Federal Court of Australia

Wikeley v Kea Investments Ltd [2024] FCA 631

ORDERS

THE COURT ORDERS THAT:

1.    The applicant provide security for the respondent’s costs of the applicant’s application for leave to appeal filed 4 March 2024 in the amount of $30,000 in a form satisfactory to the Registrar within 21 days of the date of this order.

2.    If security is not provided in accordance with paragraph 1:

   (a) the proceeding be 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.

3.    Costs reserved.

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

REASONS FOR JUDGMENT

DOWLING J

INTRODUCTION

1    The respondent, Kea Investments Pty Ltd, seeks an order for security for costs from the applicant, Mr Kenneth Wikeley, of his application for leave to appeal. Mr Wikeley seeks leave to appeal from a decision of a single judge of this Court in Wikeley v Kea Investments Ltd [2024] FCA 155 (Primary Judgment).

2    In the Primary Judgment the Court ordered, amongst other matters, that Mr Wikeley provide security for costs, in the sum of $120,000, of that proceeding. In that proceeding Mr Wikeley sought to set aside 3 judgments of the High Court of New Zealand registered in Australia by Kea under the Trans-Tasman Proceedings Act 2010 (Cth).

3    In the Primary Judgment the Court also ordered that if security for costs was not provided by Mr Wikeley, that proceeding would be dismissed. Mr Wikeley did not provide the security and that proceeding was dismissed on 5 March 2024.

4    For the reasons that follow I am satisfied that it is appropriate that Mr Wikeley be ordered to provide security for the respondent’s costs of Mr Wikeley’s application for leave to appeal the Primary Judgment.

Legislative framework and principles

5    Section 56 of the Federal Court of Australia Act 1976 (Cth) relevantly provides:

(1)     The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her.

(2)     The security shall be of such amount and given at such time and in such manner and form, as the Court or Judge directs.

6    Rule 19.01 of the Federal Court Rules 2011 (Cth) provides:

(1)    A respondent may apply to the Court for an order:

(a)     that an applicant give security for costs and for the manner, time and terms for the giving of the security; and

(b)     that the applicant’s proceeding be stayed until security is given; and

(c)     that if the applicant fails to comply with the order to provide security within the time specified in the order, the proceeding be stayed or dismissed.

7    The court has a broad discretionary power to make an order for security for costs: James v Australian and New Zealand Banking Group Ltd (No. 1) (1985) 9 FCR 442 at [444]; Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 at [6]; Stapleton v Fairfax Media Publications Pty Ltd [2019] FCA 1418 at [6]-[7]; Etnyre v Australian Broadcasting Corporation [2021] FCA 610 at [8].

8    The Court must exercise its discretion in light of the facts and circumstances of the particular case: Botsman v Bolitho & Ors [2018] VSCA 111 at [36]; Stapleton at [6].

9    In Etnyre, Abraham J summarised the relevant factors regulating the exercise of the Court’s discretion. I adopt that summary as it applies in the present circumstances. The relevant factors are as follows.

10    First, whether the security for costs application has been brought promptly: KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197, Etnyre at [10].

11    Second, whether the applicant is a natural person or a corporation: Cowell v Taylor (1885) 31 CH D 34 at [38] per Bowen LJ, Etnyre at [11].

12    Third, the risk that the applicant cannot afford to satisfy a costs order against them: Bell Wholesale Co. Ltd v Gates Export Corporation (1984) 2 FCR 1 at [4]; Australian Equity Investors v Colliers International (NSW) Pty Ltd [2012] FCAFC 57 at [25]-[30], Etnyre at [12].

13    Fourth, whether the applicant is a foreign resident. In Etnyre at [13], Abraham J cited Weinberg J in Logue v Hansen Technologies Ltd [2003] FCA 81; (2003) 125 FCR 590 at [18] where he explained the rationale of the longstanding principle that if the applicant was ordinarily resident outside the jurisdiction and had no relevant assets in Australia, then the default would be to order security. The rationale was:

… to create a fund within this country against which a successful respondent may

enforce a judgment for costs thereby enabling the avoiding of the risks, uncertainties

and delays of attempting to enforce such a judgment in the applicant’s claimed

country of residence.

