Pinecot Pty Ltd v Anti-Discrimination Commissioner [2001] NTSC 107

Pinecot Pty Ltd v Anti-Discrimination Commissioner [2001] NTSC 107 - NTSC 2001 case summary — Zoe

[5]

[3] However, after considering the purposes and structure of the Act and a number of authorities to which I will come, the Commissioner held that the plaintiff could be held to be vicariously liable for the alleged acts of M. The plaintiff has lodged an appeal against that part of the defendant's decision in the Local Court pursuant to s106 of the Act. The appeal has not yet been heard. In addition, the plaintiff has brought these proceedings which seek remedies in the nature of certiorari and prohibition and declaratory relief. There is authority for the proposition that the existence of an appeal or of a right to appeal may be a relevant consideration as to whether or not to grant discretionary relief at this stage: see The Queen v Galvin; ex parte Bowditch (1979) 39 FLR 231 at 243-244; The Queen v The Judges of the Federal Court of Australia and Another [1979] HCA 6; (1978-79) 143 CLR 190 at 207, 216, 221, 238, 240. However, the facts in this case are not in dispute. The point to be decided is a narrow one turning on a question of construction of the relevant Act. It is also an important question to the defendant. According to the affidavit of Mr Story sworn on 18 October 2001, there are 38 other complaints before the Commission that will be affected by the outcome of this case and the point is likely to emerge in more than half of all complaints lodged in the Commission, which receives approximately 400 complaints a year. Mr Green QC for the plaintiff, has given an undertaking to withdraw the appeal to the Local Court. The defendant also wishes the issue to be resolved in this Court. In those circumstances I do not consider that there is any obstacle to my hearing and determining the question which the parties wish me to resolve in these proceedings.

[4] For the sake of completeness, I should also mention that M is not interested in these proceedings and made no submissions to the defendant. As to SG, she appeared at the commencement of the hearing by her counsel, Ms Little, who indicated that SG did not wish to pursue her application to be made a party to these proceedings and I gave her leave to withdraw her application. This left the proceedings in a state where there might not be a proper contradictor and Mr McDonald QC sought the permission of the Court to put submissions going to the defendant's jurisdiction in accordance with The Queen v Australian Broadcasting Tribunal; ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13 at 35-36. This was not opposed by Mr Green QC. As the question is one of statutory interpretation going to the jurisdiction of the Commissioner, I considered it proper to grant Mr McDonald QC's application.

[11]

[7] Section 6 of the Act provides for the appointment of a person to be the Anti-Discrimination Commissioner. The Commissioner's functions as set out in s13 include a number of functions of a purely administrative or consultative kind relating to the promotion of the purposes of the Act by activities such as legal research into areas where Acts or regulations might conflict with the purposes of the Act; promoting the publication of information and data concerning discrimination and the effects thereof and the principles of equal opportunity; improving services and conditions affecting groups subjected to prohibited conduct; preparing and publishing guidelines and codes of practices to assist persons to comply with the Act; to provide persons with advice and assistance relating to the Act; and to advise the Minister.

[8] Additionally, the Commissioner has the power to carry out investigations and hearings into complaints and to endeavour to effect conciliation between parties where a complaint has been lodged: see s13(1)(a). Where a complaint is lodged with the Commissioner concerning conduct prohibited by the Act, the Commissioner may reject the complaint if it is frivolous, vexatious, trivial, misconceived, lacking in substance or fails to disclose any prohibited conduct (s67), or accept the complaint (s66). If the complaint is accepted, the Commissioner is required to investigate it (s74(1)(b)) in such manner as he sees fit (s75(1)), but thoroughly (s75(3)(a)) and with as little formality and technicality and as much expedition as the circumstances permit (s75(2)). If, as a result of the investigation, the Commissioner is satisfied that there is a prima facie case, he is required to proceed to conciliation or, if the complaint cannot be thus resolved, to a hearing (ss76, 78 and 83). The Act gives no coercive powers to the Commissioner at the investigation stage, but he may direct a person to take part in conciliation proceedings and the failure to comply with such a direction is an offence (s79).

