Proposal 11–7 The new Act should provide that a court may award the remedy of an account of profits.
11.48 The ALRC proposes that a court be empowered to award an account of profits. This award would be an alternative to damages. The gains-based remedy of an account of profit will deter 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.
11.49 In Australia, an account of profits is an equitable remedy that may be granted in cases where a defendant has profited from an equitable wrong. It is also available in some limited types of tort actions, such as passing off. 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. 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.
11.50 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.
11.51 This award is available as a remedy in breach of confidence actions. In Douglas v Hello! Ltd (No 3), the UK Court of Appeal made clear that it would have had ‘no hesitation to award an account of profits’ if ‘Hello!’ magazine had made a profit from the publication of surreptitiously obtained photographs of the wedding of Michael Douglas and Catherina Zeta-Jones.
11.52 It may however be difficult to prove that the defendant has made any profit or gain from the invasion of privacy. Media publication of private information may often be unsuited to the award of an account of profit because the story may be only one part of the media program or edition and cannot be attributed with a distinct amount of profit.
11.53 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 commissions 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 commission considered that this should more generally preclude an account of profits being available.
Several stakeholders were in favour of this proposal: 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. The ALRC proposed the availability of an account of profits in its previous Inquiry: ALRC, For Your Information: Australian Privacy Law and Practice, Report 108 (2008) Rec 74–5(b).
RP Meagher, JD Heydon and MJ Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis Butterworths, 4th ed, 2002) [25–002].
Warman International Ltd v Dwyer (1995) 182 CLR 544.
LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490, 497.
Mosley v News Group Newspapers Ltd  EWHC 1777 (QB) (2008); Attorney General v Guardian Newspapers Ltd (No 2) (1990) 1 AC 109.
Douglas v Hello! Ltd  EWCA Civ 595 (18 May 2005) .
ALRC, 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].