The Victorian Court of Appeal’s interpretation of the Queensland test for summary judgment
Introduction
The Victorian Court of Appeal (Warren CJ and Nettle JA, in a joint judgment, Neave JA agreeing) have recently1 affirmed the interpretation of rr 292 and 293 of the UCPR in Gray v Morris2 and The Commissioner of Taxation v Salcedo (‘Salcedo’).3
It is submitted that any doubt about the applicable test for summary judgment in Queensland has been removed.
In Lysaght Building Solutions Pty Ltd v Blanalco Pty Ltd (‘Lysaght’),4 the Victorian Court of Appeal was asked a question of law5 as to the ‘test to be applied when determining whether to give summary judgment in a civil proceeding pursuant to s 63 of the Civil Procedure Act 2010 (Vic) (‘CPA’)’.6
Warren CJ and Nettle JA condensed their conclusions into four points which are set out towards the end of this paper.
Relevant legislation and rules
Sections 63 and 64 of the CPA provide, with emphasis added:
63. Summary judgment if no real prospect of success
(1) Subject to section 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim or part of the claim, defence or counterclaim, as the case requires, has no real prospect of success.
(2) A court may give summary judgment in any civil proceeding under subsection (1)-
(a) on the application of a plaintiff in a civil proceeding;
(b) on the application of a defendant in a civil proceeding;
(c) on the court’s own motion, if satisfied that it is desirable to summarily dispose of the civil proceeding.
64. Court may allow a matter to proceed to trial
Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because-
(a) it is not in the interests of justice to do so; or
(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.
By comparison, r 292 of the UCPR [7] provides, with emphasis added:
292 Summary judgment for plaintiff
(1) A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant.
(2) If the court is satisfied that —
(a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
(b) there is no need for a trial of the claim or the part of the claim;
the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.
It is immediately apparent that rr 292 and 293 of the UCPR and the cognate Victorian provision in the CPA contain the same expression — ‘no real prospect [of success]’.
Warren CJ and Nettle JA’s judgment in Lysaght
In Lysaght, Warren CJ and Nettle JA recognised that the relevant provisions were ‘similar’.8 Their Honours examined Queensland cases which have sought to clarify the test of ‘no real prospect of succeeding’ commencing with Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) (‘QUT’)9 in which the Court of Appeal referred to General Steel Industries Inc v Commissioner for Railways (NSW (‘General Steel’).10
In QUT, Holmes J considered that r 292 ‘may not require the meeting of as high a test as that posited by Barwick CJ in General Steel namely: ‘that the case for the plaintiff is so clearly untenable that it cannot possibly succeed’.11 Her Honour considered that the ‘more appropriate enquiry’ was in terms of the rule itself, that is: ‘whether there exists a real, as opposed to a fanciful prospect of success’.12
In Lysaght, Warren CJ and Nettle JA observed that it was ‘not clear’ why Holmes J in QUT considered that the ‘real as opposed to fanciful prospects of success test’ may not require the meeting of as high a test as expressed in General Steel.13
Their Honours considered subsequent cases including Gray v Morris in which Phillip McMurdo J considered that rr 292 and 293 ‘should be applied by reference to their clear and unambiguous language, without a need for any paraphrase or comparison of the previous rule’.14 Chesterman J dissented on the point.15
Warren CJ and Nettle JA then turned to Salcedo which in practical effect adopted and applied Phillip McMurdo J’s position in Gray v Morris but with the driver that proceedings are to be determined summarily only in the ‘clearest of cases’ which required an applicant to demonstrate a ‘high degree of certainty as to what would happen if the matter proceeded to trial’.16
Their Honours then referred to s 31A of the Federal Court of Australia Act 1989 (Cth) (‘FCAA’) which is in relevantly different terms to rr 292 and 293 UCPR and s 63 of the CPA (with emphasis added):
31A Summary judgment
(1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is prosecuting the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.
(2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
(4) This section does not limit any powers that the Court has apart from this section.
(5) This section does not apply to criminal proceedings.
