Mount Arthur Coal Pty Ltd v Duffin

1. [1]

   MEAGHER JA: I agree with Payne JA.

2. [2]

   GLEESON JA: I agree with Payne JA.

3. [3]

   PAYNE JA: On 16 March 2020, following a six day trial, the primary judge, Harrison AsJ, found that the appellant, Mount Arthur Coal Pty Ltd (Mount Arthur), was responsible in negligence for injuries suffered on 6 March 2013 by the respondent, Ms Duffin, when a grader she was driving struck a lamination in a road which was part of the mine for which Mount Arthur was responsible: Duffin v Mount Arthur Coal Pty Ltd [2020] NSWSC 229. Damages of $2,494,386.40 were subsequently awarded by orders made on 20 May 2020.

4. [4]

   Mount Arthur no longer contests that finding of liability. The issues on this appeal are confined to a challenge about the primary judge’s findings about contributory negligence and aspects of her Honour’s findings about damages. There are also two grounds of appeal challenging the subsequent award of indemnity costs by the primary judge in Duffin v Mount Arthur Coal Pty Ltd (No 2) [2020] NSWSC 790.

Relevant facts

1. [5]

   Ms Duffin was employed by Mount Arthur to work at the Mount Arthur coal mine. On 6 March 2013, she was rostered to work the night shift driving a grader within the mine property. Her shift commenced at 6:30pm and was scheduled to finish at 6:40am. At around 8:00pm, Ms Duffin suffered injuries when the grader she was driving along Lambs Lane hit a “lamination”. On the appeal, Senior Counsel for Mount Arthur explained that a lamination in industry parlance means “any abnormality on the road surface”. By reason of the grader hitting the lamination, Ms Duffin was thrown around in her seat and suffered physical and resultant psychological injuries.

2. [6]

   At the time of the accident it was pitch black. There was no lighting in the area. The surface of the road was wet as a result of rainfall in the preceding several days. The headlights on Ms Duffin’s grader were on. She was not using the grader’s work lights, which illuminate under the grader, because she had been instructed to use headlights when driving within the mine pit. Ms Duffin and other employees of Mount Arthur using the area at that time were not aware of the lamination.

3. [7]

   Prior to the accident, Ms Duffin had driven along Lambs Lane for approximately three kilometres and approached an intersection with a road known as Red Rock Ramp. She was driving at approximately 50 kilometres per hour. Ms Duffin had been trained by her employer to move the grader to the left and to give way to all larger vehicles when approaching intersections of roads within the coal mine. Under the hierarchy of vehicles that operate within the mine, a grader would be required to give way to all other vehicles except “light vehicles”, which are four-wheel drive vehicles used for transporting personnel and small pieces of equipment around the mine.

4. [8]

   As Ms Duffin approached the intersection, she steered the grader to the left-hand side of Lambs Lane. As she drew closer to the intersection, she decreased speed so that she was travelling at approximately 20 kilometres per hour. On the left-hand edge of Lambs Lane was a “windrow” (a mound of dirt). The presence of the windrow prevented her from moving too far to the left.

5. [9]

   The roads within the pit were unsealed and topped by a smooth dirt surface. Ms Duffin expected to find a flat surface, and not a pile of dirt, on the left-hand edge of Lambs Lane. Ms Duffin knew that Red Rock Ramp could be busy with large trucks transporting coal or dirt to the combustion dump situated to her right. In order to see if it was safe to enter Red Rock Ramp, she twisted in her seat to look over her right shoulder for larger vehicles approaching from behind.

6. [10]

   The critical issue at the trial was whether the grader hit the lamination in the road or the “windrow” on the side of the road. No challenge to the primary judge’s finding that Ms Duffin hit the lamination in the road was advanced on the appeal. The only issue on appeal concerning liability was her Honour’s rejection of the appellant’s claim of contributory negligence.

7. [11]

   Ms Duffin was 40 years old at the time of the accident. The primary judge accepted that she was in pain and suffering by reason of the injury she sustained in the accident. Prior to the accident, Ms Duffin had led a full and enjoyable life. She had no restrictions upon her ability to work in her demanding job while caring for her two teenage children. She was able to maintain her home and garden. She experienced no psychological impairment of function or capacity, other than for a brief period after her husband’s death in 2008. She enjoyed her work at the mine and the company of her co-workers.

