XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd

[1985] HCA 12

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Murphy, Wilson and Brennan JJ.

XL PETROLEUM (N.S.W.) PTY. LTD. v. CALTEX OIL (AUSTRALIA) PTY. LTD.

(1985) 155 CLR 448

28 February 1985

Tort—Damages

Tort—Joint tortfeasors—Judgment—Common law rule requiring single judgment—Whether abolished by statute—Whether separate judgments may be different amounts—Exemplary damages—Judgment for exemplary damages against one tortfeasor—Law Reform (Miscellaneous Provisions) Act 1946 (N.S.W.), s. 5(1). Damages—Exemplary damages—Jury verdict—Appellate court—Function in review of verdict for exemplary damages.

Decisions

GIBBS C.J. In this appeal we are called upon to decide whether judgment was rightly entered for the appellant, XL Petroleum (N.S.W.) Pty. Limited ("XL"), in a sum which included exemplary damages and if so whether the Court of Appeal of the Supreme Court of New South Wales was right in reducing the amount of the exemplary damages awarded by the jury.

2. The appellant, XL, was a company formed in New South Wales in January 1970 for the purpose of engaging in the sale of petrol in that State. An associated company had for some years earlier been engaged in the sale of petrol in Victoria at a discount, i.e. at a price lower than that normally charged by other companies, and XL intended similarly to sell in New South Wales at a discounted price. There was, at 150 Princes Highway, Arncliffe, a piece of land owned since October 1969 by St Christopher Motors Pty. Limited which had previously been used as a service station for the sale of the petrol of the respondent, Caltex Oil (Australia) Pty. Limited ("Caltex") but which had not been used for that purpose since at least May 1968. XL entered into an agreement with St Christopher Motors Pty. Limited under which it acquired full rights of occupancy to the land from 9.00 a.m. on 12 June 1970, and, as the jury found, XL had actual possession of the land on that date.

3. Three underground tanks, designed to hold petrol, were installed in the land. The tanks had been put in the land by Caltex in about the year 1953. Caltex was a company which engaged in the sale of petrol on a large scale; it had about 800 service stations in New South Wales. Caltex had at no time been the owner of the land in question, and the jury's findings (which were not challenged on this point) negatived a submission made at the trial that the tanks were not fixtures and that Caltex was the owner of them. At about 8.45 a.m. on 12 June 1970 an employee of Caltex telephoned a company, Turnbull &Foster Pty. Limited, which carried on business as industrial plumbers, and instructed that company to spike the tanks on the land. The instruction was issued under the authority of Mr Braitling, then the manager for retail sales in New South Wales for Caltex. Mr Braitling said in evidence that he believed that the tanks were owned by Caltex and that he issued the instruction to render the tanks safe. In consequence of the instruction, Mr Peter Turnbull, a director of Turnbull &Foster Pty. Limited, went to the land that morning, between 9.00 and 9.30 a.m., filled the tanks with water and by hammering a steel bar through the dip points made a hole in each tank and then concreted over the dip points. Mr Sykes, the Managing Director of XL, came on the scene while this was going on but despite his protests the spiking of the tanks was completed. The result was that the tanks were rendered unfit for use until 7 July 1970.

4. XL commenced in the Supreme Court of New South Wales an action against Caltex, Turnbull &Foster Pty. Limited and Peter Turnbull for damages for trespass. The action was tried by a jury which returned a verdict for the plaintiff. The jury found that the damages to which XL was entitled in respect of the replacement of the tanks and the expenses incurred and profits lost as a result of the trespass was $5,527.90. The jury further found that XL was entitled to exemplary damages against Caltex in an amount of $400,000. The learned trial judge thereupon ordered that judgment be entered for XL against Caltex in the sum of $405,527.90 plus interest and costs and for XL against Turnbull &Foster Pty. Limited and Peter Turnbull in the sum of $5,527.90 plus interest and costs.

5. From this decision Caltex appealed to the Court of Appeal. Three main submissions were made on behalf of Caltex. First, it was submitted that it was not competent for the learned trial judge to enter judgment for XL against the three joint tortfeasors in different amounts. The Court of Appeal, by a majority (Hutley and Glass JJ.A., Mahoney J.A. dissenting) rejected this submission. Secondly, it was submitted that the award of exemplary damages was excessive to the point of perversity. Mahoney J.A. did not find it necessary to express an opinion on this point but the majority of the Court held that the exemplary damages were excessive and reduced them from $400,000 to $150,000. A third matter argued before the Court of Appeal was that the learned trial judge erred in rejecting admissions made by XL, including admissions that the use to which the land could have been put under the County of Cumberland Planning Scheme Ordinance without the consent of the relevant council (the Rockdale Municipal Council) did not include use as a service station for the sale of petrol and that there had been a complete discontinuance of the use of the premises as a service station and for carrying on a business of selling petrol for a period of at least two years from May 1968. A majority of the Court (Hutley and Mahoney JJ.A.) held that the wrongful rejection of this evidence would have justified a new trial; Glass J.A. did not find it necessary to consider that question. I may say immediately that it appears that the substance of the facts admitted was already before the jury, and that it is, to say the least, doubtful whether a new trial on this ground would have been justified, but it is unnecessary to decide that question. In the event both counsel asked the Court to reassess the exemplary damages in preference to making an order for a new trial and the Court did so.

6. From the decision of the Court of Appeal, XL appealed to this Court seeking an order restoring the judgment of $405,527.90 (plus interest and costs) in its favour. Caltex cross-appealed, seeking primarily an order that judgment be entered against Caltex for the sum of $5,527.90 (plus interest and costs) or alternatively for an order giving judgment in favour of XL for the amount of $5,527.90 together with such sum of exemplary damages as this Court should assess or in the further alternative that the proceedings be remitted to the Court of Appeal to reassess the amount of exemplary damages.

