12 August 2020
In Hughes v Hill, the Full Federal Court emphatically dismissed a solicitor’s appeal against a finding that he had sexually harassed a paralegal and against damages which he asserted were “manifestly excessive”. In doing so, the Court made it clear that the highest level of damages (both general and aggravated) will be available – and justified – in sexual harassment cases of this tenor. The judgement also reinforces the view that damages in sexual harassment cases are no longer an inferior category to other common law damages.
Background
Catherine Hill was a paralegal employed by a small firm of solicitors in regional New South Wales. The firm’s principal was a Mr Hughes. From mid-July 2015 (just two months after Ms Hill started working for Mr Hughes) until late 2016, she endured the persistent pursuits of Mr Hughes, which included:
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sending emails professing his love for her and proposing a romantic relationship;
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whilst on a work trip, entering Ms Hill’s room and waiting for her on a mattress in only underwear, and requiring a hug from her before agreeing to leave;
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on the same trip, waiting for Ms Hill in her bedroom when she returned from a shower dressed only in a towel; and
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repeatedly requiring Ms Hill to hug him at work.
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In response to the Ms Hill’s objections, Mr Hughes at one point made a veiled threat that he would continue to “try [his] best with [her] training” as long as she assured him that she would “not make a complaint or sue [him].”
At first instance the trial judge found that Mr Hughes had engaged in sexual harassment in breach of section 28B of the Sex Discrimination Act 1984 (Cth) (the Act) and awarded general damages of $120,000, and aggravated damages of $50,000. Mr Hughes appealed.
The appeal
The appeal to the Full Federal Court was on the grounds that:
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the trial judge had erred in finding that Mr Hughes’ conduct constituted a sexual advance, conduct of a sexual nature and sexual harassment in breach of s 28B of the Act;
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the $120,000 award of general damages was “manifestly excessive”, outside the range which was open to the trial judge, and that the trial judge had erred in failing to consider decisions prior to Richardson v Oracle Corporation Australia Pty Ltd; and
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there was no proper basis for the $50,000 award of aggravated damages.
In a unanimous judgement on behalf of the Full Federal Court, Justice Perram delivered the court’s unanimous condemnation of Mr Hughes’ conduct, both towards Ms Hill during her employment and in his conduct of the litigation.
Could the conduct be characterised as sexual?
As the appellant, Mr Hughes’ first contention was that his conduct did not breach s 28B of the Act – not because it did not occur – but because it was not sexual in nature. In submissions (which are difficult to believe) the Appellant compared himself to Mr Darcy (from Jane Austen’s Pride and Prejudice), arguing that all he had done was “make expressions or love and affection… to pursue a romantic relationship.” He argued it was not open to the trial judge to conclude his conduct was sexual.
Unsurprisingly Justice Perram gave short shrift to this argument, labelling it “delusional” and stating that “the facts of this case are about as far from a Jane Austen novel as it is possible to be”. He rejected Mr Hughes’ contention that he merely wanted to be the Respondent’s “platonic lover”, agreeing with the trial judge that the “tawdry events” described in evidence clearly constituted a determined sexual pursuit of the Respondent.
In doing so, Justice Perram dismissed the Appellant’s contention that “misguided, lofty-minded romantic conduct cannot constitute sexual harassment”.
General damages
Justice Perram was equally dismissive of the Appellant’s contention that the award of general damages of $120,000 was excessive.
Recognising the severe psychological consequences of the Appellant’s actions, Justice Perram reaffirmed that the Oracle decision marked a substantial shift in the way that damages are calculated in these cases. That case, decided by the Full Federal Court in 2014, effectively reset the benchmark for assessing damages for discrimination cases. (The court in Oracle noted that the range of general damages for pain and suffering and loss of enjoyment of life caused by sex discrimination had scarcely altered between 2000 and 2014, and therefore did not reflect the shift in the community’s estimation of the value to be placed on the experience of hurt and humiliation endured by victims of sexual harassment.)
Equally significant was Justice Perram’s discussion about how a power differential between Ms Hill and Mr Hughes will factor into the quantum of damages: it was not only relevant that the Appellant was her employer but also that the Appellant, as a member of the legal profession, held a position in society afforded status and privilege. The judge confirmed that abuses of power by such individuals will be met with an award of damages which is reflective of their especially egregious nature.
Aggravated damages
Of the trial judge’s award of $50,000 for aggravated damages, Justice Perram stated that he would have awarded even more than this. He was scathing towards Mr Hughes’ attempts to dissuade Ms Hill from bringing her case, and characterised the Appellant’s conduct of the trial, and the appeal, as a continuation of his harassment towards her.
So, what does this mean for employers?
Justice Perram’s judgement serves as a blunt reminder to employers that sexual harassment which happens under their watch will carry serious financial exposure. This is on top of (and perhaps even less damaging than) its grave impacts on the employer’s ‘brand’, and workplace culture.
The judgement echoes the evolving community sentiment of intolerance towards sexual harassers, and most significantly, it highlights that the former high water mark of damages set by Oracle in 2014 is now just the benchmark for sexual harassment compensation claims.
So, what can employers do to prevent this conduct and limit exposure? Though not covered in this case, more and more we are seeing that the solutions of the past – workplace behaviour policies and training – are being viewed as insufficient, particularly for larger employers.
Buoyed by the learnings from the Sex Discrimination Commissioner’s recent Inquiry into Workplace Sexual Harassment, best practice employers are looking at more holistic solutions, such as:
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measuring and then rectifying gender imbalances;
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increasing corporate governance reporting mechanisms;
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highlighting ‘bystander’ support;
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mirroring their safety framework for sexual harassment issues; and
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targeted training for leadership teams,
to name a few.
What remains clear is that this issue continues to demand leadership and attention from employers.
For further information, please contact:
Anthony Wood, Partner, Herbert Smith Freehills
anthony.wood@hsf.com
