Damages as compensation
According to s 55(2)(a) of the Privacy and Personal Information Protection Act 1998 (NSW) (PPIP Act) the New South Wales Civil and Administrative Tribunal (Tribunal) has the jurisdiction to, “On reviewing the conduct of the public sector agency concerned”, make an order “requiring the public sector agency to pay to the applicant damages not exceeding $40,000 by way of compensation for any loss or damage suffered because of the conduct” … “only if the Tribunal is satisfied that the applicant has suffered financial loss, or psychological or physical harm, because of the conduct of the public sector agency” (s 55(4)(b)).[1]
Tribunal’s approach
The Tribunal has concluded, in regard to its jurisdiction to award damages as compensation for psychological harm, that:
“[T]he Tribunal might find a … causal link … and make no order … there is no ‘right’ to compensation …”[2]
“The award of damages is discretionary.”[3]
“[C]ompensation … can only be considered where the Tribunal finds that the alleged loss and harm was ‘because of’ or ’caused by’ the contravening conduct of the respondent.” [4]
The Tribunal should take a ‘restrained’ approach towards awards of damages in privacy matters.[5]
“An order for compensation of the statutory maximum amount of $40,000 is reserved for the most serious breaches of the PPIPA.”[6]
Principled approach
When, however, the relevant provisions are beneficially construed:
An applicant has a right to compensation if the Tribunal is satisfied they suffered harm because of the agency’s conduct.
The Tribunal cannot take away the right to damages by the exercise a discretion.
Damages are awarded as compensation for harm caused by conduct, whether the conduct contravened the Act or not.
Damages should be fair and reasonable compensation.
The $40,000 statutory limit could unjustly preclude full compensation.
The seriousness of the breach, to the extent that it’s relevant, is measured against the policy of privacy law.
Right to compensation
The High Court said, “A right is created by the provision that a court may make an order, and such a provision also gives jurisdiction to the court to make the order. The fact that the court may not be bound to make an order, but may exercise a discretion, does not alter the effect of such a provision.”[7]
Therefore, when the PPIP Act confers on the Tribunal the jurisdiction to make an order requiring a public agency to pay damages (subject to subsections (4) and (4A)) it confers on an applicant the right to damages (subject to subsections (4) and (4A)).
No discretion to take the right to damages away
From the words “On reviewing the conduct of the public sector agency concerned, the Tribunal may decide not to take any action on the matter, or it may make any one or more of the following orders” (s 55(2)), the Tribunal has concluded that “the award of statutory damages in Privacy Act matters remains a discretionary one” … “the Tribunal might find a contravention, might find a causal link between the contravention and harm suffered and make no order … It does not follow that … the Tribunal must award damages. It still remains a discretionary matter …”[8]
However, the High Court said:
“[T]he word “may” can be used in more than one sense. It may be used to indicate that a court or other decision-maker has a discretion. Alternatively, it may be used to indicate that a decision-maker has authority to exercise a power, which they are obliged to exercise if statutory criteria are met.”[9]
“Context can give words an interpretation that is the opposite of their ordinary meaning and grammatical sense.”[10]
“The word “may” is … construed as imperative … when a person has a legal right which he [or she] cannot exercise without the intervention of some other person, and the latter person is authorized by the word “may” to take the necessary steps to enable that legal right to be exercised …”[11]
“The statutory context may be crucial. Where a statute confers rights or entitlements, as in Finance Facilities, it may be easy to conclude that the legislature did not intend that they could be taken away by the exercise of a discretion reposed in an administrative authority.”[12]
Accordingly, “may make … an order requiring the public sector agency to pay to the applicant damages” is construed as an imperative because an applicant cannot attain their legal right to damages without the Tribunal’s intervention.
And, as the PPIP Act and the Health Records and Information Privacy Act 2002 (NSW) (HRIP Act) confer privacy rights on individuals it is easy to conclude that the legislature did not intend that the right to damages could be taken away by the exercise of a discretion reposed in the Tribunal.
Construction that promotes purpose shall be preferred
The High Court said when a court assesses an amount of loss or damage for the purpose of making an order it is not merely calculating the financial consequences of a sequence of events; it is attributing legal responsibility in order to give effect to a statute with a discernible purpose.[13]
And s 33 of Interpretation Act 1987 (NSW) says: a “construction that would promote the purpose or object underlying the Act … shall be preferred to a construction that would not promote that purpose or object”.
