SHEARING SERVICES KAMUPENE LIMITED (in liquidation) v Tarahau Farming Limited [2020] NZHC 3352

SHEARING SERVICES KAMUPENE LIMITED (in liquidation) v Tarahau Farming Limited [2020] NZHC3352 [16 December 2020]IN THE HIGH COURT OF NEW ZEALANDWHANGAREI REGISTRYI TE KŌTI MATUA O AOTEAROAWHANGĀREI-TERENGA-PARĀOA ROHECIV 2019-488-000012[2020] NZHC 3352BETWEEN SHEARING SERVICES KAMUPENELIMITED (in liquidation) (formerlyShearing Services Limited and Te WhataShearing Limited)First PlaintiffAND CRAIG ALEXANDER SANSON andDAVID JOHN BRIDGMAN (as liquidatorsof Shearing Services Kamupene Limited (inliquidation))Second PlaintiffsAND TARAHAU FARMING LIMITEDDefendantHearing: 14 October 2020Appearances: G Neil for the PlaintiffP Te Whata, lay representative for the DefendantJudgment: 16 December 2020JUDGMENT OF VAN BOHEMEN JThis judgment was delivered by me on 16 December 2020 at 3.00pmPursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors/Counsel:Meredith Connell, AucklandCopy to:DefendantIntroduction[1] The plaintiffs, Shearing Services Kamupene Ltd (in liquidation), and CraigSanson and David Bridgman, the liquidators of Shearing Services, apply to strike outan application by the defendant, Tarahau Farming Ltd, to set aside the judgment ofDowns J given on 6 June 2019 holding that Tarahau Farming is liable to pay theliquidators the sum of $149,704.43 which Shearing Services is said to have advancedto Tarahau Farming.1[2] The basis of the plaintiffs' application is that Tarahau Farming has failed toappoint a solicitor or counsel to represent it, despite clear directions from the Courtand ample opportunity to do so.[3] Pessiman Pehimana Te Whata, a director of Tarahau Farming, applies torepresent Tarahau Farming and a second defendant which Mr Te Whata added to theproceeding, namely Ngati Moerewa Hapu o Maunga Hikurangi Koporeihana Maori,and to give and call viva voce evidence in support of that application.[4] The questions for decision at and following the hearing held on 14 October2020 are:(a) Should Mr Te Whata and others be permitted to give viva voceevidence?(b) Should Mr Te Whata be permitted to represent the two defendants,Ngati Moerewa Hapu o Maunga Hikurangi Koporeihana Maori andTarahau Farming?(c) Should the application by Tarahau Farming to set aside Downs J'sdecision of 6 June 2019 be struck out?Relevant background[5] There is a considerable history to the applications.1 Shearing Services Kamupene Ltd (in liquidation) v Tarahau Farming Ltd [2019] NZHC 1280.The companies and their shareholdings[6] Mr Te Whata was a director and shareholder of Shearing Services and TarahauFarming when those companies were first incorporated; Shearing Services inJanuary 1996, initially as Te Whata Shearing Ltd, and Tarahau Farming in July 2003.Both companies were established by Mr Te Whata and others, apparently on behalf ofwhānau members in Northland. The whānau has been involved in farming land inNorthland that Mr Te Whata says is ancestral land, although it is now general land heldin freehold title. Through Shearing Services, the whānau has also provided shearingservices to farms, particularly in Southland.[7] In another proceeding, Bell AJ aptly described Tarahau Farming and the natureof its operations as follows:2[2] As its name suggests, Tarahau Farming Limited runs a farm, a drystock operation at Tautoro just south of Kaikohe. Its registered office is inMoerewa. The people behind the company are the Te Whata whānau. Thecompany's main asset is its farm. It also leases some land. There is a debt tothe ANZ bank of about $300,000 secured by a mortgage. There are localauthority rates of about $20,000. The family runs the farm along traditionallines relying on "mahi tahi" and "mahi aroha" where people pitch in to help asand where they can. [8] Later in his decision, Bell AJ stated:[25] The company had been formed to buy back the land. The land hadbeen owned by an earlier Te Whata family company, but it had been put inliquidation. The family had taken out the loan from the ANZ bank to financethe purchase.[27] One matter came out strongly — [Mr Te Whata] would do anythingto hold onto the land. The loss of the land when the earlier company was putinto liquidation had been a bitter blow and the family had struggled to buy theland back again.[9] At various times, the directorships, shareholdings and operating methods of thecompanies changed as those behind the companies apparently sought to incorporateprinciples of whānau ownership in accordance with tikanga Māori and the Te TureWhenua Māori Act 1993. Thus, for a period the shareholding of Shearing Services2 Commissioner of Inland Revenue v Tarahau Farming Ltd [2019] NZHC 1783.was held largely by the Kaitiaki Ahu Whenua Trust and then by an entity known asMaunga Hikurangi Koporeihana Maori. Similarly, for a period the shares in TarahauFarming were held by the Te Haahanga Waka Trust and Maunga Hikurangi Inc.[10] In both cases, the shareholding of the companies reverted to Mr Te Whata inFebruary 2013, although Mr Te Whata continues to assert that he holds the shares ofTarahau Farming on trust for Maunga Hikurangi Koporeihana Maori.[11] Maunga Hikurangi Koporeihana Maori has no formal status underNew Zealand law but Mr Te Whata asserts that it represents the collective interests ofthe Ngati Moerewa hapū.Shearing Services put into liquidation[12] In June 2016, Shearing Services was put into liquidation following non-payment of a statutory demand by the Commissioner of Inland Revenue for paymentof $4,373,780.59 for outstanding assessed taxes, penalties and interest.3[13] That demand followed an investigation by the Commissioner into the wayShearing Services accounted for PAYE for those who performed shearing and shedhand services for the company. That investigation, in turn, was followed by a reportfrom the Commissioner's Adjudication Unit, two decisions by the Taxation ReviewAuthority, which partially and then fully struck out Shearing Services' claimchallenging the findings of the Adjudication Unit,4 and a decision by Mallon Jdeclining an application for leave to extend time to appeal the decisions of the TaxationReview Authority.5[14] In his decision appointing Mr Sanson and Mr Bridgman as liquidators forShearing Services, Bell AJ accepted that Mr Te Whata could oppose theCommissioner's application as a director of Shearing Services. However, Bell AJ also3 Commissioner of Inland Revenue v Shearing Services Kamupene Ltd [2016] NZHC 1379.4 Case 9 [2012] NZTRA 9, (2012) 25 NZTC 1-021 and Case 7 [2013] NZTRA 7, (2013) 26 NZTC2-006.5 Shearing Services Kamupene Ltd v Commissioner of Inland Revenue [2014] NZHC 3223.held that, because Mr Te Whata was not a lawyer, he had no standing to act on behalfof the company in applications to set aside the statutory demand.6Liquidators seek recovery of funds from Tarahau Farming[15] After investigating the affairs of Shearing Services, the liquidators determinedthat Tarahau Farming was indebted to Shearing Services for $149,704.43.