[9] At the hearing stage, the Commissioner (or the person appointed by the Minister to hear the complaint under s85) is generally required to conduct the hearing in public (s86). In conducting the hearing, the Commissioner is not bound by the rules of evidence and may obtain information as he considers appropriate (s90(1)(a)). The Commissioner can compel witnesses and documents (s92(1)). The failure to comply with an order under s92(1) is an offence. The complainant bears the onus of proof according to the ordinary civil standard, except where the respondent wishes to rely upon an exemption (s91). The parties are only entitled to be legally represented by leave (s95) and the Commissioner may make arrangements for a legal practitioner to appear as counsel assisting (s94). The Commissioner has powers to make interim orders to preserve the rights of the parties (s101) and if the complaint is proved, he can make orders requiring the respondent not to repeat or continue the prohibited conduct; order the respondent to pay compensation for loss or damage caused by the prohibited conduct, including damages for "offence, embarrassment, humiliation and intimidation"; as well as make orders requiring the respondent to redress the loss or damage, including the re-instatement or re-employment of a person. He can also make other orders designed to provide an effective remedy in the circumstances, including ordering the respondent to apologise (see ss88 and 89). There is a power to award costs, but the general rule is that each party bears their own costs (s96). Failure to comply with an order without reasonable excuse is an offence (s104). Where the order is for the payment of money, the order may be registered in a court and become a judgment debt of that court recoverable accordingly (s104). A right of appeal on a question of fact or law or both lies to the Local Court (s106).

[10] The scope of the conduct which is prohibited by the Act is dealt with in Parts 3 and 4 of the Act. Division 1 of Part 3 deals with the prohibited grounds of discrimination. Section 19 prohibits discrimination against a person on the ground of any of the "attributes" set out in s19(1)(a) to (r) (except where there is an exemption). Section 20 provides that discrimination includes "any distinction, restriction, exclusion or preference made on the basis of an attribute that has the effect of nullifying or impairing equality of opportunity" in an area of activity referred to in Part 4. Section 28, which is the principal provision in Part 4 dealing with areas of activity, provides that the Act applies to prohibited conduct in the areas of education; work; accommodation; goods, services and facilities; clubs (which are licensed to sell liquor for consumption on the premises) and insurance and superannuation. Division 2 of Part 3 deals with Prohibited Conduct. Section 22 provides that a person shall not, in an area of activity referred to in Part 4, sexually harass another person. Section 23 prohibits victimisation inter alia of a person who has made, or intends to make, a complaint under the Act. Section 24 which appears to be of general application, prohibits the failure or refusal to accommodate special needs because of an "attribute", and is most likely to apply to certain particular "attributes" referred to in s19(1) such as pregnancy, parenthood, breastfeeding, impairment and religious needs or activities. Section 25 prohibits discriminatory advertising. Section 26 prohibits the asking of a person to supply information on which unlawful discrimination might be based. Although these sections of the Act make the conduct unlawful, it is not an offence to engage in prohibited conduct per se; nor can anyone seek a remedy by way of an action in a court of law for damages or for a civil penalty, except where the Act creates specific offences. The Act provides for enforcement either by the complaint process or by way of a request to the Minister under s74(1), or where the Commissioner himself carries out an investigation in the circumstances referred to in s74(2).

[29]

[18] In my opinion that was not properly a case of vicarious liability. The facts show that the acts were done by the managing director who administered the business of the company. His acts were therefore the acts of the company itself: c.f. Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1; (1972) AC 153. Nevertheless, the case is some support for the general proposition that a company can be criminally liable for the acts of its employees acting in the course of their employment in circumstances where the offence can only be committed by an individual having the necessary intent and the intention of the Act is to make companies liable for their servants' acts.

[19] There is a third type of case where vicarious liability has been imputed to a principal, which is illustrated by the decision of the Full Federal Court in Hanley v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Another (2000) 100 FCR 531. In that case the plaintiff brought civil proceedings against a union for a penalty in respect of a breach of s170 NC (1) of the Workplace Relations Act 1996 (Cth). The proceedings were dismissed by the magistrate inter alia on the ground that the Union was not vicariously liable for the acts of an organiser employed by the Union. Section 349 of the Act provided that conduct by an employee or agent of a body corporate acting within the scope of his actual or apparent authority shall be taken to be action engaged in by the body corporate. Their Honours concluded that the Union organiser had breached the section, but that the Union was not directly liable for his acts under the principles in Tesco Supermarkets Ltd v Nattrass. The question then arose as to whether the Union was vicariously liable for the organiser's acts, or whether he could only be liable by operation of s349. In the result, their Honours held, following the dissenting opinion of Pincus JA in Evenco Pty Ltd v Australian Building Construction Employees and Builders Labourers Federation (Qld Branch) (2001), 2 Qd R 188, that the Union could be liable vicariously for the acts of the organiser, although in the end result, the Court applied the same test as that laid down by s349, i.e. that the Union was liable only for the acts of the organiser done within the scope of his actual or apparent authority. Their Honours, in reaching the conclusion that there was vicarious liability in the circumstances, relied upon the obiter remark of Lord Diplock (which they wrongly attributed to Lord Reid) in Tesco Supermarkets Ltd v Nattrass, supra, at 199, that

[34]

