Whitfeld v De Lauret and Company Limited [1920] HCA 75

other purchasers; and that the Government maliciously and without lawful }s business, induced,

'ane or excuse, and with intent to injure the plaintiff in Procured and forced the purchasers from it to break their contracts and refuse to accept delivery of the wheat, and induced, procured and foreed the Commis- sioners for Rail to refuse to carry the wheat, in contraven- tion ofthe Government Railways Act 1912 (N-S.W.) and, as to wheat sold to

'purchasers in other States, of the Commonwealth of Australia Constitution Actand 'the Inter-State Commission Act 1912, and induced, procured and forced certain steamship companies to refuse to carry the wheat sold to purchasers in other tates, in contravention of the Commonwealth of Australia Constitution et, Held, that the refusal of the shipping companies to carry the wheat having been caused by the refusal of the Collector of Customs to grant a permit forthe carriage of the wheat, the Government of New South Wales was not liable for the refusal of its officer to grant a permit without which the Collector of Customs would not grant his permit. Held, also, that evidence as to what would have happened with reference to the wheat crop if the Government had not put into operation the scheme was admissible, as tending to establish reasonable cause or excuse for doing the acte 'complained of.

A-consent by the Attorney-General for the Commonwealth, given under regs. 10 and 10a of the War Precautions (Supplementary) Regulations, to the instic tuting of an action against the Government of New South Wales was bel, inthe particular circumstances, to cover all the causes of action sued on.

Decision of the Supreme Court of New South Wales: De Lauret & Co. % Whifeld, 20 S.R. (N.S.W.), 669, varied.

AppeaL from the Supreme Court of New South Wales. An action was brought in the Supreme Court by De Lauret & Co, Ltd. against George Whitfeld, as nominal defendant for and on behalf of the Government of New South Wales. By the first count of the declaration the plaintiff alleged that it was carrying on the business of general traders, agents and brokers, and had in the course of such business purchased large quantities of wheat and had made contracts for the sale thereof, and had also made other contracts a8 agents and brokers for certain sellers for the sale to certain purchasers of other large quantities of wheat ; and that the Government of New South Wales maliciously and without reasonable or lawful cause oF 'exouse, and with intent to injure the plaintiff in its business, induced, procured and forced the sellers and purchasers of such wheat to break their contracts and to refuse to accept delivery of the wheat sold. By the second count the plaintiff alleged in respect of the same contracts that the Government maliciously and without reasonable or lawful cause or excuse, and with the intent alleged in the first count induced, procured and forced the Commissioners for Railways and Tramways in contravention of the Government Railways Act 1912

(NS.W.) to refuse to carry large quantities of the wheat mentioned jn the first count or to give delivery of the remaining portion of the wheat to the purchasers thereof. By the third count the plaintiff alleged that the plaintiff had in the course of its business entered into contracts for the sale of wheat which it had purchased to certain purchasers resident in Queensland and Tasmania, and as agents or brokers for certain sellers had made contracts for the sale of wheat to purchasers resident in Queensland and Tas- mania, and that the Government maliciously and without reason- able or lawful excuse, and with the intent alleged in the first count induced, procured and forced the Commissioners for Railways and Tramways to refuse to carry the wheat in respect of which those contracts were made, in contravention of the Government Railways Act 1912, the Commonwealth of Australia Constitution Act and the Inter-State Commission Act 1912. By the fourth count the plaintiff alleged, in respect of the contracts mentioned in the third count, that the Government maliciously and with the intent alleged in the first count induced, procured and forced the Adelaide Steam- "hip Co. Ltd. and the Union Steamship Co. of New Zealand Ltd. to refuse to carry the wheat in respect of which the contracts were made, in contravention of the Commonwealth of Australia Constitu- tim Act. 'The plaintiff claimed £14,000 damages.

By the particulars the various contracts referred to in the four 'counts were specified, and were alleged to have been made on specified dates beginning with 29th November 1915 and extending through December 1915 and January and Kebruary 1916 to Ist March 1916.

The defendant by his plea pleaded not guilty, and that the acts 'complained of were done by the Government under the authority and with the sanction of the Government of the Commonwealth by virtue of the royal prerogative.

