Ziliotto v Hakim

Case •

[2013] NSWCA 359

•

31 October 2013

Court of Appeal


Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Ziliotto v Hakim [2013] NSWCA 359
Hearing dates:29 August 2013
Decision date: 31 October 2013
Before: Basten JA at [1];
Macfarlan JA at [24];
Tobias AJA at [25]
Decision:

(1) Extend the time in which the Respondent may file his Notice of Contention to the date being seven days from the publication of these reasons;

(2) Appeal allowed in part;

(3) Set aside Order (1) made by Davies J on 24 July 2012 and in lieu thereof judgment for the Appellant in the sum of $1,528,385;

(4) Set aside Order (2) made by Davies J on 24 July 2012 as varied on 19 September 2012 and in lieu thereof order that the Respondent pay the Appellant's costs at first instance on an ordinary basis up to and including 7 April 2011 and that thereafter there be no order as to the costs of the proceedings other than in relation to the Respondent's costs thrown away by reason of the adjournment granted on 22 June 2011, such costs to be paid by the Appellant;

(5) The Respondent pay 60 per cent of the Appellant's costs of the appeal but have a certificate under the Suitors' Fund Act 1951, if otherwise qualified.

[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:

APPEAL - adequacy of reasons - conflicting testimony of experts - explanation required for adopting preferred opinion - whether need to address 'sub-issues' - need to balance transparency and prolixity

DAMAGES - assessment of damages - medical negligence - no issues of principle

COSTS - offer of compromise - offer not in accordance with r 20.26 UCPR - whether valid Calderbank letter - whether discretion under UCPR, r 42.1 should be exercised
Legislation Cited: Civil Liability Act 2002, s 13
Civil Procedure Act 2005, ss 56, 58, 98, 101
Uniform Civil Procedure Rules, rr 20.26, 42.1, 42.13A, 42.14
Cases Cited: Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13; (2012) 83 NSWLR 302
Calderbank v Calderbank [1975] 3 WLR 586; [1975] 3 All ER 333; [1976] Fam 93
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
Council of the City of Canterbury v Milich [2013] NSWCA 215
Dunstan v Rickwood (No 2) [2007] NSWCA 266; (2007) 38 Fam LR 491
Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322
Flannery v The Halifax Estate Agencies Ltd [2000] 1 WLR 377
Goodrich Aerospace Pty Limited v Arsic [2006] NSWCA 187; (2006) 66 NSWLR 186
Grbavac v Hart [1997] 1 VR 154
Hazim Jawad v Mehdi Rahim [2000] EWCA Civ 313
Kostik v Giannakopoulos (1989) Aust Torts Reports 80-274
Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721
Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638
Marsland v Andjelic (1993) 31 NSWLR 162 Miller v Galderisi [2009] NSWCA 353
Mitchell v Cullingral Pty Ltd [2012] NSWCA 389
Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344
MM Constructions (Aust) Pty Ltd v Port Stephens Council [2012] NSWCA 417
Old v McInnes and Hodgkinson [2011] NSWCA 410
Penrith City Council v Parks [2004] NSWCA 201
Pritchard v Trius Constructions Pty Ltd (No 2) [2011] NSWSC 1114
Rail Corporation NSW v Vero Insurance Ltd (No 2) [2012] NSWSC 926
Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33
Tickel v Trifleska Pty Ltd (1990) 25 NSWLR 353
Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194
Vieira v O'Shea (No 2) [2012] NSWCA 121
Wear Me Apparel LLC v Lam Na [2013] HKCA 191
Whitney v Dream Developments Pty Ltd [2013] NSWCA 188
Category:Principal judgment
Parties: Stella Maris Ziliotto (Appellant)
Dr Claude Hakim (Respondent)
Representation: Counsel:
B Gross QC and B Bradley (Appellant)
M Windsor SC and KJ Young (Respondent)
Solicitors:
P K Simpson & Co (Appellant)
Avant Law (Respondent)
File Number(s):CA 2012/256988
 Decision under appeal 
Citation:
Ziliotto v Dr Hakim [2012] NSWSC 610
Ziliotto v Dr Hakim (No 2) [2012] NSWSC 1079
Before:
Davies J
File Number(s):
SC 2009/297666

Judgment

  1. BASTEN JA: This matter involves an appeal from an assessment of damages undertaken by Davies J in the Common Law Division: Ziliotto v Hakim [2012] NSWSC 610. Subject to the qualifications noted below, I agree with the orders proposed by Tobias AJA (except as to the costs of the trial) and the reasons in support thereof.

Adequacy of reasons

  1. More by way of explanation than qualification, I would add the following comments with respect to the reliance placed by the appellant on the reasoning of Ipp JA in Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; 66 NSWLR 186 at [28]. As Tobias AJA notes at [66] below, the passage relied on appeared under the heading "Giving adequate reasons for demeanour findings". At [28], in Goodrich, Ipp JA stated:

"It is not appropriate for a trial judge merely to set out the evidence adduced by one side, then the evidence adduced by another, and then assert that having seen and heard the witnesses he or she prefers or believes the evidence of the one and not the other."

  1. Because, as Ipp JA immediately noted, that was not what the trial judge had done, but had rather given "detailed reasons" as to why she preferred the plaintiff's testimony, the remarks were obiter and did not require any detailed attention to scope or nuance.

  1. It is, in fact, very rare that "demeanour" stands on its own as a basis for determining the credibility of witnesses: see Hazim Jawad v Mehdi Rahim [2000] EWCA Civ 313 at [25], (Slade LJ, Aldous LJ agreeing). More often than not, credibility will depend upon an objective assessment of the credibility of the evidence of the witness, viewed in the surrounding circumstances.

  1. In a passage cited with approval by Slade LJ at [29], Henry LJ, in Flannery v The Halifax Estate Agencies Ltd [2000] 1 WLR 377 at 381, discussing the duty to give reasons, said:

"The extent of the duty, or rather the reach of what is required to fulfil it, depends on the subject matter. Where there is a straightforward factual dispute whose resolution depends simply on which witness is telling the truth about events which he claims to recall, it is likely to be enough for the judge (having, no doubt, summarised the evidence) to indicate simply that he believes X rather than Y; indeed there may be nothing else to say. But where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other. This is likely to apply particularly in litigation where as here there is disputed expert evidence; but it is not necessarily limited to such cases."

  1. These authorities were noted by Kwan JA in Wear Me Apparel LLC v Lam Na [2013] HKCA 191, after setting out the paragraphs [27]-[30] from Goodrich.

