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[2011] WASC 194
General information, not legal advice.
Supreme Court of WA
2011-08-04
Hall J
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : SAMMUT -v- AVM HOLDINGS PTY LTD [2011] WASC 194
Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Citation : SAMMUT and AVM HOLDINGS PTY LTD [2011] WASAT 32
Application for interim orders in a pending appeal - Whether a sole director can represent the company in an appeal haring - Whether company has demonstrated impecuniosity - Whether court has the power to dispense with O 4 r 3(2) of the Rules - Turns on own facts
Application - Whether party properly named as respondent
Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA), s 16(1)
Rules of the Supreme Court 1971 (WA), O 1 r 3, O 4 r 3, O 12 r 1, O 65 r 13
Leave granted for the second respondent to represent the first respondent at the hearing of the appeal
Extension of time granted to comply with provisional orders
Donyette Pty Ltd v Toplodge Nominees [No 2] [2011] WASC 141
Eastern Metropolitan Regional Council v Four Seasons Constructions Pty Ltd [2000] WASC 178; (2000) 22 WAR 372
Johan Mickil Schayen (1993) 65 A Crim R 500
Pennicuik v City of Gosnells [2011] WASC 63
Re Hoffman [2004] WASCA 238
Sammut and AVM Holdings Pty Ltd [2011] WASAT 32
Smith v The Queen [1985] HCA 62; (1985) 159 CLR 532
(This judgment was delivered extemporaneously on 4 August 2011 and has been edited from the transcript.)
1 This is an application by the respondents for interim orders in a pending appeal. I will return to the nature of the interim orders sought by the respondents shortly.
2 The appeal is from a decision of the State Administrative Tribunal made in respect of a lease of commercial premises. The appellant leased premises to the respondents and an issue arose as to whether the terms of the lease had been complied with.
3 The appellants applied to the State Administrative Tribunal pursuant to s 16(1) of the Commercial Tenancy (Retail Shops) Agreement Act 1985 (WA). The tribunal delivered its decision on 25 February this year and on 25 March the appellant filed an appeal against the decision pursuant to s 105 of the State Administrative Tribunal Act 2004 (WA) to the General Division of this Court.
4 On 27 June 2011 an application was filed by 'the respondent'. Whether the first or second respondent was making the application was unclear. In any event, the application sought interim orders in respect of the appeal. The orders sought are as follows:
5 The appellants oppose proposed order 1 but not proposed order 2. The grounds for opposing the first proposed order are that the Rules of the Supreme Court 1971 (WA) (Rules) prohibit a company taking steps in proceedings other than through a legal practitioner and that there is no power to dispense with the Rules. Further the appellants say that whilst the Court has discretion to permit a non-lawyer to speak for a company at a hearing, as opposed to taking formal steps, that discretion ought not be exercised in this case. The reason why the appellants say it should not be exercised is that they say the evidence does not establish that the first respondent, AVM Holdings Pty Ltd, is unable to access funds that would enable it to retain a lawyer.
6 The respondents for the purposes of this application have both been represented by Mr Viola, the second named respondent. Mr Viola has sworn and filed two affidavits in support of the application dated 30 June 2011 and 30 July 2011. The second affidavit was required as the first contained insufficient detail.
7 In the second affidavit Mr Viola deposes that he is the sole director and a shareholder of AVM Holdings. He annexes a copy of AVM's current financial statements. Those statements show that for the financial year ended 30 June 2011 the company suffered an operating loss. The balance sheet for the same financial year shows that the net assets of the company were less than $7,000. The company had $600 of cash on hand, the balance of its current assets being receivables.
8 Mr Viola also deposes that pursuant to the lease, AVM Holdings obtained a bank guarantee in favour of the appellants. On 23 June 2011 the appellants sought to draw on that guarantee to a total amount of $12,998.69. Though it is not entirely clear, the effect of this appears to have been to increase AVM's indebtedness to the bank and further diminish the company's assets. Indeed, if added to the liabilities in the balance sheet, the result would be that the company would now have a deficiency of assets over liabilities.
9 On this basis, the respondents submit that the company cannot retain a lawyer to act on its behalf. They say that the only way it can be heard in these proceedings is if Mr Viola is given leave to speak on its behalf. They say that fairness requires that the company have this voice as it was largely successful in the tribunal, is seeking the costs of those proceedings and its future viability significantly depends upon these proceedings.
10 The appellants have also filed an affidavit in this application. That is an affidavit from Mr Alexander Hay, who appears today as counsel for the appellant. In that affidavit, Mr Hay annexes a copy of an Australian Securities and Investments Commission extract in respect of AVM Holdings. That extract confirms that Mr Viola is the sole director of the company and that he and his wife are the sole shareholders of it. The extract also shows that there are a number of registered charges to banks and financial institutions which are of a fixed and floating nature. The amount of indebtedness is not shown on the face of the extract.
11 Also attached to Mr Hay's affidavit are a number of other documents that are relevant to whether Mr Viola is properly named in his personal capacity as a respondent to these proceedings and I will return to those documents shortly.
12 The power of the Court to make an interim order on an appeal of this type is contained in O 65 r 13 of the Supreme Court Rules 1971 (WA). That is to say, this is an appeal to the General Division of the court other than an appeal from the Magistrates Court exercising criminal jurisdiction (to which the Criminal Procedure Rules 2000 (WA) apply).
