Applicant v Respondent

1 On 30 March 2022 a Senior Member of the Victorian Civil and Administrative Tribunal ('Tribunal') published reasons ('Reasons') in proceeding number H302/2020 ('Tribunal proceeding').[1] The Senior Member found that Mr Billy Chung ('Respondent') had contravened s 93 of the Equal Opportunity Act 2010 ('EO Act') by sexually harassing Ms Zoey Leung ('applicant') who was another employee of his employer. The Senior Member made orders ('Orders') pursuant to s 125 of the EO Act that the Respondent pay to the applicant the sum of $10,000 in general damages, and that the applicant's claims for specific and aggravated damages be dismissed.

2 On 26 April 2022, the Applicant filed a notice of appeal pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 ('VCAT Act') against the Orders. On 3 November 2022, the Court heard the application for leave to appeal and the appeal concurrently.

3 The Applicant seeks leave to appeal and for Orders 1 and 2 of the Orders to be set aside. The Applicant seeks orders that the Respondent pay to the applicant $80,000 in general damages, $53,050.95 in special damages and $20,000 in aggravated damages. Alternatively, the applicant seeks orders remitting the proceeding to the Tribunal for a rehearing on loss and damage.

4 The Applicant commenced employment as a fulltime production coordinator for Gumboots Australia Pty Ltd ('Company') on 19 August 2019. At that time the Respondent was the production manager for the Company and the Applicant's direct manager.

5 In the Tribunal proceeding, the Applicant alleged that the Respondent contravened s 93 of the EO Act by subjecting her to several instances of sexual harassment. In the Reasons, the Senior Member found that:

• On three occasions in September and October 2019, the Respondent touched or slapped the Applicant on the buttocks while he was sitting at his desk and she was standing next to him;[2]
• In November 2019, the Respondent made comments on the Applicant's body shape. The Respondent said 'Why is your upper body so big but your bottom so skinny - your bottom has no meat!'. The Senior Member found these comments to be 'vulgar, and inappropriate'.[3]
• On 6 January 2020, the Respondent put his arm around the Applicant's shoulders and drew her to him, and tickled her waist.[4]
• On 7 January 2020, the Respondent gave the Applicant a shoulder massage.[5]

6 The Senior Member found that each of these six incidents constituted sexual harassment by the Respondent in the workplace in contravention of the EO Act.

7 In the Tribunal proceeding the Applicant claimed $110,000 in general damages, $53,050.95 in special damages comprised of $52,596.15 in lost wages, and $454.80 in out-of-pocket medical expenses, and $20,000 in aggravated damages.[6] By Orders 1 and 2 of the Orders, the Senior Member ordered the Respondent to pay a sum of $10,000 in general damages,[7] but dismissed claims for specific and aggravated damages.[8]

8 On 26 April 2022, the Applicant filed a notice of appeal pursuant to s 148 of the VCAT Act against the Orders. Section 148(1) of the VCAT Act provides:

A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding -

(a) if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or

(b) in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division.

9 There is no challenge to the Senior Member's findings that the six incidents constituted sexual harassment by the Respondent in the workplace in contravention of the EO Act.

10 The Senior Member ordered the Respondent to pay the applicant $10,000 in general damages. The applicant seeks leave to appeal on the following question of law:

Whether the award of general damages was manifestly inadequate.

The grounds of appeal in respect of this question of law is as follows:

The Senior Member erred in awarding damages in a sum that was manifestly inadequate to compensate the Applicant for her pain, suffering and loss of enjoyment of life.

11 In their written and oral submissions neither counsel referred me to any authority which has directly addressed the issue of whether a contention that the Tribunal's award of damages is manifestly inadequate, is a question of law for the purposes of s 148 of the VCAT Act. My own research has not identified any such authority.

12 There are, however, a number of decisions which have addressed the question of whether a contention that an award of damages by the Administrative Appeals Tribunal was manifestly inadequate, constituted a question of law for the purposes of the Administrative Appeals Tribunal Act 1984 ('AAT Act'). The Administrative Appeals Tribunal was the predecessor to the Tribunal. The AAT Act was repealed on the same day that the VCAT Act came into operation.[9]

A party to a proceeding before the Tribunal may appeal to the Supreme Court, on a question of law, from a decision of the Tribunal in that proceeding.

