Recommendation 12–6 The Act should provide that a court may award an account of profits.
12.102 The ALRC recommends that a court be empowered to award an account of profits as a remedy for the new tort. This award would be an alternative to damages. The gains-based remedy of an account of profit has the aim of deterring defendants who are commercially motivated to invade the privacy of another for profit, by removing any unjust gain made from a serious invasion of privacy.
12.103 An award of an account of profits may be appropriate where the financial benefit derived to a defendant from an invasion of privacy exceeds the loss incurred to a plaintiff. This remedy may also provide redress to plaintiffs where compensatory damages would be difficult to calculate.
12.104 The availability of an account of profits may also have a deterrent effect on the behaviour of potential defendants when they are considering the commercial benefit to be gained from publishing an individual’s private information. It is distinct from an award of damages in that it responds to the gain of the wrongdoer rather than the loss of the wronged party. To that end, PIAC argued that
Orders of this nature will prevent unjust enrichment of respondents and will also act as a deterrent in the case of ‘serial respondents’, or respondents who are unlikely to be particularly adversely affected by being ordered to pay compensatory damages.
12.105 Similarly, Witzleb argued that ‘commercially motivated defendants can only be effectively prevented from invading people’s privacy where profit-stripping remedies are made available’.
12.106 An account of profits is an established remedy in actions for breach of confidence. It is also available in some limited types of tort actions, such as passing off.
12.107 An account of profits will deter defendants who calculate that the gain to be made from publishing an individual’s private information exceeds the cost of any compensatory damages they may incur if the matter goes to court. An alternative way to achieve the same result would be to award exemplary damages to strip the defendant of any gain made from the unauthorised use of the plaintiff’s information.
12.108 It may be difficult for a plaintiff to prove that the defendant has made a profit or gain from the invasion of privacy. Calculating the profit to be attributed to the publication of private information may be complex where it forms only part of a larger publication. In these cases, a court will determine the reasonableness of the connection between the invasion of privacy and the profit obtained.
12.109 An account of profits was recommended as a remedy for a serious invasion of privacy in ALRC Report 108. The NSWLRC also recommended an account of profits, at least in exceptional cases. Both noted the concerns of some stakeholders that it would in many cases be difficult to determine the profits arising from a serious invasion of privacy, but neither considered that this should preclude an account of profits being available, if appropriate.
12.110 ASTRA argued that an account of profits is a very narrow and particular remedy, which is
likely to be more effective against a large, established company than against a fledgling web-based media outlet which is more concerned with generating ‘likes’ or ‘followers’ than generating profit.
12.111 Some stakeholders argued that an account of profits is an inappropriate remedy for a privacy action as it attaches commercial value to a dignitary interest. However the ALRC considers that, unlike other remedies—such as the calculation of damages based on a notional licence fee—an account of profits is designed to strip a defendant of the benefit of an invasion of privacy rather than to vindicate any commercial interest a plaintiff may wish to pursue.
Several stakeholders were in favour of this proposal: N Witzleb, Submission 116; T Butler, Submission 114; Office of the Victorian Privacy Commissioner, Submission 108; Public Interest Advocacy Centre, Submission 105; Australian Sex Party, Submission 92; S Higgins, Submission 82; Office of the Australian Information Commissioner, Submission 66; Public Interest Advocacy Centre, Submission 30; Insurance Council of Australia, Submission 15; I Turnbull, Submission 5.
N Witzleb, Submission 29.
Mayne and McGregor, above n 4, [12–005].
Warman International Ltd v Dwyer (1995) 182 CLR 544.
Public Interest Advocacy Centre, Submission 105.
N Witzleb, Submission 29.
Attorney General v Guardian Newspapers Ltd (No 2) (1990) 1 AC 109.
Roderick Pitt Meagher, Dyson Heydon and Mark Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 4th ed, 2002) [25–002].
LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490, 497.
CMS Dolphin Ltd v Simonet  2 BCLC 704, .
Australian Law Reform Commission, For Your Information: Australian Privacy Law and Practice, Report 108 (2008) Rec 74–5.
NSW Law Reform Commission, Invasion of Privacy, Report 120 (2009) [7.23]–[7.24].
ASTRA, Submission 99.
Telstra, Submission 107; Guardian News and Media Limited and Guardian Australia, Submission 80.