KEA INVESTMENTS LTD v WIKELEY FAMILY TRUSTEE LTD (IN INTERIM LIQUIDATION) [2023] NZHC 3260

KEA INVESTMENTS LTD v WIKELEY FAMILY TRUSTEE LTD (IN INTERIM LIQUIDATION) [2023]NZHC 3260 [17 November 2023]CONFIDENTIALITY ORDER AS PER PARA [156](f)(ii)IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2022-404-2086[2023] NZHC 3260BETWEEN KEA INVESTMENTS LIMITEDPlaintiffAND WIKELEY FAMILY TRUSTEE LIMITED(IN INTERIM LIQUIDATION)First DefendantKENNETH DAVID WIKELEYSecond DefendantERIC JOHN WATSONThird DefendantWIKELEY INC.Fourth DefendantUSA ASSET HOLDINGS INCFifth DefendantHearing: 17 May 2023 and further memoranda received 22 and 23 June2023 (culminating in judgment on 31 August 2023 dismissing stayapplication)Counsel: JBM Smith KC, M C Harris, JLW Wass and S T Coupe for thePlaintiffM D Arthur for the interim liquidators of the First DefendantNo appearance by or for the Second to Fifth DefendantsJudgment: 17 November 2023JUDGMENT OF GAULT JThis judgment was delivered by me on 17 November 2023 at 1:00 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarTABLE OF CONTENTSIntroduction [1]Factual narrativeSir Owen Glenn, Kea and Mr Watson [9]Mr Wikeley and Mr Watson [20]Mr Wikeley's incorporation of WFTL [22]Kentucky default judgment [23]Statutory demand in BVI [25]Application to set aside default judgment [29]Coal Agreement [30]Interference with Kea [36]WFTL's attempt to settle its claim for US$10 million [45]Continuation of Kentucky proceeding and actions in the USA [46]Subsequent steps [51]Jurisdiction and service [66]Approach on formal proof [72]Evidence [74]First cause of action – conspiracyApplicable law [77]Elements of conspiracy [78]Kea's pleading of conspiracy [81]Discussion [84]Relief [118]Judgment not entitled to recognition [129]Declarations [139]Additional ordersLeave to seal judgment by default [152]Confidentiality [153]Result [156]Introduction[1] This proceeding concerns a claim by Kea Investments Ltd (Kea) that thedefendants have conspired to harm and defraud Kea, including by obtaining andattempting to enforce a default judgment against Kea from the Circuit Court ofKentucky in the United States of America in the sum of US$123,750,000 plus interestand costs.[2] Kea is a British Virgin Islands (BVI) company whose shareholder is Sir OwenGlenn. He is also a director of Kea.[3] This proceeding was initially commenced against Wikeley Family Trustee Ltd(WFTL), Mr Kenneth Wikeley and Mr Eric Watson. WFTL is a New Zealandcompany incorporated by Mr Wikeley on 23 July 2021. Mr Wikeley is a companydirector and businessman currently residing in Queensland, Australia. He is the soledirector and shareholder of WFTL. Mr Watson is a New Zealand citizen andbusinessman. His place of residence is currently unknown to Kea.[4] Mr Watson has taken no steps in the proceeding. However, WFTL andMr Wikeley protested the jurisdiction of the Court and applied to dismiss theproceeding. My judgment dated 10 March 2023 set aside their protest to jurisdiction.1[5] Kea applies for judgment by formal proof following a series of eventsdescribed in more detail in my separate judgment of 31 August 2023:2(a) on 29 March 2023, I directed the (first to third) defendants to file astatement of defence by 14 April 2023;3(b) on 6 April 2023, I granted Kea leave to join Wikeley Inc as a defendant,and placed WFTL in interim liquidation with leave to continue thisproceeding against WFTL;41 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466.2 Kea Investments Ltd v Wikeley Family Trustee Ltd (in liq) [2023] NZHC 2407.3 At [12].4 At [16]; minute dated 6 April 2023 at [7].(c) no statements of defence were filed by 14 April 2023 as directed;5(d) on 17 April 2023, Kea sought to proceed by way of formal proof.I indicated a hearing date was available on 17 May 2023 and shortenedthe time for Wikeley Inc to file its statement of defence to 10 workingdays, with leave reserved to Wikeley Inc to apply for variation;6(e) on 20 April 2023, Kea filed its amended statement of claim, joiningWikeley Inc and USA Asset Holdings Inc as fourth and fifth defendants.[6] Affidavits had been filed for the interlocutory applications but Kea filed anumber of further affidavits for the formal proof hearing both because some of theinterlocutory affidavits addressed matters on the basis of information and belief andto address subsequent matters. Kea also filed detailed, helpful submissions for theformal proof hearing.[7] Insofar as it was necessary to extend the leave granted to Kea on 6 April 2023to continue this proceeding against WFTL in interim liquidation, at the formal proofhearing on 17 May 2023, Kea sought such an order. Mr Arthur, for the interimliquidators of WFTL, indicated that the liquidators understood the order of 6 April2023 granted leave unless and until it was revoked and, in any event, did not opposefurther leave. I granted leave.[8] Subsequent to the formal proof hearing, at which I reserved my decision,on 22 June 2023 Mr Wikeley applied for an extension of time and leave to appeal the10 March 2023 judgment on forum non conveniens grounds and sought interim relief(stay) pending appeal. Mr Wikeley's applications were heard in July, with judgmentdelivered on 31 August 2023 dismissing his applications for extension of time, leaveto appeal and interim relief (stay).75 Kea Investments Ltd v Wikeley Family Trustee Ltd (in liq) [2023] NZHC 2407 at [22].6 Minute dated 17 April 2023.7 This reserved judgment was not progressed in the meantime.Factual narrativeSir Owen Glenn, Kea and Mr Watson[9] In 2011–2012, Mr Watson sought to persuade Sir Owen Glenn to makeinvestments with him. Investments followed, but the relationship broke down around2013, which led to disputes. At that time, Kea was owned by the Corona Trust, a Nevistrust.[10] In early 2012, a large logistics company which Sir Owen Glenn had establishedand built up over a number of years was sold for approximately US$350 million.The proceeds were held in the Corona Trust. At that time, Sir Owen Glenn was not anofficer of the Corona Trust or of Kea. The protector of the trust was Mr David Miller,a former adviser and friend of Sir Owen Glenn's, and the corporate trustee was PizarroCompany Limited (Pizarro), a company run by Mr Peter Dickson. Mr Dickson wasalso the sole director of Kea.[11] In March 2012, Sir Owen Glenn was introduced to an investment opportunitypromoted by Mr Watson called "Project Spartan". Sir Owen Glenn encouragedMr Miller and Mr Dickson to pursue the opportunity. They did so, but failed to keepSir Owen Glenn informed of developments. Mr Dickson committed Kea to a verydifferent transaction from that which Mr Watson had first promoted to Sir OwenGlenn. Project Spartan involved Kea and a company called Novatrust (which was thetrustee of a trust of which Mr Watson was the settlor and the primary beneficiary)being shareholders in a joint venture company called Spartan Capital Ltd (Spartan),and Kea lending some £129 million to Spartan.[12] Mr Watson also persuaded Kea to invest in, and then to buy shares in, acompany called Red Mountain Resources Inc, a gas and oil company incorporated inFlorida.[13] Following disputes regarding the control of the Corona Trust, on theapplication of Sir Owen Glenn's daughter, Ms Connah (a beneficiary), the Nevis Courtmade orders in February 2013 suspending the powers of Mr Miller and Mr Dicksonand appointed a new professional trustee, Harneys (Nevis) Limited (HNL). The ordersdirected Pizarro, Mr Miller and Mr Dickson to provide all information and recordsconcerning the Corona Trust to the claimant, who in turn passed them to HNL.The orders of the Nevis Court required Mr Miller and Mr Dickson to provide writtendetails of all assets of Kea and all documents, correspondence and communications inconnection with or related to the administration of Kea including all contractualdocuments.[14] Through a review of Kea's records provided under the Nevis Court orders,HNL learned of the contracts relating to Project Spartan and Red Mountain Resources.These discoveries led to a falling out between Sir Owen Glenn and Mr Watson.A company associated with HNL, Harlaw, became a director of Kea in April 2013,and Mr Munro of Harlaw and HNL was the individual who dealt with Mr Watson onbehalf of Harlaw and Kea.[15] After a period in which Mr Munro and Sir Owen Glenn tried to work withMr Watson in relation to the Spartan investment, in April 2014 Kea filed a petition inthe BVI to wind up Spartan on the just and equitable ground. In response, Mr Watsoncaused Novatrust to bring proceedings against Kea and others in England allegingbreach of contracts and breach of fiduciary duty in relation to the Spartan agreements.Evidence filed in the English proceedings led to Kea discovering Mr Watson's fraudon Project Spartan, and in 2015 Sir Owen and Kea commenced proceedings inEngland against Mr Watson (and others including Novatrust) as a result.[16] The three proceedings were heard together in the English High Court in 2017.A judgment was issued by Nugee J on 31 July 2018. The Judge found that Kea's entryinto Project Spartan had been procured by the deceit of Mr Watson, and thatMr Dickson had breached his fiduciary duties to Kea.8 Mr Dickson was found to haveengaged in serious misconduct including accepting unauthorised inducements fromMr Watson and backdating a loan agreement so that it appeared to have been signedbefore the Nevis Court had suspended Mr Dickson's powers and frozen Kea's assets.9The winding up petition and the claim by Novatrust against Kea were settled mid-trial.8 Glenn v Watson [2018] EWHC 2016 (Ch), culminating at [528].9 At [429]-[431] and [492].[17] On 14 September 2018, the English Court ordered Mr Watson to make aninterim payment of approximately £25 million towards the Spartan judgment debt andan interim payment of around £3.8 million towards Kea's costs.[18] Mr Watson did not meet the judgment debt arising from the judgment. In 2020he was ordered to disclose certain records to Kea to enable it to enforce the judgment.He failed to comply fully with that order and was committed to prison for contempt ofcourt.10 Kea is still trying to enforce the judgment against Mr Watson.[19] Also, the investments made by Kea in Red Mountain turned out to beworthless, and Kea later discovered that a fraud had been practised on it by Mr Watson.In 2018, Kea brought proceedings against Mr Watson in respect of that fraud and on22 March 2019 a default judgment was entered against Mr Watson for US$6.37million.Mr Wikeley and Mr Watson[20] Mr Wikeley told this Court that he has not lived in New Zealand since 2002,that he lived in Kentucky between 2012 and 2015, that his permanent home is inMykolaiv, Ukraine, but that he currently lives with his sister in Ningi, north ofBrisbane. However, following a hearing before Kós J in November 2012, Mr Wikeleywas said to be resident in Melbourne.11 The New Zealand companies register disclosesmultiple directorships and shareholdings after 2002 in respect of which Mr Wikeley'splace of residence was given as New Zealand.[21] Mr Wikeley and Mr Watson have a long history of business dealings together.The correspondence exhibited to Mr Wikeley's affidavit dated 23 November 2022(filed under protest to jurisdiction) indicates their connection in 2012 and 2013.A witness statement made by Mr Watson's former associate, Mr Gibson, inproceedings in London describes Mr Watson and Mr Wikeley as members of a"relatively close-knit group" in relation to Red Mountain Resources. In December2021, Mr Watson's son, Samuel (Sam) Watson, who has been associated with his10 Kea Investments Ltd v Watson [2020] EWHC 2599 (Ch) (finding of contempt) and KeaInvestments Ltd v Watson [2020] EWHC 2796 (Ch) (committal sentencing).11 Jacomb v Wikeley [2013] NZHC 707 at [5].father's businesses, presented for registration in New Zealand a company calledBPKK Limited, whose sole director and shareholder was Mr Wikeley. BPKK Limitedwas restored to the register on 11 April 2023, having been earlier removed. Kea'sEnglish solicitor, Mr Graham of Farrer & Co LLP (Farrers), said that from hisexperience in seeking to enforce Kea's judgment, he had come across Sam Watson'sname many times in connection with businesses formerly owned by structuresassociated with Mr Watson. For example, Sam Watson is a director of an Englishcompany that ran a cannabis products business called "Dr Watson". An extract fromthe Dr Watson website taken in April 2020 stated that the cannabis from whichDr Watson's products were made was grown on farms in Georgia associated withRichard Watson, Eric Watson's brother. In 2020, a proceeding was filed in Georgia byRichard Watson and a company associated with him called Hart AgricultureCorporation seeking orders against Kea. The complaint filed in that proceeding by theplaintiffs made reference to an affidavit of Mr Graham's that had been served in theproceedings against Mr Watson in England and not at that time referred to in opencourt. Mr Watson later admitted having provided that affidavit to his brother. RichardWatson has continued to seek similar orders against Kea preventing Kea from bringingproceedings against him and Hart Agriculture, most recently unsuccessfully in the USCourt of Appeals for the Eleventh Circuit. It was Kea's case in the English committalproceedings that Hart Agriculture and the farms in Georgia are in fact Mr Watson'sbusiness. The committal judgment dealt with the interests in the Hart businesses;Nugee J held that Mr Watson "expected to obtain – and in all probability if it wereever in his interests to do so would obtain – at least the majority of the equity in thecompany, if not 100% of it".12Mr Wikeley's incorporation of WFTL[22] As indicated, Mr Wikeley incorporated WFTL on 23 July 2021. He appointedhimself sole director and shareholder.12 Kea Investments Ltd v Watson [2020] EWHC 2796 (Ch) at [216].Kentucky default judgment[23] On 19 August 2021, WFTL filed the Kentucky proceeding. It filed an amendedclaim on 3 December 2021. WFTL alleged in its claim that Mr Dickson, on Kea'sbehalf, had entered into a Coal Funding and JV Investment Agreement in 2012 (CoalAgreement) and that Kea had breached the agreement by failing to provide US$75million in funding to the Wikeley Family Trust and failing to pay royalties of US$30million, among other things.