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Ruscoe v Cattermole

Ruscoe v Cattermole

Case [2024] NZHC 3883 18 December 2024

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2024-485-080

[2024] NZHC 3883

BETWEEN DAVID IAN RUSCOE and MALCOLM RUSSELL MOORE
Applicants

AND

THOMAS VICTOR HENRY RONALD CATTERMOLE

Respondent

Hearing: 26 August 2024

Appearances:

S A Barker and J K McGrath for Applicants R A Hearn for Respondent

Judgment:

18 December 2024

JUDGMENT OF McHERRON J

(Contempt of Court application)

RUSCOE v CATTERMOLE [2024] NZHC 3883 [18 December 2024]

Table of Contents

Further consequences of the hack into Cryptopia [1]

The liquidators apply (again) for orders that Mr Cattermole is in contempt [5]

Background [9]

Who is Mr Cattermole and what is the Principality of Cogito? [10]

The Spreadsheets that were mistakenly released to Mr Cattermole [12]

Key events between 2020–2023 [13]

Interlocutory injunction against Mr Cattermole [36]

Law of contempt [43]

Burden and standard of proof [50]

Mr Cattermole’s alleged failure to comply with the 21 October 2020 Orders [53]

First alleged breach of 21 October 2020 Orders: Mr Cattermole’s failure to provide relevant information to the Court and the liquidators
[56]

Failure to delete the Spreadsheets [62]

Use of information from the Spreadsheets to engage Cryptopia account holders [63]

Mr Cattermole’s response [68]

My assessment [73]

Other methods of enforcing the court order have not been tried unsuccessfully [73](a)

The 21 October 2020 Orders were clear and unambiguous and binding on Mr Cattermole [73](b)

Mr Cattermole had knowledge of the terms of the 21 October 2020 Orders [73](c)

Mr Cattermole knowingly failed, without reasonable excuse, to comply with the terms of the 21 October 2020 Orders
[73](d)

Conclusion [74]

Mr Cattermole’s alleged failure to comply with the 20 November 2020 Orders [75]

Mr Cattermole’s response [79]

My assessment [81]

Mr Cattermole’s alleged failure to comply with the 5 March 2021 Orders [87]

Mr Cattermole’s response [89]

My assessment [96]

Mr Cattermole’s alleged failure to comply with the 14 July 2021 Consent Orders [110]

Mr Cattermole’s response [112]

My assessment [113]

Summary of findings [117]

Result and next steps [120]

Costs [121]

SCHEDULE ONE — PREVIOUS CRYPTOPIA PROCEEDINGS

SCHEDULE TWO — CHRONOLOGY

Further consequences of the hack into Cryptopia

[1] Cryptopia Ltd (in liquidation) (Cryptopia) ran a cryptocurrency exchange that was hacked in January 2019. Some $30 million worth of cryptocurrency was irretrievably transferred to an undisclosed external exchange. In May 2019, Cryptopia’s shareholders appointed David Ruscoe and Malcolm Moore as liquidators of the company under s 241(2)(a) of the Companies Act 1993. The liquidation

involves complex arrangements regarding about 370 functioning cryptocurrencies owned by some 960,000 holders of accounts with positive balances in around 180 countries.

[2] On 8 April 2020, the High Court determined that each type of cryptocurrency is intangible personal property held by Cryptopia as trustee for the benefit of all the account holders of that currency.1 Cryptopia is a beneficiary of some of those trusts for cryptocurrency it held itself.2

[3] In 2019, Mr Ruscoe filed an affidavit in the Christchurch High Court in support…

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.

Continue reading Ruscoe v Cattermole

Details

AGLC: Ruscoe v Cattermole [2024] NZHC 3883
Case: [2024] NZHC 3883
Decision Date: 18 December 2024

CaseChat Overview and Summary

In the High Court of New Zealand, the liquidators of Cryptopia Limited, David Ian Ruscoe and Malcolm Russell Moore, brought a contempt application against Thomas Victor Henry Ronald Cattermole, who had previously obtained confidential information from Cryptopia's spreadsheets through an administrative error. The application aimed to enforce various court orders issued between October 2020 and July 2021, which required Mr Cattermole to delete the confidential information and refrain from using it. The court found that Mr Cattermole had knowingly failed to comply with the orders by not disclosing that he had shared partial extracts of the spreadsheets with third parties and by not producing certain emails to the court. However, the court dismissed the application because the liquidators had already obtained the information through other means, making further enforcement unnecessary. The court also noted that Mr Cattermole's involvement in the misuse of the confidential information could not be proven beyond reasonable doubt, as he claimed others might have been involved. The case highlights the importance of enforcing court orders to protect sensitive information and the challenges in proving contempt allegations to the criminal standard of proof.

Orders