JP Morgan Trust Australia Limited v Hammond

Judgment 1JOHNSON J : This is an application by Patrick Hammond for leave to appear for his wife, Tracie Hammond, in proceedings listed for hearing in this Court on 3 and 4 April 2012. 2In those proceedings, commenced by Statement of Claim filed on 22 April 2008 the Plaintiff, JP Morgan Trust Australia Limited, seeks relief against the Defendant, Tracie Hammond, alleging mortgage default and seeking an order for possession of a property at Faulconbridge. 3Mr Hammond is not a party to the proceedings. 4The proceedings have been before the Court for nearly four years. A range of pleadings have been filed. The current and most recent pleadings include an Amended Defence and Reply filed by the Defendant on 9 September 2011, an Amended Cross-Claim filed on 4 May 2011 (in which Tracie Hammond is the Cross-Claimant and JP Morgan Trust Australia Pty Limited is the Cross-Defendant), a Defence to the Amended Cross-Claim and Reply filed 27 May 2011 and a Reply to the Amended Defence to the Cross-Claim filed 9 July 2011. 5The Court has been informed that Tracie Hammond has not attended the Court on any occasion when the matter was listed, although she did attend a mediation which took place at some time prior to 11 March 2011. 6The Court record discloses that Patrick Hammond has appeared, by leave, on a variety of occasions during the history of the litigation, before Registrars and Judges in the Common Law Division. He appeared, by leave, on an occasion when, on 11 March 2011, the Court of Appeal allowed an appeal from an order for summary judgment in the matter: Hammond v JP Mortgage Trust Australia Limited [2011] NSWCA 57. 7After the Court of Appeal decision, the matter was case managed by Davies J, the Possession List Judge. On a number of occasions when the matter came before his Honour, Davies J raised concerns with respect to a perceived (if not actual) conflict of interest between Patrick Hammond and Tracie Hammond. His Honour raised this on 9 August 2011 (transcript, page 3), 26 August 2011 (transcript, page 3) and 4 November 2011 (transcript, page 1). 8Whatever the position of the Plaintiff had been to Mr Hammond appearing by leave prior to 26 August 2011, it was made clear on that date that the Plaintiff opposed Mr Hammond being granted leave to appear for his wife at the hearing of the proceedings. 9On 4 November 2011, Davies J observed, in the course of granting the parties leave to approach the List Clerk to obtain a hearing date, that it would be a matter for the trial Judge to consider the question of whether Mr Hammond should be granted leave to appear for his wife at the hearing. 10This matter has been allocated to me for hearing. Having regard to the observations of Davies J to which I have referred, I considered it appropriate to list the matter, in advance of the hearing, so that this aspect could be addressed. 11I should mention that Tracie Hammond is not before the Court today. Mr Hammond has informed the Court that she is unwell and indisposed. There is evidence on this application (a report dated 28 January 2004) which states that Mrs Hammond undertook very substantial surgery at the Nepean Hospital in that year. There is also a certificate from a general practitioner, Dr Karen Woolley, dated 13 July 2011, which refers to Mrs Hammond's history of health difficulties since 2002, and again since 2007. It seems apparent that Mrs Hammond has had health difficulties for some time. 12Today, Mr Hammond has made submissions in support of his application to be granted leave to appear for his wife at the hearing. Mr Newton, counsel for the Plaintiff, has opposed that grant of leave. It is now a matter for the Court to determine whether leave should be granted. 13Mr Hammond is not a legal practitioner, nor is he legally qualified. In 2005 at least, he was conducting what could generally be described as a mortgage business. 14The principles to be applied on an application such as this are not in doubt. The ordinary position is that litigants may appear in person or be represented by a legal practitioner: Rule 7.1 Uniform Civil Procedure Rules 2005 . I observe that there is no suggestion that Mrs Hammond has required the appointment of a tutor, and there has never been any application of that sort in these proceedings. 