Procedure
A summary judgment application is an application, usually brought by a plaintiff, for judgment to be entered ‘summarily’ (that is, without trial) on the grounds that there is no real defence to the claim, and therefore there is no triable question of fact or law.409
In some jurisdictions it is also possible for summary judgment to be obtained by a defendant against a plaintiff.
10.3 POSITION IN VICTORIA
In Victoria, a court’s power to order summary judgment is found in the rules of court.410 Rules in the
same terms apply in the Supreme Court and the County Court. There are some variations between the relevant rules in the Supreme Court and in the Magistrates’ Court.
Supreme Court and County Court
In the Supreme Court summary judgment may be obtained against either a defendant or a plaintiff. However, this is not immediately obvious as different rules apply depending on which party makes application. In respect of an application by the plaintiff rule 22.02 of the Supreme Court (General Civil
Procedure) Rules 2005 relevantly provides:
(1) Where the defendant has filed an appearance, the plaintiff may at any time apply to the Court for judgment against that defendant on the ground that the defendant has no defence to the whole or part of a claim included in the writ or statement of claim, or no defence except as to the amount of a claim.
(2) Paragraph (1) shall not apply to a claim for libel, slander, malicious prosecution, false imprisonment or seduction or to a claim based on an allegation of fraud.
As can be seen from subsection (2), certain categories of cases are specifically excluded from the procedure. The rationale for the exclusion is that such cases raise serious questions (for example, fraud) which are more appropriately dealt with at trial.
In respect of an application by the defendant rule 23.03 provides:
On application by a defendant who has filed an appearance, the Court at any time may give judgment for that defendant against the plaintiff if the defendant has a good defence on the merits.
That is, on a summary judgment application brought by a defendant, he or she must show by evidence that he or she has a complete defence on the merits to the claim brought by the plaintiff.
Magistrates’ Court
In the Magistrates’ Court the procedure is only available for a plaintiff to obtain judgment against a defendant.411 There is no corresponding procedure for application by a defendant. The Magistrates’
Court procedure applies only where the claim is for a debt or liquidated demand.
On a summary judgment application there are a number of options available to the court. In particular, it may:
give summary judgment; •
give unconditional leave to defend (that is, dismiss the application); or •
give conditional leave to defend. •
Conditional leave to defend involves the defendant being given leave to defend provided he or she pays money into court.412 It is an effective way of screening out unmeritorious claims. That is, a
defendant with a dubious defence will have to provide security as a condition of obtaining leave to defend an amount of money. In the event that the defence is unsuccessful, there will be a ready pool of funds that the plaintiff can execute against.
The current test
As a general principle, defendants who show that they have reasonable grounds for setting up a bona fide defence ought to be given unconditional leave to defend. In the Supreme and County Courts the court may on application by the plaintiff give judgment ‘unless the defendant satisfies the Court that in respect of that claim ... a question ought to be tried or that there ought for some other reason be a trial of that claim’.413 The rule in the Magistrates’ Court is in similar terms.414
Where a defendant can establish that he or she has a good defence on the merits the Supreme and County Court may give summary judgment for the defendant against the plaintiff.415 In the
Magistrates’ Court a defendant may obtain summary judgment against the plaintiff on a counter claim.
Apart from the specific rules governing summary judgment for the plaintiff or the summary stay, dismissal or striking out of claims or defences, courts have inherent or implied jurisdiction to prevent the abuse of their processes.
