Kea Investments Ltd v Wikeley [2023] QSC 79

[1] This is an application brought ex parte for interim injunctive relief and other relief, pursuant to ss 25 and 26 of the Trans-Tasman Proceedings Act 2010 (Cth) (the Act).

[2] The applicant is Kea Investments Ltd (Kea), a company incorporated in the British Virgin Islands and owned solely by Sir Owen Glenn (Sir Owen). Kea asserts that it is the subject of a significant international fraud perpetrated against it by several parties, but relevantly for present purposes, the respondent in this proceeding, Kenneth David Wikeley. It is said that the conspiracy arises out of a long-running dispute between Sir Owen and Eric Watson who was found by the High Court of Justice of England and Wales to have fraudulently induced Kea and Sir Owen to part with the sum of £129 million.[1]

[3] Kea asserts that as part of this conspiracy, a New Zealand company, the Wikeley Family Trustee Ltd (WFTL) and Mr Wikeley, who is the sole shareholder and director of the company, fraudulently procured the Fayette Circuit Court in Kentucky in the United States (Kentucky Court) to issue a default judgment in favour of WFTL against Kea for in excess of US$120 million.[2]

[4] Mr Wikeley presently lives in Queensland with his sister, but there was material before the court in which Mr Wikeley has sworn to the fact that his permanent home is in Ukraine.

[5] Kea has commenced a proceeding in the High Court of New Zealand against WFTL, Mr Wikeley and Mr Watson. In that proceeding, Kea seeks relief with respect to the Kentucky judgment and damages for tortious conspiracy. In support of that proceeding, Kea obtained interim and interlocutory injunctive orders against WFTL and Mr Wikeley, restraining them from enforcing the Kentucky judgment in any way: a form of anti-suit injunction. Initially, WFTL and Mr Wikeley appeared to comply with the injunctions ordered in the New Zealand proceeding.

[6] Very recently, within the past few days, Kea has become aware that Mr Wikeley has taken steps to contravene the orders made by the New Zealand court and is attempting to avoid the effect of those orders. Most relevantly, the conduct by which Mr Wikeley is said to have sought that effect is by purporting to assign the Kentucky judgment from WFTL to a new Kentucky company called Wikeley Inc, incorporated for the apparent purpose of frustrating the orders made in the New Zealand proceeding.

[7] On 6 April 2023, Kea obtained ex parte orders from the New Zealand court further restraining Mr Wikeley and WFTL and placing WFTL under the control of a provisional liquidator.

[8] In this application, in order to properly secure Mr Wikeley's compliance with the orders made in the New Zealand proceeding, Kea seeks the assistance of this court to grant interim relief against Mr Wikeley under s 25 of the Act. It is submitted, and I accept, that Mr Wikeley's presence in Queensland makes him amenable to the jurisdiction of this court and to its processes for enforcement, including committal for contempt if he breaches its orders.

[9] There is some urgency to the resolution of this application. That is why these reasons were delivered ex tempore, notwithstanding the seriousness of the restraints imposed.

[10] That urgency arises in circumstances where a hearing has been scheduled for 14 April 2023 to substitute the purported assignee of the Kentucky judgment as plaintiff in the Kentucky proceeding. Kea also seeks an interim order restraining Mr Wikeley from departing Australia and to deliver up his passport, and further, or alternatively, an order under s 100 of the Civil Proceedings Act 2011 (Qld) (Civil Proceedings Act) and r 935 of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR) for the court to issue a warrant for his arrest.

[11] The material filed in support of the application consisted of an affidavit of Matthew Harris, a partner of the firm Gilbert Walker, who are the New Zealand solicitors engaged by Kea in the New Zealand proceeding, and two affidavits of Matthew Deighton, a partner of Colin Biggers & Paisley Lawyers who act for Kea in the present application. That material included all material that was put before the New Zealand court, both on the initial application for interim relief, and in the subsequent challenge to the continuation of that interim relief on an interlocutory basis.

[12] The background to the present application is set out in the reasons of Gault J for granting interim relief in the New Zealand proceeding:[3]

"[6] In 2011-2012, Mr Watson sought to persuade Sir Owen Glenn to make investments with him. Investments followed but the relationship broke down around 2013, which led to disputes.

[7] On 31 July 2018, the English High Court ruled that Kea and Sir Own Glenn [sic] had been fraudulently induced to participate in an investment called Project Spartan at a cost of £129 million. The architect of the fraud was Mr Watson. Nugee J was 'completely satisfied' that Mr Watson had 'resorted to deliberate deception'. The Judge also found that Mr Dickson, Kea's director at the relevant time, had breached his fiduciary duties to Kea. Mr Watson was subsequently committed to prison for contempt for his failure to comply with disclosure orders following the English judgment. Kea is still trying to enforce the judgment against Mr Watson.

[8] On 29 June 2022, Kea and its English solicitor received a letter from a BVI-based law firm attaching a statutory demand seeking to enforce against Kea a judgment debt of USD136,290,994 (including interest and court/service costs). The statutory demand indicated that WFTL, as trustee of the Wikeley Family Trust (a New Zealand trust), had obtained a default judgment against Kea from a Court in Kentucky, USA dated 31 January 2022 for alleged breach of a purported 'Coal Funding and JV Investment Agreement' said to have been executed in 2012 (Coal Agreement). This June 2022 letter was the first Kea had heard of both the Coal Agreement and the Kentucky Court proceeding. The Coal Agreement was not provided to Kea with the statutory demand; it was provided on 7 July 2022. Kea considers the Coal Agreement, and the claims made under it, are fabrications constructed by Mr Wikeley and Mr Watson to defraud Kea.

