TPD 2018 LTD v GODFREY & CO LTD [2020] NZHC 314

TPD 2018 LTD v GODFREY & CO LTD [2020] NZHC 314 [28 February 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-000093[2020] NZHC 314BETWEEN TPD 2018 LIMITEDPlaintiffAND GODFREY AND COMPANY LIMITEDDefendantHearing: 16 December 2019Appearances: S O McAnally and N W Coyle for Plaintiff and Third PartyR J Sussock for DefendantJudgment: 28 February 2020JUDGMENT OF ASSOCIATE JUDGE P J ANDREWIntroduction[1] The plaintiff (TPD), sues the defendant (Godfrey), for breach of fiduciary dutyand breach of contract following the termination of an alleged joint venture agreement.The joint venture (JV) is said to have been a combination of two insurance loss-adjusting businesses set up with a view to a formal merger. The JV was set up inFebruary 2011 following the second Canterbury earthquake.[2] The merger never eventuated and the plaintiff's claim for equitable and othercompensation arises from Godfrey's alleged failure to account for revenue followingthe termination of the JV.[3] In the present proceeding Godfrey makes the following applications:(a) An application to disqualify Keegan Alexander, solicitors, from actingfor the plaintiff and first third party;(b) An application for orders for further and better discovery pursuant tor 8.19 of the High Court Rules.[4] At issue is whether Keegan Alexander previously acted for Godfrey andwhether it is likely that Mr Matthew Pasley of Keegan Alexander will be required togive contentious evidence. The ultimate question for determination is whether KeeganAlexander's representation of TPD against Godfrey will impair the integrity of thejudicial process. That is not dependent on any finding of culpable conduct on thelawyer's part.Factual background[5] In 2011, the company, Thomas Pasley & Associates Ltd (TPA), was engagedin the business of insurance loss-adjusting.[6] The first third party, CNZ (Auckland) Ltd (in liquidation) (CNZ), is thesuccessor to all of the property, rights, powers and privileges of TPA following anamalgamation dated 30 November 2013, pursuant to Part 13 of the Companies Act1993.[7] TPD says that it is the assignee of all of the rights, title and interest of CNZ tothe causes of action pleaded in the statement of claim.[8] TPA and Godfrey were competitors in the insurance loss-adjusting industry. Inlate 2010 they commenced talks about merging the two companies.[9] Following the second major Canterbury earthquake of 22 February 2011, theyagreed that they should start working together with a view to a formal merger.[10] From February 2011, the two companies remained separate but traded togetherunder the name "TPA Godfreys". It was agreed that Godfrey would invoice and collectthe receivables.[11] The terms of the arrangement/agreement between the two companies is indispute.[12] Mr Thomas Pasley is a director of TPD and previously was a director of CNZand TPA.[13] The brother of Mr Thomas Pasley, Mr Matthew Pasley, is a partner in the firmof solicitors, Keegan Alexander, Auckland.[14] In February 2013, Mr Thomas Pasley instructed Mr Matthew Pasley to re-issuea letter of advice he had written for TPA approximately 12 months earlier. That letterset out a potential "road map" for a formal merger between the two companies from alegal perspective.[15] Mr Matthew Pasley's letter of 20 February 2013 was addressed to TPAGodfreys for the attention of Mr Thomas Pasley and Peter Ziegler, the directors ofTPA. It was then circulated to the other directors and shareholders of both TPA andGodfrey with a view to encouraging discussions about a formal merger. Paragraph 1of Mr Matthew Pasley's letter read:I refer to my discussions and our right to set up the steps which I see as beingrequired to effect the merger of Thomas Pasley & Associates Ltd (TPA) andGodfrey and Company Ltd (Godfrey). I have endeavoured to do this in aneutral manner which I hope may be acceptable to both parties as a wayforward.[16] On 22 March 2013, the shareholders of the two companies met and discusseda merger. Both Mr Thomas and Mr Matthew Pasley were in attendance. The agendafor the meeting had been prepared by Mr Matthew Pasley. Mr Matthew Pasley tookhandwritten notes at the meeting and it lasted approximately nine hours.[17] At the meeting the parties discussed the issue of the existing 62.5 per cent/37.5per cent split of revenue between the two companies.[18] Subsequent to the meeting Mr Matthew Pasley started drafting a shareholders'agreement, an agreement for the sale and purchase of the Godfrey business, anagreement for the sale and purchase of the TPA business and a shareholder loanagreement.