Ziliotto v Hakim

Background 28On 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. 29The 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. 30The 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. 31Due 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. 32Before 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. 33Prior 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 34The 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

35The 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).

The Primary Judge's Findings 36At [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. 37At [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. 38At [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 39The 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. 40The 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 41Dr 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. 42Elsewhere 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". 43In 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. 44He 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." 45Dr 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. 46Drs 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. 47The 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. 48Drs 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. 49Dr 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 50Ms 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. 51Ms 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. 52Mses 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? 53Although 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. 54However, 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. 55It 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. 56However, 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. 57In 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. 58In 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 59The 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. 60The 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). 61The 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. 62There 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. 63However, 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. 64This 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 65As 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. 66The 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. 67The 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. 68The 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. 69I 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. 70I 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.

The Primary Judge's Findings 71The 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. 72In 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 73The 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. 74The 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. 75The 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. 76The 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? 77Although 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. 78In 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. 79Whilst 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. 80Accordingly, 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).

Hydrotherapy 81His 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. 82After 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. 83The 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. 84The 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. 85In 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? WITNESS DALTON: A local heated pool. There are heated pools that are provided in, that are attached to various clubs. For example there are a number that are around Sydney that are attached to RSL clubs so a heated pool does not have to be in a formal rehabilitation centre. ... ... It depends on the community pool. There are plenty of pools around Sydney that specifically provide hydrotherapy services and the time is set aside. There are provisions made for patients with significant disabilities so I would suggest, I am not proposing that Mrs Ziliotto just goes to the local community pool and battles with the public. I am suggesting that she has access to a heated pool where there is provision to provide a hydrotherapy programme. I am simply saying it does not have to be part of a specific rehabilitation centre and there are a number of pools around Sydney that provide that service. These are the places that I refer my patients to for hydrotherapy. 86In the light of this evidence, I do not accept that his Honour's conclusion was based upon a misapprehension as to where the Appellant had been undertaking hydrotherapy previously. Indeed, as she acknowledged, the primary judge had noted (at [117]) that to date the Appellant had been undergoing hydrotherapy at Rehab Solutions. His conclusion as to the Appellant's needs was supported by the evidence of Dr Dalton and the occupational therapists. There is no basis for interfering with his Honour's assessment.

