State of New South Wales v Cuthbertson

[2018] NSWCA 320

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

State of New South Wales v Cuthbertson [2018] NSWCA 320

Hearing dates:

8 August 2018

Decision date:

17 December 2018

Before:

Beazley P at [1];
McColl JA at [114];
Basten JA at [127];
Meagher JA and Payne JA at [161];

Decision:

(1)   Grant leave to appeal.

 

(2)   Allow the appeal and set aside the judgment in favour of the respondent given in the District Court on 15 December 2017.

 (3)   In place thereof, give judgment for the plaintiff in the District Court in the sum of $31,000, such judgment to take effect from 15 December 2017.

Catchwords:

COSTS – Party/party – Recovery of legal costs – Whether costs of defending criminal proceedings can be recovered as damages in subsequent civil proceedings for wrongful arrest – Whether State of New South Wales v Koumdjiev (2005) 63 NSWLR 353; [2005] NSWCA 247 wrongly decided

 

DAMAGES – General principles – Exemplary, punitive and aggravated damages – Where primary judge made a single award for aggravated and exemplary damages – Where respondent engaged in provocative conduct – Whether primary judge erred in the award of aggravated and exemplary damages

  TORTS – False imprisonment – Wrongful arrest – Causation – Whether costs of defending criminal proceedings natural and probable consequence of tort of wrongful arrest

Legislation Cited:

Civil Liability Act 2002 (NSW), ss 3B, 21
Costs in Criminal Cases Act 1967 (NSW), s 3
Crimes (Appeal and Review) Act 2001 (NSW), ss 20, 28, 70
Crimes Act 1900 (NSW), s 58
Criminal Procedure Act 1986 (NSW), ss 212, 213, 214
Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), s 99
Law Reform (Vicarious Liability) Act 1983 (NSW)

Cases Cited:

Anderson v Bowles (1951) 84 CLR 323; [1951] HCA 61
Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185; [1966] HCA 37
Avenhouse v Hornsby Shire Council (1988) 44 NSWLR 1
Berry v British Transport Commission [1962] 1 QB 306; [1961] 3 All ER 65
Bradlaugh v Edwards (1861) 11 CBNS 377 ;142 ER 843
Carter v Walker (2010) 32 VR 1; [2010] VSCA 340
Coleman v Buckingham’s Ltd [1963] SR (NSW) 171; 80 WN 593
Croucher v Cachia (2016) 95 NSWLR 117; [2016] NSWCA 132
Diamond v Minter [1941] 1 KB 656
Fontin v Katapodis (1962) 108 CLR 177; [1962] HCA 63
Foxall v Barnett (1853) 23 LJQB 7; 118 ER 1014
Gray v Motor Accident Commission (1998) 196 CLR 1; [1998] HCA 70
Hawkins v Permarig Pty Ltd (2004) 2 Qd R 388; [2004] QCA 76
Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47
Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59
Lee v New South Wales Crimes Commission (2012) 224 A Crim R 94; [2012] NSWCA 262
Loton v Devereux (1832) 3 B & Ad 343; 110 ER 129
Nationwide News Pty Ltd v Naidu; ISS Security Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377
New South Wales v Ibbett (2006) 229 CLR 638; [2006] HCA 57
New South Wales v Ibbett [2005] NSWCA 445
New South Wales v Riley (2003) 57 NSWLR 496; [2003] NSWCA 208
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69
Pritchet v Boevey (1833) 1 C & M 775; 149 ER 612
State of New South Wales v Koumdjiev (2005) 63 NSWLR 353; [2005] NSWCA 247
State of New South Wales v Randall [2017] NSWCA 88
State of New South Wales v Riley (2003) 57 NSWLR 496; [2003] NSWCA 208
TCN Channel Nine Pty Ltd v Anning (2002) 54 NSWLR 333; [2002] NSWCA 82
Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118; [1966] HCA 40
Whitbread v Rail Corporation New South Wales [2011] NSWCA 130
Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71; [1920] HCA 75
XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448; [1985] HCA 12

Texts Cited:

James Edelman (ed) McGregor on Damages (Sweet & Maxwell, 20th ed, 2018)
Carolyn Sappideen and Prue Vines (eds), Fleming on Torts (Thomson Reuters, 10th ed, 2011)
Michael A Jones et al (eds), Clerk & Lindsell on Torts (Sweet & Maxwell, 22nd ed, 2018)
Mayne & McGregor on Damages 12th ed, 1961

Category:

Principal judgment

Parties:

State of New South Wales (Appellant)
Drew Cuthbertson (Respondent)

Representation:

Counsel:
M Windsor SC; A Williams (Appellant)
D Toomey SC; D Morgan (Respondent)

    Solicitors:
McCabe Curwood (Appellant)
Garling & Co Lawyers (Respondent)

File Number(s):

2017/386748

 Decision under appeal 

Court or tribunal:

District Court

Jurisdiction:

Civil

Citation:

Drew Cuthbertson v State of New South Wales; Daniel Fletcher v State of New South Wales [2017] NSWDC 367

Date of Decision:

15 December 2017

Before:

Montgomery DCJ

File Number(s):

2015/108800

Headnote

[This headnote is not to be read as part of the judgment]

The respondent, Mr Drew Cuthbertson, alleged that in the early hours of the morning of 8 September 2013, he was assaulted and unlawfully restrained by a police officer, Senior Constable McArthur, whilst he was standing in the vestibule area of a train as it neared Eastwood Railway Station and then again, whilst he was on the platform at Eastwood Railway Station. Arising out of the incident on the train and on the platform, Mr Cuthbertson was charged with two offences contrary to the Crimes Act 1900 (NSW), s 58, namely, “[a]ssault officer while in the execution of his … duty” and “[r]esist an officer while in the execution of his ... duty”. Mr Cuthbertson was convicted of both offences. The convictions were overturned on appeal to the District Court.

Mr Cuthbertson subsequently brought proceedings against the State of New South Wales (the State) for wrongful arrest, false imprisonment, and assault/trespass to the person. The primary judge found that Mr Cuthbertson had been assaulted and had been wrongfully imprisoned for a period of up to 12 minutes. His Honour awarded Mr Cuthbertson damages in a total sum of $92,856, as follows:

(a)   $12,000 in ordinary damages for assault and trespass;

(b)   $7,000 in damages for wrongful imprisonment

(c)   $15,000 in aggravated and exemplary damages as a lump sum for assault, trespass and wrongful imprisonment

(d)   $45,500, being 50 per cent of the legal costs incurred by Mr Cuthbertson in defending the criminal proceedings; and

(e)   $13,356 by way of interest on damages.

The State sought leave to appeal against two aspects of the award of damages: (i) the award relating to legal costs incurred by Mr Cuthbertson in defending the criminal proceedings; and (ii) the combined award of $15,000 by way of aggravated and exemplary damages.

In relation to (i), the State contended that this Court’s decision in State of New South Wales v Koumdjiev (2005) 63 NSWLR 353; [2005] NSWCA 247 was wrongly decided, to the extent it is authority for the proposition that a plaintiff is entitled to recover by way of damages in subsequent civil proceedings the costs incurred in successfully defending criminal proceedings.

The Court granted leave and allowed the appeal.

In relation to (i)

Per Beazley P (McColl JA agreeing, Basten JA agreeing in separate reasons, Meagher and Payne JJA agreeing)

(i) It cannot be said that legal costs incurred in defending a charge of resisting an officer in the course of duty are the ‘natural and probable consequence’ of the tortious conduct of wrongful arrest. Although harm suffered in resisting arrest, such as physical injury or property damage, is a natural and probable consequence of the wrong, the costs incurred in what ultimately turns out to be a failed prosecution are not: [44]-[45]; [114]; [135]-[136]; [161].

(ii) Damages for the tort of wrongful arrest may be distinguished from the damages that may be claimed for the tort of malicious prosecution, where damages for the costs of defending the malicious prosecution are recognised as being recoverable. The bringing of the prosecution was a different and separate process, and there was no allegation of wrongful or tortious conduct on the part of police in the present case: [46]-[47]; [114]; [137]; [145]; [161].

(iii)   A party cannot avoid the constraints on the circumstances in which costs may be awarded in criminal proceedings, pursuant to the Crimes (Appeal and Review) Act 2001 (NSW), s 70, by claiming those costs in later civil proceedings. The clear legislative intention of s 70 is to limit the circumstances in which costs in favour of a party who successfully appeals a conviction may be ordered and for the appeal to be the forum in which that determination is made: [63]-[67]; [114]; [144]-[145]; [161].

State of New South Wales v Koumdjiev (2005) 63 NSWLR 353; [2005] NSWCA 247, not followed.

Berry v British Transport Commission [1962] 1 QB 306; [1961] 3 All ER 65, in Avenhouse v Hornsby Shire Council (1988) 44 NSWLR 1, Pritchet v Boevey (1833) 1 C & M 775; 149 ER 612, Loton v Devereux (1832) 3 B & Ad 343; 110 ER 129; Anderson v Bowles (1951) 84 CLR 323; [1951] HCA 61, Diamond v Minter [1962] 1 QB 306, considered.

Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69, Nationwide News Pty Ltd v Naidu; ISS Security Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377, TCN Channel Nine v Anning (2002) 54 NSWLR 333; [2002] NSWCA 82, Pritchet v Boevey (1833) 1 C & M 775; 149 ER 612; Foxall v Barnett (1853) 23 LJQB 7; 118 ER 1014; Bradlaugh v Edwards (1861) 142 ER 843; 11 CBNS 377, Coleman v Buckingham’s Ltd [1963] SR (NSW) 171; 80 WN 593, referred to.

In relation to (ii)

Per Beazley P (McColl JA, Basten JA, Meagher and Payne JJA agreeing)

(i) There was no error of law in the primary judge making a combined award for aggravated and exemplary damages: [103]; [115]; [164].

(ii)   There was no relevant error that would warrant interference with the primary judge’s award of aggravated damages: [100]; [102]-[103]; [107]; [110]-[111]; [158]; [168]-[169].

Per Basten JA (McColl JA, Meagher and Payne JJA agreeing in separate reasons)

(i)   An award of exemplary damages required a finding that the conduct of the officer showed a conscious and contumelious disregard for the respondent’s rights. Neither the primary judge’s conclusion, nor his factual findings and characterisation of the officer’s conduct, supported an inference that the relevant standard was satisfied for the award of exemplary damages: [124]; [152]-[156]; [165]-[167].

(ii) The award of exemplary damages should be set aside. As the sum the primary judge awarded for exemplary damages could not have reasonably exceeded $7,500, the lump sum should be reduced by that amount, such that the respondent be awarded aggravated damages in the amount of $7,500: [125]; [158]; [169].

Per Beazley P

(i)   The Court should proceed on the basis that other than the specific challenges raised by the State, it had not challenged that exemplary damages were otherwise appropriately awarded. Reading his reasons as a whole, it was clear that the primary judge had recognised that Mr Cuthbertson had engaged in provocative conduct, that this conduct was such as to warrant a discount in the award of exemplary damages, but that this was not sufficient to completely disentitle him. Any submission that the primary judge had erred in not making or specifying a discount in the award in account of Mr Cuthbertson’s conduct should be rejected: [78]-[79]; [101]-[102].

Fontin v Katapodis (1962) 108 CLR 177; [1962] HCA 63, New South Wales v Ibbett (2006) 229 CLR 638; [2006] HCA 57, Whitbread v Rail Corporation New South Wales [2011] NSWCA 130, considered.

Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118; [1966] HCA 40, XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448; [1985] HCA 12, Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47, Carter v Walker (2010) 32 VR 1; [2010] VSCA 340, Gray v Motor Accident Commission (1998) 196 CLR 1, New South Wales v Riley (2003) 57 NSWLR 496; [2003] NSWCA 208, TCN Channel Nine v Anning (2002) 54 NSWLR 333; [2002] NSWCA 82, New South Wales v Ibbett [2005] NSWCA 445; Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71, Australian Consolidated Press Limited v Uren (1966) 117 CLR 185, referred to.

Judgment

1. BEAZLEY P: The respondent, Drew Cuthbertson, alleged that in the early hours of the morning of 8 September 2013, he was assaulted and unlawfully restrained by a police officer, Senior Constable McArthur, whilst he was standing in the vestibule area of a train as it neared Eastwood Railway Station and then again, whilst he was on the platform at Eastwood Railway Station. At the time, Mr Cuthbertson was on the train with a number of friends, including Daniel Fletcher, travelling back to the Central Coast after a night out in the city. Senior Constable McArthur, together with Senior Constable Walker, were on the train in the course of carrying out duties as Transport Police.

2. Arising out of the incident on the train and on the platform, Mr Cuthbertson was charged with two offences contrary to the Crimes Act 1900 (NSW), s 58, namely, “[a]ssault officer while in the execution of his … duty” and “[r]esist an officer while in the execution of his ... duty”. Mr Cuthbertson was convicted of both offences. The convictions were overturned on appeal to the District Court.

3. Subsequently, Mr Cuthbertson brought proceedings against the State of New South Wales pursuant to the Law Reform (Vicarious Liability) Act 1983 (NSW) for wrongful arrest, false imprisonment and assault/trespass to the person. Mr Cuthbertson claimed damages including aggravated and exemplary damages. He expressly made no claim for personal injuries.

4. Mr Fletcher also brought proceedings against the State for assault/trespass to the person and false imprisonment. Both claims were heard together in the District Court by Montgomery DCJ. Mr Fletcher’s claim was successful only in part. He has separately appealed to this Court against that part of the judgment upon which he did not succeed.

5. The primary judge found, at [314]-[315], that Mr Cuthbertson had been assaulted, and had been wrongfully imprisoned for “a period of up to 12 minutes”: at [320]. His Honour awarded Mr Cuthbertson damages in a total sum of $92,856, as follows:

1. $12,000 in ordinary damages for assault and trespass;

2. $7,000 in damages for wrongful imprisonment;

3. $15,000 in aggravated and exemplary damages as a lump sum for assault, trespass and wrongful imprisonment;

4. $45,500, being 50 per cent of legal costs incurred by Mr Cuthbertson in defending the criminal proceedings; and

5. $13,356 by way of interest on damages.

6. The State seeks leave to appeal against two aspects of his Honour’s award of damages in favour of Mr Cuthbertson: the award relating to legal costs incurred by Mr Cuthbertson in defending the criminal proceedings: item (d) above; and the combined award of $15,000 by way of aggravated and exemplary damages: item (c) above. If leave to appeal is granted and the appeal is successful on one or the other of these grounds, the State seeks a consequential variation of the total award of damages.

7. The principles upon which leave to appeal is granted are well established. In Lee v New South Wales Crimes Commission (2012) 224 A Crim R 94; [2012] NSWCA 262, Bathurst CJ stated, insofar as is relevant to this matter, that “[o]rdinarily it is only appropriate to grant leave concerning matters that involve issues of principle [or] questions of general public importance”.

8. An important aspect of the State’s case on appeal, if leave be granted, is the question whether a plaintiff is entitled to recover by way of damages the costs incurred in successfully defending criminal proceedings. In this regard, the correctness of this Court’s decision in State of New South Wales v Koumdjiev (2005) 63 NSWLR 353; [2005] NSWCA 247, to the extent that it is authority for that proposition, was challenged by the State.

9. The question whether a plaintiff is entitled to costs incurred in successfully defending criminal proceedings for resisting a police officer in the execution of duty raises a question both of principle and of public importance which is not limited to the present case. Accordingly, leave to appeal on that question should be granted. Mr Cuthbertson opposes the grant of leave in respect of the State’s challenge to the award for aggravated and exemplary damages. This is considered below.

10. The State has accepted that it will bear the costs of the appeal, including the leave application, regardless of the outcome of the appeal.

First issue on the appeal: whether damages could or should have been awarded for costs incurred in defending criminal proceedings which were dismissed

11. The first issue on the appeal is whether a plaintiff who has incurred costs in criminal proceedings in defending a charge of resist an officer in the course of duty is entitled to an award by way of damages in civil proceedings for the costs so incurred. To the extent that the decision of this Court in Koumdjiev is authority for that proposition, the State contended it was wrongly decided.

12. It is apparent from the primary judge’s reasons, at [375]ff, that he accepted that he was bound by Koumdjiev, as the State had conceded, and thus awarded Mr Cuthbertson damages for that portion of the costs incurred in defending the charge of resisting arrest. His Honour rejected a submission that Koumdjiev was distinguishable and refused leave to the State to raise any argument based on the Crimes (Appeal and Review) Act 2001 (NSW), s 70. In this regard, his Honour observed, at [377]:

“The grounds for achieving an award of costs pursuant to section 70(1) require special circumstances including bad faith in the prosecution of the offence, which circumstances go beyond the natural and probable consequences of the realm of common law damages sought by [Mr Cuthbertson]. As Hodgson JA in Koumdjiev said at [67] ‘costs are rarely awarded in criminal cases.’ ”

13. As already indicated, Mr Cuthbertson was charged with two offences under the Crimes Act, s 58. A Court Attendance Notice (CAN) was created on 11 September 2013, with Senior Constable McArthur identified as the prosecutor on the CAN in respect of each offence. The CAN was “accepted” by Sergeant Campbell. The CAN was served on Mr Cuthbertson on 10 October 2013. The prosecution was conducted in the Burwood Local Court.

14. Mr Cuthbertson was convicted of both offences. However, the charges were dismissed on appeal to the District Court. Notwithstanding that Mr Cuthbertson’s appeal was successful he did not seek an order from the District Court for his costs. However, in the civil proceedings, Mr Cuthbertson claimed by way of damages the legal costs he incurred in defending the resist arrest charge. He did not claim the costs incurred in respect of defending the assault charge. In awarding damages for the costs incurred, the primary judge divided the total amount of the legal costs Mr Cuthbertson incurred equally between the two charges and awarded damages in a sum being one half of the total costs. The State does not take issue with that approach, or with the reasonableness of the costs claimed.

15. The reason for costs being claimed in respect of the resist arrest charge and not the assault charge was that Mr Cuthbertson accepted that the costs of the criminal proceedings were only recoverable if they were the natural and probable consequence of the intentional tort. As the primary judge explained at [361], the conduct alleged as constituting the resist arrest offence occurred after and in consequence of Mr Cuthbertson having been wrongfully arrested. By contrast, the assault occurred before the arrest, so that the legal costs incurred in defending that charge could not be said to be the natural and probable consequence of the assault.

Submissions

16. The State contends that Mr Cuthbertson was not entitled to that part of the award of damages comprising the costs incurred in defending the resist arrest charge. The State did not contend that that omission constituted a failure to mitigate damages. Rather, its argument before the primary judge and before this Court was that the costs incurred were not the intended or natural and probable consequence of any tortious act by Senior Constable McArthur.

16. The State also submitted this Court’s decision in Koumdjiev was wrong. In this regard, in State of New South Wales v Randall [2017] NSWCA 88, Basten JA considered that there was a difficulty in identifying a principled basis for the award of damages made in Koumdjiev. The State submitted, alternatively, that even if Koumdjiev was correctly decided, Mr Cuthbertson’s failure to make an application for costs in the criminal proceedings under the Crimes (Appeal and Review) Act, s 70, should be fatal to his claim.

17. Mr Cuthbertson accepted that his legal costs for defending the resist arrest charge were only recoverable as damages if they were the intended consequence or the natural and probable consequence of the tortious act. He did not contend that the evidence directly established an intention on Senior Constable McArthur’s part to cause the loss claimed, being the costs incurred in defending the charge of resist arrest. However, he submitted that where a police officer commits the tort of false imprisonment by way of an unlawful arrest the loss occasioned by defending a subsequent charge of resisting that unlawful arrest is a natural and probable consequence of the tortious false imprisonment.

18. Mr Cuthbertson submitted that it should be accepted that his Honour applied the correct test for causation and found it to have been satisfied. Mr Cuthbertson submitted that the primary judge’s acceptance that the natural and probable consequence test was satisfied was unsurprising, in the circumstances of the case, as Senior Constable McArthur had dishonestly set up a false premise for the arrest and then when Mr Cuthbertson resisted, he was charged with resist arrest. Mr Cuthbertson argued that in those circumstances, it would have been more surprising if the respondent had not been put to the cost of defending the charge.

19. Mr Cuthbertson also contended that the fact that others may have played a role in initiating and maintaining the charges did not detract from the causative effect of the tort on the ultimate loss. This was a reference to the fact that the CAN was issued between the false arrest and the prosecution. The CAN had been accepted by a senior police officer.

20. Mr Cuthbertson also submitted that, even if the decision in Koumdjiev was wrong, that was not to the point, if the correct test of causation had been applied by the primary judge as he contended it had been. He also submitted that the fact that costs may have been recoverable pursuant to the Crimes (Appeal and Review) Act, s 70, on his successful criminal appeal in the District Court was not a bar to him recovering the costs for wrongful arrest in the civil proceedings. He submitted that the better view was that where a plaintiff failed to seek recovery of costs in the criminal proceedings, whether he was entitled to an award in the civil proceedings should be looked at through the prism of mitigation.

21. Before considering the reasons in Koumdjiev, it is appropriate to consider at the outset the statutory provisions that govern the award of costs in criminal proceedings. The State submitted that in circumstances where the legislature had determined not only that costs were available in criminal matters but had specified the bases upon which costs could be awarded, a court would be dissuaded from accepting that this Court’s decision in Koumdjiev correctly reflected an entitlement to claim damages in civil proceedings founded upon the dismissal of criminal charges.

Legislation governing costs in criminal matters

23. Appeals to the District Court from a conviction in the Local Court are governed by the Crimes (Appeal and Review) Act, Pt 3. Section 20 provides that the District Court may determine an appeal against conviction by setting aside the conviction or by dismissing the appeal. Section 28 provides, relevantly, that “[s]ubject to section 70, the District Court may make such order as to the costs to be paid by either party (including the Crown) as it thinks just”.

24. Section 70(1) provides that costs may not be awarded against a prosecutor unless the appeal court, which, relevantly, is the District Court, is satisfied:

“(a)   that the investigation into the alleged offence was conducted in an unreasonable or improper manner, or

(b)   that the proceedings in the Local Court were initiated without reasonable cause or in bad faith, or were conducted by the prosecutor in an improper manner, or

(c)   that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter:

(i)   that the prosecutor was or ought reasonably to have been aware of, and

(ii)   that suggested that the appellant might not be guilty or that, for any other reason, the proceedings should not have been brought, or

(d)   that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award costs in favour of the appellant.”

25. Costs may also be awarded in the Local Court pursuant to the Criminal Procedure Act 1986 (NSW), Pt 2, Div 3, ss 212 and 213. Section 212 provides that costs may be awarded in criminal proceedings only in accordance with the Act. Section 213 provides that on the dismissal or withdrawal of summary proceedings a court may order the prosecutor to pay costs. A similar provision to the Crimes (Appeal and Review) Act, s 70 is found in the Criminal Procedure Act, s 214, in relation to costs in criminal proceedings in the Local Court.