Towards the end of the year 1915 the Government of New South Wales brought into operation a scheme involving the formation of what was known as a wheat pool " for marketing the wheat harvest for the season 1915-1916, Under this scheme the flour-millers of the State became agents for the Government to receive and store wheat, and one of the terms of the agreements between the Govern- 'ment and the flour-millers was that the latter were not to buy, sell,

store or otherwise deal with wheat except wheat covered by their agreements with the Government. 'The scheme came into operation 'on Ist December 1915, The action arose out of alleged interferences by the Government, in the carrying out of that scheme, with the performance of the contracts made by the plaintiff,

'The action was tried before Pring J. and a jury, who found a verdict for the plaintiff for

'The defendant then moved that the verdict should be set aside | and a new trial granted or a verdict entered for the defendant, and the Full Court ordered that the verdict be set aside and a new trial be granted : De Lauret & Co, v. Whitfeld (1).

From that decision the defendant now appealed to the High Court,

'The other material facts are stated in the judgment of Knor GJ. hereunder.

Brissenden K.C, and H. M. Stephen, for the appellant.

Flannery K.C. (with him Corringham), for the respondent.

{During argument reference was made to Brisbane Shiproriglts Provident Union v. Heagie (2); Pratt v. British Medical Association (3); Valentine v. Hyde (4); Davies v. Thomas (5); The Notting Hill (6); Merest v. Harvey (7); Willoughby Municipal Council v. Halstead (8) ; Exchange Telegraph Co. v. Gregory & Co. (9); The Mediana (10); South Wales Miners' Federation v. Glamorgan Coal Co. (11) ; Joseph v. Colonial Treasurer (N.S.W.) (12); Larkin v. Long (13); Allen v. Flood (14); Lumley v. Gye (15); Inte London, Tilbury and Southend Railway Co. and Trustees of Gowers Walk Schools (16); Black v. North British Railway Co. (17).]

(1) 208. (N (10) (1900) A. (2) 3CLR., 686, at p. 697, (1) (1905) A.C. () (1919) 17K.B, 244 (12) 5 C.LR.,

13. (1915) A.6., 814, at p. 831. (5) (1920) 2 ch, (13) (1915)'4.6., Pp

Kxox C.J. The respondent Company having obtained a verdict for £3,289 15s, 5d. on the trial of this action, the appellant applied to the Supreme Court for a new trial on a number of grounds. On this application Cullen C.J. and Ferguson J. were of opinion that a new trial should be granted on the following grounds, viz. : (a) that the learned Judge at the trial was in error in directing the jury as a matter of law that the acts proved to have been done by the Govern- ment of New South Wales were done without excuse or lawful eause of any kind, and that if they were done intentionally and caused injury to the plaintiff it was the duty of the jury to find that they were done maliciously ; () that the jury were wrongly directed as to damages. Wade J. was of opinion that the new trial should be limited to assessment of damage, on the ground that there was ample material to support a verdict for the plaintiff on each of the first four counts of the declaration, and that if the jury had been correctly and fully directed the result would not have been otherwise.

In dealing with the application of the appellant for a new trial the Supreme Court decided : (a) that the learned Judge at the trial ought to have left to the jury the question whether the acts done by the Government were done maliciously and without reason- able and lawful excuse; (b) that the authority given to the plain- tiff under regs. 10 and 10, of the War Precautions (Supplementary) Regulations to institute proceedings extended to all the contracts referred to in the case ; (c) that it was open to the jury on the evi- dence given at the trial to find a verdict for the plaintiff on the fourth count; (d) that the proper direction to the jury on the question of damages would be that the damages were at lange - meaning apparently that no proof of speeifie damage was necessary and that the jury might give any amount they thought proper ; (¢) that the learned Judge at the trial was right in rejecting the following question put by counsel for the defendant - * What, in Your opinion, would have happened with reference to the wheat crop if the Government had not stepped in under the scheme known as the wheat pool 7"

From this decision the appellant brought an appeal to this Court on the following grounds, viz. : (1) that the Supreme Court should

have held that upon the proper construction of the consent by th Attomey-General the plaintiff was not entitled to maintain th action in respect of all the contracts referred to in the case that the Supreme Court should have held that there was no evi that the Government was liable in consequence of the non-perfor ance of certain of the said contracts which by their terms were be performed prior to the middle of February 1916; (3) that the. Supreme Court should have held that the plaintiff can only recover damages for the interference with the performance of contracts so far as that interference prevented it from delivering wheat in accor: dance with the terms of such contracts; (4) that the said was in error in holding that upon the evidence damages were large; (5) that the said Court was in error in holding that d Government was liable by reason of the interference of Harris the shipment of wheat; (6) that the said Court was in error in holding that the Judge presiding at the trial was right in rejecting evidence tendered for the purpose of proving that the Government. was justified in doing the acts complained of.

