Kea Investments Limited v Wikely Family Trustee Limited (in interim liquidation)

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-2086

[2023] NZHC 3532

BETWEEN
KEA INVESTMENTS LIMITED

Plaintiff

AND

WIKELEY FAMILY TRUSTEE LIMITED (IN INTERIM LIQUIDATION)

First Defendant

KENNETH DAVID WIKELEY
Second Defendant

ERIC JOHN WATSON
Third Defendant

WIKELEY INC.
Fourth Defendant

USA ASSET HOLDINGS INC

Fifth Defendant

Telephone conference: 4 December 2023 and further memorandum on 5 December 2023

Appearances:

JBM Smith KC, M C Harris and JLW Wass for the Plaintiff

Judgment:

5 December 2023

JUDGMENT (NO. 2) OF GAULT J

This judgment was delivered by me on 5 December 2023 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:
Mr JBM Smith KC and Mr JLW Wass, Barristers, Wellington Mr M C Harris, Barrister, Auckland
Mr M C Smith and Mr S Coupe (plaintiff’s instructing solicitor), Gilbert Walker, Auckland

KEA INVESTMENTS LTD v WIKELEY FAMILY TRUSTEE LTD (IN INTERIM LIQUIDATION) [2023]
NZHC 3532 [5 December 2023]

[1] My judgment of 17 November 2023 granted (among other things) permanent injunctions against the defendants.1 In respect of the permanent injunctions, I reserved leave in relation to further relief necessary to give effect to these orders.2

[2] The plaintiff (Kea) filed an interlocutory application without notice for further orders yesterday. The memorandum of counsel in support indicated that Kea urgently sought interim orders in the expectation that an application for further final relief would be brought on notice to the defendants.

[3] I convened a telephone conference yesterday afternoon, in the first instance to address whether there was any reason that application could not proceed on a Pickwick basis. Counsel for Kea explained their concern, in the unusual circumstances of this case, that forewarning Mr Wikeley would risk prejudice to Kea. I recognised that concern. In any event, I sought clarification as to whether further relief pursuant to my reservation of leave in the judgment by formal proof required to be on notice.

[4] Counsel for Kea filed a further memorandum today. It clarifies that pursuant to my reservation of leave, Kea seeks the following further relief:

(a)until 28 days after the date on which the default judgment referred to in paragraph 5(a)(i) of the sealed orders of 17 November 2023 is discharged the defendants shall not take any steps, and shall not cause or permit any other person, to:

(i)appoint an additional or replacement trustee of the Wikeley Family Trust or otherwise exercise a power of appointment in respect of that Trust;

(ii)change the proper law of that Trust; and

1 Kea Investments Ltd v Wikeley Family Trustee Ltd (in interim liquidation) [2023] NZHC 3260.
2 At [156](a)(v).

[5] As Kea seeks further orders pursuant to the reservation of leave granted in the judgment, and that judgment was obtained by way of formal proof under r 15.9 of the High Court Rules 2016, I am satisfied that the further relief may also be considered on a without notice basis.

[6] Having reviewed the further affidavit of Mr Graham dated 4 December 2023, sworn in London overnight, addressing developments in the proceedings in Queensland and in the United States, and the memoranda of counsel in support, I am satisfied that in the unusual circumstances of this case the further relief sought is appropriate. Kea is understandably concerned about the prospect of Mr Wikeley causing further steps to be taken in violation of the Court’s injunctions and that he may take a new course now that the assignments to Wikeley Inc have been ruled invalid and remain assets of WFTL as trustee of the WFT.

Result

[7] I make the following further order as sought pursuant to leave reserved at [156](a)(v) of my judgment of 17 November 2023:

(a)until 28 days after the date on which the default judgment referred to in paragraph 5(a)(i) of the sealed orders of 17 November 2023 is discharged the defendants shall not take any steps, and shall not cause or permit any other person, to:

(i)appoint an additional or replacement trustee of the Wikeley Family Trust or otherwise exercise a power of appointment in respect of that Trust;

(ii)change the proper law of that Trust; and

Gault J

CaseChat Overview and Summary

In the High Court of New Zealand, Kea Investments Limited sought further relief against Wikeley Family Trustee Limited (in interim liquidation) and others. The plaintiff, Kea, had previously obtained permanent injunctions against the defendants, and sought additional orders to ensure compliance with the court's directives. Specifically, Kea aimed to prevent the defendants from appointing a new trustee or altering the trust's governing law during a specified period. The court considered the urgency of the matter and the potential prejudice to Kea if the defendants were notified beforehand. The judge allowed the application without notice, acknowledging Kea's concern about the defendants' potential actions that could undermine the court's orders. The court granted the relief sought, imposing restrictions on the defendants' actions concerning the Wikeley Family Trust for 28 days following the discharge of a default judgment.

The central legal issue in this case was whether the plaintiff, Kea Investments Limited, was entitled to further interim relief without providing notice to the defendants. This issue arose from the urgency of the situation and the risk that notifying the defendants would prejudice Kea. The court had to balance the need for procedural fairness with the urgency and circumstances of the case. Additionally, the court had to determine whether the specific relief sought by Kea was appropriate given the context and the potential impact on the defendants. The judge found that the relief sought was justified under the circumstances and granted the application without notice, ensuring Kea's interests were protected while considering the defendants' rights.

The court's reasoning was grounded in the unique circumstances of the case, where immediate action was necessary to prevent potential harm to Kea. The judge recognised the risk that notifying the defendants could lead to further actions that would frustrate the court's orders. The court also considered the affidavits and memoranda provided by Kea's counsel, which detailed recent developments in other jurisdictions and the defendants' potential actions. The judge concluded that the relief was appropriate and granted the further orders sought by Kea. The decision emphasised the importance of protecting Kea's interests while ensuring that the defendants' rights were not unfairly prejudiced.

The court made the following order: until 28 days after the date on which the default judgment referred to in paragraph 5(a)(i) of the sealed orders of 17 November 2023 is discharged, the defendants shall not take any steps, and shall not cause or permit any other person, to: (i) appoint an additional or replacement trustee of the Wikeley Family Trust or otherwise exercise a power of appointment in respect of that Trust; (ii) change the proper law of that Trust. This order was intended to safeguard Kea's interests and ensure compliance with the court's previous injunctions.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

Telephone conference:	4 December 2023 and further memorandum on 5 December 2023
Appearances:	JBM Smith KC, M C Harris and JLW Wass for the Plaintiff
Judgment:	5 December 2023