Mike Pero (New Zealand) Limited v Krishna [2016] NZHC 1255

Mike Pero (New Zealand) Limited v Krishna [2016] NZHC 1255 [10 June 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2015-404-1508[2016] NZHC 1255BETWEEN MIKE PERO (NEW ZEALAND)LIMITEDApplicantAND KRISH KRISHNA AND VEENAROHINI KRISHNAFirst RespondentsMORTGAGE SUITE LIMITEDSecond RespondentHearing: 16 May 2016Counsel: RB Stewart QC for applicantKM Quinn for respondentsJudgment: 10 June 2016JUDGMENT OF FAIRE JThis judgment was delivered by me on 10 June 2016 at 5 pm,pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateSolicitors: Buddle Findlay, Auckland (S Barker)Heimsath Alexander, Auckland (A Hansen)ContentsIntroduction ............................................................................................................ [1]The Applications .................................................................................................... [4]Preliminary Matters ................................................................................................ [8]Background .......................................................................................................... [10]Rulings on Preliminary Matters .................................................................................Rule 8.32 notice [17]Challenge to reply affidavits [22]Application to cross-examine Mr Krishna [30]The Substantive Applications .....................................................................................The Restraint [40]Court orders and jurisdiction [41]The application to rescind/vary [44]The application for an arrest warrant and contempt order [57]Analysis [66]The LinkedIn Page [71]Professional Advisers Association (PAA) Page [78]Conclusion............................................................................................................ [82]Costs ..................................................................................................................... [84]Introduction[1] This case relates to an existing dispute between Mike Pero (New Zealand) Ltd and a group of previous Franchisees.[2] In 2010, the parties to this proceeding entered into the agreement relevant tothese proceedings ("the Franchise Agreement") under which Mike Pero (NewZealand) Limited ("MPNZ") was the franchisor, Mortgage Suite Limited ("MSL")was the franchisee, and Mr Krish Krishna and his wife, Mrs Veena Rohini Krishna, jointly the first respondents, were covenantors. Schedule 7 of the FranchiseAgreement contains a Deed of Restraint of Competition ("the Restraint").[3] The issues in this case relate to the effect of the Restraint and Orders of this Court made in reliance on the Restraint.The Applications[4] There are two substantive applications requiring determination. The first isthe applicant's application for an arrest warrant and contempt orders againstMr Krishna. The second is the application by respondents to rescind or vary orders made by Hinton J on 3 July 2015.[5] The applicant's application was filed on 28 January 2016.[6] The respondents' application was filed on 18 February 2016.[7] Directions for the disposal of the applicant's application were made byWoodhouse J on 11 February 2016. Matters came before Muir J on 23 February 2016 following the filing of the application to rescind or vary the orders made by Hinton J. At that time, Muir J directed that the applications be heard contemporaneously.Preliminary Matters[8] As a result of memoranda filed in March 2016, Edwards J ordered that the issue of whether affidavits filed by the applicant were not strictly in reply and an issue of whether or not the respondents had to comply with a notice issued under r 8.32 must be the subject of formal applications. Such applications were filed. In addition, more recently, an application by the applicant for leave to cross-examine Mr Krishna was filed on 2 May 2016.[9] This judgment deals with the three preliminary issues and the two substantive applications.Background[10] MPNZ states that it has expended time and money in developing and acquiring knowledge about the expertise in the business of mortgage broking and related services. It claims to have established substantial demand and goodwill forthat business and an exclusive reputation in goodwill in the name "Mike Pero Mortgages" and the system. It has granted, from time to time, franchises permittingfranchisees to act as an independent franchised operator of the franchisor in the business of mortgage broking and related services using the reputation and goodwillin the name "Mike Pero Mortgages" and the system in respect of such business.[11] Mr Krishna became a mortgage broker with MPNZ in February 2000 under the umbrella of a company, Epsom Finance Consultants Ltd, and from 2005, under MSL, the second respondent. On 20 October 2010, the parties entered into the Franchise Agreement under which MPNZ was the franchisor, MSL was the franchisee, and Mr Krishna and his wife Veena Rohini Krishna, jointly the first respondents, were covenantors. Mr Krishna is the sole director of MSL. Mr and Mr Krishna are MSL's only shareholders.[12] Mr Krishna notified MPNZ on 30 March 2015 that he would not be renewing the Franchise Agreement. The effect of that notification was to bring the Franchise Agreement to an end on 30 June 2015.