26. The Criminal Procedure Act does not affect the payment of costs under the Costs in Criminal Cases Act 1967 (NSW). The Costs in Criminal Cases Act contains procedures by which an accused person may obtain payment of costs from Government funds after acquittal or discharge, or the quashing of a conviction where, if the prosecution had been in possession of evidence of all of the relevant facts before proceedings for an offence were instituted, it would not have been reasonable to institute the proceedings: see s 3. Although it was not suggested that this Act had any application in this case, it is relevant to the extent that it forms part of the legislative scheme whereby a court may order costs in criminal proceedings.

The decision in Koumdjiev

27. Koumdjiev involved a claim for damages by Mr Koumdjiev who had been charged with resisting police and assault. The charges arose out of an incident at the entry of the apartment block where Mr Koumdjiev lived, when he resisted requests by police officers to open the foyer door so that they could take a neighbour to her apartment. The neighbour, who was intoxicated, had called out to Mr Koumdjiev not to admit the police. Mr Koumdjiev was convicted of resisting police, but the conviction was quashed on appeal to the District Court. Mr Koumdjiev brought proceedings against the State for assault, battery, trespass to the person, false arrest and false imprisonment.

28. The police entry onto the premises and the arrest of Mr Koumdjiev were found by the primary judge to be unlawful. These findings were upheld on appeal: Koumdjiev at [55]–[56]. The primary judge awarded Mr Koumdjiev damages, inter alia, for the costs he incurred in successfully defending the criminal proceedings brought against him. This award was challenged on the appeal on the basis that costs could not be recovered where they had been previously declined by a court having power to award costs: see Hawkins v Permarig Pty Ltd (2004) 2 Qd R 388; [2004] QCA 76 and Loton v Devereux (1832) 3 B & Ad 343; 110 ER 129; and because damages could be recovered for wrongful arrest only up to the time of remand or bail: see Diamond v Minter [1941] 1 KB 656.

29. Hodgson JA (myself and Hislop J agreeing) expressed the opinion, at [67], that:

“… there is no general rule to the effect that a plaintiff cannot recover in civil proceedings the amount of costs incurred in defending criminal proceedings. The issue before a court that decides criminal proceedings is only whether the case against the accused is proved beyond reasonable doubt; and such a court is rarely in a position, in deciding whether to award costs, to determine all the facts relevant to the merits or otherwise of the bringing of the proceedings. Costs are rarely awarded in criminal cases. In civil cases where malicious prosecution is proved, damages routinely include the costs of defending the proceedings.”

30. Hodgson JA continued, at [68]:

“I accept that, where a person is wrongfully arrested on a charge that arises separately from the circumstances of the arrest, there are generally no damages awarded in relation to the progress of the charges after the time of remand or bail, unless malicious prosecution is proved. However, I do not accept that this applies where the charges themselves arise from the circumstances of the wrongful arrest and associated assaults by the police. But for the police assault and wrongful arrest of the plaintiff, there would not have been any charges against him. In my opinion, the charges against the plaintiff were directly caused by the police assaults and wrongful arrest, and that accordingly the costs incurred in defending them can be included in the damages.”

31. As I have indicated, this reasoning was doubted by Basten JA in Randall. Mr Randall had been awarded damages, including for the costs of legal representation with respect to a criminal prosecution following upon his arrest for a number of offences, including resist a police officer in the execution of duty and assault a police officer. He pleaded guilty to the first charge and all other charges were withdrawn and dismissed.

32. Mr Randall subsequently brought proceedings against the State of New South Wales, claiming damages for assault/trespass to the person, wrongful arrest and false imprisonment. The case essentially turned upon the legality of the arrest. The primary judge awarded Mr Randall a portion of the costs of his legal representation relating to the criminal proceedings by way of damages.

33. Randall proceeded in this Court by way of a concurrent hearing of the summons seeking leave to appeal, and if leave be granted, the appeal. By majority (Sackville AJA and McDougall J), leave was refused. Nonetheless, Sackville AJA expressed the view, at [67], that:

“… there seems to be no discernible basis for his Honour to have included a component of $6,000 in the damages award for ‘the costs of defending the matter to which [Mr Randall] pleaded guilty’.”

34. McDougall J considered, at [135], that there could be no justification for allowing the costs of a plea of guilty. His Honour observed that it was apparent from the reasons of Hodgson JA in Koumdjiev that:

“… it will only be where ‘the charges against the plaintiff were directly caused by the Police assaults and wrongful arrest [that]… the costs incurring in defending them can be included in the damages’.”

35. Basten JA, at [43], considered that the primary judge’s award of damages for the legal costs incurred in relation to the criminal proceedings “was determined erroneously”. His Honour stated, at [46], that the reasoning in Koumdjiev, was “not entirely transparent” and in any event could not be applied in Randall. His Honour explained:

“It appears to commence with a distinction between a charge that arises separately from the circumstances of the wrongful arrest and a charge which arises from the circumstances of the wrongful arrest. It may be that the distinction is being drawn between the suspected offence which gives rise to the arrest (such as possession of drugs) and charges which are intimately connected with the process (such as resisting arrest). In the present case, the unrelated charges, namely the charges which led to the arrest, were both hindering police and assault. Applying that distinction would therefore require a division of the costs between the costs incurred with respect to those charges, to one of which the plaintiff pleaded guilty and the other of which was dismissed, from the costs relating to resisting arrest. That is not an exercise which is possible on the evidence and was not an exercise undertaken by the trial judge.”

36. His Honour, at [47], also considered that the factual circumstances in Koumdjiev and Randall were different. However, his Honour continued, at [48]:

“A difficulty in identifying the principled basis of Koumdjiev lies in the absence of any other authority to justify the principle in respect of damages, and the absence of any reasoned authority applying that principle. In terms of causation, it is at least arguable that the costs of defending criminal charges arose from the laying of the charges and not from the antecedent conduct of the parties. A tortious claim based on the consequence of laying criminal charges depends on the proceedings having been commenced without reasonable and probable cause and for a purpose other than the due enforcement of the law. It would introduce a degree of incoherence into the law of torts if damages could be awarded on a claim of unlawful arrest for criminal defence costs on the basis outlined in Koumdjiev.”

37. Basten JA, at [49], pointed to another difficulty. His Honour considered that if damages could be awarded in respect of such costs then:

“… the causal connection between the unlawful arrest and the costs of defending the criminal proceedings should depend upon those costs having been incurred in an attempt to challenge the validity of the arrest.”

That had not been established on the facts in Randall.

Consideration

38. The State’s challenge to the award of damages in respect of the costs incurred in the criminal proceeding in respect of the resist arrest charge raises two questions for consideration. The first is whether such costs are not recoverable because they were not caused by Senior Constable McArthur’s wrongful conduct. The second is whether such costs may be awarded in circumstances where there is a detailed statutory regime for the recovery of costs in the criminal proceedings including on appeal.

Were the costs incurred a natural and probable consequence of the tort?

39. Mr Cuthbertson’s claim to recover the costs of defending the criminal charge was brought in respect of the tort of false arrest. The tort of false arrest is described in Carolyn Sappideen and Prue Vines (eds), Fleming on Torts (Thomson Reuters, 10th ed, 2011) at [2.80], as “intentionally and without lawful justification subjecting another to a total restraint of movement by either causing that person’s confinement or preventing that person from leaving the place where he or she is”. See also Croucher v Cachia (2016) 95 NSWLR 117; [2016] NSWCA 132 at [20]; Michael A Jones et al (eds), Clerk & Lindsell on Torts (Sweet & Maxwell, 22nd ed, 2018) at [15.01]. The tort is actionable without proof of damage.

40. Where a party claims damages for harm suffered due to an intentional tort, the loss must be the intended or the natural and probable consequence of the wrong. In Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69, Gummow J stated, at [73], that a limitation on recovery based on reasonable foreseeability had no place in intentional torts. His Honour continued:

“[77]   There are more fundamental considerations which tell against the imposition of a limitation on damage based upon the notion of reasonable foreseeability where intention is an element of the tort. In Smith New Court Securities Ltd v Scrimgeour Vickers, Lord Mustill spoke of ‘the irrelevance of foreseeability’ in a case of fraud. In the same case, Lord Steyn referred to the policy of the law ‘of imposing more extensive liability on intentional wrongdoers than on merely careless defendants’.

[78]   The tort of injurious falsehood is, in the words of Bowen LJ, ‘an action on the case for damage wilfully and intentionally done’. It is difficult to see why a person who ‘wilfully and intentionally’ causes damage to the plaintiff by maliciously publishing a false statement should be able to escape liability on the basis that a ‘reasonable person’ would not have foreseen the damage. Such a person is manifestly not a reasonable person …

[79]   … [T]here is no justification for importing notions found in the law of negligence and nuisance respecting foreseeability into the law of injurious falsehood. It may be, as was said in a New Zealand case, that ‘consequences that are direct and natural are generally foreseeable’. However, for the reasons set out above, the notion of reasonable foreseeability is not appropriate in cases of injurious falsehood.” (citations omitted)

41. Gleeson CJ agreed with Gummow J, observing, at [13], that:

“As a matter of principle, this being an intentional tort, if relevant harm was intended, or was the natural and probable consequence of the respondent's act, then it is difficult to see why foreseeability should operate as an independent factor limiting the respondent's liability for damage.”

42. In Nationwide News Pty Ltd v Naidu; ISS Security Pty Ltd v Naidu (2007) 71 NSWLR 471; [2007] NSWCA 377, Spigelman CJ stated, at [81]:

“The High Court has authoritatively established the test for recovery of consequential loss in the case of an intentional tort in terms of asking whether the particular head of damage is a natural and probable result of conduct. (See Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; (2001) 208 CLR 388 esp at [13], [73], [114]. See also TCN Channel Nine v Anning [2002] NSWCA 82; (2002) 54 NSWLR 333 at [100].)”

43. In TCN Channel Nine v Anning, referred to in the passage just cited, Spigelman CJ (Mason P and Grove J agreeing) had stated, at [100]:

“The High Court has recently explained recovery for consequential loss in the case of intentional torts by invoking a general test. Damages can be recovered for harm that is intended or that is the natural and probable consequence of the tortious act. (See Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; 76 ALJR 163 esp at [13], [14], [73], [75]-[76], [114].) Damage that is the ‘natural and probable consequence’ of conduct is within the ‘presumed intent’ of the actor. (Palmer Bruyn & Parker at [73] and [80] per Gummow J.) Although this case involved injurious falsehood, the High Court’s reasoning is of more general application to intentional torts. The issue in the present case is best approached on this more general test. Palmer Bruyn & Parker establishes that reasonable foreseeability is not an element of the test for recoverable damages, a proposition which had been left open in earlier cases …”

44. It cannot be said that legal costs incurred in defending a charge of resisting an officer in the course of duty are the “natural and probable consequence” of the tortious conduct of wrongful arrest. Although harm suffered in resisting arrest, such as physical injury or property damage, is a natural and probable consequence of the wrong, the resistance being directly related or connected to wrongful arrest, the costs incurred in what ultimately turns out to be a failed prosecution are not.

