Leslie v Graham [2002] FCA 32 (4 February 2002)

Last Updated: 3 February 2003

FEDERAL COURT OF AUSTRALIA

Leslie v Graham [2002] FCA 32

HUMAN RIGHTS - sexual harassment - sex discrimination - enforcement of determination of the Human Rights and Equal Opportunity Commission - hearing de novo - whether sexual harassment by fellow employee - whether employer vicariously liable - whether employer discriminated against applicant on the ground of her sex - whether employer unlawfully victimised applicant in terminating her employment

HUMAN RIGHTS - sexual harassment - damages - where respondents did not appear at inquiry before Human Rights and Equal Opportunity Commission

Sex Discrimination Act 1984 (Cth) ss 5(1), 14(2), 28A, 28B(2), 50(1), 57, 65, 81(2), 83A(1), 105, 106

Human Rights Legislation Amendment Act (No. 1) 1999 (Cth) s 101

Acts Interpretation Act 1901 (Cth) s 8(e)

Evidence Act 1995 (Cth) ss 59(1), 60, 64(3), 102, 108(3), 135, 136, 140

Federal Court of Australia Act 1976 (Cth) s 21

Graham v The Queen [1998] HCA 61; (1998) 195 CLR 606 considered

Papakosmas v The Queen [1999] HCA 37; (1999) 196 CLR 297 cited

Smith v The Christchurch Press Co Ltd [2001] 1 NZLR 407 cited

Elliott v Nanda & Commonwealth [2001] FCA 418 referred to

Aldridge v Booth (1988) 80 ALR 1 cited

LOUISE LESLIE v LINCOLN GRAHAM & ANOR

N4 of 2001

BRANSON J

SYDNEY

4 FEBRUARY 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N4 OF 2001

BETWEEN:	LOUISE LESLIE APPLICANT
AND:	LINCOLN GRAHAM FIRST RESPONDENT ROGER GRAHAM & ASSOCIATES PTY LIMITED SECOND RESPONDENT
JUDGE:	BRANSON J
DATE OF ORDER:	4 FEBRUARY 2002
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. Lincoln Graham and Roger Graham & Associates Pty Limited pay to the applicant $16,000 within 21 days of the date of this order.

2. The liability of Lincoln Graham and Roger Graham & Associates Pty Limited under paragraph 1 of this order be joint and several.

3. Subject to the issue of costs, the application be otherwise dismissed.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N4 OF 2001

BETWEEN:	LOUISE LESLIE APPLICANT
AND:	LINCOLN GRAHAM FIRST RESPONDENT ROGER GRAHAM & ASSOCIATES PTY LIMITED SECOND RESPONDENT

JUDGE:	BRANSON J
DATE:	4 FEBRUARY 2002
PLACE:	SYDNEY

REASONS FOR JUDGMENT

BRANSON J

INTRODUCTION

1 The applicant ("Ms Leslie"), who was a complainant before the Human Rights and Equal Opportunity Commission ("the Commission"), by an application filed on 4 January 2001 commenced a proceeding under subs 83A(1) of the Sex Discrimination Act 1984 (Cth) ("the SDA") in the Court for an order to enforce a determination of the Commission made under subs 81(1) of the SDA. Although subs 83A(1) of the SDA was repealed by s 101 of the Human Rights Legislation Amendment Act (No. 1) 1999 (Cth), s 8(e) of the Acts Interpretation Act 1901 (Cth) preserves its operation in relation to the maintenance of the proceedings.

2 On 10 November 1997 Ms Leslie lodged with the Commission a complaint in writing alleging that the first respondent ("Mr Lincoln Graham") and the second respondent ("Roger Graham & Associates") by its directors Mr Roger Graham and Mrs Margaret Graham ("Mrs Graham"), had, in effect, done acts that were unlawful by virtue of provisions of Part II of the SDA (see subs 50(1) of the SDA). By her complaint Ms Leslie alleged that Mr Lincoln Graham, one of her fellow employees at Roger Graham & Associates, on 16 November 1996 subjected her to sexual harassment and that Roger Graham & Associates had thereafter unfairly terminated her employment because of the alleged sexual harassment.

3 The Sex Discrimination Commissioner ("the Commissioner") inquired into the subject matter of Ms Leslie's complaint and on 25 January 1999 referred the complaint to the Commission on the basis that her endeavour to settle the matter by conciliation had not been successful (see s 57 of the SDA).

4 On 13 March 2000 Mr Graeme Innes AM, Inquiry Commissioner ("the Inquiry Commissioner"), held an inquiry into Ms Leslie's complaint (see Division 3 of Part III of the SDA). Neither of the respondents exercised his or its right of appearance at the inquiry (see s 65 of the SDA). On 13 March 2000 the Inquiry Commissioner deliver ex tempore reasons for concluding that Mr Lincoln Graham and Roger Graham & Associates had engaged in unlawful discrimination and harassment under the SDA. The written reasons for decision of the Inquiry Commissioner, which were published on 21 July 2000, record the following conclusion:

"I direct that the amount of $18,000 is payable to the complainant jointly and severally by both respondents following my decision that they are liable for a breach of the Act in terms of sexual harassment of the complainant on or before 28 days from the publication of written reasons for this decision.

I further direct that the amount of $7,000 is payable by the company for its liability in the area of victimisation on or before 28 days from the publication of reasons for this decision.

Finally, I direct that the company provide the complainant with a written statement confirming that the termination of her employment was not related to any decrease in her work performance on or before 28 days from the publication of reasons for this decision."

5 The determination of the Inquiry Commissioner was not binding on the parties to the determination (subs 81(2)) of the SDA). Despite being requested by Mr Leslie's solicitors to do so, neither of the respondents complied with the determination of the Inquiry Commissioner.

STATUTORY PROVISIONS

6 Sexual harassment is defined by s 28A of the SDA as follows:

"(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 nature to a person, or in the presence of a person, whether the statement is made orally or in writing."

7 The sexual harassment of one employee by a fellow employee is rendered unlawful by subs 28B(2) of the SDA.

8 Section 106 of the SDA is concerned with vicarious liability. It relevantly provides:

"(1) Subject to subsection (2), where an employee or agent of a person does, in connection with the employment of the employee or with the duties of the agent as an agent:

(a) an act that would, if it were done by the person, be unlawful under Division 1 or 2 of Part II (whether or not the act done by the employee or agent is unlawful under Division 1 or 2 of Part II); or

(b) an act that is unlawful under Division 3 of Part II;

this Act applies in relation to that person as if that person had also done the act.

(2) Subsection (1) does not apply in relation to an act of a kind referred to in paragraph (1)(a) or (b) done by an employee or agent of a person if it is established that the person took all reasonable steps to prevent the employee or agent from doing acts of the kind referred to in that paragraph."

9 As Ms Leslie contended that sexual harassment is itself a form of discrimination, it is necessary for consideration to be given to the provisions of the SDA which are concerned with sex discrimination. Subsection 5(1) of the SDA provides:

"For the purposes of this Act, a person (in this subsection referred to as the "discriminator") discriminates against another person (in this subsection referred to as the "aggrieved person") on the ground of the sex of the aggrieved person if, by reason of:

(a) the sex of the aggrieved person;

(b) a characteristic that appertains generally to persons of the sex of the aggrieved person; or

(c) a characteristic that is generally imputed to persons of the sex of the aggrieved person;

the discriminator treats the aggrieved person less favourably than, in circumstances that are the same or are not materially different, the discriminator treats or would treat a person of the opposite sex."

