Australasian Legal Information Institute

High Court of Australia

Uren v John Fairfax & Sons Pty Ltd [1966] HCA 40; (1966)
117 CLR 118 (2 June 1966)

HIGH COURT OF AUSTRALIA

UREN v. JOHN FAIRFAX & SONS PTY. LTD. [1966] HCA 40; (1966) 117 CLR 118

Damages - Tort

High Court of Australia

McTiernan(1), Taylor(2), Menzies(3), Windeyer(4) and Owen(5) JJ.

CATCHWORDS

Damages - Defamation - Exemplary damages - When exemplary damages may be

awarded.
Tort - Exemplary damages - When exemplary damages may be awarded.

HEARING

Sydney, 1965, November 29, 30; 1966, June 2. 2:6:1966

APPEAL from the Supreme Court of New South Wales.

DECISION

1966, June 2.

The following written judgments were delivered:-

McTIERNAN J. The Full Court of the Supreme Court of New South Wales has
defamation
under the Defamation Act, No. 39, 1958, of that
State. There are
two counts in the
declaration. Each count is for a separate publication of the
defamatory words of which the
plaintiff
complains. One publication was in the
first edition of the Sun-Herald; the other in
the second edition. The date of
the issue of
the newspaper was 10th February 1963. The
defendant is printer
and publisher of the newspaper. The plaintiff is a member of the Federal
Parliament and has held his seat by large majorities. He was first elected in
1958. His party
is the Australian Labor Party. (at
p121)
2. The words on which the plaintiff sued the defendant were the first half of
a report from a
political correspondent at Canberra.
This report was published
in the first edition of the
newspaper in question under headlines which read:
"LABOR LINK WITH RED SPY
-
CANBERRA CHARGE", and in the second edition under
headlines: "SPY DUPED LABOR
MPs". I will not quote all of the part of the
report
which is the subject matter of the action. It
will be sufficient for
present purposes to quote the first and second paragraphs:

"Allegations are expected to be made in Parliament that

two Labor MPs were duped by the Russian spy, Ivan Skripov.

It will be claimed that Skripov inspired them to ask searching

questions in Parliament unsuspectingly, on secret defence

establishments in Australia." (The italics are mine.) (at p121)

3. In a subsequent paragraph it is said that:

"Political observers say several Government back-bench

members will make the allegations against the Labor MPs

when Parliament begins its next sitting on March 28." (at p121)

4. The writer of the article was, apparently, Elwyn Spratt - the headlines
ascribe it to him. He
was not called as a witness, the
defendant did not call
any witnesses. (at p121)

5. The pleas of the defendant raised the issue whether the words "two Labor
MPs" could
be understood to point to the plaintiff and
another person. The
defendant conceded at the
trial that the words could be understood to do so.
(at p121)
6. The defendant at the beginning of the trial abandoned all pleas it filed
in denial of liability.
They included pleas of "qualified
protection" under s.
17 (h) of the Defamation Act. It did so
to make room for an apology, which
counsel then sought leave from the
Court to make on
behalf of the defendant.
Leave was granted and the apology was made at once. The only
issue which was
left for the
jury to try was the quantum of damages. (at p121)

7. The plaintiff claimed both aggravated and exemplary damages. The

defendant's plea to
the jury was to mitigate damages on the
grounds that the
management stopped publication
of the libel in the third edition, the only
other edition of the newspaper in question,
and the
defendant apologized for
the publications of the libel which occurred in the first and second
editions.
(at p122)

8. The trial judge gave a full and fair summing up. He told the jury that
there were
circumstances which made the case one for an
award of exemplary
damages and it would
be within their discretion to make such an award. (at
p122)

9. The jury assessed damages in respect of the publication of the defamatory

matter under
the headlines: "LABOR LINK WITH RED SPY"
at 8,000 pounds, and in
respect of its
publication under the headlines: "SPY DUPED LABOR MPs" at 5,000
pounds. (at p122)

10. The State Full Court considered that the direction regarding exemplary
damages was
wrong and the damages excessive: and for
those reasons directed a
new trial limited to the
issue of damages. (at p122)

11. The substantial question is whether an award of exemplary damages was

appropriate.
The law of exemplary damages as it was before
it was altered by
the decision of the House
of Lords in Rookes v. Barnard [1964] UKHL 1; (1964) AC 1129 is
compendiously stated
in
Mayne & McGregor
on Damages, 12th ed. (1961), p. 196:
"Such damages are variously
called
punitive damages, vindictive damages,
exemplary damages,
and even retributory damages.
They can apply only where the
conduct
of the defendant merits punishment, which
is only
considered
to be so
where his conduct is wanton, as where it discloses fraud, malice,
violence,
cruelty, insolence or the
like, or, as it is
sometimes put, where he acts in
contumelious disregard of the plaintiff's
rights." "Such damages" the learned
authors said
at p.
197 "are recognized to be recoverable in appropriate cases
of defamation."
(at p122)

12. I think that nothing is disclosed by the evidence in the present case
that could bring it
within Lord Devlin's second category
- the first category
has no possible relevance. But I
think the circumstances of the case are
proper to found a claim for exemplary
damages, if
we do not change the law on
damages by holding that a case is not appropriate for an
award of exemplary
damages unless
the judge hearing it is satisfied that it can be brought
within
Lord Devlin's second category. (at p122)

13. A decision of the House of Lords is not as a matter of law binding on

this Court. But the
Court may prefer to follow a decision
of the House of
Lords rather than one of its own, even
if a conflicting decision. It is a
matter of discretion whether the Court
should do so or not. I
think that we
should not in this case decide that an award of exemplary damages is not
appropriate merely
because the case cannot be brought within Lord Devlin's
second
category. In my view there is evidence which could reasonably satisfy
a
jury that the
publication of both libels was wanton conduct and was made in
contumelious disregard of
the plaintiff's right to
his good name. I am not
prepared to follow the House of Lords
because I think the code of law on
exemplary damages, which their Lordships
have laid
down for the United
Kingdom, should not by a judgment of this Court in this case be made
law in
Australia. (at p123)

14. Lord Devlin, before specifying the two categories of case, said: "I am
well aware that
what I am about to say will, if accepted,
impose limits not
hitherto expressed on such
awards" (of exemplary damages) "and that there is
powerful, though not compelling,
authority
for allowing them a wider range"
(1964) AC, at p 1226 . I would adopt the
statement quoted above from Mayne &
McGregor on Damages
as a summary of the
decisions of this Court as to the
circumstances giving rise to a claim for exemplary
damages. It was not argued
before us that any of those decisions are manifestly wrong in
principle. The
only reason urged for rejecting them is that they allow
more scope for
exemplary damages than this decision of the House of Lords does. (at p123)

15. In Australia, the power to make laws with respect to such a matter
belongs under the
Constitution to the several States except in the case of a
Territory. The Defamation Acts of
the States were not examined in argument.
Wallace
J. in his judgment made observations
which show that he considered
that there may be some incongruity between Rookes v.
Barnard [1964]
UKHL 1; (1964)
AC 1129 in
so far as it applies to damages for defamation and
some provisions of the
Defamation Act of New South
Wales.
It is a responsibility
of the
Parliament of
each State to decide whether any departure should be made from the present
principles
limiting the remedy of
punitive damages. I think it would be
injudicious for this
Court to limit by a decision in this case the scope
of
exemplary damages
as established by
the decisions of this Court. They are, in
truth, supported by the "powerful" authority to
which Lord Devlin refers.
(at
p123)

16. A jury could find that each publication of the defamatory matter was
marked with cynical
indifference to the fact that Elwyn
Spratt's report was a
gross imputation on the plaintiff.
The defendant put forward no defence of
justification. Its only answer to
the action was to
put the plaintiff to prove
that he was one of the members to whom the article referred and
to claim a
statutory
privilege which, if proved by evidence to be available, would have
freed
the defendant from liability. The claim to that privilege
was abandoned
at the trial. The
defendant behaved well by withdrawing the article. But the
conduct complained of was the
publication
of it in the first edition and again
in the second edition. The withdrawal could be
construed as evidencing a
strong doubt in the
defendant that the publication of the article
was legally
excusable rather than something done out of consideration for the plaintiff.
(at
p124)

17. The article was the premier feature of the front page of each edition in
which it
appeared. Other features were inserted in
that page which aggravated
the insult done to the
plaintiff by the publication of the article. The
article is stated to be Number
1 feature: a
second article beginning on the
front page was expressed to be Number 2 feature. This
article was a story of
the detection
of the Russian spy, Ivan Skripov. The third feature was a
photograph of a man. It was entitled: "The Russian Spy, Mr. Ivan Skripov."
(at
p124)

18. A jury could find that the defendant considered that the publication of
Elwyn Spratt's
report with a headline "LABOR LINK WITH
RED SPY" would
contribute towards making the
issue of the newspaper of 10th February 1963 a
financial success, in other words, that
it was
published for pecuniary gain.
The plaintiff gave evidence that on Saturday evening the front
page of the
Sun-Herald was shown
on television and the headline "LABOR LINK WITH RED
SPY"
was displayed: the plaintiff said that the television station's announcer
broadcast an
exhortation in these words: "Read in tomorrow's Sun-Herald how
Russian spy Skripov
inspired two Federal Members of Parliament
to ask
carefully worded questions in Federal
Parliament." This circumstance nearly
brings the case within Lord Devlin's second category,
but it does not satisfy
the words: "Where a defendant with a cynical disregard for a
plaintiff's
rights has calculated that the money
to be made out of his wrongdoing will
probably exceed the damages at risk, it is necessary for the law to show that
it cannot be
broken with impunity" (1964) AC, at p 1227 . (The italics are
mine.) There is no evidence that
the defendant made such a calculation.
(at
p124)

19. With great respect, the test for bringing libel within the second
category imposes an
undue burden on a plaintiff and that seems
to me, besides
the general considerations I
have mentioned, to be a reason for not rejecting
the decisions of this Court and proceeding
to give adherence to the doctrine
on exemplary damages in Rookes v. Barnard [1964] UKHL
1; (1964) AC 1129 . (at p124)

20. It is said in Gatley on Libel and Slander, 5th ed. (1960), p. 573: "So
where the defendant
purposely abstained from inquiring
into the facts or from
availing himself of means of
information which lay at hand when the slightest
inquiry would have shown that
the
imputation was groundless, or where he
deliberately stopped short in his inquiries in order
not to ascertain the
truth, a jury
may rightly infer malice. A refusal to listen to an explanation
by the plaintiff may be an error of judgment, but is not in itself
evidence of
malice. It might
be otherwise if the defamatory charge was made, not on the
evidence of his own senses,
but on the information
of another, and a slight
extrinsic inquiry would have shown that the
charge was unfounded." (at p125)

21. There is evidence - it was given by the plaintiff - that he knew Elwyn
Spratt and he knew
the plaintiff; they met at Canberra
and had talked with one
another from time to time: Elwyn
Spratt knew where the plaintiff lived in
Sydney and had telephoned to him
from time to
time; he made no inquiry from
the plaintiff about the subject matter of the report in
question. (at p125)

22. In my view the statements that Skripov "inspired" the plaintiff to ask
"searching
questions" in Parliament "unsuspectingly"
are extravagant and, by
themselves, afford
evidence of malice. The failure to make inquiry tends to
strengthen the proof of malice
afforded by the words themselves. The plaintiff
swore that he was not inspired, approached
or asked by Skripov to ask
questions in
Parliament. This evidence was not challenged by
the defendant. It
is said in Mayne & McGregor on Damages, 12th ed. (1961), p.
760:
"In one
sense
defamation is the tort par excellence for the awarding of exemplary damages
because of the frequency of the defendant's
wanton conduct in the form of
malice. Thus it
may be argued that the many cases already considered in which
evidence has been
introduced
to prove malice in order to increase the damages
reflect the acceptance of
exemplary damages in defamation. And the awarding of
damages
as a punishment as
distinct from compensation stands out clearly in
Rook v. Fairrie" (1941) 1 KB 507 . In my
opinion the matters
disclosed by the
evidence provided a sound basis for the direction to
the jury that it was
within their discretion to award exemplary
damages. (at p125)