Psychiatrist and General Practitioner 87The primary judge (at [88]) allowed the cost of a monthly consultation with a psychiatrist for the remainder of the Appellant's life, less one third of that period when she may have needed psychiatric intervention in any event. His Honour noted that the Appellant claimed at the rate of $300 per consultation as estimated by Dr Klug, the Appellant's medico-legal psychiatrist. However, he only allowed the claim at the rate which the Appellant had actually been paying to her treating psychiatrist, Dr Menendez, which was $150.20 per consultation. 88The Appellant submitted that the primary judge should have allowed the cost of monthly consultations with a psychiatrist at the rate estimated by Dr Klug. It was submitted that an injured person is entitled to the reasonable cost of necessary treatment, and that the mere fact that treatment may be performed more cheaply than the amount claimed does not make the claimed amount excessive or unreasonable. The Respondent had not adduced evidence as to the reasonable cost of obtaining psychiatric intervention, nor was it put to Dr Klug that his estimate was unreasonable or excessive. In oral argument, the Appellant also submitted that it could not be assumed that Dr Menendez would be the Appellant's treating psychiatrist for the remainder of her life expectancy. 89In support of this contention, the Appellant relied upon the following passage in the judgment of King CJ in Kostik v Giannakopoulos (1989) Aust Torts Reports 80-274 at 68,904: A plaintiff is entitled to recover only the reasonable cost of the treatment which he requires. A reasonable amount of latitude may properly be allowed in choosing professional advisers and providers of treatment and the cost of treatment need not be regarded as unreasonable simply because the treatment might have been obtained more cheaply elsewhere, Wyld v Bertram 1970 SASR 1. A plaintiff cannot recover, however, exorbitant charges made by those from whom he has obtained treatment. The onus is on the plaintiff to establish the reasonableness of the charges which he seeks to recover. In the generality of cases, of course, where no issue is taken with the reasonableness of the charges claimed, no evidence on this point is necessary. Where the reasonableness of the charges is challenged, it is necessary for the plaintiff to establish their reasonableness by evidence. However, in my view, that passage provides no support for the Appellant's contention. On the contrary, King CJ's analysis is clearly predicated on the assumption that a plaintiff will seek to recover the actual cost of services provided by a practitioner (as to the choice of whom a plaintiff has a reasonable amount of latitude). 90I would reject the Appellant's submission that the primary judge erred in adopting the fee charged by Dr Menendez rather than the fee estimated by Dr Klug. The primary judge's assessment was based on the actual historical cost of the Appellant's consultations with her treating consultant psychiatrist. There was no evidence that the Appellant had any intention of changing psychiatrists, or that Dr Menendez was likely to retire within the Appellant's lifetime. There was thus no error in the approach his Honour adopted. On the contrary, any other approach would have resulted in over-compensation. 91The primary judge (at [105]) took the same approach to the Appellant's claim for the cost of attending a general practitioner 12 times per year. His Honour considered reasonable the opinion of Dr Buckley that the Appellant should have two extended "Level C" consultations and ten "Level B" consultations annually. However, his Honour did not assess the cost of those consultations on the basis of Dr Buckley's estimates ($118 and $64 respectively). Rather, he allowed the claim at the rate most regularly charged by the Appellant's general practitioner, Dr Porta Franca ($63.75, rounded to $64). For the same reasons as have been stated above with regard to psychiatric care, no error on the part of the primary judge has been demonstrated.

Psychologist 92The primary judge rejected (at [99]) the Appellant's claim for two tranches of twelve sessions with a psychologist at a cost of $180 per session. His Honour observed that whilst Dr Klug had stated that the Appellant "may also benefit from ongoing treatment by a psychologist, particularly with respect to pain management strategies", the matter was not explored with the psychiatrists when they gave their evidence and they did not comment on it in their joint report. Accordingly, he disallowed the claim on the basis that "Dr Klug raises the matter as one of possibility only". 93The Appellant submitted that his Honour overlooked Dr Klug's opinion that she "will require ongoing psychiatric and psychological input" and that she might benefit from psychological intervention. It was also suggested that his Honour overlooked the evidence of Dr Buckley, who recommended intervention from a pain management multidisciplinary team which would include a psychologist. The Appellant submitted that the claim should not be denied merely because the benefit to be derived from such intervention was expressed as a possibility, rather than a certainty. 94The Respondent submitted that his Honour was clearly aware of the expert opinion to the effect that the Appellant might benefit from ongoing treatment by a psychologist, having referred to it at [98]. However, in the absence of further persuasive evidence, an allowance for psychological expenses was not mandated. Moreover, his Honour had already made a generous allowance for psychiatric interventions and had allowed a claim for pain management which would have included psychological intervention if required by the team. 95The Appellant referred to Marsland at 178 where Kirby P and Meagher JA stated: The need for some of the items might, we will concede, be classified as "possible" rather than "certain". However, as Malec instructs, this does not, in law, relieve the court of the duty to provide for them in an assessment of damages. Naturally, the extent of possible or probable need affects the amount of damages to be awarded under such heads of claim. 96However, in my view, the High Court's statement in Malec (see [55] above) and the gloss on it provided by Kirby P and Meagher JA in Marsland do not assist the Appellant. Both of those statements support the taking into account of a possible future need in an assessment of damages. However, in this case the evidence did not support the existence of any such need. At its highest, the evidence was suggestive only of a possible benefit. His Honour did not err in concluding that it had not been shown that the claim was reasonable.