If making an order requiring an agency to pay damages is attributing legal responsibility in order to give effect to the PPIP and HRIP Acts then not making an order for damages is withholding legal responsibility and not giving effect to the PPIP and HRIP Acts.
Construing “may make … an order requiring [the payment of damages]” as an imperative promotes the purpose of the Act and it shall, therefore, be preferred to the Tribunal’s conclusion that the “Tribunal might find a … causal link … and make no order” because the Tribunal’s conclusion does not promote the Acts’ purposes.
(The purpose of the PPIP Act is, “to provide for the protection of personal information, and for the protection of the privacy of individuals generally …”[14] The purposes of the HRIP Act include, “to promote fair and responsible handling of health information by … protecting the privacy of an individual’s health information …”[15])
Compensation for harm caused by conduct
Although the legislation says: “On reviewing the conduct of the public sector agency concerned, the Tribunal may” make an order “requiring the public sector agency to pay to the applicant damages not exceeding $40,000 by way of compensation for any loss or damage suffered because of the conduct of the public sector agency”[16], the Tribunal has concluded that compensation can only be considered when the loss or harm was because of the contravening conduct of the agency.
The Tribunal has departed from the grammatical and natural meaning of the words Parliament used and read the word ‘contravening’ in, which limits the Tribunal’s order-making jurisdiction and the applicant’s right to an order.
The High Court said, however, that:
“It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words.”[17]
“The text itself provides for its own restrictions. Unnecessary restraints, without the clearest foundation in the statute, should not be introduced by judges to undermine beneficial legislation …” [18]
It is particularly important that words are construed according to their natural and ordinary meaning “when, to do otherwise, would limit or impair individual rights … The right to compensation … is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.”[19]
The Tribunal’s reading in of the word ‘contravening’ is, therefore, wrong.
The High Court also said that words may be read into a provision if the application of the literal or grammatical meaning would lead to a result that defeated the clear purpose of the statute.[20]
As the absence of the word ‘contravening’ does not lead to a result that defeats the clear purpose of the PPIP Act it may not be read in.
Damages should be fair and reasonable compensation
The Tribunal should apply the principle that that damages should be fair and reasonable compensation for the harm caused, instead of approaching the task with the idea that damages should be restrained, because the amounts of damages that the Tribunal is awarding are manifestly inadequate and out of step with awards made for similar harm in other jurisdictions, which is unjust.
Undoubted principle
The High Court said:
“The principle to be followed in assessing damages is, in our opinion, not in doubt. It is that the amount of damages must be fair and reasonable compensation for the injuries received and the disabilities caused.”[21]
Principle applied
Fair and reasonable damages were an issue for the Federal Court Full Court in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 (15 July 2014) (Richardson v Oracle), a sexual harassment case.
The Full Court was considering damages awarded under a statute that empowered a court to make “an order requiring a respondent to pay to an applicant damages by way of compensation for any loss or damage suffered because of the conduct of the respondent.”[22]
The issue was whether the damages awarded could not “fairly be seen as reasonable compensation for the loss and damage suffered” because of the conduct,[23] and whether they were manifestly inadequate[24].
