Likha Properties Limited v Eco-1 Limited

[2025] NZHC 3101

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2025-442-44

[2025] NZHC 3101

BETWEEN

LIKHA PROPERTIES LIMITED

Plaintiff

AND

ECO-1 LIMITED

Defendant

Hearing:

3 October 2025

Appearances:

M Couch / S O’Sullivan for the Plaintiff

P McIntosh / A Frost (Directors/Shareholders of ECO-1 Ltd)

Judgment:

17 October 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for leave to represent the defendant]

This judgment was delivered by me on 17 October 2025 at 3:00pm

Pursuant to Rule 11.5 of the High Court Rules 2016

……………………………………… Registrar/Deputy Registrar

Solicitors:

Wootton Kearney (M Couch/S O’Sullivan), Wellington, for the Plaintiff

Copy for:

Philip McIntosh/Tony Frost, Shareholders of the Defendant, ECO-1 Limited Findex NZ Limited (Andrew Smith), Richmond, Nelson 7020

LIKHA PROPERTIES LIMITED v ECO-1 LIMITED [2025] NZHC 3101 [17 October 2025]

Introduction

[1]    The plaintiff, Likha Properties Limited, filed a statement of claim dated 10 July 2025 alleging breach of contract against the defendant, ECO-1 Limited. The plaintiff is seeking summary judgment for the amount of $344,898.80 being a deposit paid under the contract.

[2]    As well as filing a statement of claim, the plaintiff has filed an interlocutory application on notice for summary judgment against the defendant. The application for summary judgment was called before the Court on 3 October 2025.

[3]    By interlocutory application on notice dated 19 August 2025, two directors and shareholders of the company, Mr Anthony Frost and Mr Philip McIntosh (the Shareholders), applied for leave to represent the defendant in these proceedings. In support of their application, the shareholders filed a memorandum and an affidavit of Mr Frost.

[4]    On 9 October 2025, following the hearing on 3 October 2025, the Shareholders filed a memorandum attaching a letter from the defendant’s accountant dealing with the defendant’s financial position.

[5]    On 25 September 2025 the plaintiff filed a notice of opposition to the Shareholders’ application for leave to represent the defendant. The Shareholders filed a memorandum in reply, dated 30 September 2025 together with a further affidavit by Mr McIntosh dated the same date.

Legal principles

[6]    The “Mannix” rule is that a company has no right to be represented in the conduct of a case in court except by a barrister or solicitor of the High Court. However, in Re G J Mannix Cooke J observed that the courts maintain a residual discretion to allow unqualified advocates to appear before them. Justice Cooke said:1

1      Re G J Mannix [1984] 1 NZLR 309 (CA).

In general, and without attempting to work out hard-and-fast rules, discretionary audience should be regarded, in my opinion, as a reserve or occasional expedient, for use primarily in emergency situations when counsel is not available or in straightforward matters where the assistance of counsel is not needed by the Court or where it would be unduly technical or burdensome to insist on counsel. Especially in minor matters, cost-saving could also be a relevant factor. A "one-man" company might be allowed to be represented by its owner if the Judge saw fit in a particular case. But it could not be right, for instance, to issue some sort of tacit continuing or general licence to an unqualified agent to appear in winding up or any other class of proceedings.

[7]    In The Commissioner of Inland Revenue v Chesterfields Preschools Ltd the Court of Appeal stated that “the current law is that the Mannix rule may be departed from only in exceptional circumstances”.2

[8]    In Keemati Ltd v MR Civil Ltd Associate Judge Lester set out relevant considerations for the exercise of the Court’s discretion to allow non-lawyers to appear on a company’s behalf, including: the nature of the litigation; the complexities of the case; the extent of the dispute; the point at which audience is sought; the importance of an understanding of the law and a dispassionate consideration of the circumstances; that the preliminary and interlocutory stages are important to the determination of litigation and the filing of a compliant statement of claim assists in this process; and the need for professional objectivity, including whether the person proposed to represent the company is closely associated with the applicant company and is also a witness.3

[9]    In Jayashree Ltd v Commissioner of Inland Revenue, Gordon J added the consideration of whether the application is made in an emergency situation.4

