The summary judgment test


Part 4.4 of the Civil Procedure Act 2010 sets out the test for summary judgment: a court may give summary judgment if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, has no real prospect of success (s63).

With the amendment of order 22 by the Supreme Court (Chapter I Summary Judgment) Rules 2015 and the County Court (Chapter I Amendment No. 9) Rules 2015 on 4 and 18 May 2015 respectively, it is now clear that all summary judgment applications must be made under the Civil Procedure Act and can no longer be brought under the older version of Order 22. The new version of Order 22 governs procedures applying to applications under s63 of the Civil Procedure Act, but no longer provides an independent basis for bringing the application itself.

Section 63 of the Civil Procedure Act liberalises the rules governing summary dismissal in Victoria, such that it is easier to dispose of unmeritorious claims summarily. The Court of Appeal has stated that the test:

[S]hould be construed as one of whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success; that the ‘real chance of success’ test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test; and that, as the law is at present understood, the real chance of success test permits of the possibility that there may be cases, yet to be identified, in which it appears that, although the respondent’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding (Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 at [29] per Warren CJ and Nettle JA (Neave JA agreeing)).

The test must be applied according to its own terms and not according to considerations of whether the proceeding is ‘hopeless’ or ‘bound to fail’. To adopt ‘an unduly constrained, historical approach to the construction of s63’ would ‘subvert the purpose of the provision’ (Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 at [25] per Warren CJ and Nettle JA (Neave JA agreeing)).

Courts must, however, continue to exercise the power to terminate proceedings summarily with caution. Courts should therefore only exercise the power if it is clear that there is no real question to be tried. This is so irrespective of whether an application for summary judgment is made on the basis that: the pleadings do not disclose a reasonable cause of action, and no amendment could cure this error; or the action is frivolous, vexatious or an abuse of process; or the application for summary judgment is supported by evidence (Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 at [35] per Warren CJ and Nettle JA (Neave JA agreeing)). See also Ottedin Investments Pty Ltd v Portbury Developments Co Pty Ltd [2011] VSC 222 at [18]; Matthews v SPI Electricity Pty Ltd; SPI Electricity Pty Ltd v Utility Services Corporation Ltd (Ruling No 2) [2011] VSC 168).

Further, as Derham AsJ stated in Innes-Irons & Anor v Forrest [2016] VSC 782 at [23]:

The power to give summary judgment must be exercised in accordance with the overarching purpose of the CPA and taking into account the fact that, if granted, a party will be deprived of the chance to pursue its claim or defence.

Courts have noted that summary judgment will be ordered more readily where the issue involves a pure question of law than where there is a disputed question of fact (Re Demediuk [2016] VSC 587 at [18]; Mutton v Baker [2014] VSCA 43 at [19]).

In resisting an application for summary judgment, a party is generally entitled to seek additional evidence if necessary. The proper basis certification obligation under s42 does not provide a basis for prohibiting a party from relying on or seeking to rely on information which was not available at the time the proceeding was commenced. A court must approach each case on a case-by-case basis (Klein v National Australia Bank Ltd [2016] VSCA 144 at [53]-[54]).

The power to give summary judgment must be exercised in accordance with the overarching purpose of the Act and taking into account the fact that, if granted, a party will be deprived of the chance to pursue its claim or defence (Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 at [42] per Neave JA).

In Wheelahan v City of Casey (No 3) [2011] VSC 15, it was accepted that the ‘no real prospect of success’ test ‘may in some circumstances extend to cases not regarded as sufficiently hopeless to warrant striking out under the Rules [Supreme Court (General Civil Procedure) Rules 2005]’ (Wheelahan v City of Casey (No 3) [2011] VSC 15 at [8]).

To that end, the test expands the basis for giving summary judgment from that which was contained in the courts’ respective rules. However, in most instances, the new test will not differ from the old test in its practical application (National Australia Bank Ltd v Norman [2012] VSC 14 at [12]).

For an example of a case where a defence was not hopeless or bound to fail, but was nevertheless found not to have a real prospect of success, see Campaspe Investments Pty Ltd v PBP Accounting Solutions Pty Ltd [2015] VSC 26 at [27] to [29].

Summary judgment test and pleadings

In general, a court applying the summary judgment test must consider whether any defect in the pleadings can be cured by amendment. However, the Civil Procedure Act 2010 has also changed the landscape in relation to when a party may amend its pleadings and older cases must be approached with caution. Now, the court should not permit a pleading amendment which would itself have no real prospects of success, as the amendment would be susceptible to summary judgment and so be futile. Thus, the summary judgment test now also regulates when pleadings may be amended and may have narrowed the range of amendments that are now permitted (Mandie v Memart Nominees Pty Ltd [2016] VSCA 4 at [42]-[43], [46]).

A repeated failure to present pleadings in proper form may, in suitable cases, be a basis for concluding that the case has not real prospects of success and that the other party should not be forced to continue incurring costs responding to deficient pleadings (see Sheehan v Brett-Young (No 4) [2016] VSC 53 at [67]; Nicholson Street Pty Ltd v Letten (No 4) [2017] VSC 307 at [30]).

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