The oppressor’s wrong, the proud man’s contumely and the eight hundred pound gorilla
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The exercise of a right is not permitted if its only possible purpose consists in causing damage to another. There is a sole purpose requirement. As in France, the court is prepared to deduce the intention from the absence of any apparent legitimate interest of the actor, but this hurdle and other rights in the German Code have limited the reach of this provision. It was applied where a father refused to let his children on to land where their mother was buried. XII OPPRESSION AND PREDATORINESS We might look briefly at how our laws contain bullying types of behaviour by or within large corporations. If nothing else, we will see that such behaviour is dealt with by laws expressed in very broad terms. A corporation that has a substantial degree of power in a market must not take advantage of that power for the purpose of substantially damaging competition. You do not have to be a layer or economist to see that there are about seven terms there that could evoke large arguments. A typical example of the prohibited conduct is the supply of goods for a sustained period at less than the relevant cost – predatory pricing. The common law recognises that you can start up in business with the view to wiping out the competition that you find already there, and in applying what the Americans call anti-trust laws, the courts recognise that competition is naturally ruthless – competitors are in one sense engaged in trying to lessen and therefore ‘injure’ the business of each other – such results are the product of these laws if they work to promote competition. The purpose of the Act is to promote competition, not to protect the private interests of particular persons or corporations…. Competition damages competitors. If the damage is sufficiently serious, competition may eliminate a competitor….. The essence of power is absence of constraint. Market power in a supplier is absence of constraint from the conduct of competitors or customers…. The structure of Pt IV of the Act does, despite the considerable textual differences, reflect three propositions found in the United States antitrust decisions. The first is that these laws are concerned with "the protection of competition, not competitors"… The second, stated in Brooke Group Ltd v Brown & Williamson Tobacco Corp…, is that "[e]ven an act of pure malice by one business competitor against another does not, without more, state a claim under the federal antitrust laws; those laws do not create a federal law of unfair competition or 'purport to afford remedies for all torts committed by or against persons engaged in interstate commerce'."….The third, which appears from Cargill Inc v Monfort of Colorado Inc , is that it is in the interest of competition to permit firms with substantial degrees of power in the market (or, in the United States, a dominant position) to engage in vigorous price competition and that it would be a perverse result to render illegal the cutting of prices in order to maintain or increase market share. The litigation about concrete bricks that produced those observations was horrendously complex, as shown by the differences in opinions in the very difficult judgments at different levels. The split between eleven judges was seven to four against the regulator – who had on his side a unanimous court of appeal in the Federal Court. Well, at least we are reminded that competition is meant to hurt and that even pure malice is not enough to get up under these laws. There is ample scope for conflict within a company, if a majority are acting oppressively toward minorities. Our company law was about a century ahead of the rest of our law in giving protection to minorities. These issues do not often arise in large public companies. Disaffected shareholders there can sell their shares on the open market and get out. The problem disputes are more likely to arise in small private companies that carry on business like a partnership. If the relationship between partners breaks down, there may be little alternative but to wind up the business, unless someone can be appointed to direct one party to buy the other out, or for the business to be sold as a going concern. Shareholders are not partners of each other. They are all in it for themselves. The directors are in a position of trust – a fiduciary position – for the shareholders, but the shareholders are certainly not in positions of trust for each other. They are entitled to vote their shares to their own personal advantage. But since the shareholders might fall into conflict that has the potential of festering, like a partnership dispute, the law provides ways in which the court can intervene to direct ways for the parties to end their relationship without necessarily destroying the business. The court can intervene where the conduct of the company’s affairs is contrary to the interests of the shareholders as a whole, or oppressive to or unfairly prejudicial to or discriminatory against other shareholders. There is a lot of judicial comment on this, but the powers are there, and they are wide. The judges are not to substitute their thinking for the business judgment of the directors, but the majority cannot avoid the issue simply by saying that the conflict arises in a business context. Nor do those asking the court for help have to show that their opponents have been dishonest. They simply have to show oppression within the scheme of the statute. XIII
