Ruscoe v Epic Trust Limited
[2025] NZHC 2138
•1 August 2025
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2024-485-58
[2025] NZHC 2138
UNDER the Trade Marks Act 2002 and the Fair Trading Act 1986 IN THE MATTER
of breach of confidence
BETWEEN
DAVID IAN RUSCOE and MALCOLM RUSSELL MOORE of
Grant Thornton New Zealand Limited as liquidators of Cryptopia Limited (in
liquidation) First Plaintiffs
CRYPTOPIA LIMITED (in liquidation) Second Plaintiff
AND
EPIC TRUST LIMITED
First Defendant
THOMAS VICTOR HENRY RONALD CATTERMOLE
Second DefendantMARTIN BRAINE
Third DefendantPERSONS UNKNOWN
Fourth Defendant
Hearing: 4 April 2025 Appearances:
J McGrath and B Marriner for Plaintiffs Second Defendant In Person
Judgment:
1 August 2025
JUDGMENT OF ASSOCIATE JUDGE SKELTON
RUSCOE v EPIC TRUST LIMITED [2025] NZHC 2138 [1 August 2025]
TABLE OF CONTENTS
Introduction [1]
Background and procedural history [11]
Jurisdiction [20]
My assessment [27]
Leave to apply for summary judgment [35]
Summary judgment [51]
Breach of confidence [56]
Is the information confidential? [57]
Has the information been communicated in circumstances importing an
obligation of confidence? [59]
Has there been unauthorised use to the detriment of those entitled to the
benefit of the confidence? [60]
Defences [72]
Conclusion as to breach of confidence [75]
Misleading and deceptive conduct – s 9 of the Fair Trading Act 1986 [76]
Are the defendants in trade? [79]
Misleading or deceptive conduct? [82]
Conclusion as to breach of s 9 of the FTA [92] Permanent injunctions [93]
Strike-out [99]
Counsel to assist and appointment of experts [106]
Result [116]
Introduction
[1] This proceeding is one of many relating to the consequences of the hack on the cryptocurrency exchange run by Cryptopia Ltd (in liquidation) (Cryptopia) in January 2019.1 The plaintiffs advance three causes of action against the four defendants: breach of confidence, breach of the Trade Marks Act 2002 and misleading or deceptive conduct contrary to s 9 of the Fair Trading Act 1986 (FTA).
[2] In the application before me, filed on 16 January 2025, the plaintiffs seek leave to apply for summary judgment and orders granting summary judgment against the four defendants in respect of the first and third causes of action. In the alternative, they seek strike out of the second defendant’s statement of defence. The plaintiffs say that if they are successful in obtaining summary judgment for the first and third causes of action, they will withdraw the second cause of action. The plaintiffs seek permanent injunctions in respect of the first and third causes of action.
[3] The defendants were required to serve notices of opposition and affidavit evidence in support by 27 March 2025.2 The second defendant, Thomas (Victor) Cattermole, filed a notice of opposition and affidavit by that date. Mr Cattermole opposes the application for summary judgment on the basis that this Court lacks jurisdiction. At the same time, Mr Cattermole also filed an interlocutory application seeking the appointment of an amicus curiae in this proceeding to assist the court on jurisdictional issues and international legal principles. Subsequently, on 1 April 2025, Mr Cattermole filed a memorandum suggesting that “the court may need to decide to obtain and call witness [sic] from MFAT (Ministry of Foreign Affairs) and IRD, (the Inland Revenue Department) as a minimum”.
[4] At the hearing on 4 April 2025, I raised an issue as to whether the first, third and fourth defendants had been served with the application for summary judgment and in accordance with the directions of Isac J on 28 February 2025 and rr 12.5 or 12.7 of the High Court Rules 2016. I subsequently determined that the first defendant had been properly served on 17 January 2025. However, the third and fourth defendants
1 See Ruscoe v Cattermole [2024] NZHC 3883 at sch 1, which outlines the previous Cryptopia proceedings.
2 Ruscoe v Epic Trust Ltd HC Wellington CIV-2024-485-58, 28 February 2025.
had not been served in accordance with the directions of Isac J and rr 12.5 or 12.7 of the High Court Rules.3
[5] I directed that the third and fourth defendants were to file and serve any notices of opposition and affidavit evidence in support by 24 April 2025.4 If they did not do so, then I would determine the plaintiffs’ applications and the second defendant’s application on the basis of the documents filed before the hearing on 4 April 2025 and the submissions made at the hearing. If the third defendant and/or the fourth defendant filed notices of opposition and affidavit evidence in support by 24 April 2025, I would promptly convene a case management conference to determine timetabling and procedural matters.
[6] In the event, the third and fourth defendants did not file notices of opposition and evidence in support by 24 April 2025. On or around 27 April 2025, Mr Cattermole purported to file and serve an interlocutory application being an “Application to Strike Out and Protest to Jurisdiction” supported by the affidavit of one Oleksandr Razinkov, who states that he makes the affidavit on behalf of the first, third and fourth defendants. These documents have not been accepted for filing by the Registry due to failure to pay the filing fee or properly apply for a fee waiver. Therefore, this purported application is not taken into account in determining the application for leave to apply for summary judgment, application for summary judgment and strike out and application to appoint an amicus curiae.
[7] Accordingly, the position is that only Mr Cattermole has opposed the applications for leave to apply for summary judgment and for summary judgment and strike out. Mr Cattermole also filed and served a statement of defence on 25 March 2024. The first, third and fourth defendants have not filed notices of opposition nor statements of defence. I determine the plaintiffs’ applications against these defendants on the basis they are unopposed.
[8] On or around 12 May 2025, over five weeks after the hearing, Mr Cattermole filed a “Second Affidavit of Thomas Victor Henry Ronald Cattermole in support of
3 Ruscoe v Epic Trust Ltd HC Wellington CIV-2024-485-58, 8 April 2025.
4 At [8]–[10].
Notice of Opposition and Application of appointment of Amicus Curiae”. It is not clear whether this has been served on the plaintiffs. As noted by the Court in Alderton v Sixty-Six Auckland Ltd:5
Even in the case of further submissions after a hearing, leave is required and will only be granted in exceptional circumstances.6 At least the same constraint applies to further evidence after a hearing. The conventional requirements for adducing further evidence on appeal — before an appeal hearing — are that the further evidence must be fresh, credible and cogent, and that evidence is not regarded as fresh if it could with reasonable diligence have been produced at the trial. Those requirements assist by analogy when considering whether leave should be granted to adduce further evidence after the hearing in this proceeding.
[9] Mr Cattermole has not sought leave to file the further affidavit evidence or even filed a memorandum explaining why the further evidence is relevant and should be admitted. Further, I have reviewed the affidavit which relates to alleged failures by the first plaintiffs as liquidators of Cryptopia between 2019 and 2024. The content is clearly not “fresh”: it could with reasonable diligence have been adduced for the hearing on 4 April 2025. I decline to admit Mr Cattermole’s further affidavit into evidence and to take the content of the affidavit into account in determining the applications before me.
[10] I also note the plaintiffs gave prior notice in their interlocutory application dated 16 January 2025 of their intention to use and rely on affidavits previously filed in this proceeding and in related proceedings between the same parties, in particular CIV-2019-409-544 and CIV-2024-485-411. I see no reason why leave should not be granted under r 7.32 of the High Court Rules to use those affidavits in the disposal of the current applications. Leave is granted accordingly.
Background and procedural history
[11] The first plaintiffs in this proceeding, David Ruscoe and Malcolm Moore, are the liquidators (the liquidators) of the second plaintiff, Cryptopia.
5 Alderton v Sixty-Six Auckland Ltd [2024] NZHC 2263 at [31].
6 High Court Rules 2016, r 11.8A and Practice Note [1968] NZLR 608.
[12] The first defendant, Epic Trust Limited (now Chill Education Ltd) (Epic Trust), is a Montenegrin company acting as the trust company for the Principality of Cogito (Cogito). A document before the Court purporting to be the constitution of Cogito states that Cogito is a “virtual jurisdiction situated in cyberspace, otherwise known as the Metaverse, a location where digital real estate is currently bought and sold.”7
[13] Mr Cattermole is the self-styled Crown Prince and Chairman of the Crown Council of Cogito. He also accepts that he is the director of Cryptopia Rescue, which is an unincorporated enterprise purporting to offer to help Cryptopia account holders.8 He denies the plaintiffs’ contention that he is granted extensive decision-making powers under the constitution of Cogito and that he is in control of Cogito.9
[14] The third defendant, Martin Braine, is purportedly the in-house lawyer for Cogito, whose whereabouts are unknown. Mr Cattermole has stated in an unsworn affidavit dated 14 June 2024 that “Martin Braine is a pseudonym used by one of the legal team”.
