SUPREME COURT OF QUEENSLAND

CITATION:	Wikeley v Kea Investments Ltd [2023] QCA 255	
PARTIES:	KENNETH DAVID WIKELEY
(appellant)
v
KEA INVESTMENTS LTD
(respondent/applicant)	
FILE NO/S:	Appeal No 13868 of 2023
SC No 4338 of 2023	
DIVISION:	Court of Appeal	
PROCEEDING:	Application for Security for Costs	
ORIGINATING COURT:	Supreme Court at Brisbane – [2023] QSC 215 (Cooper J); Unreported, 27 October 2023 (Cooper J)	
DELIVERED ON:	14 December 2023	
DELIVERED AT:	Brisbane	
HEARING DATE:	12 December 2023	
JUDGE:	Mullins P	
ORDERS:	1.	Pursuant to r 772 of the Uniform Civil Procedure Rules 1999 (Qld), the appellant must provide security for the respondent’s costs of the proceeding in Appeal No 13868 of 2023 in the amount of $65,000 in a form acceptable to the Registrar of the Court by 4.00 pm on 8 January 2024.
2.	The appeal is stayed pending provision of the security as required by paragraph 1.
3.	Liberty to either party to apply on two days’ notice in writing to the other.
4.	Costs reserved.	
CATCHWORDS:	APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – SECURITY FOR COSTS – where the respondent applied for security for costs of the appellant’s appeal in the sum of $110,000 – where the respondent applied in the proceeding below for the appellant to be dealt with for contempt – where the appellant applied to set aside the existing injunctions and to have the contempt application permanently stayed – where the appellant’s application was dismissed – where the appellant did not disclose his financial position for the purpose of the application for security for costs – where the appellant has not paid the judgment debts owed to the respondent in the related New Zealand proceeding brought by the respondent against the appellant – where there is no evidence that ordering security will stifle the appeal – where the respondent conceded that the appeal is not unarguable – where the appeal is not directly about the appellant’s liberty – where the appeal involves questions of public importance to some degree – whether security should be ordered and if so, for what amount
Uniform Civil Procedure Rules 1999 (Qld), r 772
Brundza v Robbie & Co (No 2) (1952) 88 CLR 171; [1952] HCA 49, cited
Haederle v Thomas [2017] EWCA Civ 1339, considered
Hood Barrs v Heriot [1896] 2 QB 375; [1896] UKLawRpKQB 155, considered
Ivory v Telstra Corp Ltd [2001] QCA 490, cited
JSC BTA Bank v Ablyazov [2012] EWCA Civ 639, cited
Kea Investments Ltd v Wikeley Family Trustee Ltd (in interim liquidation) [2023] NZHC 3260, related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881, related
Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466, related
Mensink v Parbery [2017] FCA 1248, cited
Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241, cited
Timbercorp Finance Pty Ltd (in liq) v Tomes [2015] VSCA 322, cited	
COUNSEL:	D B O’Sullivan KC, with A J Schriiffer, for the appellant
G J Gibson KC and P K O’Higgins KC for the respondent	
SOLICITORS:	Dowd + Wilson for the appellant
Colin Biggers & Paisley Pty Ltd for the respondent	
[1]	The respondent to the appeal, Kea Investments Ltd, applies pursuant to r 772 of the Uniform Civil Procedure Rules 1999 (Qld) for security for costs of the appellant’s appeal commenced on 1 November 2023 in respect of two decisions of Cooper J: Kea Investments Ltd v Wikeley (No 2) [2023] QSC 215 (the reasons) and the costs judgment given on 27 October 2023.  The amount of security sought is $110,000.  The appellant who currently resides in Queensland opposes the application.  The respondent filed a notice of contention on 15 November 2023.