During the argument before us the Court expressed the opinia that the decision of the Supreme Court on the question raised as to the extent of the authority given under regs. 10 and 10a of the Precautions (Supplementary) Regulations was correct. It is wnne sary to say more than that the question depends on the construction of the documents referred to (the consent of the Attorney-General and the statement upon which it was given) and that I agree with 'the construction put upon them by the Supreme Court. This disposes of the first ground of appeal.

'The second and third grounds of appeal were not seriously presse y Dr. Brissenden, in view of the fact that the points raised thereby did not amount to an answer to the whole cause of action alleged and that they would be open to the defendant on the new trial. The fourth ground relates to the direction to be given to the juny on the question of damages. The Supreme Court adopted the expression " damages at large" from the judgment of Esher MRe in Exchange Telegraph Co. v. Gregory & Co. (1). If this expressiom is intended to include exemplary damages, I can find nothing ia

the evidence given at the trial which would justify a direction-in H- Cor A.

'these terms. Damages may be either compensatory or exemplary. Compensatory damages are awarded as compensation for and are

measured by the material loss suffered by the plaintiffs. Exemplary py omer

damages are given only in cases of conscious wrongdoing in con- tumelious disregard of another's rights. On this footing I think the proper direction to the jury in the absence of any evidence justifying exemplary damages would have been that they should give such a sum as would compensate the plaintiff Company for the material loss suffered by it by reason of the wrongful acts of the defendant which constituted the cause of the action, taking into consideration that the defendant is only responsible for damage which was intended and for damage which is the natural and prob- able consequence of the wrongful acts. In other words, the plaintiff, if it established the cause of action, was entitled to recover for all the damage caused which was the direct consequence of the wrongful acts of the defendant and so probable a consequence that if the defendant had considered the matter he must have foreseen that the whole damage would result from those aets (see In re London, Til- bury and Southend Railway Co. (1))-

The fifth ground relates to the fourth count of the declaration, viz., inducing, procuring and forcing certain shipping companies to refuse to carry certain wheat. In my opinion the evidence establishes clearly that the refusal of the shipping companies to carry the wheat in question was caused not by any action taken by Harris, the officer in change of the Government wheat operations, but by the refusal of the Collector of Customs to grant a permit for the carriage of the wheat. 'The State Government incurred no lia- bility by reason of his refusal, for the Collector is an officer of the Commonwealth for whose acts the State Government is in no way responsible. The Supreme Court held rightly, in my opinion, that Harris's refusal to grant a permit, without which a permit could not be obtained from the Collector of Customs, afforded no cause of action against the defendant. 'The act of the Collector of Customs being the real cause of the refusal of the shipping companies to carry the wheat, Harris's interference gave rise to no cause of action,

and, in my opinion, judgment should be entered for the defendant

• on the fourth count of the declaration,

'The remaining ground of appeal is in respect of the rejection by the learned Judge at the trial of the question set out above. Tam unable to agree with the decision of the Supreme Court that this evidence was rightly rejected. As there is to be a new trial, it is obviously undesirable to point out the exact bearing which this evidence, if admitted, might have on the question at issue. That question is whether the acts done by the Government were done |

maliciously and without reasonable or lawful cause or exeuse. On that issue it is, as the Supreme Court pointed out, the duty of the jury to consider all the surrounding circumstances; and I say no 'more than that in my opinion it is certainly possible that the evidence sought to be given might in conjunetion with other facts tend to establish reasonable cause or excuse for doing the acts complained of. It is true that neither the existence of the wheat pool nor the propriety of establishing it was a matter directly in issue im the action, but reasons which led to its institution might well be regarded as justifying its maintenance as an effective agency, and in this aspect of the matter it is impossible to say definitely that the evidence rejected was irrelevant.

