FEDERAL COURT OF AUSTRALIA

Melaleuca of Australia & New Zealand Pty Ltd v Duck [2005] FCA 1481

PRACTICE & PROCEDURE – leave for unqualified advocate to appear – power of Court to make the order – discretion – not in interest of effective, efficient and expeditious disposal of the proceedings to grant leave for unqualified advocate to appear

COSTS – tax and thereafter payable forthwith - general considerations

Federal Court of Australia Act 1976 (Cth) s 23

Judiciary Act 1903 (Cth) s55B, s55C

Federal Court Rules O 1 r 4A, O 1 r 5, O 1 r 8, O 4 r 14, O 9 r 1(1), O 62 r 3

Clout (Trustee) v Anscor Pty Ltd  [2001] FCA 604

D v S (rights of audience) [1997] 1 FLR 724

Damjanovic v Maley (2002) 55 NSWLR 149

Hamilton v Oades (1989) 166 CLR 486

Grassby v The Queen (1989) 168 CLR 1

Grey v Mango [2004] FCA 1664

Paragon Finance PLC v Noueiri [2002] C. P. Rep 5

Pelechowski v Registrar of Court of Appeal (NSW) (1999) 198 CLR 435

Scotts Head Developments Pty Ltd v Pallisar Pty Ltd (unreported, Court of Appeal, 6 September 1994)

Spotwire Pty Limited v Visa International Service Association (No 2) (2004) FCA 571

Survival & Industrial Equipment (Newcastle) Pty Ltd (t/as SIE Liferaft Servicing) v Owners of the Vessel Alley Cat (1992) 36 FCR 129

Halsbury’s Laws of Australia

MELALEUCA OF AUSTRALIA AND NEW ZEALAND PTY LTD (ACN 091 339 409) AND MELALEUCA INC. v GRAHAM DUCK AND CELIA DUCK

NSD1319 OF 2004

BENNETT J

20 OCTOBER 2005

SYDNEY

THE COURT ORDERS THAT:

1.      That the further amended cross claim filed 7 June 2005 be struck out

2.      That the issues of the granting of leave to the first respondent to file a second further amended cross claim in the form of the document dated 23 August 2005, and of costs payable in that regard be deferred.

3.      That the respondents pay the costs of and incidental to the applicants’ notice of motion dated 2 June 2005 (and filed in Court on 7 June 2005), such costs to be taxed and thereafter payable forthwith, on an indemnity basis.

4.      That the first respondent pay the costs of and incidental to the applicants’ notice of motion filed 14 June 2005, such costs to be taxed and thereafter payable forthwith.

5.      That the respondents’ notice of motion filed in Court on 7 June 2005 be dismissed with costs.

6.      That the respondents’ notice of motion filed 23 August 2005 be dismissed with costs.

.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Application for leave to appear

1                     By notice of motion, the respondents, Mr and Mrs Duck, sought an order in the following terms:

‘The Court gives Leave for the Respondents or either of them to utilise the assistance of Mr Bruce Bell as advocate for their cause in these proceedings.’

2                     The application was opposed.  I heard argument and determined not to grant leave.  Counsel for Melaleuca, the respondent to the motion, asked for reasons for that decision.

3                     Mr Bell has been present at a number of interlocutory hearings in this matter and has, without objection, spoken on behalf of Mr and Mrs Duck.  On a previous occasion Mr Sibtain, counsel for Melaleuca, objected to any further participation by Mr Bell.  Accordingly, it was made clear to Mr and Mrs Duck that, before Mr Bell would be permitted further to address the Court on their behalf, an application would have to be made.

4                     The only evidence in support of the order was an affidavit by Mr Bell, who described himself as ‘Supreme Court Mediator and consultant’ and annexed a document which established that he has been admitted to the degree of Bachelor of Laws by the Queensland University of Technology on 13 April 2004.

The right of appearance

5                     Order 4 rule 14(1) of the Federal Court Rules provides that, subject to subrule (2) (which relates to corporations and is therefore not applicable) and Order 43 (which relates to disability and is therefore not applicable), any person may proceed in the Court by a solicitor or in person.

