Australian Telephone Distributors Pty Ltd. (in Liquidation) v. Golden Always Ltd and Another

Civil Appeal No 88 of 1996

Headnote

Courts Practice And Procedure - Costs: O62 r28A RSC. Held "litigant in person" does not include a company appearing by a director (following Jonathan Alexander Ltd v. Proctor (CA) [1996]1 WLR 518). Accordingly, a company so appearing is not entitled to costs pursuant to O62 r28A.

IN THE COURT OF APPEAL

1996, No. 88
(Civil)

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Coram: Hon Nazareth, V.-P. in court

Date of Hearing: 7 June 1996

Date of Judgment: 7 June 1996

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J U D G M E N T

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Nazareth, V.-P.:

1. This is an application for security for costs made by the respondent companies represented by their director Mr Malcolm Maydwell.

2. He and Mr Kenneth Ng for the appellant have very sensibly agreed that I should consider as a preliminary matter a question which it seemed to me might determine the application. This is the appellant's contention, which is disputed by Mr Maydwell, that the respondent companies are not entitled to costs. That contention turns primarily upon the construction of the expression "litigant in person" in O62 r28A of the Rules of the Supreme Court which is in the following terms:

"Costs of a litigant in person

(1) On a taxation of the costs of a litigant in person there may, subject to the provisions of this rule, be allowed such costs as would have been allowed if the work and disbursements to which the costs relate had been done or made by a solicitor on the litigant's behalf."

3. Mr Maydwell, on behalf of the respondent company, contends that the expression "litigant in person" includes a company appearing by its director, and that therefore the respondent company would be entitled to the costs provided for. In his submission Mr Maydwell points to the definition of "person" in s.3 of the Interpretation and General Clauses Ordinance, Cap. 1 which reads:

" 'Person' includes any public body and any body of persons, corporate or unincorporate, and this definition shall apply notwithstanding that the word 'person' occurs in a provision creating or relating to an offence or for the recovery of any fine or compensation."

Mr Maydwell accepts that that definition would under s.2(1) of Cap. 1 not apply "where the contrary intention appears" from Cap. 1 or any other Ordinance or the subsidiary legislation under any Ordinance; see the definition of "Ordinance" in s.3 of Cap. 1. But, he submits, there is nothing to the contrary in any Ordinance nor particularly under the Rules of the Supreme Court.

4. Mr Ng for the appellant opposes that submission and relies upon the very recent judgment of the Court of Appeal in England in Jonathan Alexander Ltd v. Proctor (CA) [1996]1 WLR 518. In that case, the plaintiff company appeared by its director in the West London County Court and upon succeeding, the question arose as to whether it was entitled to costs. The matter went to the Court of Appeal where two issues were raised. First, whether the term "costs" in the relevant legislation (The County Court Rules 1981) included costs incurred otherwise than in consequence of the employment of a solicitor. The second was whether the plaintiff company so appearing was a "litigant in person" for the purposes of the Litigants in Person (Costs and Expenses) Act 1975 and so able to recover costs pursuant to O38 r17 of the County Court Rules.

5. The first issue is of marginal assistance in the present appeal, and may be said to assist the appellant only in the following peripheral way: That in the context of a materially not dissimilar statutory regime, the Court was of the view that apart from special provision for litigants in person (and other provision inapplicable to the present case) there is nothing to suggest that the term "costs" can refer to costs such as actually or notionally incurred by a party who is not a solicitor spending time on the litigation instead of earning money elsewhere (at p. 524 C).

6. It was really upon the Court's views on the second issue that Mr Ng relied i.e. the meaning of "litigant in person". In any case, Mr Maydwell did not seek to resist Mr Ng's reliance upon the meaning of "litigant in person" otherwise than in contending that that expression did not include a company appearing by a director.

7. Proceeding then to the second issue, Hirst LJ at p. 523 C-E said this:

"I found it [the inclusion of a company appearing by a director] very difficult to reconcile with the ordinary meaning, as I understand it, of the description 'litigant in person', viz. an unrepresented individual. To extend this description to a company would require clear words, yet there is nothing in the Act of 1975 which enlarges the ordinary meaning.

I would therefore, as a matter of first impression, reject the submission that a company can constitute a litigant in person. This first impression is fully confirmed by the reasons advanced by Peter Gibson LJ in the judgment which he is about to deliver, with all of which I agree."

In his judgment Peter Gibson LJ at p. 525E-526B said:

"A company is a persona ficta. As has been said of a company: 'It does not have a soul to be damned or a body to be kicked.' It is a consequence of the artificial nature of the company as a legal person that inevitably actions by it and decisions for it have to be taken by natural persons. The law of agency is at the root of company law: Gower's Principles of Modern Company Law, 5th ed. (1992), pp 139, 164. The acts of the authorised agent, acting within the scope of his authority, are under the ordinary principles of agency the acts of the company. When a company authorises a director to act and appear for it in court proceedings, and the court allows the director to act and appear, the company acts and appears by the director. The company is the litigant.

