Nguyen v Phan (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2012 06727

MINH NGUYEN & ORS	Plaintiffs
v
TU PHAN & ORS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	26, 28 NOVEMBER; 1–4, 8–11, 17–18 DECEMBER 2014; 27, 28 JANUARY; 2–5, 9, 10, 12, 16–19, 23–26 FEBRUARY; 2, 11, 17, 18 MARCH 2015
FURTHER WRITTEN SUBMISSIONS:	24, 27 MARCH 2015
DATE OF JUDGMENT:	24 NOVEMBER 2015
CASE MAY BE CITED AS:	NGUYEN v PHAN (No 2)
MEDIUM NEUTRAL CITATION:	[2015] VSC 634

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EQUITY - trusts – express trusts – agreements - whether intention to create trusts manifest – certainty of intention – whether agreements existed – whether election not to perform agreement or purported agreement.

EQUITY – fiduciary duties – company directors – employees - whether duties as pleaded established.

CORPORATIONS – directors and officers – duties – whether duties as pleaded established.

PRACTICE AND PROCEDURE – pleadings – issues confined to pleaded case.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr I G Waller QC with Mr H L Redd and Ms K L Burgess	Baker & McKenzie
For the Defendants	Mr M D Wyles QC with Dr T J F McEvoy and Mr D J Fahey	Arnold Bloch Liebler

TABLE OF CONTENTS

A. Introduction 1

B. Early days in Vietnam 4

C. The Phan family progressively settle in Australia 6

D. The Phan family 8

D.1The Parents........................................................................................................................... 8
D.2The Relevant Children........................................................................................................ 8
D.3The Family Members – further details............................................................................. 9
D.3.1.. Son and his family................................................................................................... 9
D.3.2.. Thuy and her family................................................................................................ 9
D.3.3.. Thomas, Tina and their family............................................................................ 10
D.3.4.. Nga, Minh and their family................................................................................. 12
D.3.5.. Tinh, Joseph and their family.............................................................................. 13

D.4Other family members...................................................................................................... 13
D.4.1.. The remaining Relevant Children: Tru and Danh........................................... 13
D.4.2.. The cousins: Vien and Francis............................................................................ 14
D.4.3.. Uncle Tu.................................................................................................................. 15

D.5The trusts............................................................................................................................ 15
D.5.1.. The PN Unit Trust................................................................................................. 15
D.5.2.. The Phan United Family Trust............................................................................ 21

D.6The family gatherings....................................................................................................... 25

E. Overview of the witnesses and their evidence 26

E.1Approach to assessing evidence...................................................................................... 26
E.2The plaintiffs’ witnesses................................................................................................... 26
E.2.1... Thuy......................................................................................................................... 26
E.2.2... Minh......................................................................................................................... 27
E.2.3... Joseph...................................................................................................................... 29
E.2.4... Son............................................................................................................................ 30
E.2.5... Customer witnesses............................................................................................... 31
E.2.6... Vien.......................................................................................................................... 31
E.2.7... Brown...................................................................................................................... 32
E.2.8... Tuanh....................................................................................................................... 32

E.3The defendants’ witnesses................................................................................................ 33
E.3.1... Linh.......................................................................................................................... 33
E.3.2... Danh........................................................................................................................ 33
E.3.3... Tuan......................................................................................................................... 34
E.3.4... Chinh....................................................................................................................... 35
E.3.5... Thomas.................................................................................................................... 35
E.3.6... Tina.......................................................................................................................... 39
E.3.7... Uncle Tu.................................................................................................................. 39

F. Further relevant events before the incorporation of Roo Sheetmetal 40

G. Roo Sheetmetal – 1999 to mid 2002 42

G.1The initial steps.................................................................................................................. 42
G.2Details of family members working at Roo Sheetmetal up to mid 2002................... 43
G.2.1.. Tina.......................................................................................................................... 44
G.2.2.. Son............................................................................................................................ 44
G.2.3.. Joseph...................................................................................................................... 45
G.2.4.. Thuy......................................................................................................................... 46

G.3Increased turnover for Roo Sheetmetal.......................................................................... 51
G.4Introduction of Thuy, Son and Joseph as “partners”................................................... 52

H. The 2002 Agreement 53

H.1The approach...................................................................................................................... 53
H.2A meeting is arranged....................................................................................................... 56
H.3Competing contentions..................................................................................................... 56
H.4The 2002 agreement was struck....................................................................................... 61
H.4.1.. Thomas’ generosity............................................................................................... 61
H.4.2.. Previous arrangement at Double T Sheetmetal................................................. 62
H.4.3.. Stocktake as at 1 July 2002.................................................................................... 62
H.4.4.. Recognition Payments.......................................................................................... 63
H.4.5.. Bookkeeping concerning “old Roo” and “new Roo”....................................... 67
H.4.6.. Conduct as “employees” from 1 July 2002........................................................ 68
H.4.7.. The “will”................................................................................................................ 71
H.4.8.. Other property purchases and trusts created.................................................... 74
H.4.9.. The suggested alternative..................................................................................... 75
H.4.10Further matters of little probative value............................................................ 77

H.5The 2002 Agreement manifested an intention to create a trust as alleged................ 80

Events from mid 2002 83

J. The 2003 Agreement 88

J.1The approach...................................................................................................................... 88
J.2The agreed facts and the registered documents........................................................... 89
J.3Competing contentions..................................................................................................... 90
J.4The agreement reached in 2003....................................................................................... 92
J.5A further complication.................................................................................................... 101
J.6The 2003 Agreement manifested an intention to create a trust as alleged by the plaintiffs 102

K. Events from late 2003 to April 2009 (and related events) 103

L. The 2009 Agreement 115

L.1The approach.................................................................................................................... 115
L.2Agreed facts...................................................................................................................... 116
L.3Competing contentions................................................................................................... 116
L.4No express trusts created by the events in April and May 2009.............................. 119

M. Events from mid 2009 143

N. Events in 2012 150

O. Triangle Sheetmetal 173

O.1Background...................................................................................................................... 173
O.2The plaintiffs’ contentions.............................................................................................. 174
O.3The plaintiffs have not established Thomas beneficially owned or owns any shares in Thuan Phuoc................................................................................................................................. 175
O.4Issues concerning a dongle provided by Thomas to Francis.................................... 190
O.4.1.. Introduction.......................................................................................................... 190
O.4.2.. The plaintiffs’ allegations................................................................................... 191
O.4.3.. No case based on the computer dongle........................................................... 191

P. Further questions for determination 196

P.1Did the subject matter of the 2009 Agreement encompass any of the matters alleged at paragraph 20(a) to (c) of the Statement of Claim?...................................................... 196
P.2If the 2009 Agreement was entered into, did the 2009 Agreement end by reason of the matters alleged in paragraphs, 21, 25(c), 25(d), 25(f), and 25(g) of the Defence and Counterclaim?        196
P.3If the 2009 Agreement was entered into and an express trust was created as alleged by the plaintiffs, did those trusts end by reason of the matters alleged in paragraphs 20C, 20D, 21, 25(c), 25(d), 25(f), 26B(d), 26B(f), 26BB(g) and 26C of the Defence and Counterclaim?    199
P.4Were Minh, Thuy, Joseph, Son, and Thomas in the period 4 May 2009 to 1 July 2012:    202
(1)....... Associated with 1 another for a common end?............................................... 202
(2)....... In a commercial relationship based on mutual trust and confidence?........ 202
(3)....... Carrying on the business of Roo and Oz Sheetmetal for their joint advantage only?................................................................................................................................ 202

P.5Are each of Minh, Thuy, Joseph, Son and Thomas beneficially entitled to 20 percent of the issued shares in Roo and Oz Sheetmetal?.................................................................... 202
P.6Is Roo and Oz Sheetmetal beneficially entitled to all of the shares in Roo Sheetmetal? 203
P.7.................................................................................................................................... 203
(1)....... Did each of Minh, Thuy, Joseph, Son and Thomas determine that, from 1 July 2009, Roo and Oz Sheetmetal as the beneficial owner of Roo Sheetmetal would be the vehicle through which their joint endeavour would carry on business?.... 203
(2)....... If so, did such determination end by reason of the matters alleged in paragraphs 20C, 21, 25(c), 25(d), 25(f), 26B(d), 26B(f), 26BB(g) and 26C of the Defence and Counterclaim?...................................................................................................... 203

P.8.................................................................................................................................... 203
(1)....... Did Thomas owe to each of Minh, Thuy, Joseph, Son, and Roo and Oz Sheetmetal, the fiduciary duties alleged at:.......................................................................... 203
(a)........... Paragraph 26(c) to (e) of the Statement of Claim?........................ 203
(b)........... Paragraph 26A(a) and (b) of the Statement of Claim?................. 203

(2)....... If yes to question (1) above, were those duties brought to an end by reason of the matter alleged in paragraphs 20C, 21, 25(c), 25(d), 25(f), 26B(d), 26B(f), 26BB(g) and 26C of the Defence and Counterclaim?............................................................ 203

P.9Does Vien hold 1/3 of the issued shares in Thuan Phuoc on trust for Thomas?... 204
P.10Does Chinh Cong Tran hold 24.44 percent of the issued shares in Thuan Phuoc on trust for Thomas?............................................................................................................................ 204
P.11Was Triangle Sheetmetal’s business in Queensland an opportunity that belonged to Roo and Oz Sheetmetal?................................................................................................................. 204
P.12Was Roo and Oz Sheetmetal the owner of the dongle referred to in paragraph 33 of the Statement of Claim?........................................................................................................ 204
P.13Could the conduct alleged in paragraphs 30 to 39 of the Statement of Claim constitute a breach of the fiduciary duties as alleged at paragraph 26A(a) and/or paragraph 26(c) of the Statement of Claim?........................................................................................................ 204
P.14Did Thomas breach the fiduciary duties alleged:....................................................... 206
(1)....... In paragraph 26(c) of the Statement of Claim by reason of the matters alleged at paragraphs 40 to 42 of the Statement of Claim?.............................................. 206
(2)....... In paragraph 26(c) and 26(e) by reason of the matters alleged at paragraph 53 of the Statement of Claim?............................................................................................ 206
(3)....... In paragraph 26(d) of the Statement of Claim by reason of the matters alleged at paragraphs 55 to 57 of the Statement of Claim?.............................................. 206
(4)....... In paragraph 26(c) of the Statement of Claim by reason of the matters alleged at paragraphs 60 and 61 of the Statement of Claim?.......................................... 206
P.14.1. Thomas’ closure of Roo Sheetmetal’s term deposit accounts....................... 206
P.14.2. Alleged failure of Thomas to transfer shares in Roo Sheetmetal................. 207
P.14.3. Thomas’ handling of delivery of machines..................................................... 207
P.14.4. The Nerang Property.......................................................................................... 207

