Gold Developments Pty Ltd v Sangate Service Company Pty Ltd

[2023] VSC 342

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S ECI 2023 00659

GOLD DEVELOPMENTS PTY LTD (ACN 159 207 977) TRADING AS KITANPARTS	Appellant
v
SANGATE SERVICE COMPANY PTY LTD (ACN 006 673 427)	Respondent

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JUDGE:	Gorton J
WHERE HELD:	Melbourne
DATE OF HEARING:	19 June 2023
DATE OF JUDGMENT:	20 June 2023
CASE MAY BE CITED AS:	Gold Developments Pty Ltd v Sangate Service Company Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 342

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CIVIL PROCEDURE – Appeal from a Judicial Registrar – Whether company must act by solicitor – Mere convenience or preference of directors is insufficient reason to dispense with the requirement that a company not take a step in a proceeding other than by solicitor – Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 1.17 – Hubbard Association of Scientologists v Anderson [1972] VR 340, Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr M Kitanovski, litigant in person	N/A
For the Respondent	Mr J Ryan of counsel	Russo Pellicano Carlei Lawyers

HIS HONOUR:

Introduction

1. Gold Developments Pty Ltd, the appellant, lost a case it had brought in the Magistrates’ Court of Victoria against Sangate Service Company Pty Ltd, the respondent, and was ordered to pay Sangate Service Company Pty Ltd’s costs fixed at $3,730.  The dispute arose out of an assertion made by Sangate Service Company Pty Ltd to one of Gold Developments Pty Ltd’s customers that some parts Gold Developments Pty Ltd had supplied for the purpose of the repair of the customer’s motor vehicle were not suitable for use because their origin could not be confirmed. 

1. Mendo Kitanovski is the only director of Gold Developments Pty Ltd. He appeared on behalf of Gold Developments Pty Ltd in the Magistrates’ Court of Victoria. On 15 February 2023, Mr Kitanovski filed a notice of appeal in this Court by which Gold Developments Pty Ltd appealed against the orders made in the Magistrates’ Court. Rule 1.17(1) of the Supreme Court (General Civil Procedure) Rules 2015 provides that a corporation shall not take any step in a proceeding in this Court save by a solicitor.  Mr Kitanovski is not a solicitor and Gold Developments Pty Ltd has not engaged a solicitor to represent it in the appeal.  Gold Developments Pty Ltd applied by summons for, among other things, an order that leave be granted to Mr Kitanovski to represent Gold Developments Pty Ltd in the appeal.  Sangate Service Company Pty Ltd opposed the application.  Caporale JR made an order that regularised the filing of the notice of appeal other than by a solicitor, dismissed the application for the grant of leave to Mr Kitanovski to represent Gold Developments Pty Ltd, ordered Gold Developments Pty Ltd to retain a solicitor within 14 days, and ordered it not to take any further steps in the proceeding other than by solicitor.

1. Gold Developments Pty Ltd has filed a notice of appeal by which it appeals against Caporale JR’s orders.  It has not retained solicitors.  These reasons relate to that appeal.  The appeal is an appeal by way of hearing de novo.[1]

   [1]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 84.05(4).

1. People who are admitted to practice as a barrister or solicitor of the Supreme Court of Victoria have the right to appear for someone else before this court.  People who are not so admitted do not have that right.  Gold Developments Pty Ltd, as a incorporated body, is, in law, an independent person.  Accordingly, Mr Kitanovski has no right to appear for Gold Developments Pty Ltd.  There are good reasons of public policy for this.  Law is a specialised field.  The rule ensures that those appearing have the expertise necessary to ensure the efficient dispensation of justice.  It also ensures that those appearing are subject to the sanctions for improper conduct that apply to barristers and solicitors.  For these reasons, the Full Court concluded in Hubbard Association of Scientologists v Anderson:[2]

In spite of the appeal of the argument that a company which is a litigant that cannot speak for itself should be allowed to speak through any mouthpiece it chooses, unless that mouthpiece appears unsuitable, the considerations that have been adverted to dictate adherence to the well-established practice that a company should be allowed to speak to the Court only through a legally qualified person, founded as that practice is on the belief that any person chosen must be regarded as unsuitable for the task unless he has been accorded recognition by admission to practise.[3]

[2][1972] VR 340.

[3]Ibid 343-4 (Smith, Little and Gowans JJ). See also Worldwide Enterprises Pty Ltd v Silberman (2010) 26 VR 595, 601-602 [35]-[36].

1. The Court retains the power to dispense with the operation of this rule.[4]  Mr Kitanovski does not say that he, or Gold Developments Pty Ltd, is unable to afford a lawyer.  Instead, Mr Kitanovski submits that the rule should be dispensed with because he wants to appear for Gold Developments Pty Ltd, he says that he will be able to do the job well, and he wants to save the time and cost associated with the retention of a lawyer.  He submits that the matter is so straightforward, in his favour, that Gold Developments Pty Ltd does not need a lawyer.  

   [4]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 2.04(1).

