JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE FULL COURT (WA)
CITATION : RE HOFFMAN [2004] WASCA 238
CORAM : MURRAY J
HEARD : 20 AUGUST 2004
DELIVERED : 22 OCTOBER 2004
FILE NO/S : FUL 93 of 2003
EX PARTE
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram : MASTER SANDERSON
File Number : CIV 2685 of 2002
Catchwords:
Corporations - Whether a person can begin proceedings on behalf of corporation - Jurisdiction of Court - Whether inherent jurisdiction to grant leave to commence proceedings on behalf of company
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Legislation:
Rules of the Supreme Court of Western Australia, O 4 r 3
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Solicitors:
Case(s) referred to in judgment(s):
Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104
Doyle v Commonwealth (1985) 156 CLR 510
East Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372
HPM Pty Ltd v Fear & Ors (2002) 171 FLR 12; [2002] WASCA 249
Landsal Pty Ltd (in liq) v REI Building Society (1993) 113 ALR 643
Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68
N R & N J Gardiner & Sons Pty Ltd v Osborne Cold Stores (WA) Pty Ltd (1988) 7 SR (WA) 62
Case(s) also cited:
Alice Springs Abattoirs Pty Ltd v Northern Territory (1996) 134 FLR 440
Arbuthnot Leasing International Ltd v Havelet Leasing Ltd [1991] 1 All ER 591
Hubbard Association of Scientologists International v Anderson [1972] VR 340
O'Toole v Scott [1965] AC 939
Schagen v R (1993) 8 WAR 410
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1 MURRAY J: I respectfully agree with McKechnie J. The Court has no inherent power to make an order prohibited by the Rules of the Supreme Court 1971 (WA), O 4 r 3(2).
2 TEMPLEMAN J: I have had the advantage of reading in draft the reasons to be published by McKechnie J. I agree with those reasons and with his Honour's conclusion that the appeal should be dismissed.
3 MCKECHNIE J: By notice of originating motion dated 9 December 2002 the appellant sought the following substantive order:
"The Applicant is granted leave from Order 4 rule 3 of the Supreme Court Rules, to permit Joshua Hoffman as Director, to commence and act for Molecular Inventory Systems Pty Ltd in the action against the Dept. of Industry, Tourism and Resources & Ors".
4 On 13 December 2002, Master Sanderson refused the application relying upon East Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372.
5 On 25 June 2003, the appellant lodged a notice of appeal and, on 3 July 2003, Master Sanderson approved the appeal for expedited listing. On 11 May 2004, the Master extended time to enter the appeal for hearing.
6 The appellant has filed a number of affidavits in the appeal to which I am prepared to have regard, although they add little to the legal issues exposed by the application. In an affidavit, of 25 June 2003, the appellant deposes that he is the founder and director of Molecular Inventory Systems Pty Ltd ("MIS"), which was incorporated on 18 June 2001, and is at all times a developer and supplier of Molecular Structure Searchable Chemical Inventory software. He retains all the shares in MIS and has been the company's sole director at all times. He deposes that:
"6. Neither the company nor I, have the financial capacity to commence the action by a solicitor..."
7 In a further affidavit of 18 February 2004 the appellant deposes:
"3. The cause of the company's impecuniosity is as a direct result of the breach of natural justice that MIS has experienced from the Department of Industry, Tourism
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and Resources, and 3 departmental consultants named as defendants in the proposed action. The Statement of Claim in the proposed action asserts that MIS after paying a $250 grant application fee lost a $52,400 AusIndustry Commercialising Emerging Technologies ("COMET") grant due to attempts by these consultants to obtain financial rights over MIS and other breaches of natural justice in the assessment of the grant application."
8 The lack of financial resources is confirmed in an affidavit by the appellant, sworn 6 July 2004, which is contained in the papers headed "outline of evidence", but not actually filed in the action.
9 At the hearing of the appeal, the appellant, who appeared in person, indicated that he was content for the Court to rely upon his written submissions and other material and did not wish to advance oral argument. He handed up a draft writ of summons which, if leave is granted, he would propose to file.
10 The writ names Molecular Inventory Systems Pty Ltd as first plaintiff and Joshua Hoffman (the appellant) as second plaintiff. It names The Department of Industry, Tourism and Resources as first defendant, two companies, and one individual as other defendants. I make no comment on the writ of summons other than to observe that if the defamation alleged is a slander, then the time for bringing proceedings may have already expired.
11 The merits or otherwise of the action, both as disclosed in the writ or in the affidavits, are immaterial if the Court has no jurisdiction to make the order sought. They may be material if the Court can exercise its inherent jurisdiction.
