JUDGMENT No. [4- 7 BB . ode i wee ee wet TRADE PRACTICES - misleading and deceptive conduct - representations in relation to shopping arcade ~— conduct of survey - prior tenancy commitments - likely turn-over - opening day - consequential losses. DAMAGES - deceit - exemplary damages - power of court to award exemplary damages ~ whether exemplary damages limited to certain classes of tort - whether exemplary damages available for deceit - quantum of compensatory damages and relationship _t benefit derived by respondent - relevant factors. Trade Practices Act 1974 ss. 52, 82 and 87 Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA) s.6 Federal Court of Australia Act s.22 Mayne and McGregor on Damages 9th Ed., 12th Ed. Milsom -— Historical Foundations of the Common Law 2nd Edition (1981) Waddams - The Law of Damages (1983) pp.574-5 Sedgwick on the Measure of Damages (1858) A. Street - Principles of the Law of Damages (1962) Pollock and Maitland The History of English Law Sales and Cole, Punitive Damages: A Relic That Has Outlived Its rigins (1984) 37 Vand L.Rev.1117 F.H. Lawson - Remedies of English Law (1972) C.W.H. Johns - Babylonian and Assyrian Laws Contracts and Letters (1904) Gates v City Mutual Life Assurance Society Ltd (1986) 63 ALR 600 Neilsen v Hempston Holdings Pty Ltd (1986) 65 ALR 302 XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448 Lamb v Cotogno (1987) 74 ALR 188 Haines v Schultz (1888) 50 New Jersey L.R. 481 Butterworth v Butterworth & Englefield [1920] P.126 Denison v Fawcett (1957) 10 DLR (2d) 722 Fencott v Muller (1983) 152 CLR 570 2. Philip Morris Inc. v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457 Rookes v Barnard [1964] Ac 1129 Addis v Gramophone Company, Limited [1909] ac 488 Mafo v Adams (1970) 10B 548 Cassell & Co. Ltd v Broome [1972] Ac 1027 Denison v Fawcett (1958) 12 DLR (2d) 537 Whitfeld v De Lauret & Company Limited (1920) 29 CLR 71 Watson, Laidlaw & Co. Ltd v Pott, Cassells, and Williamson 31 RPC 104 . Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118 Wilkes v Wood (1763) Lofft.1. Archer v Brown (1985) 1 QB 401 Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194 Lucas (TN) Pty Ltd v Centrepoint Freeholds Pty Ltd (1984) 52 ALR Derry v Peek (1889) 14 App.Cas.337 GIUSEPPE MUSCA and VERONICA MUSCA and HEATHER COLLARDEAU v ASTLE CORPORATION PTY LTD and CHARLES MORRONE ASTLE CORPORATION PTY LTD v GIUSEPPE MUSCA and VERONICA MUSCA and HEATHER COLLARDEAU No. WAG 74 of 1987 FRENCH J. PERTH 20 JANUARY 1988 IN THE PEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWERFRN: AN D BETWEEN: JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: No. WAG 74 of 1987 GIUSEPPE MUSCA and VERONICA MUSCA First Applicants and HDATHER COLLARDEAU Second Applicant and ASTLE CORPORATION PTY LTD First Respondent and CHARLES MORRONE Second Respondent ASTLE CORPORATION PTY LTD Cross-Claimant and GIUSEPPE MUSCA and VERONICA MUSCA First Cross-Respondents and HEATHER COLLARDEAU Second Cross~Respondent MINUTE OF ORDER FRENCH J. 20 January 1988 PERTH THE COURT ORDERS THAT: There will be judgment for the first applicants in the sum of $11,099.67. There will be judgment for the second applicant in the sum of $1,500.00. The Lease Agreement dated 25 January 1987 is hereby declared void ab initio. The cross-claim will be dismissed. The respondents to pay the costs of the application and the cross-claim. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. tan IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: AND BETWEEN: CORAM : FRENCH J. 20 January 1988 No. WAG 74 of 1987 GIUSEPPI] MUSCA and VERONICA MUSCA First Applicants and HEATHER COLLARDEAU Second Applicant and ASTLE CORPORATION PTY LTD First Respondent and CHARLES MORRONE Second Respondent ASTLE CORPORATION PTY LTD Cross~-Claimant and GIUSEPPE MUSCA and VERONICA MUSCA First Cross-Respondents and HEATHER COLLARDEAU Second Cross-Respondent 2. REASONS FOR JUDGMENT Giuseppe Musca 18S the proprietor of the Gull Service Station at Riverton. In February 1987 he and his wife, Veronica, decided that they would open up a florist shop in the newly constructed Hilton Park Arcade on South Street in Hilton Park. They entered into a lease agreement with Astle Corporation Pty Ltd, the owner of the centre, and made an arrangement with Heather Collardeau, an experienced florist, that she and Mrs Musca would operate the shop. They commenced the business on 3 March 1987. It was an unmitigated failure, generating a turn-over well under half that needed for them to cover their overheads. They abandoned 1t and vacated the shop on 1l July 1987. They now contend that they were induced into the lease and the florist operation by misstatements made to them by Charles Morrone who, with his wife Jayne, was at all material times a director and agent of Astle Corporation. On 20 July 1987 they commenced proceedings in this Court against Astle Corporation and Mr Morrone. By their re-~amended statement of claim, they plead against the respondents causes of action arising under ss.52 and 82 of the Trade Practices Act 1974 and at common law in deceit and negligence. The Muscas claim a declaration that they are entitled to rescind the lease agreement or an order under s.87 of the Trade Practices Act that it be aN 3. rescinded ab initio. They also seek damages under s.82 and for deceit. In the alternative, they claim damages for negligence. Mrs Collardeau's claim is for damages under s.82 and for deceit and alternatively, for negligence. All applicants seek exemplary damages. Astle Corporation cross-claims for unpaid rent due under the lease. The Alleqations In substance the applicants contend that they were induced into the florist shop venture by the following representations on the part of Morrone made on or about 2 February 1987:- i. That Astle Corporation had commissioned a survey to determine the type of businesses best suited to the Arcade and that a florist shop was reported to be highly desirable. 2. That all bu. two of the shops in the Arcade were already leased out. 3. That there would be a well advertised grand opening of the Arcade on 23 February at which free snacks and drinks would be available to members of the public. 4. That a neon sign would be erected before the opening in view of passing traffic in South Street, Hilton to alert the public to facilities within the Arcade. 5. That the applicants would be able to achieve a minimum turn-over of $200.00 per day. It is the making of these representations which is said to have constituted misleading and deceptive conduct and to amount to deceit and/or negligent misstatement. 