STATE OF NEW SOUTH WALES v CORBY

Court of Appeal (NSW)|2010-02-12|Before: Beazley JA, Tobias JA, Basten JA

CITATION: STATE OF NEW SOUTH WALES v CORBY [2010] NSWCA 27

JUDGMENT OF: Beazley JA at 1; Tobias JA at 2; Basten JA at 3

(1) Grant leave to appeal on condition that the State pay the respondent's costs in this Court in any event. (2) Appeal allowed in part and orders in the District Court made on 5 June 2009 set aside. (3) In place thereof, DECISION: (a) declare that the plaintiff, absent satisfaction of the requirement of s 26C of the Civil Liability Act, cannot recover compensatory damages (including aggravated damages) but may maintain a claim for exemplary damages, (b) grant the plaintiff leave to amend his pleading, and (c) otherwise dismiss the defendant's motion. (4) Order that the State pay the respondent's costs of the proceedings in this Court.

CATCHWORDS: TORTS - damages - aggravated and exemplary - intentional tort - injury to offender in custody - recovery of personal injury damages prohibited in circumstances where permanent impairment less than 15% - whether aggravated and exemplary damages constitute personal injury damages - Civil Liability Act 2002 (NSW), ss 3B, 26B, 26C - WORDS & PHRASES - "aggravated damages" - "exemplary damages" - "offender in custody" - "personal injury damages"

Civil Liability Act 2002 (NSW), ss 3, 3B, 4, 9, 11, 15, 21, 26A, 26B, 26C, 31; Pt 2A; Sch 1, Pt 11, cll 34, 36 LEGISLATION CITED: Civil Liability Legislation Amendment Act 2008 (NSW), Sch 1 [5] Interpretation Act 1987 (NSW), s 33 Workers Compensation Act 1987 (NSW), ss 151, 151R

Harrison v Melhem [2008] NSWCA 67; 72 NSWLR 380 Lamb v Cotogno [1987] HCA 47; 164 CLR 1 Mount Isa Mines Ltd v Pusey [1970] HCA 60; 125 CLR 383 CASES CITED: New South Wales v Ibbett [2006] HCA 57; 229 CLR 638 State of New South Wales v Bujdoso [2007] NSWCA 44; 69 NSWLR 302 State of New South Wales v Ibbett [2005] NSWCA 445; 65 NSWLR 168 Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; 117 CLR 118

PARTIES: State of New South Wales - Applicant Gregory Edward Corby - Respondent

COUNSEL: P J Saidi - Applicant A Blackman - Respondent

SOLICITORS: I V Knight, Crown Solicitor - Applicant Aitken MacDonald - Respondent

LOWER COURT JURISDICTION: District Court

LOWER COURT MEDIUM NEUTRAL CITATION: Corby v State of New South Wales [2009] NSWDC 117

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2009/00298370 DC 114/2008

BEAZLEY JA TOBIAS JA BASTEN JA

3 MARCH 2010 STATE OF NEW SOUTH WALES v Edward Gregory CORBY Headnote The respondent brought proceedings in the District Court against the State of New South Wales for damages arising out of an assault that took place at the Wagga Wagga police station on 18 February 2006. The assault was occasioned by a number of Corrective Services officers and a police officer, for whose torts the State was vicariously liable. The respondent identified three elements of relief, namely damages, aggravated damages and exemplary damages.

Section 26C of the Civil Liability Act 2002 (NSW) precludes the recovery of damages in circumstances where an offender in custody suffers a degree of permanent impairment less than 15%. The respondent accepted that he was not entitled to compensatory damages due to a failure to meet the 15% threshold, however maintained an entitlement to aggravated and exemplary damages. The State sought to have the statement of claim struck out. Murrell DCJ held that s 26C did not preclude an award of aggravated or exemplary damages.

The issue for determination on appeal was the scope of the prohibition upon recovery contained within s 26C.

The Court held, granting leave to appeal and allowing the appeal in part:

Although there is no presumption against legislative interference with general law rights, there is also no reason to infer interference where the language, statutory history and context do not support it: [31]. Harrison v Melhem [2008] NSWCA 67; 72 NSWLR 380, referred to.

There is no basis for limiting pain and suffering to physical suffering, and accordingly the definition of 'injury' includes matters such as humiliation and injury to feelings. The general damages available for compensation for tortious conduct include aggravated damages, and as such, recovery for aggravated damages is precluded by s 26C: [47]. New South Wales v Ibbett [2006] HCA 57; 229 CLR 638, applied.