23. The head of damage was injury to the plaintiff's reputation, and in
addition, the injury to
his feelings had to be taken into
account. These are
not matters of pecuniary damage. Lord
Atkin said in Ley v. Hamilton (1935) 153
LT 384 : "It is precisely because
the 'real' damage
cannot be ascertained and
established that the damages are at large. It is impossible to
track the
scandal, to
know what quarters the poison may reach: it is impossible to weigh
at
all closely the compensation which will recompense a man or
a woman for the
insult offered
or the pain of a false accusation. No doubt in newspaper libels
juries take into account the
vast
circulations which are justly claimed in
present times" (1935) 153 LT, at p 386 . That
case was decided in 1935. (at
p126)

24. The summing up in the present case shows that the trial judge directed
the jury to
assess separately the amount of damages they
would award the
plaintiff under each count.
Admittedly the Sun-Herald has a large circulation.
The first and second editions came
out at
different times: and the jury could
reasonably assume that both editions of the newspaper
have large circulations.
"The amount
of damages is 'peculiarly the province of the jury', who
in
assessing them will naturally be governed by all the circumstances of
the
particular
case." (Gatley on Libel and Slander, 5th ed. (1960), p. 625.) The
character and
circumstances of the parties, their
position and standing, could
properly lead to the
aggravation of the damages. The plaintiff was a member of
the Federal Parliament.
It is a
grievous wrong to a member to raise and
circulate widely about him a question whether he
is a "dupe" of a spy prying
into
defence secrets, or is a "link" between the spy and the
member's party in
the Parliament. The retraction of the libel was a circumstance
which the
jury
could take into account: also the apology published in the next issue of the
Sun-Herald.
But in the meantime the plaintiff
commenced the action. It was a
matter entirely for the jury
whether the apology was too meagre to assuage the
plaintiff's injured
feelings and whether
the apology might have been dictated
as expedient because of the issue of the writ. When
the plaintiff's action
against Australian Consolidated Press Limited for damages for the
libels, two
of which were similar to the libels in the present
case, had ended the
defendant
in this case offered an apology to the plaintiff and to pay his
costs of the present action to
date.
The trial nevertheless took place and as
it has been said the defendant abandoned all
its pleas on denial of liability
and apologized
"in open court" to the plaintiff. Again the value
of such
action as amends for the wrong done to the plaintiff was peculiarly within
the
province of the jury. There was cross-examination of the plaintiff in relation
to the other
action designed to obtain for the
defendant a whittling down of
damages under s. 24 of the
Defamation Act. The State Full Court held that the
direction of the trial
judge as to the
matter elicited by that part of the
plaintiff's cross-examination was correct. The defendant,
as has been said,
adduced
no evidence by examination in chief. Its strategy was to get
admissions from the plaintiff by cross-examination to prove a case for
the
mitigation of
damages. In this way he obtained evidence of the non-publication
of the libel (further than
the second edition)
by asking the plaintiff
questions leading him to say that he read that
edition and the libel was not
in it. The fact that an apology
was published in the Sun-Herald
of 17th
February was proved in the same way. The words of the apology were read out to
the plaintiff
and he was asked whether he read it and whether it was in those
words. The
plaintiff said that as far as he could remember it was.
Proof of
the contents of the letter
offering to apologize and to pay the plaintiff's
costs to date was made in the same way.
This
part of the defendant's conduct
in Court at the trial of the action was a circumstance
which the jury could
take into consideration
in the assessment of damages. The jury could
take an
unfavourable view of it because there could be no cross-examination from the
plaintiff's side. (at p127)

25. The damages awarded by the jury in respect of each publication are heavy.
It was a
matter for them to say to what extent, if
at all, damages ought to be
mitigated by any
circumstance or consideration put forward by the defendant.
Its plea to the jury was
that in
all the circumstances justice did not call
for a heavy award of damages. (at p127)

26. It seems from the award of damages that the jury took the view that the
publication of
the libel in the first edition and again
in the second was in
each case wanton conduct and
had the colour of a contumelious disregard of his
reputation both as a man and
a member
of Parliament. The jury could only
express their disapproval or "detestation" (a word used
by Pratt C.J. in
Wilkes v. Wood
[1763] EngR 103; (1763) Lofft 1 (98 ER 489) ) by awarding
exemplary damages.
That is the purpose of exemplary damages. I think taking all the
circumstances
of the case into consideration and the summing up, that the jury were
moved to
punish the defendant in that way. (at p127)

27. The judgment of Pearson L.J. in McCarey v. Associated Newspapers Ltd.

(1964) 3 All ER
947 said: "However, there still remains
the question of the
excessive damages, as to which
the proper question to be considered is this:
Could a reasonable jury, correctly
applying the
true measure of damages in
libel, arrive at this figure of $9,000? Manifestly it is a very high
figure.
Is it so high
that this Court can interfere in accordance with established
principles?"
(1964) 3 All ER, at p 954 I refer to a passage from each
of two
of the cases mentioned in the
judgment found at p. 956 of the report. First
"The constitution has thought, and I think there
is great advantage in it,
that the damages to be paid by a person who says false things
about his
neighbour are best decided by a
jury representing the public, who may state
the
view of the public as to the action of the man who makes false statements
about his
neighbour": per Scrutton L.J. (1934) 50 TLR 581, at p 584 After
quoting that passage,
Pearson L.J. said: "In my view, that passage
also
involves the proposition that it is right for
a jury to include in their
assessment of damages an element of punishment for
the
defendants as distinct
from compensation for the plaintiff" (1964) 3 All ER, at p 956 The
second
passage is a sentence from the
judgment of Holroyd Pearce L.J. in Lewis v.
Daily
Telegraph Ltd. (in the Court of Appeal) (2). The sentence is: "The fact
that the
jury may give
exemplary damages for libel must always make it very
difficult for the defendants to show
that the award is out of
all proportion."
Diplock L.J. said: "If this were one of those cases
where punitive and
aggravated damages were appropriate, I would
not have thought it right
to
interfere with the award of the jury; but it is not a case of that kind"
(1964) 3 All ER, at p
959 .
In my view, the present case is such a case. (at
p128)

28. I would not interfere with the jury's assessment of damages under either
count. The
verdict of the jury for $13,000 damages
should, in my opinion, be
restored. The appeal
should in my opinion be allowed. (at p128)

TAYLOR J. This is an appeal from an order of the Supreme Court of New South
Wales
directing the new trial of an action in which
the plaintiff sought to
recover damages for
defamation. There were two counts in the declaration and
at the first trial the jury
returned a
verdict for $5,000 on the first count
and for $8,000 on the second count. The order for a
new trial made by the Full
Court
on the ground that the damages were excessive is limited
to the issue of
damages and, as I see it, the vital question is whether
this was a case in
which the jury was at liberty to award a sum by way of exemplary damages. (at
p128)

2. The substance of the defamatory matter and the circumstances attending its
publication
in successive editions of the respondent's
newspaper are
adequately referred to in the
reasons given by the members of the Full Court.
It is, therefore, unnecessary to refer
in
detail to these matters; it is
sufficient to say that the alleged libels were substantial and that,
properly
instructed, substantial
verdicts at the hands of the jury might reasonably
have
been expected. But the learned trial judge directed the jury that the
case
was one in which,
upon the facts, they were at liberty to award exemplary
damages and to my mind this was
erroneous. The direction
was given some months
after the decision of the House of Lords in
Rookes v. Barnard [1964] UKHL 1; (1964) AC 1129
and shortly after
the report of
that case
was available in this country but
his Honour declined to charge the jury
in accordance with
that decision.
Upon
the appeal
two members of the Full Court (Walsh and Wallace JJ.) -
and also, I
think, Herron
C.J. - were of the opinion that
the case was not
one in which
the
jury was at liberty to award exemplary damages either upon the
principles
enunciated by
Lord Devlin
in Rookes v.
Barnard (1), or according to the law as
it stood before that decision.
I agree
entirely with that view but since the
conclusion follows
that the order for a new trial
should stand it is necessary
for us to determine
whether Rookes v. Barnard [1964]
UKHL 1;
(1964) AC 1129 ought to
be
followed in this country. In the Supreme Court two of its
members thought,
though not without
reservations,
that they should follow
that decision
whilst
the third member was of the opinion that the Court should not do so because
of
what
was said by this Court in
Parker v. The Queen [1963] HCA 14; (1963) 111 CLR 610 and
because the law as stated in Rookes
v. Barnard [1964] UKHL 1; (1964) AC 1129 is not
applicable to the
New South Wales legislation "which appreciably differs from
the
English
Defamation Act,
1952". I do not, however, see any distinction
between the English
legislation and that in force in this State
which would
make the
observations in that case
inapplicable in New
South Wales. (at p129)
3. Prior to Rookes v. Barnard [1964] UKHL 1; (1964) AC 1129 the law relating to exemplary
damages both in England and in this country
was that
damages of that character
might
be
awarded if it appeared that, in the commission of the wrong
complained of, the conduct
of
the
defendant had been high-handed,
insolent,
vindictive or malicious or had in some other
way exhibited a contumelious
disregard
of
the plaintiff's rights. Various
expressions had
been employed to
describe such conduct and the law, though, of necessity invested
with a
degree
of flexibility, was
sufficiently certain. The cases in which this principle
has been
acted upon are numerous and it
is sufficient for the present to
say
that it has been acted
upon in this Court on a number of occasions. It is,
perhaps, desirable
to point out that there
had been
a degree of confusion
between "aggravated" and "exemplary" damages and
sufficient attention has
not,
in the past, been given to the
distinction between these two
concepts. The
former are, of course, given by way of compensation
for injury to the
plaintiff,
though
frequently intagible, resulting from the circumstances and
manner of the
defendant's wrongdoing.
On the other hand, exemplary damages
are
awarded, as Lord
Devlin says in Rookes v. Barnard (1964) AC, at p 1221 , to
"punish and
deter" the wrong-
doer though, in many
cases, the same set of
circumstances might well justify either an
award of exemplary or aggravated
damages. (at p130)

4. It seems to me that it was the purpose for which exemplary damages had
theretofore
been awarded that led Lord Devlin in Rookes
v. Barnard [1964] UKHL 1; (1964) AC
1129 to
review the previous law. Having observed that the object of damages is
usually to
compensate
and that
the object
of exemplary damages is to punish
and deter he observed:
"It may well be thought that this confuses the civil
and criminal
functions
of the law; and
indeed, so far as I know, the idea of
exemplary damages is peculiar to English law. There
is
not any decision
of
this House approving an award of exemplary damages and your
Lordships
therefore have to consider whether it
is open to the House
to remove an
anomaly
from the law of England" (1964) AC, at p 1221 . A review of a number
of authorities
convinced
his Lordship that
the House "could not, without a
complete disregard of
precedent, and indeed of statute, now arrive at a
determination
that refused
altogether to
recognize the exemplary principle"
(1964) AC, at p 1226 and "that there are certain
categories of cases
in which
an
award of exemplary damages can serve a useful purpose in
vindicating the
strength of the law and thus affording a practical
justification
for admitting
into the civil law a principle which ought logically to belong to the
criminal" (1964) AC, at p
1226
. Two categories,
not including cases where
exemplary damages are expressly
authorized by statute, were specified by Lord
Devlin,
and they appear in
a passage which I
take from his speech: "The first
category is oppressive, arbitrary or unconstitutional action
by the servants
of
the government. I should not extend this category - I say this with
particular reference to the facts of this
case - to oppressive
action by
private corporations
or individuals. Where one man is more powerful than
another, it is inevitable
that he will try
to
use his power to gain his ends;
and if his power is much greater than the other's he
might, perhaps, be said
to be using it oppressively.
If he uses his power illegally, he must of
course
pay for his illegality in the ordinary way; but he
is not to be punished
simply
because
he is the more powerful. In the case of the government it is
different, for the servants of
the
government are also the servants
of the
people and the use of their power must always be
subordinate to their duty of
service.
It is true that there is something
repugnant about a big
man bullying
a small man and, very likely, the bullying will be a source
of huliliation
that
makes the case
one for aggravated damages, but it is not, in my opinion,
punishable by
damages. Cases in the
second category are those in which
the
defendant's conduct has
been calculated by him to make a profit for himself
which may well
exceed the
compensation payable to
the plaintiff. I have quoted
the dictum of Erle C.J. in Bell v.
Midland Railway Co. [1861] EngR 486; (1861) 10
CB (NS) 287
(142 ER 462) , Maule J.
in
Williams v. Currie [1845] EngR 942; (1845) 1 CB 841, at p 848 (135
ER 774, at p 776) suggests
the same thing;
and so does Martin B. in an obiter
dictum in Crouch v.
Great Northern
Railway Co. [1856] EngR 7; (1856) 11 Ex 742, at p 759 (156
ER 1031, at p 1038)
. It is a factor
also that is
taken into account in
damages for libel; one man
should not be allowed to sell
another man's
reputation
for profit. Where a defendant
with a cynical disregard for a
plaintiff's rights
has calculated that the money to be made out of his
wrong-doing will
probably exceed
the damages at risk, it is necessary for the
law to show that it cannot be
broken with impunity.
This category is not
confined to
moneymaking in the strict sense. It
extends
to cases in which the
defendant is seeking to gain at
the expense of the plaintiff
some
object -
perhaps some property which he covets
- which either he could not obtain at
all or not
obtain except at a price greater
than he wants to put down.
Exemplary damages
can
properly be awarded whenever it is necessary to
teach a
wrongdoer that tort does
not
pay" (1964) AC, at pp 1226, 1227 . (at p131)

