Appellant v First Respondent

1 On 28 June 2024, Gobbo AsJ made an order granting summary judgment to the respondents pursuant to s 63 of the Civil Procedure Act 2010 (Vic) ('the Act') with respect to the claims contained in the appellant's statement of claim filed on 22 November 2022. By notice of appeal filed on 16 July 2024, the appellant seeks an order setting aside the summary judgment order. For the reasons which follow I have concluded that Gobbo AsJ erred by failing to consider whether, notwithstanding her Honour's satisfaction that the appellant's claim had no real prospect of success, the claim should not be disposed of summarily by reason of the matters prescribed by s 64 of the Act. The appellant has established that her Honour's exercise of discretion to summarily dismiss the proceeding was attended by error. It is therefore necessary for the Court to re-exercise the discretion conferred by s 63 taking into account the matters prescribed by s 64. Having undertaken this task, I have concluded that the matters prescribed by s 64 do not warrant the Court refraining from disposing of the proceeding summarily. Consequently, the appeal against the orders made by Gobbo AsJ on 28 June 2024 must be dismissed.

2 The facts relevant to this appeal are largely uncontroversial. The appellant is a priest in the Coptic orthodox church. The first respondent ('YWAM Surrey Hills') was registered on 20 May 2019.[1] The second respondent ('YWAM Durham') was registered on 20 May 2019.[2] On 30 March 2020, YWAM Surrey Hills purchased 1 Kent Road, Surrey Hills, Victoria ('Kent Road'), from Youth With a Mission (Melbourne) Inc ('YWAM Melbourne').[3] On 8 May 2020, YWAM Durham purchased 24 Durham Road, Surrey Hills, Victoria ('Durham Road'), from YWAM Melbourne.[4] YWAM Melbourne had been the registered proprietor of Kent Road since 1985.[5] YWAM Melbourne had been the registered proprietor of Durham Road since 1989.[6]

3 Kent Road and Durham Road are adjacent properties comprising a land area of approximately 9,147 square metres.[7] There are historical buildings situated on the land which were previously used as 'St Joseph's Home for Boys', which had been established by the Sisters of St Joseph in around 1890.[8] The Sisters of St Joseph operated St Joseph's Home for Boys until 1981.[9]

4 In September 2020, YWAM Surrey Hills and YWAM Durham advertised Kent Road and Durham Road for sale.[10] On 15 December 2020, the appellant entered into a contract with YWAM Surrey Hills and YWAM Durham to purchase Kent Road and Durham Road for $27.3 million,[11] with settlement to occur on 4 December 2022.[12] The appellant paid a deposit by way of instalments between 16 December 2020 and 31 March 2021 totalling $2.2 million.[13] Under the contract, the balance of the purchase price was payable in two further instalments: $3,260,000 by 4 December 2021, and $21,840,000 at settlement.[14]

5 On 8 December 2021, the respondents served a default notice on the appellant demanding payment of $3,260,000.[15] On 28 January 2022, the respondents served a notice of termination of the contract upon the appellant.[16] The respondents retained the $2.2 million deposit which had been paid previously by the appellant.[17]

6 On 19 April 2022, solicitors then acting on behalf of the appellant wrote to Mills Oakley, who were at the time the respondents' solicitors.[18] In this letter the appellant's solicitors stated that the appellant had become aware of allegations of child sexual abuse at St Joseph's Home for Boys which were the subject of a submission and private hearing in 2014 with the Royal Commission into Institutional Responses to Child Sexual Abuse ('Royal Commission'). The letter annexed a copy of an article published in the Ballarat Courier on 23 May 2014 which referred to a submission to the Royal Commission from the Ballarat Child Sexual Abuse Survivors' Group which named 17 institutions, including St Joseph's Home for Boys, as being institutions where children had been subject to sexual abuse.[19] The letter alleged that the respondents' failure to have disclosed to the appellant the allegations of sexual abuse in respect of St Joseph's Home for Boys constituted material non-disclosure.