6                     Order 9 rule 1(1) of the Rules provides that a respondent may enter an appearance and may defend a proceeding by a solicitor or in person.

7                     There is no provision in the Rules giving a right of appearance to another person to appear on behalf of a party.

The power of the Court to make the order sought

8                     The power to make orders is wide but not unlimited.  Section 23 of the Federal Court of Australia Act 1976 (Cth) gives the Court power to make orders, as the Court considers appropriate.  The Court has an inherent power to control its own procedures (Pelechowski v Registrar of Court of Appeal (NSW) (1999) 198 CLR 435; Hamilton v Oades (1989) 166 CLR 486; Grassby v The Queen (1989) 168 CLR 1 at 16).

9                     The Court may exercise a power unless the Rules provide otherwise (O 1 r 4A).   O 1 r 5 gives the Court power to make an order under the Rules, unless the contrary intention appears.  That power was used in Clout (Trustee) v Anscor Pty Ltd  [2001] FCA 604 to grant leave to a director of respondent companies to appear in a limited role. By O 1 r 8 the Court may dispense with compliance with any of the requirements of the Rules.  This gives the Court a wide discretion, which is not to be used to amend the Rules for the purpose of conferring a power on the Court which it otherwise would not have had (Survival & Industrial Equipment (Newcastle) Pty Ltd (t/as SIE Liferaft Servicing) v Owners of the Vessel Alley Cat (1992) 36 FCR 129).  Further, an irregularity is not a mere failure to observe a procedural requirement and thus cannot be dispensed with (Grey v Mango [2004] FCA 1664 at [54]).

10                  The Court has a broad power to give directions, in particular where a person wishes to take a step in a proceeding and the procedure is not prescribed by the Act or the Rules or by or under any other Act (O 1 r 9(1)).  An individual who is not under a disability may proceed in the Court by a solicitor or in person (O 4 r 14(1); O 9 r 1(1)).  Section 55B of the Judiciary Act 1903 (Cth) provides that a person is not entitled to practise in a federal court as a barrister or solicitor unless admitted to practise as a solicitor or legal practitioner or registered in the Register of Practitioners kept in accordance with the section 55C of the Judiciary Act.  A barrister or solicitor has a statutory right of audience in the Court.  While it is apparent that the ordinary and preferred course is that a party appear in person or by a solicitor or barrister, neither the Act nor the Rules nor the Judiciary Act proscribe or preclude an appearance by a person on behalf of another person, with the leave of the Court.  A court has an inherent right in regulating its own proceedings to allow a person, not being a party or a party’s lawyer, to conduct a case on behalf of a party where it is desirable to do so in the interests of the administration of justice (Halsbury’s Laws of Australia).  However, such an application would not be granted as a matter of course.

11                  Mr Duck relied upon a decision of the English Court of Appeal in Paragon Finance PLC v Noueiri [2002] C.P. Rep 5 in which it gave guidance about the activities of unqualified persons who from time to time seek to help litigants in person in the courts of that country.  Their Lordships, at [61], cited Lord Woolf MR in D v S (rights of audience) [1997] 1 FLR 724 at 725B-726G to the effect that the discretion to grant rights of audience to individuals who did not meet the stringent requirements of the statute that gave rights of audience should only be exercised in exceptional circumstances.  Their Lordships observed that, although the person did not purport to act as a Mckenzie friend, the principles that apply in a Mckenzie friend situation were worth mentioning:

• a Mckenzie friend is not entitled to address the Court;
• if the person does, then he or she becomes an advocate and requires a right of audience;
• a Mckenzie friend can be prevented by the Court from continuing to act as such where the assistance given ‘is inimical to’ or ‘impedes the efficient administration of justice’.

12                  The Court of Appeal also made reference to:

• the proper processes of the administration of justice and the history of the litigation in which the unqualified person in that case had taken part;
• a finding that applications had been made that had been pointless and wasteful of limited court resources and had involved the defendants in additional expense;
• the risk of exposure to adverse costs orders on the part of litigants the Mckenzie friend sought to represent;
• evidence that, although the person was eloquent and articulate as an unqualified advocate, he was also an incompetent advocate;
• the taking of hopeless points and the advancing of completely futile arguments.

