Kea Investments Ltd v Wikeley (No 2)
[2023] QSC 215
•4 October 2023
SUPREME COURT OF QUEENSLAND
CITATION:
Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215
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 ON:
4 October 2023
DELIVERED AT:
Brisbane
HEARING DATE:
3 August 2023 and 4 August 2023
JUDGE:
Cooper J
ORDERS:
Upon the undertaking of Kea Investments Ltd’s solicitors to hold the sum of $100,000 in their trust account as security for Kea Investments Ltd’s undertaking as to damages:
1. Paragraphs 2 to 4 of the orders made on 26 April 2023 are set aside.
2. The security in the amount of $10,000 paid into court in accordance with paragraphs 3 and 4 of the orders made on 26 April 2023 is to be paid out to Kenneth David Wikeley.
3. The amended application filed on 15 June 2023 is otherwise dismissed.
4. I will hear the parties as to costs.
CATCHWORDS:
PRIVATE INTERNATIONAL LAW – RESTRAINT OF PROCEEDINGS – OF LOCAL PROCEEDINGS: CLEARLY INAPPROPRIATE FORUM – GENERALLY – where the applicant is a company incorporated in the British Virgin Islands – where a court in the United States issued a default judgment in respect of an agreement the applicant contends is a forgery – where the applicant has commenced proceedings in a court in New Zealand against the respondent seeking relief with respect to the default judgment in the United States and damages for tortious conspiracy – where the applicant obtained interim and interlocutory injunctive relief in 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 New Zealand – where the applicant applied to the Supreme Court of Queensland for interim injunctive relief against the respondent and orders were made – whether the orders involved a breach of comity – whether the proceeding is oppressive or vexatious – whether the Supreme Court of Queensland is a clearly inappropriate forum
PRIVATE INTERNATIONAL LAW – RESTRAINT OF PROCEEDINGS – OF FOREIGN PROCEEDINGS: ANTI SUIT INJUNCTIONS – TO PROTECT JURISDICTION OF COURT AND ITS PROCESSES – whether there is a serious question to be tried – whether the balance of convenience favours the grant of an interlocutory injunction or the continuation of the anti-enforcement injunctive relief
PROCEDURE – JUDGMENTS AND ORDERS – AMENDING, VARYING AND SETTING ASIDE JUDGMENTS AND ORDERS – EX PARTE ORDERS AND JUDGMENTS – where orders were made pursuant to ss 25 and 26 of the Trans-Tasman Proceedings Act 2010 (Cth) following an ex parte hearing – whether the applicant failed to make full disclosure to the court of the correct legal principles, material facts and defences which the respondent submits were available to him – whether the applicant failed to comply with its obligation of disclosure at the ex parte hearing – whether the orders should be set aside
PROCEDURE – STATE AND TERRITORY COURTS: JURISDICTION, POWERS AND GENERALLY – INHERENT AND GENERAL STATUTORY POWERS – TO STAY OR DISMISS ORDERS OR PROCEEDINGS GENERALLY – where the applicant filed an application seeking that the respondent be found to have committed a contempt of court by failing to comply with orders – where a warrant was issued for the respondent’s arrest given his apparent non-compliance with orders – where the respondent subsequently delivered his passports to the custody of the court in compliance with the orders and the arrest warrant was vacated – whether the further prosecution of the contempt application would amount to an abuse of process – whether the contempt application should be permanently stayed – where the applicant sought relief from courts in the British Virgin Islands, United States, New Zealand and Australia upon substantially the same fraud argument – whether the further conduct of the proceeding would be unjustifiably oppressive – whether the further conduct of the proceeding amounts to an abuse of process – whether the proceeding should be permanently stayed
Criminal Code Act 1899 (Qld) sch 1, s 408C(1) and s 488(1)
Trans-Tasman Proceedings Act 2010 (Cth), s 25, s 26
Uniform Civil Procedure Rules 1999 (Qld), r 264Active Leisure (Sports) Pty Ltd v Sportsman’s Australia Ltd [1991] 1 Qd R 301, cited
ADM Asia-Pacific Trading Pte Ltd v PT Budi Semesta Satria [2017] 1 Lloyd’s Rep 1, cited
Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249, cited
Airbus Industrie GIE v Patel [1999] 1 AC 119 (HL), cited
Australian Securities and Investments Commission v Wiggins (1998) 90 FCR 314, cited
Bank St Petersburg OJSC v Arkhangelsky [2014] 1 WLR 4360, considered
Bensons Funds Management Pty Ltd v Body In Balance Chiropractic Pty Ltd [2015] VSC 280, cited
Brags Electric Pty Ltd trading as Inscope Building Technologies v Steven Mark Gregory [2010] NSWSC 1205, considered
Brimaud v Honeysett Instant Print Pty Ltd [1988] 217 ALR 44, cited
Brink’s-MAT Ltd v Elcombe [1988] 3 All ER 188, considered
Cabassi v Vila (1940) 64 CLR 130, cited
Cachia v Westpac Financial Services Ltd [2005] NSWCA 239, cited
Carron Iron Co v Maclaren (1855) 5 H.L.C. 416, cited
Central Petroleum Ltd v Geoscience Resource Recovery LLC [2018] 2 Qd R 371, cited
Coomera Resort Pty Ltd v Kolback Securities Ltd [2004] 1 Qd R 1, cited
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, considered
Davis v Turning Properties Pty Ltd (2005) 222 ALR 676, cited
Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575, cited
Ecobank Transnational Inc v Tanoh [2016] 1 WLR 2231, considered
ED&F Man (Sugar) Ltd v Haryanto (No 2) [1991] 1 Lloyd’s Rep 429, considered
Ellerman Lines Ltd v Read [1928] 2 KB 144, considered
ENRC Marketing AG v OJSC “Magnitogorsk Metallurgical Kombinat” (2011) 285 ALR 444, cited
Environment East Gippsland Inc v VicForests (No 2) [2009] VSC 421, cited
Essar Shipping Ltd v Bank of China Ltd (The Kishore) [2016] 1 Lloyd’s Rep 427, cited
Financial Integrity Group Pty Ltd v Farmer (No 3) [2014] ACTSC 75, cited
First Netcom Pty Ltd v Telstra Corp Ltd (2000) 101 FCR 77, cited
Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd (2017) 94 NSWLR 606, cited
Glenn v Watson [2018] EWHC 2016 (Ch), related
Graham v Campbell (1878) 7 Ch D 490, cited
Heartwood Architectural Timber & Joinery Pty Ltd v Redchip Lawyers [2009] 2 Qd R 499, considered
Henry v Henry (1996) 185 CLR 571, cited
Hotline Communications Ltd v Hinkley (1999) 44 IPR 445, considered
J Aron & Co v Newmont Yandal Operations Pty Ltd (2003) 47 ACSR 243, cited
Kea Investments Ltd v Wikeley [2023] QSC 79, related
Kea Investments Ltd v Wikeley Family Trustee Ltd & Ors (High Court of New Zealand, Auckland Registry, CIV-2022-404-2086), related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881, related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 2407, related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466, related
Lord Portarlington v Soulby 3 Myl. & K. 104, cited
Mackellar Mining Equipment Pty Ltd v Thornton (2019) 367 ALR 171, cited
Mackinnon v Donaldson, Lufkin & Jenrette Securities Corp [1986] Ch 482, cited
Masri v Consolidated Contractors International (UK) Ltd (No 2) [2009] QB 450, cited
Masri v Consolidated Contractors International (UK) Ltd (No 3) [2009] QB 503, cited
Moubarak by his tutor Coorey v Holt (2019) 100 NSWLR 218, cited
Nicols (as trustee of the bankrupt estate of Manietta) v Manietta [2022] FCA 39, considered
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, cited
Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491, cited
Rolleston Coal Holdings Pty Ltd v ICRA Rolleston Pty Ltd [2020] QSC 331, cited
SAS Institute Inc v Worldwide Programming Ltd [2020] EWCA Civ 599, considered
Savcor Pty Ltd v Cathodic Protection International APS (2005) 12 VR 639, considered
Schepis v Esanda Finance Corp Ltd [2007] QCA 263, considered
Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth (2018) 136 IPR 8, cited
Societe Eram Shipping Co Ltd v Cie Internationale de Navigation [2004] 1 AC 260, cited
Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460, cited
Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019] SGCA 10, considered
Talacko v Talacko (No 2) (2009) 25 VR 613, cited
Thomas A Edison Ltd v Bullock (1912) 15 CLR 679, considered
Trina Solar (US) Inc v Jasmin Solar Pty Ltd (2017) 247 FCR 1, cited
Trust Company (PTAL) Limited (Trustee for the LM Managed Performance Fund), Re Drake v Drake [2014] FCA 1445, cited
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538, considered
Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Pty Ltd [2005] FCA 955, cited
Warringah Shire Council v Industrial Acceptance Corp (New South Wales Supreme Court, McLelland J, 22 November 1979), considered
Wikeley Family Trustee Ltd v Kea Investments Ltd (Commonwealth of Kentucky, Fayette Circuit Court, 9th Division, Civil Action No. 21-CI-02508), related
Willmot v State of Queensland [2022] QSC 167, cited
Willmot v State of Queensland [2023] QCA 102, citedCOUNSEL:
G J Gibson KC, with P K O’Higgins and B W Wacker, for the applicant
D B O’Sullivan KC, with A J Schriiffer, for the respondent
SOLICITORS:
Colin Biggers & Paisley for the applicant
Dowd + Wilson for the respondent
The applicant, Kea Investments Ltd (Kea), is a company incorporated in the British Virgin Islands (BVI) and controlled by Sir Owen Glenn.