1. I engaged with Mr Kitanovski about some of the issues that arose in the hearing in the Magistrates’ Court and the issues that would arise in the appeal.  Mr Kitanovski was pleasant and respectful.  Nonetheless, I formed the view that Mr Kitanovski would have less ability efficiently to prosecute the appeal than a trained lawyer.  His son was at the bar table beside him.  Mr Kitanovski told me, in response to questioning, that it was his son who had formulated the notice of appeal.  When I asked Mr Kitanovski to identify with precision, for example, what relevant matter he said the Magistrate failed to have regard to, he merely read to me what his son had written in the notice of appeal.  When I asked him to identify where certain documents were, or where he had made particular submissions below, he was dependent on his son to locate them for him.  Mr Kitanovski told me that this was in part because he had been very busy as of late, and that he would be more across the detail when the appeal came to be heard.  I accept that he may well be more prepared at the hearing of an appeal from the Magistrates’ Court than he was before me today in this regard.  But even so, I was left with the clear impression that Mr Kitanovski was a competent layperson but was not someone who was well-equipped to deal with the process that would be required if an appeal were properly to be prosecuted.  This would involve identifying with precision the legal point that was to be made, articulating that legal point, and identifying the material that made good that point.  It is likely that if he, instead of someone with legal training, were to prosecute the appeal then the appeal would be less focussed, take longer and proceed in a generally less satisfactory manner.  That is no criticism of him as a person or businessman, just an observation that he does not have the critical analytical and expository skills that usually come with legal training and experience.

1. The point is demonstrated by juxtaposing Mr Kitanovski’s assertion that his case is so obviously right — so ‘black and white’ — that a lawyer is not needed to explain it, with his assertion that the Magistrate had not understood his case.  I also note that when I asked Mr Kitanovski where precisely he had identified for the Magistrate the legal framework behind the obligations on the respondent that he said it had failed to comply with, or had misunderstood, he accepted that he had not referred to those matters in his final address to the Magistrate and said that this was because he was made anxious by the way the Magistrate had conducted the hearing.  He said that the argument was all presented in the written material that was filed.  The written material that was filed was quite lengthy, and did not set out the argument with the precision that comes with legal training.

1. Further, if the details found in the evidence matter in this appeal, and Mr Kitanovski is able to explain those facts and how they are relevant to the Court, then he should also be able to explain those facts to a lawyer engaged by him in a way that would arm the lawyer properly to represent Gold Developments Pty Ltd. 

1. For the above reasons, I would not dispense, in this case, with the requirement that Gold Developments Pty Ltd not take any step in the proceeding other than by a solicitor.  One does not know what one does not know and, in my assessment, Mr Kitanovski, as someone without legal training, does not appreciate the difference that legal training would make to the presentation of Gold Developments Pty Ltd’s appeal.

1. Even if I were satisfied that Mr Kitanovski was able to prosecute the appeal as or nearly as adequately as someone with legal training, the reasons put forward by him  would still, in my view, be insufficient reasons for dispensing with the rule that a company must act through a solicitor.   The choice to incorporate a company and have that company own and run a business, rather than to own and to run a business as a natural person, has some benefits.  Most significantly, it is the company, and not the owners of the company, that incurs liabilities associated with the business.  For example, the costs order made in the Magistrates’ Court was made against Gold Developments Pty Ltd, not Mr Kitanovski personally.  Having a company own and run a business may also give other benefits, such as the ability to distribute profits to various shareholders and so to reduce the overall tax burden.  But, it also comes with disadvantages, one of which is that, if it is to appear in court, the rule is that it has to do so through a lawyer. 

1. As noted above, in this case there is no reason for which Gold Developments Pty Ltd is not able to retain a solicitor.  Mr Kitanovski accepts that Gold Developments Pty Ltd is able to afford to do so.  It comes down to his preference.  But a director’s desire to appear for the company, even if coupled with competency, is not enough.  Otherwise the rule would be denuded of any real effect and would turn into a rule whereby a director was permitted to appear for a company unless there were some reason to doubt the director’s ability competently to do so.  Hubbard Association of Scientologists v Anderson[5] was a case where an incorporated body was well able to engage lawyers but preferred not to do so.  The Court of Appeal concluded in that case that a desire not to engage lawyers and to have a non-lawyer represent the company was insufficient reason to dispense with the rule. 

   [5][1972] VR 340.

1. Mr Kitanovski referred to the various factors considered by the Court of Appeal in an application by a company to be represented by a director in Worldwide Enterprises Pty Ltd v Silberman.[6]  In that case, the Court of Appeal stated that relevant matters included  ‘the complexity of the dispute, and the capacity of the proposed representative to conduct the case in a sensible manner on behalf of the company’.[7]  The Court refused to dispense with the rule in that case principally because it concluded that the proposed representative was incapable of properly representing the company.[8]  That case did not establish, however, the contrary: that the rule should be dispensed with if a proposed representative is capable of properly representing the company.  The entire discussion in Worldwide Enterprises Pty Ltd v Silberman took place in circumstances where it was accepted that the company had no assets and was insolvent.[9]  That is not this case.  There must be a proper reason for dispensing with the rule that exists for good matters of public policy, and the mere preference or convenience of the directors of a company will not, at least in ordinary circumstances like those under consideration here, be sufficient.  The Court is even less likely to dispense with the rule where, as is the case here, the company, rather than being a respondent to or defendant in proceedings, has chosen to bring proceedings against another party.

   [6](2010) 26 VR 595.

   [7]Ibid 601 [34].

   [8]Ibid 603 [43]-[46].

   [9]Ibid 597 [7].

1. For the above reasons, I agree with Caporale JR that, in the circumstances of this case, r 1.17 of the Supreme Court (General Civil Procedure) Rules 2015 should not be dispensed with.  Of course, nothing said in these reasons is intended as a comment on the strength of Gold Developments Pty Ltd’s arguments in the appeal from the Magistrates’ Court.

1. In order to regularise the bringing of the appeal from Caporale JR’s orders, I will grant to Gold Developments Pty Ltd leave, retrospectively, to commence and to prosecute this appeal other than by solicitor.  I will otherwise dismiss the appeal.

1. I will hear the parties on the question of costs.