AURORA FISHERIES LIMITED V AKIRA HOZUMI HC NEL CIV-2010-442-000511

AURORA FISHERIES LIMITED V AKIRA HOZUMI HC NEL CIV-2010-442-000511 18 August 2011IN THE HIGH COURT OF NEW ZEALANDNELSON REGISTRYCIV-2010-442-000511BETWEEN AURORA FISHERIES LIMITEDPlaintiffAND AKIRA HOZUMIDefendantHearing: 26 July 2011Counsel: M J Logan for PlaintiffJ M Fitchett for DefendantJudgment: 18 August 2011JUDGMENT OF ASSOCIATE JUDGE MATTHEWSIntroduction[1] The plaintiff is a fishing company. At all relevant times it chartered a fishing vessel from Kanai Fisheries Co Limited, a Japanese company, and fished in New Zealand waters under authority of a fishing permit held by the plaintiff. The vessel was crewed by Kanai employees.[2] At all relevant times Kanai held 24.9 per cent of the shares in the plaintiff,and the defendant was a director of both companies. He was in charge of Kanai‟soverseas fishing fleet and new business development, and was also employed as general manager of the plaintiff. He was then resident in New Zealand but now lives in Japan.[3] As it was fishing under authority of a fishing permit, the plaintiff was under certain statutory duties under Fisheries legislation to file fishing returns in relation to all fish taken under the permit. Between 2001 and 2008 false information was inserted into these returns with a consequence that an estimated 2,870 tonnes of fish were the subject of misreporting.[4] As a result of investigations by the Ministry of Fisheries (MOF) charges were laid against the plaintiff, defendant, Kanai and others alleging offences between March 2001 and December 2008. Eight charges were laid against the plaintiff, nine against the defendant. The charges against the plaintiff were laid on the basis that it was deemed under the Fisheries Act to have knowledge that the fishing returns completed by Kanai representatives contained false statements, through the defendant as its director who had such knowledge, and Mr Matsudace of Kanai, the joint venture manager. The defendant pleaded guilty to all nine charges laid against him.[5] Two causes of action are pleaded against the defendant, the first for breach of statutory duties to the plaintiff as a director and the second for breach of fiduciary duties owed to the plaintiff. Special damages are sought in sums yet to be quantified, and exemplary damages of $100,000, together with an account of profits under the second cause of action by way of increased bonuses said to have been received by the defendant as a result of overstated catches, or otherwise. Theplaintiff pleads and intends to rely on at trial the defendant‟s pleas of guilty.[6] The plaintiff has applied for summary judgment on liability. That application has not yet been heard. The defendant has applied for three orders:(a) varying a freezing order in relation to the defendant‟s assets made bythe Court on 22 December 2010;(b) directing that the plaintiff give particular discovery of documents within a certain category;(c) barring the legal firm Oceanlaw, and a partner of the firm Michael Sean Sullivan from acting for the plaintiff in these proceedings.Application to vary the freezing order[7] The first of these matters was dealt with by consent. The application was to vary the order so the defendant can borrow the sum of $30,000 to pay legal fees in relation to this proceeding. At the hearing I made a direction in relation to thisapplication. Mr Fitchett sought costs. He outlined to me that there had been an opportunity for the plaintiff to consent earlier when the matter was raised in correspondence or at the time that the Court extended the freezing order which it had initially made. Mr Logan opposed costs on the basis that the defendant had been involved in a fraud which he described as one of the biggest in the history of New Zealand.[8] I have considered all relevant factors. In my view the defendant has received an indulgence, the Court having previously considered that it was appropriate to freeze the asset in its entirety pending the outcome of this litigation. My decision is that costs will lie where they fall.Application for discovery[9] In his notice of opposition to the plaintiff‟s application for summaryjudgment the defendant states the following grounds:1. That the defendant has defences to the plaintiff‟s claims but is not in aposition to enunciate the same fully (with the required supportingdocumentation) until the plaintiff‟s solicitor releases to his solicitor allpapers held by the plaintiff‟s solicitor for and in connection with theinvestigation referred to in paragraph 20 of the statement of claim, the charges against him referred to in paragraph 21 of the statement of claim, and all involvement of Oceanlaw on behalf of the plaintiff or thedefendant with MOF‟s post-December 2008.2. That the defendant has asked Oceanlaw to release the papers referred to in the preceding sub-paragraph: but the same have not yet been released.3. The defences to the plaintiff‟s claims relate to the knowledge theplaintiff, or directors thereof (other than the defendant) had (or ought to have had) in 2006, 2007 and 2008 of the matters detailed in paragraphs 12, 14, 15, 16, 18 and 19 and paragraphs 17, 30, 32 and 33 of the statement of claim.4. That the defendant has objected to Oceanlaw acting in these proceedings for the plaintiff on the ground that in so acting Oceanlaw is in breach (inter alia) of r.5.4 of the New Zealand Law Society Rules of Conduct. Oceanlaw has not yet ceased to act herein for the plaintiff.And upon the grounds of an amended notice of opposition to be filed after the said papers are released by Oceanlaw.And upon the grounds outlined in the affidavit of Akira Hozumi sworn and filed herein.[10] Consistent with this, the defendant seeks an order for discovery in the following terms:That the respondent (plaintiff) makes particular discovery within 14 days of all documents which consist of any communication received by it, or any director of it as has the surname ["Mr Director"] from Oceanlaw (solicitorsat Nelson) or from Michael Sullivan of Nelson, solicitor between the dates of 1st December 2008 and 1st December 2010: as has in the intituling, or in thebody, of the communication the name "Hozumi".In this passage, the name of a director appears. One director of the plaintiff company has the benefit of a permanent name suppression order made by the DistrictCourt. Therefore on each of the 11 occasions where that director‟s name wouldotherwise appear in this judgment, I have substituted the words "Mr Director" in brackets for that director‟s name, and placed it in italics.[11] In the application it is stated that the discovery sought is required to enablethe defendant "to adduce to the Court the written evidence that will corroborate his defences raised in the notice of opposition, and further defences that will be pleadedin due course in an Amended Notice of Opposition to Summary Judgment". It isstated that these defences will include the following:"(a) defences relating to the manner one or more of the Plaintiff‟s directorscarried on business in the period up to May 2011;(b) a defence seeking the Court to exercise its discretion against entering summary judgment (even as to liability) as such judgment would inhibitor prevent the Applicant/Defendant from joining Kanai Fisheries Limited and/or Chapman Tripp (a law firm) as Second (or Third) Defendants or as Third (or Fourth) Parties;(c) a defence seeking the Court to exercise its discretion against enteringsummary judgment: on the ground of the absence of „clean hands‟ inrespect of the Plaintiff and/or its solicitors;(d) a defence that the principal ground relied on by the Plaintiff in its summary judgment application (namely that the breach of thedefendant‟s fiduciary duty to the Plaintiff is proved by his pleadingguilty to certain charges brought by MoF) is unsustainable because the principal reasons he (the Applicant/Defendant) pleaded guilty were:(i) Oceanlaw (i.e. the Plaintiff‟s solicitors) advised his employer (Kanai) that he should plead guilty; and he was made aware of such advice;(ii) such advice was given to Kanai with the intention of furthering or advancing the financial position of the Plaintiff and/or Kanai; and was given notwithstanding that the Plaintiff‟s solicitors were ofthe opinion that the case against the Defendant/Applicant was weaker than the case against any of the other defendants inrelation to MoF‟s 2008 investigation of Tomi Maru 87;(iii) the Defendant/Applicant only confirmed his guilty plea in 2010 after being assured in writing by Chapman Tripp that:a) Kanai would pay all fines;b) the Defendant would have "no actual financial liability";c) the Defendant would be able to return to New Zealand at any time;d) the Defendant pleading guilty would "bring the matter to an end";and such advice was wrong.