FEDERAL COURT OF AUSTRALIA

AA Shi Pty Ltd v Avbar Pty Ltd (No 4) [2010] FCA 878

THE COURT ORDERS THAT:

The notice of motion be dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1                     Before me is a notice of motion filed last Friday 13 August 2010 by the applicant, AA Shi Pty Ltd. The applicant seeks an order from this Court that leave be granted for it to carry on the proceeding otherwise than by a solicitor. The notice of motion is filed pursuant to O 4 r 14(2) of the Federal Court Rules, which provides that except as provided by or under any Act, a corporation may not, without the leave of the Court, commence or carry on any proceeding otherwise than by a solicitor.

2                     The notice of motion is opposed by the respondents.

3                     Filed in support of the notice of motion is an affidavit sworn by Mr David Yahalom on 13 August 2010, whereby he deposes as follows:

1.         I am the Sole Director of the Applicant Company AA Shi Pty Ltd ACN 100 459 667;

2.         I seek leave of the Court to carry on these proceedings for and on behalf of the Applicant otherwise than by a Solicitor as the Applicant is not in a financial position to pay for legal representation.

3.         As I am the Sole Director of the Applicant, I am fully aware of these proceedings and am in the position to proceed with the Trial of this matter scheduled to commence before this Honorable (sic) Court on 16 August 2010.

4                     It appears from this affidavit that the reduced financial position of the applicant is the primary reason the applicant is seeking the leave of the Court to carry on the proceeding otherwise than by a solicitor. I note that it is not in dispute that Mr Yahalom is the sole director and shareholder of the applicant. In the circumstances of this case it appears that Mr Yahalom is authorised to make decisions in respect of the applicant. In light of the provisions of s 198E of the Corporations Act 2001 (Cth) I am prepared to accept that Mr Yahalom, as sole director and sole shareholder of the applicant, has the authority to cause the applicant to seek the leave of the Court to allow him to represent the applicant in this proceeding.

Background

5                     In AA Shi Pty Ltd v Avbar Pty Ltd (No 2) [2010] FCA 427 I outlined background facts which were common ground between the parties. These background facts can be summarised as follows:

1.                  For many years Mr Yahalom has had a business relationship with the respondents, in particular Mr Nir Avrahami, who is a director of the first respondent and the sole director of the second respondent.

2.                  The applicant is a commission agent of the respondents within the meaning of s 4 of the Trade Practices (Industry Codes – Oilcode) Regulations 2006 (Cth) (“the Oilcode”) in relation to service stations of which the respondents appear to be the lessees. There are four relevant service stations – one in Victoria (at North Melbourne) and three in Queensland (at Yamanto, Hatton Vale and Deception Bay). The applicant operates general stores at each service station, hiring a total of 35 staff to operate the sites.

3.                  There are one or more fuel re-selling agreements (as defined by s 5 of the Oilcode) between the applicant and the respondents. These agreements are oral. There is very little in writing before the Court as to the terms of relevant agreements.

4.                  On 12 April 2010 the respondents purported to terminate the fuel re-selling agreements with the applicant in respect of the four service stations, effective immediately. On that day persons unknown to the staff at each site, claiming to have authority from the respondents, entered the sites and directed the staff to follow their orders.

5.                  The respondents sought to terminate the fuel re-selling agreements between themselves and the applicant on 12 April 2010 because, the respondents allege, the applicant has failed or refused to comply with four alleged obligations of the applicant under the fuel re-selling agreements despite repeated requests to do so made by or on behalf of the respondents. These four obligations of the applicant were described in relevant correspondence before the Court as the Fuel Sales Obligations, Competitor’s Pricing Obligations, Takings and Banking Obligations and the Licence Fee Obligation.