P.15.................................................................................................................................... 209
(1)....... Did:........................................................................................................................ 209
(a)........... Any of Minh, Thuy, Son and/or Joseph owe Roo Sheetmetal any of the fiduciary duties alleged at paragraph 9(c)(xii)(A) to (C) of the Defence and Counterclaim?.................................................................................... 209
(b)........... Thuy owe Thomas the fiduciary duties alleged at paragraph 25B of the Defence and Counterclaim?............................................................. 209
(c)............ Minh and/or Thuy owe Roo Sheetmetal the fiduciary duty alleged at paragraph 26AA(b) of the Defence and Counterclaim?
............................................................................................................................... 209

(2)....... If yes to question (1) above, did Minh and/or Thuy breach the fiduciary duty alleged at paragraph 9(c)(xii)(A) of the Defence and Counterclaim as alleged at paragraph 23B(b) of the Defence and Counterclaim?........................................................ 209
(3)....... If yes to question (2) above, did Minh and/or Thuy breach that fiduciary duty by reason of the conduct alleged in paragraphs 26 and 26BB of the Defence and Counterclaim?...................................................................................................... 209
(4)....... If so, has Thomas waived or otherwise acquiesced in respect of any rights he has concerning the breach of fiduciary duty alleged at paragraph 23B(b) of the Defence and Counterclaim as alleged at paragraph 35(c) of the Reply and Defence to Counterclaim?...................................................................................................... 209

P.15.1Fiduciary duties alleged to be owed to Roo Sheetmetal................................... 209
P.15.2Further allegations concerning alleged fiduciary duties owed to Roo Sheetmetal 211

P.16Did Minh and Thuy cause the assets and business to be removed from Roo Sheetmetal to Oz Sheetmetal for no consideration as alleged in paragraphs 26B(a)-(d), (g)-(h) and 26BB(a)-(g) of the Defence and Counterclaim?................................................................................ 211
P.16.1. Paragraph 26B of the Defence and Counterclaim........................................... 212
P.16.2. Paragraph 26BB of the Defence and Counterclaim........................................ 214
P.16.3. General submissions........................................................................................... 215
P.16.3.1.. Funds to PN & Nominees................................................................. 215
P.16.3.2.. Funds to the Phan United Family Trust......................................... 216
P.16.3.3.. Transfers to bank account of Roo and Oz Sheetmetal from 2009 to 2010.............................................................................................................. 217

P.16.3.4.. Taking Roo Sheetmetal’s business in mid 2009............................. 219
P.16.3.5.. Property purchases and Roo Sheetmetal funds............................ 220
P.16.3.6.. Payment of wages and superannuation......................................... 222

P.17Were any payments received by Oz Sheetmetal for work performed in the business of Roo Sheetmetal impressed with a trust in favour of Roo Sheetmetal as alleged at paragraph 24 of the Defence and Counterclaim?.................................................................................... 224
P.18Was the computer dongle held by Roo and Oz Sheetmetal as the wholly owned subsidiary of Roo Sheetmetal on trust for Roo Sheetmetal as alleged at paragraph 35B of the Defence and Counterclaim?.......................................................................................................... 226
P.19.................................................................................................................................... 226
(1)....... Did any of Minh, Thuy, Son and/or Joseph owe statutory duties to Roo Sheetmetal as alleged at paragraph 9(c)(xi)(A) and (B) of the Defence and Counterclaim pursuant to ss 181(1) and 182(1) of the Corporations Act 2001 (Cth)?............................ 226
(2)....... If so, did Minh and/or Thuy breach s 181(1) of the Corporations Act by reason of the matters alleged at paragraphs 23 to 23B of the Defence and Counterclaim as alleged at paragraph 23B(a) of the Defence and Counterclaim?................................ 226
P.19.1. Duties owed under the Corporations Act to Roo Sheetmetal......................... 226
P.19.2. Did Thuy breach s 181(1) of the Corporations Act as alleged?....................... 227

P.20.................................................................................................................................... 228
(1)....... If the answer to questions P.13 and/or P.14(4) above is yes, did or will any of Thomas’ breaches of the relevant fiduciary duties constitute a fraudulent and dishonest design as alleged at paragraphs 29J(b), 35A and 63 respectively of the Statement of Claim?................................................................................................................................ 228
(2)....... If so:........................................................................................................................ 228
(a)........... Is Triangle Sheetmetal accessorily liable for any of Thomas’ breaches of the fiduciary duties alleged at paragraphs 29J and 35 of the Statement of Claim?.............................................................................................................. 228
(b)........... Is Roo Sheetmetal accessorily liable for Thomas’ breach of the fiduciary duty alleged at paragraph 62 of the Statement of Claim?
................ .............................................................................................................. 228

(3)....... If so, have any of the plaintiffs suffered or will any of them suffer, loss and damage by reason of any of Triangle Sheetmetal’s or Roo Sheetmetal’s accessorial conduct?................................................................................................................................ 228

P.21Did Minh and/or Thuy aid and abet Roo and Oz Sheetmetal to obtain funds from Roo Sheetmetal to which Roo and Oz Sheetmetal was not entitled as alleged at paragraph 23B(c) of the Defence and Counterclaim?................................................................................ 228
P.22.................................................................................................................................... 230
(1)....... If Minh and Thuy held their shares in Oz Sheetmetal on trust for Roo Sheetmetal, have Minh and Thuy conducted the affairs of Oz Sheetmetal in a manner which is oppressive of and unfairly prejudicial to Roo Sheetmetal within the meaning of s 232 of the Corporations Act by reason of the matters alleged at paragraph 26B of the Defence and Counterclaim?............................................................................... 230
(2)....... If so, and in any event, have Minh and Thuy caused loss and damage to Roo Sheetmetal by reason of the conduct alleged in paragraphs 26B to 26BB of the Defence and Counterclaim?.............................................................................................. 230

P.23In the event that the allegation at paragraph 25(b) of the Statement of Claim is upheld (that each of Minh, Thuy, Son, Joseph and Thomas are beneficially entitled to 20 percent of the shares in Roo and Oz Sheetmetal, which in turn is beneficially entitled to all of the shares in Roo Sheetmetal):.............................................................................................................. 231
(1)....... Have Minh and Thuy acted in the affairs of Oz Sheetmetal (now Roo and Oz Sheetmetal) in their own interests rather than in the interests of the members as a whole or in a manner that appears to be unfair or unjust to Thomas within the meaning of s 461(e) of the Corporations Act by reason of the conduct alleged at paragraphs 26B, 26BB and 26C of the Defence and Counterclaim?............. 231
(2)....... Have Minh and Thuy conducted the affairs of Roo and Oz Sheetmetal in a manner that is oppressive of and unfairly prejudicial to Thomas within the meaning of s 461(f) of the Corporations Act by reason of the conduct alleged at paragraphs 26B, 26BB and 26C of the Defence and Counterclaim?............................................................ 232
(3)....... Is it otherwise just and equitable within the meaning of s 461(k) of the Corporations Act that Roo and Oz Sheetmetal be wound up?............................................. 232

P.24Are the plaintiffs entitled to any of the relief sought in:............................................ 232
(1)....... Paragraph A of the prayer for relief in the Statement of Claim as against Thomas?................................................................................................................................ 232
(2)....... Paragraph B of the prayer for relief in the Statement of Claim as against Triangle Sheetmetal?........................................................................................................... 232
(3)....... Paragraph D of the prayer for relief in the Statement of Claim as against Roo Sheetmetal?........................................................................................................... 232
P.24.1. Relief against Thomas......................................................................................... 232
P.24.2. Relief against Triangle Sheetmetal.................................................................... 234
P.24.3. Relief against Roo Sheetmetal............................................................................ 234

P.25Are Thomas, Triangle Sheetmetal and/or Roo Sheetmetal entitled to any relief sought in the prayer for relief in the Defence and Counterclaim?................................................... 234
P.25.1. Relief claimed by Thomas.................................................................................. 234
P.25.2. Relief claimed by Triangle Sheetmetal............................................................. 234
P.25.3. Relief claimed by Roo Sheetmetal..................................................................... 234

P.26Other relief........................................................................................................................ 235

Q. Other matters 236

Q.1Vietnamese culture and respect for elders................................................................... 236
Q.2English as a second language........................................................................................ 237
Q.3Form of pleading of express trusts................................................................................ 237

R. Conclusion 238

HIS HONOUR:

A. Introduction

This is an unfortunate case. It involves a family who travelled to Australia from Vietnam in a situation of adversity. A number of the family members worked together to establish themselves in Australia, but, having succeeded in business, now find themselves in a bitter dispute.

In essence, the dispute concerns whether the first defendant and first plaintiff by counterclaim, Tu Phan (he prefers to be called “Thomas”),[1] agreed to share the ownership of a company business he established from around 2000 onwards. The plaintiffs’ case is that Thomas agreed to this, and the manner by which it was to occur, by way of 3 separate agreements. The defendants deny the existence of the alleged agreements and contend the ownership has never been shared, has been wrongly taken from Thomas and, ultimately, Thomas has been improperly excluded from the business altogether.
[1]I will use first names when referring to many of the parties and witnesses in the case, given the commonality of surnames.

The original business was established by a company incorporated by Thomas, namely the fourth defendant, Roo Sheetmetal Pty Ltd (“Roo Sheetmetal”). Roo Sheetmetal commenced manufacturing airconditioning ducts in approximately July 2001, in the south eastern suburbs of Melbourne. Roo Sheetmetal initially leased a factory located at 36A Cambria Road, Keysborough.[2]
[2]From December 2000 to August 2002, Roo Sheetmetal conducted its business from the factory at 36A Cambria Road, Keysborough. From August 2002 to early 2006, Roo Sheetmetal operated from 38 Cambria Road, Keysborough. Also from mid 2003 to June 2009, Roo Sheetmetal used 40 Cambria Road, Keysborough for storage. From early 2006 to August 2008, premises at 17 Cambria Road, Keysborough were used. Finally, in August 2008, Roo Sheetmetal relocated to 76-78 Rodeo Drive, Dandenong.