The respondent, Mr Wikeley, is a company director and businessman presently residing in Queensland and the sole director and shareholder of Wikeley Family Trustee Ltd (WFTL), a company incorporated in New Zealand.
On 12 April 2023, this court heard an application brought ex parte by Kea (12 April hearing). At the conclusion of that hearing, I made orders pursuant to ss 25 and 26 of the Trans-Tasman Proceedings Act 2010 (Cth) (TTPA) granting interim relief against Mr Wikeley (12 April orders).[1] Those orders required that, among other things, Mr Wikeley:
(a)refrain from taking, or from causing corporate entities he controlled to take, any steps to enforce a default judgment granted by the Fayette Circuit Court in Kentucky in the United States (Kentucky Court) in favour of WFTL against Kea for US$123.75 million plus interest and costs (default judgment);[2]
(b)cause Wikeley Inc, the second of the corporate entities he controlled, to withdraw, adjourn or seek a continuation of motions pending in the Kentucky proceeding concerning the default judgment;
(c)not leave Australia, and deliver up his passports into the custody of the court.
[1]Kea Investments Ltd v Wikeley [2023] QSC 79 (First Judgment).
[2]Wikeley Family Trustee Ltd v Kea Investments Ltd (Commonwealth of Kentucky, Fayette Circuit Court, 9th Division, Civil Action No. 21-CI-02508) (Kentucky proceeding).
As contemplated by ss 25 and 26 of the TTPA, the 12 April orders were made in support of a civil proceeding commenced by Kea in New Zealand against Mr Wikeley, WFTL and another defendant, Mr Eric Watson.[3]
[3]Kea Investments Ltd v Wikeley Family Trustee Ltd & Ors (High Court of New Zealand, Auckland Registry, CIV-2022-404-2086) (New Zealand proceeding).
The 12 April orders were expressed to have effect up to and including 21 April 2023, on which date there was to be an inter partes hearing to determine whether they should be continued on an interlocutory basis.
On 13 April 2023, I revised the 12 April 2023 orders (13 April orders). The nature of that revision has no real significance to the present application, however the 13 April orders replaced the previous orders as the operative orders binding Mr Wikeley.
On 14 April 2023, orders were made dispensing with the requirement for personal service on Mr Wikeley and for substituted service. The effect of this was that the 13 April orders and other court documents were deemed to have been served on Mr Wikeley that day.
On 20 April 2023, Kea filed an application seeking that Mr Wikeley be found to have committed a contempt of court by failing to comply with the requirements of the 13 April orders (contempt application).
On the return of the 13 April orders on 21 April 2023 (21 April hearing), Mr Wikeley was represented by a solicitor. At that hearing, the court:
(a)refused an application by Mr Wikeley for an adjournment of the inter partes hearing;
(b)made orders continuing the 13 April orders until 28 days after the final determination of the New Zealand proceeding or earlier order (21 April orders);
(c)issued a warrant for Mr Wikeley’s arrest, given his apparent non-compliance with parts of the 13 April orders, including the requirement that he surrender his passports.
On 26 April 2023, Mr Wikeley delivered his passports into the custody of the court. On that day, Mr Wikeley appeared before the court by counsel, instructed by new solicitors (26 April hearing). In response to an application by Kea to execute the arrest warrant, Mr Wikeley offered conditions in lieu of making orders for his immediate arrest. The court made orders, consistent with the conditions offered by Mr Wikeley, that he provide security for his appearance at the hearing of the contempt application and that he reside at a specified address and be subject to a curfew (26 April orders).
On 3 May 2023, upon application by Mr Wikeley, the court vacated the arrest warrant and set aside the order for the issue of that warrant.
The court subsequently made directions for Mr Wikeley to file any application he wished to make to set aside each of the 12 April orders, the 13 April orders, the 21 April orders and the 26 April orders. Mr Wikeley filed an application on 7 June 2023 and an amended application on 15 June 2023. By the amended application, Mr Wikeley not only seeks to set aside the existing court orders but also seeks to have the contempt application and Kea’s proceeding in this court permanently stayed. This judgment addresses Mr Wikeley’s amended application.
Mr Wikeley submits that:
(a)the 12 April orders and the 13 April orders should be set aside on the basis that, at the 12 April hearing, Kea did not comply with its obligation of utmost good faith because it failed to make full disclosure to the court of:
(i) the correct legal principles which apply on applications for relief of the type obtained by Kea;
(ii) material facts which were relevant to the court’s consideration whether to grant the interim injunctive relief;
(iii) defences which Mr Wikeley submits were available to him and which ought to have precluded the grant of the interim injunctive relief;
(b)the 21 April orders should be set aside on the basis that:
(i) Queensland is a clearly inappropriate forum in the sense that the proceeding brought by Kea in this jurisdiction is vexatious or oppressive;
(ii) on the merits of Kea’s application, the court ought to have refused to grant the injunctive relief sought;
(c)the 26 April orders should be set aside because the occasion for the making of those orders only arose because of the 12 April orders and the 13 April orders and, in circumstances where those earlier orders should be set aside, the later consequential orders should also be set aside;
(d)the contempt application should be permanently stayed as an abuse of process because, if the 13 April orders are set aside for material non-disclosure, it would be an abuse of process, in the sense of bringing the administration of justice into disrepute among right thinking people, if Kea were to be permitted to invoke the court’s processes to punish Mr Wikeley for contempt of that order;
(e)the proceeding should be permanently stayed as an abuse of process because Kea’s use of the court’s procedures is unjustifiably oppressive to Mr Wikeley.
For the reasons that follow, I have concluded that:
(a)the application to set aside the 12 April orders and the 13 April orders must be dismissed because I am not satisfied that Kea failed to comply with its obligation of disclosure at the 12 April hearing;
(b)the application to permanently stay the contempt application must be dismissed because, in circumstances where the 12 April orders and the 13 April orders have not been set aside, I am not satisfied that the further prosecution of the contempt application would amount to an abuse of process;
(c)upon the application of Kea’s solicitors to hold the sum of $100,000 in their trust account as security for Kea’s undertaking as to damages, the application to set aside the 21 April orders will be dismissed because I am satisfied in the circumstances of this proceeding that it is appropriate for those orders to remain in effect;
(d)paragraphs 2 to 4 of the orders made on 26 April 2023 are to be set aside because I am satisfied that, in the present circumstances, the conditions of residence, curfew and security set out in those paragraphs are no longer justified;
(e)the application to permanently stay the proceeding must be dismissed because, having regard to the conclusions I have reached in addressing the continuing operation of the 21 April orders, I am not satisfied that the further conduct of the proceeding would be unjustifiably oppressive to Mr Wikeley and does not amount to an abuse of process.
Background
Kea contends that it is the victim of a major and ongoing fraudulent conspiracy, and that Mr Wikeley is at the heart of the fraud.
The conspiracy is said to have arisen from a dispute between Sir Owen Glenn and Mr Watson concerning Kea’s participation in an investment called Project Spartan. On 31 July 2018, the High Court of England and Wales found that Kea and Sir Owen Glenn had been fraudulently induced to participate in that investment at a cost of £129 million.[4] Mr Watson was found to be the architect of the fraud. Kea’s director at the relevant time, Mr Peter Dickson, was found to have breached his fiduciary duties to the company.
[4]Glenn v Watson [2018] EWHC 2016 (Ch) (English judgment).
Kea asserts that the Coal Funding and JV Investment Agreement (Coal Agreement), which WFTL relied on to obtain the default judgment in the Kentucky Court, is a forgery, or at least is unenforceable. It maintains that the purpose of the Kentucky proceeding brought by WFTL is to frustrate Kea’s enforcement of the English judgment against Mr Watson, to force disclosure of Kea’s confidential financial information and to extract value from Kea.
