Kennedy v Shire of Campaspe [2015] VSCA 47

The Victorian Court of Appeal has considered the test applicable to applications for leave to appeal in respect of civil appeals. Leave to appeal will be granted if an appeal has a ‘real’ as opposed to a ‘fanciful’ prospect of success.

In Kennedy v Shire of Campaspe [2015] VSCA 47, the Court of Appeal (Whelan and Ferguson JJA) considered the meaning of the statutory test that now applies to obtain leave to the Court of Appeal in respect of civil appeals.

As a result of the introduction of the new appeal regime in November 2014 (and the amendments to the Supreme Court Act 1986 (Vic) (SC Act)), a ‘civil appeal’ to the Court of Appeal now requires leave to be obtained from the Court of Appeal to bring the appeal.  A ‘civil appeal’ means an appeal from a judgment or order made in exercise of civil jurisdiction, including an appeal by way of rehearing or judicial review, for which the SC Act, any other act or the Supreme Court (General Civil Procedure) Rules 2005 (Vic) (Rules) provide an appeal to the Court of Appeal.  Accordingly, civil appeal includes an appeal from a final or interlocutory order of a lower court.

Under the old system, an applicant seeking to appeal a final decision of a lower Court was entitled to appeal as of right.  Leave was only required in respect of appeals from interlocutory orders.  Such leave was granted if the decision was attended with sufficient doubt to justify a grant of leave, and substantial injustice would flow if the decision was not reversed (Niemann v Electonic Industries Ltd [1978] VR 431, 441-2).

Following the recent amendments, section 14C of the SC Act provides that the Court of Appeal may grant an application for leave to appeal (under s 14A) ‘only if it is satisfied that the appeal has a real prospect of success’.

In considering the meaning of this test, the Court of Appeal had regard to the meaning of the phrase ‘no real prospect of success’ by reference to s 63 of the Civil Procedure Act 2010 (Vic) concerning the power of the Court to grant summary judgment.  The Court of Appeal referred to the decision in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [2013] VSCA 158 (Court of Appeal) (a CommBar case note on this decision is available at http://www.commbarmatters.com.au/2015/05/29/reforms-to-summary-judgment-procedure-in-the-supreme-court-and-county-court-of-victoria/).

In Lysaght, the Court of Appeal held the ‘no real prospect of success’ test required a respondent to an application for summary judgment to have a ‘real’ as opposed to a ‘fanciful’ chance of success in respect of their case.  The Court noted 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 the ‘real chance of success test permits the possibility that there may be cases in which that it appears that while the respondent’s case is not ‘hopeless’ or ‘bound to fail’, it does not have a real prospect of succeeding.

In relation to the test applicable for civil appeals, the Court of Appeal emphasised that attention must be focused on the words ‘real prospect of success’ used by the SC Act.  The Court of Appeal held that those words ‘should be construed consistently with this Court’s interpretation of s 63 of the Civil Procedure Act.  That is, the Court may only grant leave where the appeal has a ‘real’ as opposed to a ‘fanciful’ chance of success.’  The Court of Appeal stated:

[13]      Naturally, there will be some cases where the prospects of the appeal are strong, others where the prospects are weaker but it cannot be said that they are fanciful, and others where the prospects are fanciful.  For the purposes of leave, it is only necessary to distinguish between those whose prospects are real and those whose prospects are fanciful.  There is no bright line that divides the two.  Nor is it useful to devise other categories using terminology deployed in other situations.

The Court of Appeal also noted that some different considerations may play a part in the Court’s exercise of its residual discretion to refuse leave, including where an appeal has real prospects of success.  By way of example, there may be cases where no substantial injustice will be done if a decision stands (such as orders in relation to practice and procedure).

Parties involved in banking and finance cases should be aware that leave is required to be obtained by an appellant in respect of a civil appeal from a lower Court in order to bring the appeal, and that the same test that applies to summary judgment applications will also apply to determine whether leave to bring the appeal is granted.