7 On 28 June 2022, the respondents' solicitors wrote to the appellant's solicitors denying that the respondents had any knowledge of the sexual abuse allegations prior to receipt of the letter of 19 April 2022.[20]

8 On 22 November 2022, the appellant filed a generally indorsed writ.[21] On 5 May 2023, the appellant filed a statement of claim.[22] On 30 June 2023, the respondents served a request for further and better particulars of the statement of claim. The response to the request for further and better particulars was filed on 4 August 2023.[23]

9 By his statement of claim, the appellant alleges that prior to entering into the contract of sale for Kent Road and Durham Road the respondents had knowledge by September 2020 of the following matters:

(a) that in 2004 the Australian Senate Inquiry into Children in Institutional Care had received submissions, both public and confidential, in relation to children in the care of the Sisters of St Joseph residing at St Joseph's Boys Home;[24]

(b) in about 2013 the Victorian parliamentary Inquiry into the Handling of Child Abuse by Religious and Other Non-Government Organisations received a submission from the Care Leavers Australia Network, which contained allegations of abuse and degrading treatment of children in the care of the Sisters of St Joseph residing at St Joseph's Boys Home;[25]

(c) in 2014 the Royal Commission received a submission from the Ballarat Child Sexual Abuse Survivors Group which included allegations of sexual abuse against children in the care of the Sisters of St Joseph residing at St Joseph's Boys Home;[26] and

(d) on 23 May 2014 the Ballarat Courier published an article disclosing that the Royal Commission had received a submission from the Ballarat Child Sexual Abuse Survivors Group, which contained allegations of sexual abuse of children in the care of the Sisters of St Joseph residing at St Joseph's Home for Boys (collectively, 'the Abuse Allegations').[27]

10 The appellant's statement of claim sets out the following particulars of the allegation that the respondents had knowledge of the four matters set out above:

The knowledge of YWAM Surrey Hills and YWAM Durham is actual or alternatively is to be implied.

At all material times until 30 March 2020, Youth With a Mission (Melbourne) Inc, an affiliated or related entity of YWAM Surrey Hills and YWAM Durham, was the registered proprietor of Kent Road. At all material times until 8 May 2020 Youth With a Mission (Melbourne) Inc, an affiliated or related entity of YWAM Surrey Hills and YWAM Durham, was the registered proprietor of Durham Road. Youth With a Mission (Melbourne) Inc was the registered proprietor of Kent Road and Durham Road at the time of the Inquiry into Children in Institutional Care, Inquiry into the Handling of Child Abuse by Religious and other Non-Government Organisations and the Royal Commission.

By reason of the particulars given above, YWAM Surrey Hills had actual or alternatively implied knowledge of the matters alleged.

Further and better particulars may be provided following discovery or the issue of subpoenas or interrogatories in the proceeding.[28]

11 On 20 October 2023, the respondents filed a summons seeking summary judgment pursuant to s 63 of the Act. The summons was supported by affidavits sworn by all seven directors of the respondents.[29] In these affidavits the directors deposed that they had no knowledge of the Abuse Allegations prior to the receipt of the letter from the appellant's solicitors dated 19 April 2022.[30] The summons was heard on 22 February 2024, with judgment delivered on 24 May 2024.[31] On 28 June 2024, her Honour made orders pursuant to s 63 of the Act granting the respondents summary judgment.

12 Gobbo AsJ summarised the competing contentions of the parties as follows:

The plaintiff, Fr Attala, is a priest in the Coptic Orthodox Church. The essence of the plaintiff's claim is that prior entering into the Contract of Sale to purchase the Properties, the defendants had knowledge of historical allegations of abuse of children in the care of the Sisters of St Joseph at the St Jospeh's Home for Boys ('Home for Boys') that had operated at the Properties from around 1893 to 1981. The plaintiff contends that had that information been disclosed to him, he would not have entered into the Contract of Sale for the purchase of the Properties. The plaintiff further contends that the defendants failed to disclose material information and/or engaged in misleading and deceptive conduct. The plaintiff seeks a declaration that the Contract of Sale is void ab initio, and that it should be set aside by the Court. At the core of his contention is that the defendants knew of the historical allegations of child abuse at the Properties before entering into the Contract of Sale.