7. The first question for our decision is whether it is possible for a plaintiff who has brought one action against two or more joint tortfeasors to obtain separate judgments for different amounts, one including exemplary damages and the other limited to compensatory damages. It was a settled rule of the common law that where two or more tortfeasors were sued for damages for a joint tort, only one judgment for one sum of damages could be given in favour of the plaintiff. Although this rule had been established by the time of Sir Edward Coke (see Sir John Heydon's Case (1612) 11 Co.Rep. 5a (77 E.R. 1150)), the manner in which it should be applied when the circumstances justified an award of exemplary damages against one tortfeasor and not against the others was open to debate until the House of Lords decided the question in Broome v. Cassell &Co. (1972) AC 1027. Before that time it was not clear whether, in such a case, the plaintiff was entitled to judgment for the amount which could have been recovered from the most blameworthy tortfeasor, or that which could have been recovered from the least blameworthy, or some figure in between. Support for the view that the plaintiff should get judgment for the amount payable by the most guilty tortfeasor is to be found in Sir John Heydon's Case, at p.7a (1154 of E.R.) and other decisions that where the jury does return a number of verdicts against joint tortfeasors, the plaintiff is entitled to elect to have judgment against all for the highest amount: Johns and Robinson v. Dodsworth (1630) Cro Car 192 (79 ER 768); Damiens v. Modern Society Ltd. (1910) 27 TLR 164. When Broome v. Cassell &Co. was before the Court of Appeal, Salmon L.J. seems to have accepted that view: (1971) 2 QB 354, at p 393. On the other hand, there was authority in favour of the principle that the plaintiff could not recover anything more than could be recovered from the least guilty defendant: see per Pollock C.B. in Clark v. Newsam (1847) 1 Ex 131, at pp 139-140 (154 ER 55, at p 59); Dougherty v. Chandler (1946) 46 SR(NSW) 370, at p 376. Support for taking an intermediate course might have been found in the judgment of Alderson B. in Clark v. Newsam, at p 140 (p 59 of ER) and in that of Slesser L.J. in Chapman v. Ellesmere (1932) 2 KB 431, at pp 471-472. In Broome v. Cassell &Co., at p 383, Lord Denning M.R. said that it could be left to the jury to choose any of these three methods. It is not surprising that, in this confused state of the authorities, Vaughan Williams L.J. should have thought that where there were circumstances of aggravation against one or more of the joint tortfeasors the damages should be separately assessed: see Greenlands Limited v. Wilmshurst and the London Association for Protection of Trade (1913) 3 KB 507, at pp 528-529, but that was a minority view. The House of Lords, in Broome v. Cassell &Co., held that the amount to be awarded should be the least figure for which any of the defendants could be held liable. Lord Hailsham of St. Marylebone L.C. said, at p.1063:

"I think that the inescapable conclusion to be drawn from these authorities is that only one sum can be awarded by way of exemplary damages where the plaintiff elects to sue more than one defendant in the same action in respect of the same publication, and that this sum must represent the highest common factor, that is, the lowest sum for which any of the defendants can be held liable on this score."

He was of course speaking in a case of libel. Lord Reid said, at p.1090:

"The only logical way to deal with the matter would be first to have a judgment against all the
defendants for the compensatory damages and then to have a separate judgment against each of the defendants for such additional sum as he should pay as punitive damages. I would agree that this is impracticable. ...

So, in my opinion, the jury should be directed

that, when they come to consider what if any addition is to be made to the compensatory damages by way of punitive damages, they must consider each defendant separately. If any one of the defendants does not deserve punishment or if the compensatory damages are in themselves sufficient punishment for any one of the defendants, then they must not make any addition to the compensatory damages. If each of the defendants deserves more punishment than is involved in payment of the compensatory damages then they must determine which deserves the least punishment and only add to the compensatory damages such additional sum as that defendant ought to pay by way of punishment."

The five other members of the House who heard that appeal reached the same conclusion.

8. The rule that only one judgment could be obtained in an action against a number of joint tortfeasors depended on the fact that there was a single wrong and a single cause of action. In Sir John Heydon's Case it was said (at p.5b (1151 of E.R.)) that "the jurors cannot assess several damages against the defendants, because all is one trespass, and made joint by the plaintiff, by his writ and declaration ...". In Greenlands, Limited v. Wilmshurst and the London Association for Protection of Trade (reversed on other grounds; (1916) 2 AC 15) Hamilton L.J. (as he then was) said, at p.531:

"The unity of the verdict and of the judgment when the tort is joint is founded on and must stand with the legal theory of the liability of joint tortfeasors."

In the same case Bray J. said, at p.562:

"It is but one cause of action. If it is a joint tort there is only one wrong, not two wrongs."

9. The same theory, that when two or more joint tortfeasors commit a tort there is only one cause of action, was also the foundation of the rule in Brinsmead v. Harrison (1871) LR 7 CP 547 that a judgment obtained against one joint tortfeasor is a bar to an action against the others for the same cause of action, even if the judgment remains unsatisfied. A person who suffered damage by reason of a joint tort had only one cause of action, and that merged in the first judgment obtained: see King v. Hoare (1844) 13 M &W 494, at pp 504-505 (153 ER 206, at p 210); Wah Tat Bank Ltd. v. Chan (1975) AC 507, at p 515. On the same principle, a release of one joint tortfeasor released all: Cocke v. Jennor (1614) Hob 66 (80 ER 214); Duck v. Mayeu (1892) 2 QB 511, at p 513.

