Sandbar Developments (NT) Pty Ltd v Leben Leadwort Court Pty Ltd & Anor [2026] NTSC 24

Local Court (Civil Jurisdiction) Rules 1998 (NT), r 1.15(d)(i)

Alice Springs Abattoirs Pty Ltd v Northern Territory of Australia [1996] NTSC 69; (1996) 111 NTR 9; Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd (1986) 8 NSWLR 104; Hubbard Association of Scientologists International v Anderson and Just (No 2) (1971) VR 577; Molnar Engineering Pty Ltd v Burns (1984) 3 FCR 68; Northern Territory of Australia v Alice Springs Abattoirs Pty Ltd [1996] NTSC 32; Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 12) [2012] FCA 289; Simpson v Taylors Business Pty Ltd [2025] FCA 835; Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241, referred to

Sandbar Developments (NT) Pty Ltd v Leben Leadwort Court Pty Ltd & Anor [2026] NTSC 24

[1] This is an application on summons filed 12 February 2026 by the Plaintiff for dispensation from Rule 1.13 of the Supreme Court Rules 1989 (NT) ('the Rules') and pursuant to Rule 2.04 of the same. Leave was granted for Mr Hoare, an employee of the Plaintiff, to address the Court for the purposes of the application.

[2] These proceedings were originally commenced in the Local Court by the Plaintiff. By order of the Local Court dated 18 November 2025, the proceedings were transferred to the Supreme Court pursuant to s 18 of the Local Court (Civil Procedure) Act 1989 (NT). This was on the basis that the First Defendant's counterclaim exceeded the jurisdictional monetary threshold of the Local Court.

[3] The proceeding concerns certain building works, namely the construction of two dwellings in Zuccoli. The Plaintiff was the appointed builder and engaged by the First Defendant. The Second Defendant is a director of the First Defendant. The pleadings disclose various disputes between the Plaintiff and First Defendant in respect to two written construction contracts and allegations as to breach of those contracts, including whether the First Defendant was entitled to terminate the contracts and the consequences which follow. The quantum of the Plaintiff's claim is approximately $150,000. The First Defendant's counterclaim seeks damages in respect to the costs to rectify defective and uncompleted building works, the failure of the Plaintiff to pay subcontractors, delay, lost opportunity, loss of rent, increased financing costs and recovery of overpayments made to the Plaintiff. The quantum of the counterclaim, although not yet fully quantified, is estimated at more than $600,000-$700,000. As of yet, there is no reply filed in response to the defence and no defence to the counterclaim. I expect, in both the claim proper and counterclaim, there will be technical building evidence tendered as to the alleged incomplete/defective works and expert reports obtained in respect to costs of rectification works, as to the impact on quantum for reason of loss of chance and other damages due to delay in completion of the building works. Additionally, the claim against the Second Defendant personally is not made clear in the pleadings.

The requirement for a corporation to be represented by a legal practitioner

[4] Rule 1.13 of the Rules provides that, except as provided otherwise in an Act or Chapter 1 of the Rules, a party shall not take a step in a proceeding except by a solicitor. Notwithstanding that the proceeding was commenced in the Local Court, there does not appear to be any order granting leave for Mr Hoare to represent or appear for the Plaintiff corporation pursuant to Rule 1.15(d)(i) of the Local Court (Civil Jurisdiction) Rules 1998 (NT).[1] The commencement of the proceeding itself and its subsequent transfer to the Supreme Court is a possible irregularity.[2] No application in respect of dealing with an irregularity has been made. In the circumstances, even if there is an irregularity, what has been done to date is not rendered a nullity.[3] I intend to treat the proceeding and pleadings filed to date as remaining on foot and deal with the substance of the matter going forward, namely whether the Plaintiff is required to engage a legal practitioner. Any immediate and further steps in the proceeding are required to be taken by the Plaintiff (i.e. either filing any reply to the defence and a defence to the counterclaim) and it is prevented from taking any further step in the proceeding unless as provided under the Rules. The requirement for a solicitor to represent a corporation reflects the practice of the Court and many other common law courts[4]. The various reasons for the rule were expressed by Kirby J in Bay Marine Pty Ltd v Clayton Country Properties Pty Ltd:[5]

Various reasons are suggested for the rule and the practice of the courts. They include the control which courts exercise over those having audience before them and the privilege afforded to legal representatives because of the training which they undergo and the discipline to which they submit. But they also include, in the case of a corporation, the importance of ensuring that those who speak for it (the corporation not being a natural person able to speak for itself), have authority to do so and may thereby be subjected to orders of the Court, including as to the costs of litigation. There is no common law entitlement of a member or officer of a corporation to appear for it before a court. On the contrary, the rules of this jurisdiction, as of others, require that, statute apart, a corporation shall be represented by a legal practitioner. For the reasons mentioned, and doubtless others, this practice is normally followed in this State and in this Court.

