COMFORTPLUS LIMITED (IN LIQUIDATION) V PORTSMOUTH INVESTMENTS LIMITED (IN LIQUIDATION) HC CHCH CIV-2010-409-002043

COMFORTPLUS LIMITED (IN LIQUIDATION) V PORTSMOUTH INVESTMENTS LIMITED (IN LIQUIDATION) HC CHCH CIV-2010-409-002043 [3 May 2012]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV-2010-409-002043[2012] NZHC 886BETWEEN COMFORTPLUS LIMITED (INLIQUIDATION)First PlaintiffAND FUJITSU GENERAL NEW ZEALANDLIMITEDSecond PlaintiffAND PORTSMOUTH INVESTMENTSLIMITEDThird PlaintiffAND PORTSMOUTH INVESTMENTSLIMITED (IN LIQUIDATION)First DefendantAND D F BROSNANSecond DefendantAND J C JACKSONThird DefendantAND K KOTZIKASFourth DefendantAND L M ALEXANDER, G J PAULL AND S RTOMLINSONFifth DefendantHearing: 29 February 2012[2012] NZHC 886(Heard at Christchurch)Appearances: J Ormsby and H Holderness for Fourth Defendant/ApplicantA S McIntyre for Plaintiff/RespondentNo other parties taking part on this issueJudgment: 3 May 2012JUDGMENT OF ASSOCIATE JUDGE OSBORNE as to Defendant's Applications for Summary Judgment and Strike OutIntroduction[1] The fourth defendant applies for leave to bring an application for summaryjudgment on the plaintiffs' causes of action against him. Alternatively he applies foran order striking out the plaintiffs' causes of action against him.[2] I will refer to the plaintiffs collectively as 'the companies', and to thedefendant as Mr Kotzikas.[3] The companies' claims against Mr Kotzikas were reformulated shortly before this hearing and are contained in a first amended statement of claim. The amended pleading was filed after Mr Kotzikas filed this application and shortly before Mr Ormsby filed his submissions on behalf of Mr Kotzikas. There were initially two causes of action against Mr Kotzikas (one under s 60 Property Law Act 1952 and one for the tort of knowing assistance). The cause of action under s 60 Property Law Act was abandoned in the new pleading. The new pleading introduced a fresh cause of action based on the tort of conspiracy by unlawful means.[4] Given the apparent difficulty which the companies (and their counsel) have had in attempting to put their claim into a tenable pigeonhole, it is helpful to stand back and describe generally what it is about Mr Kotzikas's conduct that aggrievesthe companies.Mr Brosnan gets rid of assets[5] The first plaintiff, ComfortPlus, was owned and operated by Mr Brosnan from 2004. It was eventually put into liquidation on 28 June 2007. It had in the meantime become insolvent. By November 2006 it owed the second plaintiff, Fujitsu (which had supplied goods to ComfortPlus) approximately $300,000. Mr Brosnan had guaranteed that debt. On the other hand, Mr Brosnan on his current account owed ComfortPlus over $200,000.[6] Mr Brosnan at the same time was the registered proprietor of four residential properties in Dunedin including 122 Sidey Street and 74 Spottiswoode Street. Within a short period of time in late 2006, Mr Brosnan disposed of all four properties.[7] On 27 November 2006 Mr Brosnan incorporated the third plaintiff, Portsmouth, and became sole director and sole shareholder. Three days later he transferred ownership of Sidey Street and Spottiswoode Street to Portsmouth. The title to Sidey Street remained subject to a mortgage which Mr Brosnan had previously granted to Pioneer First Limited. The consideration was stated to be $280,000. It is not suggested that Portsmouth paid anything when it took title. It appears clear that Mr Brosnan incorporated Portsmouth to be a trustee.[8] A valuation of Sidey Street by Barlow Justice has been produced. It indicates that the valuer inspected Sidey Street on 29 November 2006 to provide a valuation as at 30 November 2006. The valuer assessed a market value of $265,000. The report states that Mr Brosnan was the client.[9] At this point Mr Kotzikas becomes associated with the property. On 13 December 2006 he signs an agreement to purchase Sidey Street from Portsmouth for $250,000. He raises a loan for the full purchase price ($250,000) from the ANZ Bank. On 15 December 2006 Mr Kotzikas's solicitors settle the purchase withPortsmouth's/Brosnan's solicitors (Tomlinson Paull) by payment of $250,000. Tomlinson Paull immediately pays out to Mr Brosnan $132,241.41, which he uses to discharge the Pioneer mortgage. Tomlinson Paull retains the balance invested through the trust account for the following four months.[10] Mr Kotzikas allowed Mr Brosnan (and Mr Brosnan's partner, Jane Jackson)to live at Sidey Street after settlement. However on 21 February 2007 Mr Kotzikas entered into an agreement to sell Sidey Street to one Rochelle Brown for $285,000, with settlement to occur on 9 March 2007. That sale proceeded.[11] From the balance of funds held by Tomlinson Paull ($117,758.59 plus interest), Tomlinson Paull on 12 March 2007 paid $113,000 to City Harbour FamilyTrust as a "distribution". Tomlinson Paull paid itself from the trust account on 14 March 2007 $14,956.88 for "general tax advice invoice dated 14 March 2007", laterpaying itself the final balance of $601.05 for "general advice" and disbursements.[12] An accurate understanding of the City Harbour Trust (or "City Harbour Family Trust" or "Harbour Trust") is not available from the documents filed inCourt. The plaintiffs' pleading is that Mr Brosnan and Ms Jackson were beneficiaries of the City Harbour Trust and that Portsmouth became trustee of the City Harbour Trust. Its previous trustees are not identified. There is no evidence as to any assets it initially owned. When Sidey Street was transferred to Mr Kotzikas, Tomlinson Paull opened on 15 December 2006 a trust account ledger for the SideyStreet sale in the name of "Harbour Trust" (numbered as the second project for that client) and it was from this trust account that a balance of $113,000 was later paid to"City Harbour Family Trust" (above, [11]). No evidence from Mr Brosnan or Ms Jackson has been provided. The Tomlinson Paull trust account records point towards the existence of some trust with the right to the proceeds of the Sidey Street sale –other details of the trust are lacking.[13] ComfortPlus was put into liquidation in June 2007. Portsmouth went into liquidation in December 2008.[14] In the meantime Fujitsu obtained a judgment against Mr Brosnan on his guarantee of the ComfortPlus debt. The liquidators of ComfortPlus obtained judgment against Mr Brosnan on his current account debt.The plaintiffs' concern about Mr Kotzikas's involvement[15] The companies learned that Mr Kotzikas had more involvement with Mr Brosnan than simply as a purchaser of one of his properties. Mr Kotzikas and Ms Jackson have been friends for many years. In his answer to interrogatories Mr Kotzikas has identified her as his "best friend". One exchange in interrogatories was this:24 In or about November or December 2006 did you travel to Dunedin to meet with Jane Jackson and/or Dale Brosnan?Yes. I visited Jane regularly as she is my best friend.