10. The rule in Brinsmead v. Harrison was in effect abolished by s.5(1) of the Law Reform (Miscellaneous Provisions) Act, 1946 (N.S.W.) which reproduced s.6(1) of the Law Reform (Married Women and Tortfeasors) Act 1935 (U.K.). Section 5(1) provides as follows:

"Where damage is suffered by any person as a

result of a tort (whether a crime or not) -

(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage;

(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, brother, sister, half-brother, half-sister, parent or child, of that person, against tort-feasors liable in respect of the damage (whether as joint tort-feasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action;

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability in respect of which the contribution is sought."

The critical question in this case is whether the enactment of this provision affected the rule that only one sum may be awarded in an action brought against two or more joint tortfeasors.

11. The effect of s.6(1) of the Law Reform (Married Women and Tortfeasors) Act was not discussed in Broome v. Cassell &Co., but the effect of a statute of Singapore (s.11(1)(a) of the Civil Law Act) which was in the same terms as s.6(1)(a) of the Law Reform (Married Women and Tortfeasors) Act came to be considered by the Judicial Committee in Wah Tat Bank Ltd. v. Chan. In that case the plaintiff banks sued two joint tortfeasors - a ship owner and a shipping company - in one action for damages for conversion. It was ordered that judgment be entered against the shipping company for damages to be assessed, and that the liability of the ship owner be retried. The damages against the shipping company were assessed, and judgment was entered against it, but the judgment remained unsatisfied. The issue of the liability of the ship owner was then retried and it was held by the courts of Singapore that he was liable for the tort but that the action against him was barred by the judgment entered in favour of the plaintiffs against the shipping company. Those courts held that par.(a) of the subsection, on its true construction, does not apply where two or more tortfeasors are sued in the one action in respect of the same tort, and that in those circumstances judgment against one still bars the right of action against the others. This conclusion was, they thought, strengthened by the fact that par.(b) clearly contemplates a number of actions and not a single action. However on appeal the Judicial Committee held that the plaintiffs were entitled to recover. Their Lordships held that sub-s.(a) had the effect that if, in a hypothetical action, judgment would have been given against joint tortfeasors A and B, then in actual proceedings B is deprived of the immunity which he would have enjoyed at common law as a result of the judgment already recovered against A. Their Lordships continued, at p.518:

"This would follow whether in the actual action A were sued jointly with B (as in the present case) or whether the action against A had been instituted before or after the action against B.

Their Lordships accordingly conclude that

paragraph (a) abolishes the old common law rule in its entirety ...".

12. They considered that this construction of par.(a) accorded equally with the manifest intention of the legislature and with fairness and commonsense and that since par.(b) was designed to prevent a multiplicity of actions there was no reason why its provisions should have been extended to apply to the case where more than one judgment is given in a single action.

13. Soon after that decision was given the Court of Appeal in England followed and applied it in Bryanston Finance Ltd. v. de Vries (1975) QB 703. That Court held that although s.6(1)(a) of the Law Reform (Married Women and Tortfeasors) Act 1935 does not in terms apply to a single action against two joint tortfeasors it does apply to such an action as well as to successive actions. Their Lordships held that the effect of this is that if a plaintiff takes judgment against one of two defendants for an ascertained sum, and it is not satisfied, it is no bar to his obtaining judgment against another, although the plaintiff cannot recover more under the second judgment than he could have recovered under the first. If the judgment has been satisfied it is a bar (or defence) against any further judgment. Their Lordships were not, however, speaking of a case in which one defendant was liable to pay exemplary damages and another was not. Lord Diplock, whose reasoning was substantially the same as that of the Judicial Committee in Wah Tat Bank Ltd. v. Chan, agreed (at p 732) that s.6(1)(a) had "the result of abolishing in its entirety the technical common law doctrine of merger of the cause of action against all joint tortfeasors in the first judgment recovered against any one of them."

14. Although the words of the subsection are elliptical and somewhat obscure I respectfully agree with the result reached by the Judicial Committee and the English Court of Appeal. Neither court expressly dealt with the question whether the section affected the common law rule that only one sum can be awarded in a single proceeding for the one tort committed by joint tortfeasors. Lord Salmon, in Wah Tat Bank Ltd. v. Chan, at p 519, referred to Broome v. Cassell &Co. and said:

"In that case the House's attention was not called to the Act from which the Act now under consideration derives. That decision however compels a court called upon to assess damages in one action against individual tortfeasors to assess the same amount against each joint tortfeasor. This, as a rule, would be the normal course to adopt quite apart from authority. The amount of damages awarded for a tort is normally awarded as compensation for the amount of damage which that tort has caused the plaintiff. Each joint tortfeasor, irrespective of the degree of his blame vis-a-vis other joint tortfeasors, is liable to the plaintiff for the whole of the damage which the tort has caused him. The plaintiff is therefore entitled to judgment against each of the joint tortfeasors for the whole of the damage which he has suffered but he cannot recover in the aggregate more than the sum at which that damage is assessed. The present is such a case. It is only in a very special case, for example where punitive damages may be awarded, that it could ever have been even arguable that different sums of damage could have been awarded against different joint tortfeasors in respect of the same tort."

The case there before the Judicial Committee was an ordinary case - there was no question of exemplary damages - so that the application of the principle stated in Broome v. Cassell &Co. created no difficulty, and the Board directed that judgment be entered against the ship owner in the same amount as that already assessed against the shipping company. However Lord Salmon at least recognized that the case where exemplary damages can be awarded against one tortfeasor stands in a special position. In Bryanston Finance Ltd. v. de Vries Lord Diplock said, at p 732, that an agreement to release one joint tortfeasor still releases the others; it may be thought that this implies that the rule that the victim of a tort committed by joint tortfeasors has only one cause of action still applies, but the question that now falls for decision was not discussed.