The language of s 26C is inapt to preclude recovery of exemplary damages: [53]-[54].

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2009/00298370 DC 114/2008

BEAZLEY JA TOBIAS JA BASTEN JA

3 MARCH 2010 STATE OF NEW SOUTH WALES v Edward Gregory CORBY Judgment 1 BEAZLEY JA: I agree with Basten JA. 2 TOBIAS JA: I agree with Basten JA. 3 BASTEN JA: The respondent, Mr Corby, is the plaintiff in proceedings pending in the District Court in which he seeks damages from the State of New South Wales. The State sought, unsuccessfully, to strike out the claim: Corby v State of New South Wales [2009] NSWDC 117 (Murrell DCJ). The State's application for leave to appeal in this matter turns on the scope of the prohibition contained in s 26C of the Civil Liability Act 2002 (NSW), which is in the following terms: " 26C No damages unless permanent impairment of at least 15% No damages may be awarded (whether for economic or non-economic loss) unless the injury results in the death of the offender or in a degree of permanent impairment of the offender that is at least 15%." 4 Section 26C finds its place in Part 2A of the Civil Liability Act. That Part is concerned, as its heading indicates, to make special provision for "offenders in custody". The terms "offender in custody" and "offender" mean a person covered in one of a number of ways by provisions of the Crimes (Administration of Sentences) Act 1999 (NSW): s 26A(1). It is not in dispute that the plaintiff is an "offender" for the purposes of that provision. 5 The plaintiff claims that on 18 February 2006, at the Wagga Wagga police station in southern New South Wales, he was assaulted by a number of Corrective Services officers and a police officer, for whose torts the State was vicariously liable. The respondent, in his statement of claim, identified three elements of relief, namely damages, aggravated damages and exemplary damages. He now accepts that, because he did not suffer a 15% degree of permanent impairment, he is not entitled to compensatory damages. However, he maintains his entitlement to aggravated and exemplary damages. 6 By notice of motion dated 3 April 2009 the State sought to have the statement of claim struck out "due to the plaintiff's failure to meet the requirements of s 26C" of the Civil Liability Act. The assumption underlying that complaint was that the term "damages" in s 26C included compensatory damages, aggravated damages and exemplary damages, with the result that none of the relief sought by the plaintiff was available to him. On 5 June 2009 Murrell DCJ declined to strike out the pleading, holding that s 26C did not preclude an award of aggravated or exemplary damages, where the relevant level of permanent impairment was not reached. Leave to appeal 7 The matter has proceeded in this Court on the basis of full argument, both in relation to the question of leave and in relation to the substance of the appeal. 8 Three factors justify a grant of leave. First, the question of statutory construction does not admit of a certain answer. Secondly, the extent of the liability (or the immunity) of the State with respect to damages for intentional wrongs committed by its officers, is a matter of public importance. Thirdly, if the State is correct it is appropriate that the proceedings be terminated before either the parties or the courts devote further resources to resolving what are likely to be disputed factual issues. 9 There are three factors which, taken in combination, suggest that the grant of leave should be subject to a condition with respect to the payment of costs. First, the uncertainty as to the correct outcome depends entirely upon a lack of clarity in the drafting of the legislation which the State claims grants it a degree of immunity. Secondly, the Court was advised that there are other cases which will turn on the outcome of this case, in each of which the State is the respondent or defendant. Thirdly, the respondent sought a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the costs of the appeal, if he were unsuccessful. (If were successful, there would be no opposition to an order that the State pay his costs.) In these circumstances, it is appropriate that the grant of leave be subject to a condition that the State pay the respondent's costs in this Court in any event. This position was foreshadowed by the Court at the end of oral argument and the State, through counsel, has since indicated a willingness to abide by such a condition. Accordingly, leave should be granted on that basis. History of Part 2A of Civil Liability Act 10 Section 26C, the terms of which are set out at [3] above, was, with other provisions of Part 2A, inserted in the Act by the Civil Liability Amendment (Offender Damages) Act 2004 (NSW) ("the 2004 Amendment Act"). However, it is necessary to note aspects of the Civil Liability Act in force prior to those amendments. First, there were only two Parts to the Civil Liability Act as originally enacted. Those were Part 1, which contained a number of preliminary provisions, including definitions in s 3, and Part 2, which dealt with personal injury damages. Section 9 provided that Part 2 did not apply to an award of personal injury damages resulting from "an intentional act that is done with intent to cause injury …": s 9(2)(a). (The current equivalent of that provision is s 3B(1)(a), to which reference will be made below.) Bearing in mind that limitation, the Act in its original emanation included a provision materially to the same effect as the present s 21 precluding an award of exemplary or aggravated damages where the cause of the injury was negligence. 11 When it commenced on 19 November 2004, the scope of Part 2A was identified in terms similar to those found in the present s 26B (set out at [25] below) except that it only applied in the case of injuries caused by negligence. Section 26C has not been amended since it was inserted in the Act. 12 The only other provision in the original Part 2A which has present significance was the inclusion in s 26A, after the definitions, of a further subsection which stated that "[other] expressions used in this Part have the same meanings as in Part 2": s 26A(2). That subsection was omitted by the Civil Liability Amendment (Offender Damages) Act 2007 (NSW), which inserted in Part 2A definitions similar to those contained in Part 2 (s 11) of "injury" and "personal injury damages".