Proceeding before Cooper J
[2]	The respondent had commenced a proceeding in the High Court of New Zealand (the NZ proceeding) on 31 October 2022 alleging against the appellant and Wikeley Family Trustee Limited (a New Zealand company controlled by the appellant that was incorporated on 23 July 2021) that a fraud had been committed against it, including that the New Zealand company had obtained a default judgment on 31 January 2022 in Kentucky, United States of America against the respondent pursuant to a fraudulent claim under a fabricated coal agreement for in excess of US$120m.  On 18 October 2022, the Kentucky court denied the respondent’s motion to set aside the default judgment (at [32] of the reasons).  A further motion by the respondent to alter, amend or vacate its earlier decision was denied by the Kentucky court on 9 November 2022 (at [34] of the reasons).  The respondent’s counsel accepted during the hearing of that motion that the Kentucky proceeding had been validly served on the respondent and the default judgment regularly entered (at [33] of the reasons).  On 9 November 2022, the respondent filed an appeal in the Kentucky proceeding (at [35] of the reasons).
[3]	Orders for interim relief were obtained in the NZ proceeding on 4 November 2022: Kea Investments Ltd v Wikeley Family Trustee Ltd [2022] NZHC 2881.  Gault J delivered judgment on 10 March 2023 following a hearing on 12 December 2022 in which the appellant sought to set those orders aside: Kea Investments Ltd v Wikeley Family Trustee Ltd [2023] NZHC 466.  The respondent became aware that the New Zealand company on 30 March 2023 had purported to assign the default judgment and its rights under the coal agreement to Wikeley Inc which was incorporated by the appellant on 28 March 2023 (at [50] of the reasons).  On 4 April 2023 Wikeley Inc filed a motion in the Kentucky proceeding to the substituted as plaintiff in place of the New Zealand company.  Further orders were therefore obtained from Gault J on 6 April 2023 to address this development.  The appellant was represented by lawyers in the NZ proceeding from and including the hearing on 12 December 2022.
[4]	The respondent commenced its proceeding against the appellant in the Trial Division on 11 April 2023 (the subject proceeding).  Ex parte interim injunctive orders were made by Cooper J on 12 and 13 April 2023 against the appellant (with the orders of 13 April 2023 replacing the orders made on the previous day) in support of the NZ proceeding which were in substantially the same form as those ordered by Gault J on 6 April 2023 and were in the nature of anti-suit or anti-enforcement injunctions concerning the proceeding in Kentucky and also including a “no departure” order preventing the appellant from leaving Australia and an order requiring him to deliver up his passports.  The orders of 13 April 2023 had effect until 21 April 2023 which was the return date of the application.
[5]	On 20 April 2023, the respondent filed an application in the subject proceeding that the appellant be found to have committed a contempt of court by failing to comply with the requirements of the orders made on 13 April 2023 (the contempt application).  The application particularised three charges of contempt.  On the return date of 21 April 2023, the appellant was represented by a solicitor and Cooper J made orders continuing the 13 April 2023 orders until 28 days after the final determination of the NZ proceeding or earlier order.  The 13 April 2023 orders were reissued with that amendment on 21 April 2023.
[6]	On 26 April 2023 the appellant delivered his passports into the custody of the Court and further orders were made by Cooper J on that day.  From and including the hearing on 26 April 2023, the appellant has been represented by counsel and solicitors in the subject proceeding.  On 7 June 2023 the appellant filed an application (and an amended application on 15 June 2023) seeking to set aside the existing orders and to have the contempt application permanently stayed.  That application was heard by Cooper J on 3 and 4 August 2023.  The reasons were published on 4 October 2023 when Cooper J set aside paragraphs 2-4 of the orders made on 26 April 2023 but otherwise dismissed the amended application filed on 15 June 2023.  This left the orders of 21 April 2023 intact.
[7]	The orders of 21 April 2023 had been supported by the usual undertaking as to damages given by the respondent.  During the hearing in August 2023, the respondent offered to provide security for its undertaking in the sum of $100,000.  Cooper J considered (at [250] of the reasons) that the sum of $100,000 would provide adequate security for compensation to which the appellant might be entitled in respect of the order which prevented him from leaving Australia.  Cooper J acknowledged (at [249] of the reasons) that, if the respondent did not succeed on its claim for a permanent injunction restraining enforcement of the default judgment, the security of $100,000 would not be sufficient also to ensure that the appellant and his associated entities affected by the injunctions were protected against the financial harm of being held out from enforcing the Kentucky default judgment.