  1. A further difficulty with the reasoning in Goodrich appears at [29]:

"Often important issues of credibility involve sub-issues. Often, objective facts, or facts that are probable, are capable of having significant bearing on the sub-issues. In cases of this kind, it is incumbent upon trial judges to resolve the sub-issues and to explain, by reference to the relevant facts, the conclusions to which they have come."

  1. In the sense that objective circumstances may well bear upon findings of credibility in particular cases, there can be no difficulty with this statement. However, it should not be understood as requiring identification of "sub-issues" and findings in respect of sub-issues, with necessary reasons.

  1. The virtues of transparency and the importance of the losing party understanding the reasons for the result must be balanced against the values of concinnity and expedition. Judgment writing should not be "a process that is oppressive and that produces unnecessary prolixity": Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2] (Allsop P, McColl JA agreeing) repeated in MM Constructions (Aust) Pty Ltd v Port Stephens Council [2012] NSWCA 417 at [135], being a sentiment with which I expressed agreement at [228], Bergin CJ in Eq agreeing with both statements; see also Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [55]-[58].

Costs

  1. The power to award costs is conferred in unfettered terms by s 98 of the Civil Procedure Act 2005 (NSW). The power is, however, subject to the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), r 42.1 of which indicates that costs should "follow the event" unless the court otherwise orders. The usual rule is, further, that costs are to be assessed on a party and party basis, unless the court awards indemnity costs.

  1. It used to be that the facility to make a "without prejudice" offer to settle proceedings, with the incentive of a costs sanction in the event of refusal of a reasonable offer, was accepted as an important element in discouraging litigation. Thus, in Tickel v Trifleska Pty Ltd (1990) 25 NSWLR 353 at 354 Rogers CJ Comm D stated:

"It is the primary aim of any judicial system to attempt to bring the parties to a point where, with fairness to themselves, they are able to dispose of the dispute between them by compromise. It is only in the last resort that a dispute should proceed to trial and to determination. That is for any number of reasons. It is in the interests of the community that scarce resources, such as the court, should not be over-taxed. It is in the interests of the community and of the parties themselves that they should not engage in the rancour which a dispute in court necessarily entails. It is in the interests of the parties themselves to save themselves the expenditure of time and energy necessarily entailed in participation in contested court proceedings."

  1. To treat the rules governing offers of compromise in an overly technical fashion is to undermine these enduring values. Further, it is to risk subverting the statutory mandate to give effect to the overriding purpose of the Civil Procedure Act and the rules of court, which is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings": s 56(1) and (2). These principles provide the framework for a purposive construction of the rules.

  1. However, even where there has not been strict compliance with the literal meaning of the rules, there should be no diminution of the broader application of the underlying purposes they promote. The rules concerning offers of compromise were designed to make more certain the consequences as to costs which followed from refusal of an offer which the offeree failed to better at trial. It remains possible to treat an offer which does not comply with the rules as carrying a potential sanction of indemnity costs where there has been an unreasonable refusal, pursuant to the practice adopted since the judgment in Calderbank v Calderbank [1976] Fam 93.

  1. There is no doubt in the present case that the offer was intended as an offer of settlement and, if it had been accepted, the contractual result would have followed, including the entitlement in the offeree to payment of costs, in accordance with the offer or, if not so provided in the offer, almost inevitably pursuant to r 42.13A, as in force at the time of the offer. (Because it must be held that the offer did not comply with UCPR r 20.26, r 42.13A did not apply.) As the offer was stated to be "without prejudice" and was clearly intended to have costs consequences in the event of non-acceptance, it might be thought to satisfy the purpose of a Calderbank offer, in the event that for technical reasons it failed to comply with r 20.26, in accordance with which it purported to be made. In Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194, the possibility that an offer which did not comply with the rules might operate as a Calderbank offer was said to depend on "the intention of the offeror as revealed by the terms of the offer": at [27]. The reasoning of Ipp JA (with whom Mason P and McColl JA agreed) concluded:

"The offer may disclose an intention that it should take effect only if it complies with the Uniform Civil Procedure Rules. On the other hand, it may disclose a general intent to make an offer, irrespective of whether it takes effect under the Uniform Civil Procedure Rules or no."

  1. A general intent could readily be inferred in circumstances where there was no confining language indicating the intention that it only operate under the rules. The statement that it was made "in accordance with" the rules was there because it was (and is) a requirement of r 20.26(3). If there were non-compliance, it is fanciful to suppose that the offeror did not intend that the offer should have such effect as, in law, was available.

  1. The statement in Becker, however, now appears to have been reformulated so as to require an express intimation that the offer was intended to have some secondary or alternative operation: Whitney v Dream Developments Pty Ltd [2013] NSWCA 188. Absent such an intimation, this Court has held that "the correct course for the defendant to adopt was to regard the purported offer as having no force at all": at [59]. The meaning of "correct course" is obscure: a party to proceedings subject to the operation of s 56 of the Civil Procedure Act is under a statutory duty to assist the court to further the overriding purpose of the Act: s 56(3). That duty should include giving serious consideration to an offer of compromise, whether or not it complied with the rules. It is doubtful if the Court in Whitney intended to sanction deliberate disregard of informal offers.

  1. The offer in the present case was made on 7 April 2011. The terms of the offer and the covering letter are set out by Tobias AJA at [113] and [114]. The agreement of the offeror that he would pay the offeree's costs "as agreed or assessed" was in the common form of offers made prior to the decision of this Court in Old v McInnes [2011] NSWCA 410, delivered on 22 December 2011, some eight months after the offer was made. No authority in this Court is referred to in Old at [105], supporting the proposition that such an offer was not in compliance with the r 20.26. There are offers recorded in numerous judgments in this Court which are in similar form and not treated as non-compliant. It is clear that the offeror in the present case would not have envisaged that the offer was not effective in accordance with the rules. That expectation has, however, been proved to be retrospectively wrong. It also appears, by a further retrospective statement of principle, that it cannot be treated as a Calderbank offer.

  1. In Grbavac v Hart [1997] 1 VR 154 at 165, Hayne JA stated:

"[I]t is open to a judge exercising the discretion about the disposition of the costs of a proceeding to have regard not only to formal offers that may have been made pursuant to Rules of Court but, in appropriate circumstances, to informal offers of compromise that may have been made."