[16] The investigation included obtaining Court orders requiring Mr Te Whata togive oral evidence and to produce company records. Me Te Whata was examinedbefore Bell AJ on 8 February 2018.[17] During that examination, Mr Te Whata agreed there was an informal loanagreement between Shearing Services and with Tarahau Farming which was " tohelp the farm and then the farm can help the company back." Mr Te Whata also saidthat some, if not all, of the loans had been paid back by mahi aroha through servicesprovided to Shearing Services. Mr Te Whata also referred to the loans as koha.Judgment by Downs J[18] On 5 February 2019, Shearing Services issued a letter of demand to TarahauFarming to repay the amount of the loans. When Tarahau Farming did not respond,Shearing Services brought the present proceeding, seeking judgment for the sum of$149,704.43 on the basis of two alternative causes of action:(a) The advances made by Shearing Services to Tarahau Farming wereloans repayable at the dates advanced or on demand, and demand hadbeen made; and(b) To the extent the advances were not loans, they were transfers forinadequate consideration covered by s 298 of the Companies Act 1993and which the liquidators could recover.6 Above n 3, at [3]-[6].[19] Tarahau Farming did not file a statement of defence or otherwise engage.Accordingly, the proceeding was set down for formal proof.[20] Downs J heard the claim on 6 June 2019 and issued an oral judgment that day.7The operative passages of the judgment were admirably brief:[2] Mr Te Whata was examined on oath. He described the advances as loans,and inconsistently, as koha.[4] Shearing Services contends its advances are repayable as a loan. So toointerest. I agree. Absent the presumption of advancement, if A pays money toB then B must repay A. If B claims the money was a gift, B must prove asmuch. The presumption of advancement does not arise. Tarahau has not fileda statement of defence. Or evidence. The first cause of action is established.[5] Shearing Services also contends the advances constitute transactions forinadequate consideration (under s 298 of the Companies Act 1993) as analternative to the first cause of action. Although it is not necessary to determinethis cause of action, I would have found it proved. Shearing Services disposedof property—money—to Tarahau. The dispositions occurred within the three-year period contemplated by the section. They were made to a person whofalls within the section. And, value exceeds consideration. It follows thesecond cause of action would also be established.(citations omitted)Tarahau Farming appeal to Court of Appeal[21] On 18 July 2019, Mr Te Whata lodged a notice of appeal on behalf of TarahauFarming against Downs J's decision.[22] The grounds of appeal included that this was a matter of whānau hapū rightsto ancestral land, property interests and tikanga Māori and that the respondent wasunqualified to make assessments of the relationship between Tarahau Farming andShearing Services. The application also referred to Tikanga Regulations, the exchangeof kāwanatanga for the protection of rangatiratanga, and various other matters.[23] Because the notice of appeal was served on the respondents after the expiryof the required period for service, Tarahau Farming applied for an extension of time7 Shearing Services Kamupene Ltd (in liquidation) v Tarahau Farming Ltd, ave n 1..under r 29A of the Court of Appeal (Civil) Rules 2005 (Court of Appeal Rules). Thatapplication was decided on the papers on 29 November 2019.8[24] The Court of Appeal considered that the grounds of appeal were vague, notclearly articulated and did not inspire confidence in their prospects of success. It alsonoted that it was open to Tarahau Farming to apply to the High Court to set aside orvary the judgment under r 15.10 of the High Court Rules 2016.9[25] The Court of Appeal referred to the rule in Re G J Mannix under which a layperson, even a director, may not represent a company in Court except with the leaveof the Court,10 and noted that this rule extended to the filing of documents, includingthe notice of appeal which, under the Court of Appeal Rules, had to be signed by alawyer.11[26] The Court recorded it was " troubled by the way in which the grounds ofappeal advanced so far have been articulated," and said Mr Te Whata may wish toconsider the wisdom and desirability of seeking legal representation and, if so advised,filing amended grounds of appeal.12 The Court noted that that advice might extend toadvice on the less costly option of applying to the High Court to set aside or vary thedecision of Downs J.13[27] The Court of Appeal granted the application for an extension of time oncondition that an amended notice of appeal complying with r 30(1A) of the Court ofAppeal Rules14 was filed and served by Tarahau Farming on the respondents by14 February 2020.15 If no such notice was filed within that timeframe, the orderextending time would be revoked.16 The Court reserved costs.178 Tarahau Farming Ltd v Shearing Services Kamupene Ltd [2019] NZCA 601.9 At [20].10 Re G J Mannix [1984] 1 NZLR 309 (CA).11 At [23]-[24].12 At [20].13 At [25].14 Rule 30(1A) of the Court of Appeal (Civil) Rules requires that a notice of appeal is signed by anappellant personally or by the appellant's lawyer.15 At [26].16 At [27].17 At [28].