Date: 20020430
Docket: T-433-02
Neutral citation: 2002 FCT 504
BETWEEN:
ARTEMIS HOLDINGS LTD.
Applicant
and
CANADA CUSTOMS AND REVENUE AGENCY
Respondent
REASONS FOR ORDER
HARGRAVE P.
[1] These reasons arise out of the Applicant's motion to allow the sole officer and shareholder of this one-person company, Mr. Dal A.S. Brickenden, to represent his company in this litigation, which involves a review of a denial of a fairness request by the Defendant. These reasons are also reasons in a parallel motion in File T-434-02, a companion action with the same style of cause.
[2] It is appropriate that Mr. Brickenden, president of the Applicant, act as the Applicant's representative in this litigation. I will now consider this in more detail.
ANALYSIS
[3] Pursuant to Rule 120 a company must be represented by a solicitor unless the Court is persuaded that there are special circumstances which allow an officer to represent the company in litigation.
[4] The list of relevant factors to consider when a lay person applies to represent a company is probably open ended. Here counsel for the Respondent who relies upon WIC Premium Television Ltd. v. Levin, an unreported 19 September 2001 decision of Madam Justice Heneghan in action T-686-99, who in turn relied upon a decision of Mr. Justice Muldoon's, Kobetek Systems Ltd. v. The Queen [1998] 1 C.T.C. 308, submits that the relevant factors are:
1. Can the corporation afford a lawyer?
2. Will the proposed representative appear both as advocate and witness?
3. Are the issues complex?
4. Can the matter proceed expeditiously? (paragraph 11 of WIC Premium Television)
This is an appropriate set of criteria in the present instance.
[5] I accept that the company cannot afford a lawyer. Moreover, I also accept, from Mr. Brickenden's affidavit, that he is the sole shareholder and president of Artemis Holdings Ltd. and that, with an income averaging $17,281.00 per year, 1990 through 2000, he cannot, as sole shareholder, manager and director, afford to hire a lawyer for the company.
[6] From the material I do not see that Mr. Brickenden can avoid acting both as advocate and witness, for he states that he is the sole manager, director and owner of all of the shares in the Plaintiff and that there are no employees. I will return to this dual role, for it is the critical aspect of this motion.
[7] In testing whether the issues are complex I may look at both the affidavit material and at the record. The former does not address the issue of the complexity of the proceeding. However, the record does deal with complexity by inference, with the Applicant referring to extensive documentary evidence. Here I note that there is no indication whether this material is appropriately before the Court, for this is an application for judicial review, to be decided upon the documents which were before the original tribunal. With a reasonable effort to understand the applicable Federal Court Rules and some research into the nature of judicial review, I believe that Mr. Brickenden, who has produced an understandable although slightly wordy application, ought to be able to deal with the issues.
[8] As to this matter proceeding expeditiously, I agree with counsel for the Respondent that the material presented on this motion is coherent. It is reasonably presented. I would not go so far as does counsel for the Respondent to say either that the thrust of the application is the correctness of the original decision or that there is an indication that the Applicant may not appreciate the nature of judicial review. However, Mr. Brickenden will have to put serious effort into fully understanding not only the time lines set out in the Rules, but also the relevant procedure and the nature of judicial review. I now return to the central issue of whether acting as a witness bars Mr. Brickenden from representing his company.
The Lay Corporate Representative as Witness
[9] In Kobetek Systems Ltd. (supra) Mr. Justice Muldoon considered Rule 300(2), which allowed lay representation, by an officer of a corporation, in special circumstances. Present Rule 120 is similar. The special circumstances test, as considered by Mr. Justice Muldoon, does leave it open, in some instances, for a corporate officer, who is not a lawyer, to represent a company. Counsel for the Respondent points out that Mr. Brickenden appears to be the only person with any knowledge of the facts and thus would be the only witness that the Applicant would be able to offer. Counsel does not press home this point with any case law to the effect that an intended lay representative who would also be a witness, being the only individual with any knowledge, would be barred from representing a company.
