Donald Laurie v Amaca Pty Ltd and ors

CATCHWORDS: Dust Diseases Tribunal :- aggravated damages

Law Reform (Miscellaneous Provisions) Act 1944 (NSW) LEGISLATION CITED: Uniform Civil Procedure Rules Dust Diseases Tribunal Act 1989

NRMA Insurance Ltd v AW Edwards (1995) 11 BCL 200; BC 9403282; Lamb v Cotogno (1987) 164 CLR 1; Grey v Motor Accident Commission (1998) 196 CLR 1; Uren v John Fairfax and Sons Pty Ltd (1966) 117 CLR 118; Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268; CASES CITED: A B v South West Water Services Ltd [1993] 1 All ER 609; Kralj v McGrath [1986] 1 All ER 54; De Reus v Gray [2003] VSCA 84; Myers Stores Ltd v Soo[1991] 1 VR 182; Geagea v New South Wales Ministerial Corporation [2004] NSWSC 118; Crump v Equine Nutrition Systems Pty Ltd [2006] NSWSC 512

Mr J T Rush QC with Mr B F Quinn instructed by Slater and Gordon appeared for the plaintiff

LEGAL REPRESENTATIVES: Mr J C Sheller instructed by Holman Webb appeared for the first defendant Mr B R Ferrari instructed by the Australian Government Solicitor appeared for the second defendant Mr M J Leeming SC with Mr C Mantziaris instructed by Corrs Chambers Westgarth appeared for the third defendant

Dust Diseases Tribunal of New South Wales Matter Number 6057 of 2006 Donald Laurie v Amaca Pty Ltd and Commonwealth of Australia and British American Tobacco Australia Services Ltd 28 September 2006 RULING ON AMENDMENTS CURTIS J

