Exemplary damages
214In Australian law, an award of exemplary damages is intended to punish the defendant and also to deter the defendant, and others, from behaving in the same or similar reprehensible manner. The objects of such an award encompass condemnation and admonition of the defendant and his behaviour. The purpose of damages of this kind is to mark out the court's strong disapproval of the conduct and to visit retribution on the person thus sanctioned. It also embraces the notion that such an award will assuage the victim's potential desire or need for revenge and thus avoid any temptation to engage in self-help likely to endanger the peace. Lamb v Cotogno [1987] HCA 47; 164 CLR 1 at 8-13; Uren v John Fairfax and Sons Pty Limited [1966] HCA 40; 117 CLR 118 at 138; Luntz, Assessment of Damages for Personal Injury and Death: General Principles (2006) LexisNexus Butterworths [7.2] at 98-99.
215The type of conduct that will attract an award of exemplary damages has been described as "conduct showing a conscious and contumelious disregard for the plaintiff's rights": XL Petroleum NSW Pty Ltd v Caltex Oil (Aust) Pty Ltd [1985] HCA 12; 155 CLR 448 at 472 per Brennan J. It has plainly been recognised in cases where trespass to the person has been alleged against police officers who have been shown to have acted in a high-handed and contumelious fashion: Adams v Kennedy [2000] NSWCA 152; 49 NSWLR 78; Knight v State of New South Wales [2004] NSWSC 791 per Hoeben J.
216In Lamb v Cotogno , at 8, the High Court cited with approval the following passage from Mayne and McGregor on Damages, 12 th ed (1961) Sweet & Maxwell:
"[Exemplary damages] can apply only where the conduct of the defendant merits punishment, which is only considered to be so where his conduct is wanton, as where it discloses fraud, malice, violence, cruelty, insolence or the like, or, as it is sometimes put, where he acts in contumelious disregard of the plaintiff's rights."
217The trial judge, in the instant case, made it clear that he did not regard either case as appropriate for an award of exemplary damages. His Honour correctly identified that, to qualify for such an award, the defendant's conduct must be of such a character that it merits punishment. In the catalogue of the types of conduct that might merit such an award, his Honour included a number of the epithets that have been referred to in both the authorities I have mentioned, and in the textbooks. For example, his Honour considered whether the behaviour of Schofield had been "knowingly wanton, fraudulent, malicious, violent, cruel, high-handed or an abuse of power".
218I take the trial judge's reference to these epithets, and the general tenor of his observations, fairly read, as indicating that he did not think the behaviour of Schofield fell within the type of conduct that called for an award of exemplary damages to represent punishment, admonition, retribution and the like. Indeed, that appears to be the primary basis for his Honour's decision not to award exemplary damages.
219Another matter his Honour regarded as relevant to the issue of exemplary damages was "the abusive and belligerent behaviour" of the plaintiffs. In addition, he took into consideration the circumstances of the criminal proceedings brought against Schofield and, in addition, the fact that Schofield had been the subject of disciplinary proceedings and suspended from his employment.
220As a preliminary to all of these matters, his Honour indicated that he kept in mind that "the power to award [exemplary] damages should be exercised with restraint".
221I shall now list the range of errors asserted by the appellants in relation to the issue of exemplary damages. First, Mr Neil argued that it was an error of law for the trial judge to indicate that he would keep in mind the proposition that the power to award exemplary damages should be exercised with restraint. Secondly, senior counsel argued that the trial judge had failed to examine the penalty imposed on Schofield in the criminal proceedings, and failed to evaluate whether it was so substantial as to warrant exemplary damages being withheld. In that regard, Mr Neil relied upon Gray v Motor Accident Commission [1998] HCA 70; 196 CLR 1 at 13-17.
222In relation to the trial judge's reference to the criminal proceedings against Schofield, Mr Neil pointed out that, although the transit officer had been found guilty of the assaults in the Local Court criminal proceedings, the prosecution of Sebastian was later dismissed under s 10 of the Crimes (Sentencing Procedure) Act . In Christian's case, the conviction entered against Schofield in the Local Court was subsequently quashed in the District Court. Senior counsel also argued that the reference by the trial judge to the disciplinary proceedings brought against Schofield constituted a further error of law.