[10] An analogy is sometimes drawn between lawyers acting as witnesses and lay representatives acting as witnesses. A good starting point is a passage from Sopinka on the Law of Evidence in Canada, 2nd edition, 1999 at page 690:
§ 13.42 Lawyers stand on a somewhat different footing. They are competent in law to appear as witnesses in an action in which they act as counsel. Nevertheless, courts have been reluctant to allow a lawyer who has sworn an affidavit to appear as counsel in that matter. It would place the court in the untenable position of having to assess the credibility of a counsel who has given evidence. Accordingly, the practice has developed of forbidding a lawyer to appear as both counsel and witness in a motion or an action.
This bar to lawyers appearing as both counsel and witness leads to several observations. First, an individual running an unincorporated business as a sole proprietor may act as his or her own advocate, pursuant to Rule 119 and presumably give evidence. Second, were that same individual to incorporate the business, but change nothing else and were one to apply an absolute bar to a lay representative, who is an officer of the company, acting as witness, such could amount to a denial of a day in court where neither the individual, nor his company, nor any shareholder, has funds for counsel. Third, there is a question of just how absolute the bar ought to be in the case of a lay representative, who must also be a witness, because the incorporated defendant is a one-person operation.
[11] One of the most absolute cases, of which I am aware, in this Court, dealing with the role of lawyer as witness, is Shipdock Amsterdam B.V. v. Cast Group Inc. (2001) 179 F.T.R. 282. There Mr. Justice O'Keefe dealt with an affidavit sworn by counsel. He referred to the danger of that practice, for it could result in cross-examination on the affidavit and thus the disclosure of privileged matters:
[11] There is always a danger in a solicitor deposing to an affidavit and then using the affidavit on a motion which the solicitor argues or members of his firm argue. The solicitor could be cross examined, privilege issues may arise on cross-examination and the Court would have to comment and weigh the allegations made by the solicitor in the affidavit. As well the solicitor's law firm could not continue to appear for the defendant in the motion in which the affidavit was used (see International Business Machines. Corp. et al. v. Printech Ribbons Inc. et al. [1994] 1 FC 692; 69 F.T.R. 197 (T.D.)). (page 285)
Mr. Justice O'Keefe went on to refer to Director of Investigation & Research v. Irving Equipment (1986) 16 CPR (3d) 26, a decision in which Mr. Justice Muldoon sets out, at length, the reasons why affidavits sworn by solicitors who are counsel for a party ought to be rejected. First, it is the right of anyone to make it clear whether he or she speaks as a witness or as a professional advisor; second, the conflict of interest in which a person, as counsel or solicitor, is both an officer of the Court and a witness, leading to the difficulty for the person as witness in dealing objectively with the weight or credibility of testimony and the quandary of opposing counsel who ought not to be required to cross-examined a colleague; and third, the conflict between giving full evidence, but avoiding disclosure of what otherwise would be covered by solicitor and client privilege. Yet all of this involves lawyers not only acting as solicitors and counsel for parties, but also participating as witnesses.
[12] Mr. Justice Muldoon, in Kobetek Systems Ltd. (supra), dealt with an application by an officer of a corporation to represent the corporation. He commented upon the assertion by that officer that he should be able to do what was necessary as advocate by saying "Already the roles of witness and advocate have been difficult to distinguish! However, this is the sole ground advanced." (page 310). Mr. Justice Muldoon observed that the mere fact that the officer considered himself capable of representing the plaintiff corporation was not a special circumstance within Rule 300(2), the predecessor to the present Rule 120. Of importance is that Kobetek Systems Ltd. stops short of making the roles of witness and lay advocate, when combined, an absolute bar to an officer representing his company. That this is not an absolute bar, even in the case of lawyers, was certainly recognized by Mr. Justice O'Keefe, in Shipdock Amsterdam (supra) at page 286:
[15] I must point out that in certain cases, counsel for the party may depose to facts in an affidavit and appear and use that affidavit on a motion. For example if the solicitor is the only person who can depose to these facts then it would be acceptable for counsel to depose to the facts and then appear and use the affidavit on a motion. There are I am sure other examples.
If it is not an absolute bar, in all instances, that counsel may not rely upon his or her own affidavit, it ought not to be an absolute bar in the case of a lay person acting as both witness and advocate for an incorporated sole proprietorship.
