Farouk Systems Inc. v. Rica International Inc. and Munesh M. Mavadia raises a procedural point, namely whether a corporation requires a lawyer to resolve an action before the Federal Court.

The personal Defendant sought an order for an exemption from Rule 120 of the Federal Court Rules (which requires all corporate Defendants to be represented by lawyers) so that he could sign the requested judgment in his personal capacity and as an officer of the corporate Defendant.

The case law under Rule 120 requires proof of special circumstances, namely impecuniosity, the complexity of the issues and whether the proposed representative might be a witness.

The Judge was not convinced that there was impecuniosity since the proposed judgment included a $24,000.00 payment. The legal issues as evidenced by the proposed judgment were also not simple.

More importantly, there was no need for the relief sought given that the personal Defendant could sign a settlement on behalf of the corporation in the same way he could execute any other contract, thereby precluding the need for a judgment.