14    Fifth, the prospects of success of the applicant’s claim: Etnyre at [14]. Where the claim is at a preliminary stage it may be that the assessment cannot be done in a detailed way, however it is appropriate for the Court to consider the merits of a claim in a security for costs application where there is enough material for an application to be made: see Staff Development & Training Centre Pty Ltd v Commonwealth of Australia [2005] FCA 1643, Spender J at [12] to [13]. Further, prospects of success may be especially relevant to an application for security for costs of an appeal: see Singh v Secretary, Department of Employment and Workplace Relations [2007] FCA 90 at [12].

15    Sixth, whether an order of security for costs would stifle the litigation. This factor may be less important in the context of an appeal: Thomas v STX Pan Ocean Co Ltd [2011] FCA 254 at [7], Etnyre at [16].

EVIDENCE

16    Kea relied upon two affidavits. Both affidavits contained evidence of the estimate of Kea’s costs of Mr Wikeley’s leave to appeal application. The first affidavit was sworn by Mr Adam Bloom, a costs consultant at Bloom Costs. The second affidavit was sworn by Mr Matthew Deighton, the solicitor for Kea in these proceedings. Both Mr Bloom and Mr Deighton estimated the costs as around $54,000.

17    Mr Wikeley provided four affidavits to my chambers and the applicant. They were not filed consistently with the Court process, but I have considered them for the purpose of this application. Mr Wikeley, in the hearing on 1 May 2024, accepted that these affidavits were not relevant to this application but instead related to his proceeding the subject of the Primary Judgment.

Chronology of events

18    The primary judge set out the relevant factual background at paragraphs [1] to [35] of the Primary Judgment. I adopt that background and extract the following key events.

19    In Kea Investments Ltd v Wikeley Family Trustee Limited (in interim liquidation) [2023] NZHC 3260 (Gault J Decision), Gault J of the High Court of New Zealand found that:

(a)    Mr Wikeley was involved in an unlawful means conspiracy against Kea: see [122] of Gault J Decision;

(b)    That conspiracy involved multiple attempts to fraudulently use a Kentucky Default Judgment awarded against Kea worth US$120 million: see [122] of Gault J Decision;

(c)    The Kentucky Default Judgment was obtained on the basis of a fraudulent Coal Agreement: see [122] of Gault J Decision; and

(d)    the Coal Agreement was likely created by or for Mr Wikeley years after its purported date of execution: see [110] of Gault J Decision. The Coal Agreement purported to be between Kea and the Wikeley Family Trustee Limited, a New Zealand company controlled by Mr Wikeley.

20    During the course of that New Zealand proceeding before Gault J, Mr Wikeley attempted to assign the benefit of the Kentucky Judgment and the Coal Agreement to other companies, or trustees, he controlled despite Court orders: see Gault J Decision at [58]. Mr Wikeley also attempted to appoint a new trustee and change the applicable law of the Wikeley Family Trust to Kentucky instead of New Zealand: see Gault J Decision at [60]– [62].

21    The final relief ordered by Gault J at [156] of the Gault J Decision included:

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

(b)    declaratory relief that the Kentucky Default Judgment was obtained by fraud;

(c)    damages against Mr Wikeley and his related companies of £779,031.88, US$412,225.94 and AU$115,625.21 totalling over AU $2m; and

(d)    Mr Wikeley to pay Kea’s costs and interest.

22    Gault J then made a further order on 5 December 2023: see Kea Investments Limited v Wikely Family Trustee Limited (in interim liquidation) [2023] NZHC 3532. This order restrained Mr Wikeley and the other defendants from:

(a)    changing the trustee; and, or

(b)    changing the proper law

of the Wikeley Family Trust until the Kentucky Judgment had been discharged.

23    On 8 December 2023, Mr Wikeley appealed against the Gault J Decision. The appeal was heard in the week commencing 20 May 2024. That appeal is reserved. Mr Wikeley provided security for the costs of the appeal on about 12 January 2024: see Primary Judgment at [25].

