Walker & Anor v Hamm & Ors

1 I refer to my reasons in these matters published on 19 December 2008. As noted in those reasons, several issues remain to be determined, notably the claims for aggravated and exemplary damages and costs. Also outstanding is the issue of interest. As to the application of s 123 Police Regulation Act 1998, it is my understanding that its application is not a live issue between the parties.[1]

2 Written submissions were received from the parties in March 2009. Further submissions and evidence relating to the interest issue were received on 18 and 27 May 2009.

Aggravated damages - the positions of the plaintiffs and the first defendant.

3 The plaintiffs seek aggravated damages from the defendants for themselves and for the estate of Marcia Walker. Their counsel submitted that Donald Walker and Marcus Walker should each be awarded aggravated damages in the sum of between $150,000 and $200,000. Counsel also submitted that the estate of Marcia Walker should be awarded aggravated damages of between $50,000 and $100,000.

4 The second defendant, Carter, concedes that, on the facts that have been found, aggravated damages are payable to Donald Walker. He makes the point that no direct evidence was given by Donald Walker as to the impact on his feelings resulting from the way in which the wrongs were inflicted upon him. Carter concedes, however, that there were aggravating factors in the incident. He refers to the fact that the assaults and batteries occurred in Donald Walker's home and in the presence of his mother and that they occurred at the hands of public officials who are sworn to uphold the law. He accepts that they caused Donald Walker to be shocked and fearful for his safety. He submits that in Donald Walker's case, an award of aggravated damages of $50,000 would be appropriate. He denies any liability for aggravated damages in relation to Marcus Walker.

5 As to the claim for aggravated damages for the estate, Carter relies upon the amendments to the statement of claim in the course of the trial deleting paragraph 9 which contained the claim for both aggravated and exemplary damages for the estate. At the time counsel for the plaintiffs stated that those claims could not be made because of the provisions of the Administration and Probate Act. Later counsel for the plaintiffs partially resiled from this position and revived the claim for aggravated damages by the estate. The estate's pleadings were not formally re-amended but counsel for the defendants raised no objection at the time to the claim proceeding in the absence of such amendment and no prejudice can be identified. I proceed on the basis that the claim of the estate is alive but opposed by the first defendant.

Aggravated damages - the positions of the plaintiffs and the second defendant

6 The plaintiffs rely upon the admission in paragraph 1 of the defence of the State of Victoria that the 2nd to 13th defendants were at all material times acting as its servants and agents. They submit that as a result, all damages against Carter are recoverable against the State of Victoria. In its defence, the second defendant went on to plead that it denied liability for "exemplary and/or punitive damages". Its present position is that it has no liability for the aggravated damages sought. I proceed on that basis.

7 The plaintiffs submit that any damages awarded to them and the estate for aggravated damages (and to them for exemplary damages) should be awarded as to 50% as against Carter and 50% as against the State of Victoria.

8 As counsel for the State of Victoria has submitted, the grounds for the apportionment sought are not apparent. Counsel submitted that the State of Victoria had no direct liability for damages. Its liability arose vicariously by virtue of the admission of liability under s 23(1)(b) of the Crown Proceedings Act. As counsel also pointed out, although there have been adverse findings in respect of other police members in respect of the events, the plaintiffs did not plead that the State of Victoria bore any vicarious liability for the acts of the 2nd to 13th defendants other than the vicarious liability arising from the acts of the second defendant Carter (and Sesin) in the incident. There being no allegation in the pleadings in their final state alleging any tortious act of any other police member or branch, with the exception of Sesin[2], the State cannot be liable except for the actions of Carter and Sesin.

9 Any orders that are made should reflect the situation that 100% of the damages awarded against Carter should be entered against him and also entered against the State of Victoria on the basis of its vicarious liability for his actions.

The positions of the plaintiffs and the first defendant

10 The plaintiffs seek exemplary damages for themselves but not for the estate of Marcia Walker. Counsel submitted that Donald Walker and Marcus Walker should each be awarded exemplary damages of between $300,000 and $500,000.

11 For Carter, it was submitted that no award for exemplary damages should be made against Carter in respect of Donald Walker or Marcus Walker.

12 The second defendant does not concede that any liability arose in respect of the claims for exemplary damages. It advanced submissions relating to particular details of the claims of the plaintiffs and the estate. They are discussed below in dealing with the claims.

Approach to the claims for aggravated and exemplary damages

13 Counsel for Carter has submitted that the claims for aggravated and exemplary damages arise out of the same circumstances and that it would be appropriate to make one award, not two, if liability for those damages is found against Carter. In advancing this argument, counsel relied upon New South Wales v Ibbett[3]. In that case, the High Court cited with approval the following passage from the judgment of Speigelman CJ in the Court of Appeal decision in that matter

"In this regard it is relevant to note that the matters to which I have referred as justifying an award of exemplary damages are also pertinent, as is often the case, to an award of aggravated damages. The difference is that in the case of aggravated damages the assessment is made from the point of view of the plaintiff and in the case of exemplary damages the focus is on the conduct of the defendant. Nevertheless, it is necessary, as I have noted above to determine both heads of compensatory damages before deciding whether or not the quantum is such that a further award is necessary to serve the objectives of punishment or deterrence or, if it be a separate purpose, condemnation". [4]

"In cases where the same circumstances increase the hurt to the plaintiff and also make it desirable for a Court to mark its disapprobation of that conduct, the court may choose to award one sum which represents both heads of [aggravated and exemplary] damages and no element more than once".

[5]

14 The plaintiffs reject the submission that one award only should be made and have argued that it is appropriate for the Court to separate the issues and make separate awards of damages for aggravated and exemplary damages.

15 In resolving the debate, it is necessary to give separate consideration to the respective claims for aggravated and exemplary damages in any event. In doing so, it is necessary to commence by considering the findings already made and the particular matters raised by the parties about features of the incident itself which are relevant to each of the claims for aggravated and exemplary damages. They are of particular relevance to the claims of Donald Walker for aggravated and exemplary damages and the estate of Marcia Walker for aggravated damages.

16 I will consider first the issues raised in the individual claims for aggravated damages of Donald Walker, and the estate of Marcia Walker, in that order. I will then consider the claim of Donald Walker for exemplary damages. Finally, I will consider the claims of Marcus Walker for aggravated and exemplary damages. They raise significantly different issues.

The claims of Donald and Marcia Walker's estate

17 I refer to the findings as to what occurred contained particularly in paras. 11.4, 12.5(c) to 12.5(g) of the reasons already given and the findings therein as to the reasons for the conduct in the incident of Carter and Sesin in paragraph 13.2.[6]

18 The parties attempted to highlight certain aspects of the evidence about the incident.

19 As to the impact on Donald Walker, the plaintiffs rely upon the findings as to what occurred to argue that Carter, in concert with Sesin, unlawfully and viciously assaulted Donald Walker in his home and that this caused serious physical and psychological damage. Counsel submitted that at the time Donald Walker was assaulted he was attempting to assist his elderly invalided mother, who had among other things vision problems, after Carter had shone a torch in her eyes. Counsel argued that the assault of Donald Walker was an act of aggression and was cowardly in that it continued after he was handcuffed. Counsel further submitted that in his presence, Marcia Walker was injured by an assault by Carter or indirectly as a result of the unlawful assault by Carter in concert on him. It was also put that she suffered significant physical and emotional injuries when she made her legitimate attempt to prevent Carter assaulting Donald Walker. Counsel also argued that Carter and Sesin were young and fit and were sworn to keep the peace and enforce the law.

20 As to the impact of the incident on Marcia Walker, counsel for the plaintiffs submitted that she was, at the time, 67 years of age, on a stick and had restricted mobility. Counsel submitted that Carter shone the torch into her eyes and that this was an act of aggression.[7] Counsel also submitted that she witnessed Donald Walker being unlawfully and viciously assaulted when he attempted to come to her aid. Counsel repeated the submission that the assault was cowardly. It was put that she bravely and lawfully attempted to stop the attack on her son but was injured either as a consequence of an unlawful assault by Carter on her when she made that attempt or because Carter resumed his unlawful assault in concert upon Donald Walker in the course of which she was injured. Counsel argued that what occurred was either a cowardly assault by a fit young police officer on her or a consequence of a vicious unlawful assault by two policeman on Donald Walker. The officers were sworn to keep the peace and enforce the law. Counsel submitted that she was distressed not only by her own injuries and their consequences but also by the impact of the injuries upon Donald and Marcus Walker.

21 As to the whole incident, Counsel for the plaintiff also drew attention to the finding that Sesin had no control over Carter[8] and Carter was out of control from the start.[9]

The incident and reasons - Defendants' Submissions

22 Counsel for Carter made detailed submissions concerning the evidence about the incident. The State of Victoria, however, did not do so. It dealt with the evidence briefly. Save where its submissions raised issues similar to those raised for Carter, it has not joined in Carter's submissions as to the incident itself. Where it has made specific submissions they are noted below.

Counsel for Carter(4) first described the incident as being confined to "the torch incident" which was described as

"...a single episode involving an assault and battery[1] by Carter and Sesin that occurred in five or so minutes[10] between Sesin applying a headlock with his left arm to Donald Walker's neck and Donald Walker's subsequent handcuffing. In the five minute period Walker was either on his feet or on the ground. Whilst he was on his feet he was in Sesin's headlock. During this phase Carter struck Donald Walker on the head with his baton. He also struck Donald Walker twice with his baton on the left side of his upper body. He did so as hard as he could. One of Carter's baton strikes fractured one of Donald Walker's ribs. Sesin struck Donald Walker using his baton a number of times around his legs.

Donald Walker was on the ground early on in the exchange. Sesin's headlock ceased to be applied. Carter and Sesin gained a position of control. Whilst on the ground, Donald Walker received from Carter a number of further baton blows. Both Sesin and Carter applied their knees to his back and Carter dropped on Walker's back with his knee which was a probable cause of the second rib fracture. Sesin held Walker's hair. Donald Walker received a number of knocks to his head and a number of hits to various parts of his body. Carter and Sesin handcuffed Donald Walker just before, and as, other police arrived. Carter stamped on Donald Walker's right elbow after he was handcuffed."

Counsel for Carter also noted, in referring to the "torch incident", that no claims were advanced by Donald Walker in relation to the matters preceding the torch light shining in the eyes of his mother. They included the manner of entry, the property damage to Donald Walker's fixtures and chattels such as the front door and the passageway wall and the broken glass on the picture, and the force with which the constables came through the door. Counsel also noted that no claim was advanced concerning the shirt tearing incident.

23 As to the finding that Donald Walker's elbow was stamped on after the handcuffing it is put that there was no finding that this act was intentional rather than inadvertent and there was no finding of any other assault after the handcuffing.

24 As to the extent of the violence, counsel for Carter sought to highlight the fact that Donald Walker's evidence was not accepted that he was struck with batons while he was handcuffed or that Carter struck or punched Marcia Walker. It is put that the only violence that occurred after the handcuffs were applied was the stamp to the elbow.

(b) Reasons and explanations for the conduct.

Counsel for Carter submitted that Donald Walker's case was that Carter and Sesin acted with "excessive zeal". Reliance was placed on alleged findings that Carter had "totally mishandled the situation" and had approached the use of force "without any thought or precision". Counsel referred to the finding that Carter could have restrained Donald Walker while he was standing in the headlock in accordance with his training, with a full Nelson without resorting to his baton. Counsel argued that this supported a conclusion that he used "reckless force" but that it should not be concluded that he was motivated by actual malice or ill will towards Donald Walker. Counsel for the State of Victoria supported this submission, arguing that the primary explanation for Carter's conduct at the scene was "fear and anxiousness" rather than "some malicious state of mind". In support of this proposition, counsel referred to the finding that Carter and Sesin were young and inexperienced and, from the outset, were scared and highly anxious in dealing with the situation.

• Lack of predetermination and pressure of the event

Counsel for Carter also submitted that the attack on the Walkers was not "premeditated or predetermined". They submitted that it was "poor judgment that led to an escalation of the force used and the prolongation of the event." In assessing the conduct of the police, Carter's counsel emphasised that regard should be had to the statements in the authorities concerning the reality of police decision making occurring without the opportunity for "mature or deliberate reflection"[11]and with the "pressure of events and the agony of the moment"[12]. Counsel for the State of Victoria joined in these submissions arguing that the events evolved over a short period of time with little opportunity for contemplation and that whatever Carter's failings, there was an absence of premeditation. Counsel for both defendants submitted that the tortious acts took place in the sort of atmosphere described by Connor, J. in Macintosh v . Webster[13] - described as circumstances of "excitement, turmoil and panic".

Counsel for Carter referred to Carter's evidence that domestic violence situations were the worst things a policeman had to go to and that Carter was very scared from the outset. Counsel submitted that this evidence was explicitly accepted. I note that Counsel for the State of Victoria adverted to this issue in slightly different terms stating that the court had accepted the proposition that a scene of domestic violence or potential domestic violence is a situation of high risk for police members called to attend. Counsel for Carter sought to rely upon the finding that Donald Walker was angry at the police and Ruth Ham, and would not have attempted to hide his anger. Relying on these matters, counsel submitted that they may help to explain Carter's attempt to maintain "complete physical control of the situation".

Counsel for Carter submitted that Carter's failure "to perceive and understand that the violence came overwhelmingly from him", could be explained on the basis of his inexperience and bad decision making. It was put that he had a subjective belief that very substantial force was necessary to control the situation.

25 The plaintiff responded to the foregoing submissions of the defendants directed to the incident itself and the reasons and explanations for what occurred.

Counsel for the plaintiffs argued that the submission for Carter was inconsistent with the findings and, that, in particular, Carter's account of the incident, commencing with the reason for attending the premises was rejected as lies. Counsel referred to the findings that Carter had lied in evidence given by him that

• they were called to Essex Road because a woman was being held against her will,

• before he kicked the door in he heard a scream and heard sounds of violence inside,

• when they entered, Donald Walker was restraining Ruth Ham, and

• his violence was justified by the behaviour of Donald Walker whereas it was found that he had in fact, cooperated with and had not threatened them and had followed their instructions prior to the torch incident.

Counsel also referred to the evidence of Donald Walker that was accepted about the shirt tearing incident, something about which Carter and Sesin claimed to be unable to give evidence. Referring to the central incident, Counsel for the plaintiffs emphasised the findings that at the time that Sesin placed a headlock on Donald Walker it was unlawful; Donald Walker was trying to get to his mother to assist her in response to Carter's dangerous assault on her.

Counsel for the plaintiffs also argued that Carter had through his submissions attempted to downplay the gravity and seriousness of his conduct. In relation to the proposition advanced that Carter did not premeditate or plan the assault, Counsel for the plaintiffs submitted that this was of no relevance because any panic or turmoil was the result of the illegal actions of Carter and Sesin acting in concert. There was no provocation or excuse for what he did. As to the reliance upon the anger of Donald Walker, Counsel argued that it was responsive to Carter and Sesin's illegal actions in concert as Carter raised tensions and could not excuse Carter's conduct. As to the proposition that Carter had been no more than reckless, counsel submitted that in light of the findings, the force used was not merely reckless. It was also put that the force used was not caused by inexperience or lack of thought. Counsel also submitted that what occurred was not a mere case of poor judgment; for none of the force used by Carter and Sesin in concert was legal. Counsel again submitted that after the headlock was placed, Carter and Sesin viciously assaulted Donald Walker in a cowardly fashion.