14 In Martin v Crimes Compensation Tribunal & State of Victoria[10] the Applicant sought to challenge a decision of the Administrative Appeals Tribunal on the ground that the award of damages which had been granted to them under the Criminal Injuries Compensation Act 1983 was inadequate. Tadgell JA (with whom Brooking JA and Hedigan AJA agreed) stated:

In my opinion this Court should take the opportunity now to say clearly that a submission that the AAT erred in making a manifestly excessive or inadequate award of compensation does not raise a question of law in respect of which an appeal may be brought to the Supreme Court pursuant to s 52 of the Administrative Appeals Tribunal Act 1984.[11]

15 The passage set out above was cited with approval by the Court of Appeal in Dunstan v Amcor Ltd[12] in which Winneke P (with whom Buchanan and Chernov JJA agreed) concluded that a ground of appeal alleging manifest inadequacy of damages did not raise a question of law under s 52 of the Workers Compensation Act 1958.[13]

16 In Phillips v The Estate Agents Boards[14] the Court of Appeal addressed the question of whether manifest excess or inadequacy of penalty is a question of law for the purposes of the AAT Act. McGarvie J (with whom Young CJ and Nicholson J agreed) stated:

Another ground taken in the notice of appeal was argued. That was that the penalty imposed by the Tribunal was manifestly excessive or, alternatively, excessive in all the circumstances. In my opinion, that does not raise a question of law and it is not open to raise that issue on the appeal which is given by the Act.[15]

17 The judgments of the Full Court in Martin and the Court of Appeal in Phillips concerned the question of whether manifest inadequacy of compensation (Martin) or manifest excess of penalty (Phillips) constituted questions of law for the purposes of s 52(1) of the AAT Act. Section 52(1) is relevantly indistinguishable from s 148(1) of the VCAT Act. I consider myself bound to follow Martin and Phillips. Consequently I am bound to conclude that the question of whether the award of $10,000 general damages was manifestly inadequate is not a question of law for the purposes of s 148(1) of the VCAT Act.

18 I have reached this conclusion notwithstanding the judgment of the Court of Appeal of the Western Australian Supreme Court in Real Estate and Business Agent Supervisory Board v Landa.[16] McLure JA (with whom Newnes JA agreed) stated:

The Board contends that 'the disciplinary action imposed by the Tribunal overall is manifestly inadequate'. I agree.

The imposition of a manifestly inadequate penalty constitutes an implied error of law. A disciplinary order will be manifestly inadequate if it is plainly unreasonable or unjust. By imposing penalties at the bottom end of the scale, the Tribunal in my respectful opinion grossly underestimated the seriousness of certain aspects of the respondent's conduct.[17]

19 If I was not constrained by the judgments in Martin and Phillips I would have concluded that the Applicant's contention that the award of general damages of $10,000 was manifestly inadequate, does raise a question of law for the purposes of s 148(1) of the VCAT Act. I consider that the reasoning of McLure JA in Landa that the imposition of a manifestly inadequate award of compensation 'constitutes an implied error of law' has much to commend it. The Applicant's contention that the Tribunal's award of $10,000 was manifestly inadequate, is tantamount to a contention that the award was manifestly unreasonable in the sense that no reasonable decision-maker could have awarded $10,000 based on the findings of fact made by the Senior Member. If the question of law had been formulated in these terms it would have raised a valid question of law.[18]

20 The judgments in Martin and Phillips must also be read subject to the High Court's consideration of the test for legal unreasonableness.[19] As Niall JA stated in Medical Board of Australia v Jiang Joo Leow:[20]

If a decision, made in the purported exercise of a statutory power, is in breach of the standard of legal reasonableness, then the decision is outside the scope of the authority conferred by the statutory power. It is necessary to determine whether the exercise of power is seen by the supervising court as lacking 'an evident and intelligible justification'. The Wednesbury formulation of unreasonableness, namely that the decision is one that no reasonable decision-maker could have arrived at, is a way of expressing the conclusion that the decision lacks an intelligible justification.[21]

21 For the reasons discussed below, if the Senior Member's decision had been challenged on the grounds of legal unreasonableness it is strongly arguable that this challenge would have succeeded. However, it is unnecessary to express a concluded view in respect of this issue. The Applicant did not contend, in terms, that the Tribunal's award of damages was legally unreasonable. Nor did the Applicant contend that the award was unreasonable in the Wednesbury sense, such that no reasonable decision-maker could have arrived at it. Ultimately, nothing turns on the Applicant's failure to have advanced these contentions as I have upheld other grounds of appeal challenging the Senior Member's decision.