15In Teese v State Bank of New South Wales [2002] NSWCCA 219, Ipp JA (Giles JA agreeing) observed (at [5]-[6]) that the general rule is that where a litigant is not self-represented, he or she should be represented by a solicitor or barrister who is duly admitted. Ipp JA referred (at [10]-[13]) to the strong policy reasons that underlie that practice. These include not only the duties which a legal practitioner owes to the Court and indeed his or her opponent, but the objectivity which is expected of persons who appear for others in court proceedings. 16Ipp JA said that, in exceptional circumstances, the Court will allow a person who is not admitted, and who is not a member of the relevant professional legal body to appear, but good grounds must be shown to the Court before leave will be granted. 17In Damjanovic v Maley [2002] NSWCA 230; 55 NSWLR 149, Stein JA (Mason P and Sheller JA agreeing) referred to the principles to be considered where an application is made by a lay advocate to appear for a litigant in court proceedings. It was made clear that it is an exceptional step to allow a lay advocate to appear in proceedings for a litigant. 18A number of topics were addressed by Stein JA, including the complexity of the case, the unavailability of disciplinary measures and a duty to the Court by lay advocates, the lack of protection of the client and the opponent, and the interests of justice. 19The principles in Teese v State Bank of New South Wales and Damjanovic v Maley have been applied in a number of later cases ( Portelli v Goh [2002] NSWSC 997; Perpetual Limited v Kelso [2008] NSWSC 906; Wang v State of New South Wales [2011] NSWSC 609). 20What is sought by Mr Hammond is an exceptional order, for which good grounds must be demonstrated. 21Mr Hammond points to his wife's state of health. He says that it is a real problem, and her interests are served by him appearing for her at the hearing. 22Mr Hammond has stated (although there is no documentary material before the Court) that an application for legal aid was made unsuccessfully in the early stages of the litigation, which I take to be soon after April 2008. There is nothing to suggest that there has been a further application for legal aid. Mr Hammond has said as well, from the bar table, that he took steps in the early stages of the litigation with the view to retaining a legal practitioner to appear for his wife, but it did not come to pass. 23Mr Hammond submits that he will be in a position to assist the Court in the resolution of the issues to be determined in the proceedings. He has referred to the interests of justice being served by him appearing by leave for his wife, in circumstances where he submits she is not otherwise able to be represented. 24Mr Newton has pointed to a number of issues in opposition to the application. 25Firstly, he observes that the Defendant has served an affidavit of Mr Hammond affirmed 12 September 2011. An affidavit of the Defendant affirmed 25 August 2011, has also been served. Thus, Mr Hammond will be a witness in these proceedings. He is not at arm's length from the proceedings. 26Secondly, Mr Newton took the Court to the Amended Defence and Reply filed on 9 September 2011. He did so to demonstrate that, on the face of that pleading verified by the Defendant, Mr Hammond is a close and active participant in the events which fall to be considered in these proceedings. 27Paragraph 11 of the Amended Defence and Reply asserts that, on 20 March 2008, within the grace period specified in a particular notice, Mr Hammond contacted Challenger Non-Conforming Finance Pty Limited, and an arrangement was made to remedy the default. 28It is also said, in paragraph 27, that the Plaintiff had fraudulently represented itself to be the lender. 29It is alleged in paragraph 28 that, as a result of the Plaintiff's fraudulent representation, the Defendant gave all her interest in the land at Faulconbridge by way of mortgage to the Plaintiff. 30Paragraph 34 of this pleading states that the loan application was submitted on 10 February 2005, to an entity other than the Plaintiff, by Crown Mortgages Pty Limited, a company involved in mortgage origination of which Mr Hammond was the sole director. 31Paragraph 46 asserts that the Plaintiff committed fraud when assessing the Defendant's loan application by falsifying the Defendant's income for the purpose of assessment. 32Paragraph 47 alleges that the Plaintiff was aware that the Defendant was not self-employed, and therefore did not qualify for a "quik doc" loan. 33The Plaintiff submits that, on the face of the pleadings, Mr Hammond is said to be a close and active participant in the events under consideration in the proceedings. 