Supreme Court New South Wales Medium Neutral Citation: Nguyen v Grancroft Pty Limited [2020] NSWSC 1644 Hearing dates: 6 November 2020 Date of orders: 18 November 2020 Decision date: 18 November 2020 Jurisdiction: Equity - Applications List Before: Parker J Decision: See [50]-[52] Catchwords: CIVIL PROCEDURE – summary disposal – dismissal of proceedings – abuse of process – duplication of proceedings – vexatious litigant order Legislation Cited: Vexatious Proceedings Act 2005 (Qld) Cases Cited: Jorgensen v Grancroft Pty Ltd [2015] NSWSC 1723 Jorgensen v Jorgensen [2016] QSC 193 Mantonella Pty Ltd v Grancroft Pty Ltd [2015] QSC 191 Category: Procedural and other rulings Parties: Grancroft Pty Ltd (Applicant/Defendant) Tieu My Nguyen (Respondent/Plaintiff) Representation: Counsel: R Ivessa (Applicant/Defendant) Solicitors: Miller Harris Lawyers (Applicant/Defendant) In Person: TM Nguyen (Respondent/Plaintiff) File Number(s): 2020/221724 Publication restriction: Nil Judgment 1. Before the Court is an application by way of notice of motion. The defendant seeks orders summarily dismissing the proceedings; or staying them; or transferring them to the Supreme Court of Queensland. 2. The proceedings are part of a long running dispute between two brothers, Alan Jorgensen and Brian Jorgensen. For convenience, and without disrespect, I will refer to them and to other family members involved in the proceedings by their first names. 3. The dispute centres on a motel in Cairns called the Rainbow Motor Inn. Until 2015 the defendant Grancroft Pty Ltd ("Grancroft") was the registered proprietor of the motel as trustee for a unit trust called the Rainbow Motor Inn Unit Trust ("RMIUT"). Originally 45 per cent of the units (nine out of the issued twenty) belonged to a discretionary trust established for the benefit of Alan and his family. I will refer to this trust as the Alan Jorgensen Family Trust. 4. The dispute arises out of a transaction in 1992. Brian, through a company called Mainrace Pty Limited ("Mainrace"), bought the RMIUT unit holding belonging to the Alan Jorgensen Family Trust from a receiver appointed by Alan's financier, ANZ. The purchase price was $125,000. 5. This is the tenth case to have been brought since 2015 by Alan or parties associated with him about the Mainrace sale or subsequent corporate dealings within Grancroft. The plaintiff in these proceedings is Tieu My Nguyen ("Tieu"). She is Alan's de facto wife and her claim in the proceedings purports to be made on behalf of the Alan Jorgensen Family Trust. 6. Tieu and Alan are currently living in Bali. The proceedings were begun in July this year. Owing to the Covid-19 emergency, documents have been filed and exchanged by electronic means and the hearings have been conducted by audio-visual link or telephone. 7. At the call-over hearing before the Chief Judge on 8 September Alan appeared on Tieu's behalf. In the lead-up to the hearing before me, he communicated with the Court on her behalf and appeared to assume that he would represent her at the hearing. 8. Tieu is of course entitled to conduct the proceedings herself. But as an unqualified person, Alan had no right to represent her. Alan is not himself a party to the proceedings. 9. Having regard to the background to this matter, which I discuss in more detail below, I was not prepared to permit Alan to conduct the proceedings on Tieu's behalf. I allowed him to participate in the hearing (which took place by telephone) as a McKenzie friend. As such he was permitted to be present so as to advise Tieu but was not permitted himself to address the Court on her behalf. Apart from an episode where he took over the telephone for a few minutes, Alan complied with these requirements. Claims and procedural history 1. The original holder of the units in the RMIUT as trustee for the Alan Jorgensen Family Trust was a company called Nicholas John Holdings Limited ("NJH"). I assume this company was controlled by Alan. As part of Alan's borrowings with ANZ, NJH charged all of its assets, including those held on trust, as security for the loans made by the Bank. It was this charge which gave the receiver power to sell the units in the RMIUT and apply the proceeds in reduction of the monies owed to ANZ. 2. The sale took place on 31 July 1992. It seems that at the time 45 per cent of the shares in Grancroft were held by Patricia Jorgensen, who is the mother of Alan and Brian. She was also apparently a director of the company. 3. According to Grancroft, Brian's wife, Eve Jorgensen, became a director of Grancroft, and Patricia ceased to be a director, in November 1993. Much later, in 2014, Patricia's 45 per cent shareholding in Grancroft was transferred to Brian. 4. As well as complaining about the purchase of the units by Mainrace, Alan (supported, it seems, by his mother) contests the validity of Patricia's removal as a director of, and shareholder in, Grancroft. But it is not easy to see why this is important. The 45 per cent economic interest in the motel attached to the RMIUT units rather than the Grancroft shares. 