4. Factual Background The Hilton Park Shopping Arcade is Located on South Street, Hilton Park, not far from 1ts intersection with Carrington Street. Both are regional roads of some significance and carry a considerable volume of traffic. There are several small retail outlets nearby on both sides of the road, a tavern next door and a supermarket in the next block. In May 1985, before plans of the proposed arcade had been settled, Morrone had intended to approach the ANZ Bank at Mt. Lawley for financial assistance for the development. He prepared a single typed sheet entitled "Survey May 85", which was in substance a brief statement of his own observations about the locality. The second last paragraph of the document read as follows:- "By speaking to people and shop owners in general and also inspected (sic) in some close surrounding suburbs we come (sic) to the conclusion that the following suggestion would be of interest to the area and the new proposed development." The last paragraph began "Shops that are recommended are highlighted in green pen". There then followed a list of 15 shop types of which some 10 were highlighted in green marker pen. One of those so highlighted, was "Florist". oF 5. Morrone said in his testimony that he had driven and walked around in the locality to determine what reta1l facilities already existed. There was no evidence of the area covered, the system used or any contemporaneous record of the relevant observations. There was no suggestion that the "people and shop owners" referred to in the paper were approached in any systematic way, nor was there any evidence of what questions they were asked or whether they were asked the same questions. There was no evidence of any direct investigation of consumer attitudes. In the event, Morrone did not require assistance from the bank as he was able to use the proceeds from the sale of his interest in a Totalisator Agency Board agency. Construction of the Arcade commenced in July 1986 and in December 1986 advertising was commenced for prospective tenants. Guiseppe Musca's interest was sparked by a discussion with a friend, Mick Boccomazzo, towards the end of January 1987. Boccomazzo had decided to take a lease of one of the shops for a coffee and lunch bar business. He told Musca that the owner had had a survey done and that a florist shop was at the top of the list of desired retail outlets. The Muscas talked over' the possibility of starting a florist business in the Arcade. They had a friend, Heather Collardeau, who had substantial experience as a florist and who they thought might be prepared to come in with them on ae profit-sharing arrangement with a view to partnership 1n due course. Mrs Collardeau- was then working oot AE aL Bart ELLs ct tern ern tna mane te 6. part-time at the Acacia Florist in Whitford City. She was paid $143.50 per 2 1/2 day week. She is a single parent with a 5 year old son, whom she supports herself. Mr Musca telephoned and asked her whether she would be interested in joining with him and his wife in a florist venture in Hilton Park. He contemplated, he said, a 25% share for her. She said she would think about it. The following Monday, 2 February 1987, she went to the Muscas' home where she met up with Mrs Musca who drove her down to the reade. Mr Musca had gone ahead. He had previously contacted Morrone by telephone and arranged a meeting with him. When he arrived there Morrone was helping Boccomazzo put up- some partitioning for his coffee shop. Musca introduced himself and talked with Morrone while awaiting the arrival of his wife and Mrs Collardeau. He told Morrone that neither he nor his wife knew anything about the florist business, but that she would be bringing down a friend who was a qualified florist, with a view to her running the business. He also said that he told Morrone that Mrs Collardeau was a single, supporting mother, who would leave an existing job to join their business. Morrone denied that Musca told him this but when challenged in cross-examination, Musca said he remembered it clearly and recalled Morrone's comment at the time which was ~- "Does she play around? Is she available?" Musca had replied that he didn't know, it was none of his business. Pay) eb 7. Given that Mrs Collardeau had not at this' stage committed herself to any venture, 1t seems unlikely that Musca would have told Morrone that she was going to give up her job to join them. I am satisfied nevertheless that he did tell Morrone of his plans for her involvement and that she was a single supporting mother. I accept that Morrone made the comment attributed to him. Musca's disclosure of 1t only came out in cross-examination and it was obviously a comment which stuck in his mind and by which he was able to recall that he had spoken of Mrs Collardeau's situation. In further conversation at that time, Musca told Morrone that he and his wife had looked at the Arcade on the weekend and that they favoured shop number 5 as the site for their business. Shop number 3, which had been suggested, was set back too far. After the arrival of the two women and in the course of conversation that followed it is said that Morrone made the representations complained of, the first of which related to a market survey. The Representations (1) The Surve Morrone told the applicants that he had had a survey carried out and that it indicated that a florist shop was at the top of the list of local needs. Mr Musca remembers him saying that the survey cost a lot of money. Mrs Musca says that in "e ( 8. answer to a query from Mrs Collardeau, he told her that the list of needs described by the survey was "colour coded". The florist shop, he said, was in the "top category". The substance of the evidence of the Muscas and Collardeau was the same on this point. Morrone says, however, that what he said was as follows:- ""T am glad that you want to put a florist in there because on my carrying out a survey of the area is what we would need in here and this is the shop that I allocated for." (sic) In the resolution of this conflict, the hypothesis of misunderstanding must be considered. Mr Musca said he was told by Boccomazzo that the owner of the Arcade "had had a survey taken out". Boccomazzo's evidence-in-chief was that Morrone told him "he had done a survey". He also said in chief that he told Musca that Morrone had done a survey. However, in cross-examination, the following exchange took place:- "A. ..2.-He told me he had done a survey which - all these things that I mentioned were suitable for the area and they are the ones he wanted to go in. Q. Did he explain further to you, you know the sort of survey he had done?.... A. He really just told me he had a survey done which cost a lot of money. That is all he told me." The reference to cost was spontaneous. It indicates that Morrone also represented to Boccomazzo that he had commissioned a survey by a third party. Although Boccomazzo's evidence in chief gave some grounds for suspecting misunderstanding of what Morrone had said, it was resolved by his response in cross-examination. 9. In late March or early April, after 1t became apparent that the Arcade was not being patronised as anticipated, Mr Musca asked 1f£ he could see the survey. Morrone said it was in his other office at home and that he would bring 1t in. However when Musca saw him again on 6 April Morrone said:- "I have paid a lot of money for that survey. I own it. It's mine. I don't have to show it to you." Morrone said he refused to accede to Musca's request to view the survey because it came in the form of a rude demand. That refusal is, I think, more readily explained by the discrepancy between his representation and the meagre reality reflected in the so-called "survey" report which he had prepared for his bank nearly 2 years earlier. On the evidence of the Muscas and Mrs Collardeau who, allowing for human error and minor embellishment, were in my opinion, witnesses of the truth, I find that Morrone did represent that he had engaged some third party to carry out a survey. I accept also that the usage of the term "survey" in the context of market research usually carries with it the implication that questions are put to and responses secured from a representative sample of potential customers. In this case it may not be necessary to go so far along the path of implication. At the very least the implication of the representation was that someone had carried out a professional assessment of the market