Federal Court of Australia

Wikeley v Kea Investments Ltd [2024] FCA 155

ORDERS

RULE 41.06 ENDORSEMENT

IF YOU, KENNETH DAVID WIKELEY:

(A)     REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER; OR

(B)     DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR PUNISHMENT FOR CONTEMPT.

THE COURT ORDERS THAT:

Affidavit as to assets etc

1.    By 4:00pm on 4 March 2024, the applicant swear or affirm, file and serve on the respondent an affidavit deposing to the following matters:

(a)    the location and estimated value of all the applicant’s assets worldwide as at 25 January 2024 including details of his bank accounts, their respective balances as at 25 January 2024, and exhibiting copies of bank statements for all of the accounts for the period between 1 April 2023 to 25 January 2024;

(b)    details of each and every person, entity and trust who has, in the past, is currently, or has agreed to provide in the future, funding to the applicant for the purposes of any litigation in Australia or New Zealand to which the respondent is party, including:

(i)    the name and contact details of the person, entity or trust; and

(ii)    the date(s) and amount(s) of funding provided or to be provided.

Security for costs

2.    The applicant provide security for the respondent's costs of this proceeding up to the first day of the hearing in the amount of $120,000 in a form satisfactory to the Registrar by 4:00pm on 5 March 2024.

3.    If security is not provided in accordance with paragraph 2 herein:

(a)    the proceeding is dismissed without further order; and

(b)    the applicant is to pay the respondent's costs of the proceeding and this application on the standard basis.

4.    The respondent has liberty to apply for further security for its costs.

Costs

5.    The costs of the respondent’s application are reserved.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

DOWNES J:

Synopsis

1    On 8 December 2023, pursuant to Part 7 of the Trans-Tasman Proceedings Act 2010 (Cth) (the TTP Act), the respondent (Kea) registered three judgments of the High Court of New Zealand that it obtained against the applicant (Mr Wikeley) (the NZ Judgments). This registration occurred pursuant to orders of another judge of this Court in QUD551/23, QUD552/23 and QUD553/23.

2    By originating applications filed on 18 January 2024, Mr Wikeley seeks, by way of final relief, orders under s 72(1) of the TTP Act setting aside the registration of the NZ judgments and orders under s 76(1) of the TTP Act staying the enforcement of the registered NZ judgments pending an appeal or application to have those judgments set aside in New Zealand.

3    By way of interlocutory relief, Mr Wikeley sought a stay of the orders of 8 December 2023 pending the hearing of the originating applications. The application for the interim stay was heard on 25 January 2024, and Mr Wikeley was represented by counsel and solicitors at that hearing. The stay was not opposed by Kea subject to suitable undertakings being offered by Mr Wikeley and conditions being imposed. The battleground concerned the nature of those undertakings and conditions.

4    As well as consolidating the proceedings, orders were made on 25 January 2024 which granted the interim stay of enforcement of the orders on certain undertakings given by Mr Wikeley (set out in schedule A to the Order). These undertakings included that Mr Wikeley undertook to expeditiously prosecute his originating applications, and that he gave the usual undertaking as to damages. In addition, Mr Wikeley gave the following undertaking:

The applicant undertakes that he will not, by himself, his servants or agents, remove or cause or permit to be removed from Australia or sell, charge, mortgage or otherwise deal with or dispose of, or cause or permit to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of his assets (whether beneficially held or otherwise) within Australia up to the unencumbered value of $2,458,913.54, otherwise than:

(a)    in the ordinary course of business;

(b)    to meet reasonable legal expenses; and

(c)    to meet reasonable ordinary living expenses.

5    Based on those undertakings being offered, and other conditions which were imposed by the Order, Mr Wikeley obtained his interim stay.

6    One condition was an order which required Mr Wikeley to swear an affidavit informing Kea of his world-wide assets and disclosure of the identity of any parties providing funding to Mr Wikeley for the purposes of any litigation in Australia and New Zealand. Having regard to the undertaking given by Mr Wikeley which had the effect of being a freezing order, and for other reasons which I address below, it was appropriate that such an affidavit be provided.

7    The order (being Order 8) was made in these terms:

8.    The applicant swear and serve on the respondent by 4pm on 2 February 2024, an affidavit informing the respondent of:

(a)    all his assets (whether held in his own name or otherwise) world-wide, giving their estimated value, location and details (including whether his interest is legal, equitable or otherwise, and any mortgages, charges or other encumbrances to which they are subject) and the extent of his interest in the assets; and

(b)     the identity and contact details of any and all parties providing funding to Mr Wikeley for the purposes of any of the litigation in Australia or New Zealand.

