Hayes v Pioneer Credit Acquisition Services Pty Ltd

1. The appeal is allowed.
2. The judgment of the Federal Circuit Court of Australia delivered on 5 November 2018 is set aside.
3. The matter is remitted to the Federal Circuit Court of Australia for a new trial. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

RANGIAH J: 1 The appellant, Brett John Hayes, appeals against a judgment of the Federal Circuit Court of Australia delivered on 5 November 2018. The primary judge ordered that a sequestration order be made against the estate of the appellant. 2 The appellant is self-represented in the appeal. In the course of the hearing of the appeal, the appellant stated that: My appeal is wholly and solely based that I was denied my right to present my case as I so choose and I was under duress and I was threatened. 3 Accordingly, although the appellant's notice of appeal sets out 17 grounds of appeal, I understand him to only pursue the grounds that allege he was denied procedural fairness. He alleges that the primary judge denied him a reasonable opportunity to present his case by: (1) refusing to allow him to be represented by his friend, Neil Welch; (2) depriving him of the opportunity to receive other assistance from Mr Welch; (3) calling security staff into the courtroom, which had the effect of intimidating the appellant and affecting his ability to adequately make submissions. 4 This is the third time the respondent's bankruptcy proceedings against the appellant have found their way to this Court from the Federal Circuit Court. 5 The first was the respondent's appeal against a judgment of a Federal Circuit Court judge dismissing the creditor's petition. On 21 February 2017, I set aside the judgment and remitted the matter to the Federal Circuit Court for a new trial: Pioneer Credit Acquisition Services Pty Ltd v Hayes [2017] FCA 124. 6 The second was the appellant's appeal against an order made by a different Federal Circuit Court judge that a sequestration order be made against the appellant's estate. On 30 July 2018, I found that the trial judge acted unreasonably in deciding that the appellant had refused to identify himself as a party to the proceeding and having him removed from the courtroom by security staff, before proceeding with the hearing in his absence. I held that the appellant was denied procedural fairness. I set aside the judgment and remitted the matter for a new trial: Hayes v Pioneer Credit Acquisition Services Pty Ltd [2018] FCA 1113. 7 On 31 October 2018, a third Federal Circuit Court judge heard the creditor's petition. At the hearing, the primary judge refused to allow the appellant to be represented by Mr Welch, who is not a lawyer. His Honour also directed Mr Welch to leave the area where he was sitting behind the bar table near the appellant and move to the public gallery. His Honour called security staff into the courtroom. Those matters form the basis of the present appeal. 8 The early part of the hearing before the primary judge is recorded in the transcript as follows: MR B.J. HAYES: Good morning. I'm a man, Brett John Hayes. I'm sorry, I've just had a little momentary lapse. Until otherwise stated, for the record, a man named Neil Welch will be speaking for - - - HIS HONOUR: I beg your pardon? I'm sorry. MR HAYES: Yes. HIS HONOUR: What did you say then? MR HAYES: I said until otherwise stated, for the record - - - HIS HONOUR: "Until otherwise stated". MR HAYES: Just whenever - until I say otherwise. HIS HONOUR: What do you mean by that? MR HAYES: Understand until I say otherwise. HIS HONOUR: What is your name? MR HAYES: I am Brett John Hayes. HIS HONOUR: All right. And you appear for yourself; is that correct? MR HAYES: I am, myself. Correct, yes. HIS HONOUR: Yes. Who is the gentleman sitting behind you? MR HAYES: It's a man named Neil Welch who will be speaking for I, as I - on my - - - HIS HONOUR: No. No, he won't be. MR HAYES: I beg your pardon? HIS HONOUR: No, he won't be. MR HAYES: Why? HIS HONOUR: Mr - what's your name? MR N. WELCH: Neil Welch, your Honour. HIS HONOUR: Go behind the bar area. You're not a lawyer? MR WELCH: No. No. No, your Honour. I'm not. HIS HONOUR: No. Well, you go behind the - - - MR HAYES: I'm not a lawyer either. HIS HONOUR: - - - area now. You go behind the lawyer. I'm directing you to do that. Do it now. Sit down, Mr Hayes. MR HAYES: Excuse me. HIS HONOUR: Sit down. MR HAYES: I'm not a lawyer, and I'm not at the bar table. I'm at Queen's bench. Is this a Commonwealth court of law? HIS HONOUR: Sit down, Mr Hayes. MR HAYES: Excuse me, I - no. HIS HONOUR: Sit down. MR HAYES: I'm not a member of the bar. I'm not a member of a private society. And is the man known as Mr Messina, is he named any of the plaintiffs or the applicants in this matter? Is his name there? Are you