[9] Following enquiries with Kea's registered agent in BVI, Kea learned that the First Amended Complaint in the Kentucky proceeding had been delivered to the offices of Kea's registered agent in BVI. However, Kea's registered agent did not pass the complaint on to Kea.

[10] On 12 July 2022, Kea applied to set aside the statutory demand in the BVI. That application is listed for 5 December 2022.

[11] As Kea had not been aware of WFTL's claim in Kentucky, Kea did not take the required steps to defend it. The Kentucky Court entered default judgment against Kea on 31 January 2022 for USD123,750,000 plus interest and costs. The judgment was entered without any hearing and therefore without any examination by the Court of the merits of WFTL's claim.

[12] Kea instructed Kentucky lawyers to apply to set aside the default judgment. That motion to set aside the default judgment was filed on 21 July 2022. It was heard on 7 October 2022 and denied on 18 October 2022 on the ground that Kea had been properly served. The Court held that, because Kea had failed to take steps following service at its registered office, the Court did not have to, and would not, consider whether there was a meritorious defence or whether the plaintiff would suffer detriment if the judgment was set aside.

[13] On 21 October 2022, Kea issued a motion to amend, alter or vary (MAAV) the denial of its application. This was heard on 28 October 2022 and the Court indicated that it would deny the motion. As at the date this proceeding was commenced, that order had not been entered. Kea intends to issue and serve an appeal against the order of 7 October 2022 and the dismissal of the MAAV as soon as possible. However, any appeal will take time and Kea is concerned there is a substantial risk that the Kentucky Court of Appeal will take the same approach as the first instance Judge and not consider the merits.

[14] On 10 October 2022, WFTL served notice on Kea that it intended to serve (reissued) Kentucky subpoenas on some 11 banks in Kentucky and New York, and a New Jersey subpoena on a bank in New Jersey, effectively seeking details of all dollar transactions carried out by Kea since 1 January 2012. Kea is taking steps in relation to such subpoenas and a hearing is scheduled in Kentucky on Friday 4 November 2022 in which it will seek to pause subpoenas and interrogatories, but Kea is concerned that, as the Kentucky Court has refused to set aside the default judgment and consider the fraud issue, it will not entertain further argument along those lines.

[15] The Coal Agreement purports to be an agreement between Mr Wikeley as trustee for the Wikeley Family Trust New Zealand and Kea represented by Mr Dickson. It is dated 23 October 2012 and witnessed by Mr Watson. It purports to commit Kea to provide capital to fund coal investments presented by Mr Wikeley. Kea considers the document is a forgery or at least unenforceable, essentially on the grounds that:

(a) In the nine years between the purported agreement and the Kentucky proceeding, WFTL had made no demand on or complaint to Kea in relation to funds payable under the agreement; there was no pre-action correspondence.

(b) Kea has no records relating to the Coal Agreement. No such documents were provided in 2013 when Mr Dickson was ordered by the Nevis Court to provide all of Kea's records. Nor is an interest under the Coal Agreement mentioned in the list of assets provided under the Nevis Court order.

(c) Neither Sir Owen Glenn, nor Mr Munro of the Nevis professional trustee, nor any of Kea's current directors, had any knowledge of the Coal Agreement prior to receipt of the statutory demand.

(d) The Coal Agreement is irregular, oddly formatted and not professionally drafted.

(e) The Coal Agreement makes no commercial sense. It involves the payment of very significant sums of money to the Wikeley Trust in return for very little.

(f) Mr Wikeley incorporated WFTL in New Zealand on 23 July 2021, shortly before commencing the Kentucky proceeding.

(g) On the date that Mr Watson ostensibly witnessed the signatures of both Mr Wikeley and Mr Dickson, Mr Dickson was in Paris. Mr Wikeley's subsequent evidence in Kentucky conflicts with WFTL's own complaint and the document itself.

(h) There is no mention of the Coal Agreement in the detailed meeting pack for the meeting in Paris on 23 October 20212 (when Mr Wikeley now claims it was signed by Mr Dickson), or in any of the emails setting up that meeting with Mr Dickson.

(i) WFTL has not produced any document showing or evidencing any requests for drawdowns under the agreement, or any documents evidencing that it was entered into or performed, other than the purported agreement itself.

(j) WFTL's Kentucky lawyer has refused to say whether he or his client has the original of the agreement.

(k) Mr Watson appears to be supporting WFTL in its Kentucky litigation. WFTL has produced documents from the Spartan litigation trial bundle in evidence in Kentucky despite the fact that neither it nor Mr Wikeley were involved in that litigation.

(l) Mr Wikeley, Mr Watson and Mr Dickson have all been subject to adverse findings by the English or New Zealand Courts. ..."

[13] As can be seen from this passage, Kea asserts in the New Zealand proceeding that the agreement which underlies the Kentucky judgment as the foundation for the claim against Kea for damages for breach of contract, is a fabrication and otherwise unenforceable.

[14] On 16 December 2022, Kea obtained ex parte injunctive relief against respondents which included Mr Wikeley, restraining them from taking any steps to enforce the Kentucky judgment. Those orders were continued inter partes by judgment given on 10 March 2023.[4]

[15] Importantly, for the purposes of the present application, those orders provided, by paragraph 3(b), that WFTL was restrained from pursuing any litigation or taking any steps to enforce or otherwise act on the agreement said to underpin the Kentucky judgment, which is referred to in the materials as the Coal Agreement, as well as the Kentucky judgment itself, and further, a statutory demand made by WFTL by its solicitors to Kea for the sum of more than US$136 million, pursuant to s 155 of the Insolvency Act 2003 (British Virgin Islands).