45. The bringing and maintenance of a prosecution, albeit a possible outcome of an arrest, is not a natural and probable consequence of the wrongful arrest. The bringing of the prosecution which leads to a party incurring costs involves a separate decision making process, often by a different person to the wrongdoer. In this case, although Senior Constable McArthur was the named prosecutor on the CAN, the CAN was accepted by a senior officer.

46. But irrespective of Senior Constable McArthur’s identification as the prosecutor and regardless of whether there was an independent decision making process involved in its acceptance by Sergeant Campbell, the issuing of the CAN was a different and separate process in respect of which there was no allegation of wrongful or tortious conduct on the part of the police.

47. In this regard, proceedings for damages for the tort of wrongful arrest are to be distinguished from the damages that may be claimed for the tort of malicious prosecution where damages for the costs of defending the malicious prosecution are recognised as being recoverable: see Berry v British Transport Commission [1962] 1 QB 306; [1961] 3 All ER 65. In that case, the only damage claimed in the plaintiff’s suit for malicious prosecution was the difference between the costs awarded to the plaintiff in the criminal proceedings and what she had in fact incurred. The court, as a preliminary issue, dealt with the question whether the statement of claim disclosed any actionable damage. It was held the statement of claim was not demurrable.

44. In reaching that conclusion, Devlin LJ, at 322-323, explained the rationale for the award of the costs of a malicious prosecution in a later civil suit for damages. His Lordship stated that “those costs form a legitimate item of damage in a separate cause of action flowing from a different and additional wrong”, that different and additional wrong being the malicious prosecution, in which the defendant “ex hypothesi is abusing the legal process for his own malicious ends”. In a case of wrongful arrest, no additional wrong is committed. The costs are incurred in a prosecution which failed. However, there is no additional wrong in the bringing and maintenance of the prosecution as occurs in the case of a malicious prosecution. This of course is another way of saying that in the former, the necessary causal connection has been satisfied, whereas it has not been satisfied where the intentional tort sued upon is wrongful arrest.

45. Berry v British Transport Commission was considered by the New South Wales Court of Appeal in Avenhouse v Hornsby Shire Council (1988) 44 NSWLR 1, where the costs of proceedings incurred in Land and Environment Court proceedings were claimed in a subsequent negligence claim against the Council. The Court referred to the observations of Devlin LJ, which I have referred to above, and added, at 35:

“The case might be seen to be different if the now plaintiff claimed that a separate tort was involved in instigating, assisting or causing the previous proceedings and sued for damages for that tort. Such torts could be malicious prosecution, false imprisonment or conspiracy.” (emphasis added)

However, this observation was obiter and there was no consideration of the principle discussed above.

50. Another reason to impugn the award of damages for legal costs made in the present case is that the award of costs for false arrest is not supported by authority, unless the costs are associated with proceedings whereby the person obtains release from the wrongful detention such as by writ of habeas corpus. However, the right to costs in that circumstance requires proof that proceedings were necessary to procure the person’s release, that costs had been refused by the court in that action, and that the costs incurred were reasonable: see Pritchet v Boevey (1833) 1 C & M 775; 149 ER 612; Foxall v Barnett (1853) 23 LJQB 7; 118 ER 1014; Loton v Devereux; Bradlaugh v Edwards (1861) 11 CBNS 377; 142 ER 843; discussed in James Edelman, James Varuhas, Simon Colton (eds) McGregor on Damages (Sweet & Maxwell, 20th ed, 2018).

51. In Pritchet v Boevey, which is considered to be the authority upon which this principle rests, the plaintiff was held to be entitled by way of damages in an action for false arrest to the costs of his application to obtain release from his unlawful detention. This rule was explained in Bradlaugh v Edwards, where Erle CJ said, at 384:

“Where a party has been illegally imprisoned, and has been put to expense in procuring his discharge, he may very well urge that fact before the jury as an aggravation: but he has no right to demand to be reimbursed ex debito justitiae. It is in the discretion of the jury to give him such damages as they consider a sufficient compensation for the wrong the party has sustained, irrespective of any expense he may, perhaps, needlessly have incurred in his defence.” (original emphasis)

52. The author of McGregor on Damages has explained the differing outcomes in these cases as depending upon whether all of the stated criteria had been satisfied. Likewise, in Coleman v Buckingham’s Ltd [1963] SR (NSW) 171; 80 WN 593, Herron CJ and Walsh J observed, at 597, that in Pritchet v Boevey:

“… the plaintiff could recover the costs of an application to the court to be discharged from arrest, on the ground that there had been, in that case, no prior adjudication as to costs.”

53. Although the English authorities to which I have referred sometimes require explanation and a careful consideration of their factual and legislative context, the principles for which they have been accepted over a long period of time are tolerably clear.

54. As a party is only entitled to damages for tortious conduct if the relevant test of causation is satisfied, and as I am satisfied that the test was not so satisfied, this aspect of the State’s appeal should be upheld and this Court should accept that Koumdjiev was wrongly decided.

55. That is sufficient to dispose of this ground of appeal. However, as I consider that such damages are not available given the statutory regime for the recovery of costs in criminal matters, and as that question can be considered as a matter of principle, it appropriate to explain why I consider that to be the case.

Whether recovery of costs incurred in criminal proceedings is precluded by the operation of the Crimes (Appeal and Review) Act

56. As I understand it, Mr Cuthbertson’s argument is that he was entitled to an award of damages for the costs incurred in defending the criminal proceedings as of right, subject to any question of mitigation. On that argument, a court would not be required in civil proceedings to determine whether costs would have been awarded in the criminal proceedings having regard to the provisions of the Crimes (Appeal and Review) Act, s 70(1).

57. Although that is my understanding of Mr Cuthbertson’s argument on the appeal, it should be noted that at first instance he had objected to the State raising any argument based on s 70 as it had not been pleaded. Mr Cuthbertson submitted that implicit in the State’s proposed argument based on s 70 was that any application for costs in the criminal proceeding was likely to be successful. He said that the court was not in a position to determine whether that was so. It will be recalled that the primary judge refused to permit the State to rely upon s 70 on the basis that it should have been pleaded as part of the defence, so that Mr Cuthbertson could have marshalled any evidence necessary to meet the factual requirements of the section.

58. Notwithstanding that his Honour acceded to Mr Cuthbertson’s objection, I consider s 70 to be integral to the questions raised by the first issue on the appeal. I propose to consider its provisions and its implications on the question of principle, namely, whether costs incurred in successfully defending criminal proceedings may be awarded by way of damages in subsequent civil proceedings.

59. In Anderson v Bowles (1951) 84 CLR 323; [1951] HCA 61, the High Court was concerned with the question whether costs incurred in seeking possession of premises were claimable as part of the damages to be awarded in an action to recover mesne profits. Pursuant to the relevant statute, there was no power to order costs in the possession proceedings. In dealing with the statutory provision which precluded the recovery of costs in possession proceedings, the plurality stated, at 323:

“This is a legislative declaration that the parties to proceedings for the recovery of possession or proceedings arising thereout shall not be liable to one another for the costs of those proceedings. In the face of this legislative declaration can costs be properly included in the damages or mesne profits? It is a general rule that where it is sought to include costs incurred in other proceedings in the damages arising upon a cause of action, costs shall not be included, if as a matter of judicial determination or by a positive rule of law they are treated as costs which should be borne by the party suing. Accordingly it is not possible to recover as part of such damages the difference between party and party costs awarded to the plaintiff in the original litigation and the costs as between solicitor and client which he has incurred: Barnett v. Eccles Corporation (1900) 2 QB 423, at p 428 . Further, if costs are expressly withheld by the court in the original proceeding none can be recovered in the action for damages brought by the plaintiff from whom they were so withheld: Loton v. Devereux [1832] EngR 436; (1832) 3 B & Ad 343 (110 ER 129) , where Lord Tenterden C.J. said: ‘In such a case the Court have jurisdiction to say definitely whether there shall or shall not be costs’ … See, further, Pritchet v. Boevey (1833) 1 C & M 775 (149 ER 612).”

60. It should be noted that Pritchet v Boevey and Loton v Devereux, referred to in this passage, form part of the line of authority to which reference was made above, namely, that costs incurred in criminal proceedings for resist arrest are not recoverable in a civil action for false arrest, unless the court is satisfied that they were associated with obtaining release, were refused by the court in that action and were reasonable.

61. Importantly, in Anderson v Bowles, their Honours stated that where the legislature had determined that costs shall not be recoverable in a particular type of case:

“… it would be contrary to the principles which these cases exemplify if they were included in the damages and thus were made recoverable by a side wind. The case is not like Nowell v. Roake [1827] EngR 738; (1827) 7 B & C 404 (108 ER 774) depending upon a rule of the common law which simply ignored costs of legal proceedings of the character in question. It is one where the legislature, having considered whether in such proceedings costs should or should not be awarded, has expressed its conclusion in a definite provision. This should stand on the same footing as a judicial pronouncement upon the same question and as the rule that the difference between party and party costs judicially awarded and costs as between solicitor and client are not recoverable.”

62. McTiernan J, in a separate judgment, was of the same view.

63. In my opinion, the rationale for refusing costs in later civil proceedings in Anderson v Bowles is equally applicable to this case. This is so, notwithstanding that the earlier proceedings in the present case were criminal proceedings and, unlike in Anderson v Bowles where there was no power to award costs in the underlying possession proceedings, the District Court has power to award costs in the limited circumstances prescribed in the Crimes (Appeal and Review) Act, s 70.

64. As the plurality in Anderson v Bowles pointed out, where the legislature has specifically turned its attention to the circumstances in which costs may be awarded and determined that no costs were to be awarded, it would be contrary to principle for those costs to be recovered “[as] a sidewind” by way of damages in later and different proceedings.

65. That would be the case here if a party could pursue costs in civil proceedings that may or may not have been awarded, in whole or in part, in the criminal proceedings. The circumstances in which costs may be awarded in criminal proceedings is significantly circumscribed. In summary, those circumstances are directed to impropriety or unreasonableness in investigating the charges, or in initiating or conducting the prosecution in the Local Court, including on the basis of bad faith. Those constraints evince a clear legislative purpose that costs may only be awarded in the circumstances for which the legislature has provided.

66. In my opinion, a party cannot avoid those constraints by claiming damages for costs incurred in conducting a criminal appeal by claiming those costs in later civil proceedings. The clear legislative intention of s 70 is to limit the circumstances in which costs in favour of a party who successfully appeals a conviction may be ordered and for the appeal to be the forum in which that determination is made.

67. Thus, notwithstanding my agreement with Hodgson JA in Koumdjiev, I am of the opinion that the legislative scheme for the award of costs in criminal proceedings, which was not discussed in Koumdjiev, is another reason why that decision should be considered to be wrongly decided.

68. I would allow ground 1 of the appeal.

Second issue on the appeal: error in the award of aggravated and exemplary damages

69. The second issue raised on the appeal was whether his Honour erred in awarding $15,000 for aggravated and exemplary damages. The question in issue was whether aggravated and/or exemplary damages should not be awarded, or at least should be reduced, on account of Mr Cuthbertson’s provocative behaviour.

70. The primary judge, at [314], described the force involved in the restraint of and assault on Mr Cuthbertson on the train as involving him being “man-handled in the vestibule”. His Honour observed that there was “no violence in the form of heavy pushing, punching or infliction of pain”. Rather, the violence was “in reality, the strong restraint against Mr Cuthbertson’s own force of pulling away”. Senior Constable McArthur then pushed Mr Cuthbertson from the carriage.

