STEWART J:
1 Before the Court for decision are applications by Hugh Hamon Robert Massie that he have leave to represent four companies, of which he is the sole director, before the Court at the combined hearing of two proceedings. I granted Mr Massie leave to represent the companies in previous interlocutory hearings and in the present interlocutory hearing for leave. The hearing of the two proceedings, along with a third proceeding (NSD316/2020), which has been listed on an estimate of seven days in April next year, is qualitatively different from the interlocutory hearings and the present hearing: it is a final hearing, it will involve adducing evidence from and cross-examining several witnesses, there will be a substantial volume of documents, and several interrelated and overlapping factual and legal issues will have to be resolved. For that reason I required formal applications to be made for leave for Mr Massie to represent the four companies.
2 Mr Massie filed interlocutory applications in each of the two proceedings on 18 August 2021 in which he seeks leave to represent the companies. He is the first defendant in proceeding NSD 1536 of 2019.
3 The need for leave arises from r 4.01(2) of the Federal Court Rules 2011 (Cth) which provides that a corporation must not proceed in the Court other than by a lawyer. Leave is sought pursuant to r 1.34 of the Rules which provides that the Court may dispense with compliance with any of the rules, either before or after the occasion for compliance arises.
4 The four companies in question are 5G Capital Investments Pty Ltd, 5G Capital SPV27 Pty Ltd, SPV28 Pty Ltd and 5G Capital Management Pty Ltd. The companies are all part of what is referred to as the 5G Group and are, in effect, Mr Massie's companies. I will refer to them as the 5G companies. On the evidence before me, Gajah Investments Pty Ltd owns all the shares in 5G Capital Management and 5G Capital Investments, and 5G Capital Investments owns all the shares in 5G Capital SPV27 and SPV28. The identity of the officers and shareholders of Gajah Investments is not apparent on the evidence.
5 In proceeding NSD 1536 of 2019, Mr Massie and the 5G companies are defendants. There are also two other defendants, Pepperfield Holdings Pty Ltd and Sapsford Financial Services Pty Ltd. The plaintiffs are 5G Developments Pty Ltd (formerly known as Denham Wyndham Pty Ltd) (in liquidation) (DW) and its liquidator, Alan Hayes. The plaintiffs make preference claims on a variety of bases in relation to a number of different transactions. They also seek a discharge or release of Denham Constructions Pty Ltd from any liability under an assignment or variation of the assignment and the discharge and release of DW from a guarantee. 5G Capital SPV27 is a party to the assignment. The plaintiffs and Sapsford oppose leave being granted whereas Pepperfield adopts a neutral position.
6 There are two cross-claims in proceeding NSD 1536 of 2019. In the first cross-claim, SPV28 claims against a number of parties for rectification of two agreements. In the second cross-claim, in which Sapsford and Pepperfield are the cross-claimants, 5G Capital Investments is the second cross-respondent.
7 In proceeding NSD 1288/2019, three of the 5G companies are defendants. Mr Massie and 5G Capital Management are not parties to that proceeding. The plaintiffs in that proceeding are Denham Constructions Pty Ltd (in liquidation) and Mr Hayes as liquidator of Denham Constructions. The plaintiffs seek to set aside an assignment deed and a deed of variation, to which 5G Capital SPV27 is a party, on the basis that they are one or more of an uncommercial transaction, an insolvent transaction, an unfair loan or a voidable transaction. Further relief is also sought.
8 From that briefest of overviews, it is apparent that the proceedings involve considerable complexity, both factual and legal. To that can be added the observation that very substantial sums of money are at stake. Mr Massie has said that the total claims against him and the 5G companies amount to more than $14 million.
9 The 5G companies rely on an affidavit of Mr Massie sworn on 17 August 2021 in support of the applications for leave. Relevantly, that affidavit establishes the following additional facts:
(1) Mr Massie is also a director of Pepperfield Holdings, although he is not the sole director and that company which is separately represented in the proceedings.
