infer that that was a reasonable time. After a mediation, and as close as that to the start of the hearing, parties ordinarily could be expected to be well aware of the strengths and weaknesses of their respective cases.

In assessing what was "such time as is reasonable in the circumstances" for the purposes of UCPR 20.26(7)(b), the fact that the offer is made to a person under legal incapacity might sometimes be, or give rise to, a relevant factor. If there was some matter, relevant to the Appellant being under legal incapacity, that detracted from the inference that twenty-one days was a reasonable time, there would be an onus on the Appellant of adducing evidence to show what that matter was. No such evidence was adduced.

Appropriate to "Order Otherwise"?

Alternatively, the Appellant submits that the judge should have "otherwise ordered", in accordance with Part 42.14(2). I accept that, in principle, factual circumstances arising from an offer having been made to the tutor of a person under legal incapacity might sometimes enter into a court's decision whether to "order otherwise" for the purposes of UCPR 42.15.

I will consider seriatim the Appellant's submissions about why the court should "otherwise order".

"(a) The offer was made less than two months before the matter was listed for a 10 day trial, at a point in time when much of the legal expenses and other costs would already have been incurred."

I have difficulty in seeing why this is a reason to "otherwise order". The effect of an unaccepted offer of compromise can only be to alter the burden of costs for the future, from the time the offer is made. The burden of costs incurred up to that time is likely to fall on whoever proves to be the losing party in the litigation, as would be the case whether the offer of compromise was made or not.

"(b) It may have been difficult to get appropriate instructions from the tutor [to] marshal evidence for the approval and have the matter listed for approval and determined prior to the trial. In any event during the time that this would necessarily have taken legal expenses and costs in respect of the primary trial would have continued to have been incurred as there would be no guarantee the court would approve the settlement and accordingly trial preparation would need to continue. In fact there is no evidence that was before the Primary judge that would have suggested that the court would have approved any settlement on the information that would have then been available to the Judge hearing the approval."

If there were any difficulties in obtaining instructions or marshalling evidence, it was for the Appellant to demonstrate them to the judge, yet no evidence to do so was put on. That trial preparation would need to continue while approval was being sought can be accepted, but I do not see why that is a reason to "otherwise order". The transcript of the argument that preceded the judgment that the primary judge gave on 15 June 2011 is in the appeal books, and it seems that no argument on this point was put to the primary judge. Similarly, if the Appellant wished to contend that it was unlikely that approval would have been granted, if sought, it would be necessary to establish that proposition by evidence and argument, yet that was not done.

"c. The offer was not specified to be open for 28 days as is the prima facie requirement under the Rules (in this case only 23 or 24 days.)"

The submission that the offer was open for twenty-three or twenty-four days is wrong as a matter of simple arithmetic. However, for the reasons I have previously given, the time that the offer was open was prima facie reasonable. If there were any particular facts that made it unreasonable, the evidentiary onus was on the Appellant to establish those facts.

"d. The difficult situation that the appellant was in concerning workers compensation repayment and the interplay with the social security system. The appellant would have been precluded for approximately 300 or more weeks from receiving any Centrelink allowance in circumstances where the workers compensation insurer would be insisting on full repayment of its workers compensation payments (the workers compensation insurer not being concerned with any compromise that was necessary to resolve the principle proceedings) thus leaving the appellant at risk concerning her ability to survive. In fact once continued entitlement to weekly benefits and ongoing entitlement to medical expenses is factored in then the appellant is significantly better off than she would have been had she ... accepted the offer of compromise. The Workers Compensation repayment was approximately $309 000: T556.8, T9.5 (15/6/2011). Medical expenses were approximately $130 000. Given the Primary judge's findings medical expenses were subsequently agreed at $17 202.83."

The Appellant, correctly, does not submit that the amounts of workers compensation and social security payments that she must repay from the verdict enter into whether she has received "an order or judgment on the claim concerned as favourable to the plaintiff, or less favourable to the plaintiff, than the terms of the offer", within the meaning of UCPR 42.15(1). Rather, the submission is that those amounts provide a reason for the court to "otherwise order".

