Kea Investments Limited v Wikeley Family Trustee Limited (in interim liquidation)
[2023] NZHC 2407
•31 August 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-2086
[2023] NZHC 2407
BETWEEN KEA INVESTMENTS LIMITED
Plaintiff
AND
WIKELEY FAMILY TRUSTEE LIMITED (IN INTERIM LIQUIDATION)
First Defendant
KENNETH DAVID WIKELEY
Second DefendantERIC JOHN WATSON
Third DefendantWIKELEY INC
Fourth DefendantUSA ASSET HOLDINGS INC
Fifth Defendant
Hearing: 13 July 2023 Appearances:
JBM Smith KC, JLW Wass and S T Coupe for the Plaintiff M D Arthur for the interim liquidators of the First Defendant (excused during the hearing)
A F Pilditch KC, T Mullins and E Armstrong for the Second Defendant
No appearance by or for the Third, Fourth and Fifth DefendantsJudgment:
31 August 2023
JUDGMENT OF GAULT J
(Extension of time, leave to appeal and stay)
This judgment was delivered by me on 31 August 2023 at 10:30 am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
KEA INVESTMENTS LTD v WIKELEY FAMILY TRUSTEE LTD (IN INTERIM LIQUIDATION) [2023] NZHC 2407 [31 August 2023]
[1] The second defendant (Mr Wikeley) seeks an extension of time and leave to appeal this Court’s judgment dated 10 March 2023.1 That judgment dismissed an application by the first defendant (WFTL) and Mr Wikeley to dismiss or stay the proceeding on jurisdiction or forum non conveniens grounds, set aside their protest to jurisdiction, continued interim orders pending further order of the Court and dismissed Kea’s application for further interim orders. Only the forum non conveniens ground is pursued. Mr Wikeley also seeks interim relief (stay) pending appeal.
[2]The application is strongly opposed by the plaintiff (Kea).
[3] The interim liquidators of WFTL (appointed since the judgment) do not support Mr Wikeley’s application.
[4] The third defendant (Mr Watson) has taken no steps in the proceeding. Nor have the fourth and fifth defendants (added since the judgment).
Factual background
[5] The factual background to the proceeding was summarised in the judgment at [3]-[24] and need not be repeated here. In essence, Kea claims that the defendants have engaged in a worldwide conspiracy to defraud Kea, including by obtaining a default judgment in favour of WFTL as trustee of the Wikeley Family Trust against Kea in Kentucky, USA for US$136,290,994 (default judgment) based on an agreement (Coal Agreement) that Kea says is a forgery.
Judgment dated 10 March 2023
[6] As indicated, the only part of the judgment that Mr Wikeley (but not WFTL) seeks to appeal is the decision to dismiss or stay the proceeding on the ground of forum non conveniens.
[7]Relevantly, the judgment concluded:
1 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466.
(a)The applicable law did not weigh either way since no relevant issue on which foreign law would be required had been identified.2
(b)In substance, the dispute is whether the defendants are conspiring to injure Kea by fraudulent means; that is, perpetuating a fraud against Kea.3
(c)On the available evidence, the Kentucky Court is not the appropriate forum for determination of Kea’s claims against the defendants for the following reasons.
(d)First, I doubted Kentucky is an available forum for Kea’s claims.4 Professor Silberman’s evidence indicated it is not. The Kentucky Court did not appear to have any jurisdiction over the defendants Mr Wikeley and Mr Watson, who were not parties to WFTL’s default judgment proceeding. Even in relation to WFTL, despite its default judgment against Kea, which indicated that WFTL had submitted to the Kentucky Court’s jurisdiction for some purposes, there was disputed evidence as to whether the Kentucky Court has jurisdiction over WFTL in relation to Kea’s claim that WFTL is party to a conspiracy to injure Kea by fraudulent means. Even the evidence of Mr Regard, WFTL’s Kentucky counsel, suggested only that Kea could counterclaim if the default judgment were set aside. Further, the Kentucky Court is not an available forum for Kea’s second cause of action.
(e)Secondly, even if it were an available forum, Kentucky is not the most appropriate forum having regard to several factors:5
(i)The New Zealand Court has a greater interest in regulating the conduct of WFTL, a New Zealand company acting as trustee of a New Zealand trust.
2 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [81].
3 At [82].
4 At [83].
5 At [84]-[87].
(ii)The BVI Court will look to the New Zealand Court to make a conclusive finding on the conspiracy/fraud claim and will recognise such a judgment because this Court has jurisdiction over WFTL as of right.
(iii)Kea’s second cause of action will be pursued in New Zealand in any event and this Court will have to determine whether the defendants are perpetrating a fraud in that context.
(iv)The location of the parties and witnesses does not favour Kentucky or BVI.
(v)In relation to the default judgment, I accepted that Kea has taken steps in Kentucky to set it aside but, insofar as it was relevant, Kea had not submitted to the jurisdiction of the Kentucky Court.
(vi)Reference to the risk of inconsistent judgments assumes that substantive proceedings will continue in both jurisdictions, which is not an appropriate assumption when addressing forum conveniens (as opposed to the need for ongoing interim anti-suit relief).
(vii)I did not accept that Kea had tactically delayed – delay was not a factor weighing against New Zealand being the appropriate forum.
