Bai v Canberra Future Property Pty Ltd

By a notice of motion filed on 17 September 2024 the fourth defendant, Mr Lin Zhang, has sought orders dismissing or staying the proceedings on the ground of forum non conveniens or, alternatively, an order pursuant to s 5(2) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (NSW) (the Cross-vesting Act) for the transfer of these proceedings to the Supreme Court of Victoria. In addition, Mr Zhang has sought an order that the requirement for him to file a defence be deferred until the determination of the application. As to costs, Mr Zhang sought that the plaintiff, Mr Bai, be ordered to pay his costs of the motion.

In support of his application, Mr Zhang relied on an affidavit of his solicitor, Mr Andrew Zhu, sworn on 17 September 2024. There was no challenge to Mr Zhu’s evidence and I accept it.

The parties have now reached agreement to resolve the notion of motion and short minutes of orders proposed to be made by consent were signed on behalf of each party. The orders proposed to be made by consent were in the following terms:

The background to this application is that the plaintiff’s statement of claim was filed on 31 July 2024 in this Court and relates principally to debts allegedly due under a loan agreement together with interest and costs. It was a term of the loan agreement that the agreement would be governed by and construed in accordance with the laws of Victoria and there was a clause which provided for the parties’ non-exclusive submission to the jurisdiction of the courts of Victoria.

The registered address and the principal place of business of the first defendant are in Victoria and the second and fourth defendants are both residents of Victoria. The third defendant is a resident in the Australian Capital Territory. All four defendants’ legal representatives are based in Victoria. The plaintiff is a resident in the Australian Capital Territory but his solicitors are located in New South Wales. There are two witnesses, other than the parties, whom the fourth defendant proposes to call and they are both resident in Victoria.

The transfer of proceedings from this Court to the Supreme Court of Victoria is governed by s 5(2) of the Cross-vesting Act, which relevantly provides as follows:

By virtue of s 5(2), the Court must determine whether it is in the "interests of justice" to order the transfer of the proceedings to the Supreme Court of Victoria. In doing so, the Court can take into account but is not bound by any consent of the parties to the transfers. The relevant principles were considered in BHP Billiton Ltd v Schultz (2004) 221 CLR 400; [2004] HCA 61 (Schultz). These principles were helpfully summarised by Lonergan J in Pilbara Ports Authority v Ashton [2019] NSWSC 1488 at [12] and include the following:

Taking into account the principles set out above, all of the evidence before this Court and the agreement of the parties contained in the proposed consent orders, I am satisfied that it is in the interests of justice for the proceedings to be determined by the Supreme Court of Victoria. Accordingly, an order in accordance with par 1 of the form of consent orders referred to above should be made.

Paragraph 2 of the form of consent orders, however, presents a difficulty. Once the proceedings are ordered to be transferred, it does not appear to me to be appropriate for this Court to make orders in relation to the future conduct of the proceedings in the Supreme Court of Victoria. Nonetheless, in order to give effect to the substance of the agreement of the parties recorded in the form of short minutes, the Court could note an undertaking by the fourth defendant to file a defence within five business days after the Supreme Court of Victoria allocates a proceeding number to the transferred proceedings. I note that the fourth defendant is prepared to give such an undertaking.

As far as the costs in this Court are concerned, in light of the parties’ agreement referred to in par 3 of the form of consent orders, the costs of the proceedings in this Court should be costs in the cause.

Accordingly, the orders of the Court are:

The Court notes the undertaking by the fourth defendant that he will file his defence within five business days after the Supreme Court of Victoria allocates a proceeding number in respect of the transferred proceedings.