It has been held that if a plaintiff recovers less than the amount of an offer that was made, the fact that being ordered to pay costs would significantly reduce the plaintiff's verdict is not a proper consideration on the basis on which to make the consequences arising under the rules not apply: Hillier v Sheather (1995) 36 NSWLR 414 at 422; Dalma Formwork (Australia) Pty Ltd v Maricic (No 3) [2008] NSWCA 29 at [19]-[22]. The reasons that Kirby P gave in Hillier at 422 for the burden of costs not been taken into account in deciding whether to "otherwise order" included:

"They are precisely the considerations which the rule anticipated would arise. Indeed, their occasional occurrence is exactly the sanction which the rule imposes upon people in the position of the cross-respondent. Through the burdens cast upon her in this case, the rule is designed to send a clear signal to litigants, and their legal representatives, which will promote early settlement discussion outside the court and realistic consideration of offers made. A significant new peril has been introduced for litigants and those advising them."

In my view analogous reasoning is equally applicable concerning the workers compensation and social security payments that the plaintiff in a personal injuries action must make from any verdict money. The obligation to make those payments is an ordinary incident of personal injuries litigation. That a plaintiff will have to pay these expenses is no more a reason to "otherwise order" than is the fact that a plaintiff will have a liability to pay his or her own lawyers.

In any event, while the judge had the amount of the workers compensation repayment before him, and the total medical expenses that had been incurred, it would be necessary to demonstrate by argument and calculation that the Appellant was better off than she would have been had she accepted the offer of compromise. No such argument or calculation was provided to the primary judge.

"e. The Primary Judge relied in part for his ultimate assessment of damages on some video footage in respect of which the respondent had made ex parte application and then later application on notice to withhold from the appellant prior to trial. That application was dealt with by Judge Truss who granted the respondent's application shortly before trial and accordingly the appellant's tutor was deprived of any knowledge of surveillance material which could have affected his decision to accept or not accept the offer of compromise: J71.184. This argument in the case of a capable plaintiff is met, quite rightly, by the submission that whilst the plaintiff's legal advisors did not know about the plaintiff's activities the plaintiff herself did. Here the decision to settle however was not that of the plaintiffs. It was the decision of the plaintiff's tutor. He was therefore deprived of important information (so the Primary Judge found) which could have affected his decision to accept or not accept the offer of compromise in circumstances where the material was withheld solely for the respondent's perceived forensic advantage."

"f. Similar considerations apply to the lay evidence from Dr [A], the defendant, an employee of the Westpac Bank at Campsie and several medical practitioner employees all called in the respondent's case and unknown to the tutor."

These grounds are unpersuasive. If the tutor was not aware that his mother was capable of carrying out whatever physical activities were depicted in the video footage, it was for him to put evidence before the court to say so. Likewise, it was for the tutor to establish to the judge that he was unaware of the facts that arose from the evidence of Dr A, the defendant, the Westpac employee and the medical practitioner employees.

An important factor in his Honour declining to "otherwise order" was:

"McColl JA [in Caine] makes it clear that for the Court to be able to exercise its undoubted discretion the party resisting such an order needs to explain why the offer of compromise was rejected. That has not happened in this case. In fact I do not even know if the offer was discussed. Whilst I sympathise with the plaintiff's situation and the difficulties involved in dealing with her, the tutor was really the only person who mattered. No reason has been advanced as to why he rejected this offer if indeed he knew of its existence and the ramifications of a refusal."

I agree with that reason.

There is no occasion to alter the judge's costs order.

Orders

I propose that the appeal be dismissed with costs.

