Case: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 
Outcome: applied
In Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 , Rares J said at [42] [45]: '[42] I am of opinion that, properly construed, s 31A(2)(b) requires a person moving a motion for summary disposal (the moving party) to satisfy the court that there is no reasonable prospect of the party claiming relief (the plaintiff) successfully prosecuting the proceeding or the part of the proceeding in question. Experience shows that there are cases which appear to be almost bound to fail yet they succeed. As Dixon CJ once said (Pontifical Society for the Propagation of the Faith v Scales [1962] HCA 19 ; (1962) 107 CLR 9 at 20; [1962] HCA 19 ; [1962] ALR 775 at 781): "Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told." [43] Brennan CJ and McHugh J applied that observation in Jackamarra [v Krakover [1998] HCA 27 ; (1998) 195 CLR 516] at [9] to a situation which an appellate court was exercising a discretion to permit a further step to be taken in an appeal that had already been instituted. Obviously, where there is a contested application under s 31A, both parties will be present to explain their case, but not in the context of a trial. The procedure envisaged by s 31A is summary. The concept of a party having "no reasonable prospect of successfully prosecuting a proceeding" has some similarity to the test at common law for determining whether a jury properly instructed could reach a verdict for the plaintiff. That test was authoritatively stated by the Judicial Committee in Hocking v Bell [1947] UKPCHCA 1 ; (1947) 75 CLR 125 at 130 1; [1947] HCA 54 ; [1948] 1 ALR 85 at 87-8 (Hocking (1947)), approving the following statement from the dissenting judgment of Latham CJ (Hocking v Bell (1945) 71 CLR 430 at 441 2 (Hocking (1945))): If there is evidence upon which a jury could reasonably find for the plaintiff, unless that evidence is so negligible in character as to amount only to a scintilla, the judge should not direct the jury to find a verdict for the defendant, nor should the Full Court direct the entry of such a verdict. The principle upon which the section is based is that it is for the jury to decide all questions of fact, and therefore to determine which witnesses should be believed in case of a conflict of testimony. But there must be a real issue of fact to be decided, and if the evidence is all one way, so that only one conclusion can be said to be reasonable, there is no function left for the jury to perform, so that the court may properly take the matter into its own hands as being a matter of law , and direct a verdict to be entered in accordance with the only evidence which is really presented in the case. [Emphasis added] See also Swain v Waverley Municipal Council (2005) 220 CLR 517 ; 213 ALR 249 ; [2005] HCA 4 at [9] per Gleeson CJ, [128] [131] per Gummow J and [203], [208] [209] per Kirby J; see also at [33] [34] per McHugh J. [44] In a case to which s 31A applies, where there is a real issue of fact to be decided in the sense identified in the above principle, and, possibly, where there is a real issue of law of a similar kind, it is obviously appropriate that the matter goes to trial. And, one must be mindful that in Hocking (1945) at 487, Dixon J said that, in effect, every judge who had heard the matter (through four trials, two Full Court appeals and, to that point, the appeal to the High Court) would have formed the view that the plaintiff should have failed had they been able to decide the facts, yet the Privy Council restored the second jury verdict in her favour and so concluded the litigation. This raises a very real question, as to what reasonable prospects are for present purposes. [45] I am of opinion that in assessing what reasonable prospects of success are for the purposes of s 31A, the court must be very cautious not to do a party an injustice by summarily dismissing the proceedings where, in accordance with the principles in Hocking (1947), contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed. As soon as the evidence may have such an ambivalent character prior to a final determination, I am of opinion that then, as a matter of law, at that point there are reasonable prospects of success within the meaning of s 31A. Unless only one conclusion can be said to be reasonable, the moving party will not have discharged its onus to enliven the discretion to authorise a summary termination of the proceedings which s 31A envisages. In moving the second reading of the bill introducing s 31A (the Migration Litigation Reform Bill 2005) the Attorney-General said that it strengthened ... "the power of the courts to deal with unmeritorious matters by broadening the grounds on which federal courts can summarily dispose of unsustainable cases".' 