Niven v SS

Court of Appeal (NSW)|2006-10-24|Before: Beazley JA, Giles JA, Tobias JA, Kirby P

CITATION: Niven v SS [2006] NSWCA 338 This decision has been amended. Please see the end of the judgment for a list of the amendments.

JUDGMENT OF: Beazley JA at 1; Giles JA at 3; Tobias JA at 4

CATCHWORDS: DAMAGES - damages arising from indecent assault of a minor - civil proceedings conducted prior to criminal proceedings - where defendant in both proceedings sought stay in civil proceedings until completion of hearing of criminal proceedings - stay refused - whether refusal of stay amounted to a denial of procedural fairness - DAMAGES - aggravated damages - exemplary damages - future economic loss - general damages - assessment - principles - whether excessive - CIVIL PROCEDURE - stay application - principles - guidelines enunciated in McMahon v Gould (1982) 7 ACLR 202 - whether miscarriage of discretion

LEGISLATION CITED: Crimes Act 1900, ss 61J(1), 61M(1), 61N(1) Criminal Procedure Act 1986, ss 9, 93

Baker v Commissioner of Federal Police (2000) 104 FCR 359 Daniels v Thompson [1998] 3 NZLR 22 Gray v Motor Accident Commission (1998) 196 CLR 1 Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 House v The King (1936) 55 CLR 499 CASES CITED: James v Hill [2004] NSWCA 301 McMahon v Gould (1982) 7 ACLR 202 Regina v Prasad (1979) 235 ASR 161 Rookes v Barnard [1964] AC 1129 W v W [1999] 2 NZLR 1 Yuill v Spedley Securities Ltd (in liq) (1992) 8 ACSR 272

PARTIES: Arthur Bruce Niven SS

COUNSEL: A: G Flick SC / E Petersen R: R Toner SC / C Heazlewood

SOLICITORS: A: Blaxland Mawson & Rose, Cooma R: Griffiths Tierney, Bega

LOWER COURT FILE NUMBER(S): DC 12/04 (Bega District Court)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40111/06 DC 12/04 (Bega)

BEAZLEY JA GILES JA TOBIAS JA

Thursday 30 November 2006 ARTHUR BRUCE NIVEN v SS Judgment 1 BEAZLEY JA: I have had the advantage of reading in draft the judgment of Tobias JA with whose reasons and proposed orders I agree. 2 I wish, however, to make one observation. Kirby P in Yuill v Spedley Securities Ltd (in liq) (1992) 8 ACSR 272 at 274 commented upon the public interest in the primacy of the administration of criminal justice and the fact that McMahon v Gould (1982) 7 ACLR 202, which governs the outcome of this case, may not sufficiently reflect that public interest. I consider that there is force in Kirby P's comment, although this case is neither the occasion to reconsider McMahon v Gould, nor, in my opinion, would there have been any different result, for the reasons given by Tobias JA. 3 GILES JA: I agree with Tobias JA. 4 TOBIAS JA: By Ordinary Statement of Claim filed on 30 November 2004 the respondent commenced proceedings (the civil proceedings) against the appellant alleging that when he was approximately 13 years old and in Year 7 at Bombala State High School, he was over a period of time indecently assaulted several times by the appellant at his house in Bombala. 5 On 14 March 2005 the appellant was charged with some 19 offences with respect to the respondent alleged to have taken place between 1 May 1997 and 30 September 1997, of which five were for aggravated sexual offence pursuant to s61J(1) of the Crimes Act 1900, three for aggravated indecent assault pursuant to s61M(1) of the same Act and one for incite person aged under 16 years to commit an act of indecency pursuant to s61N(1) of that Act (the criminal proceedings). A committal hearing was first listed for mention before Cooma Local Court on 4 May 2005. 6 The assaults the subject of the criminal proceedings were relevantly identical to those the subject of the civil proceedings. In the latter, the respondent claimed damages alleging a severe psychological reaction, depression, shock, anxiety, loss of self-esteem, irritability, insomnia, paranoia and personality disorders. He also claimed aggravated and/or exemplary damages upon a number of grounds. 7 On 17 March 2005 the appellant filed Notice of Grounds of Defence in the civil proceedings in which he denied the assaults in question. On 29 September 2005 a status conference with respect to those proceedings was held at the District Court at Bega, at which time they were listed for hearing at the District Court civil sittings to be held at Batemans Bay commencing on 7 November 2005. 8 On 11 October 2005 the Wollongong office of the Director of Public Prosecutions filed an agreement between the Director and the appellant for a direction under s9 of the Criminal Procedure Act 1986 consenting to the attendance of the respondent and another complainant, who was the respondent's friend, for cross-examination at the committal hearing of the criminal proceedings. The special reasons given pursuant to s93 of that Act for the attendance for cross-examination of the two complainants was that their evidence might overlap such as where one complainant may have witnessed acts allegedly perpetrated on the other, as well as with respect to dates and specificity of the acts of the appellant, the subject charges. 9 On 3 November 2005 the appellant filed a Notice of Motion and supporting affidavit in the civil proceedings for an order that they be stayed until after completion of the committal hearing in the Local Court. At that time, the criminal proceedings had been listed for further mention at Cooma Local Court on 9 November 2005 in order to set a date for the committal hearing. It was anticipated that the date set would be in either December 2005 or January 2006. In fact, the committal hearing was set down for hearing on 12 December 2005. 10 Relevantly, the ground upon which a stay of the civil proceedings was sought until after the completion of the committal hearing was articulated in par 7 of the affidavit of the appellant's solicitor sworn 2 November 2005 and which was in the following terms: "The Director of Public Prosecutions has agreed that there are special reasons in the interests of justice as to why the plaintiff in these proceedings, and the other complainant [BP], should be called to be cross-examined at the committal hearing. The committal hearing will be an important opportunity for the defendant to test the evidence of the two complainants in the criminal proceedings. It would significantly prejudice the defendant's defence if the plaintiff in these proceedings is given the opportunity of giving evidence, being cross-examined and hearing the defendant's evidence in these proceedings before being subjected to cross-examination at the committal hearing. Apart from giving the Plaintiff the opportunity of rehearsing his own evidence, compelling the defendant to give evidence in these proceedings would effectively negate the effect of the defendant's relying on his right to silence prior to the complainant SS giving evidence in the criminal proceedings." 11 His Honour Judge Neilson heard the appellant's Notice of Motion on 7 November 2005. After argument his Honour delivered an ex tempore judgment in which he dismissed the appellant's application with costs. 12 His Honour then embarked upon the hearing of the civil proceedings on 10 November 2005 and on the following day delivered a judgment in which he accepted the respondent's evidence that he had been sexually assaulted on at least five occasions. His Honour then assessed damages in the sum of $386,000 made up as follows:

