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A five-year legal battle over the terms "Coon cheese" and "black babies" in a public service workplace has been quietly settled. But the government is trying to keep secret the amount of taxpayer money it spent defending its workers, including former Education Department boss Lisa Paul, who were accused of racist conduct. The news of the hushed-up settlement comes in the wake of scathing academic research finding racism against Aboriginal public servants was rife and victims were afraid to speak out for fear of suffering the same fate as football great Adam Goodes. The epic struggle between the Education Department and Edna Vata-Meyer was settled by arbitration this year after running for more than four years and going to the full bench of the Federal Court. Along the way, Education was ordered to pay Ms Vata-Meyer's legal costs, leaving taxpayers with a legal bill for the case, including its own costs, that could add up to hundreds of thousands of dollars, although the department refuses to say how much has been spent. Ms Vata-Meyer sued the department and eight of its public servants, including Ms Paul, and sought compensation for the racial discrimination allegedly suffered at their hands. The trouble started in August 2011, seven months after Ms Vata-Meyer moved to Canberra from North Queensland to work at the department, then known as DEEWR, as an Indigenous graduate. Ms Vata-Meyer said the conduct of her supervisor during a meeting on August 16, later described as a "dressing down", constituted racial discrimination. Things got worse a month later, on September 28, when co-worker Angus Lee took out a packet of chocolate-flavoured jelly babies, Chicos, and twice offered them to Ms Vata-Meyer and another Aboriginal woman with the words, "Here are some black babies". At an office afternoon tea later that day, Mr Lee was asked what sort of cheese he liked and responded, "I just like plain old Coon cheese". Ms Vata-Meyer complained to her superiors about the comments and Mr Lee, who said he meant no offence, was counselled and apologised. But Ms Vata-Meyer then took her complaint about the handling of the incident to Ms Paul. There were further clashes between the graduate and her superiors that November over her attendance at work, leading to more allegations of racial discrimination, workplace bullying and harassment. In April 2012, Ms Vata-Meyer wrote to the Australian Human Rights Commission but the complaint was terminated on the grounds there was no chance of settlement. The case then went to Federal Circuit Court, with Ms Vata-Meyer claiming the department, its boss and her public servants engaged in racial discrimination against her and the Commonwealth was liable for those unlawful acts. The department and its public servant respondents deny they breached the Racial Discrimination Act and contested some of Ms Vata-Meyer's claims, with the Commonwealth also denying liability. After court-ordered mediation failed, the case went to a full hearing with Mr Lee giving evidence before Federal Court judge Rolf Driver, saying he meant no offence by his references to black babies or Coon cheese.The judge gave the bureaucrat the benefit of the doubt "on the basis that he is simply obtuse", and dismissed the case. But Ms Vata-Meyer appealed the decision, and other aspects of Justice Driver's judgment, to the full bench of the Federal Court with three justices agreeing to set aside the original decision. But the judges appealed to the parties to try to avoid the expense of a new trial with fresh mediation, which ultimately yielded the settlement. Ms Vata-Mayer could not be contacted for comment. The Education Department referred questions to the Employment Department, which refused to answer questions about the settlement, claiming it was "not at liberty" to discuss the case.

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