[13] Mr Krishna, and other unconnected persons with the present proceeding, commenced High Court proceedings on 20 April 2015 seeking a declaration against MPNZ that the Restraint was unenforceable. MPNZ filed an appearance objecting to the jurisdiction of the Court on the grounds that the matter was covered by a reference to arbitration. That position then set the procedural position that applied so far as enforcement of the restraint in the franchise agreement by order of the High Court would follow.[14] It was following the protest that correspondence ensued between counsel for the parties, which included a limited undertaking by the first respondent, Mr Krishna, not to canvas, solicit, or attempt to solicit any customer that he served or acted for whilst he was a franchisee of the applicant.[15] As at 1 July 2015, Mr Krishna intended to establish himself in business in Auckland in competition with the applicant. He now acknowledges that he was not permitted to do so, although he says he had received legal advice to the effect that he was, or would be, permitted to do so.[16] On 2 July 2015, MPNZ made an originating application under the Arbitration Act 1996 and High Court Rules for urgent injunctive and ancillary orders without notice. The matter was determined by Hinton J on 3 July 2015 who made interimorders ("the Orders"). Mr Krishna accepts that MPNZ was entitled to apply for orders designed to ensure that he complied with his obligations under the Restraint.Rulings on Preliminary MattersRule 8.32 notice[17] The first preliminary matter relates to the service by the applicant of two notices pursuant to r 8.32.[18] Rule 8.32 provides:8.32 Notice to produce documents or things(1) A party to a proceeding may serve on another party a notice requiring the other party to produce a document or thing for the purpose of evidence at the hearing of the proceeding, or before a Judge, an officer, an examiner, or other person who has authority to take evidence in the proceeding.(2) If the document or thing is in the control of the party who is served with the notice, the party must, unless a Judge otherwise orders, produce the document or thing in accordance with the notice, without the need for a subpoena for production.(3) The notice must be treated as an order of the court to produce the document or thing specified in the notice.[19] The Rule refers specifically to a proceeding. "Proceeding" is defined in r 1.3 as follows:proceeding means any application to the court for the exercise of the civil jurisdiction of the court other than an interlocutory application[20] The current applications are both interlocutory. Prima facie, therefore, the notices do not appear to apply to either of the substantive applications because the documents referred to in the notices are not being sought for the purpose of evidence at the hearing of the proceeding. The proceeding, in this case, is the originating application. The position is not dissimilar to that which applies where a party seekspre-commencement discovery under r 8.20. In Gibraltar Group NZ Ltd v Cray Communications NZ Ltd, Master Gambrill concluded that the predecessor to r 8.34 was not engaged when the court was seized with a determination of an application for pre-commencement discovery.1 The principle reason for that is that thedocuments are not being sought "for the purpose of evidence at the hearing of the proceeding".[21] Accordingly, I conclude that r 8.32 is not engaged at this time in respect of the hearings of the two substantive applications before me. In short, the notices that were served are not notices for the purposes of r 8.32 and, accordingly, are not required to be complied with.Challenge to reply affidavits[22] The respondents challenge as inadmissible affidavits filed by the applicant by Rick Zylinski, dated 29 February 2016, Jason Serafino, dated 29 February and 4 March 2016 and Laura Racky, dated 9 March 2016. The respondents' submit thatnone of the four affidavits contain any reply evidence. In particular, it is submitted that:(a) they do not address any of the evidence adduced for Mr Krishna in opposition to the contempt/arrest application; and(b) are wholly directed at a single new allegation, raised neither in theapplicant's original evidence nor by Mr Krishna in his evidence, namely that Mr Krishna wrongfully interfered with the applicant'sdatabase in or about April 2015.[23] For the respondents it is asserted that the affidavits allege that Mr Krishnawrongfully interfered with the applicant's database in about April 2015 and thereforeprior to the making of the orders which are the subject of the contempt/arrest application on 3 July 2015. It is submitted that even if the allegations were true, which in fact is not accepted, they cannot support an allegation of contempt in1 Gibraltar Group NZ Ltd v Cray Communications NZ Ltd HC Auckland CP245/94, 11 August 1994.relation to the interim orders because they relate to events that occurred before the interim orders were made.[24] Rule 7.26(2) provides as follows:7.26 Affidavit in reply(2) The affidavit in reply must be limited to new matters raised in the notice of opposition or in an affidavit filed by the respondent.[25] Rule 9.76, dealing with the form and contents of affidavits, specifies that if anaffidavit is in reply it is limited to matters "strictly in reply".