8    The originating applications were listed for final hearing for three days in April 2024 and timetabling directions were made for the exchange of affidavit material (including expert evidence from New Zealand as foreshadowed by Mr Wikeley) and written submissions.

9    Shortly after 3pm on 2 February 2024, Mr Wikeley’s solicitor caused this proceeding to be urgently listed (without any prior notice to Kea) for the purposes of seeking an extension of time for the provision of the affidavit referred to in Order 8. During the hearing on 2 February 2024, Mr Wikeley’s counsel submitted that the reason for seeking the extension was that “further time” was needed to consider whether a “mere expectancy or right of due administration under a trust would be captured by [the] order” and that the further time was to allow senior counsel (recently briefed) to “get up to speed” and to raise the matter with him.

10    An order was made varying the time for compliance with Order 8 to 10am on 5 February 2024. Mr Wikeley was also ordered to swear, file and serve an affidavit which contains an explanation for his inability to comply with the Order by 4pm on 2 February 2024, and the reasons for the late notification of that inability to the Court and the respondent on the afternoon of 2 February 2024.

11    Mr Wikeley affirmed an affidavit dated 5 February 2024 in purported compliance with Order 8 (as modified by the Orders of 2 February 2024) (5 February Affidavit). He then affirmed a further affidavit dated 13 February 2024, in response to complaints which Kea had made about the 5 February Affidavit (13 February Affidavit).

12    By the 5 February Affidavit, Mr Wikeley deposed, in paragraph 8, that “at the time of signing this affidavit” he did not have “any funding arrangements in place with any third-party for the purposes of the Australian and New Zealand litigation” but, in paragraph 9, that he “did in the past have litigation funding from a third party”. However, Mr Wikeley did not include any details of who provided the funding, how or to what extent.

13    Both affidavits purport to disclose Mr Wikeley’s assets as at the date of the affidavit.

14    Kea brought an interlocutory application seeking a vast array of orders including:

(1)    orders with respect to Mr Wikeley’s disclosure of assets by affidavit;

(2)    orders with respect to Kea’s use of the affidavit(s) of Mr Wikeley in the New Zealand proceedings;

(3)    security for costs with respect to Mr Wikeley’s applications; and

(4)    security in support of Mr Wikeley’s undertaking as to damages given in support of the interim stay.

15    Mr Wikeley in turn brought an interlocutory application seeking an order extending the time for the filing and service of his expert evidence to 15 March 2024.

16    The hearing of these applications occurred on 23 February 2024, and there is some urgency associated with them, as the final hearing of the originating applications is approximately two months away. For that reason, I indicated to the parties at the hearing that I would deliver judgment by 27 February including by the delivery of ex tempore reasons. Although an order was made on 27 February 2024, the publication of these reasons was delayed until 28 February 2024.

17    Many aspects of the orders sought by the applications heard on 23 February 2024 were resolved during the hearing itself or orders which were sought by one party or suggested by me were not seriously opposed. As a consequence, I encouraged senior counsel for both sides to formulate a form of order which reflected the matters which did not appear to be in real dispute, and that occurred, with an Order being made in chambers on 26 February 2024. I do not propose to address those matters further, unless requested to do so. I am grateful to the parties for their co-operation in this regard.

18    There was no dispute about the legal principles to be applied in relation to the balance of the orders sought by Kea. Before turning to consider those orders, it is necessary to provide some brief background.

Background

Proceedings in New Zealand

19    In proceedings commenced by Kea in the High Court of New Zealand (the NZ proceeding), Kea alleged a major international and ongoing fraudulent conspiracy was being committed against it, and that Mr Wikeley is at the heart of the fraud. These allegations included that Wikeley Family Trustee Limited (WFTL), a New Zealand company controlled by Mr Wikeley (WFTL being trustee of the Wikeley Family Trust, a New Zealand trust) but which is now in the hands of interim liquidators, obtained a default judgment in Kentucky, United States of America against Kea pursuant to a fraudulent claim under a fabricated Coal Agreement for in excess of US$120 million (Kentucky Default Judgment).

