“Pride and Prejudice” – Court upholds $170,000 for damages for sexual harassment

We refer to our previous article on the Federal Circuit Court of Australia’s (the Federal Circuit Court’s) judgment of Hill v Hughes t/as Beesley and Hughes Lawyers [2019] FCCA 1267, where the Federal Circuit Court held that Mr Hughes, a principal of a law firm in New South Wales, sexually harassed a former female employee, Ms Hill, over the course of her employment within the meaning of the Sex Discrimination Act 1984 (Cth) (the Act). Ms Hill was awarded damages (general and aggravated) in the sum of $170,000.

Mr Hughes appealed the Federal Circuit Court’s decision to the Federal Court (the Federal Court) on the following grounds:

• The evidence did not support the conclusion that he sexually harassed Ms Hill because he was seen to be being like Mr Darcy in Pride and Prejudice;
• The award of $120,000 for general damages was manifestly excessive; and
• There was no basis for the award of aggravated damages in the sum of $50,000.

On 24 July 2020, the Federal Court dismissed Mr Hughes’ appeal and upheld the Federal Circuit Court’s initial decision.

Facts

In 2015, Ms Hill commenced employment as a paralegal at Beesley and Hughes Lawyers, a small law firm in northern New South Wales.

While Ms Hill worked for Mr Hughes, he acted for her in a mediation with her former husband. During that mediation, Mr Hughes obtained confidential and personal information about Ms Hill which he subsequently used in the legal proceedings.

Throughout the course of Ms Hill’s employment, Mr Hughes bombarded Ms Hill with highly inappropriate emails of a personal nature, expressing his desire to be with her. Further, Mr Hughes demanded hugs from Ms Hill whilst in his underwear on a work trip in Sydney.

Alarmingly, after Ms Hill had repeatedly confronted Mr Hughes to stop sending her personal emails and harassing her, Mr Hughes emailed Ms Hill words to the effect that her work output was not good enough because they were not lovers.

The Federal Circuit Court held that Mr Hughes sexually harassed Ms Hill within the meaning of the Act. The Federal Circuit Court described Mr Hughes’ conduct, especially the fact that he used information he obtained as Ms Hill’s solicitor during the proceedings, as despicable.

Decision of the Federal Court on Appeal

While Mr Hughes took issue with the strength of the Federal Circuit Court’s language in the initial decision, the Federal Court held that the language was appropriate and the conduct of Mr Hughes was despicable and improper. In fact, the language used to describe Mr Hughes’ conduct was strengthened in the Federal Court’s decision on appeal. Mr Hughes was described, among other things, as:

• having a profound power imbalance over Ms Hill and exploiting that power imbalance;
• not being a decent person; and
• exposing Ms Hill to almost intolerable stress.

In relation to the first ground of appeal, Mr Hughes did not dispute any of the findings made about what he had done, but argued that his conduct did not constitute sexual harassment. This argument was rejected by the Federal Court by interpreting the meaning of sexual harassment in section 28A of the Act. In particular, the three elements that must be satisfied are:

• the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
• 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.

Referring to Mr Darcy in Pride and Prejudice, Mr Hughes attempted to argue that “all he had done was to make expressions of love and affection to evince a desire to pursue a romantic relationship”. The Federal Court agreed that the Federal Circuit Court came to the clearest view that Mr Hughes’ overall pursuit was sexual and that his conduct constitutes sexual harassment within the meaning of the Act.

The Federal Court also rejected Mr Hughes’ arguments that the award of damages should be set aside. Based on the evidence of Ms Hill, including expert medical testimony, it was clear that the sexual harassment by Mr Hughes resulted in the progressive deterioration in her psychological and physical health. The Federal Court described the award of general damages as the ‘ruin of a person’s quality of life worth’ and rejected Mr Hughes’ contention that it was not worth $120,000 in the case of Ms Hill.

In respect of the award of aggravated damages, the Federal Court reiterated that Mr Hughes’ use of information during trial which he obtained in the course of representing Ms Hill as her solicitor was reprehensible, as an understatement. The Federal Court saw no error in the trial judge’s award of aggravated damages.

Justice Perram stated that “the trial judge was correct to condemn [Mr Hughes’] conduct of the trial as, in effect, a continuation of his harassment of [Ms Hill]. This appeal is devoid of merit and I would infer was pursued for the same purpose. Some of the submissions were, in my opinion, insulting. It should not have been brought and, in my opinion, should be emphatically dismissed.”

Take Home Messages

The Federal Court’s decision on appeal reiterates the fact that a series of inappropriate conduct can amount to sexual harassment within the meaning of the Act.

The culture of a workplace is determinative of the working relationships between employees. While it is paramount to maintain a positive workplace culture, employers need to set clear boundaries about what constitutes acceptable and unacceptable behaviour, including via electronic communications. Workplace bullying and harassment policies should deal with sexual harassment and employees should be encouraged to raise any concerns of inappropriate behaviour through appropriate process, which includes making reports to other employees or managers who do not hold a power imbalance over the complainant.

For more specific information on any of the material contained in this article please contact Lincoln Smith on +61 8 8210 1203 or lsmith@normans.com.au, Ganesh Krishnan on +61 8 8217 1395 or gkrishnan@normans.com.au or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.