5. The first proceedings concerning the sale, or the subsequent transactions affecting Grancroft, were brought in the Queensland Supreme Court by a company called Mantonella Pty Limited ("Mantonella"). That is (or was) a company controlled by Alan and he conducted the proceedings on its behalf. Mantonella claimed to have been appointed as the trustee of the Alan Jorgensen Family Trust in December 2004. NJH, the trustee at the time of the Mainrace sale in 1992, was deregistered in 2008. 6. Mantonella's proceedings were commenced on 9 January 2015. The named defendants were Grancroft, Mainrace and Brian. The proceedings were allocated to the Cairns Registry of the Queensland Supreme Court. 7. In its amended form, Mantonella's statement of claim contained the following prayers for relief, among others: A. A Declaration by the Court that the [Alan Jorgensen Family Trust] was the beneficial owner of the 9 x $1.00 Units in the RMIUT, as at 30th July 1992, which it held since inception. B. An Order that [Mainrace] and [Brian], jointly and severally, pay the Plaintiff the amount due from RMIUT's Profit Distribution for 1991/1992 fiscal year calculated as 45% of the total Profit Distribution for that year, which will be evidenced by the RMIUT records and or the ATO tax returns filed that year. C. That an Order for Equitable Compensation, or a commercial interest rate, be applied to that amount, at the option of the Plaintiff. D. A Declaration that the unauthorized removal of Patricia Jorgensen as a Director on 30 November 1993 and as a Shareholder of Grancroft Pty Ltd on 14 April 2014, are both voided, thereby reinstating her prior status as a director and shareholder of 9 shares in Grancroft as it was on 29 November 1993. E. A Declaration that Eve Jorgensen was invalidly appointed as a Director of Grancroft Pty Ltd on 12 May 1993 and thereby her appointment voided and be removed [sic] forthwith. 1. The defendants made an application for security for costs which was heard by Henry J on 1 April 2015. On 30 June his Honour delivered judgment: Mantonella Pty Ltd v Grancroft Pty Ltd [2015] QSC 191. 2. One of the defendants' arguments in support of the application for security was that Mantonella's claim was a very weak one. His Honour addressed this argument in his judgment. He noted that Mantonella had not sued the receiver who had actually effected the sale. He continued at [32]: There is no evidence in support of the plaintiff's allegation that the sale amount of $125,000 involved a gross undervalue. The applicant emphasises the Report as to Affairs of Nicholas John Holdings Ltd of 21 August 1992, signed by Alan Jorgensen, recorded the amount realisable on the "45% interest in Grancroft Pty Ltd" as being $125,000, which was the amount it sold for. The applicant suggests this was an acknowledgement of the actual value of the nine units but that does not necessarily follow because the sale for that sum had occurred back on 31 July 1992. The entry might merely have reflected the sale price, without regard to real value. Nonetheless there is no evidence that, contrary to the receiver's duty, he sold the nine units at an under value. 1. His Honour also discussed the evident limitation problems, given that more than twenty-two years had elapsed since the sale. At [34] he said: It is clear that, despite only recently bringing the action, the plaintiff and Alan Jorgensen as its director, knew of the material facts relating to the alleged breaches soon after they occurred in 1992. In his oral submissions Alan Jorgensen, appearing without legal representation for Mantonella, conceded that he and, implicitly, Mantonella were aware of all the relevant facts and the six year limitation for bring an action to the court. However Alan Jorgensen explained he had only recently discovered that claims of fraud and conversion are not statute barred. 1. His Honour further observed that there was evidence before him that Alan or associated entities had been involved in thirty-two prior court cases. Alan had also given evidence that in fact he sought advice at the time on whether he could challenge the sale and the advice was adverse. 2. In the end, Henry J found it was unnecessary to determine whether Mantonella's claim had any realistic prospect of success. It was a clear case for the award of security. His Honour decided to fix the security on a staged basis. He ordered that Mantonella provide security in the sum of $35,000 up to the completion of the pleading and disclosure stages of the proceedings. He stayed the proceedings pending payment of that amount. 3. The security has never been paid. The proceedings remain pending, but stayed, in the Cairns Registry of the Supreme Court of Queensland. 4. On 28 May 2015, while Henry J's judgment was reserved, proceedings were commenced in this Court concerning Patricia's removal as a director and shareholder of Grancroft. The proceedings were brought in the name of another company apparently controlled by Alan, called Mijac Investments Pty Ltd ("Mijac"). Allegedly that company had replaced Mantonella as the trustee of the Alan Jorgensen Family Trust. 