Cloud 9 smoke shop owner chases $2 million in lawsuit against former accountants

The Perth owner of Cloud 9 smoke shops has launched a $2 million negligence lawsuit against her former tax agent Bernard Hoey, intensifying the long-running legal saga surrounding the controversial businesses.

Linda Nguyen, 41, lodged the claim in the Supreme Court on August 25, alleging that accountant Hoey, the former principal of Burswood Partners, failed to properly manage the tax affairs of her network of companies and family trusts.

The writ, filed by Ms Nguyen’s lawyer Martin Bennett, claimed millions of dollars in trust distributions were wrongly recorded as loans as far back as 2018, exposing her businesses to heavy tax penalties.

One of her companies, JJJ Bros Corporate Pty Ltd, is seeking more than $2.1 million in damages, while other entities, including Cloud 9 outlets in Mandurah, Victoria Park and Armadale, are also claiming hundreds and thousands of dollars in compensation.

The writ also makes a claim against Hoey’s former partner, Amanda Robinett, on the basis that, solely by reason of their partnership, she is jointly and severally liable for the alleged wrongdoing of Hoey.

The case is the latest development in the turbulent history of Cloud 9.

The actions of Ms Nguyen’s former husband and ex-Cloud 9 director Hoang Nam Nguyen have put the smoke shop chain in the spotlight several times over the years. Between 2015 and 2016, police raided several stores and seized products containing synthetic cannabinoids.

Mr Nguyen, a trained pharmacist, was later sentenced to two years in jail after being caught with synthetic cannabis products branded as Wild Joker, Dark Phantom and Mr Nice, with the intent to sell them in his stores.

In 2016, Mr Nguyen was fined $60,000 for importing 2000 “ice pipes” commonly used to smoke methamphetamine.

He was also fined $2000 in 2018 for selling Jungle Juice Platinum, a product containing the poison isobutyl nitrate.

His legal troubles have continued. In January this year, the Supreme Court confirmed freezing orders on three of his properties: a house on Vincent Street in Mount Lawley, another in East Victoria Park, and a property on Cowle Street in West Perth.

All three were mortgaged by Westpac, which had not received repayments for years, with defaults back to 2017, in some cases.

Justice Stephen Lemonis ruled the bank could proceed with selling the homes to recover its debts, with any leftover money to remain frozen under the state’s confiscation laws.

Correction and apology to Amanda Robinett

An earlier version of this article suggested that the allegations of negligent conduct made in these proceedings were made against Amanda Robinett. This was incorrect. The claim against Ms Robinett arises solely from the fact that she was in partnership with Mr Hoey, for whose alleged conduct she is said to be jointly and severally liable. We apologise to Ms Robinett for the error.

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