As to the absence of a finding as to whether the stamping on the elbow was inadvertent or intentional, counsel for the plaintiffs submitted that it was never Carter's case that he and Sesin handcuffed Donald Walker or that they had any contact with him after he was handcuffed. It is put that to now assert that the standing on the elbow was inadvertent and not cowardly is "special pleading".

Interesting as this latter debate may be, no express finding was made about whether the stamping was inadvertent. It should, however, come as no surprise to the parties that I was, and am, satisfied to the requisite standard that the stamping was deliberate and by Carter.

As to the attempt to rely on the lack of claims in respect of the other conduct of Carter, counsel for the plaintiffs submitted that it was not relevant whether a claim was made or not for trespass to land or property damage but that what mattered were the findings made in respect of those matters - all adverse to Carter. In response to the reference to the finding that the assault and battery lasted less than five minutes, counsel submitted that it was "unrelenting, vicious, unprovoked and caused serious injury".

In response to this aspect of the defendants' submissions, counsel for the plaintiffs submitted that the case was not one that concerned errors of judgment or poor judgment. Counsel submitted that none of the force used by Carter and Sesin in concert was legal. Carter and Sesin were the sole authors of the situation and cannot plead in mitigation that they were acting under the pressure of events or the agony of the moment. Counsel submitted that any excitement, turmoil and panic in the minutes that followed the shining of the torch in the face of Marcia Walker was entirely a consequence of the illegal and violent conduct of Carter and Sesin acting in concert.

Counsel for the plaintiffs also submitted that Carter's need to attempt to maintain "complete physical control of the situation " was explicable on the basis that he had initiated a vicious physical assault and that he would be exposed to lawful retaliation if he did not maintain complete control. Counsel for the plaintiffs also submitted that the argument should be rejected that Carter had a subjective belief that it was necessary to apply very substantial force to control the situation; for he was the principal author of the situation and the violence.

In concluding their response on this aspect, counsel for the plaintiffs submitted that because Carter and Sesin were the sole authors of the situation, they could not seek refuge in an inability to make mature or deliberate reflection and could not plead mitigation on the basis that they were acting under the pressure of events and the agony of the moment.

26 The submissions and responses of counsel for the plaintiffs should be accepted. I make the following additional comments.

27 The submissions of counsel for Carter attempted to play down the significance of Carter's conduct. In a number of instances, the submissions were inconsistent with the findings and at times selective, incomplete, and, as a result, inaccurate and unhelpful. This continued a feature of the submissions made on liability and damages. In the present context I refer, for example, to findings relied upon by counsel for the first defendant which are quoted and referred to above.

• "Donald Walker's case was that Carter and Sesin acted with "excessive zeal". Here, counsel drew on an expression I had used not one that had been used by counsel for the plaintiffs. I used the quoted expression in the course of discussing why it might be that Carter and Sesin would not wish to acknowledge either the existence of Donald Walker's shirt or its tearing. In referring to "excessive zeal" I was being kind to Carter and Sesin. It was not a description advanced by the plaintiffs. Generally the discussion had been about excessive force. The reference should be compared with the passage from the reasons, footnoted in the written submission of counsel for Carter on this issue which was as follows:

"I accept they were very scared from the outset and that there was gross, heavy violence. But the violence came from Carter, in particular and, for Sesin, that would have been frightening. For Carter, it is also possible that he found his own conduct frightening. The violence did not come from Donald Walker."

• The court concluded that they 'totally mishandled the situation'. That comment needs to be read in its context[14]

"In light of the above findings, there was no breach of the peace by Donald Walker. There was no proper basis to exercise the power to arrest him. Carter and Sesin did not act in self defence of Sesin. In any event, they used excessive force against Donald Walker. There was no lawful justification for the blows to Donald Walker struck by Carter and Sesin. Carter and Sesin totally mishandled the situation and, once Walker was held on the ground, he posed no threat to the police officers or anybody else. He was, at all relevant times, simply wanting to go to his mother's aid. Carter acknowledged that and was aware of that fact. I am satisfied Sesin would also have been aware of that fact.

• "The Court concluded...'that Carter approached the task of his use of force 'without any thought or precision'". The quoted phrase appears in the following passage in the reasons in a discussion of Carter's inconsistent descriptions of "his first blows", not of the whole incident.

"1244 In talking to Pluim on the night, his description was simple and direct:

"and that's how he got the welt marks on his back, I just started

belting into him with the bat and telling him to get down"

1245 In his formal statement, he stated that he struck him to the side of the stomach four times and twice on the upper arms. He said nothing about aiming at the arms and missing. In neither statement was there any suggestion that he approached the task with any thought or precision."

• The submission that "reckless force" was used. This submission relies on the findings made that "Carter could have applied... a full Nelson to Donald Walker while he was on his feet and in Sesin's headlock without resorting to his baton". The findings were made in the following passage of the reasons

As to the central event, Carter and Sesin knew that Donald Walker was moving towards his mother to help and that there was no justification for Sesin's headlock. But Sesin had restrained him in the headlock and Carter could have applied his training and grabbed Donald Walker's flailing left-hand and turned it into a full Nelson as they had apparently been taught to do. Instead, he escalated the level of violence by hitting Donald Walker with his baton a number of times as hard as he could, including to the head, struck Sesin twice and, later, dropped with his knee into Donald Walker's back fracturing a rib. Carter was in a violent state. While in that state, he dealt violently with Marcia Walker.

As noted above, the submission for Carter went on to argue that the above findings supported the conclusion that Carter used reckless force against Donald Walker and that it should not be concluded that Carter was motivated by actual malice or ill will towards Donald Walker. I disagree. It is difficult to avoid the conclusion from the other findings made that there was actual malice and ill will. There was also an underlying contempt for Donald and Marcia Walker. Carter had ample opportunities to consider each blow as it was struck and the necessity for it; for nothing Donald Walker did posed any threat to him or, once the headlock ceased, posed any threat to Sesin.

As to the attempt to categorise the actions as reckless, counsel has not elaborated on the sense in which they used that term. Presumably counsel intended to imply something more than mere negligence or carelessness. Perhaps counsel meant heedless of their duties as police officers. Applying the term in the relevant criminal context - "recklessly causing serious injury" - reference may be made to the directions that are given to juries in considering the mental element of such a charge.

"The third element relates to the accused's state of mind. The prosecution must prove, beyond reasonable doubt, that at the time the accused did the acts that you find caused the complainant's injury, she/he was aware that those acts would probably result in the complainant being seriously injured. That is, NOA knew that NOC was likely to be seriously injured by his/her actions.

It is not sufficient for NOA to have known that it was possible that NOC would be seriously injured. She/he must have known that that consequence was probable.

It is also not sufficient for NOA to have known that it was probable that NOC would be injured by his/her actions. For this element to be met, NOA must have known that it was likely that his/her acts would seriously injure NOC.

In determining this part of the test, you must be satisfied that NOA him/herself actually knew of the probability of NOC's injury. It is not enough that you, or a reasonable person, would have recognised that likelihood in the circumstances. "[15]

Whatever precise meaning was intended by counsel for Carter, to categorise Carter's acts as reckless rather than acts of malice or ill will does not, in the end, assist Carter to any great degree.

I am prepared to accept that there was no pre-planning in the initial blows by Carter, but I am satisfied that those blows were struck deliberately, with maximum force and with an intent to cause the maximum pain. Carter acknowledged that he hit Donald Walker with maximum force. There is no doubt in my mind that he knew that it was likely that his acts would seriously injure Donald Walker. After the interruption caused by Marcia Walker's intervention, he returned to Donald Walker and did so, on his own description, with the intent of "belting him" and he proceeded to do so. These acts may be fairly described as pre-planned. I turn to other submissions.

28 To meet the submission by Counsel for the Plaintiffs that Carter's conduct was cowardly and vicious and continued after Donald Walker was handcuffed, Carter's counsel submitted that the court had not described Carter's conduct in that way.

29 A review of the transcript reveals that that description was used in the course of cross-examination of Donald Walker and in submissions by Counsel for the plaintiffs in referring to the entire episode from the use of batons onwards.

30 Counsel for Carter is correct. I have not expressed a view on that submission. I should do so. Having regard to the use of the two batons, very substantial weapons, by two police officers against an unarmed person who had not, and was not, threatening them with any unlawful action and could not protect himself from the blows, particularly when held in the headlock by Sesin, what Carter and Sesin did may properly be described as cowardly and as vicious. The same description properly attaches to beating him after the headlock when he was not threatening them, the act of falling on a knee on his back while he was face down on the floor and stamping on the elbow when handcuffs were in place.

31 I refer to the defence submission concerning the alleged shortness of the period involved in the incident following the torch incident. Assuming a timeframe of about five minutes, that may be a short period for a conversation. But it is a long time if you are being beaten as Donald Walker was. It was also ample time for Carter to consider what he had done, was doing, and was proposing to do.

32 As to the argument that the explanation for Carter's conduct at the scene was "fear and anxiousness", it may partly explain what occurred at the outset, but it does not excuse what occurred then or later. A police officer's job is a very difficult and demanding one. A policeman is expected, and required, to cope with and manage situations appropriately notwithstanding any fear and anxiety caused. The situation with which they were faced in the present case did not provide any special reasons for fear and anxiety such as a person armed with a gun or a knife. It was they who were armed and they outnumbered Donald Walker.

33 In my earlier reasons I invited the parties to make submissions addressing[16] the question of the reasons why Carter and Sesin acted as I found they did. Reference has already been made to a number of those submissions. Other matters were raised by the plaintiff. They are inconclusive. They are considered in Appendix Q to this judgment.

34 It is possible to suggest a variety of potential factors which could explain what occurred. A complex matrix could be developed. But it should be remembered that Carter, who was responsible for what occurred is, and was, a relatively uncomplicated human being.

In the end, the clearest and most accurate insight into Carter's actions was given by him in the statements he made to Pluim very shortly after the incident. Referring to what he did prior to Mrs Walker's interruption, he said

".. I just started belting into him with the bat and telling him to get down".

"I just - and that's when I flew back over and started belting the bloke with the baton again. What could we do?"

35 The principles to be applied are well-established and are largely common ground between the parties. Aggravated damages are awarded as compensation where the harm done to the plaintiff has been aggravated by the way in which that harm was done[17]. It is compensation awarded

"for injury to the plaintiff's feelings caused by insult, humiliation and the like".[18]

36 For a plaintiff to succeed he or she must prove that injury was done to his or her feelings at the defendant's hands[19] - whether by "insult, humiliation or the like". In New South Wales v Ibbett (2006) 81 ALJR 427[20] the injury to the feeling was described as the affront to the persons present who were family members at the time the plaintiff's exclusive possession of the premises was disturbed by the defendants. In that case the High Court took the view that the affront to the family persons present

"may aggravate the infringement of the right of the plaintiff to enjoy exclusive and quiet possession".[21]

"the decision of the majority in the Court of Appeal to uphold the award of aggravated damages partly by reference to the affront to Mrs Ibbett of the treatment of her son as well as herself was consistent with basic principle. The same is true, subject to what now follows[22], of the award of exemplary damage for the trespass".

The more insulting, humiliating or affronting the conduct of the defendant, the greater the indignity that the plaintiff is likely to suffer and the greater the injury to the plaintiff's feelings is likely to be and the greater the award of damages should be.[23]

37 In assessing aggravated damages, it may be relevant to consider evidence of events up to and including the trial[24]. Counsel for Carter accepted that the Court can have regard to the defendant's attitude "down to the time of the trial"[25]. The conduct of the defence which was not bona fide or not justifiable in the circumstances known by the defendant is something that may also be relevant[26].

38 The State also conceded that the conduct of the trial by the defendants can be taken into account in the award on aggravated damages. Counsel submitted, however, that it is not every defendant to an action who must face the prospect of aggravated damages being increased. It was put that the plaintiff must show that the defendant's conduct of the case lacked bona fides, or was improper or unjustifiable[27]. It may be said to be logical, however, that if the original tort is done in such a way that it causes injury to the plaintiff's feelings in the form of insult, humiliation and like emotions, subsequent conduct by the tortfeasor, including the conduct of the defence, will be relevant where it prolongs or revives those feelings - or is a factor in making them worse.

39 As to the material aspects of the incident itself, I refer to the material above where the parties submissions are discussed.

Post incident issues raised; parties' submissions

40 In addition to the points made about the incident itself, counsel for the plaintiffs advanced arguments based on the conduct of Carter and Sesin and other police officers and personnel of other organisations immediately after the incident and up to and including at the trial of relevance to Donald Walker's claim.

41 Carter argued, however, that applying the principles identified in Enerver v The King [1906] HCA 3; (1906) 3 CLR 969, there was no evidence that Carter was acting in concert with any of the other officers in relation to the events that followed the incident.

42 The post-incident conduct falls into different categories.

• Behaviour at the scene immediately after the incident up to and including at the police station

Counsel for the plaintiffs relied upon the findings that the police at Essex Road ignored Donald Walker's injuries. They also relied upon the fact that, on the findings made, Donald Walker was falsely arrested and conveyed to Camberwell police station in a paddy wagon.

It is put that at the police station, he continued to be naked from the waist up on a cold night and no attention was given to his injuries. He was also forced to urinate in humiliating circumstances.

Carter takes the position that the matters raised on behalf of Donald Walker do not relate to his conduct and, therefore, do not attract aggravated damages. He was instructed to go to hospital with a senior officer shortly after the central events and did so. He was not involved in the removal of Donald Walker from the scene of the incident to the police station nor was he involved in his interviews or his release. His counsel noted that while he did not take direct steps to address the welt marks on Donald Walker's back which he had observed, he did tell a sergeant about them. In essence it is put that he did not participate in or have control over the major events relied upon. This included the treatment of Donald Walker at the Camberwell police station.

In response, counsel for the plaintiff submitted that Carter, and Sesin, were present when the ambulance arrived and had it in their power to request that Donald Walker be attended to by the ambulance officers. They did not do this. As to what occurred at the Camberwell Police Station, Carter and Sesin were, after discharge from the hospital, at the police station where Donald Walker was held in custody. Counsel accepted that, on the evidence, it appears that Carter and Sesin had no direct interaction with him there. His treatment at the police station was in the hands of other people who were called to give evidence. The treatment, counsel submitted, was callous and improper and followed and reflected the callous disregard in which Carter and Sesin held Donald Walker.

Referring to the argument which referred to the Enever principles, counsel for the plaintiffs' submitted that Carter should be held responsible for aggravated damages referable to the events after his vicious and illegal assault because they were consequences of those assaults and of his failure to indicate that it was not appropriate to take Donald Walker into custody and his failure to organise any assistance for Donald Walker. Counsel submitted that, accepting that Carter and Sesin were only very junior officers at this time, these events would not have occurred if they had properly treated the Walkers immediately after the incident instead of lying about what occurred and continuing to humiliate them and treat them with contempt. They set the tone. They could have changed it. It is put, therefore, that it is relevant to consider the abovementioned treatment as the continuation of the injury to Donald Walker's feelings by Carter, with Sesin, for the purpose of the assessment of aggravated damages.