71. His Honour found, at [314], that Mr Cuthbertson’s behaviour had been “disrespectful rising to a degree of provocation” and, as Senior Constable McArthur had agreed in an exchange with Mr Cuthbertson’s Senior Counsel, a characterisation ultimately accepted by his Honour, at [144], Mr Cuthbertson was acting like a “smart arse”. His Honour considered, at [314], that although Mr Cuthbertson’s conduct did not disentitle him to compensation for ordinary damages, it was “a discounting factor for consideration of aggravated and exemplary damages of the assault in the vestibule”.

72. His Honour, at [319], found that Senior Constable McArthur’s conduct “involved a manner of wrongdoing deserving of compensation … in the form of aggravated damages”. This was so because at no point did Mr Cuthbertson direct physical aggression towards Senior Constable McArthur and he had provided the police officer with his personal identification details at the earliest opportunity.

73. His Honour, at [319], also found that “after allowing for the ‘smart arse’ behaviour of Mr Cuthbertson prior to the assault inflicted upon him by [Senior Constable] McArthur in the carriage vestibule”, Senior Constable McArthur’s conduct was “deserving of the disapprobation of the Court in the form of exemplary damages”. This was so:

“… particularly having regard for the opportunity of the police officers to gather their thoughts when within the vestibule of the train before stepping out onto the platform in order to proceed with the second arrest …”

74. Before turning to consider this ground of appeal, it is appropriate to make a number of preliminary observations. First, although it was not expressly stated to be the case, it appeared clearly enough that Mr Cuthbertson’s claim was determined by the primary judge on the basis that it was governed by the common law and not by the Civil Liability Act 2002 (NSW): see s 3B(1).

75. Although a question was raised on the appeal as to whether the Civil Liability Act applied, no point had been taken at trial nor on the appeal that the Act applied. The only reference that his Honour made to the Civil Liability Act was at [382], in relation to the award of interest, where he stated that “[h]ad damages awarded been assessed pursuant to the provisions of [the Civil Liability Act, s 18, the s 18], limits on interest would apply”. However, I do not consider that his Honour was meaning to say, or said, that the matter was governed alternatively by the Act. In my opinion, the Court should proceed on the basis that that question is not in issue on the appeal.

76. An important consequence of a claim falling outside the operation of the Civil Liability Act is that the prohibition on the award of aggravated and exemplary damages in s 21 of the Act has no application to a claim governed by the common law.

77. The second matter to which reference should be made at the outset is that it was unclear at times whether the State’s challenge to the combined award of $15,000 was confined to exemplary damages, or also extended to aggravated damages. As the matter was finally clarified, the State contended that both aggravated and exemplary damages should be refused or reduced because of Mr Cuthbertson’s provocative conduct.

78. The third preliminary matter to which reference should be made is that the primary judge did not make an express finding that Senior Constable McArthur had acted in contumelious disregard of Mr Cuthbertson’s rights. As is explained below, the High Court has adopted that terminology as best characterising the conduct that warrants an award of exemplary damages. His Honour did not make a finding in those terms, although he did consider that the conduct called for disapprobation by the court.

79. Again, this was not a point raised by the State on the appeal and in that circumstance, I consider that the Court should proceed on the basis that other than the specific challenges that have been made in respect of the award of exemplary damages, the State has not challenged that exemplary damages were otherwise appropriately awarded.

Submissions

80. The State submitted that Mr Cuthbertson’s provocative behaviour as found by the primary judge disentitled him to aggravated and/or exemplary damages or at least that such damages ought to have been reduced because of such behaviour: see especially Fontin v Katapodis (1962) 108 CLR 177; [1962] HCA 63; Whitbread v Rail Corporation New South Wales [2011] NSWCA 130.

81. The State further complained that the primary judge did not indicate what, if any, discount was made to reflect Mr Cuthbertson’s disentitling conduct, nor did he make any finding that Senior Constable McArthur had a malicious intent.

82. The State also submitted in its written submissions that his Honour ought not to have awarded a combined sum for aggravated and exemplary damages without drawing a distinction between the two and without identifying the basis upon which the single award was made. As that argument was advanced in oral submissions, the State did not “take the point that there should have been a division of what was to be allowed for aggravated and/or exemplary damages”. Rather, its point was that his Honour should have identified the discount given for provocation.

83. Mr Cuthbertson submitted that there was no error in his Honour’s award of aggravated and exemplary damages, particularly given his finding, at [153], that Mr Cuthbertson “was lawfully reacting to the unlawful restraint” applied by Senior Constable McArthur, who “instigated and pursued the struggle” when Mr Cuthbertson was “in retreat”.

84. Mr Cuthbertson further submitted that not only had Senior Constable McArthur manhandled him and unjustifiably pointed an OC canister at his face, but Senior Constable McArthur had persisted in the detention, notwithstanding that Mr Cuthbertson was protesting his innocence which Senior Constable McArthur “knew to be truthful”. Mr Cuthbertson also submitted that as his Honour had rejected Senior Constable McArthur’s evidence that Mr Cuthbertson “backhanded him to the chest” and punched him, this amounted to a finding that he had lied.

85. It is convenient at this point to put his Honour’s finding in context. His Honour, at [111], found that the CCTV evidence was to the contrary of Senior Constable McArthur’s assertion that Mr Cuthbertson “backhanded him to the chest”. The CCTV evidence of what was occurring when Mr Cuthbertson was waving his arms was not clear, but his Honour accepted, at [112], Mr Cuthbertson’s denial that he had closed his fist and punched the Senior Constable McArthur.

86. Mr Cuthbertson also submitted that an award of a single amount for aggravated and exemplary damages was appropriate in the circumstances.

Aggravated and exemplary damages: general principles

87. The distinction between aggravated and exemplary damages is well established. In Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118; [1966] HCA 40, Taylor J, at 130, explained that aggravated damages are compensatory in nature resulting from the “circumstances and manner of the defendant’s wrongdoing”. Aggravated damages may be awarded to reflect the extent to which the wrongful conduct increased the hurt to the plaintiff. The injury compensated by an award of aggravated damages may be “intangible”: New South Wales v Ibbett (2006) 229 CLR 638; [2006] HCA 57 at [31].

87. Exemplary damages are awarded to “punish and deter” the wrong-doer. They are not compensatory. It is usually said that exemplary damages may be awarded where a defendant has acted in “conscious and contumelious disregard of the plaintiff’s rights”: see Uren v John Fairfax & Sons at 154 per Windeyer J; XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448; [1985] HCA 12 at 471. The damages so awarded mark the court’s “disapprobation of the conduct”: New South Wales v Ibbett at [35].

88. It is accepted that exemplary damages may be refused or reduced where a plaintiff has provoked any excessive conduct on the part of a defendant. The same appears to apply in respect of aggravated damages as I explain below.

89. In Fontin v Katapodis, McTiernan J observed, at 184, that he considered it was “correct in principle to mitigate or reduce damages of the nature of exemplary damages if the plaintiff has provoked the assault and battery complained of”, but that “to mitigate or reduce actual or compensatory damages is to deprive the plaintiff pro tanto of a legal right”. McTiernan J continued that in the case of assault and battery, which was the tortious conduct with which the Court was concerned in that case, he was “inclined to the view that there ought to be no reduction of actual or compensatory damages in the case of assault and battery”. However, his Honour had earlier, at 183, distinguished compensatory damages from “exemplary, punitive or aggravated damages”, without any further discussion of the distinction between aggravated and exemplary damages.

90. Owen J was also of the opinion that exemplary damages may not be awarded at all or may be reduced in the face of provocative conduct by the plaintiff. His Honour referred, at 187, to:

“… the rule by which the defendant in an action in which exemplary damages are recoverable is entitled to show that the plaintiff's own conduct was responsible for the commission of the tortious act and to use this fact to mitigate damages …”

92. His Honour explained that this rule:

“… has no application to damages awarded by way of compensation. It operates only to prevent the award of exemplary damages or to reduce the amount of such damages which, but for the provocation, would have been awarded.”

93. In Whitbread v Rail Corporation New South Wales, Whealy JA accepted, at [257], after identifying the difference between aggravated damages and exemplary damages, that both types of damages could be reduced if the plaintiff had engaged in provocative conduct. His Honour observed that although aggravated damages are compensatory, such damages:

“… may be reduced if the plaintiff's conduct has been provocative, since all the circumstances must be taken into account in determining the hurt to the plaintiff's feelings, and such circumstances include the fact that the plaintiff's own behaviour may have brought the attack on himself: Fontin v Katapodis at 183 per McTiernan J; Horkin v Port Melbourne Football Club Social Club [1983] 1 VR 153 at 162 per Brooking J; O’Connor v Hewitson & Anor [1979] Crim LR 46; Hill v Cooke [1958] SR (NSW) 49.”

94. Giles JA agreed with Whealy JA that there had been no basis to warrant an award of exemplary damages. He did not make any observations on the point presently under consideration. McColl JA, although dissenting in the outcome of the appeal, accepted, at [33], that an award of exemplary damages may be reduced if the excessive conduct engaged in by the defendant was due to provocation by the plaintiff. Her Honour may have accepted, at [68], that the same position pertained in respect of aggravated damages.

95. Although the observations of McTiernan J in Fontin v Katapodis to which I have referred may not provide a clear statement that aggravated damages may be denied or reduced in the face of a plaintiff’s provocative conduct, and subject to what I say below, I am of the opinion that as a matter of principle that must be correct.

96. In assessing the extent to which the wrongful conduct increased the hurt to the plaintiff for aggravated damages, all relevant factors must be taken into account. This would logically include the extent to which a plaintiff engaged in provocative behaviour. I did not understand Mr Cuthbertson to argue otherwise as a matter of principle.

Error in not making or specifying a reduction in the award on account of Mr Cuthbertson’s provocative conduct

97. One of the State’s complaints in respect of the combined award of aggravated and exemplary damages was that his Honour erred in failing to specify the extent to which he reduced the award of aggravated and exemplary damages on account of Mr Cuthbertson’s conduct. In the way the State argued the matter, the complaint was that although the primary judge made reference, at [319], to “after allowing for the ‘smart arse’ behaviour of Mr Cuthbertson”, his Honour must not have made any reduction for Mr Cuthbertson’s conduct. The point was that the award of $15,000 was simply too high.

98. Senior Counsel for the State accepted that had his Honour, at [322], in stating the amount of the award for aggravated and exemplary damages, expressed himself in terms to the effect, “after taking account of the provocative conduct”, that would have been sufficient. Senior Counsel for the State also agreed when questioned by the Bench that that was “the essence of the argument”.

99. The State proffered that if the Court did not uphold the submission that Mr Cuthbertson was disentitled in the circumstances to any award on account of his behaviour, it should be substantially reduced and suggested that the reduction should be by at least $10,000.

100. In my opinion, to the extent that the State contended that it should be inferred that his Honour had not made any reduction for Mr Cuthbertson’s provocative behaviour, that argument should not be upheld. His Honour, at [314], had expressly acknowledged that Mr Cuthbertson’s behaviour had been “disrespectful rising to a degree of provocation” and that this was “a discounting factor for consideration of aggravated and exemplary damages of the assault in the vestibule”. His Honour also expressly stated, at [319], that “after allowing for the ‘smart arse’ behaviour of Mr Cuthbertson”, there should be an award of exemplary damages.

101. A judge’s reasons should be read as a whole. Within six paragraphs, his Honour had made a finding of conduct amounting to provocation; that that was a “discounting factor” in respect of both aggravated and exemplary damages; and that notwithstanding this conduct, he still proposed to make an award of exemplary damages. These findings make it clear that although his Honour had recognised that Mr Cuthbertson’s behaviour was such as to warrant a discount in the award of exemplary damages, he was nonetheless satisfied that that conduct was not sufficient to completely disentitle Mr Cuthbertson to an award of exemplary damages. That his Honour did not add words or repeat what he had already said, at [314] and [319], when specifying the amount that he awarded does not amount to appealable error. The argument proffered by the State is not a compelling one and, in my opinion, should be rejected.

102. Having regard to the State’s acceptance that it would have been sufficient for his Honour to have stated that he had reduced the award, it would seem that the State may no longer contend that it was necessary for his Honour to specify the discount that he made to reflect Mr Cuthbertson’s provocative conduct. However, even if the point was maintained, I do not consider appellate intervention is warranted in this case. There is no juridical requirement that any such discount be specified, other than that in the interests of clarity and transparency that may be the preferable course. However, an award of such damages involves an evaluation of all the circumstances. In this case, those circumstances had been fully articulated by the primary judge in his judgment so that it is known what factors his Honour found to be relevant, both as to the question whether to award aggravated and exemplary damages, and whether the award should be discounted. I would reject this argument.

103. It should be stated that there is no error as such in making an award of damages in a single sum for both aggravated and exemplary damages. In Uren v John Fairfax & Sons, Taylor J pointed out that the same set of circumstances may justify an award of either. See also Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47 at 8; XL Petroleum NSW Pty Ltd v Caltex Oil (Aust) Pty Ltd; New South Wales v Ibbett at [33]. In New South Wales v Ibbett, the Court stated, at [35]:

“In cases where the same circumstances increase the hurt to the plaintiff and also make it desirable for a court to mark its disapprobation of that conduct, the court may choose to award one sum which represents both heads of damages and no element more than once.”

104. I have referred above to the primary judge’s reasons, at [314] and [319], where his Honour stated the basis upon which he awarded Mr Cuthbertson aggravated and exemplary damages respectively. There is no direct challenge to those findings. When dealing with the award of aggravated and exemplary damages in Mr Fletcher’s case, his Honour stated, at [306], that the matters that justified an award of exemplary damages were also pertinent to an award of aggravated damages. His Honour continued, at [307], as follows:

“Mindful of the conceptual differences between ordinary damages for the assaults and aggravated and exemplary damages and of the danger of an excessive overall award where some or all of the factors supporting one head of damage also support the other; I intend to allow one sum for aggravated and exemplary damages whilst being conscious of not double compensating with ordinary damages.”

105. This reasoning reflected the observation in New South Wales v Ibbett set above at [103] and observed the caution given by the Court that although one sum may be awarded for both, “no element [is to be awarded] more than once”.

106. When deciding to award aggravated and exemplary damages to Mr Cuthbertson, his Honour commenced his reasons with the statement, at [319], “[e]mploying the principles set out in the case law referred to above”. Given the structure of his Honour’s judgment, that was clearly a reference to the case law he had reviewed when determining the damages to be awarded to Mr Fletcher. His Honour’s consideration of the case law expressly included a reference to NSW v Ibbett at [35] and contained the passage relating to the award of a single sum for aggravated and exemplary damages set out above.

107. There may have been some difficulty in his Honour having made a combined award if he had not understood that aggravated damages may be reduced or not awarded for disentitling conduct. However, it is apparent from his Honour’s reasons, read as whole, that he understood the law, and for the reasons I have given, I consider that it should be accepted that his Honour discounted the award having regard to Mr Cuthbertson’s conduct. Further, it is apparent from his Honour’s reasons, at [306]–[307], that he understood when it was appropriate to award a combined amount for both aggravated and exemplary damages, namely, when the same conduct justifies an award of both kinds of damages.

Did Senior Constable McArthur have a malicious intent?

108. Finally, reference should be made to the State’s submission that the primary judge did not identify that Senior Constable MacArthur had a malicious intent. In making this submission, the State referred to an observation of Owen J in Fontin v Katapodis at 187. However, this misreads what Owen J said. Malice is not a necessary requirement for an award of exemplary damages, although historically it has come within one of the phrases used to describe conduct which may entitle a plaintiff to an award: viz “wanton and malicious” conduct: see Lamb v Cotogno at 3. However, the description that has come to be accepted is, as I have stated above, is “conscious and contumelious disregard of the plaintiff’s rights”.

109. In my opinion, there was no error in his Honour’s approach to the award of aggravated and exemplary damages.

110. Finally, I should add that if, contrary to my understanding, the State did challenge the underlying basis for the award of aggravated and exemplary damages, I would reject that argument. His Honour had the benefit of seeing and hearing the witnesses and of viewing the CCTV footage. Whilst this Court also viewed the CCTV footage, the assessment of the evidence of the witnesses was otherwise a matter in respect of which the primary judge had the usual advantage of hearing and assessing the evidence.

111. Given his Honour’s finding, at [319], that the police officers had had the opportunity “to gather their thoughts when within the vestibule of the train before stepping out onto the platform in order to proceed with the second arrest”, I am of the opinion that there was a factual basis upon which to award aggravated and exemplary damages.

112. Had the question of the award of aggravated and exemplary damages been the only matter in issue, there would have been an argument for the refusal of leave, given the small amount involved. However, as the matter has been fully argued on appeal, I would grant leave on this question, but dismiss this aspect of the appeal.

Conclusion

113. Accordingly, I propose the following orders:

1. Grant leave to appeal;

2. Allow the appeal in part;

3. Set aside order 1 in the matter Drew Cuthbertson v State of New South Wales 2015/0010880 to the extent necessary to reflect the intent that there be no award compensating Mr Cuthbertson for legal expenses billed to him by Messrs Foott Law & Co;

4. Order the State of New South Wales to pay the costs of the summons seeking leave to appeal and the appeal;

5. Order the parties to bring in short minutes of order of the judgment sum, including interest to be entered in favour of Mr Cuthbertson, reflecting these reasons and order 3.

114. McCOLL JA: I agree with Beazley P and Basten JA, for each of their Honour’s reasons that State of New South Wales v Koumdjiev was wrongly decided and should not be followed. [1]

     1. (2005) 63 NSWLR 353; [2005] NSWCA 247 at [66] – [68].

115. As to ground 2 of the appeal, I do not understand the appellant to have challenged the proposition that there cannot be a single award for aggravated and exemplary damages. That was not identified as a ground of appeal, nor addressed as such in the appellant’s written submissions. In oral submissions counsel for the State of New South Wales (State) made it clear that he did not challenge the proposition as a principle of law that there cannot be a single award for aggravated and exemplary damages, where the same circumstances increased the hurt to the plaintiff and also make it desirable for a Court to mark its disapprobation of that conduct. This proposition is clearly recognised by High Court authority. [2]

     2. New South Wales v Ibbett (2006) 229 CLR 638; [2006] HCA 57 (Ibbett HCA) at [35] per Gleeson CJ, Gummow, Kirby, Heydon and Crennan JJ.

116. The fact that there may be a single award for such damages does not mean, however, that such an approach should be encouraged. As was explained in Carter v Walker,[3] there was nothing in what the High Court said in Ibbett HCA which:

“… suggests that a judge cannot award separate sums for aggravated and exemplary damages merely because the same circumstances give rise to both the hurt to the plaintiff, and the need to punish the defendant. The language of the High Court is permissive. It is not mandatory. A judge ‘may’, but not ‘must’, choose to award a single sum in such circumstances.”

3. (2010) 32 VR 1; [2010] VSCA 340 at [310] per Buchanan, Ashley and Weinberg JJA.

117. The reason it is desirable not to award one sum for aggravated and exemplary damages lies in the conceptual distinction between the two heads of damages.

118. Aggravated damages are “given by way of compensation for injury to the plaintiff, though frequently intangible, resulting from the circumstances and manner of the defendant’s wrongdoing.”[4] They “bring the damages up to the upper end of the available range.”[5]

     4. Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 at 129 – 130 per Taylor J; [1966] HCA 40; see also Gray v Motor Accident Commission (1998) 196 CLR 1; [1998] HCA 70 (Gray) at [100] per Kirby J.

     5. New South Wales v Riley (2003) 57 NSWLR 496; [2003] NSWCA 208 at [133] per Hodgson JA (Sheller JA and Nicholas J agreeing).

119. Exemplary damages go beyond compensation. They are designed to punish and to deter wrongdoers and also assuage any urge for revenge felt by victims and discourage self-help remedies. [6] However, exemplary damages are awarded rarely. Something more must be found than a mere finding of fault. [7] 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. [8]

     6. Lamb v Cotogno (1987) 164 CLR 1 at 9 per curiam; [1987] HCA 47.

     7.    Gray at [12] per Gleeson CJ, McHugh, Gummow and Hayne JJ.

     8. Ibid at [20].

120. As I said in Whitbread & Anor v Rail Corporation NSW & Ors:[9]

“In considering whether to award exemplary damages ‘the first, if not the principal, focus of the inquiry is upon the wrongdoer, not upon the party who was wronged’: Gray (at [15]; (at [31]) ‘the conduct of the wrongdoer is central to that enquiry’) per Gleeson CJ, McHugh, Gummow and Hayne JJ. In contradistinction, in the case of aggravated damages the assessment is made from the point of view of the plaintiff: State of New South Wales v Ibbett [2005] NSWCA 445; (2005) 65 NSWLR 168 (at [83]) per Spigelman CJ; referred to with approval in New South Wales v Ibbett [2006] HCA 57; (2006) 229 CLR 638 (at [34]).”

9. [2011] NSWCA 130 at [21].

121. It is accepted that, even if the same circumstances increased the hurt to the plaintiff and also make it desirable for a court to make its disapprobation of that conduct clear, it is necessary still to determine any “compensatory damages before deciding whether or not the quantum is such that a further award is necessary to serve the objectives of punishment or deterrence or, if it be a separate purpose, condemnation.”[10]

     10. New South Wales v Ibbett [2005] NSWCA 445 at [83]; app Ibbett HCA at [34].

122. The desirability of there being a separate assessment of aggravated as opposed to exemplary damages is, not least, that because the considerations that enter into the assessment of compensatory damages are quite different from those that govern the assessment of exemplary damages, there is no necessary proportionality between the assessment of the two categories. [11]

     11. See XL Petroleum (NSW) Pty Ltd v Caltex Oil (Aust) Pty Ltd (1985) 155 CLR 448 at 471 per Brennan J; [1985] HCA 12.

123. As Spigelman CJ said in TCN Channel Nine Pty Ltd v Anning,[12] because “[o]ne purpose of exemplary damages is to mark disapproval by the Court of a defendant’s conduct and to do so in a way that deters that person and others from acting in that way. This purpose is best served if a discrete amount is awarded by way of exemplary damages.”

     12. (2002) 54 NSWLR 333; [2002] NSWCA 82 (Mason P and Grove J agreeing).

124. In the present case there was, in my view, nothing in the facts which demonstrated that the conduct of Senior Constable McArthur was such as could be described in a manner ordinarily applicable to exemplary damages. That is to say, he had not demonstrated “conscious wrongdoing in contumelious disregard of another’s rights”,[13] nor committed a particularly flagrant violation of the respondent’s rights,[14] nor had he shown a cruel and reckless disregard of the respondent thereby demonstrating the State’s callousness and indifference towards him in committing the wrongful arrest.

     13. Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71; [1920] HCA 75 at 77.

