THE SUPREME COURT
[Appeal No: 2017/0065] O'Donnell J. Dunne J. Charleton J. O'Malley J. Finlay Geoghegan J. Allied Irish Bank plc
Plaintiff/Respondent
and
Aqua Fresh Fish Limited
Defendant/Appellant
Judgment of Ms. Justice Finlay Geoghegan delivered on the 18th day of October, 2018.
1. This appeal raises the difficult question of the entitlement of a company to be represented in proceedings before the Superior Courts by a person who is not a lawyer with a right of audience. In particular, it raises the continued application of the decision of the Supreme Court in Battle v. Irish Art Promotion Centre Limited [1969] I.R. 252 (" Battle ") when considered together with the later decision of the Supreme Court in Coffey v. The Environmental Protection Agency [2014] 2 I.R. 125 (" Stella Coffey ").
Background Facts
2. Allied Irish Bank plc ("the Bank") advanced monies to Aqua Fresh Fish Limited ("the Company") which created a mortgage over certain lands in favour of the Bank now claimed to be security for the loan. The Bank contended that the Company defaulted on its obligation to repay the loan, issued a letter of demand, sought to enforce the security and instituted the present special summons proceedings seeking, inter alia , an order for possession and an order for sale of the lands.
3. While the special summons was before the Master of the High Court, Mr. Adrian Flynn, the managing director and principal shareholder of the Company, applied ex parte to the High Court for permission to enter an appearance to the summons and represent the Company in the proceedings. Mr. Flynn has no professional legal qualification. The application was refused by the High Court (Peart J.) on 14 May 2013. Mr. Flynn appealed that decision to the Supreme Court and the Supreme Court made an order on 29 November 2013 which permitted Mr. Flynn to enter an appearance on behalf of the Company, remitted to the High Court the question of further representation of the Company in the proceedings and directed that any such further application be served on the Bank. Mr. Flynn brought a motion on notice to the Bank and following a full hearing was refused permission to represent the Company by the High Court (David Keane J.) for the reasons set out in a written judgment delivered on 27 March 2015: [2015] IEHC 184.
4. The High Court decision was appealed to the Court of Appeal which dismissed the appeal. Judgment was delivered by McKechnie J. (sitting as a judge of the Court of Appeal) on 2 March 2017: [2017] IECA 77 with whom Ryan P. and Hogan J. concurred. The conclusion reached at para 75 was:-
"… I am satisfied, first, that the rule in Battle still survives and that it applies to the presenting circumstances in this case. Secondly, there are no exceptional circumstances which would justify any departure from the rule. …"
5. Leave to appeal from that decision was granted by the Supreme Court on 6 July 2017: [2017] IESCDET 76. In the determination, a recommendation was made that Mr. Flynn and the Company should seek to avail of the Supreme Court scheme for the provision of legal representation, free of charge before the Court. This is a scheme agreed between the Bar Council and the Law Society with the Supreme Court. Mr. Flynn has availed of that scheme and he and the Company are represented in the appeal by a solicitor and senior and junior counsel who have volunteered to participate in the scheme.
Issues on Appeal
6. At the outset, it is important to emphasise that the Bank does not contend that the decision in Battle should continue to be applied in its absolute terms. Rather, it is contended that the basic rule in relation to the representation of companies and other bodies corporate before the Superior Courts is as stated in Battle , and that the courts have a discretion, to be exercised in exceptional circumstances, to permit such a legal person to be represented by a natural person who is not a barrister or solicitor. It is accepted that such discretionary jurisdiction identified by the High Court (O'Neill J.) in Coffey v. Tara Mines Limited [2008] 1 IR 436 (" Coffey ") and approved of by the Supreme Court in Stella Coffey exists.
7. Counsel for the Company and Mr. Flynn contends for a broader approach. He submits that the rule in Battle conflicts with the State's obligations under Article 40.3 of the Constitution to protect the rights of citizens, including the property rights of the Company and its shareholders and their right of access to the courts. He also relied upon the right to a fair trial under Article 6 of the European Convention on Human Rights and the extent to which the courts exercise discretion to hear lay persons on behalf of companies in litigation before the High Court. Insofar as the Court proposed to continue to apply a test of exceptional circumstances, the submission made was that on the facts of this case, the Company and Mr. Flynn met the test.
8. Both parties refer the Court to the same Irish case law and to judgments from the common law world, many of which are referred to in the judgment of the Court of Appeal. It is proposed to examine the issues by considering first the judgment in Battle and then developments both by way of Irish case law, legislative changes and case law in the common law world since Battle .