[24] As Kea was not aware of WFTL's claim in Kentucky, it did not take therequired steps to challenge the jurisdiction of the Kentucky courts. Default judgmentwas entered on 31 January 2022 for US$123,750,000 plus interest and court/servicecosts (the default judgment). Judgment was entered without any hearing and thereforewithout any examination by the Court of the merits of WFTL's claim and the quantumof loss and damage.Statutory demand in BVI[25] On 29 June 2022, Kea and its English solicitor received a letter from aBVI-based law firm attaching a statutory demand seeking to enforce against Kea thejudgment debt of US$123,750,000 plus interest and court/service costs, totallingUS$136,290,994. The statutory demand indicated that WFTL, as trustee of theWikeley Family Trust (a New Zealand trust), had obtained the default judgmentagainst Kea from a Court in Kentucky, USA dated 31 January 2022 for alleged breachof the Coal Agreement.[26] This June 2022 letter was the first Kea had heard of both the Coal Agreementand the Kentucky Court proceeding. The Coal Agreement was not provided to Keawith the statutory demand; it was provided on 7 July 2022. Kea considers the CoalAgreement, and the claims made under it, are fabrications constructed by Mr Wikeleyand Mr Watson to defraud Kea.[27] Following enquiries with Kea's registered agent in BVI, Icaza, Gonzáles-Ruiz& Alemán Trust Limited ("Icaza"), Kea learned that the First Amended Complaint inthe Kentucky proceeding had been delivered to the offices of Kea's registered agentin BVI. However, Kea's registered agent did not pass the complaint on to Kea.[28] On 12 July 2022, Kea applied to set aside the statutory demand in the BVI.That application was listed for 5 December 2022. This was subsequently adjourned.Application to set aside default judgment[29] Kea also instructed Kentucky lawyers to apply to set aside the default judgmentbased on the Coal Agreement. That motion to set aside the default judgment was filedon 21 July 2022, with Kea recording it was entering a limited appearance for thepurpose of contesting the jurisdiction of the Kentucky Court.Coal Agreement[30] The Coal Agreement purports to be an agreement between Mr Wikeley"as trustee for the Wikeley Family Trust New Zealand" and Kea represented byMr Dickson. It purports to be dated 23 October 2012 with both signatures witnessedby Mr Watson.[31] The Coal Agreement purports to commit Kea to provide capital to fund coalinvestments presented by Mr Wikeley. The "Background" recitals state, among otherthings, that:(a) Mr Wikeley has "developed investments, opportunities, relationships,and proprietary deals related to the coal industry";(b) Mr Wikeley "has provided [Kea] with, and [Kea] acknowledges in thisagreement that it and its advisors have now accessed and assisted with,the financial models and analysis required to satisfy their due diligenceover the past several months";(c) Kea "acknowledges that their advisors have done a feasibility study andfound this Greenfields deal and the overall pipeline of investment dealsdeveloped and those to be identified to provide a valuable and wellabove market investments return";(d) Mr Wikeley and Kea "agree that this JV arrangement will be the startof an extremely rich and rewarding long term partnership, with[Mr Wikeley] providing management and deal flow and [Kea]providing capital."[32] The commitments purportedly made by Kea to Mr Wikeley, as trustee of theWikeley Trust, under the Coal Agreement included the following:(a) To "commit and provide capital to the venture as required for thebenefit of both parties, with a minimum of US$75million over the nexteight years", by way of a 20-year loan to Mr Wikeley at an interest rateof 3% per annum;(b) To pay Mr Wikeley a "guaranteed" royalty of US$1.5m per year for thenext 20 years "irrespective as to whether production has commenced ornot, or if for any reason investment has been delayed";(c) If Kea "fails for any reason to provide a minimum of $75m USD ofcapital":(i) To indemnify Mr Wikeley for any losses and lost profits; and(ii) To indemnify Mr Wikeley for the greater of US$93.75 millionor 25% of the actual profits.(d) Mr Wikeley could at any time after the seventh anniversary of theagreement "put his shares/this agreement in the venture to [Kea] for£125m USD [sic], anytime during the next 20 years of this agreement."(e) "For simplicity and avoidance of doubt, [Kea] has agreed to guarantee[Mr Wikeley] all its just reward. This agreement is in full and finalagreement of the terms between the parties."[33] The Coal Agreement also contained a clause stating:JURISDICTIONThe parties have agreed that the jurisdiction shall be the USA. The contractwill be governed by the laws in Lexington, Kentucky and any applicableFederal law.[34] The default judgment sum of US$123.75 million reflects the indemnity ofUS$93.75 million plus unpaid royalties of US$30 million (US$1.5million for 20years).[35] Kea claims the Coal Agreement is a forgery, not signed by Mr Dickson inOctober 2012, or alternatively, even if it were signed by Mr Dickson, WFTL could nothave made any lawful claims under it.Interference with Kea[36] While Kea's application to set aside the default judgment was pending,on 7/8 August 2022 Farrers received several communications from a "David MichaelTabet",13 claiming that he and three Marshall Islands companies had been appointed"protective directors" of Kea and informing Farrers that it was no longer instructed forKea and that Mr Tabet was authorised to settle the Kentucky proceedings (for US$100million). The three Marshall Islands companies are all annulled (struck off).[37] Kea claims these communications were part of a fraudulent scheme byMr Rizwan Hussain to take over companies to which he is a stranger. Mr Hussain isthe subject of a number of judgments of the English courts recording similarschemes.14 For example, in Business Mortgage Finance 4 Plc & v Hussain the Courtsaid:15The Defendants have targeted these securitisation structures relentlessly.One or other of them have pretended to occupy the roles of directors of theIssuers, trustees for the noteholders, receivers of the underlying assets,Servicers, advisers to the Issuers, and other positions. They purported (in theirassumed role of directors) to forfeit the shares held by BMFH in the Issuers13 Kea believes that Mr Tabet is likely to be a pseudonym for Mr Hussain, referred to next.14 See Hurricane Energy Plc v Chaffe [2021] EWHC 2258 (Comm) at [7]-[10]; and BusinessMortgage Finance 4 Plc & v Hussain [2022] EWHC 449 (Ch)at [5] and Business MortgageFinance 4 Plc & v Hussain [2022] EWHC 661 (Ch).15 Business Mortgage Finance 4 plc v Hussain [2021] EWHC 17 (Ch) at [252].and sell them to Highbury. They managed to change important companyfilings at Companies House and made misleading announcements to investorsover the RNS. None of this is legitimate. The Defendants have never occupiedany of these roles. They are, for legal purposes, strangers to theSecuritisations. The reasons they have given for their actions are spurious.The corporate assault has been going on for the best part of two years, in theteeth of earlier orders of the courts and the Claimants' reasoned protests.It must now stop.[38] Kea says Mr Hussain was imprisoned for contempt of court at the same time,and at the same prisons, as Mr Watson was in prison for contempt. Kea's case is thatthe pair met while in prison.[39] The communications issued by "Mr Tabet" in the name of Kea included anotice to the Kentucky Court purporting to withdraw Kea's motion to set aside thedefault judgment on the basis that Kea had settled WFTL's claim. On 8/9 August 2022,WFTL's lawyers notified the Kentucky Court that the case had been settled and soughtto vacate the hearing of Kea's motion to set aside the default judgment. Kea's truedirectors did not authorise any such settlement. At the same time, letters sent by"Mr Tabet" in the name of Kea tried to stop Kea's Kentucky lawyers from acting forKea against Mr Watson. "Mr Tabet" also wrote to Kea's registered agent in BVIseeking (unsuccessfully) to have Kea's register of directors and members changed.[40] Kea says this was an attempt to replace a default judgment which was beingattacked by Kea with a debt due under a settlement agreement, so as to further theconspirators' attempts to wind up or extort money from Kea (or by this time, Icaza'sinsurers, Icaza having exposed Kea to the default judgment by failing to pass on theKentucky complaint). Kea says it also again links Mr Watson to Mr Wikeley'sattempted frauds on Kea by the proceeding in Kentucky since the indicia in the methodof the attack and the wording in the documents demonstrate that the person behind theattacks was Mr Hussain, and Mr Hussain can only have known of the Kentuckyproceedings through Mr Watson.[41] When Farrers wrote to "Mr Tabet" questioning the validity of his letters andpointing out the connection with Mr Hussain, the annulled Marshall Islands companiessued Farrers and Kea's BVI solicitors in England (purporting also to have Kea as aclaimant in those proceedings). Kea says this, too, reflects Mr Hussain's modusoperandi. Those proceedings, together with other Hussain-backed proceedings against(or purportedly by) Kea, were all struck out in September 2022 by the English HighCourt, which held that Mr Hussain should be subject to a General Civil RestraintOrder. Mr Watson was not a party to those proceedings, but he was held liable forKea's costs on the basis that they had been conducted for his benefit. In making thoseorders, the Judge accepted that Kea had "good grounds for thinking that Mr Watsonand Mr Hussain in these proceedings were acting in concert".16[42] Another annulled Marshall Islands company which has been found by theEnglish courts to be connected to Mr Hussain, FVS Investments Ltd (FVS), wrote toWFTL's Kentucky solicitors claiming to be a secured creditor of Kea in the sum ofUS$483 million, and offering to share the proceeds of the Kentucky proceedings. FVSis not a creditor of Kea. Kea contends this too is part of the fraudulent scheme, creatinga paper trail to justify WFTL paying to FVS part or all of any recovery it obtains,including for Mr Watson's (and Mr Hussain's) benefit.[43] In addition, on 11 August 2022 "Mr Tabet" purportedly on behalf of Kea wroteto (Long Harbour) entities in which Kea had an interest, and Mr Watson, asserting thatKea's interest had been assigned to Highbury Investments Limited (Highbury).Highbury is a Marshall Islands company that the English Court has found to beassociated with Mr Hussain.[44] Kea says it now appears that these developments are related, and thatMr Wikeley and Mr Watson, together with Mr Hussain, have conspired to defraud Keathrough the instrument of the forged Coal Agreement and the default judgment.WFTL's attempt to settle its claim for US$10 million[45] On 15 September 2022, WFTL offered to settle its default judgment for US$10million. The offers were expressly made on the basis that US$10 million was the sumwhich WFTL believed that Icaza (Kea's registered agent in BVI) would have by wayof malpractice insurance. The offer was to expire upon the beginning of the hearingof Kea's motion to set aside. Kea says that the letter is not a privileged settlement16 Blue Side Services SA v Kea Investments Ltd [2022] EWHC 2449 (Comm) at 11:02am at [7].communication because it was made for a dishonest purpose (namely to extract asettlement based on fraud),17 and that this is not the conduct of a bona fide claimant.As Kea noted, WFTL suggested it would apply for an order in this proceeding that thesettlement agreement not be read but it never did so. The fraud exception to settlementprivilege applies where there is a "prima facie" case of dishonesty.18 It applies evenif the lawyer was an unwitting participant.19 I consider the letter is admissible.Continuation of Kentucky proceeding and actions in the USA[46] In September 2022, WFTL gave notice to Kea that it had issued subpoenas inNew York and in Kentucky to various banks, seeking disclosure of various recordsrelated to Kea, the Corona Trust, and Sir Owen Glenn. WFTL also sought from Keaextensive post judgment discovery and answers to interrogatories regarding Kea'sofficers, structure, and assets. Kea says the confidential information sought by WFTLgoes well beyond information that could be relevant to enforcing the default judgment.Even though Kea is the only defendant to the Kentucky proceeding, WFTL's requestsalso related to Sir Owen Glenn, the Corona Trust and a related trust, the Regency Trust.WFTL sought documents going back to 1 January 2012 (before the purported date ofthe Coal Agreement). Kea says this also is not the action of an honest creditor who isseeking to enforce a judgment.