Gray v Motor Accident Commission - [1998] HCA 70

HIGH COURT OF AUSTRALIA

GLEESON CJ,
McHUGH, GUMMOW, KIRBY, HAYNE AND CALLINAN JJ

DONALD GRAY APPELLANT

AND

MOTOR ACCIDENT COMMISSION
(Formerly State Government Insurance

Commission) RESPONDENT

Gray v Motor Accident Commission (A36/1997) [1998] HCA 70
17 November 1998

ORDER

Appeal allowed with costs.

Set aside the order of the Full Court of the Supreme Court of South Australia. In lieu thereof, order that the appeal to that Court be allowed with costs and there be a new trial on the issue of damages, other than aggravated and exemplary damages.

The costs of the new trial be in the discretion of the judge at that trial.

On appeal from the Supreme Court of South Australia

Representation:

S W Tilmouth QC with G A Britton for the appellant (instructed by Aboriginal Legal Rights Movement Inc)

S Walsh QC with M F Newell for the respondent (instructed by Finlaysons)

Notice: This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Donald Gray v Motor Accident Commission (formerly State Government Insurance Commission)

Damages - Personal injuries - Exemplary damages - Whether trial judge precluded from awarding exemplary damages where tortfeasor already punished in criminal proceedings.

Damages - Personal injuries - Exemplary damages - Where tortfeasor insured under a scheme of compulsory insurance.

Damages - Personal injuries - Economic loss.

Words and Phrases - "substantial punishment".

GLEESON CJ, McHUGH, GUMMOW AND HAYNE JJ. The appellant, then aged 16 years, was seriously injured in September 1988 when he was struck by a motor car driven at him deliberately by Darren James Bransden. In March 1991, Bransden was convicted of causing grievous bodily harm with intent to cause grievous bodily harm to the appellant and was sentenced to seven years' imprisonment. The sentencing judge described the attack on the appellant as "brutal and cowardly" and one for which there was "no mitigating factor at all".
In 1993, in the District Court of South Australia, the appellant commenced an action against Bransden claiming damages for personal injury. The action was framed (at least principally) as a claim for damages for negligence. In January 1995, pursuant to certain provisions of the Motor Vehicles Act 1959 (SA) the respondent, the compulsory third party insurer of Bransden, was substituted as defendant in the action. Although the respondent did not admit liability, there seems to have been no real dispute about that issue at trial. A certificate of the conviction of Bransden and the sentencing remarks relating to him were tendered by consent of the parties as evidence of the truth of their contents.
The trial judge (Judge Pirone) assessed the appellant's damages at $72,206 comprising $15,000 for past economic loss, $30,000 for future economic loss, $18,190 for what is called in s 35A of the Wrongs Act 1936 (SA) "non‑economic loss" and $9,016 for special damages. The trial judge made no award of exemplary damages. He held that if the appellant were otherwise entitled to such an award, the fact that the respondent (the compulsory third party insurer) was defendant to the action, not Bransden, the tortfeasor, was no bar to making an award but, Bransden having already been punished in the criminal court, it was not appropriate to award exemplary damages. He indicated that if he had decided to award exemplary damages he would have assessed those damages at $10,000.
The appellant appealed, unsuccessfully, to the Full Court of the Supreme Court of South Australia[1]. By special leave he now appeals to this Court.
[1]Gray v State Government Insurance Commission, unreported, 10 September 1996.
Two issues arise. First, should exemplary damages have been awarded? Secondly, was the award of compensatory damages manifestly inadequate?