5. Then on 31 July 2015 Alan himself commenced Corporations List proceedings in this Court, claiming to have succeeded Mijac as the trustee of the Alan Jorgensen Family Trust. Alan himself was named as the first plaintiff. Patricia was named as the second plaintiff. The Mijac proceedings were not pursued and were dismissed because they covered the same ground as the proceedings commenced by Alan. 6. The prayers for relief in Alan's proceedings were: (1) A declaration that Patricia Jorgensen is still the registered owner of her nine ordinary shares held in Grancroft Pty Limited which she has held since its inception in June 1985. (2) In the alternate Alan Jorgensen is the equitable owner of the those nine Grancroft shares transferred from Patricia Jorgensen. (3) In the further alternate Alan Jorgensen is the equitable owner of six of those nine shares transferred from Patricia Jorgensen. 1. There were no prayers for relief concerning the Mainrace sale in 1992. At one point Alan foreshadowed an application to amend the summons so as to assert that the Alan Jorgensen Family Trust remained the beneficial owner of those units, but this did not eventuate. 2. Grancroft and Brian applied to have the proceedings summarily dismissed, or stayed. At the hearing of the application, counsel indicated that they would be satisfied with having proceedings transferred to the Supreme Court of Queensland. The application came before Brereton J (as his Honour then was) on 12 November 2015 and his Honour delivered an ex tempore decision on that day: Jorgensen v Grancroft Pty Ltd [2015] NSWSC 1723. 3. His Honour found that the claims being made duplicated the claims made in the Mantonella proceedings. He considered that this made it "strongly arguable" that the proceedings were an abuse of process. In any event the case had nothing to do with New South Wales and the case for a transfer to the Supreme Court of Queensland was overwhelming. 4. Alan resisted this, arguing that Cairns was an unsuitable venue for the litigation. In response, his Honour made three points. 5. At [27] he said: First, when this Court transfers a matter under the Jurisdiction of Courts (Cross-Vesting) Act, it transfers it to a Court, not to any particular list or registry within that Court. It is a matter for the transferee court's internal arrangements as to how the matter will be allocated and listed internally. It does not follow from an order that these proceedings be transferred to the Supreme Court of Queensland that they will necessarily be allocated to the Cairns registry, although given their connection with the pending proceedings it must be acknowledged that that would seem a logical and likely outcome. 1. Then at [28]: Secondly, this Court does not engage in the invidious exercise of comparing the capacity of other courts of concurrent jurisdiction across the country to deal with matters within their jurisdiction. True it is that on occasion, in this context, reference is made to the specialist expertise of certain courts, in deciding what is the more appropriate forum. Most typically, that would occur with the transfer of proceedings between State Supreme Courts and the Family Court of Australia, and vice versa. But where it comes to matters of general law, as this is, none of the State Supreme Courts are lacking in jurisdiction, competence or expertise to deal with them, and none of them claim a superior capacity to others to do so. All are assumed to be equivalent in that respect. True it is also that sometimes reference is made, supported by evidence, to the capacity of one Court to hear a case sooner than others, but there is no evidence before me that would enable me to conclude that this Court could hear this case any sooner than the Supreme Court of Queensland. 1. Then at [29]: Finally, if there are any legitimate concerns as to the ability of the plaintiffs to obtain a fair trial in Townsville [sic; Cairns may have been intended] – and Mr Alan Jorgensen referred from time to time to a reasonable apprehension of (as distinct from actual) bias – then I do not doubt that appropriate internal arrangements can be made in the Supreme Court of Queensland, whether by allocation of the matter to a different registry, or by the use of a visiting judge, to address them. I make those comments without intending for a moment to lend any suggestion of endorsement to the matters to which Mr Jorgensen has adverted, but for the purpose of pointing out to him that, if he does have legitimate concerns in that respect, there are remedies for them. 1. In the result, his Honour transferred the proceedings to Queensland. The proceedings were indeed allocated to the Cairns registry. They remain pending but have been effectively stayed as a result of the orders made by Daubney J to which I refer below. 