Mahend Kumar, an assistant director in the Department of Immigration's financial policy area, was warned about his underperformance in early 2008, after working for seven years without any apparent issue.

Within the year, Mr Kumar had been demoted from an EL1 to APS6 level, despite his requests that he instead be transferred to another area. He claimed he had been victimised, denied procedural fairness, and that the punishment was biased.

After years of internal wrangling over the demotion, Mr Kumar took the secretary of the department to court, starting a legal battle that, in the words of the Federal Circuit Court's Justice Warwick Neville, had had an ''almost unthinkable'' financial and human cost.

Mr Kumar lost his application to overturn the demotion earlier this month, with Justice Neville saying the accountant failed to make out his entitlement to relief from the decision.

But in a compelling postscript to his judgment, Justice Neville voiced fears for the public servant - who is likely to be hit with a hefty bill for legal costs - as he continued working at the department.

Justice Neville said he was concerned about how Mr Kumar would be treated, and whether he would ''even survive in an environment where he has taken action against the employer''.

''Respectfully, while the legal result was, in my view, almost a foregone conclusion on the basis of the documentary evidence, the longer-term financial and human cost of this litigation is almost unthinkable,'' Justice Neville wrote.

He also expressed alarm that the fight had been allowed to make its way to court, and wondered ''what might have been saved'' if the department had agreed to transfer Mr Kumar to another area.

''In every respect, I simply wonder with some alarm, if not lament, how and why this matter was not resolved without the need to proceed to a hearing,'' Justice Neville wrote.

''On a cost-benefit analysis, everyone loses or has lost.''

The department had fought Mr Kumar's application in the Federal Circuit Court on a number of grounds.

It said that the decisions and conduct he was complaining about were not reviewable under the legislation referenced by Mr Kumar.

The litigation, it argued, came too late, and was out of the legal time limit.

Mr Kumar had told the court that the action was late because he was fighting the decision internally, including through a primary review by the secretary of the department in 2009, and an attempted secondary review through the Merit Protection Commissioner.

He said he believed he had to wait until those internal reviews were finished before he could take the matter to the Federal Circuit Court.

Mr Kumar said he obtained legal advice and advice from the department and the Community and Public Sector Union, but they all failed to inform him fully of his rights to review the decision in the courts.

A decision on the payment of court costs has not yet been made.