Case: White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511
Outcome: applied
Section 31A Federal Court Act applies to all cases commenced on or after 1 December 2005. The nature of the provision and its overlap with O 20 r 2 Federal Court Rules have been considered in a number of cases in this Court, including the recent decision of Lindgren J in White Industries Aust Ltd v Commissioner of Taxation [2007] FCA 511. In that case, his Honour articulated a number of principles including: &#8226; Section 31A of the Federal Court Act, like O 20 of the Rules, is concerned with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form (at [50]). &#8226; Section 31A(2) is comparable to O 20 r 2 in that they are both concerned with dismissals of proceedings (at [50]). &#8226; The only difference that suggests itself between the concept of no reasonable cause of action being disclosed (O 20 r 2(1)(a)) and no reasonable prospect of successfully prosecuting a proceeding (s 31A(2)) is that the latter makes plain that there may be taken into account the unavailability of evidence necessary to bring success at trial, whereas it is arguable that the former does not permit the unavailability of such evidence to be taken into account (at [51]). &#8226; It appears that the legislature's intention in enacting s 31A was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91-92, and General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129-130 (at [54]). (To that extent the test in s 31A appears less stringent than that in O 20 r 2: Spender J in Rogers v Asset Loan Co Pty Ltd (2007) FCA 1371 at [55] ). &#8226; The "no reasonable prospects of success" formula of s 31A reflects the approach adopted in r 24.2 of the United Kingdom's Civil Procedure Rules (at [53]). In the United Kingdom it has been held in the context of that equivalent rule that the expressions "no real prospect of succeeding" and "no real prospect of successfully defending" require attention to be given to real, as opposed to "fanciful" or "merely arguable" prospects (at [59]). &#8226; The same test has been adopted in r 292(2) and r 293(2) of Queensland's Uniform Civil Procedure Rules 1999 (at [53]). The Queensland Court of Appeal has similarly held that the "no reasonable prospects of success" test requires the court to determine whether there are "real" as opposed to "fanciful" prospects of success: Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232 at 235 (at [59]). 15 I respectfully adopt this articulation of principles of Lindgren J. 16 It is clear that the substantive application before me is almost identical to that which was before Spender J in QUD525/2005, and upon which his Honour has given judgment. This suggests immediately a possible abuse of process by the applicant in these proceedings. However, there are clearly two differences between the substantive application before Spender J upon which his Honour has given judgment, and the substantive application before me, namely: 1. First, the substantive application in QUD525/2005 purported to be a claim for relief under the Trade Practices Act 1974 (Cth) while the proceedings before me purport to be brought under the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act"). 2. Second, whereas in the substantive application before me the applicant seeks as relief an order to set aside a bankruptcy notice filed by the second respondent on the grounds of a set off or counterclaim, and by way of interlocutory relief an order extending time to comply with that bankruptcy notice, no such relief was sought in the substantive application in QUD525/2005. 28 In any event, having regard to the decision of Spender J in Rogers v Asset Loan Co Pty Ltd [2007] FCA 1371 , it is clear that the applicant would be no more successful on the material before me in claiming relief under the ASIC Act than she was before his Honour in claiming relief under the Trade Practices Act . In light of the principles articulated by Lindgren J in White Industries [2007] FCA 511 , it is plain that the claim has no reasonable prospects of success in terms of s 31A Federal Court Act.