'The order should be that the appeal be allowed, and that the order of the Supreme Court be varied by directing that judgment be entered for the defendant on the fourth count of the declaration; the costs of the appeal to be costs in the cause.

Isaacs J. The present appellant moved the Supreme Court of New South Wales to set aside a verdict of £3,289 15s. 5d. which the present respondent had obtained, and to grant a new trial or enter a verdict for the appellant. The Court refused to enter a verdiet, but granted a new trial. The appellant appealed to this Court, claiming that a verdict should have been entered for him or anew trial granted on certain grounds.

After some argument the appellant abandoned the claim to entet a verdict for him except as to the fourth count, but contended thatia making the order for a new trial the Full Court had wrongly decided certain matters against him which should be corrected before the

Decause they are in effect curial directions to the learned H.C. or A. who will preside at the trial. 1920, 'Apart from the question as to the construction of the Attomey- warm Ns eonsent, which clearly covers this case, and as to the fourth yyy 1 "mee 'count, our observations are necessarily controlled by the eireum- & Co. Lxp. that a new trial will take place.

1. The fourth count is based on the Government's having procured "and foreed two shipping companies to refuse to carry wheat inter- 'Statefor the plaintiff, the present respondent. Abundant evidence 'yas given of the fact alleged, but the evidence established incontest- "ably that the Government interference was of no legal consequence. ¢ Commonwealth Government had established a course of "siministration by which shipments of wheat inter-State were not permitted to any vessel without a special permit from the State 'Wheat Office. The State Wheat Office was under no obligation togive such a permit, and had not given one, and the shipping ompanies acquiesced in this direction of the Commonwealth j@mment, and could not have been required by the respondent yexpose themselves to the consequences of carrying wheat "deiance of the Commonwealth prohibition, It follows that, as "iumtestably no contract to carry wheat would or could in any "eae have, as a fact, been made inter-State, the acts complained of were resultless, and gave no cause of action to the respondent. The fourth count, therefore, is not sustained, and the appellant is 'atitlel to have a verdict entered upon that count. 2, The next point is as to the decision of the Full Court: that the damages are "at lange." 'That expression is evidently based 'm the phrase quoted from Lord Esher's judgment in Exchange Telegraph Co. v. Gregory & Co. (1). The learned Master of the Rolls was there speaking of the circumstances as they appeared inthat case, including what the learned Lord called " a contemptible and fraudulent act" towards the plaintiff, and his language was, of 'ourse, appropriate to such a case, In the present case, similar may or may not be appropriate, according to the cireum- Stances as they ultimately appear to the proper tribunal. But it fannot, consistently with established prineiples, be said of the (1) (1896) 1 Q.B,, at p. 153.

tort alleged, that in its nature and apart' from special cireums the damages recoverable are damages at large. This action, it js true, is for a tort and not for breach of contract, and though a great extent the principle of awarding damages is the same in tort as in contract, vet there are differences between them, and even Detween varions classes of torts, and in different circumstances of and at this stage it would be inadvisable, to enter into any detailed consideration of the rules governing the measure of damages in a case like the present. But it is proper to state some broad principles which apply without special reference to the circumstances in contest here.

Damages are, in their fundamental character, compensatory, Whether the matter complained of be a breach of contract or a tort the primary theoretical notion is to place the plaintiff in as good a position, so far as money can do it, as if the matter complained of had not occurred (see per Lord Blackburn in Livingstone ¥. Rawyards Coal Co. (1)). This primary notion is controlled and limited by various considerations, but the central idea is compensi- tion, or, as Blackstone (vol. 1, p. 438) says, " compensation and satisfaction." There have been many judicial expositions as the application of this prineiple, but 1 think it desirable to quote that of Lord Shaw in 1914, in the case of Watson, Laidlaw & Co. y. Pott, Cassels & Williamson (2), both because of its clearness and its authority and of the fact that it is not found in the ordinary reports. 'The learned Lord said : - "" In the ease of damages in general, there is one principle which does underlie the assessment. It is what may be called that of restoration The idea is to restore the person who has sustained injury and loss to the condition in which he would have been had he not so sustained it. In the cases of financial loss, injury to trade, and the like, caused either by breach of contract or by tort, the loss is capable of correct appreciation in stated figures. Ina second class of cases, restoration being in point of fact difficult, as in the eas of loss of reputation, or impossible, as in the case of loss of life faculty, or limb, the task of restoration under the name of compel sation calls into play inference, conjecture, and the like. This ®

