Plaintiff v First Defendant

2 This Ruling also deals with a contested claim of privilege over documents produced in response to subpoena by Salient Legal, a law firm that acted for the arbitration debtors.

(a) Lucy Williams, solicitor for the defendants, affirmed 25 July and 12 September 2025; and

(b) Feng Lin, solicitor for the plaintiff, affirmed 21 August, 18 December and 22 December 2025.

4 The following affidavits were relied on with respect to privilege:

(a) Lin, affirmed 22 December 2025 and 5 March 2026; and

(b) Fei Deng, director of the non-party, affirmed 23 February 2026.

5 GHV is located in Guangdong Province, China. Its representatives reside in China.

6 Shen resides in New South Wales. Shen was admitted as a solicitor in New South Wales in 2007 and has previously held a New South Wales practising certificate.

7 Shen's Lawyers is incorporated in New South Wales and its registered office and principal place of business is in New South Wales. Shen is the sole director and shareholder of Shen's Lawyers.

8 In November 2024, the Council of the Law Society of New South Wales appointed a manager to Shen's Lawyers to carry on the law practice and do all things that the law practice or legal practitioner might lawfully have done.

9 On 21 July 2022, the China National Economic Trade Arbitration Commission issued an arbitral award in favour of GHV against Bin Bin Jin & Lifang Zhu ('debtors') for approximately $17,375,250. GHV sought to enforce the arbitral award against the debtors in China and Australia.

10 On around 28 September 2023, GHV entered into a written costs/retainer agreement with the law firm ('retainer'). Work covered by the retainer included making enquiries to find the debtors, conducting searches and investigations to identify the assets of the debtors, and commencing proceedings in the Federal Court of Australia to freeze the debtors' assets in Australia. The retainer includes the following clause:

12. Jurisdiction of this matter

This agreement, shall construct, establish in Sydney, Australia and applies to Australian Law and only the courts of New South Wales have non exclusive jurisdiction.

11 The retainer appears to include a three-page document headed 'General Terms and Conditions', which sets out matters relevant to the charging and recovery of costs, and includes the following clause:

16. Governing Law

The law of New South Wales governs these terms and legal costs in relation to any matter upon which we are instructed to act.

12 On 24 February 2023, Zhu became the registered owner of a residential property in Toorak, Victoria ('property'). The title to the property was unencumbered.

13 On 2 August 2023, Zhu signed an agent's authority with RT Edgar Boroondara ('RT Edgar') for sale of the property. The property was subsequently marketed for sale by RT Edgar.

14 A contract for sale of the property was executed by Zhu on 13 October 2023. The sale price was $5,080,000 with a deposit of $508,000 payable on this date. The settlement date was 15 February 2024. The contract records the estate agents as RT Edgar and solicitors for the vendor as Salient Legal.

15 The deposit less the commission to RT Edgar was transferred at Zhu's direction on 30 October 2023. The contract settled on the scheduled date.

16 Lin produced bank and other records that GHV alleges show the deposit and balance of proceeds from the sale of the property were paid into the Commonwealth Bank of Australia accounts in the name of Qinhua Chen, mother of Zhu. Bank records produced by Lin show deposits into an account of Chen of $490,000 on 2 November 2023 and $5.5 million on 22 February 2024. Lin alleges the funds held by Chen were subsequently transferred to other persons related to the debtors. The bank records appear to show that the above funds were transferred from Chen's account on 19 July 2024.

17 GHV filed a writ and statement of claim commencing the proceeding on 23 June 2025. The law firm chose not to file a defence before the transfer application was heard.

(a) attempts to enforce the arbitral award in China against the debtors have been unsuccessful;

(b) after funds from the sale of the property were transferred, the debtors no longer have any assets in Australia; and

(c) from at least 10 May 2023, the debtors have resided in China.

(a) on 9 October 2023, it provided a title search to the law firm showing Zhu was registered proprietor of the property and that her interest was unencumbered;

(b) by that time the property was advertised for sale on well-known property websites in Australia; and

(c) on 24 November 2023, the law firm was given access to documents obtained by way of preliminary discovery in the Supreme Court of New South Wales which showed Zhu's current address as the property.

(a) on 23 February 2024, the law firm commenced proceedings on its behalf in the Federal Court against the debtors seeking enforcement of the arbitral award by way of judgment of the Court. It did not issue any application for a freezing order;

(b) on 16 May 2024, a freezing order was made against the debtors in respect of their Australian assets on application by the law firm made that day;

(c) on 3 June 2024, the freezing order was vacated at the request of the law firm;

(d) on 28 June 2024, a new freezing order was made in the Federal Court proceeding. That freezing order remains extant; and

(e) on 16 August 2024, judgment was given in the Federal Court proceeding in favour of GHV against the debtors with the effect that the arbitral award was enforceable against them as a judgment of the Court.