The various formulations of the summary powers to terminate actions were summarised by Chief Justice Barwick in General Steel Industries Inc v Commissioner for Railways (NSW) as follows:
The test to be applied has been variously expressed: ‘so obviously untenable that it cannot possible succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them (the pleadings) to stand would be useless expense’.416
The alternative basis on which a defendant may be given unconditional leave to defend is that ‘there ought for some other reason be a trial of [the] claim’.417 The burden is on the defendant to establish
this. Thus where there are circumstances which require the matter to be closely investigated—for example, by allowing defendants to avail themselves of the compulsory processes of the court (such as discovery, interrogation, subpoena), the defendants may be given unconditional leave to defend notwithstanding that they are not able to pinpoint any precise question which ought to be tried.418
The High Court has held that the summary judgment procedure should be reserved for ‘actions that are absolutely hopeless’.419 The court has also stated that:
The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear there is no real question to be tried.420
Consistently with this approach, the Supreme Court submitted that the ‘classic approach is that summary judgment should be awarded sparingly’.421
Numbers of applications
In its submission in response to the Consultation Paper, the Supreme Court noted that:
No statistics are kept of applications for summary judgment, but the collective experience of the Masters is that applications by plaintiffs are frequent, in the order of 15–20 per week, and principally in relation to applications for possession of land and recovery of capital and interest by mortgagees.422
The court undertook a small sample study of summary judgment applications in the course of preparing its submission in response to the Consultation Paper. It reported:
The study found that, of applications for summary judgement listed in March 2004, approximately half were successful before Masters. All of the remaining matters settled before trial. A larger study would be necessary to establish if this settlement pattern was influenced by the summary judgment application.423
409 See, eg, Farncourt v Mercantile Credits (1983) 154 CLR 87, 99.
410 Supreme Court (General Civil
Procedure) Rules 2005 O 22 and
r 23.03; Magistrates’ Court Civil
Procedure Rules 1999 rr 10.07–10.18.
411 Magistrates’ Court Civil Procedure
Rules 1999 rr 10.07–10.18.
412 Yorke (MV) Motors v Edwards [1982] 1 All ER 1024; 1 WLR 444, 328. 413 Supreme Court (General Civil
Procedure) Rules 2005 r 22.06(1)(b).
414 Magistrates’ Court Civil Procedure
Rules 1999 r 10.13(1)(b).
415 Supreme Court (General Civil
Procedure) Rules 2005 r 23.03.
416 General Steel Industries Inc v
Commissioner for Railways (NSW)
(1964) 112 CLR 125, 129 (Barwick CJ). 417 Supreme Court (General Civil
Procedure) Rules 2005 r 22.06(1)(b); Magistrates’ Court Civil Procedure Rules 1999 r 10.13(1)(b).
418 See, eg, Hills v Sklivas [1995] 1 VR 599, 606–607 (Tadgell J), 607 (Ormiston J), 611 (Batt J); and Miles
v Bull [1969] 1 QB 258; Chasfield v Taranto (Unreported, Supreme Court
of Victoria, Murphy J, 9 June 1988) reproduced in Williams (2008) above n 114, [22.06.30].
419 Dey v Victorian Railways
Commissioners (1949) 78 CLR 62,
90–91 (Dixon J).
420 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, 89; 48 ALR 1, 2. 421 Submission CP 58 (Supreme Court of
Victoria).
422 Submission CP 58 (Supreme Court of Victoria).
423 Submission CP 58 (Supreme Court of Victoria).
5
Chapter 5
Case Management
Some of the particular questions which the commission considered were:
whether the classic test should be liberalised. For instance, should there be a move away •
from a requirement that ‘there is no real question to be tried’?
whether there should be an obligation on the court or judicial discretion to initiate the •
summary judgment procedure where early disposal of a proceeding appears desirable whether there should be a restatement and simplification of the rule so that it is made •
clear that summary judgment may be obtained by both plaintiffs and defendants. In particular, in the Magistrates’ Court should the rule be extended so as to allow a defendant to apply for summary dismissal of the proceeding?
whether the limitations on categories of cases that are excluded from the procedure •
should be removed
whether there should be a residual discretion to allow a matter to proceed to trial even if •
the applicable test for summary disposal is satisfied.
10.4 OThER mODELS
England and Wales
In England and Wales, the Civil Procedure Rules 1998 impose an obligation on the court to further the overriding objective by active case management.424 Rule 1.4 contains a list of 12 matters which ‘active
case management includes’. Among these 12 matters is ‘deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others’ (rule 1.4(2)(c)).
The rules provide that the court’s powers of summary disposal of issues which do not need full investigation and trial include:
(a) under rule 3.4, striking out a statement of case, or part of a statement of case (see further below),425 and
(b) under Part 24, giving summary judgment where a claimant or a defendant has no reasonable prospect of success.
Rule 24.2 sets out the grounds for summary judgment. It provides:
The court may give summary judgment against a claimant or defendant on the whole of the claim or on a particular issue if:
(a) it considers that—
(i) the claimant has no real prospect of succeeding on the claim or issue; or (ii) the defendant has no real prospect of successfully defending the claim or issue;
and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.
