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Australian interim relief granted in support of New Zealand proceedings in Kea v Wikeley

As readers of this blog will know (see here and here), the New Zealand High Court recently granted an interim anti-enforcement injunction in relation to a default judgment from Kentucky against Wikeley Family Trustee Limited (WFTL), a New Zealand company, and Mr Wikely, the sole shareholder and director of the company (Kea Investments Ltd v Wikeley Family Trustee Limited [2023] NZHC 466 and [2022] NZHC 2881). The plaintiff is claiming that the defendants have committed a tortious conspiracy against it, because the Kentucky default judgment was based on fabricated claims intended to defraud it, and is seeking a declaration that the Kentucky judgment would not be recognised or enforceable in New Zealand.

In an interesting new development, the case has now reached the Australian courts. Following the High Court’s decision to refuse the defendants’ protest to jurisdiction, Mr Wikeley apparently sought to evade or contravene the Court’s interim orders, by purporting to assign the Kentucky judgment from WTFL to a new (Kentucky) company. The New Zealand Court responded by placing WFTL under the control of a provisional liquidator. However, because Mr Wikeley was located in Queensland, the Court had limited powers to make its restraining orders effective against him.

Kea therefore applied to the Supreme Court of Queensland under s 25 of the Trans-Tasman Proceedings Act 2010. Under this section, a party to a New Zealand proceeding may apply to the Australian courts for interim relief in support of the New Zealand proceeding. More specifically, the Australian court may give interim relief if “the court considers it appropriate” to do so (s 26(1)(a)). The court must be satisfied that, “if a proceeding similar to the New Zealand proceeding had been commenced in the court”, it would have had power to give – and would have given – the interim relief in that similar proceeding (s 26(1)(b)(i) and (ii)). The equivalent provisions in the New Zealand Act are ss 31 and 32.

The Queensland Court granted the application and made an order restraining Mr Wikeley from leaving Australia (Kea Investments Ltd v Wikeley [2023] QSC 79). The Court accepted that the assistance sought was “consistent with the beneficial nature of the Act” (at [32]). It was also satisfied that it would have had power to grant the relief if Kea had commenced a similar proceeding in Queensland, and that it would have granted the relief, satisfying s 26(1)(b)(i) and (ii) (at [39]-[60]).

The case provides a good example of the value of ss 25 and 26 (and its New Zealand equivalents): the power to provide prompt and effective support of the other country’s proceedings, in circumstances where the court asked to grant the support will not – and should not – be taking jurisdiction over the merits. This power was not, of course, available under the old common law approach (The Siskina [1979] AC 210, but see now Broad Idea International Ltd v Convoy Collateral Ltd [2021] UKPC 24. [2023] AC 389), with the result that – here – the New Zealand proceeding might have proven entirely fruitless in practice. It is good to see the Trans-Tasman regime working as intended.

A more specific point worth noting is that, in the course of its analysis, the Court commented on the approach that the supporting court should take to the question of jurisdiction in the hypothetical similar proceeding. In particular, the Court noted that it had “reservations” about “transposing relevant facts, including the respondents’ connections with the jurisdiction to a Queensland setting” (at [43]-[44]). The Court’s preference seemed to be to assess the question of jurisdiction on the basis of the facts as they were. Either way, it was clear that the Court would have had jurisdiction (at [44]). The Court “plainly” had jurisdiction over Mr Wikeley, due to his presence in Queensland. Moreover, Mr Wikeley’s conduct to avoid or contravene the New Zealand orders took place in Queensland, with the result that Queensland would have been “an appropriate forum if a similar proceeding had been brought in this court” (at [45]).

The Court did not elaborate on the nature of its concerns. However, one disadvantage of “transposing” relevant facts, including geographical connections, is that – when followed strictly – this approach may render ss 25 and 26 unavailable in circumstances where they would be most useful. Ordinarily, the very reason why an applicant is asking the court for orders in support of the New Zealand proceeding, is that the New Zealand court does not have the jurisdiction to make the necessary orders. Here, the New Zealand Court did not have enforcement jurisdiction over Mr Wikeley. It could not make an order preventing him from leaving Australia or an order for his arrest. The Queensland Court’s pragmatic approach to the question of jurisdiction, therefore, is to be welcomed.

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