Damages in Tort 6. Damages in Contract 18. Restitution 27. Rescission 32. Specific Performance 38. Account of Profits 40.

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1 LW401 REMEDIES Damages in Tort 6 Damages in Contract 18 Restitution 27 Rescission 32 Specific Performance 38 Account of Profits 40 Injunctions 43 Mareva Orders and Anton Piller Orders 49 Rectification 53 Declarations 55 Equitable Compensation and Damages 57 Delivery Up 59 1

2 Introduction and Overview Classification of civil remedies Remedy: legal redress; the legal means of enforcing a right or addressing a wrong (Macquarie Dictionary) Redress for the infringement or breach of a right which is recognised and protected by law Plaintiff oriented subject; it is concerned with what the plaintiff will get o (But understand the concept of remedies from a defendant s point of view - to ascertain whether or not a defendant is entitled to defend an action and on what basis.) o Three basic types of relief which a plaintiff can reasonably expect to achieve in civil proceedings: - declaratory relief, where the plaintiff seeks an authoritative judicial statement of the legal relationship, if any, between the parties (i.e. specific performance); - relief, via a judgment in money as a substitute (therefore damages or compensation) or restitution; - specific relief, where the plaintiff seeks by the judgment to coerce the defendant in some particular way (again specific performance; Freezing Orders; Anton Piller orders) Choice of remedies Breach of the plaintiff s primary right may itself give rise to more than one remedy: o breach of contract admits of an action for damages and/or for specific performance; or o trespass permits an action for damages and for an injunction Plaintiff may be able to found his action on more than one legal basis: contract and tort; or tort and restitution; from each of which a different remedy may flow Remedies is about recognising from the facts, all remedies available, limitations of any remedy and to determine which is the best remedy available Example 1: tort/contract In Astley v Austrust Limited (1999) 197 CLR 1 at 23 the High Court stated the following in relation to contract and tort:... The conceptual and practical difference between the two causes of action remain of considerable importance. The two causes of action have different elements, different limitation periods, different tests for remoteness of damage and... different apportionment rules. The theoretical foundation for actions in tort and contract are quite separate. Whilst different, they may nevertheless be used concurrently/ alternatively A claim against a solicitor for negligence can be brought either in tort (breach of duty) or contract (breach of retainer) The advantages of choosing one over the other might be exemplified by the limitation period that applied to each of those: o Contract - begins to run from the breach o Tort - begins to run when symptoms or damage accrues Thus whilst an action in contract may be statute barred, an action or an identical action in tort may not. Example 2: rescission/rectification If a plaintiff entered into a contract under a common or unilateral mistake, the plaintiff may choose to either: 2

3 o o o rescind the contract, or seek an order the contract be rectified, to amend and bring it into conformity with what the parties agreed Example: contract for sale of land and the omission of payment of GST Example 3: restitution Restitution is the converse of compensation o Compensation - reverses the plaintiff s loss o Restitution - reverses the defendant s gain Example: recovery of the proceeds of a tort o Victim of a tort may recover the proceeds of the tort from the tortfeasor (WOT) o Restitutionary claim: in the form of an action for money had and received WOT useful where the benefit received by the tortfeasor is greater than the loss, if any, suffered by the victim, i.e.: o Defendant has tortiously converted the plaintiff s goods by selling them. o An action for money had and received will allow the plaintiff to claim for the proceeds of sale from the tortfeasor Restitution is an alternative to an action for tortious damages Restitution is the most effective remedy for an unenforceable contract Strategy and the choice of remedies Where there is more than one remedial possibility, the remedial strategy will be determined primarily by: o What he wants to achieve in litigation in the light of the overall factual situation, including o the defendant s financial position It is possible to identify two major general limitations which, as a matter of law, impact upon the plaintiff s choice. They include: o rules of law which act as restrictions on the availability of individual remedies, for example, the rules of remoteness in the law of damages, or the operation of discretionary factors in equitable relief o The extent to which a plaintiff may fail to satisfy the substantive requirements of the remedy in question, he or she will be forced to rely, subject to the other limitations, upon such other remedies as the law allows him or her there are rules of law which determine that certain remedies are exclusive of one another, at least in certain situations Rules restricting recovery Not all tortiously inflicted injuries (even if reasonably foreseeable) sound in damages. o For example: loss of a chance (medical negligence), negligent infliction of pure economic loss and pure psychiatric harm, may not be recoverable in certain circumstances Example: the application of the principle that in tort, damage is said to be the gist of action because without it, there is no action The application of that proposition was applied in the so-called wrongful birth and wrongful life cases: o Wrongful birth - Cattanach & Anor v Melchior & Anor (2003) 215 CLR 1: 3

