Nguyen v Sage Consultant Group Pty Ltd

Background

1. The dispute between the parties relates to sums paid by the first plaintiff for services to be provided in relation to applications to be made on behalf of his children (the second and third plaintiffs) for visas for permanent residence in Australia. The factual background to the dispute, as pleaded, may be summarised as follows.
2. The first plaintiff (Van Tuan Nguyen) lives in Vietnam. He is the father of the second and third plaintiffs (Phuong Anh Nguyen and Ngoc Tu Nguyen). He wished to assist his children to obtain permanent residency in Australia.
3. The first plaintiff alleges that, between 28 January 2014 and 13 February 2014, he paid the sum of $45,000 to a person who is not a party to these proceedings (Andrew Chinh Nguyen) and the company of which that person was then the managing director, BSI International Pty Ltd (BSI), by way of a fee said to be for the purpose of obtaining a "permanent residency subclass 186 visa" for the second plaintiff through an "Employer Nomination Scheme" (see [8]-[11] of the statement of claim filed 3 May 2017).
4. The first plaintiff alleges that he was then referred by Andrew Nguyen to the second defendant (Ronnie Quoc Dung Hoang) as a legal practitioner specialising in immigration (see [12]). The first plaintiff alleges that Mr Hoang represented to him, among other things, that he (Mr Hoang) was involved in the joint enterprise with BSI; that Andrew Nguyen and BSI had defrauded the first and second plaintiffs and could not assist the second plaintiff to obtain an Australian permanent residency visa through the Employer Nomination Scheme; and that he (Mr Hoang) was a legal practitioner and immigration agent specialising in immigration, who was qualified to and would assist the second plaintiff to obtain "genuine and legal permanent residency in Australia"; and that he would also assist the first plaintiff to recover the $45,000 paid to Andrew Nguyen and BSI (see [13]). It is alleged that the same representations were made by Mr Hoang to the second plaintiff (see [17]).
5. It is alleged that, in reliance on the said representations (each of which is said to have been false), both the first plaintiff and the second plaintiff entered into an oral agreement retaining Mr Hoang to act as their agent for the purposes of obtaining permanent residency for the second plaintiff and the third plaintiff (see [16]; [20]).
6. Three contracts are then pleaded as having been entered into between one or more of the parties to these proceedings.
7. First (see [40]-[43]), it is alleged that a contract (the first contract) was made on or about 6 March 2014 between the first plaintiff and the second defendant (who then carried on an unincorporated business under the trading name of "RS Specialist Consultant Pty" [sic]), which was described as a "Customer Agreement" engaging the services of Mr Hoang and retaining Mr Hoang to act as an agent on behalf of the first and third plaintiffs to obtain a permanent residency visa for the third plaintiff
8. Second (see [83]-[86]), it is alleged that a contract (the second contract) was made on or about 12 April 2014 between the second plaintiff and the first defendant (the corporate entity through which Mr Hoang was by then carrying on business), described as a "Service Contract", engaging the services of the first and second defendants and retaining them to act as an agent on behalf of the first and second plaintiffs to obtain a permanent residency visa for the second plaintiff (the second contract).
9. Third (see [97]-[99]), it is alleged that a contract (the third contract) was made on or about 26 June 2014 between the second plaintiff and the first defendant for legal services, also described as a "Service Contract", engaging the services of the first defendant and retaining it to obtain the recovery of the $45,000 paid to Andrew Nguyen and BSI (that amount being alleged to have been fraudulently obtained by them).
10. In essence, what is alleged is that Mr Hoang represented that he was a solicitor and specialist immigration advisor whereas, in truth, he had no such qualifications and that Mr Hoang engaged in misleading, deceptive and fraudulent conduct in representing to the relevant plaintiffs that he would apply for the relevant visas using a priority process for the purposes of obtaining permanent residency for the second and third plaintiffs respectively.
11. Various amounts were paid by the first plaintiff in respect of the services to be provided under the respective contracts or by way of fees said to be payable to the Department of Immigration and Border Protection in respect of the visa applications. In all, sums totalling $135,325 were paid in respect of the first contract and sums totalling $103,380 were paid pursuant to the second contract. Evidence of payment and/or confirmation of receipt of the moneys was before the Court on the present application.
12. The plaintiffs allege that the second defendant fraudulently fabricated documents pertaining to the permanent residency visa applications in respect of both the second and third plaintiffs. A raft of allegations of misleading, deceptive and fraudulent conduct and breaches of fiduciary duty are alleged against the first and second defendants.
13. The third defendant is the mother of the second defendant and a director of the first defendant. It is alleged against the third defendant that, as an officer of the first defendant, she was "subject to a fiduciary relationship with the First Plaintiff" (statement of claim at [138]) and that she had a fiduciary duty at all times to act in the best interests of the first and second plaintiffs and not to seek to gain advantage for herself or someone else nor to cause detriment to the "first plaintiffs" (see [139]). In oral argument, it was suggested that the claim against the third defendant related to the receipt by her of moneys in circumstances which gave rise to liability under one or other of the two limbs in Barnes v Addy (1874) LR 9 Ch App 244.
14. The fourth defendant is a cousin of the second defendant. As noted earlier, the statement of claim has not been served on the fourth defendant. The plaintiffs have been advised by the New South Wales Police that he has left the country.