8. [12]

   The primary judge found that the accident dramatically changed Ms Duffin’s life, which is marked by significant back and right hip and leg pain. She has also experienced substantial psychological trauma, which affects her ability to perform the entire range of pre-accident activities of daily living. She walks with a limp, which varies in severity. From time to time she uses a walking stick. On bad days, she stays in bed due to her physical and psychiatric injuries. Ms Duffin’s life is now somewhat isolated, although the primary judge found that she had exaggerated her disability to some extent and that she is able from time to time to go out and do her shopping, socialise over lunch and occasionally engage with friends in the evenings.

9. [13]

   The primary judge also found that Ms Duffin suffered from pre-existing injuries to her spine and hip. Her Honour found that had Ms Duffin not suffered her injuries to her back and right hip in the accident, in light of her pre-existing degenerative spinal and hip conditions it was likely that she would have suffered a slow deterioration of spondylosis and hip arthritis. The combination of these conditions would have allowed her to work in her current job in the mining industry for only a further 10 years. The primary judge accepted that Ms Duffin would have continued to work as a production employee in the mining industry, earning the same salary plus salary increases, until 2029 had she not suffered her physical injuries in the accident. After that 10-year period, when Ms Duffin attained the age of 57, she would have retained some residual earning capacity. She most likely would have had a decreased earning capacity until aged 67 and would have worked two or three days per week, for 12 hours in total, in a role such as sales or customer service, where she would have been able to sit and stand when she felt uncomfortable. The primary judge accepted that from the date of the accident, Ms Duffin had no residual earning capacity, with the exception of some very limited working capacity from 26 March 2013 to 28 March 2015.

10. [14]

    The primary judge assessed Ms Duffin’s non-economic loss pursuant to s 151G of the Workers Compensation Act 1987 (NSW) (as in force before the 2001 amendments) at 45% of a most extreme case. [1] In arriving at that assessment, her Honour took into account Ms Duffin’s pre-existing osteoarthritis in the right hip and degenerative changes in her lumbar spine prior to the accident. Her Honour noted that, on any view, Ms Duffin was no longer capable of working as a production employee at the mine for a period exceeding 10 years.

11. [15]

    No challenge was made on the appeal to her Honour’s award of damages addressing the following topics:

    1. (1)

       past economic loss;

    2. (2)

       future economic loss;

    3. (3)

       Fox v Wood (1981) 148 CLR 438; [1981] HCA 41 damages;

    4. (4)

       past and future loss of superannuation;

    5. (5)

       past out of pocket expenses; and

    6. (6)

       past domestic care.

12. [16]

    Mount Arthur sought only to dispute the primary judge’s findings on damages addressing the topics of:

    1. (1)

       future out of pocket expenses;

    2. (2)

       future domestic care; and

    3. (3)

       the percentage assessed for non-economic loss pursuant to s 151G of the Workers Compensation Act.

Issues on appeal

1. [17]

   Mount Arthur relied upon four grounds of appeal. It submitted that the primary judge erred in:

   1. (1)

      failing to find Ms Duffin guilty of contributory negligence (ground 1);

   2. (2)

      failing to reduce the award for future out of pocket expenses for vicissitudes after finding that Ms Duffin’s pre-existing medical conditions of a degenerative back, osteoarthritis in both hips, obesity and bursitis:

   3. (3)

      failing to reduce the award for future care for vicissitudes after finding that Ms Duffin’s pre-existing medical conditions of a degenerative back, osteoarthritis in both hips, obesity and bursitis:

   4. (4)

      failing to have regard to the following when awarding Ms Duffin damages pursuant to s 151G of the Workers Compensation Act:

2. [18]

   Mount Arthur also raised two grounds of appeal in relation to the costs judgment. It submitted that the primary judge erred in:

   1. (1)

      finding that an offer of compromise dated 30 August 2018 was an offer of compromise within the terms of Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 20.26 (ground 1 of the costs appeal); and

   2. (2)

      ordering costs on an indemnity basis in reliance upon Ms Duffin’s compliance with the terms of UCPR r 20.26 (ground 2 of the costs appeal).