[47] Kea's motion to set aside the default judgment was heard on 7 October 2022.After the hearing, on 10 October 2022, WFTL gave notice that it would withdraw theoriginal subpoenas and serve new Kentucky subpoenas on some 11 banks in Kentuckyand New York, and a New Jersey subpoena on a bank in New Jersey, seeking detailsof all dollar transactions carried out by Kea since 1 January 2012.[48] Kea's motion to set aside the default judgment was denied on 18 October 2022.The judgment stated:17 At the interlocutory stage, I left to one side the settlement offer to Kea since its admissibility hadnot been determined.18 Admissibility is governed by New Zealand law: Re RBS Rights Issue Litigation [2016] EWHC3161 (Ch), [2017] 1 WLR 1991; Rochester Resources Ltd v Lebedev [2014] EWHC 2185 (Comm).19 Icepak Group Ltd v QBE Insurance (International) Ltd [2013] NZHC 3511 at [45]. Kea did notallege that WFTL's Kentucky lawyers, who made the offer on behalf of WFTL, were actingdishonestly.1. Defendant's Motion to Set Aside Default Judgment is DENIED. TheCourt finds that Plaintiff properly served Defendant by personal service to itsregistered agent in the British Virgin Islands, Icaza, Gonzáles-Ruiz & AlemánTrust Limited ("Icaza"). The Default Judgment shall remain in place.2. Because Plaintiff properly served Defendant the Court need notdetermine if there is meritorious defense raised by Defendant or if Defendantcan make a showing of no prejudice to Plaintiff.[49] On 21 October 2022, Kea issued a motion to amend, alter or vary (MAAV) thedenial of its application. This was heard on 28 October 2022 and the Court indicatedthat it would deny the motion. Although Kea intended to appeal against the order of7 October 2022 and the dismissal of the MAAV – and subsequently did so –it commenced this proceeding on 31 October 2022 given concern that the KentuckyCourt of Appeal would also not consider the merits. Kea could not put up a bond tostay execution of the default judgment without risking compromising its challenge tothe judgment in BVI.[50] Kea issued a motion in Kentucky to quash the new overly-broad subpoenas.It also issued a motion seeking a protective order staying the post-judgment discoveryrequests pending appeal. On 21 December 2022, the Kentucky Court entered the orderin relation to Kea's motion to quash the re-issued subpoenas and motion for aprotective order in the form tendered by WFTL. The motion to quash was denied.The protective order was denied in part – responses were to be provided but with aprotective order restricting sharing with Mr Watson, Mr Hussain and Mr Dickson.Subsequent steps[51] After my judgment of 10 March 2023 setting aside the first and seconddefendants' protest to jurisdiction, the following events occurred in the period beforestatements of defence were due on 14 April 2023, as set out in my judgment of31 August 2023.20[52] On 17 March 2023, the solicitors for WFTL and Mr Wikeley, Wilson Harle,informed the Court that WFTL and Mr Wikeley intended to seek leave to appeal inrespect of the dismissal of their application to dismiss or stay the proceeding and the20 Kea Investments Ltd v Wikeley Family Trustee Ltd (in liq) [2023] NZHC 2407 at [10]-[21].setting aside of their protest to jurisdiction and that they intended to instruct newcounsel. They sought that limited timetable orders be made to allow those steps to betaken.[53] On 28 March 2023, Mr Wikeley incorporated Wikeley Inc.21[54] On 29 March 2023, I directed the defendants to file a defence by 14 April 2023but deferred making discovery orders as sought by Kea.[55] On 30 March 2023, Mr Wikeley as director of WFTL purported to assign thedefault judgment and the Coal Agreement to Wikeley Inc.22[56] On 3 April 2023, Wilson Harle filed an interlocutory application seeking anorder declaring that Mr Browne had ceased to be the solicitor on the record for WFTLand Mr Wikeley, together with an (unsworn) affidavit in support.23[57] On 4 April 2023, Wikeley Inc applied to the Kentucky Court to be substitutedas plaintiff in the Kentucky proceeding on the basis of the purported assignments.That motion was filed by the Kentucky lawyers for WFTL (as trustee of the WikeleyFamily Trust) and Wikeley Inc.24[58] On 6 April 2023, Kea applied without notice to this Court for further interimorders having discovered that Mr Wikeley had taken steps purporting to divest WFTLof the default judgment and otherwise to avoid the effect of the New Zealand Courtorders. I was satisfied that further interim orders should be made on a without noticebasis.25 I found that it appeared likely that Mr Wikeley and WFTL had acted in breach21 The principal place of business was said to be a virtual office and Mr Wikeley the sole director.Mr Wikeley gave the same address as his address as director.22 Each document was signed by Mr Wikeley in Brisbane as director of both WFTL and WikeleyInc.23 The accompanying memorandum indicated that the application and affidavit had not been servedon Kea (referring to counsel's fiduciary obligations and obligations of confidentiality) but that theplaintiff's solicitors would be advised by email that the documents had been filed. The documentswere subsequently released to the new solicitors.24 Wikeley Inc also filed motions that it would bring upon substitution to compel discovery fromKea and an anti-suit injunction restraining Kea from continuing this proceeding. The same day,WFTL's BVI lawyers served on Kea's BVI lawyers notices of the purported assignments issuedunder the name of Mr Wikeley as director of Wikeley Inc.25 These orders included adding Wikeley Inc as a defendant.of this Court's earlier interim orders by assigning or purporting to assign the CoalAgreement and the very substantial default judgment.26 In the unusual circumstances,I considered it was just and equitable that WFTL be put into interim liquidation.27[59] On 11 April 2023, any application for leave to appeal the 10 March 2023judgment was due (20 working days after judgment). No application was filed, norwas any other correspondence received.[60] Also on 11 April 2023, Mr Wikeley incorporated USA Asset Holdings Inc inKentucky.28 On the following day (12 April 2023), Mr Wikeley purported to appointUSA Asset Holdings Inc as the trustee of the Wikeley Family Trust and to change thegoverning law of the trust from that of New Zealand to that of "The Commonwealthof Kentucky a state within the United States of America".[61] On 12 April 2023, Kea commenced proceedings in the Supreme Court ofQueensland seeking ancillary interim relief. That Court made without notice ordersin support of this proceeding under s 25 of the Trans-Tasman Proceedings Act 2010(Australia).29[62] On 13 April 2023, Mr Wikeley advised the interim liquidators of WFTL thathe had replaced WFTL as trustee of the Wikeley Family Trust with the Kentuckycompany, USA Asset Holdings Inc. Mr Wikeley also stated to the interim liquidatorsthat their appointment was an aspect of a campaign of oppression and intimidation bythe directors of Kea. He called upon the liquidators to deliver up any assets or propertyunder their control.26 Minute dated 6 April 2023 at [7].27 Those orders were served on the first to third defendants the same day.28 He nominated a virtual office space in Kentucky as the address of the company's principal officeand as his own address.29 With one exception, it is unnecessary to recount the subsequent steps in the Queenslandproceeding which have included an application that Mr Wikeley be committed for contempt.The exception is a statement in Mr Wikeley's affidavit dated 26 April 2023 in the Queenslandproceeding referred to [105] below. Nor is it necessary to refer to the steps taken by the interimliquidators in the United States Federal Courts.[63] Also on 13 April 2023, the Kentucky lawyers for Wikeley Inc filed a reply inthe Kentucky proceeding pursuing the 4 April 2023 motion for substitution.30[64] I referred to this conduct by Mr Wikeley in my judgment of 31 August 2023:[48] My 6 April 2023 finding that it appeared likely that Mr Wikeley andWFTL had acted in breach of this Court's earlier interim orders reflected thefact that this Court's 12 December 2022 interim order provided that "none ofthe defendants shall sell, assign, gift, grant any security interest in or over, orotherwise in any way whatsoever transfer or encumber any interest any ofthem may have, directly or indirectly, in any rights any of them may haveunder or in connection with the Coal Agreement and/or the DefaultJudgment".[49] Further, the appointment of a new company as trustee of the WikeleyFamily Trust on 12 April 2023 also appears to have contravened this Court's12 December 2022 interim order which provided that "WFTL and Mr Wikeleyshall not take any steps, and shall not cause or permit any other person, toappoint an additional or replacement trustee of the Wikeley Family Trust".[65] The hearing of the motion for substitution in the Kentucky Court proceeded on21 April 2023. At the hearing, the same Kentucky lawyers for WFTL, now acting forWikeley Inc, advised the Court that they intended to file a parallel motion forsubstitution in the Court of Appeals (substituting Wikeley Inc as respondent).The Judge adjourned the application until after the Court of Appeals had ruled on theequivalent motion to be made in that Court. A motion for substitution was made inthe Court of Appeals on 21 April 2023. Kea has opposed the motion.Jurisdiction and service[66] The Court has personal jurisdiction over each of the defendants:(a) The proceedings were served on WFTL in New Zealand and onMr Wikeley in Australia pursuant to s 13 of the Trans-TasmanProceedings Act 2010 before the return date for the interim orders madeon 4 November 2022. The Court's jurisdiction over them wasconfirmed when the Court dismissed their application to dismiss or stay30 The Kentucky lawyers exhibited the Board Minute and Resolution of USA Asset Holdings Incdated 12 April 2023 under which Mr Wikeley as director had purported to change the applicablelaw of the Wikeley Family Trust from New Zealand to Kentucky.the proceedings and set aside their protest to jurisdiction.31An application for an extension of time and leave to appeal – on forumnon conveniens grounds only – was dismissed.32 Mr Wikeley's claimsin his affidavit of 26 April 2023 in the Queensland proceedings that hestill had reason to question the jurisdiction of this Court have no basis.(b) Mr Watson was served pursuant to r 6.27(2)(a) and (h) of the HighCourt Rules 2016 in accordance with the Court's order for substitutedservice. Mr Watson has taken no steps to protest the Court's jurisdictionor otherwise.33(c) Wikeley Inc and USA Asset Holdings Inc were joined to the proceedingby order of the Court, on the basis that Kea was entitled to serve thecompany out of the jurisdiction pursuant to r 6.27(2)(a) and (h).34[67] The second amended statement of claim was served on Mr Wikeley andMr Watson by email on 20 April 2023.[68] The proceedings were served on Wikeley Inc on 21 April 2023 by personalservice at the principal office recorded in the Kentucky Secretary of State'scorporations register and by registered mail delivered to the registered agent of thecompany. The proceedings were served on USA Asset Holdings Inc on 21 April 2023by delivery to the company's principal office and on 4 May 2023 by registered mail.Each of these companies was served outside New Zealand by a method permitted bythe law of the country in which it was to be served.35 The evidence establishes thatthe methods of service in Kentucky are not prohibited by the law of Kentucky for theservice of documents in domestic (or international) actions.31 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466.32 Kea Investments Ltd v Wikeley Family Trustee Ltd (in liq) [2023] NZHC 2407.33 Order dated 24 November 2022. This order treated the documents as served upon prescribed emailservice of the order, which for the purpose of r 6.32(1)(a) amounted to service outsideNew Zealand by a method specified in r 6.1. There was no suggestion that service of Mr Watsonoutside New Zealand was effected contrary to the law of the country where service was effected(r 6.32(4)).34 Orders dated 6 and 20 April 2023 respectively.35 Rule 6.32(1)(b).[69] The period for each defendant to file a statement of defence has expired:(a) WFTL, Mr Wikeley and Mr Watson were ordered to file a statement ofdefence by 14 April 2023;(b) The deadline for Mr Wikeley and Mr Watson to file and serve a defenceto the second amended statement of claim expired on 5 May 2023(10 working days after 20 April 2023).(c) In accordance with the Court's order shortening the period for filing ofa statement of defence to 10 working days, Wikeley Inc and USA AssetHoldings Inc were required to file statements of defence by 8 May 2023(10 working days after 21 April 2023).36[70] No statement of defence was filed.[71] Even though a formal proof application can be brought without notice underr 15.9, the notice of hearing was emailed to Mr Wikeley and Mr Watson on 21 April2023 warning them of the need to take steps if they wished to defend the claims.Approach on formal proof[72] When seeking judgment by way of formal proof under r 15.9, the plaintiff mustfile affidavit evidence establishing to the Judge's satisfaction each cause of action andsufficient information to enable the Judge to calculate and fix any damages claimed.The standard of proof is essentially the same as if the proceeding had gone to trial.