Eady: Contract not a sham
A High Court judge has allowed a company to be represented by a man it employed during an adjournment of a hearing so as to ensure compliance with the CPR.
Mrs Justice Eady decided that this was not an attempt to “circumvent the restrictions on appearances before the court and the conduct of legal proceedings”.
In a case from January only just published [1], she said Ian Andrews had appeared for Justice Investments at a number of hearings over the past three years of the proceedings without objection from either the defendants or Master Dagnall, who has been case managing them.
But she raised the issue at the start of the hearing, noting that CPR 39.6 provides that a company may be represented at trial by an employee if the employee has been authorised to do so and the court gives permission.
Though Mr Andrews was said to be the claimant’s assistant company secretary, it turned out he was not an employee.
During an adjournment for the parties to consider the position, the claimant’s sole director and shareholder entered into a contract of employment with Mr Andrews, taking effect immediately with the purpose of acting as an “authorised signatory of the company and assisting in its legal proceedings”.
Eady J assumed Mr Andrews had previously been operating on a contractor basis, continuing: “Whilst the contract might be for the purpose of these proceedings that does not necessarily mean it is a sham; it can be genuine even if it is for a purpose which is not solely to create an employment relationship and I am prepared to accept that this might still be the effect of what has taken place.”
She acknowledged that the circumstances might suggest this was an attempt to circumvent the restrictions on appearances before the court and the conduct of legal proceedings.
“That said, this is not somebody who is a solicitor or lawyer in some other jurisdiction, who is therefore attempting to appear as such in this jurisdiction, and before this court, without having the appropriate legal qualification; rather this is, so far as I can tell, somebody who is (and has been) heavily involved in the business of the claimant, other than just in relation to these proceedings.
“In those circumstances I do not think that I should see the contract as unlawful in the sense of trying to circumvent the rules on rights of audience that would otherwise apply.”
In the circumstances – including that if she did not give permission, the hearing would have to be postponed – Eady J gave permission for Mr Andrews to represent Justice Investments at the hearing.
But she stressed that this was not “a general permission”, saying the company would again need to seek the permission of the court to be represented at any future hearing other than by a lawyer.