  1. In Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344, after identifying the objects of the Court rules then in force as considered in Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Kirby P, Mahoney JA and Samuels AJA), this Court held:

"7 These objects have been accepted as relevant to informal offers of compromise: Grbavac v Hart [1997] 1 VR 154 at 165 (Hayne JA). The informal offer must, in the present case, operate against the background of the Court's discretion with respect to the award of costs which is to be exercised, presumptively, in favour of an order that 'the costs follow the event': Civil Procedure Act 2005 (NSW), s 98 and UCPR, r 42.1. One way to view an offer of compromise is to treat it as a basis for the court otherwise ordering; an alternative view is that it changes the proper characterisation of 'the event' or outcome: Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2008] NSWCA 85 at [13]. On the latter view, the party who fails to accept the offer and obtains no better result in the judgment is, from the date of the offer, treated as the unsuccessful party.
8 The willingness of the courts to take account of a 'without prejudice' offer of settlement in disposing of costs was originally tempered by the view that the practice should only be adopted where the alternative of a payment into court was unavailable: Cutts v Head [1984] Ch 290. The practice was, however, adopted in this jurisdiction without the restriction: Messiter v Hutchinson (1987) 10 NSWLR 525 (Rogers J); SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [45] (Giles JA). The expansion of formal rules providing for offers of compromise has not diminished the willingness of the courts to act upon informal offers, rather the contrary. However, there is no presumption that an offeree who does not accept an offer and does not obtain a judgment more favourable than the offer will necessarily pay indemnity costs from the date of the offer: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19] (Santow JA, Stein AJA agreeing); Jones v Bradley (No 2) [2003] NSWCA 258 at [6]-[9]; Ambulance Service of New South Wales v Worley (No 2) [2006] NSWCA 236; 67 NSWLR 719 at [18]. The approach frequently adopted in this jurisdiction has been to ask two questions, namely whether -
(a) there was a genuine offer of compromise, and
(b) it was unreasonable for the offeree not to accept it."

  1. It is well established that the reference in the rules to costs following "the event" do not have any narrow or technical meaning and may extend beyond the final judgment or order in favour of one party or another. The purpose of a trial being to quell an unresolved controversy, the "event" should be identified by reference to that which is in issue, rather than that which is not in controversy. If one party makes a bona fide offer to settle a claim for damages by payment of a specific amount, in circumstances where the only issue in dispute is the amount of damages, there is in substance no longer a dispute as to the size of the claim up to that amount. Thereafter, the party which declines to accept the offer has pursued a dispute as to a claim for a greater amount. The "event" may properly be understood as success or failure in respect of that greater sum.

  1. In the present case, the plaintiff received a reasonable, indeed generous, offer, as demonstrated by the outcome in this Court. No doubt calculation of damages is an uncertain exercise, but that is not a reason to require a defendant who has made a reasonable offer to be forced to litigate at his or her own cost in circumstances where the offer is refused and not bettered.

  1. In the present case there was no evidence to support the implausible inference that the offer was treated as otherwise than an genuine offer with potential cost consequences if refused. Nor was there any other basis suggested upon which refusal of the offer might be considered "reasonable". The offer of compromise was undoubtedly genuine and it was unreasonable for the plaintiff not to accept it. Those circumstances allow a departure from the ordinary rule that the plaintiff obtain her costs from the date of the offer and support an order that, from that date, the plaintiff should pay the defendant's costs of the trial. Although she should reasonably have perceived herself at risk of an indemnity costs order against her in the event that she failed to better the offer, given the fact that the offer is now understood to be outside the terms of r 20.26 and not capable of being treated as a Calderbank offer, it is inappropriate to order indemnity costs. Absent contrary authority, the defendant would have been entitled to such an order.

Order as to costs

  1. Instead of the order (4) proposed by Tobias AJA, I would propose the following:

(4) Set aside order (2) made by Davies J on 24 July 2012, as varied on 19 September 2012, and in lieu thereof order that the respondent pay the appellant's costs up to and including 7 April 2011 and thereafter the appellant pay the respondent's costs, including costs thrown away by reason of the adjournment granted on 22 June 2011, such costs to be assessed on the ordinary basis.

  1. MACFARLAN JA: I agree with the orders proposed by Tobias AJA and with his Honour's reasons. I also agree with Basten JA's observations concerning the decision in Goodrich Aerospace v Arsic.

  1. TOBIAS AJA: Stella Ziliotto ("the Appellant") instituted an action against Dr Hakim ("the Respondent") alleging negligence and breach of contract in the performance of abdominal surgery on 28 February 2008. The Respondent admitted liability, so that the only matters in issue at trial were causation, quantification of damages and costs.

  1. The matter was heard by Davies J on 20-22 June, 4 August and 7-9 December 2011. On 24 July 2012, his Honour delivered judgment, awarding damages in the amount of $1,373,035 and ordering that the Respondent pay the Appellant's costs: Ziliotto v Dr Hakim [2012] NSWSC 610 ("Damages Judgment"). The Respondent then sought variation of his Honour's costs order, relying on an offer of compromise dated 7 April 2011 which the appellant did not accept. The parties were heard on that issue on 3 September 2012. On 19 September 2012, his Honour varied the costs order made on 24 July 2012, ordering that the Respondent pay the Appellant's costs on the ordinary basis up to and including 7 April 2011 and that thereafter the Appellant pay the Respondent's costs on an indemnity basis: Ziliotto v Dr Hakim (No 2) [2012] NSWSC 1079 ("Costs Judgment").

  1. The Appellant appeals from the primary judge's assessment of damages and orders in relation to costs. The Respondent contends that the primary judge made no appellable error in his assessment of damages. In relation to costs, the Respondent seeks an extension of time in which to file a notice of contention, advancing three grounds, other than those on which the primary judge relied, upon which it is submitted that his Honour's costs orders should be affirmed.

Background

  1. On 28 February 2008, the Appellant, who was then aged 53, was admitted to the Eastern Suburbs Private Hospital under the care of the Respondent for an abdominal hysterectomy, left oophorectomy and abdominal lipectomy ("the procedure"). During the course of the procedure, the Respondent ligated the external iliac artery and divided and ligated the external iliac vein, which necessitated emergency surgery and caused serious permanent damage to the Appellant's right leg.

  1. The Appellant's injuries and disabilities were described in detail by the primary judge at [17]-[59] of the Damages Judgment. They included the worsening of the Appellant's lower back pain, which she had suffered for about 20 years; constant pain affecting the whole of the her lower right leg, foot and toes; severe cramp-like pain in her lower right leg, foot and toes and weakness and loss of sensation in those body parts; tingling and pins and needles in her right foot and difficulty moving the toes of her right foot.

  1. The Appellant uses a walking stick at home, and when she goes out for local activities such as shopping she uses either a manual wheelchair or an electric scooter. Whilst she is able to walk on flat surfaces and up and down stairs with difficulty, she avoids walking on uneven ground or up and down hills, avoids kneeling and is unable to squat. She has difficulty sleeping due to pain and discomfort.