According to the relevant Ministry of Justice (UK) practice direction, an application for summary judgment under rule 24.2 may be based on:
(1) a point of law (including a question of construction of a document),
(2) the evidence which can reasonably be expected to be available at trial or the lack of it, or (3) a combination of these.426
This approach to summary judgment reflects the procedure recommended by the Woolf Report, namely to replace a number of existing separate procedures, such as summary judgment and summary determination on a point of law, with a single procedure.
The new procedure incorporates a liberalised test, so that the party making the application has to show, in respect of the defendant, that he or she has no real prospect of successfully defending the claim, or in respect of a plaintiff, that he or she has no real prospect of succeeding on the claim. The party resisting summary disposition has to show more than that its case is merely arguable. Instead, the party has to show that it has a ‘realistic, as opposed to fanciful, prospect of success’.427 Where
a case is ‘entirely without substance’ or completely contradicted by documentary evidence, it is ‘fanciful’.428 In exceptional circumstances the court can allow a case or an issue to continue although
it does not satisfy this test, namely, if it is considered that there is a public interest in the matter being tried.429
It is also envisaged that the application for summary judgment may be brought by any party or of the court’s own initiative.430 It may also be brought at any stage of the proceedings.431
In their discussion of the Victorian civil justice system, the authors of Going to Court were in favour of the English approach to the summary judgment rules:
We suggest that the current Victorian approach is too cautious and that Victoria would do well to consider adopting the test recommended by Lord Woolf in the United Kingdom. That would give the courts a stronger basis for sorting out at an earlier stage than usual the unmeritorious cases which would otherwise clog up the case processing system.432
However, the test applied in England and Wales has recently been the subject of considerable controversy in light of two large commercial cases, including a ‘mega case’ against the Bank of England (the ‘BCCI case’). That case was ultimately discontinued after years of pre-trial procedures and months of trial during which time enormous costs had been incurred. In the BCCI case an application to strike out the claim had been successful before the Commercial Court judge who heard the application. That decision was upheld in the Court of Appeal but overturned in the House of Lords (by majority).
The case proceeded to trial but was eventually aborted after a lengthy hearing. This led to considerable public and professional controversy, including as to the adequacy of the legal standard relating to striking out and summary judgment. This led to a symposium in October 2006 and in January 2007 the Commercial Court Users Committee set up a working party comprising Commercial Court judges, barristers and solicitors who practise regularly in the court and two clients with wide experience who had been involved in large cases in the court.
In December 2007 the working party produced its report and recommendations.433 The working
party, after considering the present law on the test for granting summary judgment or a strike out, concluded ‘without hesitation’ that the test should remain as set out in the Civil Procedure Rules.434
However, it was proposed that the views of Lord Hobhouse435 (in dissent in the House of Lords in
the BCCI case) should guide Commercial Court judges in their approach to applications for summary judgment or a strike out. The view of the working party was that the existing powers to consider the grant of summary judgment or to strike out a case or defence are not exercised enough in large cases. As the working party noted:
It is in none of the litigants’ interests unnecessarily to prolong proceedings that are either bound to fail or bound to succeed.436
The working party also considered whether there was a need for a change in the law or procedure relating to appeals from decisions of trial judges on an application for summary judgment or to strike out a claim or defence. Although it did not recommend any change in the legal principles, two recommendations were made in respect of ‘practical ways that the Court of Appeal can assist in dealing with appeals’. It was proposed that there should be a procedure for the allocation of a particular Lord Justice (preferably with a Commercial Court background) to deal with applications in the Court of Appeal and that interim appeals, particularly those concerning summary judgment and/or strike out, should be determined very expeditiously.
The working party also considered problems arising out of a submission of ‘no case to answer’ at the conclusion of the claimant’s case.437
Other recommendations of the working party are discussed in relevant parts of this chapter.
Federal Court
Under the Order 20 (of the Federal Court Rules) procedure an application for summary judgment can only be brought by the applicant. The summary judgment procedure is not available for a respondent against an applicant.