[28] No notice of appeal complying with r 30(1A) of the Court of Appeal Rules wasfiled and served within the timeframe set by the Court of Appeal. Accordingly, theappeal could not proceed.Application for costs[29] In judgment dated 15 June 2020, the Court of Appeal granted costs in favourof Shearing Services and the liquidators.18 The Court agreed that the respondents wereentitled to increased costs on the grounds that Tarahau Farming had actedunnecessarily in filing its notice of appeal and contributed unnecessarily to the timeand expense of the appeal. The Court pointed in particular to Tarahau Farming'sconduct:19 in filing the notice of appeal without having sought a rehearing in the HighCourt, the filing of prolix documents that contained significant irrelevantmaterial, as well as its failure to comply with the Rules.Application to set aside Downs J's decision[30] On 7 February 2020, Mr Te Whata, as director of Tarahau Farming, filed anapplication, without notice, to set aside Downs J's decision.[31] Among the grounds stated for the application were that:(a) No consideration had been given by the liquidators to the owners' rightsin exercise of tikanga Māori customary laws, values and practicesregarding their property interests and ancestral lands;(b) The plaintiff was not qualified to assess matters of tikanga values andpractices, interpreted testimony under European standards withoutknowledge of tikanga, and relied on annual accounts withoutknowledge of historical consideration given to Shearing Services.[32] In addition, Tarahau Farming claimed set-off for services provided to ShearingServices as set out in a "Whaiwhakaaro Utu Account" containing unaccounted18 Tarahau Farming Ltd v Shearing Services Kamupene Ltd (in liquidation) [2020] NZCA 238.19 At [8].consideration of "mahitahi, hangatanga, kaiwhaako, taonga, manaakitanga I te mahiatu" amounting to $1,341,640.[33] In support of the application, Mr Te Whata filed an affidavit sworn on7 February 2020, to which was attached the "Whaiwhakaaro Utu Account" also dated7 February 2020.Opposition by Shearing Services and liquidators[34] By notice dated 21 February 2020, the plaintiffs opposed the orders sought byTarahau Farming. The grounds of opposition included that the application was anullity because it had not been signed by a solicitor and Mr Te Whata had no standingto act for Tarahau Farming.Amended application by Tarahau Farming[35] On 9 March 2020, Mr Te Whata filed an amended application on notice fororders setting aside Downs J's judgment or, if that order was not granted, an ordervarying the judgment and transferring the case to the Māori Appellate Court pursuantto s 61 of the Te Ture Whenua Māori Act.[36] The grounds for the application included some of those stated in the applicationof 7 February 2020 and also made reference to the Income Tax Act 2007, the Te TureWhenua Māori Act 1995, Te Tiriti O Waitangi and customary law. Much of thatmaterial was of marginal, if any, relevance and was inappropriate in an application ofthis nature.[37] Mr Te Whata affirmed a further affidavit dated 9 March 2020 in support of theamended application.Directions by Brewer J[38] Tarahau Farming's application was called before Brewer J on 7 May 2020. Inhis minute of that date, Brewer J noted that the applicant was represented byMr Te Whata, who was not a barrister and solicitor of the Court, and that there was nosolicitor on the record.20 Justice Brewer recorded that Mr Te Whata had ably takenhim through the complexities of the application but noted that:21The complexities are legal in nature and relate both to aspects of TikangaMāori and their interaction with the statutes which govern the role ofliquidators. Those are matters which require proper legal representation.[39] Justice Brewer made the following directions:22(a) The application is stayed until a solicitor can file an appearance andbe the solicitor on the record responsible for the progression of theapplication.(b) If there is no solicitor on the record by 4 June 2020, then therespondent can apply to have the application struck out.Further amended application filed on behalf of Tarahau Farming[40] By notice dated 19 June 2020 and signed by Mr Te Whata, Tarahau Farmingfiled an amended application to vary and set aside Downs J's decision. The applicationnamed Ngati Moerewa Hapu o Maunga Hikurangi Koporeihana Maori as seconddefendant and stated that Tarahau Farming was to be represented by a named lawyer.[41] The application sought various orders including an order recognisingMr Te Whata as "Native Assessor of Ngati Moerewa Hapu" as representative of thesecond defendant.[42] The application contained a section on "representation" which referred toobservations of the New Zealand Supreme Court and the Supreme Court of Canadaconcerning standing in relation to claims by collective groups of indigenous owners,as well as to other decisions and statutory provisions bearing on rights ofrepresentation. A section on judicial review referred to the Imperial Laws ApplicationAct 1988, apparently for the purpose of demonstrating that powers exercised byliquidators under the Companies Act were ultra vires. A further section on theexchange of kāwanatanga for the protection of rangatiratanga referred to commentary20 Tarahau Farming Ltd v Shearing Services Ltd (in liquidation) HC Auckland CIV-2019-488-12, 7May 2020 (Minute No 1 of Brewer J).21 At [3].22 At [4].on the conclusion of the Treaty of Waitangi, various authorities and the powers of theMāori Land Court.[43] Again, much of the material was of marginal, if any, relevance to theapplication and was inappropriate in an application of this nature.Application to strike out Tarahau Farming application[44] By notice dated 13 July 2020, Shearing Services and the liquidators applied tostrike out Tarahau Farming's application to set aside Downs J's decision. The groundsof the application included that:(a) The applications to set aside Downs J's decision had been signed byMr Te Whata and so were a nullity because they had not been signedby a solicitor;(b) Mr Te Whata had no standing to act for Tarahau Farming in theproceeding;(c) Mr Te Whata had failed to comply with the directions made by Brewer Jon 7 May 2020; and(d) There would be no miscarriage of justice if Downs J's decision wereallowed to stand.