stating that there is one law for one, and another law for another in this matter? HIS HONOUR: Mr Hayes - - - MR HAYES: Yes? HIS HONOUR: - - - there are a number of procedural matters that have to be attended to - - - MR HAYES: Yes. HIS HONOUR: - - - in this matter. The first is the recording of appearances, and that has taken place. You have identified yourself as the respondent. MR HAYES: Excuse me. With the - is the definition of a "respondent" a man who responds? HIS HONOUR: Yes. You have - I - - - MR HAYES: It is simply - excuse me. Is the - it's a "yes" or "no". Is the definition of a "respondent" the man who responds? If it's - if there's other contractual obligations, and there is some form of contractual obligation that I'm agreeing to without you disclosing what the definition of "respondent" is, it's not fair. That's unfair. It's undishonourable, and I'm not - no. HIS HONOUR: Mr Hayes, sit down. MR HAYES: Excuse me. I am Brett John Hayes. If calling me by "Mr Hayes", which is a nickname, helps you in either way and makes you feel more comfortable, I'm more than happy responding to "Mr Hayes" but only as a nickname. HIS HONOUR: Mr Hayes, please sit down. MR HAYES: Is that agreed? Do we have an agreement? HIS HONOUR: Please sit down. MR HAYES: Do we have an agreement? I am not Mr Hayes. I am Brett John Hayes. HIS HONOUR: Mr - - - MR HAYES: Are we going to do this over and over again? HIS HONOUR: Mr Hayes, if you don't sit down, I will take it that you are attempting to thwart the authority of this court. MR HAYES: Are you - is the authority of this court attempting to rename a man? Are you attempting to rename I? HIS HONOUR: I will ask you again to sit down. MR HAYES: Look, I'm not going to be threatened by you. You're causing harm and damage to me here right now. HIS HONOUR: All right. MR HAYES: Why are you causing harm and damage? I've caused you no harm. HIS HONOUR: Mr Hayes, I will - I note that you have refused to sit down. MR HAYES: Mr Hayes doesn't exist. HIS HONOUR: I will now warn you that if you don't sit down, I will have you removed from the court. … (Underlining added.) 9 The parties agree that transcript of the hearing before the primary judge omits some exchanges that took place between his Honour and the appellant. They agree that the missing exchanges were as follows. 10 First, the transcript records the appellant as saying, "Until otherwise stated, for the record, a man named Neil Welch will be speaking for---". The dashes were apparently included by the transcriber to indicate that the appellant said words that were indistinct. The parties agree that the words said were, "I, as I, under my instruction." 11 Second, the parties agree that the transcript omits words said by the primary judge immediately before, "I beg your pardon?". The parties agree that his Honour said, "You will remove yourself and get out now." Those words were directed to Mr Welch. I have some doubts about whether those words were said at precisely that point in the hearing, as the context suggests they were more likely to have been said later, perhaps after his Honour told Mr Welch to, "Go behind the bar area." However, I accept the parties' agreement. The respondent accepts that Mr Welch was told forcefully to go into the public gallery. 12 Third, the parties agree that the primary judge called for security staff to come into the courtroom, and that the words said by his Honour to do so have been omitted from the transcript. The parties agree that this occurred early in the hearing, but have not identified precisely when. 13 It is peculiar that some of the words spoken by the primary judge have been omitted from the transcript. It is not as if the transcript contains any notations indicating that his Honour said words that were too indistinct to be transcribed. In any event, the situation has been resolved by the agreement of the parties. 14 After the initial part of the hearing described above, the hearing continued, with the appellant making submissions on his own behalf. Judgment was reserved and delivered on 5 November 2018. 15 The primary judge held, relevantly: [8] The respondent's allegations to the effect that the judgment obtained against him in the Magistrates Court at Southport was invalid or of no effect were baseless. An appeal against the entry of that judgment was dismissed and an application to set aside such judgment was also dismissed. The judgment stands as a binding and enforceable judgment of a court. [9] The respondent has not demonstrated that he has any arguable counterclaim/cross-claim against either the applicant or CBA which would justify the court going behind the judgment entered against the respondent in the Magistrates Court at Southport. [10] The court finds that the act of bankruptcy occurred on 21 August 