Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd

1. Pursuant to r 9.05(1)(b)(iii) of the Federal Court Rules 2011 (Cth), JT Nominees Pty Ltd and JT Investments Pty Ltd be joined as the fourth and fifth interested parties.
2. The second interested party's application for leave to represent the third interested party is dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

O'SULLIVAN J: 1 This is an application by the second interested party, Ihab Anthony Rockwell Lutfi, to represent the third interested party, Lutfi Proctor Holdings Pty Ltd, of which he is the sole director and shareholder. 2 Rule 4.01(2) of the Federal Court Rules 2011 (Cth) (FCR) provides that a corporation must not proceed in the Court other than by a lawyer. 3 Rule 1.34 of the FCR provides that the Court may dispense with compliance with any of the rules, either before or after the occasion for compliance arises. 4 Mr Lutfi, who is the second interested party, appears today on behalf of himself, and with the Court's leave for Lutfi Proctor Holdings Pty Ltd, in order to pursue the application. Whether Mr Lufti should be granted permission to represent Lutfi Proctor Holdings Pty Ltd is a matter for the discretion of the Court, but ordinarily, a corporation will be required to be represented by a solicitor. 5 In Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [13], [14] French J, as his Honour then was and as a member of the Court, identified a number of relevant factors when considering dispensing with the requirement that a corporation be represented by a solicitor. 6 At [13], his Honour identified several factors, including the financial capacity of the company to pay for representation. I am informed from the bar table by Mr Lutfi that the company has no money, but there is no affidavit evidence to that effect, notwithstanding that Mr Lutfi has filed three compendious affidavits in recent times. Further, there is no evidence as to Mr Lutfi's financial standing, which is one of the factors French J identified. 7 Another factor identified by French J included diverting company resources. Again, there is no evidence of that, nor is there any evidence of the nature of Lutfi Proctor Holdings Pty Ltd undertaking, nor its financial structure, nor its ability to retain and pay its staff, if any. As to the identity and spread of its shareholders, as I have indicated, Mr Lutfi is the sole director and shareholder of the company. 8 This matter involves complex questions of law, and Mr Lutfi has informed me that he will be giving evidence. Under those circumstances, a relevant factor is the capacity of Mr Lutfi to conduct the proceedings effectively in circumstances where not only is he a witness, but where, in my view, he also has a personal interest in the outcome. Again, with respect to Mr Lutfi, I do not believe he will be able to conduct the proceedings effectively. 9 Ms Wood, who appears for the first interested party, Mr Tucker, observes that defences have yet to be filed and it would seem there is a possibility of complex legal pleas required, as well as discovery issues and expert evidence. All of those matters are strong factors which militate against granting permission for Mr Lutfi to represent Lutfi Proctor Holdings Pty Ltd. 10 Ms Wood referred to Mr Lutfi's conduct to date. I am not in a position to assess that, but as I note, Mr Lutfi has a personal interest in the outcome of this litigation. In all the circumstances, in my view, the grant of leave to Mr Lutfi to represent Lutfi Proctor Holdings Pty Ltd in this matter, is not warranted for the reasons I have set out. 11 Accordingly, the application for Mr Lutfi to represent Lutfi Proctor Holdings Pty Ltd in these proceedings is refused. 12 There is a further application upon which I heard from Mr Lutfi today, both on behalf of himself and Lutfi Proctor Holdings Pty Ltd, as to the application by the first interested party to join JT Investments Pty Ltd and JT Nominees Pty Ltd to these proceedings as the fourth and fifth interested parties, respectively. 13 Mr Lutfi opposed that application, submitting that there was no link between those parties and Lutfi Proctor Holdings Pty Ltd. However, he accepts there is a link to the plaintiff in the proceedings, Green Grain Processing Technologies Pty Ltd (In Liquidation). Under those circumstances, there is no reason why JT Investments Pty Ltd and JT Nominees Pty Ltd should not be joined to the proceedings as the fourth and fifth interested parties respectively for the reasons submitted in argument by Mr Abbott KC, who appeared before me on the last occasion. At that time, I heard argument on an application by the first interested party to bring derivative proceedings. There will be orders accordingly. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Sullivan.