MIKE PERO MORTGAGES LTD v MIKE PERO and MIKE PERO MARKETING LTD [2014] NZHC 2798

MIKE PERO MORTGAGES LTD v MIKE PERO and MIKE PERO MARKETING LTD [2014] NZHC 2798 [11 November 2014]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2014-404-002193[2014] NZHC 2798BETWEEN MIKE PERO MORTGAGES LIMITEDPlaintiffAND MIKE PEROFirst DefendantMIKE PERO MARKETING LIMITEDSecond DefendantCIV-2014-404-001811BETWEEN MIKE PERO MORTGAGES LIMITEDApplicantAND MIKE PERO MARKETING LIMITEDRespondentHearing: 29 October 2014Appearances: G P Blanchard for Plaintiff/ApplicantD R Bigio and A E Malone for Defendant/RespondentJudgment: 11 November 2014JUDGMENT OF ASSOCIATE JUDGE MATTHEWSThis judgment was delivered by me at 4.30 pm on 11 November 2014pursuant to Rule 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors:Buddle Findlay, Wellington.Duncan Cotterill, Auckland.Introduction[1] On 4 July 2014 Mike Pero Marketing Limited (MP Marketing) served on Mike Pero Mortgages Limited a demand under s 289 of the Companies Act seeking payment of invoices rendered between April and June 2014 in a total sum of $8,625,for monthly director's fees for Mr Pero.[2] In proceeding CIV 2014-404-1811 (the 1811 proceeding) Mike Pero Mortgages Limited (MP Mortgages) applies to the Court for orders setting aside that notice, on the ground that there is a genuine and substantial dispute on whether or not the debt referred to in the demand is owing or is due, in terms of s 290(4)(a) of the Companies Act 1993 and that the demand is an abuse of process.[3] The application to set aside the demand has been filed by Buddle Findlay, solicitors. The solicitor acting is Mr S A Barker. The date of filing is 18 July 2014.[4] The application is opposed.[5] In proceeding 2014-404-002193 (the 2193 proceeding) Mike Pero Mortgages Limited sues Mr Pero and MP Marketing Limited, of which Mr Pero is the sole director,1 raising a range of allegations including breach of a shareholder'sagreement and the company constitution, shareholder repression, and breaches of certain provisions of the Companies Act 1993.[6] This proceeding is defended by both Mr Pero and MP Marketing.[7] The proceeding has been filed by Buddle Findlay. The solicitor acting is, once more, Mr S A Barker. The date of filing is 29 August 2014.[8] Mike Pero Marketing Limited has filed interlocutory applications in both proceedings for orders restraining Buddle Findlay from acting for Mike Pero Mortgages Limited.1 The shares in MP Marketing are owned as to half by Mr Pero and as to half by a trust of which he is one trustee.[9] Both applications are opposed.[10] Since 2007 Buddle Findlay has been instructed by Mr Pero personally and by companies he is associated with, on a range of issues. Most recently, he retained Buddle Findlay to act for him and for Pennylane Properties Limited, a company of which he is the sole director, in a proceeding against Aotearoa Property Trust. This proceeding is filed under number CIV 2013-009-1197. This instruction commenced in 2013, before Buddle Findlay commenced acting for MP Mortgages on the 1181and the 2193 proceedings against Mr Pero and MP Marketing. It remains current. Therefore Buddle Findlay is acting on litigation against one of its own current clients.[11] Mr Pero and MP Marketing say that Buddle Findlay cannot act for another client in litigation against either of them. Mr Pero, personally, is a current client of the firm. MP Marketing is not, but it is closely associated with Mr Pero, and the sum in issue in the 1811 proceeding against that company represents fees for his services as a director of MP Mortgages.[12] Mr Pero and MP Marketing accept that there is no connection between the1811 and 2193 proceedings, on one hand, and the Pennylane case on the other.[13] Mr Barker is a partner in the Wellington office of Buddle Findlay. Mr Palmer, a partner in the Christchurch office of Buddle Findlay, acts on the Pennylane case. The firm says there has not been and will not be any contact between the two offices on these cases, and, if necessary, undertakings will be given to the Court.[14] The issue is whether Buddle Findlay should be restrained from acting for MP Mortgages in either case, or both, given that in doing so it is acting against a client it currently acts for on another case, and a company closely associated with that client.[15] Counsel informed me they have been unable to locate any case in New Zealand where a court has ruled on this issue. Counsel referred me to cases decided in the United Kingdom, Canada and Australia. Before referring to those cases, andthe respective submissions of counsel on them, it is appropriate in my view to reiterate the inherent jurisdiction of the Court to determine which persons should be permitted to appear before it as advocates. This is because this case concerns litigation, and there is a distinction drawn in New Zealand between acting on litigation, and acting on commercial transactions. And it is because all solicitors are officers of the Court, and the powers of the Court in relation to their conduct of cases before it are of fundamental importance.