24    Mr Wikeley was then, and is now, located in Queensland Australia. Kea sought and was granted interim orders from the Supreme Court of Queensland under ss 25 and 26 of the Trans-Tasman Proceedings Act 2010 (Cth) on 12 and 13 April 2023. Those orders (of Cooper J) prevented Mr Wikeley from taking any steps to enforce the Kentucky Judgment and compelled him to hand in his passport to the Supreme Court: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [4].

25    Mr Wikeley failed to provide his passport to the Supreme Court and Kea made a contempt application on 20 April 2023 to the Supreme of Queensland: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [8]. On 21 April 2023, a warrant was issued for Mr Wikeley’s arrest: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [9]. On 26 April 2023, Mr Wikeley handed his passport to the Supreme Court: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [10]. Mr Wikeley was ordered to reside at a specific address and was subject to a curfew: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [10].

26    On 7 June 2023, Mr Wikeley filed an application (which was amended on 15 June 2023) to set aside the existing Supreme Court of Queensland orders and to permanently stay the application for contempt and enforcement of the Gault J Decision. That application was dismissed by Cooper J: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [12].

27    Mr Wikeley filed an appeal to that dismissal by Cooper J on 1 November 2023. On 14 December 2023, Mr Wikeley was ordered by Mullins P to pay $65,000 for security for costs of that appeal, which he paid on 9 January 2024: see Wikeley v Kea Investments Ltd [2023] QCA 255 and Primary Judgment at [35]. That appeal is yet to be determined.

28    On 18 January 2024, Mr Wikeley filed an originating application in the Federal Court applying to set aside the registration of the New Zealand judgments in Australia.

29    On 16 February 2024, Kea made an interlocutory application for Mr Wikeley to provide an inventory of assets and for an order for security for costs of $248,000. That application was heard by Downes J on 23 February 2024. On 28 February 2024, Downes J delivered the Primary Judgment and ordered that Mr Wikeley provide an affidavit as to his assets and pay security for costs of $120,000 by 4:00pm on 5 March 2024 or the proceeding would be dismissed.

30    On 5 March 2024, Mr Wikeley made an unsuccessful interlocutory application to amend the security for costs order to three instalments of $40,000. Mr Wikeley did not pay any amount as security for costs and the proceeding was dismissed.

31    On 4 March 2024, Mr Wikeley filed an application for leave to appeal the Primary Judgment.

32    On 28 March 2024, Kea filed an interlocutory application for security for costs of Mr Wikeley’s application for leave. That application was heard before me on 1 May 2024.

Consideration

33    Against that background, I now address the relevant principles and factors (set out above at [7] to [15]) as applied to the circumstances of this case.

Was the application for security for costs brought promptly?

34    There is no issue of delay in this case. Mr Wikeley’s application for leave to appeal was filed on 4 March 2024. Kea’s application for security for costs was brought on 28 March 2024.

Should security be ordered against a natural person?

35    Whilst the courts are generally disinclined to order security for costs against a natural person, such an application may be granted where impecuniosity is accompanied by some other factor. That other factor might be: a lack of prospects of success; or residence outside of Australia; or a sum ordered that was not oppressive: see Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32]-[33]; Etnyre at [11]. For the reasons set out below each of those other factors are present in the circumstances of this application.

36    Mr Wikeley’s status as a natural person is considered further under the factor assessing whether an order for security will stultify the proceeding.

Is there a risk of non-compliance with a costs order?

37    The primary judge found that there was a high risk that Mr Wikeley would not comply with an adverse costs order if he was unsuccessful in the proceedings before her: Primary Judgment at [66].

38    In an affidavit filed on 5 February 2024 in the proceedings before the primary judge, Mr Wikeley deposed that he owned 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 around $50,000 of cash. He also deposed that about $70,000 is held in his solicitors’ trust account for legal fees. In an affidavit provided on 19 April 2024 in this proceeding Mr Wikeley deposed that as at 17 April 2024 he had $3,533.94 in the bank (and no longer $50,000 in cash) but otherwise the assets above remain. Mr Wikeley no longer retains his lawyers and submitted in the interlocutory hearing before me on 1 May 2024 that he owed his lawyers $265,000.