15. Once it is accepted that more than one judgment may be given against joint tortfeasors for damages caused by a joint tort, whether damages are given in the same or in different proceedings, there can remain no foundation for the rule that only one sum can be awarded by the different judgments. The reason for the rule was that there was only one cause of action against the joint tortfeasors, but that is no longer the position - the statute has abolished, "in its entirety", the old common law principle that a person who suffers damage by a joint tort has only one cause of action which merges in the first judgment recovered in respect of it. Surely the statutory provision was not intended to abolish only the doctrine of merger, for it was not primarily directed to the question of merger, and there is no reason for selecting one aspect of the principle rather than another as that which it was intended to affect; the whole principle should be held to have gone. It seems to me impossible now to hold that there is any principle that would prevent a plaintiff from recovering different sums from different joint tortfeasors if he brings separate actions against them, provided that some are liable for exemplary damages and others are not, and the same must be true if the joint tortfeasors are all sued in one action. This result does away with the injustice to which the old law led. Apart from the danger that a plaintiff might institute a multiplicity of actions - a danger which can be dealt with by an order for costs under s.5(1)(b) - there was no virtue in a rule which prevented a plaintiff from obtaining a verdict for the full damages to which he was entitled from one defendant if he was joined with another less guilty, but which nevertheless allowed the plaintiff to recover full damages by suing only the more guilty defendant or even (if the suggestion of Lord Hailsham of St. Marylebone L.C. in Broome v. Cassell &Co., at p 1063 is right) by commencing separate proceedings against each and then consolidating. The abolition of the old rule does not mean that the fears of Lord Reid will be realized and that the less guilty tortfeasor will be required to pay exemplary damages which he ought not to pay. With the very greatest of respect to that most distinguished of judges, it does not seem to me in the least impracticable to give separate judgments against two defendants, where one is liable for exemplary damages and the other is not. That course presented no difficulty at the trial in the present case.

16. It is only with reluctance and hesitation that one would differ from a conclusion reached by the House of Lords. However a number of remarks may be made about the decision in Broome v. Cassell &Co. The case was not one in which separate judgments were entered; an award of damages was made against two defendants in an action for libel; both were regarded as liable for exemplary damages, but one defendant was thought to have been guilty of more outrageous conduct than the other. Moreover, the law in England as to exemplary damages differs from that of Australia: cf. Australian Consolidated Press Ltd. v. Uren (1967) 117 CLR 221; (1969) 1 AC 590 with Rookes v. Barnard (1964) AC 1129. I doubt whether those circumstances distinguish Broome v. Cassell &Co. from the present case. However, as I have already mentioned, the effect of s.6(1) of the Law Reform (Married Women and Tortfeasors) Act was not discussed in that decision. I consider that the New South Wales counterpart of that provision, by allowing separate judgments to be given against joint tortfeasors, has made it possible for those judgments to be given for different amounts in a proper case such as the present. For the reasons I have given I hold that in the present case the Court of Appeal in New South Wales was right in concluding that it was competent for the learned trial judge to enter judgment against Caltex in a larger sum than that for which judgment was given against the other defendants.

17. The next question for decision is whether the Court of Appeal was justified in reducing the amount of damages. There were circumstances which justified a substantial award. It was open on the evidence for the jury to conclude that Caltex, a large company, decided to render the tanks unusable so that a smaller competitor, which intended to engage in discounting the price of petrol in a way that might prove detrimental to Caltex' business interests, might be impeded in its efforts to establish itself in New South Wales. At the least, this action was taken by Caltex without bothering to ascertain whether it was lawful; indeed the jury may well have thought that Caltex did not care whether it was lawful or not. The jury might well have regarded the action of Caltex as showing a high-handed and outrageous disregard for XL's rights, or, as Glass J.A. described it: "an act of vandalism of the most disreputable kind, calling for the most indignant censure". The jury was entitled to consider the financial circumstances of Caltex, and the amount awarded, $400,000, represented 1% of the operating profit of Caltex after tax. In concluding that the award was excessive to the point of perversity, Glass J.A. in the Court of Appeal relied principally on three matters. First, it was said that the infamous conduct of the defendant was of short duration. I would not attach much significance to that fact in itself; much evil can be done in a moment. However, the damage was repaired, at no very great cost, within three weeks, and the actual loss to XL was fully compensated for by the award of $5,527.90, and there was no repetition of the trespass, which occurred about eleven years before the verdict of the jury was given. These circumstances, together, reduce the seriousness of the incursion. Secondly, Glass J.A. said that there was some belief in the mind of Mr Braitling that the tanks still belonged to Caltex and that he was entitled to authorize their destruction, even though the jury found that such belief was ill-founded. I cannot agree that it was right to approach the matter in that way. It was open to the jury to conclude that Mr Braitling had no genuine belief that Caltex had any right to destroy the tanks and that the evidence given on behalf of Caltex that the spiking of the tanks was carried out as a routine operation in the interests of safety was no more than a spurious excuse. There is indeed, with all respect, some inconsistency between the tolerant view which Glass J.A. took of Mr Braitling's belief and the approach which the Court of Appeal took in making its re-assessment. Glass J.A. said that the Court had demurred to the suggestion that it should re-assess exemplary damages when it had not seen and heard the witnesses. His Honour continued:

"Particular concern was expressed with regard to the state of mind of the Caltex officers for which it could be held vicariously accountable. In these circumstances it was ultimately accepted by Mr Bennett (who appeared for Caltex) that, if the Court felt unable to decide these questions for itself upon the evidentiary record, he would consent to a re-assessment being made upon the footing that all those matters were taken to be established which the evidence was capable of proving on that view of it most favourable to the plaintiff. Mr Hodgson (for XL) naturally had no objection to this course."

