The major issue in this case is when, if ever, a corporation can be represented in a legal proceeding by anyone that is not a lawyer. Trifidus and Samgo, two corporations, became embroiled in a dispute over the use of Trifidus's property. Under Rule 17.01 of the Rules of Court, a corporation must be represented by a solicitor in a legal proceeding. However, under Rule 1.03, all rules must be interpreted with an eye to justice, expense and speed. Under Rule 2.01, the Court may dispense with compliance with any rule unless the rule implies or provides otherwise.
Justice Quigg noted that traditionally, a corporation must be represented by a solicitor as it is for most purposes treated as a natural person, but is unable to represent itself. Ruling otherwise would give natural persons a right they do not possess - the right to be represented by someone who is not a lawyer. However, under the equitable auspices of Rule 1.03, Quigg J.A. held that Rule 17.01 can be dispensed with in certain situations, and set out the following factors weighing in favour of dispensing with the rule: whether the individual seeking the waiver is a sole shareholder and sole director of the company, whether it is a closely held corporation such as a family business, whether the corporation lacks the financial resources to pursue or defend the action, whether there is merit to the action or defence, whether the matter being considered is a narrow issue of law, whether the proposed representative is capable of pursuing or defending the action having regard to the complexity of the matter, whether the corporation is ready and willing to pay costs if ordered, and whether the other party would be exposed to greater costs if represented by a solicitor. Quigg J.A. stated that the threshold to meet this test must be high, and discretion to dispense with the Rule should not be exercised where there would be injustice suffered by other parties. In this case, the test was not satisfied.
Bell J.A. concurred in the decision but disagreed over whether a trial judge has discretion to dispense with Rule 17.01, preferring to leave the issue to be determined by the Legislature or Lieutenant-Governor in Council. He argued that, should a trial judge have discretion over whether a corporation is represented by a lawyer, there would be no reason that the discretion wouldn’t also apply to disabled persons and in acting as a representative of another party.
July 7, 2011
Link to Decision
Mike Kholodenko, Mary Phan & Kai Sheffield
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