by Michael Byrnes, Swaab

Introduction

In the recent matter of Hughes trading as Beesley and Hughes Lawyers v Hill [2020] FCAFC 126 (Hughes v Hill), the Full Court of the Federal Court of Australia rejected a categorisation of conduct by a lawyer towards his employee as romantic gestures akin to those of the well-known literary figure, Mr Darcy, rather than as sexual harassment.

This case has attracted widespread attention, largely owing to the unusual factual circumstances and the “Mr Darcy” submissions made on behalf of the Applicant in the appeal, Mr Hughes. However, Hughes v Hill is also instructive from a legal perspective – it considers the definition of sexual harassment under the Sex Discrimination Act 1984 (Cth) (SD Act) and demonstrates the increasing tendency of the Court to award and uphold significant sums of general and aggravated damages in sexual harassment cases.

The Facts

In May 2015, Mr Hughes employed Ms Hill as a paralegal in his boutique firm located near Byron Bay in northern NSW. Ms Hill was recently separated from her husband and residing in northern NSW so that her children could maintain a relationship with their father. Jobs were scarce for junior lawyers in that area, and Mr Hughes had promised that he would train Ms Hill as a solicitor.

Mr Hughes was a senior legal practitioner and the principal of his small firm.

During her employment, Mr Hughes acted for Ms Hill in a mediation with her former husband. As a result, Mr Hughes obtained access to both confidential and personal information relating to Ms Hill.

The power differential between the parties was both obvious and significant.

In June 2016, Ms Hill resigned from her position and filed a complaint with the Australian Human Rights Commission alleging sexual harassment by Mr Hughes. The matter did not resolve in the AHRC.

Ms Hill then commenced proceedings in the Federal Circuit Court. At first instance, the trial judge accepted that Mr Hughes had subjected Ms Hill to sexual harassment including:

  • sending repeated, unsolicited emails to Ms Hill in which he professed his love and offered romantic relations;
  • entering Ms Hill’s room while on a work trip to Sydney and waiting on her bed in his underwear for her return;
  • preventing Ms Hill from leaving her office until she gave him a hug; and
  • making thinly veiled threats to Ms Hill to the effect that her employment was contingent upon them entering a romantic relationship.
  • his conduct towards Ms Hill was not sexual in nature – rather, it should be seen as being like Mr Darcy in Pride and Prejudice (Mr Darcy was referred to in the actual submission);
  • the award of $120,000 in general damages was excessive; and
  • that there was no basis for the award of aggravated damages.
  • First, Mr Hughes alleged that the trial judge had been incorrect in his finding that Mr Hughes’ conduct during the trial supported an award of aggravated damages.
  • Secondly, Mr Hughes submitted that, even if he was wrong on the first point, the trial judge had still erred in concluding that his conduct had increased Ms Hill’s suffering.

The trial judge accepted that at no point had Ms Hill encouraged Mr Hughes and that her behaviour unambiguously rejected Mr Hughes’ advances.

After finding that Mr Hughes had indeed engaged in sexual harassment towards Ms Hill, she was awarded $120,000 in general damages and $50,000 in aggravated damages. The aggravated damages were awarded largely on the basis of the manner in which Mr Hughes had conducted himself during the trial, including that he inappropriately (and in breach of his professional obligations as a solicitor) used Ms Hill’s confidential information which he had obtained while acting for Ms Hill during the mediation with her former husband. Indeed, the conduct of Mr Hughes during the trial was labelled by the trial judge as ‘despicable’.

Mr Hughes appealed this decision to the Federal Court on three grounds:

Defining Sexual Harassment

By way of background, section 28B(1)(a) of the SD Act provides that it is unlawful for a person to sexually harass an employee of the person. Section 28B is contained within Part II of the SD Act. Conduct which is unlawful under Part II of the SD Act is included within the definition of ‘unlawful discrimination’ in s 3 of the Australian Human Rights Commission Act 1986 (Cth) (AHRC Act). This means that a person in breach of s 28B is simultaneously considered to have engaged in ‘unlawful discrimination’ for the purposes of the AHRC Act. In certain circumstances, this empowers the Federal Circuit Court or Federal Court to make orders including the award of ‘damages by way of compensation for any loss or damage suffered because of the conduct’.