The Full Court acknowledged that pain and suffering have no market value;[25] and awards of damages for pain and suffering in other areas of the law can vary;[26] and said:
An assessment must be made in each case of the amount which can fairly be regarded as reasonable compensation for the injuries and disabilities which a plaintiff has sustained having regard to the general standards prevailing in the community.[27]
A court may be guided by what contemporary courts have discerned as proper compensation according to community standards.[28]
Community standards now accord a higher value to compensation for pain and suffering and loss of enjoyment of life than before.[29]
The change in the community’s appreciation of the value of the loss of enjoyment of life and compensation for pain and suffering is relevant in assessing damages in the context of other kinds of personal injury cases.[30]
There was no discernible in-principle difference between the compensable value of the pain and suffering and loss of enjoyment of life suffered by a victim of sexual harassment and a victim of workplace bullying. Victims in both types of case may suffer psychological injuries and distress of a comparable kind.[31]
A cursory overview of the quantum of awards historically awarded in other fields … reveals a substantial disparity [and] … an award for sexual harassment, though within the accepted range for such cases, may be manifestly inadequate as compensation for the damage suffered by the victim, judged by reference to prevailing community standards.[32]
In attempting to compensate victims for comparable kinds of injuries, interconnected fields of law look to one another in establishing a “reasonable” sum by way of compensation. The analogy between sums awarded for pain and suffering and loss of enjoyment of life caused by unlawful discrimination with sums awarded in the tortious context is particularly obvious.[33]
Adherence to a ‘range’ of damages awards that had not absorbed the increases evident in awards in other fields of litigation had resulted in an award that, judged by prevailing community standards, was disproportionately low having regard to the loss and damage suffered.[34]
The Full Court further said:
It agreed with the Court in Hall v A & A Sheiban Pty Ltd [1989] FCA 72; (1989) 20 FCR 217 (Hall v Sheiban), a sexual harassment case, that failing to grant relief would be to visit injustice upon a complainant.[35]
The sum of $18,000 awarded by the court below was not out of step with past awards in cases of the kind but it was manifestly inadequate and out of step with the general standards prevailing in the community regarding the monetary value of the loss and damage sustained by Ms Richardson.[36]
The Full Court substituted an award of $100,000[37] as compensation for the physical damage and not-insignificant chronic adjustment disorder with mixed features of anxiety and depression, suffered by Ms Richardson. [38]
Unfair and unreasonable compensation
The Full Court’s citation of Hall v Sheiban is interesting and highly relevant to privacy matters because Hall v Sheiban is, via Rummery and Federal Privacy Commissioner [2004] AATA 1221 (22 November 2004) (a Commonwealth privacy case), the authority that is said to support that damages in privacy cases should be restrained.[39]
According to the Full Court, pain and suffering (which encompasses psychological harm) has the same monetary value whatever its cause and unfair and unreasonable awards of compensation that fail to grant relief because they are manifestly inadequate visit an injustice upon a complainant.
The Tribunal should take that on board because, as the below cases show, its restrained approach has caused it to award damages in privacy cases that are manifestly inadequate when regard is had to the monetary value the general community places on pain and suffering as reflected in damages awards made by contemporary courts in other jurisdictions.
Compensation restrained
In NZ v Director General, Department of Housing [2006] NSWADT 173 (7 June 2006) (NZ) the Tribunal was satisfied that a causal link was established[40] between the conduct and the heightened or severe exacerbation of NZ’s deep levels of anxiety and propensity to panic attacks.[41] It had regard to the AAT’s decision in Rummery and awarded NZ $4,000[42].
In ALZ v SafeWork NSW (No 4) [2017] NSWCATAD 1 (4 January 2017) the Tribunal cited the restrained approach in NZ[43], was satisfied that ALZ suffered clinical depression because of the conduct[44], and awarded $5000 for pain and suffering[45].
In DKV v Southern NSW Local Health District (No 2) [2019] NSWCATAD 243 (3 December 2019) the Tribunal referred to the ‘restrained’ approach,[46] and was satisfied that DKV suffered psychological harm because of the conduct.[47] (The Tribunal did not make a finding as to whether DKV suffered the exacerbation of three psychological injuries (a major depressive disorder, social anxiety disorder, and post-traumatic stress disorder) or whether she suffered an adjustment disorder with anxiety and a possible exacerbation of her OCD symptoms).[48] The Tribunal estimated that DKV would need to see her treating psychologist 18 times[49] and awarded her $2000 compensation for pain and suffering.[50]
$40,000 statutory limit
The High Court’s judgment in Australian Iron & Steel Pty Ltd v Banovic [1989] HCA 56 (5 December 1989) (Australian Iron & Steel Pty Ltd v Banovic) provides a stark contrast to the Tribunal’s conclusion that an “order for compensation of the statutory maximum amount of $40,000 is reserved for the most serious breaches of the PPIPA”.[51]
In Australian Iron & Steel Pty Ltd v Banovic the High Court said that s 113(b)(i) of the Anti-Discrimination Act 1977 (NSW) which provided that the Tribunal may order “damages not exceeding $40,000 by way of compensation for any loss or damage suffered by reason of the respondent’s conduct”,[52] “restricts the amount of damages” [53], or, “imposes a statutory limit” [54], and it was it was “unfortunate” and an “injustice” “that the respondents are not entitled to full compensation … because of the statutory limit of $40,000…”[55]
The Tribunal should follow the High Court.