6.                  More specifically, the four alleged obligations of the applicant were described in relevant correspondence as:

·                    the applicant’s obligation to sell the fuel at the service station at prices and on terms and conditions specified by the relevant respondent, including making adjustments to the price of fuel as directed by the respondent in a timely manner (“Fuel Sales Obligations”);

·                    the applicant’s obligation at the times directed by the respondent to check the prices of fuel offered by the relevant respondent’s competitors and report those prices to the relevant respondent to enable the relevant respondent to compete in the market (“Competitor’s Pricing Obligations”);

·                    the applicant’s obligation to perform the banking tasks and remit the takings from all fuel sales in a diligent manner and as reasonably directed by the relevant respondent. In this regard the applicant was not allowed to withhold monies derived from the sale of fuel at the service station without the consent of the relevant respondent. Insofar as the banking of fuel takings was concerned:

o                  by 1.00 pm daily, the daily fuel banking was to be completed, and as soon as practicable thereafter the confirmation slip was to be sent by facsimile transmission to the relevant respondent; and

o                  by 1.00 pm daily, the daily paperwork was to be faxed by the applicant to the relevant respondent;

(“Takings and Banking Obligation”)

·                    the applicant’s obligation to pay a licence fee calculated at 10% of monthly convenience store sales, exclusive of GST (“Licence Fee Obligation).

7.                  Both the applicant and the respondents claim that the service stations and their respective businesses associated with the service stations are their only source of income.

6                     To date the proceedings have been vigorously contested before the Court with both parties represented by Counsel, including Senior Counsel:

·                    On 12 April 2010 I granted an urgent ex parte interim injunction pursuant to s 80(2) of the Trade Practices Act 1974 (Cth) to the applicant.

·                    On 16 April 2010 I ordered that the hearing of an amended notice of motion filed by the respondents on 16 April 2010, seeking orders that the interim injunction be discharged, be adjourned until 10.15 am on 28 April 2010 (AA Shi Pty Ltd v Avbar Pty Ltd [2010] FCA 368).

·                    On 28 April 2010 I heard the application of the applicant insofar as concerned interlocutory relief against the respondents. Both parties were represented by Senior Counsel, and required one and a half days of evidence and submissions, including cross-examination of Mr Yahalom by Senior Counsel for the respondents.

·                    On 6 May 2010 I ordered that the applicant be entitled to interlocutory relief on terms to be finalised following submissions from the parties (AA Shi [2010] FCA 427). After delivery of judgment in AA Shi [2010] FCA 427 I allowed the parties to make further submissions as to costs, and then varied the costs order such that the costs of and incidental to the application for interlocutory relief were reserved (AA Shi Pty Ltd v Avbar Pty Ltd (No 3) [2010] FCA 440).

·                    On 18 June 2010 the parties returned to Court for trial directions, both applicant and respondents represented by Counsel. At the directions hearing Mr Dunning SC on behalf of the respondents sought an order that the trial of the proceedings for final relief proceed by way of oral evidence. Notwithstanding that it is the usual practice in the Federal Court that evidence in chief be in the form of affidavits I was prepared to make this order:

o                  in light of the fact that both parties were represented by experienced Counsel who would make detailed submissions at the close of the trial (TS 18 June 2010 p 14 ll 21-26);

o                  because I accepted the submission of Mr Dunning SC that the case substantially turned on the credit of key parties including Mr Yahalom and Mr Avrahami, and oral evidence was an effective method for testing their credit; and

o                  because all contractual arrangements between the applicant and the respondents were concluded orally between Mr Yahalom and Mr Avrahami, and it would be appropriate for these persons in particular to explain orally to the Court the circumstances of these contracts and the terms thereof.

7                     A Notice of Change of Solicitor was filed by the applicant, through Mr Yahalom as the duly authorised officer of the applicant, on 5 August 2010. It is clear from other documentation filed with the Court, for example the affidavit of Mr Yahalom filed 13 August 2010, that the new address for service of the applicant nominated in the Notice of Change of Solicitor is Mr Yahalom’s own address.

Yesterday in Court

8                     Yesterday Mr Yahalom appeared in Court accompanied by Ms Ronit Baras who he explained was his interpreter. From the bar table, Ms Baras explained that Mr Yahalom’s first language was Hebrew, that the relevant community in Brisbane speaking this language is small, and that she knows Mr Yahalom because of the size of the community. Ms Baras affirmed, however, that her translation of Mr Yahalom’s statements, as well as questions put to Mr Yahalom, would be to the best of her ability.

