Ewin v Vergara (No 3) [2013] FCA 1311

Bromberg J

Aggravated and exemplary damages

Aggravated and exemplary damages

675                     In Clarke v Nationwide News Pty Ltd (2012) 201 FCR 389 at [347], Barker J identified both the purposes of and the difference between aggravated damages and exemplary damages:

Aggravated damages are given to compensate a person where the harm suffered was aggravated by the manner in which the act was done. In this, they are different from exemplary damages, which are intended to punish a wrongdoer and deliver a measure of moral retribution or deterrence: see Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 at 149, per Windeyer J, whose observations to this effect were quoted with apparent approval in Gray v Motor Accident Commission (1998) 196 CLR 1 at [6], per Gleeson CJ, McHugh, Gummow and Hayne JJ.

 

676                     Aggravated damages are considered to be compensatory and there is no question that it is within a court’s power to award such damages under s 46PO(4)(d). Aggravated damages were considered to be available under the predecessor provisions to s 46PO which were in similar terms: Hall v Sheiban at 239-240 (Lockhart J) and 282 (French J); Elliot v Nanda (2001) 111 FCR 240 at 297 (Moore J).

677                     In this case, Ms Ewin claims aggravated damages in the amount of $100,000. In closing submissions counsel for Ms Ewin stated the basis for such an award in the following terms:

[T]hat whatever award your Honour strikes for general damages, there is always going to be a component in a case like this that general damages in the discretion of your Honour won’t sufficiently compensate the horror, the dislocation, the disruption of life, the smell of flashbacks, the suicide attempts, the change in lifestyle. There are present in this case, as in cases of similar sort, aspects that won’t be covered within what is commonly compensated for by general damages.

678                     The considerations which Ms Ewin’s counsel referred to are considerations that have already been taken into account in the award of general damages. Those same considerations cannot be used to justify a separate order for aggravated damages because to do so would involve “double dipping”: Clarke at [348] (Barker J). As Barker J noted in Clarke at [349] by reference to Elliot v Nanda at 297-298, there are a wide range of circumstances in discrimination cases which may give rise to an award of aggravated damages. Those circumstances might include the manner in which a party conducted its case and thereby exacerbated the hurt and injury suffered from the primary discrimination. However, Ms Ewin made no submission that the Court should award aggravated damages on a basis other than that which I have already identified. Nor am I of the view that a basis that would justify an order for aggravated damages was apparent. In the circumstances I will make no award for aggravated damages.

679                     Ms Ewin’s Counsel contended that in a case such as this there is a powerful reason to award exemplary damages, namely, to express the Court’s disapproval of the conduct of the respondent, particularly in circumstances where that respondent has not been subjected to the litigious process of the criminal justice system. What I understand counsel to have meant is that an award of exemplary damages should be made in order to punish Mr Vergara for conduct in relation to which he has not been punished.

680                     The object of the award of exemplary damages for tortious conduct is to punish the wrongdoer and deter like conduct: Gray v Motor Accident Commission (1998) 196 CLR 1 at [15] (Gleeson CJ, McHugh, Gummow and Hayne JJ). As their Honours said in that case, the principal focus of the enquiry is upon the wrongdoer and not upon the person who was wronged. The party wronged will have been fully compensated without recourse to an award of exemplary damages.

681                     Exemplary damages are punitive damages and are not compensatory in nature. In Qantas Airways v Gama, French and Jacobson JJ (with whom Branson J generally agreed) noted at [94] that the damages available under s 46PO(4)(d) are “entirely compensatory”. However as Barker J noted in Clarke at [340] the Court’s broad power under s 46PO(4) to make such orders “as it thinks fit” may provide a capacity for the Court to award exemplary damages. That view is supported by the obiter observations of Stone and Bennett JJ (with whom Dowsett J generally agreed) that while s 46PO(4) refers only to orders for damages of a compensatory nature, there is no exclusion of other orders that may be made: Employment Services Australia v Poniatowska at [133].

682                     In Clarke, Barker J did not need to finally determine that question because he was not satisfied that an award of exemplary damages would be appropriate. I too, am not currently satisfied that an award of exemplary damages is appropriate. That view may change if, for reasons I will shortly set out, it turns out that the quantum of damages that I propose Mr Vergara pay to Ms Ewin needs to be reduced by reason of any prior satisfaction of Ms Ewin’s entitlement to recover her loss. Subject to that eventuality, I do not at present need to determine whether an award of exemplary damages is available.

683                     Putting to one side the reservation just expressed and assuming that I have the power to impose an impost upon Mr Vergara for the purpose of punishment and deterrence, I would not do so for the same reasons that in tort an award of exemplary damages would not be made in circumstances such as the present. As Wilcox, O’Loughlin and Lindgren JJ explained in Sanders v Snell (1997) 73 FCR 569 at 601, exemplary damages will only be awarded if a court is satisfied that the quantum of the compensatory damages awarded has insufficient punitive force. Exemplary damages will be awarded “if, but only if”, the sum awarded as compensatory damages is inadequate to punish the wrongdoer for his or her conduct.