[16] The orders further provided, by paragraph 3(f), that Mr Wikeley was restrained from taking any steps to procure, encourage, assist, or otherwise cause WFTL or the Wikeley Family Trust to take steps in violation of the orders including the restraint set out in paragraph 3(b) and then, in paragraph 3(g), that without limiting paragraph 3(f), none of the defendants shall sell, assign, gift, or grant any security interest in or over, or otherwise, in any way whatsoever, transfer or encumber any interest any of them may have directly or indirectly in any rights any of them may have under or in connection with the Coal Agreement or the Kentucky judgment.

[17] It was plain on the face of the orders made by the New Zealand court that Mr Wikeley was restrained from causing or permitting WFTL to assign the Kentucky judgment. WFTL and Mr Wikeley initially appeared to comply with those orders. That conduct included notifying banks that had been the recipients of subpoenas of an extension of time for compliance and consenting to an adjournment of Kea's application in the British Virgin Islands to set aside the statutory demand. The subpoenas to the banks constituted relief obtained by WFTL for the purpose of enforcing the Kentucky judgment by locating assets held by Kea.

[18] After the application by the respondents in the New Zealand proceeding to dismiss or stay that proceeding on jurisdiction and forum grounds, the solicitors for those parties indicated that WFTL and Mr Wikeley had instructed them to seek leave to appeal that decision and to change their legal representation. A request was made that no other steps be timetabled until the change in representation had been effected. Kea opposed that delay.

[19] Directions were made in the New Zealand proceeding that, relevantly, the defendants file and serve their defences in that proceeding by 14 April 2023.

[20] On 5 April 2023, Kea became aware that Mr Wikeley had taken steps in Kentucky to incorporate Wikeley Inc.

[21] That company was incorporated on 28 March 2023, and on 30 March 2023, Mr Wikeley signed documents in Brisbane purporting to assign the Kentucky judgment debt, and the Coal Agreement said to underlie that judgment, from WFTL as trustee of the Wikeley Family Trust to Wikeley Inc.

[22] On 4 April 2023, Mr Wikeley caused WFTL to apply to the Kentucky Court for Wikeley Inc to be substituted as plaintiff in the Kentucky proceeding together with motions that Wikeley Inc would bring upon substitution to compel discovery from Kea of documents relevant to the location of assets, as well as an anti-suit injunction, restraining Kea from continuing the New Zealand proceeding.

[23] That substitution motion is scheduled to be heard by the Kentucky Court on 14 April 2023. It was as a result of those developments, including the contravention of the New Zealand orders by the purported assignment, that on 6 April 2023, Kea obtained further ex parte orders in the New Zealand proceeding, including orders restraining WFTL and Mr Wikeley from taking steps to enforce or otherwise act on the purported assignment of the Kentucky judgment and requiring them to withdraw, adjourn, or otherwise seek a continuance of the Kentucky hearing, scheduled for 14 April 2023.

[24] The orders made on 6 April 2023 and a minute accompanying the making of those orders were served on Mr Wikeley and WFTL on 6 April 2023 by service on their New Zealand solicitors and a further copy of the orders were served on those parties' Kentucky lawyers who also acts for Wikeley Inc.

[25] At the time Mr Harris swore his affidavit for this application, he had received no response from or on behalf of Mr Wikeley or Wikeley Inc.

[26] This application was brought ex parte without notice to Mr Wikeley.

[27] Rule 27(2) of the UCPR provides that the requirement for service of an application prior to hearing does not apply if the rules, an Act, or another law, permit the application to be heard and decided without being served.

[28] By r 27(3), if an application is not served as required by r 27(1), the court must not hear and decide the application unless the court considers it just to hear and decide the application on the days set for hearing, and one of three alternatives applies.

[29] By r 27(4), where an application is not served as required by r 27(1), the court may make an order on an undertaking given by the applicant and acceptable to the court, and that a person affected by the order may apply to the court for it to be set aside. Kea has, through its counsel, offered the usual undertaking as to damages. That undertaking was also provided in the New Zealand proceeding.

[30] I also note that the proposed form of orders provides, consistently with r 27(4), that any party affected by the orders may apply to the court for the orders to be set aside or varied.

[31] Kea submits,[5] and I accept, that the conditions for hearing the application without notice to Mr Wikeley are satisfied in the circumstances of this application. I note:

(a) the application for injunctive relief in the New Zealand proceeding was initially heard without notice as the New Zealand court was satisfied that if the respondents were perpetuating a fraud, as Kea claims, they might take steps to defeat the injunction before it was granted if they had notice, including by taking steps in the Kentucky proceeding;

(b) Mr Wikely's conduct in purporting to assign the Kentucky judgment from WTFL to Wikely Inc and brining a motion in the Kentucky proceeding to substitute Wikely Inc as plaintiff;

(c) the urgency resulting from the scheduling of the hearing of the motion in the Kentucky proceeding for 14 April 2023, and the harm Kea would potentially suffer by reason of the delay caused by notice;

(d) the grant of further ex parte injunctive relief in the New Zealand proceeding on 6 April 2023;

(e) the relief sought in this application to prevent Mr Wikely from departing the jurisdiction could easily be defeated by notice;

(f) the proposal that the relief would operate until an early return date for contested argument; and

(g) Kea's offer of the usual undertaking as to damages.

The present application under the Trans-Tasman Proceedings Act

[32] Section 25 of the Act permits a party to a New Zealand proceeding to apply to this court for interim relief in support of the New Zealand proceeding.

[33] Section 26(1) of the Act provides that on that application, this court may grant interim relief:

(a) if the court considers it appropriate to give the interim relief in support of the New Zealand proceeding; and

(b) if a proceeding similar to the New Zealand proceeding had been commenced in this court, this court:

(i) would have had power to give the interim relief in that similar proceeding; and

(ii) would have given that relief.