Exemplary and aggravated damages

The distinction between aggravated and exemplary damages is often drawn. In Uren v John Fairfax & Sons Pty Ltd[2], Windeyer J noted that it is a distinction that is "not easy to make in defamation, either historically or analytically and in practice it is hard to preserve"[3]. Nevertheless, in the present context, it is a distinction which it is as well to bear in mind, if only to attempt to ensure greater accuracy of expression. In Uren, Windeyer J described the difference as being:
"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."[4]
[2](1966) 117 CLR 118.
[3](1966) 117 CLR 118 at 149.
[4](1966) 117 CLR 118 at 149.
The present case is concerned with exemplary damages, not aggravated damages. Although counsel for the appellant sought to contend that aggravated damages might have been awarded in this case, no such claim was pleaded, no evidence was given in support of such a claim and accordingly the respondent was neither called on nor given the opportunity to make any answer to such a claim. Plainly, it is too late to raise that claim now[5].
[5]Coulton v Holcombe (1986) 162 CLR 1.
The power to award exemplary damages
Exemplary damages have been awarded since at least the 18th century. Windeyer J[6] doubted "whether the famous cases concerning Wilkes and the North Briton should be regarded as the origin of the idea" conveyed by the expression "exemplary damages". Rather, the matter depended upon "how far
you wish to go back and how much certainty you demand in the connecting links". In Wilkes v Wood[7] Lord Chief Justice Pratt said[8]:
"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."
[6]Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 at 152.
[7](1763) Lofft 1 [98 ER 489].
[8](1763) Lofft 1 at 18-19 [98 ER 489 at 498-499].
This Court has long recognised the power to award such damages. So, in The Herald and Weekly Times Ltd v McGregor[9] it was assumed that "penal or vindictive damages"[10] or "exemplary damages"[11] might be awarded in a proper case. Several other examples are given in the judgments in Uren[12].
[9](1928) 41 CLR 254.
[10](1928) 41 CLR 254 at 262 per Knox CJ, Gavan Duffy and Starke JJ.
[11](1928) 41 CLR 254 at 266 per Isaacs J.
[12]Taylor J refers ((1966) 117 CLR 118 at 139) to Willoughby Municipal Council v Halstead (1916) 22 CLR 352, Triggell v Pheeney (1951) 82 CLR 497, Williams v Hursey (1959) 103 CLR 30 and Fontin v Katapodis (1962) 108 CLR 177. Menzies J refers ((1966) 117 CLR 118 at 145) also to Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71.
Neither party invited us to reconsider Uren or the considerable body of authority in this Court that lies behind it and to which effect was given in the later decisions of the Court in XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd[13] and Lamb v Cotogno[14]. Notwithstanding, then, what are sometimes seen as the anomalies and difficulties that attend the awarding of exemplary damages, this appeal concerns when such an award may be made, not whether any anomalies are such as to invite some radical change to the law.
[13](1985) 155 CLR 448.
[14](1987) 164 CLR 1.
It is as well, however, to say something about some of those apparent anomalies. As Windeyer J said in Uren[15]:
"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."
[15](1966) 117 CLR 118 at 149-150.
Exemplary damages are awarded rarely. They recognise and punish fault, but not every finding of fault warrants their award. Something more must be found. Although they are awarded rarely, they have been awarded in very different kinds of case: ranging from abuse of governmental power exemplified by Wilkes v Wood and its associated cases[16], through defamation cases of the kind considered in Uren, to assault cases such as Fontin v Katapodis[17]. And the examples could be multiplied[18].
[16]Huckle v Money (1763) 2 Wils KB 205 [95 ER 768]; Benson v Frederick (1766) 3 Burr 1845 [97 ER 1130].
[17](1962) 108 CLR 177.
[18]Nicholas McBride in his essay "Punitive Damages" in Birks (ed), Wrongs and Remedies in the Twenty‑First Century, (1996) at 175 seeks to classify common law wrongs into five "families" and to demonstrate that non‑English common law courts have awarded punitive damages in all but the fifth of those families - breach of undertakings, including contracts.
In Butler v Fairclough[19], Griffith CJ observed:
"The motive or state of mind of a person who is guilty of a breach of contract is not relevant to the question of damages for the breach, although if the contract itself were fraudulent the question of fraud might be material[20]. A breach of contract may be innocent, even accidental or unconscious. Or it may arise from a wrong view of the obligations created by the contract. Or it may be wilful, and even malicious and committed with the express intention of injuring the other party. But the measure of damages is not affected by any such considerations."
The position is put somewhat differently in Restatement (Second) of Contracts[21]:
"Punitive damages are not recoverable for a breach of contract unless the conduct constituting the breach is also a tort for which punitive damages are recoverable."
The reasons underlying the apparent rule excluding an award of exemplary damages, even in cases of intentional or malicious breach of contract, were discussed by Friendly J in Thyssen, Inc v SS Fortune Star[22]. That case also is authority that an admiralty court does not award exemplary damages for a deviation or other breach of contract[23].
[19](1917) 23 CLR 78 at 89.
[20]Bain v Fothergill (1874) LR 7 HL 158 at 206-207 per Lord Chelmsford.
[21](1979), §355; cf Denison v Fawcett (1958) 12 DLR (2d) 537 at 543; Vorvis v Insurance Corporation of British Columbia [1989] 1 SCR 1085 at 1106, 1107.
[22]777 F 2d 57 at 63 (1985); cf Hawkins v Clayton (1988) 164 CLR 539 at 584 per Deane J.
[23]777 F 2d 57 at 63-66 (1985).
Because the kinds of case in which exemplary damages might be awarded are so varied, it may be doubted whether a single formula adequately describes the boundaries of the field in which they may properly be awarded. Nevertheless, the phrase adopted by Knox CJ in Whitfeld v De Lauret & Co Ltd[24] of "conscious wrongdoing in contumelious disregard of another's rights" describes at least the greater part of the relevant field[25].
[24](1920) 29 CLR 71 at 77.
[25]See also XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 at 471 per Brennan J.
In considering whether to award exemplary damages, the first, if not the principal, focus of the enquiry is upon the wrongdoer, not upon the party who was wronged. (The reaction of the party who is wronged to high-handed or deliberate conduct may well be a reason for awarding aggravated damages in further compensation for the wrong done. But it is not ordinarily relevant to whether exemplary damages should be allowed.) The party wronged is entitled to whatever compensatory damages the law allows (including, if appropriate, aggravated damages). By hypothesis then, the party wronged will receive just compensation for the wrong that is suffered. If exemplary damages are awarded, they will be paid in addition to compensatory damages and, in that sense, will be a windfall in the hands of the party who was wronged. Nevertheless, they are awarded at the suit of that party and, although awarded to punish the wrongdoer and deter others from like conduct, they are not exacted by the State or paid to it.
There is an appearance of tension between using civil proceedings to compensate a party who is wronged and using the same proceedings to punish the wrongdoer. But there is a tension only if it is assumed that "... a sharp cleavage between criminal law on the one hand and the law of torts and contract on the other is a cardinal principle of our legal system"[26]. As Windeyer J points out in Uren, the "roots of tort and crime" are "greatly intermingled"[27]. And it is not only the roots of tort and crime that are intermingled. The increasing frequency with which civil penalty provisions are enacted[28], the provisions made for criminal injuries compensation[29], the provisions now made in some jurisdictions for the judge at a criminal trial to order restitution[30] or compensation to a person suffering loss or damage (including pain and suffering) as a result of an offence[31] all deny the existence of any "sharp cleavage" between the criminal and the civil law. The tension we have mentioned may therefore be more apparent than real.
[26]Street, Principles of the Law of Damages, (1962) at 34. See also McGregor on Damages, 16th ed (1997), par 430.
[27](1966) 117 CLR 118 at 149. See also Prosser and Keeton on The Law of Torts, 5th ed (1984) at 7-9.
[28]See, for example, Corporations Law, Pt 9.4B.
[29]See, for example, Criminal Injuries Compensation Act 1978 (SA).
[30]See, for example, Criminal Law (Sentencing) Act 1988 (SA), s 52; Sentencing Act 1991 (Vic), Pt 4, Div 1.
[31]See, for example, Criminal Law (Sentencing) Act 1988 (SA), s 53; Sentencing Act 1991 (Vic), Pt 4, Div 2.
We do not mention these matters so that we might attempt to resolve any tensions that are thus identified; it is not necessary to do so in this appeal. But they are matters that may well bear upon when exemplary damages may be awarded.
In Uren this Court declined to adopt the limitations on the award of exemplary damages stated by the House of Lords in Rookes v Barnard[32]. In Rookes v Barnard it was held that exemplary damages could be awarded only in three kinds of case[33]:
-oppressive, arbitrary or unconstitutional acts by government servants;
-where the defendant's conduct had been calculated to make a profit which might well exceed the compensation payable to the plaintiff; and
-where expressly authorised by statute.
It was said that there are three considerations that should always be borne in mind when awards of exemplary damages are being considered[34]:
-they can be awarded only if the plaintiff was the victim of the punishable behaviour;
-the power to award exemplary damages is not only a weapon that can be used in defence of liberty, it is a weapon that can be used against liberty; and
-the means of the parties, and all matters which aggravate or mitigate the conduct are relevant to the assessment of such damages.
[32][1964] AC 1129.
[33][1964] AC 1129 at 1226-1227 per Lord Devlin.
[34][1964] AC 1129 at 1227-1228 per Lord Devlin.
The limitations on the availability of exemplary damages stated in Rookes v Barnard have been criticised in England and elsewhere[35]. The United Kingdom Law Commission, in its report Aggravated, Exemplary and Restitutionary Damages[36], concluded that the boundaries set in Rookes v Barnard were not "consistent with either sound principle or sound policy"[37]. It said that its recommendations (for expanding the availability of exemplary damages) were guided by five aims which, it may be assumed, the Commission thought were not fulfilled by application of Rookes v Barnard[38]:
"First, exemplary damages should be an exceptional remedy, rarely‑awarded and reserved for the most reprehensible examples of civil wrongdoing which would otherwise go unpunished by the law. Secondly, their availability (and assessment) must be placed on a clear, principled basis. Thirdly, although flexibility is necessary, unnecessary uncertainty as to the availability and assessment of the remedy must be avoided. Fourthly, defendants must not be unfairly prejudiced. Fifthly, the impact on the administration and funding of civil justice should not be adverse."
The last four of those aims are not controversial (although the way in which they are to be implemented may be). The first may excite more debate but it will serve as a useful framework for considering some of the issues that arise in this case.
[35]In Australia, reference need be made only to Uren. In Canada, see, for example, Vorvis v Insurance Corporation of British Columbia [1989] 1 SCR 1085. In New Zealand, see, for example, Fogg v McKnight [1968] NZLR 330; Taylor v Beere [1982] 1 NZLR 81; Donselaar v Donselaar [1982] 1 NZLR 97.
[36]United Kingdom, Law Commission No 247, (1997).
[37]United Kingdom, Law Commission No 247, Aggravated, Exemplary and Restitutionary Damages, (1997), par 1.2.
[38]United Kingdom, Law Commission No 247, Aggravated, Exemplary and Restitutionary Damages, (1997), par 1.17.
An exceptional remedy
If, as we have earlier suggested, the remedy is exceptional in the sense that it arises (chiefly, if not exclusively) in cases of conscious wrongdoing in contumelious disregard of the plaintiff's rights, at least two further questions arise: are exemplary damages available where the plaintiff's claim is for damages for negligence rather than some intentional wrong, and is the award of exemplary damages a matter of right or does it depend on the exercise of a discretion informed by some identifiable criteria?

