Baker, Clifton --- "Terminating proceedings before trial: summary judgment and striking out of pleadings" [2017] PrecedentAULA 54; (2017) 142 Precedent 8

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TERMINATING PROCEEDINGS BEFORE TRIAL: SUMMARY JUDGMENT AND STRIKING OUT OF PLEADINGS

By Clifton Baker

INTRODUCTION

Summary judgment and the striking out of pleadings under legislation or rules of court, are two significant procedural options for a party to terminate proceedings before trial. This will normally be invoked where the case disclosed by an opponent is unsatisfactory, either in form or substance. In the case of striking out of pleadings, the proceedings are only terminated indirectly where a party fails to provide a pleading after the relevant order is made.

While these two methods of early termination of proceedings are conceptually distinct, the guiding principles for both are closely related. The Full Court of the Supreme Court of South Australia (SA) was critical of an applicant-defendant which claimed both summary judgment and striking out of pleadings, but the affidavit in support did not discriminate with respect to the kind of relief applied for. This ‘caused the confusion which followed’.^[1] The distinction can be neatly stated by saying that summary judgment is concerned with the substance of the case, while striking out pleadings is concerned with the form.

In addition, the principles on which a court exercises its inherent power to control proceedings, including permanent stays and termination, are influential in determining summary judgment and striking out cases brought under relevant legislation and rules of court.

SUMMARY JUDGMENT

The modern legislation and rules of court dealing with summary judgment may be summarised briefly. For a plaintiff to succeed on a claim for summary judgment, it has to show that there is evidence of facts which would entitle it to judgment, and that the defendant has no defence in relation to the claim. For a defendant to succeed, it has to show that the proceedings are either frivolous and vexatious, or that no reasonable cause of action is disclosed, or that the proceedings are an abuse of process of the court. An application may be made in relation to proceedings as a whole, or particular claims in the proceeding.^[2]

It is possible to identify two main approaches. The first is the traditional approach to summary judgment, which focuses on the demonstrated certainty of the relevant claim or defence failing. The second is the determination that there are no real prospects of success.

The traditional approach to striking out proceedings, and the applicable principles, were summarised by the New South Wales (NSW) Court of Appeal in Perera v Genworth Financial Mortgage Insurance Pty Ltd^[3] per Leeming JA:

‘I would reject the first aspect of Mr Perera’s complaint, based on the alleged failure expressly to identify the cautious approach to summary dismissal. There are of course a variety of formulations of the applicable test where a defendant applies for the summary intervention of the court to prevent a plaintiff’s case being determined in the usual way at trial. Barwick CJ collected some in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129: “so obviously untenable that it cannot possibly 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” and “be manifest that to allow [the pleadings] to stand would involve useless expense”. In part that variety stems from whether the application is made in the court’s inherent jurisdiction or under the rules (see Dixon J’s analysis in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91-92), which may in turn affect the material available to the court. In part it turns on differences in the rules of different courts, and in particular on the relaxation of the test which has occurred in some courts: see Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 at [56]. But for present purposes, two matters are clear. One is that common to all the various formulations is the need for “exceptional caution”, as was explained in Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] and Spencer at [53]-[55]. The other is that the inquiry is as to the demonstrated certainty of the outcome of the litigation, as opposed to its prospects of success.’^[4]

For a summary judgment to succeed, under those principles, the case must be a particularly clear one. The approach taken by Leeming JA and more generally in the Australian Capital Territory, NSW, Northern Territory, SA, Tasmania and Western Australia and has been contrasted with the position in the Federal Court, Queensland and Victoria.

In the Federal Court, s31A of the Federal Court Act 1976 (Cth), introduced in 2005, provides for a ‘no reasonable prospect of success’ test. That provision was interpreted by the High Court in Spencer v Commonwealth (Spencer).^[5] The plurality of the Court (Hayne, Crennan, Kiefel and Bell JJ) emphasised that the term ‘no reasonable prospect’ could not really be paraphrased to explain its operation, nor could some antinomy be established to define the principle negatively, and the judges said that the judicial creation of a lexicon of words and phrases to capture the operation of the statutory phrase ‘no reasonable prospect’ was to be avoided. They stated that the evident legislative provision revealed in the text of the provision would be defeated if its application was read as confined to cases of a kind which fell under different procedural regimes.^[6]

French CJ and Gummow J took a similar view on the inadequacy of alternative formulations. They also pointed out that a judgment on questions of law or fact, or mixed law and fact, were required. If the law was settled, then summary judgment could be granted. But in other circumstances, the development of the law should not be stultified. Where the facts were complex, caution in granting summary judgment was indicated.^[7]

In Victoria, s63 of the Civil Procedure Act 2010 (Vic) provided that an application for summary judgment could be made if the claim had no real prospects of success. The Victorian Court of Appeal in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd (Lysaght),^[8] looked at that provision’s antecedents in the English and Queensland rules, and the Federal Court of Australia Act 1976 (Cth), and considered it had modified the previous test. The relevant principles were stated as follows:

‘For the reasons we have given, we would answer the question posed for the determination of the court as follows:

Upon the present state of authority:

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.’^[9]

The approach under the reformed procedures in the Federal Court, and the Queensland and Victorian courts, indicate that the threshold for summary judgment is now lower than it was under previous rules and approaches. The approach adopted in Lysaght^[10] in parts paraphrase the legislative test, which is difficult to reconcile with the approach of the High Court in Spencer.^[11] However, the position in NSW and the other jurisdictions which have not adopted specific relaxation of the summary judgment test, still require demonstrated certainty of the potential outcome of proceedings before summary judgment will be granted.