13 The critical amendment to Part 2A, for the purposes of this case, was the extension of s 26B so that Part 2A applied, not merely to injuries caused by negligence, but also to injuries caused by "the tort (whether or not negligence) of another person for whose tort the protected defendant is vicariously liable": Civil Liability Legislation Amendment Act 2008 (NSW) ("the 2008 Amendment Act"), Sch 1 [5]. The amendment commenced on 12 November 2008. The amendment operated with respect to liability which had arisen prior to the commencement of the 2008 Amendment Act where there had been no final determination of legal proceedings prior to that date: Civil Liability Act, Sch 1, Part 11, cll 34 and 36. It therefore applied to the present proceedings. Construction of s 3B(1)(a) 14 The extension of the operation of Part 2A to cover intentional torts required an amendment to the provision, now found in s 3B, excluding the operation of the Act from such torts. As it now reads, relevantly for present purposes, that provision states: " 3B Civil liability excluded from Act (1) The provisions of this Act do not apply to or in respect of civil liability (and awards of damages in those proceedings) as follows: (a) civil liability of a person in respect of an intentional act that is done by the person with intent to cause injury … - the whole Act except: … (iii) Part 2A (Special provisions for offenders in custody) …" 15 The amendment to s 3B gives rise to a question whether the definitions contained in Part 1 of the Act (including definitions of "damages" and "non-economic loss") identified below, apply in respect of Part 2A. The language of s 3B(1)(a) cannot be read literally or it would exclude its own operation. Similarly, it cannot be read sensibly so as to exclude the operation of the transitional provisions, which determine its effect. Nor is it sensible to read it as excluding the definitions contained in Part 1, in so far as they apply to Part 2A. Were it otherwise, the meaning of "damages", which is defined in Part 1 (which includes s 3B) might give that word a different meaning in s 3B than it enjoys in Part 2A. Similarly, such an approach would exclude the operation of s 4 (also found in Part 1) which provides that the Act binds the Crown and that the savings and transitional provisions in Sch 1 have effect. Giving s 3B a sensible construction, in accordance with its apparent purpose, exclusion of the operation of the whole Act should not be read as including exclusion of the application of Part 1, as that would potentially give the provisions of Part 2A a different operation from that which they would otherwise have. Definitions relevant to Part 2A 16 In construing particular provisions in a statute, it is appropriate to read each provision in context, which includes reference to any definitions contained within the statute. The Civil Liability Act is replete with definition sections, many of which are limited to the particular Part of the Act in which each appears. Because of the apparent care with which the operation of each definition has been circumscribed, it may be inappropriate to apply a definition provided for the purposes of one Part where the same word is found in another: see State of New South Wales v Ibbett [2005] NSWCA 445; 65 NSWLR 168 at [5]-[11] (Spigelman CJ). The key words, relevantly for present purposes, found in s 26C are "damages" and "injury". As will be seen, each of these words is the subject of definition. However, before turning to those definitions, it should be noted that the connection between the two concepts in s 26C is implicit, rather than express. In other words, there is an assumption that there be an injury in respect of which damages are payable. It is the nature of that relationship which, at least on one view, is critical to the determination of the present case. 17 The relevant definition of "damages" is found in s 3 and reads as follows: " damages includes any form of monetary compensation but does not include: (a) any payment authorised or required to be made under a State industrial instrument, or (b) any payment authorised or required to be made under a superannuation scheme, or (c) any payment authorised or required to be made under an insurance policy in respect of the death of, injury to or damage suffered by the person insured under the policy." 18 There is no suggestion that any of the exclusions apply in the present case, but they are relevant to the extent that, at least by implication, the concept being defined might, absent the exclusions, have applied to such payments. Nevertheless, there was no discussion in the District Court, nor in this Court, as to the scope of the exclusions. Rather, the argument centred on the principal element of the definition, namely "any form of monetary compensation". The argument for the plaintiff was that neither aggravated damages nor exemplary damages constituted a form of "monetary compensation" and therefore neither fell within the definition. 19 On its face, that argument would not be conclusive. The definition is expressed to be inclusive and does not purport to identify everything which falls within its terms. On the other hand, the phrase "any form of" is of such potential breadth of application as to imply that a payment which does not in any sense constitute monetary compensation would not be included. 20 The last argument requires attention to the purpose of both aggravated and exemplary damages. For the argument to succeed, it must be demonstrated that one or both of them do not constitute a form of monetary compensation, a matter discussed below. Even if that were established, it would then be necessary to demonstrate that the term "damages" does not in any event extend to payments which are invariably described by the law as forms of damages, whether aggravated or exemplary. 21 Before pursuing these issues, it is convenient to note the other defined term, namely "injury". That term is defined in s 26A for the purposes only of Part 2A, within which s 26C is to be found. The definition reads as follows: " injury means personal injury and includes the following: (a) impairment of a person's physical or mental condition, (b) disease." 22 Thus, in Part 2A, injury is equated with "personal injury" and is said to include impairment of a person's physical or mental condition. The concept of "personal injury" is not defined in Part 2A, but where it is defined, as in s 5, for the purposes of Part 1A, it is in identical terms to the definition "injury" in s 26A (apart from, again, the presently insignificant addition of pre-natal injury). 23 The ordinary meanings given to the word "injury" by the Oxford English Dictionary (Online) include: " 1. Wrongful action or treatment; violation or infringement of another's rights; suffering or mischief wilfully and unjustly inflicted. … 3.a. Hurt or loss caused to or sustained by a person or thing; harm, detriment, damage."