223Mr Neil submitted that none of these matters, neither the criminal proceedings nor the disciplinary proceedings, justified the withholding of exemplary damages from the plaintiffs.
224Finally, Mr Neil argued that RailCorp ought to have had exemplary damages awarded against it, to bring home to it that its transit officers must be trained and disciplined to ensure that abuses of the kind that had occurred in the present case would not be repeated. In this regard, senior counsel relied upon New South Wales v Ibbett [2006] HCA 57; 229 CLR 638.
225This last argument raises a point of some difficulty. The issue is whether a non-State agency is to be held vicariously liable for the contumelious action of its employees, especially in circumstances where the claim makes no allegation alleging a failure in training and discipline. State of New South Wales v Ibbett had dealt with the liability of the State for actions of police officers, having regard to the special provisions in s 6 of the Law Reform (Vicarious Liability) Act 1983 (NSW). It did not directly deal with the points raised by Mr Neil's argument.
226I shall deal with each of the arguments separately. The first, and to my mind the most important, matter is whether the conduct of Schofield merited an award of exemplary damages at all. The trial judge thought it did not, and I consider that his decision in this regard was entirely correct. An analysis of the CCTV footage, and the statements from the various transit officers, show that Schofield had been present during the attempts by Sanderson to make the brothers listen to reason, and at the same time, to curb their behaviour and language. Schofield had been involved with the brothers during two earlier incidents that evening, but they had been resolved relatively amicably. Schofield observed and listened to the brothers arguing with the transit officers for about three minutes, standing with his arms folded, quite near to both brothers and Sanderson. He then gave a direction to both men to leave the station. The CCTV footage shows him pointing away from the station. Sebastian said (according to one source), "I'll kill you, you fucking cunts. I'm not leaving the station". According to another transit officer, Schofield was told by Sebastian, "I will fucking smash you". Both brothers had been described as using offensive language and speaking aggressively during the period of being spoken to by Sanderson on the concourse area. It was immediately after the aggressive language used by Sebastian that Schofield lunged at him. Schofield grabbed Sebastian by the throat and, in the melee, Sebastian's shirt was torn. He suffered no other injuries.
227Security Officer Riley said that, at that point, "the youngest one" (clearly Christian) stepped in and started to "swear and yell" at the transit officers. He then described Christian being forced to the ground. It was in that rapidly evolving situation that Schofield committed the assaults on Christian. Christian received a cut lip in the assault, but no other injuries. The assault by Schofield on both brothers was over very quickly, and they were then carried or dragged away from the concourse area.
228There was, of course, no justification for Schofield's assault on the brothers, and the judge so found. However, it is quite clear that Schofield simply lost his temper. The expression, aptly used by Mr Neil during his submissions, was that Schofield "snapped". Of course, in some cases, provocation and loss of temper may result in behaviour that is so contumelious that it will warrant an award of exemplary damages. In this case, however, Schofield's sudden loss of control plainly occurred in the context of the aggressive and offensive remarks by Sebastian and, to a lesser extent, the language and response of Christian after his elder brother had been assaulted. There was no warning given to the other officers that Schofield would "snap" as he did and his behaviour was curtailed, or at least restrained to some degree by them. In my opinion, it was well open to the trial judge to find on the present facts that Schofield's behaviour, although unjustified and warranting an award of compensatory damages, did not justify an award of exemplary damages. As Windeyer J counselled in Uren v John Fairfax and Sons Pty Limited at 153:
"... exemplary damages must always be based upon something more substantial than a jury's mere disapproval of the conduct of a defendant."
229Windeyer J, at 153-154, further cautioned that "matters that may aggravate compensatory damages do not of themselves justify the addition or inclusion or a further purely punitive element". His Honour warned against the use of "epithets without evidence".
230During the appeal hearing, Mr Neil introduced a further matter in relation to this argument. He referred to portions of the statement of CSA Truskett. It was she who had witnessed the earlier incident between Security Officer Riley and the brothers. It was she who warned the transit officers in the staff room that they should be careful, and that one of the brothers "may be looking for a blue". However, her statement had also identified one of the transit officers (presumably Schofield) saying to the others, "Come on, boys, let's go and have some fun". Mr Neil suggested that this remark was highly relevant on the damages issues and generally relevant as to the attitude of the other officers. I do not agree. It is clear that this remark by Schofield occurred at an early stage of the evening. It occurred before Schofield, Sinha and Jimenez spoke to the brothers about drinking on the concourse, and subsequently, to Sebastian about smoking on the concourse. Both of those issues were resolved relatively amicably and without any inappropriate behaviour by Schofield. The remark in the staff room had no temporal or other connection with the assault by Schofield later in the evening. It was not endorsed or commented upon by any of the other officers.
231Accordingly, I would conclude that it was entirely open to the trial judge to reach the view that exemplary damages were not appropriate in this matter, having regard to the conduct of Schofield. His Honour was also entitled to take into account the behaviour of both Sebastian and Christian as a relevant factor on the issue as to whether such damages should be awarded: Lamb v Cotogno at 13 ; Fontin v Katapodis [1962] HCA 63; (1962) 108 CLR 177.
232Further, I do not think that his Honour was in error in reminding himself that restraint was necessary before embarking on a factual evaluation as to whether exemplary damages were necessary in the present matter. Australian courts have, in the main, accepted that the power to award exemplary damages should be exercised rarely and with restraint: XL Petroleum NSW Pty Ltd v Caltex Oil (Aust) Pty Ltd at 463 per Gibbs CJ; TCN Channel Nine Pty Ltd v Anning [2002] NSWCA 82; (2002) 54 NSWLR 333 at 366 per Spigelman CJ.
233I turn next to the arguments based on the criminal and disciplinary proceedings brought against Schofield. Mr Neil argued that the judge had erred in law by taking these matters into account on the issue as to whether exemplary damages should be awarded.
234The first argument related to the criminal proceedings. The factual basis on which the judge considered this matter is set out in detail in the judgment. It bears repetition. Schofield was prosecuted in the Local Court for the assaults on the two brothers. It appears he was convicted in relation to each assault, and then appealed to the District Court. In relation to the assault on Christian, the conviction was set aside, and Schofield was found not guilty. In relation to Sebastian's assault, the finding of guilt was confirmed, but the proceedings were dismissed under s 10 of the Crimes (Sentencing Procedure) Act.
235In Gray v Motor Accident Commission , the High Court gave consideration to the factors that may be invoked when a court considers whether exemplary damages should be awarded. In particular, the Court dealt with the relevance or otherwise of the situation where criminal punishment had been imposed on a wrongdoer who was later sued by an injured person. In that case, the driver of a motor car who had seriously injured the plaintiff was subsequently convicted of intentionally causing grievous bodily harm, and sentenced to seven years imprisonment. Although not relevant to the present discussion, there were two points of special interest to note regarding the case. The first was that the third-party insurer was the defendant, being substituted under South Australian legislation as the defendant. Secondly, although the claim was based on negligence, the conduct of the proceedings at trial demonstrated that the case had properly been regarded as one of conscious wrongdoing by a tortfeasor.
236The trial judge had made no award of exemplary damages. The factor which appeared to influence him significantly was that the tortfeasor had been "substantially punished by imprisonment".
237Prior to considering this issue, the plurality judgment stated, at 15:-
"In considering whether to award exemplary damages, the first, if not the principal focus of the injury is upon the wrongdoer, not upon the party who was wronged. (The reaction of the party who is wronged to high-handed or deliberate conduct may well be a reason for awarding aggravated damages in further compensation for the wrong done. But it is not ordinarily relevant to whether exemplary damages should be allowed). The party wronged is entitled to whatever compensatory damages the law allows (including, if appropriate, aggravated damages). By hypothesis then, the party wronged will receive just compensation for the wrong that is suffered. If exemplary damages are awarded, they will be paid in addition to compensatory damages, and, in that sense, will be a windfall in the hands of the party who was wronged. Nevertheless, they are awarded at the suit of that party, and, although awarded to punish the wrongdoer and deter others from like conduct, they are not extracted by the State or paid by it."
