The recent Supreme Court case of Allied Irish Bank plc v Aqua Fresh Fish Limited [2018] IESC 49 raised various difficult issues concerning the entitlement of a company to be represented in proceedings before the courts in Ireland by a person who is not a lawyer and who has no formal right of audience before the courts. This includes by a company’s non-lawyer directors or shareholders. Although there has previously been a lack of clarity in the law on this fundamental topic of right of access to the courts, the judgment of Ms Justice Finlay Geoghegan now appears to have settled the matter. The Supreme Court held that, in the absence of exceptional circumstances or otherwise provided by statute, companies must be represented only by lawyers who have a formal right of audience in court proceedings and not by non-lawyer directors or shareholders.
The rule in ‘Battle’
Ms Justice Finlay Geoghegan stated that this case questioned the continued application of the decision of the Supreme Court in Battle v Irish Art Promotion Centre Limited [1969] IR 252. In ‘Battle’, it was held that a limited company cannot be represented in court proceedings by its managing director or any other officer or servant. This rule in Battle was anchored in the legal personality of a company as a separate and distinct entity from its members. The judgment in that case stated “…as the law stands…he [Mr Romas] cannot as major shareholder and managing director now substitute his persona for that of the company.”
Since the decision in Battle however, judges have occasionally heard from non-lawyers appearing on behalf of companies ‘as a matter of courtesy’ or ‘in the interests of justice’.
The Supreme Court decision
The facts of the Allied Irish Bank plc v Aqua Fresh Fish Limited case were that Mr Adrian Flynn, the managing director and principal shareholder of Aqua Fresh Fish Limited, sought to represent the company when AIB brought proceedings seeking to enforce security it held over certain lands owned by the company. In 2013, the Supreme Court permitted Mr Flynn, who holds no professional legal qualification, to file a formal court document called an “Appearance” on behalf of the company, but deferred to the High Court the question of his further representation of the company in the remainder of the proceedings. Both the High Court and Court of Appeal refused permission for Mr Flynn to further represent the company in the proceedings and the matter was ultimately appealed back to the Supreme Court in July 2017.
The Supreme Court noted that it was significant that a right of a company to be represented by non-lawyer lay persons in court proceedings does not exist in the Companies Act 2014 except in certain indictment proceedings. Moreover, the Supreme Court noted that across much of the common law world, “the rule or principle set out in Battle remains the default position.” The Supreme Court stated that the potential costs of litigation and retaining qualified lawyers may in effect be viewed as a practical restriction on the right of access to the courts guaranteed by the Irish Constitution. However, the Supreme Court held that notwithstanding this, provided there is an inherent ability for the courts to allow for exceptions to the general rule in Battle, this practical restriction on the right of access to the courts is not prohibited.
With regard to what might constitute these exceptions, Ms Justice Finlay Geoghegan stated that it was neither desirable nor practical for the Court to define this. The Supreme Court did however hold that a company’s lack of available funds to procure legal representation is not in any sense exceptional or even usual and that it is rather a “circumstance which in commercial life often occurs.” The Supreme Court also ruled that the fact that Mr Flynn was both the principal shareholder and director of Aqua Fresh Fish Limited, and that the nature of the business conducted by the company was arguably unique, could not be deemed ‘exceptional’ circumstances.
Conclusion
The rule in ‘Battle’ continues to apply in Ireland and companies cannot be represented by non-lawyer directors or shareholders in court proceedings, except in exceptional circumstances. Although the Supreme Court offered very limited guidance on what might constitute exceptional circumstances, it is clear that the ‘exceptional’ test will be a high threshold for companies to meet and will not include a company not being able to afford lawyers. Therefore, all companies involved in litigation in Ireland should seek appropriate legal representation. A defendant to court proceedings brought by a company not represented by a lawyer can also apply to court to have the proceedings frozen until a qualified lawyer is retained.
For more information on this judgment and how it may affect your business, contact a member of our Dispute Resolution team.
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