Representation of a company by the director

Summary

The High Court considered that exceptional circumstances existed to permit the Court to exercise its discretion to allow representation of the company by the director.

Impact of decision

A company must be represented by a solicitor but the Court may permit representation by any person in exceptional circumstances.

Facts

On 6 September 2010, the Commissioner sought and obtained a freezing order without notice over a property owned by Giovanni Holdings Ltd ("Giovanni"). In October 2010, Giovanni filed an application seeking an order discharging or varying the freezing order.

The Commissioner objected to representation of Giovanni by Ms Hancock, the director of Giovanni.

Decision

Associate Judge Osborne granted Ms Hancock limited leave to represent Giovanni (as long as she remained the sole director) on the interlocutory application for orders discharging or varying the freezing order recognising there were "powerful considerations of access to justice". The High Court held that leave of the Court would be required if Giovanni sought lay representation after the determination of the freezing order proceeding but noted that it was unlikely to be granted in a continuing manner as the substantial issues and facts (which were not before the Court at the time) are more complex than that in the interlocutory matter.

Osborne AJ referred to the rule in Re G J Mannix Ltd [1984] 1 NZLR 309 which provides that a company must have a solicitor on record to file proceedings but noted that the Court does retain its inherent jurisdiction, in exceptional circumstances, to permit someone other than a solicitor to represent the company. The Court confirmed that the Mannix rule continues to bind the Court.

Osborne AJ found that there was a "single, overarching exceptional circumstance" in the present matter in that Giovanni's assets had been frozen by the freezing order and obtained without notice before Giovanni had an opportunity to take legal advice. The Court accepted that Giovanni had provided prima facie evidence that it is at present without access to resources to fund an application to discharge or vary the freezing order.

The Court then considered whether other factors should mean that despite the exceptional circumstance, representation by Ms Hancock should be refused.

Osborne AJ, while acknowledging the matter was not straightforward, considered that issues would not arise at the interlocutory stage of such a complex nature so as to outweigh the need for representation by Ms Hancock.

Further, despite concerns raised by the Commissioner regarding the evidence (recognising that some aspects of the evidence are "of understandable concern to the Commissioner") and the independence and objectivity of Ms Hancock, Osborne AJ was not satisfied that Ms Hancock should not represent Giovanni. However, the Court did note that any development in the course of litigation which indicated Ms Hancock was not proceeding with appropriate independence would likely result in a review of his order and noted that both Giovanni and Ms Hancock were on notice that the Court had an interest to ensure Ms Hancock represented Giovanni objectively.