Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority

REASONS FOR JUDGMENT (Delivered Ex Tempore and Revised) 1 The applicant, Avetmiss Easy Pty Ltd (Avetmiss), has brought an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). This Court's jurisdiction is limited to an appeal on a question of law under s 44. The Tribunal decision from which the appeal is brought is a decision made on 17 September 2013. In that decision, the Administrative Appeals Tribunal dismissed the application of Avetmiss to reinstate its review application. In the course of the matter being returned for first directions in this Court, attention was drawn to the fact that the applicant was not represented by a lawyer as required under r 4.01(2) of the Federal Court Rules 2011 (Cth). 2 In those circumstances, an application was made by the applicant for dispensation from the operation of r 4.01(2), which provides that "[a] corporation must not proceed in the Court other than by a lawyer". That application is opposed by the first respondent. An affidavit sworn by Karst Hinderik Maat on 5 February 2014 was relied upon by the first respondent in its opposition. Mr Smith, who is the sole director and shareholder of the applicant, also made an affidavit to be relied upon in this application, and I have taken into account the contents of that affidavit. In oral submissions before me, Mr Smith made a number of submissions why dispensation should be granted. 3 He submitted that he was the sole director and shareholder of Avetmiss, that he had a clear connection with the company and that he was using that company to conduct his own business. Accordingly he was in the best position to represent the company in this Court. He described his position as a Justice of the Peace in Victoria and a number of other offices that he held. He described his experience in litigation in this Court over a number of years, and his experience as an auditor. He described having acted on his own behalf in several proceedings in the Victorian Civil and Administrative Tribunal. He also told the Court that he had worked as a private investigator. 4 Some of these facts appear in Mr Smith's affidavit and some do not. Mr Smith's involvement in previous litigation (the only matter not recorded in his affidavit) is a matter I am prepared to take into account in the circumstances of this case, and I did not understand the first respondent to have any objection to that. As I understand it, in Mr Smith's submission that evidence points to a conclusion that he has a sufficient familiarity with the way legal proceedings are conducted to satisfy me that he is able to conduct these proceedings on behalf of the corporation, even though he is not a lawyer. Mr Smith also made some submissions in response to the affidavit material filed on behalf of the first respondent, making some frank concessions that some of his behaviour to date in the conduct of this proceeding was not appropriate, and he indicated to me that he had apologised to the first respondent for that. 5 He frankly conceded that he could be abrupt, but he gave an undertaking to the Court, which I treat only as an informal undertaking and really as part of his submissions, that he would attempt to mirror the rules and ethics of lawyers in the way that he conducted this proceeding if dispensation were granted. He indicated that there was a possibility that the application might have to be withdrawn if the dispensation was not granted. 6 The first respondent filed written submissions in opposition to the application for dispensation and also made oral submissions about why there should be no dispensation. It referred the Court to a number of authorities which I accept are relevant to the exercise of the discretion. 7 In substance, the first respondent relied on the following matters. It relied on the complexity of the case, being an appeal on a question of law. It pointed to the content of the Notice of Appeal, which it submitted demonstrated Mr Smith was not able competently or efficiently to identify a question of law and conduct the case of the company concerning that question. It relied on Mr Smith's conduct of the case so far and the inferences it invited the Court to draw about his likely future conduct. It spent some time in submissions characterising that conduct and attempted to do so, I accept, in a fair way. 8 The substance of those submissions was that, to date, Mr Smith has made a number of unsubstantiated allegations of contempt, abuse of process, deceit and perjury by the first respondent and the Administrative Appeals Tribunal, in correspondence with both the first respondent and the Court. It also submitted that there was a failure to comply with the obligations under the Court's Practice Note APP2, and that there had been a number of inappropriate communications with judges' chambers which, as I understand the submission, it is submitted would not have occurred if the company were represented. Finally it relied on the fact that Avetmiss is an applicant in this proceeding rather than a respondent, and it properly pointed to a distinction in the authorities between the circumstances in which dispensation might be granted to a respondent company rather than to an applicant. 9 Importantly, it also highlighted the fact that at the time of filing the outline of submissions, and at the time of hearing, there was no detailed financial evidence about the applicant company or those who stand behind it. It properly indicated that the financial capacity of the company to engage legal representation is an important consideration in the exercise of discretion. One of the other submissions highlighted orally by counsel for the first respondent was the importance of the existence of disciplinary processes in respect of legal representatives acting on behalf of clients in court, and that the absence of those kinds of constraints over a person in Mr Smith's situation could mean that there was a higher risk of the proceeding being conducted in a way that was not appropriate for the conduct of a proceeding in the Federal Court. 