(2) Mr Massie has a Bachelor of Commerce degree from the University of New South Wales obtained in 1985. He previously practised as a chartered accountant for 10 years until 1996 with a large international firm. Through the 5G group he has operated a business of "providing capital solutions to early stage and distressed businesses".
(3) Mr Massie intends representing himself in the proceedings.
(4) Mr Massie has no assets or income in Australia.
(5) The 5G companies have previously incurred approximately $690,000 in legal fees in the proceedings before they terminated their representation by solicitors and counsel and became represented by Mr Massie.
(6) If the 5G companies were to again engage lawyers to represent them a similar sum of money would be required to see the proceedings through to finality.
10 Mr Massie also states the following in his affidavit: "The sole assets that the defendants would have available from PH/PIT1 to pay legal representatives are the subject of the Federal Court of Australia's restraining orders made on 16 August 2021."
11 Mr Massie relies on that statement and that he has no assets or income in Australia to make the submission that the 5G companies are not able to afford legal representation. However, there is no evidence before me dealing with Mr Massie's assets or income elsewhere in the world, in particular in the USA where he is resident. There is also no evidence of what assets the 5G companies have to pay for legal representation other than what they would have had available from "PH/PIT1" but for the restraining orders referred to by Mr Massie in his affidavit.
12 Given his training as a chartered accountant, and his experience over many years running companies, Mr Massie can be expected to know that the way to prove a company's financial position is by producing its audited financial statements and accounts. He has produced no such records in respect of the 5G companies. The Court is left not knowing what their financial position is. There is also no evidence as to the financial position of the ultimate holding company of the 5G companies, Gajah Investments. Mr Massie said that it has no assets, but there is no evidence to support that.
13 In the circumstances, I am not able to accept Mr Massie's submissions that the 5G companies are unable to afford legal representation.
14 Turning now to the law with reference to which the question of leave must be considered, the following principles can be identified from the authorities:
(1) Although in some jurisdictions and under some other court rules "exceptional circumstances" are required to be shown in order for leave to be granted to a corporation to be represented by a non-lawyer, that is not the case under the Rules of this Court where the position is not as restrictive; there is no threshold requirement of special or exceptional circumstances: Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [10]-[12] per French J; Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 12) [2012] FCA 289 at [18] per Flick J.
(2) Nevertheless, the policy of the rule is clear that ordinarily a corporation will be required to be represented by a lawyer: Termi-Mesh at [13].
(3) The power to dispense with that requirement should be exercised by reference to "all relevant considerations": Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 73; Pharm-a-Care at [18].
(4) Relevant factors for dispensing with that requirement include the financial capacity or lack of capacity of the corporation and those standing behind it, the effect of diverting company resources to paying legal expenses, the nature of the company's undertaking, its financial structure, its ability to retain and pay its staff and the identity and spread of its shareholders: Termi-Mesh at [13].
(5) A distinction may be drawn between the case in which the company in question is applicant and that in which it is a respondent - in the latter case it may be that a more liberal approach to the grant of leave is warranted: Termi-Mesh at [14]; Enviro Pak Pty Ltd v New Horticulture Pty Ltd [2013] FCA 306 at [17] per Griffiths J.
(6) Also relevant is the complexity of the case and the difficulty that a non-lawyer will have in dealing efficiently with the legal and factual issues involved: Termi-Mesh at [14]; Pharm-a-Care at [20]-[21].
(7) The unavailability of disciplinary measures and a duty to the court by lay advocates and the importance of protecting the client and the opponent from unqualified, unaccredited and uninsured lay advocates are factors that weigh against leave being granted: Pharm-a-Care at [20]-[21].
15 There is no dispute about the applicable principles.
16 In my view this is not an appropriate occasion to exercise the discretion in Mr Massie's favour by granting leave to the 5G companies to be represented by him rather than by a lawyer. I reach that conclusion in consideration of a number of factors.