[21] Liability in such cases for breach of statutory duty and its correlation to vicarious liability was considered by the High Court in Darling Island Stevedoring and Lighterage Co Ltd v Long, supra. In that case it was held that as the statute cast the duty only upon the "person in charge", if that person failed to perform the duty the employer was not liable, vicariously or otherwise, for his (the servant's) breach of duty. Thus, even in the law of torts, a civil liability imposed by statute does not give rise to vicarious liability unless, first, the statute imposes an obligation on the employer and second, the employer is under the general law of negligence bound to exercise due care in respect of the person in favour of whom the obligation is cast. Further, there are many instances where a civil liability is imposed by statute where it has never been authoritatively held that an employer or principal is vicariously liable: workmen's compensation (where the liability is direct); motor accident compensation schemes; damages under trade practices and consumer protection legislation and victims' assistance schemes. I therefore respectfully reject the approach adopted by the Federal Court in the Evenco case.

[22] It is necessary to briefly point out that, although vicarious liability is connected with the law of agency historically, the law has not so far unified all agency in contract and in tort into one set of principles, although attempts have been made to do so: see Bowstead on Agency, 15th Edition, at p388.

[23] Nevertheless, there is considerable inter-relationship between agency in contract and vicarious liability in tort; see Bowstead, supra, at 386ff. In some cases it may be a moot point whether liability flows from some principle of the law of agency, or whether the liability is strictly vicarious. By way of illustration in Colonial Mutual Life Assurance Ltd v The Producers and Citizens Cooperative Assurance Company of Australia Ltd [1931] HCA 53; [1931] 46 CLR 41, the appellant insurance company was held liable for defamatory remarks which were made by its agent (who was not a servant) in respect of the respondent insurance company. In that case, Dixon J (with whom Rich J concurred) considered that the "agent's" authority was such that, in performing the services under his contract, the company must be considered as itself conducting the negotiation in his person (p49). Gavan Duffy CJ and Starke J reached the conclusion that the principal was liable because the agent was "authorised to speak, and in fact spoke, with the voice of the defendant" (p47). However, although the law of agency was called into aid, the liability of the principal was direct, not vicarious. As Fleming on Torts, supra, says at p414:

[69]

[39] Turning to the first of the indicia to which I have referred in paragraph [24] above, it is clear that the prohibited conduct is intended to apply to both individuals as well as corporations. There are many indications of this to be found in the Act itself, not the least of which are the penal provisions which specifically provide for penalties for corporations. In any event, s19 of the Interpretation Act provides that "in any Act...person...includes a body politic and a body corporate." There is nothing in the Act to indicate a contrary intention. I conclude therefore that where s22 of the Act refers to "a person" the Act proscribes the relevant conduct whether it was committed by a corporation or an individual, notwithstanding that s22(1)(e)(i) requires proof of a mental element as one of the ways in which proof of a breach of s22(1) may be established. Further, it is to be noted that, because there must be proof of one of the matters referred to in s22(1)(e)(1)(i) or (ii) or (f), the liability is not absolute.

[40] Next, I consider that it is relevant that the prohibited conduct is limited to the areas set out in s28. The areas are education, work, accommodation, goods, services and facilities, clubs and insurance and superannuation. The Act provides no relevant exemptions for sexual harassment. In some of these areas, such as "work" (as to which see the definition in s4(1)) the persons likely to breach the section will be persons who are employees of others but the victim could be the employer or the managing director of an employer company. There is nothing to suggest that protection under the Act is given only to workers rather than to management. On the other hand, in the area of accommodation, the relationship between the victim and the complainant (which under s22(3) is relevant) might be that of landlord and tenant, or of the landlord's agent (such as an employee of a licensed land agent) and the tenant or perhaps even those living in rented accommodation who are not in fact tenants (see the definition of "accommodation"). The victim in either case might be the tenant, the tenant's children or wife, the land agent's employee, or the land lord's employee. Therefore it is not necessarily the case that the person who performed the act complained of was an employee or agent of a company acting in the course of his employment or in the scope of his authority. There is also a difficulty that it is extremely unlikely that, even if the act was performed by an employee, that the act could be said to be one which arose in the course of his employment, the usual test for the vicarious liability of masters for their servants. In general terms, the "course of employment" is said to encompass such unauthorised acts by the servant as can be regarded as an unauthorised mode of performing an authorised task. It is hard to envisage how, in the usual case an act of sexual harassment could be other than a "frolic of his own": see the discussion in Fleming on Torts, supra, at pp421-22.