(iv) That Zindels (being a legal firm said by Oceanlaw to have been acting as solicitor for the Applicant Defendant) and Chapman Tripp (being a legal firm that acted in a restricted capacity as solicitors for the Applicant Defendant, and contemporaneously acted for Kanai Fisheries Limited which had been the employer of the Applicant Defendant) have each failed or refused to comply with authorities to uplift their files in relation to the Applicant Defendant and have failed or refused to respond constructively to Applications made by the Applicant Defendantpursuant to the Privacy Act."[12] When MOF investigations commenced the plaintiff instructed Mr Sullivan of Oceanlaw to act for it on those matters. In so doing Mr Sullivan undertook a wide range of work in order to be in a position to advise the plaintiff in relation to theMinistry‟s investigation and subsequent allegations. It is plain from correspondence produced that a significant amount of work was involved. Amongst other matters he attended interviews, some extending into several days in duration, with Aurora staff and some Kanai staff, and liaised with MOF officials. It is clear that in the course of so doing he developed a picture of the events that were said to have taken place and he wrote a number of letters to the directors of Aurora. Letters written before the defendant ceased to be a director came into his hands in that capacity.[13] There was no evidence that the defendant at any point instructed Mr Sullivan to act for him as his solicitor. Nor, as far as can be ascertained from the evidence, did the defendant ever meet Mr Sullivan, though he was, evidently, present at the premises where some of the MOF interviews were being undertaken of other persons. He was not in the interview room; Mr Sullivan was. There is no evidence that Mr Hozumi ever gave information to Mr Sullivan or communicated with him in writing or orally. I return to this in more detail later in this judgment.[14] As Mr Sullivan‟s knowledge of the matters under investigation developed hewrote certain letters which contained references to the roles of various persons, including Mr Hozumi, in the transactions under consideration.[15] Mr Sullivan‟s instructions to act for the plaintiff started at the beginning ofthe date period for which particular discovery is sought. The documents sought are those that the plaintiff received from its own solicitors throughout the entire period of the investigation and the process of the subsequent prosecutions through the court, in which either in the intituling or the body of the communications the name Hozumi appears. The correspondence sought also includes such documents received by any of three members of the family of "Mr Director" who are also directors of theplaintiff.[16] Mr Fitchett submitted that documents will exist which relate to Oceanlaw‟s involvement with the MOF prosecutions which directly affected the defendant‟spersonal interests, and which contain advice to the defendant and others while he was a director of the plaintiff company. As I have said, that role ceased in March2009. Mr Fitchett said documents also exist recording Oceanlaw‟s advice to the plaintiff and/or ("Mr Director"), one of the directors, and/or Kanai as to the course ofaction Kanai should adopt with respect to Mr Hozumi during the MOF‟sprosecutions.[17] There can be no doubt such documents do exist. Some have already been annexed to affidavits in this proceeding. As an example, on 20 March 2009, Oceanlaw, under the hand of Mr Sullivan, wrote a 17 page report to the directors of Aurora outlining in considerable detail the events which had occurred at interviews of personnel in Timaru, Wellington and Nelson, the scope of the offending, theimplications of the Ministry‟s case and his advice on the strategy the plaintiff shouldadopt in relation to these prosecutions.[18] Prior to this letter being written Mr Hozumi had left New Zealand and returned to his home country of Japan. He says in his second affidavit that on thenight of 5 March 2009 ("Mr Director"), who was another director of Aurora, rang him and told him to return to Japan quickly because, in his words, "there is a risk of restraint by MOF". The defendant says that ("Mr Director") told him that his returnto Japan was strongly advised by Mr Sullivan. As a result of this he left Auckland for Japan on 7 March 2009 and remained out of the country until April 2011 by which time all the prosecutions had been fully dealt with. The reason for this, thedefendant said, is that both Kanai and Oceanlaw advised strongly against his return to New Zealand.[19] There is a reference to this in the report dated 20 March 2009 under theheading "Interview of Mike Hozumi". Mr Sullivan reported to the directors of the plaintiff that the Ministry had indicated that it wished to interview Mr Hozumi and that in his opinion Mr Hozumi should not return to New Zealand for this purpose. Mr Sullivan advised that he should make himself available for interview in Japan provided the Ministry supplied in advance all copies of documents they intended to put to him in that interview. Mr Sullivan said the advantage of conducting an interview on that basis would be that if the Ministry turned down the opportunity, the defendant would remain free to give whatever explanations he may choose to do in any subsequent proceedings and no criticism could be levelled at him for providing those explanations for the first time at the hearing of any charges. An interview, if conducted, could be properly prepared for as a result of the documents being made available. No doubt this view was reached because in the descriptions of the interviews earlier in the report Mr Sullivan advised that the Ministry had produced a large number of documents which were very incriminating of those involved in this fraud and which he had been assured by the interviewees did not exist before the interviews were agreed to.[20] In the strategy portion of the report reference is made to Mr Matsudace and Mr Hozumi being outside New Zealand, so their return to this country for the purpose of answering charges could be negotiated, which would provide a bargaining chip in the event of any overall deal that might be done in relation to all charges against all relevant parties. Mr Sullivan noted that there could be no doubt that the Ministry would strongly want both to return to this country. He pointed out that if they remained away they could not be charged with offences carrying a potential term of imprisonment but could still be charged under s 231 of the Fisheries Act in their absence, and he also reported to the plaintiff that it was likely that a court hearing the charges would treat the actions and intentions of these persons as being those of the company, given their senior roles.[21] The strategy section of this report is a complex interwoven series ofpropositions where certain outcomes are postulated on various bases. Mr Hozumi‟srole, and actions he might take in relation to pleading to various classes of charges, appear to form a part of an overall assessment undertaken by Mr Sullivan of the wayAurora should handle the Ministry‟s investigation and approach to the laying ofcharges.[22] The report also deals with the position of Kanai. In this section, and in the subsequent summary, Mr Sullivan reports that his firm has not acted for Kanai but has acted solely for the plaintiff and the crew and captain of the vessel. He alsoreports that the firm has "represented Kogi Matsudace and Mike Hozumi in theircapacity as directors and managers of AFL". However, Mr Sullivan advised that theposition has now been clearly reached where the shareholders will need to look to protect their individual interests. This would appear to be a reference to Kanai taking its own legal advice. Mr Sullivan went on to advise that given the evidence now before the plaintiff of the potential involvement of Mr Matsudace and Mr Hozumi in the alleged offending, they could not continue in their positions in AFL and should be stood down until such time as the matters were appropriately resolved. So far as Mr Hozumi was concerned Mr Sullivan recommended he be suspended as a director.[23] Shortly after this report was written the defendant resigned from his directorship.[24] As matters evolved from that point to the time when charges were laid, Mr Sullivan went about structuring a response to the investigation that would involve pleas of guilty being entered to certain charges by certain persons, in preference to more serious charges being laid. It is clear from documents produced that there were discussions and negotiations with the relevant personnel of MOF on these issues and that one of the potential defendants who was referred to in the negotiations was Mr Hozumi.[25] Mr Hozumi maintains that when he returned to Japan he was instructed by Kanai to plead guilty to charges against him, and that this instruction was givenagain in May 2010. On both occasions he agreed and signed papers placed before him to that effect. He maintains that at that point he did not have any legal representation but did as he was told, as an employee of Kanai.