Two law firm directors "embarked on a campaign" to deter a former partner from pursuing $500,000 owed to her, a court has found.
Erin Brooke Taylor sued Aulich Civil Law partners Benjamin Aulich and Peter Woodhouse in the ACT Supreme Court.
Mr Woodhouse placed Aulich Civil Law into voluntary administration in September 2024 and he is no longer in partnership with Mr Aulich.
In a decision published last week, acting Justice Audrey Balla found Mr Woodhouse's motive in placing the civil law business into administration was "to obtain an advantage in this litigation".
This meant the proceedings against Aulich Civil Law were stayed and the funds available to Ms Taylor were depleted by the firm having to pay more than $130,000 in administration and liquidation costs.
"Their decisions were motivated to achieve unfairness," the judge said.
In February 2019, Ms Taylor became a partner in the civil law firm and had been a romantic partner of Mr Aulich since the year before.
As part of her partnership with the business, she paid $500,000 to buy 25 per cent of the firm's shares.
Her last day was in April 2024 and she claimed she was contractually owed a refund or buyback of the shares because she left within five years.
By July 2024, Mr Aulich was no longer employed at his self-titled law firm, which included a separate criminal practice, after his practising certificate was not renewed and he was publicly reprimanded for personal behaviour.
Ms Taylor and Mr Aulich's personal relationship ended in September 2023 and the professional relationship between the three partners "became strained".
"Ms Taylor found that her mental health was being affected," the court decision states.
In February the next year, during a discussion in a cafe about workloads, Mr Aulich told Ms Taylor to "get f---ed and f--- off" as he raised his middle finger at her and walked out.
Mr Aulich later agreed in cross-examination that he had publicly humiliated his ex.
The judge found that from the day Ms Taylor agreed to leave the business, Mr Aulich and Mr Woodhouse "declined to engage" with her "repeated direct queries about how and when the money would be paid".
The two men were also found to have applied pressure on Ms Taylor to abandon her legal action against them by alleging she had improperly issued $73,000 in disbursements.
Acting Justice Balla also said they "deliberately delayed paying Ms Taylor her leave entitlements as part of their strategy to ignore her claims and deter her from pursuing the claim for the share buyback".
In a 2024 letter to Ms Taylor's lawyers for work done in a Federal Court case, Mr Woodhouse estimated she owed $380,000 to Aulich Criminal Law.
Acting Justice Balla said there was no legal basis for a demand that Ms Taylor personally pay the estimated cost and it was issued to deter her from making a claim for the shares. An invoice of almost $320,000 was later issued to the civil arm of the business.
Additionally, Mr Woodhouse caused invoices of about $440,000 to be issued by Aulich Criminal Law to Aulich Civil Law.
The court determined these steps were taken by both men "to deplete the funds available" to the civil arm of the business to pay Ms Taylor for the shares.
The ACT Supreme Court found that Mr Aulich and Mr Woodhouse engaged in oppressive conduct and breached a clause in the 2019 partnership agreement, as well as statutory and fiduciary obligations.
The court is set to issue orders and determine costs at a later date.