[16] In Black v Taylor,2 the Court of Appeal confirmed that the Court has power arising from its inherent jurisdiction to restrain a barrister from acting where the interests of justice so require. The practitioner concerned had acted as counsel for members of a family over a long period. Later he accepted instructions to act against one member of the family. The Court of Appeal dismissed an appeal from the decision of the High Court in which a declaration was granted that the practitioner should not act further.[17] The following passages from the judgment of Richardson J are relevant to the issue now before the Court:3The High Court has an inherent jurisdiction to control its own processes except as limited by statute. As an incident of that inherent jurisdiction it determines which persons should be permitted to appear before it as advocates. In determining what categories of person may appear it does so in accordance with established usage and with what is required in the public interest for the efficient and effective administration of justice (3(1)Halsbury para 396).An associated consideration is the fundamental concern is that justice should not only be done but should manifestly and undoubtedly be seen to bedoneThe integrity of our system of justice depends on its meeting those standards. The assessment of the appearance of justice turns on how the conduct in question – here [counsel's] wish to be able to act as a counsel for thedefendants against [a family member] – would appear to those reasonable members of the community knowing of that background.2 Black v Taylor [1993] 3 NZLR 403 (CA).3 At 408 line 29. See also Cooke P at 406 line 25, and McKay J at 418 line 33.In making that assessment the court will also give due weight to the public interest that a litigant should not be deprived of his or her choice of counselwithout good cause. The right to the choice of one's counsel is an important value. But it is not an absolute.[18] His Honour went on to discuss the then current rule in the Code of Ethics governing the conduct of barristers and solicitors relating to acting against a former client.[19] Richardson J then discussed cases where courts had considered the due administration of justice. In conclusion Richardson J said:4Disqualification will ordinarily be the appropriate remedy where theintegrity of the judicial process would be impaired by counsel's adversarialrepresentation of one party against the other. The decision to disqualify isnot dependent on any finding of culpable conduct on the lawyer's part.Disqualification is not imposed 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 in representation may be important in determining in particular cases whether the interests of justice truly demand disqualification.[20] This passage was cited with approval by Gilbert J in Torchlight Fund No. 1 LP (In Receivership) v NZ Credit Fund (GP) 1 Ltd & Ors.5 In this case the Court restrained Buddle Findlay from acting against former clients.[21] With those principles in mind I refer to two passages from judgments in the United Kingdom, then cases in Canada and Victoria, which arose in relation to acting in litigation.[22] First, in Bristol and West Building Society v Mothew,6 Millett LJ referred to the fiduciary duty owed by a firm to a client. He said:A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of4 Page 412 line 21.5 Torchlight Fund No. 1 LP (In Receivership) v NZ Credit Fund (GP) 1 Ltd & Ors [2014] NZHC 2552.6 Bristol and West Building Society v Mothew [1996] 4 All ER 698 at 711-712.trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or for the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary. As Dr Finn pointed out in his classic work Fiduciary Obligations (1977) p 2, he is not subject to fiduciary obligations because he is a fiduciary; it is because he is subject to them that he is a fiduciary.[23] Acting in litigation against a client for which the firm already acts on a separate case would breach at least one of the identified facets of the fiduciary obligations Buddle Findlay has to Mr Pero, namely acting for the benefit of a thirdperson without Mr Pero's informed consent.[24] In Prince Jefri Bolkiah v KPMG (a firm),7 Lord Millett referred to a submission by counsel that the Court should only intervene when two conditions are satisfied, that a solicitor is in possession of information confidential to a former client, and that information is or may be relevant to the matter on which he is instructed by a second client. His Lordship said that on that footing the intervention of the court is founded not on the impropriety but on the protection of confidential information. He then said:My Lords, I would affirm this as the basis of the court's jurisdiction tointervene on behalf of a former client. It is otherwise where the court'sintervention is sought by an existing client, for a fiduciary cannot act at the same time both for and against the same client, and his firm is in no better position. A man cannot without the consent of both clients act for one client while his partner is acting for another in the opposite interest. His disqualification has nothing to do with the confidentiality of client information. It is based on the inescapable conflict of interest which is inherent in the situation.