Procedural matters

1. Proceedings were initially commenced in the District Court by the filing of a summons on 24 February 2017, the relief there sought being for freezing orders and for the repayment of $239,950 to the plaintiffs.
2. On 31 March 2017, the second defendant filed a notice of motion in the District Court seeking, inter alia, a stay of the proceedings pending resolution of criminal charges against the second defendant involving allegations about the plaintiffs (by reference to a Court Attendance Notice, a copy of which is on the Court file). That motion was not pressed by the second defendant when the matter came before the Court on 5 April 2017. On that occasion orders were made for the matter to proceed by way of pleadings.
3. The plaintiffs' statement of claim was filed in the District Court on 3 May 2017. Shortly thereafter, the matter was transferred to the Supreme Court.
4. Service of the statement of claim on the first defendant was effected on or about 10 May 2017 at its registered office (see affidavit affirmed 20 December 2017 by the plaintiffs' solicitor, Lai Vuong, at [6]). No appearance has been filed by the first defendant and it has taken no part in the proceedings to date. It has not filed any defence.
5. Service of the statement of claim was effected on the second defendant on or about 3 May 2017 (see [4] of Mr Vuong's 20 December 2017 affidavit) by way of service on the solicitor then acting for the second defendant in criminal proceedings brought by the Commonwealth Director of Public Prosecutions in relation to charges of dishonestly obtaining financial advantage or causing disadvantage by deception and reckless dealing with proceeds of crime. Personal service of the statement of claim was effected by a process server on the third defendant on or about 8 May 2017 (see [5] of Mr Vuong's affidavit).
6. On about 31 May 2017, orders were made for the second and third defendants to file and serve their defences and any statements of cross claim by 12 July 2017. The second and third defendants were separately represented at that time.
7. The second defendant filed his verified defence to the statement of claim on 12 July 2017. The second defendant's address was noted on the defence as an address in Fairfield East. At the same time the second defendant filed a cross claim against the first, third and fourth defendants in the proceedings, seeking contribution from each.
8. The third defendant failed to serve her defence by 12 July 2017. On about 19 July 2017, the time for the filing and service of the third defendant's defence to the statement of claim was extended to 21 July 2017 and the third defendant was ordered to file and serve any defence to the second defendant's cross claim by 23 August 2017.
9. The third defendant filed a verified defence to the statement of claim on 24 July 2017. The third defendant's address was noted on the defence as an address in Smithfield.
10. On 30 August 2017, the court ordered the plaintiffs to serve all their evidence on the defendants by 25 October 2017 and that the defendants serve their evidence in reply by 29 November 2017.
11. On about 4 September 2017, the third defendant filed and served her defence to the second defendant's cross claim.
12. On 25 October 2017, the plaintiffs served copies of their affidavits and annexures, with certified English translations of those original documents that were in Vietnamese, on the solicitors who were then on the record for the second and third defendants, respectively. Mr Vuong also forwarded by express post copies of all the three plaintiffs' affidavits and exhibits, with the certified English translation of documents in Vietnamese, to each of the second and third defendants at their addresses at Fairfield and Smithfield respectively (see [18]-[22] of Mr Vuong's 20 December 2017 affidavit).
13. On about 1 November 2017, the solicitors for the second defendant filed a notice of ceasing to act in the proceedings. On about 15 November 2017, the solicitors for the third defendant filed a notice of ceasing to act in the proceedings.
14. There was no compliance by the second and third defendants with the order for the service of their evidence by 29 November 2017.
15. The matter came before the Registrar on 6 December 2017. On that occasion a solicitor, Mr Zaki Hajjar of Hajjar Legal, attended court and spoke on behalf of both the second and third defendants. He had not filed a notice of change of solicitor on their behalf and was not then (nor is he now) on the record as acting for either of the second and third defendants. On that occasion, an order was made for the second and third defendants to serve their evidence not later than 18 December 2017. Also on that occasion, Counsel for the plaintiffs informed the Court and Mr Hajjar that should the second and third defendants fail to serve their evidence by 18 December 2017 the plaintiffs would move the Court for summary judgment against them on the next occasion the matter was listed before the Court on 20 December 2017. Although Mr Hajjar was not formally on the record as acting for either of the second and third defendants, it can be assumed that (consistent with his duties as a solicitor and officer of the Court) he informed the second and third defendants (for whom he had chosen to speak when the matter was before the Court) of what had transpired on that occasion - and, particularly, it may be assumed that he advised the second and third defendants of the prospect of a summary judgment application if they failed to serve their evidence by the time specified.
16. Mr Hajjar has not filed a notice of acting for the second and third defendants. Nor has any affidavit evidence been served. There was no appearance when the matter was before the Court on 20 December 2017 before the Registrar.
17. The allegations made against, in particular, the second defendant are very serious. They are allegations of fraudulent conduct including the fabrication of false documents purporting to be issued by the Department of Immigration and Border Protection. It is alleged that the third defendant was complicit in defrauding the plaintiffs (or, more precisely, the first plaintiff) and that she received to her benefit some $173,750 of the total sum of $239,905 of which the first plaintiff claims to have been defrauded.