238On the issue of the significance of criminal punishment, the plurality judgment emphatically endorsed the proposition that, where the criminal law has been brought to bear upon the wrongdoer and substantial punishment inflicted upon him, the consequence is that exemplary damages may not be awarded in the civil proceedings. In their Honours' view, the infliction of substantial punishment (for what was substantially the same conduct as the conduct the subject of the civil proceedings) is a complete bar to the award. It is not a matter of discretion depending on the facts and circumstances in the case. Two reasons were given for this. First, the purpose for the awarding of exemplary damages will have been wholly met if substantial punishment is extracted by the criminal law; second, considerations of double punishment would otherwise arise.
239In the case then under consideration, the High Court determined that imprisonment for seven years constituted substantial punishment and, as this had been imposed on the wrongdoer for the conduct the subject of the civil action, exemplary damages could not be awarded. The plurality judgment left open the situation where a wrongdoer had been found guilty, but where a financial or non-custodial penalty had been prescribed. It left open also the situation where a wrongdoer has been brought before the criminal courts and acquitted. Equally, it left open the situation where there might properly arise a real issue as to whether the punishment inflicted upon a wrongdoer was adequate or otherwise. The plurality judgment, in each of those situations, did not conclude one way or the other whether the imposition of the criminal law would be a bar to exemplary damages.
240Kirby J (in a separate decision) thought that the issue was one of discretion. At 33-34, Kirby J said:
"I accept that describing the process involved as "discretionary" may encourage a certain looseness of thinking. However, to some extent that is inherent in the interaction of criminal punishment and civil damages which are described as being in part punitive. It is a discretion to be exercised in accordance with principle. If one of the reasons for awarding exemplary damages is the punishment of the wrongdoer in an emphatic and public way, it is obviously relevant to take into account the fact that this may already have been done or is likely to follow. Once exemplary damages are seen as supplementary to compensatory damages (an addition that may or may not be appropriate in the particular case) the fact that a plaintiff may lose them (or have them reduced by reference to the actions of others in the criminal courts) does no offence to reason. The primary judge's description of exemplary damages as discretionary was therefore correct."
241In my opinion, contrary to Mr Neil's submission, there is nothing in the plurality judgment that suggests that, where substantial punishment (for example, imprisonment) has not been imposed, the trial court is precluded from taking into account, as a relevant factor in determining whether exemplary damages should be awarded and, if so, the extent of those damages, the fact that a wrongdoer has been subjected to the rigours of the criminal justice system for the same conduct as is involved in the civil case. Kirby J's separate decision plainly envisages that such an approach is permissible.
242In other words, the High Court's decision in Gray is authority for the proposition that, where substantial punishment has been imposed by the criminal justice system for the same conduct as is involved in the civil proceedings, this will operate as a complete bar to the grant of exemplary damages. Where "substantial punishment" has not been imposed, or where it is arguable that it has not, there is no reason why the trial judge cannot have some regard to the nature of those proceedings and their outcome as a factor, amongst others, in determining whether or not to award exemplary damages.
243In the present appeals, I can discern no error in the trial judge's approach. As I have said earlier, his Honour's primary reasoning appears to proceed on the basis that the conduct of Schofield itself was not such that it warranted an award of exemplary damages. That, I think, is clear from the structure of his Honour's judgment.
244Against the background of that finding, his Honour then took into account three further matters. These he regarded as "also of relevance". They were, first, the abusive and belligerent behaviour of the plaintiffs themselves, and second, the nature of the criminal proceedings brought against Schofield. A third matter was the disciplinary proceedings which I shall mention shortly.
245I have already referred to the abusive and belligerent behavior of the plaintiffs. It could be taken into account for its part in Schofield's loss of temper. That is not to deny exemplary damages because of the plaintiff's conduct. Rather, it is to address the nature of the defendant's conduct. It goes to the nature of the defendant's conduct and in my view his Honour took it into account in that way.
246So far as the criminal proceedings are concerned, there is no doubt that, in the case of Sebastian, there was a finding of guilt, both in the Local Court and the District Court on appeal. The order made, and its precise terms, was not, however, in evidence before the trial judge. It was simply agreed between the parties that the conviction for the assault had been quashed, pursuant to the provisions of s 10 of the Crimes (Sentencing Procedure) Act . His Honour said that, notwithstanding that the conviction was quashed in these circumstances, this matter "would remain on Schofield's criminal record, and in that sense, might be regarded as a punishment as a result of the events of that evening".