[25] Mr Blanchard says that the statement by Lord Millett in Prince Jefri Bolkiah v KPMG was obiter. The case concerned acting against a former client. Thestatement was made in the context of considering whether a lawyer's obligation to keep client information confidential prevents the lawyer from acting against a formerclient. He says that the lawyer's fiduciary duty was not relevant to the outcome of7 Prince Jefri Bolkiah v KPMG (a firm) [1999] 1 All ER 517 at 526.the case because the lawyer did not owe such a duty to a former client. He also says that Lord Millett did not consider whether the principle he stated would apply when the two matters on which the firm was retained were unrelated.[26] Mr Bigio says that the interests of MP Mortgages, the plaintiff in the two proceedings in question, are adverse to those of Mr Pero, and Mr Pero most certainly does not consent to Buddle Findlay acting. The same applies to MP Marketing of which Mr Pero is the sole director, and a 50 per cent shareholder, with a family trust owning the remaining 50 per cent. Under the principle enunciated by Lord Millett, Buddle Findlay cannot act irrespective of whether there may be a risk to client confidentiality.[27] In Canada the Supreme Court has considered whether a law firm may act against a client for which it was then acting on other cases.8 McKercher LLP acted for the Canadian National Railway Company on three current matters, a personal injury claim, the purchase of real estate and in relation to its interests as a creditor in a receivership. As well, two of the partners in the firm held power of attorney from the company for service of processes in the province of Saskatchewan. Then, without the knowledge or the consent of CNRC the firm accepted a retainer to act against it in a $1.75b class action. CNRC first learned of this when it was served with a statement of claim. It sought an order from the Court equivalent to the orders sought in the present case.[28] The Supreme Court enunciated a rule known as the bright line rule. The Court said:9The bright line rule is precisely what its name implies: a bright line rule. It cannot be rebutted or otherwise attenuated. It applies to concurrent representation in both related and unrelated matters. However the rule is limited in scope. It applies only where the immediate interests of clients aredirectly adverse in the matters on which the lawyer is acting. It applies only to legal – as opposed to commercial or strategic – interests. It cannot be raised tactically. And it does not apply in circumstances where it is unreasonable for a client to expect that a law firm will not act against it in an unrelated matter. If a situation falls outside the scope of the rule, theapplicable test is whether there is a substantial risk that the lawyer'srepresentation of the client would be materially and adversely affected.8 Canadian National Railway Company v McKercher LLP [2013] 2 SCR 649.9 At [41].[29] The Court expressed its conclusion in this case thus: CN and Wallace were adverse in legal interests; CN has not attempted to tactically abuse the bright line rule; and it was reasonable in the circumstances for CN to expect that McKercher would not concurrentlyrepresent a party suing it for $1.75 billion. McKercher failed to obtain CN'sconsent to the concurrent representation of Wallace, and consequently breached the bright line rule when it accepted the Wallace retainer.[30] The decision of the Supreme Court of Canada was a decision of a Full Court of nine judges. Both the Canadian Bar Association and the Federation of Law Societies of Canada were represented, as interveners.[31] If the principles stated by Lord Millett and by the Supreme Court of Canada are applied in New Zealand, the application before me must succeed. The interests of Mr Pero and MP Marketing are directly adverse to the interests of MP Mortgages in the matters on which Buddle Findlay is acting. Their retainers are in respect of litigation, not commercial or strategic issues. There is no suggestion that this application has been brought for tactical reasons. There is also no reason to see it as unreasonable for Mr Pero and MP Marketing to expect that the firm would not act against it when it is the holder of a current brief in an unrelated matter.