[26] Reply affidavits need not be confined to mere acceptance or rejection of evidence given in opposition;2 however, they do need to relate in some way to therespondents' evidence and must be relevant to the issues involved in the application.3[27] The evidence in support of the applicant's application does not refer to the allegation of database manipulation, which is the subject of the four affidavits concerned. It does not refer specifically to Mr Krishna's conduct prior totermination of the Franchise Agreement. The evidence does not appear to me to relate to any evidence or explanation given by the respondents, nor can I see that this material would assist in any credibility determination.[28] The plain fact of the matter is that the applicant learned of the alleged database manipulation after the application and supporting affidavits were filed. It did not specifically seek an amendment of the application to include these matters. It did not seek to file further affidavits in support of any amendment.[29] Accordingly, I conclude that the four affidavits should not be read.2 Fisk v Nicholls [2012] NZHC 2507 at [7].3 Commissioner of Police v TRS [2014] NZHC 1116 at [20].Application to cross-examine Mr Krishna[30] This application was made by the applicant on 2 May 2016 and seeks permission to cross-examine Mr Krishna in respect of his affidavit dated 18 February 2016 and relating to three specific topics, namely:(a) Mr Krishna's LinkedIn webpage;(b) His Professional Advisers Association webpage; and(c) The data manipulation of the applicant's customer database.With counsel's agreement I deferred making a ruling on this at the time so that I had the benefit of counsel's submissions on the substantive applications.[31] Rule 7.28 provides that a judge may: in special circumstances, on the application of a party, order the attendance for cross-examination of a person who has made an affidavit in support of, or in opposition to, an interlocutory application.[32] "Special circumstances" are not defined. In Kidd v Van Heeren the Court of Appeal observed:4There is no dispute that, as has been accepted in other contexts, "special circumstances" are wide, comprehensive and flexible words indicating something abnormal, uncommon or out of the ordinary but something less than extraordinary ..[33] In that case, Mr Kidd had claimed that Mr Van Heeren was obliged to account to him for certain assets. Mr Van Heeren applied for a stay on the grounds that there was an exclusive jurisdiction agreement between the parties in favour of South Africa. Mr Kidd argued that there were issues over the authenticity and validity of the agreement and applied to cross-examine Mr Van Heeren. The court refused to allow cross-examination. Similarly, in Matthews v Scott an application to4 Kidd v Van Heeren (1997) 11 PRNZ 422 (CA) at 424.cross-examine was declined on the basis that credibility issues and conflicts of evidence were not of themselves special circumstances under the rule.5[34] Mr Krishna admits that the two profiles are active. Copies of the profiles are exhibited to the affidavit of Toni Angus, dated 28 January 2016. The existence and content of the profiles is therefore agreed. I accept Mr Quinn's submission that theonly issue is a legal one, ie, whether the existence of those profiles constitutes a breach of the Restraint and, further, a breach of the interim orders so as to amount to the contempt. In those circumstances, I do not see how there are special circumstances that would justify cross-examination of Mr Krishna in respect of the two profiles.[35] The position, however, can be contrasted with that which was before the Court in Divett v Skeates.6 The issue was whether there had been a breach of a Tomlin Order in respect of which the respondent had agreed in a settlement agreement not to practice a certain kind counselling. She was indisputably practising that counselling. The central factual issue was whether it was the kind of counselling she had agreed not to practice. Understandably, the Court allowed cross- examination of that matter because, clearly, the central factual issue in the case was in dispute.[36] So far as cross-examination on the data manipulation issue is concerned, the problem for the applicant is that if it did occur, it occurred before the making of the interim orders and so cannot, of itself, constitute contempt of those orders. In short, the alleged database manipulation is not a factual issue that is directly relevant to the contempt application, unlike the position which applied in Divett v Skeates. At best,it is a collateral issue designed to call into question Mr Krishna's general veracity.[37] Mr Quinn referred to s 8(1)(b) of the Evidence Act 2006. He noted that a judge must exclude evidence if its probative value is outweighed by the risk that it would needlessly prolong the proceeding. He also made reference to s 37(1) of the Act, which prohibits a party from offering evidence in a civil proceeding about the5 Matthews v Scott HC Auckland CIV-2010-404-1117, 19 November 2010, at [43].6 Divett v Skeates (2010) 19 PRNZ 653 (HC).person's veracity unless the evidence is substantially helpful in assessing that person's veracity.[38] I do not see how cross-examination of Mr Krishna on the database manipulation allegations will be substantially helpful in assessing his veracity in relation to the matters raised in the arrest/contempt application. So far as customer contact is concerned, Mr Krishna has filed affidavits from the persons concerned which support his version of events. The issue will not therefore be resolved by theCourt determining whether Mr Krishna's evidence is truthful. The issue is met bythe affidavits filed by the alleged customers concerned.