[34] Although the applicant was not able in the time available to identify any authority on the operation of ss 25 and 26 of the Act, it did refer to a statement by Atkinson J on the purposes of the Act in Z847 Limited v Skelton.[6]

[35] That purpose is to streamline the process for resolving civil proceedings with a trans-Tasman element, in order to reduce costs and improve efficiency, to minimise existing impediments to enforcing certain New Zealand judgments and regulatory sanctions, and to implement the Trans-Tasman agreement in Australian law. The regime created by the Act is designed to ensure that courts in each country can grant effective relief to support the work of the court in the other country that is hearing the substantive dispute thus saving costs, delay and inconvenience.

[36] I accept the submission that the assistance sought from this court on this application is consistent with the beneficial nature of the Act.

[37] Kea submitted, and I accept, that the New Zealand court considered the application for interim relief under general equitable principles for the granting of interlocutory injunctions, in terms relevantly similar to those which apply in this court and under principles applicable specifically to anti-suit injunctions.

[38] One of the authorities relied upon by the New Zealand court was that of CSR Ltd v Cigna Insurance Australia Ltd,[7] a decision of the High Court of Australia. It was submitted, and I accept, that the relevant principles were those applied recently in Queensland in the Court of Appeal decision of Mackellar Mining Equipment Pty Ltd & Ors v Thornton & Ors.[8]

[39] On the basis of those principles, I accept Kea's submission that, had it commenced a proceeding in Queensland similar to that which it commenced in the New Zealand court, this court would have power to grant the interim relief sought. That satisfies the condition in s 26(1)(b)(i) of the Act.

[40] The next question is whether this court would have granted the relief had a similar proceeding been commenced in this court, or as Kea expressed the question: whether this court ought be satisfied on this application that it would have exercised its discretion to make the injunctive orders, had it been the court with primary conduct of the substantive claim and dealing with the application for interim relief.

[41] I have considered the decisions of Gault J in the New Zealand proceeding. It is apparent from those decisions that the New Zealand court approached the issues before it by considering (a) whether it had personal jurisdiction over the defendants; (b) whether there was a serious question to be tried; (c) whether further steps by the respondents to the application to enforce the Kentucky judgment would be oppressive or vexatious; (d) whether Kea had delayed; and (e) whether the balance of convenience and overall justice favoured the granting of interim relief.

[42] I accept Kea's submission that that is an orthodox approach and one that this court would have adopted if it had been asked to consider the application for interim relief in a hypothetical similar proceeding.

[43] As to the question of jurisdiction, paragraphs [41] to [44] of Kea's written outline of submissions were premised on a hypothetical consideration being undertaken by this court on the basis of transposing relevant facts, including the respondents' connections with the jurisdiction to a Queensland setting.

[44] As I expressed during the course of argument, I have reservations about this being the correct approach. However, it is not necessary for me to say anything further about that, because I am satisfied that, even on the facts taken as they are, the element of jurisdiction would have been satisfied in a hypothetical similar proceeding.

[45] In that regard, I note that this court plainly has jurisdiction over Mr Wikeley, given his presence in the jurisdiction. Further, I consider that Mr Wikeley's conduct in Queensland which includes swearing an affidavit used in the Kentucky proceedings and executing the purported assignment of the Kentucky judgment from WFTL to Wikeley Inc has a sufficient connection to make Queensland an appropriate forum if a similar proceeding had been brought in this court.

[46] On the issue of a serious question to be tried, I note the reasons of Gault J:[9]

"[50] Kea says the evidence discloses a conspiracy between WFTL, Mr Wikeley and Mr Watson to perpetuate a massive fraud on Kea.

[51] As counsel submit, the tort of conspiracy requires that two or more persons combine and agree that at least one of them will:

(a) use unlawful means to cause damage to the claimant; or

(b) conspire to use means that may be lawful in themselves, but are done with the predominant purpose of injuring the plaintiff.

[52] These are often described as 'unlawful means conspiracy' and 'lawful means conspiracy' respectively, but are facets of the same tort.

[53] As submitted, the Court of Appeal in Wagner v Gill set out the essential elements of unlawful means conspiracy:

(a) The existence of a combination of persons: Whether a company can conspire with its directors and/or shareholders is not settled but, in any event, I accept there is a serious question that Mr Wikeley has conspired with WFTL as former trustee and apparently appointor, and has also conspired with Mr Watson and Mr Hussain.

(b) Unlawful action (unlawful means): This limb includes torts, but the better view is that unlawful means also includes breach of contract, criminal offences, breach of fiduciary duty or breach of statutory duties.

(c) Intention to injure the claimant: It is not necessary to prove that the conspirators' sole or predominant purpose was to injure the plaintiff. Something more than mere foreseeability may be required, but it is sufficient that the conduct is directed at the claimant.

(d) Actual damage caused to the claimant: This includes the expense caused to the claimant in exposing and resisting the wrongful activities of the defendants.