[5] Notwithstanding Rule 1.13 of the Rules, Rule 2.04 of the same provides a general dispensation power to excuse compliance. The extent and the considerations affecting the exercise of that power were discussed in Alice Springs Abattoirs, an appeal from a decision of the Master refusing dispensation.[6] In Alice Springs Abattoirs, Kearney ACJ, after an examination of various authorities and noting the variations in respect to similar rules in other jurisdictions,[7] did not apply the criterion of "exceptional circumstances". Instead, preferring that the discretion be exercised in the interest of justice on "sufficient reason" being shown. The Court followed the approach as set out in in Hubbard Association of Scientologists International v Anderson and Just (No.2).[8] The following passage from Molnar Engineering Pty Ltd v Burns was cited with approval in Alice Springs Abattoirs and bears repeating, particularly in respect to the factors to be considered in determining whether "sufficient reason" exists:[9]

The problem is to recognize what is sufficient reason for the purpose in hand. The common reason for a company seeking to proceed without qualified assistance is, no doubt, that the company does not have the funds to engage such assistance. One would suppose that a company might successfully support an application to sue or defend without qualified assistance, not only where the company is bereft of funds, but also where having regard to the necessary or reasonable commitments of the company the appropriation of funds to engage qualified assistance for the litigation in question would create financial difficulties with which the company could not cope, or with which it ought not be required to cope. The class of company involved, the nature of its undertaking, its financial structure, its ability to retain and pay its staff and no doubt other factors might be relevant in particular cases.

Similarly, the identity of the shareholders and the spread of the shareholding would be relevant. So also would the capacity of a person by whom the litigation might be commenced and carried on. In this case Mr. Molnar is, from the point of view of substance, a one man company. In addition he is the inventor of the hoist in question and understands the technical factors relating to its safety. It could no doubt be urged that, in the case of a one man company which seeks leave to carry on the proceedings without a solicitor and which proposes that it be carried on by the one man of the company the situation approximates, in substance, that of a litigant in person. If Mr. Molnar were carrying on business as personal proprietor thereof, he would have the privilege of conducting litigation himself without qualified legal assistance.

The accessibility of the courts to any citizen unconditionally, in this respect, is regarded as fundamental to the system of justice under the Crown. That ready accessibility to the courts should be available to a juristic person is no doubt similarly fundamental. However, it has been regarded as appropriate that when a trader decides to use the corporate form in which to carry on his business for the advantages flowing therefrom his accessibility to the courts as plaintiff and his appearance as a defendant should be made conditional as set forth in o.5 r.6 of the rules of the United Kingdom and the practice which it reflects. But where a discretion is conferred on the Court, and where a case is presented that there is sufficient reason to permit a company to sue or defend without qualified assistance, the circumstance that the company is a one man company and that that man is proposed as the agent by whom the company seeks to be represented, and that he has advantageous educational and technical qualifications, may be significant.

As the company had the task of persuading the Court that there is good reason for the exercise of the discretion by the Court in its favour and of performing that task in circumstances in which there may well not be any cross-examination, it was essential that the material presented should be directed to those matters in respect of which questions may well arise in the mind of the Court.

Certainly in circumstances in which a company's finances are such that a refusal to exercise the discretion in its favour would actually cause the abandonment of proceedings by a company, the loss of skilled legal assistance to the Court should carry no weight. It is fundamental that the courts be accessible to a company as an entity according to law and subject to the law.

[6] In the course of oral submissions, I was referred to the recent case of Simpson v Taylors Business Pty Ltd.[10] In that case, Bennett J helpfully summarised, without intending to limit the discretion to dispense with the equivalent Federal Court Rule, the relevant factors which have been recognised by various authorities. These include:[11]

1. The class of company involved, the nature of its undertakings, its financial structure, its ability to retain and pay staff and, no doubt, other factors which might be identified as relevant.
2. Whether the company is the applicant or respondent, or as sometimes is put, whether the company is the aggressor in litigation. In this respect it has been noted that where a company is not before the court voluntarily, it is fundamental to the system of justice in operation in Australia that courts be accessible. However, it has also been regarded as appropriate to take into account the fact that when a trader decides to take on a corporate form, it takes the benefit which that form provides as to its mercantile endeavours.
3. Whether the individual is capable of conducting the proceeding on behalf of the company.
4. The financial capacity of the company, and of those standing behind it.
5. The complexities of the case. For example, if the proceeding involves difficult questions of law, leave may less readily be granted.
6. A further factor is whether the overarching purpose prescribed by s 37M of the Act would be promoted by the grant of leave.[12]