The crucial question is whether it can be said of the company so acting and appearing that it is a litigant in person for the purposes of the Act of 1975. Mr. Dyer would answer that question in the affirmative. In agreement with Mr. Lord, I would unhesitatingly answer that question in the negative. I do so for the following reasons. (1) A litigant in person in ordinary parlance is a party to litigation who represents himself by appearing in court himself. If someone other than himself represents him, then notwithstanding that that other person is his agent, that party is not a litigant in person. ... The company appears by a representative, its director, and hence it is not a litigant in person. (2) It has repeatedly and authoritatively been stated that a company cannot appear in person: see Co. Litt. 66b, Chartles P. Kinnell & Co Ltd v Harding, Wace & Co [1918] 1 KB 405, 413, per Swinfen Eady LJ; Frinton and Walton Urban District Council v Walton and District Sand and Mineral Co Ltd [1938] 1 All ER 649, per Morton J, and Tritonia Ltd v Equity and Law Life Assurance Society [1943] AC 584, 586, per Viscount Simon LC, with whom Lord Atkin, Lord Thankerton, Lord Macmillan and Lord Clauson agreed. It has also been said that a company is not in the same position as a litigant in person: Scriven v Jescott (Leeds) Ltd (1908) 53 Sol.J. 101, per Bray J. Against that background, it is, to my mind, highly improbable that without any indication that Parliament intended the term 'litigant in person' to apply to a company, the Act of 1975 applied to a company represented by a director."

8. Finally, Buxton J, who came to the same conclusion, at p. 527H said:

"... the question remains of whether the company was a litigant 'in person' for the purposes of the Act of 1975. A series of cases, very conveniently summarised in the judgment of Scott J in A.L.I. Finance Ltd v. Havelet Leasing Ltd [1992]1 WLR 455, 460, indicates that it was generally accepted before 1975 that the expression 'litigant in person' was applicable only to an individual. This, I should emphasise, is a different proposition from the rule that applies in the High Court that a company must be represented by solicitors and counsel. The proposition concerns not a rule of representation, but the meaning of the term 'in person.' Judges of high authority who assumed that that term could only apply to an individual include Morton J in Frinton and Walton Urban District Council v. Walton and District Sand and Mineral Co. Ltd. [1938]1 All ER 649, and Viscount Simon LC in Tritonia Ltd. v. Equity and Law Life Assurance Society [1943] AC 584, 586. Given that usage, it was in my view incumbent on the draftsman of the Act of 1975 to employ specific language if he sought to extend the provisions of that Act to limited companies. By adopting the expression 'in person' he did the reverse of that. And, quite apart from the language used in the Act, there is no reason to think that Parliament did intend to extend the relief granted by that Act beyond the case of individuals."

9. The foregoing reasons are compelling. They apply equally to the position before me and I adopt them. Accordingly, in my judgment, "litigant in person" does not include a company represented by a director. The application, therefore, must fail and is refused.

10. I should add that Mr Maydwell expressed his concern that such a result may deny him an opportunity of obtaining security even if he does in the future secure legal representation. However, I do not see why he should not in that event be able to apply again upon that manifestly changed basis. Moreover it may well be that in those changed circumstances, the solicitors on both sides will be able to agree the quantum of security for I apprehend that that will probably be the question that will then exercise them. Beyond saying that, I cannot speculate upon what other matters the court may at that stage have to address.

11. Before I leave this matter, I would also refer to certain observations of the Court in Jonathan Alexander. First, those of Hirst LJ at p. 523E:

"I would therefore dismiss this appeal, though I do so with great regret, since it seems to me that this case reveals a serious lacuna in the law, and results in a considerable injustice to the company, which properly incurred very substantial costs in defeating a grossly inflated counterclaim. This may be an appropriate topic for consideration by the Rule Committee, since it would seem that a quite simple amendment to the rules could bring company directors within the scope of 'other representatives' under section 51(2)."

And at p. 526C, Peter Gibson LJ said:

"... like Hirst LJ, it does seem to me to be unjust that a successful party is prevented from recovering any costs if it is a company choosing to act by its own director, whereas an individual in such circumstances can recover under the Act of 1975. I, too, hope that this can be looked at by the rule makers, particularly as it would appear from the district judge's judgment that in the county court companies regularly act and appear by lay representatives."

I strongly endorse those sentiments. In Hong Kong, companies are, I believe, no less often represented by lay directors and, not infrequently, due to inability to afford high legal costs. I would likewise urge that our Rules be amended to the effect suggested.

Representation:

Mr Malcolm Maydwell - Appellant in person

Mr Kenneth Ng (M/s Baker & McKenzie) for Respondents