[73] In this case, there are strong allegations of fraud/dishonesty. The civil balanceof probability standard of proof applies but in the case of serious allegations the qualityof the evidence required to meet that fixed standard may differ in cogency, dependingon what is at stake.37 Here, cogent or strong evidence is required. Even so, fraud or36 If there were any question about whether the method of service on USA Asset Holdings Inc on21 April 2023 was sufficient and it needed to rely on service on 4 May 2023, Kea indicated itwould seek, and I would have granted, a further abridgement of time for the defence.37 Z v Dental Complaints Assessment Committee [2008] NZSC 55, [2009] 1 NZLR 1 at [101].See also Napier v Torbay Holdings Ltd [2016] NZCA 608; [2017] NZAR 108 at [38] and [42].dishonesty may be inferred from primary facts.38 In a circumstantial case, strands ofevidence are to be assessed independently and then cumulatively.Evidence[74] Kea relies on evidence filed at the interlocutory stages of the proceeding onlyinsofar as that evidence is admissible at a formal proof hearing. It supplemented thatevidence with new affidavits giving direct evidence of some matters previouslydeposed to by Mr Graham of Farrers on information and belief. In addition, Kea filednew affidavits updating the factual background, providing expert evidence onKentucky law, addressing recent events in Kentucky and Queensland, and supportingits damages claim.[75] Kea relies on some hearsay statements. Such statements are admissible if thecircumstances relating to the statement provide reasonable assurance that thestatement is reliable and either the maker of the statement is unavailable as a witnessor undue expense or delay would be caused if the maker of the statement were to berequired as a witness.39 "Unavailable as a witness" includes a person who is outsideNew Zealand and it is not reasonably practicable for him or her to be a witness; or isnot compellable to give evidence.40 Kea may also rely on hearsay statementscontained in business records where undue expense or delay would be caused if theperson who supplied the information were required to be a witness.41[76] Evidence of a judgment or a finding of fact in a civil proceeding is notadmissible in another civil proceeding to prove the existence of a fact that was in issuein the proceeding in which the judgment was given.42 This does not apply toproceedings to which Kea and the relevant defendant were both parties. So Kea mayprove relevant elements of its claims against Mr Watson by reference to findings madein the Spartan proceedings.4338 Thornley v Ford [2021] NZHC 611 at [39], citing Three Rivers District Council v Bank of England(No 3) [2001] UKHL 16, [2003] 2 AC 1 (HL) at [186] per Lord Millett.39 Evidence Act 2006, s 18(1).40 Section16(2)(b) and (e).41 Section 19(1)(c).42 Section 50(1).43 Section 50 does not affect the operation of the law relating to res judicata or issue estoppel, or thelaw relating to an action on, or the enforcement of, a judgment: s 50(2) of the Evidence Act 2006.First cause of action – conspiracyApplicable law[77] Kea submitted that the cause of action in conspiracy is governed byNew Zealand law. In any event, Kea is entitled to rely on New Zealand law in theabsence of a defendant appearing, pleading and proving foreign law.44 Nevertheless,Kea produced a further expert opinion on Kentucky law from Mr Kelly. Mr Kelly'sevidence demonstrates that nothing turns on the question of applicable law (even if ithad been pleaded), since the relevant Kentucky law is materially identical or therelevant causes of action would be established on the same facts; and/or a KentuckyCourt would reach the same conclusion as a New Zealand Court.Elements of conspiracy[78] The tort of conspiracy requires that two or more persons combine and agreethat at least one of them will:45(a) use unlawful means to cause damage to the plaintiff; or(b) conspire to use means that may be lawful in themselves, but are donewith the predominant purpose of injuring the plaintiff.[79] The Court of Appeal in Wagner v Gill set out the essential elements of unlawfulmeans conspiracy:46(a) The existence of a combination of persons: In determining whetherthere is a combination of persons, inferences may be drawn from overtacts and coincidental behaviour.47 Whether a company can conspirewith its directors and/or shareholders is not settled. The better view isMr Watson submitted to the English Courts and the Spartan Judgment has been registered underthe Reciprocal Enforcement of Judgments Act 1934.44 Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, Wellington, 2020)at [3.87].45 JSC BTA Bank v Ablyazov (No 14) [2018] UKSC 19, [2020] AC 727 at [8].46 Wagner v Gill [2014] NZCA 336, [2015] 3 NZLR 157 at [50].47 Cynthia Hawes "Interference with Business Relations" in Stephen Todd (ed) Todd on Torts (9th ed,Thomson Reuters, Wellington, 2023) at 804.that they can, but in any event Kea says that Mr Wikeley has conspiredwith the companies he established (WFTL, Wikeley Inc and USA AssetHoldings Inc),48 and with Mr Watson and Mr Hussain.(b) Unlawful action (unlawful means): This limb includes torts and crimes,but has also been held to include or potentially include a variety of otherwrongs including breach of contract and breach of fiduciary duty.49(c) Intention to injure the claimant: It is not necessary to prove that theconspirators' sole or predominant purpose was to injure the plaintiff.50It is sufficient that the conduct is directed at the claimant.51(d) Actual damage caused to the claimant: This includes the expensecaused to the claimant in exposing and resisting the wrongful activitiesof the defendants.52[80] In lawful means conspiracy, it is unnecessary to prove that the acts in questionare unlawful in themselves, provided the defendants' predominant purpose isnevertheless to injure the plaintiff.Kea's pleading of conspiracy[81] Kea's primary claim is that the defendants are combining by unlawful meanswith the intention of injuring Kea. Kea says:(a) Mr Wikeley incorporated WFTL on 23 July 2021, approximately onemonth before WFTL filed its complaint in the Kentucky Court, for the48 Wagner v Gill [2013] NZHC 1304 at [90]-[94], [116]-[120]. See also Digicel (St Lucia) Ltd vCable & Wireless Plc [2010] EWHC 774 (Ch) at [77]-[78].49 Cynthia Hawes "Interference with Business Relations" in Stephen Todd (ed) Todd on Torts (9thed, Thomson Reuters, Wellington, 2023) at 824–825. See also Wagner v Gill [2014] NZCA 336,[2015] 3 NZLR 157 at [54] and [71]. In that case, the Court of Appeal described the concept of"unlawful means" as a controversial and difficult one but accepted that conduct did not need to beindependently actionable by a plaintiff in order to qualify as unlawful means for the purposes ofthe tort.50 At 814.51 Wagner v Gill [2014] NZCA 336, [2015] 3 NZLR 157 at [106]. See also Cynthia Hawes"Interference with Business Relations" in Stephen Todd (ed) Todd on Torts (9th ed, ThomsonReuters, Wellington, 2023) at 817.52 British Motor Trade Association v Salvadori [1949] Ch 556 (Ch) at 569.purpose of defrauding Kea through WFTL in combination withMr Watson as pleaded below.(b) WFTL, Mr Wikeley and Wikeley Inc and USA Asset Holdings Inc areacting in combination with each other with the intention of injuring Keaby unlawful means:(i) By making claims against Kea under the Coal Agreement whenthey know that none of them has any legitimate claims underany such agreement;(ii) By WFTL and Mr Wikeley procuring the default judgment byfraud;(iii) By WFTL and Mr Wikeley accepting the fraudulent"settlement" purportedly offered by Kea and otherwise byseeking to extract a settlement from Kea based upon the defaultjudgment obtained by fraud;(iv) By taking steps on the default judgment that they know to havebeen procured by fraud, namely, by resisting Kea's attempts toset aside the default judgment and attempting to enforce it;(v) By executing the purported assignments (of the Coal Agreementand default judgment) and motions sought pursuant to them;(vi) By executing and accepting the purported deed of appointment(of USA Asset Holdings Inc) and executing the purportedchange of governing law of the Wikeley Trust.(c) Mr Watson is acting with the intention of injuring Kea by unlawfulmeans:(i) By causing and/or allowing Mr Hussain to purport to settle theKentucky proceedings for US$100 million;(ii) By causing and/or allowing and/or assisting Mr Hussain toadvance fraudulent claims and abusive proceedings againstKea, Sir Owen Glenn and Kea's advisers for his benefit;(iii) By causing and/or allowing and/or assisting FVS to assert toWFTL that it is a secured creditor of Kea for his benefit;(iv) By supplying documents and information to WFTL to supportthe fraudulent claims of WFTL and Mr Wikeley against Keaunder the Coal Agreement and in the Kentucky proceeding,which claims Mr Watson knows to be fraudulent, and causingor allowing WFTL to put Mr Watson forward as the witness tothe Coal Agreement, the person who procured Mr Dickson'ssignature on the Coal Agreement and the person who receivedthe alleged demands for payment thereunder.(d) WFTL, Mr Wikeley and Wikeley Inc are acting in combination withMr Watson:(i) WFTL, Mr Wikeley and Wikeley Inc are advancing fraudulentclaims against Kea to further the interests of Mr Watson as wellas the interests of WFTL and Mr Wikeley and, since 28 March2023, the interests of Wikeley Inc;(ii) Mr Watson caused and/or agreed to assist WFTL and WikeleyInc to bring its fraudulent claims and is assisting WFTL andMr Wikeley in advancing their fraudulent claims ...(e) It was and is reasonably foreseeable by WFTL, Mr Wikeley,Mr Watson, Wikeley Inc, and USA Asset Holdings Inc and intended byeach of them, that the unlawful conduct was and is likely to cause harmto Kea by:(i) causing loss to Kea by pursuing fraudulent claims under theCoal Agreement;(ii) obtaining control over Kea for the purpose of fraudulentlyobtaining its assets;(iii) assisting Mr Watson in continuing to avoid his obligations toKea under the Spartan judgment, including by disabling Keafrom enforcing that judgment by having it placed intoliquidation or otherwise;(iv) damaging Kea's reputation, by taking steps to enforce thedefault judgment, to have Kea liquidated in the BVI, and todamage Kea's standing with financial institutions;(v) illegitimately obtaining Kea's confidential information and theconfidential information of persons who are connected with ortransacted with Kea and using that information to defraud orotherwise damage Kea;(vi) diverting Kea's attention and resources to investigating andresponding to their conduct; and(vii) bringing abusive proceedings against Kea, Sir Owen Glenn, andthe lawyers who have assisted them in the Spartan litigation andthus causing further loss and inconvenience to Kea in wastedtime and costs.[82] In essence, Kea says it has reason to suspect that Mr Watson is attempting touse the Kentucky proceeding to frustrate Kea's enforcement of its English judgmentagainst him by winding up Kea and also by diverting its legal team and resources,to vex Kea and Sir Owen Glenn in their long-running dispute — including by forcingdisclosure of their confidential financial information and causing them to waste legalfees which are unlikely to be recovered, and to extract value from Kea. Kea says thatMr Wikeley also appears to be attempting to use the Coal Agreement and the Kentuckydefault judgment to extort Kea and its agents or associates. Kea says the immediatevehicle for this fraud is WFTL, which has obtained the default judgment.[83] The interim liquidators of WFTL abide the Court's decision in respect of thiscause of action.Discussion[84] As indicated, the background context is that:(a) Kea and Sir Owen Glenn have spent years seeking to recover fromMr Watson losses from Mr Watson's Spartan fraud. This ultimately ledto Mr Watson's imprisonment for contempt.(b) Mr Wikeley and Mr Watson have a long history of business dealingstogether.[85] On 23 July 2021, Mr Wikeley incorporated WFTL in New Zealand andappointed it trustee of the Wikeley Family Trust (a New Zealand trust). Mr Wikeleywas the sole director and shareholder of WFTL.[86] Soon after, on 19 August 2021, WFTL filed its claim in Kentucky under theCoal Agreement said to be entered in 2012. There was no pre-claim correspondence.Indeed, there is no correspondence in evidence of any demand under the CoalAgreement.[87] As for the Coal Agreement itself, Kea has no records of it, its negotiation or itsexecution. None of Kea's directors since March 2013 have any knowledge of it.Mr Dickson, the purported signatory for Kea, did not mention it or provide anydocuments relating to it in response to Court orders in February 2013 which wouldhave required him to mention it and provide such documents if it existed in 2012.As Kea submitted, the contemporaneous facts are inconsistent with the CoalAgreement being a valid agreement.