General Damages $180,000 Interest $16,000 Future Medical Treatment $10,000 Future Economic Loss $120,000 Exemplary Damages $60,000 13 On 2 June 2006 the appellant filed a Notice of Appeal with Appointment against the primary judge's decision to dismiss his application for a stay of the civil proceedings. The grounds of appeal also alleged that his Honour's award of both aggravated and exemplary damages was excessive and otherwise bad in law; that his award of future economic loss was also excessive and bad at law; and that his award of general damages was unsupported by the evidence. 14 At the hearing before this Court, the appellant abandoned his appeal against the primary judge's award of aggravated damages, accepting that such damages had not in fact been awarded. He also abandoned his appeal against his Honour's award of general damages and did not dispute the amount of exemplary damages if otherwise the respondent was entitle to an award thereof.

The appeal against the refusal of a stay (Grounds of Appeal 1, 2 and 3)

(a) The tender of fresh evidence 15 At the commencement of the hearing before this Court, the appellant sought to read an affidavit of his solicitor sworn 16 October 2006 in support of an application to receive additional evidence in the appeal pursuant to Pt 51 r19 of the Supreme Court Rules. In this respect, the appellant's trial in the criminal proceedings had commenced in the District Court at Queanbeyan before her Honour Judge English and a jury on 4 September 2006. On 6 September 2006 her Honour directed the jury to return a not guilty verdict on Counts 4, 5, 11 and 18. Further, after receiving what is known as a Prasad direction (Regina v Prasad (1979) 235 ASR 161), the jury returned verdicts of not guilty on the other counts in the indictment relating to the alleged assaults upon the respondent. 16 Apart from a letter from the District Court Criminal Registry at Wollongong to the appellant's solicitor dated 13 October 2006 confirming the result of the appellant's trial on 6 September 2006, application was also made to tender the transcript of the criminal trial for 4, 5 and 6 September 2006. After hearing argument with respect to the admissibility of the transcript, the Court rejected its tender indicating that it would include its reasons for doing so in its judgment with respect to the substantive appeal. Those reasons are as follows. 17 It was at the forefront of the appellant's submissions that the primary judge had erred in refusing a stay of the civil proceedings until the conclusion of the committal hearing and that by reason of that refusal his counsel was inhibited in his cross-examination of the respondent in those civil proceedings. It was further submitted that a reading of the respondent's cross-examination in the civil proceedings indicated that that cross-examination had in fact been truncated and was significantly less detailed than might otherwise have been the case had the respondent first been cross-examined at the committal hearing or (had the appellant been committed for trial) at that trial. 18 A reading of the transcript of the cross-examination of the respondent in the civil proceedings reveals that it was directly put to him that the various assaults in respect of which he had given evidence in chief had not occurred, a proposition that he denied. The following questions and answers at pp30-31 of the transcript of 10 November 2005 established that fact: "Q. I suggest that on the first occasion that you went to Mr Niven's house he did not touch your genitals with his hands or anything else? A. That's correct. Q. I suggest that on the first visit between you and [BP] to Mr Niven's house you didn't see Mr Niven touch [BP]'s genitals either did you? A. That's correct. … Q. Adopting the name [BP] if you don't mind and I suggest that there was no subsequent visit by you and [BP] to Mr Niven's house while Mr Niven was home, together, correct? A. That's incorrect. Q. I suggest that after you visited Mr Niven's house together with [BP] you went back there once and only once, do you agree with that? A. No HIS HONOUR: Q: What's being put to you [SS] is that you and [BP] went only once together to Mr Niven's house, is that true? A. No, it's not. … Q. I think you've agreed with me that there were times when you went to the house when Mr Niven wasn't there. On those occasions you found that the back door was unlocked. A. That's not true. Q. I suggest that you never say at any time that Mr Niven had oral sex performed on or performed by your friend [BP]? A. That's not true. Q. You never saw Mr Niven sexually penetrate [BP]'s anus or [BP] penetrate Mr Niven did you? A. No I never seen that. Q. I suggest there was no time at which Mr Niven ever performed oral sex upon you? A. That's incorrect. Q. There was no time that you performed oral sex upon him? A. That's incorrect. Q. I suggest that you never penetrated his anus and never penetrated your anus? A. That's incorrect." 19 It was submitted that if one compared the above cross-examination of the respondent in the civil proceedings with his extensive cross-examination in the criminal proceedings as evidenced by the transcript which was sought to be tendered, the proposition for which the appellant contended, namely, that as a consequence of the refusal of the stay the appellant's counsel was limited in his cross-examination of the respondent. 20 The appellant further contended that in the conduct of the civil proceedings his counsel was faced with a choice: to either cross-examine the respondent in detail and thereby expose the basis upon which it was proposed to attack his evidence including his credibility in the criminal proceedings, or to inhibit or truncate that cross-examination so as to not expose the manner in which it was intended to cross-examine him in those proceedings. 21 Given the manner in which the respondent was cross-examined before the primary judge, it was submitted that the second course was the one adopted by the appellant's counsel at the civil trial. 22 The appellant conceded that the tendering of the transcript of the criminal trial was relevant only to the submission that by having to adopt the choice of conducting a truncated cross-examination of the respondent in the civil proceedings, the appellant was denied procedural fairness. There are, however, at least three difficulties with that proposition. First, the appellant had retained different counsel in the civil proceedings to the counsel retained for the committal hearing and/or the criminal trial. Second, there was no evidence as to whether the appellant's counsel in the civil trial had the same instructions for the purpose of cross-examining the respondent as his counsel had at the criminal trial. Third, counsel appearing for the appellant in the civil proceedings (who was also junior counsel for the appellant on the appeal), had not provided the Court with any evidence to support the proposition that his cross-examination was inhibited in the manner alleged. It is true that the appellant did not give evidence in the civil proceedings and, because of the course which the trial took after the close of the prosecution case in the criminal trial, he was not called upon to give evidence at that time. 23 In these circumstances, and assuming that it was open to the appellant to seek to establish that his counsel was in fact prejudiced in the civil proceedings by the refusal of the stay in that he was inhibited in his cross-examination of the respondent at the civil trial, that conclusion could not possibly be reached simply by comparing his cross-examination in the civil trial with his cross-examination in the criminal trial. 24 Accordingly, given the factors to which I have referred in [22] above, such a comparison, even if it could relevantly be made, could not of itself be causative of the unproven fact that the appellant's counsel was inhibited in his cross-examination of the respondent at the civil trial with the result that the appellant was denied procedural fairness. It was for these reasons that the tender of the transcript was rejected.