In my view the lack of direct involvement in the matters complained of lessens the gravity of Carter's culpability. But it may fairly be said that by his failure to inform Pluim and the other police about what in fact happened, Carter allowed the humiliation and affront identified by counsel for the plaintiffs to continue up until Donald Walker's release from the Camberwell Police Station. In addition, before Donald Walker's removal from Essex Road, Carter's failure to do anything about having Donald Walker physically examined or being appropriately clothed before he left resulted in further affront and humiliation for Donald Walker. I do not accept Carter's evidence that he told a sergeant about the welt marks.

Counsel referred to the formal complaints Donald Walker made about the falsity of the evidence against him, and the criminal charges, which were ignored by those State employees to whom he complained and who failed to properly investigate the police case and the material supplied by the Walker brothers. It is put that this fuelled his anger understandably.

Counsel submitted that Donald Walker was falsely charged with serious offences and prosecuted for three days.

Counsel for Carter submitted again that Carter did not participate in or have control over the major events. This included the subsequent charging with criminal proceedings and the handling of his complaints by the Ethical Standards Department and the Ombudsman. It was put that these issues are more pertinent to the second defendant.[28]

In response, counsel for the plaintiffs submitted that while the Ombudsman was protected by s 29 of the Ombudsman Act 1973 there was no similar protection for the Ethical Standards Department. Counsel submitted that the decision not to accept the submissions of the Walkers as to what occurred was a consequence of Carter's false statements, his actions and those of Sesin. Counsel again submitted that Carter had relevant participation and control of all events that followed Donald Walker being removed from Essex Road because of his failure to set matters right. The fact that he did not participate in those events did not lessen his responsibility for them.

Counsel for the State of Victoria argued that the plaintiffs' submission that the Ombudsman and the Ethical Standards Division failed to properly investigate the matter, if true, has no relevance. Counsel for the plaintiffs advanced submissions in response but it is sufficient for me to state that, in my view, it does not ultimately advance the determination of the issues to explore the conduct of the Ombudsman and the ESD when that conduct has not been explored in this case. Further, what is relevant is the conduct of Carter subsequent to the incident and whether it prolonged or exacerbated the injury to his feelings.

Again, if Carter had told the true story, the Walkers' accounts would have been accepted and they would not have been charged and would, on the probabilities, have achieved vindication in one or other of those enquiries. Carter's deliberate failure to do so had the result that the humiliation and affront not only continued but was worsened.

Counsel for the plaintiffs submitted that the defence extensively cross-examined Donald Walker and other witnesses in an attempt to portray him as a "mendacious man who grossly exaggerated his claim". Reference was made to the fact that the defence attempted to allege that he had suffered no significant injuries and no significant economic loss.

As to the criticism of the extensive cross-examination of Donald Walker, counsel for the State directed his attention to the time aspect (not the challenge to the credibility) and argued that unresponsive answers by Donald Walker resulted in him being in the witness box longer than he would have otherwise needed to be. Counsel also relied on Donald Walker's struggle as a witness. It is put that these added to the length of the trial and did not indicate an improper approach in the defence case.

It is true that the problems identified by the State added to the time during which Donald Walker had to deal with the attacks but that was a consequence of the physical and psychological damage done by Carter, with Sesin, and the resulting medication. While it may also be said that a substantial part of the cross-examination was concerned with the unsuccessful lost opportunity claim, that cross-examination was also a critical part of the prolonged and concentrated attack to portray Donald Walker as a mendacious person.[29] That strategy was a central part of the defence strategy on both the liability and quantum issues.

In relation to the cross-examination on credibility, it was also argued for Carter that it cannot found an entitlement to aggravated damages against him. Counsel submitted that the reality was no more than that the instructions on which the cross-examination was based have not been accepted by the court on the balance of probabilities. It was put, further, that there was no evidence that Carter knew or must have known that his instructions were wrong.

I must disagree. It has been held that Carter had fabricated and lied extensively about what occurred. Such matters were put to Donald Walker. I am satisfied that Carter knew they were wrong.

Counsel for Carter also submitted that cross-examination of Donald Walker led the court to not accept Donald Walker's evidence on some critical issues. By way of example, counsel referred to the rejection of Donald Walker's allegation that Carter and Sesin beat him, including with batons, while he was handcuffed and the finding that the only violence held to occur after he was handcuffed was the stamp to the elbow. Counsel also referred to the rejection of Donald Walker's evidence that Carter struck or punched Marcia Walker.

In my view, it is not relevant that some of the cross-examination of Donald Walker resulted in the non-acceptance of some of the evidence given by Donald Walker; for that did not occur on the basis that Carter and Sesin's evidence should be accepted or that Donald Walker was lying. Rather, the basis was the probable unreliability of Donald Walker's recollection resulting from the effect of the assault and battery on his perception and recollection at the relevant time. The fact that parts of the accounts of Carter and Sesin were in a sense verified on occasions, does not detract from the proposition that Carter (assisted by Sesin and others) lied extensively in the attempt to defeat the claims of the plaintiffs and that those lies formed the basis of cross-examination about the whole incident.

43 Counsel for the plaintiffs also submitted that the actions of Carter (supported by Sesin and the other police) in giving false evidence was the principal reason for the prolonged trial running on liability and so extended the humiliation and affront. Carter could have stopped it.

44 That proposition should be accepted. The defence on liability ultimately was based on the defendants' reliance on the alleged truth of what Carter (and Sesin) had said about what occurred in the incident and on the proposition that their evidence should be accepted. The attacks on the credibility of Donald Walker and the argument that it was Donald Walker who was lying in his evidence, insofar as it related to the incident, was pursued and persisted in by relying on the continued and further expanded false accounts of Carter (and Sesin). If Carter alone had not persisted in his false account but had told the truth, the case would have had to proceed as an assessment and, as a result, the effect of the original humiliation and affront would either have been removed or at least significantly reduced.

45 Counsel for the State of Victoria raised the proposition that the Court left open the conclusion as to whether Carter was lying or had failed to perceive or understand that he was a source of the violence. Counsel was referring to the statement[30] accepting that what occurred was the worst violence Carter had been involved in over 16 years but that he was either lying or failed to understand that the violence came overwhelmingly from him and to a limited extent from Sesin. It is argued that this misperception or lack of appreciation persisted and shaped the character of the trial in respect of liability questions. It is put that this, if it were the situation, did not establish mala fides or unjustifiability in the conduct of the defence such as to contribute to aggravated damages.

46 It is true that I left alternatives open. No concluded view was expressed at that time, however, because the parties were to have the opportunity to submit further material and the above reasons raised the issue.

47 I should now address the issue and I do so by indicating that I am satisfied that there was no misperception by Carter. Carter's evidence on this issue, as with the details of which the defence was based, was a deliberately false account.

In my view, the conduct of Carter's defence on the issue of liability was based on deliberate lies and was therefore mala fide and unjustifiable.

Assessment of Donald Walker's claim for aggravated damages

48 As conceded by counsel for Carter, the jurisdiction to award aggravated damages in favour of Donald Walker was enlivened by the facts found in relation to the incident itself. I turn to the question of the assessment of those damages.

49 The circumstances were that Donald Walker was beaten unlawfully, viciously and in a cowardly fashion by Carter (in concert with Sesin) in his home, in the presence of his mother. Further he witnessed his mother, Marcia Walker, being injured in his home and in his presence directly as a result of an assault by Carter. This occurred because she lawfully came to his aid to prevent Carter beating him and he witnessed her in turn suffer significant physical and emotional injuries. His rights were flouted by two police officers who were sworn to uphold the law. He observed Marcia Walker's rights being flouted by Carter. He was treated with contempt on the night and observed his mother being treated with contempt by the other police officers. That conduct would not have occurred if Carter had been honest and given a true account to his colleagues of what had occurred. Donald Walker's shocked and traumatised reaction to the events were to be expected. I am satisfied that, though such matters were not articulated by him, Donald Walker was significantly humiliated, insulted and affronted by what occurred.

50 Unfortunately, these injuries to his feelings caused by the affront, humiliation and insult described, have, in the case of Donald Walker continued until the least date of the first judgment[31] as a result of the ongoing failure by Carter to correct his false account. Further, the injury to Donald Walker's feelings, was exacerbated by having to cope with false charges being brought (but essentially abandoned), his complaints to official channels being purportedly investigated but unsuccessful and by the protracted civil proceedings and a protracted trial. In that trial, the prolonged attack on Donald Walker's honesty was a key and critical aspect of the conduct of the defence on both liability and quantum issues. As to the latter, the defendants being unwilling to call the medical and psychiatric experts who had examined Donald Walker for the defence side, nonetheless cross-examined him as to the extent of his injuries and their effect on him and on his earning capacity in the hope of damaging Donald Walker's credibility. I am satisfied that this occurred as part of a war of attrition that was engaged in by the defendants. That issue is discussed in more detail in the context of the plaintiffs' claim for penalty interest. As to the liability issues, the defence was based, to a significant extent, on the false statements and evidence of Carter.

51 The failure of Carter to acknowledge what happened is the common and substantial thread running through the above matters and can be identified as a primary cause for the injury to Donald Walker's feelings continuing and worsening over the ensuing years since 1993. He cannot escape liability because the conduct of others was involved in the subsequent events. If he had dealt honestly with the liability issues, the extent of the injury to his feelings would have been significantly reduced, it would not have persisted and would not have worsened. The war of attrition could not have been fought in these proceedings.

52 In all the circumstances, I have come to the conclusion that the amount of aggravated damages sought for Donald Walker of between $150,000 and $200,000 is modest. In all the circumstances it would be appropriate to award aggravated damages of $200,000.

53 The findings identified as relevant to the claim for the estate of Marcia Walker by its counsel were the following:

Counsel referred to Carter and Sesin being young and fit and sworn to keep the peace and enforce the law. Further, counsel referred to the fact that at the time of her injuries Marcia Walker was 67, on a stick and had restricted mobility.

She went to the unit in Essex Road to investigate the disturbance caused by Carter kicking in the door. The kicking in of the door was not justified. There was no scream. Counsel also alleged that Carter attempted to force her to leave Essex Road and this was unjustified.

• The events at the scene after the incident

Counsel submitted that the police at the scene deliberately and falsely set out to paint her as a significant villain in the events of the night. She was falsely described as a liar, and going crazy. Carter responded to Pluim's comment that she was out of her tree by saying she was a lunatic. Counsel submitted that heavy handed pressure was brought upon her by Sergeant Pluim to change her truthful account of what happened. Counsel also submitted that Pluim supported Carter and Sesin in their elaborate story to hide their wrongdoing.

Counsel submitted that she was falsely charged with assaulting police. Reliance was placed on the fact that the charges were withdrawn on the third day of the hearing. Counsel also argued that the falsity of the evidence against her and the injustice of the criminal charges were all ignored by those State employees with whom Donald and Marcus Walker dealt with on her behalf.

Counsel argued that is was relevant to consider that she was distressed not only by her own injuries but also by the impact of the consequent injuries, physical and psychological, upon Donald and Marcus Walker.

54 The defendants have not advanced arguments directed specifically to the above propositions.

Assessment of the estate claim for aggravated damages

55 Marcia Walker had to endure the sight of her son being beaten up by police officers for no good reason, was in turn assaulted and otherwise treated with contempt by Carter. Her rights were flouted by a police officer sworn to uphold the law. She had to endure what happened afterwards at the scene including the persistent bullying, insulting and contemptuous behaviour of Sergeant Pluim in his interview and having to wait while Carter and Sesin were attended to by the ambulance people notwithstanding the significant differences in their injuries. Later, the humiliating treatment continued through the laying of charges based on Carter's lies, charges which were subsequently withdrawn, and through the opposition to complaints which were lodged. These subsequent injuries to her feelings were allowed to occur by Carter because of his refusal to face up to the truth and tell it. I am satisfied that he had ample time on the night in question to inform Pluim and his other colleagues of what had happened. It needed only a few words for him to admit the truth to them.

56 The injury to her feelings, however, was of a lesser order and for a lesser period than that suffered by Donald Walker. Further, she did not have to endure this court case and its trial. In all the circumstances, a reasonable award of aggravated damages in respect of the injury to her feelings arising from the assault and battery would be $100,000.

The claims of Donald and Marcus Walker for exemplary damages - overview

57 The plaintiffs and defendants appear to be in basic agreement as to the general principles to be applied. As was explained in Lamb v Cotogno [32], 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".

58 The High Court accepted that the conduct requiring punishment by exemplary damages is conduct showing

"a conscious and contumelious disregard for the plaintiff's rights"[33].

59 The High Court has commented that the Lamb v Cotogno description covers the "greater part of the relevant field".[34] As to the deterrent aspect, the High Court has also commented

"the deterrence which is intended extends beyond the actual wrongdoer and the exact nature of his wrongdoing. It is an aspect of exemplary damages that they serve to assuage any urge for revenge felt by victims and to discourage any temptation to engage in self-help likely to endanger the peace".[35]

60 The object of deterrence is not confined to the defendant and the victim but includes general deterrence extending

"beyond the defendant himself to other like-minded persons, but it also extends generally to conduct of the same reprehensible kind"[36]

61 Counsel for the plaintiffs submitted that bearing in mind the purposes of imposing exemplary damages, they should be such as to cause the defendant to "smart"[37]. Reference was also made to the statement by Heydon JA, as he then was, that "they must sting".[38]

62 Counsel for the plaintiff also referred to authorities dealing with cases concerning police conduct. In particular, counsel submitted that highhanded conduct that has warranted an award of exemplary damages has included

• overbearing conduct while in custody of others[39]

• the giving of evidence rejected as false and duplicitous[40]

• heavy-handed and officious use of arbitrary power[41]

• conduct where it is necessary to bring home to officials of the State responsible for the police force that police officers must be trained and disciplined so that abuses by police officers of the kind that occurred do not happen again.[42]

63 It has been noted in the authorities that there is no necessary proportionality between compensatory and exemplary damages. In addition, however, it has been recognised that in reality there can be an element of punishment in aggravated damages[43]. As a result, in considering whether to award exemplary damages and, if so, their quantum, it is necessary to consider whether the awarded compensatory damages, including aggravated damages, address any need that may exist in a particular case for punishment of the tortfeasor through the award of exemplary damages[44]. Double punishment must be avoided.[45] Further, the court should approach any assessment with restraint and moderation.[46] It also appears to be established that deciding whether to award exemplary damages, and their quantification, generally will involve the exercise of discretion except where there is no room for a discretion.[47]

64 Counsel for Carter raised two issues which require resolution[48]

• Counsel attempted to rely upon the fact that in Horvath, findings made by the trial judge about the police evidence having been fabricated and lacking credit did not feature in the court's assessment of exemplary (or aggravated) damages.

I prefer the analysis of this issue by plaintiffs' counsel that in Horvath, the Court of Appeal was not deciding which elements of the conduct of the police could support an award for exemplary damages. The Court was ruling on the issue of the liability of the State for exemplary damages on the facts in that case in the light of s 123 of Police Regulations Act.