If the Court approached the re-assessment on that footing it should, as it seems to me, have acted on the assumption that the jury had rejected Mr Braitling's evidence that he believed that the tanks belonged to Caltex.

18. The third matter upon which the Court of Appeal relied was that XL could not lawfully use the storage tanks since it could not sell petrol from the site without the consent of the council and that an application which it made for consent on or about 16 June was refused on 26 June. It was later restrained from using the site for that purpose by declaratory order made on 26 November 1970. It was submitted on behalf of XL that this was an irrelevant consideration. Certainly the fact that the sale of the petrol would have been illegal neither provoked nor justified Caltex' actions; indeed it had no bearing on Caltex' decision to act as it did. XL had not used the site when the trespass occurred, and it was not known by Caltex, and could not have been assumed, that XL intended to use the site illegally; in fact XL was not shown to have had that intention and it promptly applied for the council's consent. Nevertheless these circumstances were not irrelevant. In deciding to what extent Caltex should be punished for its invasion of XL's rights, the nature of those rights and the ability of the plaintiff to benefit from their exercise are matters properly to be considered. As events showed, XL was in fact refused the consent that it needed to entitle it to use the land for the purpose of selling petrol. Nevertheless I would not have regarded these matters as of major consequence in deciding whether to reduce the jury's assessment.

19. I doubt whether the matters upon which the Court of Appeal principally relied would, in themselves, have justified an interference with the jury's award. However, in my opinion, when all the circumstances of the case are considered, the award of exemplary damages was so large as to be unreasonable, and an appellate court was entitled to interfere with the verdict within the established principles stated in Precision Plastics Pty. Ltd. v. Demir (1975) 132 CLR 362, at p 369. Although the limitations which the House of Lords in Rookes v. Barnard placed on the circumstances in which exemplary damages may be awarded are not part of the law in Australia, I nevertheless consider that in that case Lord Devlin was correct in pointing to the risk that exemplary damages might amount to a punishment greater than would be likely to be imposed if the conduct were criminal, and in suggesting that in making an award juries should display restraint: see at pp.1227-1228. Lord Hailsham of St. Marylebone L.C., in Broome v. Cassell &Co., at p 1081, did not agree with the suggestion of Lord Devlin that appellate courts might more readily interfere with jury awards of exemplary damages than in other cases, but he did regard it as extremely important that judges make sure in their direction that the jury is fully aware of the danger of an excessive award. I respectfully agree with these pleas for moderation. The award in the present case seems to me to have been out of all proportion to the circumstances of the case and the Court of Appeal was right in reducing it.

20. Mr Bennett on behalf of Caltex then submitted that the amount selected by the Court of Appeal, $150,000, was itself excessive. Although, as I have indicated, I do not fully accept all that was said in the Court of Appeal as to the reasons for reducing the jury's verdict, I do not consider that we would be justified in interfering with the award made by the Court of Appeal. While the views expressed by the Court of Appeal were, if anything, too favourable to Caltex, the amount awarded was in my opinion at the upper end of the permissible range. It was certainly not too low, but, in the light of the circumstances which I have mentioned, which would justify a large award, I am not persuaded that it was excessive.

21. For these reasons I would dismiss both the appeal and the cross appeal. The appellant should pay the costs of the appeal and the respondent should pay the costs of the cross appeal.

MASON J. I agree for the reasons given by Gibbs C.J. and Brennan J. that, in consequence of s.5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (N.S.W.), which abolished the common law rule that the cause of action against joint tortfeasors merges in the first judgment recovered, separate judgments, differing in amounts, may be recovered on the same occasion against co-defendants who are joint tortfeasors. The effect of the subsection is that any difference in the award of punitive damages as between the joint tortfeasors may be separately reflected in judgments awarded against each of them - the award of compensatory damages being the same against all co-defendants. I do not agree that it is impracticable, as Lord Reid suggested in Broome v. Cassell &Co. (1972) AC 1027, at p 1090, to award judgment for compensatory damages against all defendants jointly and severally and to award punitive damages against one or more defendants severally. Accordingly, I would not follow Broome v. Cassell &Co. and I conclude that judgment was rightly entered for XL Petroleum (N.S.W.) Pty. Limited in an amount which included exemplary damages. As to the award of damages I agree for the reasons given by Gibbs C.J. that the Court of Appeal was justified in reducing the amount of $400,000.00 awarded at first instance to $150,000.00. I do not consider this amount to be at all excessive.

2. I would therefore dismiss the appeal and cross appeal, with costs in each instance.

MURPHY J. I agree with the Chief Justice that the Law Reform (Miscellaneous Provisions) Act 1946 (N.S.W.), by allowing for separate judgments against joint tortfeasors, permits judgments against defendants for different amounts, at least in a case such as this, where exemplary damages are awarded against one. I agree also with his conclusions that it was open to the jury to regard the action of Caltex in the words of Justice Glass as "an act of vandalism of the most disreputable kind, calling for the most indignant censure" and to award exemplary damages. The jury was entitled to consider the financial circumstances of Caltex, and to relate the exemplary damages to the financial circumstances of Caltex; in particular to its operating profit.