  1. Due to her inability to stand for any significant period of time, the Appellant is now unable to carry out any domestic tasks including the preparation of other than very simple meals. Her pain and loss of mobility have also occasioned great problems in pursuing cultural interests and other social activities. Pain and discomfort have also prevented her from enjoying a normal sexual life. The Appellant gave evidence that her marriage had deteriorated as a result of her problems, and during the course of the hearing in the Court below, she was divorced from her third husband, to whom she had been married since 2006.

  1. Before moving to Australia in 2007, the Appellant lived in Argentina, where she spent the majority of her working life as a high school literature teacher (for three years, as school principal) and as the owner of a childcare centre. From 2007 she worked in Australia as an independent contractor providing childcare services. It was not disputed at trial that as a result of the injuries she sustained, the Appellant would probably not be able to return to work on the open labour market.

  1. Prior to the procedure, the Appellant suffered from a number of health problems. The primary judge found (at [54]) that in 1989 she consulted a psychotherapist because she was distressed and depressed. She was then medicated for two years with the antidepressant Imipramine. His Honour also found (at [48]) that at the end of her second marriage in 1998, the Appellant was placed on antidepressant medication and had to cease work for a period of six months. In 2004, following the death of her mother, the Appellant again experienced depressive symptoms and was prescribed Efexor, which she was still taking at the date of the procedure (at [49]). In March 2005 she was admitted to a psychiatric hospital for approximately six and a half weeks. Following her discharge she continued to take Venlafaxine and Clonazepan until 2007, after which she continued on Venlafaxine alone (at [50]).

The issues on the appeal

  1. The primary judge conveniently summarised his award at damages (at [202]) as follows:

(1) Non-economic loss

$338,000

(2) Past out-of-pocket expenses

$157,000

(3) Interest on past out-of-pocket expenses

$3,192

(4) Future out-of-pocket expenses

(a) Occupational therapy

$9,260

(b) Podiatry

$14,070

(c) Psychiatrist

$19,500

(d) Psychiatric admission

$25,000

(e) Pain management

$1,380

(f) General Practitioner

$12,425

(g) Hydrotherapy

$11,000

(h) Orthopaedic provision

$5,000

(i) Future medication

$40,588

(j) Aids and equipment

$25,000

(k) Vascular surgeon

$5,000

(5) Past care

$47,700

(6) Future care

$114,400

(7) Past economic loss

$151,746

(8) Interest on past economic loss

$18,744

(9) Future economic loss

$153,505

(10) Accommodation costs

$130,125

(11) Home maintenance costs

$15,400

(12) Transport costs

$75,000

Total:

$1,373,035

  1. The Appellant's challenges to the primary judge's award of damages were confined to the following items of damage:

  • Future care (Item 6 above) being personal care, domestic assistance and shopping assistance;
  • Future economic loss (Item 9 above);
  • Future out-of-pocket expenses relating to
  • Psychiatrist (Item 4(c) above);
  • Psychologist (no award);
  • Pain management (Item 4(e) above);
  • General Practitioner (Item 4(f) above);
  • Remedial massage (no award);
  • Hydrotherapy (Item 4(g) above);
  • Transport costs (Item 12 above).

Future Personal Care

The Primary Judge's Findings

  1. At [147] of his reasons, his Honour noted that the Appellant claimed 13.5 hours per week personal care and domestic assistance for the next five years, comprising 7 hours of personal care, 4.5 hours of domestic assistance and 2 hours of assistance with shopping. Thereafter, she claimed 27.5 hours per week personal care and domestic assistance, comprising 21 hours of personal care, 4.5 hours of domestic assistance and 2 hours of assistance with shopping.

  1. At [149] and [150] the primary judge summarised the evidence of the rehabilitation experts, Dr Dalton and Dr Buckley, and the occupational therapists, Ms Flanagan and Ms Cheel, with regard to future care. His Honour did not refer to the evidence of Dr Buckley in regard to personal care, but noted that the occupational therapists considered that future personal care assistance was not required, nor was attendant or companion care.

  1. At [151] his Honour stated that there were reasons to prefer the views of the occupational therapists over those of the rehabilitation specialists, given that the occupational therapists had observed the Appellant in her own home and that "their experience generally would make them the better judges of an injured person's needs for the sort of assistance under consideration". Nevertheless, finding that the occupational therapists had provided no real explanation of why the Appellant's need for domestic assistance would diminish so greatly when she ceased to live with her husband, his Honour accepted the view of the rehabilitation specialists in regard to domestic assistance. At [152] he accepted the occupational therapists' assessment of the Appellant's need for a handyman/gardener and window-cleaning and at [153] he accepted their view that no separate allowance for shopping assistance was warranted, a view which accorded with Dr Dalton's opinion. He made no finding in regard to personal care and therefore made no award with respect to that item.

The Parties' Submissions on the Appeal

  1. The Appellant submitted that, in the light of the findings that she and her husband had divorced (at [43]), that her daughter would not remain living with her in the long term (at [152]), and that she had sustained a serious fall requiring hospitalisation on at least one occasion (at [22]), the claim for personal care ought not to have been dismissed without adequate reasons being provided. On the basis of the opinion of Dr Buckley, the Appellant sought an award for personal care at commercial care rates in the amount of $628,081.

  1. The Respondent submitted first, that the primary judge was clearly aware of the Appellant's claim for personal care and, secondly, that there was no requirement to provide explicit findings in regard to each disputed piece of evidence. In any event, there was no reasonable requirement for personal care in circumstances where:

(a)   The evidence of the occupational therapists was that the appellant was independent in her personal care routine;

(b)   Dr Dalton considered the appellant independent in her personal care and did not consider that there was good reason to suppose that she would deteriorate in the future;

(c)   The safety issues referred to by Dr Buckley no longer arose, as a modified approach to showering had been adopted and the risk was further minimised by the Appellant's moving into a one-storey home for which she had been compensated.

The Evidence of the Rehabilitation Specialists

  1. Dr Buckley, who was qualified by the Appellant, provided two reports. In his first report dated 8 June 2010, he expressed the view that the Appellant would require one hour of personal care per day, increasing after five years to two hours in the morning and one hour at night. The basis of this opinion was stated as follows:

[The Appellant] does require assistance for showering, and I therefore propose that she has daily personal care assistance of one hour, to help her with rising, showering and dressing.
In my opinion, due to her severely impaired mobility, this is likely to worsen, and in five years, there will be an increased requirement for assistance, which will rise to a requirement for two hours in the morning and one hour in the evening.

