CAYMAN ISLANDS Law and Practice Contributed by: Alan Bercow, Jae Shin and Ross McLeod, Appleby
who may not have committed any underlying wrongful act, and the claim can bring in par - ties who have become involved (although they might not be the main wrongdoer). A conspir - acy involves two or more parties combining or agreeing to take concerted action that results in damage being caused to the victim of the con - spiracy. As noted in 1.1 General Characteristics of Fraud Claims , there are two types of con - spiracy (unlawful means conspiracy and lawful means conspiracy); however, in the context of commercial fraud, unlawful means conspiracy is the more common. Unlawful means conspiracy This involves two or more parties combining or agreeing with the intent of injuring another party, taking concerted action using unlawful means (carrying out unlawful acts), resulting in damage actually being caused to that party. As the name suggests, the use of unlawful means is an essential ingredient. Both crimes and civil wrongs can constitute unlawful means. Although what amounts to unlawful means is case-specif - ic, examples of unlawful means include: • inducing or procuring a breach of contract; • transactions at an undervalue; • preferences; • transactions defrauding creditors; and • contempt of court. Although intent to injure the victim of the con - spiracy is required, it is not necessary for this to be the sole or predominant intention. Lawful means conspiracy This involves two or more parties agreeing or combining to do lawful acts with the sole or pre - dominant intent of injuring the victim, resulting in damage being suffered by the victim. The tort of lawful means conspiracy can make two parties
liable for an act that would not have given rise to liability if it had only been carried out by one party. One of the difficulties is proving sole or predominant intent to injure; a common defence is for the defendant to claim that they were pur - suing their own self-interest. Dishonest Assistance Liability for dishonest assistance involves liabil - ity on the part of a non-fiduciary for being an accessory to breach of trust by a fiduciary. The elements are: • a breach of trust or fiduciary duty; • the defendant procuring, inducing or assisting in the breach; and • the defendant acting dishonestly in so doing. The accessory must have not acted as an honest person would, in the circumstances, have acted. In applying this test, it is assumed that an honest person would not participate in a transaction if they know that it involved a misapplication of trust assets (Royal Brunei Airlines Sdn Bh v Tan Liability for knowing receipt involves a party receiving assets in breach of trust in circum - stances where it would be unconscionable for that party to retain those assets. Liability for knowing receipt requires a disposal of assets in breach of a trust or custodial fiduciary duty, the beneficial receipt by the defendant of assets that are traceable as representing the claimant’s assets, and the defendant’s knowledge that the assets received are traceable to a breach of fidu - ciary duty (El Ajou v Dollar Land Holdings PLC (No 1) [1994] 2 All ER 685). In a case involving a company that went into liquidation in the Cayman Islands (Saad Invest - [1995] 2 AC 378). Knowing Receipt
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