[26] The defendant pleaded guilty to the charges laid against him. He maintains that he did so because he was instructed to do so by Kanai, his employer, and that Kanai placed this requirement upon him because Mr Sullivan advised the plaintiff that an overall favourable outcome to the range of possible prosecutions that MOF might bring should include pleas of guilty by the defendant to certain types of charges as an element which would favour a better overall outcome to the prosecution process for the plaintiff.[27] At no point in his extensive affidavit evidence does the defendant deny that he carried out the activities in respect of which the charges were laid. On the contrary, he expresses the following:I cannot believe that as at the day before the MOF intervention in 2008 noneof the three ["Mr Director‟s" family] directors of the plaintiff knew, or strongly suspected, that the [vessel] was "trucking".[28] It is a clear inference from this statement that he knew the vessel was engaged in the activity (commonly known as trucking) which formed the basis of the charges. He was one of the persons actively involved in the actual reporting to MOF.Principles relating to discovery on summary judgment applications[29] Discovery may be ordered on an application for summary judgment. However, as the name of the procedure implies, it is intended to be a mechanism for relatively rapid consideration of claims where a plaintiff can demonstrate to the Court that the defendant does not have an arguable defence to the claim. An application for an order for discovery is to be considered in this context. The issue was discussed at some length in NZI Bank Ltd v Philpott.1 At paragraph [11] in the judgment McGechan J said:1 NZI Bank Ltd v Philpott (1988) 1 PRNZ 560In practical terms, it may well be that discovery will have only minor importance in summary judgment matters. Generally, I suggest, it will not be granted prior to first hearing of the summary judgment application itself.Even at that hearing such orders will not be granted at all unless "necessary". Such orders hardly will be "necessary" where a defendant, bereft of anysignificant defence framework, simply wishes to go fishing ocean-wide to see if something can be trawled up. It will not be necessary in the converse situation where quite apart from questions of discovery the Court is not satisfied the defendant has no defence and the summary judgment application therefore is to be dismissed on ordinary principles. Its likely significance will be in the relatively narrow band of marginal cases where an outline defence is made out but the Court encounters genuine difficulty in determining whether or not there is no defence, and has a substantial reason to believe discovery in the proceeding will or may well assist that determination. Even in that limited range of situations, a Court in encountering such difficulties might prefer to dismiss the summary judgment application under its general discretion, as a simple matter of caution and justice, rather than prolong matters through discovery, but the latter course would be open. Unjustified applications for discovery can of course be suitably dealt with by costs.[30] In Mobil Oil New Zealand Ltd v Bagnall & Maher,2 Wild J considered whether discovery should be ordered on an application for summary judgment. The following passage is instructive:The summary procedure is designed to enable a plaintiff quickly to obtain judgment where there really is no defence to the claim. The aim is to avoid the spectacle of a worthless defence(s) being raised and pursued for the purpose of applying undue pressure on a plaintiff through delay and additional expense, or in order to delay the inevitable. Before granting summary judgment (summary in the sense that the defendant is denied a full hearing, including the right to question witnesses), the Court must be confident that there is no bona fide defence – no reasonably arguable defence. If the Court is left with a real doubt or uncertainty as to whether there is a defence, the correct course is to refuse summary judgment. The matter then goes to trial in the ordinary way. It follows from this that, where a plaintiff seeks summary judgment, the defendant ought not to be permitted to obtain discovery unless it can demonstrate that it is seeking discovery of a document(s) which it does not have and which may provide it with a defence, or which may be relevant to a defence. This is another way of saying that discovery will only be ordered if "necessary at the time when the order is made", in terms of r 312. A Court may find it difficult, nigh onimpossible, to determine the necessity for discovery until it has all theaffidavit evidence before it, and is apprised of the parties‟ opposing arguments. Thus, the cases relied upon by Mobil refer to the practice of postponing any decision about discovery until the hearing of the summary judgment application. I consider that a defendant facing a summary judgment application must, before an order for discovery can properly be made in its favour, specify what the document(s) it seeks is, and demonstrate what is its relevance to the defence. At the very least, such a defendant must2 Mobil Oil New Zealand Ltd v Bagnall & Maher (1999) 12 PRNZ 655be able to specify a confined category of documents, and establish the relevance of it to the defence. Non-specific "trawling" cannot be permitted.[31] The Judge then adopted the passage quoted above from NZI Bank Ltd v Philpott.[32] In the present case the affidavit evidence of both parties is before the Court, and the category of documents sought is described with some precision. The question, therefore, is whether the defendant has demonstrated that documents within the specified category are relevant to its defence. Expressed by reference to the quoted passage from the judgment in NZI, is this one of those cases where an outline defence is made out but the Court has encountered, or will encounter, genuine difficulty in determining whether or not there is no defence and has a substantial reason to believe discovery in the proceeding will or may well assist that determination?[33] In my view it is clear from these two judgments that before discovery can be ordered, at least an outline defence must be made out or, perhaps more broadly, a possible defence must be identified. The dicta from these two cases shows that generally a consideration of these issues will be made in the context of determining, at a hearing of the summary judgment application itself, whether there is or is not an arguable defence. The authors of McGechan on Procedure indicate that ordinarily the applications will be heard at the same time. However, that is not invariably the case, and in this instance after considering the state of the evidence I formed the view that this application should be heard first.[34] Finally, the reference in the judgment in Mobil Oil to discovery of documents"which may provide it with a defence" must be read in my view in the context of theentire passage I have quoted, and in the context of the directive in the judgment inNZI, against a defendant simply wishing to go "fishing ocean-wide to see ifsomething can be trawled up", lest the phrase in Mobil Oil might be thought to suggest that discovery can in some instances be ordered in order to determine whether an unidentified defence can be found.The defendant's position in this case[35] In paragraph [9] of this judgment I have quoted the grounds of defence set out in the notice of opposition. They are described in broad terms, in four paragraphs. In the first paragraph there is no indication at all of what the defence might be, even if the papers referred to in that paragraph are made available. The second paragraph refers to a request for those papers and the fourth paragraph to thedefendant‟s objection to Oceanlaw continuing to act. Only the third of the fourparagraphs gives any clue about the defendant‟s stance in relation to this applicationfor summary judgment. Here it is stated that the defences relate to the knowledge that the plaintiff company or its directors other than the defendant had or ought to have had of the factual matters pleaded in certain paragraphs of the statement of claim which, broadly, are the factual foundations for the fraud which gave rise to the investigation and subsequent charges, together with, and if I may respectfully say so, the somewhat obscurely pleaded, fiduciary duties. Put another way, the defendant apparently believes he has a defence to this claim against him if documents show that the plaintiff or its directors knew or ought to have known what was going on.[36] That is the proposed defence as it stands at this point. However, I have also referred in paragraph [11] to the grounds stated in support of this application for discovery. In one respect these may be seen to mirror the grounds in the notice of opposition – the reference to defences relating to the manner in which one or more ofthe plaintiff‟s directors carried on business in the period up to May 2011 – though it is extremely difficult to see how the conduct of any directors of the plaintiff after 2008 could have any relevance to causes of action which arose up to and at that time. None of the other postulated defences is referred to in any way at all in the notice of opposition.