1. These proceedings were commenced on 15 March 2006 by the late Donald Laurie. Mr Laurie died on 29 May 2006. On 10 August 2006 his widow, Claudia Jean Laurie, was appointed executrix of his estate in Texas in the United States of America. Substitution of the plaintiff
2. Mrs Laurie moves the Tribunal for order that the proceedings be amended by the substitution of herself as plaintiff in her capacity as executrix and also in her personal capacity pursuant to which she claims damages under Compensation to Relatives legislation. Such orders are not opposed by the defendants on two conditions. First, that the probate of Mr Laurie's will be resealed in New South Wales, and secondly, that Mrs Laurie undertake that, in the event of her recovering a verdict against any defendant, but failing against others, and further failing to obtain a Sanderson or Bullock order sufficient to protect her against an adverse costs order, she will authorise that defendant against which she has succeeded, to deduct from the verdict moneys, and pay to any successful defendant, sufficient funds to discharge any costs order made in favour of that defendant against the plaintiff. Because Mrs Laurie, and the estate of Mr Laurie are both insolvent, I regard the latter condition as reasonable. Claim for aggravated damages
3. Mrs Laurie also moves the Tribunal for an order that she may further amend the original Statement of Claim by the addition of a claim for aggravated damages against BATAS. This claim is founded on allegations that BATAS intentionally destroyed documents for the purpose of defeating the claim by Mr Laurie. BATAS objects to this further amendment.
4. The plaintiff's draft amended Statement of Claim relevantly pleads (and I summarise): 34. After engaging in the negligent conduct in breach of its duty to Mr Laurie, BATAS instituted a policy of destroying documents which may have provided evidence in support of his claim and pursuant to that policy relevant documents were in fact destroyed. 35. That the intention of that policy was to prevent litigants including Mr Laurie tendering those documents into evidence against BATAS. 36. As a consequence of the development and implementation of the policy the plaintiff "may be prevented from relying upon evidence contained in documents destroyed". 37. The development and implementation of the document destruction policy "evidences BATAS' contumelious, deliberate and conscious disregard for the rights, health, welfare and safety of the deceased and the rights of the Plaintiff". 38. In consequence of these matters the plaintiff is entitled to aggravated damages. Grounds of objection
5. BATAS contends that, as a matter of law, the claim for aggravated damages is untenable because: (a) aggravated damages are not available in a personal injury proceeding; (b) the facts pleaded do not support a claim for aggravated damages; (c) aggravated damages are not available pursuant to the Law Reform (Miscellaneous Provisions) Act 1944 (NSW) (pursuant to which Mr Laurie's action survived for the benefit of his estate). The applicable test
6. The test for whether Mrs Laurie should have leave to amend the pleading so as to include a claim for aggravated damages must be that provided by Pt13 r13.4 (b) of the Uniform Civil Procedure Rules pursuant to which the Tribunal may order that the proceedings be dismissed in relation to a particular claim if "no reasonable cause of action is disclosed".
7. Ritchie's Uniform Civil Procedure Practice at 6207 cites authority for the proposition that "if a claim raises an arguable point of law, summary judgment should generally not be ordered". Further, summary determination is inappropriate in cases involving complex questions of law, the resolution of which will depend upon contentious findings of fact: NRMA Insurance Ltd v AW Edwards (1995) 11 BCL 200; BC 9403282. Are aggravated damages available in personal injury proceedings?
8. It is certain that exemplary damages may be awarded in negligence actions for personal injury (Lamb v Cotogno (1987) 164 CLR 1, Grey v Motor Accident Commission (1998) 196 CLR 1). Some doubt remains as to whether aggravated damages may be awarded in such actions.
9. The term "aggravated damages" is apt to confuse unless one clearly understands that in personal injury proceedings, a claim for "aggravated damages" describes a claim for additional damages in respect of mental harm caused to a plaintiff by some egregious quality of the defendant's breach of duty. The damages are purely compensatory and may not include any measure of punishment or retribution.
10. Windeyer J, in Uren v John Fairfax and Sons Pty Ltd (1966) 117 CLR 118 at 149 said that "aggravated damages are given to compensate the plaintiff when the harm done to him by the wrongful act was aggravated by the manner in which the act was done."
11. The conduct of a defendant sufficient to justify an award for exemplary damages is not confined to that conduct which gave to the plaintiff his cause of action. In Lamb v Cotogno (1987) 164 CLR 1 the High Court (Mason CJ, Brennan, Deane, Dawson, Gaudron JJ), rejected a submission that the conduct of the defendant in leaving the plaintiff by the roadside after injuring him constituted no tort and for that reason could not support an award of exemplary damages. Their Honours said (at 12): "Even if the act of leaving the plaintiff lying on a darkened road, when viewed separately, constituted no compensable wrong, there is no reason why it should be so viewed. Indeed, it is at least arguable that, having caused the plaintiff's injuries through what was held to be a tortious act, the defendant was under a duty to take reasonable steps to alleviate the effect of his wrongdoing".
12. If the scope of the defendant's duty to the plaintiff (of which he is already in breach) extends to require of him that he refrain from aggravating the plaintiff's suffering after the tort is complete, it follows that harm caused by subsequent aggravating conduct should sound in damages whether as exemplary damages or aggravated damages.
13. In Hunter Area Health Service v Marchlewski (2000) 51 NSWLR 268, Mason P confessed to finding no clear guidance in Australian case law on the broader question of whether aggravated damages were capable of being awarded in negligence. He found it unnecessary to decide the question in the instant case.
14. There is nothing contained within the reasoning of the High Court in Lamb v Cotogno or in Grey v Motor Accident Commission inconsistent with the proposition that aggravated damages are available in negligence actions. Judgments in each case specifically identified the nature of harm for which compensatory aggravated damages may be awarded.
15. In Lamb v Cotogno at 8 the Court said that "Aggravated damages, in contrast to exemplary damages, are compensatory in nature, being awarded for injury to the plaintiff's feelings caused by insult, humiliation and the like". In Grey v Motor Accident Commission at [101] Kirby J stated that "aggravated damages are given for conduct which shocks the plaintiff and hurts his or her feelings" (emphasis added). At [103] His Honour clearly envisaged that aggravated damages would be available in a negligence action.
16. English authority has proceeded upon a path not entirely consistent with these formulations, and does not permit the award of aggravated damages as a head of damage separately identified in a negligence action. In A.B. v South West Water Services Ltd [1993] 1 All ER 609 the English Court of Appeal, approving of an earlier decision of Woolf J in Kralj v McGrath [1986] 1 All ER 54, held that a plaintiff's "anger and indignation" generated by the tortfeasor's conduct were not proper subjects for compensation, being neither pain nor suffering.
17. The court did allow that "the ordinary measure of compensatory damages will cover all they have suffered as a result of that breach, physically, psychologically and mentally. Full account will be taken of the distress and anxiety which such an event necessarily causes. To the extent that any of these effects was magnified or exacerbated by the defendant's conduct, the ordinary measure of damages will compensate" (per Sir Thomas Bingham MR at 532-533).
18. The English judges appear to be moved by two arguments. First, the assessment of damages in a negligence action is not conditioned by the extent to which the conduct of the defendant departed from the standard required of a reasonable man. If the injuries be identical, no greater amount of damages may be awarded in a case involving wanton reckless driving than in a case involving momentary inattention.
19. Secondly, damages are the gist of an action in negligence and those damages must be both caused by, and not remote from, the defendant's tortious conduct. Hurt feelings and indignation do not qualify as damage sufficient to ground a cause of action. Further, where those feelings and that indignation are not caused by the conduct of the defendant giving rise to the cause of action, but by subsequent conduct, existing principles of causation and remoteness of damage do not admit of compensatory damages.
20. In Hunter Area Health Service v Marchlewski Mason P expressed agreement with the English cases, and the reasoning upon which they proceeded.
21. Notwithstanding the power of this obiter, contrary arguments may be advanced. Central to a claim for aggravated damages is the circumstance that the harm suffered by the claimant is not identical to that which may have been suffered in different circumstances by a person with identical injuries but who has not cause for "insult, humiliation and the like".
22. The fundamental principle which underlies the law of damages was stated by Lord Blackburn in Livingston v Rawyards Coal Co (1880) 5 App Cas 25 (HL) to be that "where any injury is to be compensated by damages, in settling the sum of money to be given for. . . damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation…".
23. It may be accepted that complete implementation of this principle is constrained by policy considerations which deny recovery for damages which, though direct, are unforeseeable (Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound (No 1) [1961] AC 388 (PC)). Nevertheless, denial of compensation to assuage a plaintiff's foreseeably hurt feelings in an action in negligence is inconsistent with the recognition of the need for such compensation in actions in defamation, assault, (De Reus v Gray [2003] VSCA 84 (27 June 2003)) and false imprisonment (Myers Stores Ltd v Soo [1991] 1 VR 182. One may ask rhetorically, when does justifiable hurt, anger, indignation and umbrage cease to be mental suffering in some degree?
24. Although damage is the gist of an action in negligence, once an action is vested in a plaintiff by virtue of his suffering some damage recognised by the law, there seems no reason to deny to him that full amount of damages justified by Lord Blackburn's principle, provided only that the harm in respect of which he seeks damages has a sufficient causal nexus to the defendant's breaches of duty and is not too remote by way of causation or foreseeability.
25. Both the Australian and the English authorities hold that in an action in negligence, the compensatory damages to which an injured plaintiff is entitled may reflect his greater distress and anxiety if this suffering has been magnified or exacerbated by the aggravating nature of the defendant's conduct. The only points of distinction would appear to be that, inconsistently with an available view of Australian law, English law either does not classify anger, indignation, or hurt feelings generated solely by the egregious nature of the defendant's conduct as suffering which merits further compensation (Kraj v McGrath), or holds that any aggravating conduct of a defendant after the tort is complete is not causally related to that tortious conduct (A.B. v South West Water Services Ltd).
26. I note that the doubts expressed by Mason P in Marchlewski have been echoed by Hislop J in Geagea v New South Wales Ministerial Corporation [2004] NSWSC 118 at [21] and Hoeben J in Crump v Equine Nutrition Systems Pty Ltd [2006] NSWSC 512 at [308]. I have however concluded that, as a matter of law, a claim for aggravated damages as I have described that term in paragraph 7 above remains tenable. It is inappropriate that such a claim should be dismissed by a court of first instance without permitting the claimant to lay before the court the evidence upon which the claim is pressed. Do the facts pleaded support a claim for aggravated damages?