[19] In late May 2013, the shareholders of TPA decided they would not proceedwith a formal merger. The plaintiff says it was agreed that the two companies would,from that time, stop trading together subject to the said JV being "run-off" through tothe end of 31 October 2013.[20] On 13 November 2013, Godfrey accounted to TPA for $300,000. However,TPA believed it was owed (as at 31 August 2013) $1,720,950 as its share of the netproceeds of the JV.[21] In the main proceedings, TPD pursues the balance that it says Godfrey mustaccount to it for, as representing TPA's residual share of the net profit for the JV.[22] Mr Matthew Pasley issued invoices for his services to TPA. One of thoseinvoices dated 28 March 2013, in the total sum of $15,111, was paid by Godfrey (albeitaddressed to TPA) at the instigation of Mr Thomas Pasley.Application to disqualifyRelevant legal principles[23] In Black v Taylor, the Court of Appeal confirmed that the courts have aninherent jurisdiction to disqualify a solicitor from acting against a former client.1Richardson J considered that disqualification will normally be the appropriateresponse in cases where counsel's representation of one party against another mayimpair the integrity of the judicial process:2Disqualification will ordinarily be the appropriate remedy where the integrityof the judicial process will be impaired by counsel's adversarial representationof one party against the other. The decision to disqualify is not dependent onany finding of culpable conduct on the lawyer's part. Disqualification is notimposed as a punishment for misconduct. Rather it is a protection for theparties and for the winder interests of justice. The legitimacy of judicialdecisions depends in large part on the observance of the standards ofprocedural justice. Where the integrity of the judicial process is perceived tobe at risk from the proposed or continuing representation by counsel on behalfof one party, disqualification is the obvious and in some cases the onlyeffective remedy although considerations of delay, inconvenience and expensearising from a change in representation may be important in determining inparticular cases whether the interests of justice truly demand disqualification.[24] The purpose of the jurisdiction is to ensure the courts may effectively see thatjustice is done and is seen to be done in any given case.3 In terms of the appearanceof justice, the question for the court turns on how the conduct in question would appearto reasonable and fair-minded members of the community knowing of the relevantbackground. When the concern is misuse of confidential information, the test iswhether, from an objective point of view, a reasonably informed person would regardthere as being real or appreciable risk of disclosure of that information.4[25] The jurisdiction must, however, be exercised with circumspection5 and alitigant should not be deprived of the fundamental right to counsel of its choice without1 Black v Taylor [1993] 3 NZLR 403.2 At 412.3 Black v Taylor, above n 1, Cook J at 406, Richardson J at 408 and McKay J at 418 (CA).4 Russell McVeagh McKenzie Bartlett & Co v Tower Corporation [1998] 3 NZLR 641 at 651 (CA).5 Black v Taylor, above n 1, at 406 per Cooke J; Russell McVeagh McKenzie Bartlett & Co v TowerCorporation, above n 4, at 651.good cause.6 The bringing of such an application without proper grounds, as a tacticto discomfort the other party, is an abuse of process.7[26] In Prince Jefri Bolkiah v KPMG (a firm), Lord Millett held that the Court'sjurisdiction to intervene on behalf of a former client is based on the need to protectconfidential information.8 Where status as "former client" is established and the newmatter relates to the matter on which the solicitor previously acted, "the court shouldinfer that confidential information was imparted unless the solicitor satisfies the courtthat no information was imparted which could be relevant".9 Furthermore, althoughthe burden of proof is on the plaintiff "it is not a heavy one".10[27] While the rules of professional conduct are not determinative in an application,they are to be applied as part of determining the standard by which it is necessary toenable the courts to discharge their functions in the administration of justice.11[28] The fiduciary relationship between a solicitor and a client comes to an endwhen the retainer is terminated. However, the solicitor has a continuing obligation toprotect the former client's confidential