  1. Elsewhere in his report Dr Buckley referred to the Appellant's statement that she required assistance to get in and out of the shower and to dry herself after the shower "because she cannot stand the 'rubbing' of a towel on her leg, due to the severe sensitivity." He also expressed the view that "the severity of weakness in the leg is likely to lead to rapid progression of osteoarthritic change, if she develops any significant capacity to mobilise".

  1. In his second report dated 23 March 2011, Dr Buckley responded to a number of questions addressed to him by the Appellant's lawyers. In response to a question as to why he increased the personal care allowance from one hour per day to three hours per day after five years, he stated:

In my opinion, her severely impaired mobility will cause the loss of general physical fitness, and reduced exercise tolerance, thus requiring an increased level of assistance.

  1. He also expressed the view that the Appellant was more likely to fall in the future, and to do so with increasing frequency, "because of her very poor exercise tolerance, and thus reducing level of fitness, balance and lower limb strength."

  1. Dr Dalton, who was qualified by the Respondent, likewise provided two reports. In his report of 19 April 2010 he did not address the issue of the Appellant's personal care requirements. In his report of 24 November 2010, having noted Dr Buckley's recommendation that the Appellant receive one hour of personal care per day to assist her with rising, showering and dressing, he stated:

The relative benefits of aids such as a shower chair and handrail, which would in my view enable Mrs Ziliotto to shower independently has (sic) not been considered.

However, Dr Dalton did not express a concluded view as to the Appellant's requirements for personal care.

  1. Drs Buckley and Dalton subsequently held two joint conferences. In their first joint report dated 10 June 2011, their opinions in relation the Appellant's personal care requirements were recorded as follows:

2. On the balance of probabilities, does the plaintiff require personal care assistance?
Dr Buckley: Believes so due to safety issues entering and leaving the shower.
Dr Dalton: Believes not - due to the Occupational Therapist report and the further reasons stated in his own report, and also due to the observations of the Occupational Therapist Claire Cheel which indicated that Mrs Ziliotto is currently independent in her personal care routine.
3. On the balance of probabilities, does the plaintiff require assistance with showering?
Dr Buckley: Believes so, see question 2.
Dr Dalton: Believes not, see question 2. On the assumption that a modified approach is used and functional aids are available in the home.
4. On the balance of probabilities, does the plaintiff require assistance with dressing?
Dr Buckley: She does not require assistance with dressing.
Dr Dalton: She does not require assistance with dressing.
5. How many hours personal care does the plaintiff require each week?
Dr Buckley: Believes 1 hour per day, increasing to 3 hours a day after 5 years due to increasing dependency and falling fitness levels.
Dr Dalton: Believes no assistance is required.

  1. The second joint conference was held on 2 September 2011. The report of that conference recorded the following:

Dr. Dalton: Believes there are no future requirements for attendant or companion care. Having regard to the transcripts of evidence of Mrs. Ziliotto and her husband and having regard to the occupational therapist report Dr Dalton considers that Mrs Z is independent in her personal care routine. She is able to undertake meal preparation, cooking and other activities of day to day living without a need for attendant care.
Dr. Buckley: Proposes one hour personal care per day increasing to 3 hours a day after 5 years due to increasing dependency and falling fitness levels.

  1. Drs Buckley and Dalton gave oral evidence concurrently, in the course of which the former stated that the main reason for the Appellant's requiring personal care was that "she needs somebody to help [her] in and out of the shower, primarily, for safety reasons". Dr Buckley also expressed the view that the Appellant would gradually deteriorate as she aged and that as she became less mobile and more dependent, she would need more help in other aspects of her daily routine. The deterioration accompanying normal ageing would be more intrusive more quickly, with the result that within only a few years she would require significantly more assistance because of her disability.

  1. Dr Dalton observed that the occupational therapists had identified that the Appellant did not require assistance in accessing the shower, other than when she was suffering from a broken toe and foot. Based on his assessment, if the Appellant had appropriate aids, no safety issues would arise. Furthermore, Dr Dalton saw no reason to assume that the requisite level of assistance would increase due to ageing, although if the acknowledged risk of increased difficulty in remaining balanced materialised, a walking frame, rather than a walking stick, might be required.

The evidence of the occupational therapists

  1. Ms Flanagan, who was qualified by the Appellant's solicitors, provided two reports. In her report of 1 July 2010 she outlined the Appellant's requirements for personal care, concluding as follows:

Provided [the Appellant] has a suitably designed bathroom including a walk in shower recess that can accommodate a shower stool, has a hand held shower hose and grab rails, has not (sic) slip flooring, she will not require assistance with personal care at the current time.

Ms Flanagan's second report dated 8 March 2011 was prepared on the assumption that the Appellant would be living in separate accommodation after divorcing her husband. That report contained no recommendation for additional personal care.

  1. Ms Cheel, who was qualified by the Respondent's solicitors, prepared a report dated 10 May 2011. She stated that the Appellant was "currently independent in her personal care routine using a modified approach with set up of the shower stool in the shower recess", a procedure the need for which would be obviated by modifications to the Appellant's bathroom. Accordingly, she considered that the Appellant had a "nil requirement for current and future personal care assistance". As is apparent, this opinion accorded with that of Ms Flanagan.

  1. Mses Flanagan and Cheel prepared three joint reports. In the first of those reports dated 9 June 2011, Ms Flanagan, whilst noting Dr Buckley's opinion regarding personal care requirements in five years time, recommended no personal care assistance other than monthly toenail care, a recommendation with which Ms Cheel agreed. That opinion was repeated in their final joint report dated 19 September 2011 which was prepared on the assumption that the Appellant would divorce her husband and live in separate accommodation. Whilst Mses Flanagan and Cheel gave oral evidence concurrently, no further evidence was elicited in regard to the Appellant's future personal care requirements.

Was the Appellant Entitled to an Award for Future Personal Care?

  1. Although the primary judge made no finding in this regard, I am not of the view that his Honour erred in making no award of damages for personal care on the basis of present need. As his Honour stated at [151] (see [38] above), there were reasons to prefer the views of the occupational therapists to those of the rehabilitation specialists - in particular, the fact that both therapists had observed the Appellant in her own home. The occupational therapists and Dr Dalton were all of the view that the Appellant did not presently require personal care. Ms Flanagan, the Appellant's own witness, gave evidence that she was independent in her personal care routine. The weight of the evidence was clearly against any award for the cost of personal care as at the date of trial.