[88] The subsequent evidence also indicates that the Coal Agreement is not a validagreement. Mr Wikeley's affidavit in this proceeding filed for the protest tojurisdiction stated that he understood there was a risk that he and WFTL could be heldto have submitted to the jurisdiction of this Court if his evidence was not restricted toevidence in support of the application to strike out or stay and extended to answeringthe claims brought by Kea, and accordingly that the content of his affidavit was limitedto matters relevant to jurisdiction and forum. Despite that statement, his affidavitaddressed execution of the Coal Agreement albeit briefly. He stated that he lived inKentucky, in the Hilton Hotel in Lexington, between 2012 and 2015 and worked onmany coal projects when based there. In the context of finding investment funding forcoal mining projects, he stated: I made contact with Eric Watson by phone from Kentucky regardingfunding coal projects that I was working on. That contact led to the coalfunding agreement with Kea.10. The agreement was drafted by me personally in Kentucky, signed by mein New York and given to Eric to arrange execution by Kea. I received asigned copy in Kentucky.[89] In relation to performance of the Coal Agreement, Mr Wikeley said that whilebased in Kentucky he searched for and identified projects in Kentucky and other stateswhich he referred to Mr Watson for funding by Kea. He said that in addition totelephone contact, he sent Mr Watson information on potential coal projects by emailfrom Kentucky. He annexed some email correspondence relating to five projects.[90] As I said in my earlier judgment,53 the documents Mr Wikeley annexed to hisbrief affidavit provide little assistance in relation to the negotiation, drafting,execution, commercial terms, or performance of the Coal Agreement. TheBackground clauses refer to Mr Wikeley having provided Kea with "the financialmodels and analysis required to satisfy their due diligence over the past severalmonths" and to Kea having done "a feasibility study". No such documents have beenlocated.53 Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466 at [53]-[57].[91] The brevity and generality of Mr Wikeley's affidavit is not explicable on thebasis that it was confined to avoid submitting to this Court's jurisdiction. Despite thatassertion, which is inconsistent with the limited submission to jurisdiction involved ina protest, his affidavit and the other affidavits filed in support purported to address theissue. Having dismissed the protest, I can take these affidavits into account.Mr Wikeley's affidavit said nothing about contact with Mr Dickson. As I said in myearlier judgment, even accepting that WFTL's Kentucky lawyer may have erroneouslypleaded that Mr Wikeley presented the agreement to Mr Dickson on 23 October 2012,Mr Wikeley's affidavit did not address the timing discrepancy between:(a) the Coal Agreement itself, on which his signature is dated 23 October2012; and(b) his account in his July 2022 affidavit in the Kentucky proceeding inwhich he said that he signed the contract in the presence of Mr Watsonin New York City on 26 September 2012, that Mr Watson told himMr Watson was meeting with Mr Dickson in Paris the following monthand would have Mr Dickson sign the contract there, and that he wasinformed by Mr Watson on 23 October 2012 that Mr Dickson hadsigned the contract.[92] Mr Graham's evidence indicates that Mr Dickson was in Paris for a ProjectSpartan meeting on 23 October 2012 but there is no mention of the Coal Agreementin the detailed meeting pack or emails setting up the meeting.[93] The Coal Agreement is irregular on its face. As Kea points out:(a) The date of 23 October 2012 beneath Mr Dickson's signature is typedwhereas the dates beneath other signatures on the document arehandwritten (being Mr Wikeley's signature and both of Mr Watson'ssignatures as witness).(b) The first two pages of the three-page document show a paper clip at thetop of the page, whereas the third page does not.(c) The third page of the document, on which Mr Dickson's signaturepurportedly appears, is numbered "2" in the bottom left corner whereasthe first two pages are not numbered at all. Also, the third page appearsto have been copied with something obscuring the top left corner andwith the slope of the top dotted line affected.[94] From all the above, it appears that the page containing Mr Dickson's signaturemay have been taken from another document.[95] I also accept Kea's submission that, despite the references in the backgroundrecitals to Kea having conducted due diligence over "several months", the allegedinvolvement of Kea's "advisors", and the quantum of Kea's alleged commitments:(a) The terms of the Coal Agreement are grossly imprudent to Kea andcommercially non-sensical (as explained next).(b) The agreement is not professionally drafted. It contains spelling andother errors and irregularities (including expressing the expected profitsvariously as "$375m" and "£375m" and the call option price as "£125mUSD"). Mr Wikeley claims to have drafted it himself, but it is highlyunlikely that anyone from Kea would have signed such a sloppydocument as and for an agreement genuinely recording the terms of abona fide transaction following actual meetings, correspondence, duediligence, negotiations, exchanging and editing of drafts. As at October2012, Kea was being represented in relation to the Spartan transactionby Duane Morris, a highly reputable solicitors' firm in London.The kind of agreement which Kea was being advised on can be seenfrom other agreements exhibited to Mr Munro's affidavit. Thoseagreements are very different from the sloppy and almostincomprehensible Coal Agreement.[96] Kea's expert Kentucky lawyer, Mr Kelly, and his firm have a long history ofadvising clients in Kentucky on all aspects of mineral energy deals. The firm hasextensive experience in many types of mineral-related transactions, including thepreparation of hundreds of contracts involving coal projects and investments.Mr Kelly has personally been involved in multiple actions involving coal and mineralenergy contracts. Mr Kelly said that the Coal Agreement "bears no resemblance to thecontract one would expect to see between sophisticated business parties relating toinvestments in coal projects" and that this "is particularly true for a contract obligatinga party to invest many millions of dollars and to pay hundreds of millions of dollars".He explained that the "Greenfields" opportunity described in the agreement is "evenmore speculative than an ordinary coal mining project" and that, therefore, "one wouldnot expect for an agreement to require the funding party to undertake the extremelybroad and absolute indemnity obligations attributed to [Kea]".[97] Mr Kelly also says that the generic jurisdiction clause, which purports tosubject the parties of the jurisdiction of all 50 states in America, is highly unusual.The contract purports to choose the law of a city which does not have an independentlegal system as the applicable law.[98] As Kea submitted, despite it alleging in Kentucky (and in this Court) that theCoal Agreement is a fabrication:(a) The original of the Coal Agreement relied upon by WFTL has neverbeen produced:(i) WFTL's lawyer in the Kentucky proceeding, Mr Regard, hasrefused to confirm whether or not he or WFTL possesses theoriginal of the Coal Agreement on the basis that the request was"an informal discovery request not authorized within theKentucky Rules of Civil Procedure".(ii) The Wikeley defendants never responded to a request from Kea,made to its solicitors by letter dated 9 November 2022, that theyproduce the original of the Coal Agreement for inspection.(b) The Wikeley defendants have not disclosed a single documentevidencing the negotiations, execution, or performance of theagreement. As indicated, they contended in their forum challenge thatthey could not enter into the merits without jeopardising their challenge(which was not accepted) but nevertheless served evidence purportingto go to the merits, in the form of an affidavit from Mr Branham(the same person who is now allegedly the sole director of Wikeley Inc)and in the form of emails between Mr Wikeley and Mr Watson between6 October 2012 and April 2013 which were exhibited by Mr Wikeley.But there is no mention of Kea, or a Coal Agreement, or any obligationon Kea, or any demand for money in any of the emails. Indeed, in theemails that Mr Wikeley sent to Mr Watson and his associates on 2 and3 October 2012, only a few days after Mr Wikeley claimed to haveconcluded negotiations with Mr Dickson and signed the CoalAgreement before Mr Watson in New York, there is no mention of Keaor Mr Dickson, nor any sense that Mr Wikeley is emailing Mr Watsonon the basis that they have in fact secured funding from Kea for thedeal. Three more emails, sent by Mr Wikeley to Mr Watson and hisassociates on 16 October 2012, 5 April 2013, and 6 April 2013, refer tosome kind of coal investment opportunities without any reference toKea or Mr Dickson. As well as the emails, Mr Wikeley annexedvarious reports, presentations and spreadsheets regarding coal ventures.Again, none refers to Kea or Mr Dickson or any funding to be providedby Kea. The Court may infer that Mr Wikeley/WFTL did not adduceany such evidence supporting their case because it does not exist.[99] In addition to the irregularities on the face of the document, and Mr Wikeley'sconflicting accounts as to its execution, Kea submitted, and I accept, there is furtherstrong circumstantial evidence that the document is fake:(a) Prior to commencing the Kentucky proceeding, WFTL made nodemand on Kea and never once complained to Kea, in the 9 years sinceat least March 2013, that Kea had failed to provide funding on requestand had never paid the annual "royalty" of "US$1.5m" ostensibly dueto Mr Wikeley under the agreement; there was no pre-actioncorrespondence whatsoever. If the agreement were genuine,Mr Wikeley's silence over that time is incredible.(b) Kea has no records of or in any way related to the Coal Agreement, orany similar agreement despite extensive searches. If the CoalAgreement existed, then Kea would have such records. In 2013 (afterthe Coal Agreement was purportedly signed), Mr Dickson was orderedto provide (among other things) all of Kea's records by the Nevis Court.This was how both the agreements relating to Spartan and RedMountain Resources came into the possession of HNL and Harlaw (thedirector of Kea from 15 March 2013) (and later Kea's other directors).The documents disclosed under the Nevis Court orders, and manyothers, were collated by Farrers for the purposes of the Spartanlitigation. Farrers holds over 600,000 documents related to Kea,including all of Kea's records from 2012 to 2014 (i.e., not only thoserelating to Project Spartan). Farrers has not located the Coal Agreementnor any document related to it amongst these 600,000+ documents.(c) Mr Dickson and Mr Miller provided a list of Kea's assets under theNevis Court order in 2013. This list included the Project Spartaninvestment and loan agreements and the Red Mountain investment, andalso other assets. The disclosure was interrogated by the lawyers actingfor Ms Connah and responded to by those acting for Mr Miller andMr Dickson. Explanations were given about many other contracts andinvestments. A balance sheet as at 31 December 2012 was alsoprovided. There was no mention of Kea's rights or liabilities under theCoal Agreement or anything like it.(d) The fact that Mr Dickson and Mr Miller did not straight away mentionthe rights and liabilities under the Coal Agreement and provide a copyin answer to the Nevis Court orders is strong evidence that it did notexist. There was no reason for Mr Miller and Mr Dickson to withholda legitimate commercial agreement, and every reason for them todisclose it.(e) That strong evidence and inference is further strengthened by the factthat Kea has no records at all of the negotiation, execution andperformance of or any demands made under the Coal Agreement.The agreement refers to months of "due diligence" and a "feasibilitystudy" ahead of entry into the agreement, as well as the agreementproviding for a long term relationship involving payments and requestsfor drawdowns over a number of years. If the Coal Agreement andWFTL's claims under it were genuine, there must have been somereference to it amongst these documents. There must have been emailcorrespondence with Mr Miller and/or Mr Dickson. Even if one or twodocuments could have been missed, it is beyond belief that not onedocument was handed over.(f) The inference that the Coal Agreement did not exist is furtherstrengthened by:(i) The fact that none of Sir Owen Glenn, Mr Munro ofHNL/Harlaw, nor any of Kea's current directors had anyknowledge of the Coal Agreement or any demand madethereunder prior to receipt of the BVI statutory demand, furtherstrengthening the inference that it did not exist. It is, again,incredible that Kea could have entered into the agreement andfailed to respond to demands for funding under it without Keahaving a single document referring to it and without any directorof Kea from February 2013 onwards having received anyintimation of it.(ii) The fact that there was no correspondence at any time sinceApril 2013 asserting any breach of the Coal Agreement.(iii) The fact that the defendants have not produced a singledocument showing or evidencing any requests for drawdownsunder the agreement, or any documents evidencing that it wasentered into or performed (other than the document itself).