Negligence and exemplary damages

Provoked by differing limitation periods for claims for damages for personal injury caused by negligence and other torts, there was a deal of debate in the 1960s about whether trespass to the person could be committed negligently[39].
[39]See, for example, Kruber v Grzesiak [1963] VR 621; Letang v Cooper [1965] 1 QB 232.
We do not think it necessary to revisit that debate. No question arises here of an intentional wrong being committed by inadvertence. For present purposes it is enough to note two things. First, exemplary damages could not properly be awarded in a case of alleged negligence in which there was no conscious wrongdoing by the defendant. Ordinarily, then, questions of exemplary damages will not arise in most negligence cases be they motor accident or other kinds of case. But there can be cases, framed in negligence, in which the defendant can be shown to have acted consciously in contumelious disregard of the rights of the plaintiff or persons in the position of the plaintiff. Cases of an employer's failure to provide a safe system of work for employees in which it is demonstrated that the employer, well knowing of an extreme danger thus created, persisted in employing the unsafe system might, perhaps, be of that latter kind[40]. No doubt other examples can be found.
[40]See, for example, Midalco Pty Ltd v Rabenalt [1989] VR 461; Coloca v BP Australia Ltd [1992] 2 VR 441; Trend Management Ltd v Borg (1996) 40 NSWLR 500.
In many jurisdictions in the United States reckless indifference to the rights of others and other culpable conduct short of malicious intent is sufficient for the issue of an award of exemplary damages to be left to a jury[41].
[41]Smith v Wade 461 US 30 at 44-48, 52 (1983).
Secondly, the present proceeding, although said to have been framed as an action in negligence, appears to have been conducted at trial as if it were a claim in trespass. The allegation made in the appellant's statement of claim, and pursued at trial, was that Bransden drove his vehicle "deliberately towards [the appellant] without regard for the safety of [the appellant]" and such evidence of the events as was given at trial was all directed to showing Bransden deliberately inflicted injury on the appellant. Whatever may be the true characterisation of the pleading, the case was conducted as one of conscious wrongdoing by the tortfeasor.
A "discretionary" remedy?

Reported cases usually speak of a "discretion" to award exemplary damages[42]. Standing alone, such a description, even if followed by the expression "to be exercised judicially" is of little assistance. At best, it invites attention to what are the criteria that are to inform the exercise of that discretion.
[42]See, for example, Lamb v Cotogno (1987) 164 CLR 1 at 12-13; Trend Management Ltd v Borg (1996) 40 NSWLR 500 at 505.
Because exemplary damages are awarded to punish, it is not surprising that their quantification should be treated as a matter for the discretion of the tribunal assessing damages. And for so many years that was a task for the jury, not the judge. Yet there is little to be found in the cases which would identify the proper instructions to a jury for performing this part of its function. Rather, it seems to be treated in a way not very different from what is called the jury's "constitutional right" to return a verdict of manslaughter notwithstanding proof of the elements of murder. That is, it is treated as if it is a power of the jury that is not to be hedged about by any more precise criterion for its use than the jury's intuitive conclusion that the defendant's conduct was sufficiently reprehensible to warrant punishment. Yet it is clear that there are thought to be limits on the power.
That reliance on the intuitive reaction of a jury may prove an insufficient restraint on the power to award exemplary damages is amply demonstrated by recent decisions of the United States Supreme Court about whether particular jury awards of exemplary damages have contravened the constitutional requirement for due process[43].
[43]See, for example, Pacific Mutual Life Insurance Co v Haslip 499 US 1 (1990); TXO Production Corp v Alliance Resources Corp 509 US 443 (1993); BMW of North America Inc v Gore 517 US 559 (1996).
Exemplary damages have long been recognised in the United States[44]. In

Uren[45], Windeyer J set out with evident approval the following statement by Grier J, writing in 1851 for a unanimous Supreme Court in Day v Woodworth:
"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. ... 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."[46] (Emphasis added)

It seems that little guidance is given to juries in the United States about how that discretion should be exercised. In at least some jurisdictions in that country, juries are given instructions about the awarding of exemplary damages. The instructions have two principal elements: first, that the purpose of an award of exemplary damages is to punish the defendant and to protect the public by deterring the defendant and others from doing such wrong in the future and, second, that in making its assessment the jury must take into consideration the character and degree of the wrong as shown by the evidence and the necessity of preventing similar wrong[47]. (Sometimes, juries may also be told to consider the wealth of the defendant.)
[44]The Amiable Nancy 16 US 546 at 558 (1818) per Story J.
[45](1966) 117 CLR 118 at 136-137.
[46]54 US 362 at 371 (1851).
[47]cf the instructions to the jury considered in Haslip 499 US 1 at 6, 19 (1990).