The Coal Agreement
The Coal Agreement purports to be an agreement between Mr Wikeley, as trustee for the Wikeley Family Trust, and Kea. On its face, it was executed by Mr Wikeley and by Mr Dickson, Kea’s then director, on 23 October 2012 with both signatures having been witnessed by Mr Watson.
The recitals record that Kea and Mr Wikeley had agreed to enter into a joint venture for the purpose of investing in coal and other energy projects identified by Mr Wikeley. They refer to various prospective investments, including a coal project in Kentucky.
Under the terms of the Coal Agreement, Kea was obliged to provide a minimum capital amount of US$75 million over 8 years to the joint venture to fund the proposed investments. Those capital payments were to be made by way of 20-year loans at an interest rate of 3%. The loans were to be repaid once investments were sold or placed in listed corporate vehicles. Kea would receive 60% of the joint venture profits. No security was to be provided for the loans.
Although the wording of the Coal Agreement is far from clear, it appears that Kea also agreed to pay a royalty of US$1.5 million per year for a period of 20 years to Mr Wikeley “irrespective as to whether production has commenced or not, or if for any reason investment has been delayed”.
Under the terms of the Coal Agreement, Kea also:
(a)indemnified Mr Wikeley for any losses and lost profits if it failed to provide a minimum capital amount of $US75 million;
(b)guaranteed its performance of all its obligations under the agreement, including the capital funding commitment and the royalty payment, in all circumstances including negligence by Mr Wikeley;
(c)in the event it failed to provide the minimum capital amount, indemnified Mr Wikeley for the greater of 25% of the estimated profits from the proposed investments—in one place said to be US$375 million and in another place said to be £375 million—or 25% of the actual profits earned by third parties from the projects identified by Mr Wikeley for investment (if capable of determination).
The Coal Agreement also contained a jurisdiction clause which provided:
“The parties have agreed that the jurisdiction shall be the USA. The contract will be governed by the laws in Lexington, Kentucky and any applicable Federal law.”
The commencement of the Kentucky proceeding and the grant of default judgment
Mr Wikeley incorporated WFTL on 23 July 2021, apparently to replace him as trustee of the Wikeley Family Trust.
On 19 August 2021, WFTL commenced the Kentucky proceeding. In its first amended complaint filed with the Kentucky Court on 3 December 2021, WFTL pleaded the Coal Agreement and alleged that Kea had breached the terms of that agreement by failing to provide the minimum capital amount of US$75 million and failing to pay the royalty of US$1.5 million per year. WFTL claimed to have suffered loss and damage of more than US$123.75 million.[5]
[5]That figure was reached by adding the indemnity of US$93.75 million (25% of the estimated profits of US$375 million) and the unpaid royalty amount which was said to be more than US$30 million.
On 6 December 2021, WFTL effected service of the Kentucky proceeding on Kea at its registered office, being the offices of its registered agent Icaza, Gonzalez-Ruiz & Aleman (BVI) Trust Ltd in Tortola, BVI. Due to oversight on the part of its agent, the Kentucky proceeding was not passed on to Kea.
Kea did not enter an appearance in the Kentucky proceeding or file an answer to WFTL’s complaint. On 28 January 2022, WFTL filed a motion for default judgment in the Kentucky proceeding. On 31 January 2022, the Kentucky Court granted the default judgment in favour of WFTL.
The issue of a statutory demand in the BVI
On 28 June 2022, WFTL served a statutory demand on Kea by its registered agent in the BVI. That demand claimed a debt arising under the default judgment of more than US$136 million including interest and costs.
The statutory demand was passed on to Kea and its English solicitors on 29 June 2022. Kea contends that this was the first notice it received of either the default judgment or the Coal Agreement. Kea asserts that the Coal Agreement, and the claims made under it, are fabrications constructed by Mr Wikeley and Mr Watson to defraud Kea.
On 12 July 2022, Kea applied to set aside the statutory demand on the basis that there was a genuine dispute as to whether the debt was owed. Kea stated its intention to apply to have the default judgment set aside and its belief, based on information provided by its Kentucky counsel, that there was a legal basis to set aside the default judgment because, among other arguments, Kea never entered into the Coal Agreement.
Kea’s attempts to set aside the default judgment and quash subpoenas
On 21 July 2022, Kea filed a motion in the Kentucky proceeding to set aside the default judgment. That motion recorded that Kea entered a limited appearance in the Kentucky proceeding for the purpose of contesting the jurisdiction of the Kentucky Court. In submissions filed in support of that motion, Kea stated that there was significant evidence showing that the Coal Agreement was “a falsehood” and “fraudulent or otherwise fake” and, for that reason, the Kentucky Court did not have personal jurisdiction over Kea. Further, Kea sought to have the default judgment set aside under the relevant procedural rules in Kentucky on grounds which included fraud.
On 18 October 2022, the Kentucky Court denied Kea’s motion to set aside the default judgment, finding that because Kea was properly served it was not necessary for the court to determine whether Kea had a meritorious defence to WFTL’s claim.
On 21 October 2022, Kea filed a motion in the Kentucky proceeding to alter, amend or vacate the decision of the Kentucky Court to deny the motion to set aside the default judgment. In support of that motion, Kea again made submissions that the Coal Agreement is a fraud. That motion was heard by the Kentucky Court on 28 October 2022. During that hearing, counsel representing Kea accepted that the Kentucky proceeding had been validly served on Kea and that the default judgment was regularly entered.
On 9 November 2022, the Kentucky Court denied Kea’s motion to alter, amend or vacate its earlier decision. In reaching that decision the Kentucky Court did not consider the merits of Kea’s fraud defence.
On the same day, Kea filed an appeal in the Kentucky proceeding (Kentucky appeal). Kea’s arguments on the Kentucky appeal include a submission that the default judgment should be set aside because of fraud.
In the period Kea was taking steps to have the default judgment set aside it also filed a motion in the Kentucky proceeding to quash subpoenas issued by WFTL to numerous banks. Those subpoenas sought broad categories of documents relating to Kea, Sir Owen Glenn and other entities going back to January 2012. In support of its motion to quash the subpoenas, Kea repeated its argument that the Coal Agreement is a fraud. Kea also relied on that argument in support of a motion it filed in the Supreme Court of the State of New York to quash subpoenas which WFTL caused to be issued in that state.
The New Zealand proceeding
Kea commenced the New Zealand proceeding on 31 October 2022.
In the statement of claim filed in the New Zealand proceeding, Kea has pleaded the following background facts in support of its claim of fraudulent conspiracy:
(a)the dispute between Sir Owen Glenn and Mr Watson and the litigation concerning Project Spartan;
(b)Mr Wikeley’s incorporation of WFTL and the course of the Kentucky proceeding;
(c)that Mr Watson provided assistance to WFTL in its conduct of the Kentucky proceeding, including by providing documents extracted from the trial bundle used in the Project Spartan litigation;
(d)conduct by Mr Rizwan Hussain, said to be a known fraudster acting in concert with Mr Watson, which included:
(i) an attempt to take control of Kea by purporting to replace its directors and to settle the Kentucky proceeding for the sum of US$100 million;
(ii) writing to the Kentucky Court and purporting to withdraw Kea’s motion to set aside the default judgment;
(iii) bringing proceedings in the High Court of England and Wales in Kea’s name against Sir Owen Glenn and Kea’s lawyers in England and the BVI;
(e)Kea’s efforts to strike out the proceedings instituted by Mr Hussain;
(f)that WFTL’s Kentucky lawyers filed a notice of settlement agreement in the Kentucky proceeding following the purported settlement effected by Mr Hussain.
As to the default judgment, Kea has pleaded:
(a)that the Coal Agreement is a forgery and was not signed by Mr Dickson on behalf of Kea;
(b)alternatively, if Mr Dickson did sign the Coal Agreement, its terms were so uncommercial that Mr Dickson could not have believed in good faith that entering into that agreement was in the best interests of Kea and thereby breached his duties as a director, and that Mr Wikeley and Mr Watson were aware of this at the time the Coal Agreement was signed;
(c)the default judgment was procured by fraud because:
(i) WFTL, by Mr Wikeley, knew the Coal Agreement to be a forgery or knew that it had no legitimate claims against Kea;
(ii) there was a fraud on the Kentucky Court because the default judgment involved misleading the Kentucky Court.