Battle
9. Battle concerned an appeal from an order of the President of the High Court refusing an application by Mr. Romas, the managing director of the defendant company, for liberty to conduct the defence of the action on behalf of the company. The plaintiff's claim was for commission alleged to have been earned on the sale of certain of its products. The appeal appears to have been heard ex parte and the appellant appeared in person. The single judgment delivered by Ó Dálaigh C.J. (with whom Haugh J. and Walsh J. concurred) records that the appellant did not refer the Court to any authorities and the Court allowed the matter stand over, so that it might have an opportunity of examining the law. The judgment considers four English authorities, including an extract from the speech of Viscount Simon L.C. in Tritonia Limited v. Equity and Law Assurance Society [1943] 1 A.C. 584 (" Tritonia "), where at p. 586 he stated:-
"In the case of a corporation, inasmuch as the artificial entity cannot attend and argue personally, the right of audience is necessarily limited to counsel instructed on the corporation's behalf."
10. Having done so Ó Dálaigh C.J. at p. 254 stated:-
"This survey of the cases indicates clearly that the law is, as we apprehended it to be when this application was first made to us, viz. that, in the absence of statutory exception, a limited company cannot be represented in court proceedings by its managing director or other officer or servant. This is an infirmity of the company which derives from its own very nature. The creation of the company is the act of its subscribers; the subscribers, in discarding their own personae for the persona of the company, doubtless did so for the advantages which incorporation offers to traders. In seeking incorporation they thereby lose the right of audience which they would have as individuals; but the choice has been their own. One sympathises with the purpose which the appellant has in mind, to wit, to safeguard his business reputation; but, as the law stands, he cannot as major shareholder and managing director now substitute his persona for that of the company. The only practical course open to him would, it appears, be for him personally to put the company in funds for the purpose of presenting its defence. The Court in my judgment should refuse this application."
11. As observed by McKechnie J. in the judgment of the Court of Appeal at para. 9, it is evident from the above passage that:-
"the essence of the rule was firmly anchored in the legal personality of a company as a separate and distinct entity from its members, subscribers, officer holders and indeed from all others".
That is the absolute rule to which I earlier refer. It is, however, also the position that there does not appear to have been any consideration in Battle of a jurisdiction to make an exception to the rule.
Developments in Ireland since Battle
12. The so-called "rule" derived from the decision in Battle does not appear to have been reconsidered by the Supreme Court until the decision in Stella Coffey in 2013. However, in the intervening period I think it would be correct to say that whilst no court re-examined the rule, either for consistency with the Constitution or otherwise, judges did from time to time hear an individual who appeared on behalf of a company, as was sometimes stated "as a matter of courtesy" or "in the interests of justice". One such example referred to in a written judgment is In the Matter of Marble and Granite Tiles Limited [2009] IEHC 455 (Unreported, High Court, Laffoy J., 16 October, 2009). This concerned a petition presented by Dublin City Council for the winding up of Marble and Granite Tiles Limited . In response to the petition, an affidavit was sworn and filed by Mr. O'Gara, a director of the company. That was opened to the Court by counsel for the petitioner and on the hearing of the petition, Laffoy J. heard submissions from Mr. O'Gara on behalf of the company. In her judgment, Laffoy J. referred to the objection made by counsel for the petitioner in reliance on Battle to the entitlement of Mr. O'Gara to represent the company and stated at p. 9 of her judgment:-
"The legal position, accordingly, is that Mr. O'Gara is not, as a matter of law, entitled to represent the company in these proceedings. However, as frequently happens on the hearing of a winding up petition when a director or a member of the company appears in Court without legal representation, he was listened to to ensure that no injustice would be perpetrated."
13. From my own experience as a judge of the High Court dealing with insolvency matters, the Court quite often hears a lay person who appears on behalf of a company which is a creditor, upon the hearing of a petition to wind up or for the appointment of an examiner. However, in such circumstances the company seeking to be so represented is probably not a party to the litigation as such and there is no inter partes dispute at issue. As stated by Laffoy J. in In the Matter of Marble and Granite Tiles Limited , a director or shareholder of a company that is the subject of a petition and which is not legally represented, is also often heard. However, it is sometimes the position that such a director or shareholder may have a personal entitlement to be heard, if he or she has a legitimate personal interest in the application.