Present application

1. As noted earlier, the application before the Court on 29 January 2018 was for the defences of the second and third defendants to be struck out for want of prosecution pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 12.7(2) (UCPR); for judgment to be entered against the second and third defendants in favour of the plaintiffs in the amount of $239,905 jointly and severally, pursuant to UCPR r 13.1, and as against the first defendant pursuant to UCPR r 16.3, it being in default of compliance since 31 May 2017. An indemnity costs order was also sought.
2. As to service of the notice of motion on the second and third defendants, Mr Vuong has deposed in his affidavit affirmed 29 January 2018 to having forwarded, by express post, copies of the notice of motion and affidavit in support filed 20 December 2017 to the second defendant at his address registered for bail in the current criminal proceedings being prosecuted by the Commonwealth Director of Public Prosecutions (the Fairfield address) and to the third defendant at the address in Smithfield, being her registered address for bail in the criminal proceedings (at [4]-[6]). In each case, the addresses to which the documents were posted by express post were the addresses noted for each of the defendants on the verified defences filed in these proceedings and on the notice of intention of ceasing to act and/or notice of ceasing to act filed by the respective solicitors.
3. Further, Mr Vuong emailed copies of the notice of motion and affidavit in support to the second defendant's email address (as provided by a solicitor from Hajjar Legal, Mr Ibrahim Halabi and as confirmed by him when he was contacted by the plaintiffs' legal representatives at my request on 29 January 2018).
4. A licensed process server, Roderick Bruce Duncombe, has sworn an affidavit dated 25 January 2018 as to his attempts at personal service on the third defendant of the notice of motion and affidavit of Lai Vuong on three occasions and having been unable to gain access to the Smithfield property - it being a "gated" property with walls surrounding the perimeter of the property and the front entry gate being padlocked and closed. He deposed that there was no other means of access to the property. On the third occasion, Mr Duncombe placed the documents in a sealed envelope addressed to the attention of the third defendant and placed the envelope in the letterbox at the Smithfield address. Reliance is placed by the plaintiffs on UCPR r 10.26 in this regard, Mr Vuong having emailed the documents to the second defendant's email address (as noted above).
5. Pausing there, although notice strictly in the terms set out in UCPR r 10.26(1)(b) does not appear to have been sent to the third defendant, I am satisfied that the steps taken to bring the documents to the attention of the third defendant, coupled with the notice given of the intention to make the application when the matter was before the Court on 6 December 2017, are sufficient to have put the third defendant on notice of the plaintiffs' application for summary judgment. (In any event, as I ultimately declined to order summary judgment against the third defendant, nothing turns on the issue as to whether the steps taken to serve the notice of motion on her did cause her to be aware of the present application.)

