Perera v Genworth Financial Mortgage Insurance Pty Limited [2016] NSWCA 53 (22 March 2016)

The decision of the New South Wales Court of Appeal demonstrates how a strict approach to granting summary judgment still prevails in that jurisdiction. There is in pronounced contrast to the post – Civil Procedure Act landscape in Victoria, where novel claims (unknown to Australian law in its current state) need to be supported by compelling submissions in order to survive the ‘no real prospects of success’ test.

The applicant, Mr Perera, representing himself, sought leave to appeal from a judgment striking out the applicant’s statement of claim in proceedings he had commenced against the respondent, Genworth. Mr Perera sought to sue Genworth on three bases including negligently inflicted economic harm (economic loss claim) and negligence causing nervous shock (nervous shock claim). These claims arose out of previous litigation in which Genworth sued a company for negligent valuations. The applicant was an author of one of the valuations.

Genworth sought to strike out the statement of claim on the basis either that the proceedings were frivolous or vexatious, or disclosed no reasonable cause of action (UCPR 13.4(1)(a) or (b)), or the pleading had a tendency to cause prejudice embarrassment or delay in the proceedings (UCPR 14.28(1)(a) or (b)).

Mr Perera argued that he had an economic loss claim because the claim against him meant that he was unable to obtain professional indemnity insurance and was unable to continue work as a valuer. In the nervous shock claim, Mr Perera argued Genworth ‘owed a duty of care not to injure him by threatening to sue him personally’. In respect of both of these, the judge at first instance (Slattery J) held that they disclosed no reasonable cause of action, noting the claims were not recognised within Australian law and also noted the tensions their recognition would create in respect of existing law. They were therefore struck out.

Slattery J struck out the defamation claim on the basis that it disclosed no reasonable cause of action, given the failure to plead that the imputations were defamatory of the plaintiff and matters identifying Mr Perera as the defamed individual (as required by the relevant Rule of Court).

In overruling Slattery J’s summary disposal of all three claims, the NSWCA (McColl JA, Leeming JA) referred to well-known cases from last century which call for inter alia ‘exceptional caution’, a ‘high degree of certainty that the plaintiff’s case will fail’ and seemingly no ‘injustice to the plaintiff’.

Many Victorian practitioners will recall those authorities being cited in resisting summary judgment applications. Judicial pronouncements in respect of summary judgment applications since the commencement of the Civil Procedure Act have cemented the more liberal Victorian approach to summary disposal (which has been helpfully set out as a case note on this blog).

The recent decision of the Supreme Court of Victoria Court of Appeal (Mandie v Memart Nominees Pty Ltd [2016] VSCA 4) shows the extent to which the ‘litigation landscape’ has diverged from the position in NSW, with the Victorian focus on efficiency and cost-effectiveness. There is power to dispose summarily of a case with ‘no real prospect of success’. Cases in this area refer to authorities interpreting these words, with consistent reference to Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (2013) 42 VR 27, where the word ‘real’ was contrasted with ‘fanciful’, and the Court of Appeal stated that the test was more liberal than the stricter common law test requiring futility.

Were Mr Perera’s novel claims brought in Victoria, to survive the summary judgment application his claims as pleaded would need to have a real prospect of succeeding at trial in their current form. Mr Perera’s novel claims are unlikely to have survived in Victoria on a summary dismissal contest. The test allows of course for received wisdom to be overturned (see e.g. [46] and [47] of Mandie), which describes a case in which proposed amendments to a pleading turned on a particularly novel construction of a provision in the Wrongs Act 1958, which would overturn the conventional interpretation of the provision: Utility Services Corporation Ltd v SPI Electricity Pty Ltd (2012) 35 VR 628.

To defeat the summary disposal application where a novel claim – unrecognised in law – is pressed; compelling submissions in support are necessary – without which the claim is very likely to be viewed as ‘fanciful’. Those compelling submissions are less likely to be made by litigants without legal representation.

In practice, the Victorian focus on efficient use of court resources and NRPOS test is requiring litigants responding to a summary judgment application to carefully consider their case and in some cases prepare for lengthy argument to satisfy the more liberal test.