14. It is not in dispute that in respect of natural persons of full age not of unsound mind, the basic rule is that, at their choice, they may appear either in person or represented by a lawyer. However, the rule, subject now to exception, is that they may not be represented by another lay person. They may have the assistance of a "McKenzie friend" who may advise them but who does not have a right of audience to speak on their behalf before the courts.
15. The jurisdiction of the High Court to permit an exception to the rule against lay representation is identified in Coffey . The facts of that case were undoubtedly unusual. Mr. Coffey had been an employee of Tara Mines; he had been injured in the course of his employment and brought two sets of personal injury proceedings. Liability was conceded in one but not in the second. The hearing of the actions, one of which was an assessment, appears to have commenced in 2000 but because of the unavailability of certain witnesses and of a difficulty with a map, was adjourned. Up to this point, the plaintiff had been legally represented. The relationship with his solicitor then broke down and the plaintiff also suffered a serious illness. He signed a form of authority for his wife to represent him and she sought to do so for the purpose of resuming the actions. It was this application that gave rise to the judgment of O'Neill J. in which he ultimately concluded at pp. 443 and 444 that the High Court has an inherent jurisdiction to manage and control its own proceedings and "in rare and exceptional cases to permit an unqualified advocate to represent another litigant".
16. In the course of that judgment, O'Neill J. referred to an earlier "extensive review of common law authorities" by Budd J. in an unreported judgment P.M.L.B. v. P.H.J. (Unreported, High Court, Budd J., 5th May, 1992) in which he had referred inter alia to judgments of the Court of Appeal of New Zealand in Re G.J. Mannix Limited [1984] 1 N.Z.L.R 309 (" G.J. Mannix "). O'Neill J. relied in particular upon an extract from the judgment of Somers J. in G.J. Mannix , where at p. 316 he says:-
"But I consider the superior courts to have a residual discretion in this matter arising from the inherent power to regulate their own proceedings. Cases will arise where the due administration of justice may require some relaxation of the general rule. The occurrence is likely to be rare, their circumstances exceptional or at least unusual and their content modest. Such cases can confidently be left to the good sense of the judges."
17. O'Neill J. continued to consider whether the judgment of the Supreme Court in Battle precluded the exercise of an inherent jurisdiction such as identified by Somers J. in New Zealand in G.J. Mannix and concluded that it did not.
18. By reason of the subsequent decision of the Supreme Court in Stella Coffey , the parties to this appeal are in agreement that Battle does not preclude the exercise by the Irish Superior Courts of an inherent jurisdiction to permit, at least in rare and/or exceptional circumstances, representation of a litigant, including a company, by a person who is not a lawyer with a right of audience.
19. I now wish to turn to the Stella Coffey judgment delivered by Fennelly J. on 26 February 2013 (with which Denham C.J. and McKechnie J. concurred). This again appears to have been an appeal heard ex parte . It is also correct to say that the representation of a company formed a minor aspect of the appeal. The judgment was given on a preliminary application in 13 appeals from three separate judgments of the High Court which had refused the appellants a "not prohibitively expensive costs order" sought in reliance upon the Aarhus Convention of 1998. There were 12 personal appellants and one company, No2GM. The appellants sought to be represented at the hearing of the appeal by Mr. Percy Podger, who was not one of the appellants and not a lawyer. The Supreme Court refused the application as he was not legally qualified and the judgment delivered by Fennelly J. gave the reasons for the refusal. He considers and sets out with clarity the fundamental rules in relation to rights of audience, the purpose and reasons therefore and need for exceptions thereto. He explains these commencing at para. 24:-
"24. The fundamental rule is that the only persons who enjoy a right of audience before our courts are the parties themselves, when not legally represented, a solicitor duly and properly instructed by a party and counsel duly instructed by a solicitor to appear for a party. That rule does not exist for the purpose of protecting a monopoly of the legal professions. Kennedy C.J. considered an application, In re the Solicitors Act and Sir James O'Connor [1930] 1 I.R. 623 at p. 629, for the readmission to the roll of solicitors of a person who had formerly practised as both a solicitor and a barrister before being appointed to the bench from which he had retired. That issue is not before the Court and I express no view on the issue of readmission of former members of a profession. It is of interest, however, that the Chief Justice explained that one of the points of view of relevance was that "of the public-of the people from whom ultimately are derived and held … as a privilege the monopoly of the right to practise as solicitors and advocates". The limitation of the right of audience to professionally qualified persons is designed to serve the interests of the administration of justice and thus the public interest.
