Allied Irish Banks Plc v Aqua Fresh Fish Ltd

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Mr. Justice William M. McKechnie
• Judgment Date: 02 March 2017
• Neutral Citation: [2017] IECA 77
• Date: 02 March 2017
• Docket Number: Neutral Citation Number: [2017] IECA 77 [2015 239]

Between /

ALLIED IRISH BANKS PLC.

Plaintiff/Respondent

- and -

AQUA FRESH FISH LIMITED

Defendant/Appellant

[2017] IECA 77

McKechnie J.

Ryan P.

McKechnie J.

Hogan J.

Neutral Citation Number: [2017] IECA 77

[2015 239]

THE COURT OF APPEAL

CIVIL

Banking and finance – Representation in court proceedings – Exceptional circumstances – Appellant seeking to challenge the rule expressed in Battle v Irish Art Promotion Centre Ltd [1968] IR 252 that a company can only be represented in court proceedings by a solicitor or duly instructed counsel – Whether the rule in Battle applied to the presenting circumstances in the case

Facts: The plaintiff/respondent, Allied Irish Banks Plc, advanced certain monies to the defendant/appellant, Aqua Fresh Fish Ltd, which as security therefor created a first legal mortgage dated the 17th February, 2010, in favour of the Bank over certain lands set forth and described in Folio 30443F County Louth. It was alleged that the company defaulted in its contractual obligation to repay the loan in the manner agreed, thereby giving rise to an entitlement on the Bank’s part to enforce the security so given. As part of that process it instituted proceedings in which it sought, inter alia, an Order for Possession and, if necessary, an Order for the Sale of such lands. After the service of these proceedings, Mr Flynn, who was the Managing Director, Chairman and Secretary of the defendant company, and also its principal shareholder, made an application seeking permission for him to both enter an appearance to the originating summons and to represent and defend the company in the proceedings. He was unsuccessful in the High Court, but on an appeal the Supreme Court granted him the first relief but remitted the issue of representation to the High Court. On the 19th February, 2014, Mr Flynn entered a conditional appearance. On a subsequent application moved on notice, Mr Flynn sought approval to act as an advocate on behalf of the company. The High Court refused to permit him to so do. Mr Flynn appealed to the Court of Appeal from that order. Mr Flynn submitted, first, that the company did not have sufficient assets to engage legal representation, second, that it had a good defence to the claim as made, and third, that his application raised multiple issues of far-reaching importance. In short, Mr Flynn wished to represent the company. He sought to challenge the rule expressed in Battle v Irish Art Promotion Centre Ltd [1968] IR 252, which was that a company can only be represented in court proceedings by a solicitor or duly instructed counsel; no officer of the company can do so. Mr Flynn argued that this rule has not survived – or at least requires substantive revision by reason of – various developments since 1968, including, inter alia, Ireland’s becoming a member of the EEC, the enactment of the European Convention on Human Rights Act 2003, the passing of the Lisbon Treaty and the coming into force of the Charter of Fundamental Rights of the European Union. A further strand to this argument was that the rule interferes with his constitutional and Convention rights to fair procedures and access to the courts. In addition, he claimed that even if Battle continues to apply, subsequent case law has modified its strict rigidity and has carved out an exception which can be invoked in rare and exceptional circumstances, an example of which, he said, were the circumstances of the instant case.

Held by McKechnie J that, first, the rule in Battle still survives and that it applied to the presenting circumstances in the case, and second, there were no exceptional circumstances which would justify any departure from the rule.

McKechnie J held that he would dismiss the appeal.

Appeal dismissed.