10 Subsection 14(2) of the SDA relevantly provides:

"It is unlawful for an employer to discriminate against an employee on the ground of the employee's sex...:

(a) in the terms or conditions of employment that the employer affords the employee;

(b) by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment;

(c) by dismissing the employee; or

(d) by subjecting the employee to any other detriment."

PARTIES

11 Ms Leslie is a transport planner. She holds a Bachelor of Visual Arts degree in Education and a Masters degree in Transport Management. Her father and grandfather operated a bus company in which she commenced to work as a teenager. From October 1992 to the beginning of 1995 she was employed by a company which operated under the name "Busways" performing a wide range of duties. In December 1994 she responded to an advertisement placed by Roger Graham & Associates which sought a transport planner and an assistant transport planner. Following an interview with Mr Roger Graham, which lasted approximately two hours, she was offered employment with Roger Graham & Associates. She commenced this employment in January 1995.

12 Roger Graham & Associates is a company established in December 1990 and which undertakes consultancy work in the transport industry. It is essentially a "family business". The directors of Roger Graham & Associates are Mr Roger Graham and his wife Mrs Graham. Mr Roger Graham holds a Bachelor of Economics degree and he has over thirty years' experience in senior management in the public and private sectors of passenger transport. He is the professional driving force of Roger Graham & Associates. The responsibilities of Mrs Graham, who works part-time at the office of Roger Graham & Associates, principally relate to office administration including the handling of account and other bookkeeping and clerical duties. She also carries responsibility for the employment and supervision of non-professional staff (ie the receptionist).

13 Mr Lincoln Graham, the son of Mr Roger Graham and Mrs Graham, completed his studies for a Bachelor of Economics degree in late 1994. He commenced employment almost immediately thereafter with Roger Graham & Associates. In his evidence he described his position at that time as "transport consultant" although his father in his evidence described it as "research officer".

14 In December 1996, with the support of Roger Graham & Associates, Mr Lincoln Graham became the principal director of a company which operates under the name "TransMarketing".

FINDINGS OF FACT

15 At the time that Ms Leslie commenced her employment with Roger Graham & Associates, four other people were working in the company's premises at Milsons Point (an inner North Sydney suburb): Mr Roger Graham, Mrs Graham, Mr Lincoln Graham and a receptionist/keyboard operator. Only Mr Roger Graham worked from an office; the others had workstations in relatively close proximity to each other. At the time Ms Leslie was twenty four years of age and Mr Lincoln Graham twenty years of age.

16 In May 1995 an additional transport planner, Mr Ian Abbottsmith, was employed by Roger Graham & Associates. Mr Abbottsmith had previously worked with Ms Leslie at Busways.

17 I accept the evidence of Ms Leslie that on joining Roger Graham & Associates she worked long hours (regularly between 8.00am and 6.00pm and often until 7.00pm or later with occasional weekend work) and that over time her duties were increased by volume, variety and complexity. I also accept the evidence of Mr Roger Graham that he carefully monitored the work of Ms Leslie to ensure that there were no delays in output. Ms Leslie's evidence as to her commitment to her work was broadly supported by the evidence of Mr Abbottsmith who described her as "enthusiastic and hardworking".

18 Mr Abbottsmith also gave evidence, which I accept, that Ms Leslie not only worked on her professional jobs but helped out wherever she could on office matters, including undertaking the duties of a receptionist if there was no receptionist available, "trouble shooting" in respect of the computers, upgrading the office computer system and assisting Mrs Graham from time to time in interviewing non-professional staff. This willingness to help out over a wide range of tasks seems to me to be an understandable approach to her work from an enthusiastic and helpful young member of a small team. To the extent that Mr Roger Graham, and also Mr Lincoln Graham, criticised Ms Leslie for adopting this approach, I find the criticism to be unfair. Whatever Mr Roger Graham may have thought of the appropriateness of Ms Leslie undertaking these tasks, I find, contrary to his evidence, that he did not regularly, and probably did not at all, counsel her to concentrate on her transport planning work and avoid diverting her time to non-core activities. I accept the evidence of Mr Abbottsmith that Mr Roger Graham and Mrs Graham appeared to encourage and expect Ms Leslie to carry out office related functions and that no one else in the office seemed to want to do them.

19 I further accept, indeed it was not disputed, that between February 1995 and November 1996 Ms Leslie became friendly in a personal way with the members of the Graham family. She developed a friendship with Mr Lincoln Graham and with Ms Keely Graham, Mr Lincoln Graham's sister. Ms Leslie mixed socially with Ms Keely Graham and Mr Lincoln Graham and his girlfriend. Mr Roger Graham and Mrs Graham knew of, and were happy with, Ms Leslie's friendship with their children. They gave this group of young people tickets to allow them to attend opera performances at the Sydney Opera House together. Mr Roger Graham gave evidence that he noticed that Ms Leslie had developed an extremely close personal, as distinct from romantic, relationship with his son Lincoln as well as with his daughter Keely.

20 I do not consider it necessary to make detailed findings in respect of the contradictory evidence led as to the frequency with which Ms Leslie had coffee breaks and lunch with Mrs Graham and the number of occasions on which Ms Leslie visited or stayed overnight at the Graham family home. It is not in dispute that she did do all of these things and I accept that the fact that she did reflected the warm relationship that developed between her and the members of the Graham family. Indeed, Mr Roger Graham acknowledged that he could have said of Ms Leslie to a close family friend words to the effect:

"We love Louise; she is more than a staff member; she's like an adopted daughter; part of the family; she works so hard; we want her to become an Associate."

Mr Roger Graham also acknowledged that he could have said of Ms Leslie to close friends from the bus industry words to the effect that:

"She is very good and she's going to have a wonderful career in the transport industry"; and

"She's got a very bright future; she's a great girl; very dedicated and loyal."

21 I find that Mr Roger Graham did make statements to the effect of those set out above. I accept Mr Roger Graham's evidence that, in effect, he may have used a degree of hyperbole in praising Ms Leslie because of his desire to promote the role of women in the bus industry. However, I see no reason to conclude that Mr Roger Graham would have sought to mislead his friend in any significant way as to his attitude towards Ms Leslie. I am satisfied that Mr Roger Graham at the time that he made the above statements (between approximately December 1995 and September 1996) did not have any significant reservations about Ms Leslie's attitude to her work or her professional abilities. As is mentioned below, I find that there was some change in Mr Roger Graham's attitude towards Ms Leslie and her professional capacities from about late 1996.