• Counsel also challenged the plaintiffs' reliance upon the fact that, in Lee v Kennedy,[49] the New South Wales Court of Appeal held that the plaintiff was entitled to exemplary damages and in support of that proposition referred to the fact that the trial judge had, when discussing damages, stated that he had rejected the police evidence "as being false and duplicitous". Counsel argued that it did not follow from that reasoning that an award of exemplary damages could be justified where "police evidence was found on balance to be lacking in credit of itself." Assuming such a distinction can be made, I accept the submissions in reply of counsel for Donald Walker that the false and duplicitous evidence of Carter and Sesin was not merely relevant to assessing the evidence of the plaintiff and defendants but was relevant to whether the entire behaviour of Carter and his colleagues should be categorised as a "disgraceful episode"[50] and therefore one attracting an entitlement to exemplary damages.

65 Bearing in mind the relevant purposes of exemplary damages, it is relevant to consider the conduct of the other associates of Carter during and after the assaults. It appears that this relates primarily to the issue of deterrence and the need to bring home to State officials responsible for the police force that behaviour of the kind revealed should not happen again. In the present case, as already noted, I am satisfied that the evidence of Carter and Sesin should be described as false and duplicitous. It may also be fairly said that the behaviour of Carter and Sesin, and officers such as Sergeant Pluim, in their treatment of Donald and Marcia Walker and their treatment of the truth, then and since, was such that the episode may be properly categorised as a "disgraceful episode".

Possible limits on the quantum of exemplary damages

66 The second defendant raised several issues relevant to the question of whether there are particular limits on the quantum of exemplary damages, namely

• the relevance of punishment available under the criminal law.

67 The issues raised are considered in Appendix R to this judgment. For the reasons there set out, I have concluded that the matters raised do not assist.

The claim for exemplary damages by Donald Walker

Issues raised by Donald Walker relevant to his claim for exemplary damages

68 Donald Walker relies upon the matters emphasised above about the incident (save for the assault on Marcia Walker), and subsequent events, in support of his claim for aggravated damages discussed above. To the extent that Donald Walker and the defendants are relying upon the same matters adverted to in the claim for aggravated damages, I refer to the material relating to that above and my summary of the responses of Carter and those, in reply, of Donald Walker and my analysis of them.

Carter was the person who initiated the physical action and was extremely violent. It was put that he failed to act with reasonableness when alternate actions were available to him.

• Police behaviour at the scene of the incident

When Pluim appreciated that Marcia Walker's account of how she and Donald Walker were injured raised a risk of an Ethical Standards enquiry into the behaviour of Carter and Sesin, he bullied Marcia Walker and attempted to have her falsely change her allegations of the illegality of the behaviour of Carter and Sesin. He also supported Carter and Sesin in an elaborate story to hide their wrongdoings.

It is put that the treatment meted out to Donald Walker after being arrested pointed to a strong antipathy towards him and an attitude that he had forfeited any right he might have had to proper consideration of his own well-being, his rights, or the facts.

• Subsequent Police conduct prior to the trial

For Donald Walker it is also argued that Sergeant Rogers was the informant to the Magistrates' Court prosecution. Contemporaneous notes he made of the interview with Carter were not made available at the Magistrates' Court to Donald or Marcia Walker. Further they were not discovered to the plaintiffs by the defendants' solicitors until 18 April 2007, three weeks before this trial commenced. It is also put that Carter failed, in light of the objective evidence by which he must have known that he was in the wrong, to rectify the situation by being honest about what had occurred.

It is put that key witnesses for the defendants lied as to the events of 15 - 16 August 1993. There were also other police.

As to Carter's performance as a witness, counsel for Carter referred to the findings that Carter deliberately exaggerated his account of the behaviour of Donald Walker and had reconstructed false accounts of critical parts of his evidence about the incident. Counsel questioned whether such findings, made on the balance of probabilities, could justify an award of exemplary damages.

The findings were made on the balance of probabilities but I was, and am, in fact satisfied as to those findings beyond reasonable doubt.

As to counsel's further submission that such findings did not foreclose argument as to whether Carter wilfully and deliberately gave false evidence, I refer to my above finding that he did.

Generally it is put for Donald walker that on the night of 15 August 1993, and ever since, no apology by any police has been made. That is so, but it should be noted that Carter did express regret while giving evidence about one aspect - describing Marcia Walker as "a lunatic" to Pluim.

Further, it is put that Carter and Sesin have "pigheadedly" refused to acknowledge any wrongdoing. Not only that, but Carter has maintained that, if faced again with the same situation, he would act in exactly the same way. Counsel for the plaintiffs submitted that it is a relevant factor in the award of exemplary damages that, having regard to the facts made available to a defendant and with the benefit of hindsight Carter has failed to recognise the wrongdoing, express regret or apologise for the actions.

Counsel for Carter and the State attempted to address these issues in slightly different ways.

(a) Carter's counsel argued that a reckless subjective belief that a very substantial force was necessary to contain the situation may explain the evidence that Carter gave in re-examination that if the same situation arose now he would do nothing differently. I do not accept that he had such a subjective belief or that, if he did at the time, it has continued.

(b) Counsel for the State of Victoria argued that it was possible that Carter's failure to perceive or understand that he was a source of violence, has persisted and that that explains why he says now he would do nothing differently. It is not wrongful future intent but incomprehension. The plaintiffs' response is in essence, with the example cited, that Carter was not under any incomprehension through faulty perception but was lying.

As noted above that is my conclusion. After considering the issue further, I am also satisfied that Carter could not have failed to perceive that he was the source of the violence and in denying that fact was yet again lying.

In any event, if reckless subjective belief or incomprehension were to be accepted as explanations, they do not assist Carter; for he is still failing to acknowledge the reality of what happened and so is at considerable risk of repeating the conduct. As to his assertion that he would not act differently if presented with the same situation he is either stating his belief or is lying. Either way, he remains at risk of repeating the conduct.

I turn to an additional matter raised by counsel for the plaintiffs relevant to the deterrent purpose of exemplary damages.

Counsel for the plaintiffs submitted that Carter and Sesin "were confident that other police would willingly assist them to justify their actions". Noting that the other police were not well-known to them, Counsel submitted that the strong inference arose that there was a culture of the police tolerating false evidence by members. Counsel for the State of Victoria submitted that if the reality was that they were labouring under the misperception of events referred to above, their state of mind was not indicative of any such confidence held by either of them. Counsel put that the plaintiffs are relying on a chain of indirect inferential reasoning to draw an extremely significant conclusion about the culture. Counsel for the plaintiffs responded by drawing attention to appendix H1 and H2[51] of the original reasons and the expressed attitude of Sergeant Pluim[52] in support of the submission.

In my view, there is insufficient evidence to support a finding of the existence of such a culture then or now. But so far as the group of officers involved is concerned, they plainly joined ranks in support of Carter and Sesin. In doing so, the senior officers, particularly Pluim, failed to objectively consider the facts, despite the fact that there was a glaringly obvious inconsistency between the injuries suffered and Carter and Sesin's account. Instead, they gave unquestioning support to Carter and Sesin which would have encouraged them to develop and continue with their lie. For the reasons given in the original reasons, Sergeant Pluim, as part of that support and encouragement was directly involved in the creation of a false picture designed to protect Carter and Sesin.[53] The underlying issues, therefore, remain relevant to the award of exemplary damages in that it should be brought home to the authorities that the police officers must be trained and disciplined so that abuses by police officers and failures of the kind that occurred do not happen. I note that the defendants have not placed evidence before the Court as to what steps have or will be taken to address these issues.

Additional issues raised by Carter in Donald Walker's claim for exemplary damages.

70 The submission filed on behalf of Carter commenced with a general comment in relation to the assessment of the quantum of any award of "punitive damages against him". It was submitted that the Court should find that the main factors resulting in his use of reckless force were inexperience and lack of thought. Counsel submitted that the assaults were not premeditated or planned. Further they occurred in circumstances of panic and turmoil.

71 I refer to and repeat my analysis above of those points in the context of the claim for aggravated damages and to my rejection of the arguments and explanations advanced by his counsel. In any event, whether deliberate or reckless, the conduct merits punitive damages and the matters raised on behalf of Carter do not moderate the award.

72 There remain, however, considerations such as the moderation principle and the need to avoid double punishment.

73 Counsel for Carter made further points expressly directed to exemplary damages.

Counsel submitted that it was not permissible to punish Carter for Sesin's misconduct, even though they were found to be acting in concert, where Sesin's misconduct itself would have given rise to an award of exemplary damages against Sesin or, vicariously, the State. In support of that argument, counsel relied upon the discussion of the liability of joint tortfeasors in De Reus v Gray[54] and XL Petroleum[55].

In my view, the authorities do not support the argument. The issues addressed in those cases and the legislation considered in them do not arise in the present case. The reality is that only one of the two joint tortfeasors has been sued, Carter. Exemplary damages may be awarded against him in respect of the acts done by him alone and in concert with Sesin in the incident.

It is also relevant to consider Carter's encouragement of Sesin to join in the false account and his failure to do anything to rectify the situation they had created. On the authorities these are matters relevant to the punishment of Carter and the issue of deterrence.

• The possibility of punishment or disciplinary action directed to Carter

Counsel for Carter submitted that there was a "distinct possibility" that Carter will be punished by disciplinary or other action for his involvement in the event's aftermath and this may have a detrimental impact on his future career. Counsel referred to the fact that criminal punishment of the driver in Gray v Motor Accident Commission[56] was held to preclude the awarding of exemplary damages.

Where the criminal law has been brought to bear upon a wrongdoer and substantial punishment inflicted, exemplary damages may not be awarded.[57]

As counsel for Donald Walker submitted plainly this is not such a case. There has been no punishment under the criminal law.

Counsel for Carter also submitted that the possibility of disciplinary action should be taken into account in deciding whether an award of exemplary damages should be made.

In the submission in reply for Donald Walker, counsel submitted that while illegal assaults by police carry with them the possibility that the police in question may be disciplined, that is something that has never been considered to be relevant to the issue of whether exemplary damages should be awarded.

It is unnecessary to resolve these issues. The reality is that there is no evidence that consideration was given to such a course between 1993 and 2009. Further, there is no evidence to suggest that in 2009, or in the more remote future, there is any prospect of punishment either under the criminal law or in the form of disciplining of Carter. If there had been, it would have been highly relevant to the deterrence purpose as well as the punishment purpose. The issues were properly described by counsel for the plaintiffs as matters of speculation.

Counsel for Carter drew attention to an attack upon Carter's credit made in cross-examination concerning an incident that occurred in 2004 for which he was disciplined[58]. It was put that no other material was advanced to demonstrate that he had not been an honest and diligent officer in the performance of his duties in his 15 years of service in the Victoria Police Force after 1993.

In my view, in all the circumstances, exemplary damages as punishment and deterrence for Carter should be assessed on the basis that he has no prior or subsequent episodes in his history involving physical violence of the kind that occurred on the night in question or any acts of dishonesty other than in the context of this matter.

Assessment of exemplary damages claim of Donald Walker

74 In my view the need to award exemplary damages is clearly made out. The initial actions in the incident of Carter, with Sesin, plainly constituted "a conscious and contumelious disregard" for Donald Walker's rights. They warrant substantial exemplary damages to provide a punishment, to deter such conduct in the future and as a measure of condemnation of what occurred. In considering what is required for deterrent purposes, it is also necessary to look beyond Carter to the police generally and to the discouragement of such conduct and to the need to bring home to those officials responsible for the police force that steps be taken to ensure that like abuses by police officers do not happen.

75 The matters to be taken into account in assessing the exemplary damages include a number of those matters that needed to be considered in assessing the aggravated damages. They include the manner in which the assaults and batteries took place and the contempt shown for Donald Walker's rights, the overbearing conduct at the scene afterwards after the incident and while in custody, the giving of false accounts which were adhered to over the years (including on oath), the serious breaches of the law involved in the arbitrary use of power and the failure of the police at the time, including senior police, to properly investigate the incident, the continued failure to do so notwithstanding the matters already referred to which should have raised grave concerns in their mind and the conduct of the litigation in which the defendants conducted a war of attrition in the course of which they went to considerable lengths, unsuccessfully, to portray him as a mendacious man.

76 There is also the issue of whether and to what extent exemplary damages are needed to deter those involved and to bring home to officials of the State responsible for the police force the need to fairly and objectively deal with matters of this kind. The defendants have chosen not to address these aspects.

77 Donald Walker seeks exemplary damages of between $300,000 and $500,000. I consider the top end of this range to be too high. First there is the overlap of the matters relied upon in the assessment of aggravated damages of $200,000. Then, there is the substantial sum payable for compensatory damages, including aggravated damages for Donald Walker. I have also taken into account the compensatory damages, including aggravated damages, awarded to the estate. They carry with them an element of punishment. There is also the need for moderation. I consider, however, that a substantial award of exemplary damages is still required by way of punishment, to address deterrence and to encourage police action to avoid such events in the future. The statement by Carter, still a police officer, that he would conduct himself in the same way if a similar situation arose is a matter of serious concern. So too is the behaviour of the other officers on the night. Another matter of concern is the issue raised by the plaintiffs of the need to bring home to officials of the State that abuses by police officer of the kind that occurred do not occur again. The defendants have not disputed the relevance of this issue and, having made no submissions and advanced no evidence on the substantive issue itself, have effectively conceded that there is a need to address this purpose in any award of exemplary damages. As a result of the resounding silence from the defendants on this issue, I note that there is no evidence before me to suggest that

• any programmes were put in place between 1993 and the present;

• there has been any thought given by State officials since the main judgment was handed down as to the development of any such programmes; or that

• the substantial damages awarded against the defendant of just over $2,000,000.00 (and the risk of the award of exemplary damages) have prompted any action on the part of officials of the State to ensure that this kind of event does not happen again.

In all the circumstances, addressing the purpose of bringing home to State officials the need for action is a significant issue.

78 The foregoing matters support the conclusion that substantial exemplary damages are needed in addition to the compensatory, including aggravated, damages already awarded.

79 I consider that $400,000 would be an appropriate figure. I am concerned that it will not carry sufficient sting and will not adequately reflect the punishment, deterrent aspects, and the remedial action and condemnation concerns that remain to be met in relation to what was done to Donald Walker. But it accords, in all the circumstances, with the principles requiring moderation. Accordingly I propose to award exemplary damages in favour of Donald Walker in the sum of $400,000.[59]

The claims of Marcus Walker for aggravated and exemplary damages

80 Counsel for Carter referred to the statement of principle of Windeyer J in Uren v John Fairfax & Sons Pty Ltd[60] that aggravated damages may be awarded to compensate a plaintiff "when the harm done to him by a wrongful act is aggravated by the manner in which it was done".

81 Counsel for Carter submitted that the application of the principles respecting aggravated damages requires the identification of the wrongful act. Counsel submitted that the wrongful act in relation to Marcus Walker is that alleged in paras.5 and 6 of the amended statement of claim. These paragraphs pleaded facts relevant to the proximity and relationships between Marcus, Donald and Marcia Walker and the physical proximity of Marcus Walker shortly after the events pleaded in paragraph 2 of the statement of claim. Counsel for Carter argued that the facts in paras.5 and 6 had been held to sustain a cause of action grounded in the statements of law of Bray CJ in Battista v Cooper [61]. It is argued that the "Battista claim" is not a claim for assault, battery or one which relies on the Wilkinson v Downton tort. It is put that the Battista claim proceeds, as it was argued, in two stages and involves elements of intention and lack of foresight. The first stage involves the identification of the person responsible for an intentionally unlawful act resulting in a traumatic event on a primary victim or victims. The second stage involves the proposition that -

If the intended consequences to primary victim (a) produces unintended consequences as to victim (b), (b) can recover damages for nervous shock if his connection to (a) is not too remote.[62]

Counsel then argued that, applying this analysis, the cause of action responds to the unintended infliction of psychiatric harm on victim (b). It is not an element that there be an intention to cause harm to victim (b). Counsel submitted that the justification advanced by Bray CJ for imposing a common law liability in these circumstances was that the intentional tortfeasor "ought to foresee the possibility of injury to a wider class of persons and the negligent tortfeasor". Counsel submitted that in this matter it had been found that Marcus Walker was within the foreseeable class of secondary victim.

