So Systems Limited v Soluxury HMC - [2017] NZHC 280

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2016-485-604 [2017] NZHC 280

BETWEEN
SO SYSTEMS LIMITED

Appellant

AND

SOLUXURY HMC Respondent

Hearing: 23 February 2017

Counsel:

V Nichols for Appellant
P D M Johns and T A Huthwaite for Respondent

Judgment:

28 February 2017

JUDGMENT OF WILLIAMS J

Introduction

[1] The appellant, SO Systems Limited (SSL), is engaged in a dispute with the respondent, Soluxury HMC. The respondent applied to IPONZ to revoke the appellant’s trademark HOTELSO for non-use. The Assistant Commissioner of Trademarks granted Soluxury’s application and the appellant has appealed to this Court.

[2] The appellant also seeks leave to adduce fresh evidence in the appeal. The proposed evidence is that of David Henderson who instructed a trademark agent to prosecute SSL’s opposition to Soluxury before the Assistant Commissioner. The respondent opposes the admission of the new evidence partly on the basis that Mr Henderson’s evidence lacks veracity.

[3] It is in this context of that veracity challenge that the appellant asks the Court for an order removing Baldwins as counsel in the appeal. The appellant says
Baldwins:

SO SYSTEMS LIMITED v SOLUXURY HMC [2017] NZHC 280 [28 February 2017]

(a) acted for SSL in the past in relation to protecting the HOTELSO trademark, the subject of the appeal, and received SSL’s instructions in that respect via Mr Henderson;

(b)continues to receive instructions from Mr Henderson on behalf of an unrelated company on unrelated matters; and

(c) may have come into confidential information from or about Mr Henderson in the course of such retainers that may be deployed to the appellant’s disadvantage in the veracity challenge.

[4] The appellant says that a reasonably informed lay observer would draw no substantive distinction between Mr Henderson and the company (SSL) with which he has or had connections such that it would be seen as inconsistent with justice to allow Baldwins to challenge his credibility.

The law

[5] The applicable legal principles are not in dispute between the parties in this application and they may be briefly summarised. In this respect, I have found the synthesis set out by Edwards J in Morris v Morris particularly helpful, and I have borrowed from it liberally, if not exclusively.1

[6] This Court has inherent jurisdiction to control who may appear before it.2

The value that must be protected in exercise of that jurisdiction is ultimately the integrity of the judicial process itself. The courts will move to disqualify counsel from appearing or solicitors from acting if there is an appearance of conflict of interest such that to allow the situation to continue will prevent justice from being seen to be done.

[7] The issue is the misuse, or potential misuse of confidential information that has been imparted to the solicitor by the appellant in the context of a former or

1 Morris v Morris [2015] NZHC 2315.
2 Black v Taylor [1993] 3 NZLR 403 (CA).

ongoing but separate solicitor/client relationship. As Lord Millet noted in Prince

Jefri Bolkiah v KPMG

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZHC 280
Decision Date: 28 February 2017

CaseChat Overview and Summary

So Systems Limited (SSL) is the appellant in this case, and Soluxury HMC is the respondent. The appellant is appealing the decision of the Assistant Commissioner of Trademarks, who granted Soluxury's application to revoke SSL's trademark HOTELSO for non-use. The appellant also seeks leave to adduce fresh evidence in the appeal. The proposed evidence is that of David Henderson, who instructed a trademark agent to prosecute SSL's opposition to Soluxury before the Assistant Commissioner. The respondent opposes the admission of the new evidence partly on the basis that Mr Henderson's evidence lacks veracity. The appellant has also applied for an order removing Baldwins as counsel in the appeal. The appellant argues that Baldwins may have come into confidential information from or about Mr Henderson in the course of such retainers that may be deployed to the appellant's disadvantage in the veracity challenge.

The legal issues in this case revolve around the misuse, or potential misuse, of confidential information that has been imparted to the solicitor by the appellant in the context of a former or ongoing but separate solicitor/client relationship. The Court has inherent jurisdiction to control who may appear before it. The value that must be protected in exercise of that jurisdiction is ultimately the integrity of the judicial process itself. The courts will move to disqualify counsel from appearing or solicitors from acting if there is an appearance of conflict of interest such that to allow the situation to continue will prevent justice from being seen to be done. The burden is on the appellant to satisfy the Court that the respondent does hold such information and that it is, or may be, relevant to the current dispute before the Court.

The court found that there was no real risk that Baldwins would use, or more accurately misuse, confidential information obtained in the context of their prior and ongoing relationship with Mr Henderson. The prior SSL retainer could not have led to Baldwins developing a strategically advantageous knowledge of Mr Henderson that could be later deployed against him. There was insufficient time and contact for that to be a real risk. The ongoing association between Mr Henderson and Baldwins as an agent of GMW does not raise any issue of potential conflict that would trouble a fair minded lay observer. GMW has no fight with Soluxury and Mr Henderson is, from the SSL perspective, just a witness known to the lawyers on the other side. The court found that the information upon which the credibility challenge is based was either provided to the respondent in the current litigation or freely available open source information.

The application to remove Baldwins as counsel in the appeal was dismissed accordingly. The court was not minded to award costs, as the issue raised was a serious one requiring careful consideration. It was appropriate in the interest of justice and the integrity of the Court's processes, that the issue be aired. Costs will lie where they fall.

Orders