On 3 September 2003, another company was incorporated, namely Oz Sheetmetal Pty Ltd (“Oz Sheetmetal”). From around 1 March 2004, Oz Sheetmetal conducted a like business to that conducted by Roo Sheetmetal. It was based in Sunshine North, principally so as to service customers in the west of Melbourne and beyond.[3]
[3]Oz Sheetmetal commenced its operations from 15-17 Arvona Avenue, Sunshine North and has remained at those premises. From mid 2004 to mid 2010, it also operated from 13 Arvona Avenue, Sunshine North. From mid 2010, in addition to Arvona Avenue, Roo and Oz Sheetmetal operated from 73 Venture Drive, Sunshine West. It also conducted business from 76-78 Rodeo Drive, Dandenong.

On 16 June 2009, Oz Sheetmetal changed its name to Roo and Oz Sheetmetal Pty Ltd (“Roo and Oz Sheetmetal”). Roo and Oz Sheetmetal is the fifth plaintiff and fifth defendant by counterclaim. (Although it is the same entity, I will refer to this company as both “Oz Sheetmetal” and “Roo and Oz Sheetmetal”, to accord with its name at the times in question.)

From 1 July 2009, the businesses previously conducted by each of Roo Sheetmetal and Oz Sheetmetal were effectively conducted as a single business by Roo and Oz Sheetmetal. In other words, Oz Sheetmetal’s business continued to be conducted by the same company (albeit its name was Roo and Oz Sheetmetal), but Roo Sheetmetal wound down its trading operations from 1 July 2009, and its business was conducted by Roo and Oz Sheetmetal. The combined business has been successful.[4]
[4]By way of illustration, according to the accounts of Roo and Oz Sheetmetal, the net profit for the financial year to 30 June 2012 was $3,868,968.94 on gross revenue of $13,099,330.96. For the financial year to 30 June 2013, the net profit was $3,397,327.74 on gross revenue of $11,912,171.38.

The agreements which the plaintiffs contend were entered into concern discussions in mid 2002 (“the 2002 Agreement”), around August 2003 (“the 2003 Agreement”), and around April and May 2009 (“the 2009 Agreement”) (collectively “the Agreements”).

It is an unfortunate case for a further reason. None of the parties maintained satisfactory records concerning agreements or arrangements entered into. To the extent that documentation was created at the relevant times, in some instances all parties contend for cases that, in significant respects, bear no resemblance to key documents. As a result, the court has been left with oral accounts of events that occurred many years ago with, on some occasions, little reliable contemporaneous documentation. Consequently, there is inherent uncertainty attaching to significant aspects of each of the competing cases.[5]
[5]Compare observations made in Watson v Foxman (1995) 49 NSWLR 315, 318.8–319.5 (McLelland CJ in Equity); referred to with approval in BHP Billiton (Olympic Dam) Corporation Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338, [687] (Tate, Santamaria and Kyrou JJA) and Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd [2013] VSCA 237, [159] (Warren CJ, Osborn JA and Macaulay AJA).

These difficulties were compounded by the manner in which some of the evidence was given at trial. The principal witnesses in this case were Thomas and his older sister, the second plaintiff and second defendant by counterclaim, Thuy Phan (“Thuy”). Neither of them was a satisfactory witness.[6] Both of them were willing to give evidence based on a reconstruction that suited their case. Further, the credibility of both of them suffered from their constant insistence (despite direction to the contrary) on not giving direct answers to questions put to them, and frequently and non-responsively telling their version of the case.
[6]See pars 128–131 and 170–182 below.

In short, in making the findings of fact in this case, I have been extremely circumspect about accepting the evidence of either of them at face value. It appeared that both of them believed they were morally in the right and were willing to give evidence to seek to achieve a particular result, rather than give wholly truthful evidence.

The relief sought by the plaintiffs is dependent upon them proving that each of the Agreements was entered into as alleged. Further, although it is not contended by the plaintiffs that any of the Agreements gave rise to a binding or legally enforceable contract, the plaintiffs’ case depends upon them establishing that each of the Agreements resulted in an express trust being created by which the legal ownership of the shares in the relevant company was held on trust in accordance with the terms of the Agreements respectively. Consistent with the manner in which the case was put by the plaintiffs, many of the allegations in response were made on the premise that either the plaintiffs were entirely unsuccessful in establishing any of the Agreements or they were successful in establishing all of them.

For the reasons that follow, the plaintiffs have established that the 2002 Agreement and the 2003 Agreement were entered into in or about mid‑2002 and August 2003 respectively. By reason of this, beneficial interests were created in the shares of Roo Sheetmetal and Oz Sheetmetal, as alleged by the plaintiffs. However, the 2009 Agreement was not entered into in April or May 2009, or otherwise. Accordingly, the beneficial ownership of Roo Sheetmetal and Oz Sheetmetal remained unchanged from what was agreed in 2002 and 2003.

Another significant issue in the case was whether or not Thomas had a financial interest in a business conducted by Triangle Sheetmetal Pty Ltd, the second defendant and second plaintiff by counterclaim (“Triangle Sheetmetal”). Triangle Sheetmetal was incorporated on 5 October 2011 in Queensland.

For the reasons stated below, the plaintiffs have failed to establish that Thomas had any financial interest in Triangle Sheetmetal. The plaintiffs also failed to establish that Thomas breached any of his fiduciary duties with regard to his dealings with Triangle Sheetmetal. It must follow that the case against Triangle Sheetmetal for being knowingly involved in Thomas’ breach of fiduciary duties must also fail.

The final statement of claim was filed by the plaintiffs on 18 February 2015 (“the Statement of Claim”). The final defence and counterclaim of the defendants was dated 23 February 2015 and filed on 2 March 2015 (“the Defence and Counterclaim”). The final reply and defence to counterclaim was dated 27 February 2015 and filed by the plaintiffs on 2 March 2015 (“the Reply”).

Given the state of the pleadings and the manner in which the case was conducted, it is not appropriate for the court to seek to formulate any relief which might be granted, until hearing further from the parties.

B. Early days in Vietnam

Tuong Phan (“Tuong”) and Thuan Lam (“Thuan”) (together, “the Parents”) lived in Da Nang in Vietnam where they married and had 12 children. One of those children died at a young age. The remainder (“the Phan Children”) grew up in Vietnam. Before the communist government came to power in Vietnam, Tuong worked for the government.

In the mid‑1960s, the family left Da Nang, which was apparently then a communist stronghold, and relocated to Quang Tin. A few years later, the family moved to Chu Lai in search of work. In Chu Lai, Tuong found work as a storeman for the United States’ army. After some time, the Parents bought a bakery and a pharmacy. At around the same time, the 3 older daughters made and sold clothes to assist the family, while the younger children all attended school.

In 1975, after some interaction with the communist government, the family fled. All members of the family left in 1 van. Having departed central Vietnam, the family moved to the south. They settled in a town called Long Khanh, about 80 kilometres from Saigon (now known as Ho Chi Minh City).[7]
[7]The “fall of Saigon” occurred in April 1975. However, the name of the city did not officially change from Saigon to Ho Chi Minh City until 2 July 1976 (by resolution of the National Assembly of the Socialist Republic of Vietnam). The parties referred to this city throughout their evidence as Saigon. For consistency, I shall do likewise.

In Long Khanh, the family purchased a small farm and grew rice. Thuy, the seventh child, was unable to finish her schooling because she had to work on the farm. Then, after a year and a half, Thuy and another daughter set up a small coffee and dessert shop. At this time, Thomas (who is the ninth child and 5 years younger than Thuy) still attended school.

The coffee and dessert shop that Thuy ran, ultimately with 2 of her sisters, was successful. Thuy worked hard in the years 1975 to 1980, supporting the family and enabling the younger children to finish their schooling. It was mainly from the proceeds of the shop that the family was able to afford a boat, which would later enable some of the family to leave Vietnam.

In 1978, Tuong had raised with the family the idea that they should escape from Vietnam by boat. In 1979, a boat was purchased, and the family spent a year restoring the boat so that it would be fit for travel. The timing of the departure had to be hastened, as the sixth child, Son Phan (“Son”), was conscripted to fight for the Vietnamese army in its war with Cambodia. Son is the third plaintiff and third defendant by counterclaim.

By 1980, the family was ready to implement an escape. Detailed preparations were made, which involved others. Although the boat was designed for only 79 or 80 people, 164 boarded the boat. It was agreed 6 siblings would depart. Son, Thuy and Thomas were amongst them. Others stayed behind. This allowed the coffee shop to remain open, and was done to create the impression that nothing had changed. The Parents also stayed behind.

In July or August 1980, the boat left Vietnam. The boat trip lasted 5 days and 5 nights, enduring a large storm, and 3 attacks from pirates. It reached Changaroo, Malaysia. The Phan siblings stayed in an immigration camp in Malaysia for approximately 6 weeks. During this time, Thuy looked after her younger siblings, including Thomas; in effect she took over the role of mother.

C. The Phan family progressively settle in Australia

Australia accepted the Phan siblings into its refugee program. Towards the end of 1980, they arrived in Australia.

The Phan siblings initially settled in Hobart and began to learn English. Some became more proficient with English than others.

Thomas and the younger children went to school. Thuy worked at a nursery, earning about $142 per week. From that income, Thuy bought clothes and food for the family. It was apparently a happy time and the siblings stuck together. The Catholic Church lent the family money for the purchase of a home. Initially, it appears they all lived in the home that was purchased.

Son worked in a bakery in Hobart, but after approximately a year and a half he moved to Sydney for work and to help repay the loan. Son worked 7 days a week. Also, at a time which is unclear, the fourth child, Tru, moved to Melbourne. After some time, Tru worked in the sheetmetal industry, and gained know-how concerning airconditioning ductwork fabrication.

Thuy stayed in Hobart to look after the children, including Thomas, and to raise them. She continued to work full time in the nursery.

In about 1987, Tru called Thuy and asked her to move to Melbourne to look for a better job. Thuy agreed to do so. Son had already moved to Melbourne, from Sydney, in 1986.