[100] Mr Wikeley also claimed in his New Zealand affidavit that he was directed byMr Dickson to deal with Mr Watson, that he sent deals to Mr Watson requestingfunding and funding was promised as required under the Coal Agreement but neversent. However, there is no other evidence that Mr Watson was authorised to act onbehalf of Kea – even before their falling out in 2014.[101] For all these reasons, I consider that Mr Wikeley's affidavit in relation to theCoal Agreement is unreliable. Further, the affidavits of Mr Branham and Mr Snyder(filed for the protest) saying what they were told by Mr Wikeley do not carry weight,if admissible at all, in relation to whether the Coal Agreement is genuine. Indeed, evenaccepting Mr Snyder's reference to Mr Wikeley's frustration when funds did not arrive(from a source that he assumed was related to the involvement of Mr Watson withSir Owen Glenn, Mr Dickson and Kea), it is more inexplicable, as Kea submitted, thatMr Wikeley failed to provide evidence of a single request or demand for funding underthe alleged agreement – for bundled projects with a valuation of US$1 billion – at anytime before filing the Kentucky proceeding in August 2021.[102] I acknowledge that Kea has not adduced evidence from Mr Dickson (Kea'ssole director at the time) stating that the Coal Agreement is a forgery. Kea's evidenceis that it has not sought an affidavit from Mr Dickson because it does not regard himas a witness who can be trusted to tell the truth, given his misconduct in relation toProject Spartan. Given the Spartan judgment, there appears to be merit in thatexplanation. Mr Dickson was not called to give evidence in the Spartan case. Kea alsosubmitted that if Mr Dickson had genuinely negotiated the Coal Agreement, thedefendants could be expected to have provided evidence from him. That may be so,but in the circumstances I do not draw an adverse inference against the defendantsfrom the absence of an affidavit by Mr Dickson that any truthful evidence from himwould not have supported the defendants' case.[103] The absence of evidence from Mr Watson would justify such an adverseinference but I acknowledge it is conceivable that he has taken no steps on the basisthat he chose to rely on his co-defendants' (unsuccessful) forum challenge and I donot draw an adverse inference from the fact that he did not provide any affidavit.[104] As Kea submitted, a separate forged document ostensibly signed byMr Dickson has emerged recently. A purported agreement, also from 2012, said to besigned by Mr Dickson was put forward by the Hussain-related parties in the litigationby/against Kea in London in 2022. That purported agreement cannot have been signedby Mr Dickson. No such contract was mentioned by Mr Miller or Mr Dickson inresponse to the Nevis Court orders, and no record of any such document, or of theagreements to which it purports to relate, were produced by them in 2012, 2014 or2016. It is inconceivable that a genuine agreement was executed in 2012 with aMarshall Islands company, and that in 2022 the same entity, by now annulled,purported to take a step in litigation which the English Courts have found to beconnected with Mr Hussain and signed in a name which has also been used in otherproceedings connected with Mr Hussain. Such a coincidence is beyond belief.[105] Further, the evidence of events since the default judgment and the BVIstatutory demand came to Kea's attention in 2022 indicates that Mr Wikeley andMr Watson worked together to defend the default judgment and implement afraudulent scheme to harm Kea. As Kea attempted to have the default judgment andthe statutory demand set aside, Mr Wikeley and Mr Watson conspired withMr Hussain, who Mr Watson likely met in prison,54 to hijack Kea and substitute thedefault judgment with a settlement. Those steps were fraudulent. WFTL also tried toextract a settlement from Kea for a fraction of its claim by leveraging its registeredagent's insurance policy.[106] Mr Wikeley and WFTL also filed for the protest an affidavit from Mr Regard,the lead attorney acting for WFTL (and now Wikeley Inc) in Kentucky. He said thathe arranged personal service on Kea's agent in the BVI, on 6 December 2021, becausehe "was aware at this time of the Hart Dairy cases in Georgia and Florida, in whichKea did not take steps after being served through Icaza". The Hart Dairy cases wereanti-suit proceedings brought against Kea in 2020 by Hart Dairy CreameryCorporation and Hart Agriculture Corporation, both of which are associated withRichard Watson, Mr Watson's brother. The Hart companies sought anti-suit relief toprevent Kea from enforcing the Spartan judgment by tracing Mr Watson's assets into54 I acknowledge the evidence of their prison records is hearsay but it is admissible under s 18(1) ofthe Evidence Act 2006 and I give it limited weight.the Hart companies. Mr Watson is referred to in the complaint annexed to Mr Regard'saffidavit. Mr Watson admitted providing Mr Graham's 16th affidavit in the Spartanproceedings to his brother for use in the proceedings in Georgia. The Hart Dairy casesdo not involve WFTL or Mr Wikeley. They can only have come to the knowledge ofMr Regard from Mr Watson (directly or indirectly). There is no other obvious sourceof Mr Regard's knowledge of those proceedings. It is therefore further evidence ofMr Watson's involvement.[107] These actions add force to the conclusion that the claimed loss of US$136million was never genuinely incurred. So too does Mr Wikeley's conduct after thisCourt dismissed the protest. He declined to participate by filing a defence andbreached the Court's interim orders by taking further steps to pursue the defaultjudgment, including incorporating Wikeley Inc and USA Asset Holdings Inc andassigning the Coal Agreement and default judgment.[108] Also, in an affidavit for the Queensland Court dated 26 April 2023, Mr Wikeleysaid:12. Following the Orders made by this honourable court on 13 April 2023,I contacted my former attorney in the United States, Mr Andre Regard, todiscuss the status of the Kentucky proceedings and steps that could be takento comply with these orders. Mr Regard told me at that time that I no longercontrolled Wikeley Inc. He informed me that I had been removed as presidentof the company and that a Kentucky resident, Mr Michael Branham had beenappointed in my place. He told me that I had been removed as president bythe majority shareholders of Wikeley Inc., being my sons, Oliver LeonardWikeley and William Kennedy Wikeley.13. On this basis, I am unable to comply with the Orders of this honourablecourt made 13 April 2023 [sic].[109] This statement lacks credibility. The evidence of Mr Kelly indicates that underKentucky law, given that Mr Wikeley was the incorporator and initial director ofWikeley Inc, shares could not have been issued to Mr Wikeley's sons, andMr Branham could not have replaced Mr Wikeley as director, without Mr Wikeley'sinvolvement.[110] Taking all these facts together, I consider the Coal Agreement was not validlyexecuted in 2012. The document was more likely created by or for Mr Wikeley muchlater – before the Kentucky proceeding was commenced in August 2021. If Mr Watsonsigned it, he would also have known it was not a valid agreement.[111] Even if I had found the Coal Agreement had been signed by Mr Dickson in2012, I would have accepted Kea's submission in the alternative that the CoalAgreement would nevertheless be liable to be set aside for fraud or breach of fiduciaryduty on the basis that Mr Dickson, Mr Wikeley and Mr Watson all knew thatMr Dickson signed without authority and in breach of his duties to Kea. Given itsnature and terms as discussed above, Mr Dickson would have known that signing itwas not in Kea's best interests and was inconsistent with his duties as a director underBVI's Business Companies Act 2004. Mr Wikeley and Mr Watson, as experiencedbusinessmen, would have been aware that Mr Dickson could not have executed itwithout breaching his duties to Kea.[112] Further, there was never any demand made of Kea by WFTL – before or afterMr Dickson was replaced as a director – for the reasons already given.[113] For these reasons, as Kea submitted, WFTL can have no genuine claim againstKea under the Coal Agreement.[114] I consider that Mr Wikeley combined with WFTL and Mr Watson to procurethe default judgment, and they also combined with Mr Hussain, and more recentlywith Wikeley Inc and USA Asset Holdings Inc, to defend the default judgment orotherwise harm Kea. The participation of Mr Wikeley and Mr Watson is evident fromthe combination of facts already addressed:(a) their prior involvement together (including as evidenced in the emailssent by Mr Wikeley to Mr Watson in 2012/2013 referred to above);(b) Mr Watson's attempts to avoid the Spartan judgment in which he wasfound to have committed acts of deceit against Kea;(c) Mr Wikeley's actions in the month before WFTL filed its claim inKentucky;(d) Mr Wikeley's explanation about the purported Coal Agreement in hisKentucky affidavit, including holding out Mr Watson as havingobtained the signature of Kea's then director, Mr Dickson, whichconflicts with the face of the document;(e) Mr Watson's signature as a witness to the purported Coal Agreement;(f) Mr Wikeley's claim that Mr Watson acted as Kea's agent in receivingalleged requests for funds under the purported Coal Agreement;(g) WFTL's use in the Kentucky proceeding of discovered documents fromthe Spartan litigation trial bundle that could only have come fromMr Watson to assist WFTL with its fraudulent claim;(h) the involvement of Mr Hussain – including steps purporting to settleWFTL's Kentucky proceeding – that also likely came about throughMr Watson;(i) Mr Regard's reference to information from separate US proceedingscommenced in Georgia (arising out of Kea's attempts to enforce itsjudgment against Mr Watson) that also likely came from Mr Watson;(j) Mr Wikeley's steps in breach of this Court's interim orders, includingincorporating Wikeley Inc and USA Asset Holdings Inc; and(k) that Mr Watson has taken no steps, and Mr Wikeley has taken onlylimited steps, in this proceeding.[115] The participation of WFTL, Wikeley Inc and USA Asset Holdings Inc isevident from Mr Wikeley's incorporation and use of these entities as set out above.[116] The use of the fraudulent Coal Agreement, the fraudulent claim under it,the subsequent fraudulent steps taken through Mr Hussain, and Mr Wikeley's breachof the Court's interim orders all amount to unlawful means and must have beenintended to injure Kea by obtaining financial advantages at Kea's expense.[117] I accept that Kea has suffered loss, not least the substantial costs associatedwith exposing the fraud and defending and bringing proceedings in multiplejurisdictions.Relief[118] Kea seeks damages, a permanent injunction, interest and costs. It submittedthat a permanent anti-suit injunction is necessary but not sufficient to right the wrongdone to Kea – not least because the defendants have ignored the interim injunction andKea continues to incur costs.[119] The ordinary measure of damages for tortious conspiracy is to put the plaintiffinto the same position as if the conspiracy had not occurred.55 This includes costsincurred in responding to the conspiracy.56 Kea accepts that in the ordinary course itcannot recover, as damages, legal costs in proceedings between the same parties in thesame jurisdiction and so does not seek its New Zealand lawyers' fees as damages.However, as Kea submitted, a plaintiff is entitled to recover as damages legal costsincurred in earlier proceedings in a foreign jurisdiction where costs are not recoverablein those proceedings, or are only recoverable to a limited extent.57 Kea accepts thatthe ordinary principles of causation, foreseeability/remoteness and mitigation apply.58It also accepts this would include a reasonableness overlay where the plaintiff seeksthe difference between indemnity costs and costs recovered in the foreign jurisdiction.[120] Here, I accept Kea's submission that the defendants' wrongful conductincludes the wrongful invocation of the Kentucky Court on the basis of a forgeddocument and fraudulent statements about the existence of, and claims made under,that document; the wrongful invocation of the BVI Court in reliance on the defaultjudgment; and the wrongful use of legal process in the form of subpoenas for theproduction of documents also relying on the default judgment. Legal costs are theinevitable consequences of such conduct. Kea had no choice but to incur those costs.55 Bill Atkin "Remedies" in Stephen Todd (ed) Todd on Torts (9th ed, Thomson Reuters, Wellington,2023) at 1485.56 British Motor Trade Association v Salvadori [1949] Ch 556 (Ch) at 569.57 Union Discount Co Ltd v Zoller [2001] EWCA Civ 1755, [2002] 1 WLR 1517 at [17].58 Kwok v Rainey [2020] NZHC 923 at [256].[121] As Kea submitted, the defendants' wrongful invocation of legal process inKentucky and the BVI amounts to the breach of an equitable right where the conductof litigating overseas is unconscionable.59 As Kea acknowledged, normally, theremedy for breach of such equitable rights is an anti-suit injunction as a form ofspecific performance of the obligation not to sue overseas. But, as Kea submitted, thisremedy has also been recognised in some contexts to be insufficient. Kea relied byanalogy on the established line of cases in England providing for damages for breachof the legal right of an applicant not to be sued overseas in breach of a jurisdiction orarbitration clause.60 Kea submitted that in principle the same logic — that damagesin addition to an anti-suit injunction are necessary to do justice — should apply to abreach of a person's equitable right not to be sued in a forum overseas.61 Kea alsoreferred to a series of Australian decisions62 where it was held that the cost of pursuingoverseas litigation can be actionable damage in the tort of unlawful means conspiracy,and the English case of Dadourian Group International v Simms,63 where the Court ofAppeal upheld an award of damages for the costs of overseas proceedings and of anarbitration in a deceit claim, as costs caused by the tort.