CP Adelaide v Hartford (Holdings) & Anor No. Scciv-01-1162

[2001] SASC 304

C.P. (ADELAIDE) PTY LTD AS TRUSTEE OF THE C.P. (ADELAIDE) TRUST & ORS v HARTFORD HOLDINGS PTY LTD & ORS
[2001] SASC 304

Miscellaneous Appeal

MARTIN J.             The appellants are plaintiffs in proceedings in the District Court.  The fourth appellant is a legal practitioner who practises predominantly as a barrister in the area of commercial litigation.  The appellants sought an order that leave be granted to the fourth appellant to represent himself in the trial of the action and for the other appellants to be represented by counsel.  The application was refused.  The Judge of the District Court has granted a certificate pursuant to r 96A.02 and the appellants appeal against the refusal of their application.

The trial of the proceedings is due to commence in the District Court on 5 November 2001.  The essential questions at issue in the trial are explained in the following passage from the reasons of the trial Judge:

“The 1st plaintiff is a company.  The 2nd to 5th plaintiffs are natural persons who have been directors and shareholders of the 1st plaintiff.  The 4th plaintiff is an admitted legal practitioner who has practised as counsel in this type of litigation.  The other plaintiffs are not lawyers.  The 1st defendant is the landlord of a food court in an Adelaide city building.  The 2nd defendant acted as the agent of the 1st defendant in leasing two shops in the food court to the 1st plaintiff.  The 2nd to 5th plaintiffs jointly guaranteed the obligations of the 1st plaintiff under the leases of the shops to the 1st defendant and various other liabilities of the 1st plaintiff incurred in setting up and operating the two shops.

The businesses of the 1st plaintiff in the two shops have failed and it is now liable to the 1st defendant and many other creditors for amounts which I was informed were in the vicinity of $1,000,000.  The five plaintiffs have instituted action 617/2001 in this Court seeking rescission of the leases and guarantees given by them to the 1st defendant and damages against both defendants on causes of action in misrepresentation and under various statutes.  The 4th plaintiff will be a significant witness on the representations.  The summons, and all the subsequent documents for the plaintiffs, have been filed by one firm of solicitors acting for all five plaintiffs.  The 1st defendant has counterclaimed against all of the plaintiffs for moneys owing to it under the leases.”

The appellants are under pressure from various creditors of the first appellant to which they have given guarantees.  They do not have the financial resources to discharge all these liabilities. Apparently the creditors have temporarily deferred payment of the debts pending the resolution of the proceedings.  However, according to the written outline of submissions filed on the appeal, the appellants continue to pay approximately $7474 to a bank each month in respect of two Lease Purchase Agreements and the fifth appellant continues to pay approximately $2075 per month in respect of a loan taken out by the fifth appellant in connection with the establishment of the businesses that are the subject of the litigation.

The appellants estimate that the cost of engaging counsel to prepare and conduct the trial on behalf of the appellants would be in excess of $100 000.  It appears to have been accepted by the trial Judge that the appellants collectively do not have sufficient financial resources to pay counsel experienced in the jurisdiction to prepare and present their case at trial.  The only way in which the appellants can afford counsel for the trial would be on some contingency basis.  Although no approach has yet been made to any member of the Bar to explore this possibility, the fourth appellant has expressed the reasonable view that it is unlikely that any barrister experienced in the field would be prepared to accept a retainer on a contingency basis.  Mr Costi, a member of the firm of solicitors acting for all appellants, is prepared to act for the first, second, third and fifth appellants on a contingency basis, but only on the condition that the fourth appellant represents himself and performs most of the work to prepare for and conduct the trial. 

It was against this background that the appellants sought an order from the trial Judge that the fourth appellant be permitted to represent himself in the trial of the action while Mr Costi represented the other appellants.  The application was not opposed by the respondents. 

In rejecting the application, the trial Judge referred to a number of older authorities which were primarily concerned with whether plaintiffs with a common cause could be separately represented by different solicitors and counsel.  After reviewing those authorities, his Honour concluded that the tenor of the decisions was that in the absence of conflict plaintiffs with a common cause cannot be separately represented in other than exceptional or extreme circumstances.  His Honour expressed the view that the fact that the appellants cannot pay their debts and also afford legal representation is not sufficient for this purpose.

