Supreme Court: Managing director does not have right to represent company in Court



Supreme Court
Supreme Court

The managing director and principal shareholder of a fishing company has been unsuccessful in challenging the rule that, in the absence of exceptional circumstances or otherwise provided by statute, companies must be represented by lawyers with a right of audience in court proceedings.

Dismissing the appeal, Ms Justice Mary Finlay Geoghegan was satisfied that the continued application of the “rule” in Battle v Irish Art Promotion Centre Limited [1969] IR 252, when complemented by the inherent jurisdiction and discretion of the Court to permit departure from the rule in exceptional cases, was consistent with the Constitution.

Background

Allied Irish Bank plc advanced monies to Aqua Fresh Fish Limited which created a mortgage over certain lands now claimed to be security for the loan. AIB contended that Aqua Fresh Fish defaulted on its obligation to repay the loan, and consequently sought, inter alia, an order for possession and an order for sale of the lands.

Mr Adrian Flynn, the managing director and principal shareholder of Aqua Fresh Fish, applied ex parte for permission to enter an appearance to the summons and represent Aqua Fresh Fish in the proceedings. In the High Court in May 2013, this application was refused as Mr Flynn does not have a professional legal qualification.

In November 2013, on appeal to the Supreme Court, an order was made permitting Mr Flynn to enter an appearance on behalf of Aqua Fresh Fish, the question of further representation of Aqua Fresh Fish in the proceedings was remitted to the High Court, and it was directed that any such further application be served on AIB.

Mr Flynn brought a motion on notice to AIB, and following a full hearing, in March 2015 the High Court refused permission to represent Aqua Fresh Fish.

In the Court of Appeal in March 2017, the appeal was unanimously dismissed, with Mr Justice Liam McKechnie concluding: “…I am satisfied, first, that the rule in [Battle v Irish Art Promotion Centre Limited [1969] IR 252] 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”.

Battle and Coffey

In the Supreme Court, Ms Justice Finlay Geoghegan said that the appeal raised the continued application of the decision of the Supreme Court in Battle v Irish Art Promotion Centre Limited [1969] IR 252 when considered together with the later decision of the Supreme Court in Coffey v The Environmental Protection Agency [2014] 2 IR 125.

In Battle, Chief Justice Cearbhall O’Dálaigh stated that, in the absence of statutory exception, a limited company cannot be represented in proceedings by its managing director or other officer or servant; that in discarding their own personae for the persona of the company, the subscribers did so for the advantages of incorporation; that they thereby lose the right of audience they would have as individuals. As such, the “rule” is that companies only have the right to representation before the courts by a lawyer entitled to a right of audience.

Although judges have heard individuals appearing on behalf of companies ‘as a matter of courtesy’ or ‘in the interests of justice’, Ms Justice Finlay Geoghegan explained that the “rule” that the legal personality of a company is a separate and distinct entity from its members, etc., was not reconsidered by the Supreme Court until Coffey. In Coffey, the Supreme Court said that Battle did not preclude the exercise of the inherent jurisdiction Superior Courts to permit exceptions to the application of the rule.

The Supreme Court

AIB did not contend that Battle should continue to be applied in absolute terms, but emphasised that the Court’s discretion to permit representation by a natural person should be exercised in exceptional circumstances.

While Aqua Fresh Fish and Mr Flynn submitted that they met the test of exceptional circumstances in any event, they contended for a broader approach – submitting that the rule in Battle conflicts with Article 40.3 of the Constitution in that the State’s obligation to protect the rights of citizens included “the property rights of the Company and its shareholders and their right of access to the courts”. Reliance was also placed on Article 6 ECHR (right to a fair trial).

Emphasising that the “rule” exists in the interests of the administration of justice and serves the public interest, Ms Justice Finlay Geoghegan said it was regrettable that the potential costs of litigation may be seen as a practical restriction to the exercise of a right of access to the courts. However, provided the inherent jurisdiction to make exceptions to the rule, such a restriction was not prohibited by the Constitution.

It was also significant that in the Companies Act 2014, the Oireachtas did not legislate for a right of a company to be represented by lay persons in court proceedings (other than already provided in relation to proceedings on indictment).

Considering “exceptional circumstances”, Ms Justice Finlay Geoghegan was satisfied that the impecuniosity of a company or lack of available funds for legal representation was not exceptional. It was also not exceptional that the nature of the business could be described as unique, or that Mr Flynn is the principal shareholder and director.

In the absence of exceptional circumstances to permit Mr Flynn to represent Aqua Fresh Fish, Ms Justice Finlay Geoghegan dismissed the appeal.

  • by Seosamh Gráinséir for Irish Legal News

© Irish Legal News Ltd 2019



Other judgments by Ms Justice Mary Finlay Geoghegan