The substantial question 27. BATAS submits that because the document destruction policy pleaded by the plaintiff occurred some 50 years after the breaches of duty said to cause his addiction to cigarettes, there can be no connection between that policy and the conduct giving rise to the cause of action. 28. I am against this submission. If the scope of its duty to the plaintiff required that BATAS refrain from aggravating the plaintiff's suffering after the tort is complete, the elapse of time is immaterial. 29. The Statement of Claim, in paragraph 25 pleads that BATAS knew that the nicotine contained in its tobacco products was addictive. In paragraphs 25 and 26 of its defence to the original statement of claim, BATAS pleads that Mr Laurie voluntarily accepted the risks of smoking although he knew that "smoking was an activity which was difficult to quit". 30. I am at present utterly uninformed by evidence as to the nature of addiction to nicotine and what, if any, effect that may have upon the exercise of unfettered willpower. However, if Mr Laurie desired to cease smoking, and his failure to do so was pharmacologically determined, rather than resulting from personal inadequacy and lack of will, it may be that he would feel a magnification of his distress, or fresh anger and indignation, if he believed that BATAS wrongly maintained to the contrary. 31. Similarly, if he believed that BATAS, for the purpose of defeating his claim, had destroyed documents which would have assisted him in proving that his failure to cease smoking, was, to the knowledge of BATAS, not a personal failing but pharmacologically determined, those same sentiments may be aroused. In either case, if he succeeds on the issue of liability he may also submit that BATAS was in breach of its duty "to take reasonable steps to alleviate the effects of [its] wrongdoing". 31. I must emphasise that I have no view whatsoever as to the merit of the claim. I have speculated upon factual findings in order to test the propriety of the pleadings. The very debate highlights the fact that this case is unsuitable for summary determination. It also illustrates the need for accurate pleading. Deficiencies in the pleading 32. Paragraph 38 of the Statement of Claim pleads that "In consequence of [the document destruction policy] the plaintiff is entitled to aggravated damages". Because identifiable harm remains the gist of a claim for aggravated damages, it is not sufficient to plead that the plaintiff "is entitled to" aggravated damages. Some additional harm, caused by the conduct of the defendant which has been impugned, must be pleaded. 34. Paragraph 31 of the present statement of claim pleads that mental suffering was caused by contraction of lung cancer. If the claim for aggravated damages is to be maintained, the statement of claim must identify that separate mental harm caused by Mr Laurie's forming a belief that BATAS operated the document destruction policy which he pleads. Resolution of the claim for aggravated damages will depend upon findings of fact which describe the state of mind of the late Donald Laurie. The descriptors of that state of mind may ultimately be decisive. Do the provisions of the Law Reform (Miscellaneous Provisions) Act 1944 create a bar to the recovery of aggravated damages?

