Garage Wholesalers Pty Ltd ACN 109 969 059 v Engineering Software Solutions Pty Ltd ACN 109 359 499

REASONS FOR JUDGMENT 1 This matter was listed before me for hearing of the respondent's motion by which it sought an order that legal assistance be provided, or alternatively leave for the director of the respondent company, Mr Kay, to appear on behalf of the respondent. The respondent also sought orders that the proceeding be stayed or alternatively transferred to the South Australia District Registry.

Leave 2 In relation to leave, O 4 r 14(2) of the Federal Court Rules (the Rules) provides that except as provided by or under any Act, a corporation may not, without leave of the Court, commence or carry on any proceedings otherwise than by a solicitor. Order 9 r 1(3) provides that a corporation may not without the leave of the Court enter an appearance or defend any proceeding except by a solicitor. 3 Unlike the English equivalent and the rules of various State Supreme Courts, O 4 r 14 raises no express threshold requirement of special or exceptional circumstances. As French J observed in Simto Resources Ltd v Normandy Capital Ltd (1993) 10 ACSR 776, the Full Court of this Court in Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68 noted that application of r 14 did not invoke of the 'inflexibility of the practice in England'. In Molnar, the Full Court of this Court said: But in this court the presence of r.14(2) of O.4 and r.3 of O.9 introduces a new element. 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. There may well have always been a discretion to permit the appearance on behalf of a party of a non-qualified person but, as stated in [Anderson's case Hubbard Association of Scientologists International v. Anderson (supra)], it has long been regarded in the higher courts as proper, where the assistance of qualified persons is available to give the courts help in the administration of justice to refuse to exercise the discretion in favour of allowing such an appearance, other than on merely formal matters such as adjournments. It is my opinion that the inflexibility of the practice in England both before and after the promulgation of the English 0.5 r.6, could not but be an influence against the exercise of that discretion by reference to all relevant circumstances. And the discretion remaining in the face of a rule such as 0.5 r.6 can hardly be other than essentially residual. Having this in mind, the discretion introduced in 0.4 r.14 and 0.9 r.3 does introduce an element different from that which might have been expected when the Federal Court of Australia was established in 1976, had it been intended that the discretion of that Court should be but a similarly residual discretion. Certainly a change of emphasis appears to be involved. The discretion introduced in the express provisions of the rules is, in the absence of other guidance, to be exercised judicially according to the requirements of justice. The discretion is as to a matter of procedure but it may well affect matters of substance. The consequence of permitting a non-qualified person to appear will be to deprive the court of assistance in respect of matters of law. It might also, according to circumstances, render difficult the proper assessment of fact. These considerations go to the ability of the court ideally to reach the correct decision on the matters of law and fact involved in the litigation. This may operate to the detriment of a company appearing without a solicitor but such a consequence would be of the company's own making. The application by the court of the correct principles of law and the correct assessment of the facts in a particular case are important objectives, but they are not necessarily unattainable without the assistance of qualified advocates. The attainment of these objectives, so far as possible without qualified assistance, is accepted as appropriate where a party sues or defends in person. The discretion being reposed in the court it is inevitable that it be exercised in favour of a company where there is sufficient reason. According to the strength of the case made as to the existence of such reason, so the weight to be given to the consideration that the court might lack qualified legal assistance, will decline. 4 Mr Kay has deposed to the fact that the respondent does not have sufficient funds to pay legal fees. The documents he has prepared are all quite clear and comprehensive. As observed by French J in Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241, it may be that a more liberal approach is warranted where the corporation is in the position of respondent rather than having actually commenced the proceedings. 5 There is no particular legal complexity about the nature of these proceedings albeit that some technical consideration will be required in relation to some mechanical features of the pleaded complaint. 6 It is a further consideration that I propose (given the modest sum involved) to transfer the proceeding to the Federal Magistrates Court so that it can be dealt with, with less formality and cost. In this regard I am mindful of the Privy Council decision of O'Toole v Scott [1965] AC 939 at 959 where the Privy Council after referring to a court's inherent right to regulate its proceedings, said: There is no reason in principal for limiting the discretion as suggested. It can be exercised either on general grounds common to many cases or on special grounds arising in a particular case. This exercise should not be confined to cases where there is a strict necessity; it should be regarded as proper [for a magistrate] to exercise the discretion in order to secure or promote convenience and expedition and efficiency in the administration of justice.