Irrelevant considerations: The nature and extent of the Respondent's contravening conduct

Whether the Senior Member erred by taking into account irrelevant considerations in determining the award of general damages.

In determining the award of general damages the Member erred by taking into account the following irrelevant considerations:

...

(b) the nature and extent of the respondent's sexual harassment.

24 As developed in the course of argument, the Applicant contends that the Senior Member erred by focusing solely on the objective nature and extent of the sexual harassment of the Applicant whilst failing to take into account the subjective impact of the sexual harassment on the Applicant. I am satisfied that the issue of the failure to take into account the impact of the harassment on the Applicant was sufficiently disclosed by the oral submissions, together with a fair reading of the Applicant's written submissions and notice of appeal.[22] Both parties addressed the question of whether the Senior Member erred by failing to have regard to the impact on the Applicant of the conduct that was found by the Senior Member to have contravened the Act.[23]

25 A failure to take into account a relevant consideration will constitute error of law if the consideration is one that the decision-maker is, by law, bound to take into account. It is necessary to distinguish between considerations which are permissive (being considerations relevant in the colloquial sense, the oversight of which does not entail invalidity) and considerations which are mandatory (being considerations relevant in the stricter legal sense, the oversight of which results in invalidity).[24]

26 Section 125(a)(ii) of the EO Act provides that if the Tribunal finds that a person has contravened the Act it may make an order 'that the person pay to the applicant, within a specified period, an amount the Tribunal thinks fit to compensate the applicant for loss, damage or injury suffered in consequence of the contravention'.

27 In Obudho v Patty Malones Bar Pty Ltd[25] Emerton J (as her Honour then was) considered the meaning of the phrase 'in consequence of' in s 125 in the context of discrimination in the provision of services on the basis of race, contrary to s 44 of the Act:

The meaning of the phrase 'in a consequence of' was considered by McHugh J in Insurance Commission of Western Australia v Container Handlers Pty Ltd, albeit in a different context. His Honour stated that 'consequence' is an ordinary English word and must be interpreted as such. The Australian Oxford Dictionary defines 'consequence' as 'the result of effect of an action'. His Honour then said:

...In the context of the Act the expression 'a consequence of' emphasises the result or effect of the driving rather than the driving causing the result. This distinction is important in an insurance context where cause is frequently - perhaps usually - equated with 'proximate' or 'dominate' cause. Although 'consequence' involves notion of causation, the term 'consequence' - with its emphasis on effect - places less emphasis on the proximity of cause and effect than the term 'cause' may do in various contexts'.[26]

28 In Hall v A & E Sheiban Pty Ltd[27] ('Hall v Sheiban') the Full Court of the Federal Court considered the construction of s 81 of the Sex Discrimination Act 1984 (Cth). Section 81(b)(iv) conferred power on the Human Rights and Equal Opportunity Commission to order a respondent to 'pay to the complainant damages by way of compensation for any loss or damage suffered by reason of the conduct of the respondent.' Lockhart J stated:

The Commission then appears to have applied an objective test to the effect that no reasonable woman could in the light of that conduct assert that she had suffered loss or damage in consequence of it. In view of the approach which I take to be the correct one to the assessment of damages in cases under the Act, and which I have referred to earlier, this approach by the Commission is in my opinion untenable and demonstrates an error of law.[28]

Whilst an unusual reaction may properly excite careful scrutiny, even scepticism, once it be accepted - if it is accepted - that the reaction is a genuine result of the relevant conduct, the complainant is entitled to have damages assessed upon that basis. The damage is not to be ignored or discounted simply because the effect of the conduct on the complainant is unusually severe. Expressed in presently relevant pronouns, the rule is the same as in other areas of tort law: a sexual harasser takes his victim as he finds her...

Firstly, with respect, it was an erroneous approach to evaluate the effect of the subject incidents on Ms Oliver's romantic life by reference to 'the reasonable effects' of her experiences. The relevant question was the actual effects of those experiences. The claimed effects must be carefully evaluated but, if proved, they are not to be discounted because they exceed the effects which the Tribunal of fact would have intuitively thought to be 'reasonable' for a person in the position of the relevant person.[29]

30 Section 81(b)(iv), which conferred power upon the Equal Opportunity and Human Rights Commission to award compensation in the form of damage 'suffered by reason of' contravening conduct, is relevantly indistinguishable from the power conferred upon the Tribunal by s 125(b) of the EO Act to award compensation for damage suffered 'in consequence of' contravening conduct.

