Determination
90It can be seen from UCPR rule 7.1, that a company within the meaning of the Corporations Act cannot commence proceedings "in person".
91In Hubbard Association of Scientologists International v Anderson and Just [1972] VR 340, at 341, in the joint judgment of Smith, Little and Gowans JJ, it was said:
"A company cannot appear before the court in person or be treated as appearing before the court in person. We refer to the cases of Re London County Council and London Tramways Co (1897) 13 TLR 254; Scriven v Jescott (Leeds) Ltd (1908) 53 Sol Jo 101; Frinton and Walton U.D.C. v Walton and District Sand and Mineral Co Ltd [1938] 1 All ER 649; Tritonia Ltd v Equity and Law Life Assurance Society [1943] AC 584; [1943] 2 All ER 401, and Re Education Pty Ltd and the Companies Act [1963] NSWR 1340. These cases show that a company, since it cannot be regarded as a litigant in person, must appear before the court by or through an agent. The cases also show that the class of agents by and through which a company may appear before the court may be limited by statute or by the practice of the court."
92In Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104, at 105-106, Kirby P (as his Honour then was) set out the reasons for imposing such a requirement as follows:
"Various reasons are suggested for the rule and the practice of the courts. They include the control which courts exercise over those having audience before them and the privilege afforded to legal representatives because of the training which they undergo and the discipline to which they submit. But they also include, in the case of a corporation, the importance of ensuring that those who speak for it (the corporation not being a natural person able to speak for itself), have authority to do so and may thereby be subjected to orders of the court, including as to the costs of litigation. There is no common law entitlement of a member or officer of a corporation to appear for it before a court. On the contrary, the rules of this jurisdiction, as of others, require that, statute apart, a corporation shall be represented by a legal practitioner. ..."
93The rule and practice referred to embody the common law principle, which existed for many years, the rationale of which was explained by Mahoney AP in Scotts Head Developments Pty Ltd v Pallisar Pty Ltd [1994] NSWCA 281, at 3, as follows:
"This rule represents the established law. This Court, as a superior court, has a discretion to determine who will be allowed to appear before it. However, it has long adopted the general rule that it will not allow an appearance by a person who has not been admitted to practise before it. This accords with the long established practice of superior courts in Australia and in England ..."
94His Honour then explained the basis for the rule of practice and said, at 3-4:
"The rule of practice which the Court has adopted whereby appearance is limited to persons admitted to practise before the Court is not based on technicalities. It has long been regarded as based on considerations central to the proper administration of justice and the protection of the parties in the litigation. First, the Court has emphasised the importance, for the administration of justice, of the fact that those permitted to appear before it owe a responsibility to the Court to ensure that the Court is properly informed and not misled ...
Second, the Court has regard to the possibility of unqualified or untrained advocates interfering with the course of the proceeding before the Court and causing loss to the parties involved ... Experience has shown that a proceeding conducted by a person unskilled in advocacy tends to last longer and to cost more. In determining whether to allow such an advocate to appear, the Court must have regard not merely to the position of the party for whom he seeks to appear, but also to that of the other party. The interest of the defendant in having the proceeding dealt with without unnecessary delay and cost is one which, in my opinion, is to be borne in mind.
Third, there remains the public interest in the effective, efficient and timeous disposal of litigation. The administration of justice requires that full assistance be available to the Court in determining the issues of fact and law which come before it. The isolation of issues and the presentation of the consideration which support one answer rather than another are things best done by a person experienced in such matters. Where one party is represented by an advocate less than appropriately skilled, the duty of the Court to act with fairness and impartiality between the parties is more difficult and may in some cases be compromised. The Court cannot adopt the role of advocate for one party or the other. Ordinarily it cannot undertake investigation of matters beyond the evidence formally before it ..."
95It can be seen that UCPR rule 7.1 refers only to a company within the meaning of the Corporations Act. Neither "company" nor "corporation" is defined in the Civil Procedure Act, or in the Dictionary to the UCPR. However, s 9 of the Corporations Act defines "company" as "a company registered under this Act" and "corporation", for the purposes of the Act, is defined, in s 57A as "a company and any body corporate (whether incorporated in this jurisdiction or elsewhere) and an unincorporated body that under the law of its place of origin, may sue or be sued, or may hold property in the name of its secretary or of an office holder of the body duly appointed for that purpose".
96UCPR rule 7.1 is a clear legislative provision requiring a relevant corporation (as Tanamerah is agreed to be) to commence, or prosecute, proceedings, in the Supreme Court, through a solicitor, or through a person with two characteristics, namely that he, or she, is a director of the corporation, and that the person is a plaintiff in the proceedings.
97There is no definition of the word "plaintiff" in the UCPR. The note to the Dictionary states that the word is defined in s 3 of the Civil Procedure Act. In that Act, the word is defined as meaning "a person by whom proceedings are commenced, or on whose behalf proceedings are commenced by a tutor, and includes a person by whom a cross-claim is made or on whose behalf a cross-claim is made by a tutor". Another way of putting this is that the "plaintiff" is the party claiming relief.