[8]	Gault J delivered his final judgment in the NZ proceeding on 17 November 2023 and granted permanent injunctive relief and awarded damages against the appellant in the sum of £779,031.88, US$412,225.94 and AU$115,625.21: Kea Investments Ltd v Wikeley Family Trustee Limited (in interim liquidation) [2023] NZHC 3260.  As the no departure and passport orders in the subject proceeding were in place until 28 days after the final determination by delivery of judgment in the NZ proceeding, the respondent was successful on 11 December 2023 in obtaining a variation of the orders from Applegarth J, so that they continue to apply until the hearing of the contempt application.
[9]	The contempt application is not being pursued while the appeal is extant and unresolved.  If the appellant succeeds on the appeal and the orders of Cooper J are set aside, that would be the end of the contempt application.
Letters preceding the application for security for costs
[10]	The respondent’s solicitors emailed a letter dated 14 November 2023 to the appellant’s solicitors and expressed the respondent’s concern that, if the appeal were dismissed, it may not recover its costs of the appeal.  The letter noted that searches revealed the appellant did not own any real property in Queensland and they had been informed by the respondent’s New Zealand lawyers that, by judgment delivered by Gault J on 31 August 2023, the appellant was ordered to pay the respondent’s costs in the NZ proceeding in the amount of NZ$246,234.67.  The respondent requested the appellant to provide security for the respondent’s costs of the appeal in the amount of $200,000.
[11]	The appellant’s solicitors responded by letter emailed on 17 November 2023 disputing the quantum sought for security for costs and denying any entitlement of the respondent to obtain security for costs on the basis that the appeal involved matters of public importance, Cooper J imposed significant restrictions on the appellant’s liberty, it was not in the interests of justice to require the appellant, who was a natural person, to provide security for the respondent’s costs of an appeal which had sound prospects of success and, if the appeal were successful, the appellant and any third party affected by the injunctions would be entitled to compensation for such damage as may have been sustained by reason of the orders.  The solicitors noted Cooper J’s observation in the reasons that the security of $100,000 that supported the undertaking as to damages was inadequate in respect of the damage that may have been occasioned to the appellant or a third party by reason of the injunctions.  The appellant’s response did not provide any information about his financial position.  There was also no suggestion in that letter that the appeal would be stifled if the appellant were ordered to provide security for the costs of the appeal.
Factors relevant to the question of whether security should be ordered
[12]	As noted by Davies JA in Natcraft Pty Ltd v Det Norske Veritas [2002] QCA 241 at [2], it is impossible to state comprehensively the factors that are relevant to an assessment of an application for security for costs of an appeal.  Some relevant factors were set out by Jerrard JA in that case at [9].
[13]	The parties were largely agreed on most of the factors that are relevant to whether the Court should exercise its discretion under r 772 to order security for the costs of this appeal.  It is common ground that the approach in considering whether security for costs should be ordered against a natural person on an appeal is less constrained than for the first instance hearing as the appellant has already had a “day in Court” and lost on the merits: Ivory v Telstra Corp Ltd [2001] QCA 490.  Other relevant factors include:
(a)	the financial position of the appellant;
(b)	whether ordering security would stifle the appeal;
(c)	the appellant’s prospects of success on the appeal;
(d)	the extent to which the appeal affects the liberty of the appellant; and
(e)	whether the appeal involves questions of public importance.
[14]	Where the parties differed was as to the weight that should be accorded to each of those factors and whether the balancing of all relevant factors favoured ordering security or not.
[15]	As to factor (a), the appellant has not disclosed his financial position for the purpose of the application.  There is material in the affidavit of the respondent’s solicitor Mr Deighton filed on 23 November 2023 that deals with aspects of the appellant’s financial position that shows that the respondent was unable to identify any assets in Australia of the appellant or an entity associated with the appellant and that there were the outstanding judgment debts from the NZ proceeding owed to the respondent which had not been paid.  An inference can be drawn from the fact of the appellant’s legal representation since 26 April 2023 in the subject proceeding and in connection with the appeal and also in the NZ proceeding that he has access to a source of funds for that purpose but no inference can be drawn from the material before the Court that there are funds available to satisfy the respondent’s costs if the appeal were dismissed.
[16]	As to factor (b), there is no evidence that ordering security will stifle the appeal.
