KKL (Kangaroo Line) Pty Ltd (In Liquidation) v Beaufort Shipping Agency Pty Ltd (No.3)

[2014] NSWSC 173

Supreme Court

New South Wales

Medium Neutral Citation:

KKL (Kangaroo Line) Pty Ltd (In Liquidation) v Beaufort Shipping Agency Pty Ltd (No.3) [2014] NSWSC 173

Hearing dates:

24/02/2014

Decision date:

05 March 2014

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1) Notice of Motion dated 18 December 2013 is dismissed.

(2) Direct that no further applications or notices of motion are to be accepted for filing in these proceedings unless any such application or notice of motion is accompanied by a certificate signed by a practising barrister or solicitor certifying that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that that the application or notice of motion has reasonable prospects.

Catchwords:

PROCEDURE - civil - judgments and orders - application to set aside 1986 orders - notice of motion - notice of motion brought in original 1986 proceedings - bad in form - matter dealt with on numerous occasions by other judicial officers - vexatious - abuse of process - no attention to the principle of finality of litigation

PROCEDURE - civil - parties - applicant not a party - no standing - vexatious - abuse of process

Legislation Cited:

Companies (NSW) Code
Uniform Civil Procedure Rules 2005

Cases Cited:

D'Orta Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1
Vangsnes v Dunn, KKL's Liquidator [1988] NSWCA 246
KKL (Kangaroo Line) Pty Ltd (In Liquidation) v Beaufort Shipping Agency Pty Ltd [2011] NSWSC 314
KKL (Kangaroo Line) Pty Ltd v Beaufort Shipping Agency & Anor [2008] NSWSC 663
Nut Trading Co (Aust) Pty Ltd v KKL (Kangaroo Line) Pty Ltd (1997) 25 ACSR 580

Category:

Procedural and other rulings

Parties:

KKL (Kangaroo Line) Pty Ltd (In Liquidation P1)
Robert George Dunn (P2)
Beaufort Shipping Agency Pty Ltd (D1)
Croxfort Ltd (D2)
T Vangsnes (Applicant on the Motion)

Representation:

Solicitors:
No appearance (P1)
No appearance (P2)
No appearance (D1)
No appearance (D2)
T Vangsnes (Applicant on the Motion)
Solicitors:
No appearance (P1)
No appearance (P2)
No appearance (D1)
No appearance (D2)
T Vangsnes (Applicant on the Motion)

File Number(s):

1986/13267

Judgment

The Original Proceedings - 1986

1. More than 25 years ago, on 17 February 1986, this Court appointed Mr Robert George Dunn to be the liquidator ("the Liquidator") of KKL (Kangaroo Line) Pty Ltd ("KKL").

1. On 28 May 1986, Rogers J, sitting in the Commercial List, made orders in the liquidation, in accordance with a Motion filed by the Liquidator seeking approval to compromise the various claims which the Liquidator or KKL had, or may have, against the defendants named in those proceedings, and others, on the terms and conditions set out in a number of Agreements dated 14 May 1986.

1. The Liquidator tendered those Agreements to Rogers J and also tendered a Letter of Advice from Mr R P Meagher QC, which the Liquidator had obtained.

1. Rogers J made orders in terms of the Notice of Motion, and indicated they would come into force when the solicitor for two of the defendants provided his Associate with a letter that the solicitor's clients accepted the terms of advice proffered. It will be convenient to refer to the orders made by Rogers J as the 1986 Orders.

1. On 30 May 1986, the solicitor for two of the defendants sent a letter to Rogers J. The letter indicated his clients, having had access to additional material, had no objection to the Liquidator entering into an agreement dated 14 May 1986, with Mr Vangsnes. Thus, the only outstanding condition had been addressed.

1. The applicant, Mr Trygve Vangsnes, who was formally the managing director of KKL, and indirectly through an associated corporation, owned all of the capital in KKL, has never accepted that Rogers J made any order on 28 May 1986 or thereafter, and contends that various adverse consequences have occurred by reason of a mistaken belief on the part of the Liquidator that Rogers J had made orders to the effect of those to which I have referred.

