Plaintiff v Defendants

2 The defendants relied upon the affidavit of the third defendant, Mr Morelli, affirmed 12 May 2022, the affidavit of the plaintiff's solicitor, Mr Amirbeaggi, affirmed 18 May 2022, and the defendants' written outline of submissions filed 20 May 2022. At the request of the parties the application has been determined on the papers.

3 All of the parties to the proceeding consented to an order being made transferring the proceeding to the Supreme Court of New South Wales. This consent does not relieve the court of the judicial function it is required to undertake pursuant to s 5(2)(b)(iii) of the Cross-vesting Act, or alter the nature or extent of that function.[1]

4 The dispute between the parties relates to the manner in which the plaintiff ceased to be a member of a partnership with the defendants, the terms of the partnership agreement, and the circumstances in which the plaintiff, the defendants and others entered into a deed of exit (Exit Deed) pursuant to which the plaintiff exited the partnership of Jirsch Sutherland. Among other things, it is alleged by the plaintiff that the defendants breached the partnership agreement, breached fiduciary duties owed to the plaintiff, engaged in unconscionable conduct, and exerted illegitimate pressure upon the plaintiff to enter into the Exit Deed. The relief sought by the plaintiff includes orders declaring the Exit Deed void or setting it aside, damages, compensation, and the taking of an account.

5 For the reasons that follow I have concluded that it appears that it is in the interests of justice that this proceeding be determined by the Supreme Court of New South Wales. Consequently, and as required by s 5(2)(b)(iii) of the Cross-vesting Act, I will make an order transferring this proceeding to the Supreme Court of New South Wales.

Transfer of proceedings under s 5(2) of the Jurisdiction of Courts Cross-vesting Act 1987 (Vic)

6 Section 5(2) of the Cross-vesting Act provides as follows:

Where -

(a) a proceeding (in this subsection referred to as the relevant proceeding) is pending in the Supreme Court (in this subsection referred to as the first court); and

(b) it appears to the first court that -

(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of another State or of a Territory and it is more appropriate that the relevant proceeding be determined by that other Supreme Court;

(ii) having regard to -

(A) whether, in the opinion of the first court, apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction, the relevant proceeding or a substantial part of the relevant proceeding would have been incapable of being instituted in the first court and capable of being instituted in the Supreme Court of another State or Territory;

(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters arising under or involving questions as to the application, interpretation or validity of a law of the State or Territory referred to in sub-subparagraph (A) and not within the jurisdiction of the first court apart from this Act and any law of the Commonwealth or another State relating to cross-vesting of jurisdiction; and

(C) the interests of justice -

it is more appropriate that the relevant proceeding be determined by that other Supreme Court; or

(iii) it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of another State or of a Territory -

the first court shall transfer the relevant proceeding to that other Supreme Court.

7 Principles and observations regarding the determination of transfer applications made pursuant to s 5(2) of the Cross-vesting Act (and s 1337H of the Corporations Act 2001 (Cth)) have been addressed in numerous authorities and are not relevantly controversial.

8 Relevant principles were helpfully summarised by Robson J in Irwin v State of Queensland[2] as follows:

7. The Jurisdiction of Courts (Cross-vesting) Act 1987 forms part of a common scheme adopted by the Commonwealth, and all the states and territories.

8. The preamble to the Act relevantly provides:

Whereas inconvenience and expense have occasionally been caused to litigants by jurisdictional limitations in federal, State and Territory courts, and whereas it is desirable - .... if a proceeding is instituted in a court that is not the appropriate court, to provide a system under which the proceedings will be transferred to the appropriate court.

9. Section 5 is headed "Transfer of proceedings." That section deals with various circumstances where proceedings may be transferred from one court to another. In several instances the court is directed to transfer the proceeding where it appears that it is more appropriate that the proceeding be determined by the other court.