[15] The first plaintiffs say that after in-depth searches to locate other natural persons involved with Cogito they have been unable to identify any other natural person (apart from Mr Cattermole) being in control of Cogito or Epic Trust. However, out of an abundance of caution, the plaintiffs have sought orders against the fourth
7 The status of the various parties to this proceeding has been addressed by McHerron J in Ruscoe v Cattermole, above n 1. In respect of Epic Trust Ltd he noted: “Epic Trust Ltd is described in the liquidators’ submissions as the Montenegrin-incorporated trust company for Cogito. Mr Cattermole is the owner of Epic Trust and appears to be the person in control of its activities, although he is not registered as its director. The sole director is a Marina Viktorova Shpineva of whom counsel were unable to locate any details. Around 25 December 2023, Epic Trust Ltd changed its name to Chill Education Ltd. Meanwhile, as of 13 August 2024, a New Zealand incorporated company owned by Mr Cattermole, and of which he is the sole director, has been named Epic Trust Ltd (it was previously named Epic Trust Trustee Ltd)” at fn 18.
8 Ruscoe v Cattermole, above n 1, at [10].
9 I note that the issue of whether Mr Cattermole is Cogito and in control of Cogito’s activities was raised before McHerron J. He considered that this was not established to the criminal standard of proof required in the proceeding before him. However, he noted that if the civil standard of proof applied he “would be content to conclude on the balance of probabilities that Mr Cattermole is responsible for Cogito’s use of the Cryptopia database to attract investors”: at [103]–[104], [107]. Other decisions have suggested that “Mr Cattermole appears to control Cogito, a metaverse for which Epic Trust is the trustee company”, see Ruscoe v Epic Trust Ltd [2024] NZHC 165 at [1].
defendants, Persons Unknown, if they exist, being any other persons or entities with decision-making functions or powers in Cogito.10
[16] Various judgments in this proceeding have already set out the background to this proceeding in some detail.11 In Ruscoe v Cattermole, McHerron J described the context as follows:12
[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.13 Cryptopia is a beneficiary of some of those trusts for cryptocurrency it held itself.14
[3] In 2019, Mr Ruscoe filed an affidavit in the Christchurch High Court in support of an application for directions. He annexed two spreadsheets as exhibits (Spreadsheets). The Spreadsheets were databases of commercially sensitive and confidential information relating to Cryptopia’s account holders and their cryptocurrency holdings. The Court received this information on a USB drive.15
[4] In April 2020, a Deputy Registrar in the Christchurch Registry mistakenly sent Thomas Cattermole, the respondent in these proceedings, a copy of the Spreadsheets after he requested them. They should not have been provided; Mr Cattermole had no entitlement to receive the Spreadsheets or their contents.
[17] Events then continued to unfold. As Isac J put it in an earlier decision in this proceeding:16
[7] Following an enquiry of the Court, the Liquidators were advised on 20 October 2020 that the confidential information had been provided to
10 The plaintiffs say the Cogito Metaverse LinkedIn profile shows six employees. Four of them have limited visibility. One is a “Product Designer” employed full-time for Cogito Metaverse for three years. The plaintiffs assume that the sixth is Mr Cattermole as Chairman of the Crown Council.
11 Ruscoe & Moore v Epic Trust Ltd [2024] NZHC 1336 [Isac J’s Interlocutory Injunction Decision] at [4]–[12] and Ruscoe v Cattermole, above n 1, at [1]–[42].
12 Ruscoe v Cattermole, above n 1, at [1]–[4].
13 Ruscoe v Cryptopia Ltd (in liq) [2020] NZHC 728; [2020] 2 NZLR 809 at [69], [120], [133],
[187] and [196].
14 At [146].
15 Isac J’s Interim Injunction Decision, above n 11, at [5]–[6].
16 At [7]–[9].
Mr Cattermole. The next day, the Liquidators sought and obtained an injunction restraining Mr Cattermole from using or disseminating it.
[8] Subsequently, following a separate application, the Court made orders by consent holding Mr Cattermole in contempt of court. The consent orders of the Court of 14 June 2021 record:
Mr Cattermole agrees that he has committed a contempt of Court by breaching the relevant Court Orders, in not providing all financial/ bank statements, and in not providing all devices containing the Spreadsheets to Deloitte, being the USB stick referred to as being used on 14/15 November 2020.
[9] The contempt arose out of Mr Cattermole’s failure to make available certain financial information, and as a result of his failure to provide all devices containing the Cryptopia spreadsheets to a Court appointed forensic examiner, Deloitte. The device in question was a USB stick containing copies of the spreadsheets that Deloitte’s forensic investigation had discovered were used on 14 and 15 November 2020, less than one month after the Court’s order requiring Mr Cattermole to delete and return the confidential information. As part of the consent orders, Mr Cattermole also gave undertakings that he did not have any copies of the spreadsheets “in his power, possession or control”, and that if they or information derived from them came into his power, possession or control in the future, he would delete the information and notify the liquidators.
[18] Subsequently, a Hong Kong company of which Mr Cattermole is a director wrote to the liquidators and Cryptopia account holders, offering to acquire their cryptocurrency, in exchange for a new digital coin (COG) within the Metaverse.17 Between 25 October 2023 and January 2024, further emails were sent, allegedly by the first, second, and third defendants to Cryptopia’s account holders.18
[19] The plaintiffs filed their statement of claim on 8 February 2024, along with an interlocutory application s eeking interim and interlocutory injunctions and ancillary orders. On 13 February 2024, Palmer J made interim without notice orders, preventing the defendants from using, relying on, referring to, disseminating or disclosing the confidential information and using the trade marks “Cryptopia” and “CRYPTOPIA”, along with other orders.19 On 15 March 2024, the first defendant applied to set aside the interim orders and filed a notice of opposition to the interlocutory application. The second defendant filed a statement of defence on 25 March 2024. Isac J then granted an interlocutory injunction until trial, in the same
17 It is unclear whether COG has any value: at [10].
18 At [11].
19 Ruscoe v Epic Trust Ltd [2024] NZHC 165 [Palmer J’s Urgent Interim Injunction Decision].
terms in respect of the confidential information and the trade marks, on 24 May 2024.20 On 13 June 2024, Isac J granted amended and ancillary orders. These included: requiring Epic Trust and Mr Cattermole to disclose the true identity, whereabouts and contract details of Martin Braine and any legal persons (being natural persons or other legal entities) in control of decision-making for Cogito; requiring the defendants to disclose what information has been posted to the Cogito websites that contains or is based on or derived from the confidential information; and requiring the defendants to disclose what information has been disclosed to Cryptopia account holders that contains or is based on or derived from the confidential information and the identity or entities the information was disclosed to.21
Jurisdiction
[20] Mr Cattermole’s submissions and affidavit filed in respect of the applications before me are purportedly made on behalf of the “Principality of Cogito”. He submits that this Court lacks jurisdiction over “the Respondent” due to its “sovereignty and sovereign immunity”. I understand him to be referring to Cogito.
[21] Mr Cattermole cites the state immunity doctrine, which he argues prevents domestic courts from exercising jurisdiction over a sovereign entity unless the sovereign has waived immunity explicitly, or an exception applies (which he contends they do not).
[22] Mr Cattermole states in his affidavit evidence that Cogito satisfies the four criteria for statehood of the Montevideo Convention on the Rights and Duties of States (1933).22 He notes that these are a permanent population, defined territory, functioning government, and capacity to enter into relations with other states. Mr Cattermole makes assertions in respect of each of the criteria in his written submissions, for example he submits that:
(c)A Functioning Government: - The Principality of Cogito operates a structured and enforceable governance model, consisting of: - A
20 Isac J’s Interlocutory Injunction Decision, above n 11.
21 Ruscoe & Moore v Epic Trust Ltd [2024] NZHC 1546 at [9].
22 Montevideo Convention on the Rights and Duties of States 165 UNTS 19 (signed 26 December 1933, entered into force 26 December 1934). It is not apparent that New Zealand was a party to this convention, nor that New Zealand has ratified it.
Legislative Framework that governs its digital economy, citizenship, and legal regulations; - A Financial Regulatory System overseeing Cogito-backed digital currencies and economic infrastructure, including a global banking structure, a stock exchange with physical asset investments across over 30 countries; - A Justice and Arbitration System that resolves disputes between Cogito citizens and external entities engaging with Cogito’s legal framework. – An education system that reaches over 135 countries, commitment to medical and IT research laboratories with varies agreements underway to establish the first 15 labs by Q4 in 2025. -Our own military with advance weapons development in collaboration with other government entities. – The existence of these institutions mirrors recognized state functions, further solidifying Cogito’s legitimacy under the Montevideo Convention.
