Evajade Pty Ltd v Cockatoo Ridge Wines Limited

[2005] SASC 152

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

EVAJADE PTY LTD & ORS v COCKATOO RIDGE WINES LIMITED

Reasons of Judge Lunn a Master of the Supreme Court

21 April 2005

PROCEDURE

Application to strike out summons insofar as it had been issued by three companies - summons issued by another natural plaintiff under alleged powers of attorney from the companies and without leave under R36.11(2) - held such issue of the summons by the companies was irregular and actions by them permanently stayed unless and until a solicitor represents them.

EVAJADE PTY LTD & ORS v COCKATOO RIDGE WINES LIMITED
[2005] SASC 152

Reasons on Application by First Defendant to Strike Out the Action Against the Three Corporate Plaintiffs

1. Judge Lunn           This action was instituted in the District Court on 8 February 2005.  The plaintiffs were named as Evajade Pty Ltd as trustee for the Andrew Garrett Family Trust (“Evajade”), Andrew Garrett, Averil Garrett, International Vineyards Pty Ltd (“Vineyards”), International Vintners Australia Pty Ltd (“Vintners”), Nicholas Garrett and Tom Garrett.  Averil Garrett is the wife of Andrew Garrett.  Nicholas and Tom Garrett are children of Andrew Garrett.  The defendants were named as Cockatoo Ridge Wines Ltd (“Cockatoo”), Brenton Atkinson, Edward Shipley and International Vintners Australia Pty Ltd.

2. The summons was signed by Andrew Garrett purportedly acting under powers of attorney for the other plaintiffs.  There is no solicitor on the record for any plaintiff.  Mr Garrett has sought to conduct the proceedings on behalf of all plaintiffs. 

3. Annexed to the summons was a document entitled “Preliminary Statement of Claim”.  It contained 145 paragraphs alleging fraud and misconduct by the other defendants in the affairs of Cockatoo.  It then apparently claimed pre-action discovery, orders reversing various transactions and findings of fraud against Shipley and Atkinson.  In the body of the summons it was stated:

   “Summons issued pursuant to Rules 7.04, 9.01 (insofar as it relates to Pre-action discovery), 10.02, 10.03, 58 and 58A of the Supreme Court Rules”.

4. The summons does not expressly refer to Rule 60 which deals with pre-action discovery.  Interestingly the fee paid on issue of the summons to the District Court was only $65 which indicates that it was proffered to the District Court as a summons for pre-action discovery under paragraph 1 of Schedule 1 of the District Court (Fees) Regulations 2004.  If orders other than pre-action discovery were sought, an additional fee of $438 was payable under item 3 of that Schedule.

5. On 28 February 2005 a Master of the District Court transferred the action to this Court where it has since proceeded.

6. On 4 April 2005 Cockatoo took out an application seeking, inter alia, that the summons be struck out insofar as it was an action by Evajade, Vintners and Vineyard.  The basis of the application was that was impermissible for Mr Garrett to have instituted the action on their behalf.  I allowed Mr Garrett to speak on his own behalf and that of the three plaintiff companies in opposing the application.

7. Cockatoo also sought leave to bring the application against Vintners and Vineyard.  I do not consider that its application is contrary to the terms of an injunction granted by Gray J on 30 March 2005 in action 247/05 and therefore no such leave is required.

8. On 11 March I had directed Mr Garrett to file any application and affidavit concerning his representing any other party by 24 March.  I then directed that all applications concerning his standing in the action be heard on 6 April in conjunction with similar applications in action 247/04.  Neither Mr Garrett nor the plaintiff companies issued any application or filed any affidavit in this action concerning Mr Garrett representing or appearing for any of the other plaintiffs.  However, even if such applications had been brought they would have failed for the same reasons as similar applications have failed in 247/05.  Hence I deal with Cockatoo’s application on the basis that no leave has been, or would have been, granted to Mr Garrett under R 36.11 or otherwise for him to represent or appear for Evajade, Vintners and Vineyards in this action.