2. In December 2015, Brian commenced proceedings in the Queensland Supreme Court seeking orders against Alan, Mantonella and Mijac under the Vexatious Proceedings Act 2005 (Qld). The application came before Daubney J who delivered judgment on 5 September 2016: Jorgensen v Jorgensen [2016] QSC 193. His Honour described the course of the proceedings commenced by Mantonella (which his Honour referred to as the "Cairns proceeding") and the proceedings commenced in this Court which had come before Brereton J (to which his Honour referred as the "NSW proceeding"). He also referred to twenty-three other cases which had previously been brought by Alan or entities associated with him. 3. His Honour concluded that Alan had what he described as an "overweening sense of entitlement" to conduct litigation free of all constraints imposed by the rules and Court orders and directions. At [68] he said: In my view, [Alan's] conduct in litigation on his own account and on behalf of his companies amply demonstrates a chronic and persistent preparedness to abuse the court processes. This … is an example of a case where a litigant ([Alan]) has, over many years and in numerous courts and tribunals, exhibited behaviour which bespeaks a persistent disregard for the practices and rulings of those courts and tribunals. That behaviour is now compounded by his clear attempt to circumvent the operation of the security for costs order made by Henry J in the Cairns proceeding by launching the NSW proceeding, thereby abusing the processes of the courts. 1. His Honour continued at [74]: The short, and obvious, point in this case is that it is clear that [Alan], and those associated with him, wish to pursue litigation against [Brian] and his interests in relation to the Trust. Yet the inconvenient truth for [Alan] is that there already exists a perfectly good and competent vehicle for the pursuit of those claims, namely the Cairns proceeding. It is [Alan's] attempts to circumvent the Cairns proceeding, and the operation of the unchallenged security for costs order in that proceeding, which ought be the object of an order under the [Vexatious Proceedings Act]. Such an order is necessary, in my view, to prevent [Alan] from persisting with his vexatious behaviour of abusing the court's process and disregarding court orders and rulings. 1. Finally, at [75] his Honour said: I should also record that, even if I am wrong about the application of the [Vexatious Proceedings Act] to this case, I would have granted relief on the alternative basis, namely the Court's inherent jurisdiction to prevent an abuse of the Court's process. … [Alan] has clearly evinced an intention to seek to abuse this Court's processes by circumventing the operation of the security for costs order made by Henry J in the Cairns proceeding. It is quite clear from [Alan's] conduct that, unless restrained, he will continue to institute, or cause to be instituted, further proceedings which traverse the same or similar territory to that already under consideration in the Cairns proceeding. 1. Under the Vexatious Proceedings Act his Honour made an order prohibiting Alan, or any associated entity controlled by Alan (including Mantonella and Mijac) from instituting any proceedings "with respect to, connected with or arising out of" the RMIUT without the Court's leave. Although the order spoke of instituting proceedings, it appears to be accepted that its effect is to prevent Alan from taking any further step in the Corporations List proceedings from this Court which were transferred pursuant to the order of Brereton J. 2. I have mentioned that there were six other proceedings concerning the Mainrace sale or the removal of Patricia as a director or shareholder of Grancroft. Some of these were brought in Queensland District Court or Supreme Court by Alan's daughters (who were not expressly covered by Daubney J's order). Others were brought in Federal courts (which were beyond the reach of the orders). I do not need to describe these proceedings in detail. All have been discontinued or dismissed. 3. Brian has made an application to the Federal Court to declare Alan a vexatious litigant. That application has been heard by Logan J and judgment is reserved. 4. The present proceedings in this Court were commenced by summons filed on 29 July this year. Under the Rules a summons is supposed to state (and state only) the relief sought. The summons in these proceedings does not do this. The first three paragraphs are representative (emphasis original): 1. A Declaration is sought by the Applicant that the [Alan Jorgensen Family Trust] ("JFT") in which she is a beneficiary and a Co-Trustee of, is still the legal owner of 45% (9 of total of 20 Units) of the Rainbow Motor Inn Unit Trust ("Rainbow Trust") pursuant to its Trust Deed, dated 4th July 1985. 2. A Declaration is sought that Equity's "Self-Dealing Rule", absolutely prohibits a Trustee, or its Director, from acquiring the interests of its vulnerable Beneficiary, as reinforced in the leading authority; Tito v Waddell [1977]; " ... that if a Trustee sells the trust property to himself the sale is voidable by any beneficiary ex-debito justitiae, however fair the transaction". Therefore, the secret sale of the JFT's 45% share, to the Rainbow Trust's Trustee's Managing Director, for just $125,000, when his own Stamp Duty Sworn Valuation was in fact $1,057,654, which fraud was approved and facilitated by the Trustee, Grancroft Pty Ltd ["Grancroft"], must be void. 3. Or in fact, a nullity Declared, as the Sale and Transfer never took effect, given the secret sale was never passed by the Grancroft Board, as it was only ever approved by that 1 purchasing Director (whose vote does not court since benefited him personally), and never approved by the mandatory minimum 2 Directors of a pre ASIC company. So a Declaration from this Court is sought that there was simply no sale ever consummated, so the attempted Sale by ex Trustee, Nicholas John Holdings Pty Ltd to Mainrace Pty Ltd is a nullity and so the original unit holders of the Rainbow Motor Inn Unit Trust, never changed. 