247It might be noted, although it was not discussed by his Honour, that s 10 of the Crimes (Sentencing Procedure Act) is in these terms:
"10(1) Without proceeding to conviction, the court that finds a person guilty of an offence may make any one of the following orders:
(a) an order direction that the relevant charge be dismissed,
(b) an order discharging the person on condition that the person enter into a good behaviour bond for a term no exceeding two years,
(c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention programme and to comply with any intervention plan arising out of the programme."
248As I have noted, the precise basis on which the s 10 order was made was not in evidence. Presumably, had it been the fact that a s 10(1)(b) bond was imposed, for example, that may have been a relevant matter for consideration.
249The legislation enables a court, in determining whether to make an order under s 10, to take into account the offender's character, antecedents, age and health. It may take into account the trivial nature of the offence, and any extenuating circumstances in which the offence was committed. Even though no conviction is recorded, the order has the same effect as a conviction for certain purposes: for example, for the purposes of enabling a court to order compensation in favour of the victim under the Victims Compensation Act 1996 (NSW).
250In my opinion, it was appropriate for his Honour to take into account the situation, so far as the criminal proceedings in connection with Sebastian's assault, were concerned. This was because it was relevant to see whether the processes of the criminal law had been brought to bear on Schofield, and to determine whether or not, in any sense, he had been punished as a result of his assaults. The trial judge was able to conclude that he had been. It was not so much a question of the adequacy of the punishment, but the fact that he had been successfully prosecuted under the criminal law, and found guilty. His Honour did not treat this fact as determinative of the outcome on the issue of exemplary damages, but merely took it into account as one relevant factor. He did not regard it as a complete bar to the award of damages. In my opinion, it was not an error of law to rely on the matter in the way he did.
251The position in relation to Christian was somewhat different. As I have said, Schofield had been convicted of the assault on Christian in the Local Court. However, on appeal in the District Court, he was found not guilty. His Honour noted that fact, but otherwise made no comment about it. There was no evidence before the trial judge as to the reasons for the acquittal. Nor is there any material before the court on that issue. It may simply be, for whatever reason, that the prosecution was simply unable to prove the charge to the requisite standard of criminal proof. I do not, however, consider that his Honour fell into any error by taking into account, as relevant on the issue, the fact of the criminal proceedings relating to the assault on Christian, and their outcome. Once again, his Honour clearly did not see this as a matter that, in itself, prohibited the imposition of exemplary damages. It was no more than a factor to be taken into account, with others, in the assessment of that issue. Indeed, in relation to both brothers, the criminal proceedings involving Schofield were not identified as being of any particular significance. As factors going to the discretion as to whether exemplary damages, they were of a minor nature and were seen as such in assessing the overall situation.
252The fact that Schofield was the subject of disciplinary proceedings and suspended from his employment was also a matter that, in my opinion, his Honour correctly regarded as relevant to the issue of whether exemplary damages should be awarded. As I have explained, those circumstances were by no means determinative of the issue, and his Honour did not treat them in that way. They too were minor matters in the ultimate evaluation. An adverse order made against a person in disciplinary proceedings, even a temporary suspension order, has the capacity to affect his or her employment, both with a present employer and future employers. Although not criminal punishment, it can rightly be regarded as some type of punishment, possibly very real punishment, for the purposes of assessing whether exemplary damages should be imposed and, if so, the relevant quantum of those damages. (On the issue of disciplinary orders being regarded as punishment: see Rich v ASIC [2003] NSWCA 342; 183 FLR 361 at 411; Police Service Board v Morris [1985] HCA 9; 156 CLR 397 at 403 per Gibbs CJ). In the present matter, as I have said, it could only play a minor role and it is clear that it did.
253The final matter relied upon by Mr Neil in relation to this aspect of the damages argument was the proposition that exemplary damages should have been awarded against RailCorp, on the basis that it had failed to train and discipline its transit officers, including Schofield, to prevent the type of abuse represented by his assaults. In view of the findings the trial judge made relating to the inapplicability of exemplary damages against Schofield and the correctness of those findings, this matter does not arise for consideration. That is especially so when regard is had to the fact that no claim of that kind appears in the pleadings.