Secretary of State for Business, Enterprise and Regulatory Reform v UK Bankruptcy Ltd [Court of Session Inner House Second Division]
| Jurisdiction | Scotland |
| Judgment Date | 21 September 2010 |
| Neutral Citation | [2010] CSIH 80 |
| Court | Court of Session (Inner House) |
| Docket Number | No 8 |
| Date | 21 September 2010 |
Court of Session Inner House Second Division
Lord Justice-Clerk (Gill), Lord Clarke, Lord Marnoch
Administration of justice - Right of audience - Company director - Whether company could be represented by a director who was not a suitably qualified legal practitioner
The petitioner presented a petition for the winding up of UK Bankruptcy Ltd ("the company") on the ground that the winding up was expedient in the public interest. One of the two directors and shareholders lodged answers to the petition, which bore to be signed by him for and on behalf of the company, but he produced no evidence that the company had authorised him to lodge the answers or that it had resolved to defend the petition. At a hearing on further procedure the director sought to represent the company, and following a hearing on whether he was entitled to do so the Lord Ordinary (Hodge) reported the case to the Inner House on the circumstances in which the court would allow a company to be represented by a person who was not a suitably qualified legal practitioner. The Inner House ordered intimation of the report to the Lord Advocate and the Advocate General for Scotland and appointed an amicus curiae. All counsel were of the view that in certain defined circumstances and subject to suitable safeguards it should be competent for a company to be represented by a lay representative, and that the rule preventing such representation should be modified by the court either by the use of its inherent power or by an Act of Sederunt.
Held that: (1) the proposal was that the case for the company should be conducted by the director, who was not legally qualified, his conduct of the case would include the framing and lodging of answers, representation of the company in procedural hearings and oral advocacy, and this was in essence a proposal for rights of audience which was in conflict with the legislation of 1532 which established the College of Justice (cap 51) as interpreted in Gordon v Nakeski-Cumming and with the related line of authority, specific to corporations, starting with Tritonia Ltd v Equity and Law Life Assurance Society (paras 31, 32, 50, 52); (2) it could not be said that the Act of 1532 was in desuetude (paras 33, 50, 52); (3) quite independently of the Act of 1532 the rule that a company cannot be represented in civil proceedings other than by counsel or, where competent, by a solicitor was rooted in cogent considerations (paras 38, 50, 52); (4) it was not open to the court to modify the rule, whether by use of its inherent power or by Act of Sederunt, but even if it were, the court should not do so as the proposal raised questions of social policy relating to rights of audience in the civil courts which were not for the court to decide (paras 39-44, 50, 52); and case returned to the Lord Ordinary with a direction that he should decline to accept the director as a representative of the company in these proceedings or to receive writs signed by him.
Observed Art 6 of the European Convention on Human Rights and Fundamental Freedoms did not arise since there was no evidence that the company had authorised the director to represent it and that its decision to do so arose from necessity rather than choice (paras 45, 46, 51, 52).
Kenneil v Kenneil [2006] CSOH 95 disapproved.
Anderson, PetrUNK 2008 SCLR 59 approved.
Tritonia Ltd v Equity and Law Life Assurance SocietySC 1943 SC (HL) 88 followed.
The Secretary of State for Business, Enterprise and Regulatory Reform petitioned the court for the winding up of UK Bankruptcy Ltd under sec 124A of the Insolvency Act 1986 (cap 45) on the ground that the winding up was expedient in the public interest. On 9 December 2008 the court granted first orders and appointed a provisional liquidator. On 22 December 2008 one of the two directors and shareholders of the company lodged answers to the petition which bore to be signed by him for and on behalf of the company. On 19 February 2009 at a hearing on further procedure the director sought to represent the company. On 16 March 2009 after hearing counsel for the petitioner and the director the Lord Ordinary (Hodge) found that the director had no rights of audience in the cause as director of the company. On 27 March 2009 the Lord Ordinary issued an opinion and reported the cause to the Inner House for a ruling in terms of RC 34.1 on the circumstances in which the court would allow a company to be represented by a person who was not a suitably qualified legal practitioner ([2009] CSOH 50).
On 6 May 2009 the Inner House ordered intimation to the Lord Advocate and the Advocate General for Scotland. On 26 May 2009 the court ordered notes of argument to be lodged. On 14 August 2009 the court appointed counsel to act as amicus curiae and appointed the cause to the summar roll.