information. This obligation is of fundamentalimportance and must be strictly observed.12 The obligation is confirmed in r 8.7.1 ofthe Lawyers and Conveyancers Act (Lawyers: Conduct in Client Care) Rules 2008which provides:8.7.1 A lawyer must not act for a client against a former client of the lawyeror of any other member of the lawyer's practice where –(a) the practice or a lawyer in the practice holds informationconfidential to the former client; and(b) disclosure of the confidential information would be likely toaffect the interests of the former client adversely; and(c) there is a more than negligible risk of disclosure of theconfidential information; and6 Black v Taylor, above n 2, at 409 per Richardson J; Li v Liu [2018] NZCA 528 at [23].7 Black v Taylor, above n 1, at 420.8 Prince Jefri Bolkiah v KPMG (a firm), [1999] 2 AC 222 at 234 (HL).9 Martin v Gray (1990) 77 DLR 4th 249, referred to by McKay J in Black v Taylor, above n 1, at 704and Richardson J at 698.10 Prince Jefri Bolkiah v KPMG (a firm), above n 8 at 235.11 Black v Taylor, above n 1, at 419.12 Torchlight Fund No 1 LP (in receivership) v NZ Credit Fund (GP) 1 Ltd [2014] NZHC 2552 at[19].(d) the fiduciary obligation owed to the former client would beundermined.[29] The types of information that the courts are prepared to protect are broaderthan what might ordinarily be understood as confidential information. In Black vTaylor, Cooke J cited with approval McGechan J's description of the type ofinformation that is relevant:13Last, the lawyer (in particular the family solicitor) gets to know personalities.He gets to know something, and often a good deal, of a former client'sweaknesses, fears and reactions. It is as much information passed on as isverbal or written description. Like all information, it can be misused foranother person. There could be cases, perhaps, with a former client witness'credibility crucial, where such knowledge of personality inevitably acquiredby virtue of the former solicitor/client relationship could amount to a realinformation consideration. There will be cases where a former client's veryreal fears that he will be cross-examined from a position of unfair superiorityshould be given due consideration.[30] The defendant's application also relies upon r 13.5 of the Conduct in ClientCare Rules. Rule 13.5 reads:13.5 A lawyer engaged in litigation for a client must maintain his or herindependence at all times.13.5.1 A lawyer must not act in a proceeding if the lawyer may berequired to give evidence of a contentious nature (whether inperson or by affidavit) in the matter.13.5.2 If, after a lawyer has commenced acting in a proceeding, itbecomes apparent that the lawyer or a member of the lawyer'spractice is to give evidence of a contentious nature, the lawyermust immediately inform the court and, unless the courtdirects otherwise, cease acting.13.5.3 A lawyer must not act in a proceeding if the conduct or adviceof the lawyer or of another member of the lawyer's practice isin issue in the matter before the court. This rule does notapply where the lawyer is acting for himself or herself, or forthe member of the practice whose actions are in issue.13.5.4 A lawyer must not make submissions or express views to acourt in any material evidence or material issue in a case interms that convey or appear to convey the lawyer's personalopinion on the merits of that evidence or issue.13 Black v Taylor, above n 1, at 693.Analysis and decision[31] The issues I need to determine are as follows:(a) Did Keegan Alexander ever act for Godfrey as its solicitors?(b) If so, does Keegan Alexander hold confidential information aboutGodfrey?(c) If yes, is there more than a negligible risk of disclosure of theconfidential information if Keegan Alexander continues to act for TPD?(d) Is it likely that Mr Matthew Pasley will be required to give evidence ofa contentious nature in these proceedings (r 13.5.2)?(e) In all the circumstances, would a reasonable and fair-minded memberof the community, knowing all of the background, conclude that in theinterests of the integrity of the judicial system, Keegan Alexandercannot continue to represent TPD?Issue (a): Did Keegan Alexander ever act for Godfrey?[32] This turns on a close assessment of the role of Mr Matthew Pasley.[33] There is no dispute that Mr Matthew Pasley acted for his brother, Thomas, andTPA for many years; the critical issue is whether in early 2013 he acted for both TPAand Godfrey.