(1) 5 App. Cas., 25, at p. 39 (2) 81 R.P.C,, 104, at pp. 7-118

necessarily accompanied by those deficiences which attach to the H. aversion into money of certain elements which are very real, hich go to make up the happiness and usefulness of life, but which 'were never so converted or measured, 'The restoration by compensation is therefore accomplished to a large extent by the & exercise of a sound imagination and the practice of the broad axe." Now, without attempting to state the working rules which a Court mist observe in relation to the various classes and instances of actions which come before it, and the recognized cautionary directions appropriate to particular occasions, Lord Shaw has very clearly set out the fundamental principle, and has also shown that the use of* the broad axe " - which the jury take in hand when the damages areat large - is only permissible in certain circumstances. Further, theleamed Lord addressed himself only to " compensatory damages," and there is still a well recognized feature, which with one exception is in the opinion of one learned writer, confined to damages for torts "(Gee Mayne on Damages, 9th ed., at p. 41). I refer to what are called "eemplary damages." From a very early period exemplary dimages have been considered by very eminent Judges to be Tuttive for reprehensible conduct and as.a deterrent. 'That was the inion of Gibbs C.J. and Heath J. in Merestv. Harvey (1) in 1814, and aSiory J.in the Amiable Nancy (2) in 1818. In Emiblen ¥. Myers (8) in 1860 Pollock C.B. used the expression " vindictive damages " ; ~ WWI861 Byles J., in Bell v. Midland Railway Co. (4), termed them "tetributory damages"; in 1889 Kay J., in Dreyfus v. Peruvian

• Guano Co. (5), called them "vindictive" ; in 1891 Lord Hobhiouse, forthe Privy Council in McArthur & Co. v. Cornwall (6), called them "penal"; in The Mediana (7) Lord Halsbury LC. called them "punitive damages"; in 1908, in Anderson v. Calvert (8), Lord Cozens Hardy, and Lord Wrenbury (then in the Court of Appeal), teed the word "punitive"; in 1913, in Smith v. Streatfeild (9),
• Bankes J. called them "vindictive" damages. See also Willoughby Municipal Council v. Halstead (10). 'This class of damages is, by the

r TG) ste, a2, 6) (4802) A.C, 75, ap 88. (2) 3 Wheat), 546, at p. (i800) Aas ae 1a. (DOM EN, ge wef Se (6) Set, 300, WIOGE. (N.S, Sof wtp, sos. (9) 01a) 3 Ky 704 tp, 700. (5) 42Ch. D,, 66) at p77. (10) 22 CLR, 352.

H.C.or A. argument, claimed in the present case as well as compensatory

Wanaxy expression "damages at large" is so comprehensive that the tral pe Lxcner Judge would find it difficult, as the judgment of the Full Court & Co. Lrp. stands, to exclude either of them, once the bare tort was proved,

'The expression ought to be treated as eliminated from the judgment, and the matter left for direction according to the circumstances, As to the rejection of evidence - The ease raises a question of considerable difficulty, and one which concerns a department of Taw as yet undefined. What is "just cause or excuse" for inter ference with contracts or business has yet to be closely examined, For several obvious reasons it would be out of place to attempt to deal with that subject, except to say that the decisions up to date make it necessary to permit considerable latitude in admitting evidence that upon any reasonable view could form, either alone or in combination with the circumstances proved or to be proved, & situation which would amount in law to an exoneration in respect of an act primd facie tortious. Romer L.J., in Glamorgan Coal Co. vy. South Wales Miners' Federation (1), enumerated a number of relevant circumstances ; and Lord Macnaghten stated his general agreement with Romer L.J., in South Wales Miners' Federation ¥. Glamorgan Coal Co. (2), a8 also did Lord Lindley (3). It may be that what is stated by Lord Watson in Allen v. Flood (4) and by Lord Herschell in the same case (5) ought, in principle, to regulate'the result. What is the proper working out of the position, postulated in South Wales Miners' Federation v. Glamorgan Coal Co. (6), pat ticularly by Lord Macnaghten (7) and Lord James (8), or of Lord Wrenbury (then Buckley L.J.) in Smithies v. National Association of Operative Plasterers (9), or what is the true effect of such cases a8 Rogers v. Rajendro Dutt (10) and Jose y. Metallic Roofing Co. of Canada (11), cannot be determined without a fuller ascertainment of the facts, and consideration of the law upon the facts so ascet tained. It is enough to say that the question put and rejected,