  1. However, in my view the evidence established that there was a significant chance that the Appellant would require personal care in the future as a consequence of her injury. As noted above, the evidence of Dr Buckley was to the effect that the ordinary consequences of ageing would be exacerbated by her injury. Furthermore, she was likely to experience falls more frequently in the future due to her poor exercise tolerance and consequent loss of physical fitness and balance. This evidence was not contradicted by the occupational therapists. Indeed, Ms Flanagan expressly accepted that as an occupational therapist, she was not able to determine the Appellant's likely condition after 20 years. The occupational therapists also acknowledged that they had made no allowance for the effects of increasing age in determining the Appellant's needs arising from her injury. As is apparent from the evidence to which I have referred at [47] and [49] above, Dr Dalton's opinion relied heavily on that of the occupational therapists. The difficulty, however, was determining precisely when in the future the Appellant's need for personal care would manifest itself.

  1. It is well-established that where it is necessary to consider an event which may happen, "unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages": Malec v J C Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 at 643 per Deane, Gaudron and McHugh JJ; see also Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 at 119 per Deane J; Marsland v Andjelic (1993) 31 NSWLR 162 at 176 per Kirby P and Meagher JA; cf Miller v Galderisi [2009] NSWCA 353 at [21]-[24]. The percentage of agreed or assessed damages awarded reflects the "degree of probability" that, in the future, the event will occur: Malec at 643; Marsland at 176.

  1. However, in many cases the Court is faced with the difficulty that damages founded on "hypothetical evaluations defy precise calculation": Malec at 640. Consequently, as stated by McColl JA in Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13; (2012) 83 NSWLR 302 at [30]:

there is a point (which may be differently assessed by different courts) beyond which the selection of a figure for economic loss is so fraught with uncertainty that the preferred course is to award a lump sum as a "buffer", without engaging in an artificial exercise of commencing with a precise figure, and reducing it by a precise percentage.

That approach is not precluded by s 13 of the Civil Liability Act: see Penrith City Council v Parks [2004] NSWCA 201; Allianz v Kerr at [30] and the cases cited therein.

  1. In my view, this is a case in which the award of a buffer is appropriate. To determine an award on the footing that personal care will be required for a fixed period commencing on or about a particular date in the future, and then discounting the award by a selected percentage, would in this case be fraught with difficulty leading to uncertainty and speculation. It is in this context that I cannot accept Dr Buckley's view that allowance should be made for 3 hours of personal care per day after five years. The particular needs which that number of hours of care would serve were not adequately identified; nor was the basis for the commencement of that regime in five years, rather than at some other date, explained. There is thus no definitive starting point for the determination of a calculated award.

  1. In determining the size of an appropriate buffer, it is necessary to take into account the Appellant's present independence in her personal care; the fact that she has been compensated for the cost of accommodation which will facilitate the continuance of that independence; and the paucity of evidence as to the likely consequences of age-related deterioration. In the light of these considerations, I would allow a buffer of $50,000.

Domestic assistance

  1. The primary judge allowed the Appellant's claim for future domestic and other assistance on the basis (at [155]) that she was entitled to receive 5.6 hours per week comprising:

  • 4.5 hours per week of domestic assistance;
  • 4 hours per month gardening and handyman assistance;
  • 10 hours per year for window cleaning.

  1. The Appellant did not seek to challenge the primary judge's assessment of the number of hours to which she was entitled. However, she submitted that his Honour erred in allowing the claim (at [156]) at the rate of $24.27 per hour which, it was said, applied to services provided gratuitously. As the Appellant would be living on her own, commercial service providers would be necessary to meet her future care requirements. It was therefore submitted that the primary judge ought to have assessed future care and domestic assistance by reference to the evidence as to the commercial rates of Premier Care, a service provider. The weekday rate provided by Premier Care was $40.15 per hour inclusive of GST. Accordingly, the Appellant submitted that the claim should have been allowed in the amount of $189,157.89 (5.6 x $40.15 x 841.3).

  1. The Respondent submitted that in this case there was no proper basis for accepting the commercial rate quoted by Premier Care. Contrary to the Appellant's submission, his Honour did not allow the rate applicable where services are provided gratuitously. Rather, at trial the Respondent had submitted that a reasonable rate was $20 per hour having regard to the rate paid by the Appellant in the past and the costs of engaging persons in the Fairfield area where the Appellant had been residing.

  1. There is no indication in his Honour's reasons as to the basis upon which he calculated the cost of future domestic assistance at the rate of $24.27 per hour. However, in the light of the fact that that rate is identical to the rate at which damages for past assistance were assessed (see [146]), the inference can readily be drawn that his Honour employed the statutory rate for gratuitous care. He did so despite the fact that he found (at [152]) that the Appellant's daughter would not remain living with her in the long term.

  1. However, in my view, there is adequate evidentiary support for the adoption by his Honour of the rate of $24.27 per hour notwithstanding that that rate may have been adopted on an erroneous basis. The evidence of Ms Cheel with regard to the rates quoted by Premier Care was as follows:

Ordinarily I would imagine that if I was in Mrs Ziliotto's position I wouldn't be approaching a large commercial agency where I might have to be paying up to $40 an hour, and just as she has done previously, she contacted a local cleaner in her area which charged her $20 per hour. It would be unlikely for her to approach one of these large commercial cleaning firms.

Ms Cheel stated that she had obtained quotes through a number of online domestic assistance search agencies, all of which were in the range of $20-25 per hour. Some of those persons quoted references and stated that they had insurance coverage. Mrs Cheel rejected the suggestion that she had obtained quotes at higher rates.

  1. This evidence adequately established that domestic care services were obtainable at or about the rate at which his Honour awarded damages under this head. Although the argument was put in oral submissions that the Court, in determining an appropriate rate, should have regard to what was recommended by persons used to recommending competent and reliable agencies, there was no evidence to suggest that the services available through online search agencies were inadequate. Accordingly, there is no proper basis for interfering with his Honour's assessment.

Shopping Assistance

  1. As noted above (at [38]), the primary judge rejected the Appellant's claim for shopping assistance. His Honour's reasons for doing so were brief:

153 I do not consider that any separate allowance should be made for shopping assistance. The occupational therapists did not consider it was needed and that opinion accorded with Dr Dalton's view.

  1. The Appellant submitted that the primary judge fell into error by failing to provide adequate reasons for dismissing this claim. It was contended that it is not appropriate for a trial judge merely to set out the evidence of the experts and then assert that, having heard all the witnesses, he or she prefers one witness over another. However, in this case the primary judge's reasons indicated that he accepted the majority of expert opinion over the minority. Nevertheless it was submitted that this was not a proper basis to reject a claim properly made and supported by expert evidence. Reliance was placed on Goodrich Aerospace Pty Limited v Arsic [2006] NSWCA 187; (2006) 66 NSWLR 186 at [28] per Ipp JA. That statement related to the necessity of giving adequate reasons for demeanour findings. Its relevance in the present context is not apparent.