Thomas, meanwhile, had gone to Launceston to study marine engineering. While in Launceston, Thomas stayed with a local family. He would return to Hobart on the weekends.

Thuy borrowed $5,000 from Son to buy an over-locking machine and a sewing machine. Thuy then borrowed $25,000 from a family friend. They became partners in a sewing business in Brunswick, a suburb of Melbourne. Within 2 years, Thuy and her business partner had managed to build up the sewing business so that it had around 20 employees, and Thuy was able to repay the business loans.

In 1989, the Parents left Vietnam and moved to Melbourne. The family all lived together in a double-storey house in Keysborough that Son had purchased.

In around 1990, Thomas completed his bachelor of marine engineering in Launceston. He began working on ships, for weeks on and then weeks off. On the weeks off, Thomas would come to Melbourne and stay in what had become the family home in Keysborough. Thomas married Thuy Tran (known as “Tina”). Tina would stay in the Phan family home rent free, while Thomas worked on the ships. This continued until Thomas and Tina purchased their own house in Noble Park.

In the early 1990s, Thuy set up a new sewing business based in North Melbourne.[8]
[8]On the evidence it is not clear what happened to the sewing business established in Brunswick.

In 1992, Thuy and Trung Nguyen (“Trung”) married. In January 1994, Thuy and Trung had a baby and sold the North Melbourne sewing business. As a result of conducting the sewing businesses, Thuy came to learn “a bit about bookkeeping”. However, neither then nor later did Thuy become proficient with accounting or computers.

D. The Phan family

The familial relationships relevant to the proceeding are intricate. It is necessary to discuss further the connections and arrangements.

Annexure “A” to this judgment is a family tree (“the Family Tree”). The Family Tree records, amongst other things, the names and dates of birth of the relevant members of the extended Phan family. The persons shaded green gave evidence for the plaintiffs. Those shaded orange were witnesses for the defendants.

D.1 The Parents

Tuong was born on 2 June 1925 and Thuan was born on 2 October 1928. By the time the Parents had moved to Australia in 1989, most of the Phan Children had already immigrated to Australia. At the time of the events relevant to the proceeding, the Parents lived in Hampstead Road, Maidstone, Victoria.

Neither of the Parents gave evidence in the proceeding. However, it is clear from evidence given by other members of the Phan family that the Parents have been, and remain, an important part of the extended Phan family.

D.2 The Relevant Children

Of the 11 Phan Children, 7 are involved, either directly or indirectly, in the proceeding. The relevant individuals are (in order from eldest to youngest): Tru, the fifth child Danh Phan (“Danh”), Son, Thuy, the eighth child Tinh Phan (“Tinh”), Thomas and the youngest child Nga Phan (“Nga”) (together, “the Relevant Children”).

Tru, Danh, Tinh and Nga, although involved in some of the relevant events, are not parties. Tinh and Nga’s involvement includes the fact that each of their spouses, namely Hoa Nguyen (he prefers to be called “Joseph”) and Minh Nguyen (“Minh”) respectively, are plaintiffs and defendants by counterclaim.[9]
[9]Minh is the first plaintiff and first defendant by counterclaim. Joseph is the fourth plaintiff and fourth defendant by counterclaim.

For convenience, in summary, Minh, Thuy, Son and Joseph are each plaintiffs and Thomas is a defendant. I will refer to these individuals collectively in the judgment as “the Family Members”. Roo and Oz Sheetmetal is the remaining plaintiff. Triangle Sheetmetal and Roo Sheetmetal are the remaining defendants.

D.3 The Family Members – further details
D.3.1 Son and his family

Son was born in 1959. Son is married to Thuy Tran and together they have 2 children. Shortly after Son moved to Melbourne in 1986, he was employed full time as a diecast machine operator with Australian Die Casting Company, where he remained until 2007. As well as working full time, from 1995 to 1999 Son also worked part time at Double T Sheetmetal Pty Ltd (“Double T Sheetmetal”).

Until approximately 2012, Son and his family lived in Leonard Avenue, Noble Park, Victoria. They now live in Mayfield Drive, Keysborough, Victoria.

Son is presently employed as a production manager at Roo and Oz Sheetmetal.

Son gave evidence at trial in relation to (amongst other things): his involvement and employment part time from 1995 to 1999 at Double T Sheetmetal,[10] Roo Sheetmetal, Oz Sheetmetal, and Roo and Oz Sheetmetal; the Agreements; and the circumstances surrounding Thomas’ exit from Roo and Oz Sheetmetal.
[10]See pars 192-196 below.

D.3.2 Thuy and her family

Thuy was born in 1960. Thuy and Trung have 2 children.

Thuy and her family live in Village Way, Maribyrnong, Victoria. They have lived at that address since around 2009. However, between around 2002 and 2004, Thuy and Trung experienced some problems in their marriage. As a result, Thuy lived periodically with her sister Nga, and Minh, in Saltwater Crescent, Maribyrnong, Victoria.[11] Thuy was close to Nga and Minh. She was also close to her other siblings at the time.
[11]There are significant discrepancies in both the oral and written evidence regarding Thuy’s residential and postal addresses. It appears that, for the purposes of documentation, Thuy used various addresses concurrently between 2002 and 2013, including: Village Way, Maribyrnong; Saltwater Crescent, Maribyrnong (ie Minh’s address); Village Way, Maribyrnong (ie Joseph’s address); and Hampstead Road, Maidstone (ie the Parents’ address).

Some of Thuy’s employment history is set out above. That history demonstrates that, by 2002, she had some experience in business. However, she had only limited computer and accounting skills at that time.

Thuy is employed by Roo and Oz Sheetmetal and is also a director of that company. Trung is not a party to the proceeding. He was not called as a witness at trial.

Thuy gave extensive evidence at trial in relation to (amongst other things): the Phan family’s immigration to Australia; her involvement in the affairs of each of Roo Sheetmetal, Oz Sheetmetal, and Roo and Oz Sheetmetal; the Agreements; and the circumstances relevant to Thomas’ exit from Roo and Oz Sheetmetal.

D.3.3 Thomas, Tina and their family

Thomas was born on 12 July 1965. Thomas and Tina have 3 children.

Since early 2009, Thomas and his family have lived in Latrobe Street, Hughesdale, Victoria. Before this time, Thomas and Tina lived in Wilela Court, Noble Park, Victoria.

Thomas is the sole director of both Roo Sheetmetal and Mega Sheetmetal Pty Ltd (“Mega Sheetmetal”). Mega Sheetmetal was the third defendant and third plaintiff by counterclaim. On 17 December 2014 (ie the fourth week of the trial), the plaintiffs informed the court they no longer pursued any claim against Mega Sheetmetal. Consequently, Mega Sheetmetal was removed as a party to the proceeding. Thomas was never a registered director of Oz Sheetmetal (or Roo and Oz Sheetmetal).

Thomas gave extensive evidence at trial in relation to (amongst other things): the establishment and affairs of various sheetmetal companies in Australia, including Double T Sheetmetal, Roo Sheetmetal, Oz Sheetmetal, Roo and Oz Sheetmetal and Triangle Sheetmetal; the establishment and affairs of various duct and airconditioning companies in Vietnam, including Thuan Phuoc Co Ltd (“Thuan Phuoc”) and Xuyen Viet; the Agreements; and the circumstances surrounding his exit from Roo and Oz Sheetmetal.

Tina was born on 21 July 1970. Tina is not a party to the proceeding, but she was called as a witness by the defendants.

Tina gave evidence in relation to (amongst other things): the establishment of Roo Sheetmetal; Thomas’ involvement in Double T Sheetmetal and Roo Sheetmetal; the 2002 Agreement; and the circumstances surrounding Thomas’ exit from Roo and Oz Sheetmetal.

Linh Cong Tran (“Linh”) is Tina’s older brother. He was born on 5 July 1967. Linh lives in Da Nang City, Vietnam. Linh is not a party to the proceeding. He was called as a witness by the defendants.

Linh gave evidence at trial in relation to (amongst other things): his relationship with Thomas; the establishment of Thuan Phuoc and Xuyen Viet in Vietnam; and Thomas’ involvement in each of those companies.

Chinh Cong Tran (“Chinh”) is Tina’s and Linh’s first cousin. He was born on 2 November 1978. Chinh also lives in Da Nang City, Vietnam. Chinh is not a party to the proceeding. He was called as a witness by the defendants.

Chinh gave evidence at trial in relation to (amongst other things): his involvement in Thuan Phuoc and Xuyen Viet; and the working relationship between Thuan Phuoc and each of Roo Sheetmetal, Oz Sheetmetal and Triangle Sheetmetal.

D.3.4 Nga, Minh and their family

Nga was born on 30 November 1968. As already noted, she is not a party to the proceeding and did not give evidence. Her husband, Minh, was born on 2 October 1965 in Vietnam and arrived in Australia as a refugee in 1984. Minh is employed by, and is a director of, Roo and Oz Sheetmetal. Together Nga and Minh have 2 children.

In Australia, Minh completed his high school education. In 1987, he studied for a bachelor of electronic engineering degree, but after a year transferred to maths and computing, a degree he completed in 1992. In contrast to the other family members who gave evidence, Minh speaks very good English.

Until approximately 2011, Minh and his family lived in Saltwater Crescent, Maribyrnong, Victoria. Since that time, Minh and his family have lived in Market Street, Essendon, Victoria.

Minh gave extensive evidence at trial in relation to (amongst other things): his involvement in each of Roo Sheetmetal, Oz Sheetmetal, and Roo and Oz Sheetmetal; the 2003 and 2009 Agreements; and the circumstances relevant to Thomas’ exit from Roo and Oz Sheetmetal.

Tuanh Nguyen (“Tuanh”) is Minh’s niece. Tuanh was born on 19 June 1983. She lives in Deer Park, Victoria. Tuanh is not a party to the proceeding. She was called as a witness on behalf of the plaintiffs.

Tuanh is a senior associate in the corporate department of the law firm Baker & McKenzie (who are also the solicitors for the plaintiffs in the proceeding). Tuanh has worked at Baker & McKenzie since commencing as an articled clerk in March 2006. She was admitted to practice in 2007. Tuanh was appointed a senior associate on 1 July 2011. In this proceeding, she facilitated communications between the plaintiffs and the litigation lawyers at Baker & McKenzie.