21 GHV claims the law firm's delay in applying for and obtaining a freezing order against the debtors was a negligent breach of the retainer that has caused it to suffer loss of the sale proceeds from the property.

22 The connecting factors between the proceeding and New South Wales overwhelmingly favour transfer to that state. The most significant of these factors is that the place where the wrong alleged by GHV occurred is New South Wales. The other connecting factors that favour transfer are:

(a) the retainer was made in New South Wales;

(b) the legal services were provided by the law firm in New South Wales;

(c) the registered address and place of business of Shen's Lawyers is New South Wales;

(d) the location of the law firm's lawyers and professional indemnity insurer and of Shen's Lawyers manager is New South Wales;

(e) the likely location of expert witnesses is New South Wales; and

(f) the law of New South Wales will govern determination of the claims made by GHV against the law firm.

23 While RT Edgar and Salient Legal are located in Victoria, the evidence from those organisations is unlikely to be controversial and will probably involve little more than the tender of documents by agreement. That is because it is unlikely there will be issues in dispute relevant to the marketing and sale of the property and transfer of the proceeds of sale.

24 It is possible the law firm will allege that the debtors are concurrent wrongdoers. There is a material difference between the law of New South Wales and the law of Victoria relevant to concurrent wrongdoers.

25 While a defence has not been filed, Williams has said that the law firm denies and intends to defend the claim. Evidence given by Shen will be critical to that defence.

26 It is the loss suffered by GHV as a result of negligent breach of the retainer by the law firm that crystalises the cause of action. That loss principally relates to dissipation of the proceeds of sale of the property. Accordingly, the lex loci delicti is Victoria.

27 Where the interests of justice lie on an application to transfer a proceeding must be assessed by reference to the real issues in dispute.[1] The law firm has chosen to proceed with this application before filing a defence. It is not appropriate to speculate whether a defence will result in there being issues in dispute in respect of which connecting factors favour transfer of the proceeding.

28 The law firm has not served any evidence to demonstrate a proper basis for denying liability on the claim made by GHV. In those circumstances, it is not possible to conclude that Shen will be required to give evidence about liability.

29 While the law of New South Wales may apply to determination of the dispute, there is no issue of law raised in respect of which the Supreme Court of New South Wales could be considered to have specialist knowledge. It is difficult to see how it could be suggested that, in the context of this claim, the proportionate liability regime within pt 4 of the Civil Liability Act 2002 (NSW) applies.

30 The assets under consideration, being the property and the proceeds of sale deposited into bank accounts, were located in Victoria. It is likely evidence will need to be called from Victorian witnesses, including persons from RT Edgar and Salient Legal. There is no reason why the experts engaged by the parties would need to come from New South Wales or have any specialist knowledge of the New South Wales jurisdiction. It would be equally appropriate for the parties to engage Victorian experts. Given the use of remote technology, Courts have not considered the locations of witnesses to be particularly relevant.[2]

31 The law firm has not discharged the persuasive onus it bears about the interests of justice favour transfer of the proceeding to New South Wales.

32 The Court must transfer a proceeding if it is in the interests of justice that it be determined by the Supreme Court of another state or territory.[3]

33 The appropriate forum will generally be determined by a consideration of the nature and strength of connecting factors between the claim made in the proceeding and the two states or territories under consideration.[4] I adopt the following summary of potentially relevant factors by Forbes J in Vernon v Kaefer Integrated Services Pty Ltd & Anor:

Proving the other court is the more appropriate forum does not require the first court to be shown to be clearly inappropriate. The starting point is the court in the place where the tort occurred. From the starting point, the court considers the relevant connecting factors to the first court and those of another court. Where there is a coincidence between the location of the tort and the residence of the parties, then the court of that place will generally be the more appropriate or natural forum. However, where there is not such a coincidence, the Court will consider and place appropriate weight on the various connecting factors to arrive at the more appropriate court. Different places of residence of the parties may cancel each other out as connecting factors to one or other forum. In Irwin v State of Queensland [[2011] VSC 291], Robson J summarised these factors in a tortious action such as in this proceeding as including: the place where the wrong occurred, the residence of the parties (and for a corporation the place where it carries on business), the convenience of parties and witnesses, the law governing the proceeding, the experience of a particular court and its ability to provide an efficient and speedy trial, and the health condition of a party.[5]