It should give up the idea that the statutory limit of $40,000 is reserved for serious breaches of the PPIP or HRIP Acts and recognise that less than full compensation is an injustice that it’s compounding by reserving the statutory limit for serious breaches instead of awarding it as fair and reasonable compensation for harm.
(Furthermore, “a cap for non-economic loss … does not create a “range” or “scale”, with the amount of the cap reserved for the most serious cases …”[56]; and, “where a legislature wishes to impose a statutory cap which is intended to have a scaling effect, it is able to use clear and unambiguous language to achieve this result.”[57])
Seriousness of the breach
The Tribunal has said (wrongly) that the $40,000 is “reserved for the most serious breaches” of the Act,[58] but why the seriousness of the breach is a factor given that the Tribunal has the jurisdiction to award damages as compensation and how it measures the seriousness of the breach is unknown.
I suspect that the seriousness of the breach becomes a factor when the Tribunal is unwilling to make the agency responsible for the harm it caused. My suspicion comes from the fact that the Tribunal doesn’t mention the PPIP or HRIP Acts’ purposes but measures the seriousness of the breach against undisclosed factors that appear to have no relation to the purpose(s) of the Acts.
To the extent that the seriousness of the breach is relevant it should be measured against the PPIP and HRIP Acts purposes because the High Court said:
“The seriousness of the illegality must be judged by reference to the statute whose terms or policy is contravened. It cannot be assessed in a vacuum. The statute must always be the reference point for determining the seriousness of the illegality; otherwise the courts would embark on an assessment of moral turpitude independently of and potentially in conflict with the assessment made by the legislature.”[59]
(“The “policy of the law” is to be found in the “scope and purpose” of the statute. The scope and purpose of the statute depend solely on the meaning of its language.”[60])
Conclusion
The High Court said, “the amount of damages must be fair and reasonable compensation for the injuries received and the disabilities caused”.[61]
The Federal Court Full Court said “interconnected fields of law look to one another in establishing a “reasonable” sum by way of compensation”.[62]
The Tribunal said damages should be restrained[63] and (by implication) scaled down from the $40,000 limit according to the breach’s seriousness judged against unknown factors that are extraneous to the purposes of the PPIP and HRIP Acts.
That’s not damages.
It’s slapping the wrist of the agency concerned, slapping the face of the person harmed, and failing to give effect to PPIP and HRIP Acts’ discernible purposes.
[1] The Tribunal may not make an order under s 55 2)(a) in circumstances that relate to convicted inmates, see s 55(4A).
[2] NW v New South Wales Fire Brigades (No 2) [2006] NSWADT 61, [24].
[3] APV and APW v Department of Family and Community Services [2015] NSWCATAD 140 (6 July 2015), [88].
[4] AOZ v Rail Corporation NSW (No 2) [2015] NSWCATAP 179 (19 August 2015), [29].
[5] DKV v Southern NSW Local Health District (No 2) [2019] NSWCATAD 243 (3 December 2019), [19].
[6] ALZ v SafeWork NSW (No 4) [2017] NSWCATAD 1 (4 January 2017), [23].
[7] R v Commonwealth Court of Conciliation & Arbitration [1945] HCA 50 (30 July 1945), Latham C.J.
[8] NW v New South Wales Fire Brigades (No 2) [2006] NSWADT 61 (3 March 2006), [23-24].
[9] Commissioner of the Australian Federal Police v Hart; Commonwealth of Australia v Yak 3 Investments Pty Ltd; Commonwealth of Australia v Flying Fighters Pty Ltd [2018] HCA 1 (7 February 2018), [104].
[10] SAS Trustee Corporation v Miles [2018] HCA 55 (14 November 2018), [64].
[11] Chanter v Blackwood (No 1) [1904] HCA 2 (10 March 1904), Griffith, C.J.
