Australia: Court Affirms the Seriousness of Sexual Harassment and Availability of Aggravated Damages
The decision in Hughes trading as Beesley and Hughes Lawyers v Hill is a Full Federal Court judgment on an appeal from a trial judge’s award of damages to Ms Hill for sexual harassment, where it had been found “unequivocally, that the conduct of [Mr Hughes] is the very conduct that the law of sexual harassment seeks to eliminate.” Relevantly, the trial judge had awarded Ms Hill $120,000 in general damages and $50,000 in aggravated damages.
Relevantly, Ms Hill was employed as a paralegal by Mr Hughes, the principal lawyer of a small law firm. Further, and whilst Ms Hill was employed, Mr Hughes represented Ms Hill during a mediation with her former husband in relation to parenting issues. During their employment relationship, Mr Hughes flooded Ms Hill with emails professing his love for her, and threatened the security of her employment to prevent her from making a complaint. There were also multiple incidents where Mr Hughes would not allow Ms Hill to leave the room without first giving Mr Hughes a hug. In one of these incidents, Mr Hughes was in his underwear.
Mr Hughes appealed to the Full Court on three grounds. Firstly, Mr Hughes submitted that the evidence did not support the conclusion that he had “sexually” harassed Ms Hill within the meaning of s 28A of the Sex Discrimination Act 1984 (Cth). Secondly, Mr Hughes submitted that the general damages award was manifestly excessive. Thirdly, Mr Hughes submitted that there was no basis for the award of aggravated damages.
In relation to the first ground of appeal, Mr Hughes contended that his conduct was not harassment of a sexual nature. Mr Hughes submitted that all he had done was make expressions of love and affection in his emails, expressions that were “honourable” and the “actions of a Mr Darcy,” not sexual. The Full Court, in setting out a useful summary of how a court should approach a claim for sexual harassment and the elements of that cause of action, rejected this submission, stating that the emails could not be viewed in isolation and must be considered in the context of Mr Hughes’s outwardly sexual conduct.
In relation to the second ground of appeal, Mr Hughes submitted that an award of $120,000 was manifestly excessive because his conduct was significantly less egregious than the conduct in Richardson v Oracle Corporation Australia Pty Ltd  FCAFC 82; 223 FCR 334 (Oracle), where the plaintiff was awarded $100,000 (the court in that decision made it clear that in sexual harassment cases normal damages principles apply, rather than any approach which placed an artificial limit on damages, and effected a substantial increase in the general damages which could be awarded in a case of sexual harassment). The Full Court found in any event that Mr Hughes’ conduct was not dissimilar to the conduct complained of in Oracle, further noting that Ms Hill had relied upon unchallenged medical evidence to support her claim that her health and quality of life had been detrimentally impacted. The Full Court also confirmed that Oracle remains the leading authority for a substantial increase in general damages for sexual harassment cases, and further, rejected Mr Hughes contention that the trial judge erred in failing to refer to any decisions pre-Oracle to determine quantum of damages. The Full Court also agreed with the trial judge that it was relevant that Mr Hughes was a practicing lawyer, when considering a general damages award. Specifically, the Full Court accepted that Mr Hughes’ role as Ms Hill’s lawyer was relevant for assessing the power imbalance between the parties and further, that Mr Hughes conduct had been an abuse of the privileges conferred to members of the legal profession.
In relation to the third ground of appeal, Mr Hughes submitted that the award of aggravated damages should be set aside, as the trial judge had erred in concluding that Mr Hughes’ conducted supported an award of aggravated damages and further, that Mr Hughes’ conduct had increased the suffering of Ms Hill.
The trial judge had awarded Ms Hill aggravated damages, accepting evidence Mr Hughes had requested Ms Hill’s assurance that she would not make a complaint or sue him. The Full Court agreed that this conduct plainly constituted a threat and an attempt to deter Ms Hill from seeking protection under sex discrimination laws. In addition, the Full Court accepted that Mr Hughes’ reliance on privileged information he had gained as Ms Hill’s lawyer had been an attempt to silence or bully Ms Hill. The Full Court found that this would clearly support an award of aggravated damages.
The Full Court also agreed with the trial judge that Ms Hill’s suffering had increased by Mr Hughes’ threats and conduct of his defence at trial. The Full Court noted that Mr Hughes’ actions during the trial, including the inappropriate use of Ms Hill’s confidential information gained while acting for her, alleging Ms Hill had been sexually abused as a child, and blaming Ms Hill for his own conduct by asserting she had behaved “coquettishly,” would have heightened her sense of injury resulting from the sexual harassment. For these reasons, the Full Court concluded that there had been no error in the trial judge’s award of aggravated damages. Indeed, the Full Court commented that had the Court been required to reconsider the appropriate award of aggravated damages, it would have concluded that a larger award was appropriate.
Broadly, this decision sets out in a convenient summary form the approach that the legislation requires a court to take in deciding whether there is sexual harassment, and confirms the shift in community attitudes on sexual harassment that should necessitate a larger general damages award. It also confirms that courts can no longer reference decisions pre-Oracle to justify a smaller general damages award in sexual harassment cases. Further, the decision emphasizes that a larger damages claim is warranted where the contravener works in a profession given additional privileges by the community, as this could increase the power differential between the contravener and the individual bringing a sexual harassment claim.
The decision also confirms that aggravated damages awards are available in discrimination law, and warranted where a contravener attempts to bully an applicant into refraining from commencing action, or where there is deplorable conduct by the contravener over the course of the trial. However, it should be noted that aggravated damages still need to be compensatory, and thus evidence of additional psychological damage is necessary to establish a claim.
For more information on these articles or any other issues involving labour and employment matters in Australia, please contact Michael Harmer (Partner) of Harmers Workplace Lawyers at michael.harmer@Harmers.com.au or visit www.harmers.com.au.