2. I do not agree that the Court of Appeal was justified in interfering with the jury's award. It has been held repeatedly that a jury's verdict is not to be dealt with in the same way as that of a judge sitting without a jury. Lord Wright, in reference to an award of damages for personal injuries, states that "(t)here is an obvious difference between cases tried with a jury and cases tried by a judge alone. Where the verdict is that of a jury, it will only be set aside if the appellate court is satisfied that the verdict on damages is such that it is out of all proportion to the circumstances of the case" (Davies v. Powell Duffryn Associated Collieries Ltd. (1942) AC 601, 616; see also Hocking v. Bell (1945) 71 CLR 430, 440; Coates v. Carter (1951) 82 CLR 537, 541-542; Precision Plastics Pty. Ltd. v. Demir (1975) 132 CLR 362, 369 and 372; Warren v. Coombes (1979) 142 CLR 531, 552). That principle must apply especially to an award of exemplary damages by which the jury, as the community's representative, expresses in its verdict its view of the seriousness of the defendant's behaviour, and its decision to deter any repetition by a punitive award.

3. It is a usurpation of the jury's function for an appellate court to weigh for itself the various factors and come to a conclusion regarding the amount of exemplary damages to be awarded. Interference is justifiable only rarely, where the verdict is obviously extreme. I find no fault with the jury's estimate of what was appropriate.

4. The appeal should be allowed and the jury's verdict restored. The cross appeal should be dismissed. The respondent should pay the costs of the appeal and the cross appeal.

WILSON J. I have had the advantage of reading the reasons for judgment prepared by the Chief Justice. I agree that both the appeal and the cross appeal should be dismissed and I cannot usefully add to the reasons which his Honour advances in support of that conclusion.

BRENNAN J. Section 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (N.S.W.) abolishes the common law rule that the cause of action against joint tortfeasors merges in the first judgment recovered against any joint tortfeasor. Judgments in successive actions may be recovered against each joint tortfeasor who causes the same damage. I agree with the Chief Justice that the consequence of enacting s.5(1) is that in New South Wales separate judgments, possibly in differing amounts, may be recovered in the same action against co-defendants who are joint tortfeasors. The effect of s.5(1) upon the joint and several liability of joint tortfeasors is far reaching, for the unity of the cause of action against all joint tortfeasors is severed by s.5(1)(a) and the resulting implications are not merely procedural. In the ordinary case, however, s.5(1)(a) and (b) appear merely to provide machinery which preserves the common law liability of joint tortfeasors while removing the bar to enforcement which arose when a judgment was given against one tortfeasor. When damages are awarded only in respect of the damage actually suffered by the plaintiff - that is, compensatory damages - the damages assessed in each action or against the respective defendants in a single action are likely to be assessed in the same amount: see Wah Tat Bank Ltd. v. Chan (1975) AC 507, at p 519. If the evidence in successive actions were to lead to differing awards of compensatory damages, s.5(1)(b) would prevent the judgment creditor from receiving an amount exceeding the amount first awarded. As between defendant tortfeasors, s.5(1)(c) and s.5(2) provide for contribution according to their respective "responsibility for the damage".

2. The rules prescribed by pars.(a) and (b) of s.5(1) do not diminish the common law right of a plaintiff to sue any or all joint tortfeasors for compensatory damages and, on recovering a judgment, to enforce it against any or all of the tortfeasors against whom the judgment is given. At common law, if the judgment debtor from whom the plaintiff first sought satisfaction of the judgment was impecunious, satisfaction might be sought from other judgment debtors until the whole of the judgment debt was paid. Under the statute, the plaintiff's right to recover a judgment against and to seek satisfaction from any or all joint tortfeasors is enhanced by the statutory right to bring successive actions against each joint tortfeasor. A plaintiff may now recover a separate judgment against each joint tortfeasor and he may seek satisfaction of each judgment recovered from the judgment debtor, subject to s.5(1)(b) which precludes recovery of sums by way of damages in excess of the amount of the damages awarded by the judgment first given. As s.5(1)(a) confers on a plaintiff the right to recover judgments in successive actions against the respective tortfeasors, the unity of the common law cause of action against all joint tortfeasors is severed. Axiomatically, a judgment awarding damages against any tortfeasor must be founded on an antecedent cause of action against him, and so a plaintiff now has as many causes of action as there are joint tortfeasors. He may sue and recover judgment on any or all of those causes of action, in one action or in successive actions, but not so as to recover more than full compensation and subject to any limitation imposed by s.5(1)(b) on recovery of sums by way of damages. When a plaintiff recovers in full the amount to which he is entitled for the damage suffered by him, he can recover no more under s.5(1). Clearly enough, s.5(1) is not intended to multiply the damages recoverable by a plaintiff but to facilitate their recovery. It follows that, once the plaintiff has recovered in full the amount to which he is entitled for the damage suffered by him, causes of action that have not merged in judgments must then be taken to be barred as between the plaintiff and the tortfeasors against whom the causes of action lay.

3. At common law, a difficulty arose when a plaintiff sued a number of joint tortfeasors but recovered an award of exemplary damages against some only of them. It would have been unjust to award exemplary damages against a defendant merely on account of the conduct of a co-defendant for whose conduct he is not responsible or to increase an award of exemplary damages against a particular defendant on account of such a co-defendant's conduct. In Broome v. Cassell &Co. (1972) AC 1027, the House of Lords resolved that difficulty by defining a rule for application in England that the maximum to be awarded by way of exemplary damages against defendants who are joint tortfeasors is the lowest amount for which any one of them can be held liable: see at pp.1063,1090,1106,1122. The rule is derived from the common law principle that only one sum may be awarded in a single proceeding for a joint tort (per Lord Hailsham of St.Marylebone, L.C. at p 1063). Under the Broome v. Cassell &Co. rule, no defendant can be held liable for an amount greater than the amount that can properly be awarded against him. On the other hand, under that rule, defendants whose conduct warrants a larger award avoid a liability to pay more than the common minimum. If it be right to say that s.5(1) has severed the unity of the cause of action against joint tortfeasors, the foundation of the Broome v. Cassell &Co. rule has been removed. In my opinion, that is the consequence of enacting s.5(1). It appears, as the Judicial Committee observed in Wah Tat Bank Ltd. v. Chan, at p 519, that the attention of the House of Lords was not called to the English provisions corresponding with s.5(1). Damages may now be awarded against each tortfeasor in the amount for which he is shown to be liable. The quantum of an award depends on the circumstances of the individual case, though the satisfaction of multiple judgments in successive actions is subject to the provisions of s.5(1)(b). The way is therefore open to award exemplary damages against any joint tortfeasor in an amount appropriate having regard to his conduct. It is a question, however, whether s.5(1)(b) limits the recovery of exemplary damages awarded against individual tortfeasors in the same way as it limits the recovery of sums by way of compensatory damages. I shall turn presently to that question, noting that, if s.5(1)(b) operates differentially on the two categories of damages, it would be necessary to quantify the assessment of each category in a judgment recovered against any tortfeasor liable for exemplary damages.