Although "injury" may refer either to the action of (or treatment inflicted by) the aggressor, or the consequence suffered by the victim, it is apparent that in the Civil Liability Act , the term is used to refer to the consequence and not the cause. Significantly, however, it is clear that the ordinary use of the word extends to a broad range of consequences, including hurt, loss, harm, detriment and damage. In its ordinary meaning, the phrase 'personal injury' would cover all of those adverse consequences when suffered (as most of them must be) by a person. 24 The statutory definition of injury includes the term "impairment". That too is defined in the Oxford English Dictionary to include the action of impairing and the fact of being impaired. The consequence is described as "deterioration" or "injurious lessening or weakening". Again, the concept would appear to cover both serious and less serious consequences. The question for present purposes is whether the concept should be understood as limited to that which gives rise to compensable damages under the general law, where the primary claim is for psychological harm. 25 The operation of Part 2A (and thus s 26C) is addressed in s 26B, in the following terms: " 26B Application of Part (1) This Part applies to and in respect of an award of personal injury damages against a protected defendant in respect of: (a) an injury to a person received while the person was an offender in custody … being an injury caused by the negligence (that is, the failure to exercise reasonable care and skill) of the protected defendant or caused by the tort (whether or not negligence) of another person for whose tort the protected defendant is vicariously liable. (2) This Part does not apply to: … (b) an award of damages for mental harm (within the meaning of Part 3) to a person who was not an offender in custody at the time of the incident that resulted in the mental harm." 26 There are a number of relevant aspects of this provision. First, the reference to a "protected defendant" is a reference to the Crown, within the meaning of the Crown Proceedings Act 1988 (NSW) and thus the State of New South Wales: s 26A. It also includes a government department (although a department would not usually be a defendant) and "members of staff of a government department". Secondly, s 26B indicates that s 26C is limited in its operation to "personal injury damages". That phrase is in turn defined in s 26A to mean "damages that relate to the death of or injury to a person". On one approach, a significant issue in the case is the scope of the words "relate to" as the form of identified connection between the damages and the injury. 27 The present case does not involve an injury caused by negligence and hence the first limb of the circumstances referred to in the concluding words of sub-s 26B(1) is not applicable. However, the second limb may be applicable if any injury suffered by the plaintiff was caused by an intentional tort "of another person" for whose tort the protected defendant is vicariously liable. The operation of this limb is not entirely beyond doubt. Both the State and the allegedly offending officers fall within the definition of "protected defendant". Despite the use of the word "defendant", the statutory concept does not expressly identify a party to the proceedings. If the protection applied generally in respect of all protected defendants, it might be arguable that the phrase "another person" was not intended to identify either the Crown or a public servant, but rather a third party for whose tort the State may be vicariously liable. However, because the section is dealing with an award of damages "against" a protected defendant, there seems to be no reason why the tort for whom the party sued is vicariously liable may not itself be the tort of a protected defendant. 28 Finally, reading the relevant parts of the definitions into s 26B the following is achieved:

This Part applies to and in respect of an award of damages, that relate to impairment of a person's mental condition, against the State, in respect of impairment of a person's mental condition, being an impairment caused by the tort of [a police officer or public servant].

