IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
Commercial Court
Commercial List
S ECI 2021 04535 

TRAJAN JOHN KUKULOVSKI (AS TRUSTEE FOR THE KUKULOVSKI FAMILY TRUST)	Plaintiff	
		
v  		
		
SULE ARNAUTOVIC
(and others according to the schedule)	Defendants	

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JUDGE:	Connock J	
WHERE HELD:	Melbourne	
DATE OF HEARING:	Application by summons filed 25 May 2022 determined on the papers at the request of the parties	
DATE OF JUDGMENT:	1 June 2022	
CASE MAY BE CITED AS:	Kukulovski (as trustee for the Kukulovski Family Trust) v Arnautovic & Ors	
MEDIUM NEUTRAL CITATION:	[2022] VSC 291	

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PRACTICE AND PROCEDURE — Jurisdiction — Application by defendants to transfer proceedings to the Supreme Court of New South Wales — Section 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic) — Relevant factors — Connection with New South Wales — Interests of justice — Transfer order sought by consent of all parties — Location of witnesses — Choice of law clause in partnership agreement — Choice of law clause in partnership exit agreement — Law covering the transaction — Cost, expense and inconvenience — General principles. 

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiff	N/A	Yates Beaggi Lawyers	
			
For the Defendants	N/A	Hegarty Legal	

HIS HONOUR:
Introduction and summary
1	Upon the defendants’ application by summons filed on 25 May 2022, the primary issue for determination is whether this proceeding should remain in this court or be transferred to the Supreme Court of New South Wales pursuant to s 5(2)(b)(iii) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (Vic) (Cross-vesting Act).
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.
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 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.
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 -
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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.  An appeal does not lie from a decision of a court in relation to the transfer of a proceeding.
13. The High Court of Australia has considered the application of the Act in BHP Billiton Limited v Schultz.  Since that decision, several decisions in this court have considered the relevant principles that should be applied.  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.
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.
(b) It is not necessary that it should appear that the first court is a “clearly inappropriate” forum.  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.
(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.
(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.
(e) The power to exercise the jurisdiction is not a discretionary power but a mandatory obligation.  No question of discretion arises.
(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.  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.  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.
(h) The appropriate court is the natural forum as determined by connecting factors to that forum.
(i) Relevant connecting factors include matters of convenience and expense such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law covering the relevant transaction.
(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.
(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.
(l) Factors which may be relevant to a tortious action are:
(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.
(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.  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.
(n) A relevant factor is whether the coincidence of the lex fori and the lex loci delicti will avoid debates concerning substantive and procedural law.
(o) The plaintiff’s choice of forum by itself is not a relevant connecting factor.
(p) Each case depends on its own particular facts.
(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.
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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 regarding the meaning of the expression ‘interests of justice’, including the need to interpret the expression broadly.
Consideration and disposition
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, 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.
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.  
Other matters
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.
Conclusion and proposed orders
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.

SCHEDULE OF PARTIES

BETWEEN:

TRAJAN JOHN KUKULOVSKI (AS TRUSTEE FOR THE KUKULOVSKI FAMILY TRUST)	First Plaintiff	
		
- and -		
		
SULE ARNAUTOVIC	First Defendant	
		
LLOYD GWYNNE KERR (IN HIS PERSONAL CAPACITY AND AS TRUSTEE FOR THE L & N KERR FAMILY TRUST)	Second Defendant	
		
BRADD WILLIAM MORELLI AS TRUSTEE FOR THE ARTEMIS NO.1 TRUST	Third Defendant	
		
GLENN ANTHONY CRISP AS TRUSTEE FOR THE CRISP FAMILY JS TRUST	Fourth Defendant	
		
ANDREW JOHN SPRING AS TRUSTEE FOR THE A & K SPRING FAMILY TRUST	Fifth Defendant	
		
MALCOLM KIMBALL HOWELL AS TRUSTEE FOR THE MTS FAMILY TRUST	Sixth Defendant	
		
TRENT ANDREW DEVINE	Seventh Defendant