Section 31A of the FCAA prescribes a test of ‘reasonable prospect’ of success and contains an express provision in sub-section (3) that a proceeding or part of a proceeding need not be ‘hopeless’ or ‘bound to fail’ for it to have ‘no reasonable prospect of success’.17
Warren CJ and Nettle JA observed that before Spencer v The Commonwealth, (‘Spencer’)18 the judges of the Federal Court of Australia treated the references to ‘no real’ and ‘no reasonable’ prospect of success as an immaterial difference in language.19
In Spencer, French CJ and Gummow J observed that s 31A of the FCAA and rr 292 and 293 UCPR embraced Lord Woolf MR’s interpretation in both the Woolf Report and Swain v Hillman20 of the ‘real prospect of success’ test as one which required a ‘realistic’ as opposed to a ‘fanciful’ prospect of success.
French CJ and Gummow J observed that s 31A(2) FCAA required a ‘practical judgment’ as to ‘whether the applicant has more than a ‘fanciful’ prospect of success’.21 Their Honours also confirmed the principal that the power to summarily terminate proceedings must be attended with ‘caution’.22
By contrast, in Spencer, the plurality (Hayne, Crennan, Kiefel and Bell JJ) approached the matter ‘differently’.23 Their Honours observed that s 31A should be understood as requiring a ‘different enquiry’ to rr 292 and 293 UCPR.24 Their Honours observed, with emphasis added and citations omitted:
Because s 31A(3) provides that certainty of failure (‘hopeless’ or ‘bound to fail’) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different enquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression ‘no reasonable prospect of successfully prosecuting the proceeding’ by reference to what is said in those earlier cases.
Likewise, it is dangerous to apply directly what has been said in the United Kingdom about the application of a test of ‘no real prospect’ or what has been said in United States decisions about summary judgment. The United Kingdom cases are directed to a different test. The controversies in the United States about what is sufficient to resist a motion for summary judgment, reflected in the recent decisions of the Supreme Court of the United States in Ashcroft v Iqbal and Bell Atlantic Corp v Twombly and in that Court’s earlier decision in Conley v Gibson, turn upon the requirements of the Federal Rules of Civil Procedure applied to a system of ‘notice’ pleading. The notion of what is not a ‘plausible claim, discussed in Iqbal and Twombly, may in some cases overlap, but does not coincide, with the notion of ‘no reasonable prospect’.
How then should the expression ‘no reasonable prospect’ be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is ‘no reasonable prospect’. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like ‘no reasonable prospect’ is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes, as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt.25
It is submitted that the ‘difference’ which was identified by the plurality did not practically change the summary judgment test as it has been understood in Queensland after Gray v Morris and Salcedo.
What is the meaning of s 63 CPA and, by extension, rr 292 and 293 UCPR?
Warren CJ and Nettle JA recognised that in the absence of authority, they ‘would have been inclined’ to consider that s 63 CPA was not a ‘great deal different’ to the test in General Steel.26 However, their Honours recognised that the explanatory memorandum to the Civil Procedure Bill 2010 stated that it was the Victorian Parliament’s intention to adopt the Victorian Law Reform Commission’s recommendation that the General Steel test should be ‘liberalised’.27 Their Honours also referred to the ‘equivocal’ provisions contained elsewhere in the CPA which tended to imply that s 63 was intended to effect a change in the summary judgment test.28
With those points in mind, their Honours considered that because of the principal in Farah Constructions29 they were bound to follow Gray v Morris and Salcedo because they did not consider that they were ‘plainly wrong’.30
Their Honours observed that there had been a succession of judgments of the Queensland Court of Appeal to the effect that the ‘test of “real prospect of success” [was] more liberal than the “hopeless” or “bound to fail test”, or at least that it [was] a different test and that there may be circumstances in which it is possible to satisfy the former without necessarily complying with the latter’.31
Their Honours concluded that ‘upon the present state of authority’, the following propositions emerged:
a) the test for summary judgment under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a ‘real’ as opposed to a ‘fanciful’ chance of success;
b) the test is to be applied by reference to its own language and without paraphrase or comparison with the ‘hopeless’ or ‘bound to fail test’ essayed in General Steel;
c) it should be understood, however, that the test is to some degree a more liberal test than the ‘hopeless’ or ‘bound to fail’ test essayed in General Steel and, therefore, permits of the possibility that there might 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 success;
d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.32
Neave JA’s concurring judgment, with an exception
Neave JA agreed with Warren CJ and Nettle JA, however, her Honour expressed a concern that point (d) above tended to place ‘undue emphasis’33 on the ‘caution with which a Court must exercised the power of summary dismissal’.34
Her Honour considered that such an emphasis ran the risk of reinforcing the ‘historical approach’ — a veiled reference to General Steel — to summary dismissal which may result in the ‘legislative liberalisation’ of the test in s 63 CPA having little impact ‘in practice’.35
Her Honour observed that such an approach would be inconsistent with the objective of reforming the summary judgment test which was expressly provided for in the CPA and the requirement that the Court give effect to the over-arching purpose of that CPA imposed by s 8 which is similar in effect to r 5 of the UCPR.