[37] Counsel for the defendant raised even more possible defences in his submissions. The following passage appears at paragraph 15:15. Finally in connection with this application for discovery, counselreminds the Court that there could be various defences to Aurora‟ssubstantive claim.Possibilities that come immediately to mind include:(i) I had no involvement with trucking: and the principal reason I agreed to plead guilty was to protect the ongoing interests ofKanai, because I couldn‟t afford to defend it, and in any eventthere was no point in defending it as my solicitor (Bruce Scott) had confirmed to me in writing that someone else would meet my fine and that after sentence I would be free to come and go to New Zealand without financial penalty;(ii) I (being an offshore staff member) knew that trucking was being done but did not have any personal involvement in the trucking; with the reason for pleading guilty being the same as just set out;(iii) I was involved in trucking and did so at the specific request and direction of my employer, and in the knowledge that Aurora knew (or ought to have known) that trucking was taking place, and Aurora was benefitting financially from it; or(iv) I was involved in trucking and was aware that trucking was partof the "business plan" agreed between the shareholders of Aurora to maximise the profit of Aurora.16. Counsel is not today in a position to advise the Court as to which of those scenarios (all of which in his submission would constitute a defence to the substantive claim) is in fact the correct scenario and possibly more relevantly, in respect of which does Mr Hozumi have (sic) admissible evidence sufficient to satisfy a Court.17. It is acknowledged that the order for discovery may not turn up any such evidence, but it is appropriate that the opportunity be given.[38] There are therefore three possible sets of defences before the Court, only one of which has actually been pleaded in the formal document which is intended by the Rules to identify with appropriate particularity the defence upon which the defendant actually relies. The immediate impression gained from this approach to respondingto the plaintiff‟s claim is that it is an exercise by which every possible scenario istossed in the air with a view to seeing whether, with the guidance of a few more documents, one or other of them might land on and squash the claim.[39] Faced with this scenario, it is necessary to view matters in light of certain first principles. The claim by the plaintiff is quite clear. It cites certain factual premises which in aggregate are said to give rise to a breach by the defendant of his fiduciary duties, or his statutory duties, as a director. Only one of those facts, thoughno doubt an important one from an evidentiary perspective, is the plaintiff‟s plea ofguilty to charges arising out of the facts. The real issue in determining, in due course, whether there is an arguable defence will necessarily be based on whether thefacts pleaded by the plaintiff are correct, whether they amount to a breach of one or other of the pleaded duties, or whether, even if that is proven, the defendant has some other defence which negatives liability. In my view it would have been a straight-forward matter for the defendant in this case to have filed a notice of opposition which set out quite clearly the basis upon which he maintains he has a defence to the claim. This might amount, for example, to stating that for certain reasons (no doubt amplified in an affidavit) the facts relied upon the plaintiff are wrong. Equally there could be a denial that the pleaded duties were owed, again no doubt supported by factual material in an affidavit. Similarly the notice of opposition could state with clarity the basic premises upon which any other defence might be based. All these propositions are simply matters of recording in the notice of opposition the defence(s) claimed to be arguable as a consequence of the instructions received from the defendant by the solicitor drafting the document. The notice of opposition fails entirely to achieve this; the closest it comes is the obscure reference to the possibility that there may be defences relating to the knowledge of the plaintiff or its directors of the activities that constituted the fraud.[40] The possible defences outlined in support of the application for a discovery order take this no further. The reference to the manner in which one or more of theplaintiff‟s directors carried on business might relate to the same issue, but that is ashigh as one could put it. A defence that judgment would prevent the joinder of other parties, and the reference to a lack of clean hands on the part of the plaintiff and/or its solicitors, are irrelevant to any matter pleaded in the notice of opposition. A possible defence in relation to the plea of guilty having been in some way forced upon the defendant in the manner stipulated has nothing to do with the defence described in paragraph 3(iii) of the notice of opposition which, as I have said, is the only point in that document where any form of defence is even referred to. The reference to two firms of solicitors having refused to make documents available without payment of fees has no relevance whatsoever to any defence imaginable to the application for summary judgment.[41] Accordingly the grounds set out in the application for discovery orders do not develop, clarify or illuminate the notice of opposition to the application for summary judgment.[42] The third document referring to possible defences is the written synopsis ofthe defendant‟s submissions. These are set out in paragraph [37]. In my opinion these are nothing short of speculation by counsel. They are phrased in the first person as possible explanations by the defendant. When these are considered against the fundamental principles for establishing whether a defence does or does not exist, which I have referred to earlier, these might be seen as bordering on fantasy. Put quite shortly, either Mr Hozumi has, or he has not, instructed his legal advisors that one or other of those scenarios is in fact the position. Where, in paragraph 16, counsel advises that he is not in a position to advise the Court which of those scenarios is in fact correct, one is left wondering why. This portion of this documentadds nothing to the strength of the defendant‟s argument. In my opinion thissubmission suggests a defendant who "simply wishes to go fishing ocean-wide to seeif something can be trawled up", in terms of the judgment in NZI.[43] Despite all these postulated scenarios, therefore, the Court is in fact left with the notice of opposition (see paragraphs 9 and 35) to use as the basis for determining whether discovery of documents should be ordered as sought. Nothing in the other two documents referred to assists with determining this issue.Discussion – will discovery assist the Court with a determination on whether the defendant has, arguably, a defence as claimed?[44] There are already before the Court a number of communications from Oceanlaw, Mr Sullivan, to the directors of Aurora which show that they were considering the activities of Mr Hozumi as part of the factual matrix upon which they were basing their evolving advice to Aurora during the course of theinvestigation. These documents show that they formed a view of Mr Hozumi‟sculpability, and a view on whether it would be beneficial to the overall approach which was going to be taken to the investigation, in terms of trying to come to a deal with the Ministry on charges in return for pleas, and that involved, in turn, a view on how Mr Hozumi should plead, and whether he should remain in Japan, a factor which would assist, apparently, as a negotiating tool, in achieving a better outcome overall. I am prepared to accept for present purposes that Mr Sullivan did advise that Mr Hozumi should leave the country, advice which was relayed to him orally by("Mr Director"), another director, and on which Mr Hozumi acted. However, so faras one can glean the gist of the proposed defence from the notice of opposition, it is derived from an allegation based on the knowledge of the plaintiff company and its directors of the factual elements of the fraud. In submissions Mr Fitchett maintained that Mr Hozumi thinks that the other directors of the plaintiff knew what was going on, and if they did, this would amount to a defence to the claim against Mr Hozumi for breach of his duties as a director. Mr Fitchett maintained that Mr Sullivan was the orchestrator of the entire defence strategy and accordingly there may be in his files something where Mr Sullivan records in some way knowledge by the plaintiff of what was going on.