The application of this rule in the Federal Court has evolved in a different direction to the procedure in Victorian courts. In a number of decisions, the Federal Court has taken a robust approach, particularly in the context of its case management regime. In Lenjimar Pty Ltd v AGC (Advances) Ltd it was said:
In this Court, there is just such a [case management] system. From that circumstance we extract two propositions. First, the fundamental differences in procedure render inapplicable most, if not all, of the principles evolved by the English courts in relation to their own procedures. Secondly, the existence of a case management system within this
424 Civil Procedure Rules 1998 (UK) r 1.4. 425 Note ‘statement of case’ replaces
‘statement of claim’ under the Civil
Procedure Rules 1998 (UK).
426 Ministry of Justice (UK), Practice
Direction 24: The Summary Disposal of Claims [1.3] <www.justice.gov.uk/
civil/procrules_fin/contents/practice_ directions/pd_part24.htm> at 18 February 2008.
427 Swain v Hillman [2001] All ER 91. 428 Three Rivers District Council v Bank
of England [2001] 2 All ER 513, 542.
The test was further considered in
Celandor Productions Ltd v Melville
[2004] EWHC 2362 (CH) [6]–[7] and in
Doncaster Pharmaceuticals Group Ltd v The Bolton Pharmaceuticals Company 100 Ltd [2006] EWCA Civ 661; Merchantbridge & Co Ltd v Safron General Partner Ltd [2005] EWCA
Civ 158 cautions against summary judgment where there is a dispute about an oral agreement. 429 Woolf (1996) above n 219, 123. 430 Ibid 310; see also Ministry of Justice
(UK), Practice Direction 26: Case
Management – Preliminary Stage: Allocation and Re-Allocation [5.4]
<www.justice.gov.uk/civil/procrules_ fin/contents/practice_directions/ pd_part26.htm> at 18 February 2008. 431 Woolf (1996) above n 219, 123. 432 Sallmann and Wright (2000) above n
9, 120.
433 Judiciary of England and Wales,
Report and Recommendations of the Commercial Court Long Trials Working Party (2007) at [87]–[88].
434 CPR 24.2 and 24PD for summary judgment and CPR 3-4(2) for striking out. As the report of the working party notes: striking out a claim is not in breach of Art 6(1) of the ECHR if an essential element of the cause of action for a claim under domestic law is missing from the statement of case:
Z v United Kingdom (2002) 34 EHRR
3. See Judiciary of England and Wales (2007) above n 433, 33 note 24. 435 Three Rivers DC v The Governor and
Company of the Bank of England (No 3) [2003] 2 AC 1 HL at [156].
436 Judiciary of England and Wales (2007) above n 433, [88].
5
Chapter 5
Case Management
Court is the backdrop against which the relevant rules must be considered and applied. That the Court follows the case management approach is well known in the legal profession.438
In the subsequent case of Caterpillar Inc & Anor v Sun Forward Pty Ltd Justice Drummond referred to
Lenjimar with approval:
It follows that, from the existence within the procedures of this Court of the case management system, that it is the text of O[order]20 r1 which must govern the outcome of the present application: there is no justification for importing into the Federal Court rule all the detailed restrictions that the cases identify as applicable to the traditional summary judgment rules. But O[order] 20 is not intended to provide an alternative to trial as the ordinary method of resolving litigation in the Court: see Bell v Clare (1989) 23 FCR 274 at 280. Its function is limited to providing an expeditious means of resolving litigation where the applicant can clearly demonstrate that there is no real defence to particular claims made by it.439
These cases suggest that where there is a case management system in place, the summary judgment procedure is to be applied more readily, in order to screen out unmeritorious cases.
However, even with the Federal Court’s stated case management approach to summary judgment, there has been debate in different contexts about potential reform of the Federal Court Rules in relation to summary judgment, in particular, about the relaxation of the relevant test.
In Managing Justice the ALRC recommended that the Federal Court of Australia Act 1976 or the Federal Court Rules be amended to allow the test for entering summary judgment against a party to be applied more flexibly and in respect of either party. The ALRC recommended a test similar to that used in England and Wales, where the court may give summary judgment if it considers that the applicant or the respondent has no real prospect of success and there is no other reason why the case should be disposed of at trial.440 A similar recommendation was made in the Federal Civil Justice