25. The exclusive right of counsel to audience in the courts is derived from the common law. In order to extend that right, in the case of the superior courts, to solicitors, it was necessary to enact s. 17 of the Courts Act 1971, which provides:-
‘A solicitor who is acting for a party in an action, suit, matter or criminal proceedings in any court and. a solicitor qualified to practise (within the meaning of the Solicitors Act, 1954) who is acting as his assistant shall have a right of audience in that court.'26. Thus, the right of audience is regulated by law. It is true that a party to proceedings (other than a corporation) has the right to appear for him or herself and to plead his or her own case. This is a matter of necessity as well as right. Regrettably it is a fact of life especially during the current economic difficulties in our country that many people are unable to afford the often high cost of professional representation and that the availability of legal aid is limited. There are other cases where litigants disagree with their lawyers or are unwilling to accept representation. Whatever the reason, there is an inevitable number of cases before the courts where litigants are unrepresented. In those cases, they have the right to represent themselves. It has to be accepted that this is sometimes unavoidable, which is not to say that it is desirable. There is no doubt that courts are better able to administer justice fairly and efficiently when parties are represented."
20. Fennelly J. then quoted from Keane C.J. in R.B. v. A.S. [2002] 2 IR 428 who, at p. 447 remarked on the difficulties presented by the necessity to deal with litigants in person and from Sir John Donaldson M.R. in Abse v. Smith [1986] Q.B. 536 at p. 545 on the purpose of the limitation of rights of audience to qualified persons as being in the public interest. Fennelly J. then continued at para. 30:- "30. It would be inimical to the integrity of the justice system to open to unqualified persons the same rights of audience and representation as are conferred by the law on duly qualified barristers and solicitors. Every member of each of those professions undergoes an extended and rigorous period of legal and professional training and sits demanding examinations in the law and legal practice and procedure, including ethical standards. Barristers and solicitors are respectively subject in their practice to and bound by extensive and detailed codes of professional conduct. Each profession has established a complete and active system of profession discipline. Members of the professions are liable to potentially severe penalties if they transgress.
31. There would be little point in subjecting the professions to such rules and requirements if, at the same time, completely unqualified persons had complete, parallel rights of audience in the courts. That would defeat the purpose of such controls and would tend to undermine the administration of justice and the elaborate system of controls."
21. Fennelly J. then turned to the representation of the company, No2GM, and referring to Battle and the passages cited above from the judgments of Ó Dálaigh C.J. and of Viscount Simon L.C. in Tritonia, he stated of Battle at para. 35:- "35. This ruling proceeds from the fact that the incorporated company is, as a strict matter of law, a legal person separate from its members and from its directors and management. Nonetheless, in practice, the courts have to deal on a daily basis with difficult cases involving unrepresented companies, frequently because there are simply no funds to provide for legal representation. The company, being a purely legal or notional person, cannot speak except through a representative of some kind. If it has no legal representation, it will not be represented at all. Although that is far from ideal, it represents the present law.
36. A slight modification of the strict rule regarding companies was adopted in the New Zealand case of Re G.J. Mannix Ltd [1984] 1 N.Z.L.R. 309, considered by Budd J. in P.M.L.B. v. P.H.J. (Unreported, High Court, Budd J., 5th May, 1992). Cooke J. in the New Zealand Court of Appeal had thought that the court should retain a residual discretion to hear unqualified advocates but considered that it would be a reserve or rare expedient.
37. In Coffey v. Tara Mines Limited [2007] IEHC 249, [2008] 1 IR 436, O'Neill J. thought that Battle v. Irish Art Promotion Centre Ltd. [1968] I.R. 252 did not preclude him from exercising an inherent jurisdiction where, in his view, there was in existence "a combination of circumstances that are so exceptional or rare as to probably, be unique." He permitted the plaintiff to be represented by his wife because he had formed the view that the action would "proceed no further, and that is an outcome or consequence that would be destructive of the interests of justice."
38. In conclusion, the general rule is clear. Only a qualified barrister or solicitor has the right, if duly instructed, to represent a litigant before the courts. The courts have, on rare occasions, permitted exceptions to the strict application of that rule, where it would work particular injustice. The present case comes nowhere near justifying considering the making of an exception. Mr. Podger seeks nothing less than the general right to appear on behalf of a group of thirteen litigants and to plead their cases to precisely the same extent as if he were a solicitor or counsel, which he accepts that he is not, but without being subject to any of the limitations which would apply to professional persons.
