#6696 - Rookes V. Barnard - Commercial Remedies BCL

Rookes v. Barnard

Facts

My Lords, on March 16, 1956, the appellant's employment, which had lasted nine years with B.O.A.C., was lawfully determined by notice. The reason why it was terminated was because on January 10, 1956, the members of the A.E.S.D., a trade union to which the appellant belonged and from which he had resigned, served notice on B.O.A.C. “that if the non-unionist Mr. D. E. Rookes. is not removed from the design office by 4 p.m. Friday, January 13, 1956, a withdrawal of labour of all A.E.S.D. membership will take place.” On January 13 the appellant was suspended from his employment and the strike thereby averted; and thereafter notice terminating his employment altogether was given to him, as I have said. The three respondents were officials of the union and two of them were employed by B.O.A.C.

It is not disputed that the notice constituted a threat of breach of contract by the members of A.E.S.D. It is true that any individual employee could lawfully have terminated his contract by giving seven days' notice and if the matter is looked at in that way, the breach might not appear to be a very serious one. But that would be a technical way of looking at it. As Donovan L.J. said in the Court of Appeal, the object of the notice was not to terminate the contract either before or after the expiry of seven days. The object was to break the contract by withholding labour but keeping the contract alive for as long as the employers would tolerate the breach without exercising their right of rescission. In the second place, there was an agreement in force between A.E.S.D. and B.O.A.C. in which the former undertook that no strike of its members would ever take place;

It is not therefore denied that the service of the notice was an infringement of B.O.A.C.'s rights. But the question is whether the respondents thereby infringed any right of the appellant.

The appellant's choice of remedies was restricted by the Trade Union exemptions, the only wrong which he asserts as having been committed by the respondents is the tort of intimidation.

Holding

Exemplary damages are essentially different from ordinary damages. The object of damages in the usual sense of the term is to compensate. The object of exemplary damages is to punish and deter. It may well be thought that this confuses the civil and criminal functions of the law; and indeed, so far as I know, the idea of exemplary damages is peculiar to English law. There is not any decision of this House approving an award of exemplary damages and your Lordships therefore have to consider whether it is open to the House to remove an anomaly from the law of England.

It must be remembered that in many cases of tort damages are at large, that is to say, the award is not limited to the pecuniary loss that can be specifically proved. In the present case, for example, and leaving aside any question of exemplary or aggravated damages, the appellant's damages would not necessarily be confined to those which he would obtain in an action for wrongful dismissal. He can invite the jury to look at all the circumstances, the inconveniences caused to him by the change of job and the unhappiness maybe by a change of livelihood. In such a case as this, it is quite proper without any departure from the compensatory principle to award a round sum based on the pecuniary loss proved.

These authorities clearly justify the use of the exemplary principle; and for my part I should not wish, even if I felt at liberty to do so, to diminish its use in this type of case where it serves a valuable purpose in restraining the arbitrary and outrageous use of executive power.

These authorities convince me of two things. First, that your Lordships could not, without a complete disregard of precedent, and indeed of statute, now arrive at a determination that refused altogether to recognise the exemplary principle. Secondly, that there are certain categories of cases in which an award of exemplary damages can serve a useful purpose in vindicating the strength of the law and thus affording a practical justification for admitting into the civil law a principle which ought logically to belong to the criminal. I propose to state what these two categories are; and I propose also to state three general considerations which, in my opinion, should always be borne in mind when awards of exemplary damages are being made.

Three categories of cases where exemplary damages are justified

The first category is oppressive, arbitrary or unconstitutional action by the servants of the government. I should not extend this category—I say this with particular reference to the facts of this case—to oppressive action by private corporations or individuals. Where one man is more powerful than another, it is inevitable that he will try to use his power to gain his ends; and if his power is much greater than the other's, he might, perhaps, be said to be using it oppressively. If he uses his power illegally, he must of course pay for his illegality in the ordinary way; but he is not to be punished simply because he is the more powerful. In the case of the government it is different, for the servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service.

Cases in the second category are those in which the defendant's conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff. Where a defendant with a cynical disregard for a plaintiff's rights has calculated that the money to be made out of his wrongdoing will probably exceed the damages at risk, it is...