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Aggravated, Exemplary and Restitutionary ... - Law Commission

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are. 584<br />

Thus reported cases in which exemplary or punitive damages have been<br />

awarded or contemplated seem to involve rather more than ‘simple’ negligence, 585<br />

or conduct that is aggravated by the defendant’s high-h<strong>and</strong>ed behaviour. 586<br />

(ii) Why include equitable wrongs?<br />

1.54 It could be argued that a reformed law of exemplary damages should be confined to<br />

torts <strong>and</strong> should not be extended so as to include equitable wrongs. 587<br />

No English case<br />

has awarded exemplary damages for an equitable wrong, whereas such damages are<br />

available for many causes of action in tort. In contrast, authorities in major<br />

Commonwealth jurisdictions have awarded exemplary damages for equitable<br />

wrongs. 588<br />

1.55 But despite the absence of English authorities for awarding exemplary damages for<br />

an equitable wrong, we can ultimately see no reason of principle or practicality for<br />

excluding equitable wrongs from any rational statutory expansion of the law of<br />

exemplary damages. 589<br />

We consider it unsatisfactory to perpetuate the historical<br />

divide between common law <strong>and</strong> equity, unless there is very good reason to do so.<br />

Professor Waddams argues,<br />

damages will not be awarded for the tort of negligence, unless the defendant’s conduct<br />

could be said to amount to recklessness or high-h<strong>and</strong>ed conduct: S M Waddams, The <strong>Law</strong><br />

of Damages (2nd ed, 1991) para 11.210. In New Zeal<strong>and</strong>, exemplary damages have recently<br />

been held to extend to the tort of negligence: McLaren Transport v Somerville [1996] 3<br />

NZLR 424 (HC).<br />

584 See, for example: Coloca v BP Australia Ltd (1992) Aust Torts Reps 81-153 (“unusual <strong>and</strong><br />

rare”) <strong>and</strong> McClaren Transport v Somerville [1996] 3 NZLR 424 (“rare <strong>and</strong> exceptional”).<br />

585 See, for example, McClaren Transport v Somerville [1996] 3 NZLR 424 (HC).<br />

586 See, for example, Backwell v AAA (1996) Aust Torts Reps 81-387 (Vic, CA) <strong>and</strong> Trend<br />

Management Ltd v Borg (1996) 40 NSWLR 500 (NSW, CA).<br />

587 The Ontario <strong>Law</strong> Reform <strong>Commission</strong>, in its Report on <strong>Exemplary</strong> Damages (1991), was<br />

unable to agree about whether punitive damages should be available for equitable wrongs:<br />

pp 71-74 (majority); pp 74-75 (dissent by <strong>Commission</strong>er Earl A Cherniak QC). See<br />

further n 48 below.<br />

588 In Canada, it appears to be well-established that exemplary or punitive damages may be<br />

awarded for equitable wrongs, such as breach of fiduciary duty. See, in particular, Norberg v<br />

Wynrib (1992) 92 DLR (4th) 440, 505-507 (per McLachlin J) (SCC). More recent cases<br />

include McDonald Estate v Martin [1995] CCL 1142 (Man CA) <strong>and</strong> Gerula v Flores [1995]<br />

CCL 8583 (Ont CA). In New Zeal<strong>and</strong>, exemplary damages have been held to be available<br />

for breach of confidence (Aquaculture Corporation v NZ Green Mussel Co Ltd [1990] 3<br />

NZLR 299 (CA majority)) <strong>and</strong> breach of fiduciary duty (Cook v Evatt (No 2) [1992] 1<br />

NZLR 676 (HC)). The position in Australia is less clear. See, in particular, Bailey v Namol<br />

Pty Ltd (1994) 12 ALR 228, 238 (FCA, GD), doubting the availability of exemplary<br />

damages in equity, without deciding the point, <strong>and</strong> P McDermott, “<strong>Exemplary</strong> Damages in<br />

Equity” (1995) 69 ALJ 773-774. Cf eg Spry, Equitable Remedies (4th ed, 1990) p 621, <strong>and</strong><br />

M Tilbury <strong>and</strong> H Luntz (1995) 17 Loyola LA Intl & Comp LJ 769, 783-785, identifying a<br />

“trend [in Australian common law] towards the recovery of exemplary damages<br />

independently of the plaintiff’s cause of action”.<br />

589 See the Ontario <strong>Law</strong> Reform <strong>Commission</strong>, Report on <strong>Exemplary</strong> Damages (1991) pp 71-74<br />

(majority), which reached similar conclusions.<br />

110

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