The instructions given to juries are therefore very general. In some jurisdictions, where only general instructions of the kind we have described are given to juries, appellate courts will review the findings of juries about exemplary damages by reference to a more elaborate set of criteria[48]. Nevertheless, O'Connor J (in her dissenting opinion in Pacific Mutual Life Insurance Co v Haslip) could say that "[o]ur cases attest to the wildly unpredictable results and glaring unfairness that characterise common‑law punitive damages procedures."[49]
[48]See, for example, the list of factors derived from Green Oil Co v Hornsby 539 So 2d 218 223-224 (1989) discussed in Haslip 499 US 1 at 51-52 (1990).
[49]499 US 1 at 49 (1990).
What has happened in the United States might well be thought to suggest that describing the power to award exemplary damages as a discretionary power to be exercised having regard to purposes of punishment and deterrence and the character and degree of the wrongdoing gives insufficient guidance about how the power should be exercised. Nor is the problem resolved by attempting to analyse the question in terms of "rights" or "claims" rather than discretionary powers. To do so may do little more than provoke an unproductive debate about jurisprudential classifications. What is important is to consider what it is that entitles a plaintiff to an award of exemplary damages or (to put it in the language of power or discretion) permits or requires the making of an award.
No doubt the conduct of the wrongdoer is central to that enquiry: for exemplary damages are concerned to punish the wrongdoer and deter others from like conduct, not to compensate the party that was wronged. But there are other factors which must be considered. In this case, attention was directed to the fact that the defendant was a third party insurer, and that the tortfeasor had been convicted and punished for a criminal offence.
Insurance and exemplary damages
In Lamb v Cotogno the Court rejected the contention that "since the object of exemplary damages is to punish and deter, it is inappropriate that they should be awarded where the wrongdoer is insured under a scheme of compulsory insurance against liability to pay them"[50]. The Court reached that conclusion for a number of reasons including that the deterrence intended by an award "extends beyond the actual wrongdoer and the exact nature of his wrongdoing"[51] and that their award appeases the victim and assuages any urge for revenge felt by the victim[52].
[50](1987) 164 CLR 1 at 9.
[51](1987) 164 CLR 1 at 9.
[52](1987) 164 CLR 1 at 9-10.
At the end of his submissions, counsel for the respondent sought leave[53] to reopen the decision in Lamb v Cotogno. That application might properly be described as belated. But even if it had been made earlier, we would have declined to reopen the decision. It is a recent judgment of the Court in which the five Justices who heard the matter gave a single set of reasons. Those are matters which may themselves be sufficient reason for refusing to reopen Lamb v Cotogno. But in addition to those considerations, it is as well to recall that no application was made to reopen and reconsider the logically anterior questions about the availability of exemplary damages that were decided in Uren and the other cases we have mentioned. The leave sought should be refused.
[53]Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311.
It follows that the fact that the tortfeasor was insured under a compulsory scheme of insurance against any liability for exemplary damages would not bar the award of such damages.
In this case, of course, the defendant was the compulsory insurer, not the tortfeasor, and any award would be made against it, not the tortfeasor. Nevertheless, in this case that would have been no bar to an award of exemplary damages.
The parties accepted that the effect of s 125A(3)(a) of the Motor Vehicles Act (introduced to the Act in 1983) was to make the respondent liable to the appellant in whatever respects Bransden would have been liable. Section 125A(3)(a) provides:
"Where, in pursuance of this section, an insurer has been joined as a defendant to an action -
(a)the insurer will be taken to have directly assumed the liability (if any) of the insured person upon the claim in respect of death or bodily injury and, where such a liability is found to exist, judgment upon that claim will be given not against the insured person but against the insurer ... ."
It follows that nothing turns on the substitution of the respondent as defendant in place of Bransden.
Secondly, if, as is now the case under the relevant South Australian legislation, the compulsory insurer is entitled to "recover from the insured person any money paid or costs incurred by the insurer" in respect of the liability the insurer incurred where the insured person drove a motor vehicle with the intention of causing the death of, or bodily injury to, a person or another's property[54] there would seem to be powerful reason to think that the interposition of the insurer's liability should not affect the power to award exemplary damages. (There may be serious doubt, however, whether the respondent has any right of recovery from the insured person in this case. The Act was amended to deal with cases of intentional conduct by the insured only in 1993[55] and the events giving rise to the present claim happened in 1988.) It is, however, not necessary to resolve these questions in order to dispose of the present appeal.
[54]Motor Vehicles Act 1959 (SA), s 124A(1)(aa).
[55]Statutes Amendment (Motor Vehicles and Wrongs) Act 1993 (SA).
Significance of criminal punishment
The factor which weighed most heavily with the primary judge in considering whether to award exemplary damages was that Bransden had been sentenced to a substantial term of imprisonment for the actions which gave rise to the appellant's claim.
The first aim adopted by the Law Commission spoke of reserving the award of exemplary damages for cases of wrongdoing "which would otherwise go unpunished by the law"[56]. What significance should be attached to the fact of earlier criminal punishment?
[56]United Kingdom, Law Commission No 247, Aggravated, Exemplary and Restitutionary Damages, (1997), par 1.17.
Where, as here, the criminal law has been brought to bear upon the wrongdoer and substantial punishment inflicted, we consider that exemplary damages may not be awarded. We say "may not" because we consider that the infliction of substantial punishment for what is substantially the same conduct as the conduct which is the subject of the civil proceeding is a bar to the award; the decision is not one that is reached as a matter of discretion dependent upon the facts and circumstances in each particular case.
There are at least two reasons in principle why that is so.
First, the purposes for the awarding of exemplary damages have been wholly met if substantial punishment is exacted by the criminal law. The offender is punished; others are deterred. There is, then, no occasion for their award.
Secondly, considerations of double punishment would otherwise arise. In R v Hoar[57] Gibbs CJ, Mason, Aickin and Brennan JJ said that there is "a practice, if not a rule of law, that a person should not be twice punished for what is substantially the same act"[58]. That practice or rule would be breached by an award of exemplary damages in the circumstances described.
[57](1981) 148 CLR 32.
[58](1981) 148 CLR 32 at 38 citing Connolly v Meagher (1906) 3 CLR 682. See also Pearce v The Queen (1998) 156 ALR 684.
Because, in this case, substantial punishment was imposed on the tortfeasor for the conduct which was in issue in the civil proceedings, it is not necessary to decide whether the bar arises only where the punishment is "substantial" or how close must be the similarity between the conduct that is the subject of the two proceedings.
No doubt references to "substantial punishment" and to the need for "substantial identity" between the conduct that is the subject of the criminal and civil proceedings may lead to difficult questions of fact and degree. What is substantial punishment? Does it matter if the prosecuting authorities and the offender reach some arrangement about what will be charged and, if charged, admitted? Does it matter if for reasons personal to the accused (or for other reasons) only a nominal penalty is imposed in the criminal proceedings? Does it matter if the criminal offence charged is an offence of strict liability?
These, too, are not questions that fall for decision in this case. At first sight, however, if criminal charges, alleging the same conduct as is alleged in a civil proceeding, have been brought and proved, it would be a most unusual case in which it was open to a civil court to conclude that the outcome of those criminal proceedings did not take sufficient account of the need to punish the offender and deter others from like conduct. There seems to be much to be said in favour of the views reached by a majority of the Court of Appeal of New Zealand in Daniels v Thompson that for a civil court to revisit a sentence imposed in a criminal court for the purpose of deciding whether the criminal received his or her just deserts is "contrary to principle" and must "undermine the criminal process"[59].
[59][1998] 3 NZLR 22 at 48 per Richardson P, Gault, Henry and Keith JJ; cf 76-77 per Thomas J.
Other considerations may well arise if relevant criminal proceedings ended in the accused's acquittal. But again those questions do not now arise and we do not deal with them[60].
[60]cf Daniels v Thompson [1998] 3 NZLR 22 at 50-52 per Richardson P, Gault, Henry and Keith JJ; cf 77 per Thomas J.
No doubt difficult questions may also arise where it is possible or probable that criminal proceedings will be brought but those proceedings have not been brought or, if started, have not been finished. The rule in Smith v Selwyn[61] no longer applies in some jurisdictions[62]. Thus it is possible for civil proceedings to be brought and concluded without there being any clear indication about whether criminal proceedings will follow. It may be doubted, however, that the mere possibility of later criminal prosecution is reason enough not to award exemplary damages in a proper case. More difficult questions might arise if it were clear that such proceedings were probable or had been begun but it is likely that in such circumstances trial of the civil proceedings may, in any event, be delayed until conclusion of the criminal proceedings. But again these questions do not arise here: Bransden had been prosecuted and sentenced.
[61][1914] 3 KB 98.
[62]Supreme Court Act 1986 (Vic), s 41; Criminal Code Act 1924 (Tas), s 9. Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26; P T Garuda Indonesia Ltd v Grellman (1994) 48 FCR 252.
Although we consider the two matters of principle that we have mentioned (satisfaction of the purposes for an award and consideration of double punishment) are sufficient reason for the conclusion we have expressed, we consider that nothing in cases decided in this country or in other common law jurisdictions would suggest the adoption of a contrary view.
First, it is a conclusion consistent with such authority as there is on the point in this country[63].
[63]See particularly Watts v Leitch [1973] Tas SR 16. Lamb v Cotogno is not to the contrary. Although the defendant in that case was convicted of an offence arising out of the incident the subject of the civil suit (see Cotogno v Lamb (No 3) (1986) 5 NSWLR 559 at 573) no point was made of that fact on appeal to this Court.
Secondly, in Canada, courts have declined to award punitive damages where the defendant has been imprisoned[64]. (It may be that different considerations arise in some Canadian jurisdictions where some criminal punishment other than imprisonment is imposed.) We note, however, that the Ontario Law Reform Commission recommended[65] that the fact of prior criminal prosecution should not be a bar to an award of punitive damages but that in determining the extent, if any, to which punitive damages should be awarded, the court should be entitled to consider the fact and adequacy of any prior penalty imposed.
[64]See Waddams, The Law of Damages, 2nd ed (1991), par 11.470; Cooper‑Stephenson and Saunders, Personal Injury Damages in Canada, (1981) at 699; Ontario Law Reform Commission, Report on Exemplary Damages, (1991) at 43.
[65]Report on Exemplary Damages, (1991) at 46.
As might be anticipated, no single view of these questions has been uniformly adopted in the many jurisdictions of the United States[66]. But in some of those jurisdictions the question is put in terms like those put forward by the Ontario Law Reform Commission namely: exemplary damages should not be awarded if the defendant has been sufficiently punished by the criminal justice system.
[66]Compare on the one hand: Jackson v Wells 35 SW 528 (1896); Wirsing v Smith 70 A 906 (1908); King v Nixon 207 F 2d 41 (1953); Browand v Scott Lumber Co 269 P 2d 891 (1954); White v Taylor 277 SE 2d 321 (1981) and on the other: Redden v Gates 2 NW 1079 (1879); Bundy v Maginess 18 P 668 (1888); Luther v Shaw 147 NW 18 (1914); Morris v MacNab 135 A 2d 657 (1957); Shelley v Clark 103 So 2d 743 (1958); E F Hutton and Co Inc v Anderson 596 P 2d 413 (1979); Coppinger Color Lab Inc v Nixon 698 SW 2d 72 (1985).
Putting the question in these terms emphasises the importance of addressing the underlying question of principle. How are the civil courts to set about a task of punishing a defendant when the criminal courts have already done so? In particular, how is the civil court to assess the adequacy of the punishment inflicted as the result of a criminal prosecution? If the criminal process has taken its course, why should it be open to a plaintiff in a civil proceeding to contend that the punishment inflicted is inadequate? Is it enough (as the Ontario Law Reform Commission suggest[67]) that the victim of a crime may bring forward at a civil trial matters that go to punishment but are not brought forward at a criminal trial? How does that proposition fit with provisions made for sentencing courts to consider victim impact statements?
[67]Report on Exemplary Damages, (1991) at 45.
No doubt, if the punishment inflicted by a criminal court is properly regarded as substantial (and a term of imprisonment would seem always to be so) no question of inadequacy should arise. But what if a financial or other non‑custodial penalty is exacted? How is the adequacy of that penalty to be judged[68]?
[68]See Daniels v Thompson [1998] 3 NZLR 22 at 52-53 per Richardson P, Gault, Henry and Keith JJ; cf 73 per Thomas J.
Again, none of these questions arises here. On any view, substantial punishment has been inflicted on the wrongdoer in this matter. But to express the rule to be applied by a civil court in deciding whether exemplary damages may be awarded, simply as a discretion to be exercised according to whether, having regard to the nature of the defendant's conduct and the need to punish it and deter others from repeating it, exemplary damages should be awarded, may very well obscure deep‑seated and difficult questions of principle.
Here, however, because substantial punishment was imposed on Bransden for the conduct that was the subject of this action exemplary damages could not be awarded.
Compensatory damages
For the reasons given by Kirby J, the damages awarded to the appellant were manifestly inadequate.
Proposed orders
The appeal should therefore be allowed with costs, the order of the Full Court dismissing the appeal to that Court be set aside, in lieu there should be orders that the appeal be allowed with costs, and there be a new trial on the issue of damages (other than aggravated and exemplary damages). The costs of the new trial should be in the discretion of the judge at that trial.