Multidisciplinary Pain Management 97The primary judge (at [104]) allowed the cost of two pain management consultations for a two year period, but none thereafter. In doing so, he preferred the evidence of Dr Dalton to that of Dr Buckley. His Honour stated (at [103]) that Dr Dalton's views accorded with his own understanding of the purpose of pain management clinics, namely to "[teach] a person ... to manage their pain with the assistance of medication and other means" to the point where stability is reached so that any on-going management is maintained by the patient's general practitioner. In the present case the Appellant had been attending pain management consultations for four years but since May 2010 those had reduced to six monthly reviews which indicated some stability in her condition. 98The Appellant submitted that in making this finding, the primary judge overlooked the evidence of Dr Niesche, a vascular surgeon qualified on behalf of the Appellant, to the effect that ongoing pain management was indicated. His Honour thus fell into error. Moreover, the Respondent did not call Dr Niesche for cross-examination. Accordingly, the Respondent was not in a position to submit that the evidence of Dr Niesche ought not to be accepted. 99In her written submissions, the Appellant also contended that his Honour should have made allowance for the cost of multi-disciplinary services provided by a number of specialists. However, at the hearing of the appeal she sought only the cost of a single specialist and a buffer for the chance that a multi-disciplinary team might be required from time to time. The cost of ongoing treatment by a pain management specialist was estimated at $11,012.13; it was submitted that an appropriate buffer would be $5000. 100The Respondent submitted that Dr Niesche's evidence did not advance the Appellant's claim for an increased allowance for future pain management. Dr Niesche saw the Appellant on 20 July 2010, at which time he considered that the Appellant "will need ongoing management of her pain and hypersensitivity", treatment which the Appellant subsequently received at the Pain Management Clinic, Prince of Wales Hospital. Dr Niesche did not prescribe treatment beyond the time frame contemplated by the primary judge's allowance. 101I do not consider that the Appellant has demonstrated any error in the primary judge's finding as to her need for future pain management. The evidence of Dr Niesche on this issue was stated in very general terms. He made no recommendation as to the duration of future pain management; as senior counsel for the Appellant acknowledged, her submission required insertion of the words "for the rest of her life" after Dr Niesche's recommendation for ongoing review. That evidence does not provide a basis for challenging his Honour's finding which was supported by the detailed evidence of Dr Dalton. His Honour's assessment should stand.

Remedial Massage 102At [107] of his reasons, the primary judge accepted that the Appellant had been receiving remedial massage from time to time. However, his Honour rejected (at [108]) a claim for the cost of that massage in the following terms: The joint rehabilitation specialists say nothing about the need for this massage. Without doubting that it may be beneficial for the Plaintiff there does not appear to be any evidence suggesting that it is reasonable that the Defendant should meet the cost of such massage. 103The Appellant submitted that the fact that the rehabilitation physicians were silent regarding the need for complementary therapies did not establish that provision for such therapies would be unreasonable or excessive. His Honour's finding, it was submitted, was erroneous in circumstances where he found that such therapy was beneficial to the Appellant in treating the hypersensitivity in her foot caused by her injury. 104The Respondent submitted that his Honour's conclusion was well-founded in the light of the rehabilitation physicians' agreement that physiotherapy was not required; Dr Dalton's opinion that there was no reasonable basis for providing remedial massage in this case, such treatment not being generally accepted in chronic pain management for neuropathic pain; and the absence of evidence from Dr Bhar or Dr Khor (pain management physicians), the Appellant's general practitioner or any other medical or paramedical practitioner that such treatment was reasonable. Moreover, it was submitted that the Appellant had not received remedial massage since July 2009, and the massage therapist did not prescribe further treatment. 105Two reports provided by Rehab Solutions to the Appellant's solicitors for the purpose of the proceedings constituted the only evidence supporting the Appellant's purported need for remedial massage. The first was a report of Wei-Ting Ting, a physiotherapist employed by Rehab Solutions dated 29 October 2009. That report did not refer to the dates or the frequency of the Appellant's remedial massage treatment, although it was recommended that she continue to receive remedial massage treatment "as it has improved her circulation and reduced ... hypersensitivity and tension in her right leg." The second was a report dated 8 August 2011 prepared by Elina Celik, a remedial massage therapist also employed by Rehab Solutions. Ms Celik noted that the Appellant had had a course of remedial massage treatments between 2 September 2008 and 10 December 2008 and a further five treatments from July 2009. Ms Celik stated that the Appellant was more relaxed after massage treatment and felt a lot more mobile and flexible. 106In my view this evidence does not establish that the Appellant required remedial massage treatment or that it would be reasonable for the Respondent to meet the cost of such treatment. The Respondent's submissions should be accepted. His Honour's conclusion that there was no reasonable basis for awarding the cost of remedial massage was correct.

Physiotherapy and orthopaedic treatment 107In her Amended Notice of Appeal, the Appellant challenged the primary's judge's failure to make an allowance for physiotherapy expenses and the quantum of his Honour's allowance for orthopaedic treatment. However, the Appellant made no submissions with respect to those two matters. Accordingly, the primary judge's findings on those issues must stand.

Transport 108At [201] of his reasons, the primary judge allowed the Appellant's claim for transport expenses in the sum of $75,000. His Honour stated that [i]n circumstances where there was little or no evidence from the [Appellant] about a need to travel by taxi, apart from an inference that such travel would be convenient from time to time to attend at doctors or hydrotherapy or even shopping, it is necessary to take a broad brush approach to the need to make an allowance for taxi travel. The allowance made by the primary judge included provision for ten return taxi trips per year out of the Appellant's local area at a subsidised rate of $75 and three return trips per week in the local area at a subsidised rate of $25. 109The Appellant submitted that this allowance was manifestly inadequate. The provision of three short distance return trips per week would allow the Appellant only to travel to her local hydrotherapy pool three times per week (as the evidence established to be reasonable). Thus, no provision was made for monthly trips to the Appellant's podiatrist, general practitioner or psychiatrist, or for accessing pharmaceuticals. No allowance was made for biannual trips to the pain management clinic or for annual review by a vascular surgeon. No allowance was made for the Appellant to visit her daughter or friends or to access shops not in the immediate vicinity of her home, whilst her ability to access the local shops on her electric four-wheel scooter would be weather-dependent. Furthermore, inadequate provision was made for activities such as attending the theatre, galleries and museums. 110The Respondent submitted that the Appellant's criticisms of his Honour's assessment proceeded on the fallacious assumption that she would require a taxi to travel to hydrotherapy. However, the evidence established that she used her scooter to do so. Furthermore, his Honour was aware that the Appellant claimed the cost of a monthly trip to her podiatrist, but found (at [198]) that there was no explanation as to why it was necessary for her to travel from Fairfield to Kings Park to do so. His Honour also referred to the evidence of the occupational therapists that it was unclear why the Appellant could not access the drug Gabapentin from a hospital (such as Westmead or Liverpool) closer to her home rather than from Prince of Wales Hospital. The Respondent also observed that the submission regarding the need to travel to an annual review by a vascular surgeon was curious, as no claim for attendance on a vascular surgeon had been made. This was incorrect as his Honour allowed $5,000 with respect to such a claim. 111Accepting that the primary judge took a "broad brush" approach to the assessment of transport expenses, I do not consider that his Honour's assessment was inadequate. In concluding that provision for ten return trips out of the area per year and three local trips per week was reasonable, his Honour specifically considered (at [201]) the need to attend doctors' consultations and hydrotherapy. Having regard to his observations at [198] of his reasons, including his finding that no evidence was offered to explain the necessity for the Appellant's claim for 26 return trips per year out of her area, I do not consider that his Honour failed to take into account the need to attend appointments with a podiatrist or to obtain pharmaceuticals. Notwithstanding that the primary judge's assessment did not distinguish between the claim for taxi transport for appointments and that for social activities, I do not regard the provision made by him for such activities on a broad brush approach to be unreasonable.

Costs 112As I have noted above (at [26]), the primary judge originally ordered that the Respondent pay the Appellant's costs of the proceedings. However, following the hearing of an application made by the Respondent for variation of that order, on 19 September 2012 his Honour ordered that the Respondent pay the Appellant's costs on an ordinary basis up to and including 7 April 2011 and that thereafter the Appellant pay the Respondent's costs on an indemnity basis. The Appellant seeks to set aside that order. 113The basis for the making of the order of 19 September 2012 was an Offer of Compromise ("Offer") sent by the Respondents' solicitors to the Appellant's solicitors on 7 April 2011. The covering letter was marked "Without prejudice except as to costs", and simply stated: We enclose by way of service, Offer of Compromise dated 7 April. 114The Notice of Offer of Compromise stated (in full): NOTICE OF OFFER OF COMPROMISE The Defendant offers to compromise these proceedings on the following terms: 1. Verdict and Judgment in favour of the Plaintiff in the amount of $2,250,000 plus costs as agreed or assessed. 2. This offer is made in accordance with Rule 20.26 of the Uniform Civil Procedure Rules 2005 and will remain open for a period of 28 days from the date of this offer. Before the primary judge, the Respondent, relying on the judgment of this Court in Vieira v O'Shea (No 2) [2012] NSWCA 121 and that of Garling J in Rail Corporation NSW v Vero Insurance Ltd (No 2) [2012] NSWSC 926, contended that the offer complied with r 20.26 of the Uniform Civil Procedure Rules 2005 ("UCPR") notwithstanding that it was stated to be "plus costs as agreed or assessed". In the alternative, the Respondent submitted that the letter should be regarded as a valid Calderbank offer. The Appellant resisted the application on the basis of what was said in Old v McInnes and Hodgkinson [2011] NSWCA 410 at [105] in regard to r 20.26. 