5. I agree that there was, perhaps, some room for a more precise definition
of the
circumstances in which exemplary damages might
be awarded. But with
great respect, I do
not feel as Lord Devlin did, that such a far-reaching
reform as he proposed, and in which
the other Lords of Appeal engaged in the
case agreed, was justified by asserting that
punishment was a matter for the
criminal law.
No doubt the criminal law prescribes
penalties for wrongs which
are also crimes but it prescribes no penalty for wrongs which
are
not at one
and the same time crimes, and in both types of cases the courts of this
country, and I venture to suggest the courts of
England, had admitted the
principle of
exemplary damages as, in effect, a penalty for a wrong committed
in such circumstances or
in such manner as to warrant the court's signal
disapproval of the defendant's conduct.
This principle did not admit of the
award
of exemplary damages against a defendant
"simply because he is the more
powerful"; it permits such an award, not because of the
character
of the
defendant, but because of the character of his conduct. But the anomaly, if
indeed there was one, was by no means removed
by the observations in Rookes v.
Barnard
[1964] UKHL 1; (1964) AC 1129 . In specifying two categories of cases in which
exemplary
damages might
be awarded his Lordship's observations
admit that in
the type of cases
specified exemplary damages in the true sense
may be awarded
and the only result which
is achieved
is the narrowing of the classes of cases
in which it is appropriate to permit
an
award of such
damages. It is with the
categories
as expressed that I find the greatest
difficulty. The first
category is limited
to wrongful acts
committed by "servants of the
government"
and exemplary damages may be awarded where such acts are "oppressive,
arbitrary or unconstitutional".
But who, for the purpose of
this category, is
to be regarded as
a servant of the government? That
the expression is not used
with
the limitations which
would
be imposed by a strictly technical
understanding of it seems reasonably
clear (cf.
Attorney-General for
New South
Wales v. Perpetual
Trustee Co. (Ltd.) [1955] HCA 9; (1955)
AC 457; (1955) 92 CLR 113 ).
But
how far does the expression extend? Does
it mean
persons invested by the
government with
authority to exercise particular rights,
powers and
functions?
If so, does it extend
to persons who, in these days of governmental
participation
in forms of trade and commerce,
are employed by a corporation
created
by Parliament for
the purpose of carrying on
some particular activity
not readily recognizable
as a strictly
governmental function?
I mention as
examples in this country The
Commonwealth Banking
Corporation constituted by
Act
No. 5 of 1959, The Australian Coastal
Shipping Commission
constituted by
Act
No. 4 of 1956 for the purpose of establishing and maintaining
and
operating a shipping service
for the carriage of passengers goods
and mails,
and The
Australian National Airlines Commission
constituted by Act No. 31 of
1945
for the purpose of
providing for the
transport by air of passengers and
goods. Such functions might,
of
course, be performed directly
by servants of
the government and
I am unable to see that
there is any material difference
whether
they are so performed or whether
they are
performed by the servants
of
a corporation constituted by Parliament. If the servants of
such a corporation
are, as I understand
the intention to be, to be
regarded as "servants of
the
government" and, therefore, within
the range of exemplary damages for wrongs
committed by them "oppressively
or arbitrarily", it is difficult to see why
servants of
corporations not constituted by an Act of
Parliament but carrying
on, for
instance, the
business of banking, aerial transport, shipping
or
insurance in precisely the same
manner
as government corporations
should not
occupy a like position. Indeed, I can see no basis
upon which any such
distinction can
be made. (at p133)

6. It seems that the basis of the first category was a group of three cases
decided between
1763 and 1766 - Wilkes v. Wood [1763] EngR 103; (1763)
Lofft 1 (98 ER 489) ;
Huckle v.
Money [1799] EngR 225; (1763) 2 Wils KB 205 (95 ER 768) ; and Benson v. Frederick
[1766]
EngR 135; (1766) 3 Burr 1845 (97 ER 1130)
. In each of these cases the defendant was "a
servant of the government" and in each case it was
held that an award of
exemplary
damages was justified. In the first of these cases Lord Chief
Justice Pratt stated the
principle
in the following words: "Notwithstanding
what Mr. Solicitor-General has said, I
have formerly delivered it as my
opinion on another
occasion, and I still continue of the
same mind, that a
jury have it in their power to give damages for more than the injury
received.
Damages are designed not only as
a satisfaction to the injured person, but
likewise 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" (1763) Lofft, at pp 18, 19
(98 ER,
at pp 498, 499) . It will
be
observed that his Lordship was not purporting to state any new
principle. Nor
was he stating
one the application of which depended
upon the official
position of the defendant; the principle was stated in general terms as one
which had
application to a tortious
act committed by any person. In the second
case the Lord Chief
Justice, before dealing with the
special facts of the
case, again
stated in general terms the
considerations which should be taken
into account in assessing damages
for tort though
without expressly
referring
to the term "exemplary damages". He said: "the law has not laid
down what
shall be the
measure of damages in actions of
tort; the measure is vague and
uncertain, depending upon a vast variety of causes, facts, and circumstances;
torts or
injuries which
may be done by one man to another are infinite; in
cases of criminal
conversation, battery, imprisonment,
slander, malicious
prosecutions,
etc. the state, degree,
quality, trade or profession of the
party injured, as well as of the person
who did the injury,
must be,
and
generally are, considered by a jury in giving damages" (1763) 2 Wils KB, at p
206 [1799] EngR 225; (95 ER 768) . Again in the third case no point
was made that the
application of the principle was dependent upon the fact that the
defendant
occupied an
official position; the
members of the Court merely agreed that the
defendant "had
manifestly acted arbitrarily,
unjustifiably and unreasonably"
and, by
inference, maliciously,
and that this justified the verdict. Lord
Devlin observes that some
considerable time
elapsed after these
cases had been
decided "before the principle eo nomine was extended
in other directions" and
that "six cases, decided in the course
of the next century", had
been cited to
their Lordships. But Tullidge v. Wade [1769] EngR 22; (1769) 3 Wils KB 18 (95
ER 909) , the
first of these
six cases, was decided in 1769 - a mere three years after
Benson
v. Frederick
[1766] EngR 135; (1766) 3 Burr 1845 (97 ER 1130) . It was an action
per
quod by a
father based upon the seduction of his daughter and the complaint
was that the jury's
award was excessive. But the
Court refused to disturb the
verdict and in giving judgment
Lord Chief Justice Wilmot
said: "Actions of
this sort are brought for
example's sake; and
although the plaintiff's loss in
this case may not really amount
to the value of twenty
shillings, yet the jury
have done right in giving liberal damages . . . if much greater damages
had
been given,
we should not have been dissatisfied therewith;
the plaintiff
having
received this insult in his own house; where he had civilly
received
the defendant, and
permitted him to make
his addresses to his daughter" (1769)
3 Wils KB, at p 19 [1769] EngR
22; (95 ER 909) . Admittedly, this was not a very precise
statement of principle
but clearly
enough his Lordship was not purporting
to
introduce any new principle; he was, it seems to
me, merely acting upon an
established principle which, as far as I can see, was
completely
in accordance
with the three cases previously mentioned. I do not
refer to the later English
cases which his Lordship
mentions other than Bell v. Midland Railway Co.
[1861] EngR 486;
(1861) 10 CB (NS) 287 (142 ER
462) which he explains as an example of the
award of
exemplary damages where the wrongdoer was seeking
to make a profit
out of his
wrongdoing. It is true that Erle C.J. said: "looking at the conduct
of the company, who set
up a wharf
of their own, and, careless
whether they
were doing right or wrong, prevented all
access to the plaintiff's wharf, for
the purpose
of extinguishing his trade
and advancing
their own profit, it is
impossible to say the plaintiff was not entitled to ample compensation"
(1861)
10 CB(NS), at
p 304 (142 ER, at p 469) and that Willes J. said: "The
defendants have
committed a grievous wrong with a high
hand and in plain
violation
of an Act of Parliament;
and persisted in it for the purpose of
destroying the plaintiff's business and
securing gain to
themselves"
(1861) 10
CB(NS), at p 307 (142 ER, at p 470) . But he prefaced this observation
by
remarking that "if
ever there was a case in which
the jury were warranted in
awarding
damages of an exemplary character, this is that case" (1861) 10
CB
(NS), at p 307 (142 ER, at
p 470) . Byles J. stated the principle in more
general terms when he said: "I agree also with
my brother
Willes, that, where
a wrongful
act is accompanied by words of contumely and
abuse, the jury are
warranted in taking that into their
consideration, and giving retributory
damages" (1861) 10 CB (NS), at p 308 (142 ER, at p 471) . I do not find in the
judgments any
suggestion that as against a private
individual exemplary
damages may be awarded only
where the wrongdoer is seeking to make a profit
out of his wrongdoing; the observations
of
the Chief Justice and Willes J.
appear to me to be directed to the facts of the particular
case and to amount
to no more than
statements that proof of those facts was sufficient to
justify
an award of exemplary damages.
(at p135)

7. I should not leave the first category without remarking upon the
difficulty which is
occasioned by the use of the word "unconstitutional".
This
word has a more particular
meaning in a federal system and I cannot imagine
that a person exercising, in the greatest
good faith,
a power which an ultra
vires statute purports to confer upon him could ever be
thought to be within
the range of exemplary damages.
But the word is not, I think, used in
this
sense; it carries with it in its context, I think, the notion of a flagrant
and deliberate
violation of some fundamental principle of the Constitution.
(at p135)

8. The difficulties occasioned by the statement in the second category,

particularly in the
case of defamation by a newspaper are,
I think, obvious
and are illustrated by the case of
McCarey v. Associated Newspapers Ltd. (No.
2) (1965) 2 QB 86 ; Broadway Approvals
Ltd.
v. Odhams Press Ltd. (No. 2)
(1965) 1 WLR 807 and Manson v. Associated Newspapers Ltd.
(1965) 1 WLR 1038 .
This category is
based upon the observations in Bell v. Midland Railway
Co.
[1861] EngR 486; (1861) 10 CB (NS) 287 (142 ER 462) to which I have already referred,
and
to
some extent upon the observations of Maule J. in Williams
v. Currie [1845] EngR 942;
(1845) 1
CB 841, at p 848 [1845] EngR 942; (135 ER 774, at p 776) and those
of Martin B. in
Crouch v.
Great Northern Railway Co. [1856] EngR 7; (1856) 11 Ex 742, at p 759 [1856] EngR
7; (156 ER 1031, at p 1038)
. I have already said all
that I wish to say about the first-
mentioned case.
The second case, which was
an action for trespass by a tenant against his
landlord
does not, in my respectful view, provide any support for the
proposition
that the
existence of a profit-making motive in a wrongdoer
is the
only circumstance entitling the
jury to award exemplary damages.
Indeed, in
that case, Coltman C.J. expressly acted upon
the
principle laid down by De
Grey C.J. in Sharpe v. Brice [1746] EngR 468; (1774) 2 Black W
942 (96 ER 557) in which the
defendant, a customs officer,
was successfully sued for
trespass and the
verdict having
been attacked as excessive, a new trial was, it appears,
refused because
of the circumstances in which the trespass had been committed.
Reference may also be made to the case of Leith v. Pope [1799] EngR 222; (1779) 2 Black
W
1327
(95 ER 777) - which is noted at the foot of the report of Sharpe v. Brice
[1746] EngR
468; (1774) 2 Black W 942 (96 ER 557) - where a verdict
for 10,000 pounds for
malicious
prosecution was upheld because of the outrageous
conduct of the
defendant. Nor, I should
add, do
I find anything in the observations of Martin
B. in Crouch v. Great Northern Railway
Co. [1856] EngR 7; (1856) 11 Ex 742, at p 759 (156 ER
1031,
at p 1038) to justify the
formulation of the second category. (at p136)