[45] There are a number of matters to be considered in this context. First, it was open to Mr Hozumi to expressly state this in the notice of opposition, and he did not do so. Mr Fitchett explained this as being a wish on his part not to suggestknowledge of fraud on the plaintiff‟s part without having an evidentiary foundationfor it to hand. I reject that. Mr Hozumi believes that the other directors knew the fraudulent actions were happening during the relevant period, it was open to him to say so based on his personal knowledge, whether he could or could not refer to any documents to support it. I infer that he does not himself know whether the other directors knew what was going on and is only, therefore, raising it as a possibility. This is borne out by the passage in his third affidavit quoted above in paragraph [27].[46] Secondly, the other directors of Aurora were thoroughly investigated by MOF and no charges were laid against them. This would appear to indicate strongly that there was insufficient evidence of knowledge on the part of those directors to lay the foundations of criminal charges.[47] Thirdly, documents held by Oceanlaw on files relating to its instructions for the plaintiff company would be entirely privileged as material held by the company‟ssolicitors, and would be inaccessible to the defendant.[48] Fourthly, it is not immediately clear that even if one or more of the other directors did know of some or all of the facts which gave rise to the fraud, that would necessarily provide a defence to the claim for breach of duty by this director. Nobasis for that proposition was given, nor argument presented in support of it. I observe that if it is to be submitted that the knowledge of the directors is the knowledge of the company, the company already has that knowledge because Mr Hozumi was a director. As recorded in paragraph [4] of this judgment, the plaintiff pleaded guilty to charges on the basis it had knowledge of the offendingthrough Mr Hozumi‟s directorship. Mr Fitchett did not explain how knowledge on the part of any or all of the other directors of the plaintiff would provide a defence tothe plaintiff‟s claim which knowledge on the part of Mr Hozumi does not.[49] I am not satisfied that documents within the class specified in the application, even if discovered without a valid claim to privilege, could assist in determining whether there is an arguable defence to this claim in terms of the notice of opposition, nor (allowing Mr Hozumi latitude to the greatest extent I can whilst being fair to the plaintiff) in determining whether there is a defence to a claim by Aurora based on knowledge by directors of that company other than the defendant that he was actively engaged in providing fraudulent returns of its catch to MOF.[50] Taking into account all factors I am not satisfied that the tests for directing discovery of documents on a summary judgment application, which I have summarised earlier, are met. The application for discovery is dismissed.Application to debar Oceanlaw and Michael Sullivan from acting[51] The order sought by the defendant is "that the legal firm of Oceanlaw, andMichael Sean Sullivan, be debarred from acting for the plaintiff in theseproceedings".[52] The grounds given for this application are these:Debarring Oceanlaw Involvementi) That Oceanlaw (and Michael Sean Sullivan) is in a conflict of interest position in that advice given by them to the plaintiff (and its directors) and to Kainai Fisheries Limited (the employer of the applicant defendant) was relied on and acted upon by the applicant defendant tohis detriment and the advice was given by Oceanlaw and Michael Sean Sullivan with the knowledge and intention that it would be provided to the applicant defendant nd relied on by the applicant defendant; and/orii) That the only legal advice in New Zealand that the applicant defendant received in New Zealand between November 2008 and July 2010 was legal advice given by Michael Sean Sullivan and/or Oceanlaw: albeit that such advice was given to the plaintiff respondent (and/or to the employer of the applicant defendant) and then relayed on to the applicant defendant.iii) That it was on the basis of legal advice given by Michael Sean Sullivan and/or Oceanlaw and relayed to the applicant defendant by ("Mr Director") (as a director of the plaintiff) that the applicant defendant leftNew Zealand on 7 March 2009; and such was not disclosed to the Court at any time by Oceanlaw.iv) That it was on the basis of legal advice given by Michael Sean Sullivanand/or Oceanlaw and relayed to the applicant defendant by ("Mr Director") (as a director of the plaintiff) that the applicant defendantstayed out of New Zealand from 7 March 2009 until 2011; and such was not disclosed to the Court at any time by Oceanlaw.v) That by letter dated 3 July 2009 to Ministry of Fisheries, Oceanlaw stateda. Zindels were acting as solicitors for the applicant defendant; andb. the applicant defendant was prepared to plead guilty to certain charges;notwithstanding that at that datec. Zindels was not the solicitor for the applicant defendant; andd. the applicant defendant had not told Oceanlaw that he was prepared to plead guilty to any charges.vi) That a partner of Oceanlaw will be required to give evidence, and such will be of a contentious nature.[53] The defendant relies, first, on r.1.20 of the High Court Rules. Rule 1.20 states:1.20 Lawyers duties(1) The duties imposed by these rules on lawyers do not limit a lawyer‟sobligations to a client or another lawyer or the court under the rules of conduct and client care for lawyers in New Zealand or other applicable ethical rules or guidelines.(2) A lawyer who acts for a party to a proceeding or is a party to any proceeding, must not, without the leave of the court, act for any other party to the proceeding who does not have the same interest in the subject matter of the proceeding.(3) In this rule lawyer includes the partner of a solicitor to whom subclause (1) applies.(4) In applying these rules, the court may have regard to the obligations referred to in subclause (1).[54] The following provisions of the Lawyers and Conveyancers Act (Lawyers‟Conduct and Client Care) Rules 2008 are relevant.13.5.1 A lawyer must not act in a proceeding if the lawyer may be required to give evidence of a contentious nature (whether in person or by affidavit) in the matter.13.5.2 If after a lawyer has commenced acting in a proceeding it becomesapparent that the lawyer or a member of the lawyer‟s practice is togive evidence of a contentious nature, the lawyer must immediately inform the Court, and unless the Court directs otherwise, cease acting.13.5.3 A lawyer must not act in a proceeding if the conduct or advice ofthe lawyer or of another member of the lawyer‟s practice is in issuein the matter before the Court. This rule does not apply where the lawyer is acting for himself or herself or for the member of the practice whose actions are in issue.[55] In Black v Taylor,3 the Court of Appeal reviewed the principles applying to the issue of whether a practitioner should be barred from acting. The facts of that case are materially different from the facts of the present case. The application involved a senior practitioner who had acted as solicitor or counsel, or in both roles, for members of the Taylor family for a number of decades. He then sought to act3 Black v Taylor [1993] 3 NZLR 403against one of them in contentious litigation. In his judgment, Richardson J emphasised four features of the case. I will refer to these in turn.[56] First, the practitioner had considerable contact with a number of members of the Taylor family over a period of 30 years, and in the case of the respondent, Mr M A Taylor, against whose interests the practitioner was representing the appellant parties, his association extended over 30 years. The Judge cited with approval the following passage from the judgment of McGechan J:I am satisfied that over the years, a considerable quantity of information, indeed covering most aspects of the family and company affairs, would have been given by the Taylor family as a whole to [the practitioner]. A capable solicitor does not work for a family, and its business, over a long period without obtaining a good working grasp of its structure and dynamics. He does not remain solicitor if he fails to do so. He may not know, or wish to know, all the fine detail, but he will know a firm outline. I have no doubtsuch was the case here. I am not persuaded by [the practitioner‟s] denial of any significant knowledge as to the company‟s position, or the position offamily members. I am satisfied he had, and has, a good grasp of the principal personalities involved. There will be some information once known, but since discarded as unimportant and now forgotten. There will also be considerable residue which [the practitioner] retains.