**********

Decision last updated: 18 December 2012

Medium Neutral Citation:	Azar v Kathirgamalingan [2012] NSWCA 429
Hearing dates:	30 August 2012
Decision date:	18 December 2012
Before:	McColl JA at [1]; Basten JA at [2]; Campbell JA at [17]
Decision:	Appeal dismissed with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	NEGLIGENCE - road accident cases - causation - where plaintiff disabled by psychological condition after accident - whether trial judge mistaken in finding condition pre-existed accident - whether trial judge mistaken in finding exacerbation of condition was not due to accident - no error demonstrated - no question of principle COSTS - proceedings brought by tutor of legally incapable person - compromise of proceedings - indemnity costs - offer of compromise not accepted by tutor of incapable person - offers of compromise made to incapable person require the approval of the court in accordance with s 76 Civil Procedure Act 2005 - whether Uniform Civil Procedure Rules concerning offers of compromise and consequential costs orders apply to offers made to persons under legal incapacity - whether settlement subject to approval of the court creates binding agreement - approval provisions have the effect that an otherwise valid agreement does not create an actual compromise of proceedings instanter but does create a binding contract conditional on court approval - where agreement to compromise does not contain express requirement to apply for approval a term to that effect will be implied - UCPR applies with that proviso - normal costs consequences of unsuccessful party rejecting an offer apply COSTS - proceedings brought by tutor of legally incapable person - compromise of proceedings - whether tutor brought into unacceptable conflict by personal liability for costs if legislation allows indemnity costs order to be made in respect of refusal of reasonable offer to compromise - tutors always at risk of personal liability for costs - risk of indemnity costs changes scope but not character of risk - not sufficient reason to reject correct interpretation of legislation COSTS - proceedings brought by tutor of legally incapable person - compromise of proceedings - reasonable time - offer of compromise made within two months of hearing date - offer expressed to be open for 21 days - whether reasonable in the circumstances - onus on party rejecting offer to show why time not reasonable - no evidence advanced COSTS - party under disability appealing by tutor - tutor's liability for costs
Legislation Cited:	Civil Liability Act 2002 Civil Procedure Act 2005 District Court Rules 1973 Divorce Reform Act 1969 Family Provision Act 1982 Fatal Accidents Act 1846 Health and Other Services (Compensation) Act 1995 Interpretation Act 1987 Matrimonial Causes Act 1965 Matrimonial Causes Rules 1971 Supreme Court Rules 1970 Uniform Civil Procedure Rules 2005
Cases Cited:	ACQ Pty Limited v Cook [2008] NSWCA 161; (2008) 72 NSWLR 318 Adamson v Ede [2009] NSWCA 379 Amaca Pty Ltd (Under NSW Administered Winding Up) v Booth [2011] HCA 53; (2011) 86 ALJR 172 Arena Management Pty Ltd (Receiver & Manager Appointed) v Campbell Street Theatre Pty Ltd [2011] NSWCA 128; (2011) 281 ALR 304 Bartlett v Coomber [2008] NSWCA 100 Brennan v ECO Composting Ltd [2006] EWHC 3153 (QB); [2007] 1 WLR 773 Brown v Heffer (1967) 116 CLR 344 Butts v O'Dwyer (1952) 87 CLR 267 Caine v Lumley General Insurance Ltd (No 2) [2008] NSWCA 109 Chen v Kevin McNamara & Son Pty Ltd [2012] VSCA 63 Coomber v Stott [2007] NSWSC 513 Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 Dalma Formwork (Australia) Pty Ltd v Maricic (No 3) [2008] NSWCA 29 Dietz v Lennig Chemicals Ltd [1969] 1 AC 170 Drinkall v Whitwood [2003] EWCA Civ 1547; [2004] 1 WLR 462 Egan v Ross (1928) 29 SR (NSW) 382 Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 Fisher v Marin [2007] NSWSC 1411 Fox v Percy (2003) 214 CLR 118 Ganter v Whalland [2001] NSWSC 1101; (2001) 54 NSWLR 122 Groser v Equity Trustees Ltd [2008] VSC 163; (2008) 19 VR 598 Guthrie v Spence [2009] NSWCA 369; (2009) 78 NSWLR 225 Hillier v Sheather (1995) 36 NSWLR 414 James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 Jones v Dunkel (1959) 101 CLR 289 Manly Council v Byrne [2004] NSWCA 123 McWilliam v McWilliams Wines Pty Ltd (1964) 114 CLR 656 Mitchell v Osborne (Supreme Court of NSW, Young J, 20 May 1997, unreported) Morgan v Johnson (1998) 44 NSWLR 578 Nominal Defendant v Rooskov [2012] NSWCA 43 Oxlade v Gosbridge Pty Ltd (No 2) [1999] NSWCA 165 Payne v Parker [1976] 1 NSWLR 191 Smallman v Smallman [1972] Fam 25 Strong v Woolworths Limited [2012] HCA 5; (2012) 86 ALJR 267 Yakmor v Hamdoush (No 2) [2009] NSWCA 284; (2009) 76 NSWLR 148 Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410
Category:	Principal judgment
Parties:	Nayla Azar (by her Tutor) Mr Pascal Ibrahim (Appellant) Imaharan Kathirgamalingan (Respondent)
Representation:	Counsel: Ms S Norton SC; Mr M Daley (Appellant) Mr KP Rewell SC (Respondent) Solicitors: Brydens Law Office (Appellant) Sparke Helmore Lawyers (Respondent)
File Number(s):	2011/164620
Decision under appeal	Jurisdiction: 9101 Date of Decision: 2011-04-21 00:00:00 Before: Williams DCJ File Number(s): 564/06