Ritson v PATS Consulting Pty Ltd
[2012] FMCA 837
•27 August 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RITSON v PATS CONSULTING PTY LTD | [2012] FMCA 837 |
| PRACTICE & PROCEDURE – Application by employee of corporate respondent for leave to represent respondent in proceedings under the Competition and Consumer Act 2010 (Cth) – relevant factors. |
| Competition and Consumer Act 2010 (Cth), ss.18, 21 of Schedule 2 Federal Magistrates Court Rules, r.9.04 |
| Fair Work Ombudsman v Finetune Holdings Pty Ltd & Anor [2010] FMCA 889 Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 |
| Applicant: | BRENDAN RITSON |
| Respondent: | PATS CONSULTING PTY LTD (ABN 55 140 733 446) |
| File Number: | SYG 1165 of 2012 |
| Judgment of: | Barnes FM |
| Hearing date: | 27 August 2012 |
| Delivered at: | Sydney |
| Delivered on: | 27 August 2012 |
REPRESENTATION
| Solicitors for the Applicant: | Mitchell Lawyers |
ORDERS
The application for leave for Mr Ryan to represent the respondent is dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1165 of 2012
| BRENDAN RITSON |
Applicant
And
| PATS CONSULTING PTY LTD (ABN 55 140 733 446) |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
(As corrected)
These proceedings were commenced by application and statement of claim filed on 29 May 2012 in which Mr Ritson sought orders against the respondent, PATS Consulting Pty Ltd (PATS). Pursuant to the Australian Consumer Law under Schedule 2 to the Competition and Consumer Act 2010 (Cth) Mr Ritson seeks compensation for what is said to be loss or damage suffered by him as a result of what are said to be contraventions of ss.18 and/or 21 of the legislation.
The accompanying statement of claim particularises a number of representations made on behalf of the respondent that were alleged to amount to misleading or deceptive conduct or conduct that was likely to mislead or deceive. It is also contended that PATS engaged in unconscionable conduct. Mr Ritson seeks to recover damages including payment for a course he undertook with PATS, return airfares from Sydney to Melbourne and accommodation in Melbourne to attend the course, and what is described as the “Lost chance to participate in the Jetstar Cadet Pilot Program”.
When this matter was first before the court Mr Ryan appeared (by telephone) and indicated that he sought to represent PATS.
Mr Ryan seeks such leave to appear having regard to the requirements of r.9.04 of the Federal Magistrates Court Rules which provides that:
Except as provided by or under an Act or regulations made under an Act, or with the leave of the Court, a corporation may not start or carry on a proceeding otherwise than by a lawyer.
(and see former O.9 r.3 of the Federal Court Rules to similar effect). He was given limited leave to appear for the purpose of seeking leave under r.9.04.
On 10 July 2012 orders were made for any affidavit in support of such an application to be filed and served by 24 July 2012. The application for leave was listed for hearing on 31 July 2012. A document described as a “Sworn Affidavit” of Mr Ryan was filed on 25 July 2012. However when the matter came before me on 31 July 2012, Mr Ryan sought an adjournment to put further evidence before the court. The adjournment was granted. Mr Ryan was given the opportunity to file further affidavit evidence, but it was ordered that the respondent pay the costs of the applicant thrown away by reason of the adjournment.
Mr Ryan filed a further affidavit on 22 August 2012 sworn/affirmed on that day. He confirmed that he sought to rely on his earlier affidavit only insofar as it related to seeking advice in relation to the costs the respondent was likely to occur if it were to engage solicitors to act on its behalf in these proceedings.
As indicated, the relevant provision under the Federal Magistrates Court rules is r.9.04 (and see s.44 of the Federal Magistrates Act 1999 (Cth) in relation to the need for representation).
The starting point and the clear policy behind this rule is as considered in Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 in relation to its predecessor in the Federal Court Rules. In Termi-Mesh French J (as he then was) referred to the fact that there is “no threshold requirement of special or exceptional circumstances” (at [12]) and that the discretion under such a rule is a discretion to be exercised by reference to all relevant considerations. However it is notable that his Honour also pointed out at [13] that “the policy of the rule is clear that ordinarily a corporation will be required to be represented by a solicitor”. The same may be said in relation to r.9.04.
French J observed at [13] that relevant factors for dispensing with the requirement of legal representation would include:
…the financial capacity or lack of capacity of the corporation and 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. The factual complexities of the case and the capacity of the proposed representative to conduct it effectively are also relevant.
His Honour made the point (at [14]) that “those who chose to carry on their businesses through corporate structures enjoy advantages that those carrying on business on their own account do not enjoy”, although there are disabilities and obligations such as that imposed by such a rule. French J acknowledged that a more liberal approach to the grant of leave may be warranted where the company in question was a respondent rather than applicant. That is the case in the present circumstances.
It is necessary to have regard to all the factors relevant to the question of leave insofar as it is possible to do so on the material before the court. I have borne in mind the possible relevant factors usefully surveyed by Lucev FM in Fair Work Ombudsman v Finetune Holdings Pty Ltd & Anor [2010] FMCA 889.
In this case an issue of considerable significance is the extent of financial information, if any, about the corporation or those who stand behind it and its, or their, ability to engage legal representation.