Based on the foregoing matters, Kea has pleaded a cause of action for tortious conspiracy on the basis that WFTL and Mr Wikeley have acted in combination with the intention of injuring Kea by unlawful means by:
(a)making claims against Kea under the Coal Agreement in circumstances where WFTL, by Mr Wikeley, knew it had no legitimate claims under that agreement;
(b)procuring the default judgment by fraud;
(c)attempting to enforce the default judgment;
(d)accepting the purported settlement sought to be effected by Mr Hussain.
Kea has further pleaded that WFTL and Mr Wikeley are acting in combination with Mr Watson to further the interests of Mr Watson, as well as the interests of WFTL and Mr Wikeley. The purpose of the conspiracy is alleged to include:
(a)to cause loss to Kea by pursuing fraudulent claims under the Coal Agreement;
(b)to take control of Kea for the purpose of fraudulently obtaining its assets;
(c)assisting Mr Watson in continuing to avoid his obligations to Kea under the English judgment, including by disabling Kea from enforcing that judgment by having it placed into liquidation;
(d)illegitimately obtaining Kea’s confidential information and using that information to defraud or otherwise damage Kea;
(e)to divert Kea’s attention and resources to investigating and responding to their conduct.
The relief Kea has sought on its claim for tortious conspiracy by unlawful means includes:
(a)damages in an unspecified amount for the costs which Kea has incurred by investigating and responding to the defendants’ unlawful conduct;
(b)a permanent injunction restraining the defendants from:
(i) seeking to enforce the default judgment anywhere in the world, including by issuing subpoenas, issuing interrogatories, seeking discovery or otherwise seeking disclosure of information concerning Kea;
(ii) taking any further steps to enforce or otherwise rely on the Coal Agreement.
Kea has also pleaded a second cause of action against WFTL and Mr Wikeley for declarations that the default judgment was obtained by fraud and is not entitled to recognition or enforcement in New Zealand.
When it commenced the New Zealand proceeding, Kea filed an interlocutory application for an anti-enforcement injunction. That application was brought on an ex parte basis.
On 4 November 2022, Gault J made orders ex parte,[6] which included:
(a)an anti-enforcement injunction in respect of the default judgment in the Kentucky proceeding;
(b)an order prohibiting the defendants from selling, assigning or otherwise transferring any interest any of them may have under or in connection with the Coal Agreement or the default judgment in the Kentucky proceeding.
[6]Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881 (2022 NZ Judgment).
On 10 November 2022, WFTL and Mr Wikeley filed:
(a)an appearance in the New Zealand proceeding under protest to jurisdiction on the ground that New Zealand is not the appropriate forum to hear the matters raised in that proceeding; and
(b)an application under protest as to jurisdiction seeking to have the interim orders set aside and the New Zealand proceeding dismissed on grounds of want of jurisdiction and forum non conveniens.
The interim orders were varied and extended with the consent of WFTL and Mr Wikeley on 11 November 2022.
The application by WFTL and Mr Wikeley seeking to have the interim orders set aside and the New Zealand proceeding dismissed was heard on 12 December 2022. The interim orders, including the anti-enforcement injunction, were continued on that date.
On 10 March 2023, Gault J dismissed the application by WFTL and Mr Wikeley challenging jurisdiction and the interim orders were continued on an interlocutory basis.[7]
[7]Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 (2023 NZ Judgment).
Kea subsequently became aware that WFTL had purported to assign the default judgment and its rights under the Coal Agreement to Wikeley Inc. Wikeley Inc was incorporated in Kentucky on 28 March 2023. The articles of incorporation of Wikeley Inc records Mr Wikeley as having incorporated the company. The assignments of WFTL’s rights to Wikeley Inc were executed on 30 March 2023.
Mr Wikeley executed the assignment of the default judgment on behalf of WFTL. He executed the deed of assignment of the Coal Agreement as director of WFTL, as assignor, and as director of Wikeley Inc, as assignee. Mr Wikeley executed those assignment documents in Queensland, as evidenced by his signatures having been witnessed by a Queensland justice of the peace.
WFTL served notices of the assignments on Kea’s agent in the BVI on 3 April 2023.
On 4 April 2023, Wikeley Inc filed a motion in the Kentucky proceeding to be substituted as plaintiff in place of WFTL (substitution motion). The substitution motion attached two further motions which Wikeley Inc sought to have heard upon its substitution as plaintiff. The first was a motion to compel Kea to provide responses to post-action discovery requests (discovery motion). The second was a motion for an anti-suit injunction restraining Kea from continuing to prosecute the New Zealand proceeding (anti-suit injunction motion).
On 6 April 2023, Kea filed an ex parte application for further interim relief, including:
(a)orders that Mr Wikeley:
(i) not permit Wikeley Inc to take any steps to enforce or otherwise act on the assignments, the substitution motion, the discovery motion or the anti-suit injunction motion;
(ii) cause Wikeley Inc to withdraw the substitution motion, the discovery motion and the anti-suit injunction motion;
(b)the appointment of interim liquidators to WFTL.
Gault J granted the interim relief sought by Kea. The minute of order dated 6 April 2023 recorded that Gault J was satisfied that Mr Wikeley was likely to have failed to comply with duties relating to WFTL by, apparently, acting in breach of the existing interim orders in purporting to assign the Coal Agreement and the default judgment in breach of Mr Wikeley’s duty to exercise his powers as a director of WFTL for a proper purpose.
Kea brought its application for interim relief under the TTPA in this court after it became aware of the purported assignment of the Coal Agreement and the default judgment in the Kentucky proceeding, and in circumstances where the substitution motion was listed for hearing in the Kentucky Court on 14 April 2023.
Events since the making of the 12 April orders and the 13 April orders
On 14 April 2023, the Kentucky Court adjourned the hearing of the substitution motion until 21 April 2023.
On 20 April 2023, the interim liquidators of WFTL filed a petition in the United States Bankruptcy Court for the Eastern District of Kentucky (US Bankruptcy Court) for recognition of the interim liquidation of WFTL as a foreign main proceeding under Chapter 15 of the United States Bankruptcy Code, as well as an emergency motion for provisional relief.
On 21 April 2023:
(a)on the resumed hearing of the substitution motion in the Kentucky proceeding, Wikeley Inc informed the Kentucky Court that it would file a parallel motion for substitution in the Kentucky appeal;
(b)in light of that indication, the Kentucky Court deferred ruling on the substitution motion until a ruling had been given on the parallel motion in the Kentucky appeal;
(c)Wikeley Inc filed its motion for substitution in the Kentucky appeal;
(d)the US Bankruptcy Court made orders on the emergency motion by the interim liquidators staying any execution against WFTL’s assets in the United States.
On 25 May 2023, the US Bankruptcy Court recognised the interim liquidation of WFTL as a foreign main proceeding under Chapter 15 of the United States Bankruptcy Code. Wikeley Inc has appealed that recognition order.[8] The evidence on this application does not reveal whether that appeal has been heard.
[8]CFI 84, exhibit “SJB-2” at page 12 of the exhibit bundle and exhibit “SJB-3” at page 15 of the exhibit bundle.
On the material before me, it appears that the effect of the grant of provisional relief and the making of the recognition order by the US Bankruptcy Court is that the substitution motions in the Kentucky proceeding and in the Kentucky appeal are now stayed.
On 26 May 2023, an order was made that the Kentucky appeal be held in abeyance for 90 days. During submissions on the present application, I was informed that the Kentucky appeal is effectively in abeyance pending resolution of the US Bankruptcy proceeding.
In the New Zealand proceeding, Mr Wikeley applied for leave to appeal against the decision to dismiss his application challenging jurisdiction. That application for leave to appeal was heard by Gault J on 13 July 2023 and dismissed on 31 August 2023.[9]
Onus of proof
[9]Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 2407.
Mr Wikeley submitted that, although he is the moving party on the present application, it is for Kea, as the party who obtained the 12 April orders, the 13 April orders and the 21 April orders, to show that there is a sufficient basis to justify the making of those orders.
Kea submitted that, in circumstances where the 12 April orders and the 13 April orders made ex parte were replaced by the 21 April orders made inter partes, and Mr Wikeley did not submit at the 21 April hearing or the 26 April hearing that the orders made ex parte should not be continued on an interlocutory basis, it no longer carries an onus of justifying the continuation of the ex parte orders. On that basis, Kea says, Mr Wikeley bears the onus of satisfying the court that the orders he seeks should be made.
Before turning to consider the authorities referred to in the parties’ submissions, it is important to note the different bases upon which Mr Wikeley relies in seeking to set aside the various orders. As already noted at [13](a) above, his challenge to the 12 April orders and the 13 April orders made ex parte is based on material non-disclosure by Kea when it applied for those orders. Mr Wikeley accepts, however, that a finding of non-disclosure would not provide a basis to set aside the 21 April orders made inter partes. It is for that reason that he seeks to have the 21 April orders set aside on the merits.[10]
[10]Transcript 2-63:39 to 2-64:20.