[39] Accordingly, I do not find that special circumstances exist which would justify the authorisation of cross-examination of Mr Krishna.The Substantive ApplicationsThe Restraint[40] The relevant provisions of the Restraint contained in sch 7 of the Franchise Agreement read:1 The Franchisee and the Covenantors severally covenant that they shall not for the period specified in Schedule A following the expiration or termination of the franchise agreement (including any period of renewal or extension of it) within the area specified in Schedule A:(a) directly or indirectly canvass, solicit or attempt to solicit, serve or act for any customer of the Business; or(b) personally or by circulars, letters or advertisements interfere with the Business or divulge to any person any information concerning the Business; or(c) use the Franchisee's telephone and facsimile numbers andother numbers used by customers to contact the Franchisee; or(d) be concerned or interested in any capacity whatsoever in any business conducted in competition with the business of the Franchisor (or its other franchisees) where such business relates to the provision of mortgage broking and Related Services.2. Where the Franchisee has provided Non Related Services during the Term clause 1d) shall apply to restrict or prevent the carrying on of business in such Non Related Services, only to the extent however that such restriction or prevention shall apply to the provision of Non Related Services to customers of the Business.3. Following the expiration or termination of the Franchisee's franchiseagreement (including any period of renewal or extension of it) the Franchisor may agree to grant dispensation to the Franchisee to provide Non Related Services to customers of the business where such services are conducted under contract to the Franchisor and are not conducted in competition with the business of the Franchisor or the Transferee. Such dispensation would be subject to the consent of the Transferee and the conditions specified in the Manual.Court orders and jurisdiction[41] The applicant filed an originating application without notice for an injunction and ancillary orders against the respondents on 2 July 2015. Because of the provisions of the Franchise Agreement and the protest, the application was made by originating application under Part 19 of the High Court Rules and art 9 of sch 1 of the Arbitration Act 1996. At the same time as the filing of the application, originating applications for orders restraining other ex-franchisees of the applicant were made.[42] On 3 July 2015, Hinton J released a minute allowing MPNZ interim orders.7The operative parts of the Orders served on the respondents are as follows:1. The originating application without notice for urgent injunctive and ancillary orders against the respondents made by Mike Pero (New Zealand) Limited on 2 July 2015 was determined by the Honourable Justice Hinton on 3 July 2015.2. The determination was made without a hearing.3. The following orders were made:(a) That pending resolution of all disputes between the parties, the respondents (including their officers, employees and agents) are restrained from:(i) taking any steps in breach of obligations that the first and second respondents owe to MPNZ under or in connection with a franchise agreement between MPNZ and Franchisor and the second respondent as Franchisee dated 20 October 2010 (Franchise7 Mike Pero (New Zealand) Ltd v Krishna HC Auckland CIV-2014-404-001508, 3 July 2015.Agreement), and in particular (without limitation) that the respondents are restrained from:(1) commencing or continuing any business or being concerned or interested in any capacity whatsoever in any business conducted in competition with the business of the Franchisor (or its other franchisees) where such business relates to the provision of mortgage broking and Related Services, or otherwise in competition with MPNZ;(2) dealing with any members of the public or customers of the second respondent, including via the websitewww.krishkrishna.com, or the email addresses Krish@KrishKrishna.com orkrishkrishna@icloud.com, or any other website or email address not approved by the applicant;(3) using, copying, disseminating, or otherwise dealing with any confidential information concerning the System, practice, dealings, transactions or affairs of MPNZ, including customer contact details, acquired by any of the respondents in connection with the performance of the first and secondrespondents' responsibilities under theFranchise Agreement (Confidential Information), otherwise than as authorised by MPNZ; and from(ii) disclosing the content of this application and its related documents to any other parties other than for the purposes of obtaining legal advice.[43] The order was served on Mr Krishna and MSL on 7 July 2015.The application to rescind/vary[44] In this case, it is appropriate to deal first with the application made by the respondents to vary or rescind the Orders, before considering whether there has been a beach of those Orders.[45] The Respondents apply to vary or rescind the Orders on the basis that they are wider than the restrictions in the Franchise Agreement. In particular, the respondents submit that:(a) The words "Commencing or continuing any business" and " or otherwise in competition with MPNZ" are more comprehensive thanthe wording in the Restraint.