Tuanh gave evidence at trial in relation to (amongst other things): her involvement in the proposed “merger” of the businesses of Roo Sheetmetal and Oz Sheetmetal; and, in particular, the 2009 Agreement.

D.3.5 Tinh, Joseph and their family

Tinh was born on 8 June 1963. She is not a party to the proceeding and did not give evidence. Her husband, Joseph, was born on 19 October 1967 in Vietnam. He immigrated to Australia in 1984, and initially lived in Sydney. After marrying Tinh in 1989, Joseph moved to Melbourne and started work as a mechanic. Initially, Thuy lived with them in Brunswick.

In 1991, Joseph purchased an existing motor mechanics business, trading as “P & Son Auto Repairs”. Thomas, Thuy and Tru each invested $5,000 in the business. When Thomas was not working on a ship, he would assist Joseph. Thomas sold his share in the business to Joseph in around 1995 or 1996. Joseph sold the entire business in August 1998 for $35,000, inclusive of stock.

Joseph is a manager at, and a director[12] of, Roo and Oz Sheetmetal. Tinh and Joseph live in Village Way, Maribyrnong, together with their children.
[12]Although his witness statement referred to him as a manager, when giving his oral evidence Joseph described himself as a director of Roo and Oz Sheetmetal.

Joseph gave evidence at trial in relation to (amongst other things): his involvement in Double T Sheetmetal, Roo Sheetmetal, Oz Sheetmetal, and Roo and Oz Sheetmetal; the Agreements; and the circumstances surrounding Thomas’ exit from Roo and Oz Sheetmetal.

D.4 Other family members
D.4.1 The remaining Relevant Children: Tru and Danh

Tru was born on 20 June 1954. Tru is not a party to the proceeding. He did not give evidence at trial.

Tru was, however, the subject of evidence of both sides in the proceeding in relation to his involvement in and ownership of Double T Sheetmetal.

Danh was born on 17 May 1957 in Vietnam and immigrated to Australia in 1980. Danh lives in Oak Park, Victoria. He is an accountant and a director of Phan Campbell & Associates, an accounting practice he founded in 1994. Danh is not a party to the proceeding. He was called as a witness by the defendants.

Danh acted as accountant for Roo Sheetmetal from its inception. Upon the incorporation of Oz Sheetmetal, Danh also acted as its accountant. Danh no longer does any work for either company.

Danh gave evidence at trial in relation to (amongst other things): the creation and lodgement of documents, and the preparation of accounts, reports and tax returns, for various entities associated with the Phan family, including the Phan Family Trust, the PN Unit Trust, Roo Sheetmetal, Oz Sheetmetal, Roo and Oz Sheetmetal and PN & Nominees Pty Ltd (“PN & Nominees”). PN & Nominees is the sixth defendant by counterclaim, and is the trustee of the PN Unit Trust.[13]
[13]See pars 87-90 below.

D.4.2 The cousins: Vien and Francis

Vien Phan (“Vien”) is the Phan Children’s cousin. He is the son of Tuong’s younger brother. Vien was born in Vietnam on 27 November 1976. He now lives in Sunshine West, Victoria and works at Roo and Oz Sheetmetal as an estimator.

Vien is not a party to the proceeding. He was called as a witness by the plaintiffs. Vien gave evidence at trial regarding his relationship with Thomas and his involvement with Thuan Phuoc and Xuyen Viet in Vietnam.

Like Vien, Dao Phan (also called “Francis”) is the Phan Children’s cousin. Francis was born on 7 December 1978. He is employed by and is a director and shareholder of Triangle Sheetmetal.

Francis is not a party to the proceeding. He did not give evidence. Francis was the subject of evidence given at trial, in particular, in relation to: his relationship with Thomas; his involvement in each of Roo Sheetmetal, Oz Sheetmetal, Roo and Oz Sheetmetal and Triangle Sheetmetal; and his involvement in the circumstances leading up to Thomas’ exit from Roo and Oz Sheetmetal.

D.4.3 Uncle Tu

Tu Nguyen (“Uncle Tu”) is not a member of the Phan family. However, he is referred to by Thomas as “Uncle Tu”.

Uncle Tu was born in Vietnam on 12 August 1927. He worked for many years in different roles, including as a bookkeeper, with the South Vietnamese army.

In 1993, Uncle Tu immigrated to Australia, together with his wife and an adopted child. Thomas acted as Uncle Tu’s sponsor for the purposes of his application for immigration. During 2009, Uncle Tu assisted Thomas with the renovation of Thomas and Tina’s house in Hughesdale.

Uncle Tu was not a party to the proceeding. He was called as a witness by the defendants. Uncle Tu gave evidence at trial in relation to (amongst other things): his relationship with Thomas, his renovation of the house in Hughesdale and the preparation of exercise books in which he kept records relevant to the renovation.

D.5 The trusts
D.5.1 The PN Unit Trust

As stated above,[14] PN & Nominees is the trustee of the PN Unit Trust. In early 2003, Thuy approached Danh and asked Danh to arrange the establishment of PN & Nominees. Thuy did not explain to Danh the purpose of incorporation. No one other than Thuy gave instructions to Danh. Thuy flatly denied giving instructions to Danh concerning PN & Nominees and the PN Unit Trust. She also asserted Danh explained the proposal to “all the siblings”.[15] Much of her evidence on this topic was non-responsive and conclusory. It was not credible. Indeed, some of the evidence must be treated as a complete fabrication. The plaintiffs’ counsel put none of Thuy’s evidence on these matters to Danh when he was in the witness box.[16]
[14]At par 78 above.
[15]Throughout the trial, the word “siblings” was used by the witnesses to refer not only to brothers and sisters directly related by blood, but also to brothers-in-law and sisters-in-law. For consistency, the use of the word in this judgment will also include this expanded meaning.
[16]See also pars 161-163 below.

According to Thuy, it was Minh’s idea to set up the PN Unit Trust.[17] This appears to be correct. Broadly, it was supported by Minh’s and Joseph’s evidence. Minh said it was both his and Thuy’s idea. At the time, Minh said the strategy was to reduce tax.[18] Joseph said Minh or Thuy made the suggestion. Joseph also said the incorporation of a company was discussed in or before March 2003, and that all the Family Members were present. In substance, Joseph’s evidence was supported by Thuy and Minh. I accept this evidence. The family met regularly. Although there was no precision as to exactly when or where such discussion took place, it is highly likely that such things were discussed at family gatherings.
[17]Later, Thuy appeared to recant this evidence, suggesting it was not her and Minh’s idea, but was the result of a meeting or discussion with all relevant parties: T407.04-408.22.
[18]Minh said that this strategy did not work, and so later on it was decided to desist with using PN & Nominees to purchase properties.

PN & Nominees was incorporated on 24 March 2003. The registered office and principal place of business was Minh’s home address in Saltwater Crescent, Maribyrnong. The defendants seem to suggest the use of this address was part of the covert operation being put in place. I reject this submission. Minh was a director. Further, in 2003, Thuy spent much of her time living at Minh’s home. In the circumstances, where Thuy was responsible for looking after the financial affairs of the family business, Minh’s home address was an obvious address to choose.

Shortly after incorporation, on 28 March 2003, PN & Nominees was appointed as the trustee of the PN Unit Trust. The trust deed was executed by each of Trung (as trustee for the Village Family Trust, being the family trust of Trung and Thuy),[19] Minh (as trustee for the Nga Phan Family Trust), Joseph (as trustee for the Vincent Family Trust), Thomas (as the sole trustee for the Phan Family Trust) and Son (as trustee for the Phan Family Trust).[20] Each of the trustee signatures was witnessed by Danh.[21]
[19]Thuy said it was signed at Danh’s office, and she was not present.
[20]The Phan Family Trust of Thomas was a separate family trust from the family trust of Son. Danh gave uncontested evidence that, at all times, Thomas was the sole trustee of the Phan Family Trust Danh established for Thomas.
[21]It is unclear whether or not Danh then became aware of the purpose of incorporating PN & Nominees as Danh was not cross-examined on his statement concerning his lack of knowledge about the reason for PN & Nominees’ incorporation.

Thomas and Minh were appointed as the directors of PN & Nominees. They both ceased to hold this position on 1 September 2003, and were replaced by Joseph. Danh could not recall why this occurred. Joseph said it occurred with the agreement of Thuy, Son, Thomas and Minh, but he could not recall the details of any discussion, when it occurred or why it was agreed. Minh suggested it was because the other Family Members (except for Son) were registered as directors and shareholders of the other companies, so it was decided Joseph should have a similar position for PN & Nominees. This appears to be a logical explanation.

Minutes of a meeting of the board of PN & Nominees, signed by Joseph, documented the resignations and his appointment. Joseph could not recall whether the meeting occurred. Later, consistent with Joseph’s appointment as the sole director, bank statements were directed to Joseph’s home address. This was done by Thuy. Joseph said it was done, after discussion among all the Family Members, just for convenience, but he could not recall any details.

In his evidence in chief, Thomas said he was unaware he had been a director of, and had never heard of, PN & Nominees or the PN Unit Trust. He suggested the first time he became aware of PN & Nominees was during discussions with his lawyer in 2013. This is difficult to reconcile with the fact that he signed a consent to act as a director of PN & Nominees dated 24 March 2003. Thomas accepted that, by putting his signature on the consent form, he was holding himself to the document he had signed, and that, by so doing he had accepted becoming a director. His explanation for signing the consent form was that he signed it because Thuy told him to.

But this does not explain away his assertion he had never heard of PN & Nominees before 2013. The explanation has even less weight given Thomas’ signature on the PN Unit Trust Deed dated 28 March 2003. The signature page refers expressly to PN & Nominees. Thomas also signed various other documents that expressly referred to PN & Nominees or the PN Unit Trust, or both.[22] The circumstances in which these documents were signed, as footnoted below, also lead me to reject Thomas’ alleged lack of knowledge of PN & Nominees or the PN Unit Trust.
[22]For example, see court book 4/1749 (see pars 338-340 below); 4/1754 (where PN & Nominees was referred to as “Customer” and PN & Nominees and/or the PN Unit Trust were referred to on at least 5 occasions, including immediately above where Thomas executed the document alongside Minh as directors of PN & Nominees); 6/3155 (being a guarantee and indemnity where PN & Nominees in its capacity as trustee for the PN Unit Trust acted as a guarantor), Thomas signing as a director of Roo Sheetmetal (as a guarantor) on a page which commenced with “Signature Section for Companies PN & Nominees Pty Ltd”; 6/3326 (being a guarantee and indemnity where Thomas signed as a director of Roo Sheetmetal (as a guarantor) on a page which commenced with “Signature Section for Companies” and the words “PN & Nominees Pty Ltd … as trustee for PN Unit Trust” appeared almost immediately below where Thomas signed); 7/3713 (being a letter to Roo and Oz Sheetmetal where Thomas signed as guarantor almost immediately above “PN & Nominees Pty Ltd … as trustee for PN Unit Trust”); supplementary court book 1/6337 (being another executed deed of the PN Unit Trust, which was plainly a different version of the deed referred to above: see date and different version of Thomas’ signature at 6349).