[23] However, other than the document referred to above purporting to be the constitution of Cogito dated April 2023, there is no evidence before the Court to substantiate these statements.
[24] Mr Cattermole submits that because “[t]he Respondent has not consented to be subject to these proceedings”, “any attempt to exercise jurisdiction over Cogito violates… international law”. Further, Mr Cattermole submits if this Court refuses to recognise Cogito as a sovereign state, New Zealand cannot assert tax authority over earnings generated within Cogito’s jurisdiction. He also submits, without adducing any substantive evidence, that Cogito “has been actively engaged in several economic and research initiatives around the world and within New Zealand”. He contends that some of these projects “would suffer” as a result of the Court denying sovereignty, including educational programs, sustainability projects, and digital business and investment projects, among others.
[25] Mr Cattermole also puts forward purported “expert testimonies”, namely “expert AI opinions from globally recognized leaders in the fields of international law, digital sovereignty, and emerging governance models”. These “opinions” are simply AI generated responses to a series of questions that are attached as appendices to, and summarised in, Mr Cattermole’s submissions. The “opinions” are not admissible as expert evidence pursuant to ss 25 and 26 of the Evidence Act 2006.
[26] Mr Cattermole submits that the first plaintiffs are part of a “large multi-national accounting firm” which has “engaged with the Principality of Cogito in a manner that constitutes de facto recognition of its sovereignty”. He refers to the first plaintiffs’
serving legal documents on Cogito representatives, requesting “exposure and compliance” of Cogito’s governmental authorities, referencing Cogito’s financial and regulatory systems, and seeking to enforce court orders within Cogito’s jurisdiction.
My assessment
[27]The basic principle of sovereign immunity was described by Cooke P in
Governor of Pitcairn v Sutton as follows:23
Sovereign immunity is a doctrine applying to sovereign states or, as it is sometimes expressed, independent sovereign states. In general at common law, reflecting international law, such a state will not be impleaded in the Courts of another country (in this instance New Zealand) against its will and without its consent; the exercise of jurisdiction is seen as incompatible with the dignity and independence of the foreign state
[28] There are difficulties with Mr Cattermole’s arguments regarding lack of jurisdiction of this Court based on the “sovereign immunity” of Cogito.
[29] As submitted on behalf of the plaintiffs, Cogito is not a party to the proceedings and the plaintiffs do not seek relief against Cogito. Rather, the plaintiffs seek relief against Epic Trust and individuals as described above. I acknowledge that, if Cogito was a sovereign state, it is arguable that sovereign immunity may extend to these parties.24
[30] However, as discussed above, apart from the document purporting to be the constitution of Cogito dated April 2023, there is no evidence before the Court to substantiate the statements made by Mr Cattermole in his affidavit and submissions regarding Cogito satisfying the requirements for statehood. Nor is there evidence of the alleged consequences of this Court not recognising Cogito as a sovereign state. On the evidence before me, I also do not accept that the plaintiffs have engaged with Cogito in a way that constitutes de facto recognition of Cogito’s sovereignty. In my assessment, Mr Cattermole’s statements in his affidavit evidence and submissions are inherently lacking in credibility and improbable.
23 Governor of Pitcairn v Sutton [1995] 1 NZLR 426 (CA) at 428. See generally Fang v Jiang [2007] NZAR 420 (HC).
24 Fang v Jiang, above n 23, at [23]–[39] and [66]–[72].
[31]I agree with the finding of Palmer J in a related proceeding that: 25
Similarly, I do not need to decide on the validity of the purported sale and purchase agreement between Epic Trust and Mr Stevenson. Clause 6(a) expresses that agreement to be subject to the “laws of the Principality of Cogito … to the exclusion of all other jurisdictions.” Cogito is a metaverse created by Mr Cattermole. It is not a foreign jurisdiction and its “law” is not foreign law recognised by this Court. Its “constitution” of April 2023 provides ultimate decision-making power to Mr Cattermole as Crown Prince of Cogito. There is no evidence of Cogito’s “laws”, including its “laws” of assignment of interests, even if this Court were to recognise the agreement as governed by those “laws”, which I do not.
[32] In short, on the basis of the evidence before me, I am not satisfied that the doctrine of sovereign immunity applies in this case because I am not satisfied that Cogito is a sovereign state.
[33] Further, Mr Cattermole is the only defendant to raise the issue of lack of jurisdiction in the proceedings and the only defendant to oppose summary judgment.26 However, Mr Cattermole filed a statement of defence in the proceeding on 23 March 2024 which did not raise any challenge to this Court’s jurisdiction. To the extent there is any issue as to lack of jurisdiction arising from sovereign immunity (and I do not consider there is), Mr Cattermole, as self-styled Crown Prince of Cogito and Chairman of the Crown Council of Cogito, has waived any sovereign immunity in respect of all the defendants and submitted to the jurisdiction of this Court.
[34] Finally, to the extent that there is any issue as to whether New Zealand is the appropriate forum for this proceeding, I am satisfied that it is.27 The case has a real and substantial connection with New Zealand. Cryptopia was based in Christchurch. The first plaintiffs, as liquidators of Cryptopia, are based in New Zealand. The mistaken release of confidential information discussed above occurred in New Zealand. There is no evidence before me of relevant proceedings afoot in another
25 Epic Trust Ltd v Ruscoe [2024] NZHC 21 [Palmer J’s Joinder Decision] at [19] (emphasis added). See also Ruscoe v Cattermole, above n 1, at [11].
26 Epic Trust has previously taken an active part on the proceedings and was represented by counsel. It filed several memoranda, an interlocutory application to set aside interim orders, and a notice of opposition to the plaintiffs’ application for interim and interlocutory injunctions. None of the documents filed by Epic Trust raise any issue about jurisdiction.
27 Jessica Gorman and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) [McGechan] at [6.29.02(3)] and Spiliada Maritime Corp v Cansulex Ltd (“The Spiliada”) [1987] AC 460, [1986] 3 All ER 843 (HL).
jurisdiction. I do not accept that any foreign court would be in a better position to provide effective relief. I do not consider that any of the defendants will suffer an unfair disadvantage by this Court determining the matter.
Leave to apply for summary judgment
[35] The plaintiffs seek leave to apply for summary judgment as it was not applied for when the statement of claim was served. Leave is not expressly opposed by the second defendant.
[36]Rule 12.4(2) of the High Court Rules provides:
An application by a plaintiff may be made either at the time the statement of claim is served on the defendant, or later with the leave of the court.
[37] The High Court Rules do not provide any guidelines for the granting of leave, as the question is a discretionary one. The party apply for leave carries the onus of showing why it should be granted.28
[38]Three factors should be considered in determining whether to issue leave:29
(a)Has the delay in filing been satisfactorily explained?
(b)Are the merits of the applicant’s case for the relief sought particularly strong and therefore deserving of determination at a later time by the Court than is prescribed by the High Court Rules?
(c)Is there any risk of a miscarriage of justice in determining the application for summary judgment at a later point in time?
[39] Leave should not be treated as a mere formality. As the Court of Appeal put it:30
We add that it is important that leave be dealt with as a prior step to the merits of an application for which leave is required. The criteria for granting leave
28 Tip Top Icecream Ltd v Polarland Ltd (2002) 7 NZBLC 103,564 (HC) at [28].
29 At [28].
30 Stephen v Barron [2014] NZCA 82 at [13].
need to be addressed, even if the merits of the substantive application are, themselves, an important aspect of the leave decision.
[40] The Court should generally not grant leave to apply for summary judgment out of time if it will not avoid prolonged proceedings.31
[41] The plaintiffs contend that the delay in applying for summary judgment is explainable. At the time they filed their statement of claim, the plaintiffs were seeking urgent interim injunctions and did not consider it appropriate to seek summary judgment, given the injunctions were sought without notice. Since that time, they contend that circumstances have arisen making summary judgment appropriate. In particular, the plaintiffs submit that further email communications from Cogito have been sent to account holders. Further, the first defendant has not filed a statement of defence and neither the first nor second defendant filed evidence opposing the plaintiffs’ applications for interim and interlocutory injunctions. They submit that neither the first nor second defendant have complied with the orders made on 13 February 2024 and 13 June 2024, requiring them to file an affidavit containing the information necessary for the plaintiffs to identify and serve the third and fourth defendants. Instead, the plaintiffs allege that Mr Cattermole has left New Zealand, and threats have been received by the liquidators and their solicitors. Mr Cattermole submits that he had no choice but to leave New Zealand because of threats against him.