2015. The evidence establishes that the respondent had failed to pay the debt then owed to the applicant by that date, that being a time more than twenty-one (21) days after the service upon the respondent of the bankruptcy notice on 30 July 2015. The act of bankruptcy was therefore deemed to have been committed pursuant to the provisions of s 40(1)(g) of the Act. The respondent was at that time, and remains, unable to pay his debts as and when they fall due for payment. [11] During the course of the hearing the respondent made lengthy oral submissions on his own behalf. He was articulate and well versed in making submissions to the court about the matters relied upon by him as set out in the affidavit material filed on his behalf. He demonstrated that he was well able to put forward his own argument throughout the course of the hearing, notwithstanding that he had earlier been refused a request for some other legally unqualified person to assist him in such tasks. … 16 The appellant has not filed any document identified as written submissions. However, he has filed a document containing the following statements, which I take to be submissions: 1. It is the right of any man to be able present his case in whatsoever manner he sees fit. 2. [The primary judge] denied i my right to present my case in the manner i chose. 3. [The primary judge] used threats and menaces by again threatening to have i removed. 4. [The primary judge] had already removed by threats the man i had with me to assist. … 7. These threats by [the primary judge] placed i under enormous and undue duress resulting in i not being able to present my case. … (Errors in original.) 17 In the appeal, the appellant made oral submissions that included the following: So I asked a friend to speak for I… as I, under my instructions. So whatever he says I was going to be responsible for. That right for me to have any man speak for me was removed. That's how I chose to defend myself. That's how I choose. So that was - that was removed. My help was removed. So even with the man helping me to take notes, he was removed from the - I believe the - the man sitting in your position called it the table. So he was removed. So then - and then after he was removed I was then threatened to have myself removed from the court. 18 The appellant alleges that he was denied a reasonable opportunity to present his case by the primary judge's refusal to allow him to be represented by Mr Welch; by being deprived of other assistance due to the direction that Mr Welch leave the area behind the bar table; and by his Honour calling security staff into the courtroom. 19 Before the primary judge, the appellant began by stating, "Until otherwise stated, for the record, a man named Neil Welch will be speaking for I, as I, under my instruction." The appellant must be understood as having asserted a right to be represented by Mr Welch. The primary judge ruled that, as Mr Welch was not a lawyer, he would not be permitted to represent the appellant. 20 Section 44 of the Federal Circuit Court of Australia Act 1999 (Cth) provides: A party to a proceeding before the Federal Circuit Court of Australia is not entitled to be represented by another person unless: (a) under the Judiciary Act 1903, the other person is entitled to practise as a barrister or solicitor, or both, in a federal court; or (b) under the regulations, the other person is taken to be an authorised representative; or (c) another law of the Commonwealth authorises the other person to represent the party. 21 It is not suggested that s 44(b) and (c) of the Federal Circuit Court of Australia Act have any present relevance. In P & R (No 1) [2002] FMCAfam 65, it was held that the Federal Magistrates Court had "inherent power" to permit a person who was not a barrister or solicitor or both to appear. Like s 44(a), r 4.01 of the Federal Court Rules 2001 (Cth) is couched in terms that, on their face, suggest that a person cannot be represented by a person who is not a lawyer, but in Nepal v Minister for Immigration and Border Protection [2015] FCA 366, Edelman J observed at [16] that there are reasonable grounds for a submission that r 4.01 does not prohibit the exercise of a discretion to permit any person to assist a party by addressing the Federal Court. 22 Having regard to the limits of the argument presented by the appellant, it is unnecessary to consider whether the Federal Circuit Court has a discretion to allow a litigant to be represented by an unqualified person. It is enough to rule that, contrary to the appellant's submission, it is not, "the right of any man to be able to present his case in whatsoever manner he sees fit". In particular, s 44 of the Federal Circuit Court of Australia Act makes it clear that there is no "right" in a litigant to be represented by an unqualified person. 