115After discussing the authorities at [8]-[31] of the Costs Judgment, his Honour concluded that the approach of Garling J in Rail Corporation was correct with the consequence that the Offer complied with r 20.26(2). His Honour also found that there were no exceptional circumstances to justify a departure from the general rule provided by UCPR, r 42.14(2). However, his Honour held (at [34]) that if his conclusion with respect to compliance with r 20.26(2) was wrong, the Offer could not, in the alternative, be regarded as a valid Calderbank offer. This was because the covering letter enclosing the Offer of Compromise said nothing about the Offer being treated as a Calderbank offer if it did not comply with r 20.26. His Honour applied what was said by Hoeben J in Pritchard v Trius Constructions Pty Ltd (No 2) [2011] NSWSC 1114 at [40]-[43] in this regard. 116On 25 June 2013, this Court, constituted by a Bench of five Judges, delivered judgment in the matter of Whitney v Dream Developments Pty Ltd [2013] NSWCA 188. In that decision, the Court unanimously held that two offers of compromise each containing the term, "the defendant to pay the plaintiff's costs as agreed or assessed", did not constitute offers exclusive of costs for the purposes of UCPR, r 20.26(2) and, accordingly, were not valid offers of compromise under the Rules. At [39(b)] of his reasons, Bathurst CJ (with whom Beazley P, McColl JA and Emmett JA agreed) expressly stated that the decision of the primary judge in the Costs Judgment was incorrect. 117The Court in Whitney also considered whether the offers of compromise in that case could take effect as Calderbank offers: Calderbank v Calderbank [1975] 3 WLR 586; [1975] 3 All ER 333. The Offers were essentially in the same terms as that in the present case and were each enclosed with a covering letter which stated: "Please find the plaintiff's offer of compromise following". The Chief Justice held (at [42]) that there was nothing in the offers or the covering letters to indicate that they were intended to have effect other than as offers under r 20.26. 118The Chief Justice said: 42 In the present case all that there was, were the offers of compromise, the second seeking a greater amount by way of settlement than the former. There was nothing in either of the offers to indicate that they were intended to have effect other than as offers under r 20.26. Further, there was nothing in the correspondence with which the offers were enclosed or in the surrounding circumstance to indicate they would be relied on in relation to the question of costs should a verdict more favourable than the offer be achieved. Such an indication, in my opinion, is the essence of a Calderbank offer. 43 That is not to say that the conduct of the parties during litigation, including the making of open offers, may not in certain circumstances be relevant to the appropriate manner in which a court's discretion as to costs should be exercised. However, an offer made expressly pursuant to r 20.26 will not of itself take effect as a Calderbank offer unless there is something in it or in the surrounding circumstances to indicate that it is proposed to be relied upon on the question of costs, irrespective of its effectiveness as an offer under r 20.26. 119Barrett JA, with whose reasons Beazley P and McColl JA also agreed, likewise held that the offers could not be regarded as Calderbank offers. His Honour observed: 57 An offer is of the Calderbank type only if the maker of it is shown to intend that the fact of its non-acceptance may be deployed as a basis for seeking a special costs order in the event of that party's ultimate success in the action. Everything therefore depends on the message conveyed by the offer itself and any covering letter or other attendant circumstance. 58 The possibility that an ineffective or deficient offer purportedly made in accordance with the rules might take effect as a Calderbank offer has been recognised in several cases. ... It is sufficient to refer to Trustee for the Salvation Army (NSW) Property Trust v Becker (No 2) [2007] NSWCA 194 in which Ipp JA (with the concurrence of Mason P and McColl JA) said (at [27]): "Calderbank offers are simply offers that do not comply with the relevant rules of court relating to the making of offers of compromise: Jones v Bradley (No 2) [[2003] NSWCA 58] (at [5]). Whether an offer, intended to be an offer under the Uniform Civil Procedure Rules but which is ineffective because it does not comply with those Rules, operates as a Calderbank offer, depends upon the intention of the offeror as revealed by the terms of the offer. 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."" (emphasis added) 59 As this passage makes clear, the crucial matter is the manifested intention of the offeror. In the present case, the message conveyed by the making of each offer in the context in which it was made was that the plaintiff intended to have resort to the r 20.26 regime. In the absence of any intimation (for, example, in a covering letter) that the plaintiff intended its offer expressly founded on r 20.26 to have some secondary or alternative significance, the fact that the plaintiff's attempt to act under r 20.26 miscarried neither required nor justified any assumption of intended secondary or alternative significance. Faced with an offer that purported to have significance under r 20.26 (and not otherwise) but which, on its face, exhibited a feature inconsistent with that rule, the correct course for the defendant to adopt was to regard the purported offer as having no force at all. The defendant was not required to speculate about some alternative intention on the part of the plaintiff; nor was the defendant justified in doing so. 60 The plaintiff did not indicate, either expressly or by implication, that, if the offer did not take effect under the rules, the plaintiff still reserved the right to rely on it on the question of costs. An essential ingredient of a Calderbank offer was therefore absent: see Calderbank v Calderbank (above) at 596. ... 120In oral argument in this Court, senior counsel for the Respondent, whilst reserving his position, accepted that he was unable to reopen Whitney, a conclusion which the decision of this Court in Council of the City of Canterbury v Milich [2013] NSWCA 215 compelled. Accordingly, it was not argued that the Offer was a valid offer of compromise pursuant to r 20.26. Rather, the Respondent sought to rely upon the grounds contained in a proposed Notice of Contention, as detailed below. 121On 15 July 2013, the Respondent filed a notice of motion by which he sought an order pursuant to UCPR, r 1.12 extending the time in which he would be permitted to file a Notice of Contention until 5 August 2013 or such other date as the Court might order. In the draft Notice of Contention annexed to the supporting affidavit, the Respondent contended that the primary judge's decision in the Costs Judgment should be affirmed on grounds other than those relied upon by the Court below. Those grounds may be summarised as follows: (1)The covering letter to the Offer, containing the words "Without prejudice except as to costs", when read with the enclosed Offer and having regard to the surrounding circumstances, was a Calderbank offer. (2)In the exercise of his discretion pursuant to UCPR, r 42.1, the primary judge should have concluded that the proper order as to costs was the order made by his Honour at [52] of the Costs Judgment. 122In his submissions in support of the application to rely on the Notice of Contention, the Respondent submitted that, having regard to s 58 of the Civil Procedure Act 2005, which requires the Court to seek to act in accordance with the dictates of justice and to consider the particular matters specified in s 58(2) in deciding whether to make orders or directions for the management of proceedings, the Court should allow the Respondent's application to rely on the proposed Notice of Contention. 123In particular, the Respondent submitted that no prejudice had been occasioned by his failure to file the Notice of Contention in accordance with the time limits; he had a fairly arguable case; the reasons for delay in filing the Notice of Contention were apparent, given the timing of the decision in Whitney; and the Respondent had acted quickly after judgment in Whitney was handed down to raise the issues in the Notice of Contention with the Appellant and to prepare submissions in support of its contentions. Permitting the Respondent to rely on the Notice of Contention would not significantly add to the length of the proceedings. Furthermore, the Court should have regard to the responsible manner in which the Respondent had conducted the proceedings. 124The Appellant resisted the filing of the Notice of Contention. It was submitted that leave was sought to file that Notice some eight months out of time, a delay which nothing in the reasons of the Court in Whitney informed or excused. However, in my view, in the light of both the result and the observations of the Chief Justice at [39(b)] in Whitney, it is appropriate to grant the Respondent an extension of time in which to file his Notice of Contention. 125In support of the grounds contained in the Notice of Contention, the Respondent submitted that in order to constitute a Calderbank offer, an offer of compromise need not explicitly provide that it takes effect only if the UCPR do not apply. Reliance was placed upon the passage from the judgment of Ipp JA in Becker (No 2) extracted in [58] of Whitney by Barrett JA (see [119] above). It was also submitted that Ipp JA's approach in Becker (No 2) was consistent with that of each of the members of the Court in Whitney. In oral argument, senior counsel for the Respondent placed particular reliance upon [42] of the Chief Justice's judgment in Whitney (extracted at [118] above). 