10. The High Court of Australia held that provisions of the federal cross vesting statute were invalid that authorised the Federal Court to exercise jurisdiction (whether original or appellate) conferred on it by State law relating to cross-vesting of jurisdiction. This did not affect the validity of the scheme for cross-vesting between the Supreme Courts of the States.[3]

11. The provision relevant to this application to transfer this proceeding from the Supreme Court of Victoria to the Supreme Court of Queensland is in section 5(2)(b)(iii) of the Act. That relevantly provides -

...

12. A court may transfer a proceeding on its own motion as well as on the application of a party or on the application of the Attorney-General of the Commonwealth or of a State of Territory.[4] An appeal does not lie from a decision of a court in relation to the transfer of a proceeding.[5]

13. The High Court of Australia has considered the application of the Act in BHP Billiton Limited v Schultz.[6] Since that decision, several decisions in this court have considered the relevant principles that should be applied.[7] Many of these principles are set out in the decision of Gillard J's in Ewins as has been recognised in subsequent decisions of this Court.[8]

14. The relevant principles may be summarised as:

(a) The Act requires that the [first] court should exercise the power of transfer whenever "it appears" that it is in the interests of justice that it should be exercised.[9]

(b) It is not necessary that it should appear that the first court is a "clearly inappropriate" forum.[10] It is both necessary and sufficient that it appears that, in the interests of justice, the second court is more appropriate than the first court.[11]

(c) The Court is not concerned with the problem of a court, with a prima facie duty to exercise a jurisdiction that has been regularly invoked, asking whether it is justified in refusing to perform that duty. Rather, the Court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice.[12]

(d) The interests of justice are not the same as the interests of one party, and there may be interests wider than those of either party to be considered. Even so the interests of the respective parties, which might in some respects be common (as for example cost and efficiency) and in other respects conflicting, arise for consideration.[13]

(e) The power to exercise the jurisdiction is not a discretionary power but a mandatory obligation. No question of discretion arises.[14]

(f) It is inapt to speak of an applicant for an order for transfer as bearing a burden of persuasion analogous to an onus of proof.[15] Rather the jurisdiction must be exercised when "it appears" to the court that "it is in the interests of justice" that the proceeding be determined in the Supreme Court of another State or Territory rather than the court of where the proceeding has been issued.[16] Unless it so appears, the court does not have power under the Act to transfer the proceedings. To that extent it may be said that an applicant assumes some onus of persuasion.

(g) The court should adopt what has been described as a "nuts and bolts" management decision as to which court, in the pursuit of the interests of justice, is more appropriate to hear and determine the substantive dispute.[17]

(h) The appropriate court is the natural forum as determined by connecting factors to that forum.[18]

(i) Relevant connecting factors include matters of convenience and expense[19] such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law covering the relevant transaction.[20]

(j) In many cases there will be a preponderance of connecting factors with one forum so that it can readily be identified as the most appropriate of natural forum. In other cases, there might be significant connecting factors with each of the two different forums. Some of the factors might cancel each other out.[21]

(k) If the action is between two individuals, and the plaintiff resides in one area and the defendant in another, there may be no reason to treat the residence of either party as determinative, although it would ordinarily be the residence of the defendant that is important to establish jurisdiction.[22]

(l) Factors which may be relevant to a tortious action are:[23]

(i) The place where the wrong occurred.

(ii) Residence of the parties and where it is an individual, the place where he or she resides, and in the case of a corporation where it carries on business. The latter is not necessarily its place of registration, although of course the latter is important to ensure jurisdiction.

(iii) The convenience of the parties and witnesses. However in this day and age this factor may not carry substantial weight because of the ability to move witnesses around Australia at small expense and little inconvenience, and also because the provision of evidence by audio visual link.

(iv) The law governing the proceeding.

(v) The experience of a particular court and its ability to provide an efficient and speedy trial, for example a court with a particular evidentiary and procedural rules hearing particular types of cases.