23 However, a question arises as to whether the primary judge denied the appellant the ability to obtain other assistance from Mr Welch, and whether that resulted in procedural unfairness. The appellant submits that his Honour, "removed by threats the man i (sic) had with me to assist." The appellant mentions the taking of notes as an example of the assistance that Mr Welch could have provided. 24 When the primary judge ruled that Mr Welch would not be permitted to represent the appellant, his Honour told Mr Welch, "You will remove yourself and get out now", and, later, "Go behind the bar area." The respondent accepts that his Honour directed Mr Welch to move from where he was sitting behind the bar table to the public gallery. I consider that his Honour's direction resulted in the appellant being deprived of assistance from Mr Welch in the presentation of the case. 25 In McKenzie v McKenzie [1971] P 33, the circumstances of the case were described by Sachs LJ at 40-41 : Not having legal aid at the moment when the cause was called on, [the plaintiff] had however the advantage at that moment of having sitting beside him a young man who had been deputed to help him by a firm of solicitors whom he had previously instructed. That young man happened to be someone who was qualified as a member of the Bar in Australia; obviously the assistance which he could give might well have proved valuable. On the first day of the trial, however, his position beside the husband attracted the attention of the trial judge, who asked him who he was and who then spoke to him in terms which he, the young man, not unnaturally took to be an intimation that he should desist from what he was doing. He went away, first to the back of the court and then out of the court. 26 Lord Sachs continued at 41: That young man, however, had done nothing, so far as this court has been able to ascertain, other than sit quietly beside the husband and give him from time to time some quiet advice or prompting. In those circumstances, the husband was fully entitled to have that assistance, and the young man was fully entitled to give it. That was settled in 1831, when Lord Tenterden CJ said (in Collier v Hicks (1931) 2 B of Ad 663 at 669): Any person, whether he be a professional man or not, may attend as a friend of either party, may take notes, may quietly make suggestions, and give advice… That statement of the position has never been criticised… No cases have been cited to this court on the effect of an error of the type now under consideration; but for my part I would have no hesitation in rejecting the submission that the proceedings were a nullity. It does, however, seem to me that where such an error takes place the onus rests on the opposite party to show that it did not cause prejudice. 27 Lord Davies held at 37-38: [Counsel] submitted, in my opinion rightly, that the learned judge was wrong in taking that course. Mr Hanger was not there to take part in the proceedings in any sort of way. He was merely there to prompt and to make suggestion to the husband in the conduct of his case, the calling of his witnesses and, perhaps more importantly, on the very critical and difficult questions of fact in this case, to assist him by making suggestions as to the cross-examination of the wife and her witnesses. … [Counsel] submitted, in my opinion rightly, that the judge ought not to…have prevented Mr Hanger from assisting the husband in the way that he proposed to do. 28 Incidentally, the Australian barrister referred to in McKenzie v McKenzie was Ian Hanger QC of the Queensland Bar. A person who provides assistance to an unrepresented litigant by sitting with the litigant and providing advice and assistance has come to be known as a "McKenzie friend" (although it may be noted the use of that expression has been criticised). 29 In R v Leicester City Justices, ex parte Barrow [1992] 2 QB 260, the Court of Appeal considered whether, in a civil case, a litigant has a right to the assistance of a friend subject to the power of the court to disallow such assistance where the conduct of the friend in disruptive or is otherwise an abuse of the court's processes; or whether the court has a discretion to permit such assistance. Lord Donaldson took the former view, while Lord Staughton said that it did not matter because the result would be the same in the circumstances of the case. Sir Christopher Slade agreed with both Lord Donaldson and Lord Staughton. 