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The Conspiracy, Collusion and Inducement of the Breach
32. Unbeknownst to the Plaintiff at the time, the Defendant, Cryptologic, and others unknown to the Plaintiff but known to Cryptologic conspired and colluded with and amongst one another and with others unknown to the Plaintiff and attempted unsuccessfully to recruit into the conspiracy and collusion TST in an effort to unlawfully and improperly convince TST to alter, amend and fabricate test results suggesting that the product was unsound, not commercially viable and wholly unfeasible notwithstanding that the test results showed that the Game and Product developed by Websports was sound, commercially viable and practically feasible with little or no structural faults. The conspiracy and collusion referred to herein was designed to further take advantage of the Plaintiff and to cause the unsuspecting Plaintiff once presented with the altered and bogus test results to release and remise Cryptologic from all obligations Cryptologic had obliged itself to under the terms of the letters of intent, the joint venture agreements and the agreements reached with Websports without lawful excuse and or without Cryptologic having to uphold and perform its end of the bargain. The conspiracy herein referred to was further designed to allow Cryptologic the opportunity to amend the game after having been provided with full and unfettered access and disclosure of all of the nomenclature and the architecture, the software and all of the code for the Game and to either reconfigure and or disguise the Game and present the Game as Cryptologics’ own Game in due course thereby eliminating the necessity and obligation of sharing the success and the profits of which Cryptologic was sure of after having investigated the Game and Product to the extent that they had and after having reconfirmed all of the assumptions and projections of the business plan and the model presented to Cryptologic by the Plaintiff at the first meetings to the direct detriment of the Plaintiff.
33. Particulars of the said conspiracy include but are not limited to the following:
a) The Defendant and others not known to this Plaintiff but certainly known to Cryptologic agreed and conspired amongst themselves and with one another, and communicated for the purpose of unlawfully and improperly depriving and denying the Plaintiff information and test results achieved by TST and by extension the viability of the Game and Product and the conspirators communicated for this purpose at dates and times not known to the Plaintiff but known to the Defendant;
b) the object of the conspiracy was to deprive, deny, misappropriate, deceive, conceal, manipulate and re-engineer test results which otherwise shed a very positive light on the Game and Product that the Plaintiff had developed in an effort to misappropriate the technology, the intellectual property, the investment already made by the Plaintiff and the toil of the Plaintiff and to avoid responsibilities and obligations incurred and agreed to by the Defendant;
c) in furtherance of the conspiracy, the Defendant deceived and misrepresented to the Plaintiff the nature and scope of the test results and certification process that they had completed;
d) the Defendant together with its co-conspirators who are not known to the Plaintiff but who are known to the Defendant fabricated, concealed, manipulated and re-engineered or attempted to convince and recruit others including TST into the conspiracy and collusion to fabricate, conceal, manipulate and re-engineer the test results and the certification reports that had been the task of TST and continued to create, invent and conceive of manners, methods, schemes and techniques to continue to give the Plaintiff false and misleading reports with respect to the commercial viability of the Game and Product in order to avoid obligations it had voluntarily entered into and in order to misappropriate and convert the intellectual property into its own for its own use and benefit;
e) on the strength of and relying upon the disclosure that was being made and controlled by the Defendant to the Plaintiff and the ruse that was being staged by the Defendant and the co-conspirators which all appeared to be valid and regular on its face, the Plaintiff set out on a course of action which was detrimental to its own interests and incurred damages and costs as a direct result.
34. The Plaintiff states and the fact is that the Defendant together with its co-conspirators who are not known to the Plaintiff but who are known to the Defendant and or Noelting and Sevingny each conspired and colluded among and between themselves during the summer of 2001 in order to convince Cryptologic and indeed used all of their respective influence and power within Cryptologic to induce, encourage and persuade Cryptologic to avoid the agreement with Websports at all costs and to do or engage in any activity including but not limited to the conspiracy set out herein necessary to avoid the agreement and the responsibilities and the liabilities outlined therein. The Plaintiff states and the fact is that the Defendant breached the agreement and the obligations it had with Websports as set out herein as a result of being influenced by others unknown to this Plaintiff to do so and the Defendant further recruited others unknown to this Plaintiff as willing and active participants in the conspiracy and collusion set out herein and in so doing the Defendant is liable to the Plaintiff for the amounts claimed in this Statement of Claim as a result causing the Plaintiff damages by inducing a breach of contract and as a result of the Defendants’ intentional interference with the economic interests of the Plaintiff.
Websports has Suffered Significant Damages
35. The refusal of Cryptologic to fulfill its obligations and perform in accordance with the Agreement to Websports, both under the Agreement and otherwise, including its funding obligations, and its conduct contrary to the Letter and the spirit of the Agreement, may jeopardize Websports’ ability to carry on its operations, resulting in the loss of its significant investment of approximately $3.5 million and the loss of the anticipated profits expected from the successful development of the Product.
36. Further, Cryptologic has failed to render any operational input or advice as promised and has failed to participate in the development of the Product despite the ownership interest intended to be allocated to it.
37. Websports states that the Pro Forma Statement of Revenue in respect of the Product, which were acknowledged as accurate by both parties, projected that Websports would earn One Hundred and Fifty Million U.S. Dollars ($150,000,000.00 US) over the next 7 years if the Agreement was carried out. Compensation of the amount pleaded in the claim herein would put Websports in the position that it would have been in had Cryptologic fulfilled its obligations under the Agreement.
38. Under the Agreement, it was intended that both parties would use their best efforts to ensure that the Product was in a position to be launched in February 2002, in time for the 2002 baseball season. This is no longer possible.
39. Websports further states that Cryptologic’s failure to fulfill its obligation under the Agreement has delayed the progress of the development of the Product and may cause other competitors to advance their position in the marketplace at Websports’ expense.
Punitive Damages
40. Cryptologic has conducted itself in a high handed, arrogant, ill spirited, vexatious and malevolent manner, with utter and complete disregard for the commitments and obligations it assumed to Websports both under the Agreement and otherwise. As a result of its leadership position in the software gaming industry, Cryptologic must believe that it can bully its contracting parties to do what it wishes and to renegotiate contracts to its liking. Websports requests that this Honourable Court send a message to Cryptologic saying that it cannot do so and that obligations that were agreed to must be performed to the extent agreed to.
41. On the basis of the above, the Plaintiff seeks the relief set forth in the statement of Claim herein and in particular paragraphs 1 and 2 herein.
42. The Plaintiff proposes that this action be tried at Toronto.
November 25, 2002
Marcello Di Francesco
Barrister & Solicitor
Suite 22,
200 Edgeley Blvd.
Vaughan, Ontario L4K 3Y8
Marcello Di Francesco
Tel 905.761.2815
Fax 905.761.6662
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