(b) The Orders have no geographical or temporal restrictions.(c) The Order prohibiting Mr Krishna and MSL from:Dealing with any members of the public or customers of the second respondent, including via the website www.krishkrishna.com, or the email addresses Krish@KrishKrishna.com or krishkirshna@icloud.com, or any other website or email address not approved by the applicant.has no basis in the Restraint or Franchise Agreement and purports to prohibit any dealings with any member of the public using any website or email address not approved by MPNZ.[46] The Orders were made on an ex parte application by MPNZ under the Arbitration Act, sch 1, art 9 and the High Court Rules. Schedule 1, art 9 provides:9 Arbitration agreement and interim measures by court(1) It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court aninterim measure and for a court to grant such measure.(2) For the purposes of paragraph (1), the High Court or a District Court has the same powers as an arbitral tribunal to grant an interim measure under article 17A for the purposes of proceedings before that Court, and that article and article 17B apply accordingly subject to all necessary modifications.(3) Where a party applies to a court for an interim injunction or other interim order and an arbitral tribunal has already ruled on any matter relevant to the application, the court shall treat the ruling or any finding of fact made in the course of the ruling as conclusive for the purposes of the application.[47] Article 17A, sch 1of the Arbitration Act provides that "[u]nless otherwiseagreed by the parties, the arbitral tribunal may, at the request of a party, grant aninterim measure." An interim measure means a temporary measure requiring aparty to:8(a) maintain or restore the status quo pending the determination of the dispute:(b) take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral proceedings:(c) provide a means of preserving assets out of which a subsequent award may be satisfied:(d) preserve evidence that may be relevant and material to the resolution of the dispute:(e) give security for costs[48] The High Court Rules provide that applications to the court under the Arbitration Act, with limited exceptions, must be made as originating applications,9as was done in this case.[49] The Orders in this case cannot be interlocutory orders as an 'interlocutory order':10(a) means an order or a direction of the court that—(i) is made or given for the purposes of a proceeding or an intended proceeding; and(ii) concerns a matter of procedure or grants some relief ancillary to that claimed in a pleading; and(b) includes—(i) an order for a new trial; and(ii) an order striking out the whole or part of a pleading; and(iii) an order varying or rescinding an interlocutory order[50] This definition clearly provides that an interlocutory order can only be an order made for the purposes of a proceeding or an intended proceeding.'Proceeding' is defined as "any application to the court for the exercise of the civil8 Arbitration Act 1996, sch 1, art 17.9 Rule 19.2.10 Definition of "interlocutory order" in r 1.3.jurisdiction of the court other than an interlocutory application".11 In this case, there is no application to the Court for the exercise of civil jurisdiction, nor is there intended to be, other than the application for interim orders. This is because the parties intended to take this dispute to arbitration, and the interim orders were made by the Court under the Arbitration Act.[51] This position is helpfully summarised by in McGechan on Procedure: 12The order made on an originating application is a final and not an interlocutory order so the method of challenge is by appeal to the Court of Appeal, and the procedure of review under rr 7.49 and 7.50 is not available.[52] This leads to the somewhat unusual position where the Orders cannot be varied or rescinded under r 7.49.13 If the respondents still wish to seek variation or rescission the avenue would be by appeal to the Court of Appeal.[53] However, to assist with the determination of the applicant's application forarrest and contempt orders I make the following observations on the Orders and the Restraint. At first glance, the Orders do appear wider than the Restraint as there is no geographical or temporal limit specifically stated in the Orders. However, this interpretation would be contrary to the intentions of all concerned. The geographical and temporal limits of the Restraint must apply correspondingly to the Orders.[54] Additionally, I note that while the words "commencing or continuing any business [conducted in competition]" are not found in the Restraint itself, they go no wider than the Restraint which prohibits the respondents from being "concernedor interested in any capacity whatsoever in any business [conducted incompetition]" which would include any activity which falls under the aboveprovision of the Order.11 Definition of "proceeding" in r 1.3.12 Andrew Beck and others McGechan on Procedure (looseleaf ed, Brookers, updated to 5 April 2016) at [HR19.10.06].13 Rule 7.49 is excluded from the list of rules on interlocutory orders which also apply to originating applications set out in r 9.10.