2020’s High Court Developments for the Law of Damages by Michael Douglas Consultant, Bennett + Co and Senior Lecturer, University of Western Australia and Jess Border, Solicitor, Bennett + Co
2020 was not ideal. We need to appreciate silver linings when we come across them. Here is a shiny one: in 2020, Australian courts produced a number of interesting decisions on damages. Here, we look at three crackers from the High Court: Berry, Lewis and Moore. This article concerns the ‘law of damages’ in the sense of the law concerning awards of money for civil wrongs.1 So understood, this body of law captures more than common law damages for common law causes of action. We live in an age of statutes,2 and so several of 2020’s leading cases within the ‘law of damages’ concern matters of statutory interpretation.
Damages under the Australian Consumer Law The prohibition on misleading or deceptive conduct in s 18 of the Australian Consumer Law (ACL)3 has had an ‘extraordinary, and even revolutionary, impact on Australian law’.4 Where a person suffers loss or damage because of prohibited misleading or deceptive conduct, then under ACL s 236, that person ‘may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention’. These provisions are frequently litigated before Australian courts. Given their regular consideration, one would think that their meaning would be settled. However, in relation to an action for damages under ACL s 236, courts have vacillated on the appropriate measure of damages.5 The question is one of statutory meaning. The starting point is the text of the statute,6 construed in light of its context and purpose.7 Textual references to ‘loss or damage’ and ‘damages’ suggest that the measure of ‘damages’ under ACL s
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236 ought to build upon principles relating to damages in non-statutory contexts.8 This construction rightly situates the statutory text within its broader context of the state of the law upon the section’s enactment.9 Thus French J, as his Honour was, once held that awards under predecessor provisions are ‘essentially compensatory in character’.10 In Henville v Walker,11 McHugh J, Gummow and Hayne JJ held that common law measures of damage for actions in tort and contract will often be of ‘great assistance’ in determining the appropriate measure of compensation for misleading or deceptive conduct.12 Courts often determine the measure of damages for ACL s 236 claims by analogy to the tort of deceit.13 Like other claims in tort, damages for deceit aim to put the plaintiff in the position they would have been had the representation not been made.14 Yet, as Treitel once said, ‘there is more than one way of “not committing” the tort of deceit’.15 Moreover, courts are not required to take the deceit approach; in certain contexts, a different measure, like that applicable to negligent misstatement, will be more appropriate.16 The policy of the law of negligent misstatement is more apt to the arms-length relationship underlying many cases concerning failed businessto-business transactions, and the purpose behind the creation of the ACL (inter alia, encouraging fair competition in a market economy) that must inform the construction of s 236.17 In a commercial context, parties should take some responsibility for protecting their own interests.18
Courts are not bound to make a definitive choice between competing measures of damages.19 As Gleeson CJ said in Henville, the court’s ‘task is to select a measure of damages which conforms to the remedial purpose of the statute and to the justice and equity of the case’.20 The appropriate measure is not even to be confined by analogy to actions in contract or tort.21 In the words of Gummow J, analogy ‘is a servant not a master’.22 Overreliance on previous case consideration of the appropriate measure of damages under s 236 risks transforming the text of the statute into case law—a tendency cautioned against by Justice Leeming.23 The malleability of the measure of damages under ACL s 236 provides opportunity for interesting case developments. One such development is the Berry case.
Berry v CCL Secure Pty Ltd24 In August, the High Court provided an important decision on ss 52 and 82 of the Trade Practices Act 1974 (Cth)—the predecessor provisions to ACL ss 18 and 236. It considered an interesting question: where a party terminates a contract in contravention of the ACL, can that wrongdoer minimise the measure of loss via the argument that, but for the contravention, they would have terminated the contract lawfully?25 The appeal was brought by Dr Berry, a successful entrepreneur, and a company controlled by him. The appellants were party to an agency agreement with Securency (now CCL Secure), a joint venture vehicle which achieved the successful commercialisation of the production and printing of polymer bank notes in the 1990s. Securency had engaged the appellants for the purposes of cultivating a business relationship between itself and the
