Introduction
Principles of a dishonest assistance claim
Knowing receipt
Comment
The torts of dishonest assistance and knowing receipt have long been recognised in the New Zealand courts. The New Zealand courts tend to apply the English authorities on these torts, as they do in many other areas of the common law, with any necessary adjustments for the New Zealand context. In 2020, the New Zealand High Court provided a comprehensive background and analysis on the law of dishonest assistance and knowing receipt in both England and New Zealand.(1)
The case involved the operation of a Ponzi scheme with losses of $115 million. For over 20 years, David Ross, through Ross Asset Management Ltd (RAM), purported to operate an investment fund for clients. Their money was to be held on trust for the client by RAM in a separate bank account. RAM opened a bank account with ANZ Bank New Zealand Ltd (ANZ) in 1990. Until 2002, client money was kept in sub-accounts under each client’s name. In 2002, RAM opened another account in the name “Ross Asset Management Ltd Client Account”. From then on, clients made deposits into that account.
RAM combined client money with its own money and used client money to make payments to David Ross, to pay for RAM’s operating expenses and to make payments to other clients as the supposed returns on their investments. The Ponzi scheme collapsed in 2012 when some investors found they were unable to withdraw money from RAM. Claims were brought against…