10 While I accept that submission has some force in a factual sense, given the way Mr Smith has conducted the proceeding to date, I am not persuaded that it is the absence of disciplinary processes which is the principal consideration in this matter. Further, I do not entirely accept the submission on behalf of the first respondent that this is a complex proceeding. Although it is a proceeding which must involve a question of law, the underlying decision is a refusal to reinstate an application. The reinstatement power of the Tribunal is a relatively straightforward one. The decision of the Tribunal is a relatively short one and in that sense I see the issues in this case, although they are principally questions of law, as relatively straightforward ones. 11 The leading authority on the applicable principles for the exercise of the dispensation discretion is the decision of French J (as his Honour then was) in Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [12]-[13]: The position under the Federal Court Rules however is not as restrictive as that under the English Rules and various of the State Supreme Court Rules. In this respect I refer to what I said in Simto Resources Limited v Normandy Capital Limited (1993) 11 ACLC 856. Although the rationale for the restriction is basically the same in all jurisdictions, the power of the Federal Court to grant leave to a corporation to carry on a proceeding, otherwise than by a solicitor, is conferred as an integral part of the Rules in O 4 r 14 and O 9 r 1. There is no threshold requirement of special or exceptional circumstances. As Smithers J said of O 4 r 14(2) and O 9 r 3 in Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 73: Those rules proceed on the basis that there is a discretion in the court to permit a company to commence and carry on any proceedings other than by a solicitor and to enter an appearance or defend any proceeding without a solicitor and, it would seem, it is a discretion to be exercised by reference to all relevant considerations. 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 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. The factual complexities of the case and the capacity of the proposed representative to conduct it effectively are also relevant - VN International Video Pty Ltd v West End HK TVB Video & Others (1996) 14 ACLC 1308. 12 One of the factors that his Honour mentions is the financial capacity or lack of capacity of the corporation and those standing behind it. There is no evidence before the Court of Avetmiss's financial position, nor is there any evidence before the Court of Mr Smith's financial position. This ought to be and is a critical factor in the grant of leave and, as the evidence currently stands, the Court cannot be satisfied the corporation has no funds to afford legal representation. 13 Indeed the tenor of the submissions from Mr Smith is that he as director chooses not to expend further funds on legal representation. Although Mr Smith sought to fill gaps in the evidence from the bar table I am not able to accept the statements that he made from the bar table and give them any evidentiary value in the consideration of how to exercise this discretion. Evidence as to the financial position of the company and Mr Smith needed to be regularly and properly proved. In one sense, his omission to have put such evidence before the Court and his attempt to do so from the bar table does reveal some of the difficulties that the first respondent has pointed to in granting dispensation in this case. 14 The Court does have limited resources and must deal with all the cases in this Court in a fair and efficient manner, and to do so it depends on the professionalism, restraint, organisation and efficiency with which the representatives of each party conduct those proceedings. Having had the benefit of listening to Mr Smith for over an hour in the directions hearing this morning and having asked him to respond to questions I put to him about questions of law, jurisdiction and authorities, I have formed the view that he has some difficulty in focusing on matters which arise under s 44 of the AAT Act, and he has some difficulties in confining himself to the matters that are truly within this Court's jurisdiction. 15 To that extent I do have some significant doubts about his capacity to confine issues in the way that they must be confined on an appeal under s 44 in this Court. Nevertheless, Mr Smith has a strong sense of grievance about the Administrative Appeals Tribunal's reinstatement refusal and he has a strong sense of grievance about the events that led up to that. He insists that he can demonstrate legal error in the reinstatement decision and that as the controlling mind of Avetmiss he is best placed to do that: see Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 74-75 per Smithers J. I am prepared to give him the benefit of the doubt for a limited time and for a limited purpose. 16 The first respondent has filed a Notice of Objection to Competency which is listed for hearing on 17 February 2014 before me. That objection will deal with the Notice of Appeal filed by Avetmiss on 17 October 2013. 17 The question for the Court on 17 February 2014 will be whether a question of law is fairly raised in that Notice of Appeal as it currently stands. If the Court concludes a question of law is fairly raised on that Notice of Appeal as it currently stands then the Court has jurisdiction to hear the appeal and the proceeding will continue. If the Court decides that no question of law is fairly raised on that Notice of Appeal as it stands then this Court has no jurisdiction to entertain Avetmiss's appeal and the proceeding will probably be dismissed. In all the circumstances of this case, and with some trepidation, I am prepared to give a limited dispensation to the applicant from the operation of r 4.01(2). That dispensation will remain in place until the determination of the first respondent's objection to competency. 18 If I determine the appeal is competent, I will then consider on fresh evidence and new arguments whether the dispensation should be continued. I emphasise that a critical consideration (but not the sole consideration) for whether the dispensation should be continued, if I have concluded the Court has jurisdiction, will be the way Mr Smith has conducted himself and has conducted this proceeding between now and that determination. He assures me he will mirror the professionalism and the ethics that this Court can expect of lawyers. If he is good to his word and he conducts this proceeding professionally and efficiently and he desists in the kinds of threats, language and communications that have been in evidence before me and which are unacceptable in the conduct of this proceeding, then the prospects of dispensation being continued are increased. 19 But I emphasise that I will consider the matter afresh on the determination of the objection to competency. Of course, if I determine that the appeal is incompetent, that is, that it raises no question of law, then the appeal will be at an end in any event and the operation of r 4.01(2) will be of no further consequence. 20 Accordingly there will be orders granting dispensation to the applicant from the operation of r 4.01(2), limited to the hearing and determination of the first respondent's objection to competency in this appeal. If any further dispensation is required, as I have said, leave will need to be sought again on behalf of the applicant and that matter heard and determined again. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.