[45] In an affidavit sworn on 9 July 2020 and filed in support of the application,Mr Sanson noted that the liquidators had delayed filing their strike out applicationwhen it appeared that Tarahau Farming was in the process of engaging solicitors to actfor the company, and had filed the application only after it learned that the solicitorsthat had been approached had not entered into an engagement to act for Mr Te Whataand Tarahau Farming.[46] By notice dated 25 August 2020, the defendants opposed the application tostrike out the proceedings.Further directions by Brewer J[47] On 27 August 2020 Tarahau Farming's application was called again beforeBrewer J. In a minute of that date, Brewer J recalled his directions of 7 May 2020,noted that there was no solicitor on the record and that the plaintiffs had applied forstrike out, and that Mr Te Whata had filed an application to represent the defendant atthe hearing of its application.23 Justice Brewer also recorded that Mr Te Whata hadtold him that Tarahau Farming could not afford a lawyer and that applications had beenmade for legal aid.[48] Justice Brewer set down the hearing of Mr Te Whata's application for leave torepresent the defendant and the application for strike out for 14 October 2020, anddirected that:[5] Mr Te Whata is to file an affidavit in which he explains the financialposition of the defendant, sets out the details of the application for legal aidand the outcome of the application, and also addresses the ability otherwise ofthe defendant to find and instruct a lawyer. That affidavit is to be filed andserved no later than 14 September 2020. The plaintiffs have to file anotice of opposition and this can be done by 21 September 2020.Further steps prior to hearing[49] Mr Te Whata did not file an affidavit as directed by Brewer J. Instead, on14 September 2020, Mr Te Whata applied under r 9.17 of the High Court Rules for aviva voce hearing to testify to the evidence in support of representation and to call twowitnesses.[50] In an accompanying affidavit sworn on the same date, Mr Te Whataacknowledged that the Court had instructed him to seek legal representation but saidTarahau Farming had no funds to secure legal representation. The last paragraph ofMr Te Whata's affidavit stated:6. Regarding seeking legal representation, I did contact several lawyersin the Northland area. I attained the contacts from the Ministry ofJustice website listings for Northland. I rang three law firms andalthough Henderson Reeve Law Firm Whangarei did prepare torepresent [Tarahau Farming] I realised they were no longer covered23 Tarahau Farming Ltd v Shearing Services Ltd (in liquidation) HC Auckland CIV-2019-488-12,27 August 2020 (Minute No 2 of Brewer J).by legal aid. Paula Wilson who worked for Henderson Reeve didprepare up to $7,000 billable hours, however she pulled out as wecould not agree on issues pertaining to the case.[51] By notice dated 21 September 2020, the plaintiffs opposed Tarahau Farming'sapplications dated 19 June 2020 and 14 September 2020.The hearing on 14 October 2020[52] The purpose of the hearing on 14 October 2020 was to hear Mr Te Whata'srepresentation application and the plaintiffs' strike out application. However, it wasalso necessary to hear Mr Te Whata's application to give and to call viva voceevidence.Application to give viva voce evidence[53] I declined to grant Mr Te Whata's application to give and call viva voceevidence, although I invited Mr Te Whata to address me on the issues to be decided.[54] My reasons for declining the application were as follows.[55] First, and as submitted by Mr Neil, counsel for the plaintiffs, Mr Te Whata hadbeen directed by Brewer J to file and serve affidavit evidence and had failed to do so.That evidence was to address the financial position of the defendant, to set out thedetails of the application for legal aid and the outcome of the application, and also toaddress the ability or otherwise of the defendant to find and instruct a lawyer.[56] While Mr Te Whata had proposed that his oral evidence should address thefinancial position of Tauhara Farming (as well as a range of broader issues), I did notconsider it satisfactory to the Court or fair to the plaintiffs for Mr Te Whata to offeroral evidence on that question at a hearing when he had been directed to set outrelevant matters in an affidavit to be filed and served one month before the hearing.As I said to Mr Te Whata, his failure to comply with Brewer J's directions did notrespect the Court's processes or give the plaintiffs the opportunity to prepareappropriately for the hearing.[57] Mr Te Whata assured the Court that he had meant no disrespect and said hewas a shearer who had been required by his whānau to represent them in this and otherproceedings. I also came to appreciate subsequently that Mr Te Whata had taken asimilar approach in a separate liquidation proceeding concerning Tarahau Farmingitself and Bell AJ had not only accepted Mr Te Whata's evidence but found that hisevidence was the better for the absence of formal preparation.24[58] Be that as it may, it is apparent from the history of the litigation involvingShearing Services and Tarahau Farming that Mr Te Whata has experience of Courtprocesses and should have been aware of the importance of complying with Brewer J'sdirections.[59] My second reason for declining Mr Te Whata's application was that to do sowould have compounded the difficulty already caused by Mr Te Whata purporting torepresent Tarahau Farming in this proceeding when he is not a lawyer. Mr Te Whataproposed not only to give evidence himself but to call other witnesses as well.[60] While Mr Te Whata did not formally give evidence, in his presentation to theCourt he confirmed the history of the Te Whata whānau and Tarahau Farming inrelation to the land as set out in Bell AJ's decision cited at [7] and [8] above. Inparticular, Mr Te Whata emphasised the importance of the land to the whānau and thewhānau's determination not to lose again land that he said had first been taken by theCrown by compulsory acquisition and which had been lost again through liquidationproceedings. Mr Te Whata also explained the whānau's reluctance to rely on lawyersbecause of that earlier experience.Representation application[61] The application of 19 June 2020 was for an order recognising Mr Te Whata "asNative Assessor of Ngati Moerewa Hapu" and as representative of the seconddefendant, Ngati Moerewa Hapu o Maunga Hikurangi Koporeihana Maori. At thetime the application was filed, it was expected that Tarahau Farming would berepresented by Henderson Reeves as stated in the application itself.24 Above n 2 at [24].[62] However, in his minute of 27 August 2020, Brewer J accepted that theapplication extended to Mr Te Whata representing Tarahau Farming, and Mr Neil andMr Te Whata addressed the Court on that basis. Indeed, the application forMr Te Whata to represent the second defendant was barely addressed.Application to represent second defendant[63] Mr Te Whata added the second defendant without obtaining an order inaccordance with r 4.56 of the High Court Rules or leave in accordance with r 7.77(4).Accordingly, the second defendant is not properly a party to the proceeding.[64] Mr Te Whata acknowledged that Maunga Hikurangi Koporeihana Maori is nota legal entity. Nor is the Ngati Moerewa Hapu. Rather, Mr Te Whata said that theshares in Tarahau Farming are held by himself on behalf of the hapū which isrepresented by Maunga Hikurangi Koporeihana Maori, not as a legal entity but in thearrangements the hapū has put in place.[65] Given those acknowledgements, there is no basis for Ngati Moerewa Hapu orMaunga Hikurangi Koporeihana Maori to be a party in its own right to the proceeding.For that reason, no question arises as to whether Mr Te Whata should be recognisedas the representative of the hapū or Maunga Hikurangi Koporeihana Maori, whetheras Native Assessor or in his personal capacity.[66] For these reasons, I dismiss Mr Te Whata's application to be recognised asrepresentative of Ngati Moerewa Hapu o Maunga Hikurangi Koporeihana Maori.Application to represent Tarahau Farming[67] The more significant question is whether Mr Te Whata should be recognisedas a representative of Tarahau Farming.[68] It is well established in New Zealand law that, apart from statutory exceptions,a company has no right to carry on proceedings in Court except by a solicitor. Thisrule was restated by the Court of Appeal in Re G J Mannix, where Cooke J reaffirmedthat the rule includes the filing of documents, including the filing of applications(writs), statements of defence and notices of appeal.25 Cooke J said the reason for therule was that it ensures that the Courts will be served by counsel who are subject tothe rules of their profession, are subject to a disciplinary code and are familiar withthe methods and scope of advocacy followed in presenting arguments to the Court.26[69] The approach set out by Cooke J in Re GJ Mannix was reaffirmed by the Courtof Appeal in 2013 in Commissioner of Inland Revenue v Chesterfields Preschool Ltd,where, after citing the above paragraph, the Court of Appeal said:27[27] We have no doubt that the rule remains in operation and to the extentdescribed by Cooke J . The rule provides an important mechanism bywhich judges may ensure that the bringing or carrying on of proceedingsachieves justice and the appearance of justice for the parties.[70] In Re G J Mannix, the Court of Appeal accepted that all Courts have a residualdiscretion to allow unqualified advocates to appear before them.28 The Court alsoaccepted that such decisions should be left to the discretion of the individual judge butthat the occasions for the exercise of that discretion would be likely to be the exceptionrather than the rule.29[71] Cooke J stated:30In general, and without attempting to work out hard-and-fast rules,discretionary audience should be regarded, in my opinion, as a reserve oroccasional expedient, for use in emergency situations when counsel is notavailable or in straightforward matters where the assistance of counsel is notneeded by the Court or where it would be unduly technical or burdensome toinsist on counsel. Especially in minor matters, cost-saving could also be arelevant factor. A "one-man" company might be allowed to be to berepresented by its owner if the Judge saw fit in a particular case. But it couldnot be right, for instance, to issue some sort of tacit continuing or generallicence to an unqualified agent to appear in winding up or any other class ofproceedings.[72] Mr Neil submitted that the present case does not come within any of theexceptions contemplated in the above passage. I agree.25 Above n 10, at 311.26 At 311.27 Commissioner of Inland Revenue v Chesterfields Preschool Ltd [2013] NZCA 53, [2013] 2 NZLR679.28 Above n 10, at 314 and 316.29 At 316-317.30 At 314.[73] This proceeding is not an emergency situation. It began in February 2019. Inaddition, in November 2019 Mr Te Whata was given clear guidance from the Court ofAppeal that he should seek legal representation. In May 2020, Brewer J stayed theproceeding until there was a solicitor on the record. Mr Te Whata has had plenty ofprompts and plenty of time to respond to those prompts.[74] The proceeding is not straightforward. The essence of the case for TarahauFarming is that Shearing Services and Tarahau Farming were operated in accordancewith tikanga and customary law, and that those considerations should have been takeninto account when considering whether the advances made by Shearing Services toTarahau Farming were loans or transactions to which s 298 of the Companies Actapplies. As Brewer J observed in his minute of 27 August 2020, the applicationinvolves legal complexities relating to aspects of tikanga and their interaction with thestatutes that govern the roles of liquidators and require proper legal representation.[75] Because the issues are complex, cost-saving is of limited relevance. Inaddition, while I accept that cost is an issue for Tarahau Farming, it was not really thebasis on which Mr Te Whata has sought to represent Tauhara Farming. WhileMr Te Whata told the Court that Tarahau Farming had no funds to secure legalrepresentation, the evidence in Mr Te Whata's affidavit of 14 September 2020 fallsshort of establishing an inability to pay. Nor does it establish that Mr Te Whata evermade a serious effort to obtain legal aid. All it establishes is that Mr Te Whata hadcalled three firms but had not followed up when he learned they "were not coveredlegal aid", and a solicitor in another firm had ceased to act after she and Mr Te Whata"could not agree on issues pertaining to the case."