82 Applying the foregoing, counsel then submitted that it followed that Carter's relevant wrongful act vis-a- vis Marcus Walker was that he failed to foresee the consequences on Marcus Walker of his intentionally tortious conduct on Donald and Marcia Walker. In other words, it is put that Carter had been held liable in law for what he failed to foresee. He had shown a lack of foresight towards Marcus Walker. Counsel then argued that the "requisite contumelious" disregard of another's rights and aggravating circumstances are absent in those circumstances. In support of that proposition, counsel referred to the proposition in Gray v Motor Accidents Commission (1998) 196 CLR 1 at 9[22] by Gleeson CJ, McHugh, Gummow and Hayne JJ that

"Exemplary damages could not properly be awarded in a case of alleged negligence in which there was no conscious wrongdoing by the defendant".

Counsel also relied on the proposition that it is inappropriate to award aggravated or exemplary damages for careless or unintentional conduct. In support of that proposition, counsel sought to rely on statements by Ormiston JA in Backwell v AAA[63] with whom, it is said, Brooking JA agreed.

83 Counsel for Marcus Walker submitted, in response, that the wrongful act in question is that pleaded in paragraph 2 - the intentional acts of assault and battery on Donald and Marcia Walker.

84 Counsel also submitted that if Carter's conduct in the circumstances involved a contumelious disregard of Donald Walker and Marcia Walker it was equally in contumelious disregard of all those likely to be injured as a consequence of what was done to Donald Walker and Marcia Walker.

85 Counsel for Carter had attempted to artificially separate the aspects of Carter's conduct. Doing so is critical to the argument advanced. The issues should be considered, however, on the basis that, accepting that the Battista claim is made out, there were intentional assaults by Carter, in concert with Sesin, on Donald and Marcia Walker and one of the foreseeable consequences of that conduct was damage to a person in the position of Marcus Walker. That carries with it an entitlement to aggravated damages where, as here, the harm to him has been aggravated to him by injury to his feelings arising out of the same conduct and its consequences. As to exemplary damages, Marcus Walker suffered injury as a result of the conscious wrongdoing of Carter and, subject to Carter having demonstrated contumelious disregard of the rights of people in the position of Marcus Walker, he is entitled to recover exemplary damages.

86 As to the authority cited for the proposition that it is inappropriate to award aggravated or exemplary damages for careless or unintentional conduct, accepting for the purposes of argument that such a proposition flows from Backwell[64], the description of the conduct as careless or unintentional does not apply to the present case.

87 A closer examination, however, of the statements in Backwell reveals that the Court held that exemplary damages were available in the medical negligence case where there was deliberate wrongdoing or a wanton or reckless disregard for the plaintiff's welfare. As already noted, counsel for Carter submitted that the actions of Carter against Donald and Marcia Walker should be regarded as reckless. If that is a correct proposition, they were also reckless in relation to anyone close to Donald and Marcia Walker - such as Marcus Walker. On the authorities, torts committed recklessly enliven the jurisdiction to award aggravated and exemplary damages. Further, Carter is not helped by the statement relied upon from Gray v Motor Accidents Commission - there was conscious wrongdoing by Carter. Marcus Walker's connection with those assaulted also meant that there was an entitlement to claim exemplary damages because Carter had shown a contumelious disregard of the rights of persons in the position of Marcus Walker.[65]

88 Counsel for the second defendant advanced slightly different arguments. Counsel put that, because the existence of Marcus Walker was unknown to either Carter or Sesin, it cannot be said that Carter had a contumelious disregard of the rights of Marcus Walker. It was put that, accepting that the Court has concluded that Carter should have foreseen that Marcus Walker was a person within a class likely to suffer harm as a result of his intentional tortious acts, his state of mind did not equate to a "contumelious disregard" vis-a-vis Marcus Walker because he had not turned his mind to the harm likely to be suffered by third persons such as Marcus Walker. He had merely failed to foresee the harm. Counsel sought to rely upon the consideration of exemplary damages in the context of negligence in Gray.[66] Counsel submitted that bearing in mind the punitive purpose of exemplary damages, they should not be awarded to Marcus Walker in the absence of a specific intent to cause him harm. In further submissions, counsel put that it cannot be said that Carter acted with contumelious disregard of the rights of Marcus Walker because there was no relevant interaction between Carter and Marcus Walker on that night or immediately afterwards.

89 I do not accept these arguments. As put by counsel for the plaintiffs, the issue to be determined is whether Carter's acts demonstrated a contumelious disregard for those person impacted by his action. I note that the majority in Gray[67], after commenting that exemplary damages questions will not arise in most negligence cases commented

1. ... But there can be cases, framed in negligence, in which the defendant can be shown to have acted consciously in contumelious disregard of the rights of the plaintiff or persons in the positions of the plaintiff. Cases of an employer's failure to provide a safe system of work for employee in which it is demonstrated that the employer, while knowing of an extreme danger thus created, persisted in employing the unsafe system might, perhaps, be of that latter kind[68]. No doubt other examples can be found.
2. In many jurisdictions in the United States reckless indifference to the rights of others and other culpable conduct short of malicious intent is sufficient for the issue of an award of exemplary damages to be left to a jury."

I note again that the conduct of Carter was described by counsel for the second defendant as reckless. It was both intentional and reckless.

90 Counsel for Marcus Walker submitted that there was no authority or principle cited or identified by the second defendant which would limit exemplary damages to the person suffering the actual beating. Here Carter showed a contumelious disregard for those close to Donald and Marcia Walker by deliberately assaulting and beating Donald Walker and Marcia Walker in reckless disregard for the rights and feelings of those close to them and it was reasonably foreseeable that they would be injured psychologically as a result of his actions.

91 It was also submitted on behalf of Carter that it would be wrong in principle to award aggravated or exemplary damages in favour of Marcus Walker because of the manner in which Carter's wrongful acts against Donald Walker were committed. It was put that this would impose double punishment on Carter. I will return to that issue at the conclusion of this section of the reasons concerning Marcus Walker's claims.

92 For the reasons given, I do not accept the arguments advanced for the defendants but accept the analyses advanced for Marcus Walker in response to the arguments. Those analyses better accord with the present law.

Assessment of claim of Marcus Walker for aggravated and exemplary damages

93 Counsel for Marcus Walker submitted that the findings relied upon by the plaintiff Donald Walker for aggravated damages were not reflected in the proposed award for Marcus Walker. Counsel for the plaintiff identified the following findings as being relevant to the assessment of aggravated damages:

• Direct consequence of the assaults on Donald and Marcia Walker

Counsel submitted that the assaults caused grave anguish, insult and humiliation to Marcus Walker. In addition, they occurred in Donald Walker's home.

The assailants were two young and fit policemen who were sworn to keep the peace and enforce the law.

Counsel submitted that Marcus Walker's life was consumed by his unrewarded battle to overcome the injustice done to his mother and brother being injured and being prosecuted on fabricated evidence.

Counsel also alleged that Marcus Walker's highly detailed analysis of the falsity of the evidence against Donald Walker and Marcia Walker and the injustice of the criminal charges were all ignored by State employees to whom Marcus Walker complained.

Counsel for Marcus Walker referred to the extensive cross-examination of Marcus Walker and his witnesses directed to attacking his credibility and portraying him as a mendacious man who grossly exaggerated his claim.

A matter also sought to be relied upon but not occurring at the time of the assaults or directly connected to the conduct of the defendants is that the effect of the injuries to his mother placed more demands upon him than her prior invalidity. As to those matters, it seems to me that the consequences described were relevant to compensatory damages.

Aggravated Damages Claim of Marcus Walker - Analysis

94 As noted above, counsel for the plaintiff submitted that Marcus Walker should be awarded aggravated damages in the sum of $150,000 to $200,000. In my view this would be excessive. I accept that his feelings were injured because of the humiliating, insulting and affronting nature of the incident in his brother's home involving his brother and his mother. I accept the submission of counsel for the second defendant, however, that in any assessment of aggravated damages the distinction should be drawn between the direct physical involvement of Donald and Marcia Walker and the "aftermath involvement" of Marcus Walker. The award of aggravated damages should reflect among other things the fact that the humiliation, insult and affront were more remote and, as a result, should be seen as diminished in force and aggravation. At the same time, the conduct of Carter, in particular, in maintaining the false story about what occurred, prolonged the denial of the events by him and others and the injury to his feelings. It fuelled the defence of this case and created a situation in which the defendants chose, as part of their war of attrition, to fight most issues and exhaustively and unsuccessfully challenge the credibility of Marcus Walker. This included reliance by the defendants upon expert testimony of embarrassingly poor quality.

95 Aggravated damages should be awarded, but they should reflect the likely reduced injury to feelings because of the indirect impact of the conduct on them. Further, there is some overlap and, in the circumstances relied upon, care must be taken to avoid awarding damages which would cover areas of compensation already dealt with in this matter. In all the circumstances I consider an award of $75,000 aggravated damages would be appropriate.

96 In relation to the claim for exemplary damages, Marcus Walker relies on the abovementioned fact findings in support of the aggravated damages claim save for the issue of the unrewarded battle he waged.[69] A further matter raised by counsel for Marcus Walker, however, was the conduct of Pluim. It was put that when he appreciated that the version of events given to him by Marcia Walker of how she and her son came to be injured raised a risk of an Ethical Standards enquiry into the behaviour of Carter and Sesin, he then bullied Marcia Walker and attempted to have her falsely change her allegations of the illegality of the behaviour of Carter and Sesin.[70] Further, it is put that he supported Carter and Sesin in an elaborate story to hide their wrongdoings. I assume these matters are said to be relevant to the deterrent aspects of exemplary damages.

97 The situation is one where Marcus Walker is entitled to claim exemplary damages. The assessment, however, is complex because a view needs to be formed as to whether

• the compensatory damages, including the aggravated damages, already awarded to him may constitute enough punishment and otherwise adequately address the other purposes of exemplary damages that arise in relation to him

• the awarding of compensatory damages, including aggravated damages, to Donald Walker and Marcus Walker and the estate and exemplary damages to Donald Walker and Marcus Walker will involve excessive punishment in respect of the whole incident or is necessary otherwise to address the need for punishment and the other purposes mentioned.

Views may differ but it seems to me that the compensatory and punitive damages awarded do not address all the culpability involved in the actions of Carter (with Sesin). It may be said that the contumelious disregard for persons in the position of Marcus Walker has not as yet been taken into account. It may also be said that the extensive unsuccessful attempt to portray him as a mendacious man and the attritional conduct of the defence in relation to Marcus Walker's claim revealed a contumelious disregard directed towards him in addition to that directed towards Donald Walker. However, other matters of relevance have been considered in relation to Donald Walker's claim including Carter's position that he would conduct himself in the same way if in a similar situation, the behaviour of the other officers on the night and the absence of any evidence or submissions concerning action to be taken to avoid situations resulting from the unlawful conduct of police officers.

98 Bearing these considerations in mind, it is arguable that an award of a further sum by way of exemplary damages in favour of Marcus Walker is warranted. In light, however, of the damages, including exemplary damages already awarded and the aggravated damages awarded to Marcus Walker which include an element of punishment, I have come to the conclusion that moderation requires that a award of exemplary damages should not be made in favour of Marcus Walker.

99 The plaintiffs seek interest under s 60 Supreme Court Act 1958 from the date of commencement of proceedings to judgment including interest on past economic loss and past loss of earning capacity. It is common ground that under the relevant provision interest is payable from the commencement of the proceedings to judgment.

100 As to interest on general damages, it appears from the written submissions of the parties that they are agreed that Donald Walker should be awarded damages in the nature of interest of $63,000 on his general damages award and Marcus Walker $42,000 and the estate of Marcia Walker $21,000 on their respective awards. The point at issue between the parties is the interest rate to be applied to the damages awarded for economic loss.

101 As to interest on the damages awarded for economic loss, counsel for the plaintiffs seeks interest on those damages from the date of issue of the proceedings at the penalty interest rates up to 18 May 2009 and thereafter per day at a penalty interest rate of 10% resulting in the following;

• for Donald Walker, $310,843 and $98.63 per day from 18 May 2009

• for Marcus Walker, $128,492 and $54 per day from 18 May 2009.

102 Counsel for Carter repeated their submission made at the conclusion of the trial of the proceedings, that interest was payable from the date of commencement of the proceedings on 13 August 1999 pursuant to s 60 of the Supreme Court Act but that it should be at the rate of 7%. Applying that figure, counsel stated that the following resulted;

• For Donald Walker, $185,456 and $69.04 per day from 18 May 2009

• For Marcus Walker, $78,435 and $42.02 per day from 18 May 2009.

103 It should be noted that the parties are agreed an error was made in paragraph 881 of the reasons when adding together the figures for economic loss. The total figure in paragraph 881 for economic loss for Marcus Walker should be $219,101. The parties agree that that figure should be corrected and the matter proceed on that basis. Counsel for Carter have in fact calculated their interest figures on the basis of that corrected figure. Counsel for Marcus Walker have not calculated interest up to 18 May 2009 on the corrected figure but their client is content with that course. They have, however, applied a daily interest rate of 10% as from 18 May 2009 using the corrected figure of $219,101.

104 The second defendant adopts the arguments advanced for Carter.

Section 60 Supreme Court Act 1986

105 Section 60 of the Supreme Court Act 1986 provides:

60. Interest in proceedings for debt or damages

(1) The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded."

106 Counsel for Carter submitted that the rate to be applied is discretionary and that the discretion should be exercised to fix an interest rate less than the statutory penalty rate. The rates fixed under the Penalty Interest Act for the relevant period are set out in the table below along with figures supplied by counsel for Carter providing a comparison with the "Weighted Average RBA Target Cash Rate"

Counsel for Carter submitted that, looking at these figures, it may be said that an approximate appropriate institutional rate of interest over that period was an average of 7%. His counsel also submitted that the discretion vested in the trial judge was unfettered except for the upper limit imposed by the section. Counsel argued that the purpose of awarding interest was to compensate the plaintiff and was not to penalise the defendant. Counsel submitted that in exercising the discretion in this case, the penalty component should be identified and excluded and the only entitlement to interest by way damages was on the basis of loss of use of the money, with the result that a lesser rate should be applied.

107 In support of this position, counsel did not argue that there was collateral disadvantage to the defendants from the delays that have occurred[71]. Rather, counsel submitted that, with one exception, the acts and omissions of the plaintiffs had been the cause of delay and, accordingly, a significantly lesser rate should be imposed upon the defendant, one that merely compensated the plaintiffs for their loss of use of the money representing the damages awarded. I note that counsel for the plaintiffs identified only one instance of delay by the defendants - "a matter of months in failing to answer the interrogatories before they challenged them".