684                     In my view the compensatory damages which I propose to award are not inadequate to punish Mr Vergara for the entirety of his unlawful conduct and to deter him and others from engaging in similar conduct. The imposition of an additional sum to facilitate those objectives is neither necessary nor warranted. On the basis of what I currently propose to award Ms Ewin, the contention made by Ms Ewin’s Counsel that Mr Vergara needs to be punished because he will not otherwise be punished is misplaced.

The possibility of double recovery

685                     I have assessed the entirety of Ms Ewin’s loss and damage arising from Mr Vergara’s conduct on 13 to 15 May 2009. When this proceeding was commenced and largely relying upon the same conduct of Mr Vergara, Ms Ewin’s originating application included a claim against LLA and also against Robert Walters. Ms Ewin’s claims against each of LLA and Robert Walters were mediated and resolved. The terms of any settlement between Ms Ewin and LLA or Ms Ewin and Robert Walters have not been disclosed to me. It is possible that in any such settlement, Ms Ewin’s entitlement to recover her loss arising from or consequential upon the same conduct relied upon here, has been satisfied in part or in whole.

686                     It is well established that an applicant may not recover from one or more respondents an amount that is in excess of his or her loss: Baxter v Obacelo Pty Ltd (2001) 205 CLR 635. It does not matter that the claims against the various respondents arise under different causes of action. Where relief is sought in respect of the same loss, recovery will be limited by the extent of the applicant’s loss. This is a principle frequently applied in relation to statutory schemes for the payment of damages or compensation: see SAS Trustee Corporation v Budd [2005] NSWCA 366 at [32] (Mason P, with whom Handley and McColl JJA agreed). The principle is often referred to as the rule against double recovery.

687                     There is a line of authority which suggests that once a respondent shows that a payment has been made to a claimant in circumstances capable of attracting the rule against double recovery, it is for the claimant to show that the payment was not received in compensation for the same loss: Boncristiano v Lohmann [1998] 4 VR 82 at 89-90 (Winneke P, with whom Charles and Batt JJA agreed) citing Townsend v Stone Toms & Partners (1984) 27 BLR 26; and see also SAS Trustee Corporation v Budd at [49] (Mason P, with whom Handley and McColl JJA agreed).

688                     Mr Vergara did not raise the possibility that the rule against double recovery may have application in this case. Nor did Ms Ewin raise the issue. Nevertheless, the demands of justice require that I be satisfied that any orders I make will not result in double recovery for Ms Ewin.

689                     In Miletich v Murchie (2012) 297 ALR 566, during the course of the trial, the first and second respondents settled with the applicants. Following the trial, Gray J determined that the remaining respondents were liable to pay damages for misleading and deceptive conduct. Given the likelihood that an award of compensation would raise an issue of double recovery, counsel for the applicants offered to tender the relevant settlement documents but contended that the settlement was no bar to the entry of judgment against the remaining respondents for the whole amount of the loss and damage the applicants were found to have suffered. It was contended that the rule against double recovery operated only at the level of execution of a judgment, so that the applicants would be bound not to execute any judgment against the remaining respondents for more than the shortfall after taking into account whatever was recovered by means of the settlement with the first and second respondents.

690                     Gray J (at [121]-[125]) referred to Boncristiano v Lohmann and Townsend v Stone Toms & Partners and by reference to the principles there discussed rejected the contention that partial satisfaction should only be taken into account at the time judgment is executed. His Honour determined that the proper approach is that where concurrent claims have been made against two persons and there has been recovery of all or part of a loss from one, the recovery will diminish the damages to be awarded against the other person. Subject to considering any further submission from the parties as to that issue, I intend to take the same approach.

691                     Gray J at [126] considered that further evidence was required before the amount of the judgment and consequently, the interest payable on that amount, could be determined. The appropriate course there adopted, and which I will here follow, is to order Ms Ewin to file affidavit material disclosing the terms of any settlement with LLA, Robert Walters or any other person and the amount, if any, Ms Ewin claims she is entitled to deduct from any lump sum settlement on account of costs. The basis for any such deduction for costs will need to be verified by affidavit. I note in that respect that where a settlement is inclusive of costs, the party against whom double recovery is pleaded is entitled to deduct the costs of pursuing an action against the party with whom settlement was reached before giving credit for the amount received under the settlement: see Miletich v Murchie at [124]-[125] (Gray J) and Nau v Kemp & Associates Pty Ltd (2010) 77 NSWLR 687 at [108] (McColl JJA) both citing Banque Keyser Ullman SA v Skandia (UK) Insurance Co Ltd (No 2) [1988] 2 All ER 880 at 882 (Steyn J).

CONCLUSION

692                     Subject to my determination of any issue which arises by reference to the rule against double recovery, I propose to order that judgment be entered against Mr Vergara for the amount of $476,163 together with interest. As my reasons have explained, that amount is made up of the following components:

  • loss of past earning capacity – $293,000;
  • loss of future earning capacity – $63,000;
  • general damages – $110,000;
  • past expenses – $7,163; and
  • future expenses – $3,000.

 

Brisbane Barrister – David Cormack

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