Shareholders and others are warring over ownership of the assets of a cashless vending start-up after a related company went into liquidation last year.
Convendium was the developer of the technology while Eftpos Vending, the licensee, was placed into liquidation last April. Convendium was removed from the Companies Register in November and then reinstated.
The first liquidators' report on Eftpos Vending stated that questions were raised over ownership of the right to many of the vending sites and of the software operating systems in the machines.
"The liquidator decided to keep trading the company until these problems could be resolved," the report stated. "To have ceased the business at the commencement of liquidation would have resulted in major losses on sale of the equipment, together with storage and moving costs."
Convendium founder and director Paul Monnery and Julie Monnery are also suing a range of parties over those ownership issues, according to High Court judgment released in December.
They allege each of the defendants, mostly fellow shareholders and investors but also developers, intentionally caused the plaintiffs economic harm by unlawful means and were complicit in a conspiracy to injure their interests.
One defendant, Sandfield Associates, developed software for Convendium, ownership of which is at the heart of the dispute. With the support of other defendants it has asserted ownership of the software, the judgment added.
The plaintiffs allege Eftpos Vending made changes the vending machines it operated to divert Convendium's share of the revenues to Eftpos and other entities and further diverted revenues from Eftpos to deny any benefit to the plaintiffs.
Also at issue is ownership of a cashless laundry solution developed jointly by Convendium and Speed Queen.
The judgment says the defendants claim ownership pursuant to contractual arrangements and because Convendium did not pay for the software.
They say they were motivated not by any intention to harm Convendium (in which several of the defendants were themselves shareholders) or to harm the plaintiffs but to protect their investments and "salvage what they could".
The judgment noted that the plaintiffs’ claim faces significant difficulties in establishing intention to cause harm and that the plaintiffs acted together to do so.
"Such evidence as is before the Court at this stage suggests that Convendium was obliged to pay for the software before it could claim ownership, and it is quite clear that it did not do so," it says. "None of that is to say that the plaintiffs’ case is doomed to fail."
They may be able to establish that one or more of the defendants formed the necessary intention and caused the plaintiffs economic harm. Further, the conspiracy cause of action does not necessarily require unlawful action on the part of any conspirators.
There is also scope for aspects of the case to be recast as it proceeds and for new evidence to emerge.
The defendants went to court asking for security of costs totalling $125,000 in the event the plaintiffs lose their case. The High Court in Wellington ordered $50,000 in security be paid in two tranches when and if the case proceeds.