[16] Mr Kotzikas has provided affidavit evidence as to his involvement in 2006 with Ms Jackson and with ComfortPlus in particular. He says:14. [Mr Brosnan] operated the business of [ComfortPlus] which was involved with the sale of Fujitsu Heat Pumps. I had no involvement or association with the business.15. At some stage in or about 2006 Jane contacted me because of concerns she had about a debt [ComfortPlus] had to Fujitsu of approximately $250,000.00 and asked me for guidance on what they should do.16. I did provide advice to [Mr Brosnan] in relation to the business of [ComfortPlus]. I was now aware of the financial difficulties that [ComfortPlus] found itself in and, in fact, recommended to [Mr Brosnan] that [ComfortPlus] be wound up in order to prevent it incurring further losses and owing creditors more. I considered thisto be consistent with the directors' obligations.17. Annexed to this affidavit is a copy of an e-mail that was sent from me in relation to [Mr Brosnan]'s business. We often exchanged e- mails given the close nature of my relationship with Jane. It gives an indication of the sort of advice that I was giving at the time in relation to the business of [ComfortPlus]. I gave this advice because of the close nature of my relationship with Jane and my desire to help her, and consequently, her partner [Mr Brosnan].18. In that e-mail I told Jane about the need to keep proper financialrecords and to "not be greedy" when it came to shareholderadvances. That is because I was concerned about ensuring the business was properly run and that it did not continue to run up debts.[17] The email which Mr Kotzikas referred to, as sent to Ms Jackson, reads:HelloThe following is the information we need to manage the business.Monthly profit and loss account with a balance sheet.You need to get your previous years accounts up to date.The payments that you know were not personal drawings get reclassified as a debt to the person who received the goods or money.If there were expenses of the business that have been classify [sic] as business expenses get them changed to business expenses.You need to be able to justify the changes so only do ones that you are sure of. Do not be greedy.You need to have an inventory system that shows a running balance of your stock, that shows the purchases, sales and stock on hand. This is to be the value you use for the stock on hand in your balance sheet and you need to do stock takes to make sure all heat pumps are being invoiced.Make a list of all your expenses to run the business then allocate them on a weekly basis.Then get the cost of the heat pumps that you pay.Calculate a conservative number of sales for the week and the profit on your sales.Then deduct your expenses for the week and that will give you estimated profit for the week.You can use these figures to put in your cashflow.A cash flow forecast produced on an Excel spread sheet.I will send you a cash flow model you can use latter [sic] today.Use it in periods of a week.I will ring you.It sounds harder than it is.Kyri[18] In addition to this evidence, the Court has Mr Kotzikas's other answers to interrogatories. He refers to advice he gave to Mr Brosnan and Ms Jackson:... I confirm that in 2006 I did provide some advice to Jane Jackson and DaleBrosnan. The advice was only in relation to Jane Jackson's concerns aboutthe financial viability of the company. As the Plaintiffs are aware, I advised them that the company be wound up to prevent it incurring further losses.[19] Mr Kotzikas, in his affidavit, then deals with his purchase of Sidey Street in this way:19. In late 2006 I was approached by [Mr Brosnan and Ms Jackson] about the property at 122 Sidey Street, Dunedin20. [Mr Brosnan] was the owner of the Sidey Street property at the time, but I knew, from my conversations with [Ms Jackson], that she had an interest in it. She had used her funds received from the sale of the Mallard St property to do this.21. I was not aware that the property was transferred from [Mr Brosnan]'s name to [Portsmouth] in late 2006. I do not know why that transaction occurred. I did not know that the property was sold to [Portsmouth] for a sum of $147,000.00.22. I note that in the Statement of Claim the Plaintiffs have made much of the fact that a mortgage on the title was not discharged before the transfer to [Portsmouth] occurred. I do not know why the mortgagewas not discharged at that stage and can only presume that the mortgagee consented to the transfer occurring.23. In late 2006, after discussions primarily with Jane, it was agreed that I should purchase the Sidey Street property. I did so in order to allow Jane and [Mr Brosnan] to realise the equity in the property to pay back creditors, while ensuring that they had a house to live in.24. It was very important to me that this was dealt with legally and properly. For that reason, I actually referred them to solicitors I had previously used, Tomlinson Paull... I had used Stephen Tomlinson, but the Fifth Defendants [sic] engaged Graeme Paull.25. In deciding to assist Jane and [Mr Brosnan] by purchasing 122 Sidey Street, my main concern and motivation was to ensure that Jane was able to preserve as much of her equity in the property as possible. Iwas concerned that Jane's share in the house be properly recognised.I was concerned that her name was not on the title. The reason I advised them to go to Tomlinson Paull was to assess the correct legal position and what could be done to protect her equity. I did not intend for either of them to avoid liability for any debts for which they were, or might be, responsible. However, I did not think Jane should have to pay for any debts which were [Mr Brosnan]'s debtsunless they were also her debts. Because Jane and [Mr Brosnan] had engaged Tomlinson Paull, I engaged Goodman Steven Tavendale and Reid to advise me in the transaction.26. I did not consider there to be any significant risk to me in buying the property because the market was still rising so I hoped that I mightalso make a capital gain. Annexed to this affidavit are copies ofthe transactional documents relating to the purchase, which shows that it effectively occurred on an 'arms length' basis.27. A valuation of the property had been commissioned The propertyat Sidey Street was valued at $265,000.00. The purchase price agreed was $250,000.00. That price reflected the fact that no real estate agents were involved in the purchase and so no advertising or commission was payable.28. The price was not reflective of any "conspiracy" to defraudcreditors, or sell the property at undervalue. The valuation was, in fact, commissioned in order to ensure that the price paid was market price with the appropriate discount given because of the lack of real estate commission. That is perfectly standard for a private sale.29. The price was funded by a mortgage from the ANZ I have noknowledge of, or involvement in, how the net proceeds of the sale were distributed. I was not a trustee of trusts of which [Mr Brosnan and Ms Jackson] were beneficiaries. I do not know where the funds I paid for the property ended up.30. After they decided to go and live in Australia, I decided to put the house on the market because it would no longer serve the purpose of providing them with a home to live in and because I was servicing the mortgage on the Sidey Street property, and did not want to do sofor too long. I asked the agent to liaise with [Mr Brosnan] as well in relation to the sale of the house, because they were still living in the property at the time and we needed to show the home to prospective buyers and organise open homes.31. I sold the property on 5 March 2007 to a Rochelle Brown. The sale was handled by a real estate agent who acted at my direction. Theproperty was marketed and the purchase price was $285,000.0032. I was pleased that the increase in price meant that my interest costs were more than covered, and that I received some gain, althoughafter the marketing costs and agent's commission were taken intoaccount it was not as much [sic] $35,000.00. I retained all of the gain from the sale. Ultimately, I was the beneficiary of what was still a rising market.