Concurrent criminal proceedings

1. I raised with Counsel for the plaintiffs at the outset the issue as to whether the application should be heard pending determination of the criminal proceedings (even though there was no attendance by either of the second or third defendants to seek a stay of the proceedings). The plaintiffs provided submissions in support of the proposition that there should be no stay of the civil proceedings, noting that the burden is upon a defendant to show that it is just and convenient that the plaintiff's ordinary right to have the proceedings proceed to hearing in an ordinary way should be deferred because of potential injustice in relation to the defence of criminal proceedings and that a party seeking such a stay must demonstrate substantial or material prejudice to justify the grant of a stay (see, in particular, McMahon v Gould (1982) 7 ACLR 202; Fotis v Favret (Supreme Court (NSW), Santow J, as his Honour then was, 8 May 1996, unrep); Philippine Airlines v Goldair (Aust) Pty Ltd [1990] VR 385). The plaintiffs pointed to the fact that the second defendant had previously elected not to pursue his notice of motion seeking a stay of the proceedings that was filed when the matter was in the District Court. The plaintiffs also submitted that the defendants cannot wish to protect their qualified right to silence since both participated in a record of interview in the criminal proceedings and filed a defence in these proceedings. It is further submitted that this is not a case that has attracted such publicity that it might influence persons who would or might be jurors in criminal proceedings. The plaintiffs submitted that any right to silence or protection against self-incrimination that the second or third defendants did wish to protect could have been protected by the application to the Court for a certificate pursuant to s 128 of the Evidence Act 1995 (NSW) or s 87 of the Civil Procedure Act 2005 (NSW) (which the plaintiffs would not have opposed).
2. Further, the plaintiffs say that the charges against the second and third defendants, other than the breaches of the Migration Act 1958 (Cth) are respectively charges of dishonestly obtaining financial advantage or causing disadvantage by deception and recklessly dealing with the proceeds of crime. It is submitted that the nature of the civil claims is fundamentally different from the criminal charges and that any findings in the civil proceedings would by definition only be on the balance of probability and would not meet the criminal standard of proof required to establish the elements of the offences with which the defendants are charged (noting of course that the allegations of fraud in the civil proceedings would need to be made out to the Briginshaw standard).
3. I was satisfied that it was appropriate to proceed and for the plaintiffs to be heard on their motion notwithstanding the concurrency of the criminal proceedings.