(b) The primary judge did not err in refusing the stay 25 In his reasons for rejecting the respondent's application for a stay of his civil trial, the primary judge applied the guidelines stated by Wootten J in McMahon v Gould (1982) 7 ACLR 202 at 206-207 and which, omitting citations, are as follows: "(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court; (b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds ; (c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with; (d) Neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding; (e) The court's task is one of 'the balancing of justice between the parties', taking account of all relevant factors; (f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors; (g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's 'right of silence', and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding. I return to this subject below; (h) However, the so-called 'right of silence' does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding; (i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings; (j) In this regard factors which may be relevant include: (i) the possibility of publicity that might reach and influence jurors in the civil proceedings; (ii) the proximity of the criminal hearing; (iii) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses; (iv) the burden on the defendant of preparing for both sets of proceedings concurrently; (v) whether the defendant has already disclosed his defence to the allegations; (vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him; (k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff; (1) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed." 26 McMahon was expressly approved in this Court by McHugh JA in Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 at 59. After observing that the source of the appropriate power of a court when application for a stay of civil proceedings pending the hearing of criminal proceedings was made, was the inherent jurisdiction of the court to prevent an abuse of process and to achieve justice between the competing rights of the plaintiff and the defendant after a proper evaluation of all the relevant circumstances, his Honour identified that approach as having been espoused by Wootton J in McMahon, noting that it had been followed on numerous occasions both in the Court of Appeal and other jurisdictions. It was an approach which required attention be paid to all factors relevant to the case. 27 In the present case the primary judge referred to the "twelve step approach" of Wootton J in McMahon and indicated that he would list each of his Honour's steps and then apply the facts of the current matter to each step. 28 It was submitted that his Honour's discretion miscarried when he mistook the guidelines set out in McMahon as involving a "twelve step approach". It was suggested that in doing so his Honour had excluded from consideration any other relevant factor which was not incorporated within those twelve steps. In my view there is no substance in this complaint as it was not suggested that the primary judge had failed to take into account any relevant factor which was actually put to him. 29 The appellant's next complaint related to his Honour's responses to guidelines (c), (d) and (e). It is appropriate to set them out: "(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with. This of course is in the plaintiff's favour but it should be noted that the emphasis is on whether the plaintiff's rights should be interfered with, not with any rights the defendant has being interfered with; (d) Neither an accused nor the Crown are entitled as of right to have a civil proceedings stayed because of a pending or possible criminal proceeding. This needs no further comment by me; (e) The Court's task is one of 'the balancing of justice between the parties', taking account of all relevant factors. This is the current exercise I am endeavouring to do." 30 The appellant complained that his Honour had erred in his response to guideline (c) by noting that the emphasis was on whether the plaintiff's rights rather than the defendant's rights were being interfered with. However, that response was the inevitable corollary of guideline (c) which asserted that the burden was on the defendant in a civil action to show that it was just and convenient that the plaintiff's ordinary rights should be interfered with. 31 Reliance was then placed upon the following passage from the judgment of Kirby P in Yuill v Spedley Securities Ltd (in liq) (1992) 8 ACSR 272 at 274: "One day it may be appropriate for this Court to reconsider the guidelines stated by Wootton J in McMahon v Gould. There are, in my view, considerations additional to those which are referred to by Wootton J which it would be relevant to consider in proceeding to determine an application for a stay such as was before Rolfe J. For example, it is my opinion relevant to take specifically into account the public's own interest in the normal primacy of the administration of criminal justice, being a part of the public law of the community relevant to its good order and peaceful government. This consideration might help explain why, ordinarily but not universally, such proceedings should be heard and determined first."