STRIKING OUT PLEADINGS: GENERAL

The circumstances where pleadings may be struck out can be summarised to give an indication of the general nature of that power. Under rules of court, a party may strike out a pleading that might prejudice, embarrass or delay the fair trial of an action or fails to disclose a reasonable cause of action or a defence, or is an abuse of process.^[12]

The function of pleadings was clearly stated by Mason CJ and Gaudron J in Banque Commerciale SA v Akhil Holdings Pty Ltd (Banque Commerciale):^[13]

‘The function of pleadings is to state with sufficient clarity the case that must be met. In this way, pleadings serve to ensure the basic requirement of procedural fairness, that a party should have the opportunity of meeting the case against him or her and, incidentally, define the issues for decision.’ (citiations omitted)

The existence of a clearly drawn pleading is fundamental to procedural fairness to an opposing party having to respond to a particular claim or defence.

A pleading which was challenged as an unintelligible, ambiguous, vague or general pleading was considered in Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd.^[14] In that case, a counterclaim had been challenged at first instance but the trial judge refused to strike out the paragraphs claimed to be offensive. The Queensland Court of Appeal allowed an appeal against this decision, and pointed out that the trial judge had applied the test for a summary judgment application, where this was a claim to strike out pleadings. A helpful summary of the general principles to be applied on striking out applications was provided. This judgment examined whether the pleadings performed the notice and procedural fairness functions required in Banque Commerciale,^[15] or if it is ambiguous, vague and too general so as to embarrass the opposite party by leaving him or her uncertain as to what is alleged against them. A particular matter advanced here was to characterise a proceeding as deficient if it was not advanced in a comprehensive and concise form, appropriate both for consideration by the court and for the purpose of preparing a response. There were, additionally, references made to the overriding objectives in civil proceedings. Delay, expense and injustice could result if an opposite party was required to do additional work in preparation for trial on the basis of issues which were legally irrelevant, and do not assist in the just determination of the true controversy between the parties, and also may lengthen the duration of a trial.^[16] Proper pleadings will contribute not only to justice between the parties, but improve access to justice overall through the efficient conduct of proceedings.

RELATIONSHIP BETWEEN STRIKING OUT AND JUDGMENT

The relationship between striking out of pleadings and proceeding to judgment is complex. In Turner v Bulletin Newspaper Co Ltd,^[17] the High Court considered a case where a conditional order for dismissal of proceedings was made unless a further statement of claim was delivered within a certain time. The High Court held that the relevant rule on striking out did not permit proceeding to judgment in this way, and allowed an appeal.

That does not mean that the process of striking out cannot lead to judgment. If a further pleading can be delivered to cure the defects identified by the court, then the action can proceed. But if the defects in the pleading cannot be rectified, and a fresh pleading delivered, then the party is in default in respect of the pleading and the other party may apply for judgment.

The Full Court of the Supreme Court of SA took the view that judgment was available on a strike out application.^[18] More recently, in NSW, the Court of Appeal allowed an appeal where a strike out application of a defence was allowed in the District Court by the defendant, and the judge proceeded to give the plaintiff judgment. The Court of Appeal held that this course was procedurally unfair, and on examining the nature of the claim, held that the defendant should be allowed to re-plead.^[19]

EMBARRASSING PLEADINGS

‘Embarrassing’ in the context of pleadings, is a legal term of art. It is not, as one litigant in person contended, material which would embarrass the opposing party through its revelation.^[20] The kind of embarrassment considered here is where the opposing party cannot respond to a pleading because it does not make clear the case which has to be met.^[21] The pleading itself was described as a narrative of grievances, and not in chronological sequence. The plaintiff alleged that he was falsely imprisoned on four grounds, although there was a general lack of clarity and the propositions relied on were internally inconsistent, the matters pleaded in the alternative were far from clear, and contained irrelevant and confusing material.^[22] The Court of Appeal upheld the trial judge’s decision to strike out the pleading on the basis that the pleadings were embarrassing.