1. At the call-over hearing before the Chief Judge on 8 September, her Honour pointed out that it would be necessary for the proceedings to continue on pleadings and for a properly pleaded and particularised statement of claim to be filed. Directions for this to happen (and for Grancroft to file its defence) have not yet been made, pending the outcome of the present application. Application for summary dismissal 1. In opposition to the application one affidavit from Tieu and two affidavits from Alan were filed and read. Written submissions under Tieu's signature were also filed. 2. In the course of hearing it became clear that Tieu has little idea of what the case is about. In fact she has only limited command of English. It is obvious that in bringing the proceedings she is acting at Alan's behest, and he is the author of the affidavit and submissions attributed to her. 3. The affidavits and submissions were largely irrelevant to the application. The comments made by Daubney J in his judgment on the vexatious litigant application ([2016] QSC 193) at [61] are equally applicable here: For his part, in both written submissions and affidavits filed in response to the application, [Alan] comprehensively failed to grapple with or address the substance of the relevant application with which I am presently concerned. Rather, [Alan] sought to argue the merits of the principal claims which he and those associated with him sought to pursue against [Brian], criticised the actions of [Brian and those advising him in bringing the present application, and sought to justify the raft of previous adverse judgments by arguing the merits of those past pieces of litigation. 1. I have already referred to Brereton J's conclusion that it was "strongly arguable" that the Corporations List proceedings in 2015 were an abuse of process. At [19] his Honour explained: In the private international law sense, Queensland and New South Wales are different countries. The mere coexistence of proceedings between the parties in different countries does not constitute vexation or oppression, and the maintenance of parallel litigation in a foreign jurisdiction is not vexatious or oppressive if it offers remedies or advantages not available in the domestic forum. However, if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter, prima facie the continuation of one or the other is vexatious or oppressive in the relevant sense [Henry v Henry [1995] HCA 64; (1996) 185 CLR 571 at 590]. 1. He continued at [20]: I have suggested that the effect of Henry v Henry may be only that, whereas under the earlier English authorities such as McHenry v Lewis [1882] 22 Ch D 397, parallel proceedings in different jurisdictions, unlike parallel proceedings within the same jurisdiction, were not prima facie vexatious - so that a party alleging that parallel proceedings in different jurisdictions were vexatious bore the onus of proving that to be so - in Australian law the onus shifts to a party who disputes the prima facie position to establish that the parallel proceedings are not vexatious [see In the Matter of Treadtel International Pty Ltd [2014] NSWSC 104 at [23]]. In this case, the prima facie position referred to in Henry v Henry is strengthened, and the force of the earlier English authorities diminished, by the circumstance that, although the proceedings are not in the same State, they are in the same nation, in a context where considerations of comity and the obligation to give full faith and credit to the laws of another State weigh against permitting parallel proceedings in different jurisdictions – a position that is strongly fortified by the provisions of the Jurisdiction of Courts (Cross-Vesting) Act, to which I shall come. 1. This reasoning applies equally in the present case. So too does his Honour's conclusion that the proceedings have nothing to do with New South Wales and there is no justification for their being brought or continued in the courts of this State. 2. For these reasons, at a minimum the proceedings should be transferred to Queensland as Brereton J did with the 2015 Corporations List proceedings. But in the light of later events I think I should go further. These proceedings not only duplicate the Mantonella proceedings still pending in Queensland, they are an attempt to evade the vexatious litigant orders made by Daubney J in 2016. They are clearly an abuse of process. Orders 1. For these reasons, Grancroft's application succeeds. The proceedings will be summarily dismissed. 2. On the face of it, costs should follow the event on the ordinary basis. If any different or additional order is sought, that can be done in accordance with the Rules. 3. The orders of the Court are: 1. Order that the plaintiff's claim be dismissed. 2. Order that the plaintiff pay the defendant's costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 November 2020