In this respect, the evidence that Mr Ryan has chosen to put before the court, notwithstanding that he has had a considerable amount of time to do so, is sorely lacking and inadequate. He indicated today that he could obtain further information from his accountants, but he has not put evidence before the court as to the identity of the controller of the company, or indeed, the directors and shareholders of the company. In his affidavit he states that he is a “Training Manager” in the “sole and permanent employ” of the respondent and “authorised to make [the] affidavit on its behalf”, which he makes from his own knowledge and belief.
There is no evidence of the company’s cash flow or financial circumstances or as to any assets or liabilities of the company or those who stand behind it. Mr Ryan asserted that the costs of these proceedings would exceed what the respondent “can presently afford” on the basis, apparently, that in recent times the respondent was said to have experienced a “slowing in the rate of applicants participating in the courses it offers” so that “its cashflow position is limited”.
I allowed limited cross-examination in relation to this aspect of Mr Ryan’s affidavit. The solicitor for Mr Ritson put to Mr Ryan the fact that promotional material on the website for PATS on or about 14 July 2012 stated:
2012, Nearly Sold Out??
…unprecedented demand for our training courses…
There are only 8 vacancies for the remainder of 2012.
In August 2012 the website stated that PATS was “extremely busy with future bookings”. This was also put to Mr Ryan. He stated that he was not prepared to provide a “yes or no” answer as to the accuracy of such material. He was somewhat evasive in addressing this issue in circumstances where on its face such material would appear to suggest that PATS is not experiencing significant cash flow or financial difficulties for the reasons given in his affidavit.
Of more concern for present purposes is the fact that there is simply inadequate evidence in relation to the company’s financial position. That is a significant factor.
I accept that this case should not require a lengthy hearing. However, while as Mr Ryan suggested it is not an extremely complicated case and the factual issues are of limited compass, the issues are perhaps not as limited and the legal questions not as straightforward as Mr Ryan would appear to suggest. I have considered that part of Mr Ryan’s affidavit that is in the form of submissions as submissions. His view is that Mr Ritson is unlikely to succeed, or if he does succeed, is likely to succeed only in a limited part of his claim. He makes those submissions in the absence of any response or defence to the statement of claim. While I accept that this is what Mr Ryan considers is the case and that PATS has obtained some legal advice, the material before the court is not such as to satisfy me that the application can be described as a farce, such that it will fail, or that it is baseless, as Mr Ryan submitted. As I indicated to Mr Ryan, if that is the case, there are legal avenues open to the respondent to seek to bring the proceedings to an end prior to a final hearing. Nonetheless I have had regard to the nature of the applicant’s claims as part of all the circumstances.
I have also borne in mind the fact that the corporation is the respondent and not the applicant. However I have some concern about Mr Ryan’s ability to effectively represent PATS, having regard to the manner in which he has endeavoured to conduct these proceedings by seeking to give, in effect, evidence from the Bar table (albeit over the telephone) in relation to what he contends is the applicant’s motivation for initiating these proceedings. He attempted to make such allegations in relation to matters that are not in evidence before the court as a justification for the grant of leave for him to represent the respondent. He has persisted in doing so despite being informed that the court cannot have regard to matters not in evidence. This raises a doubt as to his comprehension of matters that are in issue in this case and his ability to effectively represent the corporation in such circumstances. That concern is magnified by the fact that Mr Ryan’s precise role in PATS is unclear. He described himself as a “Training Manager” in his affidavit and in the employ of the company, not as a director of the company.
The respondent has had the opportunity to arrange legal representation and has taken steps in the past to obtain advice. I recognise that there are costs involved in legal representation. However the information before the court about PATS financial situation is not such as to indicate that such legal representation is not possible.
I have had regard to the absence of evidence of any prejudice to the applicant should the leave be granted. I accept that that is a factor that favours allowing such representation.
A number of issues relevant to the factors discussed above were raised by the solicitor for the applicant as to the appropriateness of leave to appear. However there was no indication of strong opposition. I have had regard to this but also to the time taken in these proceedings to deal with matters that ought to have been able to be dealt with fairly quickly. The proceedings have been unnecessarily protracted due to Mr Ryan’s approach to the proceedings, including his apparent lack of knowledge about matters that can properly be raised by a representative for a respondent and the manner in which that is to be done. It is relevant that an adjournment was sought on the last occasion in circumstances where Mr Ryan had put no evidence before the court in relation to the financial circumstances of PATS. Despite being given that opportunity, he did not put such evidence before the court in his subsequent affidavit.
In all the circumstances, having regard to the material before the court I am of the view that it is not an appropriate exercise of the discretion of the court in this case to depart from the ordinary principle that a company is to be represented by a lawyer. As French J indicated in Termi-Mesh, a departure from that ordinary rule does require the court to be satisfied that there is a reason for so doing. In this case, no such reason has been satisfactorily demonstrated. Accordingly the oral application by Mr Ryan for leave to appear as a non-lawyer on behalf of the respondent PATS is dismissed.
That leaves two matters. On the last occasion I ordered that the respondent pay the costs thrown away by reason of the adjournment. At this stage PATS is not legally represented. I do not consider it appropriate to fix the costs in those circumstances. What I would propose is to order that the applicant provide a copy of the proposed schedule of costs to the solicitor for PATS once there is a solicitor on the record. PATS will have the opportunity to make submissions on the amount of the costs thrown away by reason of the adjournment on the next occasion the matter is before the court.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Barnes FM
Date: 12 September 2012
CORRECTIONS
Paragraph 5 line 4– delete “Ritson” insert “Ryan”.
Paragraph 22 line 7– delete “Ritson” insert “Ryan”.
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