39    I am satisfied, on the material before me, that it is very likely that Mr Wikeley would not be able to comply with an adverse costs order awarded against him if his application for leave to appeal was dismissed.

40    In the Primary Judgment her Honour found that, irrespective of Mr Wikeley’s asset position, the findings of Gault J (in New Zealand) and Cooper J (in Queensland) were 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. The Gault J findings relied upon by the primary judge included:

(a)    The incorporation of Wikeley Inc and USA Asset Holdings Inc in Kentucky;

(b)    The purported assignment of the Coal Agreement and the Kentucky Default Judgment to Wikeley Inc;

(c)    The purported change of trustee of the Wikeley Family Trust to a Kentucky company; and

(d)    The purported change of applicable law of the trust from New Zealand to Kentucky.

41    Gault J determined that (b)–(d) were in breach of Court orders and were an attempt to “evade the reach of the New Zealand courts”: see Gault J Decision at [140]-[151].

42    The Cooper J finding was that Mr Wikeley had a preparedness to ignore the authority of court orders: see Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 at [278], Primary Judgment at [67].

43    I accept that, irrespective of Mr Wikeley’s asset position, there is a risk that Mr Wikeley is likely to fail to meet any adverse costs order.

44    The risk that Mr Wikeley may not comply with any adverse costs order weighs in favour of the granting of security for costs.

Should security be ordered if Mr Wikeley is ordinarily resident outside Australia?

45    If a person is not ordinarily resident in Australia, and their assets in Australia are insufficient to satisfy any costs order that may be made against them, this would militate significantly in favour of making an order for security. In Commissioner of Taxation v Vasiliades [2016] FCAFC 170; (2016) 344 ALR 558 at [72] Kenny and Edelman JJ stated:

Thus, if an applicant in a proceeding is ordinarily resident outside the jurisdiction, an award of security for costs means that a respondent “does not bear the risk as to the certainty of enforcement in the foreign country and as to the time and complexity of the action there which might be necessary to effect enforcement”.

46    In the application before me Mr Wikeley said he intended to live in Ukraine. That, together with the description of his assets, set out above at [37], weighs in favour of awarding security for Kea’s costs. This consideration is addressed further below under the prospects of proposed appeal ground 1(c).

What are the prospects of success of leave to appeal?

47    Mr Wikeley must establish some improper exercise of the primary judge’s discretion in ordering him to pay security for costs: see House v The King (1936) 55 CLR 499.

48    As the Primary Judgment was an interlocutory decision Mr Wikeley will need, and has sought, leave to appeal. An applicant seeking leave to appeal must establish that, in all the circumstances, the decision is attended with sufficient doubt to warrant its being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong. These limbs rely on each other and should not be isolated in separate components: see Decor Corp Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397 at [397].

49    Mr Wikeley’s proposed notice of appeal lists a number of different grounds of appeal under four broad appeal grounds. The proposed notice of appeal was drawn by counsel. Mr Wikeley appeared in person without counsel in the hearing before me. The respondent submitted, and I accept, that the prospects of success on leave should be tested against the proposed notice of appeal.

50    Proposed notice of appeal grounds 2 and 3 relate to the disclosure of assets and bank statements ordered by the primary judge. I accept the submission of Kea that given the proceedings have been dismissed, and the orders for the disclosure of assets are not operative, no injustice will flow to Mr Wikeley if those orders are not set aside on appeal. The principal focus in reviewing the prospects of success of the proposed appeal and application for leave is the grounds in relation to the order for security for costs.

Grounds of appeal 1(a) and (b)

51    Proposed grounds of appeal 1(a) and (b) state that the primary judge erred by finding that Mr Wikeley’s actions were not defensive in nature and that he was in the position of an appellant.