Neave JA’s comments should be considered obiter dicta and in any event, they are, respectfully, inconsistent with Salcedo in which McMurdo P referred to Rich v CGU Insurance Ltd where Gleeson CJ, McHugh and Gummow JJ said, with emphasis added:
Ordinarily, a party is not to be denied the opportunity to place his or her case before the Court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formula which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.36
In Salcedo Williams JA, to like effect, observed that ‘summary judgment will not be obtained as a matter of course’.37 By contrast, Atkinson J did not refer to the principal that summary judgment should only be awarded in the clearest of cases.38
Conclusions
Warren CJ and Nettle JA observed that rr 292 and 293 of the UCPR are ‘in pria materia’39 with s 63 of the CPA. Therefore in the same was as their Honour’s were, it is submitted that any Queensland State Court would be bound by their Honours’ consideration of a statutory provision which is in identical terms because of the principal in Farah Constructions. If that contention is doubted, their Honour’s judgment is nonetheless of very heavy persuasive authority.
The Victorian Court of Appeal were not asked in the reference to consider the impact which s 64 of the CPA, if any, may have had on the practical effect of s 63. There is no comparable provision in force in Queensland, however it is submitted that s 64 is really a statutory expression of the ‘residual discretion’40 which was identified by Phillip McMurdo J in Gray v Morris:
But in the application of the plain words of rr 292 and 293 and in particular the consideration of whether there is a need for a trial, the Court must keep in mind why the interests of justice usually require the issues to be investigated at a trial.41
The four propositions which emerge from Lysaght should therefore be understood as a neat summary of the test for summary judgment contained in rr 292 and 293 UCPR. Lysaght is therefore ripe for application in Queensland.
Chris Tam
June 2013
Footnotes
1. Judgment delivered on 24 June 2013. http://www.austlii.edu.au/au/cases/vic/VSCA/2013/158.html .
2. [2004] 2 Qd R 118.
3. [2005] 2 Qd R 232.
4. [2013] VSCA 158.
5. Referred pursuant to s 17B(1) Supreme Court Act 1986 (Vic).
6. Ibid [1].
7. Rule 293, summary judgment for a defendant, is in materially identical terms.
8. [2013] VSCA 158, [6].
9. [2003] 1 Qd R 259.
10. (1964) 112 CLR 125.
11. See [2003] 1 Qd R 259, 264-5.
12. Ibid.
13. [2013] VSCA 158, [8].
14. [2004] 2 Qd R 118, 133 [46].
15. See [2004] 2 Qd R 118, 127 [21]; [2013] VSCA 158, [11].
16. [2013] VSCA 158, [12].
17. Ibid [16].
18. (2010) 241 CLR 118.
19. [2013] VSCA 158, [17]; referring to White Industries Pty Ltd v Assistant Commissioner of Taxation (2007) 160 FCR 298.
20. [2001] 1 All ER 91; see, [2013] VSCA 158, [4]-[5].
21. (2010) 241 CLR 118, [25].
22. Ibid [24]; see, [2013] VSCA 158, [19].
23. See [2013] VSCA 158, [20].
24. Ibid.
25. (2010) 241 CLR 118, 140-1 [56]-[58].
26. [2013] VSCA 158, [23].
27. Ibid [3].
28. Ibid [26].
29. (2007) 230 CLR 89, 151-2 [135].
30. [2013] VSCA 158, [27].
31. Ibid [27].
32. Ibid [35].
33. Ibid [41].
34. Ibid.
35. Ibid.
36. (2005) 79 ALJR 856, 859 [18]-[19]; see, [2013] VSCA 158, [12].
37. [2005] 2 Qd R 232, 236-7 [17]; see, [2013] VSCA 158, [13].
38. [2013] VSCA 158, [14].
39. Ibid [27].
40. See the description of clause 64 in the explanatory memorandum to the Civil Procedure Bill 2010, [2013] VSCA 158, [3].
41. [2013] VSCA 158, [10] (emphasis added).
