Wikeley v Kea Investments Ltd

• Jurisdiction: New Zealand
• Judge: Muir J
• Judgment Date: 21 November 2024
• Neutral Citation: [2024] NZCA 609
• Court: Court of Appeal
• Docket Number: CA757/2023

Between

Kenneth David Wikeley

Appellant

and

Kea Investments Limited

First Respondent

Wikeley Family Trustee Limited (In Interim Liquidation)

Second Respondent

Eric John Watson

Third Respondent

Wikeley Incorporated

Fourth Defendant

USA Asset Holdings Incorporated

Fifth Defendant

[2024] NZCA 609

Court:

Courtney, Muir and Cull JJ

CA757/2023

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

International law — appeal against a decision which granted the respondent permanent worldwide anti-suit and anti-enforcement injunctions in respect of default judgment obtained the Kentucky Circuit Court — Private International Law (Choice of Law in Tort) Act 2017

The issue was whether the permanent injunctions should be discharged.

The Court held that on comity grounds the permanent injunctions should be discharged. The HC had jurisdiction as NZ was the appropriate forum. The Kentucky judgment was only part of the alleged conspiracy and did not define the jurisdictional limits. Kea's claim concerned other parties who were not parties to the Kentucky proceedings. Nor was the jurisdiction clause in the Coal Agreement determinative. Either the most significant elements of the conspiracy took part in NZ or the general rule in s8 Private International Law (Choice of Law in Tort) Act 2017 (applicable law was the law of the country in which the events constituting the tort in question occur) was appropriately displaced. The location of parties and witnesses did not favour Kentucky. The forum conveniens implications of a trial in NZ were limited because of the substantive similarities between the applicable NZ, Kentucky and Federal United States law.

It was not appropriate in international comity terms to grant the anti-suit and anti-enforcement injunctions. International comity required that a NZ court should be extremely cautious before deciding that there was a sufficiently real risk that justice would not be done by a foreign court to warrant imposition of anti-suit and/or anti-enforcement injunctions. They were measures of last resort. Kea had applied to the HC because of the apparent unwillingness of the Kentucky Circuit Court to intervene and its concern that the Kentucky Court of Appeals would apply a deferential standard of appellate review. However, comity required that a NZ court at least await the outcome of the appeal process before considering whether to issue an anti-suit or anti-enforcement judgment. United States courts were unlikely to look for or need the protection of NZ courts and are well capable of identifying fraud and ensuring no reward flowed from it.

Counsel:

Appellant in Person with McKenzie friend J Sheffield

J B M Smith KC, M C Harris, J L W Wass and S T Coupe for First Respondent

M D Arthur and J Marcetic for Second Respondent

No appearance for Third, Fourth and Fifth Respondents

• A The appellant's application to amend the notice of appeal is declined.

• B The appellant's application to admit further evidence is declined.

• C The first respondent's application to admit further evidence is granted in respect of the affidavits of Toby Graham dated 10 January 2024 and Andrew Hagerman dated 30 August 2024. The first respondent's application to admit further evidence is otherwise declined.

• D The second respondent's application to admit further evidence is granted in respect of the affidavits of interim liquidator Natalie Burrett dated 3 May 2024 and 17 May 2024.

• E The appeal is allowed in part by discharge of:

  • (i) the permanent anti-suit and anti-enforcement injunctions in [156(a)(i) to (iv)] of the First Judgment ( [2023] NZHC 3260); and

  • (ii) the permanent injunctions in paragraph [7] of the Second Judgment ( [2023] NZHC 3532).

• F The orders in E above are to lie in Court and not become operative for a period of 20 working days from delivery of this judgment.

• G We reserve to the first respondent the right to reapply to the High Court for further injunctive relief if required and reserve to the interim liquidators the right to apply to the High Court for any further order considered appropriate in the context of the interim liquidation.

• H The appeal is otherwise dismissed.

• I There is no order as to costs.