4. Lord Reid thought it impracticable and Lord Wilberforce thought it "fundamentally wrong" (see pp.1090, 1118) to separate awards of exemplary damages from awards of compensatory damages, and to award exemplary damages against one or more defendants severally in addition to compensatory damages recoverable against any or all defendants. However, Lord Reid acknowledged (at p.1090) that if different awards of damages could be made -

" The only logical way to deal with the matter would be first to have a judgment against all the defendants for the compensatory damages and then to have a separate judgment against each of the defendants for such additional sum as he should pay as punitive damages."

That way of dealing with the matter has been adopted in some American States without being found to be impracticable; other American States adopted the rule favoured by the House of Lords in Broome v. Cassell &Co.: see 20 ALR 3d p 666 et seq.. If s.5(1) permits the individual assessment and the cumulative recovery of exemplary damages against each joint tortfeasor whose conduct warrants the awarding of exemplary damages, that practice is preferable to the Broome v. Cassell &Co. rule (see C. Morris "Punitive Damages in Tort Cases" 44 Harvard Law Review, (1931) 1173, at p 1193). By separating the assessment of exemplary from the assessment of compensatory damages, it is possible to reduce any anomalies that inhere in the practice of awarding a single undifferentiated amount as compensation to the plaintiff for what he has suffered and as punishment of the defendant for what he has done. Separation of the assessment of exemplary damages from the assessment of compensatory damages may suggest that the single cause of action against each defendant has, amoeba-like, divided and multiplied, but on examination that is not so. Exemplary damages are parasitic on compensatory damages, the plaintiff being unable to recover exemplary damages if he is not the victim of the behaviour which attracts the exemplary damages (per Lord Devlin in Rookes v. Barnard (1964) AC 1129, at p 1227). A single cause of action provides the foundation of a judgment awarding, in an appropriate case, exemplary damages as well as compensatory damages. When a plaintiff's claim for compensatory damages has been satisfied in full, however, he no longer has a cause of action that can support an award of compensatory damages to which an award of exemplary damages can attach. He cannot thereafter recover a further judgment for compensatory or for exemplary damages. Nor, for that matter, could he then enforce any judgment that he has recovered so as to obtain more than full compensation.

5. But does s.5(1)(b) limit the recovery of exemplary damages under successive awards in the way in which it limits the recovery of compensatory damages? If s.5(1)(b) has that operation, the effect of assessing exemplary damages individually would be modified by the award made in the first judgment given. Section 5(1) applies "(w)here damage is suffered by any person" and par.(b) applies if "more than one action is brought in respect of that damage". Section 5(1)(b) limits "the sums recoverable under the judgments given in those actions by way of damages" to "the amount of the damages awarded by the judgment first given". Section 5(1)(b) admits of two constructions. The first would take "the sums recoverable by way of damages" as referring to the total award recoverable under the judgment, whether or not the total included exemplary damages. The second would take the phrase to refer to the sums recoverable in respect of "that damage" that is, in respect of the "damage suffered by any person". In my opinion, the second construction is to be preferred. The purpose of s.5(1)(b) is to prevent excessive recovery by a plaintiff consequential on the creation of multiple causes of action against tortfeasors. The limit imposed by s.5(1)(b) is reasonable if s.5(1)(b) is referring to compensatory damages alone, for it ensures that the "damage suffered by any person" for which all joint tortfeasors are responsible does not result in judgments which entitle a plaintiff to receive more than the damages assessed against the tortfeasor who first becomes a judgment debtor. So understood, s.5(1)(b) fixes the maximum sum in respect of which an order of contribution might be made under s.5(1)(c). But if s.5(1)(b) were taken to refer to exemplary as well as compensatory damages, the limitation imposed on recovery would operate capriciously so that the liability of the tortfeasor against whom an award of exemplary damages is first made would provide the ceiling of exemplary damages that might be awarded against other joint tortfeasors, although the conduct of the other joint tortfeasors may have been more reprehensible than the conduct of the firstmentioned tortfeasor. Moreover, the reference in s.5(1)(c) to the liability of a tortfeasor in respect of "that damage" suggests that the damages referred to in the earlier provisions of s.5(1) and which are amenable to the making of contribution orders under s.5(1)(c) are damages in respect of "damage suffered by any person" - that is, compensatory damages. Exemplary damages are of a wholly different kind. Exemplary damages are not awarded to compensate the plaintiff but to punish and deter the wrongdoer (Uren v. John Fairfax &Sons Pty.Ltd. (1966) 117 CLR 118, per Taylor J. at pp 129-130, per Windeyer J. at p 149; Whitfeld v. De Lauret &Co.Ltd. (1920) 29 CLR 71, per Knox C.J. at p 77 and per Isaacs J. at p 81). It would subvert the purpose of an award of exemplary damages to make a contribution order under s.5(1)(c). The better view of the provisions of s.5(1)(b) and (c) is that they do not relate to exemplary damages and that it is open to a court, if the circumstances warrant an award of exemplary damages, to assess those damages in whatever amount is appropriate to the circumstances of the case made against a particular tortfeasor.