(vi) The condition of a party, for example, in a personal injury case where life expectancy of the plaintiff is limited requiring a speedy outcome.[24]

(m) As a general rule significant weight is to be attached to the place of the tortious wrong and the residence of the parties in a personal injury claim arising out of a claim in tort.[25] Where the place of the tort and the residence of the parties coincides, this will generally be determinative of the issue of the appropriate court although other factors may need to be assessed in the process of determining where the interests of justice lie.[26]

(n) A relevant factor is whether the coincidence of the lex fori[27] and the lex loci delicti[28] will avoid debates concerning substantive and procedural law.[29]

(o) The plaintiff's choice of forum by itself is not a relevant connecting factor.[30]

(p) Each case depends on its own particular facts.[31]

(q) The list of connecting factors is impossible to state exhaustively. Equally the weight to be given to each factor must vary from case to case.[32]

...

15. Under s 5(1)(b) of the Jurisdiction of Courts (Cross-vesting) Act 1987 the question I must answer is does it appear to the Court that it is otherwise in the interests of justice that the relevant proceeding be determined by the Supreme Court of Queensland rather than the Supreme Court of Victoria? If it does so appear, I must transfer the proceeding to the Supreme Court of Queensland. I have no discretion in the matter. If it does not so appear, I have no power under the Act to transfer the proceeding to the Supreme Court of Queensland.

16. In answering that question, I must have regard to factors relevant to the interests of justice such as cost, expense and convenience to the parties, and weigh such factors up to reach a conclusion. Again, I have no discretion in the matter. Each case is decided on its own facts. The circumstances of each litigant will differ from case to case even where there might be a veneer of similarity between the basic elements of the proceedings in other decided cases.

9 I refer also to the observations of Debelle J in Dwyer v Hindal Corporate Pty Ltd[33] regarding the meaning of the expression 'interests of justice', including the need to interpret the expression broadly.[34]

10 Having regard to the evidence, the written submissions, the terms and operation of s 5(2) of the Cross-vesting Act, and the principles and observations earlier referred to, I am satisfied that it appears to be in the interests of justice that this proceeding be determined by the Supreme Court of New South Wales. Noting that the cross-vesting application was supported all parties,[35] my reasons for so concluding can be shortly stated.

11 On the evidence before the court there are a number of relevant connecting and related factors between the proceeding (and its subject matter) and the State of New South Wales that satisfy me that it appears to be in the interests of justice for the proceeding to be transferred. It is sufficient for present purposes to briefly mention the following.

12 First, the partnership agreement was drafted and prepared in New South Wales and signed by all parties in New South Wales.

13 Second, the Exit Agreement was drafted and prepared in New South Wales and, except for the plaintiff, was signed by all parties in New South Wales.

14 Third, the defendants who are the subject of the allegations made against them by the plaintiff are said to have been present in New South Wales at all relevant times.

15 Fourth, only two of the seven defendants reside out of New South Wales. It is not currently anticipated that those two defendants will give evidence.

16 Fifth, all defendants, including those who reside outside of New South Wales, have retained legal representation from practitioners whose practices are based in New South Wales.

17 Sixth, as things stand, it is currently anticipated that all witnesses of substance for the defendants will be people who reside in New South Wales.

18 Seventh, although the plaintiff resides in Victoria, he supports the application being transferred to New South Wales and is said to have retained legal representation, including counsel, from practitioners whose practices are based in New South Wales.

19 Eighth, it was accepted by the parties that additional expense and inconvenience will be incurred and experienced if the trial proceeds in Victoria and witnesses are required to travel to Victoria to give evidence. Having regard to the nature of the allegations made against the defendants regarding alleged unconscionable conduct and the exertion of illegitimate pressure, and the plaintiff's claimed special disadvantage, I infer that it is at least likely that any trial will proceed in person so long as health regulations permit. I note also the evidence regarding the defendants' view that there appears to be little prospect of resolution prior to trial.

20 Ninth, the choice of law clause in the partnership agreement refers to the laws of the State of New South Wales being the proper law of the agreement.[36]

21 Tenth, the choice of law clause in the Exit Agreement provides that the laws of the State of New South Wales are to apply to the exclusion of any other laws. There is also an exclusive jurisdiction clause in favour of the courts of the State of New South Wales.