52    Appellants are in a different position in relation to security for costs orders: see McCardle v Johnson [2023] FCA 1369. That is because an appellant has had the benefit of a decision by a Court. Whilst Mr Wikeley was not an appellant before the primary judge, the primary judge characterised him as an appellant and stated that his proceeding was not “defensive in nature”: see Primary Judgment at [74]. The primary judge found that Mr Wikeley was the subject of the New Zealand judgments. As a result of the New Zealand judgments, Kea had a prima facie right under the Trans-Tasman Proceedings Act 2010 (Cth) to enforce the New Zealand judgments. The final relief Mr Wikeley was seeking was to avoid the enforcement of the New Zealand judgments. Kea submitted that the primary judge was correct in her conclusion at [74] and that Mr Wikeley had merely asserted rather than identified error. It said further, in any event, the conclusion was one of several reasons, and even if wrong, there would not be a different result.

53    In circumstances where Kea had a prima facie right to the enforce the New Zealand judgments, and absent any identification of error by Mr Wikeley, I do not consider that these grounds have any good prospects of leave to appeal. Further, the primary judge described this consideration as an “additional factor”. It did not itself weigh heavily in the primary judge’s exercise of discretion.

Ground of appeal 1(c) - the applicant is not ordinarily resident outside the jurisdiction

54    Proposed ground of appeal 1(c) alleges that the primary judge erred in making a finding that Mr Wikeley is ordinarily resident outside the jurisdiction. As set out above, if a person is not ordinarily resident in Australia and their assets in Australia are insufficient to satisfy any costs order that may be made against them, this will militate in favour of making an order that the applicant provide security for the respondent’s costs.

55    Mr Wikeley deposed before the primary judge and submitted to me that he is ordinarily a resident of Ukraine. However, Mr Wikeley’s appeal ground states that the primary judge erred in finding that he was ordinarily a resident outside Australia because his passport has been confiscated by the Queensland Supreme Court and he cannot leave Queensland.

56    The question of ordinary residence is to be assessed as “a place where in the ordinary course of a person’s life he regularly or customarily lives”: see Re Taylor: Ex parte Natwest Australia Bank Ltd [1992] FCA 296; (1992) 37 FCR 194 at [198] (Lockhart J). Mr Wikeley has given evidence in this Court that he is ordinarily a resident of Ukraine and that he has limited assets in Australia. I do not consider that this proposed ground of appeal has any good prospects of leave to appeal. Further, the primary judge considered the factors that restrict Mr Wikeley’s movement at [68] of the Primary Judgment and reached the same conclusion. Mr Wikeley has not established how the primary judge erred in concluding that he was ordinarily a resident outside Australia.

Ground 1(d) - The proceeding would be stifled if security was granted

57    Mr Wikeley alleges that the primary judge erred in finding that the proceeding would not be stifled. The primary judge found that the proceeding would not be stifled, in part because of the fact that Mr Wikeley was represented by solicitors and senior and junior counsel. The primary judge inferred that Mr Wikeley was receiving funding from a source he did not disclose and that he would continue to do so: see Primary Judgment at [53]. Mr Wikeley did not articulate how the primary judge was wrong to reach that conclusion.

58    Kea submitted that Mr Wikeley did not depose that the proceedings will be stifled, despite him bearing the onus. It said therefore, that the primary judge did not err in inferring Mr Wikeley was obtaining funding. Kea further submitted that a separate inference could be drawn that Mr Wikeley could not depose that the proceedings would be stifled because he was receiving funding.

59    On the material before me I consider that this ground does not have any good prospects of obtaining leave to appeal. Mr Wikeley has not demonstrated any error in the exercise of the primary judge’s discretion.

Ground 1 (e) - A beneficiary of a discretionary trust has only a mere expectancy and right to due administration and has no proprietary interest in the assets of the trust

60    Ground 1(e) is that the learned primary judge failed to take into account a relevant consideration that a beneficiary of a discretionary trust has only a mere expectancy and right to due administration and has no propriety interest in the assets of the trust. Mr Wikeley did not articulate how this led the primary judge into error. Kea submitted that the nature of Mr Wikeley’s interest in the trust is irrelevant. Kea submitted that what was relevant was that Mr Wikeley was undertaking expensive litigation in multiple jurisdictions while asserting he had insubstantial assets. I accept that submission of Kea. On the material before me I consider that this ground does not have any good prospects of obtaining leave to appeal.