20    Orders for interim relief in support of the substantive proceedings to preserve the status quo were made by Gault J in the NZ proceeding: Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881. By a judgment dated 10 March 2023, Gault J refused Mr Wikeley’s application to set those orders aside: Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466. Further injunctive orders were made by Gault J on 6 April 2023 after Mr Wikeley caused WFTL to purportedly assign the benefit of the Coal Agreement and Kentucky Default Judgment to a new Kentucky company established for this purpose, Wikeley Inc. In making further interim orders on 6 April 2023, Gault J held that these steps were likely in breach of his earlier interim orders: Kea Investments Ltd v Wikeley Family Trustee Limited (in interim liquidation) [2023] NZHC 3260 at [58].

21    Mr Wikeley then advised the interim liquidators of WFTL on 13 April 2023 that he had removed WFTL as trustee of the Wikeley Family Trust and appointed another company created by him, USA Asset Holdings Inc, as replacement trustee. By a Board Minute and Resolution of USA Asset Holdings Inc dated 12 April 2023, Mr Wikeley as director purported to change the applicable law of the Wikeley Family Trust from New Zealand to Kentucky with immediate effect: Kea Investments Ltd v Wikeley Family Trustee Limited (in interim liquidation) [2023] NZHC 3260 at [60]–[62].

22    Subsequently, on 31 August 2023, Gault J ordered Mr Wikeley to pay Kea’s costs in an amount of NZ$246,234.67.

23    On 17 November 2023, Gault J delivered final judgment on formal proof in favour of Kea against Mr Wikeley and others: Kea Investments Ltd v Wikeley Family Trustee Limited (in interim liquidation) [2023] NZHC 3260. By that judgment, Kea obtained relief which included:

(1)    permanent injunctive relief against Mr Wikeley restraining him (amongst other things) from taking steps with respect to the Kentucky Default Judgment and the fabricated Coal Agreement;

(2)    declaratory relief to the effect that the Kentucky Default Judgment was obtained by fraud (and that steps taken by Mr Wikeley were fraudulent and of no effect);

(3)    damages against Mr Wikeley in various currencies totalling in excess of A$2 million; and

(4)    orders for interest and costs.

24    On 5 December 2023, Gault J delivered a supplementary judgment in favour of Kea against Mr Wikeley by which Kea obtained an order restraining the defendants from purporting to change the trustee and/or the proper law of the Wikeley Family Trust (or cause or permit any party to do so) pending Mr Wikeley complying with the order to procure the discharge of the Kentucky Default Judgment.

25    On 8 December 2023, Mr Wikeley appealed against the decisions dated 17 November 2023 and 5 December 2023 to the Court of Appeal of New Zealand. The appeal is to be heard in the week commencing 20 May 2024. Mr Wikeley was required to provide security for the costs of the appeal, and he did so on about 12 January 2024.

26    No stay application has been brought in New Zealand.

Proceedings in Supreme Court of Queensland

27    On 12 and 13 April 2023, Cooper J in the Queensland Supreme Court, pursuant to ss 25 and 26 of the TTP Act, granted ex parte interim injunctive orders against Mr Wikeley in support of the NZ proceeding: Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215. Those orders were in the nature of anti-suit or anti-enforcement injunctions concerning the Kentucky Default Judgment and also included a ‘no departure’ order preventing Mr Wikeley from leaving Australia and an order requiring him to deliver up his passports.

28    On 20 April 2023, Kea filed an application that Mr Wikeley be found to have committed a contempt of court by failing to comply with the 13 April orders.

29    On the return of the 13 April orders on 21 April 2023, Mr Wikeley was represented by a solicitor. At that hearing, the Court:

(1)    refused an application by Mr Wikeley for an adjournment of the inter partes hearing;

(2)    made orders continuing the 13 April orders until 28 days after the final determination of the New Zealand proceeding or earlier order;

(3)    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.

30    Cooper J stated in his reasons delivered on 21 April 2023 that he was “satisfied that there is a case for Mr Wikeley to answer in respect of each of the charges of contempt”.

31    On 26 April 2023, Mr Wikeley delivered his passports into the custody of the Queensland Supreme Court. On that day, Mr Wikeley appeared before the Court, by counsel, instructed by new solicitors. In response to the application by Kea to execute the arrest warrant, Mr Wikeley offered conditions in lieu of making orders for his immediate arrest. The Court discharged the warrant and 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.