126There being no precise formula required for an offer to constitute a Calderbank offer, both the content of the Offer and the surrounding circumstances were said to have clearly indicated that it would be relied upon in relation to costs. The surrounding circumstances included the making of the Offer at a time shortly prior to the commencement of the hearing and its being made, on its face, to encourage compromise and a shortening of the litigation. 127With regard to the content of the Offer, the Respondent submitted that the words "Without prejudice as to costs" in the covering letter were Calderbank offer descriptors, being a standard short form of words which conveys to a recipient of a letter in which they are contained that, at an appropriate stage, the letter may be tendered to attract an indemnity costs order. The Respondent relied upon a number of authorities for this proposition including Dunstan v Rickwood (No 2) [2007] NSWCA 266; (2007) 38 Fam LR 491 at [46] and Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [97]. It was further submitted that that form of words is not the descriptor of an offer of compromise pursuant to r 20.26, as an offer made pursuant to that rule is automatically taken to be without prejudice unless stated to the contrary (UCPR, r 20.26(9)). Moreover, there was no intimation in the covering letter that the Offer was expressly founded on r 20.26. Thus the Respondent's intention was manifestly clear. 128In my view, the Respondent's contention that the words "Without prejudice except as to costs" were sufficient to evince an intention that the Offer would be relied upon, if invalid under r 20.26, as a Calderbank offer, cannot be sustained. The attached Offer was expressly stated to be made in accordance with r 20.26. There was nothing in the covering letter or the Offer itself to indicate that it had some "secondary or alternative significance": Whitney at [59]. The Respondent's submission that the words "Without prejudice except as to costs" are a standard short form of words sufficient to indicate that an offer is relied upon as a Calderbank offer cannot be accepted. None of the cases cited by the Respondent stands for such a proposition. Indeed, none goes further than the observation in Dunstan (at [46]) that a Calderbank offer is conventionally headed "without prejudice save as to costs". That is clearly a very different proposition to that advocated by the Respondent. 129Furthermore, in my opinion the statements of the Court in Whitney upon which the Respondent relies (per Bathurst CJ at [42]-[43]; per Barrett JA at [59]; and per Emmett JA at [77]) do not support, but rather undermine, the Respondent's submission. Each of those statements makes clear that there must be something in the offer, the covering letter or the surrounding circumstances that manifested an intention on the part of the offeror that it was proposed to be relied upon with respect to costs irrespective of its effectiveness under r 20.26. In my view there was no such intimation in the present case. 130The Respondent's alternative submission was that, even if the Offer was not effective as a Calderbank offer, the Court should exercise its discretion under UCPR, r 42.1 to make an order other than an order that costs follow the event. The Respondent contended that that discretion ought to be exercised having regard to the gross disparity between the amount of the judgment and the Offer, which was indicative of its genuine and generous nature and the unreasonableness of its rejection; the fact that the Appellant had an appropriate opportunity to consider and deal with the Offer as it was open for 28 days; the timing of the Offer, two months before the commencement of the hearing when the parties would be expected to know the case each had to make and meet; the absence of any explanation for the rejection of the Offer; the public interest in the achievement of settlements; and the principle that costs should be paid in a way that is fair, having regard to the responsibility of each party for the incurring of costs. 131In support of this submission, the Respondent relied on the following observation of Beazley JA in Old v McInnes and Hodgkinson at [34]: Given the court's discretionary power as to costs and the important public policy considerations and the private interests of parties in settling litigation, the fact that a failed Rules offer of compromise is not strictly conformable with the usual Calderbank offer, does not preclude the court from considering whether it should exercise its discretion as to costs so as to make some other order than costs follow the event, in accordance with UCPR, r 42.1. Rather, when the court is asked to exercise its discretion as to costs, it is entitled to look at the conduct of the parties throughout the proceedings, including attempts made at settlement and the terms of the failed UCPR offer. Her Honour dissented in respect of the costs orders in Old v McInnes and Hodgkinson finding, at [36] and [41], that the respondents should have their costs on an indemnity basis. Meagher JA, with whom Giles JA agreed, held (at [106]) that as the purported offers contained no statement that they were to operate as Calderbank offers, in the circumstances they could not be relied upon on that basis, such that a special costs order was not warranted. 