INHERENT JURISDICTION

Superior courts have an inherent jurisdiction including a power to control their business in addition to those which are conferred on them by legislation. These powers extend to permanently staying proceedings where a fair trial cannot be had, a recent High Court example being Batistatos v Roads and Traffic Authority of New South Wales.^[23] These inherent powers of a court extend to the striking out of a claim or defence, and giving judgment accordingly.^[24] The case itself involved a road accident, alleged to have occurred nearly 40 years before, and caused by the configuration of the road with confusing signage and lighting. Because of the plaintiff’s disability, the action was brought in time and the pleadings were valid in form. However, the plaintiff’s sparse evidence as to the occurrence of the accident, the lapse of time during which the road had been straightened and records lost, and the defendant’s difficulty in preparing a defence, meant that continuation of the proceedings was an abuse of process.^[25] The inherent jurisdiction may be invoked where no specific rule applies, but injustice would follow if the proceedings continued or a defence was permitted to be raised.

PRACTICAL CONSIDERATIONS

There are factors which suggest caution should be exercised in bringing a summary judgment application or a striking out of pleadings application.

First, in the case of either application, extensive preparation will be required and substantial disclosure of the moving party’s own case. Apart from the time and expense considerations involved, the practical effect of an application which is unsuccessful, or successful on a striking out application where the pleading defect may be cured, and the opposing party’s case strengthened, will be to ‘give your opponent a tutorial on how to run his or her case’.^[26]

Second, the test for summary judgment, whether of the ‘no reasonable case’ or the ‘satisfied cannot succeed’ type, is always to be attended with caution in the final decision. Whether any practical advantage overall, in the context of the particular litigation, is to be gained by a summary judgment application must be weighed carefully because of the time and expense factors.

Those considerations also apply to applications to strike out. Numerous examples, such as where a party whose pleading has been challenged either emerges with a substantial part of its pleading intact, and has the opportunity to re-plead in a way which strengthens its case or, prior to hearing of the striking out application, responds by amending the pleading to make it unobjectionable, exist in decided cases.

Applying to grant summary judgment or strike out pleadings can be a useful tactic. The qualifications to the exercise of those powers mean that it will only be a particularly clear case, where there are strong prospects of successfully bringing the proceedings to an end or substantially enhancing of one’s own case preparation, that such applications should be made.

Clifton Baker is a Senior Solicitor at Levitt Robinson Solicitors in Sydney, NSW. EMAIL [e-mail].

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^[1] Chapman & Chapman v Australian Broadcasting Commission [2000] SASC 146, [8]-[10].

^[2] Federal Court of Australia Act 1976 (Cth) s31A; Federal Court Rules 2011 (Cth) r26.01; Court Procedures Rules 2006 (ACT) rr425, 1145, 1146; Uniform Civil Procedure Rules 2005 (NSW) r13; Supreme Court Rules (NT) rr22, 23; Uniform Civil Procedure Rules 1999 (Qld) rr292,293; Supreme Court Civil Rules 2006 (SA) rr232, 233; Supreme Court Rules 2000 (Tas) rr356,367; Civil Procedure Act 2010 (Vic) ss61, 63; Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr22, 23; Rules Of The Supreme Court 1971 (WA) O14.1.

^[3] [2017] NSWCA 19.

^[4] Ibid, [30].

^[5] [2010] HCA 48.

^[6] Ibid, [58]-[60].

^[7] Ibid, [22]-[26].

^[8] [2013] VSCA 158.

^[9] Ibid, [34]-[35].

^[10] [2013] VSCA 158.

^[11] [2010] HCA 48.

^[12] Federal Court Rules 2011 (Cth) r16.21; Court Procedures Rules 2006 (ACT) r425; Uniform Civil Procedure Rules 2005 (NSW) r14.28; Supreme Court Rules (NT) r23.02; Uniform Civil Procedure Rules 1999 (Qld) r171; Supreme Court Civil Rules 2006 (SA) r104; Supreme Court Rules 2000 (Tas) r258; Supreme Court (General Civil Procedure) Rules 2015 (Vic) r23.02; Rules Of The Supreme Court 1971 (WA) O20.19.

^[13] [1990] HCA 11, [18].

^[14] [2011] QCA 252.

^[15] [1990] HCA 11.

^[16] [2011] QCA 252, [22], [27].

^[17] [1974] HCA 25; (1974) 131 CLR 69.

^[18] Chapman & Chapman v Australian Broadcasting Commission [2000] SASC 146, [31].

^[19] Aldous v New South Wales [2014] NSWCA 280, [11]-[12], [21].

^[20] Clarke v New South Wales [2015] NSWCA 27, [63].

^[21] JC Campbell, ‘The Purpose of Pleadings’ (2004) Australian Bar Review 116, 122.

^[22] Clarke v New South Wales [2015] NSWCA 27 [69], [74]-[75], [78].

^[23] [2006] HCA 27; (2006) 226 CLR 256.

^[24] BC Cairns, Australian Civil Procedure, 11^th ed, Lawbook Co., Sydney, 2015, p543.

^[25] Ibid, p544.

^[26] JC Campbell, above note 21, 125.