Ground 1 of the appeal – Contributory negligence

1. [19]

   The primary judge found that Ms Duffin was not guilty of contributory negligence. I have set out the facts concerning the accident at [5]–[9] above. None of those facts were challenged by Mount Arthur on appeal. At [131], her Honour concluded:

2. [20]

   Mount Arthur submitted that the following factual matters demonstrated a lack of reasonable care on Ms Duffin’s part and make a finding of contributory negligence “irresistible”:

   1. (1)

      Ms Duffin was aware that following rain on the roads there would be irregularities such as potholes;

   2. (2)

      in driving a grader after a rain event, Ms Duffin accepted that she would need to look out for irregularities and drive according to the prevailing road conditions, including corrugations on the roadway and laminations;

   3. (3)

      Ms Duffin was aware that she had the overall responsibility to ensure the vehicle was driven in a safe manner; and

   4. (4)

      the lamination must have been significant and “there to be seen” because it caused Ms Duffin to be jolted in her seat five times.

3. [21]

   Mount Arthur submitted that in those circumstances, Ms Duffin was not keeping a proper lookout and that any defect in the roadway would have been “obvious”. Mount Arthur further submitted that the circumstances of the accident were not consistent with a finding of mere inadvertence, inattention or misjudgement: Bankstown Foundry Pty Ltd v Braistina (1986) 160 CLR 301; [1986] HCA 20 at [15] (Mason, Wilson and Dawson JJ); cf Liftronic Pty Ltd v Unver [2001] HCA 24; (2001) 75 ALJR 867 at [88] (Kirby J). It was submitted that the duty owed by a driver of a motor vehicle is a high one: Dungan v Chan [2013] NSWCA 182; (2013) 64 MVR 249 (Emmett JA, with whom Ward JA and Gleeson JA agreed).

4. [22]

   Mount Arthur submitted that given the respective breaches of duty, the appropriate contribution between the appellant and the respondent was 50%.

5. [23]

   The central plank of Ms Duffin’s submissions about contributory negligence was that there was no evidence (and it was not even put to her) that she had not been keeping a proper lookout, had failed to take reasonable steps to protect her own safety or that she was guilty of contributory negligence.

6. [24]

   Ms Duffin submitted that a primary judge’s finding (and apportionment) of contributory negligence is a discretionary exercise and is one that an appellate court should be reluctant to disturb: Podrebersek v Australian Iron & Steel Pty Ltd [1985] HCA 34; (1985) 59 ALJR 492.

7. [25]

   Mount Arthur bore the onus of establishing contributory negligence: Joslyn v Berryman (2003) 214 CLR 552; [2003] HCA 34 at [18] (McHugh J); [113]-[114] (Kirby J); Ghunaim v Bart [2004] NSWCA 28; (2004) Aust Torts Reports 81-731. Mount Arthur failed to establish contributory negligence on the balance of probabilities.

8. [26]

   The primary judge rejected Mount Arthur’s pleaded claim of contributory negligence. None of the critical facts found by the primary judge in reaching that conclusion were challenged on the appeal. That is, there was no challenge to her Honour’s findings that:

   1. (1)

      prior to the accident Ms Duffin drove along Lambs Lane for approximately three kilometres and approached an intersection with a road known as Red Rock Ramp. She was driving at approximately 50 kilometres per hour;

   2. (2)

      as Ms Duffin approached the intersection with Red Rock Ramp she moved the grader to the left-hand side of Lambs Lane and decreased speed to 20 kilometres per hour as she had been trained by her employer to do;

   3. (3)

      in order to see if it was safe to enter Red Rock Ramp, she twisted in her seat to look over her right shoulder for larger vehicles approaching from behind.

9. [27]

   Critically, her Honour found that Ms Duffin and other employees of Mount Arthur using the area at that time did not see and were not aware of the lamination.

10. [28]

    At the trial, Mount Arthur made no serious attempt to prove that by the exercise of reasonable care Ms Duffin could or should have become aware of the lamination. The cross-examination of Ms Duffin relied upon by Mount Arthur did not establish the basis for a submission that there was a failure to take reasonable care. The high point of that cross-examination was the following exchange:

11. [29]

    This evidence was insufficient to establish any failure to exercise reasonable care.