39. Nor do I think that the attempt to represent the company No2GM Ltd gives rise to any exception. Mr. Podger has not demonstrated any exceptional circumstance which would justify permitting him to speak as the representative of the company. It was patent that Mr. Podger availed of the opportunity provided by the Court's brief adjournment of the hearing to defeat the effect of its ruling by devising the stratagem of making himself a member of the company. It was a device and was without merit."
22. Finally, Fennelly J. briefly considered submissions made in reliance upon EU law and rejected the same, referring to the rules relating to representation before the Court of Justice of the European Union and the European Court of Human Rights.
23. The final Irish cases to which I wish to refer at this point are the judgments of the High Court and Court of Appeal in McDonald v. McCaughey Developments Limited (in Receivership) and Martin McCaughey (" McDonald "): [2014] IEHC 455 and [2015] IECA 159. As appears from the title, the plaintiff, a receiver, had sued both the company and Mr. McCaughey personally. Mr. McCaughey sought to represent the company on the basis that he was a director and principal shareholder. His purpose in so doing appears to have been to challenge the validity of the appointment of the receiver. In the High Court, Gilligan J. applied the decisions in Battle and Stella Coffey already referred to, and refused the application. In the Court of Appeal (Kelly J. Peart and Hogan JJ concurring) allowed the appeal but on the basis that Mr. McCaughey was already a party to the proceedings and as stated, at para 14, that the receiver accepted that Mr. McCaughey as a defendant might raise "all and any points and arguments and adduce any evidence which he wishes pertinent to the issues in the proceedings" which could include those "which will inure for the benefit of the company". In those circumstances, the Court found it unnecessary to consider the question of Mr. McCaughey's entitlement to represent the company. In his separate concurring judgment, Hogan J., whilst in agreement that it was not necessary to consider the status of the Supreme Court decision in Battle , referred at para. 3 to a number of potentially difficult questions which might require consideration in the future. The approach of the Court of Appeal in McCaughey , albeit with what would appear to be the agreement of the receiver, may indicate another way in which a defence that is relevant to a company which does not have legal representation may be advanced, where it is in the interests of justice to permit this. However, in this appeal, whilst reference has been made to the fact that Mr. Flynn is a guarantor of the debt due by the Company to the Bank, he has not been sued in the proceedings and he has not sought to be joined as a party to the proceedings on the basis that the claim made in the proceedings affects his position as a guarantor.
Legislative Change
24. The Companies Act 2014 is the most significant legislative restatement and amendment of companies' legislation since the Companies Act 1963. It does not provide for a right of a company to be represented by lay persons in court proceedings other than as was already provided in s. 382 of the 1963 Act and repeated in s. 868 of the 2014 Act in relation to proceedings on indictment. This permits a company charged with an indictable offence to appear by a "representative" which is defined in s. 868(5) as being "a person duly appointed by the company to represent it for the purpose of doing any act or thing which the representative of a company is authorised by this section to do". It appears that s. 382 of the 1963 Act may have been introduced to remedy an issue brought to light in the case of State (Batchelor & Co. (Ireland) Ltd.) v. Ó'Leannáin [1957] I.R. 1: see Company Law Review Group, Report on the Representation of Companies in Court , March 2016, at para. 2.8. Notwithstanding the Supreme Court decision in Battle reported and applied since 1968, albeit with acknowledgement of the possibility of exception in Stella Coffey in 2013, the Oireachtas did not legislate for a right to lay representation other than in proceedings on indictment. This is made clear by s. 868(6) which states "[a] representative of a company shall not, by virtue only of being appointed for the purpose referred to in subsection (5), be qualified to act on behalf of the company before any court for any other purpose.".
25. It is also of some relevance to note that the Companies Act 2014 provides for the possibility that a company have a single member and/or only one director (ss.11, 128 and 196) but without providing any special rules in relation to representation even of such companies in court. I draw attention to this by reason of the reliance placed by the appellants on a judgment of Gubbay C.J. in the Supreme Court of Zimbabwe in Lees Import & Export (Pvt) Ltd. v. Zimbabwe Corp. Ltd. (Attorney General Intervening) [2000] 3 L.R.C. 458 in relation to representation of a company by a person who is considered to be the "alter ego" of the company.
26. The Court's attention has been drawn to the Report on the Representation of Companies in Court by the Company Law Review group of March 2016. It is a useful summary of the position in this jurisdiction and in the common law world. However, it does not appear to me that its conclusions or recommendations directly impinge upon the decision in this appeal.