22 In about July 1996 Mr Roger Graham invited Ms Leslie to have dinner with him and Mrs Graham. During the dinner Ms Leslie's future with Roger Graham & Associates was discussed. There is a dispute as to precisely what was said during the dinner. However, there is agreement that there was discussion concerning Ms Leslie's generating consultancy fees in the area of community consultation. Ms Leslie's affidavit evidence, on which she was not cross-examined, was that Mr Roger Graham said that she should develop some community consultation plans and that he would help her and that she could then implement them. Mr Roger Graham's affidavit evidence was that he suggested to Ms Leslie that she formulate a business plan and budget for an area of transport planning that corresponded with her skills and interest and that Ms Leslie indicated that she would develop a program and budget in the area of community consultation. In cross-examination Mr Roger Graham did not expressly deny that the exchange between him and Ms Leslie was in terms of "community consultation plans" although he indicated that his interest was in business plans because, from his point of view, the important thing was to ensure that revenue exceeded cost. Mr Roger Graham said, significantly in my view, that his main grievance concerning Ms Leslie was that she did not provide him with the sort of business plan that he envisaged which included proper costings so that she could set up a company under the auspices of Roger Graham & Associates and in the end become a successful consultant in the field of community consultation. In my view, it is more likely than not that Mr Roger Graham did not mention to Ms Leslie during the course of the dinner that she should set up her own company. I also consider it likely that Ms Leslie and Mr Graham did not leave the dinner with a common understanding as to what Ms Leslie should do thereafter. To the extent that Mr Roger Graham thereafter became aggrieved with Ms Leslie, I find that this flowed, at least in part, from the absence of a mutual understanding concerning his expectations of her.

23 In about July 1996 Ms Leslie observed that Mr Lincoln Graham's attitude towards her seemed to have changed in that his earlier easy going and friendly attitude was replaced by a cooler and more remote style. Mr Lincoln Graham accepted that his attitude changed at about that time but he described it as a change in his attitude to his work rather than a change in his attitude to Ms Leslie. He said that he had become more serious about his work and was more ambitious because he had found where he wanted to go in his career.

24 It seems more likely than not that by about the middle of 1996 Mr Lincoln Graham had developed (and I do not suggest that it was unjustified) a measure of confidence in his own professional abilities and a determination to succeed in his chosen area of professional activity. Further, in my view, he had developed a sense that, in the company Roger Graham & Associates, his position was a peculiarly significant one. To the extent that Mr Lincoln Graham denied that he felt that his position as the son of the two directors of Roger Graham & Associates singled him out from the other professional employees, I do not accept his denial.

25 The finding that Mr Lincoln Graham did, understandably, come to feel that his position in the company was not entirely comparable to that of Ms Leslie and Mr Abbottsmith is supported by the evidence of Mr Abbottsmith. I accept the evidence of Mr Abbottsmith that in October 1996 when Mr Roger Graham and Mrs Graham went overseas, "there seemed to be a most fundamental and puzzling change in the relationship between Lincoln and the rest of the staff." Mr Abbottsmith described Mr Lincoln Graham as becoming remote at this time. He said that a few days before Mr Roger Graham and Mrs Graham returned Mr Lincoln Graham said to him words to the effect:

"I want you to know that I respect your work and ability but things have changed."

Mr Abbottsmith said that there was no conversation before or after this statement and he had no idea why it was made or what it meant. Mr Abbottsmith was not cross-examined with respect to this aspect of his evidence and Mr Lincoln Graham did not expressly deny making the statement attributed to him by Mr Abbottsmith. Mr Lincoln Graham, however, gave evidence of having said the words "I want you to know I respect your work and ability", but not the words "but things have changed", in the context of a longer exchange between him and Mr Abbottsmith. To the extent that there is a conflict between the evidence of Mr Abbottsmith and that of Mr Lincoln Graham in this respect, I prefer the evidence of Mr Abbottsmith.

26 While Mr Roger Graham and Mrs Graham were overseas in October 1996 an incident occurred which placed Ms Leslie and Mr Lincoln Graham in conflict. The incident arose following a decision to publish a photograph taken by Ms Leslie for a client on the front cover of the Department of Transport's annual report. At issue appears to have been, from Ms Leslie's side, whether Mr Lincoln Graham was trying to take credit for a success properly attributable to her, and from Mr Lincoln Graham's side, whether Ms Leslie over-reacted and possibly whether she sought to intrude between him and a client from whom he hoped to obtain work. The incident plainly made Ms Leslie angry with Mr Lincoln Graham and left her feeling distressed. She did not go to work the following day. The evidence of Ms Leslie and Mr Lincoln Graham conflicts as to certain details of and surrounding the incident itself. I do not consider it necessary to resolve the conflict, much of which, in any event, probably arises from the different perspectives from which they each experienced the incident.

27 However, the fact that the incident occurred is, in my view, of importance. First, it occurred only a few weeks before what I will refer to as the "Mollymook incident" which is discussed below. I find that, if any doubt lingered, the incident made it clear that the period of time during which the relationship between Ms Leslie and Mr Lincoln Graham was the free and easy relationship of two junior professional colleagues of relatively equal standing in this shared workplace was at an end. Secondly, it resulted in Mr Lincoln Graham advising his parents immediately upon their return from overseas of, as he put it -

"Ms Leslie's negative behaviour both towards me and the company, the way and contents of what she said to me and how, without notice, [she] did not turn up for work the next day."

This was something that Mr Lincoln Graham considered that his parents should know about "as soon as possible". Mrs Graham's evidence was that her son said words to the following effect:

"Mum, I am having problems with Louise. She's upset and could even resign. I just want to warn you before you go in. She developed a negative attitude while you were away to the extent that she did not attend work one day out of spite."

Although there is evidence that Mrs Graham subsequently discussed this incident with Ms Leslie, or at least Ms Leslie's failure to attend work on one day, there is no evidence that Mr Roger Graham spoke to Ms Leslie about it, or provided her with an opportunity to put to him her version of the incident. Both Mr Roger Graham and Mrs Graham gave evidence that it was Mr Roger Graham, not Mrs Graham, who was responsible for the making of decisions concerning the professional staff of Roger Graham & Associates. Mr Roger Graham's failure to raise the incident with Ms Leslie would seem to reflect a, perhaps understandable, tendency on his part to accept his son's view of incidents in which his son was involved. There is no evidence to suggest that either of the directors of Roger Graham & Associates took any steps to manage the apparent potential for conflict between these two youthful employees of the company.

28 On Friday, 15 November 1996, Mr Roger Graham drove Mr Lincoln Graham and Ms Leslie to Mollymook so that they could all attend the Bus & Coach Association's Regional Conference which was to begin that night and finish at noon the following Sunday. Mr Lincoln Graham had arranged accommodation over the weekend for Ms Leslie and himself in a serviced apartment which had two bedrooms and for his father in a motel. During the 1995 Regional Bus conference in Forster, which Mr Roger Graham was unable to attend, Ms Leslie, Mr Lincoln Graham and two female friends, had shared an apartment. Although Ms Leslie asserted, and I accept, that she was not entirely happy with the accommodation arranged by Mr Lincoln Graham for the 1996 conference, she did not express her concerns in this regard. I do not accept, as Mr Roger Graham appeared to suggest, that there was no significant difference between the accommodation arrangements, so far as Ms Leslie and Mr Lincoln Graham were concerned, for the 1995 and the 1996 conferences. There is, in my view, a deal of difference between four young people, three of whom are women, sharing an apartment for a weekend and two persons in the positions of Ms Leslie and Mr Lincoln Graham doing so.

29 On the evening of Friday, 15 November 1996 Ms Leslie, Mr Lincoln Graham and a number of other young people attended a barbecue at the local surf club and then a drinks function at the Mollymook Golf Club. At approximately 11.00pm a group which included Ms Leslie and Mr Lincoln Graham left the Golf Club. Ms Leslie went alone to the apartment and Mr Lincoln Graham went with others to the room of a Mr Brenton Deane.