cf Baker v Commissioner of Federal Police (2000) 104 FCR 359 at 366 [34]-[35]. 32 Notwithstanding the President's suggestion that at some point this Court might need to reconsider the guidelines stated by Wootton J in McMahon, he nevertheless did not consider that the case with which he was dealing was one which required any such review. In this respect the President (at 273) had observed that Wootton J's guidelines had been proposed so as to "direct, in a principled way, the exercise of the judicial discretion to provide, or refuse, a stay of civil proceedings where a party faced a related criminal charge and alleged a risk of prejudice in the trial of that charge from the prior litigation and determination of the civil action." 33 Furthermore, the President acknowledged that in Halabi McHugh JA in this Court had clearly held that the guidelines adopted by Wootton J in McMahon stated the approach to be followed by judges in this State. His Honour considered also, albeit incorrectly in my respectful view, that Samuels JA in Halabi, although in dissent, had referred to the guidelines with approval and, indeed, admiration. 34 The other two members of the Court in Yuill were Priestley JA and Meagher JA. The former generally agreed with the President except as to his reservation concerning McMahon. His Honour was content to treat that decision as a useful guide to the exercise of the court's discretion in cases such as the one the Court was considering. The only possible criticism that his Honour could see in the guidelines was the use by Wootton J of the words "prima facie" in guideline (a) which he considered might possibly be misleading to some readers. His Honour then observed (at 275): "It seems to me to be plain from the context of the whole set of guidelines set out by [Wootton J] that by 'prima facie' as he used it there, he meant substantially 'unless there is some reason for not doing so'. Once the guidelines are read in that way they are in my respectful opinion irreproachable." 35 Meagher JA agreed that no occasion had arisen to consider the correctness of McMahon and that the guidelines had, therefore, been applied consistently in this State when the courts had been required to deal with applications for a stay of civil proceedings pending the determination of criminal proceedings. 36 Importantly, the appellant did not seek to challenge the correctness of the guidelines or to suggest that this Court should reconsider them in this case. This notwithstanding, it was suggested that the primary judge's response to guideline (c) raised the question that if normal primacy was to be accorded to the administration of the criminal law given the public's interest therein, why should the burden be on the defendant to show that it is just and convenient that the plaintiff's ordinary rights be interfered with. Given that the task of the judge deciding any such application was to balance the competing interests of justice, it should follow that there should be no burden or onus on either party. 37 However, given that no such argument was put to the primary judge and that the appellant specifically eschewed any application to this Court for leave to reconsider any of the guidelines, it is unnecessary to further consider the submission referred to given that it was conceded that the primary judge was justified in applying the guidelines as properly understood. 38 The appellant next submitted that his Honour had misapplied guideline (j)(iii). His response to that guideline was as follows: "I now turn to consider the possibility of a miscarriage of justice, for example by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses. Here one of the concerns raised by the defendant's solicitor in his affidavit is this: 'It would significantly prejudice the defendant's defence if the plaintiff in these proceedings is given the opportunity of giving evidence, being cross-examined and hearing the defendant's evidence in these proceedings before being subjected to cross-examination at the committal hearing.' The question arises is whether these proceedings might enable a potential witness in the Crown case, and for current purposes that is the current plaintiff and the young man who will give evidence as a witness in this case, to 'confess and avoid' as to anything that might be said in defence by the present defendant. However, that ignores the reality that the plaintiff himself and his witness will have to give evidence before the defendant does and will each be subject to cross-examination. An attempt by one of them later to confess and avoid could be met by cross examination of him on the transcript of these proceedings. It is only the defendant who might confess and avoid, his giving evidence second in these proceedings." 39 The appellant submitted that his Honour had erred in his application of the guideline in that he had failed to properly address the fact that the appellant's counsel at the civil trial had two forensic choices open to him when preparing to cross-examine the respondent. The first was to do so vigorously and, having secured favourable answers, to then use them in the criminal proceedings together with any inconsistencies between the respondent's answers in cross-examination in the civil trial and his answers in cross-examination in the criminal trial as a platform to attack his credibility in the latter. The other choice was not to take the risk of the respondent tailoring his evidence in the criminal trial in order to reduce the impact of, or otherwise explain any inconsistencies between, his evidence in each trial. 40 The difficulty with this submission is two-fold. First, there was no evidence that the appellant's legal representatives were troubled by a choice between those options. Second, and more telling, was that this submission was not put to the primary judge. As is apparent from the appellant's solicitor's affidavit quoted by his Honour in the passage from his judgment recorded in [38] above, the only basis upon which it was asserted that there might be a miscarriage of justice within the meaning of guideline (j)(iii) was based upon par 7 of the solicitor's affidavit which I have set out in [10] above. The appellant conceded that the manner in which his Honour dealt with the assertions in that paragraph was beyond challenge. Accordingly, the ground of complaint based on his Honour's failure to consider the options available to the appellant's counsel when it came to cross-examining the respondent in the civil trial should be rejected. 41 The final complaint with respect to his Honour's application of the guidelines was based upon the following passage from his judgment which immediately follows that which I have recorded in [38] above. His Honour said: "Since any potential defence of the defendant must be put to the plaintiff and his witness in cross-examination, I do not believe that a miscarriage of justice is likely or even that there is a significant risk of it." (Emphasis added) 42 The appellant's complaint is with respect to the words which I have emphasised in the above passage. It was submitted that it did not follow that any potential defence of the appellant "must be" put to the respondent and his witnesses in cross-examination in the civil trial as the appellant may have preferred to lose the civil proceedings rather than cross-examine the respondent and his witness to establish any potential defence which he proposed to assert in the criminal proceedings. 43 Again, this was not a matter that was advanced before the primary judge. It cannot be asserted that his Honour's discretion miscarried by his failure to have regard to a proposition that was never the subject of a submission to him. 44 Apart from the submission that his Honour had erred in placing the onus upon the appellant of establishing that his rights were not to be given priority over those of the respondent, and his failure to consider the public interest in the administration of criminal justice and so confining the balancing exercise to the interests of the parties, no other basis was advanced to support the submission that his Honour's discretion in refusing the application for a stay had miscarried within the meaning of House v The King (1936) 55 CLR 499 at 504-505. 45 As the appellant accepted that the present case was not one which required any reconsideration of the guidelines espoused by Wootton J in McMahon, and as the complaints to which I have referred were not advanced to his Honour so that he could deal with them in the exercise of his discretion, it must follow that the appellant's challenge to his Honour's discretionary decision to dismiss his application for a stay of the civil proceedings should be rejected.