In the absence of submissions in support of the decision of the trial Judge, I have reservations about the proposition that parties with a common interest can be separately represented only in exceptional or extreme circumstances.  The older authorities to which the trial Judge referred were concerned with litigation conducted in circumstances quite different from those applicable to modern litigation.  If a party is funding their own representation, it is a significant step to deprive that party of the opportunity of choosing who will represent them.  However, for the reasons that follow, it is not necessary to canvass the authorities or to decide the principle that is applicable when parties with a common cause seek to be separately represented.

The fourth appellant does not seek to be separately represented.  He seeks to appear for himself.  The fact that the fourth appellant is a legal practitioner is irrelevant.  As a litigant the fourth appellant is not obliged to retain a legal practitioner to act for him.  He is entitled to represent himself.  I doubt that any order was required to permit the fourth appellant to represent himself.  He is entitled to terminate the retainer of the solicitors that have been acting for him and to conduct the litigation, including the trial, on his own behalf. 

In his reasons, the trial Judge referred to the possibility that if the application was refused the appellants might all appear in person at the trial and seek to conduct their own cases.  His Honour raised, without finally deciding it, the question whether an attempt to do so might be an abuse of process, particularly if the court decided that the appellants could afford some legal representation, but had elected not to do so in order that the fourth appellant could act as de facto counsel for the others.  His Honour suggested in the alternative that the court could act under r 32.01 to give the conduct of the appellants’ case to one of them and to make the other appellants defendants in the action. 

Speaking generally, the fact that a litigant can afford legal representation cannot in itself lead to a conclusion that the litigant is abusing the processes of the court by seeking to conduct the litigation without the assistance of legal representation.  Even if the appellants can afford to be legally represented, in my opinion a decision by one or more of them to appear at the trial on their behalf is not a basis for a conclusion that those who seek to appear on their own behalf are abusing the processes of the court.  Similarly, in my opinion it cannot be an abuse of process for an appellant to appear on their own behalf merely because the motivation is to allow another appellant to undertake the bulk or all of the work associated with the trial. 

In expressing these views, I am not overlooking the possibility that joint parties might seek to be separately represented or to appear for themselves with a view to creating unfairness to an opposing party or to create particular difficulties for the court.  In such circumstances, the court might be led to the conclusion that the parties are attempting to abuse the processes of the court.  However, in the matter under consideration, there is no suggestion that the appellants are seeking to gain an unfair advantage or to cause particular difficulties for the court.  The fourth appellant and Mr Costi have given assurances that the proposed course will not lead to the fourth appellant adopting different tactics from the other appellants.  In these circumstances there is no basis for a conclusion that the proposed course could lead to an abuse of the processes of the court.  Nor is there a basis for the exercise of the power contained in r 32.01 in the manner raised by the trial Judge.

It is not unusual for various parties to have many matters in common.  In such situations, trial Judges often ensure fairness to an opposing party by disallowing repetitive questioning or by directing that only counsel for one of the parties with common interests will be permitted to cross-examine upon matters relating to those common interests.  A court usually leaves it to the parties with common interests to determine which of the parties will undertake the questioning with respect to particular issues.  In the matter under consideration, therefore, if it is the wish of the appellants that the fourth appellant undertake all or the bulk of the questioning and submissions during the trial, in the absence of a particular reason why such a course would be unfair to the respondent or would create particular difficulty for the court, in my view the court should accede to the wishes of the appellants in this regard. 

For these reasons, in my opinion the trial Judge erred in refusing the application.  As I have said, it was probably unnecessary to make the application.  However, as the effect of the order of the trial Judge is to prevent the fourth appellant from appearing on his own behalf, it is appropriate to allow the appeal and to set aside the order of the trial Judge.

The appeal is allowed. The order of the trial Judge is set aside.  In substitution I order that leave be granted to the fourth appellant to represent himself in person in the conduct of the litigation, including the trial.  I also order that leave be granted to the remaining appellants to be jointly represented by Mr Costi or such other counsel as they may choose in the conduct of the litigation, including the trial.