[55] Likewise, the words "or otherwise in competition with MPNZ" must beinterpreted consistently with the Restraint itself which provides that if the Franchisee has provided Non Related Services during the term, the Restraint applies to those Non Related Services in the same way that it applies to Related Services.[56] I have more difficulty with the prohibition on the respondents from "dealing with members of the public" via any website or email address not approved by theapplicant. MPNZ has stated that it does not seek to prevent Mr Krishna from communicating with members of the public about matters unrelated to the Restraint such as to "procure a quote for car repairs, or to publish a food blog on his website." However, it is arguable that the Orders lack sufficient clarity on thispoint. This will be discussed more in the subsequent section.The application for an arrest warrant and contempt order[57] The applicant has applied for orders that Mr Krishna be found to be in breach of the Interim Orders of Hinton J dated 3 July 2015 and that an arrest warrant be issued for Mr Krishna for contempt of a court order and that Mr Krishna be required to purge his contempt.[58] The applicants state that r 7.48 in conjunction with rr 17.84 and 17.85 empower the Court to direct the arrest or commit a person to prison for non compliance with a court order.[59] As the Interim Orders were not interlocutory, r 7.48 does not apply. However rr 17.84 and 17.85 apply to court orders in general rather than only interlocutory orders.[60] Rule 17.2 provides that a court order, except one made on an interlocutory application, may be enforced in the same way as a judgment in the proceeding to the same effect. Rule 17.3 provides that a judgment may be enforced by one or more enforcement processes, including an arrest order.[61] The applicant submits that Mr Krishna engaged in a series of acts that infringed upon the terms of the interim orders. In particular, by:(a) advertising himself on LinkedIn; and(b) advertising himself on the Professional Advisers Association Website.[62] The applicant also raises allegations of data manipulation in the MPNZ customer database. It alleges that Mr Krishna deliberately altered customers' contact details so that MPNZ's attempts to contact these customers would beunsuccessful. This data manipulation is alleged to have occurred in April 2015, before the termination of the Agreement and well prior to the Orders being made. The applicant also alleges that Mr Krishna had contacted a bank seeking to have an application relating to an MPNZ customer withdrawn and resubmitted under his own name prior to the Orders being made. As these acts are alleged to have occurred prior to the Orders being made they cannot form the basis for a finding of contempt, although prior conduct can be taken into account when determining the state of mind of a party at a later time.14[63] For the respondents, it is alleged that the applicant has failed to adduce any persuasive or prima facie evidence of a breach of the interim orders. It is submitted that each allegation made has been rebutted. It is further asserted that none of therespondents' evidence has been addressed or even challenged in the reply evidence by the applicant.[64] Counsel were in agreement on the elements which must be proved, which are:(a) The terms of the original court order are clear and unambiguous;(b) The party sought to be arrested had proper notice of the order; and14 Yang v Chen (No 5) [2011] NZHC 1492 at [33].(c) The party has not complied with the order. 15[65] When allegations of contempt are raised, the contempt must be proved beyond reasonable doubt before criminal sanctions, such as a fine or imprisonment, are imposed.16Analysis[66] As stated above, a finding of contempt can only be made when the orders which are said to have been breached are clear and unambiguous. It is for the applicant to prove, to a high standard, that the terms of the order are clear and unambiguous. As stated by Fogarty J:17The reason for this rule is that the remedies of contempt are penal. They can range from imprisonment down to a fine, which is usually the minimum. Such penalties cannot be imposed justly if the terms of the Court raise an ambiguity relevant to the conduct of the person against whom they purport to bind.[67] As discussed above, the Order prohibiting Mr Krishna from communicating with the public through any website or email address not approved by MPNZ is not clear and unambiguous. Accordingly, to find that Mr Krishna is in contempt of that provision would be contrary to law. I instead consider whether Mr Krishna has breached the Orders by taking a step in breach of the Franchise Agreement, in particular cl 1(a) of the Restraint which prohibits the respondents from directly or indirectly canvassing, soliciting or attempting to solicit any customer of MPNZ.