Thus, somewhat awkwardly, the damages must on the one hand "relate to" an impairment and, on the other, be "in respect of" that impairment. Whether anything turns on the different terminology is unclear. Approach to construction of Act 29 The fact that there are nicely balanced considerations tending in different directions gives significance to the approach which should properly be adopted. In Harrison v Melhem [2008] NSWCA 67; 72 NSWLR 380, the Court considered the relevant approach in construing another provision in the Civil Liability Act, namely s 15(3). A question arose as to the weight which should be given to the principle that Parliament is presumed not to intend to abrogate common law rights, thereby requiring clear statutory language upon which to base such a conclusion. A majority of the Court considered that little if any weight could be attributed to that principle: [2]-[11] (Spigelman CJ, Beazley JA agreeing) and, in my judgment, at [209]-[221]. 30 What is required is a purposive approach to the provision in question: Interpretation Act 1987 (NSW), s 33. However, a relevant purpose may be identified at varying levels of particularity. In broad terms, the Civil Liability Act has been described as a statute designed to restrict common law rights with respect to damages for personal injury, primarily with respect to claims based on negligence. Such a general statement of purpose is unlikely to be useful in construing particular provisions. At the next level of particularity, it may be said that Part 2A was designed (in part) to restrict the circumstances in which offenders in custody could recover damages and the kinds of damages they could recover. (The Part also imposes procedural requirements on such claims and deals with the proceeds of such claims.) At the next level of particularity, it may be said that the purpose of s 26C is to prevent the award of damages where the consequence of the tortious conduct does not exceed a particular degree of permanent impairment. However, even at this level of particularity a purposive approach does little to assist in resolving the present question, because it does not reveal whether use of the concept of permanent impairment was adopted because it would be reflected in the measure of damages or, more generally, because it reflected the seriousness of the consequence for the victim. 31 Although there is no presumption against interference with general law rights, there is also no reason to infer interference where the language, statutory history and context do not support it. Indeed, the correct general approach may be that expressed in the Workers Compensation Act 1987 (NSW), s 151, namely that the Act does not affect any liability that exists independently of the Act, except to the extent that the Act otherwise expressly provides. Consideration of reasoning of primary judge 32 Murrell DCJ carefully considered each of the specific aspects of the Civil Liability Act discussed above, except its history. Her conclusions were identified in two paragraphs which may conveniently set out in full, although it is important to bear in mind that they are conclusions and do not reveal her Honour's full reasoning process. "[44] Part 2A does not apply to a claim for aggravated or exemplary damages arising from an assault on an offender in custody, because: (1) Part 2A applies to an award of damages "for injury to a person". The type of injured feelings for which aggravated damages compensate are not an "injury" within the meaning of Part 2A because they are neither an "impairment of a mental condition" nor otherwise an injury of the type that falls within Part 2A. (2) Exemplary damages are not compensatory. Consequently, they are not "damages" within the meaning of the Act. Further, they are not damages "for injury to a person" because they address the conduct of a tortfeasor, rather than the impact of that conduct on an injured person. (3) The purpose of the Amendment Act was to close a "loophole" that had nothing to do with aggravated or exemplary damages. Had the legislature intended that the amendments limit the right of an offender in custody to claim aggravated and exemplary damages, the Amendment Act would have expressly done so. [45] In any event, s 26C does not preclude the recovery of aggravated or exemplary damages in circumstances where the 15% threshold is not met, because: (1) Exemplary damages are not "damages" within the meaning of s 3 and s 26A of the Act because they are not of the same character as damages that involve monetary compensation. (2) As aggravated and exemplary damages address neither economic nor non-economic loss within the meaning of s 26C, they are not caught by that provision. (3) The s 26C concept of "permanent impairment" has no relevance to the type of injured feelings that are compensated by aggravated damages and no relevance to the subject matter of exemplary damages. (4) This interpretation is consistent with s 21 of the Act." 33 The formulation of conclusions, succinctly stated, is a helpful way of identifying the factors to which her Honour gave weight in reaching the final decision. However, each of the factors involved a balancing exercise, which her Honour undertook, but which is not reflected in the conclusions. Some factors are entitled to very little weight, if any. 34 First and importantly, the proposition that Part 2A applies to an award of damages "for injury to a person" is misleading. Had the legislation adopted such language, that would have been a significant consideration; however, it does not. Section 26B, dealing with the application of Part 2A, speaks of damages "in respect of" an injury; s 26A speaks of damages that "relate to" an injury. The words actually used connote a degree of flexibility in the relationship: State of New South Wales v Bujdoso [2007] NSWCA 44; 69 NSWLR 302 at [60]. They are apt to include both aggravated and exemplary damages. On the other hand, the word "for" is only used in connection with "loss" in the words in parenthesis in s 26C, in circumstances which do not expressly import a restriction into the concept of "damages", but may do by implication. 