31 The Senior Member's reasons for awarding the Applicant $10,000 in general damages were as follows:

I accept the medical evidence that the applicant's stress levels, and anxiety were at the levels identified by all three medical practitioners and accept that her presentation of these symptoms was a consequence of the sexual harassment.

The progress that the applicant has made to a recovery is substantial and must be considered in any assessment for compensation.

I find that applicant was a person who was in a vulnerable position because of her age, gender, cultural connection, and position in the Company together with her need to work for financial reasons. She displayed a reticence to report the harassing behaviour out of disbelief, ignorance of the process for complaint, and a reluctance to upset the workplace. She was required to remain silent about her allegations, and felt unable to cope with complicated and uncomfortable environment which was evident on her return to work.

From the timeline provided, the applicant may have had other options which may have enabled her to retain her position - by taking leave and developing a return to work plan with her employers. She acted quite quickly - resigning on the second working day after her complaint was heard by her employer, and the respondent was dismissed.

The applicant's claim falls within what I will call the high end of amounts awarded for sexual harassment. In those cases where such significant payments were awarded the harassment was overt, included requests and demands for sexual favours, was manipulative, continuing and aggressive. They differ significantly from the events described by the applicant.

The applicant's symptoms also are reported to have resolved significantly over time and the applicant's prognosis is good. The impact on her enjoyment of life would appear to have improved significantly by 20 June 2020, although according to Dr Paisley it is still evident.

However, even if some or part of the applicant's symptoms can be put down to other causes I accept the evidence of Dr Paisley, that the manifestation of at least one of her symptoms are contemporaneous with the reported events, and can be attributed to them. For that reason, I find that the applicant is entitled to general damages to the amount of $10,000.00.[30]

32 Mr Latham, who appeared for the Applicant, submitted that bolded passage of the Senior Member's reasons supports a finding that the Senior Member erred in focussing on the objective seriousness of the contravening conduct, as distinct from the effect of the conduct on the Applicant. I accept this submission.

33 The Applicant claimed $110,000 compensation for general damages. In rejecting this claim, the Senior Member placed significant weight upon the objective nature of the contravening conduct in cases where significant payments have been awarded, in contrast to the conduct engaged in by the Respondent. In so doing, the Senior Member fell into error. The primary consideration in the assessment of compensation under s 125 of the EO Act is what measure of compensation will compensate an applicant for loss, damage or injury suffered in consequence of the contravention.

34 Although the Senior Member did consider the impact of the contravening conduct on the applicant, the $10,000 award of compensation reflected the Senior Member's opinion that the Respondent's contravening conduct was at the lower end of seriousness. As Wilcox J observed in Hall v Sheiban, if a complainant's reaction to contravening conduct appears to be disproportionate to the nature of the conduct, such reaction might invite careful scrutiny. However, once the Senior Member accepted that the applicant's reaction was a genuine result of the relevant conduct, compensation should have been assessed on the basis of that genuine reaction.

35 The award of $10,000 for general damages borders on derisory. Whilst the Respondent's contravening conduct did not include demands for sexual favours, it was nevertheless serious and repeated. It warrants the description of manipulative given the Senior Member's finding that the applicant was a person who was in a vulnerable position vis-à-vis the Respondent. Further, and of more importance, the Respondent's contravening conduct had an extremely detrimental impact upon the complainant. That impact was a direct consequence of the contravening conduct.

The applicant's symptoms are also reported to have resolved significantly over time and the applicant's prognosis is good. The impact on her enjoyment of life would appear to have improved significantly by 20 June 2020, although according to Dr Paisley it is still evident.[31]

I accept the medical evidence that the applicant's stress levels, and anxiety were at the levels identified by all three medical practitioners and accept that her presentation of these symptoms was a consequence of the sexual harassment.

The progress that the applicant has made to recovery is substantial and must be considered in any assessment of compensation.[32]

38 The Respondent's contravening conduct occurred between 19 August 2019 and 14 January 2020. In June 2020 the Applicant's psychologist opined that the Applicant met the criteria for post-traumatic stress disorder.[33] On 26 June 2020 Ms Chan-Kwa diagnosed the Applicant as suffering from moderate depression and severe anxiety.[34] The Applicant consulted a psychiatrist, Dr Paisley, on 3 November 2021. Dr Paisley recorded a clinical history which included the following:

She became anxious when she thought about these events. She has trouble sleeping at times. She has unpleasant dreams about Mr Chung approximately once per month. She averages six hours of sleep per night and always feels tired. She is often angry, irritable and frustrated. She complained of difficulties with her memory and concentration. She often feels depressed and cries easily. She has not had suicidal thoughts and says her daughter makes her want to stay alive.