On appeal, Mr Hughes did not allege that the conduct towards Ms Hill did not occur. Rather, he submitted that the conduct could not be characterised as ‘sexual’ for the purposes of the SD Act.

Notably, s 28A of the SD Act provides the following definition of what constitutes sexual harassment under s 28B(1) of the SD Act:

(1) For the purposes of this Division, a person sexually harasses another person (the person harassed) if:

  • (a) the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
  • (b) engages in other unwelcome conduct of a sexual nature in relation to the person harassed;

in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.

(1A) For the purposes of subsection (1), the circumstances to be taken into account include, but are not limited to, the following:

  • (a) the sex, age, sexual orientation, gender identity, intersex status, marital or relationship status, religious belief, race, colour, or national or ethnic origin, of the person harassed;
  • (b) the relationship between the person harassed and the person who made the advance or request or who engaged in the conduct;
  • (c ) any disability of the person harassed;
  • (d) any other relevant circumstance.

(2) In this section:

conduct of a sexual nature includes making a statement of a sexual nature to a person, or in the presence of a person, whether the statement is made orally or in writing.

Justice Perram provided an exposition of the three elements at play in s 28A of the SD Act as follows:

“[22] First, the Court is directed by subs (1) to ask itself whether there has been any of three identified forms of conduct: a sexual advance, a request for sexual favours or other conduct of a sexual nature. Each of these concepts involves the application of a defined legal standard to the facts as found. The Court must determine, on those facts, whether there was a sexual advance, a request for sexual favours or other conduct of a sexual nature. It is a question for the Court and it is a question of fact. In determining whether there has been conduct of a sexual nature the Court applies, of course, the definition of that term in s 28A(2).

[23] Secondly, if an identified form of conduct is established subs (1) also requires that it must be ‘unwelcome’ to the person allegedly harassed. This is a question of fact which is subjective and which turns only on the allegedly harassed person’s attitude to the conduct at the time. Even if the Court has concluded under the first limb that one person has engaged in conduct of a sexual nature towards another person, this will not constitute sexual harassment under the provision if it was not actually unwelcome in this sense. Ordinarily this will be proved by the person allegedly harassed giving evidence that the conduct was unwelcome but that mode of proof is not dictated by the statute and proof of this fact, like proof of any other fact, may be done by a variety of means. In some cases, I suspect this is one, the unwelcome quality of the conduct will be painfully obvious.

[24] Thirdly, once it be established that there was conduct of a sexual nature towards another and that the conduct was unwelcome, the provision imposes an objective delimitation on the provision’s ambit. The ‘circumstances’ must be such that a reasonable person would have anticipated the possibility that the person allegedly harassed would be offended, humiliated or intimidated by the conduct. The ‘circumstances’ are defined broadly in s 28A(1A) and include, importantly for this case, the relationship between the harasser and the harassed.”

In his submissions, Mr Hughes’ senior counsel argued for a distinction between two different uses of the word ‘sexual’. On one construction, it was submitted that ‘sexual’ could mean that ‘which transpires between persons (or other creatures) of a different biological sex’. The relationship between Mr Darcy and Ms Bennet in Jane Austin’s Pride and Prejudice could be considered ‘sexual’ in this way. On an alternative construction, ‘sexual’ could mean that which was done for the purpose of sexual gratification. This behaviour could occur between persons regardless of their gender.

In rejecting this construction, the Federal Court upheld in decision in first instance that the overall pursuit of Ms Hill by Mr Hughes was sexual in nature. The Court concluded that Mr Hughes’ actions were far removed from those of Mr Darcy, and any suggestion that Mr Hughes only wished to be Ms Hill’s ‘platonic lover’ was emphatically rejected.

General damages

In his appeal, Mr Hughes argued that the trial judge’s award of $120,000 to Ms Hill was manifestly excessive.