98As previously stated, Mr Tydeman submits that UCPR rule 7.1 does not require him to have a personal cause of action against the Defendant in order for him to be a plaintiff in circumstances in which the corporation has a cause of action. He says, provided he files an affidavit with the originating process in which he states that:
(a) he is as a director of the company;
(b) he is authorised by a resolution of the directors duly passed at a meeting of directors held on a specified date (which must not be earlier than 21 days before the date of the affidavit) to commence and carry on the proceedings, as the case requires;
(c) a copy of the instrument evidencing that authority is annexed to the affidavit;
(d) the authority has not been revoked; and
(e) he is the managing, or governing, director of the company and has authority to exercise the powers of the directors, and that he is aware that he may be liable to pay some, or all, of the costs of the proceedings,
nothing else is required to enable him to commence, or carry on, the proceedings and be named as a plaintiff in the proceedings.
99This submission should be rejected.
100UCPR rule 7.1 deals with the identification of the person by whom proceedings may be commenced, and carried on, by reference to whether the person is a natural person, or a company within the meaning of the Corporations Act. That this is so is evidenced by the reference in the rule to "a natural person", to "a natural person acting on behalf of another person pursuant to a power of attorney", and to "a director of the company".
101Then, in the case of the natural person and the natural person acting on behalf of another person pursuant to a power of attorney, he, or she, may commence and carry on proceedings in person or by a solicitor.
102UCPR rule 7.1(2)(a) entitles a director to commence or carry on proceedings on behalf of the company, as of right, subject only to compliance with its procedural requirements. In the case of a relevant company, however, a director may commence and carry on proceedings, one such requirement is that "the director is also a plaintiff in the proceedings". In that circumstance, the director, who is a plaintiff, and who may appear in person, as well as by a solicitor, is considered able to commence and carry on proceedings on behalf of the company, provided that the additional requirements of UCPR rule 7.2 are complied with. That rule sets out the requirements that must be satisfied by a person who commences or carries on proceedings as a director.
103In May v Christodoulou (2011) 80 NSWLR 462; [2011] NSWCA 75, Sackville AJA, at [95], and Handley AJA at [15], stated that the Court does not grant an indulgence when UCPR rules 7.1 and 7.2 are invoked and the leave of the court is not required. The indulgence of allowing a natural person to commence and carry on proceedings on behalf of a relevant company is granted by these rules. It is not a matter of discretion. Otherwise, and subject to s 14 of the Civil Procedure Act, the company must commence and carry on the proceedings by a solicitor.
104The purpose of UCPR rule 7.2 appears to be, as stated, to ensure that the company, the director of which is also a plaintiff, is aware that the director is proposing, and has been validly authorised by the company, to act on its behalf in the proceedings. By requiring an affidavit as to the director's authority to act in that capacity, together with a copy of the instrument evidencing that authority, the court ensures that the purposes have been met. It also ensures that the director realises that he, or she, may be liable for costs.
105The rationale for the requirement that the director also be a plaintiff appears to be that since the director, who is a natural person, is also a plaintiff, and since the proceedings may continue with the director not being represented by a solicitor, the director may also represent the company.
106The identity of a party to proceedings is usually approached by reference to a consideration of whether the rights and liabilities of that person or entity, as against any other person or entity identified in the proceedings, will be directly affected by any order which may be made in the action: Homestyle Pty Ltd v City of Belmont [1999] WASCA 59; Henderson Corporation Pty Ltd v Hewitt [2005] WASC 165 at [51].
107It seems to me to be implicit that the director must be a plaintiff in his, or her, own right, and not merely one who is named as a plaintiff because he, or she, has been authorised to commence or carry on proceedings on behalf of the company. As a plaintiff in his, or her, own right, the director is not likely to be removed as a party, or have his, or her, proceedings summarily dismissed.
108The conclusion that the director cannot merely be named as a plaintiff for the purpose of commencing or carrying on the proceedings on behalf of the company, is supported by JSBG Developments Pty Ltd v Kozlowski [2009] NSWSC 1128; (2009) 75 NSWLR 745, in which Barrett J (as his Honour then was) confirmed, at [17], that UCPR rule 7.1(2) is a limiting provision and that it must be read so that the word "may" is regarded as meaning "may only". This follows from the circumstance that a company "cannot be regarded as a litigant in person".
109At [18], his Honour said:
"Importantly, however, the right or ability of a company within the meaning of the Corporations Act to commence proceedings "by a director" is, in this court, qualified and constrained by rule 7.1(3). That rule makes eligible, for the purposes of rule 7.1(2)(a) only a director who is, in his or her own right, a plaintiff in the proceedings. The combined effect of rules 7.1(2)(a) and 7.3 is that, if the company and a director of the company are both plaintiffs, the company may commence and carry on the proceedings by that director. Otherwise, the company may not commence or carry on the proceedings by a director." (My emphasis)
110A similar view was expressed by White J in Connectland Pty Ltd v Porthaven Pty Ltd, at [18] - [19]:
"Subrule 7.1(2) provides that a company may commence and carry on proceeding in any court by a solicitor, or by a director of the company. However, subrule 7.1(3) provides that in the case of proceedings in the Supreme Court, subr (2)(a) authorises a company to commence proceedings by a director only if the director is also a plaintiff in the proceedings.
