Cross v Hughes
[2006] FMCA 976
•7 July 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CROSS v HUGHES & ANOR | [2006] FMCA 976 |
| HUMAN RIGHTS – Sexual harassment – undefended proceedings – award of aggravated damages appropriate. |
| Human Rights and Equal Opportunity Commission Act 1986, s.46PH(2) Federal Magistrates Act 1999 Federal Court Rules, o.62 |
| Hughes v Car Buyers Pty Ltd & Ors (2004) FMCA 526 Hall v A. and A. Sheiban Pty Ltd (1989) 20 FCR 217 Wattle v Kirkland (2001) FMCA 66 Bishop v Takla & Ors (2004) FMCA 74 |
| Applicant: | MELANIE CROSS |
| First Respondent: | JUSTIN OWEN HUGHES |
| Second Respondent: | HOKONUI ENTERPRISES PTY LTD T/A OAKBANK INSURANCE SERVICES |
| File number: | ADG 166 of 2005 |
| Judgment of: | Lindsay FM |
| Hearing date: | 28 June 2006 |
| Date of last submission: | 28 June 2006 |
| Delivered at: | Adelaide |
| Delivered on: | 7 July 2006 |
REPRESENTATION
| Counsel for the Applicant: | Ms K. Eaton |
| Solicitors for the Applicant: | Bourne Lawyers |
| First Respondent: | No appearance |
| Second Respondent: | No appearance |
ORDERS
That the Court declares that the First Respondent unlawfully sexually harassed the Applicant contrary to s.28A and s.28B of the Sex Discrimination Act 1984.
That the First and Second Respondents do pay the Applicant compensation in the amount of $11,822 comprised of:
(a)loss of income fixed in the amount of $3300;
(b)special damages fixed in the amount of $522;
(c)general damages fixed in the amount of $5000;
(d)aggravated damages fixed in the amount of $2500.
That in addition to any other order for costs made during the course of these proceedings, the First and Second Respondents do pay the Applicant’s costs of and incidental to these proceedings fixed in the sum of $10,275.09.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADG 166 of 2005
| MELANIE CROSS |
Applicant
And
| JUSTIN OWEN HUGHES |
First Respondent
| HOKONUI ENTERPRISES PTY LTD T/A OAKBANK INSURANCE SERVICES |
Second Respondent
REASONS FOR JUDGMENT
These proceedings relate to an application filed on 27 July 2005, in which Ms Melanie Cross seeks an order that the respondent Justin Hughes and Hokonui Enterprises Pty Ltd, trading as Oakbank Insurance Services (hereinafter "the company") pay her compensation for economic loss in the amount of $3822 and compensation for non‑economic loss in the sum of $25,000.
The application does not specify the legislative source of the power to award compensation, but we know from reading the affidavit and the information sheet filed with the application that the application is for an order pursuant to the provisions of the Human Rights and Equal Opportunity Commission Act 1986 on account of what is alleged to be the respondents' liability in respect of sexual harassment of the applicant during the course of her employment.
The application comes to the Court after a notice of termination pursuant to s.46PH(2) pursuant to Human Rights and Equal Opportunity Commission Act given on 22 June 2005.
It is material to pause to outline the progress of the proceedings in this Court.
The application first came before the Court on 12 August 2005. On that day the respondents were given an opportunity to file an amended response, orders were made for discovery, and the matter was listed for trial on 6 March 2006.
A directions hearing on 20 February 2006 ordered the applicant to file and serve within seven days an affidavit from her treating general practitioner.
An application came before the court on 27 February 2006 for an adjournment of the trial. The application was made by the respondents. The application was refused for reasons that were given on that day.
Subsequently, and on 6 March 2006, the trial listed for that day was vacated and the matter was listed for trial on 24 and 25 July 2006, with the parties to attend a mediation conference on 4 April. An order was made for the respondent to pay the applicant's costs of and incidental to that hearing, fixed in the sum of $1365.
Subsequently that trial date was brought forward to 28 June 2006.
On 28 June 2006 the respondents' solicitors sought leave to withdraw. Leave was granted. The matter proceeded to hearing on an undefended basis. The affidavit of the applicant filed on 25 July 2005 and the affidavit of her general practitioner of 27 February 2006 were read into evidence. The applicant gave some short oral evidence, during the course of which further documentary evidence was received.