9. Rule 36.11 provides:

   “36.11(1) A company may apply for leave to act in an action in person and to appear in Court or in Chambers for a managing or governing director or other person in whom by the articles of association of the company the powers of the board of directors are vested between board meetings if he is authorised by a resolution of the company so to do.

   (2)    Where a company seeks to issue a summons other than through a solicitor such summons shall be lodged with the Registrar together with an application for leave under subrule (1), but the summons shall only be issued if the Court gives leave under subrule (1) upon a hearing of the application.

   (3)    On the hearing of an application the company must satisfy the Court:

   (a)that the person seeking to represent the company is authorised by the company to do so and has power to bind the company;

   (b)that the person has authority to make admissions and give undertakings which will bind the company;

   (c)that that person has power on behalf of the company to sign originating process or notices to defend to set aside process as the case may be;

   (d)that it is otherwise proper that the order be made.

   (4)    Any signature to any process or document filed in the Registry by a person in whose favour an order is made under subparagraph (1) hereof shall be valid and shall bind the company.

   (5)    Any document filed under this Rule shall state the capacity in which the party signed the document signs it and that he has the authority of the company to do so.”

10. This and all the other relevant Rules are identical in the Supreme and District Courts and therefore it is of no consequence on their application that the action was commenced in the District Court and subsequently transferred to the Supreme Court.  Under R 36.11(2) this summons should not have been issued by the District Court.  Its issue should have been conditional upon leave being granted to Mr Garrett under R 36.11(1).  As stated above, if that leave had been sought, it would have been refused.  However, under R 3.05(1) this non-compliance with the Rules does not render the action void or make it a nullity: Hubbard Association of Scientologists International v Anderson (No 2) [1972] VR 577.

11. A number of the cases cited came from other jurisdictions which had an express Rule to the effect that a body corporate could not institute proceedings other than through a solicitor:  Crescent Oil and Shipping Services Ltd v Implrantang UEE [1977] 3 All ER 428; Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd (2000) 22 WAR 372; Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104. At common law a company was not permitted to sue other than by acting through a solicitor. (See the historical survey of cases in Arbuthnot Leasing International Ltd v Havelet Leasing Ltd [1991] 1 All ER 591). There is a strong inference that R 36.11 lays down the only way in which a company can institute an action in the Court, and particularly when viewed against the older common law on the point.

12. The situation here is not materially distinguishable from that in Hubbard Association of Scientologists International v Anderson (No 2) above. At that time the Rules in Victoria were similar to our R 10.01 in requiring a writ to be signed by the plaintiff or his solicitor and this was interpreted there to exclude a signature by an agent of the company. There was no express Victorian Rule requiring a company to act through a solicitor. However, the Court held that this was the general position. It further held that because of its O70 r1, which is equivalent of our R 3.05, the writ as issued was not a nullity and the Court could deal with the irregularity as was appropriate. It decided that if a solicitor filed a notice of acting and took over the conduct of the action, it could proceed, but it should not proceed if that did not occur. Hence it imposed a permanent stay of proceedings which was only to be lifted if and when a solicitor filed a notice of acting. I consider this is the appropriate course to adopt here under R 3.05 and the inherent jurisdiction of the Court.

13. Mr Garrett argued that as Evajade was suing as a trustee of a trust in which he said he was a beneficiary he could be heard on behalf of the trust.  Rule 30.02(2), which was referred to by Mr Garrett, would only enable the beneficiary to be joined as an additional party, but not in substitution for the trustee.

14. This still leaves in place the action as brought by Mr Garrett and his family as personal plaintiffs against Cockatoo.  Cockatoo seeks to attack that part of the action by other paragraphs of its application which have not yet been argued.  The question of costs is to be left until the rest of Cockatoo’s application has been dealt with.

    The order of the Court on Cockatoo’s application of 4 April 2005 is:

    1That this action insofar as it has been brought by Evajade, Vintners and Vineyards be permanently stayed unless and until a solicitor files a notice of acting for those companies in accordance with Rule 11.

    2      Costs reserved.

    3      Fit for counsel.

15. On file is a similar application dated 8 April 2005 from the other defendants.  I will hear the parties on the listing of the outstanding applications for hearing.