Mertz & Mertz (No 3) [2025] FedCFamC1A 222 (28 November 2025)

1. The names of Mr AX KC, Mr AY, and Ms G be anonymised in the published Reasons for these Orders.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 pseudonym Mertz & Mertz has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. This appeal was commenced by way of Notice of Appeal filed on 18 July 2025. It was listed for hearing by the Full Court on 19 November 2025. A Notice of Discontinuance was filed on 17 November 2025. On 19 November 2025, the respondent made an oral application for the costs of the appeal, and the Court made an order that the respondent pay such costs fixed in the sum of $36,955. These are the Reasons for making that costs order, as well as for making an order referring the conduct of the former legal representatives of the appellant to the relevant professional regulatory bodies. That is in circumstances where artificial intelligence ("AI") was used in the preparation of a Summary of Argument and List of Authorities resulting in the Court being provided with incorrect references. By consent, the Court also made an order that Ms G, the former solicitor for the appellant, pay the respondent a further $10,000 as costs thrown away correcting the errors generated by AI.

1. On 17 October 2025, the appellant filed a Summary of Argument and List of Authorities. On 3 November 2025, the appellant filed an Amended Summary of Argument and List of Authorities with some authorities removed from the footnotes and the List of Authorities. Those amendments were not identified on the document. At the conclusion of both the original and amended documents was "[Mr AX] KC with [Mr AY] on behalf of the Applicant" along with Mr AX KC's contact details.
2. It was obvious that the amendments were made to rectify the inclusion in the original of non-existent, inaccurate and misleading authorities. The letter that accompanied the Amended Summary of Argument advised that there "were significant errors in the citations" and apologised for the "oversight".
3. On 6 November 2025, at the Court's direction, the legal case manager for the appeal judicial registrar wrote to Mr AX KC and Mr AY:

...

The Full Court has advised the Appeal Registry that the Summary of Argument filed by the appellant on 17 October 2025 and apparently signed by yourselves appears to have been drafted with the assistance of Artificial Intelligence and contains inaccurate and misleading references to case law (hallucinations).

The Court has not taken a final view on the matter but the course that presently commends itself is to refer the matter to the Legal Services Commissioner for further investigation.

If you wish, the Court will consider written or oral submissions from each of you as to the course to be taken.

Any written submissions should be filed and served prior to the hearing of the appeal. Oral submissions may be made at the conclusion of the hearing of the appeal.

...

1. Mr AX KC and Mr AY subsequently filed written submissions. They each confirmed that AI had been used in the preparation of the Summary of Argument and List of Authorities, and that three legal practitioners, namely, Mr AX KC, Mr AY and their instructing solicitor Ms G, had been involved in preparing the document. Mr AX KC and Mr AY's submissions provided detailed explanations of the circumstances (including that they had not used AI themselves), accepted responsibility, apologised to the Court and provided reassurance that the error would not be repeated. They had each settled a draft of the Summary of Argument and List of Authorities which had been prepared by Ms G.
2. On 11 November 2025, at the Court's direction, the appeal judicial registrar wrote to the parties to the effect that Ms G was also invited to file any written submissions and/or to make oral submissions.
3. On 13 November 2025, Ms G filed written submissions. In those written submissions, she denied using AI herself, and said that it was her paralegal who had used AI. These were the only references to the use of AI:
   1. I prepared a draft of the summary of argument as a word document. The paralegal inserted the list of authorities as the back two pages to this document. I know now that she also inserted a few citations within the footnotes of the document based on the contaminated list.

...

1. On the morning of 30 October 2025, [Mr AX] KC asked me via email if AI had been used on the document.
2. I replied immediately and told him categorically that I had not used AI. I have never used AI to create a court document.
3. I then asked my paralegal if she had used AI and it was at that moment I learnt she had used AI.
4. My paralegal told me she used AI to alphabetise the cases in the list of authorities and place them under headings of each ground of appeal.

