Sandison & Thornhill (No 3) - [2023] FedCFamC1F 981

Federal Circuit and Family Court of Australia

(DIVISION 1)

Sandison & Thornhill (No 3) [2023] FedCFamC1F 981

File number:	NCC 1503 of 2016
Judgment of:	HENDERSON J
Date of judgment:	20 November 2023
Catchwords:	FAMILY LAW – COSTS – Between parties – Against legal practitioners – Where orders were made declaring the parties were never in a de facto relationship – Costs sought by the successful party against the unsuccessful party and her former solicitors and counsel – Indemnity costs – Where costs were sought on an indemnity basis – Where the costs sought were apportioned between specific events in the proceedings – Discussion of principles where an order for costs will be made against a legal practitioner – Where the successful party abandoned an order for costs against counsel – Finding the former solicitors engaged in unreasonable conduct in part of the proceedings – Orders made apportioning costs between parties for various periods including indemnity costs. FAMILY LAW – LEGAL PRACTITIONERS – Misconduct, unfitness and discipline – Where litigation was continued and run in such a manner that the application could never have succeeded – Epping & Merl [2015] FamCAFC 81 applied – Orders made referring the proceedings to the Legal Services Commissioner to investigate the professional conduct of a solicitor and a law firm.
Legislation:	Evidence Act 1995 (Cth) s 128. Family Law Act 1975 (Cth) ss 90RD(1), 117, 117(1), 117(2), 117(2A), 117(2A)(a), 117(2A)(c), 117(2A)(e), 117(2A)(f). Federal Circuit and Family Court of Australia Act 2021 (Cth) s 68, 68(4), 68(5). Judiciary Act 1903 (Cth) ss 55A, 55B Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Div 12.8.2, rr 1.05, 12.15, 12.16, 12.16(1), 12.17(1)(a), Schedule 3. Federal Circuit and Family Court of Australia, Family Law Case Management – Central Practice Direction, 28 November 2022. Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW) r 4(c). Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) rr 3.1, 4.1.3.
Cases cited:	Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation (2001) 179 ALR 406; [2001] HCA 26. Beamish & Coburn (Deceased) (2021) FLC 94-005; [2021] FamCAFC 20. Carpenter & Carpenter [2014] FamCAFC 100. Cassidy v Murray (1995) FLC 92-633; [1995] FamCA 91. Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCR 801. Cornett & Hext (2021) FLC 94-067; [2021] FedCFamC1A 90. D’Cruz & Pierce [2009] FamCA 435. Epping & Merl [2015] FamCAFC 81. Ex Christmas Islanders Association Inc v Attorney-General (Cth) (No 2) (2006) 233 ALR 97; [2006] FCA 671. Harris & Dewell (No 2) (2018) FLC 93-863; [2018] FamCAFC 180. Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23. J Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No 2) [1993] FCA 42. Jachimowicz and Jachimowicz (1986) FLC 91-702; [1986] FamCA 30. Kohan and Kohan (1993) FLC 92-340; [1992] FamCA 116. Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59. Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300; [2005] NSWCA 153. Lenova & Lenova (2011) FLC 93-467; [2011] FamCAFC 114. Levick v Deputy Commissioner of Taxation (2000) 102 FCR 155; [2000] FCA 674. Lim & Zong (2022) FLC 94-104; [2022] FedCFamC1A 146. Limousin v Limousin (Costs) (2007) 38 Fam LR 478; [2007] FamCA 1178. May & Longley [2016] FamCAFC 261. Milson & Myron (No 2) [2019] FamCA 84. Moorcroft & Moorcroft [2017] FamCAFC 147. Munday v Bowman (1997) FLC 92-784. Myers v Elman [1940] AC 282. Myron & Milson (2020) FLC 93-969; [2020] FamCAFC 151. Orchard v South Eastern Electricity Board [1987] QB 565. PBF as Child Representative for AF (Legal Aid Commission of Tasmania) & TRF & LKL [2005] 33 Fam LR 123; [2005] FamCA 158. Peake v Benedict (Costs) (2014) 53 Fam LR 476; [2014] FCCA 2723. Penfold v Penfold (1980) 144 CLR 300; [1980] HCA 4. Phillips & Hansford (2020) FLC 93-941; [2020] FamCAFC 28. Pilkvist & Coburn (Deceased) [2020] FamCA 92. Prantage & Prantage (Costs) [2014] FamCA 850. Rankin & Rankin (No 3) [2019] FamCAFC 133. Ridehalgh v Horsefield [1994] Ch 205. Higginbotham and Robinson (1991) FLC 92-209; [1991] FamCA 5. Sandison & Thornhill [2019] FamCA 85. Sandison & Thornhill [2022] FedCFamC1F 894. Sandison & Thornhill (No 2) [2023] FedCFamC1F 262. Schwarz and Schwarz (1985) FLC 91-618; [1985] FamCA 21. Sfakianakis & Sfakianakis (2019) 59 Fam LR 419; [2019] FamCAFC 54. Smith & Fields (third party costs) [2013] FamCA 505. White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169; [1998] FCA 806. Worth & Worth (No 2) (2019) FLC 93-910; [2019] FamCAFC 126. Yunghaans v Yunghanns (2000) FLC 93-029; [2000] FamCA 681. Z (a solicitor) & Limousin (2010) FLC 93-433; [2010] FamCAFC 59.
Division:	Division 1 First Instance
Number of paragraphs:	178
Date of hearing:	19 October 2023
Place:	Sydney
Solicitor Advocate for the Applicant:	Mr Gittoes-Caesar
Solicitor for the Applicant:	Lander and Rogers
Counsel for the Respondent:	Mr Havenstein (up to 17 August 2023), litigant in person (from 17 August 2023 onwards)
Solicitor for the Respondent:	Allen Evans Family Lawyers (up to 17 August 2023)
Counsel for the First Interested Party:	Ms Dolenec
Solicitor for the First Interested Party:	Mills Oakley
Counsel for the Second Interested Party:	Mr Othen
Solicitor for the Second Interested Party:	DLA Piper

ORDERS

NCC 1503 of 2016
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR SANDISON Applicant
AND:	MS THORNHILL Respondent
OO LAWYERS First Interested Party MR ECKHARDT Second Interested Party

order made by:	HENDERSON J
DATE OF ORDER:	20 NOVEMBER 2023

THE COURT ORDERS THAT:

Pursuant to rule 12.16 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the Court is satisfied that OO Lawyers and Mr Eckhardt have had a reasonable opportunity to be heard in relation to the application for costs sought against them.
Pursuant to section 117 of the Family Law Act 1975 (Cth):
a.  a.Ms Thornhill is to pay Mr Sandison’s costs on a party/party basis for the period 18 January 2017 to 7 November 2018 in the sum of $71,533.88;
b.  b.Ms Thornhill and OO Lawyers are jointly and severally liable to pay Mr Sandison’s costs on a party/party basis for the period 8 November 2018 to 6 March 2020 in the sum of $7,164.27;
c.  c.Ms Thornhill and OO Lawyers are jointly and severally liable to pay Mr Sandison’s costs on an indemnity basis for the period 7 March 2020 to 6 January 2023 in the sum of $11,130.26; and
d.  d.OO Lawyers are to pay Mr Sandison’s costs on an indemnity basis for the period 7 January 2023 to 15 March 2023 in the sum of $87,013.23;
with all costs to be paid within 90 days of the date of these orders.

a.By consent between Mr Sandison and Mr Eckhardt, Mr Sandison is to pay Mr Eckhardt’s costs as agreed.
b.A registrar of the Court is to refer this matter to the Office of the Legal Services Commissioner for investigation with respect to the professional conduct of Mr RR, the solicitor listed on the Notice of Address for Service filed 22 June 2022, and OO Lawyers, his employers, in relation to their conduct in these proceedings and in particular the evidence relied upon to support Ms Thornhill’s claim for declaratory relief sought in a Response to Initiating Application filed 25 July 2016.
c.The registrar is to provide to the Office of the Legal Services Commissioner a copy of these orders, together with the following documents:
d.Reasons for Judgment delivered on 14 April 2023, and a copy of the documents and exhibits identified at [7]–[8] of those Reasons; and
e.These Reasons for Judgment, and a copy of the documents and exhibits identified at [8] of these Reasons; and

any further documents from the file NCC1503/2016 that the Office of the Legal Services Commissioner might seek for the purposes of conducting its investigation.
a.For the purpose of publication of these Reasons for Judgment, references to OO Lawyers, Mr RR, and Mr Eckhardt are to be anonymised.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonyms Sandison & Thornhill has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

THE COSTS HEARING	[5]
DOCUMENTS AND EXHIBITS	[8]
SHORT CHRONOLOGY	[9]
THE PARTIES’ POSITIONS	[24]
THE LAW ON COSTS	[28]
Costs against legal practitioners	[32]
Indemnity costs	[50]
DISCUSSION	[53]
Should a costs order be made?	[57]
*The financial position of each of the parties to the proceedings*	[60]
Ms Thornhill’s financial position	[60]
The financial position of OO Lawyerss	[66]
*The conduct of the parties to the proceedings and whether any party to the proceedings has been wholly unsuccessful*	[67]
Ms Thornhill’s conduct and success (or lack thereof)	[67]
The conduct of OO Lawyerss	[100]
*Whether either party to the proceedings has made an offer*	[131]
Quantum of costs sought	[138]
Schedule of costs	[139]
*Adjournment of the threshold hearing in 2020*	[140]
*Application for summary dismissal*	[141]
*Billing of Ms SS*	[142]
*Double charging*	[147]
*Seniority of the instructing solicitor at the threshold hearing*	[152]
*Conclusion as to quantum of costs sought*	[157]
Liable periods of costs	[158]
Conclusion as to costs	[169]
OO LAWYERS	[171]
CONCLUSION	[178]

HENDERSON J:

In the matter of Sandison and Thornhill, on 14 April 2023, I made a declaration pursuant to section 90RD(1) of the Family Law Act 1975 (Cth) (“Act”) that Mr Sandison and Ms Thornhill were never in a de facto relationship. Ms Thornhill was the applicant in the threshold hearing and Mr Sandison was the respondent.

These Reasons for Judgment deal with the costs application made by Mr Sandison.

When delivering Reasons for Judgment, one order I made was as follows:

3.… [Mr Sandison] is to file and serve written submissions within 28 days on the following:
(a)[Mr Sandison]’s costs of and incidental to the Response to Initiating Application filed on 25 July 2016; and
(b)Whom should be liable for [Mr Sandison]’s costs, including but not limited to the legal representatives of [Ms Thornhill];

(As per the original with clarification)

This order was made given my grave concerns that the matter should never have been continued as it was doomed to fail at the outset given the evidence relied upon by Ms Thornhill at the threshold hearing. All parties and interested parties filed written submissions on the question of the quantum of costs and who should be liable therein if an order was made.

THE COSTS HEARING

This costs application was to be determined on the papers. However, I heard oral submissions on 19 October 2023 given the volume of material filed.

The parties and interested parties were represented at the costs hearing as follows:

a.Mr Sandison, the costs applicant, was represented by Mr Gittoes-Caesar as solicitor advocate;
b.Ms Thornhill, the costs respondent, was self-represented;
c.OO Lawyers, the first interested party, who were the solicitors on record for Ms Thornhill at the threshold hearing, was represented by Ms Dolenec of counsel; and
d.Mr Eckhardt, the second interested party, who was counsel that represented Ms Thornhill at the threshold hearing, was represented by Mr Othen of counsel.