DAMAGES Damages at common law are said to be given to put an aggrieved party in the same position as if the contract that they rely on had been performed or as if the wrong that they allege had not been committed. There is a level of unreality with either, but especially the compensation paid to the victims of wrongs. No one who has acted for a quadriplegic who recovers millions of dollars in compensation has acted for one who feels that they are even remotely as well of as they were before. They have been awarded a sum that includes compensation for things like pain and suffering, loss of enjoyment of life, and loss of life expectancy, but compensation is just that. It is an attempt to make up for a wrong, but it can never put the person wronged back where they were. So, the first advice that a lawyer should give to a person wronged or who has suffered as a result of a breach of agreement is that history is history and cannot be re-written, and that even if they sue and win, they are quite unlikely ever to get back to where they were before they took the hit. But cases involving claims for mental distress or disappointment arising from breach of contract give rise to different emotions. These are not encouraged. And the old law closed its face to claims for compensation for damage to reputation caused by wrongful dismissal. This was one of the complications in Malik above. Being fired can be soul-destroying, and, if you are a man, unmanning. Of course it affects a person’s standing in the community – that is, their reputation has suffered as a result of the wrong. Why should that person not be able to recover compensation for that kind of harm? If a woman could recover damages on an allegation that she had been (seduced Princess Yusupov v MGM), why could not a person recover damages for the fact that they have been fired? But on claims that are compensated for the wrong of libel or defamation – that is damage to reputation – some people were seen to be recovering telephone numbers – figures in the hundreds of thousands – when the maximum amount that the state would allow for its compensation for the pain and suffering of the worst kind of crime – multiple rape – was the kind of derisory figure that is handed out in small claims tribunals. (Princess Yusupov recovered close to a world record for the suggestion that she had been seduced by Rasputin, but the evidence was that MGM had chanced its arm.) Sometimes it was hard to suppress the suspicion that some of these plaintiffs were net better off after they had been both wronged and paid out. Certainly, the press would tell anyone who listened that that was the case when politicians sued them. They thought that it was all a dirty game that they lost too often. The problem with this kind of empiricism without the benefit of evidence is that few people have much time for politicians, but no one is left to stand up for those that the press have just rolled over. We need, then, to remember what is involved in compensation for damage to reputation, especially as this wrong often involves a form of outrage. Damages for defamation are awarded for two kinds of harm – damage to reputation and hurt to feelings. The latter might be referred to as the distress or grief felt by the victim when they became aware of the offending publication. The plaintiff will be required to go into evidence in some detail on this, and cross examination may not help the publisher. Experience of forensic contests tells us that the bad conduct of the wrongdoer either in the acts sued on or in the conduct of the trial very commonly is reflected in the amount of the damages or costs awarded at the trial. A typical example is a defendant who is sued for calling someone, say, a liar or a coward, and then maintains the truth of and repeats the allegation. That conduct will aggravate the hurt to the plaintiff and the amount of damages awarded for the hurt is then likely to be aggravated. These are some of the reasons why libel actions can be a cross between a high-wire act and Russian roulette. So, damages are awarded to compensate for those two kinds of loss, hurt to reputation and hurt to feelings. Additionally, the law says that those damages may be increased –the term is aggravated – for insulting or humiliating behaviour, or increased to what are called exemplary damages where the wrongdoer needs to be made an example of. In Uren v John Fairfax, the High Court had to consider what were then large awards of damages for libel where the newspaper had linked in a sensational way a Labor politician with a ‘RED SPY’ and where the judge had directed the jury that they could award exemplary damages. The court declined to follow an English deviation on the issue of exemplary damages. In the course of his judgment, Sir Victor Windeyer distinguished aggravated and exemplary damages. Accepting that a jury may weigh the conduct of the defendant either in mitigation or aggravation of damages, how, if they think it an aggravation, can it be said that no punitive element entered into the assessment? The theory is that in such a case the damages are still only compensatory because the more insulting or reprehensible the defendant's conduct the greater the indignity that the plaintiff suffers and the more he should receive for the outrage to his feelings. That defamation may produce indignity and humiliation and that these can attract monetary compensation is no new doctrine. It goes back to the early Middle Ages, to a time before the king's courts gave any remedy for defamation: see Pollock & Maitland, 2nd ed. (1923), vol. 2, pp. 536-538. In 1928 Higgins J. remarked that it "seems to be right so long as the theory stands that 'the jingling of the guinea helps the hurt that honour feels'": The Herald and Weekly Times Ltd. v. McGregor (1928) 41 CLR, at p 272. Insult, as well as injury to reputation, thus merits compensation. This Tennysonian explanation is convenient, but not altogether convincing. Two objections may be made. First, the satisfaction that the plaintiff gets is that the defendant has been made to pay for what he did. Guineas got from the defendant jingle more pleasantly than would those