Ashgrove Cheese Pty Ltd v Victoria Foods Pty Ltd

[2011] VCC 666

IN THE COUNTY COURT OF VICTORIA Revised

(Not) Restricted

AT MELBOURNE
COMMERCIAL LIST

EXPEDITED CASES DIVISION

Case No. CI-11-00302

ASHGROVE CHEESE PTY LTD	Plaintiff
v.
VICTORIA FOODS PTY LTD	Defendant

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	30 May 2011
DATE OF JUDGMENT:	30 May 2011 (Revised 1 June 2011)
CASE MAY BE CITED AS:	Ashgrove Cheese Pty Ltd v Victoria Foods Pty Ltd
MEDIUM NEUTRAL CITATION:	[2011] VCC 666

REASONS FOR JUDGMENT

---

Catchwords:  Practice and procedure – Director applying to represent a company at
trial – Solicitors instructions withdrawn – Financial circumstances of the
company – Directors not happy with previous presentation of case –
Worldwide Enterprises Pty Ltd v. Silberman and Chizik [2009] VSC 165
considered.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L. Magowan	Sparke Helmore
For the Defendant	Mr G. Elmi (a director, by leave)
HIS HONOUR:

4

1     Mr Glen Elmi, a director of the defendant, seeks leave to represent the defendant at the trial of the proceeding which is listed to commence today. There are two directors and shareholders of the defendant, Mr Elmi and Mr Peter Paphitis, although, Mr Paphitis’ shareholding is apparently through another company. I gave leave this morning for the defendant’s solicitors, Macpherson + Kelley, to file a notice of ceasing to act.

2     Mr Elmi, in support of the application, said that:

a.	Mr Paphitis supported his application and had, in fact, asked him to represent the company at the trial;
b.	The company at present was in difficult financial circumstances and it was not considered appropriate that the additional $60,000 to $80,000 requested by Macpherson + Kelley should be spent by the defendant in defending the proceeding;
c.	There were aspects of Macpherson + Kelley’s conduct of the defendant’s defence that caused concern to the directors and had led them to conclude that it was likely Mr Elmi might better represent the defendant at trial;
d.	Although the parties were required to put their respective cases on affidavit in relation to critical issues, Macpherson + Kelley had advised the defendant that only an affidavit by Mr Elmi should be filed whereas Mr Elmi considered that
there were two or possibly three other witnesses who should give evidence at the trial on behalf of the defendant;
e.	The defendant had not taken any steps to obtain legal representation and had not investigated the possibility of obtaining legal aid.

3     The proceeding was issued in the Expedited Cases Division of the Commercial List by writ filed 2 February 2011. The writ has an indorsement of claim, indicating that the plaintiff claimed $299,823.68 as the balance owing for goods supplied and delivered to the defendant at its request.

At the first directions hearing on 25 February 2011, I made directions requiring the counsel at the hearing, to be the critical issues in dispute between the parties. There had at that time been some argument about the timing for filing pleadings and I considered that the issues would be better articulated in the first instance if the parties filed affidavit material rather than pleadings. I anticipated that pleadings would be filed at a later time. I fixed the trial for today.

a.	The defendant was established about thirteen and a half years ago. The sole directors and shareholders have always been Mr Elmi and Mr Paphitis;
b.	Mr Elmi has no tertiary qualifications. His background is in sales and the present case is apparently his first experience with the legal system;
c.	The parties have, since the commencement of the proceeding, been each represented by lawyers. The orders made in this case requiring the parties to file affidavits to define the issues and, at the request of the parties, not requiring the filing of pleadings were made on the assumption that the parties would continue to be represented by lawyers;
d.	If the matter does not proceed as a trial today but were to be adjourned, it is likely that the earliest trial date would be in the second half of September 2011;
e.