30 When Ms Leslie reached the apartment in which she was staying she showered and went to bed. If Ms Leslie had consumed alcohol at all that evening, I find that it was in a moderate amount only. I find that she was not affected by alcohol.

31 Mr Lincoln returned to the apartment at a time which I find was after midnight but probably earlier than 1.00am. I find that he had been drinking quite heavily and was affected by alcohol, although I accept Ms Peta Cheng's evidence that he did not appear to her to be staggering as he walked away from Mr Deane's room. I also accept that nervous tension associated with being required to give a public presentation played a part, although I doubt that it was the entire cause, of Mr Lincoln Graham's vomiting, as he admitted that he did, on the morning of Saturday, 16 November 1996.

32 There are marked differences between the accounts of Ms Leslie and Mr Lincoln Graham respectively about what happened after Mr Lincoln Graham returned to the apartment.

33 Ms Leslie's account is as follows. She was almost asleep when she heard Mr Lincoln Graham return to the apartment. To her surprise he opened the door to her bedroom, came in, sat on the floor and commenced to speak to her. She told him twice that she was trying to go to sleep and asked him to leave. He got up and headed for the door and she requested him to shut the door on his way out. He inquired whether she wanted a glass of water and she responded, "No, thank you". He nonetheless left the room, without shutting the door, and returned with a glass of water. She again asked him to go and to shut the door on the way out. He replied, "OK, I'm going to have a shower now" and left without shutting the door.

34 On Ms Leslie's account, Mr Lincoln Graham returned to her room approximately five to ten minutes later wearing only a towel. He lay on the floor between her bed and the wardrobe and started talking. Despite being told bluntly by Ms Leslie to go to bed because she wanted to sleep, Mr Lincoln Graham remained where he was and continued to talk for a minute or two when he closed his eyes and went to sleep.

35 Ms Leslie says that she got out of bed and put a dressing gown over the t-shirt and shorts that she was wearing. She tried, unsuccessfully, both to wake Mr Lincoln Graham and to drag him from her room. She then placed a blanket over him and left him "to sleep off his drunkenness".

36 Ms Leslie gave evidence that she was awakened at approximately 5.30am by Mr Lincoln Graham who was on top of her. The blankets had been pulled away and only the sheet was between her and Mr Lincoln Graham. She screamed, "Lincoln, get out! Get off me". He attempted to remove the sheet. There was a struggle during which be briefly kissed her. She managed to wriggle out from under him, despite his attempting to hold her down by the shoulder. During the struggle between them Ms Leslie screamed, "Lincoln, do you know who this is? It's Louise, what are you doing to me? Lincoln, this is Louise. Please stop. Stop. Get off me". Mr Lincoln Graham said repeatedly "I'm going to fuck you, fuck you bitch, I'm going to fuck you".

37 Ms Leslie says that she fled from the room and went into the other bedroom. When she looked back to see if Mr Lincoln Graham was following her she saw that he was lying face down on her bed. She remained in the other bedroom for approximately twenty minutes until she began to calm down and take control of herself. She decided to leave the apartment. She returned to her room to collect her running shoes which were near the door and then walked down to the beach where she sat and walked until approximately 8.45am when she returned to the apartment. She saw that Mr Lincoln Graham was still asleep in her bed. She collected some clothes from her room and went into the bathroom. She showered and changed with a chair against the bathroom door to prevent its being opened. As she left the apartment to go to the conference she saw that Mr Lincoln Graham was awake in her bed looking dazed.

38 Mr Lincoln Graham's account of what happened at the Mollymook apartment after he returned there was as follows. He saw that the door to Ms Leslie's bedroom was closed, but that the light was on. He knocked on the door. There was a conversation between him and Ms Leslie (it is unclear whether the conversation occurred before or after he opened the door) and after the conversation he entered the room. He sat down on the floor and had a chat to Ms Leslie about a variety of things. He denied that Ms Leslie said that she was trying to sleep and he should go to bed. He said that Ms Leslie was lying in bed propped up as one would be when reading. He agreed with the suggestion of counsel for Ms Leslie that he talked to Ms Leslie initially about work related issues and then about friends. He agreed that after about fifteen minutes he asked Ms Leslie if she wanted some water and that he left the room to get some water. He was unable to remember whether Ms Leslie said that she wanted a glass of water or not, nor whether he obtained one for her. He agreed that he got himself a glass of water and then returned to Ms Leslie's room and continued to talk to her. He agreed that he did not seek permission to re-enter Ms Leslie's room. He denied that Ms Leslie asked him to leave because she was trying to sleep. However, he agreed that after a few minutes he left the room to take a shower. He initially denied that he needed a shower to sober up suggesting instead that he was "stale from the day". However, he agreed that on an earlier occasion he could have said to his mother that he had a shower to sober up.

39 Mr Lincoln Graham said that he took a shower for about ten minutes, wrapped a towel around the lower part of his body while he was still partially wet and knocked on the open door of Ms Leslie's room saying "It's me again, can I come back in?" or something to that effect. He said that he sat down propped up against the cupboards and chatted to Ms Leslie. He denied that she asked him to leave. He said that he was uncomfortable on the floor and asked Ms Leslie's permission to sit on the bed. He agreed that once he was on the bed he rolled towards Ms Leslie and put his hand on her shoulder with the intention of kissing and hugging her. He denied that he rolled on top of Ms Leslie, that he tried to remove the sheet or that Ms Leslie had been asleep when he started to roll towards her. He agreed that he kissed Ms Leslie. He denied the verbal exchanges of which Ms Leslie gave evidence. He said that Ms Leslie responded to his advance by saying "No", pushing him aside and storming out of the room.

40 Mr Lincoln Graham said that at the stage that Ms Leslie left the room he still had the towel wrapped around him. He heard a door which he assumed was the other bedroom and being shocked and embarrassed he decided that the best thing was to do nothing. He stayed in Ms Leslie's room and went to sleep. Mr Lincoln Graham did not attend the Saturday morning session of the conference. He was scheduled to deliver, and did deliver, a paper during the afternoon session that day. He gave evidence that he worked on his paper during the morning.

41 Ms Leslie gave evidence that although she went to the Saturday morning session of the conference she was upset and unable to concentrate on the proceedings. She said that at approximately 2.00pm she tried unsuccessfully to telephone Mr Abbottsmith because she needed to talk to someone about what had happened and what she should do. She then telephoned Bengu Akdeniz ("Ms Akdeniz"), a close friend. Ms Akdeniz gave affidavit evidence that Ms Leslie said to her over the telephone words to the effect:

"You won't believe what has happened to me. Lincoln came into my room last night when I was asleep and got into my bed. He was naked and he was trying to kiss me. He was forcing himself onto me. I was asleep and woke up to this. I was trying to work out what was happening. I tried to push him away. He was saying `I'm going to fuck you bitch'."

During this short conversation Ms Akdeniz conveyed to Ms Leslie the advice of Ms Akdeniz's husband, a police officer, that Ms Leslie report the incident to the police.