Ms Leung is afraid of seeing Mr Chung in public. She experiences fear when she sees someone that looks like him, especially if she is alone. She avoids driving past the work site where these events occurred. She has installed a camera in the front of her house and car because she was worried that Mr Chung would come to her house. She expressed a desire to eventually move out of Melbourne to reduce the risk of seeing him.

Ms Leung said she recoils when her husband touches her. She told me - 'I do not want him to touch me or kiss me.' This has resulted in a loss of intimacy in the marriage. This, in combination with her irritability, has resulted in some marital strain. She believed they may have separated if it were not for their daughter.[35]

39 The Senior Member accepted Dr Paisley's opinion that the applicant's symptoms satisfy the criteria for diagnosis of an adjustment disorder because:

She developed emotional and behavioural symptoms in response to the workplace incidents (Criterion A). She experienced marked distress that is out of proportion to the severity of the incidents and it impaired her functioning (Criterion B). The symptoms do not meet the criteria for another mental disorder and is not an exacerbation of a pre-existing mental disorder (Criterion C). The symptoms do not represent normal bereavement (Criterion C and D). The symptoms have persisted for more than six months because of ongoing stressors (Criterion E).[36]

40 Dr Paisley stated the presenting symptoms to be:

[F]requent anxiety, depressed mood, insomnia, nightmares about the events at work, fear of seeing the perpetrator again, avoidance of places where she may possibly see the perpetrator again, tiredness, irritability, impaired concentration, distrust of others (especially men) and an avoidance of intimacy.[37]

41 It is not possible to reconcile the findings set out in Dr Paisley's report, which were accepted by the Senior Member, with the Senior Member's finding that:

The applicant's symptoms are reported to have resolved significantly over time and the applicant's prognosis is good. The impact on her enjoyment of life would appear to have improved significantly by 20 June 2020...[38]

42 As at 20 June 2020 the Applicant suffered from moderate depression and severe anxiety.[39] Whilst this constituted an improvement on 'extremely severe' depression diagnosed on 4 June 2020,[40] the Applicant's condition still constituted a post-traumatic stress disorder. Further, in November 2021, some 18 months later, Dr Paisley diagnosed the Applicant as having an adjustment disorder. The Senior Member's finding that the Applicant's symptoms were reported to have resolved significantly over time and that her prognosis is good is not supported by the evidence.

43 In addition to applying a discount to the award of compensation to reflect the Senior Member's assessment of the objective seriousness of the offending conduct, the Senior Member seriously misapprehended the medical evidence as to the consequences of the contravening conduct.

44 The Tribunal's order that the Respondent pay the Applicant $10,000 in damages will be set aside. Mr Latham submitted that the Court should undertake an assessment of compensation on the basis of the Senior Member's findings of fact. He submitted that s 148(7) of the VCAT Act permits the Court to substitute an order for general damages in lieu of the $10,000 ordered by the Senior Member.

45 I have no hesitation in concluding that the Senior Member's award of $10,000 for general damages is inadequate in the extreme. However, I am also mindful of the need for restraint in the exercise of the power conferred by s 148(7). In Osland v Secretary, Department of Justice,[41] the plurality stated:

The Court... in the exercise of its jurisdiction under s 148 of the VCAT Act, may make substitutive orders where only one conclusion is open on the correct application of the law to the facts found by the Tribunal. Such a case arises when no other conclusion could reasonably be entertained. In that event, the Court can make the order that the Tribunal should have made. The language of s 148(7) is also wide enough to allow the Court of Appeal to make substitutive orders in other circumstances. But its powers must... be exercised having regard to the limited nature of the appeal. Absent such restraint, a question of law would open the door to an appeal by way of rehearing. Where there is a factual matter that has to be determined as a consequence of the appeal, it may be that it is able conveniently to be determined by the Court of Appeal upon uncontested evidence or primary facts already found by the Tribunal. When the outstanding issue involves the formation of an opinion which is, as in this case, based upon considerations of public interest, then it should in the ordinary case be remitted to the body established for the purpose of making that essentially factual, evaluative and ministerial judgment.[42]

