Corbett v Nguyen & Ors [2008] NSWSC 1265

New South Wales Supreme Court

CITATION : Corbett v Nguyen & Ors [2008] NSWSC 1265

HEARING DATE(S) : 24 November 2008

JUDGMENT DATE : 28 November 2008

JURISDICTION : Equity

JUDGMENT OF : White J

DECISION : 1. Order that the defendants' notice of motion filed on 24 June 2008 be dismissed with costs; 2. exhibits may be returned after 28 days.

CATCHWORDS : PRACTICE AND PROCEDURE – costs – security for costs – plaintiff ordinarily resident in both Vietnam and Australia – extreme difficulty in enforcing costs order in Vietnam – sufficient Australian assets to meet costs order – plaintiff not shown to be lacking commercial probity – delay by defendant in bringing motion – application refused

Inland Revenue Commissioners v Lysaght [1928] AC 234 Re Taylor; Ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194 CASES CITED : Logue v Hansen Technologies Ltd [2003] FCA 81 Leyvand v Barasch (High Court of Justice, 15th February 2000 unreported; 2000 WL191256) Corby v Channel Seven Sydney Pty Ltd [2008] NSWSC 245 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 744

James Corbett PARTIES : v Hau Nhon Nguyen & 4 Ors

FILE NUMBER(S) : SC 3137/04

COUNSEL : Applicants/Defendants: T Molomby SC Respondent/Plainitff: B W Collins QC & N Potts

SOLICITORS : Applicants/Defendants: G J Gooden, Solicitor Respondent/Plaintiff: Legal Recovery Solutions

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WHITE J

Friday, 28 November 2008

3137/04 James Corbett v Hau Nhon Nguyen & 4 Ors JUDGMENT 1 HIS HONOUR: This is an application for security for costs against an individual plaintiff who is alleged to be ordinarily resident outside New South Wales. 2 The proceedings were commenced on 27 May 2004. The notice of motion seeking security for costs was filed on 24 June 2008. Security is sought in an amount of $160,000 by way of bank guarantee. 3 The proceedings relate to a superannuation fund of which the fourth defendant, Abaco Machines (Australasia) Pty Ltd ("Abaco"), is the trustee. Up to July 2001, the plaintiff and the first, second and third defendants were directors, shareholders and employees of Abaco. On or about 12 July 2001, the parties entered into an agreement for the plaintiff to relinquish his shares in Abaco. The plaintiff was to have certain superannuation entitlements from a fund of which Abaco is trustee. The defendants say that the plaintiff is entitled only to $50,000. The plaintiff contends that the defendants were required to roll over his superannuation entitlements into another fund of his nomination and pay him an additional $50,000. He contends that Abaco breached the trusts of the superannuation fund and of a unit trust in which the superannuation fund held units and of which it was also trustee. He claims superannuation entitlements as at 30 June 2007 and accruing in the sum of $263,873 and "loss and damage continuing to date of hearing". The defendants seek an order for rectification of the deed of 12 July 2001 to provide that their obligations were to pay into the superannuation fund on behalf of the plaintiff such amounts as were necessary to increase to $50,000 the net amount standing to his credit as at 30 June 2001, and to cause the superannuation fund prior to 30 June 2002 to roll over the plaintiff's accumulated contributions to a superannuation trustee nominated by him. 4 In the four and a half years the proceedings have been pending, pleadings have been prepared and amended, discovery has been given, subpoenas issued, and the plaintiff has served his evidence in chief. The defendants are yet to serve their evidence. 5 The plaintiff is an Australian citizen. He owns a house in Baulkham Hills, Sydney, where he lives when he is in Australia. His wife and son are permanently resident in that house. It is encumbered with a mortgage securing a debt of about $100,000. The land alone was valued at $340,000 in 2005. The plaintiff estimates his equity in the property to be worth about $400,000. There was no challenge to that estimate. 6 The plaintiff is a director and sole shareholder in two companies which have their registered offices in New South Wales: Aardwolf Pty Ltd ("Aardwolf") and Herdgraph Pty Ltd ("Herdgraph"). It is said that Herdgraph holds a patent for a "slab lifter" which Aardwolf, under licence, distributes worldwide. It is said that Aardwolf subcontracts the manufacture of the equipment to companies in Vietnam. The plaintiff travels frequently to Vietnam, at least for the purposes of supervising the manufacture of that product. 7 On 7 May 2007, a company incorporated in the British Virgin Islands, Aardwolf Vietnam Ltd ("Aardwolf Vietnam"), was issued with a certificate by the Vietnamese government providing for its registration to set up a business and to carry out an investment project for the production of mechanical products and machinery related to the construction industry in Vietnam. The certificate of investment required the installation of machinery and the commencement of production within six months. The plaintiff is the named authorised representative for the company in Vietnam, and I infer that he is beneficially entitled to at least some of the shares in that company. It can be inferred that his continued presence in Vietnam is, at least in part, due to the establishment of that company's business. 8 The records of the plaintiff's arrival and departure from Australia show that he was out of Australia for 56 percent of the time in the year ended 30 June 2004, 75 percent of the time in the year ended 30 June 2005, 77 percent in the year ended 30 June 2006, 76 percent in the year ended 30 June 2007 and 80 percent in the eight months ended 29 February 2008. For most of the time he was overseas he lived in a rented flat in Ho Chi Minh City, Vietnam. On 29 November 2007, he was issued a temporary resident's card which appears to permit him to reside in Vietnam without a visa. It expires on 29 November 2010. Prior to having the temporary resident's card, he travelled to Vietnam on a business visa. 9 The application is made pursuant to r 42.21(1)(a) of the Uniform Civil Procedure Rules. Rule 42.21 provides: " 42.21 Security for costs