In assessing this issue, the Court noted that Ms Hill had provided at trial evidence by way of expert medical testimony about the effect Mr Hughes’ actions had on her. Mr Hughes called no evidence on this issue and he did not question the trial judge’s acceptance of these matters on appeal.

Given the impact of Mr Hughes’ behaviour on Ms Hill, including occasioning considerable stress, anxiety and unhappiness, Justice Perram observed (at [47]):

“What is the ruin of a person’s quality of life worth? I flatly reject the Appellant’s [Mr Hughes] contention that it was not worth $120,000 and the allied submission that such a finding was not open on the evidence. It seems to me to have been entirely within the range of available awards for general damages in a case of this seriousness where actual psychological harm was occasioned to the Respondent [Ms Hill] by the Appellant’s repeated and self-indulgent actions. The Court’s decision in Oracle [Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82] involved an award of $100,000 and there are many awards in this range: Vergara v Ewin [2014] FCAFC 100; 223 FCR 151; Collins v Smith (Human Rights) [2015] VCAT 1992; 256 IR 52; Huntley v State of NSW Department of Police & Justice (Corrective Services NSW) [2015] FCCA 1827; 251 IR 136. I reject the Appellant’s submission that his conduct was ‘significantly less egregious than the conduct complained of in Oracle.”

The Court ultimately upheld the decision to award Ms Hill an amount of $120,000 in general damages. In doing so, Justice Perram confirmed that the decision in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 effected “a substantial increase in the general damages which could be award in a case of sexual harassment”.

Aggravated damages

At first instance, the trial judge had awarded Ms Hill $50,000 in aggravated damages. This was due to threats Mr Hughes had made to her regarding making a complaint against him, and the manner in which he conducted himself during the trial.

On appeal, Mr Hughes directly challenged the authority of the Court to award Ms Hill the aggravated damages on two grounds:

In rejecting Mr Hughes’ first argument, Justice Perram concluded that it was dishonourable for Mr Hughes’ to have attempted to deter Ms Hill from seeking protecting from sexual harassment through making a complaint. Furthermore, Mr Hughes’ conduct during the trial at first instance was considered reprehensible at a minimum.

Justice Perram also rejected Mr Hughes’ second contention, stating (at [63]):

“The question is whether there should be additional compensation to the Respondent [Ms Hill] for her injured feelings because her sense of injury resulting from the sexual harassment has been heightened by the manner in which the Appellant [Mr Hughes] sought to dissuade her from complaining and the manner in which he conducted his defence: Wotton v Queensland (No 5) [2016] FCA 1457; 352 ALR 146 at [1731]-[1735]. The trial judge was correct to conclude that an award of aggravated damages was appropriate. To have suffered the Appellant’s sexual harassment in the first instance was psychologically damaging to the Respondent. To deal thereafter with his menacing behaviour, as her employer, must have been a terrible experience for a woman in her position. To have suffered the final indignity of watching the Appellant divulge her confidential information in his own defence, in gross dereliction of his professional duty, can only have made her realise that she was in the ring with a disturbed, self-centred and venomous man. He had threatened that he knew how to ‘fight the good fight’ and he carried that threat out even to the extent of conduct which must surely soon end, if it has not already ended, his career as a lawyer.”

As a result, the trial judge’s decision to award Ms Hill $50,000 in aggravated damages was upheld.

Conclusion

This case has garnered much attention due to the egregious conduct involved and the novel (pardon the pun) but ultimately unsuccessful “Mr Darcy” submission.

Unlike some other cases however that draw considerable attention due to the nature of the facts, this case is instructive legally.

First, Justice Perram provides a neat, useful distillation of the elements of the definition of “sexual harassment” in the SD Act.

Secondly, the case confirms the paradigm shift in calculation of general damages in sexual harassment matters established in the Oracle case.

Thirdly, the case sets out a useful illustration of the type of conduct that will lead to an award of aggravated damages and the quantum of such damages.

While the Mr Darcy references hark back to a bygone era, the principles canvassed in the case will likely be cited well into the future.

For further information please contact:

Michael Byrnes
Phone: +61 2 9233 5544
Email: mjb@swaab.com.au