The costs application of Mr Sandison against Mr Eckhardt and Mr Eckhardt’s costs application against Mr Sandison was resolved at the costs hearing and the issue of quantum remains outstanding.

DOCUMENTS AND EXHIBITS

The material read was as follows:

a.For Mr Sandison:
b.Written submissions filed 15 May 2023, prepared by Lander and Rogers, and the annexures therein, which included a schedule of costs covering the period 18 January 2017 to 3 May 2023, with an index of costs on an indemnity basis, on a party/party basis, and on scale pursuant to Schedule 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Rules”);
c.Reasons for Judgment delivered by Carter J on 18 November 2022;
d.Reasons for Judgment delivered on 14 April 2023; and
e.Written submissions in reply filed 30 August 2023, annexing an updated schedule of costs and approximately 700 pages of invoices.

f.For Ms Thornhill:
g.Written submissions filed 9 June 2023, prepared by Mr Havenstein of counsel and her then solicitors Allen Evans Family Lawyers;
h.Reasons for Judgment delivered on 14 April 2023;
i.Her Costs Notice filed 17 March 2023, marked Exhibit A2 at the threshold hearing; and
j.A bundle of documents relating to her financial circumstances, which was marked Exhibit M1 at the costs hearing.

k.For OO Lawyers:
l.Written submissions received on 19 July 2023 and amended on 16 August 2023, prepared by Ms Dolenec and their insurer’s solicitors Mills Oakley; and
m.Written submissions in reply received on 13 September 2023, prepared by Ms Dolenec.

n.For Mr Eckhardt:
o.Written submissions received on 14 August 2023, prepared by Mr Othen and his insurer’s solicitors DLA Piper.

SHORT CHRONOLOGY

On 17 June 2016, Mr Sandison commences the proceedings in the Federal Circuit Court of Australia (as it was then known) in relation to parenting only.

On 25 July 2016, Ms Thornhill files her Response to Initiating Application in respect of parenting and pleads that the parties were in a de facto relationship, seeking a declaration in that respect. This is the first instance where Ms Thornhill asserted that the parties were in a de facto relationship.

On 23 December 2016, the proceedings were transferred to the Family Court of Australia (as it was then known).

On 10 October 2017, orders were made granting leave to Mr Sandison’s legal representatives to inspect the file in Ms Thornhill’s previous family law proceedings (“the GG proceedings”).

On 31 August 2018, Mr Sandison files his first affidavit where he denies that the parties were in a de facto relationship.

On 8 November 2018, OO Lawyers files a Notice of Address for Service on behalf of Ms Thornhill.

On 17 November 2022, trial directions were made for the filing of affidavits and case outlines.

On 13–25 March 2023, the threshold application hearing occurred and judgment was reserved.

On 14 April 2023, Reasons for Judgment are delivered, where a declaration is made that the parties were never in a de facto relationship, inter alia.

OO Lawyers asserted they ceased acting for Ms Thornhill shortly after delivery, although no Notice of Ceasing to Act was filed until 14 June 2023.

On 8 June 2023, submissions were received on behalf of OO Lawyers, whereby directions were sought for the filing of written submissions so that OO Lawyers and Mr Eckhardt could be given a reasonable opportunity to be heard pursuant to rule 12.16(1) of the Rules.

On 13 June 2023, the following orders were made in Chambers:

THE COURT ORDERS THAT:
1.[Mr Sandison] and [Ms Thornhill] are to serve their written submissions upon [Mr Eckhardt] by 4.30pm on 21 June 2023, with [Mr Sandison] to serve a copy of these orders as well.
2.[OO Lawyers] are to serve their written submissions on all parties in response to the submissions of [Mr Sandison] and [Ms Thornhill] by 4.30pm on 19 July 2023, with such submissions to be no longer than 25 pages excluding annexures.
3.[Mr Eckhardt] is to serve his written submissions in response on all parties by 4.30pm on 16 August 2023, with such submissions to be no longer than 25 pages excluding annexures.

4. Order 5 of the orders made on 14 April 2023 be varied so as to read:
5.[Mr Sandison] and [Ms Thornhill] may file and serve submissions in reply to the submissions of [OO Lawyers] and [Mr Eckhardt] by 4.30pm on 30 August 2023, with such submissions to be no longer than 10 pages excluding annexures.

5.The matter be listed for a Directions Hearing at 9.30am on 22 August 2023 via Microsoft Teams to determine whether any further directions are required.
6.In the event that [Mr Sandison] does not comply with Order 1, any order for costs sought against [Mr Eckhardt] may be deemed abandoned or not sought.
7.Within 48 hours, [OO Lawyers] are to file a Notice of Ceasing to Act with respect to their previous representation of [Ms Thornhill].
8.Within 48 hours, the legal representatives for [OO Lawyers] are to send a Notice of Address for Service to my Associate.
9.Upon service, [Mr Eckhardt] is to send a Notice of Address for Service to my Associate as soon as practicable.
AND THE COURT NOTES THAT:
A.The written submissions in relation to costs are to comply with the relevant rules in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), in particular, Chapter 12.
B.On 8 June 2023, the legal representatives for [OO Lawyers] sought a timetable for filing written submissions so as to comply with rule 15.16(1) [sic] of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
C.The Court has made these orders in Chambers so rule 15.15(1) [sic] is complied with and provide an opportunity to [OO Lawyers] and [Mr Eckhardt] to be given a reasonable opportunity to be heard in relation to any order for costs sought against them.
D.The Court is aware that the [Ms Thornhill] filed written submissions on 9 June 2023 in response to the written submissions of [Mr Sandison].
E.For the current purposes, [OO Lawyers] is nominated the First Interested Party and [Mr Eckhardt] the Second Interested Party.
F.Any material to be relied upon by [OO Lawyers] and [Mr Eckhardt] is to be sent to my Associate, with the legal representatives for [Mr Sandison] and [Ms Thornhill] to be included, given they are not yet formally joined as a party to the proceedings.
(As per the original)

On 28 June 2023, orders were made granting leave to OO Lawyers to apply for a transcript of the threshold hearing.

On 22 August 2023, the matter was listed for directions and orders were made granting liberty to OO Lawyers and Mr Eckhardt to file further submissions after Ms Thornhill filed her submissions in reply.

On 25 September 2023, the matter was listed for further directions and orders made listing the matter for hearing on 19 October 2023.

THE PARTIES’ POSITIONS

Mr Sandison sought costs as follows:

a.Ms Thornhill pays his costs incurred from 19 January 2017 to 7 November 2018:
b.On an indemnity basis in the sum of $106,191.25; or in the alternative
c.On a party/party basis in the sum of $74,333.87; or in the alternative
d.On scale pursuant to Schedule 3 of the Rules in the sum of $58,742.48;

e.For costs incurred from 8 November 2018 to present:
f.OO Lawyers pay his costs on an indemnity basis in the sum of $169,422.73; or in the alternative

g.Ms Thornhill pays his costs on an indemnity basis in the sum of $169,422.73; or in the alternative
h.OO Lawyers pay his costs on a party/party basis in the sum of $118,595.91; or in the alternative
i.Ms Thornhill pays his costs on a party/party basis in the sum of $118,595.91; or in the alternative
j.OO Lawyers pay his costs on scale pursuant to Schedule 3 of the Rules in the sum of $100,535.25; or in the alternative
k.Ms Thornhill pays his costs on scale pursuant to Schedule 3 of the Rules in the sum of $100,535.25; and

l.Any further orders the Court deems appropriate.

Ms Thornhill’s position was that there be no order for costs made against her, and if a costs order was to be made, it be against her former legal representatives.

OO Lawyers opposed any costs order being made against them, and if a costs order was to be made, there be an assessment by a registrar.

Mr Eckhardt correctly submitted no costs were sought against him by way of order, opposed any costs order being made against him, and sought Mr Sandison pay his costs in relation to the present costs application.

THE LAW ON COSTS

Section 117 of the Act is as follows:

117 Costs
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and

(g) such other matters as the court considers relevant.

The power of the Court to make an order for costs involves a wide exercise of discretion and the breadth of this discretion is not limited. The recent decisions of Phillips & Hansford, Rankin & Rankin (No 3), and Sfakianakis & Sfakianakis, all deal with the broad discretion of the Court in relation to costs applications.

It is well settled that one factor in subsection 117(2A) may be sufficient to warrant departing from the presumed position in subsection 117(1) and for a costs order to be made.

Sub-rule 12.17(1) specifies that the Court can make an order for costs in a fixed sum, assessed on a party/party, solicitor/client, or indemnity basis, or some other basis, or assessed on scale in accordance with Schedule 3. The Court can also have costs assessed for taxation by a registrar.

Costs against legal practitioners

Section 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) requires parties and their legal representatives to act consistently with the overarching purpose of this Court, with subsections (4) and (5) providing:

(4)In exercising the discretion to award costs in a civil proceeding, the Federal Circuit and Family Court of Australia (Division 1) or a Judge must take account of any failure to comply with the duty imposed by subsection (1) or (2).
(5)Without limiting the exercise of that discretion, the Federal Circuit and Family Court of Australia (Division 1) or a Judge may order a party’s lawyer to bear costs personally.

It is uncontroversial that subsection 117(2) of the Act gives the Court power to make an order for costs against a non-party, which includes legal practitioners.

Rule 12.15 of the Rules set out when the Court can make an order for costs against a legal practitioner:

12.15 Costs order against lawyer
(1)The court may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs to be incurred by a party or another person, or to be thrown away, because of:
(a) a failure to comply with these Rules or an order; or
(b)       a failure to comply with a pre‑action procedure; or
(c)       improper or unreasonable conduct; or
(d)       undue delay or default.

…

Rule 12.16 of the Rules requires that when an order for costs is sought against a legal practitioner, that they are given a reasonable opportunity to be heard. Given that I have received extensive written submissions and heard oral submissions on behalf of both OO Lawyers and Mr Eckhardt, I am satisfied both have been given a reasonable opportunity to be heard.