[42] Finally, the plaintiffs submit that Cogito and Cryptopia Rescue continue to use the name “Cryptopia”. They submit that the second defendant is the only identifiable legal person, involved with Cogito, and one of two moderators of Cryptopia Rescue’s private Facebook group.
[43] I also note Mr Ruscoe’s evidence that, having exhibited significant evidence to his affidavits already, he does not believe that anything further is to be gained from discovery and a full trial. He also does not believe that there is any further relevant material that the liquidators require for the proceeding to be determined.
31 Waihopai Valley Vineyard Ltd v Savvy Vineyards 3550 Ltd [2015] NZHC 592 at [34]–[35].
[44] The explanation for the delay in filing an application for summary judgment is not entirely satisfactory. This proceeding was commenced in early February 2024. The plaintiffs obtained interlocutory injunctions on 24 May and 13 June 2024, but then nothing happened for six months until the application for summary judgment was filed on 16 January 2025. However, a satisfactory explanation for delay is just one of the factors to be considered in determining whether to grant leave. I do not consider it is the determining factor in this case.
[45] The plaintiffs contend that there is no risk of a miscarriage of justice through determining the summary judgment application now. They submit that the defendants are already subject to interlocutory injunctions, largely in the same form as the permanent injunctions sought, which will continue until the proceeding is determined.
[46] The plaintiffs submit that leave is in the interests of justice, and best fulfils the objective of the High Court Rules (just, speedy and inexpensive determination of the proceeding).32 As noted above, the plaintiffs do not believe that anything would be gained from discovery and a full trial. They submit that the summary judgment application would avoid unnecessarily prolonged proceedings.
[47] In the circumstances, I do not see any risk of miscarriage of justice in determining the application for summary judgment now. However, it seems to me that the issue of whether leave should be granted primarily turns on consideration of the merits of the plaintiffs’ application.
[48] In respect of the merits of the application, the plaintiffs submit they are strong and deserving of determination at a later time than prescribed.
[49] The merits of the plaintiffs’ application for summary judgment are discussed in detail below. I find that the plaintiffs are entitled to summary judgment in respect of the first and third causes of action.
[50] Overall, weighing the relevant considerations, I consider it is appropriate to grant the plaintiffs’ leave to apply for summary judgment at this stage.
32 High Court Rules 2016, r 1.2.
Summary judgment
[51] In respect of the substantive application for summary judgment, the governing principles are well established. Rule 12.2 of the High Court Rules provides:
12.2 Judgment when there is no defence or when no cause of action can succeed
(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
…
[52] The approach to an application for summary judgment by a plaintiff was discussed by the Court of Appeal in Krukziener v Hanover Finance Ltd:33
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3. The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as, for example, where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 341. In the end the court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corporation Ltd v Patel (1987) 1 PRNZ 84 (CA).
[27] Under r 141A of the High Court Rules the defendant need not file a statement of defence. The onus remains on the plaintiff, and summary judgment will be denied if on the hearing of the application it appears that there is an issue worthy of trial.
[53] The notion that a defendant must have “no defence” has also been expressed as lacking a bona fide defence, having no reasonable ground or defence or no fairly arguable defence.34 Generally, a plaintiff can be considered to have discharged the onus where the only possible defences are “fanciful or are not bona fide”.35
33 Krukziener v Hanover Finance Ltd [2008] NZCA 187 at [26]–[27].
34 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.
35 McGechan, above n 27, at [HR12.2.06].
[54] The discretion suggested by the words “may give judgment” is to be restrictively applied; and in a great majority of cases, once the court is satisfied there is no defence, there is no room for exercise of the discretion.36
[55] The plaintiffs seek orders granting summary judgment against all defendants in respect of their first cause of action, breach of confidence, and third cause of action, breach of s 9 of the FTA. I now address these claims.
Breach of confidence
[56]There are three elements of the test for breach of confidence:37
(a)the information must have the necessary quality of confidence about it, which means that it is not publicly accessible;
(b)the information must have been communicated in circumstances importing an obligation of confidence; and
(c)there must have been an unauthorised use of that information to the detriment of the person who is entitled to the benefit of the confidence.
Is the information confidential?
[57] First, I am satisfied that the information has the necessary quality of confidence. The subject information is information about Cryptopia’s database and cryptocurrency holdings contained in the spreadsheets exhibited to the affidavit of David Ian Ruscoe dated 8 November 2019 in CIV-2019-409-544. The plaintiffs say the spreadsheets contained information of both a personal and commercial nature (the Confidential Information), including:
(a)Account holders’ personal information: usernames and email addresses for each account holder; the number of cryptocurrencies held in respect of each account holder; a valuation of each account holder’s
36 McLaughlin v McLaughlin [2023] NZHC 1809 at [16].
37 Coco v AN Clark (Engineers) Ltd [1969] RPC 41 (Ch) at 47–48 as cited in Stephen Todd Todd on Torts (online looseleaf edition, Thomson Reuters) [Todd on Torts] at [13.5.2].
cryptocurrency in Bitcoin (BTC) and NZD; other account information, such as location information, verification level, registration date, total number of trades, largest holding (by value), last trade date and last withdrawal date.
(b)Commercial information: details of amounts of cryptocurrency held by Cryptopia for the benefit of account holders, valuations of these holdings in BTC and NZD, lists of the different cryptocurrencies held, and the personal account holder information set out above, necessary for Cryptopia to conduct its business.
[58] Further, the spreadsheets were not publicly accessible. The plaintiffs say that prior to November 2019, only the first plaintiffs and certain Cryptopia employees had access to the information, and those employees owed Cryptopia a duty of confidence. The only other persons involved in the proceeding (at that time) were two court-appointed representative counsel, Mr Peter Watts KC and Ms Jenny Cooper KC. The spreadsheets were provided to the Court by USB stick. Although Mr Ruscoe’s affidavit was posted on the Grant Thornton webpage for the Cryptopia liquidation, the spreadsheets (as an exhibit) were not. Once the first plaintiffs became aware that Mr Cattermole had obtained the spreadsheets, they took steps to protect the information and ensure it would not become publicly accessible. These steps included seeking and obtaining court orders requiring the deletion and return of the information, appointing Deloitte to monitor Mr Cattermole’s compliance and eventually holding him in contempt of court.
Has the information been communicated in circumstances importing an obligation of confidence?
[59] I am satisfied that the information was also communicated in circumstances importing an obligation of confidence. As noted, the spreadsheets were provided to the Court by USB and not posted on the Grant Thornton webpage. In his statement of defence, Mr Cattermole alleges that the USB stick and spreadsheets were not password protected or subject to any other access-restrictions. He says that this was a factor in him believing that he was entitled to the information and that it was not subject to any
restrictions on its use or distribution.38 However, given the nature of the information and that it was not publicly accessible, I accept that any non-party to the proceedings receiving the information would or ought to have known that it was confidential.39 Further, Mr Cattermole was made aware of the confidentiality of the information on 21 October 2020, when the Court ordered him to delete or return the spreadsheets and any copies to the Court.40 Epic Trust’s knowledge or constructive knowledge is that of its directors or persons in control. As noted above, the evidence is that Mr Cattermole controls Epic Trust’s activities. The third defendant, purportedly an in-house lawyer for Cogito, can be reasonably expected to make inquiries into the circumstances in which the spreadsheets were obtained before offering to disclose the information to others. The fourth defendant ought to have known of the confidential nature of the information, in light of considerable business media and social media references to Mr Cattermole wrongfully obtaining that information and having been held in contempt of Court.
Has there been unauthorised use to the detriment of those entitled to the benefit of the confidence?
[60] I am satisfied on the available evidence that there has been an unauthorised use of information by the defendants to the detriment of the persons (the account holders and the plaintiffs) who are entitled to the benefit of the confidence.
[61] In his statement of defence, Mr Cattermole admits that Epic Trust Limited and Cogito have used the Confidential Information to contact Cryptopia account holders about the offer. Further, he admits:
… that Cogito has provided and will continue to provide account holders with their own personal details from the Confidential Information, to the extent that it possesses or controls such information, and says further that such actions are discharge of its legal obligations to do so under relevant privacy and information laws.
38 The plaintiffs have not filed a reply to Mr Cattermole’s statement of defence, but counsel for the plaintiffs submits in her written submissions that the spreadsheets were provided to the Court by “secure USB”.
