Flightdeck Geelong Pty Ltd & All Options Pty Ltd 2020 FCAFC 138

The case of Flightdeck Geelong Pty Ltd & All Options Pty Ltd [2020] FCAFC 138 is an interesting case for family lawyers.

The Second Appellant is Darren Mathews.

The appeal was unsuccessful.

This case raises and discusses the degree of assistance a self-represented litigant can reasonably expect from a court.

The Reasons for Judgement begin with this sentence:

The central issue in this appeal was said to be the scope of a judge’s duty to assist an unrepresented litigant in the conduct of a trial.”

The Appeal Court then went on and said:

The learned primary judge fulfilled every aspect of the obligation to accord an appropriate level of assistance to the litigant-in-person before him through the provision of advice and assistance where needed, as well as the modification of the usual trial procedure to ameliorate errors which had arisen through the litigant’s lack of understanding of the court processes. In so doing his Honour deftly navigated that fine line between affording the litigant-in-person the required degree of assistance and maintaining impartiality in the conduct of the proceedings.” 

As a practitioner, I am aware that represented litigants express concern that the unrepresented litigant is taking an advantage or obtaining an advantage by choosing to be unrepresented.

The Appeal Court went on and said:

It must be kept in mind that the issues raised on appeal arise in the context of the respondent advancing a very strong case before the trial judge of misleading and deceptive conduct inducing the purchase of a business at well above its true value. The primary judge found that the representations made to the respondent to induce it to acquire the business were false and, in some cases, intentionally so.”

This point was raised because the court said:

“…it does contextualise the issues now raised and brings into focus the question of whether any further assistance from the trial judge could have possibly altered the outcome.”

Mr Mathews, the Second Appellant owned Flightdeck Geelong Pty Ltd. He sold it to All Options Pty Ltd.

The court said:

During the course of negotiations, Mr Mathews made numerous representations about the establishment costs of the business, its past revenue and profit, and its future profitability. Mr Nicholls [the Purchaser] updated his financial model several times on the basis of those representations. Mr Nicholls relied on the representations which had been made to him and caused All Options to purchase the business.“

The case was based on the representations having been misleading, and a contravention of section 18 of the Australian Consumer Law.  Substantive damage claimed was the difference between the cost of the acquisition of the business less it’s true value. In addition, the trading losses, while owned by All Options, were claimed.

Mr Mathews wanted to appeal both for himself and Flightdeck.  To represent Flightdeck, Mr Mathews had to seek leave to do so because of Rule 4.01(2) of the Federal Court Rules 2011 (Cth).  At no time did Mr Mathews seek leave to represent Flightdeck.

Importantly, His Honour was of the opinion that Flightdeck could only rely on evidence which it advanced in order to assert that it had a reasonable belief for the making of a future representation and that it could not rely upon evidence adduced by Mr Mathews“.

Mr Mathews was refused leave to represent Flightdeck.

The Trial Judge also refused an application for an adjournment.

No appeals were made in respect to the Trial Judge’s refusal to grant numerous applications for adjournment nor for the refusal for leave to represent Flightdeck.

The Primary Judge “found that these representations were made for the purpose of inducing the sale of the business. He also found that as Flightdeck had not adduced evidence to establish there was a reasonable basis for making them, as against it they must be considered to be misleading and deceptive”.

In addition, Mr Mathews had made oral representations as to future matters. These again were found to have been made by Flightdeck and to have been misleading or deceptive.

Mr Mathews and All Options, the eventual purchaser, relied on different financial information.

The Trial Judge determined the representations could not be supported and were false regardless of which information was relied upon.

The misleading representations as to past matters were found to be made by Mr Mathews personally and in his position as director of Flightdeck such that they were also made by that company”.

The appeal was based on five grounds:

  1. That a self-represented litigant had been denied procedural fairness;
  2. Flightdeck as Respondent had been denied procedural fairness;
  3. The application of a particular authority had been made in error;
  4. The reliance upon a particular expert report was made in error; and
  5. The Trial Judge ought to have found that the Respondent had failed to prove that they had suffered loss or damage or alternatively, the quantum thereof.

This case note is most interested in the court’s duty to the litigant in person and denial of procedural fairness aspects of the Judgement.