9                     As a general proposition it is preferable that interpreters before the Court are accredited interpreters, for example under the National Authority for the Accreditation of Translators and Interpreters, and that they have no connection with any party associated with the litigation. However I accept that this model is not always practical or achievable. In Gaio v R [1960] 104 CLR 419 at 433, Menzies J observed that the only importance of the interpreter is to serve as an accurate means of communication. In the circumstances, I directed Ms Baras to continue to provide her services as interpreter for Mr Yahalom for the purposes of the hearing concerning the notice of motion.

10                  The extent to which Mr Yahalom actually required the assistance of an interpreter throughout the hearing yesterday was, however, unclear. As the hearing progressed, although Mr Yahalom appeared to make frequent use of the skills of the interpreter, it appeared that he actually understood questions which I was posing to him in English from the bench, and he frequently corrected the interpreter’s translation. Accordingly during the course of his submissions Mr Yahalom agreed to dispense with the interpreter and spoke directly to the bench. Ms Baras remained at the bar table in case Mr Yahalom required assistance. After the luncheon adjournment however, Mr Yahalom, through Ms Baras, insisted that he again required her services as interpreter. Accordingly, Mr Dunning SC’s submissions were translated by Ms Baras to Mr Yahalom throughout the course of the afternoon, and Mr Yahalom’s subsequent submissions were similarly translated by Ms Baras.

11                  I explained to Mr Yahalom that whether or not the applicant was to be permitted to continue the proceedings otherwise than by a solicitor was a matter for the Court in the exercise of its discretion. In summary, Mr Yahalom submitted from the bar table:

·                    The reason the applicant is unable to continue the proceeding with a solicitor is that his previous solicitors require him to pay $150,000 in respect of fees. The company is unable to afford to pay that amount.

·                    His previous solicitors have the majority of the documentation he requires to present his case, although they have released a number of documents to him already and are prepared to release the balance of the documents on 19 August 2010 when there is a break in the proceedings, or if he pays them approximately $41,000. (I note that the stage at which the applicant’s previous solicitors will release documentation to him is somewhat unclear despite several questions of Mr Yahalom from me.)

·                    Because of the financial circumstances of the stores at the service stations, he can only take necessary funds from the stores slowly and could not take the funds necessary to pay the solicitors. He also submitted that he had offered the solicitors the opportunity to be paid directly from the stores, but the solicitors had refused and said that they would no longer act for him.

·                    He has little evidence of the financial position of the applicant, and would need to obtain it from the company book-keeper. Subsequently however Mr Yahalom tendered material which included material going to extensive taxation liabilities of both himself and the applicant.

·                    He has additional material proving the “real” reason for the litigation, namely that the respondents are (allegedly) seeking to evade taxation liabilities of their own, to which arrangements he would not be a party. Mr Yahalom submitted that he had telephone recordings proving this, and that although the telephone recordings were in Hebrew he had had them translated and transcribed in English. Mr Yahalom submitted that the actions of the respondents had not been motivated by contractual issues, but rather by personal revenge against him.

12                  The material tendered by Mr Yahalom was, in summary:

·                    correspondence from the Australian Taxation Office with accompanying receipts demonstrating, according to Mr Yahalom, payments of monies owed varyingly by himself and the applicant in respect of taxation liabilities; and

·                    letters from his previous solicitors, including legal advice and details as to the amounts they required him to pay in respect of, inter alia, counsels’ fees, for them to continue to act on his behalf.

13                  It was also clear that Mr Yahalom had great difficulty understanding the difference between the notice of motion before the Court, and triable issues in the substantive proceedings, and needed regular reminder from the bench that only the notice of motion was under consideration, requiring submissions from him specifically in support of that notice of motion.

14                  In summary, Mr Dunning SC for the respondents submitted:

·                    As is clear from the Variation to Client Retainer and Costs Agreement between Mr Yahalom and his previous solicitors dated 20 May 2010, Mr Yahalom knew at that point that the costs to the applicant of the trial had expanded from $100,000 to $250,000, but continued to retain Senior Counsel and Junior Counsel through his solicitors. This suggested that as late as May 2010 the applicant had funds available to pay solicitors.