[7] In support of the Plaintiff's application, the affidavit of Mr Hoare made 12 February 2026 was filed. I take that affidavit as read. In summary, Mr Hoare deposes:

1. He is the General Manager of the Plaintiff.
2. The Plaintiff company is a small company with limited resources operating in the construction industry in the Northern Territory. Engaging a legal practitioner would impose significant financial hardship on the company as its current financial position has been damaged by the Defendants' refusal to pay monies due and payable under the contracts.
3. The Plaintiff is unable to commence new building projects to get a cash-flow as the Plaintiff does not have the financial resources to responsibly commence those projects due to the default of the Defendants.
4. He has over 15 years' experience in the construction industry, including managing contracts and disputes, and is familiar with the case having handled the projects directly.
5. He has full authority to act on behalf of the Plaintiff and bind it to Court orders. A company resolution, by the sole Director of the Plaintiff, is annexed to his affidavit.

[8] A number of other statements were made in Mr Hoare's affidavit which were in the nature of legal submissions. Such were to the effect that: granting dispensation would not prejudice the Defendants, it would allow the matter to proceed efficiently, and denying dispensation would effectively prevent the Plaintiff from pursuing its claim due to cost barriers.

[9] No evidence was filed in response by the Defendants.

[10] As outlined above, good reasons underpin the requirement in Rule 1.13. Nevertheless, the Court retains the discretion to dispense with the requirement, and any dispensation must be exercised in the interest of justice on "sufficient reason" being shown. The factors to be considered will vary according to the circumstances of each case, but guidance is available from decisions of like cases.

[11] In respect to those factors, I make the following findings and observations:

1. Only very vague information, or no information at all in certain respects, has been provided about the company's structure, its financial position, its ability to pay and retain staff and other financial information. As recognised in Molnar,[13] it may be possible for a company to support an application to sue or defend without legal assistance on the basis that it is bereft of funds or where it would cause financial difficulties with which it could not cope. However, in my opinion, more is needed in terms of evidence than general statements such as the corporation has "limited resources" or "engaging a lawyer would cause significant financial hardship" or "the company is unable to generate a cash-flow because of the actions of the Defendants". Those things may be true, but to repeat the words of Smithers J in Molnar,[14] in evidence, there needs to be a sufficiently particularised relationship between the cost of maintaining the action with legal representation and the available resources of the company. In an application of this kind, the Plaintiff should take the Court fully into its confidence and that has not been done. There is insufficient evidence in respect to the company's financial position to properly consider this factor. This factor does not favour the Plaintiff.
2. The Plaintiff company is originally the aggressor in the litigation, notwithstanding that a counterclaim has been made. As noted in Simpson, those who chose to carry on business via corporate structures enjoy certain benefits, but they also acquire disabilities and obligations. In this case, this includes the application of Rule 1.13.[15] This factor does not favour the Plaintiff.
3. As to whether Mr Hoare is capable of conducting the proceeding on behalf of the company, there is little evidence in the conduct of the proceeding to date (as compared to the facts in Simpson) that the purported representative has little understanding of Court processes. This factor involves a degree of speculation as to how the proceeding will proceed. The proceeding is at an early stage. The present application was made using the correct Court processes and forms with a supporting affidavit. However, that is not necessarily indicative of future efficiency in the proceeding, particularly as matters get more complicated in terms of discovery, likely interlocutory applications, the filing of evidence (including expert evidence) and the possible trial itself. Although procedurally, the Plaintiff's application is properly made, Mr Hoare's failure to substantially and thoroughly address, with evidence, the specific legal and evidential factors the Court is required to consider is potentially indicative of his limited capabilities in respect to addressing and dealing with the more complex legal aspects of this proceeding. This factor is close to neutral, although possibly or barely not favouring the Plaintiff.
4. In terms of whether there are others capable of financing legal representation, there is no evidence, or no sufficient evidence, of the financial capacity of the company and of those standing behind it. The evidence reveals there is a sole director of the Plaintiff company. It seems there is at least one employee, being Mr Hoare, the General Manager. There is no evidence as to the shareholdings in the company. Whilst I do not find this factor determinative, it does fall to be considered in the overall factors. It does not favour the Plaintiff.
5. As to the complexities of the case, whilst Mr Hoare may depose of his experience in the building industry and with managing building contracts, taking conduct of litigation in this Court is entirely different. This proceeding is not of an unusual type, in respect to construction disputes, which come before the Court. That is, a proceeding in respect to alleged defective work carried out by a builder, and a claim by that builder for the payment for work done, a defence to that claim and a counterclaim by a Defendant homeowner or developer for damages to make good the defective work and other resultant damages. Such claims, including a defence and counterclaim, have the real potential to raise matters of complex law and fact, and are invariably conducted by legal practitioners experienced in building and construction disputes in this Court. The Defendants' defence to the Plaintiff's claim raises a significant number of technical legal defences to the Plaintiff's claim. A reply is yet to be filed. Similarly, the First Defendant's counterclaim is relatively legally complex and will require a cogent defence. Further and better particulars are likely to be required. I do not agree with Mr Hoare that the matter is necessarily straightforward involving mere factual disputes over contract performance and termination without complex legal issues. Whilst the Plaintiff may perceive its own claim as straight forward, the defence and counterclaim indicate that the entire proceeding is likely to be otherwise. Although I acknowledge this requires a degree of speculation, in my opinion, the efficient conduct of the proceeding would be assisted by a legal practitioner engaged by the Plaintiff. This factor does not favour the Plaintiff.
6. In respect to whether granting dispensation would justly, promptly, economically and in proportion to the nature of the dispute facilitate the real issues of substance in dispute in the proceeding, I am not necessarily convinced it would.

