A former teacher has avoided having to pay more than $2 million to students over sexual abuse five decades ago after a judge found she had been unaware her conduct was harmful at the time.

Helga Lam taught languages at a school in Sydney's eastern suburbs in 1978 and 1979 when she allegedly sexually abused multiple students.

On Friday, a NSW Supreme Court judge found, to a civil standard, the abuse occurred but the 71-year-old was not negligent and she would not have known her conduct was harmful at the time.

"In my experience, things were different nearly 50 years ago," Justice Ian Harrison wrote in his decision.

"That does not reflect well upon the ill-informed standards of the day in this country. But those are the standards by which Ms Lam's obligation to foresee that her conduct c

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