The applicant was employed by the second respondent as an office administrator working in the Adelaide hills.
The first respondent is the only shareholder of the second respondent and the second respondent is, in effect, his alter ego.
In October 2004 the first respondent asked the applicant to travel with him to Sydney for the period 28 to 30 October 2004. It was made clear to the applicant that the purpose of the trip was for business and that the first respondent required the applicant's assistance with meetings to be held for business purposes on that day.
The applicant arrived in Sydney on 28 October 2004. She was met at the airport and taken to the Menzies Hotel in a vehicle arranged by the first respondent. When she arrived at the hotel, she discovered that she was booked into a single hotel suite with two bedrooms with the first respondent. She was informed by the first respondent over dinner that night that there were no appointments the next day. She says it was suggested to her that she and the first respondent attend a live sex show. She refused.
On the following day the parties went on a tour of Sydney, including lunch at an esplanade restaurant. The applicant says that during lunch the first respondent made remarks to her about her posterior which she found offensive. She says that during the course of that day the suggestion that they attend a live sex show was repeated, and on each occasion she refused to attend.
On that second evening in Sydney the parties attended a harbour cruise dinner together. Following dinner the parties attended a bar in George Street. She says that following the attendance at that bar the first respondent referred to her as "sweet pea", which remark she found offensive. She says that upon their return to the hotel she went to the bathroom and then upon entering the bedroom discovered the first respondent in her room in his underpants. He had placed his pillows on her bed. She was frightened. She said that she was going out for a cigarette, picked up her bag and left the bedroom. She went to the downstairs bar in the hotel and was subsequently joined by the first respondent. She says that she became less fearful of him at that point and agreed to return with him to the suite. She said there was a further discussion about sleeping arrangements when she returned to the suite, during which she made it clear that she was not going to sleep with the first respondent. He picked up his pillows from her bed and stormed out of her room, slamming the door. She locked her door and slept very poorly during the night.
She says that on the following day the first respondent apologised to her, but still insisted on sitting next to her on the flight home.
She says that the first respondent was a family friend and, in particular, that his wife was a friend of her mother. She says she felt that the episode involved a betrayal of the trust that she had reposed in him.
She says that following the incident she became depressed. She had problems with her appetite. She smoked and drank much more than she was wont to do. She saw her general practitioner on 3 November 2004. On 4 November 2004, she wrote to the first respondent advising him that she had medical advice not to return to work and provided him with a medical certificate on 5 November 2004. She consulted a psychologist on one occasion.
On 10 December, she provided 14 days' written notice of her resignation, which became effective from 24 December 2004.
She had, prior to this episode, already arranged to leave the employment of the first respondent at Christmas and nothing was put to me to indicate that her taking up of subsequent employment was prejudiced or delayed on account of these events.
She was paid seven days' sick leave by the second respondent in mid‑December 2004 but did not receive any other payment.
The evidence the applicant gave at the undefended hearing before me was essentially limited to the question of her damage. I did not find her to be an impressive witness. That is not to say that I found her to be untruthful. She simply did not provide any particularly convincing or coherent evidence in relation to the impact of these events upon her. Whilst she referred to being depressed and tearful and referred to such things as loss of appetite and increase in smoking and drinking, she was unable to provide any contextual embedment for these complaints in respect of the way in which they impacted upon her daily life. She was slow to answer the questions put to her by her counsel in respect of these matters. I take into account a nervousness associated with the giving of evidence in legal proceedings and I also take into account the fact that she may continue to find a recollection of these events distressing. But even allowing for those matters, her evidence was unconvincing as to the level of the impact of these events upon her. That is not to say that I do not accept that they had some impact. It is simply to say that she did not impress in the witness box as someone who was profoundly affected by the events described.
Ms Eaton, who appeared on behalf of the applicant, made it clear that the application was one pursuant to section 28A and 28B of the Sex Discrimination Act 1964. Section 28A of the act provides:
(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 that the person harassed would be offended, humiliated or intimidated.
(2)In this section:
“conduct of a sexual nature” includes making a statement of a sexual natures to a person, or in the presence of a person, where the statement is made orally or in writing.
Section 28B provides:
(1) It is unlawful for a person to sexually harass:
(a) an employee of the person; or
(b)a person who is seeking to become an employee of the person.
(2)It is unlawful for an employee to sexually harass a fellow employee or a person who is seeking employment with the same employer.