(a) The award of exemplary damages 46 In his substantive judgment, his Honour awarded the respondent $60,000 by way of exemplary damages. The appellant did not take issue with the amount but submitted that the award of such damages was contrary to the principle that exemplary damages should not be awarded if the defendant has already been punished in criminal proceedings. It was submitted that this principle should be extended to situations where the defendant is facing criminal prosecution and hence the possibility of punishment. 47 In Gray v Motor Accident Commission (1998) 196 CLR 1 at 14, Gleeson CJ, McHugh, Gummow and Hayne JJ in a joint judgment said: "40. Where, as here, the criminal law has been brought to bear upon the wrongdoer and substantial punishment inflicted, we consider that exemplary damages may not be awarded. We say "may not" because we consider that the infliction of substantial punishment for what is substantially the same conduct as the conduct which is the subject of the civil proceeding is a bar to the award; the decision is not one that is reached as a matter of discretion dependent upon the facts and circumstances in each particular case. 41. There are at least two reasons in principle why that is so. 42. First, the purposes for the awarding of exemplary damages have been wholly met if substantial punishment is exacted by the criminal law. The offender is punished; others are deterred. There is, then, no occasion for their award. 43. Secondly, considerations of double punishment would otherwise arise. In R v Hoar [(1981) 148 CLR 42] Gibbs CJ, Mason, Aickin and Brennan JJ said that there is 'a practice, if not a rule of law, that a person should not be twice punished for what is substantially the same act'. That practice or rule would be breached by an award of exemplary damages in the circumstances described." 48 The primary judge dealt with the issue of exemplary damages in the following paragraphs of his judgment: "Exemplary damages serve, amongst other things, to assuage any urge for revenge felt by victims for engaging in self-help, likely to endanger the peace. They also contain an element of appeasement and they also have a deterrent affect. There is required to be contumelious behaviour, to justify an award of exemplary damages. Here, the defendant, a mature adult man, used his position of influence and authority to degrade and sully a thirteen year old boy, for his own sexual gratification. This is most contumelious behaviour and one which any right thinking member of our community would deplore. In my view, an award of exemplary damage is called for. The defendant ought to be punished for his disregard of the plaintiff's human rights. This is abuse of a young lad and our society must know that the Courts do not accept any justification for such behaviour. I, therefore, propose to award the plaintiff $60,000 exemplary damages."