30 In Australia, the prevailing view is that in criminal cases, the court has a discretion as to whether to allow a litigant a McKenzie friend: for example, Smith v R (1985) 159 CLR 532 at 534; R v EJ Smith [1982] 2 NSWLR 608; R v Dodd (No 2) [1985] 2 Qd R 282 at 283-284; Crown v Burke [1993] 1 Qd R 166 at 167, 173, 178-179. The position is different in civil cases. I understand the Queensland Court of Appeal to have held in Coffey v State of Queensland [2010] QCA 29 at [37]-[38] that in a civil case, an unrepresented litigant may have a person attend as a McKenzie friend, subject to the power of the court to disallow such assistance where that becomes necessary. 31 In the present case, the primary judge peremptorily directed Mr Welch to leave the area behind the bar table where he was seated near the applicant and move into the public gallery. There is no suggestion that Mr Welch was disrupting or otherwise abusing the processes of the Court. The appellant was entitled to such assistance as Mr Welch could provide by taking notes, quietly making suggestions and advising him. There was no basis for the primary judge to deprive the appellant of that assistance by requiring Mr Welch to leave. In my respectful opinion, the appellant was denied procedural fairness. 32 In Nobarani v Mariconte (2018) 359 ALR 31; [2018] HCA 36, the High Court held at [39] that a denial of procedural fairness will have caused a substantial wrong if it deprived the affected person of the possibility of a successful outcome, and that, unless the other party can show some adequate reason, a new trial will be ordered. 33 In the present case, the respondent submits that even if Mr Welch had been permitted to provide assistance, it could not possibly have made a difference to the outcome of the case. The respondent relies upon the primary judge's findings that the appellant was "articulate", "well versed in making submissions to the court" and "well able to put forward his own argument throughout the course of the hearing". The later parts of the transcript do not support his Honour's characterisation of the appellant's abilities. To the contrary, the appellant was discomposed, rambling and inarticulate. 34 As the High Court observed in Nobarani v Mariconte at [48], a submission that a properly conducted trial could make no difference to the result will rarely succeed. Even if the primary judge's assessment of the appellant's ability to present his case is assumed to be correct, I am not satisfied that the respondent has demonstrated that the assistance of Mr Welch in taking notes and providing advice could not possibly have made a difference to the outcome. 35 The appellant's third submission is that he was denied a fair opportunity to present his case when the primary judge called security staff into the courtroom. He asserts that this left him feeling threatened and intimidated, particularly after his experience of being removed from the courtroom during the second hearing of the creditor's petition. 36 In R v EJ Smith, Street CJ (Nagle CJ and Maxwell J agreeing) said at 616-617: It is plain that within the courtroom itself the authority of the presiding judge in respect of security matters is absolute. An excess by the presiding judge in measures introduced on his authority within the courtroom might, in an extreme case, be relied upon on appeal as a ground for contending that there had been a miscarriage and that a conviction resulting from a trial held in such a context should be quashed. The exercise by the judge of his absolute authority within the courtroom itself is in this sense subject to appellate review. 37 In R v Farr (1994) 74 A Crim R 405, McPherson JA (Davies JA agreeing) said at 407: The underlying reason for this attitude toward matters of security is that a judge presiding at a trial has a power, which is not judicial but administrative, of regulating and controlling the conduct of his own court… 38 The precise point in time when the primary judge called the security staff into the courtroom is not clear, as his Honour's words are missing from the transcript. However, I infer that it occurred when the appellant was refusing to comply with the direction of the primary judge to sit down. The transcript shows that the appellant was being obstreperous and somewhat belligerent. His Honour warned the appellant that if he did not sit down, he would be removed from the courtroom. 39 The security arrangements for the courtroom were at the discretion of the primary judge. The appellant has not shown that it was unreasonable for his Honour to call in security staff, or that his Honour was otherwise in error in doing so. 40 However, as I have said, the appellant was denied procedural fairness by being denied the assistance of a McKenzie friend. For that reason, the appeal must succeed and a new trial be ordered. 41 I wish to emphasise that, once again, the outcome has not been caused by any fault of the respondent's counsel and solicitors. They have at all times conducted themselves with restraint and professionalism. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.