34 The cause of action relied on by GHV is negligence. The place of a tort will be determined by where the allegedly negligent conduct occurred and not by the consequences of that conduct.[6] In the case of an allegedly negligent omission 'it is possible to speak of the place of the act or acts of the defendant in the context of which the omission assumes significance and to identify that place as the place of the "cause of complaint"'.[7]

35 The fact that an applicant for transfer carries a persuasive onus is unlikely to be determinative of an application.[8]

36 There is no doubt the place of the cause of action relied on by GHV is New South Wales. The law firm was engaged by way of the retainer in New South Wales. That state was the principal state of business of Shen's Lawyers and the place where Shen practised as a lawyer. The law firm performed the work in accordance with the retainer in New South Wales. The acts and omissions of the law firm that are alleged to have breached the retainer occurred in New South Wales.

37 GHV is likely to call evidence at trial about the listing and marketing of the property for sale, payment of the deposit and settlement sum, transfer of those amounts to Chen, and the subsequent transfer of settlement proceeds out of the jurisdiction. It is likely these matters will be proved largely by the tender of relevant documents. Any oral evidence that is required to be given is unlikely to be controversial, and could conveniently be given remotely without the need for witnesses to travel interstate.

38 I reject the submission by GHV that because a defence has not been filed it is speculative to conclude that liability will be in issue or that Shen will be a necessary witness at trial. Williams' uncontradicted evidence is that the defendants deny and intend to defend the claim. Her evidence is consistent with the allegations of breach of duty against the law firm being denied. Shen is the critical witness in relation to those allegations. There is a good prospect that Shen's reliability, credibility and professional conduct will be challenged at trial. In those circumstances it is likely Shen will be required and expected to attend court personally to give evidence.

39 The role of the manager appointed to Shen's Lawyers in 2024 included providing instructions with regard to the proceeding. The manager is located in New South Wales. The manager and possibly Shen would be expected to attend to provide instructions throughout the trial.

40 There is no other connecting factor in relation to the parties or potential witnesses at trial that weighs heavily on the transfer application. GHV is located in China. The solicitor for GHV is located in Victoria. The solicitors and professional indemnity insurer for the law firm are located in New South Wales. It is possible the parties may wish to rely on expert evidence in relation to a peer professional opinion defence.[9] However, experts engaged by the parties could be located anywhere in Australia.

41 It is likely the law of New South Wales will apply to determination of the claims made by GHV. However, the governing law could as readily be applied in the Supreme Court of Victoria as that of New South Wales.

42 I conclude that it is in the interests of justice for the proceeding to be transferred to the Supreme Court of New South Wales. The significant connecting factors that support transfer are:

(a) the retainer between GHV and the law firm was made, and the legal services were provided by the law firm in New South Wales;

(b) the place of the tort, being where the allegedly negligent conduct by the law firm occurred, is New South Wales; and

(c) it is likely the most contentious evidence to be called at trial will be given by Shen, who is a resident in New South Wales.

43 Salient Legal, in answering a subpoena served on it by GHV, has claimed privilege on behalf of its clients over a limited number of documents in the file relating to sale of the property. The parties were content for me to determine the claim of privilege after viewing unredacted copies of the documents in a PDF bundle. Having done so, I conclude the documents at pages 79 and 83 of the PDF bundle are email correspondence containing legal advice and are therefore privileged. The documents at pages 84 and 85 are a disbursement authority directing the transfer of funds from sale of the property into a bank account, and a letter from the bank to the relevant account holder recording details of the account. The predominant purpose of these two pages is the transfer of funds. Accordingly pages 84 and 85 of the PDF bundle are not privileged.

44 The proceeding will be transferred to the Supreme Court of New South Wales. The parties agreed that costs should follow the outcome of the transfer application by the law firm. I will order that GHV pay the law firm's costs of the application.

[1] AIG UK Ltd v QBE Insurance (Europe) Ltd [2008] QSC 308.

[2] Stanford Barton (a pseudonym) v The State of New South Wales [2025] VSC 57.

[3] Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic) sub-s 5(2).

[4] BHP Billiton Ltd v Schultz (2004) 221 CLR 400, 421 [14] (Gleeson CJ, McHugh and Heydon JJ).

[5] [2023] VSC 667, 4 [12] (citation omitted). See also Kukulovski (as trustee for the Kukulovski Family Trust) v Arnautovic & Ors [2022] VSC 291.

[6] Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538, 567 (Mason CJ, Deane, Dawson, Gaudron JJ).

[8] James Hardie & Coy Pty Ltd v Barry [2000] NSWCA 353; (2000) 50 NSWLR 357, 380 [100] (Mason P).

[9] Civil Liability Act 2002 (NSW) s 5O.