Molnar Engineering Pty. Ltd. v Burns [1984] FCA 232; (1984) 3 FCR 68 - considered

Bay Marine Pty. Ltd. v Clayton Country Properties Pty. Ltd. (1986) 8 NSWLR 104 - considered

Hubbard Association of Scientologists International v Anderson [1972] VicRp 37; (1972) VR 340 - considered

Counsel and Solicitors Mr. G. Blank of Counsel,

1. Leave granted to the appellant corporation to prosecute

the application for leave to appeal, and the appeal, by Mr.

Stergiou and otherwise than by a solicitor.

2. Leave to appeal granted.

3. Appeal allowed; orders of Gallop J refusing Mr.

Stergiou leave to appear, and dismissing, with costs, the

principal proceedings as incompetent and a nullity, be set

aside; in lieu thereof, order that the appellant have leave

to appear in the principal proceedings otherwise than by a

solicitor; and that there be a new trial of the principal

proceedings in the Supreme Court.

4. The respondent pay the appellant's costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

BEAUMONT J Before the Court is an appeal purportedly brought in the form of a notice of appeal filed by Mr. Stergiou (said to be a litigant in person on the notice of appeal) in proceedings between ACT General Cleaning Co Pty. Ltd., as appellant, and Mr. Con Naoum as respondent. In the notice of appeal it is stated that the appellant appeals from the whole of the judgment of Gallop J, sitting in the Supreme Court of the Australian Capital Territory on 12 February 1996, in which his Honour gave judgment for the respondent on the appellant's claim for a half share of a contract, "...being $22,000". In the notice of appeal it is stated that his Honour erred in holding that (a) leave should not be granted for Mr. Stergiou to appear on behalf of the appellant company, and (b) that the principal proceedings be dismissed as incompetent and as a nullity.

2. A number of grounds of appeal are stated in the notice of appeal, including a question as to the standing of Mr. Stergiou to represent the appellant.

3. It is common ground that the appellant company is a family company controlled by Mr. Stergiou and his family.

5. The proceedings in the Supreme Court were instituted by a writ of summons dated 28 February 1994, upon which was endorsed a statement of claim in which the appellant sued the respondent for the sum of $22,500 and loss of expenses. The cause of action claimed appears to be an alleged breach of a partnership agreement. The writ of summons was filed on behalf of the appellant by Mr Stergiou.

6. On 10 January 1994, the respondent, by his solicitor, filed a defence to the statement of claim, which in essence denied the substantive claims and raised several special defences, including a defence of estoppel, and possibly, abuse of process.

7. On 24 January 1995, an amended statement of claim was filed on behalf of the appellant, again by Mr. Stergiou who then described himself as a litigant in person. On the same day, Mr. Stergiou filed in the proceedings an affidavit sworn by himself in which he stated that he had been authorised to act on behalf of the appellant. In the affidavit, Mr. Stergiou purported to state, in a summary fashion, the manner in which the appellant claimed to be entitled to sue on the cause of action it contended for.

8. The proceedings came before Higgins J in the Supreme Court for directions on 3 February 1995. On that occasion, Mr. Stergiou appeared for the appellant and the respondent was represented by his solicitor. The record of the proceedings before his Honour on that date indicates that his Honour then granted Mr. Stergiou "leave to appear for" the appellant and gave other directions. His Honour stood the matter over to 10 February 1995 for further directions.

9. Prior to the hearing on 10 February, Mr. Stergiou filed a notice of motion dated 7 February, returnable on 10 February, seeking that leave be granted to him to carry on the proceedings. The notice of motion referred to O.2A r.14(2) of the Supreme Court Rules. Under that rule, it is provided that:

"Except as provided by or under any Act a corporation

may not without the leave of the court commence or

carry on any proceeding otherwise then by a solicitor."

The notice of motion came before Master Hogan on 10 February 1995. On that occasion, the Master again granted leave to Mr. Stergiou "to act as agent on behalf of" the appellant.