6. By providing for contribution between tortfeasors in respect of compensatory damages according to their respective responsibility, s.5(1) avoids the possibility that one of the judgment debtors might be called on by the plaintiff to bear the whole of the liability for compensatory damages without recourse to the other judgment debtors. By providing for contribution in respect of compensatory damages, s.5(1) facilitates the assessment of a condign punishment appropriate to be inflicted on the individual tortfeasor. The assessment of exemplary damages is no longer beset by the problem of reconciling the joint and several liability of all tortfeasors against whom a judgment is entered with the purpose of punishing and deterring the individual tortfeasor, nor by the problem of admitting evidence as to the means of one tortfeasor in assessing damages for which all tortfeasors are liable. When an award of exemplary damages is made against a joint tortfeasor, it may be necessary to specify in the judgment the respective amounts assessed as exemplary damages and as compensatory damages in order to identify the amount to which s.5(1)(b) and (c) might apply. Where those provisions may apply the jury, under an appropriate direction, should be required, if they return a verdict for the plaintiff, to distinguish between the two categories.

7. For the reasons stated by the Chief Justice and for the reasons here stated I would dismiss the cross appeal.

8. The appeal seeks the restoration of the jury's verdict of $400,000 exemplary damages in addition to compensatory damages (as to which there is no dispute). Though the assessment is large, that is not a sufficient reason for an appellate court to interfere. Before an appellate court can interfere with the verdict, it must be plain that no reasonable jury properly applying the relevant principles could have awarded so large a sum (Coates v. Carter (1951) 82 CLR 537, at p 543; Precision Plastics Pty.Ltd. v. Demir (1975) 132 CLR 362, at p 369). If some less rigorous test were applied and an order made for a retrial, the next jury might reasonably return the same verdict as that set aside as manifestly excessive (see per Lord Reid in Broome v. Cassell &Co., at p 1090). Where a jury is entitled to award exemplary damages it is very difficult for a defendant to show that the award is so disproportionate as to warrant the setting aside of the verdict (Uren v. John Fairfax &Sons Pty.Ltd., at p 128).

9. 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. In Merest v. Harvey (1814) 5 Taunt 442 (128 ER 761) substantial exemplary damages were awarded for a trespass of a high-handed kind which occasioned minimal damage, Gibbs C.J. saying:

" I wish to know, in a case where a man disregards every principle which actuates the conduct of gentlemen, what is to restrain him except large damages?"

10. The social purpose to be served by an award of exemplary damages is, as Lord Diplock said in Broome v. Cassell &Co., at p 1130, "to teach a wrong-doer that tort does not pay". The purpose of restraint looms large in the present case. The jury were entitled to take into account that Caltex and XL were competitors in an industry in which, notoriously, competition for markets and for outlet sites has been intense. The jury were therefore entitled to form the view that a risk of repetition of Caltex' conduct in spiking a competitor's tanks was quite unacceptable, for the intensity of commercial competition might lead to violence and counter-violence among competitors if legal process proved inadequate to suppress the use of force. And if the jury formed the view that it was desirable to ensure that Caltex did not again spike the tanks of a competitor, the jury were entitled to assess exemplary damages in an amount that would be likely to have a deterrent effect - sufficient to make Caltex smart. In Uren v. John Fairfax &Sons Pty.Ltd., at pp 136-137, Taylor J. cited with approval a passage from the judgment of Grier J. delivering the opinion of the Supreme Court of the United States in Day v. Woodworth (1851) 13 How 363 (14 LEd 181). That passage included the following:

" In actions of trespass, where the injury has been wanton and malicious, or gross and outrageous, courts permit juries to add to the measured compensation of the plaintiff, which he would have been entitled to recover had the injury been inflicted without design or intention, something farther by way of punishment or example, which has sometimes been called 'smart money'. This has been always left to the discretion of the jury, as the degree of punishment to be thus inflicted must depend on the peculiar circumstances of each case."

Where exemplary damages may properly be awarded to deter a tortfeasor, evidence of his means is material not only to show that he can afford to satisfy a substantial judgment or to show that he has acted in contumelious disregard of the plaintiff's rights by taking advantage of his wealth, but to show what sum will be a sufficient deterrent against repetition of the conduct that attracts the award. No doubt the width of the jury's discretion in assessing exemplary damages has evoked judicial expressions of concern about employing the civil law to inflict punishment. But it is now beyond argument that, by the law of this country, it is proper to award exemplary damages by way of punishment of the tortfeasor (see per Taylor J. in Uren v. John Fairfax &Sons Pty.Ltd., at pp 136-137; Australian Consolidated Press Ltd. v. Uren (1969) 1 AC 590, at p 642; 117 CLR 221, at p 239). Clearly the jury in the present case must have awarded exemplary damages for that purpose. Although the amount which the jury assessed is much greater than I would have thought appropriate, I am quite unable to hold that the jury were not entitled to take the view that an award of $400,000 was necessary to provide an effective deterrent against a repetition of Caltex' conduct. As that view is not shared by a majority of the Court, I should say that, if I were to give effect to my own opinion, I would regard $150,000 as an appropriate award of exemplary damages.

11. I would allow the appeal and dismiss the cross appeal.

Orders

Appeal dismissed with costs.

Cross appeal dismissed with costs.