Negligence - Damages - Exemplary damages - Circumstances in which exemplary damages should be awarded - Conduct of defendant - Whether contumelious disregard for plaintiff

Plaintiff employee brings claim in negligence in Dust Diseases Tribunal (DDT) against defendant employer for personal injuries arising from work which created cedar wood dust - DDT finds for plaintiff and includes $30,000 exemplary damages in damages award - Employer appeals against award of exemplary damages - Whether exemplary damages available in a claim based on negligence in employment law - General principles governing the award of exemplary damages under Australian law - Test of contumelious disregard for the plaintiff's rights - Circumstances of this case re preventative measures regarding the danger of cedar dust undertaken by employer in respect of total period of employment of plaintiff - Adequacy of installation of dust extraction system - Whether conduct of defendant contumelious of the plaintiff in this case - Obligations of employers in respect of the safety of their employees:

(i) The appellant's action, for the total period of employment of the plaintiff, in attempting to alleviate the problems of cedar dust by the installation of a dust extraction system, did not warrant a finding of contumeliousness such as to attract an award of exemplary damages.

(ii) Exemplary damages are available in Australia in negligence claims by employees against employers in which the defendant's breach of duty of care is in contumelious disregard of the plaintiff.

Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1; XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12; (1985) 155 CLR 448; applied.

Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301; referred to.

2. Judgment of Johns J set aside and verdict entered for plaintiff for $107,653 to take effect from the date of the judge's judgment.

3. Defendant to pay plaintiff's costs of the trial on a party and party basis.

4. Plaintiff to pay the defendant's costs of the appeal including the costs of the cross-appeal.

MAHONEY P: From 22 February 1978 to 30 September 1981 the plaintiff was employed by the appellant company in work which created cedar wood dust. In October 1982 he began to exhibit symptoms ultimately accepted to result from asthma. In 1990 he commenced proceedings against the company in the Dust Diseases Tribunal of New South Wales on the ground of negligence.

Liability and jurisdiction were admitted. The only issue before the Tribunal was damages.

On 20 November 1992 his Honour Judge Johns gave judgment for the plaintiff for $137,653. As part of that judgment his Honour awarded exemplary damages of $30,000.

The company has appealed to this Court against that judgment. The appeal has been limited to the award of exemplary damages.

The issues arising in relation to the award of exemplary damages have been said by counsel to be of some importance in the area of employment law. The Court has been informed that other cases of a similar kind are pending and may be affected by the decision in the present case. The matter has been argued at length. Following the Court reserving its decision, further submissions have been made to the Court in writing and the parties have placed before the Court an agreed chronology of the events relevant to the determination of the issues.

Mr Deakin QC for the appellant and Mr Joseph SC for the respondent have, by their oral and written arguments, narrowed the issues for decision. Those issues may conveniently be stated as follows:

(1) May exemplary damages be awarded in a claim based on negligence (and, in particular, negligence of the present kind in the area of employment law)?

(2) (If they may) should they have been awarded in this case? and

(3) (If they should) is the award of $30,000 appealably excessive?

The respondent has lodged a cross-appeal to which I shall refer.

Mr Deakin QC has informed the Court that doubts exist as to the jurisdiction of the Dust Diseases Tribunal in respect of a case such as the present. However, it was not submitted to that Tribunal that it had no jurisdiction and no objection was taken there or before this Court to its jurisdiction to make the award that it did. The parties have invited this Court to determine the matters at issue upon the basis that the Tribunal had jurisdiction to make such an award. Jurisdiction is, of course, not a matter which can be conferred by consent. The reasons why jurisdiction is said to have been in doubt have not been canvassed. If and insofar as they might have been dealt with by evidence had the point been taken below, there is no objection to this matter proceeding upon the basis that the necessary facts are, or are deemed to be, admitted. If the objection to jurisdiction would have been based on other grounds, it is sufficient to record that as at present advised I see no basis for such objections: the nature of objections has not been discussed before this Court. Upon the material before this Court I am satisfied that the Tribunal had jurisdiction to enter upon the matter as it did. However, in deference to Mr Deakin's submissions, I note that the question of jurisdiction has not been the subject of argument, or detailed argument, in this appeal.

(1) MAY EXEMPLARY DAMAGES BE AWARDED IN A CLAIM BASED ON NEGLIGENCE?

The plaintiff's claim, as particularised in the amended statement of claim, was laid conventionally in negligence. The plaintiff claimed that the "cause of the plaintiff's injury, loss and damage was the negligence of the defendants, their servants or agents, and breaches by the defendants of statutory duties owed by them to the plaintiff". The particulars of negligence specified failure to provide a working environment appropriately safe and failure to comply with specified statutory duties.