     14. Australian Consolidated Press Limited v Uren (1966) 117 CLR 185 at 212; [1966] HCA 37.

121. Accordingly, I also agree with Basten JA’s conclusion that the sum the primary judge awarded for exemplary damages could not have reasonably exceeded $7,500 and that the lump sum of $15,000 the primary judge awarded in respect of both heads of damage should be reduced by half to remove that component of that figure.

122. I agree with the orders that Basten JA proposes.

123. BASTEN JA: On 8 September 2013, the respondent, Drew Cuthbertson, was arrested whilst travelling with a friend on a train near Eastwood in Sydney. Both he and his friend were removed from the train by police. He was arrested and detained again on the platform at Eastwood Station.

124. He brought proceedings in the District Court for damages against the State, as vicariously liable for the tortious acts of the police officers, alleging that he was wrongfully arrested, falsely imprisoned, and assaulted. The trial judge (Montgomery DCJ) upheld his claims and awarded damages in an amount of $92,856. The State seeks leave to appeal from two elements of the award of damages, namely (i) an allowance of $45,500, being an estimate of legal costs incurred for defending a charge of resisting arrest, and (ii) an amount of $15,000 awarded for aggravated and exemplary damages.

125. I agree with the President that there should be a grant of leave to appeal with respect to both grounds. I also agree that the appeal should be upheld with respect to the allowance for costs of the criminal proceedings, so that the judgment must be reduced by that amount, together with pre-judgment interest on that amount.

126. I would also uphold the State’s appeal with respect to the award of exemplary damages. The trial judge did not distinguish between the elements of his award of $15,000 on account of aggravated and exemplary damages. While it is difficult to discern a basis for awarding any particular amount by way of aggravated damages, the sum could not reasonably have exceeded $7,500. The figure of $15,000 should be reduced by half to remove the component attributable to exemplary damages, namely the amount of $7,500, together with interest on that amount.

127. The judge calculated interest at 4% for 4.2 years. The total reduction would result in a judgment, in round terms, of $31,000.

Award of costs of criminal proceedings

132. There was no dispute that the respondent was entitled to recover an amount of damages for any injury or harm suffered which was the “natural and probable consequence” of the tortious acts. The test of a “natural and probable consequence” is not to be equated with an event being a contributing factor in a chain of causation.

133. This point may be illustrated by the reasoning of Cassels J in Diamond v Minter. [15] Police in England arrested a person in London believing he was wanted for crimes committed in New South Wales. They had no power to do so, and he was not the man named in the warrant. The plaintiff was taken on the afternoon of his arrest before the Chief Magistrate at Bow Street Police Court and remanded in custody for six days. He was then released when the authorities discovered they had the wrong man. Cassels J identified and resolved the issue of present relevance in the following terms: [16]

“The fact remains that in arresting the plaintiff the two defendants … arrested the wrong man, and that in detaining the plaintiff at Bow Street police station, … detained the wrong man. The plaintiff has therefore been wrongfully arrested and falsely imprisoned. Can the defendants escape liability? I think that the periods of detention which I have to consider are the period during which the plaintiff was in the custody of the two defendants …, and the period during which he was detained at Bow Street police station before he went into the Court. What happened after that, with regard to his being remanded in custody, was the result of a judicial act by the learned Chief Magistrate, and no liability can attach to the police officers for that. It was contended, on behalf of the plaintiff, that as a result of what the defendants did the magistrate remanded the plaintiff in custody under the impression that he was remanding Forbes. I do not accept that contention. The magistrate remanded the man before him, and that was the plaintiff.”

15. [1941] 1 KB 656.

16.    Diamond at 663.

134. After concluding that the defendant officers were liable, Cassels J returned to the question of damages: [17]

“I do not award damages for the plaintiff’s detention in Brixton Prison, for that, as I have said, was the result of a judicial decision. The breaking of the chain of causation was dealt with by Scrutton LJ in Harnett v Bond [18] where the Lord Justice said:

‘But it appears to me that when there comes in the chain the act of a person who is bound by law to decide a matter judicially and independently, the consequences of his decision are too remote from the original wrong which gave him a chance to decide.’”

17.    Diamond at 674.

18. [1924] 2 KB 517, 565.

135. The tortious acts relied upon in the present case were the interference by police officers with the liberty and physical integrity of the respondent. The cost of defending the criminal charge of resist an officer in the execution of his duty was not a natural and probable consequence of the police officer assaulting the respondent or depriving him of his liberty without lawful justification. Rather the respondent’s own act in resisting the application of force to him contributed towards the incurring of those costs. They were also a natural and probable consequence of the laying of the charge of resisting the officer, but there was no allegation that laying that charge was tortious.

136. On that basis, I agree with the reasoning of the President at [44] above.

137. I also agree with the President’s conclusion that, as a matter of legal principle, damages for a tortious assault or interference with liberty cannot include the costs incurred by the plaintiff in defending criminal charges arising out of the same or related conduct.

138. In Berry v British Transport Commission [19] the Court of Appeal of England and Wales considered a claim for costs in an action for malicious prosecution brought by a plaintiff who had been acquitted of an offence of unjustifiably pulling the emergency communication cord on a train. On her acquittal she was awarded costs of 15 guineas, but sought to recover the balance of her legal costs in separate civil proceedings for malicious prosecution. The judgment of Devlin LJ, which has become the locus classicus in this area, commenced by setting out a general principle applicable to such claims, but noted that actions for malicious prosecution provided an exception to it.

     19. [1962] 1 QB 306 (Ormerod, Devlin and Danckwerts LJJ).

139. Devlin LJ noted the assertion of the defendants that the balance of costs incurred but not recovered in earlier proceedings was not recoverable in civil proceedings “because it is too remote in law.” [20] He continued:

“This allegation is based on an old rule which is stated in Mayne on Damages [21] in the following terms: ‘It was regarded as a general principle that the right to costs must always be considered as finally settled in the court where the question to which that right was accessory was determined; so that, if any costs were awarded, nothing beyond the sum taxed according to the rules of the court could be recovered; or if costs were expressly withheld in the particular case, none would be recoverable by suit in any other court.’

…

The rule is not easy to apply with justice because it embodies a presumption, which the law finds it convenient and maybe necessary to make; but which it has to, and does in other contexts, admit not to be in accordance with the fact. Rule 28(2) of the Supreme Court Costs Rules, 1959 … provides that the ordinary basis on which costs shall be taxed is the party and party basis; and that on a taxation on that basis there shall be allowed all such costs ‘as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed.’ … Reasonableness is, of course, the ordinary test that is applied in a damage claim and which would be applied here if the items of expenditure claimed were not incurred in litigation.

The reason for the rule is not that the costs incurred in excess of the party and party allowance are deemed to be unreasonable; it is that what is presumed to be the same question cannot be gone into twice. … If a party has failed to apply for costs which he would have got if he had asked for them, a subsequent claim for damages may be defeated; but that would be because in such a case his loss would be held to be due to his own fault or omission. In any case in which the legal process does not permit an adjudication, the rule does not apply. …

Thus the reason for the rule is that the law cannot permit a double adjudication upon the same point. …

If the matter were res integra, I should for myself prefer to see the abandonment of the fiction that taxed costs are the same as costs reasonably incurred and its replacement by a statement of principle that the law for reasons which it considers to be in the public interest requires a litigant to exercise a greater austerity than it exacts in the ordinary way, and which it will not relax unless the litigant can show some additional ground for reimbursement over and above the bare fact that he has been successful. Without a restatement of that sort, there is undoubtedly a practical need for the rule in civil cases. Otherwise, every successful plaintiff might bring a second action against the same defendant in order to recover from him as damages resulting from his original wrongdoing the costs he had failed to obtain on taxation …. The rule is thus essential to the administration of justice in civil suits and will continue to be so until the time comes, if it ever does, when the law either allows to a successful litigant all the costs he has reasonably incurred or recognises openly that an assessment of damage and taxation of costs as between party and party are two different things.”

20.    Berry at 319.

21.    11th ed (1946), p 119.

140. Devlin LJ then addressed, as a separate question, whether the same principle applied with respect to costs incurred in criminal cases. He noted that “[a]ll awards of costs, whether civil or criminal, are made under statutory powers.” [22] He continued:

“Thus in both classes of cases, civil and criminal, there is a general discretionary power to award costs. The words used differ in the case of each statute but the effect is the same. Mr Lawson, in reliance upon this, argued that the basis for the rule that ‘extra costs’ are not recoverable is that in the matter of costs the discretion of the court is interposed between the wrongdoer and the consequences of his act. In this respect, he submits, there is no good ground for distinguishing in the application of the rule between civil and criminal costs.”

22.    Berry at 324.

141. This argument was rejected on the basis of both practice and principle, namely that the general principle on which it is just to make an award of civil costs in favour of the successful party, does not apply to an award of criminal costs. [23] Devlin LJ continued:

“I do not propose to examine all the relevant differences that may be made for this purpose between a civil action and a criminal proceeding. But in relation to an award of costs against the party who initiates the proceedings there is one difference that is obvious. A plaintiff brings an action for his own ends and to benefit himself; it is therefore just that if he loses he should pay the costs. A prosecutor brings proceedings in the public interest, and so should be treated more tenderly.”

This justification for a differential approach in relation to the discretionary power to award costs was rejected by the High Court in Latoudis v Casey. [24] However, by statute there is now a more restrained discretion in relation to costs against a prosecutor.

23.    Berry at 326.

24. (1990) 170 CLR 534; [1990] HCA 59.

142. In the circumstances he had identified, Devlin LJ rejected the extension of the principle relating to civil costs to costs in criminal cases. However, the basis on which he did so is important: [25]

“Moreover, its usefulness, such as it is, is confined to civil cases. Its effect is to set up an artificial or conventional measure of damage when the loss consists of expenditure on litigation. This conventional measure avoids the danger which Lord Tenterden CJ remarked,[26] that a party might otherwise in every sort of case bring a second set of proceedings against the same opponent for his extra costs. But that is not a danger that can arise in relation to criminal costs except in the one case of malicious prosecution. The conventional measure is also useful as one way, though not in my opinion the best way, of keeping down the costs of litigation. I have suggested already that the last person who ought to be allowed to claim the benefit of a rule designed for the comfort of litigants generally is the man who is abusing the legal process for his own malicious ends. Yet if the presumption is extended to criminal costs, that is the only practical effect that it will have; for malicious prosecution or an action of the same sort is the only action in which a claim for damages that includes criminal costs can be made.

… It is said that in such circumstances [of malicious prosecution] a successful defendant could ask for an award for his taxed costs and might expect to get them in full. That may be a satisfactory answer if the malice appears on the face of the prosecution, but not if it does not; a court cannot try an action for malicious prosecution on an application for costs.”

25.    Berry at 328; emphasis added.

26. Loton v Devereux, 3 B & A 343, 345.

143. There is an assumption underlying the highlighted passage in this reasoning, namely that the costs of successfully defending a criminal proceeding can only be recovered in a proceeding which alleges that the laying of a charge was an abuse of process. This assumption is consistent with the analysis set out above, namely that costs of defending a charge, not recoverable in the criminal court, are only recoverable in separate civil proceedings where the laying of the groundless charge is the foundation of the cause of action. This is justified on the basis (i) that the costs incurred are not otherwise caused by the defendant’s tortious conduct and (ii) of the policy limitation on the recoverability in separate satellite litigation of costs additional to those recoverable in the primary proceedings.