[76] However, just because Tarahau Farming's circumstances do not come withinthose contemplated by Cooke J in Re G J Mannix is not the end of the matter.[77] Mr Te Whata told the Court on 14 October 2020 that he has been instructed byhis whānau to represent its interests, and whānau members wanted him to continue inthat role. Mr Te Whata explained that while he had made some effort to find a suitablelawyer, he knew that whānau members would not accept a lawyer who did notunderstand tikanga and the way the whānau operates. Mr Te Whata referred to theliquidation of the company that had previously held the family land which, he said,had happened after the whānau had followed legal advice on the use of corporatestructures to advance whānau interests. In other words, according to Mr Te Whata,the whānau members preferred Tarahau Farming to be represented by Mr Te Whatarather than by a lawyer.[78] While a preference of whānau members cannot be a reason for departing froma well-established rule on the representation of companies in Court proceedings, thequestion that Mr Te Whata's application raises is whether tikanga should have anybearing in deciding that application.[79] The relevance or otherwise of tikanga was not a consideration in Re G JMannix or in subsequent decisions such as Time Ticket International Ltd vBroughton,31 Pro-Pacific Ltd v Wilson,32 Commissioner of Inland Revenue vChesterfields Preschools,33 and Oceanic Palms v Kiwi Rail Ltd.34 To that extent, theissue has not been considered. Nor was it addressed in the submissions of Mr Neil or,other than inferentially, in the presentation of Mr Te Whata.[80] I have considered whether account should be taken of tikanga when weighingthe applicability of the rule in Re G J Mannix to companies such as Tarahau Farmingwhere the company is said, in effect, to be a proxy for collective ownership of assetsby Māori interests who, for reasons associated with tikanga, are unwilling to berepresented by lawyers. I have concluded, however, that while there may be anoccasion for considering that question, this is not such an occasion. To the contrary, Iam satisfied that in the present case there are strong practical reasons for not addingto the exceptions to the rule in Re G J Mannix.[81] In Re G J Mannix, Cooke J, in further explanation of the rule, referred to thedecision of Mihaka v Police where Hardie Boyes J observed that the rule:3531 Time Ticket International Ltd v Broughton [1996] 2 NZLR 176 (HC).32 Pro-Pacific Ltd v Wilson (1996) 9 PRNZ 687.33 Commissioner of Inland Revenue v Chesterfields Preschools, above n 27.34 Oceanic Palms v Kiwi Rail Ltd [2018] NZHC 679.35 Mihaka v Police [1981] 1 NZLR 54 (HC) at 58. gives effect to the fact that an unqualified and inexperienced person maydo more harm than good to the person he assists: if only because his ignoranceof the law which may support that person's cause.[82] Cooke J also referred to the final report of the Royal Commission on LegalServices in England in 1979 where it was said, about litigants in person, that:18.8 In the great majority of cases, a litigant in person lacks the necessaryknowledge to present his case properly and this adds appreciably to thedifficulties of the court in ensuring that his case is properly brought out andthat justice is done.[83] The history of the current proceeding illustrates those difficulties. So far,Tarahau Farming:(a) Did not file a defence to the plaintiffs' original statement of claim withthe consequence that Downs J entered judgment against TarahauFarming by default;(b) Did not file and serve the appeal against Downs J's decision within theperiod prescribed in the Court of Appeal Rules;(c) Filed grounds of appeal which the Court of Appeal considered vague,not clearly articulated and not inspiring confidence in their prospects ofsuccess, and documents which the Court of Appeal considered prolixand containing significant irrelevant material;(d) Did not file an amended notice of appeal complying with r 30(1A) ofthe Court of Appeal Rules within the time period directed by the Courtof Appeal;(e) Filed the initial application to set aside Downs J's decision on a withoutnotice basis in circumstances where there was a proceeding on foot andcounsel representing the other party and no urgency;(f) Filed amended applications to set aside Downs J's judgment, includingduring the period the proceeding had been stayed, that were also prolixand contained similar material to that considered irrelevant by the Courtof Appeal;(g) Did not comply with the directions of Brewer J to file and serve anaffidavit addressing the matters prescribed in those directions.[84] Most of these errors or deficiencies are attributable to the fact that Mr Te Whatahas no legal training, as he readily acknowledged. While I have no cause to doubtMr Te Whata's good faith, it can reasonably be said that in continuing to act on behalfof Tarahau Farming, Mr Te Whata has taken steps that have risked doing more harmthan good to Tarahau Farming's application and have added appreciably to thedifficulties of the Court in ensuring that his case is properly brought out and that justiceis done. In particular, he has jeopardised the prospects of the application because hehas failed to comply with Court orders.[85] In addition, the claim that Tarahau Farming wishes to make is both legally andfactually complex and involves questions of customary Māori and constitutional lawas well as company law. The claim is likely to need evidence, whether fromMr Te Whata or others, to establish the factual basis for the legal arguments. But itneeds a lawyer to advance the case and the Court needs the assistance of counsel tounderstand the nature of those arguments.[86] All of these reasons militate strongly in favour of requiring that TarahauFarming be represented by a lawyer.[87] For these reasons, I dismiss Mr Te Whata's application to represent TarahauFarming.Should the application to set aside Downs J's decision be struck out?