[68] Solicit is defined by Peter Spiller as "asking, entreating or urging another to do something."18 In Black's Law Dictionary solicitation is defined as "an effort orattempt to gain business".19 The definition of 'solicit' was considered by theEmployment Relations Authority in NetworksDirect Ltd v Scott:2015 Burlsem Holdings Ltd v GB & JM Bockett Ltd (1989) 4 PRNZ 616 (HC) at 619; Soljan v Spencer [1984] 1 NZLR 618 (CA).16 Ferrier Hodgson v Siemer HC Auckland CIV-2005-404-1808, 9 July 2007 at [25].17 Wilson v Davis HC Rotorua CIV-2006-463-000921, 12 June 2007 at [12].18 Peter Spiller New Zealand Law Dictionary (8th ed, LexisNexis, Wellington, 2015) at 284.19 Bryan A Garner Black's Law Dictionary (10th ed, Thompson Reuters, St Paul (MN), 2014) at 1608.20 NetworksDirect Ltd v Scott ERA Auckland AA23/02, 8 February 2002 at 8–9.There is also a need to ascertain the meaning of the restraint of trade clause as it is drafted. The key question in that respect is whether either Mr Scott orMr Raines "solicited" a client or prospective client. On the evidence, therelevant investigation must focus on the business arrangements with Te Whare.The word "solicit" means to "ask repeatedly or earnestly for or seek or invite(business etc)"Concise Oxford Dictionary 8th ed. Mere communication witha former employer's customer does not fall within this definition, as it is the subject matter of the communication that is important. However decisions of the court have addressed whether the scope of the definition is limited to assessing who made the first approach, the former employee or the customer, or whether the definition extends to activities during the subsequent process when it results in the parties entering into a business arrangement.The decisions have leaned towards the broader meaning. For example in Dee Jay Distributors Limited v Spring (unreported, 12 April 1996, Employment Court Wellington, Chief Judge Goddard, WEC 24/95) the court said:"For the purposes of today's hearing I am going toaccept Mr McBride's submission that the word 'solicit'is one of broad meaning and does not need proof of earnest entreaty. Any indication of a willingness to do business is probably sufficient and it may be that presence, for the purposes of doing business, isenough."(p. 3).In Deloitte & Touche Consulting Group ICS Limited v Halsall (unreported, 24 July 1997, Auckland Employment Court, Judge Colgan, AEC 74/97),referring to the Shorter Oxford Dictionary meanings of "solicit", the courtsaid:"Each of those wider meanings may be consistent withan intention not only to prohibit an initial unsolicited approach but to the likely encouragement of a potentially beneficial prospective employee to accept a job offer.Both counsel referred to cases in this court which, although certainly not determinative, tend to allow fora broader meaning of 'solicit' "(p. 10).Such statements are an indication that it is appropriate for me to adopt thebroader meaning of "solicit", although they fall short of making an affirmative statement of general principle to that effect. It is also relevant that both decisions were on applications for interim relief, and the court did not hear full argument on the nature of a restraint on soliciting clients of a former employer. The decisions also turned on their own facts.[69] The facts of Dee Jay Distributors Ltd v Spring,21 referred to above, involved in part, a defendant who had gone to work for another company. She had then gone with her new manager to visit a customer of her former employer. There was noevidence that she had said anything at the meeting or had made any 'earnest entreaty'.[70] As indicated above, whether Mr Krishna has, or has attempted to, solicit customers of MPNZ will require analysis of the facts. There is a broadinterpretation of 'solicit' which does not necessarily require proof of a repetitiverequest or entreat to do business. However, whether the actions of a party constitute solicitation or an attempt to solicit will turn on the particular facts. I now considerwhether Mr Krishna's LinkedIn page or PAA listing constitute a breach of theOrders.The LinkedIn Page[71] One of the grounds on which MPNZ alleges a breach of the Orders is Mr Krishna's LinkedIn profile. LinkedIn is a social media platform described as a" professional networking website where members can maintain connection withother members, establish connections to contacts of members in their network, and be introduced to other members for help in job searches and other career relatedgoals."22[72] MPNZ provided in evidence, a screenshot of Mr Krishna's LinkedIn page as it appears to someone who is not 'signed in'. As at 26 January 2016, it containedthe following information:Krish KrishnaOwner, Mortgage Suite LimitedAuckland, New Zealand | Financial ServicesCurrent: Mortgage Suite LimitedPrevious: Westpac New Zealand, Citibank Global BankingEducation: Natabus High School21 Dee Jay Distributors Ltd v Spring EmpC Wellington WEC24/95, 12 April 1995.22 Laura Scaife Handbook of Social Media and the Law (Routledge, Oxon, 2015) at 10.[73] Further down the page under 'Experience' it was listed that Mr Krishna hadbeen a director of Mortgage Suite Ltd from "February 2000 – Present (16 years)". Also listed were Mr Krishna's skills, which included mortgage lending, loans,credit, loan origination and other such things. There were also links to view Mr Krishna's full profile or contact him directly. Mr Krishna submits that his LinkedIn profile is innocuous and does not breach the Restraint as it is simply a description of who he is.[74] The applicant also refers to a direct message sent by Mr Krishna through hisLinkedIn page which said "Thanks and same to you. I have left Mike PeroFranchise and work on my own. New cell is 021 717144." This message seems to have been automatically forwarded to Mr Krishna's Mike Pero email address andso was seen by MPNZ. Mr Krishna explains this by saying that he received a message through LinkedIn on or about 21 January 2016 from a friend who had been trying to get hold of him by calling his old phone number (which had been returned to MPNZ). Mr Krishna replied to the message with his new phone number to allow the friend to contact him. The content of the message clearly shows that heis replying to a message that he has received and I accept Mr Krishna's explanationin relation to this message. The message does not support a finding that Mr Krishna has solicited or attempted to solicit customers of MPNZ.