(3) It is unlawful for a person to sexually harass:
(a)a commission agent or contract worker of the person; or
(b)a person who is seeking to become a commission agent or contract worker of the person.
(4)It is unlawful for a commission agent or contract worker to sexually harass a fellow commission agent or fellow contract worker.
(5)It is unlawful for a partner in a partnership to sexually harass another partner, or a person who is seeking to become a partner, in the same partnership.
(6)It is unlawful for a workplace participant to sexually harass another workplace participant at a place that is a workplace of both of those persons.
(7)In this section:
“place” includes a ship, aircraft or vehicle.
“workplace” means a place at which a workplace participant works or otherwise carries out functions in connection with being a workplace participant.
“workplace participant” means any of the following:
(a) an employer or employee;
(b) a commission agent or contract worker;
(c) a partner in a partnership.
In addition, regard should be had to the provisions of s.106 of the Sexual Discrimination Act 1984.. The effect of that section is that the second respondent is vicariously liable for the sexual harassment of the first respondent. No complication arises in respect of the application of that section because of the fact that the second respondent is, in effect, the alter ego of the first respondent. Any judgment entered in this matter will be entered jointly and severally against both respondents.
Having heard the evidence of the applicant and having regard to the contents of her affidavit, I am satisfied that the events of 28 to 30 October 2006 constituted unwelcome sexual advances to her by the first respondent and am thus satisfied that sexual harassment, for the purposes of the Act, has occurred. The affidavit and oral evidence of the applicant were, of course, unchallenged. The applicant was given every opportunity to attend at the hearing but made a decision not to do so. On the applicant's uncontroverted account, it is clear that she was the recipient of a number of unwelcome sexual advances over the period in question. I infer from the whole of the evidence that the weekend in Sydney was, in truth, unrelated to any business activities by the first respondent. The weekend was planned and implemented to provide him with an opportunity to seduce the applicant. In these circumstances it is little wonder that the applicant found the events surprising and distressing. I also take into account the significance of the events occurring whilst the applicant is very far from her home. The respondent planned matters so as she would be far from home and set about courting her over the period in question with a clear view to encouraging or enticing her into sexual activity with him.
The applicant adumbrated at the commencement of the hearing on 28 June 2006 an intention to apply for exemplary damages but I expressed my concern about those damages being sought in circumstances where neither the application nor the affidavit put the respondents upon notice of that aspect of the claim. It is one matter for a respondent to make a decision not to participate in a trial when a certain category of damage is sought. It is another matter altogether to make such a decision and then having the category of damage sought enlarged. I do not consider it appropriate for the nature of the damage sought to be enlarged only after the matter has been listed for hearing on an undefended basis.
I did not have the benefit of expert medical evidence as to the impact of these events on the applicant. The affidavit her general practitioner provides a narrative of the applicant’s presentation to him from November 2004 to April 2005 and corroborates her tearful and anxious state in the two months following the events, but does not contain any diagnoses of or opinion in relation to the existence of any clinical condition.
In any event, I agree with the observations of Walters FM in the matter of Hughes v Car Buyers Pty Ltd & Ors (2004) FMCA 526 that exemplary damages are not available under the legislation in respect of which this application is brought. Aggravated damages are another matter. Aggravated damages are, of course, compensatory in nature. I refer to the discussion of the nature of aggravated damages referred to in paragraphs 69 to 79 inclusive of the decision of Walters FM. There are features of this matter which, in my view, take the damage into the category of aggravated damages. I think it is appropriate to increase the award which would have otherwise been available to the applicant to take account of the conduct of the respondent in prolonging the resolution of this dispute up to and including a trial and then not to attend at the trial and challenge any aspect of the applicant's evidence. It is not a question of punishing the respondent for putting the applicant to proof. It is a matter of recognising that there was no utility in prolonging the proceedings to the point of trial if the respondent did not intend to participate in them in any meaningful way. If the proceedings were not to involve any challenge to the evidence of the applicant, that should have been made clear at a much earlier stage of the proceedings. I am prepared to infer that the conduct of the first respondent between October of 2004 and the present time is such as to have increased the distress and hurt occasioned to the applicant.