5     The defendant’s legal representatives did not consider that pleadings were necessary and at a further directions hearing before His Honour Judge Shelton on 15 April 2011, the parties submitted consent orders which made provision for the trial to be conducted

by affidavit evidence but did not make provision for the filing of pleadings. It is apparent from the affidavit that has been filed by the defendant in accordance with the directions that a number of set offs and counterclaims were proposed to be raised. It will be

necessary before the hearing commences to properly define those issues as they have
not been included in pleadings. It is against this background that I must consider the
application by Mr Elmi to represent the defendant at the trial.

6     As Justice Forrest said in Worldwide Enterprises Pty Ltd v Silberman and Chizik [2009] VSC 165, “The starting point … is that usually a company will not be permitted to appear without a legal representative. However, the rule is not absolute”. Forrest J set out a number of matters which are ordinarily relevant in determining whether it is appropriate for a company to be represented otherwise than by a legally qualified person.

7     In the present case, it appears to me that the most important considerations are the following:

Neither party requests that the proceeding be adjourned and both parties have proceed today. Apart from the fairly unrealistic statement by Mr Elmi that he and Mr Paphitis consider that they might better represent the company at the trial than experienced lawyers, nevertheless that is their wish;

f.	It appears that there are financial pressures on the defendant. The assertions by the plaintiff in its affidavit material in the proceeding is that the relationship between the parties as supplier and distributor broke down because of
problems the defendant had in making payments for goods supplied. Those allegations are denied by Mr Elmi on behalf of the defendant in the affidavit he swore. It appears that the recent request by Macpherson + Kelley to be put in funds for the trial included an amount of at least $15,000 owing to the solicitors for work already done;
g.	Apart from what I described as the rather unrealistic attitude by Mr Elmi of his capacity to better represent the defendant than solicitors, Mr Elmi’s conduct in the proceedings and during the application this morning has been entirely

appropriate and straightforward and I anticipate that if he were granted leave to represent the company he would attempt to do so to the best of his ability;

h. If leave is not granted to Mr Elmi to represent the defendant, the defendant will be unrepresented and there will be difficulties in the defendant presenting evidence in the case, perhaps apart from the affidavit already sworn by Mr Elmi, and for the court to receive submissions on behalf of the defendant;

i.           The grant of leave for Mr Elmi to represent the defendant was opposed by the plaintiff.

8     In the circumstances, although it is likely that the trial of the proceedings would be more protracted than if the defendant were not to be represented by Mr Elmi, I consider the interests of justice require that leave be granted to him to represent the company at the trial. Whilst that leave is to be granted, it can also be withdrawn if I consider at any stage that the company, or the Court or the plaintiff is prejudiced by the continued representation of the defendant by Mr Elmi.

9     After delivering my reasons for this decision to permit Mr Elmi to represent the defendant at the trial, Mr Elmi informed me that he needed to “get his documents together” and that would take a number of days. I stood the matter down to enable him to address me

further as to why I should accede to that request and not immediately withdraw the leave I had granted him. When the Court resumed, Mr Elmi stated that in the circumstances, he considered the defendant should seek alternative legal representation. Mr Elmi appeared to believe that there was a form of legal aid that might be available at a reduced rate for

companies in the situation of the defendant. He indicated that he would need some
assistance preparing affidavit material for further witnesses who might give evidence in
the trial on behalf of the defendant.

10   I consider in the circumstances I should follow the following course:

a.	Stand the trial over until tomorrow morning at 10.00am;
b.	Spend some time this afternoon with plaintiff’s counsel and Mr Elmi defining the issues raised in the proceeding;
c.	Enquire of Mr Elmi tomorrow morning if he is ready to proceed. Unless he has a proper basis for the mater to be further delayed, I will then proceed with the trial;
d.	Mr Elmi will be permitted to call further witnesses to give oral evidence provided the evidence they give is relevant to the issues previously raised in affidavit previously filed on behalf of the defendant and provided Mr Elmi informs me tomorrow morning of the names of the witnesses and the substance of the evidence they will give.

- - -

Certificate

I certify that these 4 pages are a true copy of the reasons for decision of His Honour Judge

Anderson delivered on 30 May 2011 and revised on 1 June 2011.

Dated: 1 June 2011

Hannah Christensen

Associate to His Honour Judge Anderson