The issue arising on the appeal
12 The Rules of the Supreme Court of Western Australia by O 4 r 3 provide:
"3. Right to sue in person
(1) Subject to paragraph (2) and to Order 70 Rule 2, any person (whether or not he sues as a trustee or personal representative or in any other representative capacity) may begin and carry on
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proceedings in the Supreme Court by a solicitor or in person.
(2) Except as expressly provided by or under any Act a body corporate may not begin or carry on any such proceedings otherwise than by a solicitor."
13 The words of O 4 r 3(2) are clear and on their face would preclude the appellant from acting on behalf of MIS. This was the conclusion reached by Hasluck J in East Metropolitan Regional Council. After a comprehensive review of the authorities Hasluck J said at [44]:
"It is equally important to note, however, that if O 4 r 3(2) be regarded as a corollary to O 12 r 1(2), one should take account of the fact that O 4 r 3(2) provides expressly that a body corporate may not begin or carry on any proceedings otherwise than by a solicitor. It is equally important to note that the Rules of the Supreme Court do not contain a dispensing provision of the kind that was under consideration in some of the cases mentioned above, especially Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104. It is true that O 2, in dealing with the effect of non-compliance with the rules, establishes that where at any stage there has been a failure to comply the failure shall be treated as an irregularity and shall not nullify the proceedings or any step taken in the proceedings, but this cannot be regarded as being of the same effect as a dispensing power. The High Court was quite explicit in Doyle v Commonwealth (1985) 156 CLR 510 at 518 that 'a Judge cannot dispense with the requirements of the rules of court unless the rules give him power to do so.' "
14 He concluded at [47]:
"…I am of the view that a Judge of the Supreme Court in this State does not have power to dispense with the explicit requirements of the rules with the result that, even in exceptional circumstances, an individual is not at liberty to take a step in the action on behalf of a company. This is so, notwithstanding the inherent jurisdiction of the Supreme Court to regulate its proceedings. Where the Supreme Court Rules deal with a certain matter specifically, and impose a prohibition, one is obliged to conclude that the Judges collectively, as a collegiate body, have established the practice to be observed. In
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the absence of a dispensing power, it is difficult to see upon what basis the explicit rule can be disregarded. Section 21(1) of the Supreme Court Act specifically provides that the jurisdiction of the court is to be exercised in the manner provided for by the Act and the rules of court."
15 The decision in East Metropolitan Regional Council was referred to in HPM Pty Ltd v Fear & Ors (2002) 171 FLR 12; [2002] WASCA 249, in a manner which did not appear to disapprove of the judgment.
16 The grounds of appeal, in summary, assert that the inherent jurisdiction of the Court to grant leave to an individual is not displaced but may be exercised in discretion. I should deal with some cases raised by the appellant, although all of these cases were analysed by Hasluck J. In my opinion, the express words of O 4 r 3(2) do not allow the exercise of any power to the contrary under the inherent jurisdiction of the Court. I reach this conclusion principally for the reasons given by Hasluck J in East Metropolitan Regional Council, which I respectfully regard as correct.
17 In Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104 the issue was the appearance, on behalf of an appellant company, of a person not qualified as a legal practitioner. Kirby P was the only Judge who considered that the Court had an inherent power to permit a corporation to carry on proceedings otherwise than by way of a solicitor. He considered that Supreme Court Rules 1970 (NSW) Pt 4 r 4(2), which is equivalent to O 4 r 3(2), may be dispensed with by the Court in appropriate circumstances: see Supreme Court Rules (NSW) Pt 1 r 12. There is no equivalent in the Rules of the Supreme Court of Western Australia. Samuels JA considered that the rule in Supreme Court Rules (NSW) Pt 4 r 4(2) operated without qualification and there was no power to dispense with it. Mahoney JA did not address the issue because he assumed for present purposes that there was power to dispense with the requirements under the rule but would not do so in the particular case. As Hasluck J pointed out, Bay Marine is distinguishable because of the existence of the dispensing power. In the event, only one Judge, namely Kirby P, found that there was power to dispense with the rule. Bay Marine was however followed in the District Court in N R & N J Gardiner & Sons Pty Ltd v Osborne Cold Stores (WA) Pty Ltd (1988) 7 SR (WA) 62 where Healy DCJ held that the Court does have an inherent jurisdiction to dispense with the provisions of O 4 r 3. He reached that conclusion relying upon Bay Marine. In the light of the
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decision in East Metropolitan Regional Council, I do not regard Gardiner v Osborne Cold Stores as correctly reflecting the law.
