(2004) 211 ALR 523
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Henry v Henry [1995] HCA 64
Source
Original judgment source is linked above.
Catchwords
(2004) 211 ALR 523
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Henry v Henry [1995] HCA 64
Judgment (3 paragraphs)
[1]
Solicitors:
Self-represented (plaintiffs)
Miller Harris Lawyers (defendants)
File Number(s): 2015/224142
[2]
Judgment (ex tempore)
HIS HONOUR: The first defendant Grancroft Pty Limited was until recently the trustee of the Rainbow Motor Inn Unit Trust, a unit trust in which the original unit holders were Nevgold Pty Limited as to 11 of 20 issued units and Nicholas John Holdings Pty Limited as to nine of the 20 issued units. Each of those companies held its units as trustees of the discretionary family trusts associated respectively with the second defendant Brian Jorgensen and the first plaintiff Alan Jorgensen who are twin brothers.
Nevgold was trustee of the Brian Jorgensen Family Trust, and Nicholas Holdings was the trustee of the Jorgensen Family Trust (to which, for the sake of clarity, I will refer as the Alan Jorgensen Trust).
The second plaintiff Patricia Jorgensen is the elderly mother of Alan and Brian Jorgensen. Until early last year she held nine of the ten issued shares in Grancroft, although Alan Jorgensen claims to have had some beneficial interest in them. The other share in Grancroft is held by Brian Jorgensen.
On 24 August this year, the current purported unit holders removed Grancroft as trustee of the Rainbow Trust and replaced it with another company Potinak Pty Limited. For the purposes of the present application, it may be assumed that, if necessary, Potinak would be added as a defendant in the proceedings.
Mr Alan Jorgensen resides at Kewarra Beach in North Queensland. Mr Brian Jorgensen resides in or near Cairns. Mrs Patricia Jorgensen resides with Mr Alan Jorgensen at Kewarra Beach.
The assets of the Rainbow Trust comprise a motel in Cairns, and the trust administered in Queensland. It appears - or at least the defendants contend - that by the early 1990s, Nicholas Holdings had given a charge over its assets and undertaking to the ANZ Bank including in its capacity as trustee of the Alan Jorgensen trust. The bank appointed receivers who in due course, after discussions with Mr Brian Jorgensen, sold the nine units in the Rainbow Trust to Mainrace Pty Limited, another company associated with Mr Brian Jorgensen. In any event, it is now alleged by the defendants that Mainrace holds the nine units in the trust that were formally the property of the Alan Jorgensen Trust.
It also appears that, on 17 March 2014, Mrs Jorgensen executed a share transfer of six shares in Grancroft to Mijac Investments Pty Limited, a company associated with Alan Jorgensen. However, it appears that she may also have, on 13 April 2014, executed a share transfer dated 18 March 2014 of all her nine shares in Grancroft to Brian Jorgensen. It is that transfer of the nine shares to Brian Jorgensen that is at the heart of the present proceedings, although the circumstances by which Mainrace claims to have become entitled to the nine units formerly held by the Alan Jorgensen Trust have also been raised.
On 9 January 2015, Mantonella Pty Limited, of which Mr Alan Jorgensen was a director and which claimed to have become the trustee of the Alan Jorgensen Trust in place of Nicholas Holdings, commenced proceedings in the Supreme Court of Queensland at Cairns seeking relief with respect to the matters to which I have referred. That court ordered that the proceedings continue on pleadings, and when the plaintiff filed a statement of claim in those proceedings, it sought, inter alia, declarations to the effect that the Alan Jorgensen Trust is still the beneficial owner of the nine $1 units in the Rainbow Trust which it had held since its inception, and that the unauthorised removal of Mrs Patricia Jorgensen as a director on 30 November 1993 and as a shareholder in Grancroft on 4 April 2014 were void, thereby reinstating her prior status. That statement of claim was subsequently amended, and in the amended statement of claim, Mantonella claimed, inter alia, declarations that the Alan Jorgensen Trust was the beneficial owner of the nine $1 units in the Rainbow Trust as at 30 July 1992 which it held since its inception, and that the unauthorised removal of Mrs Jorgensen as a director on 30 November 1993 and as a shareholder of Grancroft on 14 April 2014 were void, thereby reinstating her prior status as a director and shareholder of nine shares in Grancroft as it was on 29 November 1993.