[122] The unlawful means conspiracy found in this case is based on fraudulent useof the Coal Agreement and subsequent fraudulent steps (and breach of the interimorders). In the absence of a valid exclusive jurisdiction agreement, it is unnecessaryto base the claim for damages on breach of an equitable right not to be pursued inKentucky. I accept that Kea is entitled to recover damages in the tort of unlawfulmeans conspiracy. Those damages include Kea's reasonable irrecoverable legal costsin the overseas proceedings caused by that conspiracy, subject to not seeking doublerecovery. The evidence indicates that attorneys' fees are not in the ordinary course59 British Airways Board v Laker Airways Ltd [1985] AC 58 (HL) at 81. See also Convoy CollateralLtd v Broad Idea International Ltd [2021] UKPC 24, [2023] AC 389 at [153]-[155].60 Kea referred to Ellerman Lines v Read [1928] 2 KB 144 (CA); Union Discount Co v Zoller [2001]EWCA Civ 1755, [2002] 1 WLR 1517; Donohue v Armco [2001] UKHL 64, [2002] 1 All ER 749,AES Ust-Kamenogorsk Hydropower Plant LLP v Ust-Kamenogorsk Hydropower Plant JSC[2013] UKSC 35, [2013] 1 WLR 1889; Starlight Shipping Co v Allianz marine & AviationVersciherungs AG (The Alexandros T) [2013] UKSC 70, [2014] 1 All ER 590; and StarlightShipping Co v Allianz Marine & Aviation Versicherungs AG (The Alexandros T (No 2)) [2014]EWCA Civ 1010, [2014] 2 Lloyd's Rep 554.61 Kea referred to Adrian Briggs Civil Jurisdiction and Judgments (7th ed, Routledge, 2021) at 667.62 Bennett v Talacko [2017] VSCA 163; Talacko v Talacko [2018] VSC 751; Talacko v Talacko[2021] HCA 15, (2021)272 CLR 478 at [60]-[62].63 Dadourian Group International v Simms [2009] EWCA Civ 169 at [109]-[148].recoverable in proceedings in Kentucky but, in any event, Kea undertakes not to seekdouble recovery.[123] The costs incurred by Kea are quantified in the affidavit of Mr Graham, whohas co-ordinated the various proceedings in Kentucky, United States federal courts,Queensland, England and New Zealand. The amounts claimed are:(a) £1,038,709.17 (English solicitors and counsel);(b) US$549,634.58 (New York lawyers; Kentucky lawyers; BVI lawyers);and(c) AU$154,166.95 (Australian lawyers).[124] Against the Wikeley defendants, Kea seeks an award of 75% of those sums.Kea seeks a reduced award against Mr Watson since a costs order was made in theEnglish proceedings against Mr Watson as indicated. The total costs in those Englishproceedings were £252,053.23, of which Mr Watson was ordered to pay £227,077.77.Therefore, as against the Wikeley defendants, the total English costs sought are 75%of £786,655.94 (£1,038,709.17 - £252,053.23), i.e. £589,991.96, plus 75% of the USand AU dollar sums (US$412,225.94 and AU$115,625.21). Together with the fact thatKea has not claimed the costs initially incurred in respect of its English legal team inthe early stages of responding to the defendants' fraud, as explained by Mr Graham,Kea submitted the Court can be satisfied that the award does not exceed the lossproperly claimable by Kea.[125] I accept that the costs claimed have been incurred as a direct and foreseeableconsequence of the conspiracy. In the absence of that conspiracy, there would havebeen no Kentucky or English proceedings to defend, and it would not have beennecessary to bring proceedings in New Zealand, Queensland, or elsewhere.[126] The co-ordinating role played by Kea's UK legal team (solicitors and counsel)explained by Mr Graham was appropriate given their knowledge from the earlierEnglish proceeding particularly based on the underlying documents largely collectedthrough the Nevis proceedings and discovery in the English proceeding. The numberof counsel involved was warranted given the breadth, complexity and urgency of thematters. The English costs claimed relate to the period from August 2022 and so donot include initial work that was charged to Farrers' main file relating to enforcementof the earlier English judgment against Mr Watson even though some of that workwould likely have been recoverable in this proceeding. The English costs sought arereasonable and recoverable. So too are the BVI, US and Australian costs.[127] Wikeley Inc and USA Asset Holdings Inc were only incorporated morerecently. However, they joined the conspiracy and are therefore jointly and severallyliable for the losses suffered.64[128] I am also satisfied that Kea is entitled to a permanent injunction as sought inthe second amended statement of claim. Given possible developments since thehearing, I will reserve leave in relation to further relief necessary to give effect to theseorders.Judgment not entitled to recognition[129] In the second cause of action, Kea seeks a declaration that the default judgmentis not recognised or enforceable as a matter of New Zealand law. It seeks thisdeclaration to forestall attempts to deploy the default judgment in New Zealand or inother jurisdictions which will recognise or follow a decision of this Court. Kea saysthat a determination from the New Zealand Court that WFTL obtained the defaultjudgment by fraud will give rise to an issue estoppel against WFTL that will berecognised — at least — in other common law countries such as England65 and theBVI.66 It says this Court – which has jurisdiction over WFTL as a New Zealand64 Stephen Todd "Multiple Tortfeasors and Contribution" in Todd on Torts (9th ed, Thomson Reuters,Wellington, 2023) at 1452.65 See "Forum non Conveniens, Lis Alibi Pendens, Jurisdiction Agreements and Anti-SuitInjunctions" in Lord Collins and Jonathan Morris (eds) Dicey, Morris and Collins: The Conflictof Laws (16th ed, Thomson Reuters, London, 2022) vol 1 at rr 46(2) and 47.66 As Kea says, the declaratory judgment will be entitled to recognition because this Court hasjurisdiction as of right over WFTL and the judgment is final and conclusive. An issue estoppelmay therefore arise in respect of this judgment in BVI, bearing in mind that courts typically takea cautious approach. See Carl Zeiss Stiftung v Rayner & Keeler Ltd [1967] 1 AC 853 (HL) at 918per Lord Reid and van Heeren v Kidd [2016] NZCA 401, [2017] 3 NZLR 141 at [170]-[171].company and trustee of a New Zealand Trust – is best placed to grant that relief.67Kea also seeks a declaration that WFTL, Mr Wikeley, Wikeley Inc and USA AssetHoldings Inc are privies of each other, submitting that finding will assist the Courts ofthe BVI and other jurisdictions where the issue arises.[130] The interim liquidators of WFTL abide the Court's decision in respect of thiscause of action.[131] As a preliminary point, addressed in my first interlocutory judgment,68this Court may grant a declaration that a foreign judgment is not entitled torecognition, even where enforcement proceedings have not yet been commenced.In Pocket Kings Ltd v Safenames Ltd,69 the English High Court was satisfied that apre-emptive declaration was appropriate in a case relating to Kentucky.[132] For the Kentucky default judgment to be recognised or enforced, the followingrequirements must be met:70(a) the parties must be the same (or be privies);(b) the foreign court must have had jurisdiction, based on either thepresence of the judgment debtor in the foreign jurisdiction at the timeof the proceedings or its submission to the jurisdiction (either inadvance in writing, or by appearing without protest);(c) the judgment must be final and on the merits; and(d) the judgment must not have been procured by fraud or a breach ofnatural justice or give rise to a breach of New Zealand public policy.67 Kea says that while the BVI Court may consider the question of fraud in the context of theapplication to set aside the statutory demand, that would only involve an assessment of whetherKea has a prima facie case, and would not give rise to a final determination of the point.68 Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881 at [56].69 Pocket Kings Ltd v Safenames Ltd [2009] EWHC 2529 (Ch), [2010] Ch 438. See also AltimoHoldings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7, [2012] 1 WLR 1804 at[125]-[126].70 Ross v Ross [2010] NZCA 447, [2011] NZAR 30 at [13], citing Kemp v Kemp [1996] 2 NZLR 454(HC) at 458.[133] If those requirements are met, the judgment is entitled to recognition and maybe relied on to establish res judicata or issue estoppel that prevents the judgment debtorfrom relitigating the matters decided.[134] Kea says that the Kentucky Court did not have jurisdiction to grant a judgmentthat would be entitled to recognition in New Zealand, since Kea does not have apresence or assets in Kentucky, it has not submitted to the jurisdiction there, and is notbound by the jurisdiction clause in the Coal Agreement in circumstances where it wasthe product of forgery and fraud.[135] Kea also says that the default judgment is not entitled to recognition inNew Zealand on the grounds that it was procured by fraud and that recognition wouldbe contrary to public policy (for the same reason and because it would be inconsistentwith this Court's judgment). Kea submitted:(a) Fraud in this context includes where the judgment creditor procured thejudgment by misrepresentations made in bad faith,71 althoughrecklessness is also sufficient.72 The presence of fraud is sufficient onits own to establish that the judgment is not entitled to recognition.The fraud in this case consists of:(i) deploying a forged document to obtain a judgment;(ii) deliberately misleading the Kentucky Court about facts relevantto the claim, including whether demands had been made on Kea;and(iii) pursuing a claim in circumstances where Mr Wikeley knew thatWFTL did not have any legitimate claims under the contract.(b) A judgment debtor is entitled to raise allegations of fraud in recognitionproceedings even if those arguments were or could have been run in the71 Gordhan v Keremelidis HC Christchurch CIV-2010-409-2982, 20 December 2011 at [26]-[31].72 Johnson v Johnson [2016] NZHC 890, [2016] 3 NZLR 227 at [41]-[42]. See also Richard vCogswell (1995) 8 PRNZ 383 (HC) at 386.foreign proceedings and were not inferred by the foreign court.73 In anycase, Kea could not have raised its fraud defence in the Kentuckyproceedings because:(i) it was not aware of them before the default judgment wasentered; and(ii) the Kentucky court has refused to consider whether Kea has ameritorious defence.(c) Kea seeks and requires a declaration to this effect, to protect against theuse of the default judgment in New Zealand and/or in other jurisdictionswhere the New Zealand determination will be recognised and will itselfgive rise to an issue estoppel.[136] I accept Kea's submission that the default judgment is not entitled torecognition in New Zealand. First, as already addressed, the Coal Agreement –including its jurisdiction clause – was procured by fraud. Kea does not have a presenceor assets in Kentucky and has not submitted to the jurisdiction. Therefore, theKentucky Court did not have jurisdiction to grant a judgment that would be entitled torecognition in New Zealand. Secondly, as also already addressed, the defaultjudgment, based on the Coal Agreement, was procured by fraud. Thirdly, for the samereasons, recognition would be contrary to public policy.[137] I also accept that a declaration is appropriate and not moot in circumstanceswhere the defendants (except for WFTL which is now in interim liquidation) may stillseek recognition of the default judgment for enforcement purposes overseas. That riskis evident from Mr Wikeley's actions with Wikeley Inc and USA Asset Holdings Inc.[138] I also accept that WFTL, Mr Wikeley, Wikeley Inc and USA Asset HoldingsInc are privies of Mr Wikeley and of each other in relation to the impugned73 Abouloff v Oppenheimer & Co (1882) 10 QBD 295 (CA) at 302–303 per Lord Coleridge CJ, 304per Baggallay LJ and 308 per Brett LJ. See also see Maria Hook and Jack Wass The Conflict ofLaws in New Zealand (LexisNexis, Wellington, 2020), at [5.241]-[5.251] noting case lawsuggestions that legislative amendment would be necessary to change the law.transactions that are the subject of this proceeding. Mr Wikeley incorporated or causedto be incorporated all of the companies and was sole director and shareholder. Apartfrom WFTL, which is now in interim liquidation, Mr Wikeley controls them(irrespective of the purported issue or transfer of some shares to two of his sonsreferred to above). In the circumstances already addressed, I infer that he incorporatedthe companies for the purpose of implementing or furthering the fraud. Insofar as itremains necessary given the joinder of Wikeley Inc and USA Asset Holdings Inc,I accept there is a sufficient degree of identification between WFTL, Mr Wikeley,Wikeley Inc and USA Asset Holdings Inc to make it just to hold that the decision towhich one was party should be binding in proceedings to which the other is party.74Declarations[139] Kea's third cause of action seeks declarations against all defendants that theCoal Agreement, the purported assignments of the Coal Agreement and the defaultjudgment, and the purported changes to the trustee and governing law of the WikeleyFamily Trust were of no effect or are voidable and should be set aside.