Ground 1(f) - The length of time to provide the security was inadequate in the circumstances

61    Ground 1(f) and ground 2 include the claims that a period of 7 days was unreasonably short for the provision of security. Kea submitted that this period was appropriate given the order that it was to file and serve its material by 4 March 2024 which would have led to it incurring significant expense without the benefit of security. It said further that Mr Wikeley had previously demonstrated an ability to raise funds despite stating that he had insufficient assets. There was no evidence or submission about the period of 7 days before the primary judge. Mr Wikeley has not articulated what error was made by the primary judge. On the material before me, I consider that this ground does not have any good prospects of obtaining leave to appeal.

Whether a less intrusive option was available

62    Ground 2(d) is that the primary judge erred in not considering whether a stay was appropriate given it is a less intrusive order. Kea submitted that a stay would in effect grant the final relief that Mr Wikeley seeks by preventing Kea from enforcing the New Zealand judgments. I accept that submission. Mr Wikeley has not demonstrated any error in the exercise of the primary judge’s discretion. On the material before me I consider that this ground does not have any good prospects of obtaining leave to appeal.

Conclusion on prospects

63    For the reasons set out above, the prospects of success of the application for leave to appeal (and necessarily the appeal itself) are low. This weighs in favour of granting the security for costs order sought by Kea.

Might an order for security stifle the proceeding?

64    The possibility that an order for security will stultify litigation is an important factor to be considered in the exercise of the discretion: see Idoport Pty Ltd v National Australia Bank Pty Ltd [No 35] [2001] NSWSC 60; (2001) 51 NSWLR 333 at [96]. This is particularly the case when it is a natural person being ordered to pay security for costs. The basic rule “that a natural person who sues will not be ordered to give security for costs, however poor, is ancient and well established”: see Pearson v Naydler [1977] 3 All ER 531; [1977] 1 WLR 899 at [902].

65    However, there are important exceptions to that basic rule. First, even if the proceeding would be stultified that is not conclusive. In Bryan E Fencott & Associates Pty Ltd v Eretta Pty Ltd 16 (1987) FCR 497 French J found that at [129]:

The effect of the authorities is, in my opinion, that the probability or certainty that an order for security for costs will frustrate the plaintiff's claim will not automatically lead to such order being withheld. It is however a factor relevant to the granting of an order and will weigh against it where there is no party standing behind the company who is in a position to provide the necessary security.

66    Second, in Clack v Collins (No 1) [2010] FCA 513, Jagot J canvassed the authorities dealing with this question. Her Honour identified that in the case of appeals there is an exception to the general proposition that poverty should be no bar to a litigant. Her Honour relied upon what was said in Cowell v Taylor (1885) 31 Ch D 34 at 38 that there is an exception in the case of appeals where the appellant has had the benefit of a decision by a court, and so the impecunious litigant is not excluded from the courts, but only prevented, if they cannot find security, from dragging their opponent from one court to another. Similarly, Spender J in Tait v Bindal People [2002] FCA 322 at [3]-[4] said:

The difference is that, at the appellant level, there has already been a determination adverse to the person against whom security for costs is sought and, if it be shown that there is a substantial risk that even if successful the respondent to the application for leave to appeal, or to an appeal, will be deprived of his costs, such an outcome would clearly be unjust.

In a sense, it would be giving to a person who has been on the receiving end so to speak of a determination by the courts a free hit at great cost to the other party in the appeal proceedings.

67    Kea submitted that the present proceeding is a “free hit” of the type identified by Spender J in Tait. Kea says that Mr Wikeley was unsuccessful in the first instance and if security for costs is not ordered, Kea would be left with a very high risk that a costs order would not be paid. It says that the consideration of stifling the appeal has less force than it might otherwise have.