and conciuded that there was a significant need for a florist Ey 10. shop. That minimum implication was false. At most Morrone had driven around in the locality of the proposed arcade to observe existing outlets and had garnered anecdotal information from conversations with local businessmen. The representation was a matter of considerable importance to the Muscas and Mrs Collardeau. It was a substantial contributing factor to their decision to become involved in the Arcade. The other major factor arose from Morrone's statements about the prospective occupancy level of the development. (2) Occupancy Level According to Mr Musca, Morrone told them that apart from the florist shop site there was only one empty shop left in the Arcade, that being number 10. Both Muscas recall him saying that shop number 1 was to house a retail shoe store, number 2 had been taken for a record and video shop, numbers 4 and 5 were to be clothing boutiques for men and women, number 6 was to be a giftware shop and number 7 was to house a Town and Country Building Society outlet (whether branch or agency was not specified) together with Morrone's office. Shop number 8 was to be the Boccomazzo coffee lounge, number 9 was going to be a plant shop and number 10 was not then taken. Mrs Collardeau recalls basically the same outline being given by Morrone, save that she could not recollect what was to go in shop number 6. ll. The xrepresentation aS to tenancy commitments' was reinforced by Morrone when he told the Muscas and Mrs Collardeau as they walked through the Arcade, that all shops would be ready to go for the grand opening which was scheduled for 23 February. Mr Musca later telephoned Morrone's home and he confirmed that the shops were all going to be opening at the same time and that a grand opening would take place. Musca then told Morrone that he would take shop 5. By their defence the respondents contended that Morrone had done no more than advise the Muscas that there were several interested parties who had indicated an intention to lease shops in the Arcade for the various purposes of coffee shop, video library, shoe store, nursery and plant shop and a clothing store. They further alleged that at some later time Morrone had notified the Muscas that a request had been made for a building society to operate from the Arcade. Morrone's evidence was broadly in accord with the defence. He did say that he had received an offer to lease shop number 2 as a video library from V.J. Trading Pty Ltd and that the offer was still in force as at 2 February 1987 although the arrangement later fell through. This was contradicted by the evidence of a director of V.J. Trading Pty Ltd, Mr B. Eddy, who said that the arrangement fell through in late January when he indicated that the directors and shareholders of the company were not prepared to provide personal guarantees in relation to the re) — 12. lease. His evidence was not challenged in cross-examination and I prefer 1t to Morrone's on this point. As to shop 9, the plant shop, no commitment had been made and, in particular, no offer to lease was received until 22 February. At 2 February, therefore, 1t appears that there were firm commitments only in respect of shops 1 and 8, the first for Paterson's Shoe Store and the second for Boccomazzo's coffee lounge. Counsel for the applicants contended that as no disclosure statement had been delivered under s.6 of the Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), 1t was open to Boccomazzo to terminate such agreement as he had with Astle Corporation under the "cooling off" provisions of that Act. In my opinion, however, Boccomazz0's legal right to terminate is of less significance than his overt commitment to the Arcade evidenced by his having begun fitting out the shop at the date of the Muscas' visit. Nevertheless, the Muscas contend that Morrone conveyed to them that there had been commitments to take up leases in all but 2 of the shops in the Arcade. On the question of the Town and Country Building Society tenancy, Morrone said he told the Muscas that he had made an approach to the Society by telephone, suggesting that it might wish to conduct an agency in the Arcade. At the time of his meeting with the applicants he had had no final response. In the ve O 13. event the Society declined to take up any space in the Arcade and he was so advised in "Yarch 1987. In my opinion, Morrone did tell the Muscas and Mrs Collardeau that all but 2 of the shops in the Arcade were already taken. That representation was false and was also a substantial contributory factor in the decision that the applicants took in respect of the Arcade business. The three remaining representations alleged are of secondary importance. {3) Opening Day The opening day representation was, on Mr Musca's evidence, qualified by a statement that it might be necessary to postpone it because some of the new tenants were experiencing delays in vacating their existing premises. In any event the nominated date could not have been a significant inducement to the applicants as they were not in a position to be ready to open their doors by 23 February and they said so to Morrone. Eventually opening day was set for 9 April, but apart from some advertising in a community newspaper, nothing much seems to have happened to mark it. Morrone was not present at the Arcade on that day. atcha attached deme beadbtenemermmttenenaetaentchetatie 14. It was not a matter of great significance to Mr Musca. In his evidence-in-chief he was asked:~ "OQ. If you had been told either on 2 February or 23 February there would be no activity at all on whatever opening date was chosen, would that have had any affect on your decision?" and replied:- "A. Not really. As long as we all opened I think we could have made something out of the business." ~ In my opinion, the representations relating to opening day were of significance only to the extent that they supported the statements about the number of committed tenants. (4) Provision of Neon Sign As to the sign that was eventually erected in April 1987, there was a promisory statement and the performance of the promise was tardy. I do not consider, however, that the evidence o) shows any misleading or deceptive conduct in this regard. {. (5) Projected Turn-over With respect to turn-over, it was Mr Musca's evidence that Morrone said to Mrs Musca:- "If you come into this shop you've got no hassles making $200.00 a day, no problems at ali." roy 15. She said that 1n speaking with Noxrone about the survey, they had asked whether 1t showed a basis for inferring that they could make the sum of $200.00 per day. This was a figure which the applicants had calculated as necessary for them to break even. Moxrone said in answer to that question:- "yes you won't have any worries. The survey shows that there will be a lot of traffic going through the arcade." For himself, Morrone said he had no idea what money the applicants could make out of the business and he denied giving any assurances as to tuYn-over. In my opinion, it is probable that he was asked by Mrs Musca whether he thought, on the basis of the survey, that the business would make enough to cover costs. It is also likely, having regard to the apparent importance he placed on the survey results, that he expressed confidence in their ability to break even. He had no reasonable ground for making that statement, the "survey" being quite inadequate for the purposes of any quantitative market assessment. I am satisfied also that his assurance on