It is unnecessary to go in detail through each and every document Thomas signed referable to PN & Nominees and the PN Unit Trust. By way of illustration of Thomas’ unsatisfactory evidence concerning documents he signed, I refer to a guarantee and indemnity signed by Thomas in November 2009, in favour of National Australia Bank Limited (“National Australia Bank”) by which the guarantor (who included Thomas and PN & Nominees) guaranteed performance of the obligations of Roo and Oz Sheetmetal.

When taken to this document, Thomas said he understood that signing a guarantee was a serious matter and that the guarantors would have to pay the debt if the company could not pay. When it was put to him that he understood that in 2009, Thomas first answered “2009?”. When it was put to him again he answered “I can’t recall it”. When Thomas was then asked when he first learnt what a guarantee meant, he gave a non-responsive answer. When pressed with the same question, he accepted he learnt what a guarantee was in 1992. He then accepted he knew what a guarantee was in 2009.

Next, Thomas was taken to his signature on the guarantee that he executed in November 2009. That signature was immediately below the words “Signed, sealed and delivered as a deed by the guarantor” and had the words “Guarantor’s signature” in bold immediately below the signature. Thomas acknowledged it was his signature, but when it was put to him that he knew he was agreeing to sign as a guarantor when he signed the document, he answered “no”. In rebutting the suggestion that he knew, he said that normally Thuy told him where to sign. However, his signature was witnessed by a bank officer, not Thuy. Thomas said he remembered the bank officer signing her name as a witness after he signed. Whether or not the bank officer explained the document to Thomas (which Thomas said she did not), I do not accept that Thomas did not appreciate he was signing a guarantee in these circumstances.

This evidence was typical of Thomas seeking to avoid giving direct answers to questions concerning documents that he signed from time to time.

Another relevant document concerning PN & Nominees recorded Thomas resigning as a director on 1 September 2003. This document contained a signature above Thomas’ name. In the defendants’ closing submissions, they stated that Thomas was adamant that the signature on his purported resignation was not his signature. This did not accurately reflect the evidence.

Under cross-examination, when first taken to the document, Thomas denied it contained his signature. When asked if he knew whose signature it was, Thomas that the first part of the signature was his but the end part was not. Having reviewed many signatures of Thomas that appear throughout the court book, it is clear that the first part of the signature on this page strongly resembles Thomas’ signature.

When Thomas gave these answers, senior counsel for the plaintiffs declined to cross-examine on the issue further without obtaining instructions. Later, having obtained those instructions, he again pressed that Thomas had signed the document. Thomas disagreed stating that the signature finished in the wrong way. Based on this evidence, I cannot be satisfied that Thomas signed the document. However, I am equally not satisfied that someone purported to sign on his behalf. The strong resemblance of the first part of the signature to Thomas’ signature cannot be ignored. Further, senior counsel for the defendants did not put to any witness that the document had been falsely signed on behalf of Thomas.

Not all documents recording Thomas’ involvement in PN & Nominees are probative of Thomas’ knowledge. For example, minutes of a purported meeting between Joseph (as chairperson), Minh and Thomas, recording the appointment of Joseph as a director of PN & Nominees, together with the resignations of Minh and Thomas, do not satisfy me that the meeting ever occurred. When taken to the minutes, Joseph said he could not recall the meeting, but it had occurred because he signed he minutes. When pressed, he repeated he could not recall any such meeting. Minh gave no evidence of attending any meeting consistent with the minutes.

In the circumstances, there is substance to the defendants’ submission that the meeting as recorded in minutes dated 1 September 2003 was “a paper fiction”. I am not satisfied the meeting occurred. However, I reject the submission that “there were no consultations with Thomas as to the changes to the corporate structure of PN & Nominees”. The weight of the evidence compels a contrary conclusion.

Another reason for rejecting Thomas’ evidence as to his lack of knowledge of PN & Nominees is that the family then enjoyed an entirely harmonious and cooperative relationship.[23] Further, to the extent the defendants were suggesting that Minh and Thuy were seeking to deprive Thomas or Roo Sheetmetal of assets he or it owned, if that were the plan, it made little sense to have Thomas sign a consent to act as a director of the company he was supposed to know nothing about. There was no need to have Thomas as a director of the trustee, in addition to having him sign the trust deed.
[23]See pars 124-125 below.

Furthermore, it is not insignificant that, when Thomas tell out with the other Family Members and retained a solicitor in about late July 2012, the solicitor was “searching everything”, and that the searches conducted included a search of PN & Nominees (8/3932).[24]
[24]See also par 599 below. There was no evidence as to how or why the solicitor formed the view that PN & Nominees was a company that ought to have been the subject of a search.

The issue of Thomas’ knowledge of PN & Nominees and the PN Unit Trust cannot be completed without a reference to the manner in which Thomas gave evidence on the topic when it was first addressed in cross-examination. When asked when he first heard of PN & Nominees, Thomas stated he did not know “anything about that, the trust or anything”. When asked why he referred to the trust when asked about PN & Nominees, Thomas responded “what do you mean trust”. The following exchange then took place:

When I asked you, when did you first hear about PN & Nominees, do you remember, just now?---I don’t remember that.
You don’t remember me just asking you one minute ago when you first heard of PN & Nominees?---No, no.

I do not accept that Thomas had failed to remember a question asked of him only 3 questions previously. In giving the evidence that he did, Thomas was being deliberately evasive.

In summary, the evidence shows that from around March 2003 the Family Members were involving Minh in some way.[25] At this time, Thomas also wanted to help his youngest sister, Nga. With these objectives in mind, Thomas agreed to the PN Unit Trust being established and for each of the Family Members to be involved.
[25]See also pars 335-337 and 339-345 below.

D.5.2 The Phan United Family Trust

On 2 June 2005, the Phan United Family Trust was established, with Thomas, Thuy, Son, and Joseph appointed as trustees.[26] Each of them executed the trust deed.
[26]When an application was made for an Australian business number with the Australian Taxation Office on 15 May 2005, Son was listed as the only trustee. Thuy could give no explanation for this. She said it was corrected in 2007, but, when called for, no document was produced showing that the Australian Business Register had been amended.

Consistent with some other evidence given by Thomas concerning documents that he signed, when first taken to the deed, Thomas indicated a complete lack of knowledge of the circumstances in which the Phan United Family Trust deed was executed. Thomas said he was not familiar with the trust.

When it was put to Thomas that it was his idea to set up the trust, he said he did not know anything about it. Thomas said that it could have been Thuy’s idea, but he did not know whose idea it was. In contrast, Thuy said it was Thomas’ idea.

Thuy’s evidence was supported by Joseph. It was put to Joseph in cross-examination that it was Thuy’s idea. Joseph rejected this, stating it was Thomas’ idea as Thomas had said at the time that Thomas wanted to purchase properties through a trust. This was consistent with Thuy’s evidence that Thomas wanted to be able to take money from Roo Sheetmetal as rent.

I do not accept Thomas’ account of his level of knowledge. Thomas was plainly sufficiently proficient in reading English to have graduated successfully in his tertiary studies in Launceston many years before. The exams he passed were both oral and written, and in English. Since graduating in 1990 and before establishing Roo Sheetmetal, Thomas had worked on a ship and worked at Double T Sheetmetal speaking with co-workers, customers and suppliers in English.

Notwithstanding this background and that Thomas had been living in Australia for over 30 years, when his defence was filed in this proceeding (“the Original Defence”),[27] it contained an allegation that Thomas had a limited grasp of written English. This allegation was subsequently withdrawn.
[27]The Original Defence was filed on 1 February 2013.

Thomas gave his evidence in English. Although his English was not perfect, generally speaking, Thomas appeared more than capable of understanding what was being put to him. Also, when Thomas needed to read and respond to documents in English in the witness box, he was able to do so.[28]
[28]See, for example, T2017.14, 2096.22, 2139.13, 2156.09 and 2380.09.

His bare assertion that he was not familiar with the Phan United Family Trust, or the execution of the deed was not credible. By this stage, he had previously signed trust deeds.[29] Further, it was he who arranged for the document to be witnessed by a friend of his; this was not a case where Thomas simply signed a document by placing his signature where he was asked to sign. When pressed, Thomas acknowledged that he would have had to ask his friend to come to witness the document. Thomas volunteered that Thuy did not know the friend.
[29]In addition to the PN Unit Trust, Thomas had executed a deed of trust for the Phan Family Trust in 1997: see also par 90 and fn 20 above.

Furthermore, properties were purchased after the trust was created in accordance with Thomas’ plan. It is hard to accept that Thomas could have no idea that such transactions, involving large sums of money, occurred without Thomas having any understanding at all as to how the properties were to be owned. On the contrary, Thomas was actively involved in the decision-making concerning the purchase of property and the decision to pay rent, and the implementation of such decisions. In addition, Thomas himself was involved, at least once, in giving written instructions on behalf of the Phan United Family Trust.[30]
[30]See pars 425-428 below.

Moreover, Thomas executed documents referable to the property dealings of the Phan United Family Trust over an extended period of time. As late as November 2011 and February 2012, Thomas signed such documents relating to substantial sums of money.[31]
[31]See pars 421 and 504 below. Also see fn 281 below.

It should be noted that, before giving his evidence, Thomas appears to have instructed his counsel that it was Thuy’s idea to have the Phan United Family Trust established. During the cross-examination of Joseph, Thomas’ counsel specifically put to Joseph that Thomas’ evidence would be that it was Thuy’s idea.[32] I expect that, in a case of this size, Thomas had forgotten his previous instructions to his counsel by the time it came for him to give his evidence. In any event, the apparent previous inconsistent instructions of Thomas seriously undermined his initial attempt to suggest he knew nothing about whose idea it was to establish the Phan United Family Trust.
[32]Thomas was not in court for most of the time that the plaintiffs’ witnesses gave their evidence.