[54] Counsel submit the Coal Agreement and Mr Wikeley's Kentucky affidavit alone provide strong grounds for suspecting fraud, particularly when combined with the complete absence of any pre-action correspondence. Addressing the four elements above, I accept that the evidence filed with the application demonstrates an arguable if not strong prima facie case of tortious conspiracy:

(a) The evidence indicates that Mr Wikeley and Mr Watson (and WFTL) have acted in combination to procure WFTL's enforcement of the Coal Agreement. As indicated, Mr Wikeley is the sole director and shareholder of WFTL, and apparently caused it to be incorporated to act as the trustee of the Wikeley Family Trust and caused it to be appointed in that role. He has sworn an affidavit in the Kentucky proceedings. Mr Watson is identified as the witness to the execution of the Coal Agreement by both Mr Dickson and Mr Wikeley and, if it was forged, is likely to have been party to that fraud. In response to Kea's allegation of fraud, Mr Wikeley's revised explanation in his Kentucky affidavit as to the circumstances in which the Coal Agreement was executed conflict with the face of the agreement and WFTL's earlier Kentucky Complaint (that is, he executed it in New York the month before Mr Dickson executed it in Paris). Mr Watson is said to have received the demands from Mr Wikeley which gave rise to Kea's liability under the Coal Agreement. However, none of Kea's directors since February 2013 have ever received any such demand or heard anything about the Coal Agreement. WFTL has produced in the Kentucky litigation documents bearing unique ID numbers from discovery in the English Spartan litigation that could only have come from Mr Watson. The involvement of Mr Hussain in the attempt to create a fraudulent settlement agreement and then to create a paper trail to permit WFTL to pay money out of its recoveries to companies connected with Mr Hussain and Mr Watson can only have come about through Mr Watson. The English High Court has accepted that Kea has "good grounds" for thinking that Mr Watson and Mr Hussain were acting in concert in the proceedings that were struck out on 12 September 2022. Further support is not needed, but there are also the previous adverse findings of Nugee J concerning Mr Watson and (less directly relevant) of earlier New Zealand Courts concerning Mr Wikeley.

(b) The defendants have used unlawful means to implement their scheme: the use of an allegedly forged document, and/or fraudulent claims made under that document, to procure a financial benefit to which they are not entitled. That would constitute criminal offences under New Zealand law, including dishonest use of a document and obtaining by deception.

(c) The necessary inference would be that the defendants intended, and continue to intend, to harm Kea. The defendants' conduct - the attempt to enforce the Coal Agreement and the default judgment, to obtain information by subpoenas and the issue of a statutory demand - is directed against Kea.

[47] Having considered those reasons and authorities cited at paragraph [45] of Kea's written outline of submissions,[10] I accept the submission that the analysis of the elements of the claim of tortious conspiracy would be substantially the same in a similar proceeding brought in this court.

[48] For the reasons given by Gault J and the analysis of the evidence set out in that judgment, I am also satisfied that this court would have found an arguable primary prima facie case of tortious conspiracy and so concluded that Kea had established a serious question to be tried as to its tortious conspiracy claim.

[49] I further refer to the following paragraphs of Gault J's reasons for granting interim injunctive relief, concerning WFTL's entitlement to have the Kentucky judgment recognised in New Zealand:[11]

"[55] Kea's second cause of action seeks a declaration that the default judgment is not recognised or enforceable as a matter of New Zealand law in order to forestall attempts to deploy the default judgment either in New Zealand or in other jurisdictions.

[56] This Court may grant a declaration that a foreign judgment is not entitled to recognition, even where enforcement proceedings have not yet been commenced. In Pocket Kings Ltd v Safenames Ltd, the English High Court was satisfied that a pre-emptive declaration was appropriate in a case relating to Kentucky.

[57] The Reciprocal Enforcement of Judgments Act 1934 does not apply to judgments from the United States so the question whether the default judgment should be recognised or enforced is governed by the common law. For a foreign judgment to be recognised, the following requirements must be met:

(a) The parties must be the same (or be privies);

(b) The foreign court must have had jurisdiction, based on either the presence of the judgment debtor in the foreign jurisdiction at the time of the proceedings or its submission to the jurisdiction (either in advance in writing, or by appearing without protest);

(c) The judgment must be final and on the merits;

(d) The judgment must not have been procured by fraud or a breach of natural justice or give rise to a breach of New Zealand public policy.

[58] If those requirements are met, then the judgment is entitled to recognition and may be relied on to establish res judicata or issue estoppel that prevents the judgment debtor from relitigating the matters decided.

[59] I accept there is a serious question to be tried that the default judgment is not entitled to recognition in New Zealand on the ground that the default judgment was procured by fraud and recognition of the judgment would be contrary to public policy:

(a) Fraud in this context includes where the judgment creditor procured the judgment by misrepresentations made in bad faith, although recklessness is also sufficient. The presence of fraud is sufficient on its own to establish that the judgment is not entitled to recognition.

(b) A judgment debtor is entitled to raise allegations of fraud in recognition proceedings even if those arguments were or could have been run in the foreign proceedings. In any case, I accept that Kea could not have raised its fraud defence before judgment in the Kentucky proceedings because it was not aware of them.

(c) Kea requires a declaration to protect it against the use of the default judgment in New Zealand and/or in other jurisdictions where the New Zealand determination will be recognised and will itself give rise to an issue estoppel."

[50] As Kea has submitted, a well-recognised exception to the reciprocal enforcement of a foreign judgment under the common law is a case where the foreign judgment was procured by fraud. Again, for the reasons given by Gault J, and on the basis of the commentary referred to in Kea's written outline of submissions,[12] I am satisfied that in the hypothetical similar proceeding, this court would find a serious question to be tried, that the Kentucky judgment was procured by fraud and thus not entitled to recognition in this jurisdiction.

[51] As to whether the steps that might be taken to enforce the Kentucky judgment would be oppressive or vexatious, both before the New Zealand court and on this application, Kea has accepted that courts are cautious in granting relief that intersects with ongoing foreign proceedings, particularly where judgment has been obtained in that jurisdiction.

[52] Notwithstanding that caution, I accept the submission made on behalf of Kea that the circumstances of this case are sufficient to conclude that enforcing the Kentucky judgment would be oppressive or vexatious, particularly in circumstances where, as I have said, there is a serious question to be tried as to whether that judgment was procured by fraud.