KIRBY J. This appeal from the Full Court of the Supreme Court of South Australia[69] raises two questions. The first concerns a suggested error on the part of the Full Court in failing to correct the decision of the primary judge (Pirone DCJ) who refused to award exemplary (or punitive) damages in the circumstances of the case. The second concerns a complaint that the Full Court should have held that the amount allowed for pre-trial economic loss and future loss of earning capacity was manifestly inadequate, so as to authorise and require the recalculation of the damages.
[69] Gray v State Government Insurance Commission, unreported, Supreme Court of South Australia, 10 September 1996.
Special leave was granted primarily to permit examination, yet again[70], of the vexed question of exemplary damages. The quantification of damages in this case, a matter which would not normally attract the attention of the Court, was doubtless left open in case it might require reconsideration in the light of the outcome of the claim for exemplary damages. Whilst I am of the opinion that the claim for exemplary damages was rightly dismissed, the examination of the other components of the damages, occasioned by the appeal, demonstrates error which required correction by the Full Court. The only acceptable solution is a retrial of the question of damages. However, such damages must exclude the exemplary damages claimed.
[70] See Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118; Fontin v Katapodis (1962) 108 CLR 177; XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448; Lamb v Cotogno (1987) 164 CLR 1.
The facts
Mr Donald Gray (the appellant) is an Aboriginal Australian. On 9 September 1988 at Salisbury, a suburb of Adelaide, he was injured when struck by a motor vehicle driven by Mr Darren Bransden. The motor vehicle was insured under the compulsory third party provisions of the Motor Vehicles Act 1959 (SA) ("the MV Act")[71]. The insurer was the State Government Insurance Commission now renamed the Motor Accident Commission ("the Commission").
[71]Pt IV of the Act.
The primary judge found that the appellant was injured when Mr Bransden drove directly at a group of Aboriginal youths, including the appellant, doing so with the intention of running the appellant down and seriously hurting him. At trial, liability for negligence was not disputed. Nor was it contested that Mr Bransden's conduct was deliberate, evidencing a want of regard for the safety and person of the appellant. Contributory negligence was not shown. The case was therefore one for the assessment of damages.
Mr Bransden was charged with the criminal offence of intentionally causing grievous bodily harm to the appellant[72]. He was convicted of this offence by a jury[73] and sentenced to seven years imprisonment[74]. The sentencing judge described his conduct as inexcusable, with no mitigating factor at all. It was, he said, a "blatant breach of the law" that was "brutal and cowardly". The primary judge in these proceedings took a similar view of Mr Bransden's conduct.
[72]Criminal Law Consolidation Act 1935 (SA), s 21.
[73] R v Bransden, unreported, Supreme Court of South Australia, 26 February 1991 (Bollen J).
[74] R v Bransden, unreported, Supreme Court of South Australia, 14 March 1991 (Bollen J).
The background of the appellant was explained in the evidence. He was abandoned by his parents soon after birth. He was brought up by an aunt and uncle. He attended public schools but, because he was one of only two Aboriginal students at the secondary school, he was continuously picked on. He played various sports at school and was chosen for successful Australian Rules football teams in his local area. He enjoyed long distance running. He was visited occasionally by his natural father and when, in 1987 his aunt and uncle died, he went to live with a cousin in Salisbury. He commenced a course at a college there which specialises in Aboriginal education. However, he left the college to take a six month job at a local school earning $250 a week net. The work involved building school facilities. Necessarily, it required the appellant to engage in squatting, lifting materials and bending. The primary judge accepted that the appellant liked the work, that he did it well and that his performance was satisfactory. This was his situation at the time he was deliberately run down and injured.
As a result of the impact, the appellant suffered organic and psychological injuries. The former included fractures of the tibia and fibula of both legs and multiple contusions to his face and head. As found by the primary judge, the injury to the appellant's head resulted in initial confusion, disorientation, incomprehensible verbalisation and retrograde amnesia. He was left with a cognitive impairment.
Between the injury and the trial the appellant was admitted to hospital on three occasions for various procedures. He came under the care of Dr Anthony Ingman. He did not return to work or to college. He began drinking alcohol to excess. He claimed that after his injuries he turned to drinking "full on". He also became involved in a variety of criminal offences[75], most of them relatively minor. He was sentenced to various terms of imprisonment between 1990 and 1993, usually for several days but on one occasion for five months. At the trial of his action in June 1995, he told the primary judge that he had given up drinking alcohol altogether after his last term of imprisonment. However, his natural father, to whom he had gone after his release from custody, contradicted this statement. He said that the appellant had been drinking alcohol, although not every day, whilst staying at his home and had been drunk "[o]n a couple of occasions".
[75] Before the subject injuries were inflicted upon him, the appellant had once been convicted of larceny. However, he was fined $50 and placed on a six month good behaviour bond. No conviction was recorded.
The appellant brought proceedings in the District Court of South Australia, initially against Mr Bransden, claiming damages against him for negligence. The claim was not framed in terms of trespass to the person. Amongst the damages claimed was a specific claim for exemplary damages. In 1995 the proceedings were amended to substitute State Government Insurance Commission as the defendant[76]. The substitution of the Commission for Mr Bransden was effected pursuant to s 125A of the MV Act. That section provides that the Court may, on the application of the insurer, join it as a defendant to the action. Where it is so joined the insurer is taken to have "directly assumed the liability (if any) of the insured person upon the claim in respect of ... bodily injury and, where such a liability is found to exist, judgment upon that claim will be given not against the insured person but against the insurer"[77]. Although provision is made for the insured person to remain a party for purposes of defending, in effect, a property claim or prosecuting a counter-claim, neither of these was relevant. In accordance with the MV Act, Mr Bransden "cease[d] to be a party to the action"[78]. Provision is made in certain circumstances for the insurer to recover from the insured in respect of its liability where the insured has contravened or failed to comply with a term of the policy of insurance[79]. The appellant submitted that this possibility, although not yet carried into effect, continued to expose Mr Bransden to the possibility of recovery at the suit of the Commission, for example for any exemplary damages which the Commission was ordered to pay by reason of Mr Bransden's deliberate driving.
[76] By order of a Master of the District Court on 23 January 1995 on the application of the Commission.
[77]MV Act, s 125A(3)(a).
[78]MV Act, s 125A(3)(b).
[79] MV Act, s 124A(1).["Where an insured person incurs a liability against which he or she is insured under this Part and the insured person has contravened or failed to comply with a term of the policy of insurance ... by driving a motor vehicle ... with the intention of causing ... bodily injury to ... a person ... the insurer may ... recover from the insured person any money paid or costs incurred by the insurer in respect of that liability."]
Decision of the primary judge
The primary judge assessed the appellant's damages at $72,206. Judgment was entered in his favour in that sum together with an amount for interest. The components of the judgment were $15,000 for past economic loss; $30,000 for future economic loss; and $18,190 for non-economic loss (calculated in accordance with the Wrongs Act 1936 (SA), s 35A(b)[80]). The out-of-pocket expenses were agreed at $9,016. The appellant complained that this judgment was "manifestly inadequate". Specifically, he argued that the judge had erred on failing to include a sum for exemplary damages. More generally, he complained that the amounts provided for economic loss, past and future, were erroneous, being arrived at by faulty reasoning which should be corrected on appeal. He submitted that such correction was available, notwithstanding several references by the judge to credibility findings which were adverse to him.
[80] That section provides that in such cases non-economic loss is to be assigned a numerical value on a scale rising from 0 to 60. The primary judge assigned the number 17. At the relevant time, this produced the component of the judgment of $18,190. See the definition of "prescribed amount" in s 35A(6)(b).
On the claim for exemplary damages, Pirone DCJ accepted that exemplary damages were legally available in a case such as this, notwithstanding the fact that the appellant had not expressly framed his case in terms of trespass to the person and that the defendant before the Court was not the tortfeasor himself but his compulsory third party insurer. The judge found that, if the appellant was entitled to an award of exemplary damages, it should be in the sum of $10,000. However, after reference to a decision of the Supreme Court of Tasmania in Watts v Leitch[81], Pirone DCJ accepted that he had a discretion to award, or refrain from awarding, exemplary damages. Although he was not bound by the Tasmanian decision, it accorded with his own opinion. Taking into account the fact that Mr Bransden had already been punished by being sentenced to a substantial period of imprisonment in respect of the same conduct, the judge concluded that no award of exemplary damages "should" be made.
[81][1973] Tas SR 16 at 20 per Nettlefold J.
As to the claim for economic loss, the appellant presented himself at trial as totally and permanently unemployable. Essentially, this perspective of the facts was based upon the contention that he had been progressing reasonably, despite adversity, until the deliberate wrong done to him by Mr Bransden. He had regular work, was a keen sportsman, had attended college for a time and hoped to begin a career working on an oyster or abalone farm by the age of 20. After the injury his life was dislocated.