Shareholders’ position

[10]The Shareholders put forward the following grounds for granting leave:

(a)There is a genuine dispute between the parties regarding the plaintiff’s entitlement to a refund of the deposit under the contract. The dispute

2      The Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53 at [34].

3      Keemati Ltd v MR Civil Ltd [2021] NZHC 538 at [6].

4      Jayashree Ltd v Commissioner of Inland Revenue [2023]NZHC 2723 at [18].

is evidenced by the affidavit filed in opposition, which raises issues of contractual interpretation, factual disagreements and the applicability of certain clauses in the contract;

(b)the defendant is unable to obtain representation due to insolvency. Denying leave to the Shareholders would effectively deprive the defendant of the ability to present its defence, resulting in a potential injustice;

(c)the role of the Shareholders is limited in scope – to ensure that the defendant’s opposition to the summary judgment application is properly put before the Court and granting leave in such circumstances has been recognised as an appropriate order to facilitate the Court’s determination of the real issues in dispute.

[11]   In his later memorandum to the Court dated 30 September 2025, the Shareholders (at [5]) summarised what they perceive are the issues to be resolved in respect of the plaintiff’s claim:

(a)whether the contract provides any right of refund of the deposit?

(b)whether it was the plaintiff who repudiated the contract?

(c)what portion of the 1250 hours worked (valued at $205,175.00 plus GST) and the hard costs (valued at $33,800.00 plus GST) incurred by the defendant in supplying Shenzhen Yahgee International Development Limited (Yahgee), is recoverable from the defendant for completing works instructed by them and on their behalf?

(d)the effect of the “2022 Featherston settlement” arrangement with the plaintiff and which the plaintiff’s business partner did not fulfil?

(e)whether disputes resolution process agreed to in the contract was bypassed?

Plaintiff’s opposition

[12]   The grounds on which the plaintiff proposes granting leave to the Shareholders to represent the defendant are:

(a)The Shareholders cannot impartially and objectively represent the defendant’s interest given their direct involvement in the matters that are the subject of the summary judgment application;

(b)the Shareholders have not provided any independent financial statements or supporting documentation for their assertion that the defendant is insolvent and cannot afford counsel;

(c)the Shareholders are not equipped to comply with the procedural requirements of the High Court, nor have they demonstrated an understanding of the legal principles involved the proceedings;

(d)the proceedings are at the early stages and this is not a matter of emergency, or of unavailable counsel;

(e)allowing the Shareholders to represent the defendant will unduly complicate the matter, delay proceedings and prevent the administration of justice;

(f)if the summary judgment application is successfully defended by the defendant, the Shareholders’ position will be the same and they may wish to continue to represent the defendant at a substantive hearing

Result

[13]   I am of the view that leave should be granted to the Shareholders to represent the defendant. The reasons for my view are:

(a)While it is accepted that insolvency is not a reason in itself for an exception to the general rule, in this instance the interests of the defendant and the Shareholders are aligned and in the absence of granting leave to the Shareholders, there is a risk of injustice in that the defendant will have no opportunity to present its defence;

(b)as noted in Affco New Zealand Limited v NZ Premium Trading Company Ltd, Hinton J considered that in the circumstances:5

… whether tightly held, a private company cannot afford representation, and where the interests of the company and a director are clearly aligned, a common sense approach towards exercising the discretion is appropriate.

The situation in the present case is comparable;

(c)from documentation filed to date, the Shareholders have demonstrated a reasonable appreciation of the issues that will need to be determined in respect of the claim. In particular in the shareholders’ memorandum filed, dated 30 September 2025, while not necessarily demonstrating an understanding of the legal concepts, does demonstrate an understanding of the issues to be resolved in the proceeding;

(d)the insolvency of the defendant has been verified by the letter from the company’s accountants, Findex NZ Limited, dated 9 October 2025, filed by the Shareholders following the hearing on 3 October 2025.

Orders

[14]I make the following orders:

(a)The Shareholders are granted leave to represent the defendant in this proceeding.

5      Affco New Zealand Ltd v NZ Premium Trading Ltd [2017] NZHC 2218 at [4].

(b)Costs in respect of the Shareholders’ application lie where they fall.

…………………………………

Associate Judge C B Taylor