[20] Murray Allott, one of the liquidators of ComfortPlus and Portsmouth, has provided an affidavit in opposition. He deposes that with the information he held at the time this proceeding was issued he had a concern that the transaction between Mr Brosnan and Mr Kotzikas was not "arms-length", with Mr Kotzikas having someknowledge of ComfortPlus's state of indebtedness. He notes that later information (such as Mr Kotzikas's knowledge of concerns as to the financial viability ofComfortPlus) reinforces his earlier conclusions. Mr Kotzikas's appreciation of theposition of ComfortPlus was or would have been reinforced by his experience as a company director since 2003 at the latest.[21] The inference which the liquidators and the companies draw from the evidence (as pursued through their claim in this proceeding) is that Mr Brosnan and/or Ms Jackson were in November/December 2006 operating a company with significant indebtedness. It was of doubtful viability at best. It subsequently folded. Mr Kotzikas deposes that he in fact recommended to Mr Brosnan that ComfortPlus be wound up to prevent it incurring further losses and owing creditors more. At the same time Mr Brosnan and Ms Jackson were looking to realise their saleable assets for some purpose. Mr Kotzikas deposes that he entered the arrangements in relation to Sidey Street to allow Mr Brosnan and Ms Jackson to realise the equity in Sidey Street to pay back creditors while ensuring that they also had a house to live in. At the same time, there is no evidence as to any creditor being paid back apart from the payment to Mr Brosnan's personal secured creditor, Pioneer, which had to be repaid as a registered mortgagee. Given Mr Kotzikas's sworn statement that Ms Jackson is his best friend (present tense), one would have expected that if Ms Jackson hadoverseen any repayment of debts, she would have provided the evidence to Mr Kotzikas for the purposes of this litigation.[22] Bringing these matters together, it is common ground between the parties to this application that Mr Brosnan and Ms Jackson were selling their assets in order to convert their equity into cash. It is common ground that Mr Kotzikas lent himself to that arrangement.[23] Out of these circumstances the liquidators and the companies allege in the amended statement of claim that the defendants, when involved in the arrangements from November 2006, aimed to benefit Mr Brosnan and Ms Jackson to the detriment of creditors. I will return in more detail to the legal basis upon which those factual conclusions are said to create liabilities.[24] Mr Kotzikas's primary factual response (that is to say leaving aside the legal arguments to which I will come) is to say that, far from assisting Mr Brosnan and Ms Jackson to benefit themselves at the expense of their creditors, he believed he was involved in a transaction whereby they were freeing up the equity precisely in order to pay their creditors.[25] The key factual differences between the parties can be reduced to that stark contrast.[26] Mr Kotzikas seeks leave to apply for summary judgment on the plaintiffs'claim against him. In the alternative, he seeks an order striking out the plaintiffs'claim against him.Defendant's summary judgment application – the principles[27] The starting point for a defendant's summary judgment application is r 12.2(2) High Court Rules, which requires that the defendant satisfy the Court that none of the causes of action in the statement of claim can succeed.[28] I summarise the general principles which I adopt in relation to the application:(a) The onus is on the defendant seeking summary judgment to show thatnone of the plaintiff's causes of action can succeed. The Court mustbe left without any real doubt or uncertainty on the matter.(b) The Court will not hesitate to decide questions of law where appropriate.(c) The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.(d) It would be a serious matter for the Court to stop a plaintiff's claimfrom going to trial unless it is quite clearly hopeless.1(e) In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.(f) In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.(g) Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.1 See Jones v Attorney-General [2004] 1 NZLR 433 (PC) at [10].Striking out a claim – the principles[29] High Court Rule 15.1 makes provision for orders striking out all or part of a pleading. In this case the defendant invokes r 15.1(1)(a) (no reasonably arguable cause of action) and r 15.1(1)(d) (abuse of the process of the court).[30] I adopt the following as principles applicable to the consideration of this application:(a) The Court is to assume that the facts pleaded are true (unless they are entirely speculative and without foundation).(b) The cause of action must be clearly untenable, in the sense that the Court can be certain that it cannot succeed.(c) The jurisdiction is to be exercised sparingly and only in clear cases.(d) The jurisdiction is not excluded by the need to decide difficult questions of law, even if requiring extensive argument.(e) The Court should be slow to rule on novel categories of duty of care at the strike out stage.2The factual allegations – application of the principles[31] For the present discussion I leave to one side (and will come back to) the legal issues which arise. I focus now simply on the core factual allegations.[32] In their pleading of knowing assistance, the companies allege against Mr Kotzikas that he co-operated with the other defendants, with a dishonest state of mind, to benefit Mr Brosnan and Ms Jackson with the property of the City Harbour Trust to the detriment of the trustees of that property, being Mr Brosnan's creditors and Portsmouth's creditors.2 See Attorney General v Prince [1998] 1 NZLR 262 (CA).[33] In a strike out context, the allegations of co-operation and dishonest state of mind are to be assumed to be true unless they are entirely speculative and without foundation. They cannot be dismissed in that way. The co-operation is clear. The issue, and it must be an issue for trial, is whether the relevant parties and Mr Kotzikas in particular knew that there was to be a defeating of the interests of creditors.[34] For the purposes of the second cause of action against Mr Kotzikas (conspiracy by unlawful means), the allegation is that Mr Brosnan and the other defendants conspired together by unlawful means to benefit Mr Brosnan and Ms Jackson to the detriment of the creditors of Mr Brosnan and of ComfortPlus. Again, in a strike out context, the facts are to be assumed as pleaded unless they are entirely speculative and without foundation. The working together is plain. Whether that was intended to bring about a benefit of Mr Brosnan and Ms Jackson to the detriment of the creditors of Mr Brosnan and/or ComfortPlus must be a matter for trial.