Date: Tue, 6 Dec 2005 11:04:41 +1100

From: Neil Foster

Subject: VL and punitive damages

Dear Jason and other colleagues;

Two recent decisions in NSW indicate that "exemplary" damages (which I think is the category our courts use for "punitive" damages designed to "teach a wrongdoer that tort does not pay" as Lord Diplock put it in Cassell & Co Ltd v Broome) can be awarded against an employer where the employer is vicariously liable. Both cases involved the police, but the general logic would not seem to be restricted to them. See for an example the trial decision in Houda v State of NSW [2005] NSWSC 1053 (25 October 2005) where a solicitor had been "roughed up" and falsely arrested after annoying a police officer; the award of exemplary damages is at paras [503]-[508]. More recently and with much greater consideration of the legal issues involved see the Court of Appeal decision in New South Wales v Bryant [2005] NSWCA 393 (16 November 2005) where Basten JA gives an excellent and carefully reasoned discussion of why vicarious liability includes liability to pay exemplary damages based on the behaviour of the employee.

Vicarious liability for the actions of a police officer needed to be imposed under s 8 of the NSW Law Reform (Vicarious Liability) Act 1983 which makes the Crown vicariously liable for the torts of those "in the service of the Crown", which under s 6 specifically includes police officers. To some extent his Honour's judgement (see [10]-[15]) depended on distinguishing the terms of the 1983 Act from the judgement of Kitto J in Darling Island Stevedoring and Lighterage Co Ltd v Long (1956-57) 97 CLR 36. That is, because the 1983 Act was clear that the State was liable for the "torts" of the officer rather than the "actions" of the officers, it was not possible to argue that it implemented the so-called "master's tort" theory represented by the judgement of Kitto J in that case. It seems fairly clear however that in a very polite and restrained way (Robert Stevens would be proud of him!) Basten JA was tip-toing around the clash of views represented by the judgements of Fullagar J and Kitto J in the Darling Island case. It would be nice if the High Court would revisit the area and make it clear once and for all that the "servant's tort" theory is the one that courts apply these days.

In any event, UK colleagues may be interested to note that Basten JA at [29]-[30] also comments on some English decisions and legislation which he says support the view that an employer can be fixed with liability for exemplary damages, and in [7] distinguishes or refuses to follow some comments of Lord Scott of Foscote in Kuddus [2002] 2 AC 122 at 162.

Regards
Neil Foster

Neil Foster
Lecturer & LLB Program Convenor
School of Law
Faculty of Business & Law
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
ph 02 4921 7430
fax 02 4921 6931

>>> Jason Neyers 6/12/05 5:55 >>>

Dear Colleagues:

Does anyone know of any cases where an employer has been found vicariously liable for punitive damages? I seem to recall someone posting something about this to the ODG but I cannot seem to find the message anywhere.

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