10. It appears, then, that both Higgins J and the Master had granted leave to the appellant to carry on the proceedings otherwise than by a solicitor.

11. It is true that there does not appear to have been a specific, i.e. explicit, order made by either Higgins J or by the Master to this effect. However, in my opinion, there should be implied into the grant of leave an implication to that effect.

12. It follows, in my view, that as at 10 February 1995 the commencement of the proceeding, otherwise than by a solicitor, had been validly authorised nunc pro tunc; and that leave had also been granted to carry on the proceeding in the future.

13. There were further interlocutory steps taken in the course of the principal proceedings but it is not necessary to refer to them. They included matters such as discovery and the provision of further and better particulars of the claim.

THE HEARING OF THE PRINCIPAL PROCEEDINGS BEFORE GALLOP J

14. In due course, the principal proceedings were set down for final hearing on 12 February 1996. It appears from the order taken out that, on this occasion, the matter came before Gallop J, and upon hearing Mr. Stergiou in person and Mr. Blank of counsel for the respondent, the Court ordered that leave not be granted for Mr. Stergiou to appear on behalf of the appellant "at this stage in the proceedings." It was further ordered that the action be dismissed with costs, apparently summarily. As has been said, the appellant now seeks to appeal from these orders.

(a) Leave to appear on the appeal otherwise than by a solicitor

15. The first question that arises for determination is the standing of the notice of appeal itself. As has been said, the notice was purportedly filed by Mr. Stergiou on behalf of the appellant. This raises an initial difficulty since by O.4, r.14(2) of the Federal Court Rules, provision is made to the same effect as O.2A, r.14(2) of the Supreme Court Rules.

16. In Individual Homes Pty. Ltd. v Commonwealth Bank of Australia (1994) 50 FCR 372, it was held (at 375) that a "proceeding" under O.4, r.14(2) of the Federal Court Rules is to be given the same meaning as that given to the expression in s.4 of the Federal Court of Australia Act 1976. S.4 provides:

"'proceeding' means a proceeding in a court, whether

between parties or not, and includes an incidental

proceeding in the course of, or in connexion with, a

proceeding, and also includes an appeal"

In Individual Homes, Gallop and Neaves JJ held that a proceeding for the purposes of O.4, r.14 is a proceeding in the original, or the appellate jurisdiction of the Court.

18. It follows that unless leave is given, the notice of appeal in this matter would not be valid. Having had the benefit of argument, and in particular having had the opportunity to consider the submissions made by Mr. Blank on behalf of the respondent, I have come to the view, for reasons which I will give later, that the orders of dismissal made by Gallop J should be set aside. Having regard to that conclusion it is appropriate, I think, that leave should be granted to the appellant to conduct the appeal, including the filing of the notice of appeal otherwise than by a solicitor.

19. I come now to the substance of the appeal. As has been noted, the learned primary Judge made two orders in this matter. In my view, they should be separately considered.

(i) Leave to Mr. Stergiou to appear in the principal proceedings

20. The first order, as hs been noted, was that leave not be granted to Mr. Stergiou "at (that) stage" of the proceedings.

21. The approach to be taken to the exercise of the Court's discretion in this area was fully considered by a Full Federal Court in Molnar Engineering Pty. Ltd. v Burns [1984] FCA 232; (1984) 3 FCR 68. Smithers J there (at 74 to 77) indicated several of the factors which would ordinarily be taken into account in considering whether leave ought to be granted. As his Honour pointed out (at 74) the identity of shareholders and the spread of shareholding is a relevant consideration, as is the capacity of a person by whom the litigation might be commenced and carried on.

22. In the present case, it appears that, although Gallop J noticed in his reasons for judgment that Higgins J and Master Hogan had already granted leave to Mr. Stergiou to appear, his Honour was of the view that, given the complexity of the matter, and in particular the circumstance that Mr. Stergiou would be a principal witness, it was not appropriate that leave be granted.