The court found that “The submissions advanced on appeal revealed the existing lack of clarity as to the obligations of a court to a litigant-in-person”.

The court found the observations of Mason J (as his Honour then was) in MacPherson v R [1981] 147 CLR 512 at 534 that the general duty to ensure that litigants do not suffer any disadvantage from exercising their right to be self-represented, includes the obligation to ensure that they do not remain in ignorance of a fundamental principle which, if invoked, may prove advantageous to them, do offer assistance at a more granular level.”

Mason J referred to some disadvantages, being a lack of knowledge of the law and process of court and a lack of objectivity.

Neil v Nott [1994] HCA 23 “[a] frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy”.

The court said as follows:

“However, whilst disadvantages exist and the Court is obliged to act to ameliorate them by giving assistance to the unrepresented litigant, its role is constrained by its concurrent duty to remain an impartial adjudicator.“

A fine balance was referred to, and the cases of Hamod  v New South Wales [2011] NSWCA 375; Minogue v Human Rights and Equal Opportunities Commission [1999] FCA 85(1999) 84 FCR 438, 446 [29]; SZRUR v Minister for Immigration and Border Protection [2013] FCAFC 146(2013) 216 FCR 445, 452-453 [37] per Justice Robertson (with whom Allsop CJ and Mortimer J agreed).

A statement by Rajski v Scitec Corporation Pty Ltd (unreported, Court of Appeal, NSW, 16 June 1986) 27, and cited with approval by the High Court in Nobarani v Mariconte [2018] HCA 36(2018) 265 CLR 236, 250 [47]:

“The absence of legal representation on one side ought not to induce a court to deprive the other side of one jot of its lawful entitlement … An unrepresented party is as much subject to the rules as any other litigant. The court must be patient in explaining them and may be lenient in the standard of compliance which it exacts. But it must see that the rules are obeyed, subject to any proper exceptions. To do otherwise, or to regard a litigant in person as enjoying a privileged status, would be quite unfair to the represented opponent.”

The Judgement then usefully sets out in paragraph 55 three sub-paragraphs, saying:

“55.   In practical terms, the Court may find it appropriate to provide the following kinds of assistance to a litigant-in-person:

  • Ensuring the litigant has sufficient information about the practice and procedure of the Court to make effective choices in the conduct of the matter: Hamod [311]. For example, failing to explain the difference between formal sworn testimony and statements made from the bar table, and the significance of failing to file an affidavit, to enable a litigant-in-person to choose whether or not to give oral evidence, may amount to a denial of procedural fairness: SZRUR [39]. Additionally, failing to explain the risks in not leading evidence where adverse inferences might be drawn may also constitute a denial of procedural fairness: Downes v Maxwell Richard Rhys & Co Pty Ltd (in liq) [2014] VSCA 193(2014) 46 VR 283.
  • Ensuring the litigant is informed of procedures which, if invoked, may prove to be advantageous: MacPherson, 534. For example, failing to inform a litigant-in-person of their ability to apply for an adjournment may amount to a denial of procedural fairness: AMF15, 50 [47].
  • Ensuring the litigant has not, because of a lack of legal skill, failed to claim rights or put forward arguments: Rajski.”

The court set out at paragraph 56 that “the duty of the Court does not extend to providing judicial advice, counselling a litigant on how to exercise their rights, or conducting the case on their behalf.”

Further, the court said, “Nor does the duty of the Court require it to view a litigant-in-person’s case with a favourable eye”.

The following quote from the Northern Territory v Sangare [2019] HCA 25(2019) 265 CLR 164, states the principle perhaps:

“unmeritorious litigation is no less unmeritorious because it is pursued by a person who is … a litigant-in-person”.

The Appeal Court then considered the denial of procedural fairness argument.  They made quite clear that it must work a practical injustice “on the appellant in order for the Court to exercise its discretion to grant relief”.

The rest of the Judgement is an analysis of Mr Mathews, the vendor of the business. He is the person accused of engaging in the misleading conduct.

The Judgement considered the complaints he’d made.

It’s an interesting case, but the writer’s interest is in considering the principles offered in relation to the unrepresented litigant.