It is also relevant to note that, in opposing Mr Wikeley’s application for an adjournment of the 21 April hearing, Kea made submissions that, because the orders it sought to have made on an interlocutory basis would expressly provide for their continuation until the determination of the New Zealand proceeding “or earlier order” and that the parties had liberty to apply, it was open to Mr Wikeley to bring an application to vary or set aside the interlocutory orders at any stage.[11] I accepted those submissions when I dismissed Mr Wikeley’s adjournment application and made the 21 April orders. The effect of the way the 21 April hearing was conducted is that, prior to argument on the present application, Mr Wikeley had not been heard on the question whether the ex parte orders should continue.
[11]Transcript (21 April hearing) 1-5:30–39.
On the question of onus, Mr Wikeley relied on three authorities: Warringah Shire Council v Industrial Acceptance Corp;[12] Brimaud v Honeysett Instant Print Pty Ltd;[13] and Nicols (as trustee of the bankrupt estate of Manietta) v Manietta.[14] The passages referred to in his submissions addressed the situation where ex parte orders were continued by consent without a contested hearing.
[12](New South Wales Supreme Court, McLelland J, 22 November 1979) (Warringah).
[13][1988] 217 ALR 44 (Brimaud).
[14][2022] FCA 39 (Nicols).
In Warringah, McLelland J (as his Honour then was) observed:[15]
“However, where the parties agree upon the manner in which an application for interlocutory relief is to be disposed of and relief is granted pursuant to that agreement, whether by way of injunction or the acceptance by the Court of an undertaking, without any contest, any subsequent application for the variation of that relief must be approached on the basis of what justice requires as between the parties.”
and said in respect of the phrase “until further order of the Court”:[16]
“In the absence of any countervailing circumstances and of any reference to the final hearing of the proceedings, I take this phrase to express the mutual contemplation by the parties that at some time pending the final hearing of the proceedings the question of whether the second defendant should continue to be restrained from selling or completing any contract of sale of its land might properly be submitted for determination by the Court, such determination to supersede the agreed undertakings.
In these circumstances, although in a technical sense the second defendant as the moving party has the onus of showing that the orders it seeks should be made, the question is in substance, whether the plaintiffs are entitled on ordinary principles to interlocutory relief restraining the second defendant from selling or completing any contract for the sale of its land.”
[15]Warringah at 3-4.
[16]Warringah, 4.
In Brimaud, McLelland J (as his Honour then was) referred to the issue again by reference to the earlier statement in Warringah:[17]
“Not all kinds of interlocutory orders attract the same considerations. For present purposes one may put to one side orders of a merely procedural nature (as to which see for example Wilkshire & Coffey v Commonwealth (1976) 9 ALR 325) and injunctions (or undertakings) made or given by agreement and without contest ‘until further order’ (as to which see for example Warringah Shire Council v Industrial Acceptance Corp (unreported, SC(NSW), McLelland J, 22 November 1979).”
[17]Brimaud, 46.
In Nicols, Cheeseman J referred to the statements in Warringah and Brimaud extracted above before addressing the facts of that case:[18]
“The parties did not lead any evidence against which I can assess the ‘nature and quality of the consent underpinning’ the orders made in the present case. The chronology exposed by the Court record reveals that at the same time as the freezing orders were made by consent, timetabling orders were also made by consent for the inter partes hearing in respect of the ex parte orders to be vacated and for the service of any draft statement of claim. There has been no hearing on the merits. The examinations of Mr and Mrs Manietta were in train at the time the consent orders were made having commenced on 11 August 2020 and continued on 12, 13 and 25 August 2020. Viewed in this context and in the absence of any evidence as to what led to the consent orders being entered I would readily infer the parties being otherwise occupied in respect of the examinations and progressing the pleadings in the substantive proceedings agreed to put off the inter partes contest in respect of the freezing orders to a later time should it be necessary to agitate it. For these reasons, while in the technical sense, described by McLelland J, the respondents as moving party, bear the onus on the discharge application, as a matter of substance it is for the Trustee to justify the freezing orders. I am satisfied that justice requires this approach as between the parties.”
[18]Nicols, [65].
Kea submitted that the principles were correctly stated by Brereton J (as his Honour then was) in Brags Electric Pty Ltd trading as Inscope Building Technologies v Steven Mark Gregory:[19]
“An ex parte order is always a provisional one. Ordinarily, in the case of an ex parte injunction when the matter returns before the court, the applicant bears the onus of showing that there is a sufficient case to justify the continuation of the ex parte order on an interlocutory basis. But that does not involve an application to set aside the original ex parte order: the question in such circumstances is usually not whether the original order should be set aside, but whether it should be continued for a further period of time. Although it is true that even where an ex parte order is made ‘until further order’, the plaintiff still bears the onus of showing that it should be continued, that is really no more than a reflection that the practical convenience of sometimes making such orders until further order does not involve any reversal of where the onus lies. Where, however, a respondent applies to set aside an ex parte order on the basis that there has been a material non-disclosure, it will then bear an onus of showing that there has been a non-disclosure.”
[19][2010] NSWSC 1205 (Brags), [10].
I accept that this statement from Brags applies to Mr Wikeley’s application to set aside the 12 April orders and the 13 April orders for material non-disclosure. Mr Wikeley bears the onus of showing that there has been a non-disclosure.
As to the 21 April orders, this case differs from the authorities referred to by Mr Wikeley because the 12 April orders and the 13 April orders were not continued by consent. Nevertheless, I take the view that as matter of substance it is for Kea to justify the continuation of the 21 April orders. That is because of the way that the 21 April hearing proceeded, the fact that by use of the words “or earlier order” the 21 April orders contemplated Mr Wikeley challenging those orders at a later time and that, consequently, the 21 April orders were made without contest and without Mr Wikeley being heard on the question whether the ex parte orders should be continued.
The matters upon which Kea bears the onus in seeking to establish a basis for the continuation of the 21 April orders on the merits are:[20]
(a)whether this court is a clearly inappropriate forum according to the principles in Voth v Manildra Flour Mills Pty Ltd,[21]
(b)whether there is a serious question to be tried; and, if so
(c)whether the balance of convenience favours the grant of an interlocutory injunction.
[20]CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 (CSR), 398.
[21](1990) 171 CLR 538 (Voth).
In the course of argument, Mr Wikeley submitted that, at the stage of considering the issue of a serious question to be tried, the relevant inquiry for this court is whether there is a serious question to be tried that a permanent anti-enforcement injunction would be granted in the circumstances of the present proceeding. I accept that submission.
As to Mr Wikeley’s application to set aside the 26 April orders, those orders were made after a contested hearing during which Mr Wikeley made submissions through counsel, and in fact were made following the offer of conditions by his counsel, in response to an application for execution of the arrest warrant. Accordingly, there is no basis to conclude that, as a matter of substance, it is for Kea to justify the continuation of the 26 April orders. Mr Wikeley bears the onus of satisfying the court that the 26 April orders should be set aside. Likewise, Mr Wikeley, as the moving party, bears the onus on his application to permanently stay the contempt application and to permanently stay this proceeding.
The operation of the TTPA
Section 26 of the TTPA imposes three conditions which must be met before the court’s discretion to grant interim relief is engaged:
(a)pursuant to s 26(1)(a), the court must consider it appropriate to grant the interim relief in support of the New Zealand proceeding;
(b)pursuant to s 26(1)(b)(i), the court must be satisfied that, if a proceeding similar to the New Zealand proceeding had been commenced in the court, it would have had power to grant the interim relief in that similar proceeding;
(c)pursuant to s 26(1)(b)(ii), the court must also be satisfied that it would have granted the interim relief in that similar proceeding.
I accept Mr Wikeley’s submission that in the circumstances of this case the hypothetical “similar proceeding” referred to in s 26(1)(b)(i) and (ii) would comprise:
(a)a proceeding for final relief in a similar form as was filed in the New Zealand proceeding on 31 October 2022 seeking relief which includes a permanent anti-enforcement injunction in similar terms as sought in the New Zealand proceeding (see [42](b) above);
(b)an application for interim and interlocutory relief in a similar form to that filed in the New Zealand proceeding on 31 October 2022;
(c)an application for further interim and interlocutory relief in a similar form to that filed in the New Zealand proceeding on 6 April 2023.
The inquiry as to whether there is a serious question to be tried that a permanent anti-enforcement injunction would be granted must be undertaken by reference to this hypothetical similar proceeding. It was common ground in the argument before me that the counterfactual questions posed by ss 26(1)(b)(i) and (ii) are to be answered by applying the law of Queensland to the facts as established by the evidence before me on the hearing of the present application.