·                    The Notice of Assessment issued to Mr Yahalom by the Australian Taxation Office dated 9 July 2010 (exhibit 2(A)) indicated that Mr Yahalom’s taxable income for the period ending 30 June 2009 was $271,818, in respect of which Mr Yahalom had (at that point) paid no tax, and owed $100,535.35 in respect of tax liabilities. It appears therefore that as of July 2010, Mr Yahalom was in receipt of the sum of $271,818 in income, some of which could be available to pay solicitors’ fees. (I note that, from the bar table, Mr Yahalom in reply stated that he had spent some of this money in paying private debts including a car loan and $20,000 in advance rent for residential premises.)

·                    Mr Yahalom’s claims that the applicant lacked sufficient funds to pay solicitors’ fees were inconsistent with evidence given in April 2010 by Mr Yahalom and by Mr Gregory Pedersen, an accountant engaged by the applicant, to the effect that the applicant was profitable and that the net profit figure for the applicant for the 2008-2009 financial year was expected to be, according to Mr Yahalom’s affidavit sworn 21 April 2010, $514,229.56.

·                    Mr Yahalom has given no explanation as to why, despite the fact that the applicant appeared to be profitable and to have significant available funds as at 30 June 2009, on the eve of the trial the applicant has insufficient funds to pay solicitors’ fees, and since May 2010 had sold off at discount prices the stock in the stores associated with the service stations.

·                    Possible explanations for the discrepancy between Mr Yahalom’s evidence of April 2010 and the apparent current impecuniosity of the applicant are:

o                   evidence in Mr Yahalom’s earlier affidavits was false; or

o                   evidence in Mr Yahalom’s earlier affidavits was true, and the applicant and Mr Yahalom have self-impoverished while the interlocutory injunction has been in place; or

o                   evidence in Mr Yahalom’s earlier affidavits was true, but Mr Yahalom’s real purpose was always to sell down the stock at discount prices because he had received legal advice from his solicitors that even were the applicant successful in the substantive application the applicant would be unlikely to receive financial compensation from the respondents.

·                    Any of the three explanations supported a finding that Mr Yahalom was not an appropriate person to conduct the proceeding on behalf of the applicant, because his conduct either puts his credit into serious question or suggests abuse of process.

Application of relevant principles

15                  That a notice of motion seeking the leave of the Court to permit a corporation to carry on a proceeding other than by a solicitor pursuant to O 4 r 14(2) requires the Court to exercise its discretion, judicially, was discussed at length by the Full Court in Re Molnar Engineering Pty Ltd v Burns  [1984] 3 FCR 68. In that case Smithers J at 74-75 explained:

But in this Court the presence of r. 14 (2) of O. 4 and r. 3 of O 9 introduces a new element. Those rules proceed on the basis that there is a discretion in the court to permit a company to commence and carry on any proceedings other than by a solicitor and to enter an appearance or defend any proceeding without a solicitor and, it would seem, it is a discretion to be exercised by reference to all relevant considerations… The discretion introduced in the express provisions of the rules is, in the absence of other guidance, to be exercised judicially according to the requirements of justice. The discretion is as to a matter of procedure but it may well affect matters of substance. The consequence of permitting a non-qualified person to appear will be to deprive the Court of assistance in respect of matters of law. It might also, according to circumstances, render difficult the proper assessment of fact. These considerations go to the ability of the Court ideally to reach the correct decision on the matters of law and fact involved in the litigation. This may operate to the detriment of a company appearing without a solicitor but such a consequence would be of the company's own making. The application by the Court of the correct principles of law and the correct assessment of the facts in a particular case are important objectives, but they are not necessarily unattainable without the assistance of qualified advocates. The attainment of these objectives, so far as possible without qualified assistance, is accepted as appropriate where a party sues or defends in person.

The discretion being reposed in the Court it is inevitable that it be exercised in favour of a company where there is sufficient reason. According to the strength of the case made as to the existence of such reason, so the weight to be given to the consideration that the Court might lack qualified legal assistance, will decline.

