Case: Hicks v Ruddock [2007] FCA 299 ; (2007) 156 FCR 574
Outcome: cited
Success under s 31A does not require a demonstration that the case is hopeless or bound to fail. The following principles are of general application to an application under s 31A: (a) the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings; (b) the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed; (c) 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; (d) it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial; (e) if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is 'no reasonable prospect of success'; (g) it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial; (h) evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects; (i) in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party. See Genovese v BGC Construction Pty Ltd [2007] FCA 923 at [5] ; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 70 IPR 146 at [42] - [48] ; Hicks v Ruddock [2007] FCA 299 ; (2007) 156 FCR 574 at [13] ; Bond v Barry (2007) 73 IPR 490 at [46]; Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in Liq) (formerly Stanley Thompson Valuers Pty Ltd) [2006] FCA 1416 at [30] ; Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [21] ; Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60. . 31 I do not think that it can be said that the applicants have no reasonable prospects of success of demonstrating that the proper construction of the option in the Lease is as they contend, aided by a consideration of the above extrinsic circumstances. There are real issues of fact and law to be determined. The rights of the parties depend upon their resolution. In these circumstances it is appropriate that the matter should go to trial: Hicks v Ruddock at [13]. 32 Harbeth contends that there is no evidence to support the pleas that Mr Healey was its agent to prepare and negotiate with potential purchasers the terms of the documents, to effect the sale of the business and the lease including the option. The second and third respondents submit that neither of them were agents to effect the commercial relations between Dandaven and Harbeth. This, they say, was the function of Performance Business Brokers. Mr Pannekoek, in his affidavit sworn on 21 December 2007 at [6] said that, in January 2006 he arranged for the Signs Business to be advertised for sale through Russell Lyon of Performance Business Brokers and that subsequently he instructed Mr Healey to assist. He did not explain what assistance it was that Mr Healey was to render. He said that Mr Healey provided accounting services to Harbeth and related entities as a consultant to PA (2004) Pty Ltd, the third respondent. In his affidavit sworn 10 March 2008 at [6.2] Mr Pannekoek said that PA (2004) acted as Harbeth's settlement agent. 33 The emails of 13 February 2006 from Mr Healey to each of Mr Reynolds and Mr Pannekoek concerned the Contract to Lease. The contents of each, in my opinion, arguably, is evidence that he, or by implication PA (2004), to which he consulted, acted as agent for Harbeth in relation, at least, to the Contract to Lease as pleaded by the applicants. Arguably, any such agency may extend to the formation of the Lease including the option. The Contract to Lease was inextricably tied up with the Lease and both were interrelated with the agreement for the sale of the business. Accordingly there are questions of fact and law as to the allegations of agency, which will require further exploration at trial. This is sufficient to overcome the dismissal application on this ground.