39 Attorney-General v Guardian Newspapers Ltd (No 2) [1988] UKHL 6, [1990] 1 AC 109 establishes that it may be sufficient if the information received is obviously confidential; a prior relationship between plaintiff and defendant is not always required.
40 Palmer J’s Urgent Interim Injunction Decision, above n 19, at [3].
[62] The evidence relied on by the plaintiffs consists of extensive affidavit and documentary evidence filed in this proceeding and in other proceedings involving Mr Cattermole. The plaintiffs are concerned that unauthorised use of the information will damage the legitimacy of the liquidation process and cause harm to account holders. Mr Cattermole has not filed any affidavit evidence in response to the application for summary judgment addressing the issue of alleged breach of confidence and breach of the FTA. Mr Cattermole’s affidavit evidence in opposition to the application for summary judgment only addresses the issue of jurisdiction, which I have discussed above. I set out below a summary of the plaintiffs’ evidence as to unauthorised use of the information drawn in part from Isac J’s Interlocutory Injunction Decision.41
[63]First, as noted by Isac J: 42
There is evidence first that Mr Cattermole supplied a Mikhail Vakhrin with the spreadsheets in 2020 by USB stick. Email communications obtained by the Liquidators from Mr Vakhrin in December 2023 indicate that between 26 September 2020 and 28 November 2020, Mr Cattermole distributed Cryptopia’s confidential information with a view to gaining a commercial advantage from it. The last communication on 28 November 2020, explicitly discussed the proposed use of that material to commercialise the Principality of Cogito. This occurred one month after the High Court had made orders restraining Mr Cattermole’s use of the information and directed its destruction or return. …
[64] Subsequently, there is evidence in the form of six emails between November 2023 and 13 January 2024 that:43
…interests or people who appear to have a connection to Mr Cattermole, Epic Trust or Cogito, have made repeated email approaches to account holders. The emails variously make offers to acquire the account holder’s cryptocurrencies, criticise the Liquidators, or encourage the recipients to obtain their “personal data” for their Cryptopia accounts by completing a verification process with Cogito. In doing so, Mr Ruscoe deposes that the senders have used account holder email addresses that are not publicly available and could only have been obtained from the confidential spreadsheets.
[65] Mr Cattermole has deposed in a related proceeding that the source of the names and email addresses was a “social media campaign” to contact the beneficiaries of the
41 Isac J’s Interlocutory Injunction Decision, above n 11.
42 At [19].
43 At [20]. In his statement of defence dated 25 March 2024, Mr Cattermole admits all allegations regarding these emails.
trusts. However, the first plaintiffs say that no evidence of such a campaign has been provided by Mr Cattermole. Apart from two public posts on 19 October and 24 November 2023 referring to an offer to purchase account holders’ cryptocurrencies, they have been unable to find evidence of such a campaign.
[66] Rather, the first plaintiffs state that by 14 November 2023, they had received emails from 64 account holders who had never signed up for the “Cryptopia Rescue” page on Facebook or Cogito Metaverse, the Principality of Cogito or any other entity associated with Mr Cattermole. Those account holders contacted the plaintiffs complaining and/or expressing confusion about a “settlement offer” from Classic Focus Ltd (a company controlled by Mr Cattermole) and Cogito for the purchase of their cryptocurrencies. Further, 39 inactive internal Cryptopia email addresses received an email regarding the offer. The first plaintiffs state that the accounts have been inactive since liquidation and not publicly listed but were contained in the spreadsheets. A further 15 active Cryptopia email addresses received an email regarding the offer. The first plaintiffs state that these addresses were also contained in the spreadsheets and not listed publicly. Moreover, the Grant Thornton employees who had access to these accounts did not register with Cryptopia Rescue or Cogito using the email addresses.
[67] Isac J found that the six email communications referred to above have features which satisfied him that there was a serious question to be tried as to whether the defendants retained and continue to use the information as follows:44
(a)First, there is no dispute Mr Cattermole is the sole shareholder of Epic Trust or that Mr Cattermole is the self-described “Crown Prince” of the Cogito metaverse. Nor does there appear to be any dispute—or evidence to contradict—the Liquidator’s evidence that Epic Trust is the Montenegrin incorporated trust company for Cogito.
(b)There is no real doubt that for many account holders, who are located in at least 180 countries, English is their second language. One account holder, having received an offer to acquire their Cryptopia holdings from the email address cryptopia- [email protected] sent an email to the Liquidators’ official Cryptopia email address “[email protected]” stating:
Good day, can you please advise me how I can convert these 500 euros into money? my English is not the best, but I did
44 At [21].
not find the option to transfer cryptocurrency to another account (from cogito) and the exchange. Thanks a lot.
(c)There is no dispute — or no evidence to contradict — the Liquidators’ evidence that Cogito emails have been sent to account holders using email addresses that could only have been derived from Cryptopia’s confidential information.
(d)The emails are all linked in some way to Mr Cattermole, Epic Trust, Cogito, or all three. For instance, the addresses from which the emails have been sent to account holders are:
epictrust@princi[p]alityofcogito.com; and
[email protected][p]alityofcogito.com
(e)Emails sent to account holders on 25 October 2023 were signed off by a “T Cattermole”. Subsequently, emails on 4 November and 21 December 2023 were signed off by a “Martin Braine LLB, In House Lawyer, Principality of Cogito”. An email sent on 3 January 2024 is signed off “Cogito Support”. Similarly, an email sent to account holders on 21 December 2023 refers to Mr Cattermole’s acquisition of confidential information and suggests it has been sent by him to a “3rd party contractor in Europe”.
(f)Arguably some emails are set-out or expressed in such a way as to cause confusion as to whether they have been sent by the Liquidators or with their approval on behalf of Cryptopia. The subject lines and titles used in the emails routinely use the title “Cryptopia”, and phrases such as “Cryptopia Communication”, “Important Update” or “Cryptopia / Cogito Settlement Update…”. The use of the name “Cryptopia” in the subject line and in headings in the body of the emails gives the impression they are official Cryptopia communications and have been sent either by the Liquidators, on their behalf or with their imprimatur. Conversely, some emails criticise the Liquidators’ conduct and claim legal advice suggests the confidential information is now available for use by Cogito and its agents. Some of the emails carry a sense of urgency in relation to the need to accept the Cogito offer of digital currency in exchange for account holders’ cryptocurrency. Some also indicate that account holders ought to obtain their account information from Cogito, and upon verification of the account holders’ details, that information will be provided to them. This is so notwithstanding orders of the High Court preventing it.
(g)The Liquidators’ evidence is that the emails are likely to cause recipients to believe that some or all of the emails are an official communication from them rather than Mr Cattermole’s interests. The documentary evidence provided in support indicates that a number of Cryptopia account holders have indeed been misled into thinking precisely that. Others have contacted the Liquidators asking if the Cogito offer is a scam. Social media discussion on Reddit and Facebook also reveal uncertainty and confusion about the legitimacy of the Cogito offer and communications
[68] The plaintiffs submit that the admissions in Mr Cattermole’s statement of defence and the evidence establish that each of the defendants have either confirmed their possession of the information or have facilitated an offer to disclose the information on behalf of Cogito:
(a)Mr Cattermole admits that Epic Trust Limited and Cogito have used the information to contact account holders about the offer.45
(b)Mr Cattermole posted in a Facebook group on 23 December 2023 saying that the first plaintiffs had served a cease and desist notice on him “trying to get Cogito to stop communicating with people from the documents they made public”. Further, the post stated that “Cogito legal advisors gave the opinion that Cogito was obligated to make any data the organization had access to available to account holders”. The post went on to state that the information “is now available on the Cogito website…”. Mr Cattermole also refers to “the Cogito legal team” providing the information to a third party for analysis.
(c)The six emails referred to above are all linked in some way to Mr Cattermole, Epic Trust, Cogito or all three. One of the emails dated 25 October 2023 is signed off by Mr Cattermole. Two other emails dated 4 November 2023 and 21 December 2023 are signed off by Martin Braine.
[69] Mr Ruscoe states in his affidavit evidence filed in January 2025 that the defendants have not complied with the interim orders dated 13 February 2024 and the interlocutory orders made on 24 May 2024 and 13 June 2024. There is evidence that the Cryptopia Rescue website, Facebook pages, X/Twitter account and Cogito website continue to refer to the confidential information. Mr Ruscoe refers to Reddit posts which appear to indicate how Cogito obtained the confidential information and is using it. The posts appear to be by a user who is a Cryptopia account holder and is a moderator (along with Mr Cattermole) of the closed Cryptopia Rescue Facebook group. The plaintiffs are aware of further email communications from
45 See above at [61].
[email protected] to account holders in February 2024 with the headings “Grant Thornton Final Step of Liquidation Now Live” and “Cogito/Grant Thornton Crypto final stage of settlement”. The plaintiffs understand this email address is still active and corresponding with account holders. In August 2024, the first plaintiffs received a customer support ticket in Zendesk (helpdesk portal) from an account holder who sent a copy of a recent update newsletter from Cogito which includes an update for “Cryptopia Account Holders”. Mr Ruscoe also states that, although Mr Cattermole served a draft affidavit purporting to comply with the ancillary orders dated 13 June 2024,46 the affidavit is not sufficient to comply with the ancillary orders. It does not provide the information the first plaintiffs need to ensure that the liquidation claims portal process has not been compromised.