[17]	As to factor (c), the respondent concedes that the appeal is not unarguable.  It is a complex matter and interesting issues are raised in the lengthy notice of appeal including about the principles of comity between courts and whether it was appropriate in the circumstances for Cooper J to grant a worldwide anti-enforcement injunction against the judgment of a foreign court without a jurisdiction clause in favour of Australia and where the connection to Australia was that a former director of the judgment creditor was present in Australia.
[18]	As to factor (d), there are two aspects in which the appellant asserts that the appeal affects his liberty.  The first aspect is that the no departure and passport orders affect the appellant’s liberty to travel outside the state of Queensland.  That aspect has little or no relevance for the purpose of this application when it was indicated on behalf of the appellant that he has no intention to travel and, in fact, has medical reasons for not travelling.  The second aspect is concerned with the risk in the future to the appellant’s liberty, if he were dealt with for the contempt application, found guilty of contempt and sentenced to imprisonment involving actual custody.
[19]	In relation to the second aspect, the appellant relies on the approach in Hood Barrs v Heriot [1896] 2 QB 375.  The plaintiff had obtained an injunction against the defendant restraining her from receiving certain income.  An order for an attachment against the defendant was made for breach of the injunction and she appealed against that order.  The plaintiff applied for an order that the defendant give security for the costs of the appeal on the ground that she had no property available for execution.  Lord Esher MR proceeded on the basis that the poverty of the defendant had been made out and, noting that it was a matter in the discretion of the Court as to whether to order security, stated at 376:
“Where the liberty of the appellant is in question, or where highly penal consequences will be entailed upon the appellant by the order appealed against, so far from thinking that the Court is bound in any case to make an order for security of costs, I think, as a general rule, the Court would not do so.”
[20]	Notwithstanding that Heriot suggests that, as a general rule where the appeal concerns an order that affects the liberty of the appellant, the Court would not make an order for security for costs of the appeal, the power to order security for an appeal remains the exercise of a discretionary judgment: see Mensink v Parbery [2017] FCA 1248 at [52].
[21]	Heriot was applied in JSC BTA Bank v Ablyazov [2012] EWCA Civ 639.  In that case the defendant had misappropriated large sums of money from the bank and the bank obtained an ex parte worldwide freezing order.  The bank alleged over 30 breaches of the Court’s order against the defendant and a trial took place in respect of three of those allegations.  The defendant was found in contempt of court and sentenced to 22 months’ imprisonment.  He did not attend when judgment on the contempt application was given and his whereabouts were unknown.  He did appeal the order for his committal.  The bank applied for the appeal to be dismissed unless certain conditions were satisfied, including that the defendant provide security for the bank’s costs of the appeal.  Moore-Bick LJ dismissed the bank’s application.  It was noted at [36] that “it would rarely be appropriate for the court to refuse to hear a person seeking to challenge an order for his committal, even though he remains in contempt”.
[22]	The appellant placed particular reliance on the refusal of Gloster LJ in Haederle v Thomas [2017] EWCA Civ 1339 to order security for costs for an appeal by Mr Thomas against the primary judge’s refusal to dismiss committal proceedings brought against Mr Thomas by Mr Haederle for breaching freezing orders.  Mr Thomas had sought to have the committal proceedings struck out on a summary basis.  The application for committal for contempt had not been heard.  Gloster LJ noted at [19] that the appeal related to the liberty of the subject as the issue on the appeal was whether contempt allegations should proceed to a further hearing.  Unlike Heriot and Ablyazov where the application for security for costs related directly to the appeal against the committal for contempt, Haederle was concerned with an appeal against an application that was one step removed from the hearing of the committal proceeding.
[23]	The appeal in this matter is not directly about the appellant’s liberty, as the contempt application has not been dealt with and, if the appeal were successful, may never be dealt with.  The appeal is more remote from the contempt application than in Haederle.  The appellant is presently at risk of a sentence of imprisonment for contempt, if the contempt application were to proceed and one or more of the charges were proved and the Court were to exercise its discretion to sentence the appellant for the relevant contempt to a custodial sentence.  Even if the appeal were not to succeed, the outcome of the contempt application would be a matter that remained to be determined on the evidence adduced on the contempt application.  It is a relevant factor to take into account that there is the possibility of the appeal affecting the appellant’s liberty, as an unsuccessful appeal would be a step along the path towards the prosecution of the contempt application.