Developments in the Common Law World
27. The Court of Appeal judgment sets out in some detail the position in other common law jurisdictions at paras. 65 to 73. I do not propose repeating same. The conclusion, with which I respectfully agree, is as stated by McKechnie J at para. 65 that "the rule or principle set out in Battle remains the default position across much of the common law world". That conclusion is of course subject to those jurisdictions in which there has been relaxation of the rule by legislation or by rule of court, as in England and Wales. The appellant takes issue with McKechnie J.'s disagreement with the exception discussed in a number of the cases regarding either ‘one man companies' or small corporate entities, as expressed at paras. 57 to 58. For the reasons set out below, I am in agreement with McKechnie J. on this issue.
A Continuation of Rule in Battle ?
28. The first issue for consideration is whether the right of a company to representation before the courts (save as otherwise provided by statute) should remain a right to be represented only by a lawyer entitled to a right of audience. That is the rule which was decided and applied in Battle and is the basic rule which continues in many common law jurisdictions, subject to an inherent jurisdiction to make exceptions where the interests of justice necessitate.
29. Such a right of a company must be considered in the context of the general rule, which recognises the right of natural persons with legal capacity to appear in person or be represented by a lawyer, but does not permit representation by a lay person. For all the reasons set out by Fennelly J. in Stella Coffey , the general rule which confines the right to be represented by another to those legally qualified, is a rule which exists in the interests of the administration of justice and serves the public interest. If the Court were now to recognise a company as having a right to be represented by a lay person that would be a fundamental change to the general rule in relation to rights of audience before the courts.
30. The inability of a company to appear in person to pursue or defend a claim is because it is an artificial person with a separate legal personality from its shareholders and directors, as unequivocally stated by the House of Lords in Salomon v. Salomon & Co. Limited [1897] AC 22. One of the disadvantages of being an artificial person is that the company can only act through or by a natural person. Should that fact give it a right to be represented by a lay person?
31. It is a regrettable fact that legal proceedings may be costly to pursue or defend; legal representation may be expensive and proceedings may expose a party to a significant risk of an adverse costs order. A human person who cannot afford or otherwise procure legal representation or does not wish to do so undoubtedly has the option of representing him or herself. However, he does not have a right to be represented by any third party other than a qualified lawyer. Also, as a party to the litigation, he or she exposes him or herself to the risk of an adverse costs order. That fact may be a deterrent in the pursuit of certain unmeritorious claims or defences. It may also, however, preclude the pursuit of potentially successful claims or defences.
32. The potential costs of litigation or risks of adverse orders for costs may be seen as a practical restriction or obstacle to the exercise of a right of access to the courts guaranteed by the Constitution. It must be recalled that the constitutional right of access to the courts cannot be considered in isolation. It must also be considered in the context of the constitutional guarantees of fair procedures and the administration of justice in accordance with fair procedures. Almost all litigation is between at least two parties. Representation of litigants by unqualified persons creates challenges and quite often difficulties for the administration of justice in accordance with fair procedures. Some restriction to the right of access to the courts of persons who, as in the case of companies are unable to represent themselves, or in the case of human persons are unwilling to do so and either choose not to instruct a lawyer or are unable to do so, may be inevitable. Provided that there is an inherent jurisdiction to make exceptions to the general rule in Battle , justified in the interests of the due administration of justice, such a restriction is not then, in my view, prohibited by the Constitution.
33. As pointed out in many decisions, companies are used by persons to conduct business or other activities without the risk of being liable for losses incurred, and thereby create advantages for such persons. The use of a separate legal personality may also, however, have disadvantages. One such disadvantage is the inability of a company to represent itself in legal proceedings. It is, however, as stated by McKechnie J. in the Court of Appeal at para. 58, "the logical corollary of the Salomon principle".
