Oakley Inc v Franchise China Pty Ltd

[2002] FCA 404

FEDERAL COURT OF AUSTRALIA

Oakley, Inc v Franchise China Pty Ltd ACN 080 032 604 [2002] FCA 404

OAKLEY, INC v FRANCHISE CHINA PTY LTD ACN 080 032 604, BARRY JAMES RUMPF, BRUCE ROBERT JOHNSTONE AND ROBERT JOHNSTONE
V 1179 OF 2001

DRUMMOND J
BRISBANE
15 MARCH 2002

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	V 1179 OF 2001

BETWEEN:

OAKLEY, INC
APPLICANT

AND:

FRANCHISE CHINA PTY LTD ACN 080 032 604
FIRST RESPONDENT

BARRY JAMES RUMPF
SECOND RESPONDENT

BRUCE ROBERT JOHNSTONE
THIRD RESPONDENT

ROBERT JOHNSTONE
FOURTH RESPONDENT

JUDGE:	DRUMMOND J
DATE OF ORDER:	15 MARCH 2002
WHERE MADE:	BRISBANE

THE COURT ORDERS THAT:

1.The notice of motion filed 11 February 2002 be dismissed.

2.The costs of today be costs in the proceedings.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	V 1179 OF 2001

BETWEEN:

OAKLEY, INC
APPLICANT

AND:

FRANCHISE CHINA PTY LTD ACN 080 032 604
FIRST RESPONDENT

BARRY JAMES RUMPF
SECOND RESPONDENT

BRUCE ROBERT JOHNSTONE
THIRD RESPONDENT

ROBERT JOHNSTONE
FOURTH RESPONDENT

JUDGE:	DRUMMOND J
DATE:	15 MARCH 2002
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. The second and third respondents, by notice of motion filed on 11 February 2002, seek orders that they be granted leave to jointly and severally represent the first corporate respondent in these proceedings and secondly, that the second respondent, Mr Rumpf, be removed from these proceedings and that any further action which the applicant may wish to take be the subject of a new and separate proceeding.

2. So far as the application by the second and third respondents to represent the company is concerned, they are its directors and Mr Bruce Johnstone, the third respondent, is its sole shareholder.  The principles upon which a company can be permitted to be represented by other than a lawyer are well known.  The power of the Federal Court to grant leave to a corporation to be represented by someone other than a lawyer was dealt with in Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241, a decision of French J on 8 September 1999.

3. His Honour said, at [13] - [14]:

   “… 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 …

   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.”

4. The material relied on to support the application for leave to represent the company in these proceedings is very limited.  Mr Rumpf has filed an affidavit in which he asserts that the company is impecunious and does not now carry on business and does not have the financial capacity to engage legal representation.  He also asserts its sole shareholder, is, the third respondent, has no such financial capacity either.  Mr Rumpf goes in to a little detail to deal with the question of the ability, particularly of himself, to adequately represent the company, and I have no doubt that he has the skills necessary to provide effective representation for the company if he were to be granted leave, along with the third respondent, to represent the company.

5. However, the material comes nowhere near satisfying the requirements of the rule that there must be some explanation capable of demonstrating to the Court, firstly, that the company itself lacks the means of funding representation and, secondly, that those standing behind the company themselves lack the means to arrange representation for the company.  Mere assertions that that is the position are, in my opinion, insufficient to meet the requirements necessary to make out a case for the grant of leave.  I will dismiss the notice of motion in relation to the relief sought in par 1.

6. So far as par 2 of the notice of motion is concerned, Mr Rumpf bases his application, as I understand it, on three grounds.  Firstly, he submits that the requirements of O 6 r 2 the Federal Court Rules are not satisfied.  Secondly, he submits that he will suffer prejudice as a result of evidence which may be led in relation to the activities of the first and third respondents and which will not be admissible in the proceedings against him.  Finally, he submits that he will suffer prejudice if the applicant succeeds against all the respondents and a joint and several costs order is made against them, given what he says is the impecuniosity of the first respondent company and the impecuniosity of the third respondent.  I should say, the fourth respondent has not yet been served and is believed to be in  China.

7. In so far as the application, based upon an assertion of misjoinder or inappropriate joinder in view of O 6 r 2 is concerned, Mr Rumpf’s case is that the company, ie, the first respondent, on 15 October 2001, imported 2,917 pairs of sunglasses into Australia which are described as counterfeit because of the false mark they bear.  The case against the second respondent is that, five days earlier, on 10 October, he imported into Australia 598 pairs of sunglasses, bearing the same counterfeit mark.  The case against the third respondent is that, on the same day, 10 October, the third respondent imported into Australia a further 530 pairs of sunglasses bearing the same counterfeit mark.

8. The second respondent now accepts responsibility for the third respondent’s importation of 530 pairs of glasses on 10 October.  The second respondent is sole director, along with the third respondent, of the first respondent corporation.  The importations all occurred within a few days of each other.  The importations are all of the same item, viz sunglasses bearing the same Oakley mark, alleged to be a counterfeit mark.  The importation, in each of the three cases, is of substantial amounts, well capable of being regarded as commercial quantities, ie, quantities intended to be put into trade in Australia.

9. But those circumstances, in my opinion, are sufficient to show that the requirements of O 6 r 2 are strictly satisfied in so far as there is a common question of fact which will arise in all proceedings as to the origin of the three consignments of goods and that the rights to relief claimed in those proceedings can be said to arise out of the same series of transactions, given the closeness in time of the importations and the relationship between the second respondent, the third respondent and the first respondent shown in the material before me.  For these reasons, I dismiss the notice of motion in so far as it seeks relief in par 2.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond.

Associate:

Dated:             8 April 2002

Counsel for the Applicant:	Mr B Fitzpatrick
Solicitor for the Applicant:	Davies Collison Cave Solicitors
Counsel for the Second Respondent:	The Second Respondent appeared in person.
Counsel for the Third Respondent:	The Third Respondent appeared in person.
Date of Hearing:	15 March 2002
Date of Judgment:	15 March 2002