Background
Sandbar Developments (NT) Pty Ltd, a Northern Territory building contractor, sued former trustees and the manager of the Territory’s approved fidelity fund. It alleged that, from January 2023, the trustees did not issue it fidelity certificates, preventing it from undertaking residential building work. Its pleaded claims included misleading or deceptive conduct, unconscionable conduct, breach of trust deed and regulations, and injurious falsehood. It claimed losses of $5.8 million as at July 2025, continuing.
The company applied for leave to be represented in the Federal Court by its general manager, Phillip Hoare, rather than a lawyer. Mr Hoare was the spouse of the company’s sole director and shareholder, and had personally contributed $230,000 under the company’s small-business restructuring plan. The respondents opposed the application.
The Court’s Holding
Justice O’Sullivan dismissed the interlocutory application. Rule 4.01(2) of the Federal Court Rules 2011 requires a corporation to proceed through a lawyer, although the Court may dispense with that requirement under r 1.34 where there is sufficient reason and doing so is in the interests of justice.
The company had not provided adequate current evidence of its own financial position or that of Mr Hoare and its sole shareholder, despite relying on impecuniosity. The proceeding was factually and legally complex, Mr Hoare was not legally qualified and was likely to be the company’s principal witness, and his personal and financial interests in the outcome raised objectivity concerns. Allowing him to conduct the case would not advance the statutory overarching purpose of resolving disputes justly, quickly, inexpensively and efficiently.
Key Takeaways
- A company seeking to avoid the lawyer-representation rule must provide sufficient, current financial evidence, including evidence about those standing behind it.
- Impecuniosity alone does not justify non-lawyer representation.
- Complex litigation, a proposed representative’s role as a key witness, and personal financial interests weigh strongly against granting leave.
Why It Matters
The decision confirms that leave for a corporation to appear through a non-lawyer is exceptional. A corporate claimant cannot rely on broad assertions of financial hardship while withholding evidence relevant to its capacity, and its controllers’ capacity, to fund legal representation.
It also illustrates the Court’s concern that a non-lawyer who is both personally interested in the outcome and central to the evidence may be unable to conduct complex litigation with the independence and procedural skill required.