9. There have been not infrequent discussions concerning the propriety of the
civil law
providing for damages of a penal character
but, so far as I know, no
writer and no authority
has ever claimed that an award of exemplary damages
should be restricted to the
categories suggested. On this point I content
myself with the quotation of two passages in
the third edition of Sedgwick on
the Measure
of Damages. Writing in 1858, the learned
author says (s. 38):
"Thus far we have been speaking of the great class of cases where no
question
of fraud, malice, gross negligence, or oppression intervenes.
Where either of
these
elements mingle in the controversy, the law, instead of adhering to the
system, or even the
language of compensation,
adopts a wholly different rule.
It permits the jury to give what it
terms punitory, vindictive, or exemplary
damages; in other words,
blends together the
interest of society and of the
aggrieved individual, and gives damages not only to
recompense the sufferer
but
to punish the offender. This rule, as we shall see hereafter
more at
large, seems settled in England, and in the general jurisprudence
of this
country."
Thereafter, in Ch. 18 he reviews a number of English and American
authorities, some of the
former being additional
to those cited by Lord
Devlin, and cites the following passage from
the judgment of Grier J.
delivering the opinion of the Supreme
Court of the United States in
Day v.
Woodworth (1851) 13 How 363 (14 Law Ed 181) : "It is a well-established
principle of
the common
law, that in actions of trespass and all actions on
the case for torts, a jury may
inflict what are called exemplary, punitive, or
vindictive damages upon a defendant, having
in view the enormity of his
offence rather than the measure of compensation to the plaintiff.
We are aware
that the propriety of this doctrine has been questioned by some writers; but
if
repeated judicial decisions for more
than a century are to be received as
the best exposition
of what the law is, the question will not admit of
argument. By the common
as well as by
statute law, men are often punished for
aggravated misconduct or lawless acts by means of
a civil action, and the
damages,
inflicted by way of penalty or punishment, given to the
party
injured. In many civil actions, such as libel, slander, seduction,
etc., the
wrong done to
the plaintiff is incapable of being measured by a money
standard; and the damages
assessed depend on the
circumstances showing the
degree of moral turpitude or atrocity
of the defendant's conduct, and may
properly be termed exemplary
or vindictive rather than
compensatory. In
actions of trespass, where the injury has been wanton and malicious, or
gross
and outrageous,
courts permit juries to add to the measured compensation cf
the
plaintiff, which he would have been entitled to recover had the injury
been inflicted without
design or intention, something farther by way of
punishment or example, which has
sometimes been called 'smart
money'. This has
been always left to the discretion of the
jury, as the degree of punishment to
be thus inflicted must depend on
the peculiar
circumstances of each case"
(1851) 13 How, at p 371 (14 Law Ed, at p 185) . (at p137)

10. To my mind - and I say this with the greatest respect - the attempt,
expressly made in
Rookes v. Barnard [1964] UKHL 1; (1964)
AC 1129 "to
remove an anomaly from
the law" did
not achieve this result. Nor, in my view, was such an attempt
justified
by the assertion
that
it
was not the function of the civil law to
permit the award of damages by way of penalty.
Indeed, the statement
of the
categories
in which exemplary damages may be awarded
concedes that, in some
cases, at least, it is the function of the civil
law to permit an
award
of
damages by way of punishment. The first of these is, as we have seen, limited
to the
"oppressive or arbitrary"
invasion
of another's rights by a person who
answers the
description of a servant of a government. I am unable to see any
grounds,
either
in principle
or upon authority, justifying the formulation of
this limited category. This observation has, I
think, special
force
when it is
seen that in many cases much the same functions are
performed in precisely the
same manner and in the exercise of
much
the same authority by
both "servants
of the government" and other persons. There is, I think, even more force in
the observation
when it is observed that the second category admits the
principle of
exemplary damages against defendants generally. This category
relates to acts done by
any person but it is confined to acts done by a
defendant who "with a cynical disregard for
a plaintiff's
rights has
calculated that the money to be made out of his wrongdoing will
probably
exceed the damages at risk". "It is necessary"
it is said "for the law to show
that it
cannot be broken with impunity." I am quite unable to see why the law
should look with less
favour on wrongs committed with a profit-making motive
than upon wrongs committed with
the utmost degree of malice or vindictively,
arrogantly or high-handedly with a contumelious
disregard for the plaintiff's
rights. (at p138)

11. However this may be, the measure of research disclosed by the
observations in Rookes
v. Barnard [1964] UKHL 1; (1964) AC 1129
takes no account
of the
development of the law in
this country where frequently this Court has
recognized that an
award of exemplary
damages may be
made in a much wider
category of cases than that case postulates. In
Whitfield v. De Lauret &
Co.
Ltd. [1920]
HCA 75; (1920) 29 CLR 71 Knox C.J.
said: "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 damages
are given only in cases of conscious wrongdoing
in contumelious
disregard
of
another's rights" (1920) 29 CLR, at p 77 . In the same case Isaacs J. dealt
with
the matter at some
length. Having mentioned that,
in general, damages are
compensatory
in character, his Honour went on to say (1920) 29 CLR, at p 81
:
"Further . . . there is still
a
well recognized feature, which with one
exception is, in the opinion of one learned writer,
confined
to damages for
torts (see
Mayne on Damages, 9th ed., at p. 41). I refer to what are
called
'exemplary damages'. From a very early
period exemplary damages
have been
considered by very eminent Judges to be punitive for reprehensible conduct and
as a
deterrent.
That was the opinion of
Gibbs C.J. and Heath J. in Merest v.
Harvey [1814] EngR
330; (1814) 5 Taunt 442 [1814] EngR 330; (128 ER 761) in 1814, and of Story J. in the
Amiable
Nancy [1818] USSC 32; (1818)
3 Wheat 546, at p 558 (4 US (SC) 287, at p 291) (noted in 4
Law
Ed. 796). in 1818. In Emblen v. Myers (1860)
6 H & N
54, at p 58
[1860] EngR 914; (158
ER 23,
at p 25) in 1860 Pollock C.B. used the expression 'vindictive damages'; in
1861 Byles
J., in
Bell v. Midland Railway
Co. [1861] EngR 486; (1861) 10 CB (NS) 287, at p 308
[1861]
EngR 486; (142 ER 462, at p 471) , termed them 'retributory damages'; in 1889 Kay
J., in
Dreyfus v. Peruvian
Guano Co. (1889) 42 Ch D 66,
at p 77 , called them
'vindictive'; in 1891
Lord Hobhouse, for the Privy
Council in McArthur & Co.
v.
Cornwall (1892) AC 75,
at p 88 ,
called them 'penal'; in The Mediana (1900)
AC 113, at p 118 Lord
Halsbury L.C. called them
'punitive
damages'; in 1908,
in Anderson v. Calvert (1908) 24 TLR 399, at pp 400, 401 , Lord
Cozens Hardy
and Lord Wrenbury (then in the Court
of Appeal), used
the word 'punitive'; in
1913, in Smith v. Streatfeild (1913) 3 KB 764, at p
769 , Banks J. called them
'vindictive'
damages. See
also Willoughby Municipal Council v. Halstead [1916] HCA 80; (1916)
22 CLR
352 ." This principle has been clearly recognized by this
Court in the
subsequent cases of
The Herald and Weekly Times
Ltd. v. McGregor
[1928] HCA 36; (1928) 41 CLR
254 ; Triggell
v. Pheeney [1951] HCA 23; (1951) 82 CLR
497 ; Williams v. Hursey [1959] HCA 51; (1959)
103
CLR 30 ; and Fontin v. Katapodis [1962] HCA 63; (1962) 108 CLR 177 and I think we should
adhere to it. It is
a broad principle
which I think has been acted upon for a
century and
upwards, it has been part of the law of this country for many
years, the limitation
of the
application of the principle to the categories
specified in Rookes v. Barnard [1964] UKHL 1;
(1964) AC 1129 is not,
in my
view, justified
either upon principle or upon authority, and the
adoption of those categories
would
not remove the suggested
anomaly,
but on the
contrary, introduce others.
In these circumstances, I am firmly of the opinion that
the
observations in
Rookes
v. Barnard
[1964] UKHL 1; (1964) AC 1129 do not express the law of
this country and
that they should not be followed. (at p139)

MENZIES J. In my opinion, despite the arguments addressed to us about other

matters, the
fate of this appeal depends upon a determination
whether or not
the direction which the
learned trial judge gave about exemplary damages was
correct. I choose the adjective
"exemplary"
in preference to synonyms because
it is that adjective which has been
adopted by Parliament: see, for instance,
Law Reform (Miscellaneous
Provisions) Act, 1934
(U.K.), s. 1 (2) (a), and the
New South Wales Act of 1944 similarly entitled, s. 2 (2) (a). The
direction
was
that the jury would be justified in awarding the plaintiff exemplary or
aggravated damages "in addition to the compensatory component
of damages". His
Honour said: "You were invited by the plaintiff to award to him exemplary
damages. The
way it was put to you by
Mr. Evatt was that you ought to show to
the defendant company
that the publication of this sort of libel does not pay.
I think those
were the words he used. I
would suggest that you do not lightly
- I do not think any jury would lightly rush in, if I may
use that
expression,
and award exemplary damages; but, nevertheless, if upon a mature
consideration
of the situation, it appeared to you,
for example, that a serious libel was
published without being checked, and it was published with the intent of
increasing sales
and
therefore increasing circulation and profits and with a
reckless disregard of the
plaintiff's right to have his reputation preserved
unsullied, then you would be entitled to
award exemplary damages - exemplary
damages meaning merely damages that are
awarded by way
of example and
discouragement." This direction the Full Court held to be
in error. It
therefore set aside the verdict of the jury
and ordered a new trial limited to
damages. (at p140)