[140] Kea seeks such further declaratory relief on the basis that the defendants willstop at nothing to enforce the Coal Agreement and so it is essential to establishconclusively that it is void or voidable, gives rise to no obligation on the part of Kea,and cannot be relied upon for enforcement purposes. It says also that the purportedassignments are a transparent attempt to place the benefit of the Coal Agreement anddefault judgment outside the control of the New Zealand courts, to facilitate theconspiracy and to frustrate the Court's interim orders. It says the purported change oftrustee and applicable law were transparent attempts to wrestle control of the WikeleyFamily Trust from WFTL (soon after the appointment of interim liquidators) and fromthe jurisdiction of the New Zealand courts; and so to facilitate the perpetuation of theconspiracy; to seek to evade the clutches of the New Zealand courts and the interimorders; and to purport to divest WFTL (as a company subject to the jurisdiction of theNew Zealand courts as of right) of its only alleged trust asset (if the Coal Agreementhad been valid).74 Shiels v Blakeley [1986] 2 NZLR 262 (CA) at 268.[141] Kea says it is important that the true position in respect of the Wikeley FamilyTrust is affirmed: that WFTL, as a party subject to the jurisdiction of the New ZealandCourts as of right, remains as trustee (through its interim liquidators) and the WikeleyFamily Trust remains subject to New Zealand law and the control of the New ZealandCourts.[142] The interim liquidators of WFTL abide the Court's decision in respect of thedeclaration that the Coal Agreement is void or voidable and of no effect. The interimliquidators support Kea's claim to the other declarations.[143] As Kea submitted, the Coal Agreement is void because it is a forgery. A forgedcontract is no contract at all, "only bogus documents", and therefore null and voidab initio.75 The fraud taints all the terms of the Coal Agreement, including thepurported jurisdiction and choice of law clauses.[144] As Kea submitted, an assignee cannot find itself in a better position than theassignor. Further, I also accept Kea's submission that the purported assignments ofthe Coal Agreement and the default judgment are invalid, for several overlappingreasons. First, these assignments were further steps in the perpetuation of theconspiracy, an attempt to evade the reach of the New Zealand courts, and are taintedby fraud. Secondly, the assignments by WFTL were in breach of the Court's interimorders, and a director of a company can have no authority to cause the company tocarry out an act which has been enjoined by a court order.76 These assignments aretherefore void and unenforceable by Wikeley Inc, having been executed withoutauthority.77 Thirdly, the execution of an agreement by a director for the purpose ofcircumventing a court order or for the purpose of carrying out an unlawful meansconspiracy is a breach of the director's duties to the company,78 and of WFTL's powersas trustee. The assignments were also in breach of Mr Wikeley's duties under ss 131and 133 of the Companies Act 1993 to exercise his powers as director in good faith,75 Teal Investments Ltd v Higham Motors (1975) Ltd [1982] 2 NZLR 123 (CA) at 125 per Cooke J.76 Glenn v Watson [2018] EWHC 2016 (Ch) at [491].77 Criterion Properties plc v Stratford UK Properties LLC [2004] UKHL 28, [2004] 1 WLR 1846(HL) at [30].78 Glenn v Watson [2018] EWHC 2016 (Ch) at [492].in the best interests of WFTL and for a proper purpose. Wikeley Inc as assignee hadactual knowledge of the fraud through Mr Wikeley.79[145] Mr Arthur noted that it now appears the purported assignments were made withthe intention of giving effect to a decision recorded in a 30 March 2023 boardresolution of WFTL to distribute all trust assets to Wikeley Inc. As he submitted, insupport of Kea's submissions, those submissions remain valid and appropriatenotwithstanding that the assignments purport to be in furtherance of a distribution toWikeley Inc as a beneficiary because the purported assignment executed by WFTL inits capacity as a trustee must have been in breach of trust given no trustee can claimto discharge duties in entering into a contract that a Court has ordered the trustee notto enter. Wikeley Inc had knowledge of the circumstances known to WFTL and sodishonestly assisted in the breach of trust and knowingly received trust property inbreach of trust.80[146] Kea is entitled to the declaration sought that the purported assignments of theCoal Agreement and the default judgment are void and conferred no rights on WikeleyInc, cannot lawfully be performed and conferred no rights on WFTL and Wikeley Inc.[147] Mr Wikeley also purported to replace WFTL as trustee of the Wikeley FamilyTrust with USA Asset Holdings Inc and the latter, through Mr Wikeley as director,then purported to change the governing law of the Wikeley Family Trust from that ofNew Zealand to that of Kentucky. Kea also seeks declarations that these purportedchanges were invalid and of no effect.[148] As Kea and the interim liquidators of WFTL submitted, the purportedreplacement of WFTL was not a valid exercise of any power of appointment held byMr Wikeley. Section 94 of the Trusts Act 2019 provides that a person with the powerto remove or appoint trustees must exercise any power of removal or appointmenthonestly and in good faith and for a proper purpose. The purported exercise of a powerof removal and appointment in knowing breach of a court order is a breach of that79 Companies Act 1993, s 18(1) and (2).80 He submitted the distribution and assignments would also be liable to being set aside under s 348of the Property Law Act 2007.duty. The interim liquidators have not seen any evidence or other information toindicate how such steps could have been taken in good faith and for a proper purpose.Furthermore, the power was exercised improperly as a further step in the conspiracy,seeking to place the trustee and trust outside New Zealand and the control of theNew Zealand courts, and to undermine the effectiveness of the relief which Kea seeksin this proceeding.[149] Further, as Mr Arthur submitted, at least until such time as the company isremoved as trustee, the liquidator (as the person responsible for controlling thecompany) will also make decisions in relation to trust assets held by the company inliquidation.81 The interim liquidators of WFTL therefore had legal control of the trustassets upon their appointment on 6 April 2023. They also had control of the trustassets through a charge. The interim liquidators took custody and control of WFTL'sassets.82 Those assets included the trustee's right of indemnity from trust assets.83[150] It follows that the purported change of the law of the trust to the law ofKentucky was also invalid. Since Mr Wikeley appointed himself director of USAAsset Holdings Inc, that company knew that its appointment was made in knowingbreach of the Court's orders.[151] Kea is entitled to the declarations sought.Additional ordersLeave to seal judgment by default[152] Leave is required to seal judgment by default against a party served outsideNew Zealand (excluding Mr Wikeley served under the Trans-Tasman Proceedings Act2010).84 In the circumstances set out above, I am satisfied that leave should begranted. Kea was entitled to effect service on Mr Watson, Wikeley Inc and USA Asset81 Levin v Ikiua [2010] 1 NZLR 400 at [116].82 Companies Act 1993, s 248(1)(a).83 Equity Trust (Jersey) Ltd v Halabi [2022] UKPC 36, [2023] 2 WLR 133 at [105], [112]-[114],[156], [164]-[168] and [212]. In New Zealand see Temple 88 Ltd (in liq) v Hassine [2021] NZHC2351 at [19] and [21]; and LSF Trustees Ltd v Footsteps Trustee Co Ltd (in liq) [2017] NZHC2619, [2017] NZAR 1676 at [13]-[24]. The proprietary interest created by the trustee's lienprevails over s 116(1) of the Trusts Act 2019: s116(3).84 High Court Rules 2016, r 15.11.Holdings Inc without leave under rule 6.27. There is no reason to believe that servicewas effected, or may have been effected, contrary to the law of the country concernedrelating to the method of serving documents in domestic actions on persons in thatcountry. Service was effected in sufficient time to enable each party to appear.Confidentiality[153] Further to my interim order at the hearing prohibiting search of the Court filewithout Court order to protect confidential material, Kea seeks a direction under s 69of the Evidence Act 2006 that Mr Graham's confidential affidavit as to Kea's lossesnot be disclosed to the defendants or made available to any person searching the Courtfile. Mr Graham said that he considers that there is a real and substantial risk thatMr Watson and his associates may use confidential information of Kea to seek to causeKea further harm in furtherance of the conspiracy which is the subject of theseproceedings. In addition, Kea's claims against Mr Watson in England are ongoing andthere is ongoing litigation between Kea and WFTL and other entities associated withMr Wikeley in Kentucky, the BVI and potentially elsewhere. Kea submitted that, inthe unusual circumstances of this case, the public interest in disclosure of theinformation in proceedings is outweighed by the public interest in preventing harm toa litigant whose confidential information is at serious risk of misuse by the defendantsand in the wider public interest in the protection of confidentiality in the details of thecosts incurred by a person seeking legal advice.[154] In the unusual circumstances of this case, I accept Kea's concern as to the riskof misuse of confidential information. Balanced against prejudice to the defendantsand the principle of open justice, I consider this risk is sufficiently addressed byrestricting access to the confidential spreadsheet attached to Mr Graham's affidavitdated 12 May 2023 and access to Mr Graham's confidential affidavit dated 16 May2023, which break down Kea's costs in further detail, listing (where applicable) theEnglish and non-English law firms by workstream and detailing the relevant invoicenumbers and dates and payment details. The remainder of Mr Graham's 12 May 2023affidavit, which summarises the costs sought and addresses other matters, should notbe withheld from the defendants.[155] Any requests by non-parties for access to documents on the Court file (otherthan Mr Graham's confidential spreadsheet and affidavit dated 16 May 2023) shouldbe determined in accordance with the Senior Courts (Access to Court Documents)Rules 2017, with notice to Kea.Result[156] I make the following orders:(a) A permanent injunction ordering the defendants to:(i) consent and otherwise take all steps necessary to procure thedischarge of the default judgment;(ii) refrain from seeking to enforce or act on the default judgmentanywhere in the world, including by dealing with it byassignment or otherwise, issuing subpoenas, issuinginterrogatories, seeking discovery, or otherwise seekingdisclosure of information concerning Kea;(iii) withdraw, and desist from pursuing any further, any steps toenforce or otherwise rely on, the Coal Agreement;(iv) cause their privies and assignees to comply with the orders inparagraphs (i)-(iii); and(v) reserving leave in relation to further relief necessary to giveeffect to these orders.(b) Declarations that:(i) the default judgment was obtained by fraud;(ii) the default judgment is not entitled to recognition orenforcement in New Zealand;(iii) WFTL, Mr Wikeley, Wikeley Inc and USA Asset Holdings Incare privies of each other in relation to the impugned transactionsthat are the subject of this proceeding;(iv) the Coal Agreement and the purported assignments of the CoalAgreement and the default judgment were void, cannot lawfullybe performed and conferred no rights on Wikeley Inc; and(v) the purported appointment of USA Asset Holdings Inc as trusteeof the Wikeley Family Trust and the purported change in thegoverning law of the Wikeley Family Trust were invalid and ofno effect.(c) Damages (jointly and severally except in respect of the English costsnot sought against Mr Watson):(i) against WFTL, Mr Wikeley, Wikeley Inc and USA AssetHoldings Inc of:(1) £779,031.88(2) US$412,225.94(3) AU$115,625.21(ii) against Mr Watson of:(1) £589,991.96(2) US$412,225.94(3) AU$115,625.21(d) Interest on damages under the Interest on Money Claims Act 2016.(e) Costs, to be quantified separately by memorandum / affidavit filedwithin 20 working days, and determined on the papers.(f) Ancillary orders:(i) leave is granted under r 15.11 to seal judgment by defaultagainst Mr Watson, Wikeley Inc and USA Asset Holdings Inc;and(ii) the confidential spreadsheet TGS-12/66 annexed toMr Graham's affidavit dated 12 May 2023 and Mr Graham'sconfidential affidavit dated 16 May 2023 detailing Kea's lossesare not to be disclosed to the defendants and are to be sealed onthe Court file and not made available for inspection.________________________________Gault JSolicitors / Counsel:Mr JBM Smith KC and Mr JLW Wass, Barristers, WellingtonMr M C Harris, Barrister, AucklandMr M C Smith and Mr S T Coupe, Gilbert Walker, AucklandMr M D Arthur, Chapman Tripp, Auckland