46 General damages are 'of their very nature, incapable of mathematical calculation'.[43] On the other hand, special damages, which are awarded in respect of monetary loss actually suffered and expenditure actually incurred 'are capable of precise arithmetical calculation or at least being estimated with a close proximity to accuracy'.[44] I do not consider it to be an appropriate exercise of the power conferred by s 148(7) for the Court to substitute an award of general damages for that made by the Senior Member. Any such assessment should be undertaken afresh upon remittal of the proceeding to the Tribunal. I consider it appropriate that the proceeding be remitted to be heard by a different member of the Tribunal.

3. Whether the Senior Member erred in finding that no award of special damages should be made as the Applicant did not suffer past loss wages in consequence of the respondent's contravention.

4. Whether on a proper construction of section 125 of the Equal Opportunity Act 2010 ('the Act'), special damages for past lost wages may only be awarded where a contravention of the Act prevents an employee from continuing in her employment.

3. The Senior Member erred by finding that an award of special damages should not be made as the Applicant did not suffer past loss wages in consequence of the respondent's contraventions of the Act.

4. The Senior Member erred in finding that special damages for past loss wages may only be awarded under section 125 of the Act where a contravention of the Act prevents an employee from continuing in her employment.

49 The Applicant claimed $53,050.95 as special damages. This claim was based on lost wages from the date of her resignation on 14 January 2020 until she obtained fulltime employment, less an amount of $1,750 derived from casual employment. The Senior Member rejected the claim:

The applicant says that she felt that she had to resign because it was not comfortable for her to work at the Company. She gave the Company little opportunity to manage the situation and make accommodations for her. At the time the applicant resigned she knew that the respondent had been dismissed and that she would not need to work with him.

The applicant is entitled to compensation for lost wages if the Tribunal is satisfied that the reason she lost wages was because of the acts of the respondent. I am satisfied that the events occurred and that the applicant made a complaint which resulted in the dismissal of the respondent. I also take into account the evidence of the applicant that the Company representatives allowed her time off to deal with circumstances, and encouraged her to take it. The applicant's evidence is that the Director of the Company called her when he became aware of her resignation and asked her to remain on the staff. The applicant refused.

Under these circumstances, I am not satisfied that the applicant was prevented from working at the Company and that her claim for lost wages can succeed.[45]

50 The Applicant is entitled to compensation for lost income if she establishes that the loss occurred in consequence of the Respondent's contravening conduct. The Senior Member addressed the wrong question of whether the applicant was prevented from working at the Company. If the Applicant's resignation was a genuine result of the Respondent's contravening conduct the Applicant is entitled to be compensated for lost income, even though she was not prevented from continuing in employment. It is not necessary for the Applicant to establish that the Respondent's contravening conduct was the sole cause of her loss of income. It is sufficient if the conduct was a cause of her ceasing to be an employee.[46]

51 The Senior Member misdirected herself as to the application of s 125 of the EO Act to a claim for lost income as a result of loss of employment which is a consequence of contravening conduct. Unlike general damages, it is possible for the Court to undertake an assessment of the Applicant's lost income. Employees of the Company were placed on Jobseeker allowance between 26 March 2020 until the Company was placed in liquidation on 8 September 2020. Mr Latham submitted, without opposition, that the evidence before the Tribunal established that the Applicant's loss of income between 14 January 2020 and 8 September 2020 was $29,250.04 less $1,750 earned from casual employment: $27,500.04. These figures assume that the Applicant would have received a Jobseeker allowance rather than her usual salary between 26 March 2020 and 8 September 2020. Putting to one side the Respondent's evidence that the Applicant's position was made redundant on 19 March 2020, it would be open to the Court to substitute an order for compensation for $27,500.04 in lieu of the order made by the Senior Member dismissing the Applicant's claim for compensation for lost income.

52 The Senior Member did not make a finding of fact as to whether the Applicant's role was made redundant on 19 March 2020. It was unnecessary for the Senior Member to do so because of her finding that the Applicant was not entitled to special damages because the Company had not prevented her from continuing in employment. On one view, the Respondent's evidence that the Applicant's position was made redundant is made self-serving because it reduces the Respondent's potential liability to pay compensation. Further, even if it is established by admissible evidence that the Applicant's position was made redundant on 19 March 2020 it does not follow that this would have occurred if the Applicant had not resigned and had continued as an employee post-14 January 2020. In this respect, the Senior Member accepted the Applicant's evidence that the director of the Company had called her when he became aware of her resignation and asked her to remain on staff.[47] This evidence is consistent with the Applicant being regarded as a valuable member of staff. Even if the Applicant's position was made redundant it does not follow that her employment would have been terminated. The Company may have decided to find her another position.