Conversely, the position of the defendants is that they did not know of the historical allegations of child abuse at the Home for Boys prior to the matter being raised by the plaintiff on 19 April 2022. On this basis, they contend that the plaintiff cannot succeed in his claim. The defendants say that an essential element of the claim - knowledge on the part of the defendants - does not exist. Accordingly, they submit that the plaintiff's claim has no real prospect of success. Alternatively, the defendants contend that the plaintiff has failed to properly plead and particularise the alleged knowledge, such that the pleading does not disclose a cause of action and may embarrass the fair trial of the matter.[32]

13 Gobbo AsJ's conclusion that summary judgment should be granted, was as follows:

The case the plaintiff seeks to prosecute involves questions of attribution of knowledge from one corporate entity to two others of:

(a) historical events dating back to a time prior to 1981 when the Home for Boys was operated at the Properties; and

(b) subsequent submissions made to various inquiries dating back to 2004, in the case of the Senate Inquiry, 2013 in the case of the Victorian Inquiry and 2014 in the case of the Royal Commission.

The unchallenged evidence before me is that none of the directors of YWAM Surrey Hills or YWAM Durham had knowledge of the Abuse Allegations. Neither of the defendant entities existed at the time the Home for Boys was operated. Further, the defendants did not exist at the time of the Senate Inquiry, the Victorian Inquiry, the Royal Commission or the Ballarat Courier Article. At its highest, the directors of YWAM Surrey Hills and YWAM Durham say that they were generally aware of the Senate Inquiry and the Victorian Inquiry but were not aware of submissions being made by unrelated parties in respect of the Home for Boys. In relation to the Royal Commission, the defendants say that whilst they were aware of [the Royal] Commission, they were not aware of a submission having been made by an unrelated party that contained allegations of child abuse at the Home for Boys. None of the defendants' directors read the Ballarat Courier Article or were aware that it had been published. Their unchallenged evidence is that they did not know of the Abuse Allegations until they received the plaintiff's letter dated 19 April 2022. Further, YWAM Melbourne did not make any submissions to [the] Senate Inquiry, the Victorian Inquiry, the Royal Commission or the Ballarat Courier Article. Mr Aherne's unchallenged evidence is that he did not know of the Abuse Allegations until 19 April 2022.

In the circumstances, I consider the plaintiff's suggestion that discovery, subpoenas or interrogatories might yield some evidence by which the he can establish actual knowledge of the Abuse Allegations by the defendants to be fanciful at best.

Having regard to the cause of action pleaded, the facts that are said to give rise to the plaintiff's claim, the defence and evidence filed by the defendants and the absence of evidence on behalf of the plaintiff, I am not satisfied that there is a real question of law or fact that should be decided at trial. In my opinion, the plaintiff's claim is improbable, tenuous and one that is contradicted by all the available evidence. There is nothing that sensibly suggests that the plaintiff's position will be improved by discovery, subpoenas or interrogatories given the nature of the plaintiff's claim and the evidence before me.

Accordingly, summary judgment will be given for the defendants. ...[33]

14 An appeal from an Associate Judge to the Trial Division constituted by a Judge of the Court is governed by r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Civil Procedure Rules'). An appeal from an Associate Judge is an appeal by way of re-hearing. The appellant is required to establish legal, factual or discretionary error before appellate power may be exercised.[34]

15 The appellant's notice of appeal contains four grounds of appeal:

When exercising judicial discretion under the Civil Procedure Act 2010 (Vic) (CPA) s 63, the associate judge erred in the decision to summarily dismiss the Plaintiff's claims contained in the statement of claim filed 5 May 2023 (Plaintiff's claims) due to the associate judge:

(a) acting on a wrong principle by failing to invoke, further or alternatively failing to exercise discretion under, the CPA s 64 ('Ground 1');

(b) failing to take into account a material or relevant consideration by failing to rule on the application of s 64 to the summary judgment application ('Ground 2');

(c) failing to take into account a material or relevant consideration regarding the substance of the Plaintiff's claims for the purpose of determining whether the Plaintiff's claims had no real prospect of success, specifically the allegation of knowledge as pleaded in paragraph 13 of the Plaintiff's statement of claim filed 5 May 2023 where, on the particulars to that paragraph, the relevant knowledge was expressed as being 'implied' in the alternative to actual knowledge ('Ground 3');

(d) failing to take into account a material or relevant consideration regarding the capacity for the Plaintiff to 'show cause' for the purpose of the Supreme Court (General Civil Procedure) Rules 2015 r 22.19(1) by failing to take into account the existence, alternatively the significance, of pleaded allegations of fact in the form of the Plaintiff's claims when making that enquiry ('Ground 4').

