New Zealand Court of Appeal allows appeal against anti-enforcement injunction
Introduction
The New Zealand Court of Appeal has allowed an appeal against a permanent anti-suit and anti-enforcement injunction in relation to a default judgment from Kentucky, which the plaintiff alleged had been obtained by fraud: Wikeley v Kea Investments Ltd [2024] NZCA 609. The Court upheld the findings of fraud. It also did not rule out the possibility of an injunction being an appropriate remedy in the future. However, the Court concluded that an injunction could only be granted as a step of last resort, which required the plaintiff to pursue its right of appeal against the Kentucky judgment.
The background to the case is set out in a previous post on this blog (see also here). In summary, the case involved allegations of “a massive worldwide fraud” perpetrated by the defendants — a New Zealand company (Wikeley Family Trustee Ltd), an Australian resident with a long business history in New Zealand (Mr Kenneth Wikeley), and a New Zealand citizen (Mr Eric Watson) — against the plaintiff, Kea Investments Ltd (Kea), a British Virgin Islands company owned by a New Zealand businessman. Kea alleged that the US default judgment obtained by WFTL was based on fabricated claims intended to defraud Kea. Kea claimed tortious conspiracy and sought a world-wide anti-enforcement injunction, which was granted by the High Court, first on an interim and then on a permanent basis. Wikeley, the sole director and shareholder of WFTL, appealed to the Court of Appeal.
The Court of Appeal allowed the appeal against the grant of the injunction. At the same time, it upheld the High Court’s declarations that the Kentucky default judgment was obtained by fraud and that it was not entitled to recognition or enforcement in New Zealand. It also upheld the High Court’s damages award (for legal costs incurred in overseas proceedings in defence of the tortious conspiracy). Read more