The appeal was allowed in part.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Muir J)

Table of Contents

	Para No.
Introduction	[1]
Background	[9]
The Coal Agreement	[9]
Kea and Project Spartan	[15]
Mr Wikeley and the Kentucky Default Judgment	[22]
A third party becomes involved	[30]
The New Zealand Proceedings	[39]
The First Judgment	[44]
The Second Judgment	[59]
Set aside application	[61]
Applications to amend notice of appeal and admit further evidence
Introduction	[62]
Key dates	[67]
Kea's application to adduce the WhatsApp messages	[68]
Mr Wikeley's applications	[75]
Kea's application to admit further evidence	[101]
Affidavits of interim liquidators	[105]
Mr Wikeley's admissibility challenges	[107]
Spartan litigation	[114]
Relationship between Mr Wikeley and Mr Watson	[116]
Mr Hussain and his connection to Mr Watson	[122]
Mr Wikeley's credibility	[129]
Where does that leave the Judge's findings?	[134]
Jurisdiction	[147]
Comity	[162]
Introduction	[162]
The Judge's approach	[168]
Discussion	[174]
Position of interim liquidators and consequences of Kentucky	[196]
Default Judgment not being set aside
Legal costs as damages	[202]
Mr Wikeley's challenge to the Second Judgment	[204]
Summary of our judgment	[211]
Costs	[212]
Result	[213]

Introduction

1 This proceeding concerns claims by Kea Investments Ltd (Kea), a British Virgin Islands (BVI) company associated with Sir Owen Glen (Sir Owen), against Mr Kenneth Wikeley and others associated with him. Kea says that Mr Wikeley is party to a global fraud instigated and driven by Mr Eric Watson. At issue is the enforcement of a default judgment obtained in January 2022 in the Commonwealth of Kentucky Circuit Court (the Kentucky Default Judgment) by entities associated with Mr Wikeley against Kea.1 Mr Wikeley says that he is an international entrepreneur with many business successes who has been falsely maligned by Sir Owen's interests.

2 Mr Wikeley appeals the decision of Gault J dated 17 November 2023 (the First Judgment) on Kea's claims, heard by formal proof.2 The Judge granted Kea permanent worldwide anti-suit and anti-enforcement injunctions in respect of the Kentucky Default Judgment, among other orders. Mr Wikeley also appeals a supplementary judgment (the Second Judgment) dated 5 December 2023 in which the Judge made further orders restraining the defendants from taking steps in relation to the Wikeley Family Trust (WFT) because of concerns Mr Wikeley would cause steps to be taken in violation of the previous injunctions.3

3 The dispute has its genesis in the January 2022 Kentucky Default Judgment for USD 123,750,000 plus interest and costs, obtained against Kea by Wikeley Family Trustee Ltd (WFTL), a New Zealand incorporated company of which Mr Wikeley is the sole director and shareholder.4 The basis for the Kentucky Default Judgment was an asserted breach by Kea of a purported contract from 2012 styled “Coal Funding and JV Investment Agreement” between Kea and WFTL (referred to by all parties as the Coal Agreement). WFTL obtained the Kentucky Default Judgment following failure on the part of Kea's BVI registered agent to notify it of WFTL's claim. A subsequent

application by Kea to set aside the Kentucky Default Judgment on the basis that the claim was fraudulent was denied on the grounds Kea had been “properly served”. 5 A further application to amend, alter or vary the Circuit Court's dismissal of the motion to set aside was also denied. 6 Kea commenced appeals against these judgments to the Kentucky Court of Appeals on 9 November 2022. 7

4 Kea responded to dismissal of its applications in Kentucky by filing, on 31 October 2022, an ex parte application for interim worldwide anti-suit and anti-enforcement injunctions in the New Zealand High Court. That application was granted by Gault J on 4 November 2022.8 Mr Wikeley did not file a statement of defence. As a result, the proceeding ultimately came before Gault J for a formal proof hearing on 17 May 2023.

5 In the First Judgment Gault J granted permanent worldwide anti-suit and anti-enforcement injunctions. He did so having found the Coal Agreement to be “void because it is a forgery” and, as such, “null and void ab initio”.9

6 Mr Wikeley vigorously disputes that characterisation, and now seeks to adduce affidavit evidence that the Coal Agreement was, as it purports to be, signed by Kea's authorised representative Mr Dickson, in Paris in October 2012. He says that provided the Kentucky Default Judgment can be sustained, his interests are entitled to enforce it and that the permanent worldwide anti-suit and anti-enforcement injunctions of the New Zealand High Court represent an unprecedented breach of international comity.

7 The issues we are required to address are:

• (a) whether Mr Wikeley should now be permitted to engage with the merits of Kea's claim that the Coal Agreement is fraudulent which we will consider in the context of his applications to amend the notice of appeal and adduce further evidence; 10

• (b) the validity of 44 challenges to the evidence relied on by the Judge to support his findings of forgery and of the existence of an international conspiracy to defraud;

• (c) whether the High Court was correct to assert jurisdiction in respect of Kea's claims;

• (d) if it was, whether it nevertheless breached international comity by granting worldwide anti-suit and...