(f)Nor was it suggested the BVI Court is an appropriate forum for determination of Kea’s claims against the defendants. The BVI Court does not have jurisdiction over the defendants in relation to Kea’s conspiracy claim.
[8]I therefore concluded that New Zealand is the appropriate forum.6
6 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [88].
Subsequent steps
[9] Following the judgment of 10 March 2023 setting aside the first and second defendants’ protest to jurisdiction, most of the chronology of events is a matter of record. Before setting out this chronology, I note that Mr Smith KC, for Kea, objected to the admissibility of a substantial part of the affidavit in support of Mr Wikeley’s application sworn by his Queensland solicitor, Mr Dowd, on the basis it was inadmissible hearsay or opinion. Rather than addressing individual admissibility objections, Mr Pilditch KC, for Mr Wikeley, focused on the common ground that there was a period during which Mr Wikeley was without New Zealand legal representation. Mr Pilditch also submitted that the Court should not draw inferences adverse to Mr Wikeley given parallel contempt proceedings in Queensland, to which I will refer below.
[10] On 17 March 2023, the solicitors for WFTL and Mr Wikeley, Wilson Harle, informed the Court that WFTL and Mr Wikeley intended to seek leave to appeal in respect of the dismissal of their application to dismiss or stay the proceeding and the setting aside of their protest to jurisdiction and that they intended to instruct new counsel. They sought that limited timetable orders be made to allow those steps to be taken.
[11]On 28 March 2023, Mr Wikeley incorporated Wikeley Inc.
[12] On 29 March 2023, I directed the defendants to file a defence by 14 April 2023 but deferred making discovery orders as sought by Kea.
[13] On 30 March 2023, Mr Wikeley as director of WFTL purported to assign the default judgment and the Coal Agreement to Wikeley Inc.
[14] On 3 April 2023, Wilson Harle filed an interlocutory application seeking an order declaring that Mr Browne had ceased to be the solicitor on the record for WFTL and Mr Wikeley, together with an (unsworn) affidavit in support.7
[15] On 4 April 2023, Wikeley Inc applied to the Kentucky Court to be substituted as plaintiff in the Kentucky proceeding on the basis of the purported assignments. That motion was filed by the Kentucky lawyers for WFTL (as trustee of the Wikeley Family Trust) and Wikeley Inc.8
[16] On 6 April 2023, Kea applied without notice to this Court for further interim orders having discovered that Mr Wikeley had taken steps purporting to divest WFTL of the default judgment and otherwise to avoid the effect of the New Zealand Court orders. I was satisfied that further interim orders should be made on a without notice basis.9 I found that it appeared likely that Mr Wikeley and WFTL had acted in breach of this Court’s earlier interim orders by assigning or purporting to assign the Coal Agreement and the very substantial default judgment.10 In the unusual circumstances, I considered it was just and equitable that WFTL be put into interim liquidation.
[17] On 11 April 2023, any application for leave to appeal the 10 March 2023 judgment was due (20 working days after judgment). No application was filed, nor was any other correspondence received.
[18] Also on 11 April 2023, Mr Wikeley incorporated USA Asset Holdings Inc in Kentucky, and the following day purported to appoint that company as the trustee of the Wikeley Family Trust and to change the law of the trust.
7 The accompanying memorandum indicated that the application and affidavit had not been served on Kea (referring to counsel’s fiduciary obligations and obligations of confidentiality) but that the plaintiff’s solicitors would be advised by email that the documents had been filed. The documents were subsequently released to the new solicitors.
8 Wikeley Inc also filed motions that it would bring upon substitution to compel discovery from Kea and an anti-suit injunction restraining Kea from continuing this proceeding.
9 These orders included adding Wikeley Inc as a defendant.
10 Minute dated 6 April 2023 at [7].
[19] On 12 April 2023, Kea commenced proceedings in the Supreme Court of Queensland seeking ancillary interim relief. That Court made without notice orders in support of this proceeding under s 25 of the Trans-Tasman Proceedings Act 2010 (Australia).
[20] On 13 April 2023, Mr Wikeley advised the interim liquidators of WFTL that he had replaced WFTL as trustee of the Wikeley Family Trust with the Kentucky company, USA Asset Holdings Inc. Mr Wikeley also stated to the interim liquidators that their appointment was an aspect of a campaign of oppression and intimidation by the directors of Kea. He called upon them to deliver up any assets or property under their control.
[21] Also on 13 April 2023, the Kentucky lawyers for Wikeley Inc filed a reply in the Kentucky proceeding pursuing the 4 April 2023 motion for substitution.
[22] On 14 April 2023, Mr Wikeley’s statement of defence in this proceeding was due. No statement of defence was filed. That same day, Kea filed a memorandum foreshadowing the possibility of an application for judgment by formal proof if no defence was filed.
[23] On 17 April 2023, following a telephone conference, I made an order declaring that Mr Browne had ceased to be the solicitor on the record for WFTL and Mr Wikeley, on terms including that unless and until Mr Wikeley filed an alternative address for service, any further documents may be served on Mr Wikeley by email.11
[24] At that telephone conference Kea indicated that, as the deadline for statements of defence by the first to third defendants had expired without defences being filed or served, it sought to proceed by way of formal proof but intended to notify those defendants so that they had an opportunity to seek leave to file a statement of defence.12 The minute following that telephone conference was provided to Mr Wikeley that evening.