13                  The Court of Appeal at [75] found that it was contrary to the public interest to permit an unqualified, incompetent person to appear as an advocate.

14                  In Damjanovic v Maley (2002) 55 NSWLR 149 the New South Wales Court of Appeal dealt with an application for leave by a person without legal qualifications to appear on behalf of a litigant pursuant to section 43(1) of the District Court Act 1973 (NSW), which provided for the right to make such an application.  Their Honours found that there was nothing exceptional or special to warrant the grant of leave.  Stein JA, with whom Mason P and Sheller JA agreed, drew upon principles from other cases relevant to the exercise of the discretion to grant or refuse leave to an unqualified person to appeal on behalf of an unrepresented litigant.  I comment as follows:

• The complexity of the case:  I accept that this case may be complex.
• Genuine difficulties of the unrepresented party:  Mr Duck has no language difficulties and has been successful in business.  There was no evidence of any difficulties on his part or on the part of Mrs Duck.
• The unavailability of disciplinary measures and a duty to the Court by lay advocates: the protection available to Mr and Mrs Duck when a qualified lawyer represents them would not be available if Mr Bell were given leave to appear as their advocate.  Further, Mr Bell would not have the overall duty of a barrister or solicitor to the Court or be subject to the relevant disciplinary codes.
• Protection of the client and the opponent:  Mr Bell may be legally qualified but there is no evidence that he is accredited or insured.  He does not owe to his client the same duty as does a barrister or solicitor.
• The interests of justice: Stein JA observed at [83] that what runs through all of the authorities as the guiding principle in the exercise of any discretion is the public interest in the attainment of the ends of justice.  His Honour said ‘the public has an interest in the effective, efficient and expeditious disposal of litigation in the courts.  As a general rule this can best be achieved by parties employing qualified lawyers’.  As had been pointed out by Mahoney A-P in Scotts Head Developments Pty Ltd v Pallisar Pty Ltd  (unreported, Court of Appeal, 6 September 1994) and cited by Stein JA at [60] and ff, the rule of practice of not allowing an appearance by a person who has not been admitted to practice before it is not grounded in technicalities.  I note that one of the matters specifically noted by Mahoney A-P is that unqualified or untrained advocates may cause loss to the parties involved as a case in which such an unskilled person participates tends to last longer and to cost more.  The interest of the defendant in having proceedings dealt with without unnecessary delay and cost is relevant.

15                  There is, in the present case, no material before me to warrant a grant of leave for Mr and Mrs Duck to appear by Mr Bell.  Having permitted Mr Bell to speak on behalf of Mr and Mrs Duck on previous occasions, I am firmly of the view that he has done nothing to expedite matters or to present the case better or more efficiently than Mr and Mrs Duck could do themselves.  He seems to me to have no sufficient understanding of substance or procedure in any way to assist the Court or Mr and Mrs Duck.

Application for costs

16                  Melaleuca seeks orders for costs in respect of a number of interlocutory applications.  Mr Duck stated at the hearing that he had no objection to an order for costs.  In three instances, costs were sought on an indemnity basis.  I indicated that I would be prepared to award costs on this basis for one of those applications, the motion dated 2 June and filed in Court on 7 June 2005.  Mr Duck stated that he had no objection to that award of costs on an indemnity basis.

17                  In addition, Mr Sibtain sought an order that each order for costs be taxed and thereafter payable forthwith. Mr Duck opposed such orders.