12. [30]

    The finding by the primary judge that nobody saw the lamination in the road that Ms Duffin struck was amply supported by the contemporaneous evidence. An important document was the event report prepared for Mount Arthur by an investigating supervisor and checked by an investigation auditor which relevantly provided:

13. [31]

    That document provided a firm foundation for the primary judge’s finding that other employees of Mount Arthur had been using the area where the accident occurred prior to the incident and that those operators had also “failed to notice the hole in the road and therefore the hazard remained.”

14. [32]

    There was a critical absence of evidence supporting Mount Arthur’s claim of contributory negligence. Such evidence as there was tended strongly against a finding of contributory negligence. Mount Arthur’s own records confirm that it was not only Ms Duffin, but other operators of heavy machinery at the Mount Arthur coal mine on the night in question who also failed to see the lamination in the road on that night.

15. [33]

    I reject Mount Arthur’s submission that it should be concluded that Ms Duffin was not keeping a proper lookout and that any defect in the roadway should have been “obvious”. This was not a case where the primary judge found that the accident occurred by reason of inadvertence, inattention or misjudgement. Whilst it may be accepted that the duty of care owed by a driver of a motor vehicle such as was engaged in this case is a high one, there was no evidence that by exercising reasonable care Ms Duffin could or should have been aware of the lamination in the road.

16. [34]

    The primary judge was correct to conclude that there was no contributory negligence proven by Mount Arthur. Ground 1 should be dismissed.

Ground 2 of the appeal – Future out of pocket expenses

1. [35]

   The assessment of future out of pocket expenses included amounts representing general practitioner, psychologist and psychiatrist fees, medication, annual services, future equipment, future occupational therapy expenses and hydrotherapy. It also included an allowance of $4,000 for the possibility that Ms Duffin may require a hip replacement earlier, as the accident had made a material contribution to the acceleration of her hip condition.

2. [36]

   The primary judge approached this topic having regard to the following principles:

3. [37]

   After describing, in general terms, the findings her Honour made, the primary judge left it to the parties to agree upon the amounts comprising three of the components of the award ultimately made for future out of pocket expenses: future occupational therapy expenses, past care and future care. Although the appeal books and the parties’ submissions provided no real assistance in determining those components of the award for future out of pocket expenses, at the hearing of the appeal documents were handed up (marked MFI 1 and MFI 2) [2] from which, it was submitted, the component parts of the award may be discerned:

4. [38]

   As can be seen from the transcript, both parties proceeded on the basis that the amounts set out at (a)-(i) above totalled $157,773.24 and the primary judge awarded Ms Duffin damages for future out of pocket expenses in that amount:

5. [39]

   The amounts set out at (a)-(i) of MFI 2 (Ms Duffin’s calculations which Mount Arthur specifically agreed with on this point in MFI 1) above do not actually add up to $157,773.24. The discrepancy was not explained by either party. Given that the parties chose not to address this calculation difficulty I will proceed, as the parties did, on the basis that MFI 2 accurately records the component parts of the primary judge’s award of $157,773.24 for future out of pocket expenses.

6. [40]

   Mount Arthur challenged all but item (e) (the award of $4,000 for future hip surgery). The essence of Mount Arthur’s complaint was that in awarding future out of pocket expenses, her Honour had failed to take into account her findings about pre-existing injuries.

7. [41]

   Mount Arthur submitted, and Ms Duffin did not disagree, that the references by the primary judge to vicissitudes and Sharman v Evans (1977) 138 CLR 563; [1977] HCA 8 must be understood in the context of the decision being made at a time before the adoption of life tables to determine future life expectancy. A good deal of the confusion on this topic was introduced, both before the primary judge and in this Court in written submissions, by Mount Arthur. Those submissions failed adequately to distinguish between the “vicissitudes of life”, addressed by the primary judge, and the separate question of the effect of the previous conditions suffered by Ms Duffin upon the award of damages. Mount Arthur referred to the latter by adopting, without elaboration, a confusing shorthand of “vicissitudes” to describe the deduction sought by reason of Ms Duffin’s pre-existing injuries.

