Problems often arise in cases where parties choose to act for themselves or are unable to use lawyers to represent them, meaning the Court will not have the benefit of legally trained advocates appearing before it.
The recent decision of Flightdeck Geelong Pty Ltd v All Options Pty Ltd  FCAFC 138, considered a judge’s duty to assist an unrepresented litigant in the conduct of a trial and the Court’s discretion to refuse leave for a litigant-in-person from representing a Company.
In November 2014, Darren Mathews (Mr Mathews) resolved to sell an indoor trampoline business “Airodrome Trampoline Park”, owned by Flightdeck Geelong Pty Ltd (Flightdeck), a company of which he was the sole director and shareholder. In or around March 2015, All Options Pty Ltd (All Options) entered into negotiations with Flightdeck to purchase the business.
During the course of these negotiations Mr Matthews made representations in relation to the establishment costs, past revenue and profit, and future profitability of the business. All Options relied on those representations and purchased the business. After the sale the business made significant losses and All Options commenced proceedings against Flightdeck alleging the representations made were misleading and in contravention of s18 of the Australian Consume Law (ACL), being Schedule 2 to the Competition and Consumer Act 2010 (Cth).
The hearing was set down for 5 days. Mr Mathews appeared without legal representation and applied to represent both himself and Flightdeck. As leave was required for him to represent Flightdeck in the proceedings given that r4.01(2) of the Federal Court Rules 2011 (Cth) (FCR) does not permit a corporation to proceed in the Court other than by a lawyer. On the first day of the hearing Mr Mathews made an application seeking leave to represent Flightdeck and applied for an adjournment on the basis he lacked the necessary skill to conduct the hearing. Both applications were refused and following the hearing (in which Mr Mathews still appeared for himself) the Court held:
- Misleading representations were made by Mr Mathews and Flightdeck for the purpose of inducing All Options to purchase the business in contravention of s18 of the ACL; and
- The damages caused by the misrepresentations were the difference between the price paid for the business and its true value at the date of sale together with the trading losses sustained by All Options for the period it operated the business.
Issues before the Court of Appeal
In the Appeal it was argued that the trial Judge denied:
- Mr Mathews procedural fairness as a self-represented litigant (i.e. in acting for himself) in that he failed to adequately explain the processes of the trial and the legal consequences of his choices during the trial; and
- Flightdeck procedural fairness by refusing Mr Mathews leave to represent it.
In relation to the assistance it was said should have been provided to Mr Mathews the Full Court said at :
“The assistance provided to a litigant-in-person must therefore be limited to that which is necessary to diminish the disadvantage which he or she will ordinarily suffer and the Court should be wary to avoid placing a litigant-in-person in a position of advantage or privilege over a represented opponent.”
The Court held that it would ordinarily be appropriate to ensure a self-represented-litigant:
- has sufficient information about the practice and procedure of the Court to enable effective choices in their conduct of the proceedings;
- is informed of procedures which may be advantageous, such as the ability to apply for an adjournment; and
- has not, because of lack of legal skill, failed to claim rights or put forward arguments.
The Court emphasised that the duty of the Court does not extend to providing judicial advice or conducting the case on a self represented litigant’s behalf.
The Court noted the following circumstances of Mr Mathews:
- he had a detailed understanding of the nature of the case from his participation in the negotiation and representations and his experience in the business;
- he had over 5 months to prepare his case anticipating he would have to represent himself;
- his cross-examination of witnesses was orderly, focused and logical demonstrating an intelligence and capability to deal with the technical issues; and
- he was quick to pick up court procedure as he tendered documents and prepared written submissions in support of his defence.
The Court noted the Trial Judge assisted Mr Mathews in identifying the evidence he anticipated Mr Mathews wished to reply to, warned about the potential problems facing Flightdeck and proceeded to outline the manner in which the trial would proceed, including the contents of the court books and the practice and procedure in calling witnesses. Further, his Honour sought confirmation from Mr Mathews on a number of occasions as to his understanding of court processes and permitted an alteration to the standard trial procedure to overcome a potential detriment.
In conclusion, their Honours determined the Trial Judge had provided sufficient instruction and assistance to Mr Mathews as to ensure a fair hearing of the case against him.
With respect to the failure to allow Mr Mathews to represent Flightdeck the Court outlined a number of factors to be considered in exercising discretion to grant leave for a company to be represented by someone other than a lawyer, including:
- any evidence of financial incapability of the company;
- any impact on employees of diverting funds to meets costs of legal representation;
- the complexity of issues and ability of a lay person to understand the litigation;
- the delays which come with permitting a lay person to conduct litigation;
- the financial structure of the company and the financial ability of those who stand to benefit from the litigation;
- whether the person seeking to represent the company is also a party to the litigation where issues overlap and will also be a witness, and if so their ability to maintain objectivity; and
- whether the company is the applicant or a respondent, with a more liberal approach provided to the latter.
The Court noted Mr Mathews admission that the case was too complex for him and he was not in a position to provide meaningful assistance to the Court and the lack of financial information available about Flightdeck, the delay in applying for leave to adjourn the hearing and the fact that no proper explanation had been given in relation to the withdrawal of Flightdeck’s legal representation. The Court said at :
“Flightdeck is only entitled to be represented by a legal practitioner. Whilst Mr Mathews might represent himself, albeit ineptly and inefficiently, it does not automatically follow that he should inflict the same harm on Flightdeck merely because he will be in the Court and dealing with similar issues. It is to be remembered that a not insignificant factor was that, despite urging to do so, Flightdeck did not adduce any evidence of its financial position with the consequence that the primary judge could only assume that it was unrepresented by choice rather than necessity.”
The Appeal was dismissed.
- The Court will ensure it does not place a litigant-in-person in a position of advantage over a represented litigant.
- The Court will carefully consider the need for a Company to be represented by a legal practitioner and the fact that another party (such as the director) is also appearing does not mean that party will automatically be entitled to appear for the Company or that the relevant considerations do not apply.