David v Fraser-Kirk

Lasting public and media recollections in respect of the claim by Kristy Fraser-Kirk against DJ’s may well only be that it was a sexual harassment claim against her employer and its CEO, and that a huge amount of punitive damages was claimed.

This overlooks the fact that the pleadings in the case traversed many bases of claim and were novel in some respects, and it is interesting to consider ramifications for directors, not from the point of view that the case lead to any development in the nature or extent of directors’ duties (because an early settlement precluded any determinations being made by the court), but whether allegations that on the facts of the case the directors had engaged in conduct which was likely to mislead or deceive under trade practices legislation might in any way influence directors’ future behaviour.

In particular, Fraser-Kirk asserted that the failure of directors to correct published media reports, which were inaccurate, emanating from representations allegedly constituted by the conduct of some directors at a press conference, was conduct by those directors while engaging in trade and commerce and was likely to mislead or deceive. This pleading in a sexual harassment case was novel. Ordinarily such claims are brought under the federal Sexual Discrimination Act or under State equal opportunity legislation, in either case requiring time consuming investigation and consultation processes before the claimant can proceed to a court or tribunal. By claiming under trade practices legislation, Fraser-Kirk thereby involved the Federal Court, enabling the full range of her claims (-including at common law, under federal and State trade practices legislation and in tort opening the way for her claim to exemplary damages) to be combined in one proceeding. Because the claim was settled, no rulings or dicta in relation to the trade practices pleadings have emerged which of themselves could impact on directors’ behaviour.

Further, many commentators share the view that they would not have succeeded on the facts in any event. Directors should take at least these two lessons from the case, namely (1) the importance of directors ensuring that appropriate procedures and mechanisms for pre-empting and dealing with sexual harassment claims are in place in their organisations, and that they are monitored for compliance and improvement and (2) that directors should be wary of media conferences, ensuring that attending directors are adequately media trained, with consideration being given to the engagement of media consultants when appropriate.