32    On 7 June 2023, Mr Wikeley filed an application (and an amended application on 15 June 2023) seeking to set aside the existing court orders and to have the contempt application and Kea’s proceeding permanently stayed.

33    On 4 October 2023, Cooper J dismissed the application, save that his Honour ordered that the residence, curfew and security orders made on 26 April 2023 be vacated: Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215. At [276] and [278] of his Honour’s reasons, Cooper J described Mr Wikeley as “a person who is prepared to ignore the authority of court orders when he is not amenable to the court’s powers of enforcement”.

34    On 1 November 2023, Mr Wikeley filed a notice of appeal in the Queensland Court of Appeal in respect of the orders of Cooper J on 4 October 2023 (and subsequent costs orders).

35    On 14 December 2023, Mr Wikeley was ordered to pay $65,000 as security for costs of the appeal, which he paid on 9 January 2024. In the decision of Wikeley v Kea Investments Ltd [2023] QCA 255 at [15], Mullins P stated:

As to factor (a), the appellant has not disclosed his financial position for the purpose of the application. There is material in the affidavit of the respondent’s solicitor Mr Deighton filed on 23 November 2023 that deals with aspects of the appellant’s financial position that shows that the respondent was unable to identify any assets in Australia of the appellant or an entity associated with the appellant and that there were the outstanding judgment debts from the NZ proceedings owed to the respondent which had not been paid. An inference can be drawn from the fact of the appellant’s legal representation since 26 April 2023 in the subject proceeding and in connection with the appeal and also in the NZ proceeding that he has access to a source of funds for that purpose but no inference can be drawn from the material before the Court that there are funds available to satisfy the respondent’s costs if the appeal were dismissed.

Orders sought by kea

Assets as at 25 January 2024

36    By paragraph 1(a) of its proposed order, Kea sought an order in these terms:

The applicant swear, file and serve on the respondent by 4:00pm on 26 February 2024 an affidavit deposing to the following matters:

(a)    the location and estimated value of all the applicant’s assets worldwide as at 25 January 2024 including:

(i)    details of his bank accounts, their respective balances as at 25 January 2024, and exhibiting copies of bank statements for all of the accounts for the 12 months prior to 25 January 2024.

37    Kea submitted that:

Mr Wikeley’s affidavits purport to disclose his assets as at the date of the affidavit but should disclose the position as at the date of the order so as to avoid any inference that assets have been disposed of or otherwise dealt with (contrary to the undertaking) in the period between the making of the order (25 January 2024) and the swearing of the 5 February Affidavit (11 days).…

38    Mr Wikeley proposed a form of order in these terms:

By 28 February 2024, the applicant swear, file and serve an affidavit deposing to his knowledge, if any, of the following:

(a)    the location and estimated value of all the applicant’s assets worldwide as at 25 January 2024 including details of his bank accounts, their respective balances as at 25 January 2024…

39    When I pressed senior counsel for Kea to explain the reason for seeking bank statements for the previous 12 months, it was submitted that it was an ancillary order in support of other orders, and that the litigation in Queensland has been on foot since April 2023. It was also submitted that the bank statements would show what funding was being received by Mr Wikeley for the litigation, and that, based on the findings made in the NZ Judgments and the proceedings in the Supreme Court, there is reason to doubt whatever Mr Wikeley says about his litigation funding in any affidavit.

40    Senior counsel for Mr Wikeley resisted the provision of 12 months of bank statements on the basis that it was unnecessary, because Kea would be able to verify the accuracy of what Mr Wikeley says by looking at bank statements which reveal the balance as at 25 January 2024. Senior counsel for Mr Wikeley also indicated that bank statements “covering the 25 January period” could be provided to show that the balance attested to by Mr Wikeley was correct.

41    However, while provision of the bank statements proffered by Mr Wikeley showing the balance of the accounts as at 25 January 2024 will verify the accuracy of Mr Wikeley’s evidence about his cash at bank position as that date, they will not verify the accuracy of Mr Wikeley’s evidence about the details of funding which he has received for litigation in Australia and New Zealand.

42    For this reason and because no issue of prejudice was raised on behalf of Mr Wikeley in opposition to the form of order sought by Kea, I was persuaded that I should make an order in the terms sought by Kea with one variation, being that Mr Wikeley was ordered to provide copies of his bank statements for the period from 1 April 2023 to 25 January 2024 only (having regard to the justification provided by Kea by reference to the litigation in Queensland).

