Acting Business Editor for the NZ Herald

Mike Pero Mortgages tries to arrest former franchisee

The M3 Racing Mike Pero Mortgages car. Photo / Sarah Ivey.
The M3 Racing Mike Pero Mortgages car. Photo / Sarah Ivey.

Mike Pero Mortgages tried to get an arrest warrant issued for one of its former franchisees and an order he be held in contempt of court.

The Australian-owned mortgage business is in a dispute with numerous ex-franchisees, who are contesting the parts of their contracts that prohibit them from competing with it until 2017.

The former franchisees want a High Court judge to declare that these restraint of trade terms are void and unenforceable, although a trial date has yet to be set.

Mike Pero Mortgages (MPM), which founder Mike Pero is no longer involved with, is owned by Melbourne's Liberty Financial.

MPM last year went to the High Court itself and obtained orders that prevent the former franchisees from competing with it while this dispute is resolved.

Earlier this year, MPM alleged that one of these franchisees - Krish Krishna - breached the terms of these non-compete orders.

The company wanted an arrest warrant issued for Krishna and an order he be held in contempt of court.

MPM argued Krishna had infringed the non-compete orders by advertising himself on the social network LinkedIn and on the Professional Advisers Association (PAA) website.

Justice John Faire, when considering the contempt and arrest warrant application, said anyone looking for Krishna's LinkedIn page would need to be actively searching for him.

"Even if a client found Mr Krishna's LinkedIn page its contents do not amount to Mr Krishna urging or entreating a client to do business with him. Accordingly, I do not believe that the LinkedIn profile amounts to an attempt to solicit MPNZ's [Mike Pero Mortgage's] customers," Justice Faire said in a decision published publicly today.

When it came to the PAA website, the judge made a similar finding.

" ... a client would need to be actively searching for information on Mr Krishna or for a mortgage broker. There is no evidence that Mr Krishna promoted 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," Justice Faire said.

He dismissed both the arrest and contempt order applications.

Krishna, during the hearing, also applied to vary or rescind the non-compete order but Justice Faire said there was no jurisdiction for the High Court to do this.

- NZ Herald

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