[88] In his minute of 7 May 2020, Brewer J invited the plaintiffs to apply to strikeout Tarahau Farming's application if there was no solicitor on the record by 4 June2020. Responsibly, the plaintiffs delayed bringing their application until it was clearthat solicitors had not been engaged to act for Tarahau Farming.[89] Mr Neil refers to rr 1.5, 5.36 and 15.1 of the High Court Rules in support ofthe strike out application.[90] Rule 1.5(2) provides that the Court may set aside a proceeding, wholly or inpart, where there has been a failure to comply with the High Court Rules. Rule 5.36sets out the requirements for solicitors to act. Under r 15.1(1), the Court may strikeout all or part of a pleading if it discloses no reasonably arguable cause of action, islikely to cause prejudice or delay, is frivolous or vexatious, or is otherwise an abuseof the process of the Court.[91] Mr Neil submits that Tarahau Farming has failed to comply with r 5.36 andrefers to commentary on the rule in McGechan on Procedure, where it is said that it isimplicit in the rule that a solicitor must act for a company in commencing and carryingon a proceeding, on the basis of Re G J Mannix and other decisions.36 Mr Neil alsorefers to Lynx Trustees Ltd v Body Corporate 68792 where (Francis) Cooke J alsoconsidered an application to strike out an application to set aside a statutory demandthat had been made on behalf by a body corporate by a person who was not a solicitor.37[92] As the Court of Appeal said in Commissioner of Inland Revenue vChesterfields Preschools, in New Zealand, it is implicit rather than explicit in the HighCourt Rules that a company must be represented by a solicitor at all stages of theproceeding.38 The Court said:39We are satisfied that the rule in New Zealand is that a solicitor must act for acompany in commencing and carrying on a proceeding, subject to thediscretion of the court.[93] On that basis, Tarahau Farming is not in compliance with the High Court Rules.There is no solicitor acting and the Court has not exercised its discretion to allow anexception to that requirement.[94] However, r 1.5(1) provides that a failure to comply with the requirements ofthe High Court Rules must be treated as an irregularity and does not nullify the36 A C Beck and others McGechan on Procedure (online ed, Thomson Reuters) at HR 5.36.02.37 Lynx Trustees Ltd v Body Corporate 68792 [2019] NZHC 945.38 Above n 27, at [33].39 At [33].proceeding or any step taken in the proceeding. As Cooke J said in Lynx Trustees, theconsequence of non-compliance with the Rules is not that non-compliant actions area nullity. Rather, once an error or deficiency has been identified, it is for the Court todecide what relief should be granted.40 In that case, as in this proceeding, thecommencement of a proceeding by a person who is not a solicitor is treated as a validand effective act unless and until it is set aside.41[95] In Lynx Trustees, Cooke J decided not to strike out the proceeding because,among other reasons, the deficiency of commencing a proceeding in the name of acompany without a solicitor had been largely rectified. By the time of the hearing theapplicant had a solicitor on the record.42 Other considerations to which Cooke J hadregard were the tight timeframes that apply to the setting aside of statutory demandsand the fact that the respondent did not contend there was no substance to theapplication.43[96] As Mr Neil submits, the situation in the present proceeding is rather different.The deficiency has not been remedied. It continues despite the clear guidance fromthe Court of Appeal in November 2019 that Mr Te Whata needed to instruct a lawyerand despite the directions given by Brewer J in May 2020. At the hearing on14 October 2020, Mr Te Whata made it clear that he seeks to represent TarahauFarming irrespective of that guidance and directions.[97] Nor is there any issue of tight timeframes in this proceeding. There is noparticular urgency in this proceeding.[98] The much more difficult question is whether there is substance to theapplication to set aside Downs J's decision.[99] Mr Neil submits that Tarahau Farming's application is unmeritorious and thatno miscarriage of justice will occur if the application is struck out. He submits thatTarahau Farming has failed to identify any substantial ground of defence to the claim40 Above n 37, at [7].41 At [8].42 At [16].43 At [17]-[18].upon which Downs J's decision was entered, that decision was regularly obtained andwas entered with regard to admissions by Mr Te Whata when being examined on oath.[100] That submission does not address the essence of Tarahau Farming'sapplication.[101] While the application and revised applications filed by Mr Te Whata have beenlengthy and have contained irrelevant and inappropriate material, the essence of theTarahau Farming's application is clear enough. As I said at [74], it is that Downs J didnot consider whether those involved in Shearing Services and Tarahau Farmingmanaged those businesses in accordance with tikanga and customary law, and thatthose considerations should have been taken into account when considering whetherthe advances made by Shearing Services to Tarahau Farming were loans ortransactions to which s 298 of the Companies Act applies.[102] The factual basis for part of that position is apparent. Apart from the scepticalreference to koha, Downs J's decision makes no reference to tikanga. That is notsurprising because Tarahau Farming took no part in the hearing so the argument thatTarahau Farming seeks to make in its application was not made to Downs J.[103] To that extent, I am satisfied that Tarahau Farming has put forward a reasonablyarguable case, even if it has yet to be established, as a matter of fact, that ShearingServices and Tarahau Farming operated according to tikanga.44 Assuming thatTarahau Farming were able to establish the factual basis for the claim, the questionthat would then arise is whether that tikanga and related matters should be taken intoconsideration when assessing whether the advances made by Shearing Services toTarahau Farming were loans or transactions to which s 298 of the Companies Actapplies. That is not a straightforward question, as Brewer J acknowledged in hisminutes of 7 May and 27 August 2020.44 Just because Mr Te Whata asserts that Tarahau Farming and Shearing Services operated accordingto tikanga does not make it so. If Tarahau Farming wanted to advance that case, it would need tofile evidence, possibly including expert evidence, to establish what practices were followed andthat those practices were according to tikanga. Mere assertions about how the companies operatedwould be unlikely to be sufficient. The same would be likely to be the case with a "WhaiwhakaaroUtu Account" that was clearly put together well after the events to which it relates.