11 Minute dated 17 April 2023 at [4].
12 At [8], citing High Court Rules 2016, r 15.9(3). Kea also sought to abridge time for Wikeley Inc to file a statement of defence.
[25] On 21 April 2023, Kea’s solicitors emailed Mr Wikeley (and Mr Watson) advising that the hearing of the formal proof application had been fixed for 17 May 2023. The email expressly warned Mr Wikeley of the consequences of failing to take steps before the hearing. Mr Wikeley did not reply.
[26] On 15 May 2023, Mr Dowd received and acknowledged an email and attachment from Kea’s solicitors advising of the formal proof hearing to take place on 17 May 2023. The attachment was a copy of Kea’s submissions for the hearing.
[27] On 17 May 2023, the substantive one day hearing proceeded by way of formal proof. Judgment was reserved.
[28] On 1 June 2023, Mr Dowd filed in this proceeding a notice of change of solicitor and a memorandum recording that Mr Wikeley wished to seek a stay of the New Zealand proceedings pending the contempt hearing in Queensland and then to bring an application so that he could defend the proceeding in New Zealand that was subject to a formal proof hearing on 17 May 2023 and to file a defence and evidence and have the defence considered by the Court. That memorandum did not signal any intention to seek leave to appeal.
[29] On 22 June 2023, Mr Wikeley’s new solicitor, Mr Mullins, filed a notice of change of representation and the present application, seeking an extension of time and leave to appeal my judgment of 10 March 2023 and interim relief (stay) pending appeal, together with an affidavit from Mr Dowd. An amended interlocutory application was filed on 6 July 2023.
Matters for determination
[30] There is an overlap between the components of Mr Wikeley’s application, particularly seeking extension of time to appeal and seeking leave to appeal under s 56(3) of the Senior Courts Act 2016, but it is convenient to deal with the components sequentially:
(a)extension of time;
(b)leave to appeal; and
(c)interim relief (stay).
[31]I preface consideration of these by noting the context Mr Pilditch emphasised
– that the decision that Mr Wikeley wishes to appeal is the foundation for the parallel proceeding in Queensland to punish Mr Wikeley for contempt, in which his liberty is at stake. Mr Pilditch submitted the applications bring Mr Wikeley’s right to silence, to be presumed innocent, and to access the courts to the fore. I will return to this submission.
Extension of time
Applicable principles
[32] In Almond v Read,13 the Supreme Court identified the applicable factors on an application for an extension of time to appeal. That case concerned an extension of time to bring a substantive first appeal but it is common ground that those factors are relevant even where there is no appeal as of right and leave to appeal is required irrespective of an extension of time.14 The factors are:15
(a)the length of the delay, including how quickly the applicant sought to rectify any mistake as to the filing date;
(b)the reasons for the delay, where it will be particularly relevant to know whether the delay resulted from a deliberate decision not to proceed followed by a change of mind, from indecision, or from error or inadvertence, there being less justification for an extension of time in the first two situations;
(c)the conduct of the parties, particularly of the applicant, such as a history of non-cooperation or delay;
13 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.
14 Jones v New Zealand Bloodstock Financing and Leasing Ltd [2021] NZCA 213 at [19].
15 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38].
(d)any prejudice or hardship to the respondent, such that significant delay and significant prejudice may lead to an extension being refused even where the appeal is strongly arguable; and
(e)the significance of the issues raised by the proposed appeal, including whether it gives rise to matters of public interest.
[33]Ultimately, the question is what the interests of justice require.
Length of delay
[34] Since the last day to apply for leave to appeal was 11 April 2023 and the application for an extension of time was filed (without earlier signal) on 22 June 2023, the length of Mr Wikeley’s delay was over two months or 10 weeks. During that period, the substantive formal proof hearing took place, with judgment reserved. There is no suggestion of miscalculation or not knowing the leave to appeal period and the evidence indicates that Mr Wikeley knew about the formal proof hearing. In the context of a challenge to jurisdiction and a proceeding warranting urgency, this delay was not insignificant.
Reasons for the delay
[35]As to the reasons for this delay, Mr Pilditch submitted that:
(a)Mr Wikeley wished to apply for leave to appeal;
(b)he was without representation in New Zealand from 15 March 2023 until 19 June 2023;
(c)he attempted unsuccessfully to obtain replacement solicitors;
(d)since 20 April 2023, he has been facing the contempt proceeding in Queensland;
(e)the matter is serious and complex and in no way one that a self-represented person could be expected to advance; and
(f)Mr Dowd did not appreciate the significance of the formal proof hearing.
[36] Mr Pilditch did not suggest this was a case of a mistaken slip or omission. However, he did not accept it could be inferred that Mr Wikeley had disavowed the expressed intention to appeal – in the sense that he made a deliberate decision not to proceed with an appeal and then changed his mind.
[37] Mr Smith submitted that Mr Wikeley does not have a valid excuse for the delay. Having communicated a decision to apply for leave to appeal in time, his subsequent failure to do so cannot be other than as a result of a deliberate choice – to devote his time and resources to taking steps calculated to avoid the effect of this Court’s orders.