[12] Samad v District Court of New South Wales [2002] HCA 24 (20 June 2002), [36].
[13] I and L Securities v HTW Valuers [2002] HCA 41, (2 October 2002), [26].
[14] PPIP Act, long title.
[15] HRIP Act, s 3(1)(a).
[16] PPIP Act, s 55(2)(a) and s 55(4)(b).
[17] Ship “Shin Kobe Maru” v Empire Shipping Company Inc [1994] HCA 54 (9 November 1994), [29].
[18] Griffith University v Tang [2005] HCA 7 (3 March 2005), [153].
[19] Marshall v Director General Department of Transport [2001] HCA 37 (21 June 2001), [38].
[20] James Hardie and Co v Seltsam Pty Ltd [1998] HCA 78 (21 December 1998), [73].
[21] Planet Fisheries Pty Ltd v La Rosa [1968] HCA 62 (14 October 1968), [11].
[22] Australian Human Rights Commission Act 1986 (Cth), s 46PO(4)(d).
[23] Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 (15 July 2014), [93].
[24] Ibid. [73] – [81].
[25] Ibid. [82].
[26] Ibid. [115].
[27] Ibid.[90].
[28] Ibid. [95].
[29] Ibid. [96].
[30] Ibid. [99].
[31] Ibid. [108].
[32] Ibid. [109].
[33] Ibid. [110].
[34] Ibid. [117].
[35] Ibid.
[36] Ibid. [118].
[37] Ibid. [118]; the amount included compensation for the injury caused to Ms Richardson’s sexual relationship with her then partner.
[38] Ibid. [74].
[39] See for example NZ v Director General, Department of Housing [2006] NSWADT 173 (7 June 2006), [25-26]; and DKV v Southern NSW Local Health District (No 2) [2019] NSWCATAD 243 (3 December 2019), [19].
[40] NZ v Director General, Department of Housing [2006] NSWADT 173 (7 June 2006), [44].
[41] Ibid. [47].
[42] Ibid. [50].
[43] ALZ v SafeWork NSW (No 4) [2017] NSWCATAD 1 (4 January 2017),[23].
[44] Ibid. [47].
[45] Ibid. [50]; as well as taking a restrained approach the Tribunal (impliedly) considered that the contraventions were not serious, and, it did not make SafeWork responsible for all the harm that flowed from the contraventions.
[46] DKV v Southern NSW Local Health District (No 2) [2019] NSWCATAD 243 (3 December 2019), [19].
[47] Ibid. [21].
[48] Ibid. [13-14].
[49] Ibid. [24].
[50] Ibid. [26].
[51] ALZ v SafeWork NSW (No 4) [2017] NSWCATAD 1 (4 January 2017), [23].
[52] Deane and Gaudron JJ, [4].
[53] Dawson J, [6].
[54] McHugh J, [5].
[55] McHugh J, [40].
[56] Rush v Nationwide News Pty Ltd (No 7) [2019] FCA 496 (11 April 2019), [671].
[57] Cripps v Vakras [2014] VSC 279 (20 June 2014), [606].
[58] See APV and APW v Department of Family and Community Services [2015] NSWCATAD 140 (6 July 2015) at [86]; ALZ v SafeWork NSW (No 4) [2017] NSWCATAD 1 (4 January 2017) at [23]; and DKV v Southern NSW Local Health District (No 2) [2019] NSWCATAD 243 (3 December 2019) at [20].
[59] Nelson v Nelson [1995] HCA 25 (9 November 1995), [36].
[60] Equuscorp Pty Ltd v Haxton; Equuscorp Pty Ltd v Bassat; Equuscorp Pty Ltd v Cunningham’s Warehouse Sales Pty Ltd [2012] HCA 7 (8 March 2012), [124].
[61] Planet Fisheries Pty Ltd v La Rosa [1968] HCA 62 (14 October 1968), [11].
[62] [110].
[63] NZ v Director General, Department of Housing [2006] NSWADT 173 (7 June 2006), [25-26]; ALZ v SafeWork NSW (No 4) [2017] NSWCATAD 1 (4 January 2017), [23]; DKV v Southern NSW Local Health District (No 2) [2019] NSWCATAD 243 (3 December 2019), [19].