Kea did not challenge Mr Wikeley’s submission that, in circumstances where interim relief has been granted in the New Zealand proceeding and similar interim relief is then sought in this court, ss 25 and 26 of the TTPA do not contemplate or permit this court simply enforcing, in Australia, an interim order made in New Zealand or adopting the findings made by the New Zealand court. I accept Mr Wikeley’s submission that this court must:
(a)consider whether to make its own order and, in doing so, apply the terms of s 26;
(b)satisfy itself of the legal principles that apply to an application for interim relief in Queensland and apply those principles;
(c)make its own findings of fact based on admissible evidence filed in this proceeding.
Kea also accepted that submissions Mr Wikeley made about considerations of comity are relevant to the court’s consideration whether to grant interim relief under s 26 of the TTPA. There was discussion during the hearing of the application as to whether those matters ought be considered as part of the enquiry under s 26(1)(a)—whether the court considers it appropriate to give the interim relief in support of the New Zealand proceeding—or as part of the enquiry under s 26(1)(b): whether the court would have had power to give, and would have given, the interim relief in a similar proceeding brought in this court. Ultimately, I do not think anything turns on the resolution of that issue. In circumstances where the parties are agreed that those matters must be taken into account at some point when the court considers whether to grant interim relief under s 26 then I do not need to say anything further about it.
There was an issue whether the question of clearly inappropriate forum, as understood in Voth,[22] arises for determination on an application for interim relief under ss 25 and 26 of the TTPA.
[22](1990) 171 CLR 538 (Voth).
Kea submitted that the question does not arise for consideration in the context of such an application. That submission was based on the legislative history of s 26. Kea relied upon the repeal of s 26(2) from the TTPA and the explanation for that repeal. The repealed subsection had provided that an Australian court may refuse to give the interim relief if it considered that it had no jurisdiction, apart from s 26, in relation to the subject matter of the New Zealand proceeding and for that reason it would be inexpedient to give the interim relief. That was said to be unnecessary because the Australian court would already have considered issues of jurisdiction and expediency when assessing whether it is appropriate to grant relief under s 26(1)(a).[23]
[23]Explanatory Memorandum to the Trans-Tasman Proceedings Amendment and Other Measures Bill 2011 (Cth), 5 [18]–[21].
I do not accept Kea’s submission. The question whether an Australian court is a clearly appropriate forum is different to issues of jurisdiction and expediency. Where the interim relief sought under ss 25 and 26 of the TTPA is an anti-suit injunction or an anti-enforcement injunction, the condition imposed by s 26(1)(b)(ii)—that, if a proceeding similar to the New Zealand proceeding had been commenced, the Australian court would have given the interim relief—must involve a consideration of the question whether the Australian court is a clearly inappropriate forum.
The obligation to make disclosure on an ex parte hearing
In Thomas A Edison Ltd v Bullock,[24] Isaacs J described the duty of a party seeking ex parte orders in the following terms:[25]
“… it is the duty of a party asking for an injunction ex parte to bring under the notice of the Court all facts material to the determination of his right to that injunction, and it is no excuse for him to say that he was not aware of the importance. Uberrima fides is required, and the party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all of the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts informing its judgment is unfulfilled and the order so obtained must almost invariably fall.”
[24](1912) 15 CLR 679 (Edison).
[25]Edison, 681–2.
The obligation of disclosure was further explained by Alsop J (as his Honour then was) in Walter Rau Neusser Oel Und Fett AG v Cross Pacific Trading Pty Ltd:[26]
“That does not mean stating matters obliquely, including documents in voluminous exhibits, and merely not mis-stating the position. It means squarely putting the other side's case, if there is one, by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the Court to search out, organise and bring together what can be said on the respondents' behalf. That is the responsibility of the applicant, through its representatives.”
[26][2005] FCA 955, [38].
The question of what constitutes a material fact was considered in Savcor Pty Ltd v Cathodic Protection International APS:[27]
“The obligation is to disclose all material facts. What is a material fact is a matter which is relevant to the court’s determination. To be material, it would have to be a matter of substance in the decision making process.
In Brink’s Mat Ltd v Elcombe, Ralph Gibson LJ conveniently summarised the principles. His Lordship noted that ‘the material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers.’ His Lordship observed that the applicant must make proper enquiries before making an application. If a material non-disclosure is established the court would be astute to ensure that the plaintiff obtaining an ex parte order without full disclosure is deprived of any advantage he may have derived, and further that whether a fact not disclosed ‘is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the facts to the issues which were to be decided by the judge on the application.’ His Lordship pointed out that the innocence or otherwise of the non-disclosure and the failure to understand its relevance are important factors to take into account.”
[27](2005) 12 VR 639 (Savcor), 650 [35]–[36] per Gillard AJA (Ormiston and Buchanan JJA agreeing) (citation omitted).
In Re South Downs Packers Pty Ltd,[28] a decision of the Full Court of this court, the same question was succinctly answered as follows:[29]
“A non-disclosure will not be material unless it be likely to influence the court in acceding to the application.”
[28][1984] 2 Qd R 559 (South Downs Packers).
[29]South Downs Packers, 566.
In Brink’s-MAT Ltd v Elcombe,[30] Slade LJ observed:[31]
“The principle is, I think, a thoroughly healthy one. It serves the important purposes of encouraging persons who are making ex parte applications to the court diligently to observe their duty to make full disclosure of all material facts and to deter them from failure to observe this duty, whether through deliberate lack of candour or innocent lack of due care.
Nevertheless, the nature of the principle, as I see it, is essentially penal and in its application the practical realities of any case before the court cannot be overlooked. By their very nature, ex parte applications usually necessitate the giving and taking of instructions and the preparation of the requisite drafts in some haste. Particularly in heavy commercial cases, the borderline between material facts and non-material facts may be a somewhat uncertain one. While in no way discounting the heavy duty of candour and care which falls on persons making ex parte applications, I do not think the application of the principle should be carried to extreme lengths. In one or two other recent cases coming before this court, I have suspected signs of a growing tendency on the part of some litigants against whom ex parte injunctions have been granted, or of their legal advisers, to rush to the R v Kensington Income Tax Comrs principle as a tabula in naufragio, alleging material non-disclosure on sometimes rather slender grounds, as representing substantially the only hope of obtaining the discharge of injunctions in cases where there is little hope of doing so on the substantial merits of the case or on the balance of convenience.”
[30][1988] 3 All ER 188 (Brink’s-MAT).
[31]Brink’s-MAT, 194–5.
That statement was referred to with approval by Basten JA, with whom Beazley ACJ and Leeming JA agreed, in Fitz Jersey Pty Ltd v Atlas Construction Group Pty Ltd.[32]
Was there adequate disclosure at the 12 April hearing?
[32](2017) 94 NSWLR 606, 623 [67].
With those principles in mind, I turn to consider whether Kea failed to adequately disclose any of the matters which Mr Wikeley relies on in his application to set aside the 12 April orders and the 13 April orders.
Whether this court is a clearly inappropriate forum
Where an anti-suit injunction is sought in the exercise of the court’s equitable jurisdiction, the court is required to consider whether it is appropriate—in the Voth sense that it is not clearly inappropriate—for it to determine the matters in issue. If the court decides that it is clearly an inappropriate forum then the occasion for considering whether or not to grant an anti-suit injunction will not arise.[33]
[33]CSR, 397; Mackellar Mining Equipment Pty Ltd v Thornton (2019) 367 ALR 171 (Mackellar), 179 [32].
Mr Wikeley submitted that Kea failed to draw this requirement to the court’s attention at the 12 April hearing. He contended that the effect of this non-disclosure was that Kea did not ask the court to make a finding that it was not a clearly inappropriate forum before considering whether to make the 12 April orders.
These submissions relied upon part of Kea’s outline for the 12 April hearing (12 April outline)[34] where, under the heading “Jurisdiction”, it cited paragraph 47 of the 2022 NZ Judgment. In that paragraph, Gault J accepted that New Zealand appeared to be the appropriate forum for Kea’s claims and set out reasons for that conclusion. His Honour then noted that the New Zealand court may grant urgent interim relief before service has been effected on overseas parties, and before any protest to jurisdiction—including any question about appropriate forum—has been determined.[35]
[34]CFI 6, [43].
[35]2022 NZ Judgment, [48].
Mr Wikeley submitted that, in considering issues about appropriate forum, the New Zealand courts apply principles set out in Spiliada Maritime Corp v Cansulex Ltd,[36] which were rejected by the High Court in Voth.
[36][1987] AC 460.