4 - failure to warn case. A couple became the parents of an unintended child as a result of negligent advice and failure to warn by the doctor who had performed a sterilisation procedure upon the mother. - Damages awarded included an amount to the couple jointly for the reasonable cost of raising and maintaining a child until the age of The majority held that in compensation for the birth of an unintended child resulting from the doctor s negligent advice and failure to warn, the couple were entitled to the damages claimed for the cost of raising and maintaining the child Rules restricting recovery Wrongful life o Harriton v Stephens (2006) 226 CLR 52: - By majority of 6 to 1 the High Court refused to recognise wrongful life as an actionable injury where a severely disabled plaintiff would not have been born but for the doctor s negligence - The doctor failed to diagnose rubella in the mother during pregnancy and she thereafter lost an opportunity to abort the baby. Their daughter was born with life long disabilities including blindness, deafness, mental retardation and spasticity - She claimed special damages for her past and future medical costs and general damages for pain and suffering. Crennan J in the majority held: - A comparison between a life with disabilities and non-existence, for the purposes of proving actual damage and having a trier of fact appreciate the nature of the damage caused, is impossible. Judges in a number of cases have recognised the impossibility of the comparison and in doing so references have been made to philosophers and theologians as persons better skilled than courts in apprehending the idea of non-being, nothingness and the afterlife. - There is no present field of human learning or discourse, including philosophy and theology, which would allow a person experienced access to non-existence, whether it is called pre-existence or afterlife. There is no practical possibility of a court, (or jury) even appreciating or evaluating or receiving proof of, the actual loss or damage is claimed by the appellant. It cannot be determined in what sense (the child) life with disabilities represented a loss, deprivation or detriment compared with non-existence. Exclusiveness of remedies Some situations where one course of action is exclusive of another - the two courses of action are mutually inconsistent A plaintiff who has chosen the one course of action - elected irrevocably in favour of that course of action - cannot now pursue the other Contracts - the doctrine of election: o Breach of contract may entitle the innocent party to terminate the contract o The innocent party can elect to accept the breach as a repudiation of the contract, or he can insist upon the guilty party s performance of the contract: - Accept breach: contract is terminated from that time; the innocent party can forthwith sue for damages. - Compel performance: contract is affirmed; and the guilty party is given an opportunity to make amends. Declaration and damages: 4

5 o inconsistency would arise if a court were asked (at the same time) to grant damages for breach of contract on the basis that the contract had been terminated by the defendant s breach and, o a declaration that the contract subsist Restitution and damages: o restitution - plaintiff seeks to compel the defendant to disgorge a benefit which the defendant has unjustly obtained at the plaintiff s expense o A claim for damages (tort, contract, equity) - plaintiff seeks compensation from the defendant for a wrong Specific performance and damages: o An election to seek specific performance will usually exclude a claim in damages 5

6 Damages in Tort What is the general principle of tortious damages? Damages compensatory in nature Tortious damages intended to put the plaintiff in pre-tortious position The guiding principle in awarding damages: Lord Blackburn in Livingstone v Rawyards Coal Co. (1880) 5 App Cas 25 at 39: o I do not think that there is any difference of opinion as to its being the general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given reparation of damages, you should nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation... [Justine s emphasis] Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, per Mason, Wilson and Dawson o In tort, on the other hand, damages are awarded with the object of placing the plaintiff in the position in which he would have been had the tort not been committed Exceptions: o Heads of damage - Exemplary (punitive) damages - The only head of damage that does not follow the same position guiding principle of the award of compensatory damages in tort: - Punishment and Deterrence the conduct was so bad that the wrongdoer needs to be taught a lesson - Purely designed to punish the defendant - Not compensatory o Statutory exceptions also limit awards of compensatory damages in: - Civil Liability Act 2002 (WA): s 9 restrictions on damages for non pecuniary loss (general damages), i.e. pain & suffering, loss of amenities and enjoyment of life etc. s 11 restriction on damages for loss of earnings (past & future) no more than 3 times the WA average weekly earnings limits the amount of damages you can receive at 3 times the WA regular wage s 12 restrictions on the amounts for provision of home care services - Safety, Rehabilitation and Compensation Act 1988 (Cth); - Seafarers Rehabilitation and Compensation Act 1992 (Cth); - Workers Compensation and Injury Management Act 1981 (WA). - Motor Vehicle Claims Elements for receiving compensatory damages To receive compensatory damages in tort a court must find: a. Plaintiff has tortious cause of action against the defendant; b. Defendant s tort has in fact caused the plaintiff s loss; c. Plaintiff s loss is not too remote; and d. Plaintiff has not breached their duty to mitigate unnecessary loss. Standard of Proof (threshold required for case) o Plaintiff bears onus of proving their case on the balance of probabilities: Civil Liability Act 2002 (WA) - s 5D: 6

7 - In determining liability for damages for harm caused by the fault of a person, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation. o Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at : - A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of the event having occurred is less than it not having occurred, it is treated as not having occurred. Burden of Proof o Plaintiff: - Cause of action - Causation (factual causation) - Remoteness (legal causation) o Defendant: - Contributory negligence (part of causation) - Mitigation 1 How do various tortious causes of action differ from each other in the assessment of damages? The tort gives rise to the entitlement to compensatory damages. The character of the tort itself its elements will affect how the court examines the plaintiff s claim for damages: Torts actionable per se o Damages assessed at large : presumed the natural, probable consequence of the tort is injury or damage. o Damage is irrelevant to proving the commission of the tort o Examples: - Defamation - False imprisonment - Malicious prosecution Torts where proof of actual damage is required o Damage forms an essential element of the cause of action and must be proved to succeed. o Commonwealth v Cornwell [2007] HCA 16: - Proof of actual damage or injury is a requirement of the cause of action itself - Action will not accrue unless damage occurs - Negligence (please know) [Duty Breach Causation Damage] Establishing a tortious cause of action without proof of damage o No damage = nominal damages (possibility of costs) o Action should not have been brought = contemptuous damages (no costs) - i.e. Connolly v Sunday Times Publishing Co Ltd (1908) 7 CLR How does causation affect any award of tortious damages? Causation is required in both fact ( but for test) and law (remoteness) But for test: but for the defendant s wrong, would the plaintiff have suffered the loss or damage complained of? If the loss or damage would have occurred despite the wrong, the claim must fail for lack of causal connection. But what exactly is it? o Traditional distinction problematic when you have: 7