42 Ms Akdeniz acknowledged in cross-examination that when she made a statement to the police in April 1998 concerning Ms Leslie's telephone call to her she did not say that Ms Leslie had told her that Mr Lincoln Graham had said words to the effect of "I am going to fuck you bitch". She said she probably didn't remember that aspect of what Ms Leslie had said at the time that she gave her statement to the police. I find this explanation unsatisfactory having regard to Ms Akdeniz's awareness that her statement was required by the police in relation to an allegation of indecent assault against Mr Lincoln Graham. I am not satisfied that Ms Leslie did tell Ms Akdeniz on Saturday 16 November 1996 that Mr Lincoln Graham had said to her "I am going to fuck you bitch" or words to that general effect. It may be that Ms Leslie has spoken to Ms Akdeniz at a later date about Mr Lincoln Graham using those words and Ms Akdeniz had conflated the conversations. However, I accept, indeed the contrary was not suggested to Ms Akdeniz, that she otherwise accurately recalled what Ms Leslie said to her on 16 November 1996.

43 Ms Leslie did not make a complaint to the police concerning Mr Lincoln Graham's behaviour in the Mollymook apartment until 18 February 1998.

44 I have not found it an easy task to evaluate the credibilities of the two versions of the Mollymook incident advanced by Ms Leslie and Mr Lincoln Graham respectively. In making the following finding concerning the incident I have had regard to the whole of the evidence, including all of the evidence referred to below.

45 Turning first to the evidence of Mr Lincoln Graham, the following factors have caused me to treat his evidence on the topic with caution. First, I have difficulty accepting his evidence that at the time of the Mollymook incident he genuinely entertained in his mind the possibility of an ongoing romantic relationship developing between him and Ms Leslie. The formerly free and relaxed relationship between them had been severely dented, if not terminated, by the conflict which had arisen between them while Mr Roger Graham and Mrs Graham had been overseas. Moreover, his anxiety to advise his parents promptly on their return of Ms Leslie's negative attitude to Roger Graham and Associates would seem inconsistent with the conduct to be expected of a man who entertained the possibility of a romantic relationship with the subject of his complaint. I also take into account that at the time of the Mollymook incident Mr Lincoln Graham was involved in a steady romantic relationship with a young woman with whom, as it seems to me, he had and thereafter maintained an ongoing commitment. To the extent that Mr Lincoln Graham had "inner feelings" for Ms Leslie, as he acknowledged that he may have said that he did, I am satisfied that they were a response to sexual attraction rather than a reflection of a desire to establish an ongoing romantic relationship.

46 I also find that I am unable to accept the evidence of Mr Lincoln Graham that, although he showered and returned to Ms Leslie's bedroom partly wet and clad only in a towel, he did not entertain in his mind the possibility of engaging in an act of sexual intercourse with her that night. As my findings below reveal, I do not accept that Mr Lincoln Graham was intent on having sex with Ms Leslie against her will. However, I am satisfied that when Mr Lincoln Graham returned to Ms Leslie's bedroom after showering he hoped that sexual intercourse between the two of them would occur.

47 I therefore consider that it is necessary for me to assess Mr Lincoln Graham's evidence concerning the Mollymook incident on the basis that he was not entirely frank in his evidence to the Court concerning the incident.

48 The respondents have criticised Ms Leslie's credibility on the basis that her answers to questions on whether or not she considered leaving Mollymook during Saturday 16 November 1996 were implausible. The respondents argued that Ms Leslie's evidence disclosed that she did not give serious consideration to returning to Sydney on the Saturday by taking the bus to Nowra and then the train to Sydney. I agree that Ms Leslie's evidence suggests that she did not give serious consideration to this possibility. I also agree that it is more likely than not that Ms Leslie did not in reality fear that Mr Lincoln Graham would rape her, or repeat his conduct of early Saturday morning, if she remained in the apartment. However, I accept that Ms Leslie was uncomfortable, and to a degree apprehensive, about remaining in the apartment. I therefore also find it necessary to assess Ms Leslie's evidence concerning the Mollymook incident with care.

49 I am satisfied that Ms Leslie was genuinely shaken and distressed by the Mollymook incident. I am also satisfied that she had a genuine concern that if Mr Roger Graham were to learn of it, her continuing employment might be placed in jeopardy. Little weight, in my view, can be attributed to the choices made by Ms Leslie as to the persons to whom she mentioned the incident. The intricate subtleties of personal interrelationships, particularly so far as the sharing of intimate and perhaps embarrassing experiences are concerned, make conjecture in this area dangerous. I accept the opinion expressed by Dr Ellard, a psychiatrist in private practice, who gave evidence on behalf of Ms Leslie, that, if Ms Leslie had experienced the incident described by her, she may not have responded entirely rationally. I note and accept the validity of the opinion expressed by Dr Ellard that Ms Leslie's conduct, and the physical symptoms which she described, were consistent with her having experienced an incident such as that which she described as having occurred at Mollymook.

50 I turn to consider the evidence of Ms Akdeniz. In my view, it is not necessary for consideration to be given to the use which might have been made of this evidence at common law. The Evidence Act 1995 (Cth) (the "Evidence Act") contains express provisions concerning hearsay evidence which differ from the common law. Subsection 59(1) of the Evidence Act embodies the "hearsay rule". Consistently with the common law, the subsection provides:

"Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that the person intended to assert by the representation."

51 However, s 60 of the Evidence Act provides:

"The hearsay rule does not apply to evidence of a previous representation that is admitted because it is relevant for a purpose other than proof of the fact intended to be asserted by the representation."

In addition s 64 provides an exception to the hearsay rule for "first-hand" hearsay in civil proceedings where the person who made the previous representation is available to give evidence about the asserted fact. Subsection 64(3) provides:

"If the person who made the representation has been or is to be called to give evidence, the hearsay rule does not apply to evidence of the representation that is given by:

(a) that person; or

(b) a person who saw, heard or otherwise perceived the representation being made;

if, when the representation was made, the occurrence of the asserted fact was fresh in the memory of the person who made the representation."

52 I do not consider it necessary to decide whether the evidence of Ms Akdeniz as to what was said by Ms Leslie to Ms Akdeniz during their telephone conversation on 16 November 1996 was relevant for a purpose other than proof of the fact intended to be asserted by Ms Leslie to Ms Akdeniz (see s 60 of the Evidence Act). It might be, although it is not necessary to decide, that the evidence was relevant to rebut an adverse inference that might otherwise have been open to be drawn as to Ms Leslie's credit and as evidence showing consistency in Ms Leslie's behaviour and in her allegations. If the evidence was so characterised, consideration would have had to be given to whether subs 108(3) of the Evidence Act, which gives a court discretion to allow evidence to be adduced notwithstanding that the evidence is relevant only to a witness's credibility (see s 102 of the Evidence Act), had any application in respect of the evidence.