16 Grounds 1 and 2 are underpinned by the contention that Gobbo AsJ failed to have regard to and exercise the discretion conferred by s 64 of the Act. Section 64 provides as follows:

Despite anything to the contrary in this Part or any rules of court, a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success the civil proceeding should not be disposed of summarily because -

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.[35]

17 In Yin v Wu ('Wu'),[36] the Court of Appeal stated:

In De Saram, a submission that in every summary judgment application under s 63 it is necessary for the Court to consider the discretion under s 64 before granting summary judgment was left open.

For the reasons appearing below, it is also unnecessary to decide that issue in this case. However, our view is that there is much to be said for a construction of s 63 which requires the court to consider whether the discretion under s 64 to order that a proceeding proceed to trial should be considered in every case where the court reaches the view that there is no real prospect of success. Otherwise, it is difficult to see the purpose of the introductory words to s 63(1) ('Subject to section 64'). Reading the two sections together suggests that the discretion to give summary judgment under s 63 is subject to the court's consideration of its discretion under s 64. On this basis, there is no requirement that express reliance be placed on s 64. Nevertheless, a person who wishes to rely on the matters in s 64 as a basis for resisting an application for summary judgment should, ordinarily, expressly rely upon them so that these matters can be addressed in argument.[37]

18 It is common ground that when resisting the application for summary judgment the appellant did not advance a submission that, if Gobbo AsJ concluded that the appellant's claim had no real prospect of success, the Court should exercise a residual discretion under s 64 and refrain from making an order disposing of the proceedings summarily.[38] The Court of Appeal's judgment in Wu is authority for the proposition that the exercise of discretion to order summary judgment pursuant to s 63 is subject to the Court considering matters prescribed in s 64, irrespective of whether a party resisting an application for summary judgment has placed expressed reliance upon s 64.

19 Gobbo AsJ did set out s 64 when setting out provisions of the Act relevant to the application for summary judgment.[39] Also, her Honour referred to the judgment of Elliott J in Stubbings v Jams 2 Pty Ltd ('Stubbings')[40] in which his Honour determined that if he was incorrect to conclude that the defendant's defence based on unconscionability had a real prospect of success, the proceeding should nevertheless go to trial as a matter of discretion under s 64(b) of the Act.[41]

20 Although the matter is not clear cut, I accept the appellant's submission that Gobbo AsJ did not directly address the question of whether, notwithstanding her satisfaction that the appellant's claim had no real prospect of success, the proceeding should not be disposed of summarily because it would not be in the interests of justice to do so, or that the dispute was of such a nature that only a full hearing on the merits was appropriate. It follows that the appellant has established that Gobbo AsJ's exercise of the summary judgment power under s 63 of the Act involved legal error. I uphold grounds 1 and 2 of the notice of appeal.

21 The appellant's third ground of appeal contends that Gobbo AsJ failed to take into account a material or relevant consideration, namely, that the respondents' knowledge of the Abuse Allegations was pleaded in the particulars to paragraph 13 of the statement of claim as being 'implied', in the alternative to 'actual' knowledge. This ground of appeal has no merit. The proceeding before Gobbo AsJ was conducted on the basis that the appellant's claim required him to establish that the respondents had actual rather than constructive knowledge of the Abuse Allegations.[42] Further, the pleading of implied knowledge in the alternative to actual knowledge was explained in the appellant's written submissions filed before Gobbo AsJ as follows:

Fr Attalla has alleged that YWAM Surrey Hills and YWAM Durham had actual knowledge of the Abuse Allegations, or alternatively that the knowledge can be implied from the facts and circumstances. The implication of knowledge, as a process of inferential reasoning, is a finding of actual knowledge on the balance of probabilities.[43]

22 Although pleaded as an alternative, the appellant's pleading of implied knowledge is a pleading of actual knowledge implied from facts and circumstances. Gobbo AsJ considered that 'the plaintiff's suggestion that discovery, subpoenas or interrogatories might yield some evidence by which he can establish actual knowledge of the Abuse Allegations by the defendants to be fanciful at best'.[44] Her Honour plainly considered that the appellant would not be able to establish facts or circumstances from which actual knowledge of the Abuse Allegations could be implied.