[38] There is no affidavit from Mr Wikeley. Even taking a conservative approach to his right to silence and privilege against self-incrimination given the Queensland contempt proceeding, he could and should have sought to explain the reason for his delay in applying for leave to appeal. Mr Dowd could not provide admissible evidence on that issue at least prior to expiry of the leave to appeal period on 11 April 2023 and his involvement from 23 April 2023 (after the Queensland Court ordered the arrest of Mr Wikeley on 21 April 2023). Mr Dowd’s evidence about this early period was limited to hearsay and opinion about Mr Wikeley’s stress and medical condition following delivery of the 10 March 2023 judgment, and hearsay about Mr Wikeley’s fee dispute with Wilson Harle, culminating in the (objected to) assertion that Mr Wikeley was not able to obtain legal representation to file an appeal in that time (by 11 April 2023). The Queensland proceeding cannot have caused any earlier failure to seek new legal representation in New Zealand.
[39] The evidence that Mr Wikeley attempted unsuccessfully to obtain solicitors to replace Wilson Harle is underwhelming. Mr Dowd’s reference to steps taken to obtain new solicitors to appeal the judgment is hearsay. No documents are exhibited. Even admitting Mr Dowd’s account that Mr Wikeley was in contact with Mr Rowan of CS Law, Levin from 21-27 March 2023,16 and two Auckland firms on or about
16 It is unclear why Mr Rowan could not address this since he provided an affidavit for the Kentucky proceeding on 15 May 2023.
27 April 2023, Mr Wikeley took no steps between 27 March and 27 April 2023 to obtain replacement lawyers to pursue an application for leave to appeal. Nor did he advise Kea’s solicitors that he was unable to obtain legal representation but still wished to apply for leave to appeal as soon as he reasonably could. As indicated, he did not reply to the 21 April 2023 email from Kea’s solicitors.
[40] After 27 April 2023, Mr Wikeley also took no steps to obtain replacement lawyers or advise Kea’s counsel that he still wished to apply for leave to appeal before the formal proof hearing on 17 May 2023, nor subsequently until just days before 22 June 2023. Even Mr Dowd indicated a contrary position when he purported to file a notice of change of solicitor on 1 June 2023. At this stage, I make no finding as to whether Mr Dowd must have appreciated the “seriousness” of the formal proof hearing when he acknowledged receipt of Kea’s email and submissions in support on 15 May 2023. Mr Wikeley and Mr Dowd were at least aware that the formal proof hearing was to take place on 17 May 2023.
[41] Despite Mr Dowd’s (inadmissible) references to Mr Wikeley’s stress and medical condition and the fee dispute with Wilson Harle, Mr Wikeley appears to have had no difficulty engaging solicitors and counsel to pursue his interests in other jurisdictions, including in Australia and the USA, during the same period. There is no evidence of impecuniosity. Also, as Mr Smith submitted, Mr Wikeley has been a party to significant civil litigation in the past. He is no novice when it comes to New Zealand court processes.17
[42] I conclude that Mr Wikeley has not provided satisfactory evidence of the reason(s) for his delay in applying for leave to appeal. In particular, there is insufficient evidence to establish that the reason for the delay was his inability to obtain replacement counsel. I next turn to address Mr Wikeley’s conduct during this period before commenting further on the reason for the delay.
17 Jacomb v Wikeley [2013] NZHC 707; Jacomb v Wikeley [2013] NZHC 3034; Jacomb v Wikeley [2013] NZHC 3368; Wikeley v Jacomb (as trustees of the Genset Trust) [2014] NZCA 146; and Edel Metals Group Ltd v Geier Ltd [2017] NZCA 359.
Conduct
[43] In relation to Mr Wikeley’s conduct, Mr Pilditch submitted that contempt has not been established and that no adverse inference could be drawn in relation to Mr Wikeley’s intention given the parallel contempt proceeding which he characterised as essentially criminal in nature. Therefore, he submitted, Mr Wikeley has not responded to those allegations in this proceeding. While acknowledging that the particulars of the alleged contempt relate to conduct from 12 April 2023, Mr Pilditch submitted that the earlier period would be part of the narrative in the contempt proceeding and that no inferences should be drawn even in relation to the steps taken between 28 March and 11 April 2023.
[44] Mr Smith accepted that this Court should not address issues of contempt, but submitted that the Court could and should take into account the steps taken by Mr Wikeley and draw inferences on the basis that it could not be suggested those steps were taken unintentionally. Kea relies on Mr Wikeley’s conduct as disclosed by the record and this Court’s findings of 6 April 2023 to demonstrate that Mr Wikeley devoted his effort and resources since 30 March 2023 to an attempt to evade the very orders he now seeks to appeal.
[45] Mr Smith submitted that Mr Wikeley does not deny that he has breached orders of this Court and has not attempted to explain or justify his conduct. Mr Smith submitted that assignment of the Coal Agreement and the default judgment did not happen by accident. He referred to “the paramount importance which the court must attach to the prompt and unquestioning observance of court orders”.18 Nor, Mr Smith submitted, has Mr Wikeley attempted to rectify his actions or suggested any willingness to do so as a term of obtaining permission to appeal or otherwise. He has continued to take steps seeking to enforce the default judgment. Mr Smith submitted it may be inferred that Mr Wikeley intends to take the benefit of an appeal if he obtains leave and wins but does not intend to comply with any orders of the Court if he loses. Mr Smith submitted the application cannot be described as bona fide.