In Jachimowicz and Jachimowicz, the Full Court of this Court cited Myers v Elman with approval. In that matter, Viscount Maugham said:

… the jurisdiction in question ought to be exercised only when there has been established dereliction of duty …

Lord Wright in a separate judgment said:

The underlying principle is that the Court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally … The matter complained of need not be criminal. It need not involve peculation or dishonesty. A mere mistake or error of judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor’s duty to ascertain with accuracy may suffice. Thus, a solicitor may be held bound in certain events to satisfy himself that he has a retainer to act, or as to the accuracy of an affidavit which his client swears. It is impossible to enumerate the various contingencies which may call into operation the exercise of this jurisdiction.
(As per the original)

In Orchard v South Eastern Electricity Board, Donaldson MR said that the jurisdiction to make a costs order against a legal practitioner:

… falls to be exercised with care and discretion and only in clear cases. In the context of a complaint that litigation was initiated or continued in circumstances in which to do so constituted serious misconduct, it must never be forgotten that it is not for solicitors or counsel to impose a pre-trial screen through which a litigant must pass before he can put his complaint or defence before the court. On the other hand, no solicitor or counsel should lend his assistance to a litigant if he is satisfied that the initiation or further prosecution of a claim is mala fide or for an ulterior purpose or, to put it more broadly, if the proceedings would be, or have become, an abuse of the process of the court or unjustifiably oppressive.
There is one other aspect of which sight must not be lost. Justice requires that the solicitor shall have full opportunity of rebutting the complaint, but circumstances can arise in which he is hampered by his duty of confidentiality to his client, from which he can only be released by his client or overriding authority … In such circumstances justice requires that the solicitor be given the benefit of the doubt.
(As per the original)

In Ridehalgh v Horsefield, Bingham MR said the following in relation to costs being ordered against legal practitioners:

Experience has shown that certain safeguards are needed if this system is to function fairly and effectively in the interests of parties to litigation and of the public at large. … Solicitors and barristers may in certain circumstances be ordered to compensate a party to litigation other than the client for whom they act for costs incurred by that party as a result of acts done or omitted by the solicitors or barristers in their conduct of the litigation.
…
The argument we have heard discloses a tension between two important public interests. One is that lawyers should not be deterred from pursuing their clients’ interests by fear of incurring a personal liability to their clients’ opponents; that they should not be penalised by orders to pay costs without a fair opportunity to defend themselves; that wasted costs orders should not become a back-door means of recovering costs not otherwise recoverable against a legally-aided or impoverished litigant; and that the remedy should not grow unchecked to become more damaging than the disease. The other public interest, recently and clearly affirmed by Act of Parliament, is that litigants should not be financially prejudiced by the unjustifiable conduct of litigation by their or their opponents’ lawyers. The reconciliation of these public interests is our task in these appeals. Full weight must be given to the first of these public interests, but the wasted costs jurisdiction must not be emasculated.
(As per the original)

In Cassidy v Murray, and after discussing this extract in Ridehalgh v Horsefield, the Full Court of this Court said this:

Whereas some of the cases say that there must be “a serious dereliction of duty” by the solicitor before a costs order can be made against that solicitor, in our view the matters identified by the Master of the Rolls in Ridehalgh v. Horsefield accurately reflect the law, which, in its application to this jurisdiction, can be set out as follows:
1.Pursuant to s. 117(2) Family Law Act, the Court has jurisdiction to make an order for costs against a solicitor or a non-party.
2.The court should not make such an order without giving the person to be affected by the order an opportunity to be heard.
3.The Court may make an order for costs against a solicitor without the necessity to establish that the solicitor has been guilty of serious professional misconduct.
4.The solicitor has a duty to the Court to promote the interests of justice whilst at the same time attending to the needs of the solicitor’s client.
5.A mistake or error of judgment would not justify an order for costs against a solicitor. However, misconduct, default or negligence, any of which are found by a Court to be of a serious nature, may be sufficient to justify an order.

6. The jurisdiction is compensatory.
Whilst the English cases talk of the conduct needing to be “serious or gross”, it adds nothing to set the threshold at “serious or gross”, rather than at “serious”, “gross” being a more extreme term than “serious”. We think that this represents an appropriate balance between the competing public interests involved, namely, the concern that lawyers should not be deterred from pursuing their clients’ interests for fear of being made personally subject to orders for costs, and the principle that innocent parties should not be occasioned costs, for which they would not otherwise be liable, as a result of the inappropriate conduct of solicitors.
(As per the original)

The Full Court in Cassidy v Murray referred to the compensatory nature of an order for costs made against a legal practitioner:

The order in this case is not appropriately seen as made for the purpose of punishing the appellant, but rather as protecting the respondent from loss. We think that though the effect of any costs order is obviously punitive in one sense, and though the order in this case was made only because of conduct of which the Court disapproved, the rationale behind the making of the order is the requirement that the innocent party be compensated for expenses caused by a solicitor.

The Full Court referred to two extracts in Latoudis v Casey, which I will address shortly, and then said:

… a Court would not make an order for costs against a solicitor who had been guilty of seriously negligent conduct if that conduct caused no loss to another.
…
We think that confusion may arise from the fact that it is reproachable conduct by the solicitor which leads to the order against him or her. The confusion subsides, however, once that requirement is seen in context.
Almost any act done by a solicitor in connection with proceedings gives rise to costs, which are generally to be borne by one, some or all of the parties to proceedings – that is expected by parties who engage solicitors. Where those costs are appropriately incurred in the performance of a solicitor’s responsibilities, the solicitor cannot fairly be called upon to meet them.
It is only when there is something relevantly inappropriate about the incurring of those costs that it will be proper to attach liability to the solicitor. It is for that reason that the conduct of the solicitor is called into issue. It is not that the Court seeks to punish the solicitor for his or her conduct. …
In cases of this type, causation alone cannot be the test of whether a solicitor should be held liable for parties’ expenses. Only the solicitor’s improper conduct can provide a ground for the making of such an order against him or her. But the basis of the order is the concern that the innocent party should not bear costs which arise only out of the improper conduct of the solicitor, and not the improper conduct itself.
(As per the original).

In Latoudis v Casey, Mason CJ and McHugh J highlight that an order for costs is not to punish an unsuccessful party but rather to compensate a successful party having been put through the legal proceedings.

In White Industries (Qld) Pty Ltd v Flower & Hart (a firm), Goldberg J said the following:

The authorities do not support the proposition that simply instituting or maintaining a proceeding on behalf of a client which has no or substantially no prospect of success will invoke the jurisdiction. There must be something more namely, carrying on that conduct unreasonably. It is not clear what is encompassed by “unreasonably” initiating or continuing proceedings if they have no or substantially no chance of success. It seems to me that it involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success with either a recognition that there is no chance of success but an intention to use the proceeding for an ulterior purpose or with a disregard of any proper consideration of the prospects of success.
Expressing the principle this way accommodates the competing principle that a party is entitled to have a practitioner act for him or her even in an unmeritorious case. This principle was expressed succinctly in Ridehalgh v Horsefield …
…
The Court of Appeal [in Ridehalgh v Horsefield] cited, without disapproval, Edwards v Edwards, Davy-Chiesman v Davy-Chiesman and Orchard v South Eastern Electricity Board. There is nothing in the decision which detracts from the principles in these cases. Those principles are, put shortly, that a solicitor does not act improperly or in breach of his or her duty to the court by acting for a party with a hopeless case.
In order to affix liability for costs to a solicitor there must be something further added in the nature of acting unreasonably or for reasons unconnected with success in the litigation or for an otherwise ulterior purpose resulting in an abuse of process or in circumstances resulting in a serious dereliction of duty or serious misconduct in promoting the cause of and the proper administration of justice. I do not accept the submission advanced by White that the law is that because a solicitor’s duty is to the court he or she should refuse to pursue, on behalf of a client, a case which he or she knows to be hopeless … something further is required. It is likely that the fact that a client insists on pursuing a hopeless case will raise an issue or inquiry as to whether the reason for pursuing the case is the pursuit of an ulterior purpose. However, an ulterior purpose or an abuse of process cannot, in my opinion, be assumed simply because of the fact that the case is hopeless.
…
This analysis of the cases makes it clear that the jurisdiction to order costs against an unsuccessful party’s solicitors is enlivened when they have unreasonably initiated or continued an action when it had no or substantially no prospects of success but such unreasonableness must relate to reasons unconnected with success in the litigation or to an otherwise ulterior purpose or to a serious dereliction of duty or serious misconduct in promoting the cause of and the proper administration of justice. Further, the cases establish the proposition that it is a relevant serious dereliction of duty or misconduct not to give reasonable or proper attention to the relevant law and facts in circumstances where if such attention had been given it would have been apparent that there were no worthwhile prospects of success.
(Underline emphasis added)

In Levick v Deputy Commissioner of Taxation, the Full Court of the Federal Court of Australia, citing White Industries with approval and referring to other authorities, said:

Having said that, it is equally important to uphold the right of a court to order a solicitor to pay costs wasted by the solicitor’s unreasonable conduct of a case. What constitutes unreasonable conduct must depend upon the circumstances of the case; no comprehensive definition is possible. In the context of instituting or maintaining a proceeding or defence, we agree with Goldberg J that unreasonable conduct must be more than acting on behalf of a client who has little or no prospect of success. There must be something akin to abuse of process; that is, using the proceeding for an ulterior purpose or without any, or any proper, consideration of the prospects of success.
(As per the original)

Ridehalgh v Horsefield, White Industries, and Levick, were cited and adopted by the Full Court of this Court in Limousin v Limousin (Costs).

In Lemoto v Able Technical Pty Ltd, McColl JA (with Hodgson and Ipp JJA agreeing) summarised the principles relating to the power of a court to make an order for costs against a legal practitioner:

(a)The jurisdiction to order a legal practitioner to pay the costs of legal proceedings in respect of which he or she provided legal services must be exercised “with care and discretion and only in clear cases” …
(b)A legal representative is not to be held to have acted improperly, unreasonably or negligently simply because he or she acts for a party who pursues a claim or a defence which is plainly doomed to fail …
(c)the legal practitioner is not “the judge of the credibility of the witnesses or of the validity of the arguments” … the legal practitioner is not “the ultimate judge, and if he reasonably decides to believe his client, criticism cannot be directed to him” …
(d)A judge considering making a wasted costs order arising out of an advocate’s conduct of court proceedings must make full allowance for the exigencies of acting in that environment; only when, with all allowances made, a legal practitioner’s conduct of court proceedings is quite plainly unjustifiable can it be appropriate to make a wasted costs order …
(e)A legal practitioner against whom a claim for a costs order is made must have full and sufficient notice of the complaint and full and sufficient opportunity of answering it …
(f)Where a legal practitioner’s ability to rebut the complaint is hampered by the duty of confidentiality to the client he or she should be given the benefit of the doubt … in such circumstances “[t]he court should not make an order against a practitioner precluded by legal professional privilege from advancing his full answer to the complaint made against him without satisfying itself that it is in all the circumstances fair to do so” …

(g)The procedure to be followed in determining applications for wasted costs must be fair and “as simple and summary as fairness permits…[h]earings should be measured in hours, and not in days or weeks… Judges … must be astute to control what threatens to become a new and costly form of satellite litigation” …
(As per the original with in-text citations omitted)

Lemoto and White Industries was cited and adopted by Strickland J sitting as the Full Court of this Court in May & Longley, and his Honour said this:

20However, as much as one may be concerned at what advice was given to the appellant on the issue of whether she should pursue an appeal and/or bring an application seeking to adduce further evidence, there is no basis established here for an order for costs to be made against the appellant’s solicitors. For example, it is not open to submit (as the respondents do) that it was the fault of the solicitors that the Amended Notice of Appeal was filed out of time, or that the appellant filed an unmeritorious appeal, or an application in an appeal that was doomed to fail. Absent evidence to the contrary, I have to proceed on the basis that at all times the solicitors were acting on the instructions of the appellant, and here there is nothing to say otherwise. …
…
22A final word, and to revisit a comment made earlier in these reasons. Although the solicitors in their written submissions, and the appellant in hers, stressed that the solicitors were acting at all times on the instructions of the client, it is still incumbent on a legal practitioner to undertake a reality check and provide fearless advice to the client as to the prospects of success.
(As per the original)

In Ex Christmas Islanders Association Inc v Attorney-General (Cth) (No 2), French J undertook a detailed discussion of principles relating to when an order for costs will be made against a legal practitioner, citing various cases, including Ridehalgh v Horsefield, White Industries, Levick, and Lemoto.