[53] The Kentucky judgment itself is a default judgment obtained without any consideration of the merits of that claim and I was informed that the Kentucky Court has indicated it is not willing to intervene on an application to set aside the default judgments by engaging in any determination of the merits of the fraud allegations. That conclusion is fortified in the circumstances I have described above, where since the orders were made in the New Zealand proceeding, Mr Wikeley has taken steps, apparently directed to undermining or avoiding the effect of the orders of the New Zealand court and seeking to enforce the Kentucky judgment without referring the Kentucky Court to the existence of any of the injunctions granted in the New Zealand proceeding.

[54] On the question of delay, it is apparent from the judgments of the New Zealand court that there was no relevant delay on Kea's part, as it had no notice of the Kentucky proceeding until after the default judgment was obtained by WFTL, and upon becoming aware of that fact, acted expeditiously in seeking interim and then interlocutory relief in the New Zealand proceeding.

[55] The application in this court has, I accept, also been brought expeditiously in circumstances where Kea only became aware of the purported assignment of the Kentucky judgment on 5 April 2023, one week ago, that period including the Easter long weekend.

[56] Finally, on the balance of convenience, I accept Kea's submission that the factors identified by Gault J and set out at paragraph [54] of the written outline of submissions remain relevant on this application. I note:

(a) the harm of alleged fraudsters enforcing the Kentucky judgment in circumstances where the Kentucky Court has refused to entertain any argument on the question whether the judgment was obtained by fraud;

(b) the impact the enforcement of the Kentucky judgment on Kea;

(c) if Kea's substantive claim in the New Zealand proceeding succeeds the prospects of effective relief by way of damages is remote;

(d) a delay in enforcement of the Kentucky judgment will cause little harm given Kea's undertaking as to damages.

[57] But more significantly, the steps taken by Mr Wikeley and WFTL to purportedly assign the Coal Agreement and the Kentucky judgment, contrary to the express orders made in the New Zealand proceeding, reinforce that the interests of justice support the grant of relief in this court in terms equivalent to those already made in the New Zealand proceeding.

[58] That is because Mr Wikeley has shown a disregard for the orders made in the New Zealand proceeding and the restraints set out in those orders. Those actions demonstrate that securing his compliance with orders will be difficult without personal consequences for him for contravening court orders, including committal for contempt. Mr Wikeley appears to have considered himself free to disregard the restraints imposed by the orders made in the New Zealand proceeding, in circumstances where, because of his residence in Queensland, he is beyond the scope of enforcement of the orders made in New Zealand.

[59] It is on that basis that the orders sought on this application are said to be sought in support of the orders made in the New Zealand proceeding. For that reason, I am satisfied that this court, had it been considering a similar proceeding to that commenced in the New Zealand court, would have exercised its discretion to make the interim orders.

[60] On that basis, I am satisfied that the requirements of s 26 of the Act are satisfied.

[61] I will make restraining orders in the form sought by Kea which, as I have said, reflect orders already made in the New Zealand proceeding.

[62] As to the orders sought restraining Mr Wikeley from leaving Australia and delivering up his passport, I am satisfied that this court has power to make what was referred to in argument as a no-departure order. That power comes both from s 9(3) of the Civil Proceedings Act and in the court's inherent jurisdiction.

[63] The jurisdictional basis for such orders was discussed by Habersberger J in Talacko v Talacko (No 2).[13] It was concluded that the statutory power to grant an injunction gives power for the court to make orders where it is just and convenient to do so, and that the inherent jurisdiction of the court also provided power to make such a no-departure injunction for the purpose of preventing the abuse of its processes or for the purpose of enhancing the administration of justice.[14]

[64] I agree that such reasoning also applies to the statutory power and the inherent jurisdiction of this court.

[65] In paragraph [61] to [64] of the written outline of submissions, Kea referred me to legal principles which apply upon the consideration whether to make such an order. Those principles include that the order involves a restriction of a subject's liberty and so should be exercised with caution. There is also authority to the effect that the applicant must establish that there is probable cause for believing that the respondent is about to quit the jurisdiction, unless he is restrained from doing so.

[66] Further, an applicant must establish that the absence of the respondents from the jurisdiction will materially prejudice the applicant in the prosecution of the action. I accept the submission that as to probable cause for believing that the respondent is about to quit the jurisdiction, something less that proof on the probabilities will be sufficient, but something more than a fear expressed on the part of the applicant is required.

[67] As to material prejudice, Kea recognised that there must be something more than the mere existence of proceedings against the person sought to be restrained.

[68] Kea submits that in the circumstances of this case, there is material prejudice to Kea and its enforcement of court orders if the no-departure order is not made. That situation arises in circumstances where, as I have already addressed, Mr Wikeley has ignored the restraints imposed by the orders made in the New Zealand proceeding and there is little that the New Zealand court can do with respect to that breach. Mr Wikeley is presently amenable to this court's jurisdiction, given his presence in Queensland. I accept that the need to ensure he stays in Queensland so that Kea will be able to enforce the restraints against him personally means that his absence from the jurisdiction would materially prejudice Kea.

[69] I turn then to the evidence relied upon by Kea as to Mr Wikeley's likely departure from Queensland.

[70] Paragraphs [66] to [72] of the written outline of submissions set out a number of matters relied upon by Kea in that regard. Of those matters, the following seem to me to be most important:

(a) in a decision of the New Zealand court in 2013, concerning an application to stay a bankruptcy petition against Mr Wikeley, it was found that he did not appear to have any fixed base, having recently spent time in Kentucky in the United States, although there was no evidence that he had established a permanent residence or domicile there, and that he had also spent time in Melbourne and in Chile,

(b) that the whereabouts of Mr Wikeley at the time that application was heard was unknown.

[71] I accept the submission that it remains the position that Mr Wikeley still has no fixed base. In the proceeding before the New Zealand court, Mr Wikeley prepared an affidavit in which he stated that he currently lives at his sister's house in Ningi, north of Brisbane, but that his permanent home was in Mykolaiv, Ukraine. He had been unable to return to Ukraine because of the COVID-19 pandemic and the war. He further stated that he had not lived in New Zealand since 2002. Kea submits that claim is open to doubt in circumstances where since 2002, on numerous occasions, he supplied New Zealand residential addresses to the New Zealand Companies Registrar.

[72] On that basis, Kea submits, and I accept, that it is reasonable to infer that Mr Wikeley's connection with Queensland is limited, particularly in circumstances where his evidence to the New Zealand court was not that he maintained a residence in Queensland, but rather that he was living at his sister's house until such time as he is able to return to his permanent home in Ukraine. He has also lived in multiple jurisdictions, including for a significant time in Kentucky between 2012 and 2015.

[73] Beyond those matters, I am satisfied in any event that Mr Wikeley's willingness to contravene the orders made by the New Zealand court provides a basis to infer that he would also take whatever steps might be available to him to avoid the operation of similar restraints made by this court.

[74] The obvious step for him to take in those circumstances is to leave Queensland so as to put himself beyond the jurisdiction of this court and enforcement of its orders.

[75] Kea also relied upon the decision of Merkel J in Australian Prudential Regulation Authority v Siminton (No 2).[15] In that case, a no-departure order was made restraining the respondent's departure from Australia and delivering up of passports, even where there was no evidence that the respondent proposed to leave Australia. That decision was based on the public interest aspect of the litigation brought by a regulator; the harm that would be suffered if Mr Siminton did leave; the difficulty in locating him; and an indication by Mr Siminton that he did not recognise the processes of Australian law to be binding upon him.

[76] Plainly, this case is somewhat different. It is not brought by a regulator. Nevertheless, Kea submits, and I accept, that there is a public interest in ensuring the operation of the regime established under the Act, and the effectiveness of relief sought from this court in support of proceedings brought in New Zealand.

[77] In that context, and in circumstances where Mr Wikeley has shown himself to be a person who does not consider himself bound by court orders, even had I not been satisfied that there was reason to infer that Mr Wikeley would leave Queensland, I nonetheless would have accepted that the circumstances of this case justified the making of the no-departure order and the order for the surrender of the passport.

[78] For completeness, I accept that the factors identified in paragraph [76] of Kea's written outline of submissions mean that it is necessary to make the no-departure order for the purpose of preventing the abuse of this court's process or for the purpose of enhancing the administration of justice. I particularly note:

(a) the restraint on Mr Wikely's liberty will be for a short duration before, on the return date or by earlier application on notice he can seek to persuade the court that he will suffer substantial harm by the making of the order;

(b) the harm to Kea if the order is not made and Kea loses its ability to enforce this court's orders personally against Mr Wikely;

(c) the risk that non-compliance with the orders of the New Zealand court and any non-compliance with the orders of this court will not be subject to any available sanction.

[79] I am therefore prepared to make the no-departure orders.

[80] The final matter concerns the application for orders for the issue of a warrant for Mr Wikeley's arrest. That application is made under s 100(1) of the Civil Proceedings Act and r 935 of the UCPR.

[81] Both provisions are in the same terms and provide that the court may issue a warrant for the arrest of a defendant to a claim in any court if the court is satisfied:

(a) the defendant has absconded or is about to abscond; and

(b) the absence of the defendant would materially prejudice the plaintiff in prosecuting the proceeding or enforcing any judgment that may be given.

[82] For the reasons I have already given, I accept that the absence of Mr Wikeley would materially prejudice Kea in enforcing the orders I propose to make. Kea submitted that on the question of absconding or appearing to abscond, like the situation of probable cause for believing proof on the balance of probabilities is not required.

[83] It is submitted that it is sufficient if there is evidence from which it can be reasonably inferred that Mr Wikeley will leave the jurisdiction and not return, and that for the reasons I have addressed in respect of the no-departure orders, that there is sufficient evidence from which it can be inferred that Mr Wikeley will leave the jurisdiction.

[84] Kea proposes an alternative arrest order on the basis that execution of the arrest warrant would be conditional upon Mr Wikeley complying with the order to deliver up his passports, failing which he would be arrested. The purpose of such an order would be to ensure compliance with the orders for delivery up of the passports, and only on default of that obligation would Mr Wikeley be subject to arrest.

[85] Notwithstanding those submissions, and my acceptance that there is a basis to infer that Mr Wikeley is likely to leave the jurisdiction, I am not persuaded to exercise my discretion in favour of making an order for the issue of a warrant for Mr Wikeley's arrest in either of the forms sought by Kea, including the alternative form just discussed. In reaching that conclusion, I am conscious that the orders this court makes on an ex parte application of this type should be the minimum necessary to preserve the position pending an expedited hearing on notice.

[86] In my view, the orders restraining Mr Wikeley in the same form as made in the New Zealand proceeding and the no-departure orders and orders requiring Mr Wikeley to surrender his passport meet that requirement. The orders seeking the issue of an arrest warrant go further than the minimum necessary to preserve the position.

[87] It is a matter for Kea's legal representatives as to what steps might be available to notify relevant government authorities of the existence of the no-departure order. In the event that Mr Wikeley seeks to quit the jurisdiction in defiance of that order, the question of arrest might be revisited if Kea were to apply, as the orders provide for, to vary the terms of the orders.

[88] As matters presently stand, I am not satisfied that I should exercise the discretion to make any order for the issue of an arrest warrant at this time.