108 Counsel for Carter prepared a chronology of events which bears out his summary of the direct causes of delay from the commencement of the trial. The chronology shows the plaintiffs lagging behind, failing to comply with directions, defaulting in giving discovery and changing legal representatives from time to time. I accept that with the one above exception, the acts or omissions of the defendants in the conduct of their defences did not cause any delay.

109 Counsel for the plaintiffs in response submitted that while it was true that the bulk of the delays had directly flowed from the matters identified, they in turn were a direct consequence of the serious physical and psychological damage done to Donald Walker by Carter with Sesin. Counsel referred to an affidavit on this issue filed on 19 April 2009 sworn by Donald Walker.

110 I accept that submission. Considered with the evidence placed before me at the trial about the impact of the incident and its aftermath, on Donald and Marcus Walker together with my observation of them, I consider that it was in fact remarkable that they managed to get such a difficult and hard fought case to trial at all, let alone participate in it. Their physical and psychological states would have presented a major challenge for themselves and for those trying to act for them in preparing the case. Funding litigation was also a major problem for them. Over $1,000,000 has been incurred by them and the lawyers who represented them at the trial did so on a "no win no fee" basis. In their state it is little wonder that they had great difficulty in obtaining legal assistance and retaining it.

111 It may fairly be concluded that the physical and psychological injuries suffered as a result of the incident were the major cause of the delays. The plaintiffs brought their cases to trial in spite of the problems created for them by their physical and psychological state. That state was caused by Carter, with Sesin. In my view, the defendants, therefore, cannot realistically or fairly argue that the delays were caused by the plaintiffs. In reality, the defendants bear the major responsibility for the delay. Therefore, the factual basis of the argument is not made out. I turn to the legal analysis.

112 Counsel for Carter referred to a number of cases in an attempt to support the proposition that compensation alone was the relevant consideration. Counsel referred to the following statements in Clarke v Foodland Stores[72]

"If, as we have said, interest is to be awarded, not to punish the defendant, but to compensate the plaintiff for being deprived of his money and the discretion arising out of the words 'unless good cause is shown to the contrary' is to be seen as existing in order to relieve against injustice of the defendant, the question will be whether the plaintiff's delay, such as it is in a given case, is seen as working such an injustice were the plaintiff to be allowed interest for the whole of the period available under s 58."

"Nevertheless the rate may not be altogether irrelevant to the result. It may be accepted that the purpose of the statutory power to allow interest is to compensate the plaintiff for being kept out of his money, although not because he has on that account lost the opportunity to invest it, but because he has thereby been deprived of its use.[74]

Counsel also referred to a passage in the judgment of Gillard J in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (No.3)[75] where his Honour cited Gowans J in Marsh v Ruby[76] who stated

"The policy behind the new provisions is that in the cases specified the defendant is, on judgment being pronounced or entered, treated as having kept the plaintiff out of his money and in doing so had the use of it himself so that he ought to compensate the plaintiff accordingly .... As I see it, such discretion as is conferred is not intended to be directed to penalising the plaintiff but to alleviating the defendant in the proper case. He may be able to show that he has been disadvantaged in some way by the plaintiff's conduct....but in general the defendant will not establish that he has been disadvantaged by showing that he has had the use of the money for longer than he should have been allowed to keep it. He would need to show collateral effects of the delay to his disadvantage"

113 A difficulty facing the argument advanced for Carter is that, in the past, courts have awarded interest covering periods of time which elapsed because of the delays caused by the plaintiff.

114 The major difficulty, however, is that there are purposes other than compensation that are relevant. As Gillard J said[77]

"There are three main objectives of the award of interest. First, as compensation of the judgment creditor for being out of the funds from the date of commencement of the proceeding until judgment; secondly, to deter judgment debtors from delaying proceedings and thereby having the use of the money for a longer period; and finally, to encourage defendants to make realistic assessments of their liability in a case and to take bona fide steps to compromise the claim."

For example, in Clarke v Foodland,[78] after noting that damages were not "to be allowed simply for the purpose of penalising the defendant for not having paid earlier, although, of course, an award of interest may have that effect", the Court went on to state

"Allowing interest at proper commercial rates may well encourage defendants not to delay litigation for the sake of it, but it appears from the authorities that that is not the purpose for which the statutory power to allow interest is now recognised as having been conferred."[79]

It then referred to the Penalty Interest Rates Act[80], saying:

"On the other hand, the discouragement of tardiness on the part of defendants appears to have been an element in Parliament's enacting of the Rates Act in 1981 in Victoria....that the maximum rate allowed under the Supreme Court Act should be the rate fixed from time to time under s 2 of what is called 'the Penalty Interest Rates Act' - and there is no reason to suppose that the Act was misnamed - does at least suggest that the maximum rate may, at least under certain conditions, include an element of penalty which, on the foregoing cases would not be appropriate when interest is being allowed under the Supreme Court Act."

The Court went on to consider the relative justice or injustice of the relevant approaches to the two parties.

115 I suggest that the statement quoted in the previous paragraph from Clarke's case draws a distinction between the purpose for which the statutory power to allow interest was conferred initially and the reason for introducing the penalty rate approach. We are dealing with the latter. Further, there is support for other purposes to be found, in my view, in High Court authorities relied upon by Gillard J. His Honour cited Barwick J in Ruby v Marsh[81] who, in referring to the predecessor of s 60, stated:

"The purpose of giving courts the power to award interest on damages is to my mind twofold and neither aspect of the purpose should be lost sight of. In the first place, the successful plaintiff, who by the verdict has been turned into an investor by the award of a capital sum, and whose claim in the writ has been justified to the extent of the verdict returned, ought in justice to be placed in the position in which he would have been had the amount of the verdict been paid to him at the date of the commencement of the action. In the second place, the power to award interest on the verdict from the date of the writ is to provide a discouragement to defendants, who in the greater number of actions for damages for personal injuries are insured, from delaying settlement of the claim or an early conclusion of the proceedings so as to have over a longer period of time the profitable use of the money which ultimately the defendant agrees or is called upon by judgment to pay."

116 Gillard J also cited[82] the following passage from Grincelis v House where the High Court referred to the Penalty Interest Rates Act 1983 in Victoria stating

"As was noted in Gogic;

'the function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period.'[83]

There is no doubt that this is a very important purpose of statutory provisions providing for the award of interest on the amount of a debt or damages in respect to the period between the cause of action accruing (or, in some statutory provisions, the commencement of the proceedings) and the date of judgment. It may be, however, that statutory provisions for interest serve not only that purpose but also a purpose of encouraging early resolution of litigation."

Counsel for Carter was critical of Gillard J for not quoting the whole passage from Grincelis v House which concluded as follows

"That statutory awards of pre-judgment interest may have such a purpose may be more readily understood in relation to claims for debts or some certain than in personal injury cases where it will often be in the interests of the plaintiff to wait until injuries have stabilised before bringing the action for trial. For present purposes, however, it is sufficient to have regard to the compensatory purpose of interest."

In my view, that further passage does not detract from what is said earlier which acknowledges that a purpose of imposition of a penalty interest rate is to encourage early resolution of litigation. As to the suggestion that the purpose of encouraging early resolution of litigation in personal injury cases is in some way less readily "understood", accepting that there will be cases where it will be desirable, and even necessary, to wait for injuries to stabilise, the encouragement of early resolution of litigation remains a valid and operative purpose. The way it is carried out will vary from case to case depending upon the need to wait for stabilisation of injuries. It is an issue that might affect the detailed assessment of the appropriate award of interest but would not detract from the need to recognise that one of the purposes of the awarding of damages in the form of penalty interest is to encourage early resolution of litigation.

117 For the foregoing reasons, I do not accept the argument advanced by counsel for Carter that the sole purpose of the exercise of the power and discretion under s 60 is to compensate the plaintiff. As noted above, there are in fact three purposes, those articulated by Gillard J in Johnson Tiles Pty Ltd.[84]

118 For the above reasons, the defendants' primary case that the discretion should be used to fix a lower rate of interest rather than to apply the penalty rate is not made out.

119 I am also of the view, however, that the application of the penalty rate in this case is otherwise supported by the other objectives which are directly relevant to the penalty aspect, namely,

• discouraging defendants from delaying proceedings and thereby have any use of the money for longer and

• encouraging defendants to make realistic assessments of their liability in a case and taking bona fides steps to compromise claim.

Allowing the full penalty rate may have the result of imposing a penalty on the defendant where those other purposes are relevant, but that is an intended and appropriate consequence. It is not intended to punish but simply to do justice between the parties and to achieve the other purposes. It is relevant to consider those other purposes in the circumstances of this case.

120 Counsel for Carter did so by submitting that, accepting that a purpose of awarding interest at a higher than commercial rate is to encourage early settlement, the opportunity to resolve the case was not readily available to the defendants during the years in which the interlocutory steps were being taken. Counsel pointed to the uncertainty surrounding the conspiracy claim and the impact that any settlement of such claim would have had on members of the police force when there was an allegation of fraud being made in relation to the preparation of documents. Once the trial began, the claim of Marcus Walker was a novel one and penalty interest should not be applied because that was not a cause of action that a party could be encouraged to settle. Counsel argued that parties have to consider the risks and returns and that it is not easy to judge them in such a situation.

121 In advancing this argument, counsel may have been seeking to bring Carter's case within the situation considered by Gillard J in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd[85] where his Honour concluded that in the exercise of his discretion it would be unjust to award the full penalty interest rate in respect of the claims because the defendant was not in a position to fully analyse the claims in an attempt to compromise them earlier than June of that year, the judgment having been handed down on 3 July 2003. In that case his Honour commented

"The penalty aspect which is aimed at encouraging settlements and deterring defendants from delaying the proceeding in my opinion does not apply in relation to these claims."[86]

122 The points raised by counsel for Carter plainly were points that complicated the task of settlement. Counsel is not in a position, however, to argue that Carter was not in a position to fully analyse the claims and attempt to compromise them, at an early date. The matters referred to in fact put the plaintiffs in a very vulnerable and weak position and the defendants in a very strong negotiating position. To prove a conspiracy was going to be very difficult and costly. Marcus Walker's claim was plainly novel and that too meant that the risk lay with him rather than the defendants. If one then considers the relevant financial positions of the parties, the defendants position was powerful and the plaintiffs' extremely precarious. Further, if they lost, they stood to lose everything.

123 Thus it seems to me that the matters relied upon by counsel for Carter do not assist Carter but rather raise questions as to why the case was not settled and whether the defendants had any responsibility for the failure for the case to settle. Exploration of that issue is not possible on the evidence before me. But there are other relevant matters to be considered.

124 To my observation, the defence of the case was conducted remorselessly and in close detail, and issues were pursued in circumstances where the defendants had no realistic prospect of success. The defendants in fact conducted a war of attrition. If specific examples be needed, I have referred above to the prolonged and unsuccessful attack on Donald Walker's honesty through the disputation of the state of Donald Walker's physical and psychological health where the psychological expert available to the defendant essentially supported his case and was called by Donald Walker and the defendants failed to call their orthopaedic expert. Even in that situation, when the defendants had no evidence of any substance to offer in opposition, attempts were made to challenge most, if not all, aspects of that claim. Further, to suggest that there was little or no loss of earning capacity in someone as badly injured, psychologically damaged and medicated as Donald Walker plainly was, was to ignore reality. As to Donald Walker's credibility, their own expert, Dr Cole, said that in his judgment Donald Walker was genuine. Dr Cole also referred to the great difficulties in getting a history from him because of his condition, and so provided the obvious explanation ignored in the attack launched by defence counsel using alleged inconsistencies in the histories given by Donald Walker to various medical experts. I refer also, by way of example, to the claim of Marcus Walker where the defence sought to rely on an expert whose approach was unprofessional[87] and time was wasted by the defendants in relying on his evidence. I have also referred above to some selective, inaccurate, unhelpful submissions provided for Carter in particular. This also occurred in some of the submissions on liability and quantum.

125 As to the issue of liability, it was fought hard and in detail by the defendants notwithstanding the problems posed by the evidence for the case on liability, in particular;

• the fact that the injuries suffered were inconsistent with the accounts of Carter and Sesin, and

• the truth and the inconsistencies revealed in the Pluim tape and Rogers notes and other records,

and the reality that the prosecutions of Donald and Marcia Walker before the Magistrates' Court had been effectively abandoned.

126 It is also relevant to bear in mind that in extensively contesting the evidence relevant to liability in respect of Donald Walker and the estate, the defendants ran the risk of increasing the damages recovered because it provided more detail and exposed the defence witnesses to detailed cross-examination on what occurred. In addition, on the authorities, they thereby exposed themselves to the risk of increasing aggravated and exemplary damages. Fighting these issues was a high risk strategy but was understandable as part of the war of attrition.

127 The attritional manner in which the defendants have fought this case may have been motivated by a desire to grind the plaintiffs into submission or to discourage anyone else from suing the police in the future, or both.[88] One can well understand that tactic being taken by the defendant having regard to the issues at stake and the fragile psychological state and stressed financial position of both Donald and Marcus Walker. But whatever be the motivation, the defendants must accept the consequences of their actions, namely that they conducted themselves in a manner inconsistent with the objectives of s 60, particularly the purposes of encouraging expedition and settlement. As is discussed below on the question of costs, their approach added significantly to the time of the litigation.

128 For these reasons, it seems to me that the purpose of encouraging expedition and early settlement are relevant matters to consider in exercising the discretion to determine a just rate of interest.

129 I note that there is a further difficulty in any event in the argument advanced for Carter on the rate of interest to be applied in that the evidence presented on his behalf does not assist in determining what the penalty element is. The only evidence offered on interest rates by Carter was the "Weighted Average RBA Target Cash Rate". It was not explained and its content, relevance and significance cannot be determined.

130 No satisfactory basis exists, in my opinion, to support a decision to impose a rate less than that fixed by the Penalty Interest Rates Act 1983. In all the circumstances, it is just to award the penalty rate fixed.

131 In conclusion, I draw attention to Gillard J's statement in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd[89] in which he noted that the practice had evolved in the State of Victoria

"to apply as a general rule the rates fixed pursuant to the Penalty Interest Rates Act, but clearly the Court does have a discretion to fix that lesser rate. The rate fixed pursuant to the Act contains a penalty component and there may be good reason not to award the total amount of penalty component or something less."

"There is a penalty component in the rates; but is penalty a form of punishment? No defending litigant in this day and age properly advised by his lawyer could be under any misapprehension about paying a penalty interest rate component if unsuccessful."[90]

133 The practice and expectation his Honour described is the reality. Moreover, the practice and expectation are in my view, consistent with s 60's purposes of expediting proceedings and encouraging settlement. In my view, the practice does not fetter the discretion given to fix the rate once it is decided that there is no good cause for not giving damages in the nature of interest. The practice described does not fetter the discretion because it reflects and guides the exercise of the discretion and serves the purpose of the provision well; for, as Gillard J said, it means that no defending litigant should be under any misapprehension about paying a penalty interest rate component if unsuccessful unless some good reason is advanced by the defendant - as occurred in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd.

134 The plaintiffs in their initial submission sought an order against the defendants for all their costs in the proceedings on an indemnity basis from the time of commencement of the trial. They referred to offers of compromise made to the defendants on 29 May 2007 pursuant to Order 26 of the Supreme Court (General Procedure) Rules 2005 and two Calderbank offers made on 29 May 2007 and 18 June 2007. The details are as follows.