The problem is to recognize what is sufficient reason for the purpose in hand. The common reason for a company seeking to proceed without qualified assistance is, no doubt, that the company does not have the funds to engage such assistance. One would suppose that a company might successfully support an application to sue or defend without qualified assistance, not only where the company is bereft of funds, but also where having regard to the necessary or reasonable commitments of the company the appropriation of funds to engage qualified assistance for the litigation in question would create financial difficulties with which the company could not cope, or with which it ought not be required to cope. The class of company involved, the nature of its undertaking, its financial structure, its ability to retain and pay its staff and no doubt other factors might be relevant in particular cases.

Similarly the identity of the shareholders and the spread of the shareholding would be relevant. So also would the capacity of a person by whom the litigation might be commenced and carried on. In this case Mr. Molnar is, from the point of view of substance, a one man company. In addition he is the inventor of the hoist in question and understands the technical factors relating to its safety. It could no doubt be urged that, in the case of a one man company which seeks leave to carry on the proceedings without a solicitor and which proposes that it be carried on by the one man of the company the situation approximates, in substance, that of a litigant in person. If Mr. Molnar were carrying on business as personal proprietor thereof he would have the privilege of conducting litigation himself without qualified legal assistance.

The accessibility of the courts to any citizen unconditionally, in this respect, is regarded as fundamental to the system of justice under the Crown. That ready accessibility to the courts should be available to a juristic person is no doubt similarly fundamental. However, it has been regarded as appropriate that when a trader decides to use the corporate form in which to carry on his business for the advantages flowing therefrom his accessibility to the courts as plaintiff and his appearance as a defendant should be made conditional as set forth in o.5 r.6 of the rules of the United Kingdom and the practice which it reflects. But where a discretion is conferred on the Court, and where a case is presented that there is sufficient reason to permit a company to sue or defend without qualified assistance, the circumstance that the company is a one man company and that that man is proposed as the agent by whom the company seeks to be represented, and that he has advantageous educational and technical qualifications, may be significant. With these considerations in mind I turn to the situation before the Court.

16                  In this proceeding to date, the applicant has satisfied the Court that there is a serious question to be tried. I note also that Mr Yahalom, being the sole director of the applicant, would have detailed knowledge of circumstances and events relevant to the proceeding. Furthermore, impecuniosity of a litigant does not, under any circumstances, warrant a denial of access to justice in respect of that litigant.

17                  However in the circumstances of this case I am not persuaded that the applicant should be granted the leave it has sought pursuant to O 4 r 14(2). I form this view for the following reasons.

18                  First, there is no material before me which demonstrates in any way that Mr Yahalom is capable of conducting the proceeding on behalf of the applicant. There are no documents before me prepared by Mr Yahalom, either pursuant to directions of this Court or otherwise, which, for example, are “quite clear and comprehensive” as was considered to be the case by McKerracher J in Garage Wholesalers Pty Ltd v Engineering Software Solutions Pty Ltd [2009] FCA 361 at [4].

19                  Second, I am not persuaded that Mr Yahalom has any real understanding of Court process. I note that following the filing of the Notice of Change of Solicitor for the applicant, the applicant failed to comply with directions given on 18 June 2010, in particular:

·                    Order 5 “Each party to file and serve a statement of facts, issues and contentions, not to exceed ten pages in length by 4.00 pm on 6 August 2010.”; and

·                    Order 6 “The applicant shall, after consultation with the respondents, prepare and file a chronology on or before 4.00 pm on 12 August 2010”.

20                  This position is in contrast with the applicant’s compliance with directions while represented by solicitors.

21                  Further, I note from the correspondence file in this proceeding that the notice of motion was successfully filed on 13 August 2010 only after unsuccessful attempts to do so by Mr Yahalom.

22                  I also note that, without explanation, Mr Yahalom failed to appear at the directions hearing convened last Tuesday 10 April 2010, and failed to communicate with either my chambers (or, apparently, the respondents), despite numerous attempts by my associate to contact Mr Yahalom by telephone and fax to inform him that the directions hearing had been listed.

