By Mick Hassell
The question of self-representation for corporations is on the mind of a lot of small business owners who are incorporated and involved in civil litigation in Superior Court as a plaintiff or defendant. Superior Court litigation is slow and expensive. Many small businesses experience litigation burnout, where they spend so much time and money litigating that claims and defences fall apart due to a lack of affordability.
A corporation can represent itself in Small Claims Court, where the limit on any claim is $25,000. Generally, small businesses with claims in the $25,000 – $35,000 range may opt to waive the portion of their claim over $25,000 and proceed in Small Claims Court, which is faster and cheaper than Superior Court.
But when the claims exceed $35,000 they are bound to end up in Superior Court. This poses a challenge to small business corporations because rule 15.01(2) says that “a corporation shall be represented by a lawyer, except with leave of the Court.” The expression “leave of the Court” means the Court’s permission.
Therefore, it is possible for a corporation to represent itself in Superior Court with the Court’s permission. By representing itself, it means that a director or officer or other senior member of the corporation will speak on behalf of the corporation.
How does a corporation get the Court’s permission to represent itself? The corporation must bring a motion.
The Rules of Civil Procedure are not well-suited for self-represented corporations. If a corporation wants to start a lawsuit (aka issue a statement of claim) in Superior Court, but has no lawyer, how is it possible to do so without breaking rule 15.01(2)? Or what if a defence is due in 20 days and there is not sufficient time for a motion, which takes months?
A self-represented corporation can’t bring a rule 37.17 motion (urgent motion before a lawsuit is started) before issuing the claim if the issue is not urgent. The only option seems to be to issue a claim or file a defence without a lawyer and then bring a motion for leave of the Court that the corporation may be represented by a particular director and/or officer of the company. Taking this course of action is to assume that rule 1.04 regarding justice, speed and cost is more important than rule 15.01(2) requiring a corporation to be represented by a lawyer at all times. No case law that I am aware of has address this obstacle to self-representation by corporations in the rules. I have heard anecdotally that some companies can issue claims and file defences wihtout a lawyer and others have been turned down by Court Registrars.
Where a lawsuit is already underway, a corporation has a more clear path to bringing a motion pursuant to rule 15.01(2). The historic test on whether to give a corporation permission to self-represent is outlined in the Astrochrome Crankshaft case where looking at the seniority of the proposed representative, the nature of the action and the ability of the proposed representative were considerations.
Any company doing so will want to review the case of Lamond and Smith, which shoots down a number of historical reasons why corporations cannot be self-represented and small business owner Mr. Smith the right to self-represent his small company.
For more information on self-represented corporations, please feel free to contact Mick Hassell, who assists businesses behind the scenes in civil and commercial litigation and trials.
Disclaimer: this blog post is for information and discussion purposes only and is not legal advice. The blog post discusses what may be possible, but is not fully addressed in the Rules of Civil Procedure.