8. [42]

   The real question was whether Mount Arthur had led any evidence sufficient to permit the effects of the previous conditions suffered by Ms Duffin to be “disentangled” from the effects of the injury for which Mount Arthur was responsible. That involved an analysis of the stream of High Court authority in Watts v Rake (1960) 108 CLR 158; [1960] HCA 58; Purkess v Crittenden (1965) 114 CLR 164; [1965] HCA 34 and Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20.

9. [43]

   Those authorities were addressed in by this Court in Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208, where Ipp JA (with whom Mason P relevantly agreed) explained the operation of the relevant principles thus:

10. [44]

    The problem for Mount Arthur in the present case was its failure to lead any evidence permitting any “disentanglement” in accordance with the principles identified in Watts v Rake, Purkess v Crittenden and Malec v Hutton to occur. This is a case where the evidence does not adequately establish the possible consequences of the pre-existing condition relevant to all but one of the component parts of the award of future out of pocket expenses.

11. [45]

    The one exception relates to an adjustment for out of pocket expenses for future GP consultations. This is because of the finding at [311] of the primary judgment that it was more likely than not that in the future, half of the plaintiff’s medical consultations would have been incurred due to her pre-existing conditions. Applying the relevant principles, only half of the award of $12,990.60 which was made for future GP consultations should have been made. The relevant award should have been for $6,495.30.

12. [46]

    So far as the remaining components of the award of future out of pocket expenses are concerned, Mount Arthur failed to demonstrate that a possible consequence of Ms Duffin’s pre-existing condition was that she might in the future incur any of the expenses awarded by the primary judge in any event. These may be addressed in turn.

13. [47]

    The primary judge made an award of $84,483.00 for the costs of future consultations with a psychologist. Mount Arthur made no attempt to lead evidence from any witness, including the psychologists who gave evidence, that assuming the injury suffered in 2013 had not occurred, Ms Duffin might nevertheless have required psychological assistance by reason of her pre-existing conditions. To the contrary, two psychologists gave evidence jointly before the primary judge and that joint evidence did not address the fact or possible effect of her pre-existing spinal and hip conditions or the case which Mount Arthur now seeks to advance with respect to the claim for future medical treatment. The experts were asked:

14. [48]

    No suggestion was made in that evidence (or in any other evidence at the trial) that by reason of her pre-existing conditions Ms Duffin might have needed the assistance of a psychologist if she had not suffered the workplace injury in 2013. The suggestion by Mount Arthur on appeal that the fact of Ms Duffin’s pre-existing injuries might have led to a need for psychological assistance in the future was mere conjecture, not supported by the evidence.

15. [49]

    The primary judge made an award of $15,923.25 for the costs of future medications. No suggestion was made in evidence that by reason of pre-existing conditions Ms Duffin might have needed some part of that medication in any event. Given the absence of evidence about this subject (including the nature and extent of any medication allegedly required) the evidence does not adequately establish the possible consequences of the pre-existing condition for Ms Duffin’s medication requirements such that a reduction is warranted.

16. [50]

    The primary judge made an award of $9,414.00 for participation in a pain program and $1,053.42 for occupational therapy. No suggestion was made in evidence that by reason of her pre-existing conditions Ms Duffin might have needed that pain program or occupational therapy in any event.

17. [51]

    The primary judge made an award of $21,114.93 for the costs of equipment in the future. Mount Arthur made no attempt to lead evidence from any witness, including the occupational therapists who gave evidence, that assuming the injury suffered in 2013 had not occurred, Ms Duffin might nevertheless have required equipment in the future by reason of her pre-existing conditions. To the contrary, two occupational therapists gave evidence jointly before the primary judge and that joint evidence was inconsistent with the case Mount Arthur now seeks to advance. The experts were asked:

18. [52]

    No suggestion was made in evidence that by reason of her pre-existing conditions Ms Duffin might have needed any of the assistance the subject of the occupational therapists’ evidence in any event. Given the absence of evidence, in circumstances where expert occupational therapists were called and not asked about this subject, Mount Arthur failed to lead even a scintilla of evidence supporting the submission that some part of the award of costs of equipment in the future might have been incurred in any event by reason of Ms Duffin’s pre-existing conditions.