There was no challenge to these factual findings. 49 It is noteworthy, and it would appear to be the case, that no submission was put to the primary judge of the nature of that now advanced. No doubt this was because it was considered that the principle in Gray to which I have referred had no application to the present case as the criminal trial of the appellant had not yet occurred, whereas in Gray the civil trial occurred after the criminal trial at which the accused had already been punished. 50 A similar argument to that advanced in the present case was rejected by this Court in James v Hill [2004] NSWCA 301 at [81] and [82]. The point made there was that if a civil trial was concluded before a criminal or disciplinary trial at which the defendant was convicted, then it would be open to the sentencing court to take into account that an award of exemplary damages had been made against the defendant/accused when determining the appropriate punishment. Of course, in the present case, the appellant was acquitted and had therefore suffered no relevant punishment in respect of the assaults which the primary judge found he had committed upon the respondent, a finding which was not the subject of challenge. 51 During the course of argument reference was made to the decision of the New Zealand Court of Appeal in Daniels v Thompson [1998] 3 NZLR 22. That case was decided some nine months before Gray. The plurality in Grey (at 15) noted that there was much to be said in favour of the views reached by the majority of the Court of Appeal in Daniels that for a civil court to revisit a sentence imposed in a criminal court for the purpose of deciding whether the criminal received his or her just desserts was "contrary to principle" and must "undermine the criminal process": Daniels at 48. 52 Their Honours in Grey also observed (at 15 [47]) "Other considerations may well arise if relevant criminal proceedings ended in the accused's acquittal. But again those questions do not arise and we do not deal with them." 53 However, they were dealt with in Daniels. The majority decision was accurately summarised by Thomas J (who dissented) as having established the following propositions. First, there should be an absolute bar to civil proceedings claiming exemplary damages where the acts relied upon as the basis for an award of such damages have been the subject of a conviction in the criminal courts. Second, a claim for exemplary damages should be struck out as an abuse of process if the defendant has been acquitted and essentially the same acts that constituted the criminal offences are relied upon. Third, to similarly prevent an abuse of process it would be appropriate to stay the civil proceeding if it appeared a criminal prosecution was likely in respect of the subject matter of the claim for exemplary damages. His Honour noted that these conclusions were reached largely as a matter of public policy in which the role of the State in dealing with criminal conduct was accorded primacy which was absolute where the defendant had been convicted and effectively exclusive where he or she had been acquitted or was liable to criminal prosecution. 54 The decision of the majority in Daniels was upheld by the Privy Council in W v W [1999] 2 NZLR 1, a case in which two actions for exemplary damages had been struck out against the same defendant in respect of conduct which was also a criminal offence and which had been the subject of criminal prosecution. In one case the defendant had been convicted and in the other he had been acquitted. In delivering the judgment of their Lordships, Lord Hoffman observed (at [2]) "The main purpose of exemplary damages (sometimes called punitive damages) is to punish the defendant. This gives rise to two separate but related questions. The first, which their Lordships will call the wider question, is the extent to which the civil law ought to concern itself with the punishment at all, this being more obviously the province of the criminal law. The second, which their Lordships will call the narrower question, is the interaction, in cases in which exemplary damages are in principle available, between the civil remedy and the fact or possibility of a criminal prosecution. As both intended to punish, there is in a general sense a possibility of double punishment, or double jeopardy, which the law ordinarily regards as unfair and contrary to principle." 55 His Lordship noted that on the wider question there was a difference between English law on the one hand and Australian and New Zealand law on the other. In the latter the restrictions on the scope of exemplary damages imposed by Lord Devlin, speaking for the House of Lords in Rookes v Barnard [1964] AC 1129 at 1221, was indicative of the whole concept of exemplary damages being viewed with disfavour as it might well be thought to confuse the civil and criminal functions of the law. Accordingly, the House had decided to confine awards of exemplary damages to a limited category of cases. 56 After referring to the difference between the majority judgment delivered by Henry J and the minority judgment of Thomas J in Daniels, each of which contained an exhaustive survey of the policy issues at stake, Lord Hoffmann observed (at 3) that there could be no doubt that allowing an action for exemplary damages to follow or precede a criminal prosecution carried the risk that a person may be punished twice for the same offence. His Lordship noted that the minority view in Daniels acknowledged that this would be unfair and proposed that any criminal punishment should be taken into account by way of reduction in the damages awarded. 57 However, on the narrower question identified by his Lordship, he noted that there were aspects of the argument which were peculiar to New Zealand including the absence of a tort remedy for compensatory damages for personal injury which had been abolished by the Accident Compensation Act 1972. Accordingly, in New Zealand the absence of a tort remedy for compensatory damages meant that if exemplary damages are barred, the action is struck out altogether. 