[70] The plaintiffs are concerned that the defendants have used the confidential information to communicate with account holders and facilitate an offer from Epic Trust to purchase Cryptopia account holders’ cryptocurrencies. The plaintiffs are concerned that confidential information could be obtained and used by people who are not account holders to register as claimants in the Cryptopia liquidation. Much of the confidential information is used to verify claimants’ ownership of their Cryptopia accounts. If the verification process is compromised, then the first plaintiffs may be unable to rely on the account ownership verification process. They may need to undertake additional verification which, four years on from the liquidation, may be difficult for bona fide account holders to recall. This would require significant additional costs being borne by the trusts which is not in the account holders’ interests.
[71]As found by Isac J in the Interlocutory Injunction Decision:47
[31] First, the continued unconstrained use of the confidential information will cause greater costs in the liquidation, which will ultimately become a cost to the account holders.
[32] Second, there is evidence the defendants—or parties likely connected to them—are offering to supply confidential account holder information, used by the Liquidators to verify the identity of account holders, to anyone who can meet Cogito’s verification processes. There is no guarantee that such processes will lead to the identification of legitimate account holders. There is therefore a real risk of release of account holder information to third-parties
46 See above at [19].
47 Isac J’s Interlocutory Injunction Decision, above n 11, at [31]–[32].
seeking to pass themselves off to the Liquidators as the true owners of coin held on trust. Should the defendants release account holder confidential information to the wrong parties, the Liquidation itself may be put at risk. There is clearly a significant risk of irreparable harm to account holders as a consequence.
Defences
[72] The plaintiffs submit that the only real defence available to the defendants is that the information is not confidential. In other words, the “horse has bolted” because the information is now publicly available and in use, so has lost its confidential character and can no longer be protected by the Court. These arguments are raised in Mr Cattermole’s statement of defence and Epic Trust’s opposition to the application to the interlocutory injunction application. However, they have not been raised in Mr Cattermole’s notice of opposition to summary judgment.
[73] However, for the reasons discussed above, I have found that the information is confidential; and even though it is clear the information has been made available to third parties by the defendants, that does not mean it is publicly accessible or available.48 Further, even if it could be established that the information is to some extent publicly available as a result of the defendants’ actions, I do not consider the defendants can create their own defence by wrongfully distributing the information and then arguing the horse has bolted. As noted by Isac J in the Interlocutory Injunction Decision, “a Court exercising its equitable jurisdiction will not generally allow a defendant to avail itself of circumstances it has brought about itself”.49 Such circumstances would not be an appropriate context in which to release the defendants from their duty of confidence.50
[74] Mr Cattermole has also suggested that the defendants had access to extensive data from Cryptopia’s database prior to liquidation. However, Mr Ruscoe states that he has not seen any documents in Cryptopia’s control which would suggest this or that Mr Cattermole had any dealings with Cryptopia prior to the liquidation. Further, Cogito has confirmed in its email to account holders dated 21 December 2023 that the information was obtained from the High Court in New Zealand, and it was then
48 See above at [57]–[58].
49 Isac J’s Interlocutory Injunction Decision, above n 11, at [24].
50 Todd on Torts, above n 37, at [13.5.3].
provided to a third-party contractor. The email also confirms that the data is “as per the list in the liquidators 2nd affidavit on his website”. Even if defendants or third parties did somehow have access to some of the information prior to the liquidation, the information would still be confidential. Further, the defendants or third parties would or ought to have known that it was confidential. Therefore, they would have been subject to an obligation of confidence.
Conclusion as to breach of confidence
[75] For the reasons set out above, I am satisfied on the balance of probabilities that all three elements of the test for breach of confidence are established. The defendants have no defence to the plaintiffs’ first cause of action against them for breach of confidence.
Misleading and deceptive conduct – s 9 of the Fair Trading Act 1986
[76] The plaintiffs’ third cause of action is breach of s 9 of the FTA. Section 9 provides:
9 Misleading and deceptive conduct generally
No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
[77] Section 9 is a strict liability provision. In Red Eagle Corp v Ellis, the Supreme Court set out the following test:51
…whether a reasonable person in the claimant’s situation — that is, with the characteristics known to the defendant or of which the defendant ought to have been aware — would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive the hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.
51 Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28]–[31] (footnote omitted).
[78] The plaintiffs seek a permanent injunction restraining the defendants from making misleading and deceptive statements including in relation to the legitimacy of their acquisition, retention, use and/or disclosure of the confidential information.
Are the defendants in trade?
[79] The plaintiffs submit that Cogito and Epic Trust contacted Cryptopia’s account holders, through several emails, offering to purchase their cryptocurrencies held on trust by Cryptopia, in exchange for COG. The plaintiffs submit that the communications were made in trade, as they concerned a commercial offer to purchase Cryptopia account holders’ cryptocurrencies.52 Further, the plaintiffs cite s 3(1) of the FTA which extends the application of the Act to:
the engaging in conduct outside New Zealand by any person resident or carrying on business in New Zealand to the extent that such conduct relates to the supply of goods or services… within New Zealand.
[80] The plaintiffs note that Mr Cattermole was resident in New Zealand when the communications were sent and up until early April 2024, when the first plaintiffs became aware he had left New Zealand. It is unclear whether Mr Cattermole has since returned to New Zealand. In making the offer to purchase cryptocurrency held in New Zealand by Cryptopia from account holders of the New Zealand based company, including many account holders who are in New Zealand, the plaintiffs contend that Cogito has been carrying on business in New Zealand. I accept that the defendants’ conduct relates to the supply of services within New Zealand.
[81] In the circumstances, I am satisfied that the defendants are in trade for the purposes of the plaintiffs’ second cause of action.53
Misleading or deceptive conduct?
[82] The plaintiffs submit that the communications to account holders are misleading and deceptive because they appear to be from the liquidators and/or
52 Fair Trading Act 1986, s 2: trade means any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land.
53 Also see Isac J’s Interlocutory Injunction Decision, above n 11, at [26].
Cryptopia. Across various emails, the communications adopt similar visual characteristics, using the same font and “Cryptopia” in headings, subject lines, and domain/user names. The emails address recipients by name or as “Cryptopia Account Holder” and carry a sense of urgency, relating to the need to accept the offer or take steps. As a result, the plaintiffs contend a reasonable person would be misled into thinking that they were sent on behalf of the liquidators, or that Cogito was affiliated to or endorsed by Cryptopia/the liquidators. The plaintiffs emphasise that account holders may have been actually misled, although this is not required for liability. By 14 November 2023, the first plaintiffs had received emails from 64 account holders complaining and/or expressing confusion about the emails they received regarding the “settlement offer”. Between 22 December 2023 and February 2024, the first plaintiffs received over 291 further helpdesk requests or emails expressing confusion about the status of Cogito’s settlement offer and what it has to do with the liquidation process. Some account holders seemed to think that the emails from Cogito are the official channel for the Cryptopia liquidation and that the liquidators are responsible for the offer. There is also evidence that account holders have expressed confusion about the Cogito offer on online forums.
[83] The plaintiffs say that the defendants have also made a series of misleading and deceptive comments or statements in their communications with account holders.
[84] The plaintiffs say that Cogito’s 4 November 2023 email falsely implied that the liquidators leaked the account holders’ confidential information. In particular, it suggested that the liquidators’ response to the offer was because of their own “failure to secure all 960,000 account holder details which were leaked post the court hearing in 2020”. As found above, the spreadsheets were mistakenly sent to Mr Cattermole by the Court registry, after he requested them, and he was not entitled to receive them or their contents.
[85] The plaintiffs say that the 4 November 2023 email also falsely implies that the liquidators deliberately misled Cryptopia account holders regarding the offer. The email stated that the liquidator “has, in our opinion, purposely misled people as to the offer by Cogito”, in reference to a 2 November 2023 email from the liquidators clarifying their position on the offer and encouraging account holders to seek
independent advice. It is apparent that there is nothing misleading in the liquidators’ 2 November 2023 email.