1. As well, Mr Vangsnes has disagreed with, and sought to challenge, the Liquidator's justification for entering into the compromise agreement which was approved by the 1986 Orders.

The 1995 Challenge

1. Over 18 years ago, in 1995, Bryson J held that there were no substantial grounds for maintaining that the compromise reached by the Liquidator in 1986, and approved by Rogers J by the 1986 Orders, ought be re-opened.

1. Mr Vangsnes had sought leave to appear to argue against the compromise being maintained, and in favour of the re-opening of the compromise. On 16 May 1995, for reasons which he then gave, Bryson J rejected the application by Mr Vangsnes to appear and be heard.

1. On 23 August 1995, Bryson J gave reasons for ordering that it was proper for the Liquidator to distribute the assets of KKL to the creditors of KKL by way of first and final dividend. On 5 September 1995, Bryson J made formal orders directing, inter alia, that the Liquidator distribute the assets of KKL to creditors by way of a first and final dividend.

1. Once that dividend had been made, for all practical purposes the liquidation of KKL was at an end.

The 1997 Challenge

1. Over 16 years ago, in November 1997, in proceedings in the Equity Division in which Mr Vangsnes appeared and sought various orders, Einstein J sitting on an appeal from a decision of Master McLaughlin, comprehensively reviewed the matter, including the transcript of the remarks of Rogers J on 28 May 1986 and the 1986 Orders, and the judgment of Bryson J in 1995. Einstein J, amongst other things, granted the Liquidator's application that he be released as liquidator, and that KKL be dissolved pursuant to s 381(d) of the Companies (NSW) Code.

1. In his 86 page judgment delivered on 13 November 1997, Einstein J said, at page 76 ([617] of the reported judgment):

"KKL's assets have been distributed and the liquidator is now devoid of funds. Accordingly, the liquidator is now exposed to personal expense not only for the present applications but also on account of any further applications which Mr Vangsnes might make. That state of affairs comes about because the liquidator gave Mr Vangsnes and other creditors every opportunity to ventilate their concerns and, having done so, the liquidator then acted on the directions given by this Court to distribute the assets of KKL to creditors."

1. The reasons of Einstein J are reported as Nut Trading Co (Aust) Pty Ltd v KKL (Kangaroo Line) Pty Ltd (1997) 25 ACSR 580.

1. On 11 May 1998, the Court of Appeal dismissed Mr Vangsnes' application for leave to appeal from the judgment of Einstein J. The Court of Appeal ordered that he pay the costs of the application for leave to appeal.

1. The reasons of the Court of Appeal are published at Vangsnes v Dunn, KKL's Liquidator [1998] NSWCA 246.

The 2006 Challenge

1. Nearly 8 years ago, on 1 May 2006, McDougall J considered two Motions brought by Mr Vangsnes, each of which he dismissed. The substance of the applications made to McDougall J were that the 1986 Orders were the subject of certain conditions or the occurrence of certain future events, and as there was no proof of the occurrence of those events or the satisfaction of those conditions, accordingly, the 1986 Orders should be set aside.

1. McDougall J dismissed the Notices of Motion, finding that amongst other reasons, Mr Vangsnes had no standing to seek to set aside or challenge the 1986 Orders since he was not a party to those proceedings, they having been brought by the company in liquidation by its liquidator.

1. The principal of finality of litigation does not seem to be one with which Mr Vangsnes has any affinity.

The 2008 Challenge

1. On 2 July 2008, for the extensive reasons which he then published, Smart AJ dismissed another application brought by Mr Vangsnes seeking to challenge the authenticity of the 1986 Orders made by Rogers J, and seeking in effect to re-open the issues considered by Rogers J: KKL (Kangaroo Line) Pty Ltd v Beaufort Shipping Agency & Anor [2008] NSWSC 663.

1. At [51] his Honour said:

"Mr Vangsnes submitted that Justices Bryson, Einstein and MacDougall and the Court of Appeal [wrongly] proceeded on the basis that the [1986 Orders] had been made and entered. A careful examination of the Court files reveals that they were correct to so hold. The transcript of 28 May 1986, the letter of 30 May 1986 of Norton, Smith & Co., and the original sealed Order in the file signed by the Chief Clerk and the circumstances in which it came to be executed ... establish that there is no reason to doubt that orders were made on 28 May 1986 and subsequently entered on 22 March 1988."