Ms Caporale is not a plaintiff in the proceedings and she would not be a proper party had she so named herself."
111White J took a similar view in DB Mahaffy and Associates Pty Ltd v Mahaffy [2011] NSWSC 673, in which an individual sought leave to be joined as a party/Plaintiff. His Honour said, at [27], that the applicant "would not be a proper plaintiff on an application to set aside a statutory demand".
112In In the Matter of DB Mahaffy & Associates Pty Limited [2012] NSWSC 776, which was also an application under s 459G of the Corporations Act to set aside a statutory demand served on the plaintiff company, after referring to UCPR rule 7.1, Brereton J, at [2], concluded that the individual, who was not a plaintiff in the proceedings, would not have "standing" to be a plaintiff in the proceedings.
113In a subsequent related matter, In the Matter of DB Mahaffy & Co Pty Limited [2012] NSWSC 1286, Brereton J said:
"2 The substantive proceedings are an application by the plaintiff pursuant to (Cth) Corporations Act 2001, s 459G, to set aside a creditor's statutory demand served on it by the defendant Deputy Commissioner of Taxation. There is no apparent basis upon which an individual, who happens to be the sole director of the company in question, has standing to be joined as a party to the company's application to set aside the creditor's statutory demand, or to make such an application themselves. The proper plaintiff, and the only proper plaintiff, in such proceedings is the company on which the demand has been served. There is therefore no apparent basis upon which Mr Mahaffy as an individual can be joined as a party to the proceedings.
3 The application is made in light of a judgment I gave on 2 July 2012 [In the Matter of DB Mahaffy & Co Pty Limited [2012] NSWSC 776], in which I made orders that unless a notice of solicitor acting was filed by a legal practitioner retained by the plaintiff, the proceedings be stayed. That order was made in circumstances that the present proceedings had purportedly been brought by the company DB Mahaffy & Associates Pty Ltd without a solicitor acting for it. As I then pointed out, (NSW) Uniform Civil Procedure Rules 2005, r 7.1(2), provides that a company within the meaning of the Corporations Act may commence and carry on proceedings in any court by a solicitor or by a director of the company, but r 7.1(3) provides that in the case of proceedings in the Supreme Court, a company can commence proceedings by a director "only if the director is also a plaintiff in the proceedings". Mr Mahaffy is not also a plaintiff in the proceedings, and does not have standing to be a plaintiff in those proceedings."
114The scheme of the UCPR also gives support to this construction. For example, UCPR rule 6.12 requires a statement of claim to specifically state the relief claimed by the plaintiff. UCPR rule 13.4 provides that if in any proceedings it appears to the court that in relation to the proceedings generally, or in relation to any claim for relief in the proceedings no reasonable cause of action is disclosed the court may order that the proceedings be dismissed generally or in relation to that claim. UCPR rule 14.28 provides that the court may, at any stage of the proceedings order that the whole, or any part, of a pleading be struck out, if the pleading discloses no reasonable cause of action or other case appropriate to the nature of the pleading.
115Thus, the director who seeks to commence or carry on proceedings on behalf of the company must be a plaintiff who is not likely to be removed, and the proceeding by him, or her, should be one that is not likely to be struck out, because, for example, he, or she, has no, or no reasonable, cause of action, disclosed against the defendant. If that were not so, every relevant company, by complying with the requirements of UCPR rule 7.2, and by the joinder of a director as a plaintiff, could be represented by that director without more.
116Having read the pleadings, Mr Tydeman, in a legal sense, is a stranger to the controversy between Tanamerah and the Defendant. His only connection appears to be as a director of Tanamerah and as a witness in the proceedings.
117In my view, Mr Tydeman is not a "plaintiff" in these proceedings in the sense required under UCPR rule 7.1(3), because he does not have a cause of action against, or claim for relief from, Tibra. Merely to be named as a plaintiff because he has the authority of the company to commence or carry on the proceedings on behalf of the company does not bring him within UCPR rule 7.1(3).
118Finally, the way in which I have interpreted UCPR rule 7.1 is consistent with the overriding purpose in s 56 of the Civil Procedure Act. To interpret the rule in the way submitted for by Mr Tydeman will not do so.
119It follows that the first basis upon which Mr Tydeman relies to justify the continuation of Tanamerah's proceedings fails. On that basis, he could be removed as a plaintiff.
120I turn then to the issues under UCPR rule 7.11. The first question is whether the proceedings are proceedings "relating to a trust".
121In the Amended Statement of Claim, under the heading "Type of Claim", there appears "Breaches of Shareholders' Agreement; Misrepresentation of Shareholders' Agreement" and "Intentional Tort (theft of property - Shares)". These accurately identify, in a summary way, the claims for relief in the amended Statement of Claim. Apart from the reference to Tanamerah as the trustee of the Alexander Superannuation Fund, there is no other reference to the Trust.
122In Clerical, Administrative & Related Employees Superannuation Pty Ltd v Bishop (1997) 76 IR 139, Northrop J, at 140-141, said:
"The words "superannuation" and "superannuation fund" are in common use but the concept of a superannuation fund is not always fully understood. ... Essentially a superannuation fund is based upon principles of equity. Essentially, a superannuation fund is created by a trust deed under which a fund, or other assets, are held by a trustee upon the trust expressed in the trust deed. Persons entitled to the benefits of the trusts, commonly are known as members, and although members are not parties to the deed, they are able to enforce their rights against the trustee by legal proceedings. The funds held on trust can be added to by contributions made by persons including members. Members can constitute a class of persons. Employees constitute a common class of persons receiving benefits under superannuation funds, the benefits being defined and payable in conformity with the terms of the trust deed.
In Australia, taxation concessions, including an exemption from income tax, were granted with respect to income received from specified types of funds, including superannuation funds, established for the benefit of employees... Interesting expositions relating to the nature of superannuation funds for the benefit of employees are given by Windeyer J, in Scott v Comissioner of Taxation (Cth) (No 2) (1966) 40 ALJR 265 at 278 9 and by Kitto J, in Mahoney v Commissioner of Taxation (Cth) (1967) 41 ALJR 232. In Re Coram; Ex Parte Official Trustee & Bankruptcy v Inglis (1992) 36 FCR 251, a case in which the question was whether the interest of a member of a Superannuation Fund vested in his trustee and bankruptcy upon him becoming a bankrupt. O'Loughlin J, at 253-254, in a very helpful analysis of the nature of a superannuation fund quoted those two passages by Windeyer J and Kitto J."
123Thus, a superannuation fund is a particular species of trust.
124However, merely because there is a superannuation fund that holds the shares that are referred to, and because the trustee of that fund is bringing proceedings, does not necessarily mean that the proceedings are "proceedings relating to a trust".
125In Tooheys Ltd v Commissioner of Stamp Duties (NSW) [1961] HCA 35; (1961) 105 CLR 602, Taylor J, at 620 said of that phrase:
".. the expression ... is extremely wide but it is also vague and indefinite. Clearly enough it predicates the existence of some kind of relationship but it leaves unspecified the plane upon which the relationship is to be sought and identified. That being so, all that a court can do is to endeavour to seek some precision in the context in which the expression is used."
126His Honour went on to say, at 620, that "relating to" in the context there considered was not the 'equivalent of "referring to"'; the relationship between two different things must be based upon some more substantial ground.
127In Oceanic Life Ltd v Chief Commissioner of Stamp Duties (NSW) [1999] NSWCA 416; (1999) 168 ALR 211; 154 FLR 129 Fitzgerald JA said, at [56]:
"The width of the phrase 'relating to' is undoubted. Lord Macnaghten stated that '[t]here is no expression more general or far-reaching': Commissioner of Inland Revenue v Maple & Co (Paris) Ltd [1908] AC 22 at 26. See also Fountain v Alexander [1982] HCA 16; (1982) 150 CLR 615 at 629; Colakovski v Australian Telecommunications Corporation [1991] FCA 152; (1991) 29 FCR 429; Secretary, Department of Foreign Affairs and Trade v Boswell (1992) 36 FCR 367; PMT Partners Pty Ltd (In Liq) v Australian National Parks and Wildlife Service [1995] HCA 36; (1995) 184 CLR 301 at 329-330, although the addition of the words 'or depending on' was presumably intended to give the combined phrase 'relating to or depending on' a wider operation than 'relating to'. The difficulties of construction presented by such language have also been noted. Taylor J observed that '... the expression 'relating to' ... is ... vague and indefinite ...' and '... leaves unspecified the plane upon which the relationship is [to be] sought and identified': Tooheys Ltd v Commissioner of Stamp Duties [1961] HCA 35; (1961) 105 CLR 602 at 620. One area of debate has been whether, in particular legislation, a relationship need or need not be 'direct' or 'direct and immediate': see, for example, Ausfield Pty Ltd v Leyland Motor Corporation of Australia Ltd (No 2) (1977) 14 ALR 457 at 460, 462; 30 FLR 477 at 480, 483; Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 364 and 370; Joye v Beach Petroleum NL [1996] FCA 1552; (1996) 67 FCR 275 at 285; see also Perlman v Perlman [1984] HCA 4; (1984) 155 CLR 474. Overall, the position judicially adopted has been that the operation of the phrase 'relating to' is determined by the statutory context and purpose: Butler v Johnston (1984) 4 FCR 83 at 87; Hatfield v Health Insurance Commission (1987) 15 FCR 487 at 491."
128In Black's Law Dictionary (5th ed.), the meaning of "relates to" includes "to have bearing or concern", "to pertain" and "to bring into association with or connection".
129Whilst I accept that the term "relating to a trust" should not be given a narrow meaning, and that it is an expression of "an expression of wide and general import" (Fountain v Alexander [1982] HCA 16; (1982) 150 CLR 615, at 629), in the present case, no relief is sought in respect of the trust. Nor is the claim one in which the trust is the main, or central, issue.
130To the contrary, the involvement of Tanamerah, as trustee, is merely because Tibra issued shares to the Trust, which shares were held by the trustee in its name. There is no dispute about the ownership of those shares and even if Tanamerah is successful in its claims, there will be no dispute about how the proceeds of any judgment are held. Other than the manner in which the shares are owned, there is no logical or reasonable connection with the Trust. Accordingly, it cannot be said that the proceedings can be characterised as "proceedings relating to a trust " so as to attract the operation of UCPR rule 7.11
131I am not satisfied that the proceedings, in this case are "relating to a trust". Even if I am wrong, as will be seen, the trustee, Tanamerah, is a party to the proceedings and Tibra presently seeks no relief in relation to claims brought by Tanamerah.
132In my view, Mr Tydeman is not a trustee of the Alexander Superannuation Fund. He acknowledged that he was not. He sought to derive comfort from the fact that "directors of any superannuation trustee company must also be trustees of the fund by virtue of the fact they have fiduciary and management duties". I do not agree. That is not the context in which the word "trustee" is used in UCPR rule 7.11, particularly in circumstances in which the case involves the trustee of a superannuation fund who is a party to the proceedings.
133In paragraph 1 of the amended Statement of Claim, Tanamerah is identified as the sole corporate trustee of the Alexander Superannuation Fund. The affidavit of each of Mr Tydeman and Ms Tydeman included in the amended Statement of Claim, to which I have earlier referred, confirms that statement. Finally, the Trust Deed specifically identifies Tanamerah as the "Trustee".
134Mr Tydeman's reliance on the definition of "trustee" in Commonwealth taxation legislation is not relevant in circumstances where the meaning of the word "trustee" as used in UCPR rule 7.11 is clear.
135Furthermore, in order to deal with the submission, I note that each of the sections of the Commonwealth Acts relied upon, specifically differentiates between "the trustee" and "the person who manages the fund" or "the director of the body corporate which is the trustee of the fund" and "the person having, or taking upon himself, the administration or control of income affected by any express or implied trust, or acting in any fiduciary capacity". The UCPR rule relied upon does not make any distinction. It simply refers to the "trustee" of the trust.
136In the circumstances, I reject the submissions of Mr Tydeman and reliance upon UCPR rule 7.11.
137I then turn to UCPR rule 7.12. It is not necessary to repeat what has been said about "proceedings relating to a trust".
138Even if I am wrong, I note that the Trust Deed specifically states that with limited exceptions, a Member has no right to, or interest in, the Fund. However, under the Superannuation Industry (Supervision) Act, a "beneficiary", in relation to a fund, scheme or trust, is defined as meaning "a person (whether described in the governing rules as a member, a depositor or otherwise) who has a beneficial interest in the fund, scheme or trust and includes, in relation to a superannuation fund, a member of the fund despite the express references in this Act to members of such funds". I have earlier referred to s 17A of the Superannuation Industry (Supervision) Act.
139As I have said, although he is a member, I do not know what interest, if any, he has to any funds in the Alexander Superannuation Fund. There is no evidence of any contributions made by him, or on his behalf. Accordingly, he has not established that he does have a beneficial interest under the trust.
140However, even if Mr Tydeman does have a beneficial interest under the trust, even though one in which an identified part of the trust cannot be said to be held upon trust for him, the appropriateness of joining him will depend upon the extent to which the trustee protects his interests under the trust. The usual case for the joinder of beneficiaries is in circumstances in which the outcome the plaintiff seeks, if achieved, will adversely affect the interests of the beneficiaries and there is no party who is able to contradict the contentions, both as to fact and law, advanced by the plaintiff. Nor are the persons with a beneficial interest in the trust entitled to an opportunity to contest the grant of the relief the plaintiff seeks.
141In Personalised Transport Services Pty Ltd v AMP Superannuation Ltd [2005] NSWSC 396, Barrett J, at [22], referred to the predecessor of the rule (Part 68 rule 5 of the Supreme Court Rules, which was relevantly the same) as follows:
"It is often the case that trust beneficiaries, although proper parties to litigation, are not necessary parties. The need for them to be parties will not, in a practical sense, arise if their interests are to be represented by the trustee. The matter is put thus at p 187 of the eighth edition (1914) of "Daniel's Chancery Practice":
According to the practice of the Court of Chancery all cestuis que trust were, subject to certain exceptions and statutory relaxations, necessary parties to suits against their trustees, by which their rights were likely to be affected; but according to the practice of the High Court, trustees may be sued on behalf of or as representing the property or estate of which they are trustees without joining any of the persons beneficially interested in the trust or estate, and are to be considered as representing such persons in the action; but at any stage of the proceedings any of such persons may be ordered to be made parties either in addition to, or in lieu of, the previously existing parties."