• The offers of compromise on 29 May 2007. Three offers were made.

(a) In the Estate action, number 6504 of 1999, the plaintiffs' offer was that they would accept the sum of $80,000 in full settlement of that claim.

(b) In action number 6503 of 1999, Donald Walker's offer of compromise stated that he would accept the sum of $700,000 in full settlement of his claim.

(c) In the same action, Marcus Walker's offer of compromise stated that he would accept the sum of $400,000 in full settlement of his claim.

Each of the offers was stated to be open to be accepted within 14 days of service. The sums proposed totalled $1,180,000.00 The offers of compromise were not accepted.

The period to 12 June 2007 during which the offers were open was occupied during the trial with the evidence of the plaintiffs' witnesses particularly Marcus and Donald Walker. Donald Walker's evidence was interrupted with other witnesses called for the plaintiffs. His evidence concluded on about 21 June 2007. Thus the period encompassed by the offers occurred towards the end of the plaintiffs' cases.

On the same day that the offers of compromise were made, the plaintiffs' solicitors wrote to the defendant's solicitors stating that the plaintiffs would accept $1 million plus costs on a party/party basis in full settlement of all claims. The letter also stated that the offer would remain open until 4 p.m. on Tuesday 12 June 2007. It stated that if the offer was not accepted or rejected and the plaintiffs obtained a result better than the offer, the letter would be produced to the Court on the questions of costs and an application would be made for indemnity costs from the time of commencement of the actions or, alternatively, from the date of the letter on the basis of the principles enunciated in Calderbank v Calderbank.[91] That offer was not accepted.

By letter dated 18 June 2007 a further Calderbank offer was made on the same terms as to the costs consequences if it was not accepted. The plaintiffs indicated a preparedness to accept a significantly lesser sum of $600,000 plus costs on a party/party basis in full settlement of all claims. That letter stated that the offer would remain open for acceptance until 4 p.m. Monday 2 July 2007. That offer was not accepted.

The offer was made before the conclusion of Donald Walker's evidence on 21 June 2007. The first defendant's case then began with witnesses such as Ms Gough and Sergeant Rogers. Carter commenced his evidence on the following day, 22 June 2007. His evidence concluded on 28 June 2007 and was followed with a brief start to the evidence of Sesin.

135 The plaintiffs did not in the initial submission express a choice between the offers of compromise and the Calderbank offers as the basis for the claim.

136 In the submissions filed for Carter, he accepted that the offers of compromise were conforming offers and that the consequences of Rule 26.08 (2)(a) should follow. That rule provides:

"26.08 Costs consequences of failure to accept

26.08(1) This rule applies to an offer of compromise which has not been accepted at the time of verdict or judgment.

(2) Where an offer or compromise is made by a plaintiff and not accepted by the defendant, and the plaintiff obtains a judgment on the claim to which the offer relates no less favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall be entitled -

(a) if the claim of the plaintiff is for damages for or arising out of death or bodily injury, to an order against the defendant for the plaintiff's costs in respect of the claim taxed on an indemnity basis;

(b) ..."

Carter accepts that the plaintiffs are entitled to an order against the defendants for their costs taxed on an indemnity basis from the commencement of the proceedings "unless the Court otherwise orders".

137 In his submissions, he did not advance any arguments directed to showing that the offer of compromise should not have full effect in respect of the estate claim - Action 6504. An order for the plaintiffs' costs of those proceedings on an indemnity basis should be made against the defendants.

138 In relation to Action 6503, having made the concession as to the offers of compromise giving prima facie entitlement to indemnity costs from commencement of the proceedings, counsel for Carter made no submission with respect to the plaintiffs "purported Calderbank letters". Two issues were raised.

Counsel for Carter submitted that the Court should otherwise order. Relying on Rule 63.15, counsel argued that the plaintiffs should pay -

• Carter's costs of and incidental to the defence of the conspiracy claim to the extent that they were incurred only in respect of that claim.

• the costs of the individual defendants (other than Carter) of the proceeding as a result of the discontinuance of the conspiracy claim.

"63.15 Discontinuance or withdrawal

Unless the Court otherwise orders, a party who discontinues or withdraws part of a proceeding, counterclaim or claim by a third party notice shall pay the costs of the party to whom the discontinuance or withdrawal relates to the time of the discontinuance or withdrawal.

Counsel for Carter also submitted that the plaintiffs' costs of the proceedings should be reduced by 2/10ths or 20% because of the failure of the plaintiffs on their lost opportunity claims. Carter's costs in defending those claims should be ordered in his favour.

63.04 Costs of question or part of proceeding

(1) The Court may make an order for costs in relation to a particular question or a particular part of a proceeding.

(2) Where the Court makes an order under paragraph (1), the Court shall by order fix the proportion of the total costs of the proceeding which is attributable to the particular question or the particular part of the proceeding.

139 The second defendant focussed its submission on the costs incurred in opposing the plaintiffs' unsuccessful lost opportunities claims and argued that a proportion of the plaintiffs costs should be disallowed under Rule 63.04. It made no submission on the other issues raised in relation to the discontinuance and I proceed on the basis that it does not seek to mount any argument in respect of that issue. A possible explanation may be that it did not prepare that aspect but relied on those representing the individual officers.

140 The plaintiffs in their response have proceeded on the basis that the costs issues should be resolved applying Rule 26.08(2)(a). They join issue on the above specific issues. I will proceed under Rule 26.08(2)(a) in determining the cost question and consider the application of the other rules. That appears to me, in any event, to be the appropriate way to proceed in exercising the Court's costs discretion in this case.

141 It is convenient, therefore, to consider the two issues raised - the costs implications of and incidental to the discontinuance of the conspiracy claim and the costs orders sought by the defendants in respect of the unsuccessful lost opportunity claims. I consider, however, that, ultimately, they should be looked at in the context of the costs of the proceedings as a whole. There is a further issue, namely, whether the two claims are relevant where the circumstances were that they were live issues when the offers were made and would have been disposed of, if the offers had been accepted. I will return to these matters in due course.

142 Counsel for Carter submitted that the catalyst for the abandonment of the conspiracy claim against Carter and the fourth, fifth, sixth, seventh, ninth and twelfth defendants was that on 4 May 2007, they brought a summons seeking the summary termination of the conspiracy claim. The summons was adjourned off to be dealt with at the trial. On the first day of the trial the plaintiffs sought leave to discontinue proceedings against all the police defendants served save for the assault and battery claim against Carter. Leave was given but the issue of costs was reserved for future argument.

143 Counsel for Carter relies upon the concession which he argues is implicit in abandoning the claim. Counsel submitted that there was no reason to depart from the usual order under Rule 63.15 and the orders are sought as stated above.

144 As noted above, counsel for the second defendant did not seek orders in respect of the costs associated with the conspiracy claim.

145 The plaintiffs addressed the particular issues raised by the defendants. Addressing the conspiracy claim issue as put, the plaintiffs submitted that the ordinary rule should not be followed. They argued that a percentage only of the claims of Carter and the fourth, fifth, sixth, seventh, and 12 defendants could be allowed and taxed on a party-party basis and offset against the costs awarded in Action number 6503 in favour of the plaintiffs. They listed the following points

• the defendants chose to leave their strike out application until 4 May 2007 and this served a forensic purpose because the longer and more difficult the trial would be, the stronger hand the State of Victoria had for a negotiation for any compromise of the battery claims
• the conspiracy theory was in part vindicated by the collegiality of the evidence available to Carter to sustain his defence. Much of this evidence fell "into disarray".[92]

Counsel submitted that as a result any percentage of costs ordered to be set off should be significantly less than 50%.

146 In addition it was put that Carter and the fourth, fifth, sixth and seventh and ninth defendants to action number 6503 were all called as witnesses in the proceedings and their evidence covered much of the factual ground that would have been relevant to the claim which was discontinued. As to Carter, himself, it was put that no significant costs could reasonably have been incurred by Carter in respect of the conspiracy claim over and above those incurred in defending the other aspects of the claims.

147 As noted above, counsel for Carter argued that the costs associated with this failed issue should be addressed by reducing the costs to be otherwise awarded to the plaintiffs by 20% in respect of Action number 6503. For similar reasons, counsel submitted that Carter's costs of opposing the lost opportunity claim should be ordered in his favour. Counsel submitted that at the commencement of the trial the claims were particularised at approximately $750 million and supported by an expert report assessing the loss of potential profits as being in excess of $1.269 billion. Counsel submitted that these claims were raised and pursued unreasonably. Counsel submitted that the claims occupied a substantial amount of hearing time and a significant proportion of the parties' forensic effort. It was also put that delays occurred in the conduct of the trial while the plaintiffs sought to comply with their discovery obligations and provide particulars of the claims. Counsel also referred to the fact that there were six expert reports provided for the plaintiffs none of which were relied upon.

148 In response, counsel for the plaintiffs addressed the particular issues as put and submitted that the claims as particularised were figures which self-evidently required little material to defend them being based upon figures arising from the belief that Donald Walker and Marcus Walker had as to the potential of the business activities. The main point argued for the plaintiffs, however, is that the suggestion that 20% of the costs of the proceedings related to those matters exaggerated the role of the issue in the case "enormously". Counsel submitted that counsel for the defendants chose, in any event, to use those claims for the purpose of attacking the credit of Donald Walker and Marcus Walker. Counsel submitted that the time spent and costs incurred in attacking the credibility of Donald and Marcus Walker through the claims for lost opportunities was very considerable. Counsel argued that having regard to these matters the costs of the plaintiffs should not be reduced because the plaintiffs failed on those issues. It presumably is also put that no costs orders should be made in favour of Carter on this issue.

149 I accept the plaintiffs' submissions that, assuming an offset should occur, it would be inappropriate to offset all the costs connected to the conspiracy allegations. It was not a discrete issue. I accept that there were likely to have been some costs wasted as a result of the discontinuance in preparation as to that issue. But preparation for trial for Carter and the other police witnesses would have covered evidence relevant to the issues generally and the credibility of the police witnesses and so most of that preparation would not have been wasted. For issues would have been explored in any event to a very considerable extent because of the need to present evidence relevant to liability and damages concerning the incident, the conduct of the police at Essex Road and the conduct of the police subsequently to that. As to the trial itself, Carter, Sesin and the fourth, fifth, sixth, seventh, and ninth defendants to Action number 6503 were all called as witnesses and the questioning of them covered much the same factual ground as would have been covered in the conspiracy claim.

150 As to the other matters, there is insufficient evidence on which to reach a view about whether the Victorian Government Solicitor made a tactical decision not to seek to strike out the claim earlier. The point that the evidence as it emerged gave some vindication to the conspiracy allegations does not seem to me to assist in greatly resolving these costs issues, except that the claim cannot be dismissed as being without any basis. Taking the other matters into consideration, it seems to me that the claim by the relevant defendants, for costs thrown away by reason of the discontinuance of the conspiracy claim, should, if they were to be allowed, be confined to the costs of Carter and the fourth, fifth, sixth, seventh, ninth and 12th defendants incurred in the presentation and preparation of their defences of the proceedings until the discontinuance which have been thrown away with that event. In my judgment this would comprise a small percentage of the defendants' costs.

151 Whether ultimately an allowance should be made in relation to the discontinuance of the conspiracy claim and, if so, to what extent, and whether that should be a basis for "otherwise ordering" under Order 26 will depend on other considerations which I discuss below after discussing the issues raised in respect of the lost opportunities claim.

152 As to the costs associated with the preparation for, and exploration of, the claim relating to business opportunities lost, a portion of the preparation work would have been wasted. But I have no doubt that even if the plaintiffs had not pursued those claims at the hearing, the defendants would have done so because they relied heavily on the material relevant to that issue to try to attack the credibility of Donald Walker and Marcus Walker. Thus it too was not a discrete issue[93]. It was also necessary for the defendants in making that attack to have expert assistance providing material required to support that attack. In addition, a significant amount of the evidence relevant to the lost opportunity claim was also relevant to the claim for past lost earnings and earning capacity and future loss of earning capacity and costs. It would have been called and tested on those issues. Pursuit of the issue did not unnecessarily prolong the trial in my view.[94]

153 For these reasons, the situation was not that sought to be described on behalf of the defendants. In fact, the time wasted in preparation for and in the hearing on that issue that would otherwise have been saved if the issue had not been pursued by the plaintiffs was, in my view, minimal at most. In my judgment there was likely to have been a more significant saving in respect of the plaintiffs' costs in their preparation if it had not been pursued.

154 The powers under Rules 26.08, 63.15, 63.04, are not to be considered in a vacuum. It is necessary to consider them, and the allowances claimed under the latter rules, in the context of the performance of both parties in the conduct of the case generally.

155 As to the plaintiffs' conduct, the defendants have identified two relevant matters and they have been discussed above. As to the defendants' conduct, I have referred to the defendants' war of attrition and given examples. Alternatively, and at best for the defendants, it was a self-indulgent defence in which issues were pursued that they could not reasonably have expected to win. That conduct added considerably to the time and cost of the litigation.

156 It is not possible to assess with any precision the costs flowing from the example of the parties' conduct that has been identified. But in my judgment, the costs expended and wasted by the parties in dealing with the issues unsuccessfully pursued by the defendants were substantial and would have exceeded the costs expended and wasted by the parties on the conspiracy and lost opportunity claims. Alternatively, the defendants cannot demonstrate that there was a deficit in their favour or one that would warrant any reduction from an award of indemnity costs from the commencement of the proceedings. Having regard to these realities, I am not persuaded that any reduction should be made in respect of the matters identified by the defendants from the costs to which the plaintiffs would otherwise be entitled as a result of failures by the defendants to accept the offers of compromise or costs ordered in favour of the defendants on any issues. The offers of compromise should be allowed to have their full costs consequences under Order 26. The Court should not otherwise order.

157 To conclude, while considering the issues raised, I became concerned about an issue not raised or debated but arguably pertinent to the determination of the issue of costs. I noted above that when the offers of compromise were made, the costs of the discontinuance and of the lost opportunity claim were live issues and, if the offers of compromise had been accepted by the defendants, the results would have been no costs allowances in favour of the defendants. As to the plaintiffs, under the terms of the offer of compromise, they would have borne their own costs. The offers purported, therefore, to deal with all costs issues. In such circumstances, I suggest that a question arises as to the relevance of the matters raised by the defendants to the exercise of the cost discretion, the powers under Order 26 and the relevance of the under Rules 63.15 and 63.04. When they received the offers, the defendants were in a good position to understand the complexities of the case, the relative strengths and weaknesses and the potential outcomes. The defendants cannot, and do not, point to any difficulty in assessing the offers.[95] They chose, however, to take their chances on the offers of compromise and the cost outcomes proscribed by the Rules. It may be arguable that, unless there are special circumstances, it would be inconsistent with the objectives of r 26.08 to permit a defendant to raise such issues when they were effectively addressed by the offer. The issues not having been debated before me, however, I express no final views upon them.

158 To sum up, I have come to the conclusion that aggravated damages should be awarded to Donald Walker in the sum of $200,000. He should also receive $400,000 by way of exemplary damages. Marcus Walker should be awarded aggravated damages of $75,000. The estate should be awarded aggravated damages of $100,000.