1. Smart AJ's finding set out above directly related to an allegation that a document which was described as "Attachment JMM13" to the affidavit of James Millar sworn 20 July 1994, which contained a draft of the 1986 Orders, was defective, invalid and of no effect.

1. No appeal or application for leave to appeal has ever been filed with respect to this judgment. There has been no appellate challenge of any kind to the finding of Smart AJ that the 1986 Orders were correctly made and entered.

1. At [52], his Honour noted that there was a series of very strong discretionary factors against intervening. These included, amongst others:

• it was 22 years, at that time, since the orders were made, and over 20 years since they were entered;
• it would be inappropriate to call into question the validity of agreement made so long ago, approved by the Court and acted upon for so long;
• as at November 1997, and as a result of the orders of Einstein J, the liquidator's documents would have properly been destroyed and the liquidator was devoid of funds;
• KKL had been dissolved and removed from the Register; and
• Mr Vangsnes was a party to one of the original agreements made on 14 May 1986 and did not seek to set aside the agreement within a reasonable time.

1. Accordingly, his Honour dismissed Mr Vangsnes' Motion and ordered that he pay the costs of the former liquidator of the Motion.

1. Whilst the transcript of the proceedings before Smart AJ is not available to me, the judgment at [60] records a submission which was made to him by Mr Vangsnes in these terms:

"I have taken into account Mr Vangsnes' submission that he should not be ordered to pay any costs as he was acting in the public interest and seeking to maintain the integrity of this Court's processes. ... Mr Vangsnes' allegations were, after a detailed investigation, rejected. ... There are no free challenges, especially when other interested persons are put to expense."

1. The submission that Mr Vangsnes was seeking to maintain the integrity of the Court's processes, which was unsuccessful before Smart AJ, was again relied upon before me.

The 2009 Challenge

1. On Friday 28 August 2009, whilst sitting as Duty Judge, McCallum J was called upon to deal with a Notice of Motion which had been filed on 29 July 2009 which sought to attack the 1986 Orders and in particular the document described as "Exh JMM 13" which Mr Vangsnes submitted was not a correct record of the Court's 1986 Order.

1. For the reasons that she gave, her Honour dismissed the Motion. Her Honour formed the view that the issues which Mr Vangsnes wished to ventilate had been fully and adequately ventilated in the proceedings before Smart AJ, were the subject of Smart AJ's carefully reasoned judgment and, as Mr Vangsnes did not have standing to bring the applications in any event, his Motions were manifestly hopeless and ought be dismissed.

1. Her Honour concluded that the claims for relief brought by the two Notices of Motion disclosed no reasonable cause of action. Both Notices of Motion were dismissed.

The 2011 Challenge

1. Mr Vangsnes seemingly remained undaunted by his lack of success because on 8 April 2011, he sought to have Rothman J make orders the effect of which was to set aside the 1986 compromise between KKL and the creditors approved by Rogers J, by the 1986 Orders.

1. On 18 April 2011, Rothman J dismissed the proceedings for reasons which were published: KKL (Kangaroo Line) Pty Ltd (In Liquidation) v Beaufort Shipping Agency Pty Ltd [2011] NSWSC 314. He held that the matter had been adequately dealt with previously, including by Smart AJ and McCallum J, and further that Mr Vangsnes was not a party to the proceedings. His Honour said at [8]:

"The proceedings are now almost 30 years old and the Liquidator has passed away. There have been innumerable applications before the Court to achieve a result which, on each occasion, has been unsuccessful."

1. His Honour dismissed the Motions saying, at [13]:

"The claims for relief brought by Mr Vangsnes manifestly disclose no reasonable cause of action or basis for relief and, given the number of times with which this matter, or a similar matter, has been dealt, those claims are vexatious, unreasonable and an abuse of the process of the Court."

1. His Honour ordered that Mr Vangsnes pay the costs of all other parties to the proceedings on an indemnity basis.

1. Within a few weeks after the delivery of the reasons of Rothman J, the 1986 Orders became 25 years old. There is no other matter in the Common Law Division of this Court which continues to be active after celebrating its silver jubilee.

1. After the refusal over a period of nearly 20 years of six separate Judges of this Court, and two Judges of Appeal, to accede to the attempts of Mr Vangsnes to attack the 1986 Orders which were made in a case to which he was not party, the people of New South Wales were rightly entitled to conclude that Mr Vangsnes had exercised all possible entitlements to access the publicly funded court system to satisfy his seemingly insatiable need to ventilate his dissatisfaction with the 1986 Orders.

1. It might have been reasonably expected that after such a milestone as a silver jubilee, Mr Vangsnes would have retired gracefully to the shores of Lake Macquarie, there to live peacefully with his memories of his sea faring life.

1. But, alas, in late 2013 the lure of the inside of a courtroom in the Supreme Court building in Queens Square, Sydney was too powerful for Mr Vangsnes to resist. Like a magnetic force, the prospect of another attempt to have the Court deal with the 1986 Orders overcame all other things, and he emerged from his retirement to once again attempt to revive the proceedings.

The 2013 Challenge

1. On 18 December 2013, Mr Vangsnes filed a further Notice of Motion.

1. Mr Vangsnes described the person seeking the orders (himself) in the following way:

"Trygve Vangsnes, with reference to Justice McDougall's 1 may 2006 judgment that Mr Vangsnes has the leave of the Court to make a notice of motion for the Court on its own motion to set aside the purported consent order which is attachment 'JMM13' to James Millar's 20 July 1994 affidavit and which according to the Court in direction hearing on 11 May 2001 and Justice Smart's 2 July 2008 judgment is an entry of order that was not made by the Court pursuant to the Court's direction on 11 May 2001 is a Part 20, rule 10 matter than can be dealt with by the Principal Registrar in her Chamber." (sic)

1. The Motion also set out the relief claimed and orders which he sought. They are as follows:

"That the Court by its own motion and in accordance with Justices McDougall and Smart's 2006 and 2008 judgment and Registrar Berecry's 2001 Direction in the opening paragraph of page 1 above set aside or expunge 'JMM13' to James Millar's 20 July 1994 affidavit under Part 20, rule 10, the Slip Rule, by the Principal Registrar in his or her Chamber as according to the 2011 direction by the Court is the proper way to set aside an order such as 'JMM13' which also according to James Millar in his report to ASIC and sworn deposition before United States Judge Politan, after the alleged making and entry of 'JMM13', was not made by Justice Rogers as alleged in such purported consent order -

'JMM13' is further according to Wah Kwong President Frank Chao in sworn deposition before the United States Court in January 1991 under paragraph 'Wah Kwong on the Deed' on page 2 of the 'Notice disputing Facts and Authenticity of Documents' - an order which pretends to approve the admitted under oath fabricated justification for the liquidation of KKL in Clause 1 of the Deed on the subject page 2 - a Deed which is only signed by Frank Chao for reason identified under 'The Liquidator' on page 2 of the 'Notice disputing Facts and Authenticity of Documents' - and which this matter before this and the United States Court is all about." (sic)

1. Mr Vangsnes supported the Notice of Motion by a document which he entitled "Notice disputing Facts and Authenticity of Documents", and also by an affidavit of 21 February 2014.

1. That affidavit was accompanied by a very large number of documents in PDF format on a USB stick which was purportedly annexed to the affidavit. At Mr Vangsnes urging, I have read all of the documents copied onto that USB stick, together with the documents annexed to Mr Vangsnes' affidavit.

Discernment

1. I am satisfied that the Notice of Motion is bad in form, and is an abuse of the process of this Court and accordingly should be dismissed.

1. First, Mr Vangsnes purports to bring the Notice of Motion in the original 1986 proceedings to which he was not a party. He has no standing to bring the Motion. He was not a party to those original proceedings who could have been aggrieved by the relief which was sought in the proceedings, and the content of the 1986 Orders.