35 Secondly, her Honour relied upon the second reading speech of the Minister as indicating that "the purpose" of the 2008 Amendment Act was to close a "loophole" unrelated to aggravated or exemplary damages. It is true that the Minister's statement of purpose in the second reading speech, set out by her Honour at [12] is to that effect. However, the proposition that there was a "loophole" may itself have been unconvincing. To describe a prisoner who has been the subject of a deliberate assault as "circumventing" the provisions of the Civil Liability Act by pleading a claim in intentional tort rather than negligence, is unpersuasive. Little weight can be given to the second reading speech as a definitive statement of purpose. 36 There remain two critical questions. The first and broader question is whether the concept of "damages" in s 26C was limited to forms of compensatory payments. If it were so limited, exemplary damages, but not aggravated damages, might fall outside its scope. If it were not so limited, both forms of damages would fall within its scope. 37 The second issue arises only if the term "damages" is limited to monetary compensation. In that case, aggravated damages might nevertheless be caught within the preclusive effect of s 26C unless such damages are awarded for something other than an "injury", as understood in ss 26B and 26C. 38 It is convenient to deal first with the question of the meaning of "injury". The definition of injury in s 26A may be found elsewhere in the Act, including s 11, which is in similar terms, but adds "pre-natal injury", a factor of no present consequence. The definition in s 11 applies for the purposes of Part 2 of the Act and therefore s 21, which is the only provision in the Act which expressly deals with aggravated and exemplary damages. It is in the following terms: " 21 Limitation on exemplary, punitive and aggravated damages In an action for the award of personal injury damages where the act or omission that caused the injury or death was negligence, a court cannot award exemplary or punitive damages or damages in the nature of aggravated damages." 39 Her Honour's reasoning in respect of the scope of the word "injury" placed weight upon the view expressed by Spigelman CJ in Ibbett that, in s 21, the concept of "personal injury damages" may not include damages with respect to injury to feelings. His Honour stated at [21]: "The concept of 'personal injury' is reasonably well established in Australian legal practice. It has rarely, if ever, been used to refer to harm to reputation, deprivation of liberty, or to injured feelings such as outrage, humiliation, indignity and insult or to mental suffering, such as grief, anxiety and distress, not involving a recognised psychological condition. (See e.g. Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 359-363.) An award for the emotional harm involved in apprehension of personal violence would not generally be regarded as an award for 'personal injury damages'." 40 That tentative view contrasted with his Honour's conclusion as to the meaning of the word "injury" in s 3B(1)(a), which excluded from the operation of most of the Act, liability in respect of "an intentional act that is done with intent to cause injury …." In that context, his Honour stated at [11]: "I can see no reason why the word 'injury' in s 3B(1)(a) should not be given its natural and ordinary meaning. That meaning would encompass the harm occasioned by an apprehension of physical violence." 41 To similar effect, Ipp JA held that "anxiety and distress would be 'an impairment' of a person's mental condition in accordance with the ordinary meaning of 'impairment', as the word is used in s 11": at [124]. His Honour further concluded that "irrespective of whether the ordinary meaning is attributed to 'injury', or whether it is given the meaning defined in s 11, the word is wide enough to encompass anxiety and stress": at [125]. His Honour further reasoned that the exclusion in s 31 of liability for "pure mental harm", being something less than a recognised psychiatric illness, also suggested that the concept of personal injury damages might extend to such harm, absent such a preclusion. I took a similar view at [212] and [216]. I accepted the Chief Justice's construction of "injury" in s 3B(1)(a) at [218]. 