23                  Third, in this proceeding the applicant is the sole applicant. There is no other applicant appearing by solicitor or counsel to assist the Court in respect of the applicant’s case (contrast Young v ICM Agriculture Pty Ltd [2009] FCA 1065).

24                  Fourth, any liberality in approach the Court might be inclined to adopt where leave is sought by a respondent (and therefore not the moving party in the litigation) is not relevant in this proceeding (contrast Super Choice Now Pty Ltd v BrisConnections Management Company Ltd [2009] FCA 1026 at [19] and Tobacco Control Coalition Inc v Philip Morris (Australia) Ltd [2000] FCA 131 at [5]).

25                  Fifth, I am not satisfied that reliable financial information has been produced to the Court explaining why neither the applicant, nor Mr Yahalom who is the applicant’s sole director and shareholder, can fund a solicitor to represent the applicant. In this respect I note that while Mr Yahalom may be the alter ego of the applicant, nonetheless as explained by Smithers J in Molnar [1984] 3 FCR 68 when a trader decides to use the corporate form in which to carry on his or her business for the advantages flowing therefrom, the accessibility to the courts by that corporation is conditional as set forth in O 4 r 14(2). The lack of reliable evidence as to the applicant’s financial position is a factor which is relevant to the exercise of the Court’s discretion in relation to applications for leave pursuant to O 4 r 14(2): cf Silkearl Pty Ltd v Ainsworth Game Technology Ltd [2006] FCA 949 at [25]. In this case:

·                    substantial evidence was produced by the applicant in April 2010 supporting the proposition that the applicant had significant resources at its disposal;

·                    the material tendered yesterday in Court by Mr Yahalom suggested that both the applicant and Mr Yahalom had, at least at the close of the 2008-2009 financial year, significant resources; and

·                    as recently as 20 May 2010 Mr Yahalom agreed to a variation of the estimate of legal fees and costs of his previous solicitors, resulting in an estimate of $250,000 in relation to the proceeding, presumably on the basis that he could pay that sum in fees.

26                  Yesterday in Court however Mr Yahalom’s explanations as to the reasons for the current reduced financial situation of himself and the applicant were very thin as to detail, and not supported by any sworn evidence. In response to my direct questioning in respect of this issue Mr Yahalom’s answers were vague, with a suggestion that his book-keeper would have relevant materials, and other unsworn evidence from the bar table as to the necessity to pay tax liabilities, car loans, private debts and residential rental payments. While, as I have observed, impecuniosity of a corporate applicant does not warrant a denial of access to justice, if impecuniosity is claimed as the reason a corporate applicant seeks leave to carry on a proceeding otherwise than by a solicitor, such impecuniosity must be demonstrated. In this case, I am not satisfied that either the material produced by Mr Yahalom in Court or his unsupported explanations for the significant discrepancies between the apparent previous financial position of the applicant and himself, and their respective current financial situations, are credible and support the grant of leave pursuant to O 4 r 14(2).

27                  Sixth, in Mr Yahalom’s affidavit sworn 13 August 2010 he deposes that he is in a position to proceed with the substantive trial. However in oral submissions yesterday, Mr Yahalom submitted that the majority of the documentation upon which the applicant was relying remained in the possession of his previous solicitors pending his payment of outstanding (or other) legal fees. Despite questioning Mr Yahalom about this issue, it remains unclear to me how Mr Yahalom proposes to properly advance the applicant’s case without access to material relevant to the proceeding.

28                  Seventh, the proceeding involves narrow, but difficult, questions of law including interpretation of the Oilcode and the proper construction of oral agreements between the relevant parties. To date the issues in dispute have been hard fought by the respondents, and there is every indication that they will continue to be hard fought (cf comments of French J in Simto Resources Ltd v Normandy Capital (1993) 10 ACSR 776 at 783).