1. Secondly, there has been no change in circumstances since the judgments of Rothman J of 2011, McCallum J of 2009 and Smart AJ of 2008, such as would provide any basis for any further examination of the questions which have been previously dealt with on many occasions.

1. Thirdly, the reason advanced by Mr Vangsnes for the Court to make the order, is insufficient for the Court to do so. Mr Vangsnes acknowledged that he had no personal interest in the making of the order sought - he said in submissions that he was content to leave things "as they were". However, he submitted that having regard to the nature of the errors found by Smart AJ in his judgment in 2008, that there was a basis in the institutional integrity of this Court for the Court itself to correct the error. This submission reflected a submission which he had put to Smart AJ unsuccessfully, to which I have earlier referred.

1. Mr Vangsnes also seemed to submit that such a correction was appropriate so as to assist in negotiations between the Government of the Commonwealth of Australia and the Government of the United States of America with respect to a bi-lateral Free Trade Agreement.

1. These submissions are entirely misplaced. There is no evidence of any satisfactory kind before me that the 1986 Orders which are sought to be attacked by the Motion are at all relevant to any bi-lateral negotiations between the Government of the Commonwealth of Australia and the Government of the United States of America. The Minister for Trade and Investment, the Honourable Andrew Robb MP, although on notice of these proceedings, has not sought to intervene to provide any supporting evidence. I conclude that there is none, and that the 1986 Orders, as described in JMM13, are of no interest at all to the Australian Government.

1. The submission made with respect to institutional integrity is also misplaced. The first reason is that Smart AJ has already dealt with it and rejected it. The second reason arises because the litigation was engaged in between nominated parties. The Liquidator brought proceedings seeking the Court's approval with respect to a compromise agreement which he had entered into with the creditors of KKL. The Court simply approved that compromise agreement as it was permitted to do under the Companies (New South Wales) Code. In the absence of the Liquidator, the company which was in liquidation, and any of the creditors seeking any correction of the order, even if that be justified, there is no basis for the Court to be concerned with its own "institutional integrity".

1. This Motion is entirely misplaced. Mr Vangsnes has sought and been refused similar relief on many occasions in the past, and nothing has emerged in the course of this Motion that would result in any different outcome to those which have been previously determined by the Court. The continued attempts by Mr Vangsnes to relitigate the same issues, when he has previously been denied relief by the Court, amounts to an abuse of the processes of the Court.

1. I am satisfied that the provisions of r 13.4 of the Uniform Civil Procedure Rules 2005 are applicable and the Motion must be dismissed. As no other parties have attended, there is no need to order costs, and I will not do so.

Denouement

1. As these reasons show, Mr Vangsnes has absolutely no basis to continue to seek to re-agitate any of the issues which he has been doggedly pursuing. Rothman J described Mr Vangsnes' application before him as vexatious, unreasonable and an abuse of process. I have concluded also that these proceedings are vexatious and an abuse of the processes of the Court.

1. It is time that Mr Vangsnes stops bringing motions in these proceedings in this Court attempting to deal with the 1986 Orders, and associated matters. This matter is at an end, the company has ceased to exist, the liquidator has died, all monies have been distributed and the principle of finality of litigation has assumed its rightful pride of place.

1. As Gleeson CJ, Gummow, Hayne and Heydon JJ said in D'Orta Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 at [34]:

"A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be re-opened ..."

1. These are words to which Mr Vangsnes must in future give careful attention.

1. In order to ensure that there are no further attempts by Mr Vangsnes to re-agitate the issue in these proceedings which he has done in the past, I will give a direction that no further applications or notices of motion are to be accepted for filing in these proceedings unless any such application or notice of motion is accompanied by a certificate signed by a practising barrister or solicitor certifying that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that that the application or notice of motion has reasonable prospects.

Orders

1. I make the following orders:

(1)   Notice of Motion dated 18 December 2013 is dismissed.

(2)   I direct that no further applications or notices of motion are to be accepted for filing in these proceedings unless any such application or notice of motion is accompanied by a certificate signed by a practising barrister or solicitor certifying that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that that the application or notice of motion has reasonable prospects.

**********

Decision last updated: 05 March 2014