Cases referred to:
Ali Finance Ltd v Havelet Leasing LtdWLRUNKUNK [1992] 1 WLR 455; [1991] 1 All ER 591; [1990] BCC 627
Anderson, PetrUNK 2008 SCLR 59
Bournemouth and Boscombe Athletic Football Club Ltd v Lloyds TSB Bank plcUNK [2004] EWCA Civ 935
Clark Advertising Ltd v Scottish Enterprise Dunbartonshire 2004 SLT (Sh Ct) 85
Clarkson v Gilbert (Rights of Audience)FLRUNKUNK [2000] CP Rep 58; [2000] FLR 839; [2000] 3 FCR 10; [2000] Fam Law 808
Cultural and Educational Development Association of Scotland v Glasgow City CouncilSCUNK [2008] CSIH 23; 2008 SC 439; 2008 SLT 670; 2008 SCLR 507
Dana Ltd v StevensonUNK 1989 SLT (Sh Ct) 43; 1989 SCLR 229
Ewing v Times Newspapers Ltd [2010] CSIH 67; 2010 GWD 31-647
Frost and Parkes v Cintec International Ltd [2005] CSOH 119
Gordon v Nakeski-CummingENR 1924 SC 939; 1924 SLT 640
Izzo v Philip Ross & Co [2002] BPIR 310; (2001) 98 (35) LSG 37; 145 SJLB 216
Kenneil v Kenneil [2006] CSOH 95; 2006 GWD 22-488
McKenzie v McKenzieELRWLRUNK [1971] P 33; [1970] 3 WLR 472; [1970] 3 All ER 1034
Mushtaq v Secretary of State for the Home DepartmentSC [2006] CSIH 19; 2006 SC 524; 2006 SLT 476
Paragon Finance plc v NoueiriUNKWLR [2001] EWCA Civ 1402; [2001] 1 WLR 2357; [2002] CP Rep 5; [2002] 1 Costs LR 12
R (on the application of POW Trust) v Chief Executive and Registrar of CompaniesUNKUNK [2002] EWHC 2783; [2004] BCC 268; [2003] 2 BCLC 295; 100 (10) LSG 27
Rush v Fife Regional Council 1984 SLT 391
Tods Murray WS v Arakin Ltd Court of Session, 31 October 2003, unreported
Tritonia Ltd v Equity and Law Life Assurance SocietySCELR 1943 SC (HL) 88; 1943 SN 22; 1944 SLT 24; [1943] AC 584
Textbooks etc. referred to:
Gill (Lord), Report of the Scottish Civil Courts Review (B60185) (Scottish Civil Courts Review, Edinburgh, 2009), vol 2, Ch 11
Maclaren, JA, Court of Session Practice (W Green, Edinburgh, 1916), p 14
Maxwell, D, The Practice of the Court of Session (Scottish Courts Administration, Edinburgh, 1980), p 14
Ministry of Justice, Practice Direction: Miscellaneous provisions relating to hearings in Civil Procedure Rules (TSO, Norwich, 1998), Pt 39.6 (Online: http://www.justice.gov.uk/civil/procrules_fin/contents/parts/part39.htm#IDAAFOVB (12 Oct 2010))
Parliament House Book (W Green, Edinburgh, 1982), vol 2, para 4.2.6
Woolf, H, Access to Justice: Final report to the Lord Chancellor on the civil justice system in England and Wales (HMSO, London, 1996), p 136
The cause called before the Second Division, comprising the Lord Justice-Clerk (Gill), Lord Clarke and Lord Marnoch, for a hearing on the summar roll.
At advising, on 21 September 2010-
Lord Justice-Clerk (Gill)-
[1] This is a petition for the winding up of UK Bankruptcy Ltd ('the company') under sec 124A of the Insolvency Act 1986 (cap 45) on the ground that the winding up is expedient in the public interest. On 9 December 2008 a provisional liquidator was appointed. On 22 December 2008 Paul Mason, one of the two directors and shareholders, lodged answers to the petition. They bear to be signed by him for and on behalf of the company.
[2] Mr Mason has produced no evidence that the board of the company has authorised him to lodge these answers, or has even resolved to defend the petition. Therefore, in my view, we should proceed on the basis that the lodging of answers by Mr Mason has not been authorised by the company. According to the petitioner, Mr Mason is opposing the petition in order to forestall disqualification proceedings against him under the Company Directors Disqualification Act 1986 (cap 46). Mr Mason has not contradicted that assertion.
[3] On 19 February 2009, at a hearing on further procedure, Mr Mason sought to represent the company in the process. On 16 March 2009 there was a hearing before Lord Hodge on the question whether he was entitled to do so. Mr Mason submitted that (1) under Art 6 of the European Convention on Human Rights and Fundamental Freedoms a company has the right to be represented in court by one of its directors, and (2) the rule that a company may be represented before this...
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