[75] The respondents refer the Court to BTS USA Inc v Executive Perspectives LLC from the Superior Court of Connecticut, Judicial District of Waterbury.23 The case involved a claim by BTS that Mr Bergmann, a defendant, had breached his employment contract with BTS. There was a clause in the employment agreement which prohibited Mr Bergmann from directly or indirectly soliciting, attempting to solicit, or communicating in any way with clients of BTS for a period of two years following the end of his employment with BTS. Following the end of his employment with BTS, Mr Bergmann began working for Executive Perspectives. He posted his new job to his LinkedIn account. One of his first tasks at Executive Perspectives was to revamp their website; on completion he posted an invitation to"check out" the new website via his LinkedIn account. Mr Bergmann was 'linked'to some client and contacts he had developed at BTS.23 BTS USA Inc v Executive Perspectives LLC 2014 WL 6804545 (Conn Super 2014).[76] The Court considered whether Mr Bergmann's LinkedIn activity constituted a breach of his employment agreement and stated:To the extent that BTS relies upon Bergmann's use of his LinkedIn accountfor its breach of contract claim, those claims fail as well. The posts made by Bergmann do not amount to solicitation or otherwise breach the employment agreement. He announced his new employment, a common occurrence on LinkedIn, and he invited linked individuals to visit the EP website. There was no evidence as to the extent to which any BTS clients or customers received the posts. The posts would have been received only by those whose settings alert them to such posts. There was no evidence that any BTS client or customer accepted the invitation and viewed the EP website or that any BTS client or customer did business with EP as a result.[77] In this case, the LinkedIn page can be found by anyone who searches MrKrishna's name regardless of whether or not they have a LinkedIn account.However, the point still remains that a client would need to be actively searching for Mr Krishna in order to find the information and even if a client found MrKrishna's LinkedIn page its contents do not amount to Mr Krishna urging orentreating a client to do business with him. Accordingly. I do not believe that the LinkedIn profile amounts to an attempt to solicit MPNZ's customers.Professional Advisers Association (PAA) Page[78] Mr Krishna's listing on the PAA website, as at 26 January 2016, contained the following statement "I am a well-respected and experienced mortgage adviser in New Zealand and have been a Mortgage Broker for the last 15 years. After working as a Mortgage Franchise Owner, I am now operating under my owncompany, Mortgage Suite Limited."[79] Under the heading 'Contact Details" was the Onehunga address where Mr Krishna previously carried out the franchise business and an Orakei PO Box address as well as two phone numbers and the email address'krishkrishna@icloud.com'.[80] Mr Krishna submits that there has been no breach of the Restraint as at thetime that the webpage was 'captured' Mr Krishna was not in business as amortgage broker, and he was, in any case, permitted to carry out business as a mortgage broker from 1 January 2016 anywhere except in the Auckland region.Mr Krishna, in his affidavit states that upon termination of the Franchise Agreement he contacted the PAA and asked them to remove all references to him being a franchisee from the website. He states that the PAA advised him that as he was still a registered member of the PAA, they needed to maintain his information on the website, but agreed to remove references to Mr Krishna being a franchiseeof Mike Pero. The issue is whether Mr Krishna's page on the PAA website breachesthe clause preventing Mr Krishna from directly or indirectly soliciting or attempting to solicit any client of MPNZ.[81] In order to access Mr Krishna's PAA listing, a person would need to eithersearch for his name, or scroll through the members registered in the Auckland region. In other words, a client would need to be actively searching for information on Mr Krishna or for a mortgage broker. There is no evidence that Mr Krishnapromoted the listing in any way or referred any of MPNZ's customers to it. Although, under a broad definition of 'solicit' presence and a willingness to do business may be sufficient, on the facts of this case, the PAA listing is, in my view, too far removed from the clients of MPNZ to amount to solicitation of them.Conclusion[82] The application by the respondents to vary or rescind the Orders is dismissed as there is no jurisdiction for the High Court to do so. An application to vary or rescind the Orders would need to be made to the Court of Appeal.[83] The applicant's application for arrest and contempt orders against Mr Krishnais dismissed.Costs[84] I reserve costs. If the parties cannot agree, memoranda in support, opposition, and reply shall be filed and served at seven day intervals.____________________JA Faire J