[34] I accept that Mr Matthew Pasley's role in the matters in dispute was a limitedone. He never dealt directly with Godfrey, its directors or shareholders separately orindependently of TPA – and his involvement was confined to attending the meeting on22 March 2013, providing advice in the letter of 20 February 2013 and drafting fairlystandard commercial documentation that was never finalised or executed.[35] However, despite his limited role, the better interpretation in my view is thatMr Matthew Pasley did act as solicitor for both TPA and Godfrey. That is consistentwith what Mr Matthew Pasley has described in his affidavit as "common" for groupsof actual prospective shareholders to approach one lawyer with common instructionsto prepare a shareholders' agreement and associated venture.[36] Godfrey paid the Keegan Alexander invoice of 28 March 2013 in thesubstantial sum of $15,111 on what appears to be the understanding that it was a clientof Keegan Alexander, together with TPA. Godfrey did so on the basis that it was inreceipt of legal advice from Keegan Alexander and had also received draft legaldocumentation that was of benefit to it. In my view, Mr Matthew Pasley hasrecognised his dual role acting for both Godfrey and TPA in his letter addressed to"TPA Godfreys" of 20 February 2013, where he stated:I have endeavoured to do this in a neutral manner which I hope may beacceptable to both parties for a way forward.[37] The contention that there is no legal entity "TPA Godfreys" may strictlyspeaking be correct, but it is no answer to the claim Mr Matthew Pasley was not actingfor both TPA and Godfrey. The clear intention of the letter of 20 February 2013 wasto provide legal advice relating to the proposed merger for the benefit of both TPA andGodfrey – and Mr Matthew Pasley accepts that he knew that his advice was to becirculated to Godfrey. He also attended the meeting of 22 March 2013 in his capacityas legal adviser to both parties. Godfrey paid for the full cost of his attendance. Theevidence also suggests that he continued to act for both parties up until May 2013.[38] These arrangements were, as Ms Sussock submitted, somewhat casual; that isprobably a reflection of the sibling relationship between the Pasleys and a recognitionby Mr Matthew Pasley that in accordance with his practice, he would, following hisinitial draft of the necessary documentation, have recommended to each shareholderthat they obtain independent advice. I do not doubt the good practical sense of thatapproach. However, with the benefit of hindsight, it would have been prudent at theoutset, namely in February 2013, for Mr Matthew Pasley to have clarified and recordedhis role and for him to have advised Godfrey expressly (again recorded) that it wouldultimately be necessary for it to obtain independent legal advice. Where there is morethan a negligible risk of conflicting duties for a lawyer acting for more than one client,he/she cannot act for more than one party without the prior informed consent of allparties concerned.14 I accept that Mr Thomas Pasley, in his email of 22 February 2013,referred to the "expectation" that Godfrey may wish to have its own legal advice tooand the possibility of having a third lawyer for the merged entity to "avoid the lawyerbeing seen to favour anyone". However, the better approach would have been forMr Matthew Pasley to have assumed direct responsibility and for him to have recordedin writing the informed consent.Issue (b): Does Keegan Alexander hold confidential about Godfrey and is there morethan a negligible risk of disclosure of the confidential information (if any) if KeeganAlexander continues to act for TPA?[39] Rule 8 of the Client Conduct and Client Care Rules sets out the primary rulein relation to a client's confidential information:8. A lawyer has a duty to protect and to hold in strict confidence allinformation concerning the client, the retainer, and the client'sbusiness and affairs acquired in the course of the professionalrelationship.[40] There is an expanded definition of confidential information in the footnote tothe rule:Information acquired during the course of the professional relationship thatmay be widely known or a matter of public record (such as the address of theclient, criminal convictions, or discharged bankruptcy) will nevertheless beconfidential information.