Case note: Lewis v Australian Capital Territory [2020] HCA 26; 94 ALJR 740
The High Court has unanimously declined to award compensatory damages for false imprisonment where the imprisonment was inevitable notwithstanding the commission of the tort. The Court also refused to recognise a separate head of substantial ‘vindicatory’ damages. Edelman J delineated the scope of the ‘user principle’. Gordon J and Edelman J (with whom the other members of the Court variously agreed) each examined the existing heads of damages in Australia, favouring the status quo against the introduction of a new class.
What was the case about?
The Appellant, Mr Lewis, had been arrested and imprisoned for 82 days pursuant to a decision (Decision) of the Sentence Administration Board (Board) in the ACT. The Decision was invalid because it was made while the Board was inquorate. Mr Lewis sought substantial damages for false imprisonment.
At first instance Refshauge J of the ACT Supreme Court accepted that Mr Lewis had an action for the tort of false imprisonment and assessed damages at $100,000. However, his Honour awarded only nominal damages because it was inevitable that Mr Lewis would have been imprisoned upon a hearing of a quorate Board. There was no finding that Mr Lewis was entitled to exemplary damages. The ACT Court of Appeal dismissed Mr Lewis’s appeal.
Mr Lewis appealed to the High Court, seeking substantial damages for false imprisonment. The appeal gave rise to three questions. Firstly, was Mr Lewis entitled to substantial damages to vindicate his rights irrespective of the fact that he had not suffered any true loss and in the absence of an award of exemplary damages? Secondly, was Mr Lewis entitled to a substantial award under a separate head of ‘vindicatory damages’? Thirdly, could Mr Lewis recover compensatory damages when the imprisonment itself was inevitable? Edelman J noted that the first and second questions were in essence the same.[1]
Vindicatory damages
Mr Lewis argued that he had an entitlement to substantial damages based solely the fact that his right not to be imprisoned had been infringed. The submission discerned a category of substantial ‘vindicatory’ damages, available where there is no loss to be compensated.
Kiefel CJ and Keane J agreed with Edelman J’s findings on the question, and Gageler J agreed with Gordon J’s findings. All agreed that Australia does not recognise the species of vindicatory damages.
Edelman J held that to adopt vindicatory damages would militate against this country’s existing attitude to nominal damages and that there was no support in principle for such an approach.[2]
Gordon J too held that there was no basis in principle or practice for the course.[3] Her Honour accepted that the concept of vindicatory damages does exist in some Commonwealth countries, but that its application is confined to a constitutional context and directed to emphasising the significance of constitutional rights.[4]
In response to a submission that vindicatory damages should be available at least where compensatory damages are not available and nominal damages are insufficient, Gordon J considered that this role is already adequately performed by grants of declaration and awards of exemplary or aggravated damages.[5] Her Honour accepted that vindication is not an alien concept to damages in this legal system, but held that the aim of that concept is achieved through the existing heads of exemplary, aggravated and nominal damages.[6] In particular Gordon J noted that nominal damages are vindicatory in character, and that they would cease to have any purpose were a new head of vindicatory damages to be recognised.
The user principle
Of the axiom:
the inured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed,
Edelman J noted that it was a statement of principle that does not explain its own operation.[7] There are 2 types of legal remedy, said his Honour, that do the legwork of the compensatory principle. The first is directed toward rectifying the wrongful act, and the second is directed toward providing compensation for the consequences of the wrong.[8]
Edelman J allocated the user principle to the first class of remedy. His Honour reviewed the application of the user principle for determining damages in cases of trespass to land (damages based on the value of the use of land), the conversion of goods (damages assessed by a reasonable hiring charge), and intellectual property infringements (damages quantified by reference to a reasonable licence fee).[9] These calculations were described by Edelman J as requiring payment of an amount that would have rendered the use lawful.[10] His Honour identified that the user principle was often applied when there was no actual detriment to the plaintiff and it would therefore be “strained and artificial” in those circumstances to describe the plaintiff has having suffered loss.[11] Thus, damages awarded pursuant to the user principle are not concerned with loss:
If A, being a liveryman, keeps his horse standing idle in the stable, and B, against his wish or without his knowledge, rides or drives it out, it is no answer to A for B to say: ‘Against what loss to you want to be restored? I restore the horse. There is no loss. The horse is none the worse; it is better for the exercise.’[12]
Rather, the plaintiff must show that the defendant has obtained some advantage by the breach of the plaintiff’s rights. Edelman J noted that while user damages are generally assessed objectively by reference to a hypothetical use or licence fee according to value of the wrongful acts to both the defendant and the claimant, the truly crucial ingredient is a benefit to the wrongdoer:
To adapt a famous example from Lord Halsbury, suppose that a person removed a chair from my room for 12 months and locked it in storage. If the absence had no adverse effect on me, perhaps because a colleague substituted an identical spare chair of theirs, then damages would be nominal; despite the deprivation of use, no user claim is countenanced where the defendant obtains no opportunity for use from the deprivation. In contrast, as Lord Halsbury said, user damages are payable if the person “kept it” – that is, took my chair for the opportunity of their own use.[13]
Edelman J pointed to the fact that the user principle has never assisted in remedying the tort of assault, because no benefit can be gained by a wrongdoer for striking someone.[14]
Gordon J too briefly read the authorities relating to the user principle. However, her Honour did not explore the topic in detail, holding rather that its objectives did not coalesce with the tort of false imprisonment, and that none of the authorities on the user principle addressed a circumstance in which the loss incurred by a claimant was inevitable notwithstanding the wrongful act.
The remainder of the Court did not deem it necessary to explore the question of user damages. Rather, their Honours rejected Mr Lewis’s entitlement to any genus of compensatory damages on the basis that the counterfactual outcome would have been the same for him in any event.
Mr Lewis’s appeal was dismissed with costs.
[1] [170].
[2] [156], [173].
[3] [51].
[4] [105], referring to R (Lumba) v Secretary of State for the Home Department [2012] 1 AC 245; Attorney-General (Trinidad and Tobago) v Ramanoop [2006] 1 AC 328.
[5] [108]. See also Edelman J at [175].
[6] [109].
[7] [139]-[140].
[8] [140].
[9] [144].
[10] [145].
[11] [145]-[146].
[12] Watson, Laidlaw, & Co Ltd v Pott, Cassels, & Williamson 1914 SC (HL) 18 at 31 (Lord Shaw), quoted by Edelman J at [146].
[13] [148], referring to Owners of Steamship “Mediana” v Owners, Master and Crew of Lightship “Comet” [1900] AC 113 at 117. See also Gordon J at [82].
[14] [149].