29                  Eighth, Mr Yahalom has no legal qualifications or training. Yesterday from the bar table he submitted that he had been involved as an investigator in the management of police matters many years ago in Israel. As was observed by Weinberg J in Platcher v Joseph [2004] FCAFC 68 at [151], it need hardly be said that a self-represented litigant is unlikely to have any real appreciation of the nuances of the rules of evidence, or indeed Court process as a whole. Such considerations are equally applicable to persons other than solicitors representing corporate litigants.

30                  Ninth, I note that English is not Mr Yahalom’s first language. At the directions hearing of 18 June 2010, Counsel for Mr Yahalom anticipated that an interpreter would be required for Mr Yahalom. Counsel continued:

In relation to the issue of Mr Yahalom’s evidence, given that he is obviously a non – English is not his first language, my side is looking, at the moment, at the possibility of having an interpreter available for Mr Yahalom. We don’t intend that he would give all his evidence through that interpreter. Obviously, as my learned friend said, he can deal, to some extent, in English but the concern is that some of the complexity of the questions that he faces – and your Honour will have seen that when he gave his evidence-in-chief - - -

HER HONOUR: Yes

MS AHERN: - - - that sometimes he has difficulty understanding the complexity of the questions and, on occasion, has difficulty in framing his own responses. So our intent there is to see if an interpreter could be available to assist him, in that limited sense.

(TS 18 June 2010 p 13 ll 8-21)

31                  Ms Ahern, Counsel for the applicant, also submitted at the directions hearing of 18 June 2010 that if Mr Yahalom were to give evidence-in-chief orally, Counsel anticipated that the trial would be protracted because an interpreter’s assistance might be necessary (TS 18 June 2010 p 13 ll 31-34).

32                  The fact that Mr Yahalom’s first language is not English clearly does not exclude him from representing the applicant in the proceeding. However it is an issue which goes to his capability to conduct the litigation, and to understand and address issues which will inevitably arise in the course of a trial. This was made abundantly clear yesterday, where despite what appeared to be the best endeavours of the interpreter to translate, endeavours by Mr Dunning SC to clarify issues for Mr Yahalom and the interpreter during the course of the proceeding, and endeavours by myself to simplify matters for Mr Yahalom, Mr Yahalom continued to struggle with the components of the litigation.

33                  Tenth, Mr Yahalom is a key witness in this proceeding, and clearly will be the principal witness for the applicant. I am not confident that Mr Yahalom will be able to properly manage the applicant’s case while in the role of principal witness.

34                  Finally, as observed by Allsop J in Silkearl [2006] FCA 949 at [34], one of the fundamental obligations of any practitioner in the discharge of his or her obligations to the client and the Court is the civil and dispassionate communication with other parties to that litigation. Yesterday in Court Mr Yahalom made allegations to the effect that the respondents, or Mr Nir Avrahami, had been involved in criminal activity in respect of their tax liabilities. Making scandalous accusations and allegations of impropriety against the respondents which were in any event irrelevant to the proceedings yesterday suggests that Mr Yahalom is not a proper person to conduct the proceedings on behalf of the applicant.

Conclusion

35                  The trial in this proceeding is currently scheduled for three weeks. I have already observed that the case involves difficult legal questions and is strenuously opposed by the respondents. Mr Yahalom – who proposes to represent the applicant in the proceeding – has a limited grasp of English and requires an interpreter. As was also clear yesterday at the hearing, Mr Yahalom has little if any understanding of Court process, including the difference between the interlocutory procedural issues inherent in a notice of motion brought pursuant to O 4 r 14(2) and substantive issues at trial. I have no confidence that Mr Yahalom would be able to conduct the trial on behalf of the applicant in a meaningful fashion. Furthermore Mr Yahalom is the principal witness for the applicant in this proceeding. To paraphrase language of French J in similar circumstances in Simto (1993) 10 ACSR 776 at 783, the presentation and management of the applicant’s case in this proceeding, even with the assistance of an interpreter for Mr Yahalom, will be both practically unworkable and potentially hopelessly protracted.

36                  In my view the application for leave brought by the applicant AA Shi Pty Ltd pursuant to O 4 r 14(2) for it to carry on the proceeding otherwise than by a solicitor should be refused. The appropriate order is that the notice of motion be dismissed.

Associate:

Dated:         17 August 2010