35. The answer must be no. Section 2 (1) of this Act provides that, upon the death of a person, any cause of action subsisting in that person shall survive for the benefit of the person's estate.
36. Although s2(2)(d) of the Act provides that where the death of the person is caused by the conduct which gave rise to the cause of action, the damages recoverable in the surviving action may not include any damages for the pain or suffering, s12B(2) of the Dust Diseases Tribunal Act 1989 provides that s2(2)(d) does not apply in relation to proceedings pending before this Tribunal at the date of death. Aggravated damages are awarded for pain and suffering. They survive for the benefit of the victim's estate. Further pleading problems
37. The plaintiff, Mrs Claudia Jean Laurie, sues both in her personal capacity as dependent widow, and as executrix of Mr Laurie's estate. The claim for aggravated damages may only be brought in her capacity as executrix, and advanced only in respect of the harm done to Mr Laurie. Paragraph 39 of the Statement of Claim pleads that "the Plaintiff is entitled to aggravated damages". This paragraph should be amended to identify the capacity in which Mrs Laurie claims this damage.
38. Paragraph 37 of the proposed Statement of Claim alleges that the document destruction policy demonstrates a conscious disregard for the rights of Mr Laurie and "the rights of the plaintiff". This pleading is bad in law. An action pursuant to Lord Campbells Act is confined to claims for loss of pecuniary benefits. No damages may be awarded for mental distress. The Statement of Claim should be further amended to delete the allegation relating to the rights of the plaintiff Mrs Laurie. Orders
39. For reasons apparent above, I decline to grant leave to file the particular amended Statement of Claim advanced by Mrs Laurie. General orders are however appropriate.
40. I order that Claudia Jean Laurie have leave to file an amended Statement of Claim substituting herself as plaintiff both in her capacity as executrix of the estate of the late Donald Laurie, and in her personal capacity as a person entitled to claim damages pursuant to the Wrongs Act 1958 (Vic) and the Compensation to Relatives Act 1897 (NSW).
41. This leave is conditional upon the probate of the late Donald Laurie being resealed in New South Wales, and Mrs Laurie in each of her several capacities undertaking that, in the event of her recovering a verdict against any defendant, but failing against others, and further failing to obtain a Sanderson or Bullock order sufficient to protect her against an adverse costs order, she will authorise that defendant against which she has succeeded to deduct from the verdict moneys, and pay to any successful defendant, sufficient funds to discharge any costs order made in favour of that defendant against the plaintiff.
42. I further order that Mrs Laurie, in her capacity as executrix, have leave to include in the amended Statement of Claim a claim for aggravated damages.
43. I reserve the question of costs. Mr J T Rush QC with Mr B F Quinn instructed by Slater and Gordon appeared for the plaintiff Mr J C Sheller instructed by Holman Webb appeared for the first defendant Mr B R Ferrari instructed by the Australian Government Solicitor appeared for the second defendant Mr M J Leeming SC with Mr C Mantziaris instructed by Corrs Chambers Westgarth appeared for the third defendant

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