I do not accept that, by its reference to paragraph 47 of the 2022 NZ Judgment, Kea failed to disclose the requirement that this court consider whether it was a clearly inappropriate forum. Mr Wikeley’s submissions ignore earlier parts of the 12 April outline which specifically refer to both CSR and Mackellar, the authorities which set out the requirement.[37] In particular, paragraph 33 of the 12 April outline referenced paragraphs 29 to 33 of Mackellar in which the Court of Appeal stated the requirement.
[37]CFI 6, [30]–[34].
In my view, Kea adequately drew the threshold requirement to the court’s attention at the 12 April hearing.
The principles relating to anti-suit injunctions and anti-enforcement injunctions
Mr Wikeley submitted that Kea failed to identify the correct principles for an anti-suit injunction or an anti-enforcement injunction because the 12 April outline referred to the approach taken in the 2022 NZ Judgment and the described that approach as “an orthodox approach”.[38] That approach involved the New Zealand court considering the following five matters: (i) whether it had personal jurisdiction over the defendants; (ii) whether there was a serious question to be tried; (iii) whether further steps by the respondents to the application to enforce the default judgment would be oppressive or vexatious; (iv) whether Kea had delayed; and (v) whether the balance of convenience and overall justice favoured the granting of interim relief.
[38]CFI 6, [38]–[39], referring to 2022 NZ Judgment, [44].
As I have sought to explain in addressing Mr Wikeley’s submission that this court is a clearly inappropriate forum (see [210] to [224] above), the court’s consideration of the effect of Kea’s conduct in the Kentucky proceeding as part of the assessment of the balance of convenience must have regard to the following contextual matters:
(a)Kea has demonstrated an arguable case that the default judgment has been obtained by fraud and that the steps sought to be taken to enforce that default judgment form part of a tortious conspiracy between Mr Wikeley and others to injure Kea; and
(b)the Kentucky Court has not yet considered the merits of Kea’s fraud argument.
Comity
Mr Wikeley’s submissions on the relevance of principles of comity have already been considered in addressing the question of clearly inappropriate forum (see [159] to [203] and [225] to [228] above).
In addition to the matters considered there, Mr Wikeley submitted that this court was persuaded to make orders which replicated those made by Gault J in the New Zealand proceeding because doing so would allow those orders to be practically enforced.[167] On Mr Wikeley’s submissions, this was an error because it misunderstood or misstated the scope and purpose of the TTPA.
[167]First Judgment, [8], [36], [53] and [57]–[59].
As I have already indicated at [81] above, I accept that s 26 of the TTPA does not empower an Australian court to simply replicate injunctive orders granted by a New Zealand court in order to secure compliance with the New Zealand orders without the Australian court being satisfied that the requirements of the section are met in the circumstances of the application. This was, however, not the basis upon which the orders were made in the present proceeding.
Mr Wikeley accepted that the application for relief under s 26 of the TTPA is to be decided on the footing that there is evidence that he breached orders made in the New Zealand proceeding.[168] Both the existence of those New Zealand orders, and the evidence that Mr Wikeley had breached them, were relevant to, and were considered by this court with reference to, the requirements under s 26 of the TTPA that: (i) this court considered it appropriate to grant the relief in support of the New Zealand proceeding; and (ii) this court would have granted the interim relief if a proceeding similar to the New Zealand proceeding had been commenced in this court.[169] That consideration did not involve simply granting relief which replicated the New Zealand orders, in order to ensure effective compliance with those orders, without being satisfied that the orders were appropriate having regard to the facts before the court and the relevant legal principles.
[168]CFI 81, [262](g).
[169]First Judgment, [32]–[61].
Having regard to the earlier discussion of the fraud exception in the context of considerations of comity, I do not accept Mr Wikeley’s submission that orders of the kind made against him by this court could only be justified by a need to protect the integrity of the processes of this court and to ensure compliance with its own orders.
Consideration of the balance of convenience (paragraph 3 of the 21 April orders)
The factors that weigh in favour of the continuation of the injunctions made in paragraph 3 of the 21 April orders are:
(a)the evidence which establishes an arguable case that the default judgment was obtained using a fabricated document, and that the procuring of that judgment and steps taken subsequently to enforce it have been taken pursuant to a tortious conspiracy between Mr Wikeley and others to injure Kea;
(b)the potential for harm to be caused to Kea by the continued perpetration of the alleged tortious conspiracy.
The assessment of the potential for harm to be caused to Kea must have regard to evidence of Mr Wikeley’s present ability (through Wikeley Inc) to take further steps directed towards enforcement of the default judgment. In this regard, Mr Wikeley referred to:
(a)the order made in the New Zealand proceeding which appointed interim liquidators to WFTL and expressly stated that Mr Wikeley had ceased to have any powers, functions or duties as director of WFTL other than those required or permitted by New Zealand statutory provisions governing company liquidations;
(b)evidence that the interim liquidators of WFTL sought and, on 25 May 2023, obtained, recognition by the US Bankruptcy Court of the interim liquidation of WFTL as a foreign main proceeding under Chapter 15 of the United States Bankruptcy Code, and the effect of this recognition and the provisional relief granted by the US Bankruptcy Court in staying the hearing of the substitution motion in the Kentucky courts and any further attempts at enforcement against the assets of WFTL (see [58] to [61] above);[170]
(c)Mr Wikeley’s evidence that he was told by his former attorney in Kentucky that he is no longer in control of Wikeley Inc because the shareholders of that company (Mr Wikeley’s sons) had removed him as president of the company and replaced him with Mr Branham.[171]
[170]CFI 51, [5]–[9]; CFI 84, [5]–[13].
[171]CFI 52, [12]–[13].
The first two of these matters support the submission that Mr Wikeley’s ability to pursue the substitution motion, and thereby continue to pursue enforcement of the default judgment by Wikeley Inc, is now constrained by orders of the US Bankruptcy Court.
However, the injunctions in paragraph 3 of the 21 April orders extend beyond a restraint on Mr Wikeley causing WFTL or Wikeley Inc from taking steps in existing proceedings. They act to restrain him from taking any steps himself, or causing any other person (not only WFTL or Wikeley Inc) from taking any steps, based on: the Coal Agreement; the default judgment; the statutory demand; the purported assignment of the Coal Agreement; the purported assignment of the default judgment; any notices of the purported assignments; and any subpoenas issued based upon the Coal Agreement or the default judgment. Given the evidence that Mr Wikeley breached the orders made in the New Zealand proceeding by causing the purported assignment of the Coal Agreement and the default judgment from WFTL to Wikeley Inc, I am satisfied that there is continued utility in maintaining the injunctions in paragraph 3 of the 21 April orders notwithstanding the constraints now imposed by the orders of the US Bankruptcy Court.
As to the question of the sufficiency of Kea’s undertaking as to damages, the conclusion at [249] above weighs against the further continuation of the injunctions. However, the importance of this in the overall balance must be considered in the unusual circumstances of this case: (i) Kea has established an arguable case that the default judgment is based upon a fabricated agreement; (ii) the anti-enforcement injunctions granted by this court have been made on an application for relief under s 26 of the TTPA in support of the New Zealand proceeding; (iii) Mr Wikeley was already subject to anti-enforcement injunctions in similar terms made in the New Zealand proceeding; (iv) consequently, a refusal by this court to grant the interlocutory injunctions sought by Kea would not leave Mr Wikeley free to seek to enforce the default judgment (he could only take steps to enforce the default judgment by acting in contravention of the New Zealand orders); (v) there is evidence that Mr Wikeley was prepared to act in contravention of the orders of the New Zealand court; (vi) Mr Wikeley did not challenge the sufficiency of Kea’s undertaking as to damages in seeking to have the orders made in the New Zealand proceeding set aside.
In that context, I consider that the importance of the worth of the undertaking as the price of the injunction—and the sufficiency of the security offered in support of the undertaking—is greatly diminished. That is because, save in respect of the restriction upon his ability to travel outside Australia, the orders made by this court did not impose any restraint upon Mr Wikeley’s conduct to which he was not already subject by reason of the New Zealand orders (but which he was prepared to contravene).
As to the steps taken by Kea in the Kentucky proceeding, I have already indicated at [114] above that I am not persuaded that the extent of Kea’s participation in the Kentucky proceeding means it has waived its rights to seek to restrain Mr Wikeley as it has done in the New Zealand proceeding and in this proceeding. Nor am I persuaded that Kea’s application for injunctive relief is vexatious or oppressive, or is an abuse of process, in circumstances where the Kentucky Court has not yet considered the merits of Kea’s fraud arguments (see [210] to [224] above).