53 As Ms Leslie was called to give evidence, the effect of subs 64(3) of the Evidence Act is that the hearsay rule does not apply to the evidence given by Ms Akdeniz provided that when Ms Leslie spoke to Ms Akdeniz, the occurrence of the incident was fresh in Ms Leslie's memory. The High Court in Graham v The Queen [1998] HCA 61; 195 CLR 606 considered the comparable requirement contained in s 66 of the Evidence Act 1995 (NSW) that, at the time that the representation was made, the occurrence of the asserted fact was fresh in the memory of the person who made the representation. In Graham's case, Gaudron, Gummow and Hayne JJ at [4] observed:

"The word `fresh', in its context in s 66, means `recent' or `immediate'. It may also carry with it a connotation that describes the quality of the memory (as being `not deteriorated or changed by lapse of time') but the core of the meaning intended, is to describe the temporal relationship between `the occurrence of the asserted fact' and the time of making the representation. Although questions of fact and degree may arise, the temporal relationship required will very likely be measured in hours or days, not, as was the case here, in years." (footnote omitted)

Callinan J, with whom Gleeson CJ agreed, at [34] said:

"Whilst it cannot be doubted that the quality or vividness of a recollection will generally be relevant in an assessment of its freshness, its contemporaneity or near contemporaneity, or otherwise will almost always be the most important consideration in any assessment of its freshness."

54 In the circumstances of this case, I have no hesitation in concluding that Ms Leslie spoke to Ms Akdeniz when "the occurrence of the asserted fact was fresh in [her] memory" within the meaning of subs 64(3) of the Evidence Act. Understandably, in the circumstances, no application was made to have the evidence excluded under s 135 on the basis that it would be unfairly prejudicial to the respondents or either of them for it to be admitted, or to have a limit placed on the use to be made of the evidence (see s 136 of the Evidence Act).

55 The evidence of Ms Akdeniz as to what was said to her by Ms Leslie as to the Mollymook incident on 16 November 1996 is therefore not affected by the hearsay rule. In my view, the evidence is relevant as it could rationally affect the assessment of the probability of the existence of a fact in issue in the proceeding, namely what occurred between Ms Leslie and Mr Lincoln Graham early on the Saturday morning of the Mollymook weekend (see Papakosmas v The Queen [1999] HCA 37; 196 CLR 297 per Gleeson CJ and Hayne J at [32]; Gaudron and Kirby JJ at [56]; McHugh J at [76]-[78]).

56 Section 140 of the Evidence Act provides:

"(1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.

(2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:

(a) the nature of the cause of action or defence; and

(b) the nature of the subject-matter of the proceeding; and

(c) the gravity of the matters alleged."

57 In my view s 140 provides guidance on the approach to be taken to issues of proof not only so far as the entire case of a party is concerned but also so far as individual elements of that case are concerned. Having regard to the matters identified in subs 140(2) of the Evidence Act, the evidence discussed above and to the totality of the evidence in the proceeding so far as it bears on the respective credibilities of Ms Leslie and Mr Lincoln Graham, I accept, subject to two important exceptions, Ms Leslie's version of the Mollymook incident. The exceptions are that I am not satisfied that Mr Lincoln Graham said repeatedly, or at all, "I'm going to fuck you, fuck you bitch, I'm going to fuck you" or that he made any serious attempt to remove the sheet that was between them. I find on the balance of probabilities that Mr Lincoln Graham, at a time when he was still somewhat affected by alcohol and Ms Leslie was asleep, moved onto Ms Leslie's bed and rolled on to her for the purpose, which he achieved, of kissing her, and in the hope, which was not realised, that she would prove responsive to his advance and agree to engage in an act of sexual intercourse with him. I am not satisfied that Mr Lincoln Graham intended to, or sought to, engage in an act of sexual intercourse with Ms Leslie against her will. I think it more likely than not that a significant part of the explanation for Ms Leslie's strong reaction to Mr Lincoln Graham's advance was that he commenced to make it whilst she was particularly vulnerable by reason of being in bed and asleep. I am satisfied that she was taken wholly by surprise by his physical proximity and the intimate nature of his conduct. I am satisfied that she thought that he may have been intent on engaging in an act of sexual intercourse with her.

58 Ms Leslie remained at Mollymook for the rest of the conference although she did not attend the dinner dance for conference delegates held on the evening of 16 November 1996. Rather she stayed in her room. She spoke to Mr Lincoln Graham only briefly that evening when he knocked on her door and inquired whether she was going to the dinner. There is a dispute as to what precisely was said on this occasion. However it is not in dispute that Mr Lincoln Graham attempted to apologise and that Ms Leslie indicated that she did not want to speak about the incident then. I see no need to make findings as to precisely what was said on this occasion.

59 On 17 November 1996 Mr Roger Graham, Mr Lincoln Graham and Ms Leslie drove back to Sydney. There was little conversation in the car. Mr Lincoln Graham drove for much of the journey and for at least part of the trip the others were asleep. Mr Roger Graham dropped Mr Lincoln Graham and Ms Leslie off in Milsons Point where Ms Leslie had left her car. She then drove Mr Lincoln Graham to his flat. The two of them then discussed what had happened in Mollymook. There is a conflict between them as to what was said although it is not in dispute that Mr Lincoln Graham apologised for his conduct. Further, by reason of the manner in which Ms Leslie was cross-examined, I think that it is necessary to accept that it is not in dispute that Ms Leslie said to Mr Lincoln Graham, following the apology, words to the effect:

"I'll not say anything as long as you stay out of my way. However, if you ever put me in this situation again I'll tell your mother and father what you did."

Further, Mr Lincoln Graham's evidence that if Ms Leslie was going to tell people about the Mollymook incident he wanted to talk to his girlfriend about it, coupled with the evidence that he did not tell his girlfriend of the incident, provides support for a finding that Ms Leslie agreed not to speak of the incident.

60 Ms Leslie's evidence was that she thereafter found it difficult to interact with Mr Lincoln Graham in the friendly way that she previously had, and that her anger and disgust over the incident did not abate. She felt that a chill descended on the work environment. She felt, as I understand her evidence, torn between a desire to work elsewhere and a desire to remain with Roger Graham & Associates because of her belief that her career could best be furthered with that company. Eventually she formed the view that she could not continue to work with Roger Graham & Associates while Mr Lincoln Graham's conduct towards her at Mollymook "remained unrevealed and unaddressed". She in fact did speak of the incident to friends, including Mr Abbottsmith, and eventually to Mrs Graham.

61 It was in May 1997 that Ms Leslie spoke to Mrs Graham about the Mollymook incident. There is a dispute as to the content of the conversation. Mrs Graham's evidence was that she invited Ms Leslie to have coffee with her outside of the office to discuss the recent resignation of the company's receptionist. Ms Leslie's evidence was that Mrs Graham opened the conversation, not with a reference to the receptionist's resignation, but with a reference to the unpleasant atmosphere in the office. It seems to me that these differences in recall probably reflect no more than their respective different priorities at the meeting. It is not in dispute that during the conversation Ms Leslie raised the Mollymook incident.

62 Mrs Graham gave evidence that Ms Leslie diverted the conversation from consideration of why the receptionist had resigned to the topic of why Ms Leslie had not received a pay rise. Then Mrs Graham said that Ms Leslie mentioned that there was "something else", and after coaxing, said that Mr Lincoln Graham had tried to have sex with her at Mollymook. Mrs Graham said that she was concerned about what Ms Leslie had said "because her story to me didn't add up". Mrs Graham gave evidence that she was sceptical about the incident as described by Ms Leslie because Ms Leslie had spent the night following the incident alone with Mr Lincoln Graham in the Mollymook apartment. Mrs Graham also gave evidence that Ms Leslie said that she did not want the Mollymook incident mentioned to Mr Roger Graham as she did not want to lose her job.