2. The libels for which the plaintiff had sued were published in two editions
of the Sun-
Herald of 10th February 1963. The imputation
made was a grave one
which impugned the
plaintiff's fitness to be a member of Parliament. It was
that he, being a member of
Parliament,
had some link with a Russian spy and
had been duped by that spy to ask
searching questions in Parliament to extract
from the Prime
Minister and the Minister for
Defence information about secret
defence establishments in Australia. In the next issue of
the defendant's
paper - that is, that of 17th February 1963 - under the heading "Apology",
the
following statement was published by the defendant:
"In the early editions of
the Sun-
Herald last Sunday a report was published under the heading 'Labor
Link with Red Spy'. It
stated
that some Government members were expected to
allege in the Federal Parliament
that there had been association between some
Labor
members and the Russian spy Ivan
Skripov and that he had duped them. The
report was withdrawn as soon as it came to the
notice of
a senior executive of
the publishing company. The Sun-Herald regrets that the
report implied that
some Labor members had an improper
association with Skripov. It
apologizes for
publication of the report." It seems to me that the implication here
attributed
to the
earlier publication, viz. that of an improper association
between the plaintiff and Ivan
Skripov, could be regarded as an aggravation
of
what had been published previously, for
the charge of an improper association
with a spy might be thought to go beyond the charge
of being the foolish dupe
of a spy. This latter charge, it is to be observed, was not
withdrawn. Having
regard to the terms of this
apology, it is not surprising that under
cross-
examination the plaintiff said that, in his view, this second
publication was not
a sincere
apology. However, more was to follow. On 11th
March 1964 the defendant's solicitors wrote
to the plaintiff's solicitors
a
letter saying, inter alia: "As you are aware, the article of which
your client
complains did not refer to him by name and as soon
as its publication was
noticed by a senior executive of our client company steps were taken to have
it withdrawn
from our client's
newspaper and from further publication. At the
first available opportunity
and without request from your client an apology
was published;
in the belief that your client
would not want us to identify
him, the apology made no specific reference to him, a course
which did
not
meet with your client's disapproval. In the course of the recent proceedings
by your client against Australian Consolidated Press
Limited, the article
published by our
client was referred to and tendered in evidence. It was
stated in open court by counsel for
your client that it referred to your
client and, indeed, it was claimed that the article
published in the Sunday
Telegraph had been
lifted from our client's newspaper. All these
matters have
received publicity in the morning and evening Press, so that there may
be
now
no doubts in the minds of the reading public that he was one of the persons
referred to
in the article complained of. Realizing
that your client's
particular concern is his reputation,
our client is now prepared to reiterate
its apology to your client by name
in open court and
also to pay all your
client's costs to date. Will you please let us know what are your client's
instructions in
this matter." This means that, in satisfaction for a serious
libel for which it
had been sued for heavy damages, the defendant was
offering
"to reiterate its apology to
your client by name in open court and also to pay
all your client's costs to date" and no
more.
This letter was dated the same
day as that on which the jury which had tried an
action by the plaintiff
against Australian Consolidated
Press Limited had returned a verdict
in favour
of the plaintiff for 15,000 pounds in respect of a libel similar to that
published
by
the defendant. This offer could be regarded not as a genuine
attempt on the part of the
defendant to right a grave wrong which
it had done
to the plaintiff, but merely as an attempt
to escape from the consequences of
its wrongdoing. Finally, at the hearing
and before the
plaintiff's counsel
could open his case to the jury, the defendant's counsel offered an
apology in
open court to be
published in its newspaper. The apology was for having
inserted the article, together with an expression of regret for any
inconvenience
or
annoyance it may have caused the plaintiff. The offer to pay
full costs to date was repeated.
Again the jury might think that
the
expression of regret for "any inconvenience or
annoyance" that the defendant
may have caused the plaintiff was, in the circumstances,
something less than a
penitent defendant would have offered. (at p141)
3. In the foregoing circumstances, it was hardly surprising that, at the end
of a trial lasting
six days - notwithstanding that
damages only were in issue
- in which the plaintiff was
cross-examined to indicate that he was entitled
to no more than a withdrawal
of the
libellous imputation, the jury should
bring in verdicts of 5,000 pounds in respect of the first
count which related
to the
edition in which the article was published under the heading
"Spy Duped
Labor MPs", and 8,000 pounds in respect of the second count
relating to the
publication of the same article under the heading "Labor Link with Red Spy".
(at p142)

4. One of the defendant's grounds of appeal to the Full Court was that,
independently of
any misdirection, the damages were excessive,
and this
contention did there receive some
support, for Herron C.J. said " . . . in my
opinion the verdict might well be regarded
as
excessive upon general
principles". At the hearing before us, I was left in some doubt about
the
defendant's attitude to this
matter in the event of this Court disagreeing
with the Full
Court and upholding the direction that exemplary damages could
be awarded.
A reading of
the transcript has not removed that doubt. However,
if it was open to the jury to have
awarded exemplary damages, I
would
certainly not regard the verdict as excessive. An
infamous personal attack,
which the jury could think was nothing but a concoction,
was
featured upon the
front page of the defendant's paper under banner headlines and
advertised on
television for no purpose other
than to induce people to buy the paper. To
this matter I must return later. (at p142)

5. Before coming to what I regard as the real point of the case, there is a
matter to be
mentioned merely to be put on one side.
Mr. Woodward, for the
defendant, laid great stress
upon the apologies made or tendered and, as I
followed him, he did so not merely
as
matters to be taken into account in
mitigation of damages - a point already discussed and
one entirely for the
jury - but as,
in some way or other, negating malice or ill will on the part
of the defendant towards the plaintiff. As I indicated during the argument,
I
fail to grasp the
significance of the apologies to any matter in issue upon
this appeal. Whether or not they
establish, or even
tend to establish, the
absence of malice or ill will was a matter for the
jury, and it is not
surprising that the jury remained unimpressed.
(at p142)

6. I turn now to the question whether the direction that exemplary damages
could in the
circumstances be awarded was, as the Full
Court decided, a
misdirection. (at p142)

7. With respect to the different opinion of Wallace J., I think the direction
was correct unless
the law in Australia is what the
House of Lords in Rookes
v. Barnard [1964] UKHL 1; (1964)
AC 1129 stated the law of England to be. Independently of
that case, I
think exemplary
damages could have been awarded on
the simple
ground that it was open to the jury to find
that the defendant recklessly
and
arrogantly
attacked the plaintiff's reputation
for the
purpose of publishing a
sensational story to attract the custom of newspaper
readers.
That
conduct, if
so found, was malicious,
wilful and reprehensible. It was a "contumelious
disregard" of the rights of the
plaintiff
to his reputation. See Whitfeld v.
De
Lauret & Co. Ltd.
[1920] HCA 75; (1920) 29 CLR 71, at p 77 . (at p143)

8. The next question is whether the law in Australia is as stated by the

House of Lords in
Rookes v. Barnard [1964] UKHL 1; (1964)
AC 1129 . The
question of damages
in that case
arose upon a cross appeal by the defendant to the action and the
decision
of the House
that there
should be a retrial because the jury had been
wrongly directed that punitive
damages could be awarded to
the plaintiff
was
based
upon the opinion of Lord Devlin, with
which the other members of the
House agreed. (at p143)

9. Lord Devlin, having stated that exemplary damages are anomalous,

considered whether
"it is open to the House to remove an anomaly
from the law
of England" (1964) AC, at p 1221
. Having considered earlier authority going
back to Wilkes v. Wood [1763] EngR 103; (1763)
Lofft 1 (98
ER 489) , his Lordship said: "These
authorities clearly justify the use of the
exemplary principle; and for my
part I should not
wish, even if I felt at liberty to do so, to
diminish its
use in this type of case where it serves a valuable purpose
in restraining
the
arbitrary and outrageous use of executive power" (1964) AC, at p 1223 . His
Lordship then
considered cases, other
than those
concerned with the arbitrary
and outrageous use of
executive power, in which exemplary damages had been
awarded. At the
conclusion
of this
survey, his Lordship said: "These
authorities convince me of two things. First, that your
Lordships could not,
without a
complete disregard of precedent, and indeed of statute, now
arrive
at a determination that refused altogether to recognize
the exemplary
principle.
Secondly, that there are certain categories of cases in which an
award of exemplary
damages can serve a
useful purpose
in vindicating the
strength of the law and thus
affording a practical justification for admitting
into the civil law
a principle
which ought
logically to belong to the
criminal. I propose to state what these two categories are; and I
propose also
to state three
general considerations which, in my opinion, should always be
borne in mind when awards of exemplary damages are being
made. I am
well aware
that
what I am about to say will, if accepted, impose limits not hitherto
expressed on such
awards and that
there is powerful,
though not compelling,
authority for allowing them a
wider range. I shall not, therefore, conclude
what I have
to say on the general
principles of
law without returning to the
authorities and making it clear to what extent I have rejected
the
guidance
they may be
said to afford" (1964) AC, at pp 1225, 1226 . (at p144)

10. Thus, the first category of cases in which punitive damages could be
awarded his
Lordship described as cases of "oppressive,
arbitrary or
unconstitutional action by the
servants of the government" (1964) AC, at p
1226 . Cases in the second category are those
"in which the defendant's
conduct has been calculated by him to make a profit for himself
which may well
exceed the compensation
payable to the plaintiff" (1964) AC, at p 1226 . In
elaboration, his Lordship said: "It is a factor also that is taken into
account
in damages for
libel; one man should not be allowed to sell another
man's reputation for profit. Where a
defendant with a cynical
disregard for a
plaintiff's rights has calculated that the money to be
made out of his
wrongdoing will probably exceed the damages
at risk, it is necessary for
the
law to show that it cannot be broken with impunity. This category is not
confined to
moneymaking
in the strict sense. It extends to cases in which the
defendant is seeking to
gain at the expense of the plaintiff some object -
perhaps some property which he covets -
which either he could not obtain at
all or not obtain except at a price greater than he wants
to put down.
Exemplary damages can properly be awarded whenever it is necessary to
teach a
wrongdoer that tort does not pay" (1964)
AC, at p 1227 . (at p144)
11. His Lordship's judgment continued with a statement of three
considerations to be borne
in mind when awards of exemplary damages
are being
considered. These are: (1964) AC, at
pp 1225, 1226 "the plaintiff cannot
recover exemplary damages unless he is the victim
of the
punishable
behaviour"; (1964) AC, at p 1226 "the power to award exemplary damages
constitutes a weapon that, while it can
be used in defence of liberty, as in
the Wilkes Case,
can also be used against liberty"; and (1964) AC, at p 1227
"the means of the
parties,
irrelevant in the assessment of compensation, are
material in the assessment of exemplary
damages. Everything which aggravates
or mitigates the defendant's conduct is relevant"
(1964) AC, at pp 1227, 1228
. On the basis of this reasoning and after observing
that some of
the cases
where an award of exemplary damages had been upheld could be explained as
cases of aggravated compensatory
damages, his Lordship reached the conclusion
that it
was necessary to overrule Loudon v. Ryder (1953) 2 QB 202 and express
dissent
from much
of the reasoning in Owen and Smith (trading as Nuagin Car
Service) v. Reo Motors (Britain)
Ltd. (1934) 151 LT 274 and Williams
v. Settle
(1960) 1 WLR 1072 . His Lordship then stated:
"This conclusion will, I hope,
remove from the law a source of confusion
between
aggravated and exemplary
damages which has troubled the learned commentators on the
subject. Otherwise,
it will not, I think,
make much difference to the substance of the law or
rob
the law of the strength which it ought to have. Aggravated damages in this
type of case
can do most, if not all, of the work that could be done by
exemplary damages. In so far as
they do not, assaults and
malicious injuries
to property can generally be punished as
crimes, whereas the objectionable
conduct in the categories in which
I have accepted the
need for exemplary
damages are not, generally speaking, within the criminal law and could
not,
even if the criminal
law was to be amplified, conveniently be defined as
crimes. I do not
care for the idea that in matters criminal an aggrieved party
should be given an option to
inflict for his own benefit punishment by a
method which denies to the offender the
protection of the
criminal law" (1964)
AC, at p 1230 . (at p145)

12. The question for us now is whether, in a case where the award of
exemplary damages
has not been authorized by statute and is
not concerned with
unlawful executive action,
exemplary damages can be awarded only if "the
defendant's conduct has been calculated
by him to make a profit for himself
which may well exceed the compensation payable to the
plaintiff" (1964) AC, at
p 1226 . (at p145)