[35] A similar analysis applies in relation to Mr Kotzikas's summary judgmentapplication, so far as it is based on factual issues. It is common ground that:(i) Mr Kotzikas wished to help Ms Jackson and Mr Brosnan to free up assets in order to deal with some part of their situation; and,(ii) both ComfortPlus and Mr Brosnan had very significant debt problems; and,(iii) Ms Jackson and Mr Kotzikas were best friends.[36] There is valid ground then for scepticism as to Mr Kotzikas's professed understanding that Ms Jackson (who shortly afterwards chose to leave for Australia) was intent on using the released funds to pay creditors. There is an arguable tension between Mr Kotzikas's stated goal of ensuring that Ms Jackson was able to preserve as much of her equity in Sidey Street as possible, on the one hand, and a goal ofrepaying debt which was not Ms Jackson's personal debt in the first place. In myjudgment these are matters inherently unsuitable for resolution by way of summary judgment. There is a similarity, given the allegations of intent to defeat creditors, with allegations of fraud in cases such as Sime v Bale.3The legal rationale of the plaintiffs' case – application of the principles[37] The companies (in their original statement of claim) initially sued Mr Kotzikas (with other defendants) for relief under s 60 Property Law Act 1952 upon the basis that the transfer and alienation of Sidey Street had been entered into with intent to defraud the creditors of Mr Brosnan. The companies now accept that they cannot succeed against Mr Kotzikas on that cause of action. The amended statement of claim amounts to a withdrawal of that cause of action."Knowing assistance" cause of action[38] The companies, in the first 54 paragraphs of their first amended statement of claim, set out factual allegations which reflect and develop upon the history I have summarised. Under their first cause of action, the companies seek as against Mr Brosnan and Portsmouth an order that the transactions by which Sidey Street were transferred by Mr Brosnan ultimately to Portsmouth be set aside under s 60(1) Property Law Act 1952 (which applies to the period involved) to the extent that the transaction prejudiced the companies as creditors. The following are the particulars specifically pleaded in relation to Mr Kotzikas:Particulars – Transfer by Portsmouth to Kyriakos Kotzikas(f) Kyriakos Kotzikas was a long time friend and advisor of Jane Jackson and Dale Brosnan;(g) Kyriakos Kotzikas was aware of the financial predicament of Dale Brosnan and Jane Jackson (by then engaged to be married) by virtue of a meeting with them in Dunedin during December 2006 (to which Mr Kotzikas travelled from Christchurch);(h) Kyriakos Kotzikas acquired the property with 100% finance and at a value at least $35,000 less than the true market value;(i) On settlement date, Kyriakos Kotzikas settled with Portsmouth notwithstanding that there was a mortgage held in the name of a3 Sime v Bale HC Whangarei CP34/95, 15 February 1996.third party (Dale Brosnan) to Pioneer Finance First Limited which was undischarged since November 2006;(j) The transfer of Sidey Street occurred in the context of three othertransfers of residential property at the same time;Subsequent conduct showing intent to defraud(k) Kyriakos Kotzikas as trustee of the KK Family Trust guaranteed the $250,000 loan for no apparent benefit or consideration;(l) In February 2007, less than two months after the acquisition of the property, Kyriakos Kotzikas in combination with Dale Brosnan and/or Jane Jackson (by then married) listed the property for sale with Dunedin real estate agents;(m) Kyriakos Kotzikas cooperated with Dale Brosnan and Jane Jackson in all respects relating to the on-sale;(n) The real estate agent, acting on behalf of Kyriakos Kotzikas as vendor, in fact referred to Dale Brosnan for instructions during price negotiations with potential purchasers;(o) Neither Portsmouth nor Dale Brosnan nor Jane Jackson nor any oftheir interests obtained from Tomlinson Paull's trust account the$113,000 net proceeds of sale from the original Brosnan to Portsmouth transaction (November 2006) until Kotzikas had successfully sold Sidey Street to Rochelle Brown in March 2007 following an arrangements [sic] between the parties to hold the proceeds undisbursed pending sale in order to protect the interests of Kyriakos Kotzikas.[39] As a second cause of action the companies allege against Mr Brosnan and Portsmouth that:(a) Tomlinson Paull held the net equity in Sidey Street on a constructive trust for the creditors of Mr Brosnan; and(b) Mr Brosnan (and Ms Jackson) as beneficiaries of the City Harbour Trust and Portsmouth (as trustee of City Harbour Trust) together with Tomlinson Paull, in March 2007 received $147,000 with knowledge of a dishonest and fraudulent design on the part of Mr Brosnan but have failed to account for those funds and are in breach of trust.[40] Orders are sought against Mr Brosnan, Ms Jackson, Portsmouth and Tomlinson Paull for restoration of $147,000 to the companies and for an inquiry into equitable damages.[41] The amended pleading then pleads a third cause of action, which is stated tobe "knowing assistance" in which the companies claim against Mr Brosnan, MsJackson, Portsmouth, Tomlinson Paull and Mr Kotzikas an order requiring each ofthose defendants to "personally account for the trust property of $147,000". Thecompanies seek also an inquiry into equitable damages. The additional pleading which supports that claim is contained in a single paragraph:56. In the circumstances outlined [in the preceding paragraphs], and in relation to the 3 property transactions which occurred in November, December 2006 and March 2007 (including distribution of funds from those property transactions to Portsmouth and/or the CityHarbour Trust) when Portsmouth was insolvent and Dale Brosnan owed the company a fiduciary duty as director, each of(a) Dale Brosnan as beneficiary of the City Harbour Trust; and(b) Jane Jackson as beneficiary of the City Harbour Trust; and(c) Portsmouth as trustee of the City Harbour Trust; and(d) Kyriakos Kotzikas; and(e) Tomlinson Paull as solicitors for Dale Brosnan, Portsmouth and the City Harbour Trustco-operated together, with dishonest state of mind, to benefit Dale Brosnan and Jane Jackson with the trust property to the detriment of the trustees of the property being creditors of Dale Brosnan and/or the creditors of Portsmouth.The legal treatment of dishonest assistance[42] Counsel for the plaintiff companies has chosen to plead and to refer to theparticular conduct complained of under the heading "knowing assistance", althoughthe pleading (see [41] above) recognises a dishonest state of mind as an ingredient.[43] Mr Ormsby, accurately in my view, identified the concept of "dishonest assistance" as the correct formulation of this cause of action.