159 In relation to interest, interest on general damages should be awarded as follows:

• Donald Walker $63,000
• Marcus Walker $42,000
• Marcia Walker's Estate $21,000

Interest should be awarded on their damages for economic loss to Donald and Marcus Walker as follows:

• Donald Walker $310,843 and $98.63 per day from 18 May 2009
• Marcus Walker $128,492 and $54 per day from 18 May 2009

160 As to costs, the defendants should be ordered to pay the plaintiffs' costs in each proceeding on an indemnity basis.

APPENDIX Q - THE INCIDENT; OTHER POSSIBLE CAUSES

161 Counsel for the plaintiffs referred to the question of the training of Carter and Sesin. Counsel commented that they were the only witnesses called as to details of their training and their evidence conflicted on issues such as what targets were to be chosen for baton blows (body or limbs) and on other important details of their training.[96] Counsel argued that it was evidence that they had different understandings of the content of their training and may reflect upon the clarity of it.[97] Counsel submitted that, on the evidence of the defendants, there was no information as to whether better police training would have lessened the likelihood of the events not being repeated.

162 Counsel for the second defendant submitted that there was insufficient information and evidence and that the State does not bear the burden of proof.

163 I accept that there is insufficient evidence to draw any relevant conclusions as to the training and its effect on the incident. What is significant about the evidence, however, a point referred to in the earlier published reasons, was what it revealed as to Carter's perception as to what he was trained to do and how that reinforced the conclusion that what he did was done with full knowledge of what he did and done deliberately.

164 Counsel for the plaintiffs also submitted that Carter and Sesin were inexperienced and should not have been rostered to work together on their own.

165 Counsel for the second defendant submitted that there was no evidence upon which to make a finding that the Victoria police should have foreseen the likelihood that harm otherwise would follow if they were rostered to work together. Their combined experience post graduation was in excess of five years. Counsel submitted that there was no basis to conclude that the Victoria police should have somehow foreseen the potential for the events.

166 The plaintiffs' response was to say that if possible junior police should be rostered with those with greater experience and maturity and that was a matter of common sense.

167 The discussion on these two issues did not relevantly advance matters beyond the point already reached about their lack of experience.

168 I note also that, while the specific issues might have been relevant to a possible negligence claim against the second defendant, such a claim was not made.

APPENDIX R - POSSIBLE LIMITS ON THE QUANTUM OF EXEMPLARY DAMAGES

Another party may be ultimately liable - relevance?

169 An issue referred to by the second defendant is whether the award of exemplary damages may be restricted where another party may ultimately be liable for the payment of the damages. It accepts, however, that generally that is not so[98] -- a position accepted by the plaintiffs. I proceed on that basis.

170 Counsel also drew attention to the High Court decision of NSW v Ibbett[99] where it was concluded that the financial means of the principal tortfeasor are not a significant and limiting determinant of the quantum of liability for exemplary damages where the Crown is vicariously liable. Counsel, however, sought to distinguish that decision and argued that the Court should focus on the personal circumstances of the principal tortfeasor rather than the financial resources of the State in determining quantum. The argument was put on the basis of the different legislative structure applicable in New South Wales and Victoria at the relevant times dealing with the issue of the liability of the State for torts committed by police members. In particular it was argued that the issue of vicarious liability was considered in Ibbett in the context of the Law Reform (Vicarious Liability) Act 1983 (NSW) as amended. Counsel submitted that it was very different to the statutory framework provided by s 123 Police Regulation Act and that this provides a proper basis to distinguish Ibett. As pointed out by counsel for the plaintiffs, however, the liability of the State arises from s 23 (1) (b) of the Crown Proceedings Act and the admission of vicarious liability by the State.

171 I am not persuaded, on the authority cited, that it is relevant to consider the personal circumstances of the principal tortfeasor in determining the appropriate quantum of exemplary damages. I was not, in any event, provided with evidence about the circumstances of the principal tort feasor relevant to the issue.

Relevance of punishment available under the criminal law

172 Counsel for the second defendant submitted that in determining the quantum of exemplary damages, the Court should have regard to limits on financial penalties found in the criminal law. Counsel submitted that to do otherwise would be to introduce a lack of congruity in the law particularly when one considers the different standard of proof applicable in each jurisdiction. In support of the general proposition counsel relied upon the statement of Gibbs CJ in XL Petroleum[100] that Lord Devlin was correct in Rookes v Barnard

" in pointing to the risk that exemplary damages might amount to a punishment greater than would be likely to be imposed if the conduct were criminal...."[101]

173 Counsel for the second defendant went on to refer to the penalty for intentionally causing serious injury proscribed by s 16 Crimes Act 1958. Counsel argued that it was punishable by a maximum of level 3 imprisonment and that the "equivalent" level 3 fine was 2400 penalty units which translates to a current value fine of approximately $272,000.[102] Counsel submitted that the lower suggested figure for Donald Walker and Marcus Walker exceeded, in each case, the maximum financial penalty provided in criminal law and, if combined, by 2.2 to 3.6 times.

174 Counsel for the second defendant submitted that the calculations are conservative. It is put that they are based on

• the most serious form of assault,
• the maximum financial penalty available without regard to mitigatory matters, and
• the current value of a penalty units rather than the 1993 value.

The second defendant submitted that in all the circumstances the sums of exemplary damages sought by the plaintiffs totalled between $600,000-$1,000,000 and were manifestly excessive even at the lower suggested figure.

175 In my view, the argument does not correctly apply the legislation. The offence of intentionally causing serious injury carries with it the primary penalty of a maximum term of imprisonment of 20 years.[103] In addition, the offence of recklessly causing serious injury carries with it the primary penalty of a term of imprisonment of 15 years.[104] A further difficulty with the argument advanced for the second defendant is that s 109(2) which sets out the penalty units for the maximum fine for a level 3 offence relied upon by the second defendant, is not applicable because it applies to

"an offence described in an Act....being an offence of a level specified in Column 1 of Table 2 or as being punishable by a fine of a level specified in that column"

The offences of intentionally and recklessly causing serious injury are described in the Crimes Act ss 16 and 17 as punishable by Level 3 and Level 4 imprisonment respectively not by a fine of a specified level. They, therefore, do not come within s 109(2) of the Sentencing Act. The purported comparison, therefore, breaks down and does not assist. The relevant comparison is with substantial periods of imprisonment.

176 I also accept, in any event, the submissions on behalf of the plaintiffs that there is no authority to support a cap on damages based on relevant criminal penalties. I also accept the submission for the plaintiffs that the principles to be applied in assessing damages in civil proceedings, including aggravated and exemplary damages, developed through the common law, are different to those that guide the exercise of the sentencing power, to be found primarily in the Sentencing Act 1991. I accept their propositions that

• aggravated damages are proportionate to the injury to the plaintiffs' feelings caused by insult, humiliation and the like and are unrelated to criminal penalties, and
• exemplary damages are proportionate only to the gravity and character of the defendants' conduct.

[1] Because of the admission of vicarious liability by the latter.

[2] In para.2 of the amended statement of claim in Action 6503 of 1999.

[3] [2006] HCA 57; (2006) 229 CLR 638 at 648 [35] and [34].

[5] At [35], citing Bray CJ in Johnston v Stewart [1968] SASR 142, 144-5. It should also be noted that the High Court appeared to approve of a variation adopted by Basten JA of a global award of exemplary damages in respect of the causes of action in trespass and assault but noted that nothing in fact turned on that.

[6] See also analysis of evidence of Carter and Sesin in section 12.4

[7] Counsel alleged that she tried to stop Carter kicking Donald. This refers to a statement she was recorded as making in the Pluim tape. That evidence was not admitted to prove the truth of the facts she asserted. I therefore, do not take it into account.

[10] It was noted in the submission that the finding was less than five minutes.

[11] State of Victoria v Horvath (2002) 6 VR 226, 343 [42].

[12] Woodley v Boyd [2001] NSW C. A. 35, [38]

[13] (1980) 43 F. LR 112, 123

[16] See [328] - [329]; They included further submissions if so advised as to any further findings that should be made about the central event relevant to the claim for damages including the reasons why Carter and Sesin acted as they did, and the relevance of any of the conduct immediately following and subsequent to the central incident of Carter and Sesin and other police, other Government bodies and the State of Victoria and the relevance if any of Carter's evidence in re-examination that if the same situation arose there was "absolutely nothing" he would do differently.

[17] Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 at 149; Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1 at 8; Vignoli v Sydney Harbour Casino [1999] NSWSC 1113.

[18] Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1 at 8.

[19] Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966) 117 CLR 118 at 151.

[21] Citing Brame v Clark 62 SE 418 at 419 (1908); May v Western Union Telegraph Co 72 SE 1059 at 1062 (1911); Douglas v Humble Oil and Refining Co 445P (2d) (1968); re Statement of Torts, 2d Vol 1, Appendix (1966), para.162.

[23] Uren v John Fairfax (1966) 177 CLR 178, 151.

[24] McFadzean v CFMEU 2007 VSCA 289 at [140]; De Reus v Gray (2003) 9VR 432, at [28]; McFadzean v CFMEU (2004) VSC 289 [102 - 105], Giller v Procopets (2008) VSCA 236 at [200].

[25] Citing De Reus v Gray, above, at 458[28].

[26] McFadzean v CFMEU 2004 VSCA 289, [102], citing Triggle v Pheeney [1951] HCA 23; (1951) 82 CLR 497, 514; Spautz v Butterworth (1996) 41 NSW LR 1, 14-18. See also Vignoli v Sydney Harbour Casino [1999] NSWSC 1113 and cf defamation cases such as Davis v Nationwide News Pty Ltd [2008] NSWSC 693, 32, 34 and 36, Lewincamp v ACP Magazines Ltd [2008] ACTSC 69.

[27] Citing Coyne v Citizen Finance Ltd [1991] HCA 10; (1991) 172 CLR 211, 237.

[28] Carter also queried whether civil litigation is an appropriate forum to consider such issues but I understand that to be advanced as a comment not an argument.

[29] See Appendix C of the first judgment.

[32] [1987] HCA 47; (1987) 164 CLR 1 at [8].

[33] Quoting Brennan J. in XL Petroleum (NSW) Proprietary Ltd v Caltex Oil (Australia) Proprietary Ltd [1985] HCA 12; (1985) 155 CLR 448,471 ; the first defendant also refers to New South Wales v Ibbett (2006) 209 CLR 638, 647 [33]; Giller v Procopets [2008] VSCA 236 at [499] the Neave JA (Maxwell P agreeing).

[34] Gray v Motor Accident Commission (1998) 196 CLR 1, [14].

[37] X. L. Petroleum (NSW) Proprietary Ltd v Caltex Oil (Australia) Proprietary Ltd [1985] HCA 12; (1985) 155 CLR 448, 472, per Brennan J citing Day v Woodsworth (1851) 13 HAW.363, 320 and Taylor J in Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR, at 136-7.

[38] Harris v Digital Pulse [2003] NSWCA 10 at 342 [254] -- cited with approval in James v Hill [2006] NSWCA 301, [84].

[39] Vignoli v Sydney Harbour Casino [1999] NSW C. 1113.

[40] Lee v Kennedy and others [2000] NSW C. A. 153 at [14].

[41] Zaravinos v New South Wales [2004] NSW CA 320

[42] Adams v Kennedy and others at [36], [59]; New South Wales v Ibett above at 653 and cases there cited.

[43] Uren v John Fairfax and Sons Proprietary Ltd above; De Reus v Gray [2003] VSCA 84 and [28] and authorities there cited.

[44] Backwell v AAA (1997) 1 VR 182, 186, 207-8.

[45] New South Wales v Ibett [2006] HCA 57; (2006) 229 CLR 638 at 647 [35].

[47] McFadzean, [112]; citing Gray above - eg where there has been substantial criminal punishment.

[48] Note in Ibbett [55] the High Court said that the development of the law over the last 2 ½ centuries respecting Crown liability in tort did not support attention to the financial means of the miscreant public officers as a significant and limiting determinant of the quantum of damages. This is not an issue that has been raised in the present case.

[52] Reasons 243, 279, 290 and following.

[53] Note Appendices paras.1250 and 1260 and 417 in the judgment.

[56] (1998) 196 CLR1; see also Giller v Procopets [2008] VSCA 236.

[57] per Gleeson CJ, McHugh, Gummow and Hayne JJ, 14.

[58] Concerning unauthorised access to information on a computer database.

[59] In assessing exemplary damages I have considered a number of decisions. Recent cases of relevance include Knight v State of New South Wales [2004] NSWSC 791, Adams v Kennedy & Ors [2000] NSWCA 152, Lee v Kennedy & Ors [2000] NSWCA 153 and Nye v State of New South Wales [2003] NSWSC 1212.

[61] (1976) 14 SASR 225.

[63] (1977) 1 VR 182 at 210.

[64] Backwell v AAA (1997) 1 VR 182 at 210; as I read His Honour's statements, he was looking at the issue of exemplary damages in the context of a claim for compensatory damages arising out of negligence and seemed to contemplate that punitive damages could be awarded in that situation.

[68] Citing inter alia, Midalco Pty Ltd v Rabenalt [1989] VicRp 45; [1989] VR 461.

[69] And the demands upon him in caring for his mother which I have not taken into account in any event for reasons given above.

[71] Marsh v Ruby [1975] VicRp 20; [1975] VR 191 and 193.

[74] And see the authorities there cited.

[75] [2003] VSC 244 at 52.

[76] [1975] VicRp 20; [1975] VR 191 and 193.

[77] Johnson Tiles, above, at [61].

[79] Referring to Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642 at 652-3 per Barwick CJ.

[80] Defined in the judgment as "The Rates Act".

[81] Barwick CJ in Ruby v Marsh [1975] HCA 32; (1975) 132 CLR 642 at 652; Grincelis v House [2000] HCA 42; (2000) 201 CLR 321, 329.

[83] Bachelor v Burke [1981] HCA 30; (1981) 148 CLR 448 at 455.

[87] See Appendix N1(a) and para.521 of the first judgment.

[88] An additional, or alternative explanation, might be that those with the responsibility to settle the litigation felt unable to publicly acknowledge the truth and therefore felt unable to sensibly resolve the matter even though the defendants would be exposed to s 60 interest at the penalty rate. If that was the case, however, it is further reason to apply the full rate.

[91] (1975) 3 All ER 333.

[92] Paragraph 299 and appendix H of the first judgment.

[93] GT Corporation Pty Ltd v Amare Safety Pty Ltd (No. 3) [2008] VSC 296 at [31].

[94] GT Corporation Pty Ltd (above), [49].

[95] cf Siminovski v Bendigo Bank Ltd (No. 2) [2003] VSC 139 (offeree denied access to information improperly by offeror; Johnson Tiles above; (inability of offeree to analyse the claims).

[96] Reasons for judgment [161] - [166] and footnote 117.

[98] Lamb v Cotogno [1987] HCA 47; (1987) 164 CLR 1, 9; Gray v Motor Accident Commission (1998) 196 CLR 1, 12.

[101] The passage went on to make the point that the approach to assessment required restraint.

[102] Sentencing Act 1991, s 109 -- table 2.

[103] Section 16 Crimes Act 1958 - "Level 3 imprisonment".

[104] Section 17 Crimes Act 1958 - "Level 4 imprisonment".