[86] The plaintiffs say Cogito’s 21 December 2023 email to account holders falsely implied that the confidential information is in the public domain, that the spreadsheets were “requested and supplied legitimately” by the Court and then supplied to a third party contractor in Europe in accordance with “normal business practice”. The email suggests that Grant Thornton made “their affidavit public” and thus “removed any powers of the court under their rules to protect the files”. As found above, the information was not in the public domain when it mistakenly came into the hands of Mr Cattermole. To the extent that it may now be publicly accessible, that is the result of the defendants’ actions and does not prevent the Court from enforcing obligations of confidence.
[87] The plaintiffs say that the 21 December 2023 email also falsely implies that Cogito is entitled to use and disclose the information, by referring to its acquisition of it as “normal business practice” and stating that “we were entitled to communicate with you regarding Cryptopia, there is no privacy breach”. Mr Cattermole’s 23 December 2023 post on the Cryptopia Rescue Facebook page also states that:
Cogito has received many requests for access to account holders’ data and the Cogito legal advisers gave the opinion that Cogito was obligated to make any data the organization had access to available to account holders.
[88] It further states “now this is available on the Cogito website”. As found above, the defendants have no defence to the plaintiffs’ cause of action against them for breach of confidence.
[89] The plaintiffs say that the 23 December 2023 Facebook post also falsely implies that the liquidators have misled the Court. The post refers to ex parte orders made by this Court and to the fact that Mr Cattermole was only served with the order of the Court “where the judge had ruled anyway”. It further states that “this is another example of the lawyer for the liquidator misleading the court again”. The post also states that “GT has mislead [sic] the court and failed to disclose around US$700 million worth of coins”. The liquidators did not mislead the Court in seeking and
obtaining the ex parte orders and there is no credible evidence that the liquidators have failed to disclose US$700 million worth of coins.
[90] The plaintiffs say that the defendants have falsely implied that there are no legal barriers to assignment of account holders’ claims to Epic Trust. The plaintiffs say they believe that assignment is expressly prohibited and refer to cl 18.2(b) of the terms and conditions between Cryptopia and account holders.54 The plaintiffs acknowledge that the issue has not yet been determined but submit that there is plainly a legal barrier because the issue would need to be resolved by the Court prior to the liquidators accepting any assignment. I agree.
[91] The plaintiffs say that, in its 3 January 2024 email, Cogito falsely stated that the liquidators have not applied for directions as to distribution of cryptocurrency other than BTC or DOGE. This is incorrect, as the liquidators’ 2023 directions application applied to all cryptocurrencies held by Cryptopia.55
Conclusion as to breach of s 9 of the FTA
[92] For the reasons set out above, I am satisfied on the balance of probabilities that the elements of the test for breach of s 9 of the FTA are established. I am further satisfied that the defendants have no defence to the plaintiffs’ third cause of action against them for breach of s 9 of the FTA.
Permanent injunctions
[93] A permanent injunction is a common remedy for breach of confidence. The Court has a wide discretion to grant injunctive relief where it is just to do so in the circumstances.56 Recently, in HHP Society Inc v Wang, this Court granted summary judgment and a permanent injunction in respect of breach of breach of confidence and breach of fiduciary duty.57
54 See Palmer J’s Joinder Decision, above n 25, at [18].
55 Ruscoe v Houchens (Distribution) [2024] NZHC 419.
56 Silich v White [2019] NZHC 103 at [26].
57 HHP Society Incorporated v Wang [2025] NZHC 122.
[94] The Court may grant an injunction under s 41 of the FTA, when a s 9 cause of action has been established, whether or not it appears that the person intends to continue to engage in the misleading or deceptive conduct.58 Relevant factors to consider include whether there was delay in applying for relief, whether the conduct is ongoing, public interest considerations and the impact on the defendant.59
[95] Here, permanent injunctions are sought to prevent the plaintiffs continuing to use or disclose the confidential information and from continuing to make misleading and deceptive statements about the information and the liquidation. The plaintiffs note the hundreds of queries already received expressing confusion about the Cogito communications to account holders including as to Cogito’s relationship with the liquidation and the actions of the liquidators.
[96] Having considered the relevant factors referred to above, I am satisfied that permanent injunctions are appropriate to prevent compromise of the liquidation and the risk of irreparable harm to account holders. In particular, as noted above, the claims portal process could be compromised by further disclosure of the confidential information, as it contains information that could be used to verify account ownership in the claims portal. Therefore, that information could be used for fraudulent registrations. If the first plaintiffs are required to carry out additional verification, this could be difficult for genuine account holders to recall (given the passage of time) and could significantly increase the costs of the liquidation, against account holders’ interests. A permanent injunction is also needed to prevent further misleading and deceptive conduct causing confusion and concern amongst account holders.
[97] As a further remedy for breach of confidence, the first plaintiffs also seek orders requiring the defendants to deliver up the confidential information in their custody or control, destroy any copies, disclose to whom they have provided the information, and use their best endeavours to recover any information provided to such person(s). In the circumstances, I am satisfied that this is also an appropriate remedy in this case and within the inherent jurisdiction of this Court.60
58 Fair Trading Act 1986, s 41(3).
59 Debra Wilson The Fair Trading Act Handbook (Wellington, LexisNexis, 2018) at [15.42]–[15.58].
60 See, for example, Waikato District Health Board v Radio New Zealand Ltd [2021] NZHC 2002 at sch 1.
[98] At the interlocutory injunction stage, Epic Trust contended that there is no longer a case for a permanent injunction because it is “too late” and the claim should be for damages. It was argued that some 10,000 account holders had either entered into agreements with Cogito in response to the “settlement offer” or were in negotiations to do so. However, as noted by Isac J, even if account holders in the order of 10,000 or more have or are in the process of taking up an offer with Cogito, there are a total of 960,000 account holders.61 If a permanent injunction is not granted, further account holders may be misled by further Cogito communications. Also, account holders who have entered into agreements with Cogito as a result of the defendants’ misuse of the confidential information may have the right to set aside the agreements. Alternatively, those agreements may be the subject of challenge by the first plaintiffs.
Strike-out
[99] In the alternative to summary judgment, the plaintiffs seek an order striking out Mr Cattermole’s defence to their first and third causes of action. The bases for strike out are two-fold. First, that Mr Cattermole has no reasonably arguable defence to the claims. Second, that Mr Cattermole has failed to comply with the two interlocutory orders in this proceeding (the 13 February 2024 and/or 13 June 2024 orders). Therefore, counsel submits that his defence to the two causes of action should be struck out under r 7.48 of the High Court Rules.
[100]Rule 15.1 of the High Court Rules relevantly provides:
15.1 Dismissing or staying all or part of proceeding
(1)The court may strike out all or part of a pleading if it—
(a) discloses no reasonably arguable cause of action, defence, or case appropriate to the nature of the pleading; or
…
[101] The principles pertaining to this provision are well-established. The principles were summarised by the Court of Appeal in Attorney-General v Prince, which has
61 Isac J’s Interlocutory Injunction Decision, above n 11, at [34] –[36].
been recently endorsed by the Supreme Court in Smith v Fonterra Co-operative Group Ltd:62
[38] We [address each cause of action] through the lens of well-established strike out principles. That is to say, we assume the pleaded material facts are true save for those that are entirely speculative and without foundation and we also bear in mind that the strike out jurisdiction is to be exercised sparingly and only in clear cases. We must be certain the claim is so untenable it cannot succeed and slow to strike out claims in any developing area of law. The fact a claim involves a complex question of law which requires extensive argument should be no bar provided we have the requisite materials and assistance to determine the matter. We must also be mindful of the well-established principle that if any deficiencies can be cured by an amendment to the pleadings, allowing the claim to proceed on condition the necessary amendments are made, is preferable to strike out.
[102] As the Supreme Court in Smith v Fonterra emphasised, a measured approach is appropriate. The Court held that:63
[84] Such an approach is consistent with fully informed access to civil justice by those who have a tenable case that they have been harmed and who will otherwise go without remedy based on a pre-emptive evaluation only. And, as was observed in Couch, a refusal to strike out a cause of action “says little about its eventual merit”. That is to say, it is not a commentary on whether or not the claim will ultimately succeed.
[85] Pre-emptive elimination is only appropriate where it can be said that whatever the facts proved, or arguments and policy considerations advanced at trial, a case is bound to fail.