[57] The second factor referred to by Richardson J was that little direct information was supplied by Mr M A Taylor to the practitioner in confidence. The trial Judge at first instance concluded that Mr Taylor gave him information on a range of matters including his finances, his personal position and concerns relating to the proposed sale of a company, estate planning and a number of other factual matters related to those issues.[58] The third factor referred to by Richardson J was the practitioner‟saccumulated knowledge of the personalities, characters and relationships of the Taylor family, particularly Mr M A Taylor and J B Taylor. The Judge observes that alawyer and particularly a family solicitor "gets to know personalities. He gets toknow something, and often a good deal, of a former client‟s weaknesses, fears and reactions". The Judge observed that whilst knowledge of personalities andrelationships may not be confidential information in a strict sense, it is derived from the professional relationship. He said:It would not be unreasonable for a family member to feel chagrin and concern to find a lawyer who had built up knowledge of that kind was able consciously or unconsciously to draw on it when acting against that member of the family.[59] The fourth factor referred to by Richardson J was the significance of such knowledge in the litigation concerned. Having looked at the issues, the Judge found that an understanding of the personalities and relationships of those involved was an important factor.[60] I have referred to these in some detail because they provide the context in which the Court found in that case that the practitioner concerned could no longer act. I observe at this point that the facts before me are materially different, as willemerge when I review Mr Sullivan‟s actions and Mr Hozumi‟s views of them shortly.[61] Richardson J outlined the principles of the due administration of justice, in this context. First, the High Court has an inherent jurisdiction to control its own processes except as limited by statute. As part of this jurisdiction the Court determines which persons should be permitted to appear before it as advocates. It makes that determination in accordance with established uses and with what is required in the public interest for the efficient and effective administration of justice.[62] Secondly, the Court will control a particular proceeding as part of the administration of justice, and a basic need to preserve confidence in the judicial system. The right to a fair hearing in the courts is an elementary but fundamental principle of justice.[63] Thirdly, the Court will have a fundamental concern that justice should not only be done but should manifestly and undoubtedly be seen to be done. The Judge stated that the integrity of our system of justice depends on its meeting those standards.[64] Fourthly, in making an assessment on these issues the Court will also give due weight to the public interest that a litigant should not be deprived of his or her choice of counsel without good cause, which he described as an important value but not an absolute one.[65] His Honour went on to refer to a number of cases in which courts in other jurisdictions had ruled on applications to debar practitioners from acting. In this judgment, I need refer to only one of those discussed by His Honour. This is a judgment of the Full Court of the Ontario Divisional Court in Everingham v Ontario.4 His Honour approved the following passage:It is within the inherent jurisdiction of a superior court to deny the right of audience to counsel when the interests of justice so require by reason of conflict or otherwise. This power does not depend on the rules of professional conduct made by the legal profession and is not limited to cases where the rules are breached.The issue here is not whether or not the rule was breached, or whether the solicitor worked for the government. Nor is it solely whether the patient lost confidence in the process. The issue is whether a fair-minded reasonably informed member of the public would conclude that the proper administration of justice required the removal of the solicitor. .....The public interest in the administration of justice requires an unqualified perception of its fairness in the eyes of the general public. .....The goal is not just to protect the interests of the individual litigant but even more importantly to protect public confidence in the administration of justice.[66] Richardson J phrased his conclusion thus:I respectfully agree with the approach of the Ontario Court. Disqualification will ordinarily be the appropriate remedy where the integrity of the judicialprocess would be impaired by counsel‟s adversarial representation of oneparty against the other. The decision to disqualify is not dependent on anyfinding of culpable conduct on the lawyer‟s part. Disqualification is notimposed as a punishment for misconduct. Rather it is a protection for the parties and for the wider interests of justice. The legitimacy of judicial decisions depends in large part on the observance of the standards of procedural justice. Where the integrity of the judicial process is perceived to be at risk from the proposed or continuing representation by counsel on behalf of one party, disqualification is the obvious and in some cases the only effective remedy although considerations of delay, inconvenience and expense arising from a change of representation may be important in determining in particular cases whether the interests of justice truly demand disqualification.[67] In Clear Communications Ltd v Telecom Corporation of New Zealand Ltd and Telecom New Zealand Ltd.5 Fisher J enunciated a series of propositions which4 Everingham v Ontario (1992) 88 DLR (4th) 7555 (1999) 14 PRNZ 47he had drawn from decided cases, principally Black v Taylor. It is necessary to mention only one:Although the jurisdiction is not to be emasculated by setting the threshold so high that it could never be attained, there must be something truly extraordinary before removal could be contemplated. It could be justifiedonly in cases of "truly egregious misconduct likely to infect futureproceedings". Koller v Richardson-Merrel Inc (1984) 737 F.dd 1038 at 1055-1056.Michael Sullivan's involvement with the defendant[68] To determine the extent to which the foregoing principles direct the outcome of this application, it is necessary to establish Mr Sullivan‟s involvement with thedefendant to date.[69] First, I have summarised Mr Sullivan‟s engagement for the plaintiff over theperiod from the beginning of the investigation by MOF to the conclusion of the Court process in relation to the charges which were laid. The firm has continued to act since. Michael Sullivan remains a partner. Present counsel for the plaintiff is not a member or employee of the firm, he is a partner in another firm. I have indicated that in the course of acting for Aurora on these charges Mr Sullivan formed views on the steps Mr Hozumi should take in relation to the potential prosecution.[70] Secondly, Mr Scott of Chapman Tripp in Wellington acted for Mr Hozumi on the charges and his eventual plea of guilty. It was that solicitor, in particular, who was intricately involved in liaising with MOF and settling the terms of the statements of fact that would be put before the Court, not only for Mr Hozumi but also for certain other defendants. It was to that solicitor that Mr Hozumi ultimately gave his final instruction that he would plead guilty, though as I have recorded he had signed, twice before, statements to the effect that he would do so, at the instigation of Kanai. It would seem at least arguable that Kanai‟s stance on that matter was as a direct result of Mr Sullivan‟s investigations, and consequent advice that pleas of guilty byMr Hozumi would be beneficial in the overall picture of things for at least the plaintiff if not all defendants, including Mr Hozumi himself. However, Mr Hozumi must in my view be taken as having made his own decision on his own plea; he was no longer employed by Kanai and had his own solicitor acting for him.[71] Thirdly, the evidence before me establishes that Mr Sullivan has never spoken to Mr Hozumi, nor written to him. Neither has Mr Hozumi ever spoken to Mr Sullivan, nor written to him, nor directly or indirectly instructed Mr Sullivan to act for him. Mr Hozumi did receive, in his capacity as a director of the plaintiff, reports and advice from Mr Sullivan to the plaintiff which recommended a course of action involving numerous parties including Mr Hozumi, and Mr Sullivan did formand express to the plaintiff views on Mr Hozumi‟s conduct.[72] Fourthly, Mr Sullivan did not at any time give to Mr Hozumi any advice on the matters in issue. The closest this came to occurring was the advice relayed to Mr Hozumi by ("Mr Director") to leave the country, advice I think can fairly betaken as given to the company: it was conveyed to a director, and appears, from the advice Mr Sullivan gave to the company on strategy, to have been regarded by himas in the company‟s interest. The same can be said of the references, in Mr Sullivan‟s advice to the company on strategy, to Mr Hozumi pleading guilty to certain classes of charges. None of this advice was given to Mr Hozumi.