[41] Next, neither the statute nor the general law of negligence confers a duty on a principal or employer, whether corporate or otherwise, to take any positive steps to prevent the prohibited conduct from happening when the acts are performed by the principal's servants or agents. This may be contrasted with the provisions of similar Acts which contain express provisions which make the principal primarily liable for the acts of servants or agents (notwithstanding section headings such as "vicarious liability"), but at the same time provide that the principal is not liable if he has taken all reasonable steps to prevent the prohibited conduct from occurring: see for example Racial Discrimination Act (Cth) s18A; Sex Discrimination Act 1984 (Cth) s106; Disability Discrimination Act 1992 (Cth) s123(3) and (4); Anti-Discrimination Act 1977 (NSW) s53; Equal Opportunity Act 1995 (Vic) ss102 and 103; Anti-Discrimination Act 1991 (Qld) ss132 and 133; Equal Opportunity Act 1984 (WA) s161; Discrimination Act 1991 (ACT) s108I. The lack of any similar provision, or any other provision of the Act imparting a positive duty on corporations or principals to prevent the conduct complained of by its servants or agents is a telling one. The Act only provides for the liability of others where the person concerned causes, instructs, incites, assists or promotes another to contravene the Act: see s27(1). In such a case, that person becomes jointly and severally liable with the principal contravener (s27(2)). It would have been a simple matter for the legislature to have expressly provided for the liability of principals or corporations for the acts of their servants or agents. They did not do so and I think that in the circumstances it must be inferred that the omission to do so was deliberate.

[42] Next, reliance was placed by Mr McDonald QC on s88 of the Act pursuant to which a respondent in a hearing may be required to, inter alia, employ, re-instate, or re-employ a person, etc. A provision such as this, so it was submitted, clearly contemplates a corporate employer being a respondent and being capable of liability by reason of the conduct of one or more of its employees. Mr Green QC described this as the respondent's best point, but in my opinion there is no substance to it. As has often been said, corporations can only act through their servants and agents. A servant or agent having the power to hire or fire is not a mere employee, but is one to whom authority so to act on behalf of the company has been expressly conferred. Thus, an act of discrimination relating to work under s31 must of necessity be an act performed by the company itself and does not depend upon any notion of vicarious liability. It is feasible that such a person could fire someone because of a complaint of sexual harassment, but that would amount to an act of victimisation under s23 and again would be treated as the act of the company.

[43] I have already referred to the objects and purposes of the Act at para [6 ] above. One of the objects of the Act is stated to be, rather baldly, "to eliminate sexual harassment". Despite this, the Act itself does not seek to eliminate sexual harassment, except in the areas set out in Part 4 of the Act. No doubt an interpretation of the Act which promoted this objective should be preferred to one that does not, but to give effect to such a purpose, there must be some provision of the Act identified capable of being so interpreted. As stated by McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc and Others v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at para [69]:

[71]

[44] The difficulty in this case is to identify any specific provision of the Act which is open to the construction contended for by the respondent. None was contended for, but in the circumstance of this case, it could only be s22. The difficulty of reading "a person shall not" as meaning that "a corporation is to be vicariously liable for the acts of its servants or agents acting in the course of their employment or on behalf of the corporation" needs only to be stated. Kay J in State Electricity Commission of Victoria v Equal Opportunity Board [1989] VicRp 46; (1989) VR 480 managed to add words to a provision (s34(i)) of the Equal Opportunity Act 1984) to create vicarious liability, but there, at least, there was a provision which was capable of that construction.

[45] Finally, the question arises as to whether the objects or purposes of the Act would be defeated or severely curtailed if the principal's acts were to be limited to acts for which the principal is directly liable in so far as breaches of s22 are concerned. I have already noted that, even if principals were made vicariously liable for breaches of s22, that it is unlikely that the conduct of a servant involved in sexual harassment in the workplace would fall within the concept of the course of the employment. I note that Kay J reached a similar conclusion in State Electricity Commission of Victoria v Equal Opportunity Board, supra, at 482.

[46] In conclusion, I consider that the weight of the factors which I have mentioned lead to the result that an employer is not vicariously liable for a breach of s22 of the Act committed by his servant in the course of his employment. I am therefore satisfied that the defendant has committed jurisdictional error entitling the plaintiff to an order in the nature of certiorari: see: Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163 at 177, 179 and 183. I am further satisfied that unless prohibited the defendant intends to hear and determine the complaint on the basis that vicarious liability exists and that therefore the plaintiff is entitled to an order in the nature of prohibition.

[47] I make the following declarations and orders:

Declare that on the proper construction of the Anti-Discrimination Act an employer cannot be held vicariously liable for actions of an employee which allegedly contravene the provisions of s22 of the Act.

The decision of the defendant made on 15 September 2000 that the plaintiff could be vicariously liable for the actions of its employee, David Mudge, in relation to a complaint brought by Sue Garovic against David Mudge and the plaintiff is quashed.

The defendant be prohibited from further hearing the complaint by Sue Garovic against the plaintiff in so far as the complaint relies upon or raises the question of whether the plaintiff is vicariously liable for the acts of David Mudge.

The defendant pay the plaintiff's costs of the proceedings including any costs reserved.

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