68    I accept those submissions of Kea, however, whether the proceeding would be stifled remains a factor that should be considered in the Court’s exercise of its discretion. The party resisting the security for costs order bears the onus of establishing that the proceeding would be stifled: see Madgwick v Kelly (2013) 212 FCR 1. In this case, Mr Wikeley has deposed that it would stifle the proceeding because he would not be able to afford an order for security for costs. However, Mr Wikeley did not provide or rely upon any financial documentation, in support of that assertion, in this application.

69    The inference drawn by the primary judge that Mr Wikeley was being funded is less available to the Court in the present circumstances, given Mr Wikeley is a litigant in person and not represented by solicitors and Counsel. Mr Wikeley submitted in the hearing that he would not be able to pay a $50,000 security. Mr Wikeley separately deposed (Affidavit by Kenneth David Wikeley on security for costs dated 19 April 2024) that the most he could “scrape up” is around $10,000.

70    Mr Wikeley has paid security for costs twice previously. On 9 January 2024 in the Queensland Court of Appeal case where Mr Wikeley paid $65,000 in security for costs. Then, on 12 January 2024, for his Court of Appeal case in New Zealand, Mr Wikeley submitted that he was ordered to pay $30,000 in security for costs and paid $14,000 and the New Zealand Court of Appeal waived the rest of the security.

71    On the material before me I am not satisfied that the proceeding would be stifled. Mr Wikeley has said he could pay some but not all of the amount sought by Kea and that he will be relying on support from others. He did not identify those other persons or what their financial position might be. He did not produce any financial documentation to support the claim of stifling made in his affidavit material. I accept the submission of Kea that this appeal is analogous to the “free hit” described by Spender J in Tait. Whilst there remains some risk of stifling, in all the circumstances of this application for leave to appeal, this factor does not prevent the exercise of the Court’s discretion to make such an order.

Quantum and timing of the order

72    In all the circumstances, I am satisfied that I should exercise my discretion to make an order for security for costs. I must also consider the quantum of that order and when the security must be paid.

73    Kea seeks that the security is $54,000 and paid within 7 days. Kea relies on two affidavits for the estimate of $54,000. As explained above both the affidavit of Mr Deighton, the solicitor with carriage of the matter for Kea, and Mr Bloom a specialist costs lawyer, conclude that the costs would be between $50,000 and $54,000. These estimates are unchallenged by Mr Wikeley.

74    Kea’s estimates rely on Mr Gibson KC appearing as Senior Counsel for Kea for the leave to appeal application. In the hearing before me on 1 May 2024, Kea was represented by Mr O’Higgins SC. Kea submitted that it had no opposition to Mr O’Higgins SC being briefed as Senior Counsel for Kea for the leave to appeal rather than Mr Gibson KC. In the affidavit of Mr Bloom, Mr Gibson KC had a daily rate of $11,000 per day whereas Mr O’Higgins SC had a daily rate of $8,000. Therefore, it follows that if Mr O’Higgins SC is retained instead of Mr Gibson KC, the costs estimate would reduce.

75    In his affidavit, Mr Bloom estimates that the future work for Counsel on this case will be between 1.5 and 2 days for both senior and junior counsel. Mr Bloom has estimated the costs based on 2 days. Taking the lower estimate of 1.5 (and applying the discount), the estimated future disbursements would come to $17,850. Consistent with Mr Deighton and Mr Bloom’s affidavits that would bring the costs of the leave to appeal to $38,530. Given the Court’s broad discretion, and the fact that Mr Bloom had not seen any time recording or file content, nor was he aware of the working split between junior and senior counsel, a more realistic estimate is $30,000.

76    Whilst Kea sought payment within 7 days, it did not oppose an order for 21 days. In all of the circumstances set out above I consider 21 days to be an appropriate period.

Disposition

77    Taking into account all of the matters set out above and balancing the position of Kea with the position of Mr Wikeley, I consider it appropriate to make an order for security for costs. I order that Mr Wikeley pay $30,000 in security for costs within 21 days. If that security is not paid the proceeding will be dismissed.

Associate:

Dated:    14 June 2024