The primary judge accepted that the appellant's earning capacity had been diminished as a result of the subject injuries, both in relation to the past and with respect to the future. In measuring the extent of his loss, he recorded his preference for the evidence of Dr Ingman. That witness had testified that:
"[I]n work that involved heavy lifting and carrying [the appellant] would be restricted, and also in work requiring squatting or bending ... He could do this work intermittently and more slowly than the average person."
Dr Ingman concluded:
"The reality is that, unless he happened to be in a situation where someone wanted a person who worked more slowly, he would be better employed in something else."
Although accepting that the injury to the head was "significant and severe" and although generally accepting the evidence of Mr Mark Reid, a neuropsychologist, that the appellant had suffered cognitive impairment which Mr Reid, as to approximately 75%, attributed to the accident, the primary judge concluded that the appellant had a pre-existing short-term memory impairment. He therefore found that the short-term memory problems were not related to the subject incident.
The reasons advanced to support this conclusion, vital to the calculation of past and future economic loss, were two. The first involved consideration of a number of comments on the appellant's scholastic performance at secondary school when he was in his early teens. The second related to the judge's assessment of the appellant as a witness and his observations of him whilst he was in the witness box. The judge also seems to have been affected by the fact that the appellant's natural father deposed, contrary to the appellant's own testimony, that he was still drinking alcohol. Taking these considerations into account, as well as the disadvantages inevitably flowing from the appellant's criminal record, Pirone DCJ concluded that the appellant had "evinced no intention or genuine desire to make use of his residual earning capacity" in the past and that "the same may be true of him at other times in the future". He therefore reached the monetary allocations already mentioned after "wielding the broad axe". Essentially, his Honour concluded that the "obvious lack of motivation" which the appellant displayed after injury, and demonstrated during his evidence, had its roots not in the trauma and dislocation of the wrong done to him by Mr Bransden but in personality traits already obvious when he was at high school. He did not accept the appellant's evidence that he could not play pre-injury sports; although he was prepared to concede that long distance running might now be beyond him.
Decision of the Full Court
In the Full Court, the reasons for rejecting the appellant's appeal were given by Millhouse J[82]. On the complaint concerning the refusal to include exemplary damages, it was recorded that the Commission had conceded that such damages "could have been awarded. It was a matter of discretion"[83]. Reference was made to Watts v Leitch and to the primary judge's consideration of the fact that the driver had already been punished by imprisonment. Millhouse J accepted that the primary judge had a discretion which he had chosen not to exercise in favour of the appellant. He considered that there was no reason why the Full Court should interfere.
[82]Bollen and Williams JJ concurring.
[83] Gray v State Government Insurance Commission, unreported, Supreme Court of South Australia, 10 September 1996 at 4.
On the more general complaint concerning the suggested inadequacy of the damages, Millhouse J referred to the "adverse view of the appellant's credibility"[84] formed by the primary judge, the "appalling" school reports, the resort to drinking alcohol and the appellant's criminal record. He concluded[85]:
"The sad fact is that the appellant's chances of achieving much by way of employment in life have always been small. Although [counsel] argued that the learned judge should not have, nor should we, set store by those school reports I cannot see why not. They don't shew much promise ... The learned judge had ... found the reports pointed to the appellant's lack of motivation: he found that this lack of motivation had gone on. There is no reason for us to review these findings."
[84] Gray v State Government Insurance Commission, unreported, Supreme Court of South Australia, 10 September 1996 at 3.
[85] Gray v State Government Insurance Commission, unreported, Supreme Court of South Australia, 10 September 1996 at 4.
Whilst accepting that the assessment for non-economic loss in this case was "quite low", the Full Court declined to intervene. As to the economic loss, on the footing that the appellant's future "given his lack of skills and motivation" was never a good one and that he had been left with "little permanent disability"[86], those sums were also left undisturbed. The result was that the Full Court dismissed the appeal.
[86] Gray v State Government Insurance Commission, unreported, Supreme Court of South Australia, 10 September 1996 at 4.
Common ground
Upon some questions raised by the appeal there was common ground between the parties:
1.The Commission accepted that it was liable to the appellant for any exemplary damages that might be awarded in the proceedings arising out of the conduct of Mr Bransden. No point was taken that liability for such damage would fall outside the policy. I shall assume that this is so whatever might be the subsequent rights of the Commission, as insurer, to recover the whole or any part of the damages from Mr Bransden[87]. Had it been otherwise, or had the matter been in doubt, it would have been necessary to join Mr Bransden once again as a party so that he could be given the opportunity to be heard before any such damages were ordered affecting him. Neither party suggested that Mr Bransden should be afforded notice of the hearing to protect his contingent interests in its outcome. In light of the conclusion to which I have come, it is unnecessary to explore this problem.
2.The references to the criminal proceedings, made by the primary judge, arose out of the tender of part of the transcript of those proceedings, including the remarks on the sentencing of Mr Bransden[88]. This tender was received by consent of the parties. It served simply to confirm the conclusions independently reached by the primary judge so that no question arises as to such use. The case was conducted on the basis that there was no, or no sufficient, provocation on the part of the appellant to justify or explain Mr Bransden's conduct[89]. A defence of contributory negligence, although pleaded, was not pressed.
3.Whilst contesting the adequacy of the primary judge's quantification of pain and suffering, the appellant concentrated his attack on the judgment in terms of the omission of exemplary damages and the alleged errors in the calculation of the allowances for economic loss. The appeal was conducted on the footing that the quantification of the potential exemplary damages by the primary judge was accepted. The appellant therefore asked that $10,000 be added to his judgment if he were to succeed on that ground of appeal alone. If he succeeded on the complaint about economic loss, the appellant asked that there be a general retrial as to damages. This represented a departure from the relief initially sought in the grounds of appeal where the appellant had asked that the proceedings be returned to the Full Court for assessment of damages or that this Court should substitute its own assessment.
[87]Pursuant to MV Act, s 124A.
[88] The certificate of conviction was admitted pursuant to the Evidence Act 1929 (SA), s 34A.
[89]In this respect the case was different from Lamb v Cotogno (1987) 164 CLR 1.
Although not specifically pleaded, the appellant sought, under the claim for compensatory damages, to argue that allowance ought to have been made for aggravated damages. At the very close of the hearing, the Commission, for its part, asked the Court to reconsider the authority of its decision in Lamb v Cotogno[90]. This is where the common ground ran out. The Commission objected to any allowance for aggravated damages. It relied, to support its objections, upon the formulation of the grounds of appeal and argument, and the way in which the proceedings had been conducted in the courts below. The appellant did not expressly object to this Court's reopening Lamb v Cotogno, but stated his strong support for that decision.
[90](1987) 164 CLR 1.
The issues
The issues raised by the appeal are:
1.Should the authority of this Court in Lamb v Cotogno be reopened to permit the Commission, as a compulsory insurer, to contest the applicability to it of the law entitling a plaintiff to recover exemplary (or punitive) damages on the grounds of the conduct of the tortfeasor whom it is obliged to indemnify? (The reopening issue).
2.If not, is the holding in Lamb v Cotogno inapplicable to the facts of this case on the footing either (a) that the claim in Lamb v Cotogno was framed in terms of trespass to the person, whereas in this case the sole cause of action pleaded by the appellant was negligence? or (b) on the basis that in Lamb v Cotogno the defendant was the tortfeasor, whereas in this case the sole defendant was, by statute, the Commission, punishment of which was said to be neither rational nor fair. (The scope of exemplary damages issue).
3.If the Commission is prima facie liable to the appellant under the holding in Lamb v Cotogno, is that liability affected in any way by the provisions of the Wrongs Act, s 35A limiting recovery of damages in the case of motor vehicle accidents? (The Wrongs Act issue).
4.If exemplary damages may be recovered, is the award of such damages discretionary and, if so, did the discretion miscarry by reference to the way in which the prior criminal conviction and punishment of Mr Bransden was treated? (The criminal punishment issue).
5.Having regard to the pleadings and the conduct of the proceedings, is the appellant entitled to aggravated damages in addition, or in the alternative, to the exemplary damages claimed? (The aggravated damages issue).
6.In respect of the remainder of the appeal, the question is whether the award of damages for economic loss, past and future, is manifestly inadequate and whether, having regard to the reasons given by the primary judge (including his references to his assessment of the credibility of witnesses) the Full Court was authorised and required to intervene to correct the misassessment. (The economic loss issue).
The reopening issue