[24]	As to factor (e), the appeal involves questions of some general importance, although the parties differed as to the extent to which that should be characterised as public importance.  The relationship between courts where the underlying dispute between the same parties has resulted in multiple proceedings in more than one jurisdiction is a matter that has some degree of public importance.  The weight to be given to this factor is reduced somewhat when the underlying dispute is based on a serious allegation of fraud alleged to have been committed by the appellant against the respondent in the Kentucky court.  In any case, this factor loses any relevance when there is no evidence that the appeal would be stifled by the ordering of security: Timbercorp Finance Pty Ltd (in liq) v Tomes [2015] VSCA 322 at [34].
[25]	An additional factor about which the parties disagree is the appellant’s reliance on the orders directly affecting Wikeley Inc as under order 3 of the orders made on 21 April 2023, the appellant is restrained from causing or permitting Wikeley Inc to take any steps, to bring or pursue any litigation, or to enforce or otherwise act on the coal agreement, the default judgment, the assignment of the coal agreement, the assignment of the judgment and the motion for substitution in the Kentucky court.  Wikeley Inc is not itself restrained, is not a party to the subject proceeding, and has not sought to be heard.  It is potentially affected if the appellant has power to do the matters that are the subject of order 3 and does them.  The position of the appellant before Cooper J was that he had been removed as President of Wikeley Inc and was unable to comply with the orders concerning Wikeley Inc (at [226] of the reasons).  That eliminates the relevance of that factor.
[26]	Factors (a) and (b) and that the appellant has had a hearing at first instance favour ordering security.  Factors (c) and (d) support exercising the discretion against ordering the security.  Factor (d) does not carry the same weight, as it did in the decisions relied on by the appellant commencing with Heriot and that applied Heriot, as the subject matter of the appeal relates to the appellant’s liberty indirectly, as explained above.  Taking into account all the relevant matters, the balance favours ordering security for the costs of the appeal.
Amount of the security
[27]	The respondent and the appellant relied on affidavits obtained from the lawyers specialising in costs assessments retained respectively by each party.  The appellant’s expert estimated the standard assessed costs for a one day appeal where senior and junior counsel were briefed as between $74,500 to $79,500.  The respondent’s expert’s estimate was in the range of $108,400 to $113,400, exclusive of GST.  The difference between the estimates mainly relates to the numbers of days allowed for preparation by counsel for the appeal and the daily rates allowed for counsel.  It is not necessary to delve into these differences, as in ordering security for costs, the Court does not necessarily give “a complete and certain indemnity” to the party which obtains the benefit of the order: see Brundza v Robbie & Co (No 2) (1952) 88 CLR 171 at 175.  After all, the amount that is sought as security is based on an estimate of the assessed standard costs of the respondent based on the anticipated work necessary for the appeal.
[28]	The appellant had proposed that the amount of the security should be $30,000 as a portion of its expert’s estimate of the assessed costs.  Even proceeding on the basis that only a proportion of the estimated costs need be ordered as security in the circumstances of this matter, the quantum proposed by the appellant is too low.  At the outset of the appeal, I suggested to the parties after perusing the material, that if I were inclined to order security, it would be for the sum of $65,000.  Consideration of the oral submissions and closer consideration of the written material has not dissuaded me from that view.  At this stage of the appeal, the security that should be provided is the amount of $65,000.
[29]	At the hearing of the application, the parties ultimately agreed that, if security were ordered, costs should be reserved.
Orders
[30]	The orders that should be made are:
1.	Pursuant to r 772 of the Uniform Civil Procedure Rules 1999 (Qld), the appellant must provide security for the respondent’s costs of the proceeding in Appeal No 13868 of 2023 in the amount of $65,000 in a form acceptable to the Registrar of the Court by 4.00 pm on 8 January 2024.
2.	The appeal is stayed pending provision of the security as required by paragraph 1.
3.	Liberty to either party to apply on two days’ notice in writing to the other.
4.	Costs reserved.