turn-over can be treated as embodying a re-statement and elaboration of the survey representation. @) oa 16. The Effect of the Representations The effect of the representations upon Mrs Collardeau's attitude to the Muscas'' proposal was critical. She was the only one of the three who knew anything about the operation of a florist business. I am satisfied that, without her involvement, the Muscas would not have proceeded with the venture. In her evidence-in-chief, Mrs Collardeau said that she was initially unenthusilastic about the proposal. She had been advised by two business brokers not to get involved:- "However on speaking to Mr Morrone and him looking me straight in the eye, I regarded what he said as true about a survey and all the shops being full and the bank being there and a sign being erected. I felt that that was - they were all factors pointing to a _ good business." On simple inspection of the shopping centre and absent Morrone's representations, she would not have gone ahead. Not all the representations were critical to the Muscas' decision to proceed. However, had Mr Musca been told on 2 February of the true position with respect to other prospective tenants, he would not have gone into the Arcade straight away as he did. His whole decision, he said, was based upon the fact that there would be passing traffic in the Arcade generated by the other shops. 17. He used the term "renegotiate" to describe a course he might have taken 1f he had known the true position with respect to occupancy in the arcade. By this I take 1t he meant that he might have negotiated terms of tenancy more Favourable to him than those ultimately accepted. He thought that 1f he had ascertained the true nature of the survey, he would have "had to cancel the deal there and then until further investigation had been carried out". Not surprisingly, the absence of a gala opening event and the delayed erection of the advertising sign outside the Arcade do not seem to have been of critical importance to Mr Musca. Nor did he put great store by the representation as to turn-over. His wife regarded the represented survey as important in that it disclosed a need for another florist. In the absence of the survey, she said, she and her husband would not have gone into the Arcade. The presence of other shops in the Arcade was necessary to generate the traffic needed to sustain the florist business. The importance of the representations in that regard is obvious enough. She and Mrs Collardeau worked out that they would need to bring in $200.00 per day in order to cover costs, including the cost of re-stocking the shop. This incidentally comes close to a WwW 18. figure mentioned by the respondent's expert witness, a chartered accountant, Mr A.M. Travers. In his written report he observed that the Muscas required monthly sales in the order of $4,400.00 to break even. Morrone's assurances on this issue, embodying as they did a re-statement of the representation as to the survey, were critical to Mrs Musca and Mrs Collardeau in their decisions to become involved in the Arcade. Mr Musca did not attach much weight to 1t. For him, as he said, "the main thing...was that the whole Arcade was going to be open for opening day. There was going_to be activity." The opening day representation was important to Mrs Musca, but, in my opinion, was not decisive. Similarly, the promised erection of a sign outside the Arcade was not a vital issue and in any event as I have found, there was no misleading or deceptive conduct in that regard. In summary, I am satisfied that Morrone's representations as to the conduct of the survey and prior commitments by other persons to take up tenancies in the Arcade, were factors which, taken in combination and probably separately, persuaded the applicants to enter into the lease agreement with Astle Corporation and to commence the florist shop operation in the Arcade. 7 ae o) 13. The Progress of the Business By 3 March the applicants had fitted out shop number 5 and were open for business. The grand opening originally promised for 23 February was put off until 14 March, but immediately prior to that date there were only 3 tenants in the Arcade, the Paterson's shoe shop, the coffee shop and the florist. A fourth tenant, the plant shop and nursery trading as "A Leafy Affair", opened about 14 March. No grand opening took place on that day. Confronted by Musca about the other empty shops, Morrone said the intending tenants were still having problems extricating themselves from existing lease arrangements. On 3 April the five tenants then occupying the Arcade, wrote a letter to Morrone "to air some common grievances" and to "inform you of our demands". The letter sought:- l. A rent-free period of 3 months from the date of the official opening. 2. High priority to filling existing vacancies. 3. Erection of the promised neon sign on South Street. 4. Delivery of keys to the Arcade. 5. Tidying up of Arcade surrounds and improvement in lighting. 6. Thursday night trading to be at option of individual tenants. The letter concluded with a statement that the tenants were losing money and would be unable to continue. Lard 20. The disposition of tenancies in the Arcade at this time was as follows:- Shop Number Tenant 1. Paterson's Shoe Store 2. Vacant 3. Vacant 4. Vacant 5. Aababas Lflorist 6. Popcicles Baby's and Children's Wear 7. Morrone/Astle Business Brokers 8. Bocco's Coffee and Lunch Bar 9. A Leafy Affair Plant and Nursery 10. Vacant Morrone did not respond to the letter and for the next 2 or 3 days would not speak to any of the tenants. Musca rang him and went and saw him and asked to view the survey. Morrone said he had 1t at home and would bring it in. In the meantime Musca withheld payment of a rent cheque. On 6 April Morrone told him to "pay the bloody money" and, as mentioned earlier, refused to show him the survey. On 14 April Musca wrote to Morrone enclosing a cheque for the March rent and outgoings in the amount of $259.50. In the letter he asked for a review of the rental provisions and said:- 21. "At present we cannot afford to continue trading in the Arcade much longer as business has not met expections (sic) promised by you and the said survey, carried out on your behalf, before entering into the lease agreement." On 6 May Morrone wrote to the applicants referring them to the terms o€ their lease and pointing out that they were behind in payments of rent and outgoings. On the same day he sent what appears to be a circular letter to all tenants. In that letter he, in effect, denied responsibility for the tenants' difficulties and said that 1t was for them to properly conduct and promote their businesses. The Muscas, who had been generating about half the turn-over necessary to cover costs, consulted a solicitor 2 weeks later but were told that they were bound by the terms of their lease. Ultimately, they were referred to their present solicitors, whom they consulted on 24 June. Sometime in May a tenant called "Baby Buys" opened up in shop number 2 of the Arcade and for about a fortnight there- were 6 tenants. Then Popcicles closed down and a fortnight after that the plant shop went. At 24 June there were 3 shops left operating in the Arcade: the shoe store, the coffee shop and the florist. On il July the applicants ceased operating the florist shop. ' < L © i F f i f. § E z CC} 22. The Applicants' Losses Moneys received by the applicants during the period of their occupancy totalled $6,657.20. Their highest monthly turn-over was $1,682.55 