Under the general law, exemplary damages may be awarded in claims based upon liability in tort. In Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1 the High Court, in a joint judgment, affirmed that, under Australian law, exemplary damages may be awarded in tort. The appellant-employer contends that such damages cannot be awarded where the claim is based in negligence or alternatively in a negligent failure to discharge the duties of care cast upon an employer or alternatively where the breaches in question are of the kind here in question.

In order to determine the availability of exemplary damages, it is necessary to consider the nature of exemplary damages and why they are awarded, and the circumstances in which they are awarded.

It is not necessary, I think, to go beyond the statement of these matters by the High Court in Lamb v Cotogno. The Court there examined the earlier cases and detailed the principles to be derived from them.

In Lamb v Cotogno: at 8-9; the High Court adopted the "oft cited description of exemplary damages" contained in Mayne & McGregor on Damages, 12th ed (1961) at 196):

"Such damages are variously called punitive damages, vindictive damages, exemplary damages, and even retributory damages. They can apply only where the conduct of the defendant merits punishment, which is only considered to be so where his conduct is wanton, as where it discloses fraud, malice, violence, cruelty, insolence or the like, or, as it is sometimes put, where he acts in contumelious disregard of the plaintiff's rights."

As the Court pointed out: at 8; exemplary damages "go beyond compensation and are awarded 'as a punishment to the guilty, to deter from any such proceeding for the future, and as a proof of the detestation of the jury to the action itself': Wilkes v Wood [1763] EngR 103; (1763) Lofft 1 at 9; 98 ER 489 at 498-9, per Pratt LCJ".

The Court considered briefly the question whether, in concept, exemplary damages are to any extent compensatory. Their Honours pointed out that:

"The object, or at least the effect, of exemplary damages is not wholly punishment and the deterrence which is intended extends beyond the actual wrongdoer and the exact nature of his wrongdoing ...".

As their Honours pointed out, exemplary damages "assuage any urge for revenge felt by victims". They said: at 9-10:

"They nevertheless remain as part of the law. When exemplary damages are awarded in order that a defendant shall not profit from his wrongdoing or even where they are described as a windfall to the plaintiff - a description which a plaintiff is unlikely to accept - the element of appeasement, if not compensation, is none the less present."

And, for reasons of this kind, the Court concluded that the fact that the particular defendant was insured under a compulsory (motor vehicle) insurance scheme was not a reason for refusing to award exemplary damages: they saw such an award as serving "to mark the court's condemnation of the defendant's behaviour and its effect is not entirely to be discounted by the evidence of compulsory insurance".

Mr Deakin's submissions suggested, I think, that the fact that the defendant's actions were contumelious (I use the term compendiously to describe the conduct for which exemplary damages is appropriate) does not mean that compensatory damages may not be given for hurt and distress which is produced by the contumelious nature of what was done. In my opinion where the fact that what was done was done contumeliously produces actual hurt or distress to the plaintiff he is entitled to be compensated for that hurt and distress. Whether that compensation is in principle part of the exemplary damages or whether it is part of the ordinary damages awarded to him separately from the exemplary damages need not be pursued. I shall for present purposes assume that, as I am disposed to think, exemplary damages as a concept is confined to damages which are non-compensatory in their nature. I shall deal with the submissions on that basis.

Mr Deakin's submissions suggested that exemplary damages are of their nature not appropriate to a claim based in negligence. As a general proposition, I do not think that that should be accepted. There are no doubt classes of claims in negligence to which exemplary damages will not be appropriate. The fact that exemplary damages are given for the reasons to which the Court, in Lamb v Cotogno, referred will ordinary mean that they will not be appropriate where, for example, the negligence consists in a mere inadvertent failure to take the care for the plaintiff's safety which a particular duty of care requires. They will ordinarily not be appropriate where the negligence consists in the failure, notwithstanding bona fide endeavours, to achieve the standard of care towards the plaintiff which the situation or the defendant's professed skills required that he attain.

But I see no reason to doubt that there may be cases of negligence in which that which constitutes the defendant's breach of care is done, in the sense to which I have referred, contumeliously. The present case is suggested to be of that nature. It was submitted that the defendant was carrying on an activity which it knew was apt to produce dangerous consequences for its employees if proper precautions were not taken. The precautions involved the installation of an effective dust extraction system. The judge's conclusions were as follows:

"The defendant chose not to install an effective dust extraction system because it preferred to use its capital expenditure on other capital items. To increase production and profits the first defendant was prepared to surrender its obligations to protect the health and well being of its employees, including the plaintiff, in order to maintain its preferred priority in capital expenditure. It was mindful only of its own interests and acted arrogantly towards the plaintiff by placing its own interests above the welfare of its employees.

In doing so it showed such an intentional and reckless disregard for the plaintiff's health that its conduct is in my view deserving of the court's disapprobation. The first defendant refused to engage in expenditure on safety in the workplace and knowingly exposed its employees to serious risk of injury. It showed an indifference to the plight of its employees by abandoning them to a polluted environment. In doing so it was guilty of a conscious and contumelious disregard for the health of the plaintiff."

In my opinion the Court should not exclude the possibility that conduct which is of this kind and is of an appropriate degree of contumeliousness can warrant an award of exemplary damages. Issues of this kind may arguably arise in (as I shall describe them for brevity) the tobacco, the asbestos, and similar contexts. Accordingly, it is not appropriate to attempt in this case to mark out the boundaries of what conduct on the part of an employer may warrant an award of exemplary damages. But, as a matter of principle, I see no reason to exclude the possibility of such an award in claims by employees against employers based upon negligence.

The same observations may be made in relation to claims based upon the breach of statutory duties. It is, I believe, possible to envisage the breach of statutory duties in a way and/or in circumstances such as to involve contumeliousness of the relevant kind.

At the suggestion of the Court, counsel examined, or re-examined, the law in other parts of the world where comparable questions may have arisen. Counsel have assisted the Court by references to material from other jurisdictions. I shall, I trust, not be thought guilty of disrespect if I do not pursue the detail of the material produced by counsel's researches. It is sufficient that I indicate that, in my opinion, those researches have produced no definitive reason why exemplary damages should not be available in an appropriate claim based upon negligence of the present kind.

In view of the submissions made, two further things may be said. First, I see nothing in the nature of negligence or in the nature of the employer/employee relationship which is inconsistent with the award of exemplary damages. The Lamb case and XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12; (1985) 155 CLR 448 each involved acts causing physical damage, to the defendant or to his property. In the Lamb case, it might be thought that there was little difference in the defendant driving his car with the deliberate purpose of shaking the plaintiff from the bonnet of it and driving it recklessly and negligently not caring whether that was the result of it and conscious of what was apt to happen. One may, I think, act "in contumelious disregard of the plaintiff's rights" by doing recklessly and negligently what is likely to cause damage to the plaintiff even though it is not one's intention to cause it.

Second, the mischief at which exemplary damages are directed is a real mischief and accordingly it is proper that the law should deal with it.

The mischief is described in the Lamb case: at 8-10; I need not describe it further. The contumelious conduct which constitutes that mischief does not (as I assume) cause damage to the plaintiff in the sense of something for which damages can be awarded. But the existence of the power to award exemplary damages indicates that that which the law regards as a mischief is not limited to those things which produce damage of that kind to the plaintiff.

If there be a legally unaccepted mischief, then the law must determine how it is to be dealt with. One option is to provide no sanction for it: this is what was done by the Defamation Act 1974, when it forbade the courts to award exemplary damages for defamation. Another option, that adopted by the general law, is to impose on it the sanction of damages, in the sense of requiring the defendant to pay a sum of money. The objection to this appears to be that, as it is said, though it punishes the defendant for a mischief for which he should be punished, it does this by requiring that he pay the sum to a person, the plaintiff, who has not suffered damage (or, at least, the kind of damage for which the law awards "damages"). But, in my opinion, this is no sufficient reason for not imposing a sanction upon mischief which warrants a sanction. If the choice be between awarding damages to a plaintiff who has not suffered damage of the conventional kind and allowing a defendant who has been guilty of such a mischief to go without sanction, this should be to impose the sanction, notwithstanding such conceptual difficulties as may be thought to be caused by doing so.

There is an additional consideration. The fact that a plaintiff may suffer no compensable damage from contumelious conduct does not mean that he has not suffered from it. In the Lamb case, there is, I think, a recognition of the fact that such conduct is apt to cause in the plaintiff feelings of resentment and the like such as may tempt "self help" and which exemplary damages may "appease". The resentment which contumelious conduct may cause may be no small thing. In the Carson case: [1991] HCA 43; (1991) 173 CLR 194; the conduct of the newspaper and the journalist led, I think, to resentment of this kind and it is possible to speculate that the damages which the jury awarded in the first trial ($600,000) and the second trial ($1,300,000) were influenced by the felt need to deal with it. But, however that be, it is, in my opinion, proper that the law recognise it and provide a sanction against it.

2. SHOULD AN AWARD HAVE BEEN MADE IN THE PRESENT CASE?

The judge's conclusion that exemplary damages should be awarded was based, and dependent upon, his findings of fact, summarised in the passage to which I have referred. If conclusions of that kind be correct, there was in my opinion a proper basis for the exercise of the judge's discretion to award exemplary damages. The terms of the judge's conclusions fall within the concept of contumeliousness to which I have referred: "a conscious and contumelious disregard for the health of the plaintiff" in circumstances in which (as it was suggested) the defendant knew what should be done and could have done. It had "preferred to use its own capital expenditure on other capital items" for the purpose of increasing production and profits. That is a context in which, in my opinion, an award of exemplary damages could be made.

The defendant's submissions would not, I think, seriously contest this. They were directed, at least in the main, to establishing that the judge's conclusions were wrong.

The appeal has been argued upon the basis that it is an appeal by way of rehearing. If it were an appeal limited to an error of law, the defendant's submissions would, I think, still be relevant in that the thrust of them has been that the judge went so far wrong in his assessment of the matter as to have failed to apply correct legal principles.

The submissions for the defendant suggested that the judge had wrongly assessed the facts. The contest below involved, inter alia, a contest as to the acceptability of the evidence of a Mr Thompson. He had been involved in the relevant work, under different employers, since about 1959. As the agreed chronology indicates, the business was taken over by a Rio Tinto company in about 1974. It was said that then some of the machines in question were not connected to the dust extraction system. Mr Thompson said he complained about, as he suggested it was, the inadequacy of the exhaust system and was told that "funds were not available".

He said that in 1974-5, he had discussions with management concerning the need for masks. He was told that none would be provided because to provide them would inflame neighbourhood concern about the danger of the dust. He said that masks were available in the factory and were used by spray painters and other people.

His evidence was that during the 1970 decade he, being then involved in management, continuously received complaints from employees of the defendant concerning the dust. In 1977 he made written submissions to the company in relation to the matter, without result. Reference was made to memoranda prepared in February, March and May 1977. He said that he sought funds for a new exhaust system but action upon the matter was put off until the following year due, as he said, to lack of funds.

It is in this context that the plaintiff came to work for the appellant. He commenced employment on 22 February 1978. The evidence apparently accepted by the judge was sufficient to establish that there was then a good deal of dust in the atmosphere. The plaintiff said that he never wore a mask and was not warned as to the dangers of the dust.

However, in August 1979 approval was given by the company for remedial work upon the exhaust system. In August 1979 a written authority was given to Mr Thompson approving the upgrading of the dust collection system and in mid-1979 work on upgrading commenced. It was completed in or about June 1980.

There was evidence which the judge could have accepted that, following the upgrading, the conditions improved but problems still persisted and further steps had to be taken. In July 1981 the improvement of the extraction system was the subject of a tender. During 1981 a further dust extraction system was installed.

On 30 September 1981 the plaintiff ceased work with the first defendant; he was then employed by the second defendant in the same premises. In June-July 1982 he ceased employment with the second defendant.

Accordingly, the employment of the plaintiff in the premises extended from approximately 22 February 1978 until June-July 1982, for about three and a half years with the first defendant and for about nine months with the second defendant. Work on improving the exhaust system was approved some sixteen months after he commenced the employment and went on from time to time during the whole of the period of his employment.

In considering the judge's findings, regard must be had to the advantage that he had in seeing and assessing the witnesses: counsel have referred to Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472 and the cases there referred to. I have this principle in mind in dealing with the evidence and the conclusions which are to be drawn from it.

Mr Deakin has taken the Court in detail to the evidence as appearing in the transcript. He has suggested that, in some of the individual findings of fact, the trial judge erred. It is not necessary for me to pursue each incident to which, in his careful examination of the facts, Mr Deakin has gone. Giving appropriate effect to the evidence which it was open to the trial judge to accept, I am of the opinion that, in respect of the period up to the date of the plaintiff's employment, the facts justified conclusions generally to the effect of those formed by the judge. Putting aside matters in respect of which sufficient doubt exists as to the correctness of the judge's findings, there remains material which warrants conclusions generally to the effect of those formed by the judge.

However, it is necessary to determine whether what the defendant did was contumelious of the plaintiff. In determining this, it is necessary to examine what it did during the period of the plaintiff's employment. However contumelious its actions were prior to that date, if, when the plaintiff became employed by it, it made such efforts to improve conditions that the epithet should not be applied to its actions, then the award of exemplary damages to the plaintiff would not be appropriate. In the learned judge's detailed review of the evidence, the reference to this distinction is, I think, brief. His Honour concluded that the work authorised in 1979 was "begun in early 1980" but "the work conditions appear to have not much improved". The system installed was, he found, "inadequate and inefficient". His Honour concluded:

"The fact that the first defendant endeavoured to install a better and more efficient dust extraction system will be taken into account as a mitigating factor in assessing the extent of exemplary damages."

"Significant additional expenditure was necessary and it is difficult to establish whether thereafter conditions had improved to acceptable levels. They certainly had not at the time Mr Thompson ceased his employment with the first defendant."

There is, however, no finding that, having undertaken remedial work, the relevant employer did not do so bona fide or that it did not seriously attempt to remove the difficulties which previously had existed. The conclusion that what it did was not effective and that the system first installed in 1980 was "inadequate and inefficient" would not, of itself, warrant a finding of "contumeliousness".

The judge, in his findings, did not direct attention in terms to what was the defendant's attitude to what was necessary and what was being done and he made, in terms, no finding that, during this period, his conduct was "wanton" or the like or whether it involved a "contumelious disregard of the plaintiff's rights". I have examined the evidence to see whether there is there material which should, taken as a whole, lead me to the conclusion that that was the employer's attitude to the plaintiff. I am satisfied there is not; I am not satisfied that I should conclude that, in doing what it did, it acted in that way.

It follows that I am of the opinion that the judge's conclusions, those to which I have referred and otherwise, are not conclusive of this issue. It is necessary for this Court to consider what conclusion should be formed.

In my opinion, having regard to the advantage which the trial judge had, I do not feel I should differ from the judge's conclusion that the attitude of the relevant employer was such as to warrant a finding of contumeliousness in respect of its employees generally for some eight years or more up to about the time when approval was first given for remedial work, namely, about August 1979. That means that, for a period of some sixteen months (February 1978 - August 1979) the plaintiff worked in circumstances such that there was a contumelious disregard of the obligations of the employer to its employees generally, including to the plaintiff. I am not prepared to find that for the remaining period (approximately two years and ten months, August 1979 - mid 1982) what the employers did warrants the finding of contumeliousness.

The High Court, and the courts to which it has referred in Lamb v Cotogno and XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd have emphasised that findings of contumeliousness are not lightly to be made. The terms in which the contumely is described in the cases indicate, I think, that the conduct of the defendant must be of considerable seriousness and deliberation to warrant this remedy. The judge's findings do not, I think, indicate this. Considering the evidence, as on a rehearing, upon the basis on which this Court may consider it, I am satisfied that, having regard to what the employers did and failed to do during the relevant period of nearly three years, that finding would not be justified.

What arises from this? It is necessary to determine by reference to what period or periods the finding of contumelious conduct is to be made. There are three relevant periods during which the plaintiff was employed and so was affected by dust: the first sixteen months (February 1978 - August 1979): the remaining period of employment with the first defendant (August 1979 - September 1981) and the period of employment with the second defendant (September 1981 - mid 1982). During the first period only, the conduct was contumelious. If the conduct is to be categorised by reference only to the first period, exemplary damages would be appropriate. If it is to be categorised by reference to the first together with the other periods, I would not find that the conduct as a whole warranted being so described.

That leads to the next question: when was the tort committed? Insofar as it is relevant, this question was not dealt with in detail at the trial, at least as far as the evidence discloses. It may be arguable that the tort was complete a short time after the plaintiff's employment commenced, in that the entry of quantities of cedar dust into his respiratory system must have caused damage such as to render the tort of negligence complete. But that, I think, cannot determine this issue. If, for example, such damage had occurred one week after the employment commenced but, the next day and thereafter, the employer did all that could be expected and bona fide to remove the dust danger, I do not think it would be correct to find the employer's conduct contumelious because, during that week, it had acted as it was here held to have acted. I think that, for a finding of contumely, the law requires more.

If, on the other hand, the matter is to be judged over the first and second or the first, second and third periods together, I would not accept that, over that period, the finding was such as to warrant such a categorisation of it.