42 Murrell DCJ appears to have adopted the remarks of the Chief Justice in Ibbett in relation to s 21 as restricting the concept of "personal injury damages" in s 26B to damages traditionally available in relation to loss suffered from the negligence of the defendant. That would not cover mental harm or impairment which did not constitute a recognised psychiatric condition: Mount Isa Mines Ltd v Pusey [1970] HCA 60; 125 CLR 383. Because aggravated damages may be assessed by reference to a mental or psychological effect not constituting a recognised psychiatric condition, they might not fall within the scope of Part 2A, as identified in s 26B. Whether her Honour actually adopted that approach is unclear. Although she referred to it at [19]-[21], she also noted that "feelings such as anger, outrage, injured pride, humiliation and fear do not reflect any 'impairment' of a victim's mental condition" and, presumably, might therefore fall outside the definition of 'injury' in s 26A: at [22]. Ultimately, her Honour appears to have determined the issue on a different basis, stating at [27]: "Although aggravated damages are compensatory, they are assessed not only by reference to a plaintiff's reaction, but also by reference to a defendant's conduct. As aggravated damages are not wholly determined by reference to a plaintiff's condition, they are not damages of the same character as those to which the s 26A definition of 'injury' makes reference." 43 This reasoning appears to adopt the proposition that damages, for the purposes of Part 2A, must be entirely compensatory in their purpose and assessed purely by reference to the plaintiff's condition. Her Honour's reasoning with respect to aggravated damages therefore depended upon her conclusion with respect to exemplary damages, namely that they were not truly "damages" for the purposes of s 26C, because they were not awarded by way of compensation. Distinguishing aggravated and exemplary damages 44 Her Honour, correctly, dealt separately with aggravated and exemplary damages. In the context, that was necessary because there is a plethora of statements of the highest authority to support the proposition that aggravated damages are compensatory. The State referred to passages in Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; 117 CLR 118 at 129-130 (Taylor J), at 149 (Windeyer J); Lamb v Cotogno [1987] HCA 47; 164 CLR 1 at 8 and New South Wales v Ibbett [2006] HCA 57; 229 CLR 638, where the following appeared in the judgment of the Court at [31]: "Aggravated damages are a form of general damages, given by way of compensation for injury to the plaintiff, which may be intangible, resulting from the circumstances and manner of the wrongdoing." 45 It is undoubtedly true that exemplary damages are of a different character and are assessed to reflect a contumelious disregard of the plaintiff's rights. As explained by Windeyer J in Uren, a defamation case: "The difficulty of the matter lies in uncertainty of the basis on which damages for defamation are given; and in a still deeper uncertainty as to the fundamental principle of liability in the law of torts, compensation and fault competing for first place. … Compensation is the dominant remedy if not the purpose of the law of torts today. But fault still has a place in many forms of wrongdoing. And the roots of tort and crime in the law of England are greatly intermingled." 46 In Ibbett, the High Court stated at [38], in relation to a case of trespass to land: "An action for trespass to land and an award of exemplary damages has long been a method by which, at the instance of the citizen, the State is called to account by the common law for the misconduct of those acting under or with the authority of the Executive Government." 47 In the present case, the plaintiff sought to contend that even aggravated damages fell outside the concept of "personal injury damages" in the Civil Liability Act. However, to reach that conclusion, it was necessary to adopt a definition of "injury" which did not include matters such as humiliation and injury to feelings. That position is untenable. The general damages available for compensation for tortious conduct include damages for pain and suffering. There is no basis for limiting pain and suffering to physical suffering. Accordingly, there is no ready basis for distinguishing between an assessment of general damages and aggravated damages. As explained in Ibbett, aggravated damages are a form of general damages. 48 For reasons explained below, I would not adopt the limited meaning for the word "damages", which her Honour accepted. However, even if one did adopt such a definition, there is no reason not to describe aggravated damages as compensatory in their purpose. They are, in effect, compensation for mental suffering falling short of a recognised psychiatric illness. The fact that the liability depends in part upon the defendant's conduct does not put them in a different category from compensatory damages generally. Accordingly, there is no reason why Part 2A would not operate with respect to an award of aggravated damages, nor why s 26C would not in its terms cover such an award. 49 There remains the question whether exemplary damages do not fall within Part 2A because they do not constitute any form of monetary compensation. There are a number of reasons for not accepting that exclusion generally. 50 First, the term "exemplary (or punitive) damages" is well-established in legal parlance. There is no other phrase (such as civil penalty) which is applied to such an award. That understanding and use of language is reflected in other statutory provisions including the Workers Compensation Act 1987 (NSW) which provides that "[a] court may not award exemplary or punitive damages to a person in an award of damages": s 151R. Because the definition of "damages" in s 3 is inclusive, there is no reason to exclude from its scope a concept universally referred to as "damages" in the general law of tort. 51 Secondly, far from supporting the conclusion that exemplary damages are not included within the statutory concept in s 26B, s 21 might give rise to the contrary inference. It expressly envisages that, absent its own prohibition, a court could award exemplary or punitive damages (and aggravated damages) by way of an award of personal injury damages. 