43    An additional reason for requiring Mr Wikeley to provide his bank statements covering this period is that it will provide full and frank disclosure, and independent verification, of his sources of funding in circumstances where he has been found by a High Court judge in New Zealand to have engaged in fraud and by a Supreme Court judge in Queensland to be prepared to ignore the authority of court orders.

Funding for litigation and assets generally

44    By paragraph 1(b) of its proposed order, Kea sought an order in these terms:

The applicant swear, file and serve on the respondent by 4:00pm on 26 February 2024 an affidavit deposing to the following matters:

…

(b)    details of any and all parties (irrespective of whether the party is a professional litigation funder or otherwise) who are as at the date of this order providing, or have at any time in the past provided, funding to the applicant for the purposes of any litigation in Australia or New Zealand to which the respondent is party, including:

(i)    the name and contact details of the person who provided or is providing the funding;

(ii)    in respect of each payment of funding provided, the date(s) and amount(s) of funding provided;

(iii)    how the funding was provided to the applicant (that is, whether paid by cheque or international transfer or otherwise);

(iv)    the name, BSB and account number of the bank account into which the funding was paid.

45    It will be recalled that Order 8 required that Mr Wikeley swear an affidavit which informed Kea of the identity and contact details of any and all parties providing funding to Mr Wikeley for the purposes of any of the litigation in Australia or New Zealand.

46    This order was made in circumstances where, by its submissions on 25 January 2024, Kea expressed an intention to apply for security for costs, and Mr Wikeley had refused to identify the existence of any third party which was funding him. Its submission, which I accepted at that time, was that if there is such a funder, Kea should be informed, so that it can consider whether to seek security for costs from that funder.

47    By his 5 February Affidavit, Mr Wikeley deposes to owning 50% of an apartment in Ukraine (which he purchased in 2007 for about USD$330,000), a car, golf clubs, two mobile phones and a laptop and to having cash at bank totalling about $50,000. He also states that about $70,000 is held in his solicitors’ trust account for legal fees.

48    Mr Wikeley also deposes in that affidavit that “at the time of signing this affidavit” he did not have “any funding arrangements in place with any third-party for the purposes of the Australian and New Zealand litigation” but that he “did in the past have litigation funding from a third party”.

49    That evidence plainly suggests that the “past” litigation funding was for the purposes of the Australian and New Zealand litigation, especially having regard to the terms of Order 8.

50    By the 13 February Affidavit, Mr Wikeley deposes that, “I do not presently have litigation funding. Wikeley Family Trust [sic] Limited previously had litigation funding in place with Legalist. …I have not at any time had litigation funding in place for any proceedings in Australia or New Zealand”.

51    This evidence appears to be inconsistent with the 5 February Affidavit.

52    By an affidavit which he affirmed on 22 February 2024 (22 February Affidavit), Mr Wikeley deposed that:

I can confirm that I have a mere expectancy to receive distributions from a discretionary trust. I do not control that trust, am not the appointor or settlor of that trust or in any other way in a position to influence its administration other than in my capacity as a discretionary beneficiary.

I am not prepared to disclose the identity of the trustee/s and produce a copy of the trust instrument…

53    Mr Wikeley has been funding his involvement in extensive litigation in Australia and New Zealand for a significant period of time, with solicitors, senior and junior counsel, and with further appeals, trials and applications to come. However, Mr Wikeley’s asset position, as disclosed by his affidavits, reveals that he has no ability to fund this litigation from his own assets. It is therefore reasonable to infer, and I do infer, that he has received and will receive funding from a source which he is yet to disclose.

54    Having regard to his 22 February 2024 affidavit, Mr Wikeley is a beneficiary of a discretionary trust, and I infer that this unidentified trust is a possible source of funding for his litigation, whether by way of loan or distribution or otherwise.

55    By his affidavits, it is not clear whether Mr Wikeley is intending to differentiate between parties to the litigation and third-parties when he refers to funding for the litigation, and between professional litigation funders and others who have provided funding.

56    Order 8 did not draw any distinction between a “litigation funder” and any other party or parties providing “funding” to Mr Wikeley. To the extent that Mr Wikeley seeks to draw a distinction between formal “litigation funding” and a party who has provided him with funds for the purposes of the litigation, it is not consistent with the terms of the order. Further, any distinction between a “third party” providing him funding and a “party” to the litigation is also illusory and should not provide any basis for not disclosing such funding.