[41] As I have already noted above, the role of Mr Matthew Pasley in acting forGodfrey was a very limited one. There is no reason to doubt or challenge hisrecollection of the events described in his affidavit as follows:12. I must point out that I have little unassisted recollection of thesematters. It needs to be borne in mind that my involvement was oversix years ago and for a very limited period of time. For that reason Ihave looked back to my file, which is pretty small, to refresh mymemory.13. I do not recall meeting any of the Godrey directors or shareholders, orhaving any conversation of any kind with any of them, other than in ameeting on 22 March 2013. I now have very little recollection of anyof them.14 Rule 6.1.1 of the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.[42] The bare and fleeting relationship between Keegan Alexander and Godfrey isfundamentally different from the solicitor/client relationship at issue in Black v Taylor,where the solicitor had acted for some decades for members of the Taylor family andwhere over a long period, having obtained a good working grasp of the family structureand dynamics, he sought to take sides in an intra-family dispute.15[43] I accept that the issue of the 62.5/37.5 per cent "split" was discussed at themeeting of 22 March 2013. However, there is nothing in the handwritten notes ofMr Matthew Pasley, the agenda for the meeting or in the evidence generally, that mightinfer that Mr Matthew Pasley acquired any relevant confidential information aboutGodfrey that might credibly be of any concern to it. The letter of 22 February 2013was circulated to both parties and, as Mr Matthew Pasley states, it was "formulaic andfairly standardised".[44] Ms Sussock submitted that Mr Matthew Pasley may have gleaned some senseof the vulnerability of Godfrey's position in the current dispute as a result of his actingfor it, but there is no real evidence to support that submission and, in any event, thefocus of the meeting and the advice and interaction between Mr Matthew Pasley andGodfrey appears to have been very much on prospective matters, namely the then-proposed formal merger. It is for the applicant to adduce evidence establishing thatthe lawyer in question had access to confidential information and reliance on the"conceptual possibility" that the lawyer could access the defendant's confidentialinformation is not enough.16[45] In all the circumstances I find that Keegan Alexander does not holdconfidential information about Godfrey. Even if I am wrong on that issue, I wouldconclude that there is not more than a negligible risk of disclosure of any confidentialinformation if Keegan Alexander continues to act for TPD. Mr Matthew Pasley's rolewas a very limited one, his file contains little information and he has very littlerecollection of the events at issue.15 Black v Taylor, above n 1.16 L & M Cole Holdings Ltd v Bathurst Resources Ltd [2017] NZHC 2333 at [60].Issue (c): Is it likely that Mr Matthew Pasley will be required to give evidence of acontentious nature in these proceedings (r 13.5.2)?[46] If Mr Matthew Pasley is to give contentious evidence, then Mr McAnally, as amember of Keegan Alexander, must cease acting, unless the Court directs otherwise.In Li v Liu, the Court of Appeal held that the test is not whether the solicitor will be anecessary witness but whether there is a reasonable likelihood that he or she will becalled as a witness; that is sufficient to make the possibility more than speculation andthe threat to the integrity of the judicial process real.17[47] The assertion by Ms Sussock that it is likely that Mr Matthew Pasley will berequired to give evidence must obviously be taken seriously. Mr McAnallyresponsibly accepted as much but further contended that such a submission needs tobe critically examined.[48] I accept that Godfrey's defence makes it clear that it is an issue in theproceedings whether there was a separate agreement between the parties that is notrelated to the merger but whether the arrangements were all part of the sameagreement, the terms of which included interim arrangements. However, on theevidence before me it is difficult to conclude that it would be likely that Mr MatthewPasley could give substantially relevant evidence about that particular issue or anyother contentious issue. I reject Ms Sussock's submission that Mr Matthew Pasleywas "in the middle of all of this". I accept that he set the agenda for the meeting,attended the meeting and took notes of what occurred. However, the notes of themeeting and the evidence generally suggest that Mr Matthew Pasley's role was notcentral and he was there only to provide advice on the somewhat mechanical andprospective commercial legal arrangements pertaining to the yet to occur merger.Mr Matthew Pasley was one of a number of persons in attendance at the meeting andit is not apparent why it would be important for him (as opposed to the others present)to give evidence about what took place. Mr Matthew Pasley cannot give evidence asto what other parties might have meant by any statements they made at the meeting.Godfrey has been unable to identify the real relevance of any evidence Mr Matthew17 Li v Liu, above n 6, at [37].Pasley might give beyond simply referring to his handwritten notes which record"37.5/62.5 done deal?".