(1) (1908) 2 K.B., 545, at p. 574 (2) (1905) A.C, at p. S47. Cat pe 248. (G) (1905) A.C, tp. 25 (9) (1909) KB. 310, af p. 337. ey hee wv Pp. yin oe (10) 13 Moo. P.C.C., 209,

-C., at pp. 118, 125, 11) (1908) A. (6) (1905) A.C 236" Leen bolas

taken in conjunction with the rest of the evidence given, was sufficiently relevant to be admitted, because it had reference to 'the standing effect of the wheat pool, and the answer might have afforded information as to the result of breaking down the public arrangements constituted by the wheat pool, quite as much as the result of not instituting it. If, as Stirling L.J. says, rightly or wrongly, in the Glamorgan Case (1), a father might justify inter- ference with a contractual relation by reason of his interest or a duty. towards his child; if, as Lord Macnaghten says (2), instances of justification are not difficult to give - and Lord Wrenbury, as quoted, gave some which he thought sound, - and if, as Stirling L.J, said at the page above quoted, and, as I venture to b with perfect accuracy, "it must be left (in the language of Lord Bowen) to the tribunal to analyse the circumstances of each particular ease and discover whether a justification exists or not" : i appears to me that the question put and rejected was not too remote to have ultimately reasonably possible effect in law on the question of * just eause or

excuse," and that its rejection may, for all that so far appears, have deprived the appellant of a legal right of exoneration for an act prima facie wrongful.

Rick J. I agree in the conclusions arrived at by the other members of the Court, and may briefly state my reasons, The Attomey-General's consent is wide enough to cover the claims,

The fourth count is disproved by the plaintiff's evidence, and the defendant was entitled to a direction. In the circumstances not only not denied but proved by the plaintiff itself, the interven- tion of the Government to prevent the shipping companies making contracts was innocuous. 'The companies were entitled to regard, as they did regard, the Federal direction as binding unless @ permit was given, and as the Government of New South Wales owed no duty to the plaintiff to give a permit the plaintiff has failed to establish any actionable interference with its right of employing the shipping companies as carriers.

The use of the expression " damages at large " might lead to mis- apprehension. It may be proper to tell the jury that, or it may

(1) (1903) 2 K.B., at p. 577. (2) (1905) A.C, at p. 246.

H.C.oF A. not, It is enough to say it is not necessarily right. The evi 1020.

Wine. any other relevant facts proved on the question of " just cause g De Livmer excuse." Nodefinition of just eause or excuse" has yet been g & Co. Lt. which would exclude the question under the circumstances,

• ~ ought to have been allowed so that the defence might be investigated.

Appeal allowed. Order appealed from varied by directing that judgment be entered for the defendant on the fourth count. Cote appeal to be costs in the cause.

r for the appellant, J. V. Tillet, Crown Solicitor for Ne South Wales. i Solicitor for the respondent,

THE UNION STEAMSHIP COMPANY OF ). NEW ZEALAND LIMITED. . . J

THE FEDERAL COMMISSIONER OF } 4 TAATION, S685 sch pi dee 0c,

H.C.or a, Wartime Profits Tax - Assessment - Forcign company - Liability to tax - I

1920, to make returns - Method of assessment - Objections to assessment - Bxe

es assessment - War-time Profits Pax Assessment Act 1917 (No. 38 of 1917), Svowey, 7, 10, 16, 22, 28, 55 (}- - Jncome Tax Assessment Act 1915-1916 (No. Mal Dee. 19 19 of 1916), see, 2,

Tnaaes, épping company incorporated outside the Common aan Day ana'Blch JY, consisted of trading between ports outside and ports within the Com

'wealth, and of carrying passengers and cargo from ports outside the wealth to ports within the Commonwealth and vice versd. For this p 'the company owned certain land and was the lessee of certain other land