[44] Counsel recognised the leading authority in New Zealand as the judgment of the Privy Council in Royal Brunei Airlines Sdn Bhd v Tan.4 The elements of dishonest assistance which emerge from Royal Brunei Airlines require proof of:(a) the existence of a trust or fiduciary relationship;(b) a breach of trust or fiduciary duty by the trustee or fiduciary;(c) assistance or procurement by the defendant in the breach;(d) knowledge of the defendant of facts relating to the transaction which make it objectively dishonest to assist in the breach or to procure it;(e) causation of loss to the plaintiff.[45] I adopt also the review of authority by Duffy J in Eden Refuge Trust v Hohepa5 where, under the heading "Dishonest assistance" her Honour said:[206] The claim of dishonest assistance is directed towards strangers to trusts who are accessories to a breach of trust. A recent statement of the requisite elements of dishonest assistance can be found in Burmeister vO'Brien HC Tauranga CIV 2005- 470-3396, 1 December 2009. There has been some controversy since the House of Lords decision in Twinsectra Ltd v Yardley [2002] 2 AC 164 over whether this claim requires a subjective approach to the assessment of dishonesty. Dicta of the Court of Appeal in US International Marketing Ltd v National Bank of New Zealand Ltd [2004] 1 NZLR 589 (CA), as well as a recent finding in the judgment of this Court inBurmeister make it clear that in New Zealand the approach to be taken follows that of the Privy Council in Royal Brunei Airlines v Tan [1995] 2 AC 378; namely, an objective approach to assessing dishonesty is all that is required. Mr Fletcher invited me to adopt the approach taken in Twinsectra. Whilst I do not think the outcome for Mr Fletcher would have been any different if I did adopt the Twinsectra approach, I intend to follow the approach of Asher J in Burmeister.[207] The three key elements of dishonest assistance are (Burmeister at [93]):a) Money is lost as a result of a breach of trust or a breach of fiduciary duty;b) The defendant has participated in the breach of duty by helping or assisting in some way with those breaches; and4 Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 (PC).5 Eden Refuge Trust v Hohepa [2011] 1 NZLR 197 (HC).c) There is dishonesty (objectively assessed) on the part of the defendant.Portsmouth as a trustee[46] The pleading in paragraph 56 of the amended statement of claim (above [41]) is omnibus and confusing. It contains a number of statements of fact rolled together. The relationships alleged are not easy to follow or to precisely identify. What appears to emerge is that the central allegation, as identified by the particular (c), is that Portsmouth was the relevant trustee. Nonetheless, Mr Brosnan is referred to inthe pleading as having owed "the company" (Portsmouth) a fiduciary duty asdirector.[47] Mr McIntyre's written submissions filed for the hearing commenced inrelation to this pleading with the explanation:The Plaintiffs allege that Mr Kotzikas knowingly assisted Mr Brosnan in breaching his fiduciary duties owed to Portsmouth.[48] To similar effect, Mr McIntyre concluded this part of his submissions with this:The Plaintiffs submit, in any event, that the facts as currently disclosed establish the requisite knowledge of Mr Kotzikas, therefore making it objectively dishonest to assist Mr Brosnan in the transfer of the property.[49] Mr McIntyre's written submissions did not include any analysis based on the proposition that Portsmouth was the trustee whom the other defendants had knowingly or dishonestly assisted.[50] In relation to the role played by Portsmouth, Mr McIntyre in his submissions said:Of interest that on 27 November 2006, shortly after this advice [from Mr Kotzikas to Ms Jackson] was provided, Portsmouth was established, with what appears to have been the sole purpose to allow Mr Brosnan to transfer assets out of his personal ownership. The Sidey Street property and the property at 74 Spottiswoode Street were transferred to Portsmouth on 30 November 2006.Submissions for the plaintiff companies[51] Mr McIntyre submitted that the plaintiffs would succeed in relation to each of the five elements under the Royal Brunei Airlines formulation for the following reasons:(a) A fiduciary duty existed because Mr Brosnan in his capacity as a director of Portsmouth owed Portsmouth fiduciary duties of loyalty and good faith.(b) Mr Brosnan breached his fiduciary duty to Portsmouth by transferring the Sidey Street property to Mr Kotzikas when Portsmouth had been trading while insolvent from its incorporation.(c) Mr Kotzikas (amongst others) assisted Mr Brosnan in the breach of fiduciary duty by taking ownership of the Sidey Street property.(d) Mr Kotzikas's knowledge of the Brosnan/Jackson financial difficulties made it objectively dishonest for him to assist in the breach and to procure it.(e) The plaintiff companies suffered loss through the breach of duty because, but for the transfer of ownership from Brosnan/Portsmouth, the ComfortPlus liquidators would have been able to have the transfer of Sidey Street (from Mr Brosnan to Portsmouth) declared void under s 60 Property Law Act and would have been able to sell the Sidey Street property to obtain the $147,000 equity for the benefit of the creditors of ComfortPlus.[52] Mr McIntyre submitted that the only element which might really be inquestion was the state of Mr Kotzikas's knowledge and whether that rendered hisinvolvement objectively dishonest.Submissions for Mr Kotzikas[53] Mr Ormsby submitted that the dishonest assistance cause of action must fail on at least three of the limbs of the Royal Brunei Airlines formulation, namely lack of a relevant trust or fiduciary relationship; lack of conduct which was objectively dishonest; and a lack of causation of loss.Discussion[54] I do not consider that either in a strike out context or a summary judgment context the Court is in a position to rule out an objectively dishonest involvement or to rule out causation of loss. Mr Kotzikas was far from being a stranger to Mr Brosnan and Ms Jackson. The evidence discloses at the very least an intent to assist them in some way in relation to indebtedness. Some aspects of the transaction (the timing soon after discussion about indebtedness; the formation of Portsmouth as a trust company; the interposition of Portsmouth as a purchaser before the sale on to Mr Kotzikas; a sale at a figure below the valuation obtained) are open to a level of question or suspicion. The correct conclusions to be drawn from such information are properly matters for cross-examination and determination at trial. Similarly, the conclusion which Mr Ormsby invites at this interlocutory hearing – namely that the plaintiff companies are in no worse position in terms of Mr Brosnan's equity inSidey Street than they were prior to the purchase by Mr Kotzikas – would be a matter for evidence about the property, its valuation and potential marketing, and therefore for determination at trial.[55] That said, I am satisfied that the plaintiff companies cannot succeed in relation to those two elements of the Royal Brunei Airlines formulation which require the existence of a trust or fiduciary relationship and a breach of trust by the trustee or fiduciary.[56] I begin with Portsmouth itself, as that is particularised in paragraph 56(c) of the pleading, as a trustee of the City Harbour Trust. It is common ground that thatwas Portsmouth's status. It is also common ground that Mr Brosnan and Ms Jacksonwere beneficiaries of the City Harbour Trust.