Case: Oakley Inc v Franchise China Pty Ltd [2002] FCA 404 
Outcome: referred to
In Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68, the Full Court of this Court, in particular Smithers J and Keely J, recognised that the discretion was a broad one, to be exercised judicially depending on the existence of sufficient cause. See in particular Molnar at 74-75 per Smithers J and 80 per Keely J. In Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 , French J set out the guiding approach, which has been followed and applied by other judges of the Court: see Australian Communications Authority v Viper Communications Pty Ltd [2000] FCA 982 ; Oakley Inc v Franchise China Pty Ltd [2002] FCA 404. In Termi-Mesh French J said the following at [10]-[14]: Order 9 rule 1 of the Federal Court Rules provides, in the relevant parts: " 1(1) A respondent may enter an appearance and may defend a proceeding by a solicitor or in person. . . . (3) Notwithstanding sub-rule (1) and subject to any Act, a corporation may not without the leave of the Court or a Judge enter an appearance or defend any proceeding except by a solicitor." It should also be noted that O 4 r 14(2) provides that: "Except as provided by or under any Act, a corporation may not, without the leave of the Court, commence or carry on any proceeding otherwise than by a solicitor." The burden of authority in the Federal Court relates to the latter rule. Equivalent rules in other jurisdictions and particularly England and other Australian States set up an "exceptional circumstances" or like test before leave can be granted Arbuthnot Leasing International Ltd v Havelet Leasing Ltd [1991] 1 All ER 591; Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104. In the latter case, Samuels JA in the New South Wales Court of Appeal, saw the court's discretion to dispense with its rules about representation as one to be exercised "only with the most meticulous care" and in exceptional circumstances. The position under the Federal Court Rules however is not as restrictive as that under the English Rules and various of the State Supreme Court Rules . In this respect I refer to what I said in Simto Resources Limited v Normandy Capital Limited (1993) 11 ACLC 856. Although the rationale for the restriction is basically the same in all jurisdictions, the power of the Federal Court to grant leave to a corporation to carry on a proceeding, otherwise than by a solicitor, is conferred as an integral part of the Rules in O 4 r 14 and O 9 r 1. There is no threshold requirement of special or exceptional circumstances. As Smithers J said of O 4 r 14(2) and O 9 r 3 in Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 at 73: "Those rules proceed on the basis that there is a discretion in the court to permit a company to commence and carry on any proceedings other than by a solicitor and to enter an appearance or defend any proceeding without a solicitor and, it would seem, it is a discretion to be exercised by reference to all relevant considerations." Nevertheless the policy of the rule is clear that ordinarily a corporation will be required to be represented by a solicitor. Relevant factors for dispensing with that requirement include the financial capacity or lack of capacity of the corporation and those standing behind it, the effect of diverting company resources to paying legal expenses, the nature of the company's undertaking, its financial structure, its ability to retain and pay its staff and the identity and spread of its shareholders. The factual complexities of the case and the capacity of the proposed representative to conduct it effectively are also relevant VN International Video Pty Ltd v West End HK TVB Video &amp; Others (1996) 14 ACLC 1308. There is no doubt that those who chose to carry on their businesses through corporate structures enjoy advantages that those carrying on business on their own account do not enjoy. They also acquire disabilities and obligations. One of the disabilities is that which is imposed by the Rules of Court under consideration in this case. A distinction may be drawn between the case in which the company in question is applicant and that in which it is respondent. In the latter case it may be a more liberal approach to the grant of leave is warranted. ...