[32] The Supreme Court elaborated on the last factor at paragraph [37] of the judgment. The Court referred first to the judgment in R v Neil,10 in which the bright line rule was first stated. In that case, the Supreme Court said:In exceptional cases, consent of the client may be inferred. For example, governments generally accept that private practitioners who do their civil or criminal work will act against them in unrelated matters and the contrary position in a particular case may, depending on the circumstances be seen to be tactical rather than principled. Chartered banks and entities that could be described as professional litigants may have a similarly broad-minded attitude where the matters are sufficiently unrelated that there is no danger of confidential information being abused. These exceptional cases are explained by the notion of an informed consent, express or implied.[33] Developing this approach in McKercher,11 the Court went onto say: In some cases, it is simply not reasonable for a client to claim that it expected a law firm to owe it exclusive loyalty and to refrain from acting10 R v Neil [2002] SCC 70.11 At [37].against it in unrelated matters. As Binnie J stated in Neil, these cases are the exception, rather than the norm. Factors such as the nature of the relationship between the law firm and the client, the terms of the retainer, as well as the types of matters involved, may be relevant to consider when determining whether there was a reasonable expectation that the law firm would not act against the client in unrelated matters. Ultimately, courts must conduct a case-by-case assessment, and set aside the bright line rule when it appears that a client could not reasonably expect its application.[34] It will be seen from these passages that although the rule is stated in absolute terms, there remains an assessment to be undertaken by the Court on whether the circumstances may warrant setting it aside. The Court observed that in most cases, simultaneously acting for and against the client in legal matters will result in a breach of the bright line rule, with the result that the law firm cannot accept the new retainer unless the clients involved grant their informed consent,12 but the Court may find the firm may accept the retainer if it concludes that the client does not hold a reasonable expectation that the law firm would not act in unrelated matters.[35] I conclude reference to this case with the following passage from the judgment:13Courts of inherent jurisdiction have supervisory power over litigation brought before them. Lawyers are officers of the court and are bound to conduct their business as the court directs. When issues arise as to whether a lawyer may act for a particular client in litigation, it falls to the court toresolve those issues. The courts' purpose in exercising their supervisorypowers over lawyers has traditionally been to protect clients from prejudice and to preserve the repute of the administration of justice, not to discipline or punish lawyers.[36] It will be noted that this mirrors the decision of the New Zealand Court of Appeal in Black v Taylor.[37] The only case cited to me by either counsel where a court has ruled that a firm may act both for and against a client at the same time, on litigation instructions, is Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd,14 a decision of the Supreme Court of Victoria at first instance. In that case, a firm was acting for Tasman Liquor Traders in proceedings in Queensland, then accepted12 At [39].13 At [13].14 Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd [2002] VSC 324.instructions on behalf of Australian Liquor Marketers to bring proceedings against Tasman Liquor Traders in Victoria. The cases were entirely unrelated. The Court declined an application to prevent the firm from continuing to act against them.[38] The Judge reviewed a number of cases and concluded that in all but one, the courts had supported intervention when the solicitors concerned were acting on the same or related matters. The Court concluded that the firm would not be in breach of its fiduciary duty of loyalty as there was little risk in relation to confidential information. Tasman Liquor Traders had not pointed to any specific relevant confidential information it considered at risk. Tasman Liquor Traders had pointed to certain other factors derived from its relationship with the firm, which have come tobe known as the "getting to know you" factors which I will refer to later in this judgment. The Judge concluded that the solicitors acting in the firm's Melbourne office should give undertakings to the Court to ensure that no confidential information had been or would be passed between offices.