17 First, as mentioned, I am not satisfied on the evidence that neither the 5G companies nor those who stand behind them have the means to appoint legal representation. The evidence is insufficient to support Mr Massie's submissions in that regard.
18 Secondly, also as mentioned, the proceedings are legally and factually complex and much is at stake. The Court requires, and is entitled to, proper assistance from the parties in dealing with the matter including in the conduct of the trial and reaching a judgment. While I accept, as submitted by Mr Massie, that he has shown in his appearances before me to act in a reasonable, constructive and measured way, by his own admission he is not qualified in the law. Meaning no disrespect to him at all, the truth of the matter is that he does not have the requisite learning and understanding in the substantive aspects of the law which will need to be called on in this case, including in relation to complex questions such as rectification. Neither does he have learning and experience in important adjectival aspects of the law, including the intricate skills of cross-examination and the law of evidence.
19 The truth of the matter is that these proceedings, which are to be heard together, are not run-of-the-mill or everyday proceedings. As previous judgments in them demonstrate, the relevant events span a significant period of time, there are innumerable transactions that are interrelated and have knock-on effects, there are multiple parties with overlapping and diverging interests, there are multiple witnesses and there is a very considerable volume of documentation: Re 5G Developments Pty Ltd [2019] FCA 1541; Re 5G Developments Pty Ltd (in liq) [2021] FCA 791; Re 5G Developments Pty Ltd (in liq) (No 2) [2021] FCA 887. With all the goodwill in the world, Mr Massie has not demonstrated that he has the ability to adequately represent the companies and assist the Court in such a context.
20 Thirdly, Mr Massie will be an important witness in the case and is likely to be subjected to long cross-examination. It will put him in a difficult position, and it will inevitably prejudice the 5G companies, if, as a witness, he also has to deal with objections on the companies' behalf. In giving evidence he will be responsible for multiple interests, including his own as a witness and as a party and as representative of each of the 5G companies. It may be that no conflict arises between those interests, but one cannot be confident in that regard. More particularly, he will be in an invidious position trying to protect all those interests at the same time even if they are not in conflict with each other.
21 Fourthly, while the 5G companies are for the most part defendants to claims brought against them by others, which is a factor which would weigh to some degree in favour of leave being granted, SPV28 is the moving party as cross-claimant in the second cross-claim. That is a complicated claim for rectification in which seven cross-respondents are cited. There is no good reason why those parties should face the prejudice of such a claim being conducted by a non-lawyer. The fact of the 5G companies otherwise being defendents is accordingly substantially neutralised.
22 Fifthly, I do not consider Mr Massie's reliance on the fact that neither he nor the 5G companies were contacted prior to the proceedings being commenced to be relevant. It may be, as he says, that had he been contacted in advance, settlement of the claims prior to proceedings being commenced would have been achieved. But that did not happen and there are proceedings on foot that the parties have not been able to settle despite having engaged in mediation. I am now concerned with the future progress of those proceedings and whether the companies should be permitted to be represented by a non-lawyer. What happened prior to the proceedings being commenced is of no relevance to that question.
23 Sixthly, I accept that even if Mr Massie does not represent the 5G companies he will nevertheless represent himself. Whilst that weighs to some degree in favour of leave being granted inasmuch as not granting leave will not avoid the difficulties presented by a self-represented party in proceedings such as this, it does not alter the balance against leave being granted. If leave were granted, the companies would still stand to be prejudiced, the Court would still not have the assistance of the companies being legally represented, the other parties would be prejudiced and Mr Massie would be trying to manage several different and possibly conflicting interests at once.
24 In the result, the applications for leave should be dismissed.
25 There is no apparent reason why the costs should not follow the result. Mr Massie should therefore pay the costs of the applications.
26 I accordingly make the following orders in proceeding NSD 1536 of 2019 and in proceeding NSD 1288 of 2019: the interlocutory application filed on 18 August 2021 is dismissed with costs.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart.