An issue that frequently arises in commercial proceedings is whether a company can be represented by one of its directors appearing in person.

Although the rules are fairly clear, they are not absolute, and determining the issue isn’t always clear-cut. Here are the principles that assist with working through the issue.

The rules

The starting point is the rules. In the Supreme and County Courts, rule 1.17 provides:

Corporation a party
(1) Except where otherwise provided by or under any Act or these Rules, a corporation, whether or not a party, shall not take any step in a proceeding save by a solicitor.

In the Magistrates Court, rule 1.17 is slightly more permissive, allowing a corporation to undertake basic initial tasks without a lawyer, including the filing of a complaint, defence, obtaining a judgment in default and issuing a warrant:

Corporation a party

Except where otherwise provided by or under any Act or these Rules, a corporation, whether or not a party, shall not take any step in a proceeding save by an Australian lawyer.
Paragraph (1) does not apply to:

i - The filing of a complaint;

ii - The giving of a notice of defence;

iii - In a case to which Part 1 of Order 21 applies [ie - obtaining an order in default of defence], obtaining an order by a corporation which is by a party or by an employee, authorised in writing, of a corporation which is a party;

iv - A request to issue a warrant to seize property.

The authorities

Scotts Head Developments Pty Ltd v Pallisar Pty Ltd, (Unreported, New South Wales Court of Appeal, 6 September 1994) is one of the key early cases in which the key principles set out by Mahoney AP are still applicable and relied upon today:

The rule of practice which the has adopted whereby appearance is limited to persons admitted to practise before the 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: see Meek v Fleming (1961) 2 QB 366 . In Ex parte Browne: at 597; Pring J referred to the importance of having, as the party before the court, a person “who was responsible to the court, responsible to his client and responsible to the other party to the litigation”. See also Ex parte WA Grubb Pty Ltd Re Johnstone at 226, Tritonia Ltd v Equity and Law Life Assurance Society.

Second, the court has regard to the possibility of unqualified or untrained advocates interfering with the course of a proceeding before the court and causing loss to the parties involved. Reference was made to considerations of this kind in Hubbard Association of Scientologists International v Anderson and in Abse v Smith . 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.

In Victoria, the Court of Appeal in Worldwide Enterprises Pty Ltd v Silberman [2010] VSCA 17 refers to Scotts Head with approval:

[35] Clearly r 1.17(1) is, as Scotts Head Developments Pty Ltd makes clear, intended to promote the proper administration of justice. The Court must have regard to the difficulties posed when a lay individual endeavours to conduct a complex piece of litigation. Experience has shown that cases conducted by litigants in person, particularly those who happen to be of a querulous disposition as some such litigants are, can be very protracted. This means that valuable court time is wasted, at the expense of other prospective litigants who are denied timely resolution of their disputes. As well, significant costs are likely to be unnecessarily incurred.

[36] In addition, where a lay person appears on behalf of a company, the Court is deprived of the assistance it might otherwise receive, and to which it might be thought to be entitled. Also, a lay advocate is not subject to the ethical precepts that apply to legal practitioners who are entitled to address the Court, but who bring with them particular responsibilities when doing so. That may create its own problems.

[37] In determining whether to allow an unqualified individual to represent a corporate litigant, the Court must have regard not merely to that party’s interests, but also those of other parties.

[38] As his Honour correctly noted, this Court, in Lettieri v Strangio, explained the force of the Rule in the following terms:

The law is clear. There are sound policy reasons why a corporation ought be represented by a lawyer. Nothing has been submitted in this hearing to warrant variation or exemption from that policy... The rule is clear.

Dispensation from the rule

After the rules have been considered, a company seeking to appear without legal representation may consider applying for leave from the Court to appear without a lawyer.

Rule 1.17(1) is not absolute and the Court may, pursuant to rule 2.04, dispense with the rules in an appropriate case. What circumstances warrant a dispensation from the rules?

In Worldwide Enterprises at [41] Weinberg JA (with Bongiorno JA agreeing) set out the following list of factors:

(i) the manner in which the case has progressed at the time that the application is made;

(ii) the manner in which the case can proceed in the future without a solicitor;

(iii) the complexity of the issues involved in the case;

(iv) whether the lack of disciplinary measures in relation to the person seeking to represent the company will affect the administration of justice;

(v) whether the case can be conducted in an orderly and responsible fashion without a solicitor;

(vi) whether there are financial considerations which would inhibit a company from obtaining legal representation;

(vii) the stage which the case has reached;

(viii) whether the defendant is likely to expend more funds in defending the claim absent a solicitor acting for the company; and

(ix) what effect, if any, permitting a company to appear without a solicitor will have on Court resources and, particularly, the effect upon other litigants in the Court List.

Upon consideration of these factors, the applicant for leave (ie usually the director of the company) bears the onus of persuading the Court that leave should be given to appear on its behalf without a lawyer.

Numerous cases have considered or applied Worldwide Enterprises since 2010. The most recent is Rossi Homes Pty Ltd v Victorian Civil and Administrative Tribunal & Anor [2018] VSC 95. Rossi concerns circumstances where the company asserted that it lacked the finances to obtain legal representation. The application for a dispensation from rule 1.17(1) failed.

Derham AsJ at [9] sets out the principles applicable in cases where the dispensation is sought on financial grounds:

[9] The financial considerations which inhibit a company from obtaining legal representation may be of particular importance in providing the reason for the application, as is apparent in this case. If that is the case, it is important that the company produce evidence of its financial capacity or lack of capacity and of those standing behind it, the effect of diverting company resources to paying legal expenses, the nature of the company’s undertaking, its financial structure, its ability to retain and pay its staff and the identity and spread of its shareholders.

Federal Court

In the Federal Court, the same rules apply as in the Supreme Court. Rule 4.01(2) provides:

(2) A corporation must not proceed in the Court other than by a lawyer.

Note 1: Corporation and Lawyer are defined in the Dictionary.

Note 2: A notice of address for service for a corporation must be filed by a lawyer – see rule 11.02.

Note 3: the Court may dispense with compliance with this rule – see rule 1.34.

The Dictionary within the rules contains the following definitions:

corporation means any artificial person other than an organisation.

lawyer has the meaning given by section 4 of the Act.

Rather unsatisfactorily, section 4 doesn't provide the expected definition of 'lawyer'. Instead, it is a more procedural section. The section provides for ‘proceeding by a lawyer or in person’ (s4.01), ‘power to act by lawyer’ (s4.02), ‘appointment of lawyer – notice of acting’ (s4.03), ‘termination of retainer by party’ (s4.04), and ‘termination of retainer by lawyer’ (s4.05).

VCAT

In VCAT, the starting point is that all parties may appear self-represented pursuant to section 62(1)(a) of the Victorian Civil and Administrative Tribunal Act. A party may be represented by a person who is not a professional advocate if the VCAT permits (section 62(1)(c)).

The other key provision is section 62(7)(b) of the VCAT Act which provides that where a party who is not a professional advocate seeks to represent a party in a proceeding, VCAT may require them to produce a certificate of authority for the representation from the party.

In practice, many companies will seek legal representation for matters where the facts and legal issues are complicated, where the quantum in dispute warrants it, where the risks of losing are high (whether in potential damages or penalties) or where a professional advocate would handle witnesses in a trial with greater skill and speed.