18                  In Spotwire Pty Limited v Visa International Service Association (No 2) (2004) FCA 571 at [103]–[109] I considered the principles applicable to such an application, being an application under Order 62 rule 3 of the Federal Court Rules:

• The general principle is that costs ought to be resolved when the proceeding has been concluded and the rights of the parties have been finally determined.  However, O 62 r 3(3) contemplates that, in certain circumstances, the general principle can be varied, as a matter of the Court’s discretion.
• The exercise of the discretion should only be exercised where the interests of justice in the particular case require a departure from the general practice.
• The discretion should be exercised in favour of a party who establishes that the demands of justice require that there be a departure from what appears to be the general practice envisaged by the rule.
• One consideration is the length of time until the proceedings will conclude, in the ordinary course of events.
• Where costs are sought in respect of a successful strike out application, the fact that the unsuccessful party failed to remedy defects despite clear notice of those defects, may make appropriate immediate taxation and payment.
• Costs incurred by reason of an ill-considered pleading may give rise to an exception to the principle that the costs await the final resolution of the issues between the parties.
• In ordinary circumstances, it would be inappropriate that an unsuccessful party in an interlocutory proceeding be required to pay costs immediately, since that party might ultimately be entitled to an order for costs in the substantive proceeding.

19                  In Spotwire I observed that there was a dearth of evidence on which to determine the demands of justice.  The same can be said on this occasion.  There is no particular disadvantage or prejudice to which Melaleuca can point, nor is there any evidence to suggest that the litigation would be stifled on the part of Mr and Mrs Duck if an order were to be made.

20                  Mr and Mrs Duck first filed a cross claim on 13 December 2004.  Melaleuca wrote two letters to the Ducks and advised them of inadequacies and asked if the Ducks intended to re-plead, failing which Melaleuca would file a motion to strike out the pleading.  Such a notice of motion was filed and served on 24 February 2005.  An affidavit and written submissions in support of the motion were also filed and served by Melaleuca and the motion was heard on 4 April 2005.  The cross claim was struck out with an order that the Ducks pay Melaleuca’s costs of the motion.  The Ducks were granted leave to file and serve an amended cross claim, which they did on 16 May 2005.

21                  Melaleuca advised the Ducks by letter that the amended cross claim was liable to be struck out and said that if a further amended pleading was not produced by 1 June 2005, they would apply to strike out the pleading.  Melaleuca’s notice of motion and supporting affidavit were served on 2 June 2005 for filing in Court on 7 June 2005.  On that date, the Ducks filed a further amended cross claim in the Registry without leave.  It was served on Melaleuca that morning in Court.  The amended cross claim was struck out.  Mr Sibtain applied for costs and on the basis that they be taxed and payable forthwith.  The question of costs was deferred pending a possible mediation.  On 14 June 2005 Melaleuca filed and served a notice of motion seeking to strike out the further amended cross claim. 

22                  On 23 August 2005 the Ducks filed the notice of motion seeking an order that Mr Bell be given leave to appear (repeating, in effect, orders sought in an earlier motion of 7 June 2005 without any supporting affidavit) and also the discharge or variation of interlocutory orders made on 6 October 2004.  The next day that motion was served together with a second further amended cross claim (described as a further amended cross claim on the document).  An affidavit by Mr Duck in support of the motion of 23 August was served on 26 August.

23                  Melaleuca, on 26 August 2005, filed and served an affidavit and a written outline of submissions directed to asserted deficiencies in the second further amended cross claim and responding to the Ducks’ motion of 23 August 2005.  The matters were heard on 29 August 2005.

24                  Melaleuca agreed to the application for leave to file the second further amended cross claim being heard on 29 August without the need for a notice of motion.  However, consideration of the grant of leave to file the second further amended cross claim was deferred.  The further amended cross claim that had been filed on 7 June 2005 was struck out by consent.  The notice of motion filed 23 August by the Ducks was dismissed. 

25                  Subject to the events of 7 June 2005, the Ducks did not have advance notice of Melaleuca’s application for costs to be taxed and payable forthwith.  Mr Duck has forwarded written submissions on costs dated 9 September 2005, some part of which canvasses matters that were determined on 29 August 2005.  The written submissions also contain assertions about which there is no evidence, such as an assignment by Mrs Duck to Mr Duck.  Mr Duck has previously sought removal of Mrs Duck as a respondent.  There was no evidence to support that informal application, Mr Sibtain opposed it and relied on his pleading.  I refused the application.