142It may also depend upon "whether his rights against, or liabilities to, any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action": Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52, at 55-56.
143In this case, I am of the view that Mr Tydeman is neither a necessary, nor a proper, party to the litigation between Tanamerah and Tibra. There is no suggestion that his rights are being affected by the making of the orders sought, or the relief claimed, by Tanamerah against Tibra. The outcome Tanamerah seeks against Tibra, if achieved, will not adversely affect his interests. Tanamerah, in commencing and carrying on the proceedings, is representing the interests of all of the "Members" of the Alexander Superannuation Fund and will continue to do so. There is no reason for it not to, particularly in circumstances where the only two Members are the only directors and where there is no dispute between them, as Members or directors, and Tanamerah.
144In considering UCPR rule 7.11 and 7.12, I am of the view that the person who is sought to be joined should, in each case, be a necessary and proper party to the proceedings. As I have said, in this case, each Member's interest is being represented by Tanamerah and there is simply no need for Mr Tydeman to be joined as a party other than, so it would seem, to enable Tanamerah to be represented by a director when, under UCPR rule 7.1, it cannot be. Such a result is not one that would achieve the objects of the Civil Procedure Act.
145I have also considered case management principles and UCPR rule 6.24 which rule aims to ensure that all matters in dispute are effectually and completely determined. The joinder of Mr Tydeman as a person having a beneficial interest under a trust would not minimise time and costs in the litigation, which is one of the modern notions of case management: Woodings v Stevenson [2001] WASC 174 at [24]; (2001) 24 WAR 221, 226 - 227; referred to, with approval, in Martin Bruce Jones as Receiver and Manager of Miami Waterfront Developments Pty Ltd v Miami Waterfront Developments Pty Ltd [2012] WASC 483 at [31].
146In all the circumstances, subject to s 14 of the Civil Procedure Act, I am of the view, that Mr Tydeman's reliance on UCPR rules 7.1, 7.11 and 7.12 does not enable him to commence or carry on proceedings on behalf of Tanamerah. I turn then to that section.
147In relation to dispensing with the rules to allow Mr Tydeman to appear by dispensing with the rules under s 14 of the Civil Procedure Act, the court must be satisfied that it is "appropriate to do so in the circumstances of the case".
148The power granted to the court by s 14 is a broad one and, in the light of s 57 and s 58 of the Civil Procedure Act, must also be exercised so as to promote the objectives stated in s 56. The discretion is unfettered but is to be exercised judicially and according to the requirements of justice.
149Importantly, there is nothing in s 14 that now requires "special" or "exceptional" circumstances. Nor should the section be given a narrow construction.
150Kirby P (although in the minority) said in Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd, at 108, in relation to a similar rule, that it "was designed to bring into the general practice of the court the approach of courts of equity to their rules. It was long ago said that "the rules must be the servant not the master of the court: see Clune v Watson (1882) Tarl 75"."
151The onus of establishing facts that would lead the court to be satisfied rests on the party seeking an order dispensing with the rules, in this case Tanamerah. There is no guidance in the section as to the matters that would, or would not, lead the court being so satisfied. The court should take into account not just the interests of the party seeking dispensation, but also the interests of the other party or parties, as well as the proper and efficient administration of justice.
152There have been a number of cases that give consideration to matters that may be considered by the court. In this regard, I cannot do better than quote from the decision of Stein JA (with whom Mason P and Sheller JA agreed), albeit the decision is one given in the broader context of considering whether an unqualified person should be granted leave to appear for an otherwise unrepresented party, in Damjanovic v Maley [2002] NSWCA 230, (2002) 55 NSWLR 149, in which his Honour set out the principles that he had distilled from other authorities:
"Principles from the cases
[69] A number of themes or principles run through the cases which are relevant to the exercise of the discretion to grant or refuse leave to an unqualified person to appear on behalf of an unrepresented litigant. They may be briefly summarised as follows:
(a) The complexity of the case
[70] Whether the case is one of complexity or minor or straightforward has often been seen as a discretionary factor. ...
(b) Genuine difficulties of the unrepresented party
[72] These include matters such as unexpected language difficulties and emergencies. ...
(c) The unavailability of disciplinary measures and a duty to the court by lay advocates
[74] Almost every case mentioned these matters as protection for a client when a qualified lawyer represented a party but were protections which were not available where an unqualified lay advocate appears. ...
...
[76] In my opinion, the overall duty of a barrister or solicitor to the court is an important consideration. It is a duty of candour and a practitioner must not knowingly mislead the court. The court is entitled to place reliance on that duty and expect it to be met. The disciplinary codes of the legal profession back up the overriding duty of a practitioner to the court. (See D A Ipp, "Lawyers' Duties to the Court" (1998) 114 Law Quarterly Review 63).