22 Finally, and as I have observed, all parties to the proceeding support the application.

23 I am satisfied that it appears to be in the interests of justice that the proceeding be determined by the Supreme Court of New South Wales.

24 By their summons, the defendants also sought an order in the following terms:

Order that the Conditional Appearance filed by the Defendants is conditional on the transfer of these proceedings to the Supreme Court New South Wales, pursuant to Rule 8.08(3) and (4) of the Supreme Court (General Civil Procedure) Rules 2015.

25 It is not clear what is intended to be achieved by an order of that kind referred to. Although it is apparent from the court file that the defendants filed a conditional appearance, the proposed order referred to above was not addressed in the evidence or in the written submissions.

26 Pursuant to the terms of r 8.08(3) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), a conditional appearance shall have effect for all purposes as an unconditional appearance unless, on application by the defendants, the court otherwise orders. Such an application is required by r 8.08(4) to be made by summons within 14 days after the day the conditional appearance was filed. The conditional appearance in this proceeding was filed by the defendants on 29 April 2022, but the defendants' application by summons was not filed until 25 May 2022, and no application for an extension of time to file the application has been made.

27 Further and in any event, not only is it difficult to comprehend what is being sought by the terms of the proposed order, there is no evidence or submission before the court that establishes that the making of an order of the kind sought would be appropriate in the circumstances. The result is that no such order will be made and, insofar as this part of the summons was pursued, it will be struck out. However, the strike out order will be made without prejudice to the right of the defendants to make a future application of the kind contemplated should they be so minded and it is otherwise permissible.

28 This proceeding should be transferred to the Supreme Court of New South Wales pursuant to s 5(2)(b)(iii) of the Cross-vesting Act.

29 I propose to make orders to the following effect:

(a) Pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic), Supreme Court of Victoria proceeding S ECI 2021 04535 be transferred to the Supreme Court of New South Wales.

(b) Paragraph 1 of the defendants' summons filed 25 May 2022 is struck out.

(c) The costs of the proceeding in the Supreme Court of Victoria are reserved.

TRAJAN JOHN KUKULOVSKI (AS TRUSTEE FOR THE KUKULOVSKI FAMILY TRUST)

LLOYD GWYNNE KERR (IN HIS PERSONAL CAPACITY AND AS TRUSTEE FOR THE L & N KERR FAMILY TRUST)

BRADD WILLIAM MORELLI AS TRUSTEE FOR THE ARTEMIS NO.1 TRUST

GLENN ANTHONY CRISP AS TRUSTEE FOR THE CRISP FAMILY JS TRUST

ANDREW JOHN SPRING AS TRUSTEE FOR THE A & K SPRING FAMILY TRUST

MALCOLM KIMBALL HOWELL AS TRUSTEE FOR THE MTS FAMILY TRUST

[1] Similar observations have been made in other cases including, for example, Webster (as trustee for the Elcar Pty Ltd Super Fund Trust) v Murray Goulburn Co-Operative Co Ltd [2017] VSC 249, [15] (Croft J).

[2] [2011] VSC 291, footnotes included. See also Smartscaff Pty Ltd v Capital Scaffolding Pty Ltd (No 1) [2017] VSC 606; Kadac Proprietary Limited v Complete Health Products Pty Ltd [2015] VSC 613; Webster (as trustee for the Elcar Pty Ltd Super Fund Trust) v Murray Goulburn Co-operative Co Ltd [2017] VSC 249; Tasmanian Land Company v Van Dairy Group Pty Ltd [2018] VSC 618; Sakura Energy Australia Pty Ltd v Yu [2020] VSC 517; Gepps Pty Ltd v O'Brien [2020] VSC 448; Tardis Nominees Pty Ltd v Ocean 3D Film Pty Ltd (in liq) [2020] VSC 494; Re Quirky Mama Productions Pty Ltd [2021] VSC 514; Baker v Morona [2021] VSC 643.

[3] Re Wakim; Ex parte McNally (1999) 198 CLR 511. See discussion by Gummow J in Schultz at [47].

[4] Section 5(7).

[5] Section 13. As Gillard J points out in Ewins v BHP Billiton Limited [2005] VSC 4 (Ewins) at [10] there is a right of appeal from a single judge to the High Court pursuant to s 73(ii) of the Constitution subject to leave.

[7] Ewins; Hall v Australian Finance Direct Limited [2005] VSC 306 per Hollingworth J (Hall); Slater & Gordon Pty Ltd v Porteus [2005] VSC 398 per Whelan J (Slater & Gordon); McLeod v Munro [2005] VSC 375 per Dodds-Streeton J (McLeod) Simpson v Francke [2006] VSC 200 per King J (Simpson); Holt v Rorehan [2006] VSC 148 per Harper J (Holt); Eden v Amaca Pty Ltd [2007] VSC 374 per Kaye J (Eden); Kellow v Irish Murphy's Pty Ltd [2010] VSC 239 per Warren CJ (Kellow); Lloyd v Riverland Regional Health Services Inc [2010] VSC 350 per Emerton J (Lloyd).

[9] Schultz at [14] per Gleeson CJ, McHugh and Heydon JJ and at [17] per Gummow J (with whom Hayne J agreed); and Ewins [16].

[10] The reference to a "clearly inappropriate" forum is the test adopted by the High Court of Australia in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 that should be applied in an application to stay a proceedings on the grounds of forum non conveniens. In Schultz at [7]-[11] Gleeson CJ, McHugh and Heydon JJ distinguish between the test to be applied in such an application and the test that should be applied in an application under the Jurisdiction of Courts (Cross-vesting) Act 1987.

[12] Schultz at [14] per Gleeson CJ, McHugh and Heydon JJ when distinguishing between an application for a stay on the ground of forum non conveniens and an application under the Act.

[13] Schultz at [15] per Gleeson CJ, McHugh and Heydon JJ.

[14] Schultz at [62]-[63] per Gummow J (with whom Hayne J agreed); Ewins at [17].

[15] Schultz at [71] per Gummow J (with whom Hayne J agreed).

[16] Schultz at [71] per Gummow J (with whom Hayne J agreed); Bankinvest AG v Seabrook (1988) 14 NSWLR 711 per Rogers AJA at 727 (Bankinvest). In Ewins at [23] Gillard J held that although persuasive it was not adopted by the majority of the High Court. He said he was not prepared to accept that it represents the law.

[17] Bankinvest at 714 per Street CJ; approved in Schultz at [13] per Gleeson CJ, McHugh and Heydon JJ.

[18] Schultz at [10] per Gleeson CJ, McHugh and Heydon JJ; Spiliada Maritime Corp v Cansulex Ltd [1986] UKHL 10; [1987] AC 460 the House of Lords (Spiliada); Ewins at [31].

[19] Preamble to the Act "Whereas inconvenience and expense have..".

[20] Schultz at [18]-[19] per Gleeson CJ, McHugh and Heydon JJ.

[21] Schultz at [19] per Gleeson CJ, McHugh and Heydon JJ.

[26] James Hardie & Co Pty Ltd v Barry (2000) 50 NSWLR 557 (James Hardie) at 361 per Spigelman CJ.

[29] Schultz at 262 per Gummow J (with whom Hayne J agreed).

[30] Schultz; Ewins at [12]. Gummow J said at [77] in Schultz "The phrase "otherwise in the interests of justice" in sub para (iii) of s 5(2)(b) of the Cross-vesting Act requires the Supreme Court to determine a transfer application by identifying the more appropriate forum without any specific emphasis in favour of the choice of forum made by the plaintiff."

[33] [2005] SASC 24; (2005) 52 ACSR 335 [16]-[17].

[34] These observations were also referred to (and set out) by Croft J in Webster [2017] VSC 249.

[35] Including by the submission to the court of proposed consent orders on 5 May 2022 and the terms of the plaintiff's solicitor's affidavit of 18 May 2022.

[36] It also refers to the laws and the courts of the Commonwealth of Australia.