26                  At the hearing, Mr Duck made no objection to an order for costs but did oppose any costs being taxed and payable forthwith.  In the written submissions Mr Duck submits that he should not be held liable for any costs and that no order for costs should be made.  He also seems to be submitting that no order for costs should be made against Mrs Duck.  The amended cross claim refers to the cross claimant but it is not clear whether it was filed on behalf of Mr Duck or Mr and Mrs Duck.  In the further amended cross claim only Mr Duck seeks orders.  I note that Mr Duck is listed as the cross claimant in the second further amended cross claim.  The notice of motion was filed by both Mr and Mrs Duck.

27                  In the written submissions, Mr Duck asserts that he has limited finances and he refers to the cost of litigation.  He also asserts that payment of costs forthwith will severely affect his ability to conduct his case.  He seems also to say that such a costs order would be punitive and that his financial difficulties are in part due to the retention of moneys owed to him by Melaleuca.  There is no evidence of any of these matters.  I have continually reminded Mr Duck of the need for evidence if he wishes to make factual assertions.  So too has Melaleuca in correspondence.  The matters that I take into account are reflected in the chronology and the correspondence between the parties that is in evidence.

28                  These proceedings have not advanced as they should.  It is hard to predict when they will be ready for hearing.  Various forms of the cross claim have been struck out.  The circumstances include notification of the defects by Melaleuca and little or no response until a strike out motion has been filed and listed for hearing.  The fact that orders have then been made by consent or without substantial argument only emphasises the unnecessary time and money that has been expended by Melaleuca, not to mention the time of the Court. 

29                  Mr and Mrs Duck have been afforded considerable latitude by the Court and by Melaleuca as litigants in person.  Mr Bell’s participation at Mr and Mrs Duck’s request has only lengthened the proceedings.  It cannot be said that the ordinary course of events has occurred.  In my opinion it is inappropriate for Melaleuca to await the conclusion of the proceedings to obtain payment of costs that are unusually incurred and properly recoverable.  Those costs have been occasioned by the failure to remedy defects in pleadings that have been either ill-considered or defective.

30                  The Ducks are to pay Melaleuca’s costs of the notices of motion to strike out the cross claim in its various forms.  Melaleuca seeks orders that costs in respect of the motions of 2 June 2005 (filed 7 June 2005) and 14 June 2005 be taxed and thereafter paid forthwith.  Each of those motions sought orders to strike out a form of the pleading.  The orders are sought against Mr and Mrs Duck for the motion of 2 June and against Mr Duck for the motion of 14 June.  Those orders are in each case appropriate and will be made.

31                  Melaleuca also seeks orders that the costs of the Ducks’ motions of 7 June and 23 August seeking orders for Mr Bell to appear and to vary the interlocutory orders be paid on the same basis.  There are, in my view, no circumstances sufficient to depart from a normal costs order with respect to those motions.  Mr and Mrs Duck are to pay the costs of those motions, including so much of Melaleuca’s written submissions directed to them.

32                  Melaleuca seeks orders that the costs of Mr Duck’s application for leave to file the second further amended cross claim be taxed and payable forthwith, including the costs of Melaleuca’s written submissions directed to that issue.  I have not yet determined the application for leave to file the second further amended cross claim nor the extent of costs payable in that regard.  At the hearing, it was agreed that Mr Duck would determine whether he wished to pursue this application or would file a cross claim and affidavits in support.  The appropriateness of that latter course was raised by Mr Sibtain at the hearing of 29 August. 

33                  Whichever course is adopted by Mr Duck, he is liable for Melaleuca’s costs of the application for leave to file the second further amended cross claim.  This is the fourth attempt by Mr Duck to put his case.  Melaleuca has pointed out to him the deficiencies in his pleading.  Until Mr Duck makes clear the course he proposes to adopt and any relevant application is dealt with, it cannot be determined whether the matters raised by Melaleuca are upheld.  I will defer dealing with Mr Sibtain’s application for costs on an indemnity basis and for any costs be taxed and payable forthwith until the fate of this pleading is determined.

Associate:

Dated:              20 October 2005