In Z (a solicitor) & Limousin, the Full Court of this Court also undertook a detailed discussion of these principles, citing Ridehalgh v Horsefield, Cassidy v Murray, White Industries, Levick, Lemoto, and Ex Christmas Islanders Association, and concluded by saying:

62Thus we conclude in this case a costs order could have been made against the legal practitioner if the proceedings:
(a)were commenced with little or no chance of success, but for an ulterior purpose; OR
(b)were commenced or continued with disregard of any proper consideration of the prospects of success.

(As per the original)

In Pilkvist & Coburn, Carew J provided a concise summary on a court’s power exercising jurisdiction under the Act to make an order for costs against legal practitioners. An appeal in Pilkvist & Coburn was unsuccessful. I will refer to Pilkvist & Coburn later in these Reasons for Judgment.

Indemnity costs

Indemnity costs are only ordered in exceptional circumstances. The matters of Kohan and Kohan and Smith & Fields (third party costs) are both authority for this proposition. The category of cases in which indemnity costs may be awarded are not closed. Costs on this basis have been ordered in matters where an application is pursued with wilful disregard of known facts or clearly established law, and where there has been an imprudent refusal of an offer to compromise. Additionally, indemnity costs may be awarded where a party should have known they had no chance of success, and where a party persists in what should, on a proper consideration, be seen to be a hopeless case.

In Worth & Worth (No 2), the Full Court of this Court summarised the principles for when the Court can make an order for indemnity costs that are relevant to these proceedings:

9The authorities are clear, that for the usual basis to be departed from, exceptional circumstances need to be demonstrated (see, eg, Limousin & Limousin (Costs) (2007) 38 Fam LR 478). The categories of such circumstances are not closed (Yunghanns & Yunghanns (2000) FLC 93-029), but some examples are provided in the oft-quoted decision of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 (“Colgate-Palmolive Co”), and usefully, Holden CJ in Munday v Bowman (1997) FLC 92-784 at 84,660, drew from his Honour’s decision the following:
(a)Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts.

…
(Citations omitted)

…
17… In our view, a case needs to be made out by the wife for giving her greater indemnity than she would receive on a party/party basis, and indeed, something approaching an exceptional circumstance is required. As Sheppard J said in Colgate-Palmolive Co at page 233:
4.In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course …

(As per the original)

More recently, in Harris & Dewell (No 2), the Full Court of this Court said the following in relation to indemnity costs:

23In Kohan and Kohan, the Full Court held, in applying the principles expounded by Sheppard J in Colgate-Palmolive, that an order for indemnity costs represents a “very great departure from the normal standard”. In the later decision of the Full Court in Prantage & Prantage, Thackray and Ryan JJ referred to Kohan and other authorities in the Full Courts of both this Court and the Federal Court of Australia as well as the state appeal courts. Their Honours concluded (at [86]) that the “usual rule” continued to apply in respect of awards of costs in this Court notwithstanding the Full Court accepting that the difference between party/party costs and a party’s actual costs has continued to grow significantly.
24That proposition also derives support from what Callinan J said in Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation. His Honour said that an order for indemnity costs should “be exceedingly rare, as they have a tendency to encourage extravagance and put the quantum of legal fees beyond the effective scrutiny of the courts and their taxing officers”.
25The rarity of an order for indemnity costs can also be seen illustrated by the comments of Lindgren J in NMFM Property Pty Ltd v Citibank Ltd (No 2), referred to by their Honours in Prantage (at [102] – [103]). Lindgren J said that there is no rule that indemnity costs will be ordered “where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation.”
(As per the original with footnotes omitted)

DISCUSSION

There are several issues raised in relation to Mr Sandison’s application for costs:

a.Whether an order for costs should be made against Ms Thornhill and/or OO Lawyers; and if so
b.Whether the costs be confined to certain times during the proceedings; and if so
c.The quantum of costs for the liable periods.

With respect to quantum, OO Lawyers objected to certain items in Mr Sandison’s schedule of costs on the grounds that the charge should not be attributed to them, the charge was not in accordance with the applicable costs agreement or were a double charging, or issue with the seniority of the instructing solicitor.

While I am cognisant that the Court should not attempt “something akin to a taxation of costs undertaken by an assessor”, I am of the view that dealing with the objections raised by OO Lawyers in relation to certain charges will “obviate for the parties the delay and added expense of an assessment”. This will permit me to make an order for costs at scale, party/party, or fix a sum in accordance with rule 12.17(1)(a) of the Rules.

The findings in my judgment are highly relevant to the costs to be paid and who is liable for those costs as follows:

THE EVIDENCE
64For the reasons that follow, I have found that the applicant is not a witness of truth, and I cannot accept anything she has said, deposed or proffered as evidence in these proceedings, unless the respondent has agreed or there is independent, objective evidence to support her case.
65The applicant’s evidence was an attempt to cover up what she now asserts were lies in the [GG] proceedings with more recent inventions. This conduct is at the extreme end of credibility and has only frustrated the Court processes and proper administration of justice, in that a hearing at cost to the respondent and the public was necessary to demonstrate that the story the applicant told in these proceedings is but a fabrication.
Affidavit evidence and exhibits
66The only evidence before the Court that could support the existence of a de facto relationship, within the meaning of the Act, is that contained in the applicant’s affidavit together with her oral evidence, as the entirety of the remaining evidence, being the respondent’s case and oral evidence, did not support the existence of a de facto relationship. The facts in her affidavit were inconsistent with her affidavits deposed in the [GG] proceedings and there were inconsistencies in her oral evidence.
67Despite this glaring flaw in her case, counsel for the applicant submitted that as to the question of the existence of a de facto relationship is a matter of law, on the accepted facts and laying great emphasis on the fact that the parties had a child, I could find a de facto relationship existed between them.
68The flaw in this argument is that I must, where there is a contest, as there is here, determine the facts enabling me to make a finding as to a matter of law. Further, the applicant must prove the existence of a de facto relationship and it is not for the respondent to prove a de facto relationship did not exist. The applicant’s credibility was shattered at the hearing, as will become apparent, resulting in the respondent’s evidence being preferred and ipso facto the applicant failing to prove her case.
…
92Part of the applicant’s evidence was a statement tendered on the first day of the hearing, of further evidence she sought to rely upon.
93This document, rather than assist her case, further muddied the waters and is support for the finding I have reached that the applicant will change her story and say whatever she thinks will convince this Court that she and the respondent were in a de facto relationship.

…
123In cross-examination, the applicant said the reason she did not disclose her de facto relationship in the [GG] proceedings was because the respondent told her they were not in one. This evidence of asking the respondent if they were in a de facto relationship is rejected by me, given the applicant had her own lawyers at this time and they were the people to ask, not her […] boyfriend. Further, her lawyers were well aware of the existence of [X’s] father at this time and would have clarified with her the nature of their relationship. This evidence was but a bald-faced lie.
…
140It is apparent the applicant did not declare that she was receiving $1,000 per week from the respondent and did not declare that she had a partner in any form. The applicant submitted to Centrelink a position consistent with the respondent’s evidence and her evidence in the [GG] proceedings.
141Under cross-examination on this failure to declare the monies received from the respondent, the applicant answered:
THE APPLICANT: I was not receiving any money for my newborn because I’d been receiving the money from [Mr Sandison] for a long time for myself. I didn’t put it to the newborn.

This answer typifies the entirety of the oral and written evidence of the applicant. When she was found out in a lie, she attempted to cover it up with another lie. This cover up lie did not assist her in any event, for had that been her belief, she should have declared this payment as income and she did not.
142The applicant, being aware she had been caught out, provided a second lie to the Court. The applicant said when questioned on her failure to declare the monies being paid to her by the respondent or that he was her partner at the time, was that she spoke to a woman at Centrelink, explained what the relationship was and what was happening, and the woman told her she did not need to worry about disclosing the money or the relationship.
143I reject her evidence that any employee of Centrelink would tell a person not to disclose money they were receiving from the parent of their child, given the purpose of Centrelink is to support parents and children who are unable to support themselves and to minimise this burden on the taxpayers of Australia.
144In relation to not declaring the respondent as her partner, this evidence makes sense if the relationship she described to the woman at Centrelink was the relationship the respondent has consistently asserted they had and that she said it was in the [GG] proceedings, which is that they had a commitment to the support of [X], but not to each other or a shared life, and they were not living together nor in a domestic relationship.
145The applicant realised she had been caught out again and a third lie was told, namely that on multiple occasions, she had rung Centrelink to tell them of the receipt of $1,000 per week. There is no record of any such telephone call being made from the records produced under the FOI request. Centrelink would have never known this was occurring, even if they had accessed her banking records, because this money was being paid, at her direction, into a bank account in her sister’s name.
146When asked why she did not declare the payment of this money in her two financial statements filed in the [GG] proceedings, the applicant told her fourth lie and said that her lawyers at that time told her this money was not relevant to put in her financial statement. I reject that evidence as scandalous.
147This too is a feature of the applicant’s evidence; blaming her lawyers, unknown people working in government departments, the respondent, and anyone else she has involved in this charade of lies.
…
183On 2 November 2014, the applicant sent an email to the respondent, saying inter alia:
It is very clear to me now that things between us will never be resolved.
…
I do not want to ever keep your son from you, he is just as much yours as he is mine but I need to protect myself and my relationship with him.
I will not be able be to give you [X] until I have a interim court order. …
…
I think we both know as much as it hurts … we are finished together.
(As per the original)

184On 14 May 2015, the applicant sent an email to the respondent, saying inter alia:
I am sorry this relationship failed, I believe we are both just as responsible for the demise. There are several upsetting issues that keep coming to the surface for me and it is very clear that nothing is going to change.
(As per the original)

185All of these emails are consistent with the respondent’s assertion that the parties were never in a de facto relationship and at no time cohabitated in any residence, either at the applicant’s various houses or the respondent’s house at [Suburb FF], or had a common intention for a shared life in any sense other than as parents of [X]. In light of this evidence, the applicant has failed to establish that there was a common intention or a shared life in the period she asserts a de facto relationship was on foot.
…
253These findings of fact coupled together with the applicant’s evidence in the [GG] proceedings and to Centrelink that she had no partner, that she and the respondent were not in a de facto relationship, with my finding that she was not a witness of truth in these proceedings, is overwhelming evidence to support making a declaration that the parties were never in a de facto relationship.
254Credit findings in this matter, despite submissions from counsel for the applicant that they would not impact on my decision, are crucial. My decision is based upon which story I accept; the respondent’s consistent story or the applicant’s inconsistent story. As the Full Court said in Ricci & Jones:
61We agree with Murphy J [in Jonah & White [2011] FamCA 221] at paragraph 39 that the making of a declaration that a de facto relationship existed does not involve the exercise of discretion but rather a consideration of the facts which may found the jurisdiction.

(Bold emphasis added)
255The respondent’s story is the only credible story, and for all these reasons I dismiss her application, and make a declaration that the parties were never in a de facto relationship.
(As per the original with footnotes omitted)

Should a costs order be made?

Ms Thornhill’s case was entirely unsuccessful and doomed to fail at the outset given the evidence she relied upon at the threshold hearing. Additionally, her conduct was at the extreme end of duplicitous, and her legal representatives failed to address these most serious flaws in any meaningful way.

In light of the findings in the Reasons for Judgment, it is appropriate I exercise my discretion to make a costs order.

The issue is who should be liable for those costs and the quantum of costs.

The financial position of each of the parties to the proceedings

Ms Thornhill’s financial position

Ms Thornhill blames her former legal representatives (i.e. OO Lawyers and Mr Eckhardt) for failing to file evidence as to her financial position as part of the threshold application. Ms Thornhill also blames her former legal representatives for adducing further evidence, in the form of a written statement, without including her present financial position. The parties’ financial positions have no relevance in determining whether two people are in a de facto relationship and there cannot be criticism of her former legal representatives for this.

Despite blaming her former legal representatives for this, Ms Thornhill failed to give evidence of her financial position in her written submissions. However, at the costs hearing for submissions, Ms Thornhill tendered a bundle of documents in relation to her financial position.

Although I have had regard to these documents, I note her credit at the threshold hearing was impugned and I remain cautious that the documents tendered may not accurately depict her financial position.

What is uncontroversial is that she has the care of the parties’ child, as well as the care of three children from her ex-husband, two of whom are now adults, and that she owns no real estate. From the bundle of documents tendered, it appears that Ms Thornhill is currently on JobSeeker payments from Centrelink. However, I accept she has little by way of financial resources or income. Mr Sandison pays child support for his son in the amount of approximately $1,175 per month.

In the bundle of documents tendered, Ms Thornhill exhibits some purported loan agreements she has taken out with individuals. I have little faith in the authenticity in these documents, particularly where all but one has a date stating the agreement was executed prior to the date on the cover of the agreement.

In any event, impecuniosity is no barrier to an order for costs.

The financial position of OO Lawyers

If an order is made by the Court, their insurers will pay the amount initially, hence their involvement in the matter. There was no further evidence filed in this regard.

The conduct of the parties to the proceedings and whether any party to the proceedings has been wholly unsuccessful

Ms Thornhill’s conduct and success (or lack thereof)

Ms Thornhill was wholly unsuccessful in her application and her conduct was unacceptable. She failed to address, in any meaningful way, the stark inconsistency in the case she presented in the GG proceedings, which was consistent with that she declared as correct to Centrelink, and the story she was now peddling before the Court in the threshold application.

Her former legal representatives failed to address this fundamental issue in the Case Outline prepared on her behalf or file fulsome or acceptable evidence to deal with this crucial issue.

The only explanation given for this significant evidentiary lacuna in her affidavit was as follows:

27.In early 2013 I was going through a property settlement with [Mr GG]. I didn’t want [Mr GG] to know that I was in another relationship. …

(As per the original)

In her statement tendered on the first day of the threshold hearing, Ms Thornhill asserted:

14.[Mr Sandison] refers to my affidavit filed 4 March 2014 where I depose that I wasn’t in a relationship with [Mr Sandison] at that time. [Mr Sandison] and I had a volatile relationship … I broke up with him on numerous occasions … only to then reconcile.
(As per the original)

When questioned on this and other difficulties with her evidence and after being given an opportunity to confer with his client, Mr Eckhardt responded that the question of whether a de facto relationship existed is a question of law and not what the parties think it is. That answer failed to acknowledge that:

a.A Judge is required to make findings of facts on contested issues, as was the case here, to determine whether jurisdiction under the Act was enlivened; and
b.Ms Thornhill bore the onus of proof.

Further, I note the judgment of Peake v Benedict (Costs) in relation to being wholly unsuccessful. In that matter, it was determined that because the party asserting a de facto relationship existed failed to achieve this outcome, that party was wholly unsuccessful in establishing jurisdiction. This is the case here. Little attention was paid to the question of whether jurisdiction would be enlivened, in the absence of any evidence from Ms Thornhill to explain the fatal inconsistency of all her evidence in the GG proceedings, to that before me. Had that question been asked by her former legal representatives, the clear fatal flaws in her case presented should have been apparent. They may have been possibly addressed, for example, by the filing of an updated affidavit and seeking a certificate under section 128 of the Evidence Act 1995 (Cth) if required when relying upon same, none of which was done.

Ms Thornhill changed her evidence relied upon prior to the threshold hearing, during the threshold hearing, and during cross-examination, on multiple occasions, and in tendering the written statement, sought to introduce “new” evidence not contained in her affidavit. This is unacceptable conduct.

In Pilkvist & Coburn, Carew J dismissed an application for costs to be made against Ms Pilkvist, instead holding her former legal representatives jointly and severally liable for Mr Coburn’s legal personal representatives’ costs. The reasons cited by her Honour for dismissing the application against Ms Pilkvist were “factors of special disadvantage” to Ms Pilkvist and that the proceedings in that matter should have never been commenced.

Although there are differences between Pilkvist & Coburn and the present matter, there are also similarities. One prominent similarity are the inconsistencies in the asserted dates for the commencement of the de facto relationship and separation on a final basis, as both cases had multiple dates for both milestones in the relationship.

In Pilkvist & Coburn, Ms Pilkvist maintained throughout the proceedings that the de facto relationship between the parties had never broken down, had not broken down when her partner Mr Coburn was removed to a nursing home, and was continuing until his death. In those circumstances, Carew J found that as matter of law, the Court could never have exercised its power under section 90SM of the Act, as the Court must be satisfied that not only that a de facto relationship existed, but that it had broken down, in order to enliven jurisdiction under section 90SM.

It is apparent from Pilkvist & Coburn that this was a question of law that any competent lawyer should have been cognisant of when instructions were first taken, let alone as the matter continued, and thus Ms Pilkvist, who had relied upon her lawyers’ legal competence – or in that matter incompetence – was not liable for costs, hence the “special disadvantage”.

Going to the matter before me, in her written submissions, Ms Thornhill submitted the following:

a. It is conceded that [Ms Thornhill] was wholly unsuccessful.
…
c.The court … went so far as to express its concern that [Ms Thornhill’s] case proceeded to a final hearing despite clear evidence from [Ms Thornhill] herself that a de facto relationship never existed between the parties where it should have been apparent to competent legal representatives that the credit of the parties would be crucial to my [sic] findings of fact.
…
e.It should have been apparent to her legal representatives that the credit of the parties would be crucial to the Court’s findings of fact. [Ms Thornhill’s] legal representatives had four years within which to advise [Ms Thornhill] and did not do so.
(As per the original with clarification)

Although correct, it is not for Ms Thornhill to now say the responsibility for the result of the litigation lies solely at the feet of OO Lawyers. It was her application filed well before OO Lawyers came onto the record that she pursued. Further, she has not waived client legal privilege, which is her right, however that would have allowed the Court to know what advice was given.

Further, this was a ploy she used in the threshold hearing before me to cover up her lies, blaming lawyers and others for decisions she made, and it was rejected given she was not a witness of truth. Ms Thornhill was well aware of the lies she told, either in the GG proceedings or before me, and yet persisted with the matter.

Ms Thornhill filed her Response to Initiating Application on 25 July 2016 in respect of parenting and seeking a declaration that a de facto relationship existed between her and Mr Sandison. OO Lawyers only came onto the record on 8 November 2018. However, OO Lawyers continued to pursue this application, and thus, took onboard the consequences of such a course.

OO Lawyers cannot be responsible for costs incurred prior to them coming onto the record. Such a concession was made by Mr Sandison in his reply submissions. If I make a costs order against OO Lawyers, it could only be from 8 November 2018 when they came onto the record and only Ms Thornhill could be liable for costs prior to that date, should I so order.

Ms Thornhill proposed OO Lawyers and Mr Eckhardt be liable for the costs incurred by Mr Sandison for the following reasons:

a.She did not receive advice as to the clarity of the evidence that a de facto relationship existed; and
b.Her legal representatives should have known from at least early 2020 that significant contradictions existed in her case and the evidence in support.

I assume that this means she did not know she had to be specific about commencement dates, times of separation, and periods of reconciliation. As Ms Thornhill has not disclosed what advice she received nor waived her privilege, I cannot make a finding in this regard. Further, this misses the gravamen of the concern the Court has in that there was no evidence filed to explain the inconsistency in her current evidence regarding the status of her relationship with Mr Sandison, and that in the GG proceedings. Ms Thornhill is also responsible for her actions in this debacle.

The circumstances in this matter are different from that in Pilkvist & Coburn in that Ms Thornhill suffers no special disadvantage, despite a submission made by OO Lawyers that Ms Thornhill exhibited some “cognitive dissonance”. Ms Thornhill pursued her application, knowing the fundamental untruths in her own story, and her lack of credit was cemented by her multiple attempts to shore up her story during the threshold hearing, as her subterfuge and lies were revealed. This is unacceptable conduct.

The “cognitive dissonance” submission made on behalf of OO Lawyers read as follows:

77.[OO Lawyers] was aware that [Ms Thornhill] had difficulties with written and oral testimony. The parenting proceedings were settled by consent without an assessment of the applicant by an expert, however it seems to be the case that [Ms Thornhill] had been exhibiting some cognitive dissonance since at least the time of the [GG] proceedings.

(As per the original with clarification)

Such a submission is scandalous and without any foundation or merit, was not based on any evidence whatsoever, and is rejected. In any event, if OO Lawyers had a view that Ms Thornhill suffered some “cognitive dissonance”, this can only go against their case and is support for a finding that there has been a serious dereliction of duty on their part.

Ms Thornhill knew what she had deposed in the GG proceedings, and at minimum, should have told OO Lawyers what she had said about the status of her relationship with Mr Sandison in that matter. Ms Thornhill simply made up a new story before me and OO Lawyers pursued the matter on her behalf.

OO Lawyers knew or ought to have known that she had been involved in prior proceedings, as Mr Sandison’s affidavit filed 6 March 2020 revealed many of the inconsistencies apparent as to the status of their relationship, including evidence deposed in the GG proceedings. Additionally, orders were made on 10 October 2017 granting leave to Mr Sandison’s legal representatives to inspect the file in the GG proceedings, highlighting that there was issue with respect to the GG proceedings before 6 March 2020. There is no cogent explanation from OO Lawyers for their failure to address this most important issue head-on in the material they relied upon.

I also note that various orders were made throughout the proceedings, including on 17 November 2022, granting leave to both parties to file updating affidavits in relation to the threshold application, which OO Lawyers did not take advantage of, despite their request at this court event for leave to do so.

Additionally, Mr Sandison’s legal representatives wrote to OO Lawyers on 13 January 2023, noting that Ms Thornhill had not filed any updating material and requested they confirm what documents Ms Thornhill intended to rely upon at the threshold hearing. They did not respond. This conduct is unacceptable.

Mr Eckhardt bears no responsibility in this regard, and although his submission on what the Court requires to make a finding of the existence of a de facto relationship was not accepted, he was entitled to rely upon OO Lawyers to file evidence addressing Ms Thornhill’s inconsistent evidence and they did not do so. Thus, I do not see Mr Eckhardt could be liable for any costs, noting that the issue of costs against Mr Eckhardt has been settled.

The only evidence supporting the existence of a de facto relationship was that filed and adduced by Ms Thornhill, as part of the threshold application, in an affidavit that purports to be sworn or affirmed on 17 December 2018, and signed and filed on 14 February 2020. This is despite Ms Thornhill’s oral evidence at the threshold hearing and at the costs hearing that there were other affidavits she had filed previously addressing these inconsistencies, and that an affidavit had been prepared for the threshold hearing yet not filed. If same was prepared, Ms Thornhill was correct that it was not filed or relied upon.