There is much force in his Honour's observations. I would, with respect for myself, have been minded to adopt and apply his Honour's reasoning if I were free to do so because in my opinion the punitive purpose of exemplary damages is overwhelmingly the predominant purpose. But Lamb v Cotogno[213] is a recent unanimous decision of five Justices of this Court. Furthermore, I think that the statutory scheme here is a quite different one from that under consideration in Lamb v Cotogno, and, in my view this aspect of the case depends for its resolution upon the terms of the particular South Australian statute pursuant to which the damages are recoverable, the Motor Vehicles Act 1959 (SA). It is therefore neither necessary nor appropriate to deal with the belated application by the respondent for leave to argue that Lamb v Cotogno should be reconsidered.
[213](1987) 164 CLR 1. See also Kars v Kars (1996) 187 CLR 354 at 378-382 per Toohey, McHugh, Gummow and Kirby JJ in which their Honours accepted that there will inevitably be anomalies in the assessment and awarding of damages in cases in which the wrongdoer is insured: especially will this be so where the insured is covered under a scheme of compulsory insurance.
There have been amendments made to the Act since the appellant was injured. It was common ground that the case and the appeals fell to be decided under the provisions in force at the time of the running down of the appellant and this appears to be so[214].
[214]See s 19 of the Statutes Amendment (Motor Vehicles and Wrongs) Act 1993 (SA):
"The amendments made by this Act do not affect a cause of action, right or liability that arose before the commencement of this Act."
Section 102 imposed on drivers an obligation to drive only insured motor vehicles on a road or wharf.

