Nguyen v Grancroft Pty Limited

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

In its amended form, Mantonella’s statement of claim contained the following prayers for relief, among others:

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.

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]:

His Honour also discussed the evident limitation problems, given that more than twenty-two years had elapsed since the sale. At [34] he said:

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.

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.

The security has never been paid. The proceedings remain pending, but stayed, in the Cairns Registry of the Supreme Court of Queensland.

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.

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.

The prayers for relief in Alan’s proceedings were:

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.

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.

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.

Alan resisted this, arguing that Cairns was an unsuitable venue for the litigation. In response, his Honour made three points.

At [27] he said:

Then at [28]:

Then at [29]:

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.

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.

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:

His Honour continued at [74]:

Finally, at [75] his Honour said:

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.

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.

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.

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):

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.

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.

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.

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:

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:

He continued at [20]:

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.

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.

For these reasons, Grancroft’s application succeeds. The proceedings will be summarily dismissed.

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.

The orders of the Court are: