SUPREME COURT OF QUEENSLAND
CITATION:
Kea Investments Ltd v Wikeley [2023] QSC 79
PARTIES:
KEA INVESTMENTS LTD
(applicant)
v
KENNETH DAVID WIKELEY(respondent)
FILE NO:
BS No 4338 of 2023
DIVISION:
Trial Division
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at BrisbaneDELIVERED EX TEMPORE ON:
12 April 2023DELIVERED AT:
Brisbane
HEARING DATE:
12 April 2023
JUDGE:
Cooper J
ORDERS:
Orders as per draft dated 13 April 2023 reflected in Appendix A.
CATCHWORDS:
PRIVATE INTERNATIONAL LAW – RESTRAINT OF PROCEEDINGS – OF FOREIGN PROCEEDINGS: ANTI SUIT INJUNCTIONS – TO PROTECT JURISDICTION OF COURT AND ITS PROCESSES – where the applicant is a company incorporated in the British Virgin Islands – where the applicant asserts that it is the subject of international fraud perpetrated against it by the respondent – where the Fayette Circuit Court in Kentucky in the United States issued a default judgment against the applicant – where the applicant has commenced proceedings in the High Court of New Zealand against the respondent seeking relief with respect to the default judgment in Kentucky and damages for tortious conspiracy – where the applicant obtained interim and interlocutory injunctive orders in the High Court of New Zealand restraining the respondent from enforcing the default judgment – where the respondent has taken steps to contravene and avoid the effect of the orders made in the High Court of New Zealand – where the respondent presently lives in Queensland – where an application was brought ex parte for relief pursuant to ss 25 and 26 of the Trans-Tasman Proceedings Act 2010 (Cth) – whether the relief should be granted
Civil Proceedings Act 2011 (Qld), s 9, s 100
Trans-Tasman Proceedings Act 2010 (Cth), s 25, s 26
Uniform Civil Procedure Rules 1999 (Qld), r 27, 935Australian Prudential Regulation Authority v Siminton (No 2) [2006] FCA 336, considered
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, considered
Glenn v Watson [2018] EWHC 2016 (Ch), related
Kea Investments Ltd v Watson [2020] EWHC 2599 (Ch), related
Kea Investments Ltd v Watson [2020] EWHC 2796 (Ch), related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881, related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466, related
Mackellar Mining Equipment Pty Ltd & Ors v Thornton & Ors [2019] 367 ALR 171; [2019] QCA 77, cited
Talacko v Talacko (No 2) (2009) VR 613, considered
Z847 Limited v Skelton [2014] QSC 309, consideredCOUNSEL:
P K O’Higgins for the applicant
No appearance for the respondent
SOLICITORS:
Colin Biggers & Paisley Lawyers for the applicant
No appearance for the respondent
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).
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…
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Details
- Case
- [2023] QSC 79
- Decision Date
CaseChat Overview and Summary
The case of Kea Investments Ltd v Wikeley Family Trustee Ltd involves a dispute between a company incorporated in the British Virgin Islands and an entity based in New Zealand. The applicant, Kea Investments Ltd, claims to be the victim of an international fraud perpetrated against it by the respondent, Wikeley Family Trustee Ltd. The Fayette Circuit Court in Kentucky issued a default judgment against Kea, which it now seeks to challenge, as well as to obtain damages for tortious conspiracy. The applicant has already obtained interim and interlocutory injunctive orders in the High Court of New Zealand, restraining the respondent from enforcing the default judgment, but the respondent has taken steps to circumvent and avoid the effect of these orders. The respondent presently resides in Queensland. The applicant has now brought an ex parte application in the Federal Circuit and Family Court of Australia for relief under sections 25 and 26 of the Trans-Tasman Proceedings Act 2010 (Cth), seeking to protect the jurisdiction of the New Zealand court and its processes.
The central legal issue in this case is whether the court should grant the relief sought by the applicant. The applicant argues that the respondent's actions in circumventing the New Zealand court's orders and seeking to enforce the default judgment in Kentucky undermine the authority and integrity of the New Zealand court's jurisdiction. The court must weigh the need to protect the jurisdiction and processes of the New Zealand court against the respondent's rights and interests, including the right to challenge the default judgment and pursue legal remedies in other jurisdictions. The court also has to consider the potential impact of its decision on the respondent's ability to defend against the applicant's claims in New Zealand and the broader implications for international litigation and cooperation.
In granting the relief sought by the applicant, the court found that the respondent's actions in circumventing the New Zealand court's orders and seeking to enforce the default judgment in Kentucky constituted a serious threat to the authority and integrity of the New Zealand court's jurisdiction. The court noted that the respondent had taken steps to appoint a replacement trustee for the Wikeley Family Trust, pursue litigation in Kentucky based on the default judgment, and enforce compliance with subpoenas issued in reliance on the default judgment. The court also found that the applicant had demonstrated a strong likelihood of success in its claims against the respondent in New Zealand, including its allegations of international fraud and tortious conspiracy. The court concluded that the relief sought by the applicant was necessary to protect the jurisdiction and processes of the New Zealand court and to prevent the respondent from undermining the applicant's ability to pursue its claims there. The court made orders restraining the respondent from taking various steps, including appointing a replacement trustee, pursuing litigation in Kentucky based on the default judgment, and enforcing compliance with subpoenas issued in reliance on the default judgment.
The final orders of the court are set out in the amended draft dated 13 April 2023, which is attached as Appendix A to the judgment. The orders restrain the respondent from taking various steps, including appointing a replacement trustee, pursuing litigation in Kentucky based on the default judgment, and enforcing compliance with subpoenas issued in reliance on the default judgment. The orders also require the respondent to cause Wikeley Inc to withdraw or adjourn certain motions in Kentucky and to refrain from providing documents or information obtained under any such subpoena to any other person. The orders have effect until 4pm on 21 April 2023, subject to a further hearing before Justice Cooper on that date. Any party affected by these orders may apply to the Court for them to be set aside or varied.
The central legal issue in this case is whether the court should grant the relief sought by the applicant. The applicant argues that the respondent's actions in circumventing the New Zealand court's orders and seeking to enforce the default judgment in Kentucky undermine the authority and integrity of the New Zealand court's jurisdiction. The court must weigh the need to protect the jurisdiction and processes of the New Zealand court against the respondent's rights and interests, including the right to challenge the default judgment and pursue legal remedies in other jurisdictions. The court also has to consider the potential impact of its decision on the respondent's ability to defend against the applicant's claims in New Zealand and the broader implications for international litigation and cooperation.
In granting the relief sought by the applicant, the court found that the respondent's actions in circumventing the New Zealand court's orders and seeking to enforce the default judgment in Kentucky constituted a serious threat to the authority and integrity of the New Zealand court's jurisdiction. The court noted that the respondent had taken steps to appoint a replacement trustee for the Wikeley Family Trust, pursue litigation in Kentucky based on the default judgment, and enforce compliance with subpoenas issued in reliance on the default judgment. The court also found that the applicant had demonstrated a strong likelihood of success in its claims against the respondent in New Zealand, including its allegations of international fraud and tortious conspiracy. The court concluded that the relief sought by the applicant was necessary to protect the jurisdiction and processes of the New Zealand court and to prevent the respondent from undermining the applicant's ability to pursue its claims there. The court made orders restraining the respondent from taking various steps, including appointing a replacement trustee, pursuing litigation in Kentucky based on the default judgment, and enforcing compliance with subpoenas issued in reliance on the default judgment.
The final orders of the court are set out in the amended draft dated 13 April 2023, which is attached as Appendix A to the judgment. The orders restrain the respondent from taking various steps, including appointing a replacement trustee, pursuing litigation in Kentucky based on the default judgment, and enforcing compliance with subpoenas issued in reliance on the default judgment. The orders also require the respondent to cause Wikeley Inc to withdraw or adjourn certain motions in Kentucky and to refrain from providing documents or information obtained under any such subpoena to any other person. The orders have effect until 4pm on 21 April 2023, subject to a further hearing before Justice Cooper on that date. Any party affected by these orders may apply to the Court for them to be set aside or varied.
Orders
Orders of the court
Orders as per draft dated 13 April 2023 reflected in Appendix A.
Background
Background to the litigation
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. Background 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][3]Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881, [6]-[15] (citations omitted).“[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.Further alleged fraudStatutory demand in BVI and Kentucky proceedings[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.Coal Agreement[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. …”
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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.Conclusion For the reasons I have given, I make the orders as per the amended draft dated 13 April 2023 reflected in Appendix A. The application for these orders is returnable immediately. 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. 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. Any party affected by these orders may apply to the Court for these orders to be set aside or varied. A respondent ordered to do something must do it by himself or herself or through directors, officers, partners, employees or agents. A respondent ordered not to do something must not do it personally or through directors, officers, partners, employees, agents or in any other way. 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;(vii)The Motion to Compel Discovery (Motion to Compel Discovery) and the Motion for Injunction (Motion for Injunction) annexed to the Motion for Substitution;(viii)Any notices of the Assignment of Coal Agreement and Assignment of Judgment to the Applicant or any other person anywhere in the world;(c)The Respondent shall cause Wikeley Inc to withdraw, adjourn or seek a continuance of the Motion for Substitution, the Motion to Compel Discovery and the Motion for Injunction;(d)Without limiting orders (a) and (b), the Respondent shall be restrained from taking any steps, or causing or permitting any other person including WFTL and Wikeley Inc to take any steps: (i)to enforce compliance with any subpoena issued by WFTL or Wikeley Inc that relies on the Coal Agreement or the Default Judgment (WFTL or Wikeley Inc subpoena) which would result in documents being provided under that subpoena pending further order of the Court;(ii)to obtain documents from any other person whether under any WFTL or Wikeley Inc subpoena or otherwise in reliance on the Coal Agreement or Default Judgment;(iii)to read any document which WFTL or Wikeley Inc has received or may in the future receive under any WFTL or Wikeley Inc subpoena;(iv)to directly or indirectly (or by any agent including a lawyer or attorney) provide any document it receives under any WFTL or Wikeley Inc subpoena or any information contained in any such document to any other person and specifically not to Eric John Watson or Rizwan Hussain or any company, person or other entity with which either of them is associated;(v)to obtain an order which compels the Applicant to answer any interrogatories or to provide any disclosure pending further order of the Court;(e)Without limiting the above orders, the Respondent shall not cause Wikeley Inc or WFTL to sell, assign, gift, grant any security interest in or over, or otherwise in any way whatsoever transfer or encumber any interest he or Wikeley Inc may have, directly or indirectly, in any rights either of them may have under or in connection with the Coal Agreement and/or the Default Judgment;(f)For the avoidance of doubt the following would not constitute a breach of the interim orders of this Court:(i)WFTL filing required briefs in Kentucky in response to the appeal lodged by the Applicant in the Commonwealth of Kentucky Court of Appeals against the denial of its motion to set aside the Default Judgment and the denial of its motion to alter, amend or vacate.
Ratio Decidendi
Legal Principle Established
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