18 Siemer v Stiassny [2007] NZCA 581, [2008] 3 NZLR 22 (CA) at [41].
[46] I expressly avoid making any finding as to contempt. I also draw no adverse inference as to Mr Wikeley’s intentions relating to alleged breaches of Court orders. That, however, does not preclude reference to Mr Wikeley’s actions which are evident from the record including those already addressed in my minute of 6 April 2023. As Mr Smith submitted, Mr Wikeley has put his conduct in issue by bringing this application.
[47] During the period between 27 March and 27 April 2023 when Mr Wikeley took no steps to obtain replacement lawyers to pursue an application for leave to appeal, he took steps outside New Zealand, as indicated above:
(a)He purported to assign the default judgment and the Coal Agreement to Wikeley Inc, a new company he had incorporated. Wikeley Inc then applied to the Kentucky Court to be substituted as plaintiff in the Kentucky proceeding on the basis of the purported assignments. On 6 April 2023, I found that it appeared likely that Mr Wikeley and WFTL had acted in breach of this Court’s earlier interim orders by assigning or purporting to assign the Coal Agreement and the very substantial Kentucky default judgment.19
(b)On 11 April 2023, he incorporated USA Asset Holdings Inc in Kentucky, and the following day (12 April 2023) purported to appoint that company as the trustee of the Wikeley Family Trust and to change the law of the trust. On 13 April 2023, he advised the interim liquidators of WFTL that he had replaced WFTL as trustee of the Wikeley Family Trust with that company.
[48] My 6 April 2023 finding that it appeared likely that Mr Wikeley and WFTL had acted in breach of this Court’s earlier interim orders reflected the fact that this Court’s 12 December 2022 interim order provided that “none of the defendants shall sell, assign, gift, grant any security interest in or over, or otherwise in any way
19 Minute dated 6 April 2023 at [7]. Subsequently, Mr Wikeley said in an affidavit in the Queensland proceeding that following the orders in Queensland Mr Regard told him that he no longer controlled Wikeley Inc having been removed as president by the majority shareholders, being his sons, Oliver Leonard Wikeley and William Kennedy Wikeley.
whatsoever transfer or encumber any interest any of them may have, directly or indirectly, in any rights any of them may have under or in connection with the Coal Agreement and/or the Default Judgment”.
[49] Further, the appointment of a new company as trustee of the Wikeley Family Trust on 12 April 2023 also appears to have contravened this Court’s 12 December 2022 interim order which provided that “WFTL and Mr Wikeley 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”.
[50] I comment no further on the implications of these actions except to say in relation to the reason proferred for Mr Wikeley’s delay that, given the steps he took before service of the without notice orders in Queensland, it is more likely that the Australian contempt proceeding only later caused him to seek to appeal in order to challenge this Court’s jurisdiction to continue interim orders. Mr Wikeley’s actions also count against an extension of time to apply for leave to appeal.
Prejudice
[51] Mr Pilditch submitted that prejudice to Kea arising from the formal proof hearing having occurred and potential delay to final orders is reduced since a formal proof judgment will in any event remain subject to challenge. He submitted that prejudice could be addressed by way of costs and commitment to a fast track one day appeal.
[52] Mr Smith submitted that Kea has suffered material prejudice, preparing for discovery on the basis the Wikeley defendants would participate in the proceeding and then preparing for the formal proof hearing. He submitted an appeal would mean continued delay with no confidence in this case of compliance with a condition that any appeal is pursued expeditiously. He also submitted that the effect of Mr Wikeley’s conduct on the Court and public resources is a relevant consideration.
[53] I accept Kea has suffered prejudice particularly in the form of cost in relation to the formal proof hearing, which would not have proceeded pending a possible appeal, and in terms of delay. An appeal now will mean further delay in a case that
has been given priority due to urgency given attempts to enforce the default judgment in other jurisdictions. Given Mr Dowd’s notice of 1 June 2023 before judgment on the formal proof application, I place little weight on the suggestion that such a judgment will in any event remain subject to challenge. However, as Mr Pilditch submitted, further prejudice could be addressed by a condition that any appeal is pursued expeditiously and an appropriate costs order. Even so, prejudice due to delay remains a factor. The wasted court time is relevant but would not in itself be decisive.
Significance of the issues
[54] Mr Pilditch submitted that in any event the significance of the appeal, both to the parties and more generally in relation to the core issue of comity, eclipses any concern about Mr Wikeley’s conduct and means that an extension should be granted. He submitted that, as an issue of general public importance arising in anti-suit injunction cases, there needs to be a very strong subject-matter connection where forum is being asserted for the purpose of making the orders sought in this proceeding. He submitted this has implications for all the defendants.
[55] Mr Wikeley also says the proposed appeal is of significant personal importance both in disposing of the New Zealand proceeding – save as to recognition of the default judgment in New Zealand – and in relation to his position in respect of the various interim orders including the contempt proceeding in Queensland.
[56] Mr Smith submitted there is no public interest in the issues that count in favour of leave, and the appeal is not seriously arguable. He submitted that extending time for Mr Wikeley to apply for leave to appeal in these circumstances would obstruct the administration of justice and would send a signal that even egregious unexplained delay will be ignored – it is difficult to imagine a less meritorious case and, if an extension is given in this case, it is hard to imagine a case when one would not be given. He submitted that would call into question the purpose of the time limit in the rules.
[57] I consider the proposed appeal does not raise an issue of public interest. However, I accept it is of some significance to the parties.
