Background
In July 2026, the Federal Court summarily dismissed two proceedings brought by Zofia Bozena Majak: one against the State of Victoria and another against the Commonwealth of Australia. The Court found both proceedings to be obviously untenable, without reasonable prospects of success, and frivolous, vexatious and/or an abuse of process.
The State proceeding concerned matters connected with extensive prior litigation involving Ms Majak, including Family Court and Victorian Supreme Court proceedings. The Commonwealth proceeding challenged a travel restriction imposed during her bankruptcy and sought related relief. The Court held that Ms Majak was attempting to re-agitate her bankruptcy, which had already been litigated and determined.
When dismissing the proceedings, the Court ordered Ms Majak to pay each respondent’s costs on an indemnity basis. She then sought different costs orders—either no order as to costs or party-and-party costs—contending that she had raised genuine constitutional questions, acted properly, and had not engaged in dishonesty, improper purpose or litigation misconduct.
The Court’s Holding
Justice O’Sullivan refused both applications and left the indemnity-costs orders undisturbed. Although the ordinary costs order is party-and-party costs, indemnity costs may be justified where a claim is hopeless, wholly untenable, or unreasonably exposes the other party to costs. A self-represented litigant’s position may be relevant, but does not preclude an indemnity order.
For the proceeding against Victoria, the Court relied on the long litigation history, the absence of any prospects of success, and its earlier finding that the proceeding was an abuse of process. For the proceeding against the Commonwealth, Ms Majak had been told that the travel restriction arose under s 272(1)(c) of the Bankruptcy Act 1966 (Cth), had been offered an opportunity to discontinue without costs, and nevertheless pursued a claim premised on her not being an undischarged bankrupt. The Court found that premise clearly wrong and the proceeding an attempt to re-litigate settled bankruptcy issues.
Key Takeaways
- Indemnity costs can be appropriate where proceedings are hopeless and constitute an abuse of process.
- The absence of dishonesty or an improper purpose does not itself prevent an indemnity-costs order.
- Self-represented status does not displace the ordinary costs consequences or immunise a litigant from indemnity costs.
Why It Matters
The decision confirms that indemnity costs are compensatory, not punitive: they may be awarded where it was unreasonable to subject opposing parties to the expense of defending untenable litigation. Genuine belief in a claim or reliance on constitutional procedures will not justify a different costs order where the claim remains legally untenable and re-agitates issues already determined.