[73] Notwithstanding that, on two occasions Mr Sullivan did hold himself out as acting for Mr Hozumi. The first was on 9 December 2008. Mr Sullivan wrote to the Investigations Manager of MOF stating, at the beginning of the letter, "We act forAurora Fisheries Limited, Mike Kozumi, Koji Matsudace and the master and crew of the FV Tomi Maru 87".[74] The second was on 3 July 2009. Mr Sullivan wrote to MOF advising that Mr Hozumi would plead guilty to certain charges. This letter, although written by Mr Sullivan, was stated to be written on behalf, also, of Zindels another law firm in Nelson, which acted for one of the other parties in the investigation. However, Zindels has since confirmed that it did not act for Mr Hozumi. The net result is thateither Oceanlaw or Zindels was purporting to represent Mr Hozumi‟s position toMOF, yet neither accepts that it was acting for him.[75] These two items of correspondence were written seven months apart but midway between them, in April 2009, Mr Sullivan wrote to the directors of the plaintiff setting a possible basis of negotiating an acceptable outcome with MOF. Inthe course of that he indicated that the plaintiff would need to obtain the agreement of Mr Hozumi to enter a plea of guilty to charges under s 230 of the Fisheries Act.[76] This letter is at variance with the two letters written either side of it and in my view is more consistent with the factual position: Mr Sullivan did not act for Mr Hozumi, and any participation by Mr Hozumi in an overall agreed plea bargainwith MOF would require Mr Hozumi‟s agreement. With the wisdom of hindsightMr Sullivan may have overstepped his authority in writing the two letters referred to, and to that extent his actions may have been imprudent, but the letters were written in the context of trying to achieve the best outcome for Aurora. It is also apparent, on reading the correspondence exhibited to the affidavits in which Mr Sullivan is shown to have been orchestrating an overall response to the investigation that he was attempting to obtain a favourable outcome for all concerned. There are instances, for example, where he has made it quite clear that whilst Mr Hozumi should, as part of an overall deal, plead guilty to charges carrying lesser penalties than others, he has also made it clear that the laying of more serious charges could probably be avoided if Mr Hozumi took certain steps, and this was in the interests of Aurora as well as Mr Hozumi.[77] Fifthly, there is no evidence that Mr Sullivan ever sought or received MrHozumi‟s views on his culpability, or the level of his involvement in the frauds underinvestigation, nor his views on the actions of any other person, whether staff or directors of the plaintiff, or of Kanai.[78] Sixthly, as I have said earlier, Mr Hozumi was at all times free to take advice himself. It appears on the evidence that he did not do so until relatively late in the piece when he instructed his Wellington solicitor to advise him on, and throughout, the court process itself. There was a long period when he was in Japan; he may have taken advice in that country, but there is no evidence that he did so or did not do so. There was ample time for him to do so if he wished. There is reference to a firm in that country, Toda (which acted for Kanai) giving him some advice but insufficient material before me to show that firm acted as well for Mr Hozumi himself. After he left New Zealand, however, ongoing references by Mr Sullivan in his reports and correspondence which are before the Court clearly show that his part in the fraudwas one of the matters at the front of Mr Sullivan‟s mind and a material factor in hisassessment of the advice he gave to Aurora.[79] Taking into account all these factors I am satisfied that Mr Sullivan did not act for Mr Hozumi at any time.[80] Mr Hozumi made a number of statements on this issue in his affidavits. Inthe first affidavit, sworn in opposition to the plaintiff‟s application for summaryjudgment on 3 May 2011 he stated that at the time of the MAF investigation he was being advised by Mr Sullivan and Wayne Jones (a solicitor from Zindels). He expressed his understanding from correspondence at the time that Oceanlaw took the lead role in negotiating a settlement with MAF. He stated that he received various correspondence and advice from Oceanlaw advising him to plead guilty to the MAF charges.[81] In his third affidavit Mr Hozumi sought to correct this. He stated that instead of deposing that he was being advised by Mike Sullivan and Wayne Jones, he"possibly" should have said "My employer and I were being advised by Mike Sullivan at Oceanlaw (the plaintiff‟s solicitor in these proceedings)." He stated thathis former evidence could not be said to be entirely correct now that his solicitors Rout Milner & Fitchett had done background investigative work.[82] I need comment on this only briefly. The corrected version of this evidence excludes Zindels, which is immaterial to the present application, but includes his employer being advised by Mr Sullivan, in addition to himself. His employer, of course, was Aurora, the plaintiff. Since he was a director of that company until he left New Zealand, and in that capacity received reports and advice to Aurora, it would seem he would have known when he swore his first affidavit that Aurora was being advised by Mr Sullivan without Rout Milner Fitchett having done what he described as background investigative work, particularly given that he now relies in part on the fact of that advice having been given to submit that Mr Sullivan should no longer act. Be that as it may, in paragraph 10 of his first affidavit he stated:On the basis of legal advice received from Ocean Law, I subsequently pleaded guilty to the MAF charges.[83] At paragraph 20 he said:Although I can speak reasonable English, it is my second language – and I do not profess to understand the New Zealand legal system/legal terminology. However, I cannot understand how Ocean Law can, at one point in time advise me to plead guilty to charges, and then later use thatguilty plea to its client‟s advantage and try and pursue me personally for aclaim I strongly deny.[84] In his second affidavit sworn on 30 May 2011 he deposed in paragraph 9:At all relevant times during the initial stage of the MOF investigation, I was instructed what to do by my employer Kanai and/or advised by Mike Sullivan (of Ocean Law) in (in my understanding of the matter) my capacity as a director of Aurora, as well as personally.[85] I infer from these three paragraphs that Mr Hozumi formed the view that Mr Sullivan was advising him what to do, at the same time as he was advising Aurora. For reasons I have canvassed I do not accept that Mr Sullivan was in fact acting for Mr Hozumi. However, he was advising Aurora on an overall strategy which included pleas of guilty by Mr Hozumi and I cannot exclude the possibility that Mr Hozumi took the references in the reports to the plaintiff to him pleading guilty as being advice to him as much as it was to Aurora.[86] Further in his second affidavit Mr Hozumi deposed that in August 2009 he signed a paper agreeing to plead guilty to charges under s 230 of the Fisheries Act at the request of his employer, which he explained was, to him, the same as an instruction. This, he said, was on the recommendation of Mr Sullivan.[87] In paragraph 17 of the same affidavit Mr Hozumi said that Mr Sullivan wasarranging and coordinating the whole strategy and "in the words of my solicitors,Mr Sullivan was „the puppet master‟."[88] In paragraphs 19 and 20 Mr Hozumi again referred to Mr Sullivan‟s advice. He said that he worked for Kanai for 23 years and always carried out his employer‟sinstructions. This included their instructions/advice, as he put it, to plead guilty to the MOF charges, thus to minimise any damage to Aurora and damage to Kanai.These instructions were as a result of Oceanlaw‟s advice and advice from BruceScott. Mr Hozumi said that if he had not received that advice he did not think hewould have pleaded guilty to the MOF charges. Whether that was a reference toOceanlaw‟s advice, Bruce Scott‟s advice or "the instructions/advice" from hisemployer, cannot be determined from these passages. Mr Hozumi concluded this portion of his evidence by stating that if he had known that he would be sued by Aurora, he would definitely have pleaded not guilty.[89] At paragraph 25 of the same affidavit Mr Hozumi said that he was advised by a solicitor in Japan, Mr Toda, that Mike Sullivan had put together a deal which must be accepted by all parties and "If I did not accept, then the whole deal would fall over." He said that under immense pressure he confirmed his earlier guilty plea butreceived written assurance that Kanai would pay all his costs including fines.