[77] Training, qualifications and experience are also important. This is not to say that there are not incompetent lawyers, including some who seek to practice advocacy. For the most part, the market and the disciplinary codes account for them. But with unqualified and uninsured lay advocates, the court loses the benefit of the overriding duty and clients are at a distinct disadvantage. Apart from endeavouring to ensure that a lay person granted leave to appear obeys the rules, there is little a court can do except, in an appropriate case, withdraw the leave to appear. ...
(d) Protection of the client and the opponent
[79] Lay advocates are unqualified, unaccredited and uninsured. This places a client at considerable risk. ...
[80] One should also not lose sight of a lawyer's duty to his/her opponent. ...
(e) Lay advocates in inferior courts and tribunals
[81] There are indications in some of the cases that Local Courts, given their jurisdiction and large numbers of unrepresented litigants, may be more likely to grant leave to unqualified persons. This is, one assumes, in straightforward uncomplicated matters where the party is under some disability in presenting his/her own case. This may also be the case with some specialist jurisdictions and tribunals.
[82] The authorities however suggest that higher courts should be very chary at giving leave. ...
(f) The interests of justice
[83] What runs through all of the authorities as the guiding principle in the exercise of the discretion is the public interest in the attainment of the ends of justice. The public has an interest in the effective, efficient and expeditious disposal of litigation in the courts. As a general rule this can best be achieved by parties employing qualified lawyers.
[84] The reason for this was explained by Gleeson CJ in a speech given to the Supreme Court of Japan in January 2000 (Current Issues for the Australian Judiciary). The Chief Justice said that:
The adversary system assumes, in the interests of both justice and efficiency, that cases will be presented to courts by skilled professionals. To the extent to which that assumption breaks down, so does the system.
[85] Representation by legal practitioners will not always be possible because of the high cost of legal services and restrictions on legal aid. There is therefore room for the discretion to be exercised in an appropriate case, as indeed the authorities make plain and in circumstances where the achievement of justice cannot be otherwise secured.
[86] Nonetheless, the foundation for the general principle and limited room for the discretion to be exercised is, as Mahoney AP said in Scotts Head, the proper administration of justice and the protection of the parties. It is not a rule devised to protect a lawyer's privilege or monopoly. Access to justice is a difficult issue in an ever more complex society with constraints on public resources. It will therefore be understandable and appropriate that judges will from time to time be prepared to grant leave to an unqualified person. Advocacy before courts is however a difficult skill to acquire without formal qualifications, training and practice. Ultimately perhaps governments may take up some of the recommendations of the Access to Justice Report referred to earlier."
153In Helmhout v Apostoloff & Ors; Reynders v Commonwealth of Australia & Anor; Dempsey-Fiddes v Commonwealth of Australia & Anor [2011] ACTSC 2, Refshauge J, after referring to the matters referred to by Stein JA, added, at [46], that "in relation to corporations, it is also relevant to have regard to whether the director is a sole director or the real force behind the company and where the lay advocate is an agent, including a director, regard should be had to the nature of the holding of equity capital in the company. Despite what was said by Keely J in Molnar Engineering Pty Ltd v Burns [1984] FCA 232; (1984) 3 FCR 68, the weight of authority seems to suggest that this is a relevant factor".
154The passage quoted was referred to, with approval, by Flick J, in Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 12) [2012] FCA 289 at [21].
155I shall deal with each of the matters referred to.
156I have earlier referred to the nature of the case being advanced by Tanamerah in the amended Statement of Claim. There is little doubt, in my view, that in its present form, the case being advanced is complex. Mr Tydeman did not suggest otherwise, although he did submit that if there were separate determination of questions, the complexity might be reduced.
157Unfortunately, that is speculation only. The final form of separate questions that might be determined, have not been identified, and it is far from certain that such an application, if made, would succeed.
158Furthermore, based upon the evidence that I have read, it is highly unlikely that the parties would be able to agree on the questions that might be determined separately and the consequences that would flow from that separate determination.
159(In these circumstances, I do not propose to deal in more detail with the submissions made on behalf of Tibra, which I have carefully read.)
160Whilst Mr Tydeman has no difficulty with language, I do think that he will have difficulties in relation to the substantive hearing. He is not legally qualified and the amended Statement of Claim raises complex questions upon which submissions on the facts and the law may be required. Training, qualifications and legal experience, in a case such as this, would benefit Tanamerah.
161With no disrespect intended, the fact that neither he, nor Ms Tydeman, seems to appreciate the potential difficulties, confirms that he, and therefore, Tanamerah, is likely to suffer genuine difficulties in a substantive hearing.
162Mr Tydeman is unqualified, unaccredited and uninsured. This places Tanamerah at a considerable risk. The fact that its two directors do not seem to appreciate this risk is significant, and, in my view, also demonstrates a lack of objectivity on the part of each of them.
163I accept Tibra's submission that if a solicitor were retained to act for Tanamerah, many of the claims made in the amended Statement of Claim may well not be pursued (or at the very least would be able to be properly pleaded) in a further draft pleading. Tibra has already threatened a strike out application in relation to some or all of the amended Statement of Claim.