  1. The Appellant further submitted that in the light of Dr Buckley's evidence that she required assistance with shopping, and the contrary view of Dr Dalton that such assistance was not required "given [her] access to online grocery shopping and a shopper scooter", the issue for the primary judge to determine was whether it was reasonable to restrict the Appellant to those means of meeting her shopping needs. Relevant to the determination of this question were said to be "the social and psychological benefits of giving the [A]ppellant access to the community as recommended by Dr Buckley". In any event, the Appellant contended that it was inadequate to refuse any allowance for shopping assistance on the basis that the Appellant could access online shopping and home delivery services, yet provide no allowance for delivery costs.

  1. The Respondent submitted that his Honour's conclusion in regard to this claim was supported by his earlier findings that the Appellant was able to use an electric scooter to travel to places nearby (at [33]); that she was able to walk on flat surfaces and, with difficulty, up and down stairs (at [29]); and that she was able to travel to the local shopping area across the road from her home and to the medical practitioner and hydrotherapy sessions within the local area (at [38]). Furthermore, it was submitted that the Appellant had given evidence that she was able both to go the shops by herself and to access the internet on her own computer. Accordingly, the primary judge's findings should not be disturbed.

  1. I do not consider that the Appellant has demonstrated any error in the primary judge's reasoning on this issue. His Honour considered the Appellant's need for shopping assistance within the context of her other claims for future care. His reasons for preferring the views of the occupational therapists in relation to matters other than domestic assistance (as to which he considered their reasoning inadequate) are stated at [151] to which I have already referred (at [38] above). As his Honour noted, the occupational therapists' view accorded with that of Dr Dalton such that the weight of the evidence was against the making of any award for shopping assistance.

  1. I would also reject the Appellant's claim for additional home delivery charges arising from shopping online. No claim was made for those charges in the court below and there was no evidence to support them.

Future Economic Loss

The Primary Judge's Findings

  1. The primary judge assessed (at [176]) the Appellant's future loss of earnings on the basis (as required by s 13 of the Civil Liability Act 2002) that the most likely future circumstance but for the injury was that the Appellant would have continued to work in the childcare business on a full-time basis until she was aged 60 years (she was 57 at the date of judgment) and would thereafter have worked part time in that business until she was aged 63 years.

  1. In making that determination, his Honour took into account the Appellant's pre-injury employment in Australia; her history of employment in the childcare business in Argentina; his finding that but for the injury the Appellant would probably have remained married and her husband would have retired some time after his 55th birthday; and the Appellant's other, unrelated health problems, including arthritis and lower back problems which he considered made it unlikely that the Appellant would have been able to continue working full time in the childcare business beyond about the age of 60 years. Taking into account the Appellant's age and other health problems, including her depression, his Honour applied (at [178]) a discount of 20% for vicissitudes. Accordingly, he calculated (at [179]) total damages for future economic loss of $153,505.

The Parties' Submissions on the Appeal

  1. The Appellant submitted that there was no basis on which to conclude that a professional and motivated woman would have retired early merely because her husband planned on early retirement. It was contended that there was no evidentiary basis for the finding that the Appellant planned an early retirement, it never having been put to her that she intended to cease her working life merely because her husband planned on accepting a potential redundancy package. The Appellant submitted that, on the contrary, she had given unequivocal evidence that she did not intend to cease employment before 65 years of age. Whilst acknowledging the existence of her other health problems, she submitted that despite those health issues, at the age of 53 she was managing up to 70 hours a week in the childcare industry. There was no expert evidence to the effect that the deterioration of her health would have prevented full-time employment in that industry or, indeed, any other industry.

  1. The Appellant further submitted that by applying a higher rate for vicissitudes, the primary judge effectively discounted her claim twice resulting in inadequate compensation for her loss of earning capacity. The Appellant contended that his Honour ought to have assessed future economic loss in the sum of $307,989. That figure was based on her working full-time until she was 67.

  1. The Respondent submitted that it had been put to the Appellant that she would retire before the age of 65. Although she disagreed with that proposition, the evidence established that her health problems included osteoarthritis, for which she was taking anti-inflammatory and other medications to alleviate her strong pain; lower pain problems, for which she was taking medication; abnormal liver function; and bilateral pain in her elbows, shoulder ridges, neck, hand, upper back and left leg. The Appellant was also experiencing memory loss. Moreover, the Respondent submitted that there was no evidence from the Appellant that she would work to the age of 67.

  1. The Respondent further submitted that there was no basis for the Appellant's contention that by applying a rate of 20% for vicissitudes, the primary judge discounted the Appellant's claim twice. Rather, in calculating the appropriate rate for vicissitudes, his Honour was accounting for matters not the subject of any earlier reduction in her working life due to her pre-injury health problems, including her depression, which the two consultant psychiatrists qualified by the parties considered would likely have resulted in periods in which she was unemployable, and the fact that she was employed under a fixed term contract which stipulated that the employer did not warrant that it would issue any work orders to her. Thus the discount of 20% was reasonable.

Did the Primary Judge Err in Assessing Future Economic Loss?

  1. Although the evidence clearly established that the Appellant had a number of pre-injury health problems for which she was receiving treatment, there was no expert evidence as to the likely effects of those problems and, in particular, whether they would prevent her from working full-time until the age of 65. The Appellant's evidence was that she had continued to work in spite of lower back problems over a period of some twenty years. It was not put to her that those problems or the arthritis in her hands would prevent her from working until that or any other age.

  1. In my view, in determining the Appellant's most likely future circumstances but for the injury on the basis that her pre-injury health problems would have prevented her from working full time past the age of 60, whilst allowing a greater than usual discount for vicissitudes due to those same problems, his Honour did engage in "double discounting". I do not accept the Respondent's submission that the discount for vicissitudes accounted for matters not considered in his Honour's determination of the Appellant's likely future circumstances, in the light of the fact that (at [178]) that discount was stated to have been made "bearing in mind her age and other health problems, including her depression". That statement makes no distinction between the physical health problems which had been taken into account in assessing her most likely future circumstances and the depression which arguably had not.

  1. Whilst it was clearly permissible to make some allowance for the possibility that the Appellant's pre-injury health problems would have obliged her to retire before the age of 65, in the absence of evidence, I do not consider it appropriate to assess her most likely future circumstances on that basis. I would allow damages for future economic loss on the basis that the Appellant's most likely future circumstances but for the injury were that she would have worked full-time until the age of 65. It was not put to the Appellant that she would have worked to the age of 67, and I would not allow damages to that age. The appropriateness of a discount of 20 per cent for vicissitudes, if the usual percentage was to be increased to take into account pre-existing health problems, was conceded in the Court below.

