Court cites legal complexity, conflicting interests, insufficient evidence of financial hardship
The High Court of New Zealand has refused a company director permission to represent his company in a property dispute, finding no exceptional circumstances warranting a departure from the requirement that companies engage lawyers in High Court proceedings.
In Packer v Capestone Developments Ltd [2026] NZHC 3124, the court dismissed the director’s application to represent Capestone Developments Ltd. in proceedings involving a constructive trust claim or equitable compensation.
The dispute arose from a residential subdivision project involving 19 lots in Foxton. The plaintiff, a project manager and brother of one of Capestone’s directors, alleged that he entered an oral agreement with the company in January 2020 to provide project management services in exchange for ownership of a lot.
He claimed the parties varied the agreement in 2022 and that he worked on the development until late 2023 without payment. Capestone denied the agreement, maintaining that its director managed the project and that the plaintiff attended the site as family support.
After Capestone’s lawyers withdrew in June 2026, its director sought permission to conduct the defence personally.
He argued that the company lacked funds for legal representation, that five law firms had declined instructions and that his legal studies and business qualifications enabled him to present its case.
Applying Re G J Mannix Ltd. [1984] NZCA 162, the court confirmed that non-lawyers may represent companies only in exceptional circumstances.
The High Court found that the proceeding was not an emergency and involved complex issues concerning constructive trust, unjust enrichment, equitable compensation, an oral agreement involving land, and separate corporate personality.
It also identified a substantial credibility dispute between the brothers. The director was a principal witness with personal interests in the outcome, making it inappropriate for him to act as both advocate and witness.
The court further found that his interests could diverge from Capestone’s because part of the company’s defence concerned whether the brothers had any personal arrangement.
Regarding financial hardship, the court found insufficient evidence that Capestone could not afford legal representation. Neither the company nor its directors had provided financial statements demonstrating an inability to pay or obtain funding. The court also noted that companies are ineligible for civil legal aid.
The court declined leave and directed Capestone to appoint counsel. It recognised the plaintiff’s presumptive entitlement to costs on the application and encouraged the parties to agree on costs, failing which the court would determine them on the papers.