19. [53]

    As described in MFI 2, the primary judge made an award of $21,686.85 for physiotherapy and hydrotherapy and a separate award of $8,749.04, also described as being for hydrotherapy. The parties did not explain how it was that two separate awards for hydrotherapy were agreed to be made, beyond pointing out that the primary judge had addressed the topic of hydrotherapy twice in her judgment, at [322] [4] and [337]. [5] Mount Arthur did not complain about the primary judge addressing the issue twice, nor about the calculation of either amount. As Mount Arthur bore the onus to disentangle the extent to which Ms Duffin’s pre-existing conditions were likely to have required hydrotherapy in any event, the failure to explain the reason for, or calculation of, the two separate awards is an issue for Mount Arthur.

20. [54]

    I was, however, initially sympathetic to Mount Arthur’s claim that in accordance with the principles in Watts v Rake, Purkess v Crittenden and Malec v Hutton, some adjustment of the award for hydrotherapy should have been made by the primary judge. Upon analysis, however, there was no sufficient evidence that assuming the injury suffered in 2013 had not occurred, Ms Duffin might nevertheless have needed that hydrotherapy the subject of this component of the award. The high point of the evidence in favour of an adjustment was that two orthopaedic surgeons gave the following evidence jointly:

21. [55]

    The extent to which the matter was taken any further in evidence was limited. Dr Hopcroft explained that the suggested hydrotherapy was linked to the suggested need for weight loss and the need for domestic care. Mount Arthur did not demonstrate the possible consequences of the pre-existing condition for Ms Duffin’s need for hydrotherapy, in the absence of the injury she suffered. It is possible, although not clarified in the evidence, that the “planned hydrotherapy” of $500 per year referred to in item 9 was the same “planned hydrotherapy” referred to in item 10. The time at which the “planned hydrotherapy” referred to in item 10 would have been required, in the absence of the injury suffered in 2013, was not explored in the evidence. I have concluded that the evidence on this topic was not such that a reasonable person could draw from it the inference that the possible consequences contended for by Mount Arthur existed.

22. [56]

    Ground 2 of the appeal should be allowed, but only to a very limited extent being the discrete topic of GP visits addressed at [45] above. The award of $157,773.24 [6] should be reduced, but only by $6,495.30 to give effect to the finding of the primary judge at [311]. Mount Arthur otherwise failed adequately to establish the possible consequences of Ms Duffin’s pre-existing conditions. A reasonable person could not draw the inference that the possible consequences contended for by Mount Arthur existed from the evidence led.

Ground 3 of the appeal – Future domestic care

1. [57]

   There was no dispute on the appeal that Ms Duffin requires future assistance of a commercial nature. The primary judge held at [397]:

2. [58]

   In respect of “phase three” of Ms Duffin’s past domestic care referred to in this passage, her Honour said at [388]-[391]:

3. [59]

   The parties agreed that the issue should be addressed by reference to the principles of assessing damages explained in Watts v Rake, Purkess v Crittenden and Malec v Hutton as applied in Seltsam v Ghaleb set out above at [43].

4. [60]

   Mount Arthur submitted that the primary judge should have made an allowance of four hours per week of domestic assistance for 10 years, to which a further reduction of 25% should have been applied, by reason of Ms Duffin’s pre-existing conditions. This was the submission made at trial. Ms Duffin’s case at trial was that 12 hours of domestic assistance per week should be allowed, plus an award for fortnightly car washing and weekly grocery delivery. The primary judge awarded seven hours of domestic assistance per week, plus an award for fortnightly car washing and grocery delivery, which the parties agreed resulted in an award of $346,635.50. The primary judge recorded that in making the award she had taken into account a deduction which should be made having regard to Ms Duffin’s pre-existing condition, although she did not quantify that deduction.

5. [61]

   Mount Arthur has not established error by the primary judge in making this award. As I have said, two expert occupational therapists gave evidence. They were not asked to make any assumptions about the extent to which Ms Duffin may have been incapacitated by her pre-existing condition or asked any questions at all about that topic. As a result, there was not even a scintilla of evidence from which a reasonable person could draw the inference that the possible consequences contended for by Mount Arthur existed.