In the course of the Queensland proceedings, Mantonella on 27 March 2015 filed an interlocutory application seeking orders, inter alia, that the nine shares held by Mrs Jorgensen in Grancroft be ratified, and the form 484 lodged with ASIC dated 14 April 2014, purporting to transfer those shares to Brian Jorgensen be declared void and set aside. That interlocutory application was dismissed on 1 April 2015, without determining the merits of the claim, on the basis that it effectively sought to circumvent the court's decision that those claims for relief ought to proceed by way of pleadings.
The defendants in the Queensland proceedings - Grancroft, Mainrace and Brian Jorgensen - filed an application for security for costs. That application was heard by Henry J on 1 April 2015, and decided in a judgment delivered on 30 June 2015. The judgment refers to the background to the dispute, including in respect of the unit holdings in the Rainbow Trust and the shareholdings in Grancroft. It notes that Alan Jorgensen represented the plaintiff Mantonella in the proceedings, purportedly in his capacity as its director. It set out the claims for relief as recorded in the statement of claim and the amended statement of claim, including those to which I have above referred, which are contained in claims A and D in each version of the pleadings and referred to in paragraphs 27 and 28 of Henry J's judgment. It is unnecessary to refer to the discussion of the security for costs application, save to record that his Honour made an order that the plaintiff give security for the defendants' costs to the close of pleadings and disclosure in the sum of $35,000 in a form satisfactory to the registrar on or before 21 July 2015, and that further proceedings be stayed pending compliance with that order. The order for security was not complied with and the Queensland proceedings are currently stayed by operation of that order.
According to the plaintiffs, Mantonella was replaced as trustee of the Alan Jorgensen Trust by Mijac Investments Pty Limited. On 28 May 2015 - that is to say, before Henry J's judgment on the security for costs application was delivered - Mijac commenced proceedings in this Court. It is unnecessary in the circumstances to refer to those proceedings in much detail; because of their relationship with the current proceedings, they have been dismissed.
On 31 July 2015, the present plaintiff Mr Alan Jorgensen, claiming to have succeeded Mijac as trustee of the Alan Jorgensen Trust, commenced these proceedings by ex parte application before Sackar J sitting as a duty judge, and obtained an abridgement of time for service and directions for service of the initiating process on the defendants.
The proceedings were commenced irregularly by a notice of motion. On 7 August, when the proceedings returned before the Court, the plaintiff Alan Jorgensen indicated that he pressed only for a declaration as to the ownership of the nine ordinary shares in Grancroft purportedly transferred to Brian Jorgensen on 14 April 2014, and consequential orders. Directions were made for the filing of the summons to regularise the commencement of the proceedings, limited to that claim for relief, and making provision for the joinder of Mrs Patricia Jorgensen who appeared to be a necessary party.
In due course, a summons which included Patricia Jorgensen as second plaintiff was filed. That summons, which is extant initiating process before the Court, claims the following relief:
(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 (sic) Alan Jorgensen is the equitable owner of those nine Grancroft shares transferred from Patricia Jorgensen.
(3) In the further alternate (sic) Alan Jorgensen is the equitable owner of six of those nine shares transferred from Patricia Jorgensen.
What is said to be a consequential order for the convening of a meeting is then also sought.
At that stage, it appeared that with careful management, the limited issue which Mr Alan Jorgensen sought to agitate could be expedited and decided relatively promptly. However, a number of difficulties emerged, not least that the restoration of the nine shares in question to Mrs Jorgensen, if successful, would have no effect on the beneficial ownership of the trust, unless something was also done about the unit holding. Thus, Mr Alan Jorgensen foreshadowed an application to amend the summons to enlarge the relief claimed, so as to assert that his trust remained the beneficial owner of the nine units. However, in the course of argument today, Mr Jorgensen resiled from that proposal, and indicated that he would press only for the relief currently claimed in the summons - that is to say, to impugn the transfer of the nine shares in Grancroft.
Presently before the Court for determination is a notice of motion filed on 8 September 2015 by the defendants, which claims dismissal or stay of the proceedings on the basis that they are an abuse of process, essentially because of the pendency in the Supreme Court of Queensland of the proceedings to which I have referred and in which, effectively, the same relief is sought. The motion also claims an order for security for costs, but that was not pressed today, with a view to its being pursued on a later occasion if the proceedings continue. Alternatively, the motion sought an order that the proceedings continue on pleadings. In the course of argument, in addition to the application for a dismissal or stay, counsel for the defendants indicated that the defendants would be content with an order under the (NSW) Jurisdiction of Courts (Cross-Vesting) Act 1987, transferring the proceedings to the Supreme Court of Queensland.