13. The first thing to be said is that in Australia, as in England prior to

Rookes v. Barnard
[1964] UKHL 1; (1964) AC 1129 , such
a limitation
upon the power to award
exemplary
damages had not been perceived, with the consequence that
to accept
the limitation
now
adopted
by the House of Lords would involve a radical
departure from what has been
regarded as established
law. It is not merely
that in
the authorities there is nothing to
support the limitation adopted by
the House of Lords but the law
has from time to time
been stated
in different
terms. See Whitfeld v. De Lauret & Co. Ltd. [1920] HCA 75; (1920) 29
CLR 71 ; The Herald and
Weekly
Times Ltd. v. McGregor [1928] HCA 36; (1928) 41
CLR 254 ;
Triggell v. Pheeney [1951] HCA 23; (1951)
82 CLR 497 ; and Fontin v.
Katapodis [1962] HCA
63; (1962) 108 CLR 177 . It is, perhaps, of
more importance
that it has always been taken for
granted that
damages beyond
restitutio
in integrum can be awarded to punish a defendant
for reprehensible
misconduct in cases falling outside
the limits of the decision
of the House
of
Lords in Rookes v. Barnard [1964] UKHL 1; (1964) AC 1129 . Thus,
for instance, in cases
of
trespass "high-handed procedure or insolent behaviour" (1900) AC, at p 118 ,
to
use the
language of the
Earl of Halsbury L.C.
in The Mediana (1900) AC 113
, has been regarded as
warranting the award of exemplary
damages. In Fontin v.
Katapodis [1962] HCA
63; [1962]
HCA 63; (1962) 108 CLR 177 , Owen J., with the concurrence of the Chief
Justice, expressed
this common understanding in Australia
when
he
said in an
assault case: "In a proper case
the damages recoverable are not limited to
compensation for the loss sustained
but
may
include exemplary or punitive
damages as, for example, where the defendant has acted in a
high-handed
fashion or with malice"
(1962)
108 CLR, at p 187 . Again, in libel cases what
Farwell L.J. said in Jones v. E. Hulton & Co. (1909) 2 KB 444 represents
the
general
understanding of the law in Australia, viz. "Such newspapers as
publish libellous
statements do so because they find
that
it pays:
many of
their readers prefer to read and
believe the worst of everybody, and the
newspaper proprietors cannot complain
if
juries
remember this in assessing
damages" (1909) 2 KB, at p 483 . Thus, to use McTiernan J's
phrase in Smith's
Newspapers Limited
v. Becker
[1932] HCA 39; (1932) 47 CLR 279, at p 315
, "the deserts of"
the defendant in a libel action are not to be left out of
account in
assessing
damages.
Furthermore, breach of contract of marriage has always been treated
as warranting exemplary damages
in an appropriate case
on the
basis stated by
Bowen
L.J. in Finlay v. Chirney (1888) 20 QBD 494 where his Lordship said:
"The question
we have
to decide
today
relates to a class of action which,
though in its form and substance
contractual, differs from other forms
of
actions ex contractu
in permitting damages to be
given as for a wrong. This
double aspect of an action for breach of promise creates
the
perplexity in
the
present instance. On which side of the line is to fall an action which is
based on the hypothesis of a broken
contract, yet is
attended with some of the
special
consequences of a personal wrong, and in which damages may be given of
a vindictive
and
uncertain
kind, not merely to repay the plaintiff for
temporal loss but to punish the
defendant in an exemplary manner? (1888)
20
QBD, at p
504 " Must it now be said that
Bowen L.J. was in error? (at p146)

14. My examination of the English and Australian authorities has not shown
that before
Rookes v. Barnard [1964] UKHL 1; (1964)
AC 1129 the common
law in relation to
exemplary
damages was as the House of Lords has now stated it to be. Indeed,
the opinion
of
Lord
Devlin recognizes
that what is there stated to be the law
is not what was previously
understood to be the law and his Lordship's
examination began
with an inquiry whether the
House could "remove an anomaly
from the law of England" (1964) AC, at p 1221 . What
the
House did was
not to
remove an anomaly but, for reasons of policy, to limit what was
regarded as an
anomaly to cases "in which
an award of exemplary
damages can serve a
useful
purpose . . ." (1964) AC, at p 1226 . Conceding that a line must be drawn
somewhere,
what the House of
Lords has done is to draw a different line from
that drawn previously by
lower courts in England. Naturally enough,
the law as
it
stood in Australia and in the United
States of America - see Restatement of
the Law of Torts, par. 908, Punitive Damages
-
seems
not to have been
considered. (at p147)
15. Upon full consideration, I do not think that the decision of the House of
Lords should
force this Court to conclude that the
law here is other than what
it has for so long been
taken to be, viz. that where an action is based upon a
personal wrong and the
defendant
has acted arrogantly, mindful only of its own
interests and, to use the phrase of Knox C.J.,
"in contumelious disregard"
of
the rights of the plaintiff, "damages may be given of a
vindictive and
uncertain kind, not merely to repay the plaintiff for temporal
loss but to
punish the defendant in an exemplary manner" for his outrageous conduct (see
Finlay v.
Chirney (1888) 20 QBD, at p 504
). In Australia, no one could say
that, if the vigorous
assertion and application of this rule were to curb the
malice and arrogance
of some
defamatory publications, it would not serve a
useful purpose in vindicating the strength of
that part of the law which
protects
people's reputations, and would afford that protection
without
encroaching in any way upon the liberty of the Press. A vigilant concern
with
freedom of speech is in no way inconsistent with the recognition that
malicious and callous
disregard for a man's reputation
deserves
discouragement: cf. New York Times Co. v.
Sullivan (1964) 11 Law Ed 2d 686,
Headnote 20 . (at p147)

16. In this case the direction of the learned trial judge was, in effect,
that "the deserts of" the
defendant should not be left
out of account and that
the "spirit and intention" of the
defendant are matters for consideration in
assessing damages, to use the
language of
Tindal C.J. in Pearson v. Lemaitre
[1843] EngR 666; (1843) 5 Man & G 700 (134 ER 742) . In
the circumstances I consider that the
defendant's
spirit and intention could be regarded
as
warranting exemplary
damages and that, in the result, the defendant got no more than,
what
the jury
could properly think, were
its deserts. (at p147)

17. I would therefore allow the appeal and restore the jury's verdicts of
5,000 pounds and
8,000 pounds damages. (at p148)

WINDEYER J. The trial of this action at nisi prius took place not long after
that of an action
the plaintiff had brought against
another defendant,
Australian Consolidated Press Limited,
for various publications in its
newspapers, one of which was substantially
the same as that
in question in the
present case. In each case the jury found for the plaintiff. Each defendant
moved in the Full
Court of the Supreme Court for a new trial. In each case one
ground
taken was that the damages awarded were excessive. And in each
case one
question
argued was whether the jury had been misdirected by being told that
they were at liberty to
give exemplary damages.
In this case the only issue
fought at the trial was the quantum of
damages, liability not being disputed.
(at p148)

2. The argument about damages became largely centred upon what was said in
Rookes v.
Barnard [1964] UKHL 1; (1964) AC 1129 . In
the judgments in
the Supreme Court the
matter is
discussed as raising a deep question of the doctrine of precedent
and the authority
in
Australia
of decisions of the House of Lords. I do not
think it is necessary to sound these
depths in this case.
I recently stated,
in Skelton
v. Collins [1966] HCA 14; (1966) 115 CLR 94 ,
my belief on this. I shall not
repeat what I said there. Some of the reasons
given in earlier
times
for
awarding
exemplary damages for insulting words, such as the need to discourage
duelling, have disappeared
today. But law has
often used its
old weapons
instead of forging
new ones. If some passages in what was said in the House of
Lords
in Rookes v. Barnard
[1964] UKHL 1; (1964) AC 1129 are to be understood in an absolute
way, part of what had
long been taken to
be the common law has been overthrown
in England. The House of
Lords can of course overturn for England what had
been thought to
be established doctrine
by declaring it
to have been mistaken.
But it indicates no disrespect for the high authority of
their Lordships'
House, no breaking of the ties light
as air, if we, having a duty to abide by
the law that we have inherited and having in mind the
way it has been declared
here, feel
unable to join in this. (at p148)

3. Nevertheless, for myself, I accept what I take to be the broad principle

that is stated in
that part of Lord Devlin's judgment
that relates to the law
of defamation. That does not
mean that I accept the narrow application of it
that counsel for the newspaper
companies
urged upon us. If that were the
effect of what the House of Lords has said I would only say,
with respect,
that we ought
not to follow it. It would be to restrict the general principle,
that
exemplary damages may be given to make it clear that tort does
not pay,
to particular
instances which Lord Devlin illustratively described. It is
general conceptions that count in
the development
of the common law, and I
respectfully adopt what his Lordship said of this
in another case: "The
general conception can be used to
produce other categories in the
same way. An
existing category grows as instances of its application multiply until the
time
comes
when the cell divides": Hedley Byrne & Co. Ltd. v. Heller &
Partners Ltd. [1963] UKHL
4; (1964) AC 465, at p 525 . An attempt
to subsume incongruous
instances and anomalies
under one rule may make obvious the need to
redefine
the rule and thus to limit a
category.
That is what
has been done, it seems,
for England in relation to exemplary damages:
but
not, as I understand it, so
drastically
as the argument
supposed. I shall return to this later.
First, it
is necessary to notice
that, whatever be the position in torts
other than
defamation,
the distinction between aggravated and exemplary damages is not
easy
to make in
defamation, either historically
or analytically;
and in
practice it is hard to preserve. The
formal distinction is, I
take it, that
aggravated damages are given
to compensate the
plaintiff when the harm done to
him by a wrongful act was aggravated
by the manner in
which the act was done:
exemplary
damages,
on the other hand, are intended to punish the
defendant,
and presumably
to serve one or more of the objects of punishment
- moral
retribution or deterrence. (at p149)

4. The difficulty of the matter lies in uncertainty of the basis on which

damages for
defamation are given; and in a still deeper
uncertainty as to the
fundamental principle of
liability in the law of torts, compensation and fault
competing for first place. The
muddle the
matter is in appears from an
informative article "Problems of Assessing Damages for
Defamation", by Mr.
Samuels in the
Law Quarterly Review (1963) 79 Law Quarterly Review
63 . The
law of defamation and of damages for defamation has a complicated history:
see
the articles by Sir William Holdsworth in the Law Quarterly Review (1924) 40
Law Quarterly
Review 302, 397; (1925) 41 Law Quarterly
Review 13 . References
to some aspects,
presently relevant, appear in the sketch "Exemplary Damages
for Defamation", by L. F. S.
Robinson (1929) 3 Australian Law Journal pp 250,
292 . Compensation is the dominant
remedy if not the purpose of the law of
torts
today. But fault still has a place in many forms
of wrongdoing. And the
roots of tort and crime in the law of England are greatly
intermingled. Some
things that today are seen as anomalies have roots that go deep, too
deep for
them to be easily uprooted. (at
p150)

5. Defamation is a criminal offence and also a civil wrong. We heard in the

course of the
argument some complaint of a victim of
a criminal act having an
option to pursue his civil
remedy and in this to seek punitive damages instead
of seeking to set the criminal
law in
motion. But the law allows this, and not
only for defamation; and perhaps wisely so. One
lesson of eighteenth century
events
may be that libels, especially those arising out of
private feuds and
partisan political controversy, ought not, except in very gross
cases, to be
made the subject of criminal prosecutions. (at p150)

6. When it is said that in an action for defamation damages are given for an
injury to the
plaintiff's reputation, what is meant?
A man's reputation, his
good name, the estimation in
which he is held in the opinion of others, is not
a possession of his as a chattel
is. Damage
to it cannot be measured as harm
to a tangible thing is measured. Apart from special
damages strictly so called
and damages
for a loss of clients or customers, money and
reputation are not
commensurables. It seems to me that, properly speaking, a man
defamed
does not
get compensation for his damaged reputation. He gets damages
because he was
injured in his reputation, that is simply because
he was publicly defamed.
For
this reason, compensation by damages operates in two ways - as a vindication
of the
plaintiff to the
public and as consolation to him for a wrong done.
Compensation is here a
solatium rather than a monetary recompense for harm
measurable
in money. The variety of
the matters which, it has been held, may
be considered in assessing damages for
defamation must in many
cases mean that
the amount of a verdict is the product of a
mixture of inextricable
considerations. One of these is the conduct of
and the intentions of
the
defendant, in particular whether he was actuated by express malice. Yet in the
abstract
the harm that a
plaintiff suffers cannot be measured by, nor does it
necessarily depend at all
upon, the motive from which the defendant acted or
upon his knowledge or intentions.
These, however, have always been regarded as
important in estimating damages. Indeed,
the common-law
rule that truth is a
complete defence seems to reflect this. It has been
rationalized by saying
that the law does not protect the
reputation that a man has, but only
the
reputation that he deserves. But is it not a mistake to suppose that there is
not a deeper
explanation? The law of defamation descends from more than one
source. Among these
were the action on the case for words whereby
the king's
courts took over slander from the
local courts, the ancient jurisdiction of
the ecclesiastical courts, and the jurisdiction
of the
Star Chamber. The idea
of wilful wrongdoing had a place in the first. It was of the essence
of the
second; for a man must
not bear false witness against his neighbour, he must
not of
malice harm his neighbour. And it strongly influenced the law of libel
in the Star Chamber.
The Star Chamber was concerned with libel as a criminal
act, a disturbance of the peace,
yet in some cases it
also allowed damages to
the person defamed. It is enough to say here
that when the law of libel was
taken into the common law, although
in a general sense
compensation was the
remedy given, the conduct of the defendant remained always a
matter that the
jury might consider.
Damages being at large, it became in time indisputable
that a jury could in all cases consider "not only what the plaintiff should
receive, but what
the defendant should pay". These words came from Forsdike v.
Stone (1868) LR 3 CP 607,
at p 611 . That was a case
of slander, but the
proposition was not new. It was applicable to
defamation generally and has
often been repeated. (at p151)