[49] It is also difficult to see what evidence Mr Matthew Pasley might give beyondwhat he has already stated in his affidavit in these proceedings:32. My recollection of the meeting, and there is nothing in my notes orthe minutes of the meeting that Mr Godfrey has produced that isinconsistent with it, is that the discussions were prospective. I do notrecall there being any discussion around what the existingarrangements were between the parties other than the fact that theyhad been working on the assumption that the appropriate division ofnet profit was 62.5/37.5 in favour of Godfrey & Co Ltd.33. The discussion was general and I participated so far as it was relevantto what Tom has asked me to do at the outset which would suggest astructure for a merged entity and a "road map" as to how that mightbe achieved from a legal point of view.[50] Mr Matthew Pasley is of course a commercial solicitor and attended the March2013 meeting in that capacity and with a view to drafting the relevant documentation.18Consistent with that role, after the meeting, he started drafting the relevantshareholder's agreement for sale and purchase of the Godfrey business and theshareholder loan agreement.[51] There is no evidence that at the time there was any real controversy or disputebetween the parties and there is no reason to doubt Mr Matthew Pasley's claim that hetried to be neutral and that his role was a confined one. In my view, this case is quitedifferent from Li v Liu, where the firm of solicitors was disqualified because the Courtwas concerned its continuation would place it in a position where employed solicitors"may face conflicting duties to the court, the Lis and their employer".19[52] I find that it is not likely that Mr Matthew Pasley will be required to giveevidence of a contentious nature in these proceedings.18 Richard Scragg The Ethical Lawyer: Legal Ethics and Professional Responsibility (ThomsonReuters, Wellington, 2018) at 240-241, citing Mike Pero Mortgages Ltd v Pero [2014] NZHC2798, [2015] 3 NZLR 24619 Li v Liu, above n 6, at [42].Issue (d): In all the circumstances would a reasonable and fair-minded member of thecommunity, knowing all of the background, conclude in the interests of the integrity ofthe judicial system, Keegan Alexander cannot continue to represent TPD?[53] This is the ultimate and critical issue which involves the balancing of variousfactors. The focus is of course upon protecting the integrity of the judicial system, butthe authorities also make it clear that the Court should not interfere in a party'sfundamental right to counsel of their choice, particularly where considerations of delayin the application, inconvenience, or sunk cost favour the affected party.20[54] In considering the perspective of a reasonable and fair-minded member of thecommunity, it is troubling that of the $22,225.25 total fees rendered by KeeganAlexander for services relating to the merger between TPA and Godfrey (five invoicesover the period April 2012 to July 2013) Godfrey paid the lion's share, namely$15,111. I accept that the five invoices in evidence are all issued in the name of TPAand it appears that it was Mr Thomas Pasley, separately from Mr Matthew Pasley, whopersuaded Godfrey to pay the invoice ($15,111) of 28 March 2013. I also accept thata number of the earlier invoices, albeit for modest sums, relate to a time whenMr Matthew Pasley was not acting for Godfrey. However, it is understandable thatGodfrey should be concerned about Keegan Alexander's ongoing role acting forentities associated with TPA and in litigation arising out of the failed merger whereGodfrey paid for most of Keegan Alexander's fees for services relating to that merger.A reasonable and fair-minded member of the community might also feel some disquietarising from the appearance of Mr Matthew Pasley's firm, having previouslyrepresented both the parties, continuing to act for his brother's company (and entitiesassociated with it). However, that is not a matter that Ms Sussock placed any realreliance on and apart from the bare fact that the two men are brothers, such a factorshould not be overstated.