53 The Senior Member's order dismissing the claim for special damages will be set aside. The Applicant's claim for special damages will be remitted to the Tribunal for rehearing. If the Tribunal is satisfied that the Applicant's employment would have been terminated by reason of redundancy on 19 March 2020 the Applicant will be entitled to an award of compensation of $10,846.19 representing lost earnings between 14 January 2020 and 19 March 2020. If the Tribunal is satisfied that the Applicant's employment would have continued until the company was placed in liquidation, the Applicant will be entitled to an award of compensation of $27,500.04.

54 In addition to a claim for lost income the Applicant also made a claim for out-of-pocket medical expenses. The claim was rejected by the Senior Member on the basis that the evidence produced by the Applicant was not sufficient to prove the claim.[48]

55 There is a direct nexus between the Respondent's contravening conduct and the circumstances giving rise to the need for the Applicant to obtain medical assistance. Further, as the question of the Applicant's entitlement to special damages is to be remitted to the Tribunal, absent good reason to the contrary, the Applicant should be permitted to pursue a claim for out-of-pocket medical expenses as part of her claim for special damages.

5. Whether, on a proper construction of s 125 of the Act, aggravated damages may only be awarded in extreme circumstances.

6. Whether the Senior Member was bound to, and failed to, have regard to the frequency, duration and context of the sexual harassment in determining whether to award aggravated damages.

5. The Senior Member erred in finding that aggravated damages are only to be awarded under s 125 of the Act in extreme circumstances.

6. In finding that no award of aggravated damages should be made, the Senior Member erred by failing to take into account the following material considerations:

(a) the respondent's sexual harassment was part of a cause of conduct;

(b) the respondent's sexual harassment occurred over a prolonged period; and

(c) the respondent's sexual harassment occurred in a confined office environment.

58 The Senior Member rejected the claim for aggravated damages. Her reasons for doing so were as follows:

The applicant seeks aggravated damages on the grounds that the respondent has increased the hurt and humiliation experienced by the applicant through his attempt to belittle her description of the event; because of the power imbalance between them which made the applicant particularly vulnerable; by conducting the proceedings in a way that was intimidating and badgering; by describing her husband as a drunkard and a thief; and including claims of threats causing cancer and making a counter claim of $100,000.00.

The weight of authority favours the view that aggravated damages may be awarded as compensation for hurt and humiliation where the circumstances are extreme or exaggerated by the conduct of the respondent. The application where the hurt and humiliation arise from the conduct of the proceedings by a self-represented litigant have moderated the application in some cases.

The respondent has attempted to defend this claim and disputed the evidence of the applicant. He made some bold accusations in his evidence and submission to the Tribunal. However, they were little more than the Tribunal and the applicant might expect of a legally trained person conducting cross-examination. I am not satisfied that the matters raised in support of the claim for aggravated damages demonstrate that the respondent's behaviour aggravated and increased her hurt, humiliation or enjoyment of life to a point where there should be a separate award for that aggravation.[49]

59 In Talacko v Talacko,[50] I summarised the principles which govern an award of aggravated damages as follows:

Aggravated damages are a form of compensatory damages, available where the conduct of the defendant 'exacerbates or increases the subjective hurt of the plaintiff'. The compensation is 'for mental suffering falling short of a recognised psychiatric illness'. Damages are awarded as compensation for 'injury to the plaintiff's feelings caused by insult, humiliation and the like'. The damages are for what are frequently intangible injuries resulting from the circumstances and manner of the wrongdoing.