Determination

1. There is no doubt but that the first defendant has failed to take any step in relation to the defence of the proceedings and therefore, subject to a review of the pleaded claim, an order for default judgment to be entered would be appropriate.
2. As to the second and third defendants, no step appears to have been taken in the proceedings in relation to the defence of the proceedings since the filing of the defences. The third defendant's defence largely puts the plaintiffs to proof of the allegations (being largely comprised of non-admissions). The second defendant's defence is comprised largely of denials of the alleged representations (though he admits that if various representations were found to have been made they were in the course of trade and commerce). He admits that he was not a legal practitioner or a registered and qualified migration agent specialising in immigration. He pleads, for the purpose of a claim that any liability he may be found to have should be apportioned as between concurrent wrongdoers, that Mr Andrew Chinh Nguyen's conduct was the primary cause of all of the plaintiffs' damages claims and that he is a concurrent wrongdoer and, further, that the first defendant (as the second defendant's employer) is also a concurrent wrongdoer.
3. Neither of the second or third defendants has filed or served any evidence in his or her defence. Nor has any solicitor been appointed to act for them on the record in the proceedings. There has been no attendance by either since their legal representatives ceased to act (other than the attendance by Mr Hajjar who was not then and is not now on the record as at 6 December 2017). I am satisfied that there has been continued non-compliance with orders for the service of evidence and a want of prosecution of the second and third defendants' defence of the claims made against them. There is no indication that the second and third defendants propose to take any further steps to defend the proceedings.
4. It is relevant to note in this regard that the matters alleged against them, and in particular against the second defendant, are serious.
5. I was taken by Counsel through the evidence in support of the contractual claims made against the first and second defendants and I am satisfied that on that evidence the first plaintiff's claim as to the making of the respective contracts and as to the breaches of those contracts is made good. Insofar as the judgment sought to be entered is for the repayment of the amounts paid under the respective contracts, I am satisfied that, whether couched as a claim for breach of the contract or for (which was not pleaded as such) total failure of consideration, the plaintiffs' claims are made good. The second defendant admits that he was not a legal practitioner, nor was he a registered and qualified migration agent specialising in immigration. He clearly was not in a position to provide the services the subject of any of the three contracts, yet he was the person held out as the person to provide the services under the contracts entered into with the first defendant (of which he was the managing director). There was evidence of rescission of the first and second contracts and the evidence established a total failure of consideration in relation to the particular contracts.
6. I should add that the claims were made by all three plaintiffs (even though the contracts were not pleaded as having been entered into by all three of them) on the basis that the second plaintiff was acting as agent for the first and third plaintiffs in relation to the dealings between herself and the first and second defendants (statement of claim at [2]). In hindsight it may be that the orders should have differentiated between the three plaintiffs but that point was not raised at the time and, absent an application to vary the orders, I propose to leave the orders as pronounced.
7. I considered that in circumstances where what was pressed was the claim for the repayment of the moneys and that was made good on the contractual basis it was not necessary to consider the separate claims made for damages for misleading and deceptive conduct. Counsel for the plaintiffs did not raise objection to that course when I indicated the orders that I was proposing to make.
8. As to the claims made against both the second and third defendants for breach of fiduciary duty, I considered that these were more problematic. I was not prepared to enter summary judgment against either of them on that basis. It is by no means clear that there was a fiduciary obligation arising on the part of the second defendant separate from the obligations arising under the respective contracts (see, e.g., Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41; [1984] HCA 64). The position is even more difficult in relation to the third defendant. The only allegation against her in the pleading is that she was in a fiduciary relationship and owed fiduciary obligations because she was a director of the company in question. I do not accept that this claim is made out on the evidence before me (and it was ultimately conceded by Counsel for the plaintiffs that no Barnes v Addy claim was in fact pleaded against the third defendant).
9. Costs were sought on an indemnity basis. In circumstances where the conduct in which Mr Hoang engaged was very serious, and his conduct of the defence of the proceedings did not bear the hallmarks of being genuine, nor was it diligently prosecuted, I was satisfied that an indemnity costs order should be made against him.
10. It was for those reasons that I made the following orders: 1. Strike out the defence of the second defendant pursuant to Uniform Civil Procedure Rule 12.7(2). 2. Strike out the defence of the third defendant pursuant to Uniform Civil Procedure Rule 12.7(2). 3. Judgment for the plaintiffs in the amount of $103,380 jointly and severally as against the second defendant (pursuant to UCPR 13.1) and the first defendant (pursuant to UCPR 16.3). 4. Judgment for the plaintiffs against the second defendant (pursuant to UCPR 13.1 in the sum of $136,526). 5. Order the second defendant to pay the plaintiffs' costs of the proceedings on an indemnity basis. 6. Otherwise dismiss the proceedings.
11. Finally, I should make clear that it is a matter of concern that, at least on the face of the documents in evidence before me, Mr Hoang appears to have held himself out as having legal qualifications. On the evidence of the plaintiffs he represented himself as being a legal practitioner. He admits that he is not. Part 2.1 of the Legal Profession Uniform Law (NSW) (which applies in this jurisdiction by virtue of the Legal Profession Uniform Law Application Act 2014 (NSW) s 4) prohibits an unqualified entity from advertising or representing that it is entitled to engage in legal practice (s 11(1)) and provides for the designated local regulatory authority to take the necessary or proper steps to investigate and/or prosecute contraventions of this Part (s 14). I will direct the Registrar to issue to Mr Hoang a notice to show cause why he should not be referred to the Professional Standards Department of the Law Society of NSW in relation to this matter.

Amendments 07 February 2018 - Amendments to legislation on coversheet 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: 07 February 2018