[90] At paragraph 33 Mr Hozumi reiterated certain points of concern about Mr Sullivan‟s actions. Summarised, he found himself at a complete loss tounderstand how Mr Sullivan could ever have given advice on pleas of guilty, advisedthrough ("Mr Director") that he should leave New Zealand and advised the directors of Aurora that he should not cooperate with MOF on service of papers in Japan, and then sue him personally under a legal principle – fiduciary duty, which was unknown to him and to the best of his knowledge is unknown in Japanese law.[91] I draw two conclusions from this evidence. First, Mr Hozumi entered guilty pleas partly as a result of instructions by Kanai and after taking into account thatKanai would pay all his costs and fines if he did so. I say „partly‟ because by thetime he did so Mr Hozumi was no longer employed by Kanai, had independent legal advice, and has not, anywhere in his affidavits, denied his guilt (see paragraphs [27]and [28]). He believed that Kanai‟s position was taken because of the overall advicegiven by Mr Sullivan in relation to pleas being entered to negotiated charges, which Kanai used as a basis for putting a degree of pressure on Mr Hozumi to participate in the overall outcome.Application of the relevant principles to the facts[92] I turn now to Mr Fitchett‟s submission that Mr Sullivan and his firm have aconflict of interest as a consequence of their prior involvement with the investigationand subsequent prosecutions which form the basis of this proceeding. He did not define with any precision exactly what he considers that conflict of interest is. To determine whether a conflict of interest exists it is first necessary to define the two interests which are said to be in conflict. One of those interests must be theplaintiff‟s, in having Mr Sullivan‟s continuing professional representation, a role hehas held on matters relevant to this litigation since 2008. In my view the other interest, that of Mr Hozumi, is that this proceeding should not be conducted by a practitioner in possession of information of such a kind that it would be prejudicial to Mr Hozumi.[93] Overlaid on this issue are the public interest issues I have summarised in paragraphs [61] to [67]. For the following reasons, it is my view that there is no conflict in the interests identified, nor are any public interests offended. First, as I have found, Mr Sullivan has not at any point acted for Mr Hozumi, there have been no communications between them, and only indirect advice has been given by MrSullivan which affects Mr Hozumi‟s interests. The information Mr Sullivan hasabout Mr Hozumi‟s actions have not therefore been gleaned from Mr Hozumihimself. Mr Sullivan has no prior knowledge of Mr Hozumi as a former client and has no knowledge of Mr Hozumi which he would be required to shut out or disregard if confidence in the judicial system is to be retained. The factual situation in this case is far removed from the factual situation in Black v Taylor which I have summarised earlier. None of the four features identified by Richardson J is present here ([56] to [59] above).[94] Secondly, I have referred earlier to two instances where Mr Sullivan held himself out to others as representing Mr Hozumi. That does not mean that he did in fact act for him. In any event, at the time each material step in the prosecution process was taken, Mr Hozumi was either in a position to take his own independent legal advice, or was in fact represented by Mr Clark as I have described.[95] Thirdly, I have given due weight to the views expressed by Mr Hozumi in his affidavit, and the findings I have made: first that he may well have believed that he was being advised by Mr Sullivan at one point, and secondly that he pleaded guilty partly as a result of overall advice given by Mr Sullivan which Kanai wished toaccept and required Mr Hozumi to act on as a consequence. Even allowing for these matters, this is not a case where justice will not be served by Mr Sullivan continuing to act, nor a situation where justice will not be seen to be done. Had Mr Sullivan been in possession of information imparted by Mr Hozumi which he would not have had but for a relationship between the two of them, either of solicitor and client or at the very least as a direct consequence of Mr Sullivan acting for Aurora but receiving that information from Mr Hozumi under that cloak, the position might have been different. Here that has not occurred. There can be no suggestion that in any sense Mr Sullivan is changing sides. Nor can it in any sense be said that Mr Sullivan would be required, if he were to continue, to compartmentalise his or her mind so as to screen out information that has been gleaned from a client from information which has been gleaned elsewhere: Martin v Gray.6[96] Finally, in Black v Taylor Richardson J stated that disqualification will ordinarily be the appropriate remedy where the integrity of the judicial processwould be impaired by counsel‟s adversarial representation of one party against theother. I find that there is no basis in this case for a finding that that would or could occur.[97] Mr Fitchett also based his client‟s application on his stated intention to callMr Sullivan as a witness at trial, to give what he described as contentious evidence. Thus he sought to invoke r.13.5.1, which I have set out above. Rule 13.5.2 would, in this circumstance, require that Mr Sullivan cease to act unless the Court directs otherwise.[98] It is therefore necessary to determine whether it has been shown that Mr Sullivan may be required to give evidence of a contentious nature.[99] Mr Sullivan has not sworn an affidavit in relation to the application for summary judgment or any of the other interlocutory applications which have come before the Court to date, and Mr Logan assured me that he has no intention of doing so. If he is required to give evidence, therefore, it will be at a later point after the application for summary judgment has been determined. On 30 May 20116 Martin v Gray (1990) 77 DLR (4th) 249Mr Fitchett wrote to Mr Sullivan asking for an opportunity to meet him with a view to briefing evidence which he suggested Mr Sullivan would be able to give for the defence. On 9 June Mr Sullivan replied. He referred to sources from which Mr Fitchett would be able to glean material in answer to a number of his questions, and declined to provide any other information. It is clear that Mr Sullivan regards this as a tactic to remove him from the proceeding and Mr Logan described it as absurd to suggest that Mr Sullivan would be called by the defence, given his knowledge of the case and the advice he has given to Aurora in respect of it.[100] Because this case is only at the stage of an application for summary judgment, and no statement of defence has yet been filed, it is not possible to make a finding on whether Mr Sullivan could be called to give evidence of a contentious nature at trial. The issues between the parties are far from settled. For reasons I have analysed at length in this decision, it is not even clear at this point exactly what defence Mr Hozumi proposes to present in relation to the application for summary judgment, given the terms of the notice of opposition which I have discussed, nor whether the question of knowledge of the fraud by other directors, in addition to Mr Hozumi, is itself a defence, that being at least one issue for which it seems Mr Sullivan‟s knowledge is suggested to be relevant. At this point I do not accept Mr Fitchett‟s contention that Mr Sullivan will be required to give evidence. Nor do Ieven accept that he may be, that being the test in r.13.5.1. In terms of r.13.5.2, I find that it has not become apparent that Mr Sullivan is to give evidence of a contentious nature and it is not necessary therefore for me to determine whether he should cease acting.[101] The grounds for this application have not been made out. The most that can be said is that Mr Fitchett wants answers to a series of questions which have no apparent relevance to the application for summary judgment nor, on the pleadings as they stand, to the issues at trial on the substantive proceeding should the application for summary judgment be declined.[102] For these reasons the application to debar Michael Sullivan and Oceanlaw from acting is dismissed.Outcome[103] The applications for discovery and to debar Oceanlaw and Michael Sullivan from acting, are dismissed. On each the plaintiff is entitled to costs on a 2B basis with disbursements fixed by the Registrar.[104] The application to vary the freezing order dated 23 December 2010 is granted. The order is varied to permit the applicant to obtain an advance of $30,000 from the Bank of New Zealand secured by way of first mortgage against the encumbered property. On this application, costs lie where they fall._____________________________J G MatthewsAssociate JudgeSolicitors:Pitt & Moore, PO Box 42, DX WC70013, Nelson 7040 for PlaintiffRout Milner Fitchett, PO Box 580/DX WC70014, Nelson for Defendant (john@rmf-law.co.nz )