Reforms to the summary judgment procedure in the Supreme Court of Victoria and the County Court of Victoria now provide for one streamlined test in respect of summary judgment applications.

Recent reforms to the Supreme Court (Civil Procedure) Rules 2005 and the County Court (Civil Procedure) Rules 2008 (together, the Rules) (which take effect from 4 May 2015) now provide for one single test in respect of summary judgment applications. In order for a Court to grant summary judgment in favour of a plaintiff or a defendant, the Court must be satisfied that the respondent to the application for summary judgment has ‘no real prospects of success’ (ss 61 and 62 of the Civil Procedure Act 2010 (Vic) (CPA).

Prior to the reforms, there were two tests that applied to summary judgment applications. In respect of an application for summary judgment brought by a plaintiff, the Court could grant summary judgment if it was satisfied that the defendant had:

  • no defence on the merits (pursuant to former Or 22) (meaning the defence was ‘hopeless’ or ‘bound to fail’); or
  • no real prospects of success (pursuant to s 61 of the CPA) (meaning the respondent to the application had to have a ‘real’ but not ‘fanciful’ chance of success’).

The issues associated with having two applicable tests in relation to a summary judgment application was highlighted by the Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSC 201. The Court of Appeal held that the ‘no real prospects of success’ test was a more liberal test than the ‘hopeless’ or ‘bound to fail’ test. The Court noted that there may be cases (then yet to be identified) in which that it appears that, although a case is not hopeless or bound to fail, it does not have a real prospect of success.

The case of Campaspe Investments Pty Ltd v PBP Accounting Solutions Pty Ltd [2015] VSC 26 was one such example. The case concerned a claim brought by the executors of a deceased estate for the recovery of money from the deceased’s accountant and financial advisor who had control over the deceased’s accounts under a power of attorney. The defendant accounting firm and principal, Mr Wortman, sought to defend the claim on the basis he had authority to withdrawal the monies for particular transactions. While Daly AsJ held that the defendant’s case was not ‘hopeless’ or ‘bound to fail’, it did not have a real prospect of succeeding at trial, and therefore Her Honour made orders granting the application for summary judgment.

Parties involved in banking and finance cases who rely upon the summary judgment regime to obtain judgment without the burden and costs of going to trial should be aware of the recent reforms to the summary judgment procedure. It is important to note that in respect of summary judgment applications under Order 22 of the Rules:

an application must be made by summons supported by affidavit which verifies the facts on which the claim for summary judgment is based; and stating that in the belief of the deponent the defence (or part thereof) has no real prospect of success (Or 22.04(1));

  • the supporting affidavit may be based on information and belief (Or 22.04(3));
  • the defendant to the application may show cause against the application for summary judgment by affidavit or otherwise to the satisfaction of the Court (Or 22.05);
  • where a defendant shows cause by filing and serving a responsive affidavit, the Court may order the applicant to file and serve an affidavit in reply (Or 22.06);
  • the Court may order a party or a deponent of an affidavit to attend and be examined and cross-examined at the hearing of the application, and to produce documents (Or 22.07).

At the hearing of the summary judgment application, the Court may dismiss the application, give summary judgment (in whole or in part) in favour of the applicant, or give the respondent leave to defend the proceeding on terms (such as the payment of security into Court) and make appropriate directions (Or 22.08 to Or 22.11).