in the month of May. Expenditure for the period totalled $19,756.87, including interest on a _ bank overdraft. Allowing credit for what I accept as a conservatively high estimate of $1,000.00 for stock not realised, they suffered a net loss of $11,099.67. During the same period Heather Collardeau suffered loss of income. She was out of work between 11 July 1987 and 27 July 1987 when she obtained alternative employment, a loss of $300.00. She was also said to have lost the difference between her income at Aababas and what she was able to earn at her subsequent employment for the period 27 July 1987 to 27 October 1987, i.e. $22.50 per week for a period of some 14 weeks, namely $315.00. This latter component does not seem to be causally related to the respondents' conduct. [It is in the nature of an expectation loss. In my view, the properly allowable loss 1s $300.00. The Respondents' Conduct Morrone's conduct in representing that he had had a survey done and that all the shops but two remained to be filled, was misleading and deceptive. It being conduct engaged in by him in his capacity as a director of Astle Corporation Pty Ltd, it was —* 23. misleading or deceptive conduct by that company. It was plainly conduct engaged in trade and commerce. By that conduct therefore, the company contravened s.52 and Morrone was involved in the contravention in the sense that he was knowingly concerned in or party to ut within the meaning of para.75B(c) of the Trade Practices Act 1974. Further, 1t was conduct by which the applicants suffered loss. I am also satisfied that Morrone, and therefore Astle Corporation, acted fraudulently. He knew of the true position with respect to the so-called "survey" at the time that he pretended to the applicants that it had been carried out for him. He also knew of the true position with respect to the tenancies when he pretended that all but two of the shop sites had been let. He was engaged in a hard sell, no doubt in the hope that a commitment From the Muscas would enhance his prospects of securing commitments from other prospective tenants. The means involved the communication of information he knew to be false in order to induce the applicants to take up space in the Arcade. Damages Under Section 82 In this case and for the purposes of s.82 of the Trade Practices Act 1974, the loss suffered by the applicants is to be assessed by comparing the positions they were in as a result of the misleading conduct with that in which they would have been had 24. the conduct not occurred. The measure is that appropriate to an action in tort - Gates v City Mutual Life Assurance Society Ltd (1986) 63 ALR 600, 609. On that basis the loss flowing from the contravention totals $11,099.67 for the first applicants and $3.9.00 for the second. No point was taken that there should be any deduction for the tax benefits derived from the losses - Neilsen v Hempston Holdings Pty Ltd (1986) 65 ALR 302, 314 (Pincus J.). And as that would seem to require some evidence as to the tax rates otherwise payable by the applicants, I will treat the losses demonstrated as the actual loss. Declaration Under Section 87 As to the relief claimed in connection with the lease agreement, I have a statutory discretion under s.87 of the Act and, in particular, sub-s.87(1A) and para.87(2)(a) read together. This is not a case in which: it appears that in the absence of the principal misrepresentations the applicants would have taken up the lease on terms other than those in fact agreed. Without the representations as to the survey and the prior commitment of other tenants, the Muscas would not have entered the lease agreement. No hypothesis was suggested or presents itself whereby they might have entered into a lease upon terms other than those in fact agreed. No question therefore arises as to the neem ee a + () @ 25. appropriateness of an order varying terms of the lease under para.87(2)(b) in lieu of an order declaring it to have been void ab initio. The propriety of this course is reinforced by the fact, as I have found, that the entry into the lease was induced by fraud. I will make the order sought in that regard. Exemplary Damages - The Court's Powers The applicants have also claimed exemplary damages. These are damages of a punitive, rather than compensatory, character. They are intended to punish a defendant for conduct showing a conscious and contumelious disregard for a plaintif£'s rights and to deter him from committing like conduct again - XL Petroleum (NSW) Pty Ltd v Caltex 011 (Australia) Pty Ltd (1985) 155 CLR 448, 471 (Brennan J.), cited with approval in Lamb v Cotogno (1987) 74 ALR 188, 192. They have been described as "a sort of hybrid between an assertion of ethical indignation and the imposition of a criminal fine" ~- Haines v Schultz (1888) 50 New Jersey L.R. 481, cited with approval in Butterworth v Butterworth & Englefield [1920] P.126, 136-7 (McCardie J.), Denison v Fawcett (1957) 10 DLR (2d) 722, 726 (McRuer C.J.H.C.) Exemplary damages do not compensate for loss. They are therefore not recoverable under s.82 of the Act, for that section will allow only for the recovery of the amount of loss or damage 26. suffered by conduct of another in contravention of a provision of Part IV or Part V of the Act. Nor does it appear that the Court can award such damages under s.87, for the orders that may be made under that section are essentially compensatory in character. The claims for exemplary damages are based upon the causes of action in deceit. Those causes of action are determined by the Court in the exercise of its accrued jurisdiction defined for this case by the application of the principles enunciated in Fencott v Muller (1983) 152 CLR 570, 608. Jurisdiction being the defanition of a court's authority to adjudicate does not embody its remedial power. [In particular, the investing of this Court with an accrued jurisdiction does not convey the power to grant remedies - Philip Morris Inc. v Adam P. Brown Male Fashions Pty Ltd (1981) 148 CLR 457, 477 (Barwick CJ). That power is to be found in s.22 of the Federal Court of Australia Act which provides:- "The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided." It does not define jurisdiction. It confers power in aid of it - Philip Morris Inc. v Adam P. Brown Male Fashions (supra), 489 27. (Gibbs J.), 506 (Mason J.), 502 (Stephen J.), and 529 (Aickin J.). Whether it will authorise the grant of exemplary damages in a case where the court has found a tort committed in respect of which that remedy 1s available, depends upon the scope of the words "all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him in the matter". To the extent that the purpose of exemplary damages is punitive, a question might arise whether 1t constitutes a remedy to which the applicant can be "entitled". However, S.22 is to be given a liberal construction and must encompass discretionary remedies in accordance with its expressed purpose that "so far as possible all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided". Accordingly, I conclude that the section empowers the court to award exemplary damages where such relief would be available at common law in the disposition of a cause of action raised under the accrued jurisdiction. Exemplary Damages and Deceit The question that then arises is whether exemplary damages are available in cases of deceit. eee emmamemene ye en 28. The common law in Australia differs significantly from that in England in relation to the availability of the remedy. The principal