6. [62]

   The two occupational therapists, Ms Sanja Zeman and Ms Anita Barbara, provided individual reports to the court. They were asked to confer and clarify any areas of discrepancy in relation to those reports. The relevant extracts of their joint conclave report provided:

7. [63]

   The essential contest between these experts was that Ms Barbara, called by Ms Duffin, estimated that 12 hours of future assistance per week was required plus fortnightly car washing and a weekly grocery delivery fee, whilst Ms Zeman, called by Mount Arthur, had a much more optimistic estimate of Ms Duffin’s future care needs at four hours per week plus fortnightly car washing, based largely on surveillance video footage which had been obtained. Neither expert was asked to address Ms Duffin’s future care needs on the basis of any assumption about her pre-existing conditions.

8. [64]

   Mount Arthur did not set out to prove at the trial any possible consequence of the pre-existing conditions upon the demonstrated need for Ms Duffin’s future care. That is, the evidence did not adequately establish the possible consequences of Ms Duffin’s pre-existing conditions. It was not possible to carry out the comparison and assessment required for the exercise Mount Arthur invited this Court to conduct. There was no evidence about the possible consequences of the pre-existing conditions upon the need for future commercial care. A reasonable person could not draw from the evidence the inference that the possible consequences contended for by Mount Arthur existed.

9. [65]

   Ground 3 should be dismissed.

Ground 4 of the appeal – Non-economic loss (s 151G of the Workers Compensation Act)

1. [66]

   The parties proceeded on the basis that s 151G of the Workers Compensation Act before the 2001 amendments applied: [7]

2. [67]

   The primary judge assessed Ms Duffin’s non-economic loss at 45% of a most extreme case at [244]. In arriving at that assessment, her Honour specifically took into account Ms Duffin’s pre-existing osteoarthritis in the right hip and degenerative changes in her lumbar spine prior to the accident. Her Honour noted that, on any view, Ms Duffin was no longer capable of working as a production employee at the mine for a period exceeding 10 years.

3. [68]

   While acknowledging that the assessment of Ms Duffin’s non-economic loss involved discretionary considerations, Mount Arthur submitted that the primary judge failed to have regard in any significant or definable way to the extent to which Ms Duffin would have experienced pain, suffering and loss of amenities of life in any event by reason of her pre-existing conditions.

4. [69]

   I am unable to agree.

5. [70]

   In making the assessment required by s 151G of the Workers Compensation Act, the primary judge specifically took into account:

   1. (1)

      Ms Duffin’s age at the time of the accident;

   2. (2)

      her pre-existing conditions, namely, osteoarthritis in the right hip (which was asymptomatic prior to the accident, but would have resulted in a hip replacement at some stage because of its progressive nature) and degenerative changes in her lumbar spine;

   3. (3)

      her significant weight loss in the preceding few years;

   4. (4)

      her “full and enjoyable life” prior to the accident. Ms Duffin had no restrictions upon her ability to work in her demanding job while caring for her two teenage children. She was able to maintain her home and garden. She experienced no psychological impairment of function or capacity to undertake the usual range of work, social and domestic activities, outside of a brief period after her husband’s death in 2008; and

   5. (5)

      the fact that Ms Duffin was no longer capable of working as a production employee at the mine for a period exceeding 10 years.

6. [71]

   Her Honour concluded that the accident had “dramatically changed” Ms Duffin’s life, which is now marked by significant back and right hip/leg pain. Ms Duffin walks with a limp, which varies in severity. She occasionally uses a walking stick. On bad days, she stays in bed due to her physical and psychiatric injuries. The primary judge also found that substantial psychological trauma suffered by Ms Duffin affected her ability to perform the entire range of pre-accident activities of daily living.

7. [72]

   These conclusions for the purposes of s 151G of the Workers Compensation Act were reached after a lengthy survey of the medical evidence. The primary judge referred in terms to the conclusions drawn in that evidence in addressing the issue posed by s 151G of the Workers Compensation Act. Her Honour was not required to do any more.

8. [73]

   In oral submissions, the appellant sought to expand the complaint made in the notice of appeal as one encompassing an absence of reasons. That complaint should be rejected. First, the absence of reasons was not part of the notice of appeal and no application was made to amend the grounds of appeal. The submission should be rejected for that reason alone. Secondly, even if the complaint made by Mount Arthur about the absence of reasons were permitted to proceed, in circumstances where the primary judge set out in terms the matters she took into account by reference to findings made about the ways in which the accident had “dramatically changed” Ms Duffin’s life, which are not challenged, the complaint about an absence of reasons is without substance.