[39] Counsel referred me to three cases which arose in the context of commercial transactions, the first being Marks and Spencer v Freshfields Bruckhaus Deringer.15Freshfields acted on two commercial instructions. The first related to Marks &Spencer's principal contractual arrangements, the second a takeover bid for thecompany. Freshfields was advising the company on the former and then commenced acting for the consortium making the bid. The High Court and the Court of Appeal found that Freshfields could not continue acting for the consortium as it was in breach of its fiduciary duty of loyalty to Marks & Spencer. Collins LJ referred to the principle enunciated by Lord Millett in Bolkiah as the double engagement rule. The double engagement rule is not limited to conflicts where an engagement was on thesame matter. He said, however, that there must be "some reasonable relationship"between the two matters on which the firm was instructed. They do not have to be the same. Pill LJ, with whom Collins LJ agreed, said:I will accept that there must be a degree of relationship between the two transactions but I am quite unable to accept the submission that the language used by Lord Millett in Bolkiah and the comparative strictness, with respect, with which he has stated the principles in this area of the law is confined to same transaction cases.15 Marks and Spencer v Freshfields Bruckhaus Deringer [2004] 3 All ER 773 (HC).[40] This case supports the proposition that on commercial matters a firm may act against the interests of an existing client but not where there is a reasonable relationship between the matters on which it seeks to do so. A firm will not be prevented from acting only where the instructions are on the same matter.[41] In Russell McVeagh McKenzie Bartlett & Co v The Tower Corporation,16 the Court of Appeal considered the involvement of Russell McVeagh on two sets of instructions it held covering quite distinct unrelated commercial issues. The Court expressed the view that in this circumstance conflicts will generally arise, and probably only arise, where there may be problems resulting from possession of confidential information. The Court specifically stated that the factual situation then before it, and the legal implications arising from it, were far removed from those inBlack v Taylor, the decision in which was based on the Court's inherent jurisdictionto control the conduct of proceedings and those who appeared before it. This jurisdiction was not invoked in that case, and was not at issue.17[42] Re A (Barrister and Solicitor of Auckland)18 arose out of the events that resulted in the litigation between Russell McVeagh and Tower.[43] A appealed from a decision of the Law Practitioners' Disciplinary Tribunal.A had accepted instructions to act for a client on a commercial transaction involving Tower, when a partner in a different office of his firm acted for Tower on a dispute with the Inland Revenue Department. The decision of the Court is not of present relevance, but Mr Blanchard referred to a passage from the judgment of Williams and Harrison JJ. Rule 1.07 of the Rules of Professional Conduct, which then governed the conduct of law practitioners, set out certain requirements where a conflict of interest is identified. Their Honours said:[42] Mr Galbraith submitted that R 1.07 [of the Rules of Professional Conduct for Barristers and Solicitors] applies only where the parties'interests are in direct conflict on the same matter or where their legal interests are opposed. He submitted that a conflict could not arise where there was no risk of confidential information held by a practitioner about one client becoming available to another client.16 Russell McVeagh McKenzie Bartlett & Co v The Tower Corporation [1998] 3 NZLR 641 (CA).17 At 649 lines 9-23.18 Re A (Barrister and Solicitor of Auckland) [2002] NZAR 451 (HC).[43] To the contrary, Mr Carruthers submitted that a conflict of interest arises in any situation where the interests of two clients become opposed, and that the risk of disclosure is an immaterial factor. We agree with Mr Carruthers. The existence of a conflict cannot be defined or circumscribed by the risk of disclosure. The two concepts are unrelated. A conflict relates to the opposition of interests, not to the efficacy of the measures taken to eliminate or reduce risks of disclosure once the opposition of these interests is manifest. Accordingly, R 1.07 applies to this situation.[44] However, the interests of the client will not become opposed and aconflict will not arise within Mr Carruthers' formulation unless either (a) the opposition relates to the same transaction or (b) the confidential information held by a practitioner for one client is acquired in a professional capacity and is or may be of use or relevant to another client on a separate matter. See also the comments of Henry J for the majority in Russell McVeagh McKenzie Bartleet & Co v Tower Corporation at 648.[44] In the present case, proposition (a) does not apply. As to (b), there is no evidence, Mr Blanchard says, that confidential information held by Buddle Findlayfor Mr Pero and MP Marketing on the Pennylane's property case is of use or relevantto MP Mortgages on its claims against Mr Pero and MP Marketing.