  1. Accordingly, I would allow damages for future economic loss in the sum of $258,855 (representing a wage of $920.80, as found by the primary judge, with a multiplier of 351.4, adjusted by 20 per cent for vicissitudes).

Future Out-Of-Pocket Expenses

Hydrotherapy

  1. His Honour noted (at [110]) that the issue of hydrotherapy involved two questions. The first was whether the Appellant should have a small heated swimming pool at home in which hydrotherapy could be conducted. The second was how many times per week hydrotherapy was reasonably required. A subsidiary issue then arose (at [116]) as to whether the Appellant needed a personal trainer to undertake the hydrotherapy or whether it would be sufficient for her to be supervised at a public pool. The first issue was determined against the Appellant which she does not challenge.

  1. After setting out the evidence of the rehabilitation specialists and occupational therapists, his Honour determined (at [119]) that the Appellant should be allowed $10,095.65, representing the cost of an annual pool pass of approximately $600 for the remainder of her life expectancy, which was rounded up to $11,000 as representing an additional small sum to enable occasional visits for hydrotherapy at Rehab Solutions, a rehabilitation centre.

  1. The Appellant submitted that the primary judge did not attempt in his reasons to address "the contested issues of safety or motivation". It was suggested that his Honour had based his finding that the Appellant was able to undertake hydrotherapy at a public pool on the mistaken belief that she had been able to access appropriate hydrotherapy at a public pool since undertaking that form of therapy. It was also submitted that the provision of minimal hydrotherapy sessions at Rehab Solutions and an annual pool pass was manifestly inadequate. This was because public pools were not designed for the disabled and because the Appellant required a treatment structure or regime sufficient to motivate her to continue to attend. Accordingly, the Appellant contended that an allowance of $151,434 should have been made to enable her to continue for the rest of her life expectancy of 31.67 years her hydrotherapy sessions at Rehab Solutions three times per week at $60 per session.

  1. The Respondent submitted that his Honour's finding was supported by the evidence of Dr Dalton, Ms Flanagan and Ms Cheel. It was also contended that in cross-examining the occupational therapists, senior counsel for the Appellant did not seek to contradict their assessment of the Appellant's needs in regard to hydrotherapy. Thus the allowance made by the primary judge should be accepted as reasonable.

  1. In my view, the Appellant has not demonstrated any error in the primary judge's approach. Although his Honour did not refer in detail to the evidence of Drs Bahr, Buckley and Dalton, he was clearly aware of the competing expert evidence as to the appropriate or alternative facilities for the Appellant to undertake hydrotherapy. None of that evidence suggested that the Appellant required one-on-one supervision while performing hydrotherapy exercises. The oral evidence of Dr Dalton, which his Honour clearly preferred to that of Dr Buckley on this issue, was as follows:

GROSS: When you refer to the local heated pool was that the reference to the local hydrotherapy centre?

  1. Since writing the foregoing reasons I have had the benefit of reading in draft the reasons of Basten JA and, in particular, his Honour's remarks with respect to the costs of the trial. The difficulty I have with his Honour's analysis relates to his remarks at [20] of his reasons. I note that they reflect the "alternative view" referred to by the Court in Miwa at [7] and recorded by his Honour at [19]. The issue concerns the identification of the "event" for the purpose of UCPR, r 42.1. Basten JA expresses the view that where an offer of a specified amount of damages is made, the only issue in dispute is the other party's claim for a greater amount than that offered.

  1. My problem with this approach is that the issue of whether to make an order other than that costs should follow the event is to be determined as at the time of judgment. The fact that a genuine offer has been made by a defendant and unreasonably refused and judgment for a lesser amount achieved by the plaintiff is the trigger for the making of such an order. But once the offer is refused, unless an admission is made that the plaintiff is entitled to the amount offered so that the only dispute is whether the plaintiff is entitled to more, then the dispute relates to the total amount of damages to which the plaintiff is entitled.

  1. This is what occurred in the present case, where the respondent contended at trial for an award of damages totalling $828,670, which was significantly less than the Offer. Yet the appellant achieved judgment for a significantly greater sum ($1,373,035) and so was, in that sense, successful in resisting the respondent's damages case at trial.

  1. I appreciate the force of Basten JA's remarks at [21] of his reasons and generally I agree with what he says at [22] except as to the order which his Honour proposes should be made, namely, that the appellant should pay the respondent's costs of the trial from the date of the Offer. Although the appellant may have understood that if she did not accept the Offer and achieved judgment for a lesser amount, she would have to pay the respondent's costs from the date of the Offer on an indemnity basis, she was, as it turns out, not subject to that risk and the primary judge was in error in finding to the contrary.

  1. In my view it is not appropriate in this case to order that the appellant pay the respondent's costs from the date of the Offer albeit on the ordinary and not on an indemnity basis. The latter basis was never an available option, whether under the Rules or otherwise. No relevant misconduct of the appellant was alleged.

  1. The discretion as to what order to make is therefore at large albeit informed by all the circumstances of the case including the attitude taken as to damages by the respondent at trial. Certainly the appellant is not entitled to her costs after the date of the Offer but it does not follow from that that she should pay those of the respondent. I therefore confirm the view expressed at [139] above that each party should pay his or her own costs from the date of the Offer.

Orders

  1. Accordingly, the orders I propose are as follows:

(1) Extend the time in which the Respondent may file his Notice of Contention to the date being seven days from the publication of these reasons;

(2) Appeal allowed in part;

(3) Set aside Order (1) made by Davies J on 24 July 2012 and in lieu thereof judgment for the Appellant in the sum of $1,528,385;

(4) Set aside Order (2) made by Davies J on 24 July 2012 as varied on 19 September 2012 and in lieu thereof order that the Respondent pay the Appellant's costs at first instance on an ordinary basis up to and including 7 April 2011 and that thereafter there be no order as to the costs of the proceedings other than in relation to the Respondent's costs thrown away by reason of the adjournment granted on 22 June 2011, such costs to be paid by the Appellant;

(5) The Respondent pay 60 per cent of the Appellant's costs of the appeal but have a certificate under the Suitors' Fund Act 1951, if otherwise qualified.

**********

Amendments

01 November 2013 - Added KJ Young who also appeared for the Respondent.


Amended paragraphs: Coverpage - Counsel

Decision last updated: 01 November 2013

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Cases Cited

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Statutory Material Cited

3

Ziliotto v Dr Hakim [2012] NSWSC 610
Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187
Mitchell v Cullingral Pty Ltd [2012] NSWCA 389