The trust deed was revisited in around 2007. Some of the names of the specified beneficiaries had been misspelt in the original deed. Thomas initialled these corrections. These initials were placed on a document already executed by all the parties. If Thuy or others were seeking to conceal what was going on, it seems highly unlikely they would reintroduce Thomas to a document already executed. Thomas agreed in cross-examination that he had initialled the document and, although he could not recall doing that, he accepted he had initialled a change to correct a spelling mistake.

Subsequently, a further trust deed was prepared in which the specified beneficiaries were included with their names typed correctly. Different solicitors were used to those who had prepared the previous deed. Thuy suggested she did not give instructions to create a new deed.[33] This version of the trust deed, which was executed on or about 20 February 2007, recorded Thuy as the only trustee. Thuy could give no explanation for this other than it was a mistake. This trust deed was only executed by Thuy, Son and an accountant. There were no documents produced which suggested any of Son, Thomas or Joseph had resigned as a trustee.
[33]It was not clear from this evidence whether Thuy was stating she did not give any instructions, or whether she was indicating that she did not do so alone and without the approval of Thomas, Son and Joseph.

Son was asked no questions about the circumstances in which he signed this document. Joseph was cross-examined as to why he was not recorded as a trustee. His response was, incorrectly, that it was a different trust. He said he recalled some explanation by Thuy that there were problems with the names, but he could not recall why there had been a change in the trustee name. No determination is required in this proceeding concerning the validity or otherwise of the deed executed on 20 February 2007.

Finally with respect to Thomas’ knowledge, he attended a meeting in late April or early May 2009 at which the Phan United Family Trust owning land was specifically referred to.[34] There was no suggestion from any witness that Thomas expressed any surprise about the existence of the trust.[35]
[34]See par 471 below.
[35]Thomas denied he was at the meeting, but this denial has been rejected: see par 453 below.

Before leaving this topic, I refer to a document signed by Thuy purporting to record a meeting of the “Trustee of The Phan United Family Trust”. It has a date stamped on it of 18 May 2012. It concerns the distribution of investment income. The “minutes of meeting” recorded Thuy, Son, Thomas and Joseph were present. The meeting never occurred. When Thuy was confronted with this suggestion, she said it was because they could not find Thomas. When asked when she was provided with the document, she could not say.[36] Whenever the document was provided, the position was unsatisfactory.
[36]The document had a facsimile header with the date 17 September 2014. It was page 7 of the fax. The previous page was draft minutes for the Phan United Family Trust for a meeting on 30 June 2009. These were not executed. Thuy gave evidence she had not seen the document dated 30 June 2009 before.

D.6 The family gatherings

To understand the dynamics and the context of communications between the Family Members in this proceeding, it is necessary to appreciate the closeness of the family before the matters in dispute arose. Speaking generally, the Family Members (and others) would get together every 2 weeks or so. These were not formal occasions. There would be more at some gatherings than others. However, not infrequently, all of the Family Members would meet with their respective partners. At these family gatherings there would often be informal discussions about the family business.

Accordingly, without being specific, it is highly likely that many matters were discussed on numerous occasions in the lead-up to the discussions that were relied upon in this proceeding.

E. Overview of the witnesses and their evidence

E.1 Approach to assessing evidence

The lack of reliable contemporaneous documentation, and the considerable lapse of time between the relevant events and the trial, necessarily requires the court to make a careful assessment of the credibility and reliability of each of the key witnesses. Accordingly, I will make some further observations in this regard before turning directly to the issues in the case.

For completeness, I will refer to the other allegations in paragraph 26B briefly. Paragraph 26B(e) alleged that, since 2011, Minh and Thuy ignored Thomas’ directions and instructions as to how the business was to be conducted and thereby deprived Roo Sheetmetal and Roo and Oz Sheetmetal of Thomas’ knowledge, skill and directions in the business of Roo Sheetmetal. Save that Thomas was excluded from the business in mid 2012 (after which he did not attempt to give any relevant directions or instructions), there is little or no evidence to support the allegation that Minh and Thuy otherwise ignored Thomas’ directions and instructions. That disposes of the allegation, but, to the extent the allegation appears to be premised, contrary to the findings above, on Thomas having authority to give directions and instructions that Minh and Thuy were bound to follow, the defendants have failed to make out the allegation.

Paragraph 26B(i) alleged Minh and Thuy wrongfully and without authority paid legal fees of Minh, Thuy, Son and Joseph for this proceeding from money belonging to Roo and Oz Sheetmetal in circumstances where Roo and Oz Sheetmetal makes no substantial claim in this proceeding. There was no issue that Roo and Oz Sheetmetal has met the legal fees of the plaintiffs in this proceeding.

Paragraph 26B(j) alleged Minh and Thuy wrongfully and unfairly caused Roo and Oz Sheetmetal to restrict and not make payment to Roo Sheetmetal of any dividend in the period since 2010 from the profits of Roo and Oz Sheetmetal. It has been found that dividends were paid in the financial years of 2010 and 2011.[487] Otherwise, no further dividends have been paid.[488] However, for most of Oz Sheetmetal/Roo and Oz Sheetmetal’s existence dividends have not been paid and Thomas has taken no exception to this. In the circumstances, the absence of dividends for the financial years ended 30 June 2012, 2013 and 2014 does not establish that Minh and Thuy have acted wrongfully or unfairly in this regard.
[487]See pars 535-540 above.
[488]See par 736 above.

Paragraph 26B(k) alleged Minh and Thuy failed to cause Roo and Oz Sheetmetal to register Roo Sheetmetal as its only member. There was no issue that Roo Sheetmetal has not been registered as the only member of Roo and Oz Sheetmetal, but there has never been any proper basis for doing so.

P.23In the event that the allegation at paragraph 25(b) of the Statement of Claim is upheld[489] (that each of Minh, Thuy, Son, Joseph and Thomas are beneficially entitled to 20 percent of the shares in Roo and Oz Sheetmetal, which in turn is beneficially entitled to all of the shares in Roo Sheetmetal):
(1)Have Minh and Thuy acted in the affairs of Oz Sheetmetal (now Roo and Oz Sheetmetal) in their own interests rather than in the interests of the members as a whole or in a manner that appears to be unfair or unjust to Thomas within the meaning of s 461(e) of the Corporations Act by reason of the conduct alleged at paragraphs 26B, 26BB and 26C of the Defence and Counterclaim?
(2)Have Minh and Thuy conducted the affairs of Roo and Oz Sheetmetal in a manner that is oppressive of and unfairly prejudicial to Thomas within the meaning of s 461(f) of the Corporations Act by reason of the conduct alleged at paragraphs 26B, 26BB and 26C of the Defence and Counterclaim?
(3)Is it otherwise just and equitable within the meaning of s 461(k) of the Corporations Act that Roo and Oz Sheetmetal be wound up?

[489]I have amended this question. The agreed question referred to paragraph 25(d) of the Statement of Claim. No such paragraph exists. I have assumed it was intended to refer to paragraph 25(b).

This question does not arise as the allegation in paragraph 25(b) of the Statement of Claim has not been upheld. Each of subparagraphs (1), (2) and (3) are contingent upon a finding that Minh, Thuy, Son, Joseph and Thomas were beneficially entitled to 20 percent of the shares in Roo and Oz Sheetmetal. Accordingly, there is no occasion, on the pleadings, to consider whether Minh and Thuy have acted in their own interests rather than in the interests of the members as a whole, or acted oppressively in the conduct of the affairs of Roo and Oz Sheetmetal or that it is otherwise just and equitable for Roo and Oz Sheetmetal to be wound up.

P.24 Are the plaintiffs entitled to any of the relief sought in:[490]
(1)Paragraph A of the prayer for relief in the Statement of Claim as against Thomas?
(2)Paragraph B of the prayer for relief in the Statement of Claim as against Triangle Sheetmetal?
(3)Paragraph D of the prayer for relief in the Statement of Claim as against Roo Sheetmetal?

P.24.1 Relief against Thomas

[490]Paragraph C of the prayer for relief sought orders against Mega Sheetmetal. No claim was pursued in this regard: see par 55 above.

Paragraph A of the prayer for relief sought various forms of relief against Thomas. I will deal with each of these in turn.

Equitable compensation was sought based on claims for breaches of fiduciary duties.[491] Those claims were unsuccessful. To the extent that the plaintiffs have been successful in establishing the existence of express trusts arising out of the 2002 Agreement and the 2003 Agreement, such claims do not give rise to a basis for equitable compensation. No claims for compensation were made on this basis in the Statement of Claim.[492]
[491]Plaintiffs’ closing submissions, par 6.
[492]The 2002 Agreement, the 2003 Agreement and the 2009 Agreement were pleaded collectively to found the relief sought. Alternate cases based on the 2002 Agreement alone, or the 2002 Agreement and the 2003 Agreement only, were not pleaded as independently forming a basis for relief: see also par 849 below.

A declaration was sought that Thomas holds the proceeds of the Term Deposits on constructive trust for Roo and Oz Sheetmetal. Those funds belonged to Roo Sheetmetal. Accordingly, there is no basis for the declaration sought.

Further to the declaratory relief, the plaintiffs sought an order directing Thomas to make restitution of the proceeds of the Term Deposits.[493] Again, this is not a claim properly made by the plaintiffs. Any claim would be that of Roo Sheetmetal, and Roo Sheetmetal has made no such claim in this proceeding.
[493]See fn 420 above.

Next, a declaration was sought that Thomas holds his shares in Roo Sheetmetal on trust for Roo and Oz Sheetmetal. Such declaratory relief was sought based on a claim that the 2009 Agreement was entered into. This claim has been wholly unsuccessful.

Consistent with the declarations sought as referred to in the previous paragraph, an order was also sought directing Thomas to take all steps necessary to transfer his shares in Roo Sheetmetal to Roo and Oz Sheetmetal. For the same reason, no such order should be made.

Declarations were sought giving effect to the 2009 Agreement. On the findings set out above, there is no basis for such declaratory relief.

In summary, in relation to the specific relief sought against Thomas, the plaintiffs have been wholly unsuccessful.