57    Without forming any final view as to whether Mr Wikeley has failed to comply with Order 8(b) of the Order of 25 January 2024 (but reserving that question) and taking into account his evidence that he is a discretionary beneficiary under a trust (which appears to be a different trust to the Wikeley Family Trust), I made an order which required that Mr Wikeley provide:

(b)    details of each and every person, entity and trust who has, in the past, is currently, or has agreed to provide in the future, funding to the applicant for the purposes of any litigation in Australia or New Zealand to which the respondent is party, including:

(i)    the name and contact details of the person, entity or trust; and

(ii)    the date(s) and amount(s) of funding provided or to be provided.

58    Such an order makes more explicit what was required by Order 8, so that Mr Wikeley can be in no doubt as to what he is required to do.

59    By paragraph 1(e) of its draft order, Kea also sought other information about the discretionary trust of which Mr Wikeley is a beneficiary.

60    However, I am not prepared at this stage to make the balance of the orders sought by Kea in paragraphs 1(a) and 1(e) of its draft order as I am satisfied that the order which I have made will address the concerns which Kea has about the identification of the person, entity or trust which is funding Mr Wikeley’s litigation in Australia and New Zealand.

Reasons for inability to comply with Order 8

61    By paragraph 1(d) of its draft order, Kea sought an order that Mr Wikeley provide an affidavit which contained this information:

[I]n respect of the applicant’s inability to comply with [Order 8]:

(i)    the steps taken by the applicant, prior to 10 am on 2 February 2024, to comply with the Order;

(ii)    the date and time upon which the applicant determined that he would be unable to comply with the Order;

(iii)    the reasons for the late notification of that inability to the Court and to the respondent;

62    Mr Wikeley attempted to provide an explanation in the 5 February Affidavit.

63    Since receiving that evidence and by the Order of 26 February 2024, Mr Wikeley was ordered to pay Kea’s costs of and incidental to his application for an extension of time to comply with Order 8. There was no real resistance by senior counsel for Mr Wikeley to that order being made, and it was appropriate in the circumstances.

64    As Mr Wikeley will now bear the costs of his urgent application, the further information sought by Kea from him as to why or how it came to be that that hearing was required is of no utility, and the order sought by Kea will not be made.

Security for costs

65    Kea also sought orders in these terms:

The applicant provide security for the respondent's costs of this proceeding in the amount of $248,000, or such other amount as the Court sees fit, in a form satisfactory to the Registrar by 4:00pm on 1 March 2024.

If security is not provided in accordance with paragraph 4 herein:

(a)    the proceeding is dismissed without further order; and

(b)    the applicant is to pay the respondent's costs of the proceeding and this application on the standard basis.

66    There can be no dispute that, based on his affidavits as to his asset position, there is a high risk that any costs order against Mr Wikeley will not be satisfied if his originating applications are dismissed.

67    Irrespective of his asset position, the findings by Gault J are also relevant to and support a conclusion that there is a real risk that Mr Wikeley is likely to fail to meet any adverse costs order. Mr Wikeley has been found to have taken steps to seek to evade the consequences of the court’s orders in New Zealand, including by (i) the incorporation of Wikeley Inc and USA Asset Holdings Inc in Kentucky, (ii) purporting to assign the Coal Agreement and Kentucky Default Judgment from WFTL to Wikeley Inc, (iii) purporting to change the trustee of the Wikeley Family Trust to a Kentucky company, and (iv) purporting to change the proper law of the trust to Kentucky law. That there is such a real risk is also supported by the findings of Cooper J regarding Mr Wikeley’s preparedness to ignore the authority of court orders.

68    Although Mr Wikeley is presently living in Queensland (and subject to a ‘no departure’ order made by the Supreme Court), he has deposed to being ordinarily resident in Ukraine (where he co-owns real property), and there is nothing to prevent him from returning to the Ukraine if his passport is returned and any orders preventing him from departing cease to have effect.

69    That Mr Wikeley is a natural person is not fatal to an application for security for costs. While courts are disinclined to order a natural person to provide security for costs, they are more willing to do so when impecuniosity is accompanied by another factor: see Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]–[33]; Etnyre v Australian Broadcasting Corporation [2021] FCA 610 at [11].