JUDGMENT of Mr. Justice William M. McKechnie delivered on the 8th day of February, 2017

Introduction

1 Arising out of their relationship as banker and customer, the plaintiff advanced certain monies to the defendant company, which as security therefor created a first legal mortgage dated the 17th February, 2010, in favour of the Bank over certain lands set forth and described in Folio 30443F County Louth. It is alleged that the company has defaulted in its contractual obligation to repay the loan in the manner agreed, thereby giving rise to an entitlement on the Bank's part to enforce the security so given. As part of that process it has instituted the within proceedings in which it seeks, inter alia, an Order for Possession and, if necessary, an Order for the Sale of such lands.

2 After the service of these proceedings, Mr. Adrian Flynn, who is the Managing Director, Chairman and Secretary of the defendant company, and also its principal shareholder, made an application seeking permission for him to both enter an appearance to the originating summons and to represent and defend the company in these proceedings. He was unsuccessful in the High Court, but on an appeal, in respect of which very little is known, the Supreme Court granted him the first relief but remitted the issue of representation to the High Court. On the 19th February, 2014, Mr. Flynn entered what he described as a ‘conditional appearance’. Nothing turns on the conditionality of such entry.

3 On a subsequent application moved on notice, Mr. Flynn sought approval to act as an advocate on behalf of the company: the High Court, in applying well-established jurisprudence, refused to permit him to so do. It is his appeal from that Order which is addressed in this judgment.

4 Mr. Flynn, in a detailed and extensive submission which runs to over 100 pages of script involving a mixture of evidence and legal argument, says, first, that the company does not have sufficient assets to engage legal representation; second, that it has a good defence to the claim as made; and, third, that his application raises multiple issues of far-reaching importance. In short, however, Mr. Flynn, who is a non-lawyer, wishes to represent the company. Faced with authority which prohibits such a step, he seeks to challenge the rule expressed in Battle v. Irish Art Promotion Centre Ltd [1968] I.R. 252 (‘Battle’), which is that a company can only be represented in court proceedings by a solicitor or duly instructed counsel. No officer of the company can do so.

5 Mr. Flynn argues that this rule has not survived – or at least requires substantive revision by reason of – various developments since 1968, including, inter alia, Ireland's becoming a member of the EEC, the enactment of the European Convention on Human Rights Act 2003 (‘the 2003 Act’), the passing of the Lisbon Treaty and the coming into force of the Charter of Fundamental Rights of the European Union (‘the Charter). A further strand to this argument is that the rule interferes with his constitutional and Convention rights to fair procedures and access to the courts (see paras. 49-51, infra). In addition, he claims that even if Battle continues to apply, subsequent case law has modified its strict rigidity and has carved out an exception which can be invoked in ‘rare and exceptional circumstances’, an example of which, he says, are the circumstances of the instant case (see para. 52 et seq., infra).

The Rule in Battle:

6 Mr. Mordechai Romas was the Managing Director and beneficial owner of virtually all of the issued share capital in the defendant company, which was being sued for commission allegedly earned by the plaintiffs in the sale of its products. Mr. Romas asserted in his grounding affidavit that the company had a good defence to the claim but that it did not have sufficient assets to engage either solicitor or counsel to act on its behalf. He further said that if decreed by default, the same would reflect badly on his business reputation. Accordingly, he applied to the High Court for permission to represent the company in the proceedings. Having been unsuccessful in this regard, he appealed that decision to this Court.

7 In his judgment, with which Haugh J. and Walsh J. agreed, O Dálaigh C.J. referred to a number of UK authorities in which courts at various levels had refused similar applications. One such was Tritonia Ltd v. Equity & Law Life Assurance Ltd [1943] A.C. 584, where Viscount Simon L.C. said the following at p. 586:-

‘In the case of a corporation, in as much as the artificial entity cannot attend and argue personally, the right of audience is necessarily limited to counsel instructed on the corporation's behalf.’

Even though Tritonia was the most informative of the cases cited, it seems clear that that there had been little debate, as such, about the basis or foundation for the rule or about what its parameters might be, and certainly there was no discussion about possible exceptions to it.

8 Be that as it may, O Dalaigh C.J. at p. 254 of the report said:-

‘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...