[57] Mr Brosnan was director of Portsmouth. It was he (as director of Portsmouth) who signed the agreement whereby Portsmouth sold the Sidey Street property to Mr Kotzikas. When Tomlinson Paull received the $250,000 sale price from Mr Kotzikas, they (through Mr Brosnan) arranged for repayment of the Pioneer mortgage ($132,241.41) and they retained the balance for a period to March 2007 before distributing the net balance (after payment of legal fees and disbursements) to the City Harbour Trust.[58] There is no suggestion by the plaintiff companies, nor can there on the evidence be such suggestion, that the City Harbour Trust existed for the benefit of the creditors of Mr Brosnan or the creditors of Portsmouth. When Mr Brosnan asPortsmouth's director arranged for the balance of sale funds to be paid fromTomlinson Paull's trust account to the City Harbour Trust, that was in fulfilment ofthe trustees' rights and duties, not in breach of them. Similarly, and on the assumption that the City Harbour Trust then distributed monies to Mr Brosnan and Ms Jackson or a combination of both, such payments were to beneficiaries of the trust. Portsmouth, as trustee of the City Harbour Trust, had to account to that trust (and/or indirectly to its beneficiaries) and not to any person who claimed to be a creditor of one or other of the beneficiaries.[59] If the intended focus of the knowing assistance cause of action was MrBrosnan, as a director of Portsmouth (as Mr McIntyre's written submissionsindicated), a claim based on a breach of fiduciary duty by Mr Brosnan is as flawed as a claim of breach of trust by Portsmouth itself. Mr Brosnan, through the arrangements made, oversaw the payment of money which belonged to the City Harbour Trust to that trust, and oversaw the on-payment to a beneficiary or beneficiaries of that trust.[60] Although the plaintiffs' pleading of the knowing assistance cause of action makes the allegation that Portsmouth was insolvent, and that might appear to involve an invitation to the Court to find that Mr Brosnan as a director of an insolvent company (Portsmouth) owed fiduciary duties to creditors of that company, Mr McIntyre in his submissions did not seek to put the matter in that way. His submissions expressly focused on the fiduciary duties which Mr Brosnan owed toPortsmouth in the normal director's way. In any event, on the facts the allegation ofinsolvency leads nowhere. Portsmouth was a trustee which acquired and then sold a property for the benefit of Mr Brosnan and/or Ms Jackson. No relevant trading creditors came into existence. To the extent that Mr Brosnan might have been for a period a creditor in relation to the Sidey Street purchase price, there was clearly no breach of fiduciary duty by Mr Brosnan wearing his other hat as director of Portsmouth. All conduct was within his control and authorisation.[61] In the circumstances, the plaintiff companies are unable to succeed on their knowing assistance cause of action as against Mr Kotzikas, whether it is analysed in terms of a director's breach of fiduciary duty or breach of an inter vivos trust. What Mr Kotzikas has in fact done, properly viewed, is either assisting the director of atrust company to carry out the trust company's functions, or assisting the trustees of a family trust to carry out that trust's functions. If in doing either of those things MrKotzikas is said to have wrongly assisted the individuals involved to avoid their obligations to their creditors, then that must be the subject of a different legal analysis.Conspiracy cause of action[62] The companies, for their second cause of action against Mr Kotzikas, repeat all the previous paragraphs of the amended statement of claim and then allege:58. In the circumstances outlined [in the preceding paragraphs], and in relation to the 3 property transactions which occurred in November, December 2006 and March 2007 (including distribution of funds from those property transactions to Portsmouth and/or the CityHarbour Trust), each of(a) Dale Brosnan as beneficiary of the City Harbour Trust; and(b) Jane Jackson as beneficiary of the City Harbour Trust; and(c) Portsmouth as trustee of the City Harbour Trust; and(d) Kyriakos Kotzikas; and(e) Tomlinson Paull as solicitors for Dale Brosnan, Portsmouth and the City Harbour Trustconspired together by unlawful means (section 60 of the Property Law Act 1952 and/or knowing assistance) to benefit Dale Brosnanand Jane Jackson to the detriment of the creditors of Dale Brosnan and/or ComfortPlus.Tort of conspiracy by unlawful means[63] Mr McIntyre referred to the summary of the tort of conspiracy by unlawful means in the judgment of French J in ABC Developmental Learning Centres (NZ) Ltd v Artemis Early Learning Ltd,6 and both counsel proceeded on the basis that herHonour's summary of the law was applicable. I agree and adopt it.[64] Her Honour said, in relation to the tort of conspiracy by unlawful means:[52] A combination of persons causing damage to a plaintiff is an actionable conspiracy if the acts done pursuant to the combination would have been actionable if done by one person alone.[53] The elements of this tort are:a) The defendants must be parties to a common design.b) The common design agreed upon is to be, or is, carried out by unlawful means.c) The defendants must know of the facts which would make the action unlawful.d) the defendants must intend, by carrying out the common design, to injure the plaintiff.e) The defendant must take steps in furtherance of the common design.f) The plaintiff must suffer loss as a result.[65] It is also settled law that the defendant's intention to injure the plaintiff neednot have been the predominant purpose of the conspirators, which might be the furthering of their own legitimate interest. Intention to injure the plaintiff as a concurrent or as a subsidiary purpose will suffice.76 ABC Developmental Learning Centres (NZ) Ltd v Artemis Early Learning Ltd HC ChristchurchCIV-2010-409-001198, 25 June 2010. John Hughes "Interference with Business Relations" inStephen Todd (ed) The Law of Torts in New Zealand (5th ed, Brookers, Wellington, 2009) 601 at13.4.01 – 13.4.02.7 John Hughes "Interference with Business Relations" in Stephen Todd (ed) The Law of Torts inNew Zealand (5th ed, Brookers, Wellington, 2009) 601 at 13.4.02; see Swann v SecurelandMortgage Investment Nominees Ltd [1992] 2 NZLR 144 (CA) per Cooke P at 147.Knowing assistance as the unlawful means involved in a conspiracy?[66] The companies plead that the unlawful means involved in the alleged tort was either the commission of the tort of knowing or dishonest assistance or a breach of s 60 Property Law Act.[67] By reason of my earlier finding that the plaintiff companies cannot succeed on their knowing assistance cause of action, and for the same reasons, I find that the plaintiff companies cannot succeed on that part of their conspiracy pleading which asserts that there was knowing assistance in the tortious sense.[68] This leaves the allegation that the unlawful means was a breach of s 60 Property Law Act.