7. Accepting that a jury may weigh the conduct of the defendant either in
mitigation or
aggravation of damages, how, if they think
it an aggravation,
can it be said that no punitive
element entered into the assessment? The
theory is that in such a case the damages
are
still only compensatory because
the more insulting or reprehensible the defendant's
conduct the greater the
indignity that the
plaintiff suffers and the more he should receive for
the
outrage to his feelings. That defamation may produce indignity and humiliation
and that
these can attract monetary compensation is no new doctrine. It goes
back to the early
Middle Ages, to a time before the
king's courts gave any
remedy for defamation: see
Pollock & Maitland, 2nd ed. (1923), vol. 2, pp.
536-538. In 1928 Higgins J.
remarked
that it
"seems to be right so long as the
theory stands that 'the jingling of the guinea helps the
hurt that honour
feels'":
The
Herald and Weekly Times Ltd. v. McGregor (1928) 41 CLR, at p
272
. Insult, as well as injury to reputation, thus merits compensation.
This
Tennysonian
explanation is convenient, but not altogether convincing. Two
objections may be made.
First, the satisfaction that
the plaintiff gets is
that the defendant has been made to pay for
what he did. Guineas got from the
defendant jingle more pleasantly
than would those given
by a sympathetic
friend. Secondly, conceding that an indignity suffered must be paid for,
why
is the degree
of the indignity that the plaintiff suffers to be measured by
considering
what was in the mind of the defendant, the malice or motive
which
moved him? It seems to
me that in truth a punitive or vindictive element does
lurk in many cases in which the
damages were
aggravated by the defendant's
conduct. (at p152)

8. What the House of Lords has now done is, as I read what was said, to
produce a more
distinct terminology. Limiting the scope
of terms that often
were not distinguished in
application makes possible an apparently firm
distinction between aggravated
compensatory
damages and exemplary or punitive
damages. How far the different labels
denote concepts really different in
effect may be debatable.
I suspect that in seeking to
preserve the distinction
we shall sometimes find ourselves dealing more in words than
ideas. Telling
the jury in a defamation action that compensation is to be measured having
regard to aggravating circumstances the result of the
defendant's conduct
might not result
in a verdict different from that which they would return if
they were told that because of that
conduct they could give damages by way of
example. The judgment of Knox C.J., Gavan
Duffy and Starke JJ., in The Herald
and Weekly
Times Ltd. v. McGregor (1928) 41 CLR, at p
263 , points out that
"it does not matter under what name or denomination the Judge
classified
the
damages if he was right in instructing the jury that a particular fact was one
for their consideration in assessing damages".
But in that case the jury had
been told that
they could not give exemplary damages. It can never be right to
tell a jury that they
are at
liberty to award exemplary damages if the case is
not one in which it would be proper for
them to do so. And I do not doubt
that
in some cases it might be necessary for the judge to
tell them expressly that,
while they could take various aggravating matters
into
consideration in
weighing the compensation the plaintiff should have, they should not add
anything simply to punish the defendant
or by way of example to others. (at
p152)

9. Returning to Rookes v. Barnard [1964] UKHL 1; (1964) AC 1129 - It is not necessary to

examine here the authorities to which
Lord Devlin there
referred. I would only
say that
I take
leave to doubt whether what has been called the exemplary
principle is of
such recent
appearance
in the law as the second
half of the
eighteenth century, although it seems that it
was then that the expression
"exemplary damages"
was first used. And I
doubt whether the
famous cases
concerning Wilkes and the North Briton should be regarded
as the origin of
the
idea. However, like
any attempt to trace the lineage of an idea, much depends
on how
far you wish to go back
and how much certainty
you demand in the
connecting links.
Exemplary damages, so described, have been said to be given
for assaults
because of the
insult
involved. The relationship
between the
words "insult" and "assault" may perhaps
have contributed to this, one
meaning
of insult being
attack. For example, when
Fitzherbert
wrote, an action of
trespass for assault and battery was quare in ipsum
insultum fecit et
ipsum
verberavit. However that
may be, it is noteworthy that in Merest v. Harvey
[1814]
EngR 330; (1814) 5 Taunt 442, at p 444 (128
ER 761) (one of the
cases referred to by
Lord
Devlin) Heath J. said: "I remember a case where
a jury gave 500 pounds
damages for
merely knocking a man's
hat off; and the Court refused a new trial
. . . . It goes to prevent
the practice of duelling, if juries
are permitted
to punish
insult by exemplary damages." (at
p153)

10. We were asked to read Lord Devlin's statement of the second category of
cases fit for
exemplary damages as if it were not descriptive,
but
exhaustively definitive. We were asked
to construe it literally and rigidly as
if it were a statute. We were asked to subordinate
the
statement of principle
to an illustration of that principle. I understand the principle
expressed by
his Lordship to be that
the law does not allow a man to do a wrong with
impunity simply because he thinks that it will be worth his while to pay
damages
to the
person wronged. I do not think that the principle is limited,
or that his Lordship really
intended to limit it, to cases where
the advantage
that the wrongdoer hopes to gain by his
wrongdoing is money or some tangible
thing. The law can ensure not only that
the
publication of defamation must be
paid for, but also that the wilful publication of
indefensible defamation is
not made to pay.
But this does not mean that, as was
suggested, we are to
suppose a deliberate calculation of profit and loss in terms of money,
almost
a pencil and paper affair, and that only in such a case can exemplary damages
be
given. An equally untenable proposition was put
forward on the other side.
Those who
publish newspapers, it was said, do so with a view to profit: the
profit depends, directly or
indirectly, on, among other factors, the
circulation of the paper: the publication of
sensational matter, obviously
defamatory, calculated
to increase the circulation of the paper
may therefore
in all cases attract exemplary damages. There is no warrant for this. (at
p153)

11. What we should welcome in the decision in Rookes v. Barnard [1964] UKHL 1; (1964) AC
1129 is its emphasis that exemplary damages
must always
be based upon
something more
substantial than a jury's mere disapproval
of the conduct of a
defendant. This of course
is
old doctrine.
The decision makes clear too, if it
was ever in any doubt, that all
matters that
may aggravate compensatory
damages
do not of themselves
justify the addition or
inclusion of a further
purely punitive
element. But we should not, I think, treat the
decision
as
excluding
exemplary damages from any of those forms of wrongdoing for
which,
in the
past, the Court has said they might
be given. It is however
not enough,
and this Court has
never said that it was enough,
to justify an award of
exemplary damages that
the tort
should be of
a kind for which such damages are
permissible. The wrong must
be one of a
kind for which exemplary damages
might
be given; and the
facts of the particular case
must be such that exemplary
damages
could properly be given. Quite apart from
anything
that has recently
been said in the House of Lords and the Court of Appeal, there
must (as
Walsh
J. pointed out in this case
in the Supreme Court) be
evidence of some positive
misconduct to justify a verdict for
exemplary damages. There must be evidence
on which
the jury could find
that there, was, at least, a "conscious
wrong-doing in contumelious
disregard of another's rights".
I select that
particular phrase
out of many, because it has
been used more than once in this
Court.
It appears in the first edition
of Salmond on Torts,
p. 102.
It is not
much removed in meaning from the cynical disregard of a plaintiff's
rights by
a calculating
defendant in Lord Devlin's
illustration. Whatever words be used
there must be
evidence to support them. Epithets
without evidence
will not
suffice. Was there
in this case
evidence of conduct by the defendant which
could merit punishing it by
awarding a greater
sum to the plaintiff? I think
not. I agree, therefore, that the order of the Supreme Court for a
new trial
should
stand. I do not
mean that the libel was not a
serious one. The
defendant
apparently recognized that it was, for it hastily withdrew
it from
the later
editions of its
paper. But
it had appeared: the paper had a large
circulation, and the defendant had
advertised
on television that
a sensational
story would
appear in it. The mischief that was in
the article as I see it I
shall mention in my
judgment in the other
case, that of Australian
Consolidated Press Ltd. v. Uren [1966] HCA 37; (1966) 117 CLR 185 . Substantial damages
might
be awarded
by a jury; and I do not say that if the
jury had been properly
directed
a
verdict for the amount they awarded might not have been
allowed to
stand. It is because I
think
that unfortunately they were not
properly
directed that I consider a new trial to be
necessary.
(at p154)

12. As to the evidence that the defendant had already recovered damages from
another
newspaper proprietor in respect of the publication
of the same libel:
Section 24 of the Act
makes this evidence admissible in mitigation of damages.
Since the purpose of admitting
it
is to mitigate damages, it seems to me plain
that the amount of damages recovered may be
proved and not merely the fact
that some
damages had been recovered. It is however
probably desirable that
the judge explain to the jury that the evidence is admitted to
mitigate damage
by shewing the extent to which the plaintiff has already been
compensated for
the harm done him by the publication
of the defamatory statements, and
that it
is not admitted for the purpose of fixing a scale of damages. Unless this be
done the
evidence
might inflate rather than mitigate damages. (at p155)

13. As for the apology: It was not accompanied by a payment into Court or an
offer of
payment. It was for the jury to say what weight,
if any, they would
give to it in mitigation. It
was for them to consider how far, if at all, it
made amends. An apology can be a
tricky thing
in a libel action. I express no
opinion at all about this one. The learned trial judge summed
up the case to
the jury
carefully and fairly on this and other matters. Apart from his ruling
about exemplary damages, no complaint is, I think, now made
of what he said.
(at p155)

14. I would dismiss the appeal. (at p155)

OWEN J. The plaintiff, the present appellant, brought an action of

defamation against the
defendant alleging that on 10th February
1963, in two
successive editions of a Sunday
newspaper published by it, it had libelled
him. The declaration contained two counts,
each
setting out one of the
publications of which the appellant complained. The only difference
between
them appears to be that in
the first the headlines announced "Spy Duped Labor
MPs - Canberra Charge" while the headlines in the second publication read
"Labor
Link
with Red Spy - Canberra Charge". (at p155)

2. At the trial it was conceded that, although the plaintiff's name was not
mentioned in the
publications, he was one of the persons
to whom they referred
and that they were
defamatory of him. The only contested issue was one of
damages and the jury returned a
verdict
in the plaintiff's favour on both
counts, awarding 5,000 pounds on the first count
and 8,000 pounds on the
second. The evidence showed
that at all relevant times the
plaintiff, a man of
good fame and character, was a member of the Commonwealth
Parliament who had
served
overseas with the Australian Imperial Forces during the war and
had
been taken prisoner by the Japanese when the island of Timor
was captured by
them
and the libels might well be regarded by a jury as casting serious
reflections on him. Their
substance was that
two members of Parliament who had
asked questions in the House
seeking information on defence matters had, in
doing so, been the
dupes of a man named
Skripov, a member of the Soviet
Embassy staff in Australia who had, shortly before the
publications appeared,
been declared persona non grata by the Commonwealth
Government because of his
underground activities, an occurrence which had aroused
much
public interest
and concern. It was conceded at the trial that the plaintiff had had no
association with Skripov and the case
was one in which the jury might well
have taken the
view that a substantial award of damages was called for. (at
p156)