[55] In support of the application to disqualify, Ms Sussock relies upon the VictorianSupreme Court decision of Spincode Pty Ltd v Software Pty Ltd21 which involved acase regarding a failed merger. There, the Court found that the solicitor had attendedmeetings between the participants and there were discussions with him, or at least in20 Li v Liu, above n 6, at [23].21 Spincode Pty Ltd v Software Pty Ltd [2001] VSC 248.his presence, as to whether there was an agreement between the shareholders, whatconstituted that agreement and whether there should be an agreement and what thecontent of that agreement should be. The fact that the other party was present duringthose discussions did not mean that the information imparted was not confidential.The appellate court upheld the decision of the lower court granting an injunction toprevent a firm of solicitors from continuing to act for Spincode in proceedings it hadtaken to have the company wound up.[56] I accept that there are some similarities between the facts here and the Spincodecase. However, it is clear that in Spincode the conduct of some of the solicitorsinvolved was clearly reprehensible (not the case here) and the role of those solicitorswas far more extensive than the relatively bare and fleeting involvement ofMr Matthew Pasley in this case.[57] In the circumstances of this case, I find that a reasonable and fair-mindedmember of the community, knowing all of the background, would conclude that theintegrity of the judicial system would not be impaired by Keegan Alexandercontinuing to represent TPD. The jurisdiction is to be exercised with circumspectionand the authorities describe the threshold for removal of a party's chosen representativeas a high one.22 As I have been emphasising, Mr Matthew Pasley's relationship withGodfrey was a very limited one. While he did attend the nine-hour meeting in March2013, his focus (consistent with his role as a commercial legal adviser), was ondrafting the necessary legal documentation to implement the proposed merger. It isunlikely he acquired any confidential information about Godfrey or any informationthat Godfrey might be concerned about, though I acknowledge that the jurisdiction todisqualify is not dependent upon such a finding. Mr Matthew Pasley's involvementwas more than six years ago and for a very limited period of time. As he notes in hisaffidavit his file is pretty small and his recollection of the events very limited. Iunderstand that perception of Godfrey, but there is no real evidence to establish thatthere would be some undue advantage to TPA or corresponding prejudice to Godfreywere Keegan Alexander to continue to represent entities associated with Mr ThomasPasley.22 Burgess v Malley [2016] NZCA 585 at [9], citing Accent Management Ltd v Commissioner ofInland Revenue [2013] NZCA 155, [2013] 3 NZLR 374 at [32].[58] I acknowledge that in considering the integrity of the judicial process, it is notnecessary for the Court to find any culpable conduct on the lawyer's part (which is notpresent in this case) and that my finding on whether r 13.5.2 of the Lawyers Conductand Client Care Rules is engaged, is not determinative of this ultimate issue. However,the high threshold for disqualification has not been met.[59] Having concluded that Keegan Alexander's representation of TPD againstGodfrey will not impair the integrity of the judicial process, the application by Godfreyto disqualify Keegan Alexander must be dismissed.Application for particular discovery by defendant - r 8.19 of the High Court Rules[60] The defendant seeks discovery from the plaintiff and first third party of thefollowing:All documents (including correspondence, records of communications andfinancial records) relating to the failed merger between Thomas Pasley &Associates and Godfrey not already discovered by the plaintiff or first thirdparties.[61] The defendant says that the application for discovery is related to theapplication to disqualify Keegan Alexander. The defendant submits that decisions onthe necessary extent of discovery and on the theory of the case appear to have beenmade in a context where it suited Keegan Alexander to say that there was a separatejoint venture agreement entered into in 2011 prior to their involvement, as they canthen continue to say that they did not act in relation to the separate joint venture.