The Court's focus is principally on the plaintiff and the quantum of damages necessary to compensate for the injury suffered. An award of aggravated damages is appropriate when the actions of the defendant do not constitute 'ordinary wrong-doing, of a kind consistent with ordinary human fallibility'. The character of the conduct necessary for an award of aggravated damages was described by the High Court in Triggell v Pheeney as lacking bona fides, or being improper or unjustifiable.[51]

60 The Senior Member correctly observed that aggravated damages may be awarded as compensation for hurt and humiliation where the circumstances are extreme or exaggerated by the conduct of the Respondent. However, in rejecting the Applicant's claim for aggravated damages the Senior Member applied a test of 'circumstances [which] are extreme or exaggerated by the conduct of the respondent.'[52] In doing so, the Senior Member erred. As stated by the High Court in Triggell v Pheeney,[53] the character of conduct necessary for an award aggravated damages is that which is lacking in bona fides, improper or unjustifiable.[54] Mr Latham submitted that the Senior Member erred by failing to take account of material considerations namely:

(a) the Respondent's sexual harassment was part of a course of conduct;

(b) the Respondent's sexual harassment occurred over a prolonged period; and

(c) the Respondent's sexual harassment occurred in a confined office environment.

61 It is arguable that the circumstances of the Respondent's contravening conduct satisfied the threshold for an award of aggravated damages. However, this will be a matter for the Tribunal to determine on the remittal of the proceeding.

62 Leave to appeal will be granted in respect of questions of law 1 to 6 and the appeal upheld on grounds 2(b), 3, 4 and 5. An order will be made setting aside paragraphs 1 and 2 of the Tribunal's order of 30 March 2022. Paragraph 3 of the order granted leave to the Applicant to apply for costs of the proceeding in the Tribunal. That order remains in place. The question of whether the Applicant should be awarded those costs can be dealt with by the Member of the Tribunal who hears the proceeding on remittal.

63 I shall make an order remitting the proceeding to be heard and decided again by a different Member of the Tribunal. The rehearing of the proceeding is not an opportunity for the Respondent to recontest the Senior Member's findings at [48] to [76] of the reasons that the Respondent engaged in conduct in contravention of the EO Act. The further hearing should also be conducted on the basis that the evidence as set out at [81] to [93] regarding the psychological impact on the Applicant of the contravening conduct is not open to challenge. However, on remittal the Tribunal is not bound by the Senior Member's findings at [94] and [96] to [99] which I consider to be inconsistent with the medical evidence accepted by the Senior Member. Further, the Applicant should be permitted to lead further evidence, including medical evidence, regarding her current psychological condition and prognosis. Both parties should be permitted to lead further evidence on the question of whether the Applicant's position was made redundant on 19 March 2020, and if so, whether the Applicant's employment would have been terminated at that time.

64 I shall provide the parties with an opportunity to make submissions as to the costs of the application for leave to appeal. My provisional view is that the Respondent should pay the Applicant's costs of the application on a standard basis, to be taxed in default of agreement. My provisional view is that if application is made by the Respondent for an indemnity certificate pursuant to s 4 of the Appeal Costs Act 1988, a certificate should be granted in respect of the Respondent's costs of the application.

[1] Leung v Chung (Human Rights) [2022] VCAT 216 ('Reasons').

[2] Reasons [17(a)-(b)], [48]-[54].

[9] Transport Accident Commission v O'Reilly [1998] VSCA 106; [1999] 2 VR 436, 438 [2].

[10] (1997) 91 A Crim R 301.

[12] [2000] VSCA 9 [21].

[14] [1988] VicRp 24; [1988] VR 179.

[16] [2009] WASCA 191.

[18] Cf Bell Corporation Victoria Pty Ltd v Stevenson [2003] VSC 255, [22].

[19] Minister for Immigration & Citizenship v Li [2012] HCA 61; (2013) 249 CLR 332.

[20] [2019] VSC 532.

[22] Cf McSteen v Architects Registration Board of Victoria [2018] VSCA 96, [9], [37].

[23] See Applicant's Submissions dated 16 September 2022 [11]-[12]; Respondent's Submissions dated 5 October 2022 [16]; Transcript of Proceedings, T 6 L 18-29; T 44 L 12-28 (3 November 2022).

[24] M Aronson, M Groves and G Weeks, Judicial Review of Administrative Action and Government Liability (Law Book Co, 7th ed, 2022), 281 [6.90].

[25] [2017] VSC 28.

[27] [1989] FCA 72; (1989) 20 FCR 217.

[41] [2010] HCA 24; (2010) 241 CLR 320.

[43] Paff v Speed [1961] HCA 14; (1961) 105 CLR 549, 559 (Fullagar J).

[46] Pearson (as President of Association of Canonical Administrators of Padua College) v Martin [2015] VSC 696 [82]-[85].

[50] [2018] VSC 751.

[53] [1951] HCA 23; (1951) 82 CLR 497.