8 The approach of Rares J in Boston Commercial was adopted by Jacobson J in Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in liq.) (formerly Stanley Thompson Valuers Pty Ltd) [2006] FCA 1416 where his Honour said at [30] [33]: '[30] ... The authorities relating to the proper construction and effect of s 31A of the Federal Court of Australia Act were exhaustively reviewed by Rares J in Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 at [31] [48]. His Honour stated the relevant principles at [45] and they may be summarised as follows: &#8226; In assessing whether there are reasonable prospects of success, the Court must be cautious not to do an injustice by summary dismissal. &#8226; There will be reasonable prospects of success if there is evidence which may be reasonably believed so as to enable the party against whom summary judgment is sought to succeed at the final hearing. &#8226; Evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects. &#8226; Unless only one conclusion can be said to be reasonable, the discretion under s 31A cannot be enlivened. [31] I do not think that this approach conflicts with the provisions of s 31A(3). [32] It is true that summary dismissal applications are to be determined on the pleadings and any evidence before the Court; but at the heart of the exercise is the assessment on incomplete materials, of the prospects of success if the matter proceeds to a final hearing: Boston Commercial at [38], [48]. [33] It would be wrong to determine the application on a narrow approach to the pleadings where, as here, there is evidence, albeit incomplete, and perhaps at this early stage, ambivalent, which may at a final hearing, and with amended pleadings, produce a verdict for the applicant.' 9 In Hicks v Ruddock [2007] FCA 299 ; (2007) 156 FCR 574 , Tamberlin J also gave clear approval to the approach taken by Rares J in Boston Commercial . His Honour said at [12] [13]: '[12] Section 31A of the Federal Court Act 1976 (Cth) was introduced to impose a lower requirement to dismiss an action by way of summary judgment than that which was imposed in General Steel Industries Inc v Commissioner of Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125. In that case, the requirement was expressed in terms of "manifestly groundless" or "obviously untenable". [13] In a case where evidence can give colour and content to allegations and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading: see Boston Commercial Services Pty Ltd v G E Capital Finance Australia Pty Ltd [2006] FCA 1352 at [45] . The underlying principle is that the need for a summary judgment must be clear before the court will intervene to prevent a plaintiff submitting a case for determination in the usual way. Once it appears that there is a real issue to be determined, whether it be of fact or law, and that the rights of the parties depend on it, the court should not terminate the action by way of summary judgment. As Barwick CJ said in General Steel at 129-130, great care must be exercised to be sure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of the opportunity to have his or her case tried by the appointed tribunal. The general principle that a person should not lightly be shut out from a hearing is cogent the onus on the party applying for summary judgment is heavy.' 11 In Jefferson Ford , the Full Court was comprised of Finkelstein, Rares and Gordon JJ. Finkelstein J summarily dismissed the standard adopted by Rares J in Boston Commercial in the following words at [21]: '[21] In Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 70 IPR 146 Rares J attempted to describe the requisite standard under s 31A. After reviewing many cases, most from different and not necessarily analogous areas, he came down to the view (expressed at 157) that if there was "a real issue of fact to be decided" or "possibly, where there is a real issue of law" to be resolved the matter should go to trial. This, with respect, does not seem to be very far removed from the old O 14 test. So the standard must be found elsewhere.' 14 In Jefferson Ford at [73], Rares J merely observed that the parties accepted both before the primary judge and the Full Court, that the test to be applied under s 31A of the FCA was that which his Honour stated in Boston Commercial and that in those circumstances, it was not open to the Court to undertake a frolic of its own (again, my words, not his Honour's). 16 Whether one applies the standard adopted by Rares J in Boston Commercial , the indicia of assessment which Gordon J thought s 31A required to be addressed in Jefferson Ford or, applying the tasks which Finkelstein J thought were imposed on a judge when considering an application made in reliance on s 31A, this ground of the motion must fail.