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 actual outlay.
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 amount...'
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.