[58] In the context of an extension of time to bring a general appeal, a decision to refuse an extension of time based substantially on the lack of merit of a proposed appeal should be made only where the appeal is clearly hopeless.20 This is different from the test where leave to appeal is required in any event, considered below. For present purposes, I do not treat the appeal as clearly hopeless.
Conclusion
[59] The delay, reasons for it, Mr Wikeley’s conduct and prejudice to Kea all weigh against an extension of time to seek leave to appeal. I do not consider that the significance of the proposed appeal to Mr Wikeley outweighs these factors such that an extension of time should be granted. On the basis of these relevant factors, I consider that Mr Wikeley’s request for an extension of time should be declined.
[60] However, I acknowledge that the ultimate question is what the interests of justice require. As this is also the ultimate question when considering leave to appeal, and given some overlap between the relevant factors, I will go on to address leave to appeal and conclude what the interests of justice require.
Leave to appeal
Applicable principles
[61] It is common ground that leave to appeal is required under s 56(3) of the Senior Courts Act 2016. The principles governing interlocutory appeals are well established.
They were summarised by the Court of Appeal in Tomar v Tomar:21
[6] In Finewood Upholstery Ltd v Vaughan, Fitzgerald J appropriately observed that the requirement for leave to appeal should serve as a filtering mechanism to ensure that unmeritorious appeals of interlocutory orders, or appeals of interlocutory orders of no great significance to either the parties or more generally, do not unnecessarily delay the proceedings in which the orders were made.22 The following considerations were recognised as relevant on an application for leave to appeal:23
(a)A high threshold exists.
20 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [39](c).
21 Tomar v Tomar [2021] NZCA 419. See also recently Sneesby v Southern Response Earthquake Services Ltd [2023] NZCA 206.
22 Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13].
23 At [9] and [14], citing A v Ministry of Internal Affairs [2017] NZHC 887.
(b)The applicant must identify an arguable error of law or fact.
(c)The alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value.
(d)The circumstances must warrant incurring further delay.
(e)The ultimate question is whether the interests of justice are served by granting leave.
[7] This Court in Ngai Te Hapu Inc v Bay of Plenty Regional Council indicated that considerations similar to the principles applicable to applications under the former s 24G of the Judicature Act 1908, as explained in Meates v Taylor [Leave],24 apply to applications under s 56(5) of the Senior Courts Act, stating:25
We agree that leave to appeal should only be granted where the significance or implications of an arguable error of fact or law, either for the particular case or for the applicant or as a matter of precedent, warrants the further delay which the appeal process would involve.
Arguable error?
[62]Mr Wikeley says that this Court erred in its assessment of:
(a)the subject matter connections between the claim and the competing
fora (New Zealand and Kentucky);
(b)the related proceedings in Kentucky and their impact on the forum conveniens issue; and
(c)the law applicable to the claim.
[63]He also says:
(a)While the relief claimed in the second cause of action may well have been permissible to proceed on in New Zealand, it was always moot because no one ever threatened to enforce the default judgment here.
24 Meates v Taylor (1992) 5 PRNZ 524 (CA) at 526.
25 Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [17]. I note that s 56(5) applies where an application for leave is made to the Court of Appeal following the declining of leave by the High Court.
(b)There were already proceedings on foot in Kentucky in which Kea was actively participating. There, Kea raised similar or the same arguments that it raises in this proceeding. Kea continued to participate in the Kentucky proceeding after commencing this New Zealand proceeding by filing a notice of appeal in Kentucky.
(c)Extraordinarily, the purpose of the proceeding here was to enjoin Australian and New Zealand parties from taking steps including in the forum where the Kentucky courts were seized of the matter.
(d)So, allowing these proceedings to continue was contrary to principles of judicial comity.
[64] He says that just because he and WFTL are in New Zealand or Australia, and therefore able to be enjoined personally, does not make it the role of this Court to order them to do or refrain from doing things elsewhere in the world.
[65] He emphasises that the final relief sought by Kea in this proceeding is exceptional, submitting that the relief sought in the amended statement of claim is primarily directed at preventing Mr Wikeley and WFTL from enforcing the judgment obtained by WFTL in Kentucky and that the Court is effectively being asked to indirectly interfere with, and override, a judgment of a foreign court in that foreign jurisdiction. He submits that very few anti-enforcement injunctions appear to have been granted in any common law jurisdiction and that the making of the order must be exercised “sparingly and with caution”.26 In particular, as indicated, it is submitted that given the acute issues of comity that arise in relation to anti-enforcement injunctions, the New Zealand court must have a very strong subject-matter connection to the claim seeking such remedy before displacing the foreign court as the natural forum for the dispute.
26 Lu v Industrial and Commercial Bank of China (NZ) Ltd [2020] NZHC 402 at [102].
[66] Mr Wikeley says that the subject matter connection to New Zealand is weak given there is no New Zealand exclusive jurisdiction clause, Kea’s claim primarily relates to parties not based in New Zealand, acts done overseas, issues currently before the courts in Kentucky and BVI, witnesses overseas and seeks relief that would impact the judgment of foreign courts. He particularly disputes the Court’s findings that the New Zealand Court has a greater interest than the Kentucky Court in regulating the conduct of WFTL as a New Zealand company acting as a trustee of a New Zealand trust, that the location of parties and witnesses do not favour Kentucky or BVI and that Kea has not submitted to the jurisdiction of the Kentucky Court. In oral submissions, Mr Mullins, for Mr Wikeley on this part of the application, submitted that Professor Bermann’s affidavit on US law indicated that Kentucky would have jurisdiction over the defendants.