I have already referred to the relief claimed in the Queensland proceedings, and in particular to the extant claim in the amended statement of claim for a declaration that the unauthorised removal of Mrs Jorgensen as a shareholder of Grancroft on 14 April 2014 is void so as to reinstate her as a shareholder of nine shares as she was on 29 November 1993. For all practical purposes, that claim for relief is indistinguishable from the claim for relief in paragraph 1 of the summons in these proceedings, which is the principal claim in the present proceedings.
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].
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.
On that basis, it seems to me strongly arguable that the proceedings in this State are an abuse of process, as they raise the identical issue that is being litigated by the plaintiff (albeit currently through in earlier trustee) in the Queensland proceedings. Even applying the broader test referred to in CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 (at 401), allowing this issue to be litigated in New South Wales, when it is already the subject of litigation in Queensland, would be productive of serious and unjustified trouble and harassment, and be seriously and unfairly burdensome, prejudicial or damaging.
Moreover, quite apart from the pendency of and relationship with the Queensland proceedings, the current proceedings have no connection whatsoever with New South Wales and can only be brought in New South Wales because of the (Qld) Jurisdiction of Courts (Cross-Vesting) Act 1987, which gives to this Court the jurisdiction of the Supreme Court of Queensland. None of the parties resides in New South Wales. The trust assets are in Queensland. The trust is administered in Queensland. The proper law of the trust is the law of Queensland. Neither party was able to identify any connecting factor of the proceedings with New South Wales. If this Court were to hear the proceedings, it would do so exercising the jurisdiction of the Supreme Court of Queensland and applying the law of trusts according to the law of Queensland, not New South Wales law. In this case, the natural forum for the litigation is, it seems to me, very plainly Queensland.
Thus, quite apart from the pendency of the Queensland proceedings, I am of the view that for the purposes of (NSW) Jurisdiction of Courts (Cross-Vesting) Act, s 5(2)(b), this Court has jurisdiction in this matter only because of the cross-vesting law, and this proceeding would have been incapable of being instituted in this Court but for the cross-vesting law. The matters for determination in the proceedings are matters arising under the laws of Queensland, and the more appropriate forum, having regard to the location of the parties, potential witnesses and the subject matter of the dispute, is Queensland. When one adds to that the consideration referred to in s 5(2)(b)(i), that the proceeding is related to proceedings pending in the Supreme Court of Queensland, the case that this proceeding should not be permitted to continue in this Court but should be transferred to Queensland becomes overwhelming.
As the alleged abuse of process lies in the duplication of the claims in this proceeding in a different forum, that would be effectively answered by a transfer of the proceedings to Queensland.
Mr Alan Jorgensen argued that weight should be given to the plaintiffs' choice of forum. While a plaintiff's choice of forum - particularly if there are legitimate forensic advantages in one State rather than another - is not necessarily to be disregarded, the High Court has observed that not too much weight should be given to it [see BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 211 ALR 523 at 564 (Kirby J), 585 (Callinan J)].
Mr Jorgensen also argued that it was not appropriate to transfer the proceedings to Queensland as Cairns was a "one-judge town"; this was a very large case; the Queensland Supreme Court did not have the specialist arrangements involving equity lists that this Court has; and the matter could be heard more expeditiously and justly in this Court. He went so far as to say that if the matter were transferred, he would not bring at least certain aspects of the proceedings in Cairns.
A number of matters need to be noted in that connection. 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.
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.
Finally, if there are any legitimate concerns as to the ability of the plaintiffs to obtain a fair trial in Townsville - 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.
Mr Jorgensen also argued that it would effectively waste what had been done in this Court to date to transfer the proceedings to Queensland. There are two answers to that: first, frankly, not all that much has been done in this case to date. Although progress had been made towards an early hearing of the limited issue, that was much set back when Mr Jorgensen sought to enlarge the issues, from which he has now resiled. Secondly, upon transfer to Queensland, the proceedings will not have to be recommenced from the beginning, but will carry on from where they currently are. The file, the pleadings - such as they are - and the affidavits will be transferred to Queensland.
The Court orders that:
1. The plaintiff's notice of motion filed 18 September 2015 be dismissed.
2. The plaintiff is to pay the defendant's costs of the notice of motion filed 18 September 2015.
3. Pursuant to the Jurisdiction of Courts (Cross-Vesting) Act, s 5(2), the proceedings be transferred to the Supreme Court of Queensland.
4. Costs of the defendant's notice of motion filed 8 September 2015 will be costs in the proceedings.
[3]
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 2015