The reality was that Mr Sandison’s evidence, the evidence of Ms Thornhill in the GG proceedings, the Centrelink documents, and Ms Thornhill’s emails, were all consistent with a finding that that there was no de facto relationship and that the Court’s jurisdiction was not enlivened.

When OO Lawyers came onto the record, the threshold application was at large. By 3 March 2020, it was the only cause of action left for determination in the proceedings. Additionally, the threshold application was listed before Carew J in February 2020, and Mr Sandison was successful in his application to vacate that hearing.

It behoved OO Lawyers to carefully consider Ms Thornhill’s evidence in respect of the threshold application and her evidence in the GG proceedings concerning the status of her relationship with Mr Sandison, at least in 2020, and then again in 2023. I have no evidence that they did so, given the insufficient affidavit evidence relied upon at the threshold hearing. This conduct is not a matter for instructions but goes to the heart of legal competence and OO Lawyers’ submissions were silent on this issue.

It behoved OO Lawyers to ensure that if there was an inconsistency in Ms Thornhill’ evidence in the GG proceedings and that which they relied upon at the threshold hearing, that they addressed this most salient issue, particularly where Ms Thornhill had the onus of proof. This did not occur, and that failure is not due to instructions from a client, but rather falls within the forensic choices lawyers make on behalf of their clients, and goes to the very heart of competency and the role of a lawyer in litigation.

The only mention of the inconsistencies in Ms Thornhill’s case at the threshold hearing and that which she plead in the GG proceedings was as set out at paragraph 27 of her affidavit:

27.In early 2013 I was going through a property settlement with [Mr GG]. I didn’t want [Mr GG] to know that I was in another relationship. …

(As per the original)

The Case Outline prepared on Ms Thornhill’s behalf did not even mention the inconsistent evidence she had given the Court, despite this being clearly apparent from Mr Sandison’s 6 March 2020 affidavit.

The conduct of OO Lawyers

The case was poorly prepared and presented on behalf of Ms Thornhill. There were multiple dates of the commencement and cessation of the alleged de facto relationship across the Response to Initiating Application filed in July 2016, in Ms Thornhill’s affidavit, and in the Case Outline prepared on her behalf. This was summarised in Mr Sandison’s written submissions:

4.21 The Applicant failed to properly plead her case:-
4.21.1In the de facto application, the Applicant sought a declaration that the parties were in a de facto relationship from April 2012 to 22 December 2015.
4.21.2In an Affidavit sworn on 23 August 2017 and filed on 27 August 2017, the Applicant deposed at paragraph 8 that the parties “commenced cohabitation on or about 6 December 2011” and at paragraph 9, that they “separated on or about 28 November 2015”.
4.21.3In an Affidavit sworn and filed on 4 December 2017, the Applicant deposed as follows:-
(a)at paragraph 4 that the parties “were in a de facto relationship between April 2013 to December 2015”;
(b)at paragraph 21 that the parties “commenced cohabitation on or about 2 April 2013”; and
(c)at paragraph 22 that the parties “separated on or about 26 December 2015”.

4.21.4In an Affidavit sworn and filed 18 December 2018, the Applicant deposed at paragraph 3 that the parties were “in a de facto relationship that commenced in or around April 2013 and ended December 2015”.
4.21.5In an Affidavit sworn and filed 14 February 2020, the Applicant deposed at paragraph 3 that the parties were “in a de facto relationship that commenced in or around April 2013 and ended December 2015”.
4.21.6In the Applicant’s Case Outline document filed 28 February 2023 and authored by the Applicant’s Counsel:-
(a)The alleged relationship is described as being “from April 2015 to 22 December 2015” at paragraph 2;
(b)The Orders sought at paragraph 7 are in relation to the period “from April 2012 to 22 December 2015”;
(c)The alleged de facto relationship is referred to in the chronology as having commenced in April 2013 (page 2); and
(d)The alleged relationship is described as being “from April 2013 until December 2015” at paragraph 10 and paragraph 15.

(As per the original)

It was not until the threshold hearing commenced and during Ms Thornhill’s cross-examination that the date of commencement and cessation of the relationship was finally revealed as April 2013 until December 2015.

This failure to properly plead her case, and the poor presentation of the case continued at the threshold hearing, is not due to instructions, but rather it goes to the heart of competent legal representation.

Ms Thornhill was to file and serve the material she intended to rely upon by 6 January 2023, and despite the request from Mr Sandison’s legal representatives as noted above on 13 January 2023, she, and more specifically, OO Lawyers failed to do this.

To correct the clear gaps in the preparation of their client’s case, OO Lawyers and Mr Eckhardt determined to tender a statement during the threshold hearing, which I accepted. The statement was dated 13 March 2023.

The statement tendered was inconsistent with Ms Thornhill’s affidavit relied upon at the threshold hearing in many respects, was further evidence of her inability to tell the truth, and demonstrated her propensity to say whatever was required to make out a case. Again, the preparation and tendering of this statement was not a matter for Ms Thornhill but was a forensic decision made by OO Lawyers.

It was always open to OO Lawyers to request a certificate pursuant to section 128 of the Evidence Act 1995 (Cth) if they were concerned that filing an updated affidavit that was inconsistent with her prior affidavits would have put her at some legal jeopardy for perjury and the like. This was not requested at any time. Again, this was a forensic decision by OO Lawyers.

I am unclear what attention, if any, was paid to the preparation of Ms Thornhill’s case prior to the day of the threshold hearing.

Mr Sandison has made out a clear case that a costs order be made and a clear case for an indemnity cost ought to be made in part, given the evidence from Ms Thornhill herself. Such was the state of her evidence at the threshold hearing that her case was doomed at the outset and any competent lawyer, after reading the material filed in the GG proceedings, would have advised Ms Thornhill that there was no prospect of success given the inconsistency in all the evidence filed in the GG proceedings in 2014, the Centrelink documents, and her emails, to the evidence that she was now relying upon.

I accept entirely the position put forward on behalf of OO Lawyers that parties are entitled to present a hopeless case and lawyers in representing them are not thereby liable for costs. However, legal representatives have a primary obligation to the court and administration of justice first, and then to their client second. If a client persists in pursuing an application that any competent lawyer would know was doomed to fail, and after having been given an opportunity to confer with your client when these deficiencies were pointed out, there are at least two solutions:

a.Withdraw from the case; or
b.Obtain written instructions from the client that advice has been given that the case may be doomed to fail, that a cost order may follow, and that the client has given instructions to proceed with the litigation notwithstanding the advice given.

OO Lawyers did not withdraw, nor have I been provided with signed instructions from Ms Thornhill to proceed with the case. At the costs hearing, counsel for OO Lawyers asserted that such a letter would be subject to client legal privilege. This cannot be the case. The letter would simply assert that advice – without specifics as to the advice – has been given with respect to the threshold application and the instruction from Ms Thornhill is to proceed. Such a letter is a clear defence to this exact situation where an application is made for legal representatives to pay costs and is a prudent step when acting for a client who has the burden of proof and is relying upon current evidence that is inconsistent with prior evidence.

I apprehend no thought was given to obtaining written instructions given Mr Eckhardt’s submission to me that the question of the existence of a de facto relationship was a matter of law and not what parties believe the relationship is. This was an extraordinary submission considering the significant and fatal inconsistencies in his client’s own evidence that had not been addressed. From that submission, I could conclude that Mr Eckhardt and OO Lawyers had failed to understand at least the following:

a.Until I determined the disputed facts, I would be unable to find I had jurisdiction to entertain the application;
b.The question of whether a de facto relationship existed at law was underpinned by the findings of fact I am required to make; and
c.In a matter where there was such a significant contest on the facts, including the commencement and cessation date of the alleged de facto relationship, credit would loom large.

Although these apparent failures may sound as to Mr Eckhardt’s incompetence, he was not responsible for the state of the evidence or in the decision to continue the threshold application on the evidence presented. I was informed at the costs hearing that Mr Eckhardt was briefed late in the proceedings and I accept that there is no case for costs against him.

The fact is OO Lawyers continued to represent Ms Thornhill and were seriously derelict in their duty to her demonstrated by their decision to run the case on the evidence relied upon.

The issue for determination is whether in light of these facts, was the conduct of OO Lawyers unreasonable, such that a costs order against them in part is warranted? I find it was for the following reasons.

Little, if any attention, was given to the problematic evidence before the Court of Ms Thornhill’s earlier sworn affidavits and financial statements in the GG proceedings of there being no de facto relationship, and her claim now was that they were in a de facto relationship.

That issue was not addressed in the affidavit she relied upon for the threshold hearing filed 14 February 2020. Nor could this issue have been addressed as this affidavit was filed prior to Mr Sandison’s affidavit filed 6 March 2020, wherein he comprehensively outlined most of, if not all, the inconsistencies in Ms Thornhill’s affidavit, citing the affidavits and financial statements in the GG proceedings, the Centrelink documents, and the emails sent by Ms Thornhill to Mr Sandison. No affidavit of Ms Thornhill filed after 6 March 2020 was relied upon at the threshold hearing.

There was either a forensic choice to ignore these clear inconsistencies by relying upon one affidavit filed prior to 6 March 2020, which did not address that most important issue before the Court, namely which story to accept, or a failure to:

… give reasonable or proper attention to the relevant law and facts in circumstances where if such attention had been given it would have been apparent that there were no worthwhile prospects of success.
(As per the original)

In either scenario, such conduct amounts to a serious dereliction of duty in the White Industries sense. A solicitor can choose to believe their client and thereby represent them to the best of their ability. However, at a minimum, the evidence relied upon must support the story now being told where it is inconsistent with a prior story and particularly where your client has the burden of proof.

Referring again to Cassidy v Murray:

Whereas some of the cases say that there must be “a serious dereliction of duty” by the solicitor before a costs order can be made against that solicitor, in our view the matters identified by the Master of the Rolls in Ridehalgh v. Horsefield accurately reflect the law, which, in its application to this jurisdiction, can be set out as follows:
1.Pursuant to s. 117(2) Family Law Act, the Court has jurisdiction to make an order for costs against a solicitor or a non-party.
2.The court should not make such an order without giving the person to be affected by the order an opportunity to be heard.
3.The Court may make an order for costs against a solicitor without the necessity to establish that the solicitor has been guilty of serious professional misconduct.
4.The solicitor has a duty to the Court to promote the interests of justice whilst at the same time attending to the needs of the solicitor’s client.
5.A mistake or error of judgment would not justify an order for costs against a solicitor. However, misconduct, default or negligence, any of which are found by a Court to be of a serious nature, may be sufficient to justify an order.