23 Ground 4 of the notice of appeal contends that Gobbo AsJ failed to take into account the appellant's capacity to 'show cause', for the purposes of r 22.19(1) of the Civil Procedure Rules by way of the pleaded allegations of fact in the statement of claim. This ground of appeal has no merit.

24 Rules 22.16 to 22.23 of the Civil Procedure Rules relate to an application for summary judgment by a defendant under s 62 of the Act. Rule 22.19(1) provides that a plaintiff may show cause against the application 'by affidavit or otherwise to the satisfaction of the Court'.[45] Notwithstanding the appellant's failure to file any affidavit material challenging the respondents' directors' denial of any knowledge of the Abuse Allegations, the appellant submits that the pleading in the statement of claim that the respondents had such knowledge was sufficient to 'show cause' for the purposes of r 22.19(1).

25 The appellant placed reliance upon the judgment of Pagone J in Portbury Development Pty Ltd v Ottedin Investments Pty Ltd & Ors ('Portbury').[46] In Portbury, Pagone J held that the defendants were entitled to rely upon the facts pleaded in their amended defence and counterclaim to show cause in response to a summary judgment application and in seeking a favourable exercise of the discretion under s 64 of the Act.[47]

26 The difficulty which confronts the appellant is that the particulars pleaded to paragraph 13 of the statement of claim do not provide any foundation for the allegation that the respondents had knowledge of the Abuse Allegations. The sole basis upon which the respondents are alleged to have knowledge of the Abuse Allegations is the ownership of Kent Road and Durham Road by YWAM Melbourne prior to 30 March 2020. The particulars to paragraph 13 of the statement of claim allege that at all material times YWAM Melbourne was an affiliated or related entity of the respondents. Assuming in the appellant's favour that this was so, on no view could this be sufficient to constitute attribution of knowledge of the Abuse Allegations to the respondents. The particulars to paragraph 13 of the statement of claim do not constitute particulars of the allegation that the respondents had knowledge of the Abuse Allegations pleaded in paragraphs 5 to 11 of the statement of claim. The matters pleaded in the particulars to paragraph 13 do not provide any basis for the appellant to show cause for the purposes of r 22.19(1). Gobbo AsJ did not err by failing to take into account the matters pleaded in the statement of claim for the purpose of determining whether the appellant had shown cause for the purpose of r 22.19(1).

27 I have concluded that Gobbo AsJ erred in exercising the discretion conferred by s 63 of the Act by failing to take into account the matters prescribed by s 64. This is an error in the exercise of judicial discretion of the type identified by the High Court in House v The King.[48] Where the exercise of judicial discretion involves a failure to take into account a material consideration an appellate court may exercise its own discretion in substitution for the exercise of discretion at first instance.[49] Further, r 77.06.9(2)(c) of the Civil Procedure Rules provides that a Judge of the Court hearing an appeal from an Associate Judge has power to give any judgment and make any order which ought to have been given or made by the Associate Judge.

28 Having concluded that Gobbo AsJ erred in the exercise of the discretion conferred by s 63 by failing to have regard to the matters prescribed by s 64, it is necessary for the Court to re-exercise the discretion conferred by s 63 taking into account the residual discretion conferred by s 64.

29 Appeal grounds 1 and 2 do not challenge Gobbo AsJ's finding that the appellant's claim had not real prospects of success. Rather, appeal grounds 1 and 2 assume that the appellant's claim does not have a real prospect of success, but contend that the Court should refrain from disposing of the claim summarily on the basis of one or both of the matters prescribed by s 64.