[69] Mr McIntyre explained the plaintiffs' remaining reliance on s 60 as againstMr Kotzikas in this way. The plaintiff companies have accepted that a s 60 claim cannot be sustained against Mr Kotzikas. However, they do maintain a s 60 claim against Mr Brosnan for transferring the Sidey Street property to Portsmouth. In this respect, the plaintiff companies are alleging that Mr Kotzikas, acting as a conspirator, assisted in this unlawful act. Mr Kotzikas was advising Mr Brosnan and Ms Jackson prior to the transfer of Sidey Street to Portsmouth, and before Portsmouth was set up. Shortly after giving that advice, Portsmouth was set up and the transfer to Portsmouth occurred. The plaintiff companies invite the Court to draw an inference from this and later conduct that Mr Kotzikas advised or suggested that Mr Brosnan transfer personal assets out of his ownership. Mr McIntyre submitsthat the focus on getting assets out of Mr Brosnan's name is reinforced by Mr Kotzikas's evidence that he believed he was purchasing the Sidey Street propertyfrom Mr Brosnan directly (rather than from Portsmouth, as was in fact the case).[70] Mr McIntyre submits that the conspiracy was carried out (or at least arguably carried out) and has caused damage to the plaintiff companies. If the property had remained in the ownership of Mr Brosnan, the liquidators of ComfortPlus would have been able to have the transfer of Sidey Street from Mr Brosnan to Portsmouth declared void under s 60 Property Law Act and would have been able to sell the property and release an equity of $147,000 to the creditors of ComfortPlus.[71] In summary, Mr McIntyre submitted that the single element truly in issue in relation to the alleged conspiracy is whether the alleged conspirators had the alleged purpose to benefit Mr Brosnan and Ms Jackson to the detriment of the creditors of Mr Brosnan and ComfortPlus.Submissions for Mr Kotzikas[72] Mr Ormsby submitted that the conspiracy pleading against Mr Kotzikas (and others) based on an alleged breach of s 60 of the Property Law Act must fail for four reasons:(i) Section 60 of the Property Law Act does not actually apply in the pleaded circumstances.(ii) There is no evidence that Mr Kotzikas was part of any conspiracy.(iii) There is no evidence that Mr Kotzikas was aware of any intention to defeat creditors.(iv) There is no evidence that the effect of the sale of Sidey Street to Mr Kotzikas created any prejudice to creditors.I will examine each of those arguments in turn.Can s 60 of the Property Law Act 1952 apply in the pleaded circumstances?[73] What s 60(1) Property Law Act provided was:Save as provided by this section, every alienation of property with intent to defraud creditors shall be voidable at the instance of the person thereby prejudiced.[74] Mr Ormsby further developed his submissions in relation to s 60. Hesubmitted that s 60 does not create "unlawful means" but rather creates a mechanism whereby a particular transaction can be avoided. That transaction itself, in MrOrmsby's submission, is not an "unlawful act" as required by the authorities.[75] Mr Ormsby referred to the discussion of the nature and application in s 60 by Elias CJ in the Supreme Court in Regal Castings Ltd v Lightbody,8 where Her Honour said:[20] An alienation made with fraudulent intent is an effective alienation, notwithstanding the emphatic language of 13 Eliz c 5 that it is "void". That consequence is made more explicit in modern statutory treatment such as s60 by which such alienations are "voidable at the instance of the person thereby prejudiced". Only creditors or those claiming through them canattack such alienation under s 60. It remains effective until a creditor succeeds in having it set aside[76] Reference may also be made to the judgment of Blanchard and Wilson JJ inRegal Castings, in relation to the expression "intent to defraud" as used in s 60 of theProperty Law Act. Their Honours said:9The expression "intent to defraud" in s 60(1) of the Property Law Act 1952was not happily chosen. But it has been regarded as shorthand for intent to hinder, delay or defeat a creditor in the exercise of any right of recourse of the creditor in respect of property of the debtor. That is how the concept is now expressed in s 345(1)(a) of the Property Law Act 2007. The existence of any such dishonest intent on the part of the debtor is a question of fact and the onus of proving it is upon the party attacking the transaction.[77] While it is thus recognised that the concept of intention to defraud in s 60 was an unhappy expression, (which has been replaced in the current legislation by the concept of an intent to hinder, delay or defeat a creditor in the exercise of any right of recourse of the creditor in respect of the debtor's property), a dishonest intent on the part of the debtor remained an integral aspect of s 60.[78] I find it unhelpful on the facts of the present case to focus narrowly on the concept of "unlawful means" and the characterisation of s 60 as providing a remedyrather than establishing the category of unlawful conduct. As the analysis of French J in ABC Developmental Learning Centres indicates, an alternative way of expressing the requirement of unlawful means is to say that the conduct would havebeen actionable if done by one person alone. The plaintiff companies' pleading isintended to allege an "intent to defraud creditors" through its reference to s 60 of the8 Regal Castings Ltd v Lightbody [2009] 2 NZLR 433 (SC), at 460.9 Ibid, at [52].Property Law Act, and by the concluding words of paragraph 58 of the amended statement of claim: to benefit Dale Brosnan and Jane Jackson to the detriment of the creditorsof Dale Brosnan and/or ComfortPlus.[79] Mr McIntyre emphasised that s 60 Property Law Act is but one mechanism through which the Courts respond to cases of fraud. I have made reference to the observations of Cooke P in Swann v Secureland Mortgage Investment Nominees Limited.10 Later in his judgment the President, having found that what was perpetrated upon Mrs Swann was "transparently a fraudulent scheme" and indeed "a fraudulent conspiracy", discussed various sources of the Court's jurisdiction torespond to that situation:11In my view it does not matter in this case whether this is done under s 60 of the Property Law Act 1952 or in the jurisdiction over "equitable" fraud or common law fraud or all or any of them. Indeed, now that equity and common law are merged or mingled (see Aquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] 3 NZLR 299), I would be disposed to label it simply a case of fraud for which the Courts will give the relief appropriate to the particular case.[80] Mr Ormsby cited the observation of Wild CJ in Re Hale (a bankrupt).12 His Honour said in respect of s 60 of the Property Law Act that:[I]t is an intent to defraud creditors that the section strikes at. It is not directed to an intent merely to prefer one creditor or class of creditors against the general body of creditors.[81] But the pleading against Mr Kotzikas is not that the conspiracy involved a preference of one creditor above the general body of creditors. It is expressly a pleading that the debtor himself (together with Ms Jackson) was to benefit at the cost of the creditors of Mr Brosnan and/or ComfortPlus.