132The proper approach to the award of costs in these circumstances also received some consideration in Whitney. Bathurst CJ, having referred to Beazley P's observations in Old v McInnes and Hodgkinson at [32] and [34], and having outlined the requirements of a valid Calderbank offer, remarked (at [43]) that: [t]hat is not to say that the conduct of the parties during litigation, including the making of open offers, may not in certain circumstances be relevant to the appropriate manner in which a court's discretion as to costs should be exercised. 133Barrett JA observed (at [55]) that the fact that an offer which does not comply with r 20.26 has been made and not accepted may be relevant to the exercise of the court's jurisdiction with respect to costs. Whether it is so relevant will depend in part on whether it has the characteristics associated with Calderbank v Calderbank [1975] 3 WLR 586. 134In my view, these authorities demonstrate that the conclusion that the Offer was not effective as a Calderbank offer does not preclude the Court from taking into account the conduct of the parties, including attempts at settlement, in exercising its discretion pursuant to UCPR r 42.1 as to whether to make some order other than that costs should follow the event. 135The Appellant submitted that she had not acted unreasonably in rejecting the Offer. It was asserted that the Respondent's evidence as to her personal and domestic care requirements was not properly articulated until after the service of the report of Ms Cheel, late and in breach of the directions of the Court. Moreover, the Appellant's claim, based on the reports of Ms Flanagan and Drs Buckley and Klug, was valued at a sum in excess of $3,000,000 plus costs. However, this claim was undermined by the Appellant's acknowledgment that the actuarial report from which that valuation was drawn was not provided until 8 June 2011 (being over a month after the Offer had closed) and, as the report itself disclosed, was in fact not requested until 16 May 2011. 136In my view, the Appellant's rejection of the Offer was unreasonable and this was so notwithstanding that liability had been admitted. The extent of the disparity between the Offer of $2,250,000 and the primary judge's assessment of the appellant's damages in the amount of $1,373,035 strongly suggests as much. That impression is confirmed by the fact that, at the date of the Offer, the Appellant had no evidence, and had not sought to obtain any, that valued her claim in excess of the Offer. The evidence of Ms Cheel did not differ so greatly from that of Ms Flanagan as to have a substantial impact upon the quantum of the Appellant's claim. 137Two further matters should be mentioned. The first is that the disparity to which I have referred between the amount of the judgment and the Offer is not mitigated to any significant degree by the fact that the Appellant has succeeded in obtaining on appeal an increase in her damages by $155,350 to a total of $1,528,385. The second is that on the appeal and upon the assumption that she was successful on every challenge made by her to the findings of the primary judge, the Appellant's total claim was only $2,582,213, a figure very close to the amount of the Offer. 138However, it should be noted that at trial the Appellant in her final amended schedule of damages claimed, in round figures, total damages of $4 million. This figure and the submissions relied on to support it had all the hallmarks of an ambit claim, generally dependent, as it was, on the primary judge accepting the totality of the evidence tendered on the Appellant's behalf, an unlikely scenario which resulted in a seven day hearing. 139In the light of the responsibility of each of the parties for the incurring of costs in these proceedings and the Respondent's genuine attempt to compromise the proceedings before trial, in the circumstances there should be no order as to the costs of the trial from the date of the Offer with one qualification. The qualification is that the primary judge found (at [51] of the Costs Judgment) that had it not been for the indemnity costs order which he made from 7 April 2011, he would have ordered the Appellant to pay the Respondent's costs thrown away by reason of an adjournment granted on 22 June 2011. In oral argument, the Appellant accepted that such an order would be appropriate. 140As to the costs of the appeal, the Appellant has had limited success in that she has succeeded in increasing her damages with respect to only two of the eleven items which were the subject of challenge. She claimed an increase in her damages in the amount of $1,209,178 but has succeeded in gaining an increase of only $155,350. In the foregoing circumstances in my view the Appellant should only be entitled to 60 per cent of her costs of the appeal. 141Since 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. 142My 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. 143This 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. 144I 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. 145In 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. 146The 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 147Accordingly, 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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 November 2013