The existence of an arguable case that the default judgment was obtained using a fabricated document, and that the procuring of that judgment and steps taken subsequently to enforce it have been taken pursuant to a tortious conspiracy between Mr Wikeley and others to injure Kea, also means that Mr Wikeley’s submissions on the impact of delay are substantially weakened.
Weighing these various matters in the overall balance and having regard to what, in my view, can properly be described as the exceptional circumstances of the present case, I am ultimately satisfied that the balance of convenience favours the continuation of the injunctions in paragraph 3 of the 21 April orders. That is, I am satisfied that it is just in all the circumstances that those injunctions should be continued.
No departure orders (paragraph 4 of the 21 April orders)
In Talacko v Talacko (No 2),[172] Habersberger J concluded that the Supreme Court of Victoria has the inherent power to make orders preventing a person from departing the jurisdiction, in an appropriate case, for the purpose of preventing the abuse of its processes or for the purpose of enhancing the administration of justice.[173] As I observed when the 12 April orders were made, I consider this court has the same power.[174]
[172](2009) 25 VR 613.
[173](2009) 25 VR 613, 623 [46].
[174]First Judgment, [63]–[64].
Mr Wikeley submitted that the power to restrain a person from leaving the jurisdiction, or to require a person to deliver up his or her passport, is one which should be exercised with great caution and only in a most clear case.[175]
[175]Australian Securities and Investments Commission v Wiggins (1998) 90 FCR 314, 320.
It may be readily acknowledged that restraint and caution must be exercised in relation to curtailing or interfering with a person’s travel and freedom of movement.[176] Nevertheless, I remain satisfied that there is a proper basis for interfering with Mr Wikeley’s travel and freedom of movement in the present circumstances.
[176]Trust Company (PTAL) Limited (Trustee for the LM Managed Performance Fund), Re Drake v Drake [2014] FCA 1445, [26].
There are two justifications for continuing the no-departure orders made in paragraph 4 of the 21 April orders. The first is that such orders assist in attempting to ensure that Mr Wikeley complies with the injunctions made in paragraph 3 of the 21 April orders. The second is that the orders assist in attempting to ensure that Mr Wikeley appears at the hearing of the contempt application.
As to the first justification, based on the evidence referred to at [264] above, Mr Wikeley submitted that there was no longer any need for the no-departure orders to remain in place. I do not accept that submission in circumstances where the injunctions in paragraph 3 of the 21 April orders extend beyond a restraint on Mr Wikeley causing WFTL or Wikeley Inc from taking steps in existing proceedings. The evidence of Mr Wikeley’s earlier contravention of orders made in the New Zealand proceeding satisfies me that he is a person who is prepared to ignore the authority of court orders when he is not amenable to the court’s powers of enforcement. On the basis of that history, I am satisfied that there is an unacceptable risk that if Mr Wikeley is permitted to leave Australia he would, upon leaving, act in contravention of the injunctions made in paragraph 3 of the 21 April orders.
As to the second justification, Mr Wikeley submitted that there is no evidence that he is likely to depart Australia. It is true that there is no direct evidence that Mr Wikeley has expressed an intention to, or taken steps toward, leaving Australia, however, that position is explained by Mr Wikeley having been subject to the no-departure orders made ex parte at the 12 April hearing.
Even in the absence of direct evidence, I consider that there is an unacceptable risk that, if the no-departure orders are discharged, Mr Wikeley would, despite his stated intention to the contrary, leave Australia and not return as required to appear on the hearing of the contempt application. I have already explained my conclusion that Mr Wikeley is a person who is prepared to ignore the authority of court orders when he is not amenable to the court’s powers of enforcement. Having reached that conclusion, I am satisfied that if the no-departure orders are discharged Mr Wikeley is likely to seek to put himself beyond the powers of enforcement of this court by leaving Australia.
Conclusion on the 21 April orders
I am ultimately satisfied that the 21 April orders should be continued on the undertaking of Kea’s solicitors to hold the sum of $100,000 in their trust account as security for Kea’s undertaking as to damages (see [250] above).
Should the 26 April orders be set aside?
Mr Wikeley applied to have the 26 April orders set aside because:[177]
(a)those orders depend on the 12 April orders and the 13 April orders which, on Mr Wikeley’s submissions, should be set aside;
(b)because they were made to secure his appearance at the contempt application which, on Mr Wikeley’s submissions, should be permanently stayed; and
(c)it would be an abuse of the court’s processes for the 26 April orders to remain in force when, on Mr Wikeley’s submissions, the 12 April orders and the 13 April orders should be set aside.
[177]CFI 72, [91].
Each of these arguments depend upon the court finding that the 12 April orders and the 13 April orders should be set aside.
In circumstances where I have dismissed Mr Wikeley’s application to set aside the 12 April orders and the 13 April orders, these arguments do not provide a basis to set aside the 26 April orders.
However, Mr Wikeley also submitted at the hearing of the application that the 26 April orders, which were described as imposing a limited form of house arrest, could no longer be considered necessary to secure his appearance at the hearing of the contempt application. That submission was based on the following matters:
(a)the conditions of residence, curfew and surety were offered in circumstances where Kea was pressing for the immediate execution of the warrant for Mr Wikeley’s arrest, and that warrant has since been set aside;
(b)Mr Wikeley is now represented by solicitors and counsel who are conducting the proceeding in the ordinary way;
(c)there is no evidence that, since 26 April 2023, Mr Wikeley has breached any orders made by this court.
I have concluded that the no-departure orders made in paragraph 4 of the 21 April orders should be continued to ensure Mr Wikeley appears at the hearing of the contempt application. Having regard to the matters identified by Mr Wikeley above, I accept there is no longer sufficient justification for the additional conditions of residence, curfew and surety imposed by the 26 April orders to attempt to ensure that outcome. Based on the present circumstances, I consider the non-departure orders in paragraph 4 of the 21 April orders to be sufficient in that regard.
Should the proceeding be permanently stayed?
Mr Wikeley submitted that the proceeding should be permanently stayed because it involves an abuse of process of the court in circumstances where:
(a)Kea sought relief from courts in the BVI on the footing that Kea could, and would, seek relief from the courts in Kentucky, founded upon substantially the same fraud argument raised in the New Zealand proceeding and in this court;
(b)Kea sought relief in the Kentucky proceeding (to set aside the default judgment and to set aside subpoenas) and in courts in New York (to set aside subpoenas) founded upon substantially the same fraud argument raised in the New Zealand proceeding and in this court;
(c)Kea continues to seek relief in the Kentucky appeal from the refusal to set aside the default judgment, relying upon the same fraud argument raised in the New Zealand proceeding and in this court;
(d)this conduct was unjustifiably oppressive to Mr Wikeley and WFTL.
I am not persuaded that Kea’s conduct in bringing the present proceeding is unjustifiably oppressive to Mr Wikeley or WFTL such as to amount to an abuse of process. I have already explained my reasons for reaching that conclusion (see [210] to [217] and [268] above).
Nor do I accept that the proceeding in this court is unjustifiably oppressive to Mr Wikeley because of:
(a)the period of four months from when Kea alleges it became aware of the default judgment in the Kentucky proceeding and its commencement of the New Zealand proceeding (for the reasons set out in [253] to [256] and [269] above) or
(b)Kea’s purpose in commencing the New Zealand proceeding or the proceeding in this court (for the reasons set out in [218] to [224] above).
I also do not accept that the proceeding should be stayed because Queensland is a clearly inappropriate forum (for the reasons set out in [154] to [230] above).
Having regard to the conclusions I have reached in addressing Mr Wikeley’s application to set aside the 21 April orders, I am not satisfied that he has discharged the burden of demonstrating a basis for a permanent stay of the proceeding, having regard to the summary of the principles governing the exercise of the court’s power to grant such relief given by Bell P (as the Chief Justice of New South Wales then was) in Moubarak by his tutor Coorey v Holt.[178]
[178](2019) 100 NSWLR 218, 233–4 [71]. That summary was adopted by Bowskill CJ in Willmot v State of Queensland [2022] QSC 167, [53] and in the appeal from that decision: Willmot v State of Queensland [2023] QCA 102, [48]–[52].
The application for a permanent stay of the proceeding must be dismissed.
Orders
The orders will be that, upon the undertaking of Kea’s solicitors to hold the sum of $100,000 in their trust account as security for Kea’s undertaking as to damages:
1.Paragraphs 2 to 4 of the orders made on 26 April 2023 are set aside.
2.The security in the amount of $10,000 paid into court in accordance with paragraphs 3 and 4 of the orders made on 26 April 2023 is to be paid out to Mr Wikeley.
3.The amended application filed on 15 June 2023 is otherwise dismissed.
I will hear the parties as to costs.
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