6. The jurisdiction is compensatory.
Whilst the English cases talk of the conduct needing to be “serious or gross”, it adds nothing to set the threshold at “serious or gross”, rather than at “serious”, “gross” being a more extreme term than “serious”. We think that this represents an appropriate balance between the competing public interests involved, namely, the concern that lawyers should not be deterred from pursuing their clients’ interests for fear of being made personally subject to orders for costs, and the principle that innocent parties should not be occasioned costs, for which they would not otherwise be liable, as a result of the inappropriate conduct of solicitors.
(As per the original)

The conduct of the threshold application was the choice of OO Lawyers and not a matter of instruction. That this was their choice and not Ms Thornhill’s was confirmed by the Case Outline filed on her behalf, which made no mention at all of these problematic evidentiary issues which bore directly upon the question of whether the Court’s jurisdiction could be enlivened. This forensic decision was confirmed by Mr Eckhardt’s submission that the finding of a de facto relationship is matter of law and not what a party thinks it is, when Ms Thornhill, who bore the onus of proof, had failed to address these issues at all.

In their written submissions, OO Lawyers refer to an interim judgment of Johnston J in relation to the parenting proceedings, and submitting his Honour:

… referred to these inconsistencies as “a lack of care” in giving her evidence …
(As per the original)

But going to the paragraph in question in his Honour’s judgment:

16As was pointed out by counsel for the father, the mother has given two different dates for when she moved into her parents’ [Suburb K] home. I accept that this appears to demonstrate some lack of care by the mother by giving inconsistent evidence. …
(As per the original)

That submission was of no assistance to help me understand the forensic choices made by OO Lawyers at the threshold hearing.

On these facts and consistent with the decision of Carew J in Pilkvist & Coburn, Ms Thornhill’s case could never have succeeded, as she failed to address the clear and known contested issues of fact that the Court was required to determine in order enliven its jurisdiction, in circumstances where she bore the onus of proof.

I find that there was a serious dereliction of duty by OO Lawyers in failing to grapple with the evidentiary issues and consistent with Z (a solicitor) & Limousin, they continued the threshold application:

… unreasonably with disregard of any proper consideration of the prospects of success …
(As per the original)

Further, I could find that there was “an intention to use the proceeding for an ulterior purpose or with a disregard of any proper consideration of the prospects of success” for the following.

No updating affidavit was filed in accordance with the directions made on 17 November 2022; a direction sought by OO Lawyers, that set out Ms Thornhill’s case and addressed the known and glaring inconsistencies in her current application with the GG proceedings and supporting documents proffered by Mr Sandison in his evidence.

OO Lawyers acted for Ms Thornhill on a “no win, no fee” basis. The terms of the Costs Notice filed 17 March 2023 states:

It is agreed that any costs outstanding or incurred by you in the future will be payable only by way of funds received by you upon a resolution of the matter.
(As per the original with bold emphasis added)

In light of the significant evidentiary issue going to the very heart of the Court’s jurisdiction and that Ms Thornhill bore the onus of proof to establish her claim, the failure to file any material to address these inconsistencies and enable a court to find jurisdiction is inexplicable unless there was an ulterior purpose in continuing the litigation. Combining the “no win, no fee” contingency costs agreement and the above failure to file evidence, I can infer the matter was continued by OO Lawyers on the chance that Mr Sandison would pay Ms Thornhill some “go away money” by way of resolution and thus they would have their fees paid.

In the absence of payment of fees by Ms Thornhill, it was in OO Lawyers’ interest to continue to pursue the threshold application as it was their only means to have their fees paid.

OO Lawyers could have had no reasonable grounds for believing that Ms Thornhill’s case would be successful before a Judge in the absence of even attempting to grapple with the clear inconsistencies in her own evidence, of which they were aware from at least 6 March 2020. They may have had some reasonable grounds to believe Mr Sandison would prefer to pay Ms Thornhill some money, rather than pay the legal fees he has incurred in the threshold application, now in the vicinity of some $270,000. Such conduct is an improper or ulterior purpose to maintain litigation and goes to the very heart of the administration of justice.

I accept it would be unsafe to rely only upon the inference above to ground my decision of liability for costs. However, I have also found that there was a serious dereliction of duty on the part of OO Lawyers to their client, this being the primary submission of Mr Gittoes-Caesar on behalf of Mr Sandison, and hence a finding that their conduct was unreasonable.

Whether either party to the proceedings has made an offer

On the evidence, no party made an offer to settle the threshold application.

Ms Thornhill submits that although she did not make an offer in writing to settle the threshold application, criticism is made that Mr Sandison did not make an offer in writing. This submission is adopted by OO Lawyers.

In her written submissions, Ms Thornhill referred to the decision of Higginbotham and Robinson, where Nygh J said (with Simpson and Smithers JJ agreeing) that:

… when one looks at paragraph (f) it is quite clear that the purpose of that provision is to ensure that offers to settle, if made seriously, are considered seriously, to ensure that the cost of litigation is avoided, the workload of this Court is lightened, and one other consideration is certainly that a party with greater wealth is not placed in a position whereby he or she can wear out the other by simple attrition.
(As per the original)

The submission that Mr Sandison should have, or ought to have, made an offer to settle, is rejected. The Court was faced with a binary decision. Either there was a de facto relationship or there was not.

Further, Ms Thornhill had the onus of proof to discharge, not Mr Sandison, and it was clear on his filed material and the letters sent by his legal representatives that he disputed the nature of the relationship asserted by Ms Thornhill at all times.

Ms Thornhill’s submission on the issue of offers is rejected and she conceded that she did not make an offer to settle.

Having fleshed out the relevant factors weighing in my determination, I will now assess the quantum of costs and the relevant periods.

Quantum of costs sought

The quantum of costs sought by Mr Sandison is as follows:

Date Range	Indemnity	Party/Party (70%)	Scale
Date Range	Indemnity	Party/Party (70%)	Low	High
18/01/17-07/11/18	$102,191.26	$71,533.88	$51,552.38	$58,742.57
08/11/18-06/03/20	$12,765.23	$8,935.66	$8,749.89
07/03/20-06/01/23	$13,435.06	$9,404.54	$6,337.39	$7,028.43
07/01/23-15/03/23	$98,013.23	$68,609.26	$39,586.34	$60,542.72
Total	$226,404.78	$158,483.34	$106,226.00	$135,063.61

Schedule of costs

Going now to the issues raised by OO Lawyers of certain charges in the schedule of costs prepared on behalf of Mr Sandison.

Adjournment of the threshold hearing in 2020

The threshold application was listed for hearing on 6–7 February 2020 before Carew J. Orders were made by her Honour on 24 January 2020 vacating those hearing dates. As this was Mr Sandison’s application, I accept that Ms Thornhill and OO Lawyers should not be liable for costs in for this application, and I will reduce the costs sought by $2,530.55 on an indemnity basis, $1,771.39 on a party/party basis, and $987.76 on a scale basis.

Application for summary dismissal

In written and oral submissions, counsel for OO Lawyers objected to the costs incurred by Mr Sandison for preparation of an application to dismiss the threshold application in circumstances where the application was not filed. I accept this submission and will reduce the costs sought in that regard, being $2,304.80 on an indemnity basis, $1,613.36 on a party/party basis, and by $898.32–$1,071.08 on a scale basis.

Billing of Ms SS

In oral submissions, counsel for OO Lawyers referred to an invoice dated 15 March 2023 issued by Ms SS, who appeared on behalf of Mr Sandison at the threshold hearing.

The unit measurement of the invoice is in days, being two and a half days of preparation and three days of hearing.

This is not in accordance with the most recent costs agreement entered into with Ms SS dated 8 February 2023 in respect of preparation.

The costs agreement stipulates that preparation is charged on an hourly basis of $1,100 including GST and the charge of two and a half days for reading and preparation is not within the costs agreement, unless I accept that there were 25 hours spent reading and preparing for this matter over a period of time, and I do not accept that this is correct.

I will reduce the time allowed to 15 hours or $16,500, which reduces this item by $11,000 on an indemnity basis and $7,700 on a party/party basis. The charges on a scale basis appear correct in this regard.

Double charging

In oral submissions, counsel for OO Lawyers objected to what appeared to be a form of double charging by the solicitors and Ms SS for Mr Sandison. One example was that the Case Outline was prepared by Lander and Rogers, and although Ms SS settled the Case Outline, she has still charged two and a half days for reading and preparation.

In circumstances where there was a substantial amount of material to be read in the GG proceedings, the subpoenaed material including Centrelink documents and the material filed for these proceedings, both in affidavits and tender bundles, it would be appropriate that the solicitors dedicated significant time to reading and preparation.

While only the parties ended up being cross-examined, there were multiple lay witnesses who were not cross-examined, yet their affidavits were required to be considered and an evaluation of how their evidence sits with the case presented.

I also take notice that this threshold application involved a significant fact-finding exercise, given the failure of OO Lawyers to respond to even the most basic of requests for information and the evidence Ms Thornhill was going to rely upon.

I reject the submission of a double counting of preparation for the threshold hearing.

Seniority of the instructing solicitor at the threshold hearing

In oral submissions, counsel for OO Lawyers objected to the charging of an instructing solicitor in circumstances where senior counsel was briefed, or alternatively, the seniority of the instructing solicitor.

Although I was not taken to a specific example, a review of the schedule of costs provided indicates two things about the instructing solicitor.

First, she was a more junior solicitor than the previous solicitor with carriage of the matter. In May/June 2022, the previous solicitor with carriage charged $627 per hour including GST, while the instructing solicitor at the time charged $473 per hour including GST. This remained the case at the threshold hearing.

Second, the instructing solicitor had had carriage of the matter since mid-2022 and was well across the facts.

I reject the submission of the quantum charged due to the seniority of the instructing solicitor.

Conclusion as to quantum of costs sought

My findings above change the quantum of costs sought to the following:

Date Range	Indemnity	Party/Party (70%)	Scale
Date Range	Indemnity	Party/Party (70%)	Low	High
18/01/17-07/11/18	$102,191.26	$71,533.88	$51,552.38	$58,742.57
08/11/18-06/03/20	$10,234.68	$7,164.27	$7,762.13
07/03/20-06/01/23	$11,130.26	$7,791.18	$5,439.07	$5,957.35
07/01/23-15/03/23	$87,013.23	$60,909.26	$39,586.34	$60,542.72
Total	$210,569.43	$147,398.59	$104,339.92	$133,004.77

Liable periods of costs

On the facts, I find costs at scale would not be appropriate. I have found a dereliction of duty on the part of OO Lawyers, resulting in them acting unreasonably, that Ms Thornhill’s case was doomed to fail from the outset as she simply did not tell the truth, and the Court’s jurisdiction could not have been enlivened in these circumstances. It is rather a matter for costs to be ordered on a party/party basis or on an indemnity basis, or if not, such other basis as I determine.

I find Ms Thornhill is liable to pay Mr Sandison’s costs on a party/party basis from 18 January 2017 – the date Mr Sandison engaged his current solicitors – to 7 November 2018, the day prior to OO Lawyers coming onto the record in these proceedings. Ms Thornhill knew the inconsistencies in the threshold application to that in the GG proceedings, yet she persisted with the threshold application and costs greater than scale are warranted given she failed to discharge the onus of proof upon her ultimately.

I find Ms Thornhill and OO Lawyers are jointly and severally liable to pay Mr Sandison’s costs on a party/party basis from 8 November 2018 to 6 March 2020. Prior to 6 March 2020, OO Lawyers may have been unaware of the extent of the inconsistencies in Ms Thornhill’s evidence, although a prudent and competent solicitor would have at least perused the GG file, which was available to OO Lawyers. As such I have determined party/party costs are appropriate.