1. The submissions of Ms G did not identify which AI program or programs had been used. Her submissions did not identify what, if any, training, supervision or guidance the paralegal had been given in relation to the use of AI. The solicitor wrote that "[d]espite me not using AI myself, I accept full responsibility for the use of AI by my paralegal". She indicated the steps that she has taken to ensure the error does not occur again, which include that she has "terminated the services of [her] paralegal".
2. On 13 November 2025, Ms G wrote to the Southern Appeal Registry enclosing an "updated list of footnotes to be considered in substitution for each and every footnote set out in the Appellant's amended Summary of Argument filed on 3 November 2025". That correspondence identified that the updated footnotes "have been settled by Mr David Brown KC who is instructed to appear on behalf of the Appellant in this matter".
3. There was no indication from Ms G in that letter about whether the further identified errors in the footnotes could also be explained by the use of AI. The Court is concerned that that may be the case, but her submissions filed the same day implied to the contrary and senior counsel who appeared for Ms G at the hearing was not able to assist the Court further. The submissions of Mr AX KC and Mr AY did not address any further errors in the footnotes in the Amended Summary of Argument and List of Authorities and implied that the relevant errors had been corrected. They did not appear at the hearing and so were not able to assist the Court further.
4. The replacement of each footnote and why amendments were required thus remains entirely unexplained.
5. As the written submissions of Mr AX KC, Mr AY and Ms G make clear, AI was used in the preparation of the originally filed Summary of Argument and List of Authorities. To what extent and in what way it was used remains opaque, notwithstanding the written submissions of the solicitor responsible. The use of AI at least resulted in erroneous citations. As the Full Court indicated in Helmold & Mariya (No 2) (2025) FLC 94-272 ("Helmold & Mariya"), a case where a self-represented litigant had used AI in preparation of a Summary of Argument, "[r]eliance upon unverified research generated by AI has the capacity to confuse, to create unnecessary complexity, to result in wasted time and to mislead the Court and other parties" (at [8]).
6. There are other well-documented risks to the administration of justice associated with the use of AI in the preparation of Court documents, and the Full Court in Helmold & Mariya endorsed the cautions expressed in overseas authorities about the use of AI in litigation.
7. The issues arising from the use of AI by legal practitioners have been carefully and helpfully considered by Judge A. Humphreys in Dayal [2024] FedCFamC2F 1166 ("Dayal"). In Dayal, her Honour referred a legal practitioner to the Office of the Victorian Legal Services Board and Commissioner in circumstances where he had acknowledged that he had used an "AI driven research tool module" to generate a list of authorities and summaries provided to the Court, that he had not reviewed the results produced by the module to ensure their accuracy, and that the authorities did not exist. Her Honour identified the significant risks which attend the use of AI tools in legal practice and identified the relevant duties of legal practitioners, including the duty not to mislead the Court, to deliver legal services competently and diligently and not to engage in conduct which is likely to diminish public confidence in the administration of justice or bring the legal profession into disrepute. Those obligations extend, of course, not only to the use of AI but also to addressing difficulties when they are identified (as they were here).
8. In addition to these general duties, in proceedings under the Family Law Act 1975 (Cth) ("the Act"), by s 114Q of the Act and subject to various exceptions, communication to the public of an account of proceedings that identifies a party, a witness or an associated or concerned person is prohibited. There is a risk that entering draft documents into an AI program will result in a breach of s 114Q, a breach of the Harman undertaking, breaches of rules in respect of material produced under subpoena and/or give rise to a waiver of legal professional privilege. The Supreme Court of New South Wales, Practice Note SC Gen 23 - Use of Generative Artificial Intelligence (Gen AI), 28 January 2025 prohibits the entry into any Generative AI program of any information subject to non-publication or suppression orders, the Harman undertaking, material produced on subpoena, or any material that is the subject of a statutory prohibition upon publication unless the legal practitioner or person responsible for the conduct of the proceeding is satisfied as to confidentiality and other matters (para 9A).
9. Useful guidance is also provided by the Supreme Court of Victoria, Guidelines for Litigants: Responsible Use of Artificial Intelligence in Litigation, May 2024.
10. Other Courts, including this one, are considering what guidelines and practice directions to issue, but the following are abundantly clear:

(1) If AI is used to identify authorities for the purposes of any Court document, then it is incumbent on the author and those accepting responsibility for the document to verify that those authorities are both accurate and relevant to the proceedings. Each of the relevant legal practitioners conceded that they had not done so in respect of the original Summary of Argument and List of Authorities.

(2) Where AI is used more widely, such as to prepare the text of submissions, create footnotes or prepare a chronology, the same responsibility to ensure that the material is accurate and relevant arises.

(3) As the submissions of King's Counsel and counsel in this matter acknowledge, the use of AI in the preparation of Summaries of Argument or other submissions does not absolve the author or person who accepts responsibility for the documents from any of their professional or ethical obligations to the Court or the administration of justice. To the contrary, it calls for careful interrogation of whether such use is appropriate, what disclosure is appropriate, and what safeguards must attend to its use.

1. It is appropriate that this matter be referred to the relevant professional disciplinary bodies for consideration of the conduct in this matter of Mr AX KC, Mr AY and Ms G. That is not the only purpose of referring the matter; as Judge A. Humphreys emphasised in Dayal, it is in the public interest that those regulating the legal profession are aware of examples of difficulties which have arisen from the use of AI in the preparation of Court documents.
2. Ms G is a solicitor practising in South Australia and Mr AX KC and Mr AY are counsel practising in Victoria. The relevant bodies are therefore, in respect of Ms G, the South Australian Legal Profession Conduct Commissioner, and in respect of Mr AX KC and Mr AY, the Victorian Legal Services Board and Commissioner. Those regulatory bodies should have the benefit of the written submissions filed in this matter, including the very helpful submissions on behalf of the respondent in support of a costs order with respect to the AI issue.

1. By way of oral application made on 19 November 2025, the respondent sought costs of the appeal on a party and party basis, being the sum of $36,955. No submissions were made against the making of that order. That order was made at the hearing.
2. The respondent had been put to the considerable expense of preparing for an appeal which was discontinued two days prior to the listing date. The appellant was wholly unsuccessful (albeit not by way of a judicial determination), and the delay in discontinuing the appeal is relevant conduct under s 114UB(3)(c) of the Act. We were satisfied that there are justifying circumstances for the making of an order that the appellant pay the respondent's costs of the appeal in accordance with the scale.
3. We were satisfied that the respondent's Schedule of Costs filed 12 November 2025 reflects the scale in Sch 3 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). We note the necessity for senior counsel to read and consider a transcript of 1234 pages and an Appeal Book of 1295 pages. Accordingly, the Court was satisfied that an order for costs fixed in the sum of $36,955 is just.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Aldrige, Carew & Behrens.