70    By the 22 February Affidavit, Mr Wikeley refers to the application for security for costs in the amount of $248,000 and deposes that, “I am unable to pay this amount”, “I have insufficient assets to pay [this amount]”, “I simply do not have funds available to me to pay the sums sought by the respondent” and “If ordered to pay [the security amounts], I would be unable to do so”.

71    Importantly, Mr Wikeley does not say:

(1)    that he would not be able to pay any amount as security for costs – just “this amount” or the “security amounts”;

(2)    that he would not be able to obtain any part of the amount sought whether by way of loan or gift or litigation funding or by approaching the trustee of the discretionary trust and requesting a distribution;

(3)    that if the order for security for costs is made, he will not be able to proceed with the prosecution of the originating applications.

72    Mr Wikeley was represented by senior and junior counsel at the hearing on 23 February 2024, and I was informed that a different senior counsel had been retained and would be appearing at the final hearing in April 2024. For this reason, I infer that Mr Wikeley is obtaining funding for this and other litigation in Australia and New Zealand from somewhere. That is because he has been and continues to be represented by counsel, including senior counsel, and solicitors, and because he has been coy about disclosing the details of the litigation funding to date (as I address above).

73    For these reasons, I was not persuaded that these proceedings would be stifled or that it was oppressive to order that Mr Wikeley provide security for Kea’s costs.

74    An additional reason for ordering security was that Mr Wikeley is in substance in the same position as an appellant because he is the subject of the NZ Judgments in New Zealand and has ‘had his day in court’: see generally McCardle v Johnson [2023] FCA 1369 (Stewart J). The present proceedings are therefore not “defensive” in nature in circumstances where Kea has a prima facie right to enforce the NZ Judgments in Australia under the TTP Act.

75    For these reasons, the appropriate balance between the need to ensure fair and adequate protection of Kea’s position in this proceeding and any perceived injustice to Mr Wikeley was such as to support the imposition of security for Kea’s costs.

76    However, I was not prepared to make an order for security in the amount sought by Kea, being $248,000. Taking into account the unchallenged and uncontradicted evidence of Mr Bloom, that it is appropriate for the Court to adopt a “broad brush” approach in determining quantum and that I have given Kea liberty to apply for further security for its costs (including against a third party), I was satisfied that the amount of $120,000 was an appropriate amount at this stage and I otherwise made orders in the terms sought by Kea, with some minor changes.

Security for undertaking as to damages

77    Kea sought orders in these terms:

The applicant provide security for performance of the undertaking as to damages contained within schedule A of the orders of Justice Downes dated 25 January 2024 in the amount of $157,644.24 or such other amount as the Court sees fit in a form satisfactory to the Registrar within 7 days of the date of this order.

If security is not provided in accordance with paragraph 6 herein:

(a)    paragraphs 2, 3 and 4 of the orders of the Court on 25 January 2024 be set aside; and

(b)    the respondent is entitled to immediately enforce the New Zealand judgments registered by orders of the Court made on 8 December 2023.

78    Kea submits that:

The stay granted on 25 January 2024 was underpinned by Mr Wikeley’s undertaking as to damages. Mr Wikeley was ordered to disclose his assets so that an assessment could be made of the worth of such undertaking. The affidavits of Mr Wikeley as to his assets make it plain that the undertaking is substantially worthless and illusory.

In circumstances of this case and where the potential damage to Kea by the stay of enforcement is likely to exceed $157,000, there are no exceptional circumstances to warrant departure from the general position and Mr Wikeley ought to be required to provide security in that amount in support of his undertaking as to damages.

79    However, I was not prepared to make the orders sought by Kea for the following reasons.

80    First, when Mr Wikeley offered the undertaking as to damages at the hearing on 25 January 2024, Kea was aware that his asset position was questionable because it indicated an intention to apply for security for its costs. With that knowledge, it ought to have raised the issue of the worth of Mr Wikeley’s undertaking as to damages at that time, and pressed for security if it considered that the undertaking was without value.

81    Second, the amount of $157,644.24 represents interest accruing and expected to accrue on the monetary amounts awarded to Kea pursuant to the NZ Judgments. In circumstances where Mr Wikeley does not have sufficient assets in Australia against which Kea could pursue enforcement absent the interim stay, my present view is that it cannot be concluded that the accrued and accruing interest represents potential damage to Kea caused by the imposition of the stay because it will suffer this damage in any event.

Associate:

Dated:    28 February 2024