Section 107 provided as follows:
"Notwithstanding any enactment, an insurer under a policy of insurance (whether under this Part or otherwise) in relation to a motor vehicle is, as from the date of the policy, liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover."
Section 112 was in these terms:
"Where-
(a) a person has obtained judgment in an action against an insured person for death or bodily injury caused by, or arising out of the use of, an insured motor vehicle;
and
(b) before the action came on for hearing the insurer knew that the action had been commenced,
the judgment creditor may recover by action from the insurer such amount of the money (including costs or a proportionate part of those costs) payable pursuant to the judgment as relates to death or bodily injury and has not been paid."
It seems to me that exemplary damages awarded to a person who has suffered bodily injury as a result of high handed[215] or malicious conduct prima facie may be said to "relate" to bodily injury within the meaning of s 112.
[215]See Kirby P in Cotogno v Lamb [No 3] (1986) 5 NSWLR 559 at 574-575.
Section 124 required that the owner, person in charge, or driver of a motor vehicle involved in an accident give notice of particulars of it.
Section 124A made provision for recovery by the statutory insurer of damages for death or bodily injury caused when an insured has contravened the term of the policy or has driven the vehicle under the influence of a drug or alcohol:
"(1) Where an insured person incurs a liability against which he or she is insured under this Part and the insured person has contravened or failed to comply with a term of the policy of insurance-
(a)     by driving a motor vehicle while so much under the influence of intoxicating liquor or a drug as to be incapable of exercising effective control of the vehicle;
or
(b)     by driving a motor vehicle while there is present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood,
the insurer may, by action in a court of competent jurisdiction, recover from the insured person any money paid or costs incurred by the insurer in respect of that liability.
(2) Where an insured person incurs a liability against which he or she is insured under this Part and the insured person has, to the prejudice of the insurer-
(a)     contravened or failed to comply with a term of the policy of insurance other than one referred to in subsection (1);
or
(b)     contravened or failed to comply with-
(i)    a requirement of section 124;
or
(ii) a provision of section 126,
the insurer may, by action in a court of competent jurisdiction, recover from the insured person so much of the money paid or costs incurred by the insurer in respect of that liability as the court thinks just and reasonable in the circumstances."
In this case the insurer chose to be joined as a defendant in the action pursuant to s 125A:
"(1) Where an action for damages or other compensation has been commenced in a court against an insured person in respect of death or bodily injury resulting from the use of a motor vehicle, the court may, on the application of the insurer, join it as a defendant to the action.
(2)    The court may not join an insurer as a defendant to an action under subsection (1) unless the court is of the opinion that-
(a)     there is an actual or potential conflict of interest between the insurer and the insured in relation to the presentation of the defence;
and
(b)     the defence proposed by the insurer in relation to which the actual or potential conflict of interest arises is, in the circumstances of the case, not merely speculative.
(3) Where, in pursuance of this section, an insurer has been joined as a defendant to an action-
(a)     the insurer will be taken to have directly assumed the liability (if any) of the insured person upon the claim in respect of death or bodily injury and, where such a liability is found to exist, judgment upon that claim shall be given not against the insured person but against the insurer;
(b)     the insured person remains a party to the action only for the purposes of-
(i) defending a claim that is not a claim in respect of death or bodily injury;
or
(ii) proceeding upon a counterclaim,
and where there is no such claim or counterclaim, the insured person ceases to be a party to the action;
(c)     the insured person may not be joined as a third party to the action;
(d)     the insured person is, notwithstanding paragraphs (b) and (c), entitled to be heard in the proceedings upon any question related to the claim in respect of death or bodily injury;
(e)     for the purpose referred to in paragraph (d), the insured person is entitled to be represented by counsel of his or her own choice, and the insured person’s costs must be paid by the insurer unless, in the opinion of the court, there are special reasons for ordering otherwise;
and
(f)      the insurer may apply to call the insured person to give evidence and, in that event, the person will be called, or summoned to appear, as a witness and be liable to cross-examination by the insurer.
(4) No judgment or finding of a court in proceedings in which an insurer has been joined as a defendant under this section is binding in subsequent proceedings against the insured person under section 124A."
The language of s 125A(3)(a) is very wide. Here there was no doubt that the insured was potentially liable to pay exemplary damages. That liability was, in my opinion, a liability "upon [a] claim in respect of …bodily injury" within the meaning of s 125A(3)(a).
Unlike some other States, South Australia has not enacted legislation expressly exempting statutory motor vehicle insurers from liability for exemplary damages[216].
[216]See for example the following provisions:
Section 81A of the Motor Accidents Act 1988 (NSW):
"A court shall not award exemplary or punitive damages to a person in respect of a motor accident".
Section 55 of the Motor Accident Insurance Act 1994 (Qld):
"(1) No award of exemplary or punitive damages may be made against an insurer on a motor vehicle accident claim.
(2) However, if the court is of the opinion that the conduct of an insured person is so reprehensible that an award of exemplary or punitive damages is justified, the court may give a separate judgment against the insured person for the payment of exemplary or punitive damages.
(3) An insured person is not entitled, under a CTP insurance policy, to an indemnity against an award of exemplary or punitive damages."
See also Workers Compensation Act 1987 (NSW) s 151R; Accident Compensation Act 1985 (Vic) s 135A(7)(c); Transport Accident Act 1986 (Vic) s 93(7).
Accordingly, on the proper construction of the Motor Vehicles Act 1959 (SA), in my opinion if the appellant had been able to make out a case for exemplary damages, he would have been entitled to recover them from the respondent statutory insurer and the fact that they are to be paid by a statutory insurer becomes irrelevant as a discretionary consideration. The insurer was, by the Act, placed in no better or worse a position than the driver with respect to any liability for exemplary damages. A court should therefore look at the conduct of the insured and matters peculiar to him or her and the plaintiff, and not the ultimate liability of the statutory insurer in deciding whether exemplary damages should be awarded.
At first instance Pirone DCJ thought that the fact that the defendant motorist had been punished in the Criminal Court was the decisive discretionary consideration against an award of exemplary damages.
The fact of the imposition of punishment and its extent and impact on the defendant will always be relevant factors, probably on most occasions the major and decisive factors[217]. They may not however be conclusive ones for all cases. Other matters will require consideration: for example, the likelihood or otherwise of criminal proceedings in a particular case, the existence and effect of any victims compensation legislation,[218] the nature of the conduct of the defendant, the extent to which the plaintiff may be entitled to be appeased, and would benefit from being appeased, the means of the defendant, the deterrent effect upon the defendant, any profit derived by the defendant from the wrongdoing and the deterrent effect upon the potential wrongdoing community generally. A court would also be entitled to take into account that lesser punishments may have been, or might be imposed as a consequence of the acceptance of a lesser plea, the availability (for what might be sound policy reasons in and for the purposes of the criminal law) of a small penalty only, the desirability of the less condemnatory process by way of civil rather than criminal proceedings, the need to encourage compliance with the law[219], and the fact that the possibility of any criminal sanction is illusory[220]. These matters are in my view relevant whether the cause of action is in trespass or negligence, although in the latter, particularly in accidental running down cases, occasions for an award of exemplary damages are likely to be extremely rare indeed[221].
[217]cf A B v South West Water Services Ltd [1993] QB 507 at 527 per Stuart Smith LJ:
"In the present case there is the further complication to which I have already referred of the conviction and fine of the defendants. These problems persuade me that there would be a serious risk of injustice to the defendants in this case if an award of exemplary damages were to be made against them."
[218]For example Criminal Injuries Compensation Act 1978 (SA).
[219]See Law Commission Consultation Paper No 132, Aggravated, Exemplary and Restitutionary Damages, (1993) at 114-127; Law Commission Report No 247, Aggravated, Exemplary and Restitutionary Damages, (1997) at 96-97.
[220]See Defamation Act 1889 (Qld) s 34 which operates to require a prior order of the Supreme Court for a defamation prosecution.
[221]In Daniels v Thompson [1998] 3 NZLR 22, the Court of Appeal of New Zealand by a majority took the view that there should be an absolute bar on exemplary damages when criminal proceedings have been instituted and whether a conviction or an acquittal has resulted. Thomas J (dissenting), whilst accepting that an award of exemplary damages would be exceptional when criminal proceedings have been taken was opposed to the absolute rules proposed by the majority.
The trial judge here did make a provisional assessment of exemplary damages of $10,000 taking the relevant factors into account. However his Honour exercised the power which was undoubtedly available to him not to award any sum under this head of damages because of the criminal penalties imposed on the defendant. The Full Court did not think that the trial judge fell into error in doing so and nor do I.
The appellant was given general leave to appeal. His counsel launched an attack upon the trial judge's award of damages for future economic loss assessed at $30,000. The three principal bases for the attack were that his Honour misused, or in some way misunderstood the school reports on the appellant tendered in evidence; that his Honour overlooked or gave insufficient weight to the fact that the appellant was in employment at the time of his injury; and, that on its face, the sum of $30,000 is so grossly and manifestly inadequate as to call for increase.
These arguments were apparently pressed and rejected on the appeal to the Full Court.
It is now submitted that the Full Court fell into error in not accepting these submissions and in two other respects:
(i) by making a significant factual error in holding that there was "little permanent disability"; and,
(ii) in not discharging its entire appellate jurisdiction to consider whether there was a "wholly erroneous estimate of the damages": Precision Plastics Pty Ltd v Demir[222].
[222](1975) 132 CLR 362 at 369.
It was also said that there was an inexplicable disproportion between the award for pre-trial loss of earning capacity ($15,000) for a period of 6.75 years (9 August 1988 to 28 June 1995) and $30,000 for the rest of the appellant's life. The appellant's counsel pointed out that it was proved that the appellant was in fact earning $250 per week (net) when he was injured.
In my view, the primary judge and the Full Court in reviewing his Honour's assessment of damages for future economic loss did fall into error in three respects even though from the school reports the appellant's pre-injury future looked unpromising: in treating the report cards as if they were indicative of an almost complete lack of earning capacity on the part of the appellant, despite the short periods that they covered and the appellant's age when they were made; by awarding an amount which is manifestly inadequate to compensate a relatively seriously injured young man without skills and entirely dependent upon his physical capacity to pursue remunerative employment; and, in failing to give weight to the relevant consideration that the appellant was in paid employment, albeit of limited duration when he was struck by the defendant's motor vehicle. Any impression of inadequacy is heightened by the obvious disparity between the amounts assessed for past and future economic loss.
The appellant tried to mount an argument that he was entitled to recover but had not been awarded aggravated damages. A claim for these was neither pleaded nor pursued in the courts below. Such a claim requires specific pleading, particulars and evidence directed to it. For these reasons the Court should not entertain this argument.
I would allow the appeal with costs and substitute for the orders of the Full Court an order that the matter be remitted to the District Court for a retrial confined to the issue of general damages for future economic loss. The respondent should also pay the appellant's costs of the appeal to the Full Court and I would order accordingly.