13 The Rules preclude a company beginning or carrying on proceedings other than by a solicitor: O 4 r 3(2). Similarly, O 12 r 1 provides that a company may not defend an action otherwise than by a legal practitioner. The Court does not have power to dispense with an explicit requirement of the Rules in this regard: Eastern Metropolitan Regional Council v Four Seasons Constructions Pty Ltd [2000] WASC 178; (2000) 22 WAR 372 [47] (Hasluck J). The same conclusion was reached in Re Hoffman [2004] WASCA 238. Therefore, it is not possible to do as the respondents seek and dispense with O 4 r 3(2).
14 However, it is apparent that what in essence Mr Viola seeks to do in essence is not to take formal steps in these proceedings but, rather, to appear to make submissions on behalf of AVM on the hearing of the appeal.
15 There are two possible bases on which Mr Viola may be permitted to act as a representative of the company on the appeal. Firstly, it is arguable that O 4 r 3(2) does not apply to appeal proceedings of this nature. Both O 4 and O 12 by their language appear to relate to civil actions. O 4 r 3 is headed 'Right To Sue In Person' and O 12 r 1 refers to defendants in 'an action'. There might be thought to be good reason to require representation by lawyers in proceedings of that nature given the greater procedural complexity involved, for example, in pleadings and discovery. On the other hand, individuals are not required to be represented by a lawyer in the same circumstances. Perhaps the purpose of these Rules is to prevent abuse of the corporate form and ensure that a company's interests are properly represented. That concern would apply equally to appeals of this type. Furthermore, appeals of this nature do not fall within the classes of cases excluded from the Rules by O 1 r 3. For those reasons, I would conclude that O 4 r 3(2) does apply in this case.
16 The second basis upon which it is arguable that Mr Viola may be permitted to act for the company on the hearing of the appeal is that it is arguable that to permit a person to appear as an advocate for a company on the hearing of the appeal does not offend O 4 or O 12. The prohibition may be interpreted as being on taking steps in the proceedings; that is, the filing of initiating documents, pleadings, interlocutory applications and the like. In Re Hoffman McKechnie J said:
I accept that there are circumstances where, in the exercise of an inherent jurisdiction, a Court may permit a person who is not a legal practitioner to appear as an advocate for another person or a company [26].
17 I also refer to the recent decision of Corboy J in Donyette Pty Ltd v Toplodge Nominees [No 2] [2011] WASC 141.
18 In the present case the following factors are relevant:
(1) AVM Holdings did not bring these proceedings; it is a respondent;
(2) the appeal is regular and notice of the respondent's intention was filed by a solicitor. In the normal course, it will therefore proceed to a hearing. There is no suggestion that it can be dealt with by any default on the part of the respondents;
(3) Mr Viola is the sole director of AVM and as such may be expected to have a good understanding of the issues and interests of the company;
(4) the indications are that AVM is impecunious and cannot afford to retain a lawyer. In those circumstances there is a substantial likelihood that AVM would be unrepresented on the hearing of the appeal if leave is not granted; and
(5) the issues raised on the appeal are reasonably factually complex. It is in the interests of justice that AVM have a voice at the hearing and that the court have the benefit of hearing any contentions made on its behalf in opposition to those made by the appellants.
19 For those reasons, I would grant Mr Viola leave to appear to represent the company at the hearing of the appeal. For this purpose, he may prepare and submit an outline of written submissions by a date which I will set shortly. This leave does not, however, permit him to take any step in the proceedings or file any other document on behalf of the company. That would require a lawyer.
20 Mr Viola has also sought a McKenzie friend on account, he says, of his unfamiliarity with Court proceedings and his Italian accent (see Smith v The Queen [1985] HCA 62; (1985) 159 CLR 532, 534 (Gibbs CJ), Johan Mickil Schayen (1993) 65 A Crim R 500 and Pennicuik v City of Gosnells [2011] WASC 63). I note that I have had no difficulty in understanding Mr Viola to date. In the circumstances the better course in this regard is to defer any decision to the hearing of the appeal. Whether or not Mr Viola needs assistance and can justify a McKenzie friend can best be determined at that time.
21 Finally when this matter last came before me on 27 July 2011 Mr Viola raised a question of whether he had properly been named as a respondent to these proceedings. He is presently named as the second respondent in his personal capacity. Mr Viola was not named as a respondent in the published decision of the tribunal which is the subject of this appeal: Sammut and AVM Holdings Pty Ltd [2011] WASAT 32.
22 However, in Mr Hay's affidavit of 3 August 2011 an annexed copy of the SAT application has a handwritten addition noting Mr Viola as the second respondent in his capacity as a guarantor to the lease. I am told that this is the copy of the application from the files of the tribunal. Some other documents apparently filed in the tribunal also refer to Mr Viola as the second respondent. Annexed copies of the assignment of lease and notice of default also show that Mr Viola was named in those documents as guarantor. On that basis, he appears to have had an interest in the SAT proceedings and been joined as a respondent in those proceedings because of that interest. I therefore conclude, on the evidence presently available, that he has been properly named as the second respondent to this appeal.
(2000) 22 WAR 372
(1985) 159 CLR 532