[104] In other words, Tarahau Farming would be likely to face substantial evidentialand legal challenges in making the case that Downs J's decision should be set aside.However, just because it would face those challenges does not make the caseunmeritorious or frivolous. In my view, there may well be real issues that warrant theCourt's attention.[105] However, the above considerations do not change the reality that TarahauFarming has failed to appoint a lawyer to represent it in its application despite clearguidance from the Court of Appeal and direct instructions from the High Court that itmust do so. Nor has Tarahau Farming established that it is unable to appoint a lawyer.As I have held, Mr Te Whata's evidence falls short of establishing an inability to payor that he made a serious effort to obtain legal aid. I understood from Mr Te Whata'spresentation to the Court that he and those he represents prefer Tarahau Farming to berepresented by Mr Te Whata rather than a lawyer.[106] In these circumstances, I am satisfied that the maintenance of the applicationby Tarahau Farming to set aside Downs J's judgment in circumstances where TarahauFarming has repeatedly failed to appoint a lawyer to represent its interests would causedelay and would be an abuse of the Court's process and should be struck out.[107] In reaching that conclusion, I am cognisant that the power to strike outproceedings should be exercised sparingly, particularly in a case in which the law maybe developing.45 However, the consequence of not striking out the application wouldbe to leave on foot an application by a company that has declined to appoint counseldespite a Court order to do. That would be a most unsatisfactory result.Next steps[108] The effect of striking out the application is to leave in place Downs J's decisionthat Tarahau Farming owes a debt to the plaintiffs for the sum of $149,704.43 plus anyinterest that may be payable. What happens next has yet to be determined. I recognise,however, that if Tarahau Farming does not pay that amount, an application forliquidation is likely to follow.45 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].[109] In that regard, it is appropriate to recall the observations of Bell AJ when hedeclined the earlier application to liquidate Tarahau Farming:46[30] The effects of liquidation would be severe, as it is likely to separatethe Te Whata whānau from their ancestral land. In a normal insolvencycontext, the sale of an asset ought not to matter. If a business has failed becauseof insolvency, assets should be liquidated so that they can be sold to someoneelse able to use them more profitably. That approach is inappropriate here. Ido not need to refer this case to the Māori Appellate Court to understand theimportance of this family's ties to their ancestral land. It goes to their sense ofwhere they belong; their tūrangawaewae. The loss of land leads to a loss ofidentity. That is recognised in statute. Te Ture Whenua Māori Act makes thatclear. It is intended to facilitate and promote the retention, use, developmentand control of Māori land as he taonga tuku iho by Māori. That is one pieceof legislation where Parliament sought to give effect to the principles of theTreaty of Waitangi, especially Article 2. The tax legislation and the CompaniesAct say nothing about the Treaty, but that does not matter. In a case betweenthe Crown and Māori where retention of land in the hands of Māori is in issue,it is appropriate to take Treaty principles into account, even if the legislationis silent. In Huakina Development Trust v Waikato Valley Authority Chilwell Jgave the lead on taking the Treaty into account in the absence of expressstatutory provision. Other legislation with Treaty references could beconsidered to give guidance. In Barton -Prescott v Director-General of SocialWelfare Gallen and Goddard JJ said:"We are of the view that since the Treaty of Waitangi was designed tohave general application, that general application must colour allmatters to which it has relevance, whether public or private and thatfor the purposes of interpretation of statutes, it will have a directbearing whether or not there is a reference to the treaty in the statute."[31] In exercising a discretion where the effects of the court's order mayseparate Māori from their ancestral land, it is appropriate to take into accountthe importance of keeping ancestral land in Māori ownership. If a liquidationorder were made, the liquidator is likely to put the land up for sale, and theproceeds of sale would be applied to pay the mortgage debts, the localauthority rates, the costs of the liquidation and creditors, before any surpluscould be made available for the shareholders. That would not be an adequatesubstitute for the loss of the land. There is no assurance that the family wouldbe able to buy the land back again. Given this dire consequence, it makes senseto give the company more time to save the situation.(citations omitted)[110] Given the severity of the consequences of liquidation, if liquidationproceedings are commenced I strongly urge the directors of Tarahau Farming not topersist in their practice of seeking to represent themselves.46 Above n 2.Result[111] For the reasons given:(a) I declined Mr Te Whata's application to give and to call viva voceevidence at the hearing on 14 October 2020;(b) I decline Mr Te Whata's application to represent Tarahau Farming andNgati Moerewa Hapu o Maunga Hikurangi Koporeihana Maori in thisproceeding; and(c) I strike out Tarahau Farming's application to set aside Downs J'sdecision of 6 June 2019.Costs[112] The plaintiffs are entitled to costs on a 2B basis.______________________G J van Bohemen J