63 Mrs Graham discussed the incident with her son during which she expressed surprise that he would have acted in such a way while he was in a steady relationship with his girlfriend. Her evidence was that Mr Lincoln Graham said:

"I know, I had a few drinks, and I feel very embarrassed by the whole thing. We have talked it over and agreed to treat it as a personal matter and not one relating to work. We will continue to be friends."

Mrs Graham said she decided to respect both Ms Leslie's and her son's wishes and to treat the matter as a personal rather than a work related matter. She said that she decided not to inform her husband of the issue and that she did not inform him of it.

64 Ms Leslie's version of the conversation in May 1997 between her and Mrs Graham was that after she described to Mrs Graham what had happened at Mollymook, Mrs Graham responded that she could not believe that Lincoln would treat a woman that way. Ms Leslie's evidence was that, after further conversation, the following exchange occurred:

Ms Leslie: "What he has done is wrong and he should be made accountable for it and Roger should be told about it. Lincoln thinks he has gotten away with this and I am the one who has to sit 3 metres opposite him every day. I have got to the point where I have trouble getting out of bed in the morning because I don't want to come to work and have to sit opposite him. I hate him for what he has done."

Mrs Graham: "Well you'll have to sort this out for yourself."

Ms Leslie: "Well, as you are probably aware, I have been looking further afield and looking at other avenues. I want Roger to be told about this. He should know. Lincoln can't be allowed to get away with this."

65 It seems to me to be unlikely that Ms Leslie would have determined in May 1997 to raise the Mollymook incident with Mrs Graham unless she intended that Mr Roger Graham should also learn of the incident. I am satisfied on the balance of probabilities that Ms Leslie did not ask Mrs Graham not to mention the incident to her husband. I accept that by this time Ms Leslie did not believe that she could continue to work at Roger Graham & Associates unless the incident was openly addressed within the company and some action taken which recognised Mr Lincoln Graham's accountability in respect of the incident.

66 Nonetheless, I accept that Mrs Graham determined not to tell her husband of Ms Leslie's allegations against Mr Lincoln Graham. I accept her evidence and that of Mr Roger Graham that she did not tell him of the allegations. It is not necessary for me to determine why Mrs Graham decided on this course of action. However, I accept that Mrs Graham viewed the incident as one which Ms Leslie had exaggerated and as an incident which should be treated as a personal rather than a work related matter. It may be that Mrs Graham intended to protect her son by not mentioning the incident to her husband.

67 It is not in dispute that, during her conversation with Mrs Graham in May 1997, Ms Leslie raised the topic of pay rises. I also accept the evidence of Mr Roger Graham that Ms Leslie asked him for a pay rise on a number of occasions. In fact Ms Leslie did not receive any rise in her remuneration during the entire period of her employment by Roger Graham & Associates. I accept the evidence of Mr Roger Graham that this reflected his perception that she did not ever generate profit for the company at a level which justified an increase in her remuneration. Mr Roger Graham's evidence was that for a period Mr Lincoln Graham's remuneration was not increased for the same reason, but that Mr Lincoln Graham did eventually achieve, in effect, the status of a consultant. I am satisfied that initially Mr Roger Graham accepted the legitimacy of Ms Leslie not generating significant profits for the company, but that by late 1996 he began to have concerns in this respect.

68 It is not necessary for me to make a finding as to why Ms Leslie did not, as Mr Roger Graham believed, generate profits for Roger Graham & Associates at a level sufficient to warrant an increase in her remuneration. I believe it to be, at least in part, because she lacked a proper understanding of what Mr Roger Graham expected of her. It may also have been because the level of counselling and supervision that she received was less than she needed to achieve the expectations that Mr Roger Graham had of her and more than Mr Roger Graham's personality and busy scheduled enabled him to provide to her. It may have been in part because she was by personality and training better suited to work other than consultancy work. Importantly, however, for present purposes, I am not satisfied on the balance of probabilities that Mr Roger Graham's decision to terminate Ms Leslie's employment by Roger Graham & Associates was made on any ground related to the Mollymook incident. I am satisfied that at the time when he decided that Ms Leslie's employment should be terminated, and at the time of the implementation of that decision, Mr Roger Graham did not know of the Mollymook incident, but was responding to a number of factors which included Ms Leslie's changed attitude towards the workplace and her failure to develop, as Mr Roger Graham perceived it, into an independent consultant.

LEGAL DETERMINATIONS

69 I turn first to the allegation that Mr Lincoln Graham engaged in unlawful sexual harassment of Ms Leslie. This allegation is to be assessed in the light of the findings that Mr Lincoln Graham, at a time when he was clad, if at all, only in a towel, climbed on to Ms Leslie's bed while she was asleep, rolled towards her, placed his hand on her shoulder and kissed her. Such conduct, in my view, plainly amounts to a "sexual advance" or "conduct of a sexual nature in relation to [Ms Leslie]" within the meaning of s 28A of the Act. It is not in dispute that Mr Lincoln Graham's conduct was in fact unwelcome so far as Ms Leslie was concerned.

70 In considering whether Mr Lincoln Graham's conduct occurred "in circumstances in which a reasonable person, having regard to all of the circumstances, would have anticipated that [Ms Leslie] would be offended, humiliated or intimidated", I place significant weight on my finding that Ms Leslie was asleep at the time that Mr Lincoln Graham commenced his sexual advance towards her. Because she was in bed and asleep she was in a position of considerable vulnerability. I place weight also on the fact that Mr Lincoln Graham climbed on to Ms Leslie's bed while he was barely, if at all, clad. His position and his state of dress, or perhaps more accurately undress, was, in my view, likely to cause alarm as to the extent of his intentions in someone in Ms Leslie's position when she was suddenly aroused from sleep. I conclude that in all of the circumstances Mr Lincoln Graham's conduct occurred in circumstances in which a reasonable person would have anticipated that Ms Leslie would be offended, humiliated and intimidated. It is not to the point that Mr Lincoln Graham may not himself have expected that his conduct would cause Ms Leslie to experience these emotions.

71 I therefore conclude that in the early hours of Saturday, 16 November 1996 Mr Lincoln Graham sexually harassed Ms Leslie within the meaning of s 28A of the Act. His conduct was unlawful by reason of subs 28B(2) of the Act if it constituted sexual harassment of one employee by a fellow employee. Although Ms Leslie and Mr Lincoln Graham were away from their normal workplace at the time of the Mollymook incident, I am nonetheless satisfied that the incident constituted the sexual harassment of one employee by a fellow employee. At the time of the Mollymook incident the relationship of Ms Leslie and Mr Lincoln Graham as fellow employees was a continuing relationship. They were sharing an apartment at Mollymook in the course of their common employment; it was the accommodation provided to them by Roger Graham & Associates for the purpose of their attending the Bus & Coach Association's Regional Conference. It could not, in my view, be suggested that their common employment was unrelated, or merely incidental, to the Mollymook incident (see Smith v The Christchurch Press Co Ltd [2001] 1 NZLR 407). I conclude that Mr Lincoln Graham's conduct was rendered unlawful by subs 28B(2) of the Act.