23. With respect, there is certainly force in his Honour's observations so far as concerns the difficulty that can arise, especially if credit is involved, where a person seeking to appear on behalf of a corporation is proposed to be called at a trial (see also Bay Marine Pty. Ltd. v Clayton Country Properties Pty. Ltd. (1986) 8 NSWLR 104 per Mahoney JA. at 113). There is force also in the observations made by the Supreme Court of Victoria in Hubbard Association of Scientologists International v Anderson [1972] VicRp 37; (1972) VR 340 emphasising (especially at 312) the need to ensure, so far as is practicable, that the Court is assisted in a proper case by a person able to provide true assistance, if the litigation is complex.

24. Nonetheless, and with all respect to the learned primary Judge, I have come to the conclusion that his Honour's discretion miscarried in the present case for two principal reasons.

25. In the first place, it does not appear that his Honour gave any weight, or any real weight, to the circumstance that both Higgins J and Master Hogan had previously granted leave. In my view, this was a most significant consideration. Not only would the grant of leave on previous occasions carry considerable weight of its own, as a reason why the status quo should not be altered; but also, to change course as it were, after the commencement of the litigation would, I think, call for the intervention of some exceptional circumstance; and none is suggested here.

26. The second matter, which his Honour does not appear to have taken into account, is the close nature of the holding of the equity capital of the company. As has been said, the appellant is a family corporation; and it is not disputed that it is effectively controlled by Mr. Stergiou.

27. In short, although the orders made by Higgins J and by Master Hogan were interlocutory orders and therefore technically liable to be reviewed by another Judge of the Supreme Court, there was, in my view, no cause, or no good cause, for reversing those orders.

28. For those reasons, given again the interlocutory character of this order, I would grant the appellant leave to appeal from the order of Gallop J refusing Mr. Stergiou leave to appear, that is to say, refusing the appellant leave to carry on the proceedings otherwise than by a solicitor. I would allow the appeal to that extent. I would set aside that order of Gallop J and I would, in lieu thereof, grant the appellant leave to carry on the proceedings otherwise than by a solicitor.

(ii) The summary dismissal of the principal proceedings

29. I turn now to the second order made by Gallop J dismissing the principal proceedings as incompetent and a nullity.

30. It appears that his Honour made this order as a direct consequence of his refusal to grant the appellant leave to continue the proceedings otherwise than by a solicitor. In other words, it does not appear that his Honour embarked upon a consideration of the merits, if any, of the appellant's claim. It must follow from the conclusion that I have reached in respect of the grant of leave to the appellant to continue the proceedings, otherwise than by a solicitor, that I would also allow the appeal in this respect. His Honour's order was clearly final and an appeal lies as of right.

31. In the circumstances, I would propose the following orders:

1. Leave granted to the appellant corporation to

prosecute the application for leave to appeal, and the

appeal, by Mr. Stergiou and otherwise than by a

solicitor.

2. Leave to appeal granted.

3. Appeal allowed; orders of Gallop J refusing the

appellant leave to appear, and dismissing, with costs,

the principal proceedings as incompetent and a nullity,

set aside; in lieu thereof, order that the appellant

have leave to appear in the principal proceedings

otherwise than by a solicitor; and that there be a new

trial of the principal proceedings in the Supreme

Court.

4. The respondent pay the appellant's costs of the

appeal.

HEEREY J I agree. There is only one additional matter to which I wish to advert. The appeal book in this matter covered some 168 pages but did not contain any record of the reasons of the learned trial Judge for the order appealed against. It was only by chance that Mr. Blank of counsel, who appeared below, was able to assist this Court with his notes of the reasons given by his Honour when the order was made. This is self-evidently a most unsatisfactory position and I hope that it will not be repeated.

FINN J I agree with the reasons of the presiding Judge and with the comments of Heerey J.