[103] The Court will not usually consider evidence inconsistent with a pleading, except where an essential factual allegation is so demonstrably contrary to indisputable fact that the matter ought not to be allowed to proceed further.64
[104] Rule 7.48 of the High Court Rules deals with enforcement of interlocutory orders and provides:
7.48 Enforcement of interlocutory order
62 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at [38] as cited in Smith v Fonterra Co-Operative Group Ltd [2024] NZSC 5, [2024] 1 NZLR 134 [Smith v Fonterra] at [74]–[75]. See also Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33] per Elias CJ and Anderson J.
63 Smith v Fonterra, above n 62, at [84]–[85] citing Couch v Attorney-General, above n 62, at [37] per Elias CJ and Anderson J (footnotes omitted).
64 Attorney-General v McVeagh [1995] 1 NZLR 558 (CA) at 566.
(1)If a party (the party in default) fails to comply with an interlocutory order or any requirement imposed by or under subpart 1 of Part 7 (case management), a Judge may, subject to any express provision of these rules, make any order that the Judge thinks just.
(2)The Judge may, for example, order—
(a)that any pleading of the party in default be struck out in whole or in part:
…
[105] As I have found that the plaintiffs are entitled to summary judgment against all the defendants in respect of their first and third causes of action, I do not need to determine the application for strike out of parts of Mr Cattermole’s statement of defence. However, in the event that I was required to do so, for the reasons set out above in determining the plaintiffs’ application for summary judgment, I would find that Mr Cattermole does not have a reasonably arguable defence to the plaintiffs’ first and third causes of action.
Counsel to assist and appointment of experts
[106] Mr Cattermole, as second defendant, applies for the appointment of an amicus curiae to make submissions on jurisdictional issues. The issues that Mr Cattermole submits require an amicus curiae’s submissions include the applicability of sovereign immunity to the Principality of Cogito and international legal principles relating to digital sovereignty recognition and the Montevideo Convention. He also seeks the appointment of an amicus curiae to submit on any other matters the Court deems relevant to the resolution of this case.
[107] The plaintiffs have not formally opposed the application but submit that it does not appear that the circumstances are such that an amicus would be required as the Court is likely capable of reaching a decision without the assistance of an amicus.
[108] Counsel assisting (formerly amicus curiae)65 are usually appointed under the inherent jurisdiction of the Court where there is a danger that an important and difficult
65 Consistent with the terminology now used in the Judicature Act 1908 (now repealed), s 99A; the High Court Rules 2016, r 10.22 and the Immigration Act 2009, s 269: see Erwood v Holmes (Amicus Curiae) [2017] NZHC 1278 at [32].
point of law will require determination, without having been the focus of argument.66 Appointment of counsel to assist is “entirely in the Court’s discretion” and designed to “assist the Court in a way in which the Court would not otherwise have been assisted”.67 In other words, the appointment of such counsel is only made in exceptional circumstances.68
[109] In Erwood v Holmes, Moore J determined that an Associate Judge had not erred in refusing to exercise his discretion to appoint counsel to assist. In doing so, the Court canvassed situations where counsel assisting have previously been appointed, which included where:69
(a)important issues arose for determination but a party has chosen not to participate;
(b)the interests of individuals or sectors of society that were not party to the proceeding were likely to be significantly affected by determination of the issues;
(c)the case involved complex issues of human rights or international law; and
(d)the case involved confidential information that cannot be disclosed to a party or their counsel.
[110] Mr Cattermole applies on the basis that the Court requires an “impartial and well-reasoned legal perspective” on:
(a)whether the Court has jurisdiction over Cogito;
(b)the principles of sovereign immunity and statehood, in respect of emerging digital jurisdictions; and
66 At [34]–[35].
67 At [35] and [37], citing Levy v Victoria [1997] HCA 31, (1997) 189 CLR 579 at 604.
68 Hartley v Attorney-General [2018] NZHC 2639 at [12](a).
69 Erwood v Holmes, above n 65, at [39].
(c)the implications of the plaintiffs’ actions, including “implicit recognition of the Principality”.
[111] Mr Cattermole submits that Mr Peter Watts KC should be appointed as counsel to assist, in the interests of justice, as he has previously assisted in matters relating to the Cryptopia liquidation and has relevant expertise. He contends that this would assist the Court in:
(a)understanding the applicability of sovereign immunity to Cogito;
(b)evaluating New Zealand’s jurisdictional reach over sovereign and digital entities; and
(c)interpreting international legal principles in the context of emerging digital economies and non-traditional sovereign claims.
[112] Mr Cattermole purports to make this application “without prejudice” to his primary position that the “Court lacks jurisdiction to hear this matter”. However, as found above at [33], the difficulty for Mr Cattermole is that he has already submitted to the jurisdiction of the Court when he filed his statement of defence on 25 March 2024.
[113] I understand based on the written and oral submissions that Mr Watts was approached by Mr Cattermole about accepting appointment as counsel to assist. I understand he declined to do so on the basis that he has previously acted as counsel to assist in CIV-2023-485-411. Further, pending order of the Court, he will act as counsel to assist for the next application to the Court by the first plaintiffs for directions to wind up the trusts.70
[114] In his memorandum of 1 April 2025, Mr Cattermole further submits with regard to the issue of alleged sovereign immunity that:
…there… may be a grey area of diplomatic relations and the immunity agreed under the United Nations Convention on Jurisdictional Immunities of States
70 Mr Cattermole suggested other potential appointees at the hearing.
and Their Property (2004). New Zealand did not ratify this but the New Zealand courts have applied sovereign immunity based on:
a. Customary international law,
b. British common law principles
c. Recognition that the 2004 Convention largely reflects established custom
… the court may need to decide to obtain and call witness [sic] from MFAT (Ministry of Foreign Affairs) and IRD, (the Inland Revenue Department) as a minimum.
[115] I apprehend that Mr Cattermole seeks appointment of counsel to assist and experts because he considers that the Court may need assistance to determine the issues raised by him (but no other defendant) as to this Court’s alleged lack of jurisdiction due to Cogito’s sovereign immunity.71 However, I have considered and determined the issue of jurisdiction above at [20]–[34]. I have determined on the evidence before me that the doctrine of sovereign immunity does not apply because I am not satisfied Cogito is a sovereign state. I have determined that this Court has jurisdiction and is the appropriate forum to determine this proceeding and the plaintiffs’ application for summary judgment. In the circumstances, I am not satisfied that it is necessary or appropriate for me to exercise my discretion to appoint counsel to assist or any experts.
Result
[116]Mr Cattermole’s application for appointment of counsel to assist is dismissed.
[117] I grant summary judgment in respect of the plaintiffs’ first cause of action, breach of confidence, and third cause of action, breach of s 9 of the Fair Trading Act 1986.
[118]Regarding the cause of action for breach of confidence, I grant:
(a)a permanent injunction restraining the first to fourth defendants from:
71 See High Court Rules, r 9.36.
(i)using, relying on, referring to, disseminating or disclosing the Confidential Information72 (or copies thereof, whether in electronic or hard copy) to any person or entity whatsoever; and
(ii)referring to the existence or possession of the Confidential Information.
(b)orders requiring the first to fourth defendants to:
(i)deliver up to the plaintiffs the Confidential Information in their custody or control, including any copies of the Confidential Information and any correspondence or documents derived from or containing part of the Confidential Information; and
(ii)destroy all records of the Confidential Information (or copies thereof, whether in electronic or hard copy) in their custody or control; and
(iii)disclose to the liquidators any persons or entities to whom they have provided the Confidential Information, including any copies of the Confidential Information or any documents derived from or containing part of the Confidential Information; and
(iv)use their best endeavours to recover the Confidential Information (or copies thereof, whether in electronic or hard copy), from any person or party to whom they have provided the Confidential Information.
[119] Regarding the cause of action for breach of s 9 of the Fair Trading Act, I grant a permanent injunction restraining the first to fourth defendants from making misleading and deceptive statements:
72 Defined at [57] above.
(a)that state or imply that they are in any way connected to, affiliated with and/or otherwise endorsed by the liquidators or Cryptopia; and
(b)about the legitimacy of the acquisition, retention, use and/or disclosure of the Confidential Information; and
(c)about the liquidation of Cryptopia of the liquidators’ actions or future actions in respect of Cryptopia.
[120] As to costs, my preliminary view is that the plaintiffs have been successful in their application for summary judgment and in opposing Mr Cattermole’s application for appointment of counsel to assist and are entitled to one set of 2B scale costs and reasonable disbursements. The parties should endeavour to agree costs. However, if the parties are unable to agree, memoranda may be filed (not exceeding three pages, excluding costs schedules) and costs will be determined on the papers.
Associate Judge Skelton
Solicitors:
Buddle Findlay, Wellington for Plaintiffs
2
20
0