18 The appellant also calls into aid the provisions of the Corporations Law s 198A especially at s 198A(2) which provides that directors may exercise all the powers of the company. Section 198E provides:
"The director of a proprietary company who is its only director and only shareholder may exercise all the powers of the company except any powers that this Act or the company's constitution (if any) requires the company to exercise in general meeting. The business of the company is to be managed by or under the direction of the director."
19 In my judgment, the grant of power under those provisions of the Corporations Law does not affect the provisions of O 4 r 3(2). Although a director may exercise all the powers of the company and manage its business, the corporation still remains a distinct legal entity subject to burdens or restrictions in other cases such as O 4 r 3(2). This was the view held by Smithers J in Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 74.
20 Molnar Engineering is otherwise distinguishable because the provisions of the Federal Court Rules O 4 r 14(2) conferred a discretion on the Court to grant leave, a discretion absent from the Rules of the Supreme Court of Western Australia.
21 The appellant also sought to bring into aid the provisions of O 2 which provide as follows:
"1. Non-compliance with Rules
(1) Where in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there has, by reason of anything done or left undone, been a failure to comply with the requirements of these Rules, whether in respect of time, place, manner, form or content or in any other respect, the failure shall be treated as an irregularity and shall not nullify the proceedings, any step taken in the proceedings, or any document, judgment or order therein.
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(2) Subject to paragraph (3) the Court may, on the ground that there has been such a failure as is mentioned in paragraph (1), and on such terms as to costs or otherwise as it thinks just, set aside either wholly or in part the proceedings in which the failure occurred, any step taken in those proceedings, or any document, judgment or order therein or exercise its powers under these Rules to allow such amendments (if any) to be made and to make such order (if any) dealing with the proceedings generally as it thinks fit.
(3) The Court shall not wholly set aside any proceedings or the writ or other originating process by which they were begun on the ground that the proceedings were required by any of these Rules to be begun by an originating process other than the one employed.
22 In East Metropolitan Regional Council, Hasluck J at [44] was of opinion that O 2 cannot be regarded as being of the same effect as a dispensing power. I agree. The Court may exercise its power under O 2 to excuse an irregularity, not to bless it.
23 In Doyle v Commonwealth (1985) 156 CLR 510 the Full High Court said at 518:
"…a judge cannot dispense with the requirements of the Rules of Court unless the Rules give him power to do so, and when a
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power is expressly conferred on the court subject to a condition, a judge cannot, by relying on inherent powers, escape from the necessity of ensuring that the condition has been fulfilled…"
24 This decision was relied on by the Federal Court in Landsal Pty Ltd (in liq) v REI Building Society (1993) 113 ALR 643 where the Full Court said at 650:
"This court's implied power to regulate its own procedures in the administration of justice in a particular regard is not confined to a situation in which there is no statute or rule of court that could possibly apply to what is to be done in that regard. The true rule is that a court may exercise its inherent or implied powers in a particular case, even in respect of matters that are regulated by a provision of a statute or rules of court, so long as it can do so without contravening any such provision: see Taylor v Attorney-General [1975] 2 NZLR 675 at 680, 687-8 and 692-3; cf Wentworth v NSW Bar Association (1992) 106 ALR 624; 66 ALJR 360 at 364.
Hamilton v Oades provides an example of the denial of any entitlement of a court to rely upon its inherent jurisdiction to circumvent a statutory abrogation of the right against self-incrimination. Doyle v Commonwealth (1985) 156 CLR 510; 60 ALR 567, provides an example of the denial of the availability of the inherent jurisdiction as a source of power to do, free of restraint, that which a rule of court confers power to do, but only subject to certain restraints."
25 As Master Sanderson pointed out in his judgment, the operative part of O 4 r 3 is:
"The operative part of this rule is 'begin'. In my view there is no power, I have no power, to authorise Mr Hoffman or anyone else other than a solicitor to commence an action on behalf of a body corporate."
26 I accept that there are circumstances where, in the exercise of an inherent jurisdiction, a court may permit a person who is not a legal practitioner to appear as an advocate for another person or a company. Indeed, East Metropolitan Regional Council was such a case. The cases to which reference is made, and the cases to which the appellant refers, are almost all such cases.
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27 However, cases where such appearances have been allowed are not authority for the more general proposition that the inherent jurisdiction of the Court may be exercised to overcome the provisions of an express rule of court. To do so would offend what the Full Federal Court described as the true rule. In my opinion, the decision of the Master was correct and this appeal should be dismissed.