34. In the Court of Appeal in England in Radford v. Freeway Classics Limited [1994] 1 B.C.L.C. 445 (" Radford "), a decision given prior to the changes in the Civil Procedure Rules, Sir Thomas Bingham M.R., delivering a judgment (with which the other two members of the Court concurred) on an application by a Mr. Corry to represent companies, spoke of the rule in relation to the representation of a company as one which rests "on a basis of fairness and good sense". Explaining the rational succinctly at p. 448, he stated that:-
"A limited company, by virtue of the limitation of the liabilities of those who own it, is in a very privileged position because those who are owed money by it, or obtain orders against it, must go empty away if the corporate cupboard is bare. The assets of the directors and shareholders are not at risk. That is an enormous benefit to a limited company but it is a benefit bought at a price. Part of the price is that in certain circumstances security for costs can be obtained against a limited company in cases where it could not be obtained against an individual, and another part of the price is the rule that I have already referred to that a corporation cannot act without legal advisors. The sense of these rules plainly is that limited companies, which may not be able to compensate parties who litigate with them, should be subject to certain constraints in the interests of their potential creditors."
35. The same judgment, however, recognised by reference to authority, the inherent power of the courts to regulate their own procedure and, as part of same, the power to permit any advocate to appear for a litigant if the exceptional circumstances of the case so warrant. The exceptional circumstances sought to be relied upon in that case were the company's lack of means to instruct lawyers; a good defence to the plaintiff's claim and certain criticisms of the plaintiff's behaviour. Bingham M.R. upheld the decision of the trial judge to reject such circumstances as constituting exceptional circumstances.
36. The above considerations, in my view, justify not identifying a company as having a right to be represented by a lay person simply because as an artificial person, it is unable to represent itself before a court as a natural person can.
37. That conclusion leads to a consideration of the general rule which restricts the right of any litigant to third party representation by a qualified lawyer. For all the reasons set out by Fennelly J. in Stella Coffey and the decisions to which he refers, I consider that it is in accordance with the interests of justice and our principles of fair procedures that the right of any litigant to be represented by a third party should, subject to any different statutory entitlement, continue to be confined to a right to be represented by a lawyer who has a right of audience before our courts. As pointed out by Fennelly J., barristers have a right of audience at common law. When it was sought to grant solicitors a right of audience, that development was carried out by statute. EU law now provides for a right of audience for certain lawyers from other EU jurisdictions. The position as a matter of right for litigants is tempered by the inherent jurisdiction to permit lay representation in exceptional cases.
38. There is one other potentially relevant matter to which I would draw attention; that of the pursuit or defence of claims by natural person without legal capacity. The Superior Court Rules expressly provide for the pursuit and defence of claims by certain natural persons without legal capacity, namely infants and those of unsound mind. The proceedings, in those instances are however brought in the name of the next friend or defended by the guardian ad litem . That person with legal capacity is, however, usually the party to the litigation and may be the subject of costs orders, as was held to be the case by the Supreme Court in McHugh v. Phoenix Laundry Ltd [1966] I.R. 60, and further affirmed by Ó'Dálaigh C.J. in Sheridan v. McCartan [1968] I.R. 7. This type of representation of natural persons under a disability is different to the representation sought to be exercised by Mr Flynn in this appeal, as he does not seek to become a party to the proceedings.
39. The discretion of the Court to permit in exceptional circumstances representation of litigants, whether human or corporate, by persons who are not lawyers with a right of audience is both important and essential in ensuring that the general rule is not in breach of the constitutional guarantees of rights of access to the courts and fair procedures.
40. Accordingly, I have concluded that the so-called rule in Battle , when complemented by the inherent jurisdiction and discretion of the Court to permit, in exceptional circumstances, the representation of a company by a person who is not a lawyer with a right of audience, continues to be the law in this jurisdiction and is consistent with the Constitution.
Exceptional Circumstances
41. The further difficult question is whether this Court should seek to give guidance as to what might in any individual case constitute exceptional circumstances. I do not consider that this is desirable or practicable. This is so because of the multiplicity of types of claims which may be sought to be brought by or made against companies and the factual positions which may relate thereto. The present appeal arises in the context where the Company which seeks to be represented is a party to the proceedings as defendant. Quite different considerations might arise if a company sought to be represented in order to pursue proceedings as a plaintiff. Where a company is relatively impecunious and seeks to be a plaintiff, there is the additional limitation on its ability to litigate by reason of the rules relating to security for costs now set in s. 52 of the Companies Act 2014. Also in practice, there may be instances where a director or shareholder of a company which is not a party to the proceedings, may appear only for the purposes of seeking to put facts pertaining to the company before the court or registering an interest of the company in the proceedings such that it might be notified of future applications, and different considerations may apply. This is quite often the position of creditors in insolvency or examinership matters. Further, an application by a director or shareholder to appear on a petition for the winding up of the company or for the appointment of an examiner, whether in his own right or to seek to adduce evidence or make representations on behalf of the company, may again involve different considerations.
