Dye v Commonwealth Securities Limited (No 2)
 FCA 407
The Federal Court of Australia has ordered Vivienne Dye
('Dye') to pay $5.85 million in costs to her
ex-employer, Commonwealth Securities Limited and others for
bringing 'false' claims, including a sexual harassment
claim, against them.
The Court ruled that the claims were 'without any relevant
factual foundations or any legal substance.'
The substantive case(s) involved 94 days of hearings, 600
documentary exhibits and thousands of pages of transcripts.
Justifying the costs
There were two separate proceedings containing the claims by Dye
which were heard together by the Court. The Respondents sought an
order that Dye pay their costs on an indemnity basis. Costs awarded
on an indemnity basis are more favourable than a standard costs
order because they allow the winning party to recover most of their
actual monetary outlay. A standard costs order only recovers a
portion of the outlay but rarely if ever an amount close to the
The Respondents based their application for indemnity costs on
the following basis:
Dye's claims were based on 'falsehood'
Offers were made in both proceedings in attempt to settle the
matter out of court. The offers were that 'Dye abandon the
proceedings and bear her own costs and avoid liability to pay the
Respondents costs.' The offers were rejected.
The Court noted that 'indemnity costs are not awarded as a
punishment against an unsuccessful litigant however, they will be
awarded in appropriate cases to protect a respondent from the
financial burden of proceedings which were unjustified and should
not have been commenced.'
The Court went on to find that 'the lack of merit in each
proceedings is so marked and the claim for protection by the
Respondents against unwarranted financial burden is so
well-founded, that there is indemnity costs with respect to the
whole of each proceedings.'
The Respondents, while entitled to an indemnity costs order,
proposed and opted for effectively a lesser costs order against
Dye. Their reasoning was that if an indemnity costs order was
sought they would need to 'enable a lengthy and costly process
of taxation of those costs in order to establish the amount to be
awarded on an indemnity basis.' Providing a suitable bill
for taxation purposes would cost somewhere in the vicinity of
$570,000 and $715,000.
The Court accepted the Respondents proposal noting 'it would
be unjust to require the Respondents to incur substantial
additional costs to prepare a bill of costs for taxation when there
is serious doubt about the capacity of [Dye] to pay any significant
The Court accordingly awarded a lump sum order for costs. This
entitled [Dye] to receive a 50% reduction in solicitor costs. The
amount awarded was $5.85 million.
This decision demonstrates the high risk associated with
bringing not only claims of this kind to court, but in commencing
litigious proceedings generally. It is clear that the courts will
not take kindly to proceedings being brought to court in
circumstances where claims have no basis.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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