3. In his summing up, however, the learned trial judge directed the jury that
they might, if
they thought fit, award "exemplary
damages meaning merely
damages that are awarded by
way of example and discouragement" in addition to
whatever amount they thought
proper
to award by way of compensation. The
defendant appealed to the Full Supreme Court
(Herron C.J., Walsh and Wallace
JJ.) which
ordered a new trial limited to damages and
against that order the
plaintiff, by leave, now appeals to this Court. In the Full Supreme
Court,
their Honours took the view that on the evidence the case was not one in which
it
was open to the plaintiff to recover exemplary
- and by that I mean
punitive - damages; that
in this respect the learned trial judge had
misdirected the jury; and that there should
therefore be a new trial of the
issue of damages. In so deciding their Honours were called
upon to consider
the recent decision of
the House of Lords of Rookes v. Barnard [1964]
UKHL 1; (1964) AC 1129
in which Lord Devlin, with whom the other members of the House
agreed, laid
down a number of propositions placing
limits far narrower than those which
had
hitherto been thought to exist upon the
right of a
jury to award punitive
damages in
certain
types of action. In the argument put to the Full Court on
behalf of the defendant,
much
reliance was placed upon that decision and
it
was said that it should be followed and
applied even if it was found to be in
conflict
with decisions of this Court. This necessarily
involved a
consideration of what had been said by Dixon C.J. in Parker's
Case [1963] HCA
14; (1963)
111
CLR 610, at pp 632, 633 , a statement with which every member of the High
Court agreed. Walsh and
Wallace JJ., and I
think Herron
C.J. also, were of
opinion that
whether Rookes v. Barnard [1964] UKHL 1; (1964) AC 1129 was applied
or not, the
case was
not one in which, on the
evidence as it stood, punitive damages could
properly
be awarded.
But since the jury
had been directed that they could
award such
damages and a new trial
was therefore necessary they
considered
that they should deal
with the arguments based
upon Lord Devlin's
speech. In
the result a majority of the Court (Herron
C.J. and Walsh J.)
took the view
that Rookes' Case [1964] UKHL 1; (1964) AC 1129 , which had
been applied by
the Court of
Appeal in McCarey v. Associated Newspapers
Ltd. (No. 2) (1965) 2 QB 86 and
Broadway Approvals Ltd. v.
Odhams Press Ltd. (No. 2) (1965) 1 WLR 805 and by
Widgery J.
in Manson
v. Associated Newspapers Ltd. (1965)
1 WLR 1038 , should
be
followed
notwithstanding the fact that what Lord Devlin had said conflicted
with a number of
decisions of
this Court which proceeded
upon the basis that
the right to award punitive
damages covered a wider
field than that marked out
in
Rookes' Case [1964] UKHL 1; (1964)
AC 1129
. The third member of the Full Court, Wallace
J., was of
opinion that the High Court
decisions settled the law in
Australia
and should
be followed. (at p157)

4. The hearing of the appeal in this Court followed immediately upon the
conclusion of the
argument in an appeal in another defamation
action of
Australian Consolidated Press Ltd. v.
Uren [1966] HCA 37; (1966) 117 CLR 185 in which the
same plaintiff had recovered
substantial damages
for the publication of
libellous statements in
another Sydney
newspaper. In that appeal, as in this,
the decision
in Rookes' Case
[1964] UKHL 1; (1964) AC
1129 was debated at length and counsel
for the defendant in the present case adopted the
arguments of counsel for the
defendant
in the earlier one in support of his contention that
this Court
should apply that decision
even if it conflicted with its
earlier
decisions.
In both
appeals counsel for the plaintiff submitted that we should not follow
Rookes'
Case [1964]
UKHL 1; (1964) AC 1129 ; that it was
inconsistent with a number of
decisions in this and
other Australian courts and
that we should apply
what,
until that decision was
given, was
regarded, both here and in England, as
being the common law governing
the right to award
punitive damages. (at p157)

5. It would be sufficient in the present appeal for me to say that whether

Rookes' Case
[1964] UKHL 1; (1964) AC 1129 be accepted
and applied or
not I have found no
reason to
differ from the conclusion reached by the Full Supreme Court
that,
on the evidence
adduced,
the case
was not one in which it was open to the jury
to award punitive damages
and that in this respect
the learned trial judge
fell into
error. Their Honours set out in
considerable detail the material
bearing upon the question and
the reasons for their
conclusion
and
I need not
repeat what they said. But, since it is possible that on the new
trial
additional
facts will emerge and arguments
based
upon Lord Devlin's speech may
again be raised, I think I should state the views I have formed
of that
decision. (at p158)

6. It is not open to doubt that this and other courts in countries where the
common law is in
force have, time and again, recognized
that there are certain
types of tortious acts in which
a jury may award damages over and above those
required to compensate the plaintiff
for
the injury suffered by him if it
forms the opinion, on evidence justifying that conclusion, that
the
defendant's conduct in committing
the wrong was so reprehensible as to require
not
only that he should compensate the plaintiff for what he has suffered but
should
be
punished for what he has done in order to discourage him and others
from acting in such a
fashion. "Vindictive", "penal", "punitive",
"exemplary"
and the like terms have been used to
describe damages of this kind. In actions
of defamation, for example, it has been
said by
this and other courts in
Australia and on many occasions by the courts in England that if, in
publishing defamatory matter,
the defendant was actuated by malice or ill will
towards the
plaintiff, punitive damages may be awarded. So far as the
Australian
cases on defamation
are concerned it is sufficient to refer to The
Herald and Weekly Times Ltd. v. McGregor
[1928] HCA 36; (1928)
41 CLR 254 and
Triggell v.
Pheeney [1951] HCA 23; (1951) 82 CLR 497 .
The same principle has been recognized in the case
of some
other tortious acts as, for
example,
where a defendant
is said to have
maliciously induced another to commit a
breach of a contract
made by that
other with the plaintiff.
Whitfield v.
De Lauret & Co. Ltd.
[1920] HCA 75; (1920) 29 CLR 71
is such a case and
in the judgment of Isaacs J. (1920) 29
CLR, at pp 80-82
will
be found references to a number
of the English authorities on the
subject
of punitive damages. More recent cases in England are Tolley
v. J.S. Fry and
Sons
Ltd.
(1930) 1 KB 467 ; Knuppfer v. London Express
Newspapers Ltd. (1943)
KB 80 ; Loudon
v. Ryder (1953) 2 QB
202 ; Owen and Smith v. Reo
Motors
(Britain) Ltd. (1934) 151 LT 274
and
Williams v. Settle (1960) 1 WLR 1072 , in
all of which the
same principle was recognized.
Other cases in this Court to
which reference
may be made are Williams v. Hursey [1959]
HCA 51; (1959) 103 CLR 30
where the
defendants were alleged to have conspired to prevent
the plaintiff from
continuing in his employment,
and Fontin v. Katapodis [1962] HCA 63;
(1962) 108 CLR 177 , an
action for trespass
to the person. In England, however, the decision
in Rookes
v. Barnard [1964] UKHL 1; (1964) AC 1129
has put what, with all respect,
appear to
me to be
unduly narrow limits upon what was formerly thought to be the
law in order, as
Lord Devlin put it, "to remove
an anomaly from the law of England" (1964) AC,
at p 1221 .
The anomaly of which his
Lordship spoke
was that the purpose of
awarding
punitive
damages was not to compensate but to punish and deter and
that this confused
the civil
and criminal functions of the law.
After
examining a number of the authorities, he
concluded, however, that "without a
complete disregard
of precedent" (1964) AC, at
p 1221
it was not possible to
refuse to recognize "the exemplary principle" and that
there were
"certain
categories of cases in which
an award of exemplary damages can serve a useful
purpose in vindicating the strength
of the law and
thus affording a practical
justification
for
admitting into the civil law a principle which ought
logically to belong
to the criminal"
(1964)
AC, at p 1226 . His Lordship
proceeded then to state what, in his opinion, those categories
were, agreeing,
however, that
there was "powerful, though not compelling,
authority" (1964)
AC, at p 1226 opposed to the limitations which he proposed.
The categories
were three in
number. One is where there
is statutory authority for the award
of exemplary damages.
That, of course,
is plainly so
and requires no
discussion. The first of
the other two
categories, his Lordship said, consists
of "oppressive, arbitrary
or unconstitutional
action
by the servants of the
government" (1964) AC, at p 1226 . Whether the employees of a
statutory
corporation
set up, for example,
to manage a country's railway
system or to
conduct its broadcasting and television services would be regarded
as servants
of the
government for the purposes of
this proposition is not clear to me, nor
do I understand
what exactly would be
covered by the word
"unconstitutional".
His Lordship
was, no doubt,
not using that word in the sense in which it is
used in a country
which has a federal
system
of government and where
government officials not infrequently take action in all good faith
under what
appears to be the law
of the land only to find later
that the enactment
pursuant
to which they have acted is not a valid law and
that they have acted
illegally.
It is plain that
in such
cases an award of punitive damages would
not be permitted. I mention these
matters in passing since they
serve to
indicate difficulties
that might arise if his Lordship's
words are to be
accepted as being
the law of this country. He went
on to say that he would
not
extend this category to cover action by private corporations or individuals
using their
power to oppress
persons less able to protect
their interests. If
a powerful corporation or
individual used its or his
power to effect an
unlawful
purpose it or he must answer
for the
wrong done by paying
compensatory damages, but such an offender,
his Lordship said, is
"not
to be
punished simply because
he is the more powerful" (1964) AC, at p 1226 . I
would
agree that no tortfeasor
should be punished
simply because he is more
powerful
than the
person he has wronged but, with great respect, it may be
pointed out
that he never is
punished simply for that reason. Punishment
is
called for only if he has caused injury by
using his power "in contumelious
disregard
of another's rights", to use the phrase
of Knox
C.J. in Whitfeld's
Case (1920) 29 CLR, at p 77 . (at p160)

7. The remaining category of cases in which his Lordship considered that

punitive damages
might be awarded is that in which "the
defendant's conduct
has been calculated by him to
make a profit for himself which may well exceed
the compensation payable to the
plaintiff"
(1). That this is a type of case in
which punitive damages may properly be awarded,
assuming of course that the
plaintiff
can establish the necessary fact, is undoubted. In
Broadway
Approvals Ltd. v. Odhams Press Ltd. (No. 2) (1965) 1 WLR 805 however,
the
Court
of Appeal pointed to some of the difficulties in applying this statement
to the case of the
publication of defamatory matter
by a newspaper, which
ordinarily prints and publishes its
news items with a view to increasing its
circulation and thereby increasing
its profits. Lord
Devlin went on then to
refer to three of the decisions of the Court of Appeal, which I have
mentioned
earlier:
Loudon v. Ryder (1953) 2 QB 202 ; Owen and Smith v. Reo Motors
(Britain) Ltd. (1934) 151 LT 274 and Williams v. Settle (1960) 1 WLR
1072 .
The second and
third of these decisions might, he thought, be justified in the
result but not for the reasons
which had been
given while Loudon v. Ryder
(1953) 2 QB 202 could not be sustained at all
and should be overruled. (at
p160)

8. With the greatest respect I am unable to agree with the reasoning which
led his Lordship
to impose such narrow limits upon the
power of juries to
award punitive damages. His
purpose was, as he frankly said, to "remove" an
anomaly from the law, a task which
I would
have thought was one for the
legislature rather than for the courts. The propositions which
he laid down
are not in accord
with the common law as it has always been understood in
this
country and I can see no good reason why we should now place such narrow
limits
upon the right of a jury to award punitive damages in appropriate
cases, a right which is
subject always to a considerable
measure of control by
trial judges and by appellate courts.
The very fact that the right exists has
provided in the past and will
no doubt provide in the
future a useful
protection against the abuse of power and malicious and high-handed action
by
persons in
disregard of the rights of others. In Skelton v. Collins [1966] HCA 14; (1966) 115
CLR 94 I endeavoured to state what, in my opinion,
should be
the policy which
this Court
should now follow where it is
called upon to consider a decision of
the House of Lords. I will
quote
one passage: "This statement" - that is the
statement made
by Dixon C.J. in Parker's
Case [1963] HCA 14; (1963) 111 CLR 610
- "is not to
be taken
to have meant that judgments
of the House of Lords are not to be
treated by this and every
court in Australia
with all the
respect
that is
rightly due to decisions of the ultimate appellate tribunal in England. But it
does
mean that if the
High Court comes to
a firm conclusion that a decision of
the House of
Lords is wrong it should act in accordance
with its own views."
(1966) 115 CLR,
at p 138 ;
and add that were a conflict exists between a
decision of the High Court and one
of the
House of Lords
I am of opinion
that
other Australian courts should follow the decision of
this Court. (at p161)

9. In the present case and with all due respect to those who decided Rookes'
Case [1964]
UKHL 1; (1964) AC 1129 I am firmly of
opinion that that
case should not be
followed. Since I
am of opinion, however, that the learned trial
judge
misdirected the jury
on the question of
damages, I would dismiss the appeal.
(at p161)

ORDER

Appeal dismissed with costs.