52 Thirdly, with the exception of the words in parenthesis in s 26C, the language of the Civil Liability Act is not restricted to damages "for" or "assessed by reference to" the loss suffered by the injured party. Rather, the language of connection is "in respect of" or that "relate to" the injury in question. Whilst Part 2A may not apply in respect of a tort where there has been no injury at all, assuming that the term injury extends beyond a recognised psychiatric illness, it is, in practical terms, difficult to imagine a case in which exemplary damages would be awarded absent any personal injury. 53 There are, however, particular factors which militate against the conclusion that exemplary damages are covered by s 26C. They derive from the combined operation of ss 21 and 26C, when viewed in the light of the history of amendments to the Civil Liability Act. Thus, the 2004 Amending Act introduced s 26C but applied only to injuries caused by negligence. At that time, s 21 operated so as to preclude any claim for aggravated damages or exemplary damages in an action for an award of personal injury damages where the injury was caused by negligence. Accordingly, the drafter of s 26C would not have envisaged any need to address the question of aggravated or exemplary damages. That in turn explains the words in parenthesis in s 26C, referring to damages "whether for economic or non-economic loss". That language was apt to deal with claims for ordinary compensatory damages in negligence cases, which were all that were available. 54 When Part 2A was extended to cover intentional torts, it operated, in that respect, alone and without the complementary assistance of Part 2. In such cases, s 21 had no operation. (Even if Part 2 had had operation, s 21 was limited to negligence cases.) However, no amendment was made to s 26C. Because aggravated damages constitute a form of compensation for non-economic loss, the language of s 26C, without amendment, was apt to include such damages within its preclusive operation. However, its language, including the words in parenthesis, is not apt to refer to exemplary damages. Its original operation was not intended to cover exemplary damages. Accordingly, without amendment its language remains inapt for that purpose. 55 There remains a question as to whether, in the language adopted by the State, awards of exemplary damages were entirely "parasitic", in the sense that they could not stand alone. There may be a sense in which that is true under the general law, though whether as a practical effect, rather than a legal requirement, might require consideration. The objection is, in any event, one which cannot affect a statutory reform. Subject to constitutional constraints, the Parliament is entitled to vary, by way of limitation or expansion, the heads of damages available in respect of torts, just as it may vary the elements and existence of causes of action. If it has done so, so as to leave available only one head of damages, that result is effective. 56 In substance, the argument must be that such a result is manifestly unlikely and bespeaks some error in the process of statutory construction which reached that conclusion. However, the premise is not necessarily sound. The purpose of s 26C is to preclude recovery of damages where the impairment suffered by the offender is relatively minor. The Parliament may well not have been prepared to exclude liability for exemplary damages, even in cases of relatively minor physical or mental impairment, where the conduct of its officers, for which it accepts vicarious liability, demonstrates egregious disregard of the civil rights of its citizens. Whether that be so or not, it is a decision to be made by the Parliament and not by the courts. There was nothing in the second reading speech which suggested that the Parliament had addressed the question, the oversight, if such it be, being explained by non-advertence to the legislative history. Conclusion 57 In these circumstances, I would conclude that s 26C operates with respect to aggravated damages, but not exemplary damages. In that event, I would make the following orders:

(1) Grant leave to appeal on condition that the State pay the respondent's costs in this Court in any event.

(2) Appeal allowed in part and orders in the District Court made on 5 June 2009 set aside.

(3) In place thereof, (a) declare that the plaintiff, absent satisfaction of the requirement of s 26C of the Civil Liability Act , cannot recover compensatory damages (including aggravated damages) but may maintain a claim for exemplary damages, (b) grant the plaintiff leave to amend his pleading, and (c) otherwise dismiss the defendant's motion.

(4) Order that the State pay the respondent's costs of the proceedings in this Court. **********

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Civil Liability Legislation Amendment Act 2008(NSW)

Suitors' Fund Act 1951(NSW)

Civil Liability Amendment (Offender Damages) Act 2004(NSW)

Civil Liability Amendment (Offender Damages) Act 2007(NSW)

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