Australian Communications Authority v Viper Communications Pty Ltd

REASONS FOR JUDGMENT 1 I have before me two applications commenced by the Australian Communications Authority against, first, Viper Communications Pty Limited and secondly, Albury Local Internet Pty Limited. Because each case raised identical issues they have both been placed into my docket and are now to be dealt with together. It appears unlikely that separate points will develop in relation to either of them which will require separate determination. I will discuss with them together in this judgment. 2 In each case the respondent, a corporation, has filed a notice of motion seeking an order pursuant to Order 9 rule 1(3) of the Federal Court Rules that an appearance be entered and the proceedings be defended by a person other than a solicitor. In the case of Albury Local Internet Pty Limited, the respondent seeks that Mr Ross Wheeler, a director of the respondent, be granted right of appearance to represent the respondent. In the case of Viper Communications Pty Limited, the notice of motion seeks an order that Mr Mark Russell be granted right of appearance to represent the respondent, Mr Russell being a director of that company. Both notices of motion also seek an order that Mr Adam Todd be granted a conditional right of appearance to further represent each respondent. Mr Todd has in fact appeared in Court for and with the two respondents up to this point. Each of Mr Russell, Mr Wheeler and Mr Todd has spoken in support of the making of the orders sought. Mr Todd is not a lawyer. He was described in an internet message, of which he was apparently the author, and which was annexed to an affidavit lodged today, as an "IT&T consultant and sometime Activist". 3 The substantive application in each case seeks an injunction requiring that the respondent, an internet service provider, take all steps reasonably required to enter into the scheme known as the Telecommunications Industry Ombudsman Scheme ("the Scheme") operated by the Telecommunications Industry Ombudsman Limited. Each of the respondents say, as I understand it, that they are prepared to join the scheme. However the notices which have been served upon them require that they join a corporation called the Telecommunications Industry Ombudsman Limited. They say that whilst being prepared to join the Scheme, they are not prepared to become members of this corporation. 4 A preliminary question was devised by the applicant, raising the issue of statutory interpretation as to whether the requirement under the relevant legislation that internet service providers join the Scheme requires that they become members of the corporation. The terms of the question do not need to be recited here. Suffice it to say that the issue has some complexities which will need to be addressed when the matter comes for hearing as a preliminary question. 5 At the last hearing of this matter a further issue was raised by Mr Todd, on behalf of the respondents, as to whether, even if the answer compiled by the applicant were answered adversely to the respondents, applications which the respondents have already lodged to join the Scheme, but upon which a number of alterations had been made, would be sufficient to discharge their obligation. Accordingly, a further question has been devised by the applicant which appears to meet this additional issue. The hearing of these two questions has been fixed for 17 July 2000. 6 Each of Mr Wheeler and Mr Russell have filed affidavits in support of their respective notices of motion. Their initial affidavits said simply that the respondent in each case was unable to afford a solicitor and that no pro bono solicitor was available in spite of attempts to obtain legal assistance. A further detailed affidavit has since been lodged by Mr Wheeler but not by Mr Russell. Mr Wheeler has also provided quite extensive documentary material, including copies of taxation returns for the years 1995 to 1999. These show that the respondent, Albury Local Internet Pty Limited, has grown significantly since its inception in 1995. The last taxation return shows a gross income in the order of $750,000 with a taxable income of slightly over $200,000. Much of Mr Wheeler's affidavit goes to explain that, with recent changes to internet service delivery, requiring the outlay of substantial funds, the financial records supplied to the Court do little to show the current situation of these companies. 7 Mr Russell on behalf of Viper Communications Pty Limited has provided much less information in support of its notice of motion. The last trading statement, which was for the year ended 30 June 1998, showed a gross profit on trading of approximately $103,000. He also deposes to very significant expenses. 8 Order 9 rule 1(1) of the Federal Court Rules provides, as relevant here: "A respondent may enter an appearance and may defend a proceeding by a solicitor or in person." Subrule 3 is as follows: "Notwithstanding subrule 1 and subject to any Act a corporation may not without the leave of the Court or a Judge enter an appearance or defend any proceeding except by a solicitor." 9 In fact a defence has been filed in one of these cases, but no appearances have yet been filed. Presumably the Registry would not accept one other than through a solicitor. 10 There have been a number of cases in this court dealing with Order 9 rule 1. Most of them relate to applicant corporations. The strictness with which the rule will be enforced in relation to applicants will not necessarily be appropriate to respondents, who have not chosen to invoke the jurisdiction of the Court. Nevertheless the underlying issues remain the same. In Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 French J made the following observations: "Nevertheless the policy of the rule is clear that ordinarily a corporation will be required to be represented by a solicitor. Relevant factors for dispensing of 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. The factual complexities of the case and the capacity of the proposed representative to conduct it effectively arealso relevant - VN International Video Pty Ltd v West End HK TVB Video (1996) 14 ACLC 1308. There is no doubt that those who choose to carry on their business through corporate structures enjoy advantages that those carrying on business on their own account do not enjoy. They also acquire disabilities and obligations. One of the disabilities is that which is opposed by the Rules of Court under consideration in this case." 11 His Honour in that case declined to give leave to a respondent who was seeking to be represented other than by a solicitor. 12 Whilst I have the greatest of sympathy for the respondents in terms of their financial situations, nevertheless the issues which have now been raised before this court are of sufficient legal complexity to make it, in my view, almost impossible for the respondents' interests to be represented adequately by a non-lawyer. That this is so has been thoroughly demonstrated during the last two direction hearings. On the last occasion the transcript shows that the Court was sitting for an hour and a quarter dealing with issues which, had an experienced lawyer been appearing, would have been disposed of within 20 minutes at most. Some of the issues raised on behalf of the respondent appeared to border on the farcical. 13 The respondents' representatives, Mr Wheeler and Mr Russell, assert that they are unable to afford a lawyer. It is impossible to discern from the financial material which they have provided, the extent to which there might be any leverage in their situation. The fact that there are two of them means that their individual cost liability can probably be halved. I propose in any event to refer the matter to the Registrar under Order 80 rule 4 of the Federal Court Rules for referral to a legal practitioner on the Pro Bono Panel for legal assistance. 14 I am firmly of the view that it would be in the best interests of the respondents, as well as those of the applicant, if the respondents were legally represented. A great deal of time has already been expended unnecessarily in dealing with issues which would not have arisen had the respondents been legally represented. As Mr Russell and Mr Wheeler have been warned, the respondents face a potential adverse costs order if the substantive issues are decided against them. The more time that is unnecessarily expended the greater will be their obligation in that eventuality. Moreover the Court's time is being wasted in an unacceptable manner. In my view the preponderance of relevant considerations clearly point to the declining of leave in this case. Accordingly I decline to make the orders sought in each of the notices of motion. 15 I reserve the question of costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mathews.