difference concerns the circumstances rather than categories of cause of action in which the relief may be claimed. The House of Lords in Rookes v Barnard [1964] Ac 1129 limited its availability to two classes of case defined by Lord Devlin at 1226-1227 as follows:- (1) Where the conduct in question involved oppressive, arbitrary or unconstitutional action by the servants of government. (11) Cases in which the defendant's conduct' was calculated by him to make a profit for himself which might exceed the compensation payable to the plaintiff. . rian tS y alt His judgment, in which all their Lordships concurred, '3 u did not set out the causes of action in which exemplary damages ! és =3 may be claimed. It is clear however, that such damages were not i re awarded in contract save for breach of promise to marry, wrongful S Me ~,dishonouring of a cheque by a banker and failure by the vendor of My real estate to make title - Addis v Gramophone Company, Limited ie [1909] AC 488, 495 (Lord Atkinson). gt ae: fy Ate Lord Devlin proceeded on the basis that the only relevant class of cause of action was tort:- 7 "Exemplary damages can properly be awarded whenever it is necessary to teach a wrongdoer that tort does not pay." (1227) 29. The judgment did not address the question whether the remedy was available only in respect of some types of tort. In particular, 1t did not provide any direct answer to the question whether exemplary damages would be available for deceit where the facts of the particular case brought 1t within either the first or second category. In the decision of the Court of Appeal in Mafo v Adams (1970) 1 OB 548, there was a difference of opinion between Sachs LJ and Widgery LJ on the point which was conceded by the defendant. Sachs LJ observed that there was in the books "no case of exemplary damages ever having been awarded for this cause of action". He would need to be persuaded, he said, that Lord Devlin's speech, which sought so drastically to limit the circumstances in which exemplary damages can be awarded, had the effect of enlarging considerably the number of causes of action in which claims to such damages could be maintained. Widgery Ld, on the other hand, saw the speech as increasing the range of causes of action while drastically reducing the circumstances in which such damages might be awarded (558). The latter approach appealed to neither the Lord Chancellor nor Lord Diplock in Cassell & Co. Ltd v Broome [1972] AC 1027, where both expressed the obiter view that it was not intended by the judgment in Rookes v Barnard to extend the power to award exemplary damages to torts for which it had not been previously awarded, such as deceit (Lord Chancellor at 1076, Lord Diplock at 1131). None of the other Law Lords took as explicit a stand on this point, although it may be inferred from Lord Reid's 30. judgment at 1087. Explaining the rationale of the decision in Rookes v Barnard in which he had concurred, his Lordship said:- "We were confronted with an undesirable anomaly. We could not abolish it. We had to choose between confining 1t strictly to classes of cases where 1t was firmly established, although that produced an illogical result, or permitting it to be extended so as to produce a logical result. In my view 1t 1S better in such cases to be content with an illogical result than to allow any extension." Apart from the historical fact that exemplary damages had not been awarded for deceit, no basis for that exclusion was advanced, although the Lord Chancellor suggested that' the explanation might lie in the close connection that the action for deceit has always had with breach of contract (at 1076). That suggestion may have been inspired by an ohservation in the then current and 12th Edition of Mayne and McGregor on Damages at para.968:- "Exemplary damages appear to have passed the tort of deceit by. This is strange, for fraud more than deliberate defamation or wilful trespass might well seem to be the conduct par excellence that is in contumelious Gisregard of the plaintiff's rights and that therefore merits punishment.... The explanation may lie in the close connection of this tort with contractual Situations, but it cannot be proper to press' the contractual analogy to this extent while at the same time refusing to accept it where the plaintiff claims for loss of bargain. The defendant should not have it both ways." The history of the tort is conveniently set out in Milsom - Historical Foundations of the Common Law (2nd Edition) ns 31. (1981) at 361-366. In local jurisdictions it was treated as a wrong because of 1ts criminal element and the public interest in honest dealing. Although it usually arose in a contractual context "in local jurisdictions the punitive element was sometimes harnessed to the victim's interest, being used to compel restitution, the undoing of the transaction, whenever that was possible" (362). In the Royal Courts, however, the criminal Feature that had tied deceit to wrong rather than contract was lost and the common law "hardly ever distinguished the true cheat from his innocent counterpart" (363). Chancery restored restitution and the Star Chamber punished fraud:- "Not until 1789 in _Pasley v Freeman [(1789) 3 Term Rep. 51] was a liability for deceit clearly established as an entity in its own right, neither necessarily associated with contract nor excluded by 1t; and this resurrection of an ancient and elementary liability has been treated by modern writers as an example of the rare "invention" of a new tort." There is nothing in the pre-Rookes v Barnard passage cited from the 12th Edition of Mayne and McGregor, nor in the history of the tort as outlined in Milsom, which suggests any basis in principle for its exclusion from the category of cases in which the remedy of exemplary damages may be awarded. In current practice allegations of deceit are commonly based upon facts used to support claims of breach of contract or collateral contract. But the tort stands by itself and no contractual relationship 1s necessary to establish it. 32. In Canada in 1958 the Ontario Court of Appeal upheld an award of exemplary damages for conspiracy to defraud - Denison v Fawcett (1958) 12 DLR (2d.) 537. The claim in the case had been framed in both conspiracy and deceit. Schroeder J.A., delivering the judgment of the court, found it unnecessary to express any Opinion on whether exemplary damages might be awarded in a simple action for deceit. However it has been suggested, and I think it an attractive suggestion, that there 1s no reason to distinguish in this respect between deceit and conspiracy to defraud - Waddams - The Law of Damages (1983) pp.574-5. An early statement of the law relating to exemplary damages in Australia is to be found in a judgment of Isaacs J. in Whitfeld v De Lauret & Company Limited (1920) 29 CLR 71. After referring to a judicial exposition of the compensatory principle of damages by Lord Shaw in Watson, Laidlaw & Co. Ltd v Pott, Cassells, and Williamson 31 RPC 104, he said that there was another well recognised feature "which with one exception is, in the opinion of one learned writer, confined to damages for torts (see Mayne on Damages 9th ed., at p.41)". This was exemplary damages. It is notable that the confinement of the remedy was not said to exclude any sub-class of causes of action in tort. In Uren v John Fairfax & Sons Pty Ltd (1966) 117 CLR 118, a defamation case, the High Court refused to accept the limitations propounded in Rookes v Barnard. The judges did not directly address the range of torts in which exemplary damages - 33. might be awarded. It was not necessary for them to do so in order to determine their attitude towards Lord Deviin's categories. McTiernan J. adopted as a proper statement of the common law in Australia a passage from the 12th Edition of Mayne and McGregor on Damages at p.196 where 1t was said of exemplary damages that they would apply only where the conduct of the defendant merited punishment and in particular where it disclosed fraud, malice, violence, cruelty, insolence or the like, or as sometimes put, "where he acts in contumelious disregard of the plaintiff£'s rights". Taylor J. took as his text a passage from Sedgwick on the Measure of Damages (1858) which also made specific reference to fraud as one of the elements in a controversy which would permit a jury to award exemplary damages. In rejecting the Rookes v Barnard classification His Honour spoke of the principle of exemplary damages as "a broad principle which I think has been acted upon for a century and upwards" (139). Menzies J. at 147 appeared to assume the availability of the remedy in all cases of tort when he said:- ",..where an action is based upon a personal wrong and the defendant has acted arrogantly, mindful only of its own interests and, to use the phrase of Knox C.J., "in contumelious disregard" of the rights of the 34. plaintiff, "damages may be given of a vindictive and uncertain kind, not merely to repay the plaintiff for temporal loss but to punish the defendant in an exemplary manner" for his outrageous conduct (see Finlay v Chirney (1888) 20 OBD. at p.504)." On the other hand, the judgment of Windeyer J. (at 154) suggested an acceptance of the existence of an historical limit on the classes of tort in which the remedy was available:- "But we should not, I think, treat the decision as excluding exemplary damages from any of those forms of wrongdoing for which, in the past, the Court has said they might be given. It 1s however not enough, and this Court has never said that 1t was enough, to justify an award of exemplary damages that the tort should be of a kind for which such damages are permissible. The wrong must be one of a kind for which exemplary damages might be given; and the facts of the particular case must be such that exemplary damages could properly be given....There must be evidence on which the jury could find that there was, at least, a "conscious wrongdoing in contumelious disregard of another's rights." (emphasis added) A similar limitation may be inferred from the judgment of Owen J. at 158 where reference was made to "certain types of tortious acts" for which exemplary damages might be awarded where the defendant's conduct was so reprehensible as to require that he be punished. His Honour referred specifically to defamation and went on to speak of "some other tortious acts" including express references to intentionally inducing breach of contract, conspiracy and trespass to the person. eo) Suet paeesen wee agen coe 2 era itemewamne re ee es Sar 35. What emerges from the Uren case, is a repudiation of the limits proposed by Lord Devlin and an acceptance of the pre-existing common law. The range of torts to which the remedy is applicable was not considered. It seems however to have been accepted in the judgments of Windeyer and Owen JJ that it 1s not available for all causes of action in tort and this seems to have been taken as a matter of history rather than as an expression of some limiting principle. Neither was the range of torts for which the remedy is available canvassed in XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (supra) where the principal question was whether exemplary damages could be awarded against one or more joint tortfeasors severally. In Lamb v Cotogno (supra), the issue was whether exemplary damages were available in a case where the defendant was insured against such liability. In their joint judgment the members of the Court referred to the judgment of the Privy Council upholding the court's decision in the Uren case and observed that the well settled judicial approach in Australia extends exemplary damages to a "wider range of torts". This could be taken as implying some limit on the class of torts for which the remedy is available. One basis for some limitation is suggested in the Canadian text book, Waddams' The Law of Damages (1983) at p.575, where it is noted that exemplary damages have been excluded in enticement and related torts, the suggested reason for the 36. exclusion being to prevent the extension of these "anomalous torts". The present position in Australia appears to be that there 15 neither binding nor persuasive authority directly on the question whether exemplary damages may be awarded in relation to any tortious cause of action where there has been a contumelious disregard of the plaintiff's rights. More particularly, there is no decision of which I am aware relating to its availability in cases of deceit. In Rookes v Barnard the remedy seems to have been treated as a species of weed sprung from a wilderness of single instances, which, while 1t could not be uprooted by the common law, could at least be quarantined. Lord Devlin's exposition of its origins relied in part upon the account given by Professor Street in his Principles of the Law of Damages (1962) and saw its growth as episodic and anomalous, having its origin in Wilkes v Wood (1763) Lofft. 1. Lord Reid made it clear in Cassell & Co. Ltd v Broome (supra) that their Lordships in Rookes v Barnard regarded the remedy as highly anomalous. On that premise the choice which had faced the House was to confine the remedy strictly to those cases where it was firmly established, although that produced an illogical result, or to permit 1t to be extended so as to produce a logical result. 37. ' The High Court's disagreement with the confinement option as applied in Rookes v Barnard has not given any express imprimatur to logical extensions of the remedy to torts in which it has not hitherto been granted. Nevertheless that course has been left open. Indeed as Peter Pain J. observed in Archer v Brown (1985) 1 QB 401 at 423, with respect to deceit, che door, on the authorities, is st111l open even in England. In considering whether exemplary damages can apply to this tort it is relevant to consider the extent to which they should be regarded as an illogical or anomalous remedy. In Pollock and Maitland's The History of English Law reference is made to a "favourite device" of 13th century legislators under Edward I. of giving double or treble damages to a party aggrieved:- "They have little faith in "communal accusation" or in J any procedure that expects either royal officials or people in general to be active in bringing malefactors to justice. More was to be hoped from the man who had suffered. He would move if they made it worth his while. And so in a characteristically English fashion punishment was to be inflicted in the course of civil actions: it took the form of manyfold reparation, of penal and exemplary damages." (Vol.2 p.521) This "characteristically English" approach was anticipated by ancient laws of other civilisations, some of which antedated it by more than 3,000 years - Sales and Cole, Punitive Damages: A Relic That Has Outlived Its Origins (1984) 37 Vand ITT eat iS / 38. L.Rev.1117 at 1119. Examples are to be found in the Code of Hammurabi ~- see C.W.H. Johns - Babylonian and Assyrian Laws Contracts and Letters (1904) at 98 and in Exodus Chapter 22 Verses 1 and 9 (King James Version). More recently the concept of multiple damages found statutory expression in the United States Clayton Act, which was copied in s.1l of the Australian Industries Preservation Act 1906 (repealed by the Trade Practices Act 1966) and described by Dixon CJ as a "well known if somewhat antiquated method of inducing obedience to the law" - Redfern v Dunlop Rubber Australia Ltd (1964) 110 CLR 194, 209. Viewed against its conceptual ancestry, it is difficult to dismiss the remedy as either anomalous or illogical. In Remedies of English Law (1972), F.H. Lawson at 326 expressed considerable sceptism about the "very academic" objection to exemplary or punitive damages based on the proposition that they blur the line between civil and criminal liability, and by implication suggested that the objection might have something to do with a desire for neat classifications. And Brennan J. has recently observed that "it is now beyond argument that, by the law of this country, it 1s proper to award exemplary damages by way of punishment of the tortfeasor" - Xf Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (supra) at 472. There are of course trenchant and powerful critics of the remedy and the force of their arguments must be acknowledged. However, in my opinion, there is nothing that is so anomalous or illogical about exemplary damages as to prevent their logical _ 39. application, to deceit. Indeed that tort 1s a paradigm case for their application. It does not follow that exemplary damages will be awarded in all cases where deceit is proven. In Lucas (TN) Pty Ltd v Centrepoint Freeholds Pty Ltd (1984) 52 ALR 467 at 514, Jenkinson J., having found deceit made out and dealing with a claim for exemplary damages, assumed, without deciding, that they oo might be awarded upon the causes of action established by the applicant, but did not consider that the conduct of the respondent had been shown by the evidence to merit such an award. For the foregoing reasons I conclude that the nature of the remedy and the principles governing its availability allow its application in this case. Whether Exemplary Damages Should Be Awarded in the Present Case ~~ WW) According to its classic analysis by Lord Herschell in Derry v Peek (1889) 14 App. Cas. 337 at 374, proof of deceit requires proof of fraud. Fraud is proven when it is shown that a false representation has been made knowingly or without belief in its truth or recklessly careless as to whether it be true or false. The false representations made in this case can only have been made knowingly. They were made with the clear intention of inducing the applicants to set up a business in the Arcade on a falsely based understanding as to their prospects of success. 40. The unknown risks to which they exposed themselves by reason of the representations were considerable. They were exposed to those risks and to inevitable disaster by the respondents' desire to fill the Arcade at all costs. Mrs Collardeau, on the strength of the representations, exposed herself and her child to the risk of her unemployment by leaving an established job for the Arcade venture. Her situation was known to Morrone and his misrepresentations were addressed to her also, The subject matter of the two principal representations was well within Morrone's knowledge and not readily verifiable by the applicants. In my opinion the respondents' conduct displayed a considerable disregard for the rights of the applicants. It is conduct which is deserving of punishment in respect of each of them. I should add that in this case, it is, in my opinion, unnecessary for the purpose of awarding exemplary damages to draw any distinction between the respondents, one being the alter ego of the other. In assessing exemplary damages it is important to bear in mind that the compensatory award may itself be of punitive effect. An award can take into account the impact of the total upon the respondents. It has been said that exemplary damages are 41. awarded where the compensatory damages are insufficient punishment - Cassell & Co. Ltd v Broome (supra) at 1089 (Lord Reid), 1095 (Lord Morris), 1118 (Lord Wilberforce), 1126 (Lord Diplock). On the question whether exemplary damages could be awarded severally against one or more joint tortfeasors, the High Court, in holding that they could be so awarded, differed from the House of Lords in Cassell & Co. Ltd v Broome - see XL Petroleum (NSW) Pty Ltd v Caltex 011 (Australia) Pty Ltd (supra). In his judgment Brennan J. at 468 also rejected the view expressed in the House of Lords that awards of exemplary damages could not be separated from compensatory awards. That rejection does not however go so far as to say that the quantum of compensatory damages may not be taken into account in assessing exemplary damages. Where a compensatory award exceeds the benefit gained by the defendant by reason of his tort, the case for or the quantum of exemplary damages may be diminished accordingly. So far as the Muscas are concerned, their compensatory damages based on the measure appropriate to the tort of deceit considerably exceed the rental benefit derived by Astle Corporation and therefore, indirectly by Morrone. In my opinion the excess is such that no further punishment by way of exemplary damages is warranted. The position with respect to Mrs Collardeau is different. The question of her entitlement to exemplary damages — 42. is not answered by reference to the compensatory award paid t. the Muscas. To do so would be to disregard the appeasement element of the remedy which was expressly recognised by the High Court in Lamb v Cotogno (supra) 192-193. It would also fail to give any weight to the disregard shown by Morrone for her particular economic vulnerability, a factor which imports into his conduct towards her a more objectionable character than his conduct towards the Muscas. For reasons which I have already expressed, the compensatory award to Mrs Collardeau 1s limited to $300.00. In my opinion however the Court's disapproval of the respondents' conduct towards her 1s properly recognised by a further award in her favour of exemplary damages in the sum of $1,200.00. I should add that there has been, in this case, no claim for aggravated damages. In assessing the exemplary damages to be paid to Mrs Collardeau, I take no account of the inconvenience and disruption suffered by her as a result of the respondents' conduct. Those are factors which might go to an assessment of aggravated damages. Had such an assessment been made, it would have been necessary to take into account its punitive effect when calculating what, if any, exemplary damages should be awarded. In the circumstances there will be judgment for the first applicants in the sum of $11,099.67 and for the second applicant in the sum of $1,500.00. A claim for interest was royeey Ae ne Ae LETITIA ED PEI 43. included in the relief sought in the application, but no submissions on that question were made during addresses. As to that and whether there should be liberty to apply, I shall hear from the parties. I certify that this and the preceding forty two (42) pages are a true copy of the Reasons for Judgment of His Honour Justice French. Associate: Dorel. Uate pate: QO Gorrvos) (ASB Counsel for the Applicants: Mr C.J. Pullin Solicitors for the Applicants: McLeod & Del Piano Counsel for the Respondents: Mr M. Frichot Solicitors for the Respondents: Kott Gunning Dates of Hearing: 14, 15, 16 and 17 December 1987 Date of Judgment: 20 January 1988