9. [74]

   No error has been shown in the primary judge’s assessment under s 151G of the Workers Compensation Act. Ground 4 of the appeal should be dismissed.

Grounds 1 and 2 of the costs appeal

1. [75]

   On 30 August 2018, Ms Duffin served on Mount Arthur an Offer of Compromise stating the following:

2. [76]

   Rule 20.26 of the UCPR provides, relevantly:

3. [77]

   Rule 42.14 of the UCPR provides, relevantly:

4. [78]

   The essential problem with the offer made in this case is that it did not comply with UCPR r 20.26 in that the orders the Court would make if the offer were accepted were not “identified”.

5. [79]

   I take a broad view of the circumstances in which orders to be made by the Court may be “identified” within the meaning of UCPR r 20.26. This is not the occasion to try to describe all of the circumstances where the orders to be made may relevantly be “identified” within the meaning of UCPR r 20.26, even in the absence of a specification of those orders.

6. [80]

   In the present case, however, there was a critical issue left unresolved by the terms of the offer. In context, it is not possible to discern whether, if the offer were accepted, the Court would be invited to enter judgment for the plaintiff, enter judgment for the defendant or make some other order bringing the proceedings to an end. The absence of identification of the basis upon which the proceedings would be brought to an end by acceptance of the offer was a critical omission. By reason of this omission, there was no “offer” made under UCPR r 20.26 capable of engaging UCPR r 42.14(2).

7. [81]

   The primary judge cited the judgment of McColl JA, with whom Gleeson JA and Sackville AJA agreed, in Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No 2) [2014] NSWCA 391 as supporting the making of an indemnity costs order here. I am unable to agree. That case did not involve an offer which had failed to identify the order the Court would be asked to make if the offer had been accepted.

8. [82]

   Ms Duffin did not advance an alternative claim for indemnity costs based on the principles in Calderbank v Calderbank [1976] Fam 93. This concession was correctly made. An offer that does not comply with UCPR r 20.26 will not of itself take effect as a Calderbank offer unless there is something in the terms of the offer, or in the surrounding circumstances, to indicate that it is otherwise proposed to be relied upon on the question of costs: Whitney v Dream Developments Pty Ltd (2013) 84 NSWLR 311; [2013] NSWCA 188 at [43].

9. [83]

   It follows that the costs appeal should be allowed and the award of indemnity costs made by order 1 on 23 June 2020 set aside.

Costs of the appeal

1. [84]

   Section 98 of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion with respect to costs. Under r 42.1 of the UCPR the general rule is that the Court is to order that costs follow the event. The “event” may be characterised in more than one way. Generally the “event” refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] (Ward, Emmett and Gleeson JJA). Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22.

2. [85]

   The relevant principles for the determination of costs on an issue-by-issue basis were stated in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] (Beazley, Ipp and Basten JJA):

3. [86]

   The present is a case where the various issues dealt with were severable and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings. Such an exercise will be carried out on a relatively broad brush basis.

4. [87]

   The appellant has achieved complete success on only one issue, costs, which occupied virtually none of the written submissions or hearing time on the appeal. The only other topic the appellant succeeded on in part was ground 2, which resulted in a change of less than $7,000 in the award made by the primary judge. [8]

5. [88]

   To reflect the relative success of the parties on the severable issues I would award the appellant only 5% of its costs of the appeal. The respondents succeeded on virtually every issue. I would award them 95% of their costs of the appeal. Rather than make separate awards of costs it is appropriate to take an overall approach to costs by way of set off and I propose that the appellant be ordered to pay 90% of the respondent’s costs of the appeal.

Orders

1. [89]

   For the foregoing reasons I propose the following orders:

   1. (1)

      Appeal allowed in part;

   2. (2)

      Set aside order 1 made on 20 May 2020 and in lieu thereof order that the defendant pay to the plaintiff the sum of $2,487,891.10;

   3. (3)

      Set aside order 1 made on 23 June 2020 and confirm that the defendant is ordered pay the plaintiff’s costs of the trial on an ordinary basis;

   4. (4)

      Appeal otherwise dismissed;

   5. (5)

      Order the appellant pay 90% of the respondent’s costs of the appeal.