58 Having determined that the answer to the narrower question, as in the case of the wider one, depended upon one's perception of the balance of public advantage and disadvantage, his Lordship considered that there were no principles which mandated an answer one way or the other. The question, therefore, was whether it would be right for the Board to take a different view of the public interest in New Zealand from that of the New Zealand Court of Appeal. His Lordship concluded that their Lordships should not substitute their own views for those of the National Court of New Zealand. The view of the majority in Daniels was reached as a matter of policy and the choice of policy was for New Zealand and New Zealand alone. 59 However, their Lordships did consider whether the majority in the New Zealand Court of Appeal in W v W had erred in principle where they had held that the acquittal of the defendant even on technical grounds should also bar the civil remedy for exemplary damages notwithstanding that the accused had not been punished at all so that no question of double punishment could arise. Again, their Lordships considered that the decision to bar the remedy after conviction and punishment was plainly a matter of policy. Consistent application of that policy required that it should apply irrespective of the severity or lightness of the punishment imposed by the criminal court. That must also be the case where the sentence was an absolute discharge, in which event it would be illogical to bar an action against an accused who had been convicted and discharged but not against an accused who had been acquitted. 60 Both parties in the present appeal were given leave to provide supplementary written submissions as to the effect of Daniels in a case such as the present where exemplary damages had been awarded in a civil action whilst criminal proceedings were pending (but not yet determined) and in which the accused had been ultimately acquitted. It was submitted that the High Court in Grey had approved the first of the three principles decided by the majority in Daniels, namely, that where there was already a conviction and sentence imposed by the criminal law on a defendant in civil proceedings, it was appropriate that there should be an absolute bar on claims for exemplary damages for conduct which was the same as that the subject of the criminal proceeding. This Court should, therefore, apply the second principle established in Daniels which was to strike out as an abuse of process a claim for exemplary damages in a civil proceeding where the defendant had already been acquitted of essentially the same conduct in a criminal proceeding. Furthermore, it should not matter, so it was submitted, that the acquittal occurred after the conclusion of the civil trial. 61 As I understand this submission, the fact that the appellant had been acquitted of the charges which involved essentially the same conduct as that which he was found to have committed against the respondent in the civil trial, was in effect, fresh evidence which would justify the striking down of the primary judge's award of exemplary damages. The appellant's acquittal would not effect the compensatory damages awarded by his Honour but only exemplary damages which were intended to punish the defendant for conduct showing a contumelious disregard for the plaintiff's rights: see James v Hill at [66] to [69] where the relevant principles are summarised. 62 As I have said, the High Court in Grey left open the position that might arise if relevant criminal proceedings ended in the accused's acquittal prior to the hearing and determination of the civil proceedings for the same conduct. In such an event it would be difficult to suggest the whole of the plaintiff's action including a claim for exemplary damages should be struck out given the differences, particularly with respect to the standard of proof, between a criminal and a civil trial. In my opinion, the position is a fortiori where the acquittal occurs after the conclusion of the civil trial. 63 The fact is that the appellant having been acquitted of the charges preferred against him in the criminal proceedings, no question of double punishment arises. There is no possibility of any punishment. Where, as in the present case, there is no challenge to the primary judge's findings on liability or with respect to the factual considerations which he took into account in determining to award of exemplary damages, I am not prepared to accede to the appellant's submission that this Court should, as a matter of policy, apply by analogy the decision of the New Zealand Court of Appeal in Daniels as affirmed by the Privy Council in W v W to strike out or dismiss a claim for exemplary damages where the appellant has been acquitted of the charges preferred against him subsequent to the conclusion of the civil trial at which exemplary damages were awarded. 64 In my view the whole tenor of the High Court's approach in Grey to the award of exemplary damages is consistent with that position and this is so even though the Court in that case was at one with the New Zealand Court of Appeal in Daniels in concluding that exemplary damages should not be awarded in a civil trial where the defendant, in a preceding criminal trial, had had inflicted upon him or her "substantial punishment". Even in Grey, the Court left for another occasion the meaning of "substantial punishment" particularly if only a nominal penalty for reasons personal to the accused or other reasons had been imposed in the criminal proceedings. 65 In Grey the defendant had been convicted of intentionally causing grievous bodily harm and sentenced to seven years imprisonment. Accordingly, no question as to whether the punishment was other than "substantial' arose. 66 For the foregoing reasons I would reject the appellant's submission that his Honour erred in awarding the respondent exemplary damages.