[45] He thus founds the proposition that in the absence of there being any connection between the two sets of instructions, or any risk of confidential information being passed, Buddle Findlay should not be prevented from acting on the 2193 and 1811 proceedings. Undertakings can be given to the Court to protect confidentiality.[46] Mr Bigio says that the principles enunciated in these cases relate only to commercial transactions and not to instructions to act on litigation.[47] Mr Bigio is correct. As noted,19 the Court of Appeal in Russell McVeagh v Tower expressly disavowed any application of the inherent jurisdiction of the Court to control its own proceedings to the facts of that case, because the factual situation was far removed from the situations where those principles apply. The same applies to Re A. Observations by the Court on the passing of confidential information were not made in the context of a firm acting on litigation, contemporaneously, for and against a client.19 At [41] above.[48] In my opinion observations in Marks & Spencer, Russell McVeagh v Towerand Re A are of no assistance in deciding the applications presently before the Court. It is important not to conflate the principles which must be considered when practitioners act on commercial transactions in circumstances where the interests of one client for which they act might be contrary to the interests of another, with the principles which apply to practitioners conducting litigation before the Court. The difference was expressly recorded by the Court of Appeal in Russell McVeagh and is not to be overlooked.[49] The issues arising in litigation have been considered in two recent cases. InDeliu v The Auckland Standards Committee,20 Woolford J considered an application for an order that a practitioner not represent the Standards Committee on proceedings against Mr Deliu, because that practitioner had extensively interviewed Mr Deliu prior to the proceedings commencing. In particular, Mr Deliu had formed the view that a level of pressure was placed upon him by the practitioner to plead guilty to the charges which he was facing.[50] The learned Judge commenced his consideration by adopting the principles enunciated in Black v Taylor.21[51] His Honour said:22I am of the view that the public interest in the administration of justice requires an unqualified perception of its fairness in the eyes of the general public. As noted in the Canadian case of Everingham v Ontario the issue is not whether any ethical rule has been breached. Nor is the issue solely whether one of the parties has 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 requires the removal of the solicitor.[52] After further discussion of the facts his Honour concluded:23It is not my role on appeal to determine Mr Deliu's application to stay ordismiss the charges against him as an abuse of process. That is clearly a matter for the Tribunal in due course and I make no comment on its merits20 Deliu v The Auckland Standards Committee [2014] NZHC 2530.21 At [14].22 At [22].23 At [40] and [41].but a fair-minded reasonably informed member of the public would think that Mr Deliu should have the ability to have his application determined by an impartial tribunal and an impartial process. That impartiality should extend to counsel for the Law Society.I have therefore reached the conclusion that tribunal (sic) was wrong todismiss Mr Deliu's application to debar Mr Pike from acting as counsel for the respondents in these proceedings. I repeat that in doing so I make nocomment on the merits or otherwise of Mr Deliu's application to stay ordismiss the charges as an abuse of process. I also stress that my decision should not be seen as a reflection of Mr Pike's conduct. My decision toallow the appeal and disqualify Mr Pike does not depend on any finding of culpable conduct on his part. Disqualification is not imposed as a punishment for misconduct. Rather, it is a protection for the parties and for the wider interests of justice which must be seen to be done.[53] Thus the learned Judge squarely applied the principles enunciated in Black v Taylor.[54] Two days later the Court issued a judgment in Torchlight Fund No. 1 LP (In Receivership) & Ors v NZ Credit Fund (GP) 1 Ltd & Ors.24 In that case, Buddle Findlay had acted for the second defendant, Mr Kerr and his related entities for 14 years, until 2012. It had then accepted instructions to act against Mr Kerr on two proceedings, and Mr Kerr applied for an order restraining Buddle Findlay from acting for him or any party associated with him in any proceeding.[55] The present case differs materially from Torchlight because here Buddle Findlay seek to act against a present client, not a former client. The relevance of thecase to the present case is his Honour's approach to the issue before the Court byreference to the fundamental principles enunciated in Black v Taylor and Prince Jefri Bolkiah.