34For the limited purpose of the present application, Mr Newton tendered an application made by facsimile on 10 February 2005 by Mr Hammond, to a Ross Williams to which is annexed a "Lo Doc Declaration of Financial Position" (Exhibit 1). This document asserts that Tracie Hammond was self-employed with an annual income of $185,000.00. 35Mr Hammond has sought to dispute the relevance of this document to the issues to be considered at the hearing. He has asserted that it was not a document upon which the Plaintiff relied. 36The very fact that arguments of this sort are being advanced gives rise to concern. A number of the concerns expressed by Davies J as to a perceived (if not actual) conflict of interest between the Defendant and Mr Hammond are fortified by an examination of the pleadings and Exhibit 1. 37The question is not simply whether Mrs Hammond would like her husband to act as her advocate in this case. Of course, she is not here to express her views on the matter, but I assume that is her wish for the purpose of this application. However, that is not the test. 38A litigant in person has the right to appear for him or herself and that is Mrs Hammond's right. Beyond that, there is a right to have a legal practitioner appear on behalf of a litigant but even then, in the case of actual or perceived conflict of interest, the Court may exclude a legal practitioner from acting for a party to litigation (cf Kallinicos v Hunt [2005] NSWSC 1181; 64 NSWLR 561). 39Mr Hammond's position is more difficult than that of a legal practitioner. He has no right to appear in the Court at all. He needs to satisfy the Court that leave should be granted. He is not at arm's length from the litigation. He is not a relative or friend of Mrs Hammond who has had nothing to do with the subject matter of the litigation and who wishes to assist her. In saying that, I am not suggesting that if such a person did make an application for leave, that it would necessarily be granted. I am making the point that the very involvement of Mr Hammond in the subject matter of the litigation is a fundamental problem for the purpose of the application itself. 40If Mr Hammond was granted leave to appear in the proceedings, he would owe no duty to the Court. He would owe no duty to the opponent. He would owe no duty under the Civil Procedure Act 2005 of the type which would apply to his wife as Defendant, including the duties under s.56 of that Act. 41Of importance to this application is the need for the Court to take steps to ensure that the litigants (both Plaintiff and Defendant) are protected in the sense referred to by Stein JA in Damjanovic v Maley at 163 [79]-[80]. As Stein JA said, lay advocates are unqualified, unaccredited and uninsured and they place a client at considerable risk. An unqualified advocate may cause loss to a party, a lay advocate does not owe the same duties to his client as a lawyer. There is no duty of the type owed by a lawyer to assist the Court in ensuring the proper administration of justice, nor the lawyer's duty to his or her opponent. 42None of these protections for the system of justice exist with an unqualified lay advocate. This is especially so given that, on the face of it, Mr Hammond will be a witness in the proceedings, and the amended pleadings suggest that there are significant issues to which his evidence will relate. 43I have had regard to all the factors which appear to me to be relevant to the current application. I am conscious that the interests of justice are a very significant consideration. 44It may be that efforts will now be taken to obtain legal representation for the Defendant. It would be of considerable advantage to her. 45On the basis of what has been put from the bar table, I should not assume that there would be no representation at all available if application for legal aid had been made more recently. However, I simply do not know because it has not happened. 46In any event, a fundamental problem with the present application lies in the identity of the person who seeks leave, given his inextricable involvement in the litigation itself. 47The interests of justice involve a broad concept, including the protection of the administration of justice in the proceedings and the just, quick and cheap resolution of the real issues in dispute in the proceedings. 48In my view, there is, at the least, a perceived conflict of interest between the interests of Mr Hammond and Mrs Hammond. 49I am not persuaded that leave should be granted for Mr Hammond to appear as a lay advocate for the Defendant at the hearing and I decline the application.