At the trial and before this Court, in considering the tortious nature of what the employers did, attention was directed I think to the whole period of employment. Reference was made to the limitation period and so to the date when the tort was complete. Though issues of the present kind were not put aside, the analysis did not extend so as to require detailed findings of the present kind. If, as at one stage the argument appeared to infer, regard should be had to the employment up to 1982, I would not categorise the employer's conduct as contumelious.

In the amended statement of claim, the plaintiff's case was pleaded relevantly as follows:

"5. At the abovementioned place during the period 1978 to 1984 the plaintiff ... was continuously exposed to dust. As a result of such exposure, the plaintiff suffered injury, loss and damage". (Emphasis added).

I think it is proper to treat the relevant period as that of the total employment. On that basis, I would not categorise the conduct as a whole as warranting the relevant finding, in respect of the whole or, so considered, in respect of any portion of it.

I am conscious that categorisation of conduct as contumelious is, to an extent, the exercise of a judicial discretion. However, by reason of the limitations of the judge's findings, as I have referred to them, I do not think that I am for that reason bound by what his Honour found.

It is proper to add a further observation. The learned judge, in his judgment, noted that "the standard of safety requirements between 1977 and 1979" were "not to be confused with the requirements and expectations of the present". The law has in more recent times emphasised the obligations of employers in respect of the safety of their employees. The High Court: see Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301; and this Court have emphasised that, with the technology now available to prevent injuries, what can and should be done is of a higher order than, perhaps, in practice was required in earlier times. The higher statutory requirements now imposed and the sanctions to be applied in respect of them emphasise the legislative intentions in this regard. (Reference may be made to, as it is described, the Worksafe legislation). What I have said does not indicate that an employer may now adopt the attitude described by Johns J. If it does, exemplary damages may be awarded.

However, it is important that exemplary damages be awarded only where the findings are of the kind to which the High Court has referred. In other countries, such as the United States of America, exemplary or punitive damages appear to have been awarded in circumstances which, I believe, would not warrant their award in Australia: see generally the observations of Law Commission (United Kingdom) in its consultation paper "Aggravated Exemplary and Restitutionary Damages" (31 August 1993) p 102 et seq; and cf the views expressed in relation to the American approach generally in: G Edward White "Tort Law in America: An Intellectual History" (Oxford University Press, 1980, p 231, 237). In my opinion, if exemplary damages are to perform the function which the Australian law has assigned to them, it is important that the seriousness of the conduct involved be not diluted.

Having regard to my conclusions, this question does not arise. However, were the matter to be determined, I would not conclude that the award was, in circumstances such as have been suggested for the plaintiff, appealably excessive.

The plaintiff submits that the judge reduced the award for his future economic loss "by the cost of his own maintenance until age sixty-five" and that this should not have been done.

As the parties have indicated in address, it is not clear precisely what the judge did. In his judgment he adverted to the evidence that a Mr Vella "a comparable employee" had earned amounts which, as I infer, suggested that "the loss for the last financial year is $50 per week as detailed in Exhibit H". His Honour took "the amount of $40 per week ..." as "the measure of his loss of earning capacity". He then said:

"The plaintiff therefore is entitled to continuing loss to age 65 at the rate of $40 per week. This sum is to reduced by the cost of his own maintenance during those years (sic). It is appropriate to allow a discount of 15% which also takes into account the vicissitudes."

Fifteen per cent of $40 per week is $6 per week. The judge then said:

"The present value of the resulting loss of $34 per week for 23 years calculated on the basis of the appropriate rate of discount of 3%, amounts to the sum of $29,607."

It is difficult to see how "the cost of his own maintenance" was taken into account by the judge. It does not appear to have been taken into account in estimating the amount of $40 per week which the judge took as the measure of the loss of earning capacity. If this be so, then the submission by Mr Joseph SC that the judge, in fact, reduced the award by "the cost of his own maintenance" fails. It is for the plaintiff to show error in what the judge did. I am not satisfied that error has been shown. Accordingly the cross-appeal should be dismissed.

It is accepted that, if the Court holds that exemplary damages should not have been awarded, the order for costs on an indemnity basis cannot stand. I have held that the award of exemplary damages was not justified. Accordingly, the order for costs should be altered.

In the result I am of the opinion that the damages should be reduced by the amount of the exemplary damages $30,000. The costs should be ordered on a party and party basis.

The judge's judgment should be set aside. There should be a verdict for the plaintiff for $107,653 to take effect from the date of the judge's judgment. The defendant should pay the plaintiff's costs of the trial on a party and party basis. The plaintiff should pay the defendant's costs of the appeal including the costs of the cross-appeal.