42. Insofar as I refer to "exceptional circumstances", I do so deliberately. I am conscious that certain of the earlier decisions referred to "rare and exceptional circumstances". It does not appear to me that the addition of the term "rare" adds anything to what a court must consider. The starting point is always the general rule that a company has no right to lay representation. The circumstances which lead a court to conclude that it is necessary in the interests of justice to permit representation of a company by a person who is not a qualified lawyer must be exceptional in order that the decision to permit is not one which will warrant common repetition such that the general rule is undermined. It follows that the circumstances which warrant such permission may be considered to be rare and those which may occur often will not usually be considered exceptional. However, all the relevant facts must be considered and a particular combination of facts which individually might occur more often may be considered exceptional.
43. As has been stated in a number of decisions, unfortunately the impecuniosity of a company or the lack of available funds in a company to procure legal representation is not in any sense exceptional or even unusual. It is a circumstance which in commercial life often occurs. Hence, that in itself cannot constitute exceptional circumstances. Similarly, a view expressed on behalf of a company that it has a good arguable defence or even the putting up of facts which objectively suggest an arguable defence is not of itself an exceptional set of circumstances. Reliance was sought to be placed on behalf of the Company by Mr. Flynn on the nature of the business conducted by the Company as being somewhat unique. In the context of a claim made by a bank seeking to enforce security for monies advanced or lent that again, does not of itself constitute, in my view, exceptional circumstances.
44. The fact that Mr. Flynn is the principal shareholder and a director of the Company is similarly not, in my view, an exceptional circumstance. A company seeking to be represented will probably seek to be represented by a principal shareholder and director where such a person is willing to so act. Nor do I consider that all of the above in combination are exceptional, as they are a combination of facts which often occur.
45. It is probably relevant for a court to consider when asked to exercise this jurisdiction to identify the nature of the claim, the type of proceedings and the representation sought. Many of the decisions focus on the right of oral audience before the courts, as ultimately the person by whom a company seeks to be represented will exercise that right of audience. However, in these proceedings, the representation sought is not simply to make oral or written submissions in exercise of a right of audience but also to represent the company effectively as the solicitor on record for the company in the proceedings. Such representation would include pre-hearing obligations to which the professional rules of the solicitors' profession apply. The absence of a solicitor on record may make the pre-trial part of the proceedings more difficult and costly for the other party.
46. Whether or not the person by which the company seeks to be represented is already a party to the proceedings, or is willing to be joined and has an interest such as would permit joinder, pursuant to Order 15 of the Rules of the Superior Courts, may be a relevant circumstance to be taken into account in determining whether or not the overall facts and circumstances are such as to amount to exceptional. As explained so clearly by Bingham M.R. in Radford , part of the fairness and justice of the rule of limited representation, certainly in relation to limited companies such as the Company, relates to their separate legal personality from their directors and shareholders and the absence of any risk either by reason of the company's debts or costs of the proceedings to the directors and shareholders. A person who is already a party to the proceedings is probably at risk of an adverse order for costs if unsuccessful in the claim or defence. The decision of the Court of Appeal in McDonald indicates an ability by the courts to make orders in the interests of justice which effectively permit, in the case of co-defendants, the pursuit of the defence attributable to the company. I am not suggesting that such an approach may be available in all cases where a company and human defendants are joined in the same proceedings. It may however, be a factor to be taken into account. Similarly, if a person seeks to be joined as a party and has an interest which would justify being joined as a party to the proceedings, this may be a factor to be taken into account if the interests of justice required representation also of the company by the person joined as a party.
47. On the facts of this appeal, no application has been made on behalf of Mr. Flynn to have him joined as a party. The fact that a person is a director or shareholder of a company would not of itself normally permit him to be joined as a co-defendant to proceedings which sought to enforce security allegedly given by a company for monies advanced to it. No application to be joined was made upon the basis of his position as guarantor of the Company's debt.
Summary of Conclusions
48. The so-called rule in Battle v. Irish Art Promotion Centre Limited [1969] I.R. 252, when complemented by the inherent jurisdiction and discretion of the Court to permit, in exceptional circumstances, representation of a company by a person who is not a lawyer with a right of audience, continues to be the law in this jurisdiction and is consistent with the Constitution.
49. On the facts of this appeal, exceptional circumstances have not been established which would warrant the Court permitting the Company to be represented by Mr. Flynn.
Decision
50. I would propose an order dismissing the appeal.