[67] Mr Wikeley says the Court erred in assessing the Kentucky proceeding and its impact – the judgment obtained, enforcement steps in BVI and Kea’s steps to set them aside. He says that as a matter of substance, not form, the dispute stems from acts alleged to have taken place in Kentucky and issues that are before the Kentucky Court. He says the essence of Kea’s claim is that Mr Wikeley and WFTL fraudulently procured the default judgment in the Kentucky Court. He points to the relief that Kea is seeking in the Kentucky Court of Appeals.
[68] In relation to the applicable law, he says the Court was wrong to say it did not weigh either way. He says it favours Kentucky.
[69] Mr Mullins acknowledged that a decision on whether New Zealand is the appropriate forum is a discretionary decision so the Court of Appeal will not interfere unless a material error of principle has been made or the decision is plainly wrong.27
[70] Mr Wass, for Kea on this part of the application, submitted that in the context of this case, the threshold for leave to appeal should be higher – whether there is a serious prospect of a different outcome.
27 See Schumacher v Summergrove Estates Ltd [2014] NZCA 412, [2014] 3 NZLR 599 at [29].
[71] I accept the importance of comity. It was addressed by reference to the authorities and reflected in the initial (without notice) judgment28 and the (on-notice) judgment of 10 March 2023.29 The need for caution is most apposite in relation to the anti-suit or anti-enforcement relief sought. In that regard, I accept that anti-enforcement injunctions will be granted only in rare circumstances. Even so, in terms of the threshold jurisdiction requirement, I see little merit in the distinction between that of a “sufficient” subject matter connection, as I summarised the authorities, and a “very strong” subject matter connection, as Mr Wikeley now contends. That was not the way forum was contested at the earlier hearing. The terms “very strong” or “strong” are not used in the cases. This is not a material error of principle. Comity is not at risk here.
[72] Turning to the Court’s conclusion that New Zealand (rather than Kentucky) is the appropriate forum for Kea’s claim for the reasons set out in the judgment (summarised above at [7]), I deal first with whether the evidence showed that Kentucky is an available forum for Kea’s claim. The onus was on Mr Wikeley to identify a more appropriate forum.
[73] I accept that Professor Bermann’s affidavit said that in a tort of conspiracy claim, the steps in the alleged fraud and conspiracy, if they occurred, would have largely occurred in Kentucky, and that irrespective of the validity of the forum selection clause, a court of Kentucky would be competent to adjudicate the case before it. Even if this is taken to mean a case brought by Kea, Professor Silberman said that the US Supreme Court in Daimler AG v Bauman clarified the due process test for general jurisdiction as one that required that a corporate defendant be “essentially at home” in the forum state and pointed to the paradigm situations of its place of incorporation and principal place of business being in that state.30 In any event, WFTL is not contesting forum conveniens.
28 Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881 at [38]-[40], [43], [66]-[68] and [72].
29 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [92] and [98].
30 Daimler AG v Bauman 571 US 117 (2014).
[74] Professor Silberman also said that the Supreme Court’s post-International Shoe v Washington cases have emphasised that an affiliation between the defendant and the forum is a critical requirement and that a connection between the defendant and the subject matter of the litigation is not itself sufficient to satisfy due process.31 She believed Professor Bermann was wrong. Although focusing on jurisdiction over Kea, Professor Silberman’s summary of the law applies also to the defendants. The evidence did not show that the Kentucky Court would have jurisdiction over Kea’s conspiracy claim against Mr Wikeley or Mr Watson.
[75] In any event, this Court’s “doubt” that Kentucky was an available forum was merely one factor in the assessment that New Zealand was the appropriate forum. In relation to the other factors, particularly the three disputed findings (referred to at
[66] above), I do not consider there is an arguable error:
(a)The New Zealand Court has a real interest in supervising the conduct of WFTL as a New Zealand company acting as a trustee of a New Zealand trust. That extends to WFTL’s conduct outside New Zealand. As indicated, WFTL does not contest forum conveniens.
(b)The location of parties and witnesses do not favour Kentucky or BVI. The Court’s reasons speak for themselves.
(c)Insofar as it is relevant, Kea has not submitted to the jurisdiction of the Kentucky Court.
[76] I also do not accept that the second cause of action should be put aside as moot. The evidence showed that a New Zealand decision would be recognised in BVI where Mr Wikeley has sought to enforce the Kentucky judgment.
[77] I turn to the alleged error in assessing the Kentucky proceeding and its impact. As in the judgments,32 I acknowledge that Kea has also taken steps to set aside the Kentucky default judgment (without submitting to the jurisdiction). It should not be
31 International Shoe v Washington 326 US 310, 316 (1945).
32 Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881 at [70] and [74]; Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [86], [89] (fn 61) and [91].
criticised for doing so. Moreover, I do not consider that doing so means the Kentucky Court has jurisdiction over Kea’s tort of conspiracy claim. The Kentucky Court stated it need not determine if there is meritorious defence raised by Kea or if Kea can make a showing of no prejudice to WFTL.33
[78] Given the Kentucky appeal, I reserved leave as to whether it was appropriate to stay the New Zealand proceeding against WFTL or to extend time for WFTL’s statement of defence. That was not sought but in any event is a separate issue from whether the New Zealand Court is the appropriate forum for Kea’s claim. Mr Wikeley’s criticisms of the interim relief are misplaced since the interim orders were extended by consent and are not the subject of his current application.