164I have grave doubts that Mr Tydeman would be able to draft the necessary amended pleading.
165If the matter proceeds to a final hearing on the merits, it is clear that it would involve evidence, upon which there may be the need for cross-examination, and complex questions of facts and law, including the proper construction of the Shareholder's Agreement. It would be inappropriate for such an action to be litigated without the services of a solicitor.
166Furthermore, as was acknowledged by him, Mr Tydeman is likely to be a principal witness on behalf of Tanamerah and there may be other witnesses called on its behalf. Even if most of the evidence were documentary, this would, of itself, cause some difficulties in, for example, taking instructions from the other witnesses and preparing affidavits upon which it is intended to rely. I refer to Pacific Air Freighters (Qld) Pty Ltd v Toller [2000] FCA 343; 171 ALR 519, per Drummond J, at [7]; and Cytel Pty Ltd v People Bank Recruitment Pty Ltd [2006] FCA 985, per Bennett J, at [9].
167I cannot be satisfied that Mr Tydeman will be able to properly manage Tanamerah's case, including its preparation, while in the role of the principal witness.
168There are likely to be witnesses called by Tibra who may have to be cross-examined. This will present its own difficulties, not only for Mr Tydeman but also for the court if Tanamerah remains legally unrepresented.
169It is likely that the costs of the proceedings would be increased if Mr Tydeman were to carry on the proceedings on behalf of Tanamerah. Experience dictates that this is so when a lay advocate appears. Sometimes, cross-examination takes longer. Furthermore, it may be necessary for a trial Judge to explain things to Mr Tydeman that would be unnecessary with a solicitor or barrister appearing at the hearing.
170I cannot forget, in this case, that a self-managed superannuation fund is involved and in my view, it would be in the interests of its members if the trustee retained a solicitor to carry on the proceedings on its behalf.
171The interests of justice, in my view, are all one way. In this regard, it is not only the rights of Tanamerah that I must consider. I must also consider the rights of Tibra. For the reasons expressed above, and for the additional reasons that I shall express below, I am of the view that the interests of justice do not favour dispensing with the rules.
172It was said in Molnar Engineering Pty Ltd v Burns, at 73-75:
"The common reason for a company seeking to proceed without qualified assistance is, no doubt, that the company does not have the funds to engage such assistance. One would suppose that a company might successfully support an application to sue or defend without qualified assistance, not only where the company is bereft of funds, but also where having regard to the necessary or reasonable commitments of the company, the appropriation of funds to engage qualified assistance for the litigation in question would create financial difficulties with which the company could not cope, or with which it ought not be required to cope. ...
Similarly the identity of the shareholders and the spread of the shareholding would be relevant. So also would the capacity of a person by whom the litigation might be commenced and carried on."
173In the exercise of discretion, a consideration is the reason advanced for not retaining a solicitor: Simto Resources Ltd v Normandy Capital Ltd (1993) 10 ACSR 776, at 782. Here, no rational reason has been advanced for Tanamerah not commencing, or proceeding, with a solicitor. Even if Mr Tydeman has had difficulties with some solicitors (about which there is only his statement, without example), I am able to take judicial notice that there are over 25,000 solicitors in New South Wales, of which about 17,000 work in private practice and that nearly 13,000 solicitors work in the Sydney CBD: 2011 Profile of Solicitors in NSW - Law Society of NSW.
174I have no doubt that there would be at least one solicitor who Mr Tydeman and/or Tanamerah would not find "untrustworthy". There is no suggestion that any effort has been made to locate such a solicitor.
175Furthermore, there is no suggestion that Tanamerah will be forced to abandon its claim if Mr Tydeman is not permitted to carry on the substantive proceedings.
176I have no financial information about Mr Tydeman. The acknowledgment that "he may be liable to pay some or all of the costs of the proceedings" does not matter if such an order, ultimately, were made and he was unable to satisfy that order.
177I have earlier referred to part of the written submissions that criticised, in my view, unjustifiably, the conduct of Tibra's solicitor and counsel. The unavailability of disciplinary measures and a duty to the court by lay advocates does not assist Mr Tydeman. Such allegations, particularly as they appear to be unfounded, and unjustified, when taken with a demonstrated suspicion of Tibra's solicitors, in circumstances where they were offering to assist him, may well lead to delay and unnecessary expense in the conduct of the proceedings.
178In all the circumstances, I am not satisfied that it is appropriate to dispense with the requirement of the rules and I refuse the application.
179I order that:
(a) James Scott Tydeman be removed as a party/Plaintiff in the proceedings.
(b) The Plaintiffs' notice of motion filed on 31 October 2012 is dismissed.
(c) Unless by 20 February 2012, a notice of legal practitioner acting has been filed and served by a solicitor retained by Tanamerah Estates Pty Limited, the proceedings be stayed.
(d) Tanamerah Estates Pty Limited and Mr Tydeman are to be jointly and severally liable to pay the Defendant's costs of the notices of motion.