The assessment of damages in matters such as the one before me is a difficult process. With respect, I adopt the observations of Wilcox J in the Federal Court in the matter of Hall v A. and A. Sheiban Pty Ltd (1989) 20 FCR 217 at 256 as to the difficulties involved in the process and the way in which the assessment of the damages should be approached. On the other hand, the guiding principle is straightforward. Damages should be assessed on the basis of tortious principles, ie putting the applicant in the position she would have been had the behaviour of the respondent not occurred (see the remarks of Driver FM in Wattle v Kirkland (2001) FMCA 66 at [70]).
The first head of damage sought by the applicant is relatively easily dealt with. It relates to the loss of income suffered by the applicant on account of the respondent's behaviour. That aspect of the damage was set forth with particularity as early as the information sheet filed at the commencement of the proceedings and I am satisfied that the amount of $3822 is the appropriate award to make in respect of the application for loss of income and medical expenses. The claim for six weeks' wages at $550 gross takes into account the fact that the applicant has received one week of sick leave. That aspect of the award is, of course, taxable. I am satisfied on the basis of the material tendered during the course of the applicant's evidence before me and on account of material set forth in the affidavit that the other aspects of these special damages, ie medical expenses and the like, ought to be awarded.
With respect to the claim for damages for non-economic loss, Ms Eaton provided me with a number of determinations of the Federal Court and of this Court in respect of awards in sex discrimination cases. So for example, Raphael FM, in the matter of Bishop v Takla & Ors (2004) FMCA 74 considered an award of non-economic damages in the amount of $20,000 was appropriate. That was a case involving sexual harassment of a waitress by a chef in a work environment over a period of time, involving both physical touching and repeated suggestive remarks. In Wattle v Kirkland (2001) FMCA 66 Driver FM considered an award of $15,000 to be appropriate by way of general damage. This was a case of a female taxi driver having been the subject of unwelcome sexual remarks on three occasions over the period of approximately three weeks and unwelcome physical contact on two occasions during that period, in addition to a more general allegation of unwelcome touching at other times.
In addition I have had regard to the table of damages awarded in sexual harassment cases under the legislation which appears at page 163 of the publication of the Human Rights and Equal Opportunity Commission, known as "Federal Discrimination Law 2004".
Having given careful attention to the affidavit and oral evidence of the applicant, I consider the appropriate award by way of general damages in the instant case to be in the amount of $5000. There should be an award in addition to that of aggravated damages by a further 50 per centum of that amount, reflecting the unnecessary prolongation of these proceedings referred to above and the consequent intensification and prolongation of the hurt and distress caused to the applicant.
There is an application for costs. I am asked to fix the amount of the costs. My power to award costs in these proceedings arises from both the legislation under which the award is made and pursuant to the Federal Magistrates Act1999 and the Rules of Court, and in particular the rules set out in Part 21. In making an order for costs, I can set the amount of the costs or, alternatively, set the method by which the costs are to be calculated or refer the costs for taxation pursuant to order 62 of the Federal Court Rules. I think the appropriate way to proceed is to fix the costs immediately. There has already been quite unnecessary delay occasioned by the conduct of the respondent in this matter and I have been provided with a schedule of costs by the applicant's counsel.
The claim for costs is in the amount of $15,175 plus disbursements in the sum of $275.09.
The claim for costs includes an amount in respect of the aborted trial on 20 February 2006 and an amount of $6770 in respect of preparation of the matter for a final hearing. It is to be borne in mind that an order for costs thrown away in respect of the earlier trial has already been made and this order is not intended to supplant that order but is an order made in addition to that order.
In all of the circumstances I think an award of costs fixed in the sum of $10,000 plus disbursements is appropriate. That does not allow for all of the fees provided for in the Schedule 1 to the Rules of Court but I consider the amount for preparation for the final hearing and in respect of the amount sought for the interim hearing on 20 February 2006 should be discounted in order to make an appropriate costs order.
The orders of the Court are as follows:
(1) That the First and Second Respondents do pay the Applicant compensation in the amount of $11,822 comprised of:
(a)loss of income fixed in the amount of $3300;
(b)special damages fixed in the amount of $522;
(c)general damages fixed in the amount of $5000;
(d)aggravated damages fixed in the amount of $2500.
(2)That in addition to any other order for costs made during the course of these proceedings, the First and Second Respondents do pay the Applicant's costs of and incidental to these proceedings fixed in the amount of $10,275.09.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Lindsay FM
Associate: Ms K Clarke
Date: 7 July 2006.
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