given by a sympathetic friend. Secondly, conceding that an indignity suffered must be paid for, why is the degree of the indignity that the plaintiff suffers to be measured by considering what was in the mind of the defendant, the malice or motive which moved him? It seems to me that in truth a punitive or vindictive element does lurk in many cases in which the damages were aggravated by the defendant's conduct. (Emphasis added.) In the English case of Cassell & Co Ltd v Broome, a distinguished naval officer had been badly libelled in a book where the publishers had been warned before publication and they just kept making things worse. On the final appeal, the leading judge (the Lord Chancellor) said that aggravated damages reflect the natural indignation of the court at the injury suffered. Where damages for loss of reputation are concerned, or where a simple outrage to the individual or to property is concerned, aggravated damages….should …take care of the exemplary element, and the jury should neither be encouraged nor allowed to look beyond as generous a solatium as is required for the inuria simply in order to give effect to feelings of indignation. (Emphasis added.) Well, those distinctions may be fine even for most lawyers, and almost certainly too fine for most juries. All that the jury see is that the plaintiff has been badly and unfairly dealt with by the press and then put over the jumps, and that it is about time the press paid for it – and they are big and ugly enough to do just that. After all, the division between criminal law and civil law was not always with us. At the dawn of our legal history, proceedings for a wrong had the dual purpose of satisfying someone for their personal loss and the king for the breach of the peace; wrongs had to be atoned by compensation to the injured and a contribution to the king, but there is no reason in logic or experience why a payment to the victim may not serve both purposes. A payment to the king is not a compensation for the victim, but the payment of compensation to the victim is of itself a detriment to the defendant. XIV
CONTUMELY AND CONTUMACY Damages that are called punitive or exemplary damages are given not to compensate the victim – that will have been done – but to punish the defendant or make an example of them. When damages are awarded to deter a wrongdoer and others from engaging in similar conduct, we are not far from the law sanctioning a judgment of the court to reflect outrage. The word ‘outrage’ might equally reflect either conduct inflicting gross indignity or the sense of the communal reaction to that conduct. You will be likely to find the conduct of the wrongdoer stigmatised as contumelious or contumacious. We referred earlier to the observation of Sir Frederick Pollock: ‘In the modern common law, compensation for insult, as distinct from actual bodily hurt, is arrived at only in a somewhat indirect fashion, by giving juries a free hand in the measure of damages.’ In Cotogno v Lamb [Number 3], the New South Wales had to consider an unedifying case. A process server, the defendant, tried to serve a summons on the plaintiff at his home. The plaintiff got very angry and threatened to kill the defendant. He tried to get away in his car, but the plaintiff threw himself over the bonnet. The defendant drove the car for about 400 metres before braking sharply to throw the plaintiff off. The court found in favour of the plaintiff and awarded substantial damages for injuries, and a modest amount of punitive damages. This was upheld in the Court of Appeal. Justice McHugh said: An award of exemplary damages acts as an example to all those engaged in the community who might engage in wrongdoing involving a conscious and contumelious disregard of another person’s rights. The sanctions of the criminal law are not always sufficient to protect the weak and the disadvantaged against the oppressive conduct of the powerful and the wealthy. An award of exemplary damages also serves another useful social purpose. It helps to remove the sense of grievance which the plaintiff feels when he has been the victim of insulting behaviour. It was when the victim of such behaviour believes that the law can not or will not remedy his grievance that he is most likely to take the law into his own hands. Historically, the award of exemplary damages was the common law’s substitute for the duel. An award of exemplary damages against a conscious wrongdoer placates the victim who has the satisfaction of seeing the defendant punished and of receiving the additional damages. All that is what used to be called robust good sense, but it is in short supply here now. One reason is that we have greatly reduced the role of the jury in civil actions – unlike in the U S – and the press persuaded our governments to take damages for libel way from the jury altogether. The press did not stop there. They had exemplary damages banned just for them and they got their friends in every state parliament to say this: ‘In awarding damages for defamation, the court is to disregard the malice or other state of mind of the defendant at the time of the publication of the defamatory matter to which the proceedings relate or at any other time except to the extent that the malice or other state of mind affects the harm sustained by the plaintiff.’ Why should a court disregard malice for any purpose or to any extent when looking at compensating one person for the wrong done to them by another? Even a dog knows the difference between being kicked accidentally and deliberately. Is not our law of wrongs based on the notion that there is someone to blame? Damages were capped at a level far below what juries had been awarding. Now the press wants to emasculate the law against offending or insulting people on account of their race even though they have no criminal or civil liability to fines or damages. Another reason is for our loss of rights gainst outrages is our continuing fixation on legal pigeon-holes. We allow people to recover punitive damages for negligence, fraud or defamation, but not for breach of contract or breach of trust. We do not, at least at present, allow damages for breach of trust, including breach of what is called fiduciary duty, because they arise from a head of law called ‘equity’, and it is not just a fallacy but something approaching heresy north of the river to assert that ‘equity’ was fused with the common law by an English statute passed midway through the reign of Queen Victoria. Instead, we and people in business are solemnly assured by the oracles in Sydney, who only received the relief of Queen Victoria in the year of Our Lord 1970, that ‘the two streams of jurisdiction, though they run in the same channel, run side by side and do not mingle their waters.’ The doctrine, or dogma, is not quite as hard as that of transubstantiation, but the brethren are working on it. In a case called Harris v Digital Pulse, the trial judge, after a trial of more than five days about employees setting up in competition, began a reserved judgment with these observations: 1 Were it not for one feature, this case would be unremarkable amongst the many of its type which come into the equity court: employees resolve to go into business for themselves in competition with their employer; they decide to give their new venture a head start by remaining in employment and diverting to themselves their employer’s business opportunities until they are economically secure enough to declare their hands, throw up their employment and compete openly. No one doubts that the employees have breached their contractual and fiduciary duties of loyalty to their employer and that they are liable for damages, an account of profits or equitable compensation. 2 What makes this case remarkable is that, in addition to the usual remedies, the Plaintiff seeks exemplary damages for the Defendants’ breaches of fiduciary duty. Whether exemplary damages can be awarded by a court of equity at all and whether they can be awarded for a breach of equitable duty in particular are issues which have caused great controversy in the common law world. Strangely, the question is undecided by authority in Australia. It must be decided in this case. The judge found the defendants guilty of conscious dishonesty, and that they carefully planned the subversion of the business of their employers. But the actual damages were only about $25,000. (I say ‘only’ because the costs on each side would most likely have been well over $100,000.) But for the fine legal point, the judge could have probably dealt with it on the spot. But he had to consider a difficult legal argument. He found that he could award punitive damages and did so to the modest tune of $20,000. (I say ‘modest’ because of what would obviously have been the level of costs.) At that stage, the plaintiff was probably looking at being at a net loser even if the defendants were good for the amounts awarded. But they found the found enough money to appeal. The judgments of the Court of Appeal are of astounding length for such a small and grubby issue that could surely have been wrapped up in a morning by a competent magistrate. The plaintiff went down two to one on appeal. That left the judicial scoreline at two all. The Court of Appeal did not allow the plaintiff to keep the judgment for $20,000 in punitive damages, but they softened the blow on costs. They had been told that the amount of costs in dispute was of the order of $200,000. They made no order for costs of the appeal. ‘That position, which is highly favourable to the plaintiff, results from the highly special circumstances of the present case.’ Both sides would therefore have been out of pocket well north of $200,000; the plaintiff was left with a judgment for about $25,000 and an order that would give them some costs of trial – we have no way of knowing whether the defendants had anything left; and the lawyers are left blushingly in the money. The views of the parties on this Dickensian quagmire would not be repeatable, but sadly their experience will be. In this state of the law, punitive damages are at best a very iffy answer to insult and outrage, especially if they are so doubtful where the insult is offered or the outrage is committed by someone who is close to and who is trusted by the victim. XV
During a phase when our law might be moving from its beginnings more than a millennium ago to protect the public peace and maturing towards defending private dignity, the brief meander of this note might give us pause. Our law is used to dealing in broad terms with people who are prone to hurting other people by their power or position, but we have not developed general wrongs like abuse of right or outrage that other legal systems have. We have tended to stick to being flexible in the award of damages. As a result, people who have to confront aggressive corporations or government bodies – that is, all of us – might feel that other legal systems have offered or do offer more protection to people in their position. Directory: 2014 2014 -> For want of a nail 2014 -> The Global Warming that Wasn’t 2014 -> Assembly, No. 3901 state of new jersey 216th legislature 2014 -> Stop Militarizing Law Enforcement Act of 2014 2014 -> Ihbb asian Championships 2014 middle school bowl Round 4 First Quarter 2014 -> Unit: Automotive and Auto Body 2014 -> Ihbb european Championships 2014 Bowl Round 4 First Quarter 2014 -> International History Bee and Bowl 2013-14 Asian Division Question Set Bowl Round Six 2014 -> United states patent and trademark office 2014 -> Walnut creek, ca branch executive committee meeting minutes Download 113.95 Kb. Share with your friends:
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