[13] The final case to which I will refer is S.A.R. Group Relocation Inc. v. Canada, an unreported 13 March 2002 decision of Mr. Justice of Appeal Strayer, dealing with a motion in writing in action A-14-02. In S.A.R. Group the president, herself a plaintiff, sought to represent her two corporations. Mr. Justice of Appeal Strayer dealt with ability to pay, authorization and the representative of the companies as a witness:
2 For the Court to make such an order in these circumstances it must be satisfied that the corporations are truly unable to pay for a lawyer and that the person sought to be allowed to represent them has indeed been authorized by the corporations to represent them. (Source Services Corp. v. Source Personal Inc. (1995), 105 F.T.R. 42; Re NsC Diesel Power Inc. (Bankrupt) (1995), 96 F.T.R. 161). There is no clear evidence here on either point. Further, it is relevant to consider whether the proposed representative would also be a witness, as counsel cannot appear in cases where they are witnesses. (See Kobetek Systems Ltd. v. R., [1998] F.C.J. No. 16, [1998] 1 C.T.C. 308). In the present application for judicial review Susan A. Ryan has filed a purported affidavit (not yet sworn) which indicates she expects to be the principal witness as well as acting in role of counsel. This is another circumstance which militates against the Court making an order under Rule 120.
Relevant in this paragraph is that Mr. Justice of Appeal Strayer appears to differentiate between lawyers acting for corporations and persons representing corporations. He notes that it is relevant to consider whether the representative might be a witness, "as counsel cannot appear in cases where they are witnesses.". The authority for this statement is Kobetek Systems Ltd.: Kobetek clearly does not go so far as to bar a lay person from the two roles. I believe this is something Mr. Justice of Appeal Strayer recognizes when, referring to the role of representative and witness, he says "this is another circumstance which militates against the Court making an order under Rule 120.", for militate, used as a verb in this sense, is not an absolute. To militate against something is to contend against, certainly forcefully, but not absolutely. This is borne out by the Oxford English Dictionary definition of militate "Of evidence, facts, circumstances: To have force, ‘tell' against . . . some conclusion or result." This idea of having force against some conclusion is picked up by Garner in the Oxford Dictionary of Modern Legal Usage, 2nd edition, at page 569, where he discusses the legal uses of both "mitigate" and "militate", the latter meaning "to exert a strong influence.", again far less than an absolute.
CONCLUSION
[14] To summarize, in S.A.R. Group Relocation Inc. first, Mr. Justice of Appeal Strayer differentiates between the roles of lawyer and witness, on the one hand, and representative and witness on the other hand, but more important he then goes on to weigh the result of the latter role as merely militating or making a strong argument or influence against allowing a lay representative, an officer of a corporation, to act as a representative when that person might be a witness. This idea of the dual role being less than an absolute bar is consistent with Rule 160 by which the Court, in special circumstances, may grant an officer of a company the privilege of representing that company as an advocate. To take a narrower view would render the Rule 120 exception meaningless in many circumstances and certainly meaningless in the case of an incorporated sole proprietorship.
[15] As I pointed out in Sharpe's Tropical Shell Co. v. The Queen (1996) 100 F.T.R. 59, at page 61, "Where there is a director who seems reasonably capable of representing a company, an impecunious company ought not to be denied its day in court.". To deny Artemis Holdings Ltd. the representation of its sole officer, as its advocate, would be to deny the company its day in court. This is an instance in which the special circumstances provision in Rule 120 comes into play. To determine otherwise would be neither an equitable nor a desirable outcome. The president of Artemis Holdings Ltd., Dal A.S. Brickenden, may represent his firm in this litigation.
(Sgd.) "John A. Hargrave"
Prothonotary
Vancouver, British Columbia
30 April 2002
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-433-02
STYLE OF CAUSE: Artemis Holdings Ltd. v.
Canada Customs and Revenue Agency
MOTION DEALT WITH IN WRITING
REASONS FOR ORDER: HARGRAVE P.
DATED: April 30, 2002
SOLICITORS OF RECORD:
Mr. Dal A.S. Brickenden FOR APPLICANT
President, Artemis Holdings Ltd.
Mr. Morris Rosenberg FOR RESPONDENT
Deputy Attorney General of Canada
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