[12] To the above factors, I would add that I have no concerns in respect to the ability or authority of Mr Hoare to bind the company. The resolution of the company Director appears to address any issue as to authority to bind the company.[16]

[13] In considering the above factors, I am mindful of the statements made in Molnar in relation to the accessibility of the Courts to any citizen unconditionally being regarded as fundamental to the system of justice under the Crown, and such accessibility should extend to a juristic person. In Simpson, the Court was persuaded by the previous poor conduct of the applicant in the proceeding. In the circumstances of the financial situation of the company where refusal would really operate as an effective barrier to the continuance of the company's proceedings in the Court, the Court cautioned in Molnar against giving too much weight to the loss of qualified legal assistance. However, the Court concluded that, on the materials submitted with respect to the company's financial situation, it could not be satisfied that good reason was shown for the exercise of the discretion in favour of the company. A similar conclusion was reached in Alice Springs Abattoirs in respect to the failure to provide evidence of the ability to pay for legal representation and particularly by those standing behind the company.[17] Bare statements as to the ability of those behind the company were not sufficient. Similarly, bare statements as to the company's financial situation and position are insufficient to establish good reason for the exercise of the discretion. The Plaintiff's application therefore fails and as a result, the Plaintiff is prohibited by the Rules from taking any further step in the proceeding except by a solicitor. As was the case in Alice Springs Abattoirs, it is open for the Plaintiff to make a fresh application at any time with particulars as to the structure of the company and its specific financial circumstances, including of those standing behind it.

[14] In respect to costs, I see no reason why the ordinary rule that costs in interlocutory proceedings be costs in the proceeding pursuant to Rule 63.18 of the Rules. However, if any party wishes to make submissions otherwise, they each shall have 14 days to provide written submissions, and the issues of costs will be determined on the papers.

1. The Plaintiff's summons filed 12 February 2026 is dismissed.

1. The parties are to file and serve any written submissions in respect to costs within 14 days of the publication of these reasons, which will be determined on the papers. Otherwise, costs shall be costs in the proceeding.

[1] Which provides a party may appear in Court, in the case of a corporation by an officer or employee of the corporation, with leave of the Court.

[2] Or certainly would if it had been commenced in the Supreme Court.

[4] (1986) 8 NSW LR 104 at pp 105-106 ('Bay Marine'). See also: Alice Springs Abattoirs Pty Ltd v Northern Territory of Australia [1996] NTSC 69; (1996) 111 NTR 9 at p 17 ('Alice Springs Abattoirs').

[7] Such as the requirement to seek leave versus granting dispensation, or "carrying on proceedings" versus "taking a step in proceedings".

[8] (1971) VR 577. Although that was a case of grating relief under the equivalent of Rule 2.01(2) dealing with irregularities, the Court found the same basis should be applied.

[9] (1984) 3 FCR 68 at [74]-[76] per Smithers J ('Molnar').

[10] [2025] FCA 835 ('Simpson').

[12] Similar to Rule 1A.01, which provides '[t]he overarching purpose of this Chapter is to facilitate the resolution of the real issues of substance in dispute in proceedings justly, promptly, economically and in proportion to the nature of the dispute.'

[15] See: Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No. 12) [2012] FCA 289 at [13]; Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 at [14] per French J.

[16] Affidavit of Phillip Hoare made 12 February 2026 at Annexure 'A'.

[17] Alice Springs Abattoirs at p 23.