72 I further conclude that Roger Graham & Associates is vicariously liable for the actions of Mr Lincoln Graham pursuant to subs 106(1) of the Act. No real attempt was made by the respondents, or either of them, to establish that Roger Graham & Associates took all reasonable steps to prevent Mr Lincoln Graham from doing an act or acts rendered unlawful by Division 1 or 3 of Part II of the Act. In fact it would appear that the directors of Roger Graham & Associates failed entirely to turn their respective minds to the terms of the Act or its potential significance for the company. Even when the Mollymook incident was drawn to Mrs Graham's attention she regarded it as a personal matter between her son and Ms Leslie rather than as a matter of significance for Roger Graham & Associates. She did not mention the incident to the director of the company responsible for the supervision of professional staff, namely Mr Roger Graham.

73 Ms Leslie further alleges that Roger Graham & Associates engaged in unlawful sexual discrimination against her within the meaning of the Act. Moore J has, in Elliott v Nanda & Commonwealth [2001] FCA 418, given recent consideration to whether s 14 of the Act is capable of extending to conduct that constitutes sexual harassment as defined by s 28A of the Act. I respectfully agree with his Honour's conclusion that it can. I am satisfied that, during the course of the Mollymook incident, by reason of her sex, Mr Lincoln Graham treated Ms Leslie less favourably than, in the same or similar circumstances, he would have treated a man (see subs 5(1) of the Act). However while the Act renders unlawful discrimination by an employer on the ground of sex, it does not render unlawful discrimination by a fellow employee on the ground of sex. While I have found that Roger Graham & Associates is vicariously liable under the Act for Mr Lincoln Graham's sexual harassment of Ms Leslie, nothing in the Act deems an employer found vicariously liable for an act of sexual harassment to have itself engaged in the act of sexual harassment (cf s 105 of the Act). I am not persuaded that Mr Lincoln Graham's sexual harassment of Ms Leslie constituted discrimination against her by her employer, Roger Graham & Associates.

74 No other basis was advanced upon which a finding of unlawful discrimination against Ms Leslie on the ground of sex by Roger Graham & Associates could be sustained. While Roger Graham & Associates may be open to criticism for its failure to formulate or implement a policy concerning harassment in the workplace, and for the way in which it responded when one of its directors learned of the Mollymook incident, I am not satisfied that its conduct in either regard amounted to discrimination against Ms Leslie on the ground of her sex. Nor do I understand the applicant to have contended that it did. I therefore conclude that it has not been established that Roger Graham & Associates unlawfully discriminated against Ms Leslie on the ground of her sex.

75 The applicant's allegation that Roger Graham & Associates engaged in unlawful victimisation of her was based on her allegation that she was dismissed from her employment because of her complaint concerning the Mollymook incident. As appears above, I am not satisfied on the balance of probabilities that Ms Leslie's employment with Roger Graham & Associates was terminated because of her complaint concerning the Mollymook incident. The claim for a declaration that Roger Graham & Associates engaged in unlawful victimisation of Ms Leslie must therefore fail.

RELIEF

76 The power of the Court to grant relief in a proceeding of this kind is wide, but must, of course, be exercised judicially. Subsection 83A(2) of the Act provides:

"If the Court is satisfied that the respondent has engaged in conduct or committed an act that is unlawful under this Act, that Court may make such order (including a declaration of right) as it thinks fit."

77 As is mentioned above, I accept that Ms Leslie was genuinely shaken and distressed by the Mollymook incident. I find that her adverse reaction to the incident has continued, albeit with abated severity, through to the present. I further accept her evidence that, particularly in the early months after the Mollymook incident, she tended to dwell on the incident during the day and to have disturbed sleep, affected by nightmares, at night. She found attending work at Roger Graham & Associates stressful, particularly so far as it involved her in working with or along side Mr Lincoln Graham. She felt vulnerable to being dismissed from her employment with adverse consequences for her future career. I place little weight on the evidence called from individuals who saw Ms Leslie and Mr Lincoln Graham together after the date of the Mollymook incident, and who observed no change in the way that they related to each other. In my view, in all of the circumstances, it was to be expected that Ms Leslie would seek to achieve an appearance of normality in the presence of others.

78 I accept that Ms Leslie's decisions to lodge a complaint with the Commission and to report the incident to the police reflect her inability to put the incident behind her even after she ceased to work at Roger Graham & Associates. I also accept that she has suffered depression, anger, anxiety, diarrhoea and that she has experienced a widespread rash which may have been a neurodermatitis. I am satisfied on the balance of probabilities that all of these symptoms, other than the rash, flowed from the Mollymook incident. I am further satisfied that the actual termination of Ms Leslie's employment by Roger Graham & Associates, as opposed to her fear of such termination, contributed to her symptoms to only a limited degree. She found apparently satisfactory employment almost immediately after she ceased to work for Roger Graham & Associates. I am unable to be satisfied one way or the other as to the nature of the rash and am therefore unable to be satisfied that it has links to the Mollymook incident.

79 Dr Ellard gave evidence, which I accept, that there is no relevant current disturbance of Ms Leslie's health, that there have been no major adverse effects on her sexual life and that the conclusion of legal proceedings arising out of the Mollymook incident should see its significance diminish in her life.

80 It is for this Court to determine for itself the award of damages appropriate to be made in respect of the sexual harassment experienced by Ms Leslie (Aldridge v Booth (1988) 80 ALR 1; Elliott v Nanda). In reaching that determination, I consider it appropriate to have regard to the determination of the Commission, a body with particular expertise in this area. In considering the determination of the Commission, however, it is necessary for the Court to take into account the fact that the Court had the benefit, denied to the Inquiry Commissioner, of a hearing in which the respondents took part. This has resulted in the Court making findings of fact which differ in some respects from those made by the Inquiry Commissioner. In particular, having had the benefit of hearing Mr Lincoln Graham give evidence, and of Ms Leslie and Ms Akdeniz being cross-examined, I have concluded that the Mollymook incident was somewhat less severe in nature than the Tribunal found it to be, albeit an incident deeply distressing to Ms Leslie.

81 I consider it appropriate to place weight on the facts that the respondents did not take part in the hearing before the Commissioner and exercised their right not to comply with the determination of the Commission. It may be that if the respondents had cooperated with the Commission when it conducted its inquiry, its finding may in part have been different. It may also have been that a hearing before this Court would have proved unnecessary. That is, I am satisfied that there is a real possibility that, had the respondents cooperated with the Commission, an earlier resolution of the matter would have been achieved. As is mentioned above, I accept that resolution of the matter will assist Ms Leslie in putting the Mollymook incident behind her.

82 In all of the circumstances I consider it appropriate to make an award of damages in Ms Leslie's favour of $16,000. The respondents will be jointly and severally liable for the payment of the award. By her application, Ms Leslie has claimed various heads of declaratory relief. The power of the Court to make a declaration is discretionary (s 21 of the Federal Court of Australia Act 1976 (Cth)). I am not satisfied that it is either necessary or appropriate in this case to grant declaratory relief.

I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson .

Associate:

Dated: 4 February 2002

Counsel for the Applicant:	Ms K Eastman
Solicitor for the Applicant:	Gray & Perkins
Counsel for the Respondent:	Dr C Birch SC
Solicitor for the Respondent:	Harmers Workplace Lawyers
Date of Hearing:	15, 16, 17 August and 19 October 2001
Date of Judgment:	4 February 2002