[79] Accepting that assessing forum conveniens is a question of substance, not form, this is not an ordinary commercial dispute. Kea claims the defendants are conspiring to injure it by fraudulent means – perpetuating a (worldwide) fraud against it. That is the substance of Kea’s claim, rather than characterising the proceeding as being “primarily directed at preventing Mr Wikeley and WFTL from enforcing the judgment obtained by WFTL in Kentucky”.
[80] A challenge to the Court’s finding in relation to applicable law was not pursued in oral submissions. That finding was on the basis that no relevant issue on which foreign law would be required had been identified.34 Further, I considered there was a good arguable case that New Zealand law governs Kea’s conspiracy claim applying the Private International Law (Choice of Law in Tort) Act 2017.35 That is the requisite threshold at the forum stage.
[81] On the evidence, I do not consider that in weighing these factors this Court was arguably in error, let alone plainly wrong, when concluding that New Zealand (rather than Kentucky) is the appropriate forum for Kea’s claim.
33 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [12] and [89] (fn 61).
34 At [81].
35 At [81] (fn 58).
[82] Finally, I mention two further points. First, I note that Mr Wikeley has not addressed whether in any event injustice would displace Kentucky as a more appropriate forum.36 It may do.
[83] Secondly, as indicated, Mr Wikeley is the only defendant seeking to contest that New Zealand is the appropriate forum, and the liquidators of WFTL expressly do not support his application. Mr Wikeley can only apply for himself. It is common ground that forum has to be assessed globally – the claim against Mr Wikeley cannot appropriately be split from the claims against the other defendants in this case who do not contest forum conveniens. Therefore, any stay would have wider ramifications. I do not consider it arguable that the outcome on appeal would be to stay the proceeding against all defendants.
Importance and further delay
[84] Mr Wikeley says the proposed appeal is of general or public importance as it appears to be the first case to consider the threshold for forum conveniens in the context of an anti-enforcement injunction. He says that appellate consideration is warranted.
[85] As indicated above at [55], Mr Wikeley also says the proposed appeal is of significant personal importance. He says he acted promptly after securing new representation and he could have awaited the formal proof judgment.
[86] I do not consider the threshold for forum conveniens in the context of an anti-enforcement injunction raises an issue of general or public importance warranting appellate consideration. Moreover, any arguable error in the ultimate finding that the New Zealand Court is the appropriate forum for Kea’s claim does not raise an issue of general or public importance. It was a factual assessment in a most unusual case. Even in terms of the importance to Mr Wikeley, I do not consider the circumstances warrant incurring further delay, particularly given the context in which his application arises.
36 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [89].
[87] Overall, the high threshold for leave to appeal is not met. The interests of justice are not served by granting leave to appeal.
Interim relief / stay
[88] It is therefore strictly unnecessary for me to consider the interim relief sought in the amended application that, pending the determination of the second defendant’s application for leave to appeal and any subsequent appeal:
(i)further steps in this proceeding toward substantive judgment are stayed (for the avoidance of doubt, without affecting the ability to come to the Court with respect to the interim orders, other interim matters and reserving all other rights); or
(ii)any judgment delivered on the basis of the hearing by way of formal proof be stayed as against the first defendant and second defendant as to execution, enforcement and otherwise in any jurisdiction.
[89] However, I address this briefly given that, as Kea recognised, I am giving judgment on this application before giving judgment on the substantive claims and to assist in the event leave to appeal is sought from and granted by the Court of Appeal.
[90] Even if I had granted leave to appeal, I was not cited any precedent for an order preventing the Court drafting and delivering a reserved judgment. In the absence of such authority, I consider they are not steps in the proceeding by a party that could or should be restrained. Further, any interim relief could not extend to defendants other than Mr Wikeley and, even as against him, I would have declined to stay a substantive judgment before it is delivered. That seems premature, particularly in the circumstances of this case. As Mr Pilditch acknowledged, any interim relief or stay in relation to a substantive judgment is better addressed once a substantive judgment is delivered.
Result
[91] Mr Wikeley’s applications for extension of time, leave to appeal and interim relief are dismissed.
Interim liquidators
[92] As Mr Arthur for the liquidators sought, I record that nothing in this judgment affects the appointment or powers of the interim liquidators who were appointed by order of this Court in a separate proceeding on 6 April 2023.37
Costs
[93] Kea is entitled to costs on this application. If costs cannot be agreed, Kea is to file a memorandum within 15 working days, with Mr Wikeley’s response within a further 15 working days, and I will determine costs on the papers. Memoranda are not to exceed five pages.
Gault J
Solicitors / Counsel:
Mr JBM Smith KC and Mr JLW Wass, Barristers, Wellington
Mr M C Harris and Mr S T Coupe (plaintiff’s instructing solicitors), Gilbert Walker, Auckland Mr M D Arthur, Chapman Tripp, Auckland
Mr A F Pilditch KC, Barrister, Auckland
Mr T Mullins and Ms E Armstrong (second defendant’s instructing solicitors), LeeSalmonLong, Auckland
37 Kea Investments Ltd v Wikeley Family Trustee Ltd HC Auckland CIV-2023-404-626.
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