[82] As the discussion of jurisdiction by Cooke P in Swann indicates, s 60 of the Property Law Act is but one jurisdictional tool which responds to fraudulentconspiracies. The jurisdiction within s 60, however, indicates that for the "fraud"responded to by that section an aggrieved creditor will have a right of action. The10 Above, n 7.11 Ibid, at 148.12 Re Hale (a bankrupt) [1989] 2 NZLR 503 (CA) at 506.fact that the period within which s 60 permits the remedy under the Act to be granted may have expired by the time particular creditors come to Court cannot cut across the right of that creditor to seek a remedy against conspirators for a conspiracy involving the unlawful means.Was Mr Kotzikas aware of Mr Brosnan's intention?[83] As my earlier discussion of the intention of those involved indicates,13 I regard this as an inherently inappropriate case to dismiss summarily the plaintiffcompanies' allegations of a fraudulent intent.[84] In his submissions Mr Ormsby referred me to aspects of the evidence which might indicate that Mr Kotzikas believed the net funds left over after sale would be used by Mr Brosnan to meet his debts. But the correct conclusions to be drawn from all the evidence remain properly matters for cross-examination and determination at trial.Was there an intended injury or prejudicial effect?[85] Mr Ormsby submitted that on the facts of the case none of the plaintiffs could possibly have been prejudiced by the transfer from Portsmouth to Mr Kotzikas in terms of s 60(1) of the Property Law Act because of four factors:(a) If the companies had any claims in relation to Sidey Street while it was held by Portsmouth, then those claims could equally be advanced to give the proceeds of sale by Portsmouth to Mr Kotzikas.(b) The transfer of Sidey Street from Portsmouth to Mr Kotzikas was for the full value of the sum of $250,000.(c) The mortgage over Sidey Street to Pioneer took priority over any valid claims the companies may have had in respect of the proceeds of sale of Sidey Street to Mr Kotzikas.13 Above, [54].(d) The mortgage to Pioneer having been discharged following the Portsmouth/Kotzikas transfer, the net balance of the consideration paid by Mr Kotzikas (approximately $113,000) was held by Tomlinson Paull.(e) Against the background of these propositions, Mr Ormsby'ssubmission was that the disposition of Sidey Street to Mr Kotzikas left the companies in no worse position than they would have been had the sale to Mr Kotzikas not occurred. He therefore submitted that it was untenable to argue that the plaintiffs were prejudiced in terms of s 60 Property Law Act.[86] Mr McIntyre's response was succinct. He submitted that damage had in factbeen caused to the companies. If the property had remained in the ownership of Mr Brosnan, the liquidators of ComfortPlus would have been able to have the transfer of Sidey Street from Mr Brosnan to Portsmouth declared void under s 60 of the Property Law Act and would have been able to sell the property and release the equity to the creditors of ComfortPlus.[87] In relation to the tort of conspiracy, it is inappropriate to focus on whether prejudice in fact flowed through the unlawful means themselves. The question in relation to damage actually incurred is whether that occurred as a result of the conspiracy (whether or not it flowed from the unlawful means themselves). In this case it is at least arguable that, out of the events which the conspirators allegedly combined upon, the companies have sustained damage. At the level of money received by Mr Brosnan, he became free to deal with that money as he chose and the evidence suggests that none of it went to the benefit of his creditors. That is sufficient in itself to indicate an arguable level of damage to the creditors. Beyond that, however, at the level of the funds held in the interim through the sale of Sidey Street, it is arguable that the transaction produced less equity through the sale to Mr Kotzikas than it would have through the sale at arms length. The sale to MrKotzikas at a figure less than the current valuation and Mr Kotzikas's on-sale at a figure above his purchase price indicates at least an argument as to damage resulting from the alleged conspiracy.[88] Turning then to focus on the alleged tortious conduct itself (as against the ensuing damage) it is not appropriate to focus solely on whether the alleged unlawful means would have caused the damage. It is sufficient that the conspirators, using an unlawful means, intended to injure a plaintiff. The unlawful means themselves may have been only one aspect of the combined scheme. Another aspect of the scheme may have caused the damage. In this case, it is arguable that the intention of the defendants was to cause injury to creditors including the companies.Conclusion – conspiracy by unlawful means[89] Mr Kotzikas is unable to meet the onus upon him in relation to either the strike out or summary judgment upon the plaintiffs' conspiracy cause of action. This flows from the immediately preceding discussion.[90] The conclusion is also reinforced by the necessary focus in this case upon issues of intention which are most often inappropriate for resolution in a summaryway. Mr Ormsby's submissions at several points would have the Court essentiallyaccept Mr Kotzikas's word that he was honest throughout. The companies areentitled to have that assumption tested at trial. The need for trial is further reinforced by the unusual and relatively hasty steps associated with the sequence of transactions involved in this case, with fluctuations in price which may ultimately be upheld to have been commercial and innocent but, at least arguably, may not. Mr Kotzikas lent himself to the transaction. The debtor involved (Mr Brosnan), and his partner(in Mr Kotzikas's words, his own "best friend") have not given evidence but are compellable witnesses. This is a case where the plaintiffs are entitled to have the issues explored and determined at trial.Costs[91] Mr Kotzikas has succeeded in his strike out application in relation to one cause of action but failed in relation to the other. He cannot succeed on his summary judgment application. Costs should be dealt with now. My immediate impression is that the just outcome is that costs should lie where they fall having regard to the even balance of outcome. The matter is left with counsel to discuss and agree if possible. Failing agreement submissions are to be filed, with Mr McIntyre to file hissubmissions first (limit four pages) and Mr Ormsby to file his submissions within five working days thereafter. Costs would then be dealt with on the papers.Orders[92] I order –(a) The cause of action pleaded against the defendant as "knowing assistance" is struck out.(b) The defendant's application for leave to bring an application forsummary judgment and/or strike out in relation to the cause of actionpleaded as "conspiracy by unlawful means" is dismissed.(c) The costs of the applications are reserved.Solicitors:Collins & May Law Office – Eugene@collinsmay.co.nzCounsel: amcintyre@beachcroft.comYoung Hunter - cjh@younghunter.co.nz als@younghunter.co.nz sgg@younghunter.co.nzWynn Williams - jared.ormsby@wynnwilliams.co.nz henry.holderness@wynnwilliams.co.nzDuncan Cotterill - j.forsey@duncancotterill.comCounsel: r.raymond@canterburychambers.co.nz