After Mr Sandison filed his fulsome and comprehensive affidavit on 6 March 2020 setting out the myriad of inconsistencies in Ms Thornhill’s threshold application, her prior evidence in the GG proceedings, and material produced from Centrelink, OO Lawyers were on notice of the clearly apparent fatal flaws in Ms Thornhill’s case and on notice that they needed to take steps to remedy this issue, given Ms Thornhill had the onus of proof.

Given the affidavit evidence relied upon by Ms Thornhill at the threshold hearing and the failure to address the inconsistent evidence they were now relying upon in any meaningful way and where they had been requested to do so by Mr Sandison’s legal representatives, I have concluded either:

a.OO Lawyers simply did not read or ignored Mr Sandison’s affidavit and the evidence contained therein; or if not
b.OO Lawyers did not comprehend the impact Mr Sandison’s evidence would have on Ms Thornhill’s case; or if not
c.OO Lawyers paid little or no attention as to how to answer these apparent fatal flaws in Ms Thornhill’s case or make any proper attempt to do so.

These failures all lie at the feet of OO Lawyers and there may be more which I have not been able to discern.

For Ms Thornhill’s part, she determined to continue her threshold application, despite knowing her own evidence in the GG proceedings was in direct contradiction to her current case and that controversy had been raised by Mr Sandison.

This is behaviour that takes this matter out of the ordinary. It strikes at the very heart of legal competence and the administration of justice. Ms Thornhill did not tell the truth at any time and OO Lawyers failed to address the clear inconsistencies in her prior evidence to that now being relied upon at the threshold hearing and ignored this most important forensic issue almost completely.

In light of these findings, I find OO Lawyers and Ms Thornhill are jointly and severally liable to pay Mr Sandison’s costs on an indemnity basis from 7 March 2020 to 6 January 2023 when the preparation of the threshold hearing began in earnest.

The circumstances are out of the ordinary and exceptional given both Ms Thornhill’s continued persistence despite Mr Sandison’s clear affidavit evidence, and OO Lawyers’ continuing to prosecute the threshold application, despite doing nothing in this period to rectify, answer or address the obvious deficiencies in Ms Thornhill’s case.

After 6 January 2023, Ms Thornhill had little input into the preparation of the threshold hearing and the forensic decisions made. OO Lawyers determined the affidavit evidence to be relied upon. They ignored in their Case Outline the clear inconsistencies in Ms Thornhill’s evidence in the Mr GG proceedings and these proceedings. They failed to assist the Court as to how the Court could reconcile these inconsistences when Ms Thornhill had the onus of proof. They failed to seek a certificate pursuant to section 128 of the Evidence Act 1995 (Cth) to enable Ms Thornhill to rely upon one consolidated affidavit dealing with the inconsistencies between these proceedings and the Mr GG proceedings. Finally, they determined to tender a statement during the threshold hearing, which only further impugned Ms Thornhill’s credibility. All of these decisions were forensic decisions taken by OO Lawyers in which Ms Thornhill had little input. This represents a serious dereliction in duty to their client. Ms Thornhill bears no responsibility for these actions which were the responsibility of her legal advisors.

Such a dereliction of duty was compounded by their earlier failures, inter alia, since coming onto the record on 8 November 2018, commencing with failing to answer requests for information from Mr Sandison’s lawyers on multiple occasions and failing to file the updated affidavit they sought leave to do to support Ms Thornhill’s case. These circumstances, as outlined above, are exceptional, out of the ordinary, and warrant costs on an indemnity basis to be paid by OO Lawyers solely.

Conclusion as to costs

The orders in relation to costs will be as follows:

a.Ms Thornhill is to pay Mr Sandison’s costs on a party/party basis for the period 18 January 2017 to 7 November 2018 in the sum of $71,533.88;
b.Ms Thornhill and OO Lawyers are jointly and severally liable to pay Mr Sandison’s costs on a party/party basis for the period 8 November 2018 to 6 March 2020 in the sum of $7,164.27;
c.Ms Thornhill and OO Lawyers are jointly and severally liable to pay Mr Sandison’s costs on an indemnity basis for the period 7 March 2020 to 6 January 2023 in the sum of $11,130.26; and
d.OO Lawyers are to pay Mr Sandison’s costs on an indemnity basis for the period 7 January 2023 to 15 March 2023 in the sum of $87,013.23.

I will order that all of these costs are to be paid within 90 days.

OO LAWYERS

In the Reasons for Judgment delivered on 14 April 2023, I expressed my concern over the conduct of Ms Thornhill’s legal representatives:

259Despite my findings that there was clear evidence that demonstrated that these parties were never in a de facto relationship, the applicant pursued her application. The applicant has known for some time, particularly since March 2020, that the respondent has opposed her assertion that they were a de facto relationship and had identified significant contradictions in the applicant’s case, which were pointed out to her legal representatives at the commencement of the hearing and not addressed.
260It is even more concerning that these contradictions are consistent with the applicant’s evidence filed in this Court in the [GG] proceedings and representations to Centrelink, which contradict what she asserted in her evidence before this Court in these proceedings.
261Further, the Case Outline prepared on the applicant’s behalf did not even address these fundamental flaws in her case and was silent on how I was to deal with these contradictions. I am concerned that the applicant’s case proceeded to a final hearing despite clear evidence from the applicant herself that a de facto relationship never existed between the parties and where it should have been apparent to competent legal representatives that the credit of the parties would be crucial to my findings of fact.
262The Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (NSW) states the following:
4 Other fundamental ethical duties
4.1 A solicitor must also—
…
4.1.3deliver legal services competently, diligently and as promptly as reasonably possible,

(Underline emphasis added)

263The Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW) contains a similar rule:
4 Principles
These Rules are made in the belief that:
…
(c)barristers as specialist advocates in the administration of justice, must act honestly, fairly, skilfully, bravely and with competence and diligence,

(Underline emphasis added)
264The competency of legal representatives who practice in any jurisdiction is a critical element in the proper administration of justice.
265Further, the applicant’s conduct, aided by her legal representatives, appears to be contrary to the core principles underlining the Federal Circuit and Family Court of Australia Act 2021 (Cth), including the ‘Family Law Case Management – Central Practice Direction’, which came into effect on 1 September 2021, and as of 28 November 2022, are relevantly as follows:
1. PURPOSES
1.1The purposes of this Central Practice Direction are to outline the core principles applicable to …
(a)reduces unnecessary cost and delay in family litigation and facilitates proceedings being conducted with the least possible acrimony in order to minimise harm to children and families;

…
(c)achieves the overarching purpose of the family law practice and procedure provisions of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act), being to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

…
1.3The Court takes the overarching purpose enshrined in the FCFCOA Act seriously. … This co-operation requires (and the Court expects) that the parties and their lawyers think about the best way to conduct their cases in accordance with the overarching purpose. The parties and their lawyers can expect that the Court will engage with them in a dialogue to achieve the overarching purpose.
1.4The Court expects parties and their lawyers to have in mind, at all times, the cost of each step in the proceedings and … parties and lawyers are expected to approach proceedings in a manner directed towards identifying the issues in dispute and ascertaining the most efficient, including cost efficient, method of resolution or determination. This includes giving proper consideration to identifying the issues in dispute, complying with their obligation to provide full and frank disclosure in a timely manner (see Part 6.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (the Family Law Rules)) …
1.5Any failure to comply with these requirements may attract costs orders against parties and/or practitioners and other consequences including, in appropriate cases, the drawing of adverse inferences, the making of a summary decree pursuant to section 45A of the Family Law Act 1975 (Cth) (Family Law Act), or orders providing that a matter be heard on an undefended basis.

…
266The overarching purpose of proceedings in the Federal Circuit and Family Court of Australia (Division 1) are as follows:
67 Overarching purpose of family law practice and procedure provisions
(1)The overarching purpose of the family law practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; …
(2)Without limiting subsection (1), the overarching purpose includes the following objectives:
…
(b)the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e)the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

…

68 Parties to act consistently with the overarching purpose
(1)The parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 1) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.
(2)A party’s lawyer must, in the conduct of a civil proceeding before the Federal Circuit and Family Court of Australia (Division 1) (including negotiations for settlement) on the party’s behalf:
(a)take account of the duty imposed on the party by subsection (1); and

(b) assist the party to comply with the duty.
…
(5)Without limiting the exercise of that discretion, the Federal Circuit and Family Court of Australia (Division 1) or a Judge may order a party’s lawyer to bear costs personally.
(6)If the Federal Circuit and Family Court of Australia (Division 1) or a Judge orders a lawyer to bear costs personally because of a failure to comply with the duty imposed by subsection (2), the lawyer must not recover the costs from the lawyer’s client.

(As per the original with footnotes omitted)

Having reviewed the written submissions received from all parties and interested parties, and subsequently heard oral submissions, and having regard to the above discussion, my concerns remain. Specifically, my concerns remain regarding the conduct of the solicitor on record who appeared at the threshold hearing, Mr RR, and his employers, OO Lawyers. One concern I hold is that the threshold application was continued in such a manner wherein it could never have succeeded.

I am minded to refer Mr RR and OO Lawyers, his employers, to the Legal Services Commissioner for investigation into their professional conduct.

I note that although Mr RR and OO Lawyers have not been heard in relation to this referral, this is not necessary. I find that there must be some investigation into this by the appropriate person or body. I am not making a finding of fact, but rather bringing my concerns to the attention of the Legal Services Commissioner. In Milson & Myron (No 2), Carew J said the following in relation to a father, who was admitted as a solicitor in Queensland:

124I am conscious that the father has not been heard on the proposed referral but I am not deciding the issue of whether or not he should retain his practising certificate. That will be a matter for the professional bodies concerned. Whether a decision is made to take the matter further will be a determination entirely within the remit of those bodies and the father will have the opportunity to be heard in any proceedings commenced against him. In the circumstances I do not consider that I need provide the father with an opportunity to be heard on this issue.

And the corresponding footnote to this paragraph:

Epping & Merl [2015] FamCAFC 81 [58] where a solicitor appealed against a decision to refer him to the LSC before hearing submissions. In dismissing the appeal the Full Court held that the solicitor had in fact been provided with an opportunity to be heard but in any event May J observed that ‘the judge was not making any findings of fact, simply referring the transcript to the LSC for their consideration’; D’Cruz & Pierce and Ors [2009] FamCA 435 [5] (where Dessau J held that was no obligation to hear submissions before making a referral; Carpenter & Carpenter [2014] FamCAFC 100 where the Full Court referred a barrister to a professional body without hearing submissions …
(As per the original)

And these authorities, and in particular Epping & Merl, allow me to make a referral without hearing submissions as to whether such a referral should be made.

I will direct a registrar of this Court to provide these Reasons for Judgment, my Reasons for Judgment delivered on 14 April 2023, and the documents and exhibits in both judgments, to the Legal Services Commissioner. The registrar is to also provide to the Legal Services Commissioner any further documents from the court file as requested.

Finally, Mr Eckhardt’s submissions sought that any references to him be anonymised prior to publication of these Reasons for Judgment. This was sought by OO Lawyers in their written submissions in reply.

Although there is a public interest in not so doing, it is this Court’s process for anonymisation to occur, and I will make the anonymisation orders sought.

CONCLUSION

I make the orders as set out in the forefront of these Reasons for Judgment.

I certify that the preceding one hundred and seventy-eight (178) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson.

Associate:

Dated: 20 November 2023