[62] The defendant says that the reason for the breadth of the request for further andbetter discovery is because of the respective parties' positions and the fact that KeeganAlexander has stated in its correspondence that it has not discovered documentsrelating to the merger, but only documents that relate to the joint venture.[63] In Assa Abloy NZ Ltd v Allegion (NZ) Ltd, Asher J sets out a widely acceptedfour-stage approach the Court usually follows when considering an application underr 8.19.23 The focus is on relevance and proportionality:23 Assa Abloy NZ Ltd v Allegion (NZ) Ltd [2015] NZHC 2760 at [14].(a) Are the documents sought relevant, and if so, how important will theybe?(b) Are there grounds for belief that the documents sought exist?(c) Is discovery proportionate?(d) Weighing and balancing these matters, and the Court's discretion,applying r 8.19, is an order appropriate?[64] On the question of whether the documents exist, Godfrey relies upon thehandwritten notes of Mr Matthew Pasley that are attached to his affidavit in oppositionto the application to disqualify Keegan Alexander. Those handwritten notes had notbeen included in the plaintiff's or CNZ's discovery.[65] It is clear that the key issue of relevance is not to be determined by referenceto one party's (i.e. the plaintiff's) theory of the case; all of the pleadings must beconsidered.[66] I reject the submission by TPD that Godfrey's statement of defence can onlybe interpreted to exclude Mr Godfrey's contention that there were simply interimterms agreed initially between the parties on the basis that the merger would happenshortly. Ultimately, TPD's interpretation of events may be correct. However, at thisinterim stage, I find, as Ms Sussock submitted, that documents relating to the failedmerger are relevant. Godfrey has squarely put at issue the critical question of whetherthere was a separate agreement that is not related to the merger or that thearrangements were all part of the same agreement, the terms of which included interimarrangements.[67] Furthermore, I find that the documents relating to the merger may well be ofsome importance to Godfrey, there are grounds for believing that further documentsexist and, in the circumstances, it would not be overly burdensome for the plaintiff toprovide the discovery sought. I acknowledge that the terms of the discovery ordersought are expressed in broad terms, but the evidence suggests that the documents inthe category sought will not be extensive or raise any problem of proportionality.[68] I accordingly grant the defendant's application for particular discoverypursuant to r 8.19 and make the following orders:(a) I order that the plaintiffs and the first third party are to file an affidavitstating whether these documents described at [60] above are or havebeen in the parties' control and if they have been but are no longer intheir control, their best knowledge and belief as to when the documentsceased to be in their control and who now has control of them; and(b) The affidavit is to be served on the defendant and if the documents arein the plaintiff's and/or first third party's control, those documents areto be made available for inspection as soon as reasonably practicable.The affidavit is to be filed and served within 14 days.Result[69] The application by the defendant to disqualify Keegan Alexander, solicitors,from acting for the plaintiff and the first third party, is dismissed.[70] The application by the defendant for particular discovery pursuant to r 8.19 isgranted on the terms set out at [68] above.[71] As to costs, I am of the preliminary view that costs should lie where they fall.Both parties have had a measure of success and in my view the application todisqualify Keegan Alexander was not without merit. However, in relation to theplaintiff's and first third party's application for enforcement of a discovery orderagainst the defendant (29 August 2019) I order that the defendant pay costs to theplaintiff on a 2B basis plus disbursements. It is clear that the affidavit of documentsnow filed by the defendant (December 2019) was filed late and in breach of timetabledirections.[72] In relation to the outstanding application by the plaintiff and first third partyfor further particulars (dated 13 September 2019), I direct that counsel are to file amemorandum within 14 days with a proposed solution for the determination of thatmatter.[73] If the parties cannot agree on the question of costs on the two applications thesubject of this judgment, then short (no more than three pages) memoranda are to befiled and served within 14 days.__________________________Associate Judge P J Andrew