[89] For the reasons I have given, I make the orders as per the amended draft dated 13 April 2023 reflected in Appendix A.

UPON THE APPLICANT PROVIDING THE USUAL UNDERTAKING AS TO DAMAGES, THE ORDER OF THE COURT IS THAT:

[1] The application for these orders is returnable immediately.

[2] The time for service of this application and supporting affidavits is abridged and service of this application, supporting affidavits and this order, is to be effected by 4pm on 14 April 2023.

[3] Subject to the next paragraph, these orders have effect up to and including 21 April 2023 (the return date) and at 10am on the return date there will be a further hearing of these orders before Justice Cooper.

[4] Any party affected by these orders may apply to the Court for these orders to be set aside or varied.

[5] A respondent ordered to do something must do it by himself or herself or through directors, officers, partners, employees or agents.

[6] A respondent ordered not to do something must not do it personally or through directors, officers, partners, employees, agents or in any other way.

[7] Pursuant to section 25 of the Trans-Tasman Proceedings Act 2010 (Cth) in support of a proceeding in the High Court of New Zealand (Auckland Registry) No. CIV 2022-404-2086, until 4pm on the return date:

(a) the Respondent shall not take any steps, and shall not cause or permit any other person, to appoint an additional or replacement trustee of the Wikeley Family Trust;

(b) the Respondent be restrained from taking any steps, or causing or permitting any other person including Wikeley Family Trustee Limited (WFTL), a New Zealand company, and/or Wikeley Inc (Wikeley Inc), a corporation formed under the laws of the Commonwealth of Kentucky, to take any steps, to bring or pursue any litigation, or to enforce or otherwise act on:

(i) the purported Coal Funding and JV Investment Agreement dated 23 October 2012 between the Applicant and the WFTL (Coal Agreement);

(ii) the Order for Default Judgment (Default Judgment) dated on or about 31 January 2022 in proceedings Wikeley Family Trustee Ltd v Kea Investments Ltd (Commonwealth of Kentucky, Fayette Circuit Court, 9th Division (Kentucky Court), Civil Action No. 21-CI-02508 (Kentucky Proceedings);

(iii) the statutory demand purportedly made by WFTL, by its solicitors Mourant Ozannes, to the Applicant, dated 28 June 2022, for the sum of USD136,240,994 pursuant to s 155 of the Insolvency Act 2003 (BVI) (Statutory Demand);

(iv) The purported Deed of Assignment of Contract between WFTL and Wikeley Inc dated 30 March 2023 (Assignment of Coal Agreement) under which WFTL purported to:

• (A) Advance all assets belonging to WFTL as trustee of the Wikeley Family Trust to Wikeley Inc; and
• (B) Assign to Wikeley Inc the "full benefit of" the Coal Agreement;

(v) The purported Assignment of Judgment (Assignment of Judgment) between WFTL and Wikeley Inc dated 30 March 2023 under which WFTL purported to assign to Wikeley Inc the benefit of the Default Judgment;

(vi) The Motion for Substitution and Notice of Hearing on April 14 2023 (Motion for Substitution) under which application has been made to the Kentucky Court for orders that Wikeley Inc be substituted for WFTL as the plaintiff in the Kentucky Proceedings, purportedly in reliance on the Assignment of Coal Agreement and the Assignment of Judgment;

[8] Pursuant to section 25 of the Trans-Tasman Proceedings Act 2010 (Cth) in support of a proceeding in the High Court of New Zealand (Auckland Registry) No. CIV 2022-404-2086, alternatively, pursuant to the inherent jurisdiction of the Court:

(a) until 4pm on the return date, the Respondent be restrained from leaving Australia; and

(b) the Respondent forthwith deliver up all of his passports into the custody of the Registrar of this Court, or an enforcement officer of this Court, or an appropriately qualified person (within the meaning in rule 936 of the Uniform Civil Procedure Rules 1999 (Qld)) authorised in writing by the enforcement officer, or of the solicitors for the Applicant.

(c) until 4pm on the return date, the Respondent be restrained from applying for any additional or replacement passport whatsoever.

(d) until 4pm on the return date, the Australian Federal Police are to place KENNETH DAVID WIKELEY DOB 20 SEPTEMBER 1955 on the AFP Watch List.

[9] The parties have liberty to apply on 24 hours' notice.

[1] Glenn v Watson [2018] EWHC 2016 (Ch); Kea Investments Ltd v Watson [2020] EWHC 2599 (Ch); Kea Investments Ltd v Watson [2020] EWHC 2796 (Ch).

[2] Wikeley Family Trustee Ltd v Kea Investments Ltd (Commonwealth of Kentucky, Fayette Circuit Court, 9th Division, Civil Action No. 21-CI-02508 (referred to in these reasons as the Kentucky judgment or Kentucky proceeding).

[3] Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881, [6]-[15] (citations omitted).

[4] Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881; Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466.

[5] Outline of argument of the applicant dated 11 April 2023, [7].

[6] [2014] QSC 309, [32]-[33].

[8] [2019] 367 ALR 171; [2019] QCA 77, [21]-[33].

[9] [2022] NZHC 2881, [50]-[54] (citations omitted).

[10] Fatimi Pty Ltd v Bryant [2004] NSWCA 140; (2004) 59 NSWLR 678; Bennett v Talacko [2017] VSCA 163, [4] fn 3, citing Talacko v Talacko [2015] VSC 287, [64]; Terranora Laisure Time Management Ltd (in liq) v Harris [2004] 1 Qd R 93.

[11] [2022] NZHC 2881, [55]-[59] (citations omitted).

[12] Davies et al, Nygh's Conflict of Laws in Australia (Tenth Edition, LexisNexis Butterworths, 2020), [40.65]ff.

[15] [2006] FCA 336.