144. In so far as the reasoning in Berry depended upon the statutory scheme for the recovery of costs in force in England in 1962, it appears that the only material difference is that the current NSW legislation, as explained by Beazley P above, expressly circumscribes when costs may be awarded in criminal proceedings, without the need to refer to judicial practice.

145. With the possible exception of State of New South Wales v Koumdjiev,[27] there is no basis in authority for doubting the application of the principles stated in Berry in this State. In Koumdjiev the claim for the costs of defending criminal proceedings was dealt with briefly by Hodgson JA at [66]-[68]. Although he referred to three English authorities, including Diamond v Minter, in the summary of the submissions at [66], it is clear that the Court was not taken to the reasoning in Berry, nor to the underlying principles derived from the statutory provisions relating to costs. I agree with Beazley P that this passage in the reasoning in Koumdjiev should not be followed. Accordingly, the judgment below must be set aside and the damages reduced by the amount allowed on account of the costs of defending the criminal proceedings for resisting arrest, and the component of interest allowed on those costs.

     27. (2005) 63 NSWLR 353; [2005] NSWCA 247.

Exemplary damages

146. The State also challenged the award of damages in so far as they included aggravated and exemplary damages. These two heads of loss were not separately quantified by the trial judge, but I agree with Beazley P that there was no error of law in that approach. I also agree with the President that no relevant error would warrant this Court interfering with an award of aggravated damages.

147. Nevertheless, the failure to distinguish the amounts awarded on account of each head of damages makes it difficult to assess the effect of any error which may infect the assessment on one head, but not the other. In circumstances where ordinary damages are awarded only for an interference with the liberty of the individual and an affront to his or her dignity, some care must be taken not to double count the same elements. [28] Given the level of provocation provided by the respondent in the circumstances of this case, only a modest award could have been made on account of aggravated damages.

     28. New South Wales v Ibbett (2006) 229 CLR 638; [2006] HCA 57 at [36] (Gleeson CJ, Gummow, Kirby, Heydon and Crennan JJ).

148. With respect to exemplary damages, the High Court noted in New South Wales v Ibbett:

“[38]   The common law fixes by various means a line between the interests of the individual in personal freedom of action and the interests of the State in the maintenance of a legally ordered society. An action for trespass to land and an award of exemplary damages has long been a method by which, at the instance of the citizen, the State is called to account by the common law for the misconduct of those acting under or with the authority of the Executive Government.”

149. This principle applies equally with respect to an action for trespass to the person. Although an award of exemplary damages is intended to be punitive and deterrent, rather than compensatory, it was accepted in Ibbett that such an award could properly be made against the State, had it been available against the individual officer concerned, absent the provisions of the Law Reform (Vicarious Liability) Act 1983 (NSW). [29]

     29. Ibid at [58].

150. It was common ground between the parties that an award of exemplary damages required a finding that the conduct of the officer showed “a conscious and contumelious disregard for the plaintiff’s rights”. [30] In Lamb v Cotogno,[31] the High Court approved the following passage from Mayne & McGregor on Damages: [32]

“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.”

30. XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 at 471 (Brennan J); [1985] HCA 12.

31. (1987) 164 CLR 1 at 8; [1987] HCA 47 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).

32.    12th ed, 1961, p 196.

151. In this Court, senior counsel for the respondent accepted that he needed a finding that the officer had acted in such a fashion. [33] None was sought in this Court; rather counsel relied upon the following passage in the trial judgment for the relevant finding:

“[319]   … In my opinion, after allowing for the ‘smart arse’ behaviour of Mr Cuthbertson prior to the assault inflicted upon him by SC McArthur in the carriage vestibule and particularly having regard for the opportunity of the police officers to gather their thoughts when within the vestibule of the train before stepping out onto the platform in order to proceed with the second arrest; the unlawful conduct by SC McArthur is deserving of the disapprobation of the Court in the form of exemplary damages.”

33.    Tcpt, 08/08/18, p 50(11).

152. While it is true that exemplary damages are intended to reflect the disapprobation of the court, this passage identified their purpose, without reference to the standard to be applied before the power to award exemplary damages was engaged. The fact that the officer’s conduct was “unlawful” was inherent in the earlier finding that he had acted tortiously.

153. The underlying facts were addressed by the trial judge in the following terms:

“[314]   Mr Cuthbertson was man-handled in the vestibule of the train by SC McArthur. There was no violence in the form of heavy pushing, punching or infliction of pain. Indeed, the violence was, in reality, the strong restraint against Mr Cuthbertson’s own force of pulling away. Then SC McArthur pushed him from the carriage holding his arm. That Mr Cuthbertson’s behaviour was disrespectful rising to a degree of provocation and satisfying the term used by Senior Counsel for the plaintiffs ‘smart arse’ does not lessen his entitlement to compensation for ordinary damages of the assault; but is a discounting factor for consideration of aggravated and exemplary damages of the assault in the vestibule.”

154. This description fell short of a finding necessary for the purposes of awarding exemplary damages.

155. The absence of an express finding in the relevant terms is significant; indeed, if the judge had intended such a finding it would be remarkable that it was not expressly made, in circumstances where the respondent’s own submissions at trial were replete with references to the correct standard, referring to State of New South Wales v Riley. [34]

     34. (2003) 57 NSWLR 496; [2003] NSWCA 208 at [138] (Hodgson JA): outline of submissions – damages, 30 May 2017, pars 16 and 28.

156. Neither the judge’s conclusion, nor his characterisation of the conduct of the officer, supports an inference that the relevant standard was satisfied. Accordingly, there should not have been an award of exemplary damages.

157. The judgment below must be reduced by an amount referable to exemplary damages. As noted above, the judge made no separate assessment of exemplary damages. Although the High Court recognised in Ibbett that “the Court may choose to award one sum which represents both heads of damages and no element more than once”,[35] there are reasons why it is desirable that there should be separate statements of the amounts awarded by way of compensatory and punitive damages. As illustrated by XL Petroleum, the failure to do so may give rise to difficulties where a contribution order is sought. Similarly, where there is an appeal by way of rehearing, it may be impossible to know whether a combined award has made an inappropriate or disproportionate allowance for exemplary damages. [36] Further, if the award of exemplary damages is to have a deterrent effect, that will usually only achieve its proper force if the quantum is expressly stated.

     35. Ibbett at [35].

     36.    XL Petroleum at 470-471 (Brennan J).

158. In the present case, this Court can only make an estimate as to what part of the $15,000 awarded by the trial judge would have been appropriate by way of additional compensatory damages. In my view the appropriate figure would have been $7,500, or half of the overall award. It follows that the balance ($7,500) was properly to be attributed to exemplary damages. As that award should not have been made, the judgment should be reduced by that amount, together with the interest component on that amount.

Costs

159. The State agreed that it would bear the reasonable costs of the respondent in this Court in any event. (Such a condition might otherwise have been imposed on the grant of leave to appeal.) Although, in its draft notice of appeal, the State sought a reduction in the costs recoverable by the plaintiff in the District Court, consistently with its agreement in this Court, there should be no variation of the costs order made in the District Court in favour of the plaintiff.

Conclusions

160. I would propose the following orders:

1. Grant leave to appeal.

2. Allow the appeal and set aside the judgment in favour of the respondent given in the District Court on 15 December 2017.

3. In place thereof, give judgment for the plaintiff in the District Court in the sum of $31,000, such judgment to take effect from 15 December 2017.

161. MEAGHER and PAYNE JJA: We have had the advantage of reading the decisions of Beazley P and Basten JA in draft. We agree with their Honours, for the reasons they each give, that State of New South Wales v Koumdjiev (2005) 63 NSWLR 353; [2005] NSWCA 247 at [66]-[68] was incorrectly decided and should no longer be followed.

162. On ground 2 of the appeal, the question of aggravated and exemplary damages, we agree with the reasons of Basten JA. These brief additional reasons are not intended to be inconsistent with anything said by his Honour.

163. The primary judge here made an award of a “single figure sum for aggravated and exemplary damages compensation for assault, trespass and wrongful imprisonment in the sum of $15,000”. While the circumstances which might justify an award of aggravated damages are often the same as those which justify the granting of exemplary damages, the two heads of damages are quite distinct. In XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448; [1985] HCA 12 at 471 Brennan J said:

“As an award of exemplary damages is intended to punish the defendant for conduct showing a conscious and contumelious disregard for the plaintiff’s rights and to deter him from committing like conduct again, the considerations that enter into the assessment of exemplary damages are quite different from the considerations that govern the assessment of compensatory damages. There is no necessary proportionality between the assessment of the two categories.”

164. The High Court has described the circumstances in which exemplary damages may be awarded as being where:

1. the defendant has been guilty of “conscious wrongdoing in contumelious disregard of another’s rights”: Whitfeld v De Lauret & Co Ltd (1920) 29 CLR 71; [1920] HCA 75 at 77;

2. the defendant has committed a particularly flagrant violation of the plaintiff’s rights: Australian Consolidated Press Ltd v Uren (1966) 117 CLR 185; [1966] HCA 37 at 212;

3. the defendant by his or her conduct shows a cruel and reckless disregard of the plaintiff thereby demonstrating the defendant’s callousness and indifference towards the plaintiff in committing the wrong: Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47 at 12–13.

165. The primary judge made no such findings here. The respondent sought to address this question by inviting this Court to accept that the primary judge made a finding “by necessary implication, at least, that Senior Constable McArthur was dishonest in his evidence when he said that he was struck by Mr Cuthbertson.”

166. We are unable to accept that the primary judge made such a finding. The most significant finding made by the primary judge relating to this issue was that Senior Constable McArthur was “willing to exaggerate [his] description of events in order to justify his two very serious actions of what was ‘manhandling’ Mr Cuthbertson in the vestibule and of deploying his O.C. spray canister”: [113]. This falls short of a finding warranting an award of exemplary damages. If the primary judge had intended to find that the police officer had lied, his Honour would have said so.

167. His Honour’s ultimate conclusion was that, because of what he saw on the CCTV footage, he was “unable to accept SC McArthur’s evidence that he felt the slap and experienced a slight sting”. In making that finding his Honour was addressing the requirements of s 99(2) of the Law Enforcement (Powers and Responsibilities) Act 2002 (NSW). On the basis of the findings of fact made by the primary judge there was no basis for an award of exemplary damages. His Honour’s award of exemplary damages must be set aside.

168. The findings of the primary judge relevant to the award of aggravated damages were:

1. there was no violence, heavy pushing, punching or infliction of pain; the only violence was against Mr Cuthbertson’s own force pulling away;

2. Mr Cuthbertson gave exaggerated evidence of forceful action by Senior Constable McArthur upon him

3. the behaviour of Mr Cuthbertson towards the police was characterised as being that of a “smart arse”;

4. force was employed by Senior Constable McArthur and Senior Constable Walker on the platform, pinning Mr Cuthbertson’s arms behind him to separate him from Mr Fletcher which was an excessive and unjustified response to Mr Cuthbertson’s behaviour;

5. the pointing of the O.C. canister at Mr Cuthbertson was the deployment of unnecessary force but it was not an imminent use of a weapon;

6. Mr Cuthbertson was wrongfully imprisoned for a total period of between 10 and 12 minutes; and

7. although the conduct occurred in a public place there was no one other than Mr Cuthbertson’s friend Mr Fletcher to witness the conduct.

169. On the basis of these findings, we agree with Basten JA that an award of aggravated damages in the amount of $7,500 should be made. It follows that the orders proposed by Basten JA should be made.

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Endnotes

Amendments

20 December 2018 - Minor typographical errors corrected