P.24.2 Relief against Triangle Sheetmetal

The plaintiffs have been wholly unsuccessful in seeking to establish any claim against Triangle Sheetmetal.

P.24.3 Relief against Roo Sheetmetal

The only substantive relief sought against Roo Sheetmetal was a declaration that Roo and Oz Sheetmetal is beneficially entitled to all the shares in Roo Sheetmetal. Such a declaration was dependent upon the plaintiffs establishing the existence of the 2009 Agreement, which claim has failed.

P.25Are Thomas, Triangle Sheetmetal and/or Roo Sheetmetal entitled to any relief sought in the prayer for relief in the Defence and Counterclaim?

P.25.1 Relief claimed by Thomas

The only relief specifically sought by Thomas was declaratory relief in the event that the plaintiffs established he owed fiduciary duties to the plaintiffs as alleged. Those fiduciary duties have not been established and accordingly no declaratory relief is appropriate.

P.25.2 Relief claimed by Triangle Sheetmetal

No relief was claimed by Triangle Sheetmetal.

P.25.3 Relief claimed by Roo Sheetmetal

Roo Sheetmetal sought declaratory relief concerning the ownership of Oz Sheetmetal, and the alleged relationship between Oz Sheetmetal and Roo Sheetmetal as subsidiary and holding company respectively. These claims have been unsuccessful.

Alternatively, on the basis that the court found that Thomas was only entitled to an interest in Roo and Oz Sheetmetal and Roo and Oz Sheetmetal was the owner of Roo Sheetmetal, then an order was sought pursuant to s 461 of the Corporations Act that it was just and equitable to wind up Roo and Oz Sheetmetal. The premise for the relief sought, namely that Roo and Oz Sheetmetal is the owner of Roo Sheetmetal, has not been established.[494] Accordingly, the relief as sought cannot be granted.
[494]See pars 361, 365, 394, 419 and 825 above.

Damages were sought from Roo and Oz Sheetmetal, being the going-concern value of the business of Roo Sheetmetal, and the assets and properties in which it held a legal and equitable interest, as at 30 June 2009. No evidence was led as to the value of Roo Sheetmetal as at 30 June 2009. With respect to damages generally, the defendants submitted that the court should order that damages be assessed. The parties will be given the opportunity to make further submissions on this issue.[495]
[495]See pars 793-795, 824 and 826 above.

Finally, an order was sought that PN & Nominees transfer title in the property at 15-17 Arvona Avenue, Sunshine North to Roo Sheetmetal. For the reasons set out in paragraphs 780 to 781, 796(2), 798 and 801 above, there is no basis for such an order.

P.26 Other relief

Both the Statement of Claim and the Defence and Counterclaim sought such further orders as, to the court, seemed appropriate.

In supplementary closing submissions dated 24 March 2015, the plaintiffs, at the request of the court, formulated further relief that might be sought based on express trusts established by the 2002 Agreement, or the 2002 Agreement and the 2003 Agreement. (Other scenarios were also addressed, but they are no longer relevant.) In a written response filed 27 March 2015, the defendants complained about these alternate forms of relief on the basis that the plaintiffs have not sought leave to amend the Statement of Claim.

I will refrain from expressing any concluded view as to what the appropriate orders might be with respect to the position that both Roo Sheetmetal and Roo and Oz Sheetmetal, and the Family Members, now find themselves in as a result of the findings in this judgment. After the parties have considered these reasons, I will invite further submissions. I would expect those submissions to include addressing whether or not a special referee[496] ought to be appointed by the court to oversee a proper taking of the accounts of each of Roo Sheetmetal and Roo and Oz Sheetmetal from 1 July 2002 to the present, so that the court may make appropriate orders in accordance with the findings made above. In making these observations, I express no opinion about whether or not further or other relief would be appropriate.

Q. Other matters

Q.1 Vietnamese culture and respect for elders

[496]Civil Procedure (General Civil Procedure) Rules 2005 (Vic), r 50.01.

Throughout the course of the trial, reference was made in the evidence to the Vietnamese culture and the respect shown to elders as part of that culture. By way of example, Chinh gave evidence that Thomas, “in hierarchical terms” was senior to him. He said that, if he was dealing with someone younger, he would ask his secretary or accountant to work with that person, but, if the person was older than him, then he would work with that person directly.[497]
[497]See also par 659 above.

No expert evidence was sought to be led on this issue.[498] Although there appears no doubt that respect for elders is intrinsic to both business and personal relations, I am in no position to comment on the Vietnamese culture generally. But, insofar as this respect was said to affect how decisions were made or how people interacted, it could be given little or no weight in this case in circumstances where younger siblings made decisions on numerous occasions that were either not in accordance with, or directly contrary to, the desires of an elder. By way of example only:
[498]I make no comment as to whether such evidence would be admissible: see Evidence Act, s 79.

(1)Thuy, the younger sister of Danh, withdrew Danh’s retainer as the accountant for Roo Sheetmetal and Oz Sheetmetal. Thomas (younger than both Danh and Thuy) was aware of this occurring, because Thuy told Thomas she had had a fight with Danh. Thomas said he acceded to Thuy’s desire to cease to use Danh’s services.
(2)Thomas, as the younger brother, would not agree with Tru’s decision as to how the business of Double T Sheetmetal was to be conducted. Thomas decided they should go their separate ways.
(3)Son is older than both Thuy and Thomas, but played a far lesser role in the management of Roo Sheetmetal and Oz Sheetmetal, and in the other significant decisions concerning family trusts and property acquisitions.[499]
(4)Minh, husband of the youngest sister Nga, and younger than each of Son, Thuy, Thomas and Joseph, was clearly a figure who exerted considerable weight and control in family relations, particularly as time progressed. The transcripts of meetings between the Family Members demonstrate Minh had no difficulty with showing disrespect towards Thomas.[500]

Q.2 English as a second language

[499]But also see pars 144-145 above.

[500]For example, Minh told Thomas in a meeting that Thomas talked like a child. Minh, on occasions, also raised his voice when addressing Thomas.

All of the key witnesses in this case either gave their evidence in Vietnamese, with the assistance of interpreters, or gave their evidence in English with Vietnamese being their first language. It appeared that, on numerous occasions, female and male pronouns were used interchangeably, so that on occasions a female pronoun was used when a male was being referred to, and vice versa. Sometimes this also occurred with nouns, such as niece or nephew. When I made this observation during closing submissions, all parties agreed that it was fairly made. Accordingly, this has been taken into account in understanding the evidence.

Q.3 Form of pleading of express trusts

With respect to each of the express trusts alleged, the Statement of Claim alleged “[b]y reason of” the Agreements the express trust arose.[501] This has already been addressed in the context of the 2002 Agreement.[502] More generally, the defendants submitted the language used was consistent with either an actual transfer of legal ownership or of the existence of a constructive trust, rather than express trust.
[501]As to the 2003 Agreement, the incorporation of Oz Sheetmetal, and the fact that the shares in Oz Sheetmetal were originally held in Minh’s name and then were held in Minh and Thuy’s names, was also referred to: see par 348 above.
[502]See par 327 above.

This submission focuses on form rather than substance. It was plain the case ultimately put by the plaintiffs was that the discussions giving rise to the Agreements manifested an intention for express trusts to be created.

R. Conclusion

Both the plaintiffs and the defendants have been largely unsuccessful in the cases they ultimately advanced to the court.

A pivotal aspect of so much of the plaintiffs’ case depended upon them establishing the existence and implementation of the 2009 Agreement. They have failed to do so on both counts.

Equally, a pivotal aspect of the defendants’ case was to establish that neither the 2002 Agreement nor the 2003 Agreement was struck, and that Thomas was the sole ultimate beneficial owner of all of the shares in Roo Sheetmetal and Oz Sheetmetal (later Roo and Oz Sheetmetal). Thomas has been entirely unsuccessful in this regard. He has also failed in establishing a significant amount of property was owned other than by PN & Nominees, the Phan United Family Trust or Roo and Oz Sheetmetal.

An interesting dynamic is this case centres upon numerous allegations concerning the implausibility of Thomas’ conduct. The defendants submitted it was implausible that Thomas would have agreed to effectively gift 75 percent of the ownership in Roo Sheetmetal to Thuy, Son and Joseph. Further, they submitted it would be implausible for Thomas to allow Minh, Thuy, Son and Joseph to have an interest in Oz Sheetmetal, in 2003, when the proposed business would compete with the existing business, owned by Thomas. However, the defendants also rely upon Thomas’ generosity towards others in seeking to establish that he engaged in a large range of activities and transactions concerning Thuan Phuoc and Triangle Sheetmetal, not because of any proprietary or beneficial interest, but because of Thomas’ charitable disposition.

Conversely, the plaintiffs said that Thomas entered into the 2002 Agreement and the 2003 Agreement, manifesting an intention to create a trust on each occasion which, on any view, can only be considered to be very generous conduct on the part of Thomas. The plaintiffs also acknowledged many other charitable acts on Thomas’ behalf. However, they then submitted it was implausible that Thomas helped Thuan Phuoc and Triangle Sheetmetal to the extent that he did unless he had some proprietary or financial interest in those businesses.

The submissions of the plaintiffs and the defendants are equally difficult to reconcile in this regard.

Thus, in reaching the conclusions set out above, generally, I have not acted upon submissions based on “implausibility” where they have been put forward based upon nothing more than a mere suggestion that Thomas would not have acted other than in his commercial interests. If 1 thing is abundantly clear in this case, Thomas’ actions have been motivated for many years not purely for commercial gain.

At the conclusion of the trial, the parties were urged by the court to find an alternate resolution to the dispute. They were informed that whatever the judgment ultimately delivered, no relief granted by the court would resolve the long-running and acrimonious family dispute. Those observations still apply.

The proceeding will be listed for a further hearing shortly. Before the further hearing, the parties are required to provide proposed orders to the court.

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Annexure A – Family Tree[503]

[503]See [37]. This family tree records the name and dates of birth of the relevant members of the extended Phan family. The persons shaded green gave evidence for the plaintiffs. The persons shaded orange gave evidence for the defendants. The judgment records the years in which Son and Thuy were born, but not the dates. It appears that the dates provided by the parties are in error as they suggest these 2 siblings were born less than 4 months apart.

[2015] VSC 634

24 NOVEMBER 2015