[56] Buddle Findlay owes a fiduciary duty to its existing clients. A fundamental element of that duty is loyalty. It cannot fulfil that duty on its present course. I respectfully adopt the opinion of Woolford J which I have quoted at [51]. In my opinion a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice requires the removal of Buddle Findlay from the role of solicitors for the plaintiffs in the two proceedings in question. To apply24 Torchlight Fund No. 1 LP (In Receivership) & Ors v NZ Credit Fund (GP) 1 Ltd & Ors [2014] NZHC 2552.with adaptation the words of Richardson J in Black v Taylor, the integrity of the judicial process is, in my view, at risk from the proposed or continuing representation by counsel in these two cases, given that the same firm presently acts in the proceeding brought by Pennylane Properties Limited.[57] I do not see any distinction, in the circumstances of this case, between Mr Pero and MP Marketing which is not a party to the Pennylane proceeding. Its association with Mr Pero, who is a party to that proceeding, is extremely close. Application of the principle must be undertaken with care, but it is not an exercise infine distinctions which are most unlikely to be recognised by, as Woolford J put it, "afair-minded, reasonably informed member of the public".[58] Given the basis upon which I have reached my conclusion it is not necessaryto discuss whether there are, in this case, any "getting to know you factors" whichmight direct the outcome of a case involving a former client.25[59] I am conscious that a different outcome may be reached if I followedAustralian Liquor Marketers Pty v Tasman Liquor Traders Pty.26 With respect to the learned judge, I think the duty of loyalty to an existing client is breached by acting against that client, and I do not consider that controlling the risk of passing of confidential information is material to that position. This accords with the principle enunciated by Lord Millett, whether obiter or not, and the view of the Supreme Court of Canada, that lawyers owe clients duties of commitment and candor. For the reasons I have given I prefer not to follow that case.[60] I have reached my conclusion without finding it necessary to followCanadian National Railway Company v McKercher LLP. Application of the principles of fiduciary duty, and those enunciated in Black v Taylor is sufficient. As I have noted,27 certain observations in the judgment mirror the decision in Black v Taylor. Whether it is necessary in New Zealand to lay down a hard and fast rule is debatable. The principles laid down in Black v Taylor and applied consistently since25 Mendolin Court Pty Ltd v Delrayne Supreme Court of Victoria, 8 September 1997; Manna Hill Mining Company Pty Ltd v Iles Selley [2004] FCA 1175.26 At [14] above.27 [34] and [35].are sufficient, in my view, for the Court to decide issues of this kind which come before it. The statement of principle in Bristol and West Building Society v Mothew,Prince Jefri Bolkiah v KMPG (a firm), and Canadian National Railway Company v McKercher LLP do not differ from the principles which apply in this country. Taken together these cases represent a forceful body of authority for the principles which are to be applied.[61] If the bright line rule was applied, it would still be necessary to decide if Mr Pero and MP Marketing could reasonably expect Buddle Findlay not to act. I think that a decision on that issue, and a decision on what a fair-minded and reasonably informed member of the public would expect, come down to the same point.[62] Whilst in cases concerning commercial transactions the courts have balanced a number of factors in reaching conclusions that in certain circumstances solicitors may act for more than one party, and sometimes contrary to the interests of former clients, there is now a recognised range of factors to be considered in such circumstances. It is not necessary, and in my view it would be undesirable, to proscribe the principle in Black v Taylor in circumstances of solicitors acting both for and against an existing client. Solicitors are officers of this court, and the processes of the court are within its own control.[63] In reaching my conclusion in this case I have given due weight to the public interest in a litigant not being deprived of its choice of counsel without good cause. However, the right to choose counsel is not an absolute right. It is one factor to be considered. In this case it is outweighed by the wider interests of justice; there was not, and could not be, a suggestion that in either of these cases any special skill is possessed by Mr Barker or others within Buddle Findlay that is not possessed by other lawyers, or that any special skill is required to run either case. Both cases are at a relatively early stage.Outcome[64] Buddle Findlay is restrained from acting as solicitors for the applicant, Mike Pero Mortgages Limited on proceeding 1811, and for the plaintiff, Mike Pero Mortgages Limited on proceeding 2193.[65] The respondent will pay costs to the applicant on a 2B basis plus disbursements fixed by the Registrar._______________________J G MatthewsAssociate Judge