(b) The award of damages for future economic loss 67 The primary judge dealt with the question of future economic loss upon the basis that the respondent claimed a cushion or buffer for such loss. After noting that after the assaults the respondent had lost any confidence in himself, including any interest in what he was then doing or as to his future, and noting the nature of the work which he had undertaken since the assault, the primary judge concluded that although he could probably earn $500 per week as a shop assistant or barman, waiter or even doing clerical work, he was prevented from doing so by his present psychiatric condition. In this respect Dr Hugh Jolly, consultant psychiatrist, diagnosed the respondent as suffering from severe Post Traumatic Stress Disorder in September 2005 which was having an adverse impact upon his quality of life. 68 Although Dr Jolly considered that the respondent desperately wanted to work and to become "normal again", his psychiatric condition prevented him from doing so. The sexual assault upon him was the cause of his appalling low self-esteem and had created a colossal hurdle for him to overcome particularly in the area of inter-personal relationships. 69 Because he had no money and no job or training prospects, the respondent found it difficult to make in-roads into his psychiatric condition from his own resources. That situation was not going to improve without skilled psychotherapy. As at October 2005 Dr Jolly considered that he was suffering from a form of chronic adjustment disorder with persistent systems of chronic post-traumatic stress and personality and inter-personal issues which were adversely impacting upon his way and quality of life. That position would continue unless and until he had sufficient resources to undergo weekly psychotherapy sessions which might well need to continue for up to 24 months. The primary judge accepted Dr Jolly's evidence. 70 Accordingly, his Honour allowed the respondent $500 per week for three years or $75,000 without applying the discount tables as a cushion whilst he was undergoing appropriate treatment for his psychiatric condition. Over and above that, his Honour considered that there would always be other problems that the respondent might experience in life, and times when he might find it difficult to work and where, for example, he was required to work with people with whom he might feel uncomfortable because of his history of prior sexual abuse. Doing the best he could, his Honour believed it appropriate to award the respondent $120,000 for future economic loss. 71 The appellant submitted that there was no evidence to support a finding of either past or future loss of earning capacity. No wage records were tendered in evidence as the respondent had been in receipt of workers compensation benefits for a considerable period prior to the hearing for an unrelated injury. It was submitted that his Honour's award of $120,000 comprised a speculated three years of employment at $530 per week. In fact $75,000 for three years amounts to $480 per week, although his Honour awarded him $500 per week which, he said, amounted to "roughly $75,000" without applying the discount tables. 72 His Honour then added an additional global $45,000 without, so it was submitted, any apparent evidentiary basis or discount for the vicissitudes of life. It was further submitted that the respondent's oral evidence did not make up for the lack of financial and medical evidence on this point. 73 As I have indicated, the primary judge did not select the figure of $530 per week but a figure of $500 which was ultimately rounded down to $480 per week to reach a figure of $75,000 over three years. The period of three years was that which his Honour considered necessary to enable the respondent to set up the counselling he needed and to complete the necessary course of counselling without which he would be practically unemployable. 74 It is true that to a point the figures adopted by his Honour were arbitrary, but that is the very nature of an award of future economic loss which is provided by way of a buffer or cushion. It would be difficult, as a matter of common sense, to challenge the figure of $480 per week, let alone $500 per week, which his Honour adopted as the level of remuneration that the respondent could have earned in the particular occupations identified by his Honour. Furthermore, there was evidence from Dr Jolly as to the necessity for and the period over which he would need to undertake intensive counselling if he was to return to the workforce. Equally, that evidence supported his Honour's finding that the respondent might still encounter difficulties in the future in respect of which he awarded him the additional modest sum of $45,000. 75 In the foregoing circumstances, I am not persuaded that the appellant has established any demonstrable error with respect to the primary judge's assessment of future economic loss which would justify appellate intervention.

Conclusion 76 In my opinion, the appellant's various challenges to the decisions of the primary judge given on 7 November 2005 and 11 November 2005 should be rejected. Accordingly, I would propose that the appeal be dismissed with costs. **********

30/11/2006 - Amendment to parties - Paragraph(s) Various 05/12/2006 - Pending confirmation - Paragraph(s) Coversheet

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Judgment (23 paragraphs)

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Cases Cited (6)