30 Gobbo AsJ's conclusion that the appellant's claim had no real prospect of success was underpinned by the following findings:

(i) the appellant had been on notice of the respondents' contention that they had no knowledge of the Abuse Allegations since 28 June 2022 when the respondents' solicitors wrote to the appellant's solicitors;[50]

(ii) the appellant had ample time prior to the commencement of the proceeding on 22 November 2022 to apply for preliminary discovery;[51]

(iii) the appellant made no request for specific discovery or the production of critical documents under s 26 of the Act prior to the hearing of the summons on 22 February 2024;[52]

(iv) the appellant had not identified, in correspondence or submissions, any categories of documents he sought by way of discovery or the type of material he would expect to receive;[53]

(v) the appellant could have issued a subpoena for the production of documents prior to 22 February 2024 but had not done so;[54]

(vi) the appellant could have, but did not, seek leave to cross-examine the directors who had denied having any knowledge of the Abuse Allegations;[55]

(vii) as the respondents had established a prima facie case that the appellant's claim had no real prospect of success the burden of resisting the summary judgment application shifted to the appellant. The appellant failed to file any evidence in opposition to the respondents' application;[56]

(viii) the appellant failed to establish that there were any serious issues that remained unanswered by the evidence filed on behalf of the respondents;[57]

(ix) the appellant failed to plead or file evidence to support a finding that the alleged knowledge of the Abuse Allegations was attributable to the respondents;[58]

(x) the appellant's suggestion that discovery, subpoenas or interrogatories might yield evidence establishing that the respondents had actual knowledge of the Abuse Allegations was fanciful;[59] and

(xi) the appellant's claim against the respondents was improbable, tenuous and contradicted by all of the available evidence. There was nothing that sensibly suggested that the appellant's position would be improved by discovery, subpoenas or interrogatories given the nature of the appellant's claim and the evidence filed on behalf of the respondents.[60]

31 Save for appeal grounds 3 and 4 (which I have rejected), counsel for the appellant did not advance any submission which calls into question Gobbo AsJ's finding that the appellant's claim has no real prospect of success. It follows that in order for the appellant to succeed in setting aside Gobbo AsJ's order granting summary judgment, the Court must be satisfied that, despite there being no real prospect of success, the appellant's claim should not be disposed of summarily because:

(a) it is not in the interests of justice to do so; or

(b) the dispute is of such a nature that only a full hearing on the merits is appropriate.

32 The appellant's counsel submitted that there were three matters which support the exercise of discretion under s 64 to refrain from granting summary dismissal of the appellant's claim. First, counsel submitted that the transaction which underpins the proceeding is 'significant beyond mere commercial or, indeed, personal considerations or motives; the land had a history of cultural and religious significance, being the former site of the "Home for Boys" for decades; the parties to the transaction claim to have represented, or otherwise appear to have been affiliated with, religious institutions; the appellant's desire to purchase the land was informed by religious and community based considerations. There may therefore be a broader (public) interest in having the dispute tried. Those qualities, coupled with the nature of the allegations regarding the parties' bargain - misrepresentation, misleading or deceptive conduct, and a failure to disclose a material fact - suggest that it would be in the "interests of justice" to allow the matter to proceeding to trial.'[61]

33 The interests of justice encompass the interests of the parties and 'larger questions of legal principle, the public interest and policy considerations'.[62] The nature and content of the interests of justice is to be discerned from, and informed by, the purpose and context of the provision itself.[63] The particular circumstances of the case inform the meaning of 'the interests of justice'.[64]

34 The interests of justice are not limited to matters that ensure that there is justice between the parties, but also involve the public interest in the proper and efficient use of court resources.[65] For the purpose of s 64 of the Act the interests of justice include the public interest. However, I do not accept the appellant's submission that in addition to the interests of the appellant and the respondents there is 'a broader public interest in having the dispute tried'. The proceeding involves a private dispute between a vendor and purchaser of land. Resolution of this dispute does not involve any novel questions of statutory construction, the resolution of which might enliven the public interest. Even if the dispute is characterised as involving public interest considerations, these must be weighed against the public interest in the proper and efficient use of court resources.

35 The nature and content of the interests of justice for the purpose of s 64 is to be discerned from the purpose and context of s 64. The context includes the overarching purpose of the Act in s 7 of facilitating the just, efficient, timely and cost effective resolution of the real issues in dispute. Prima facie, the hearing and determination of claims which have no real prospect of success does not constitute an efficient use of judicial resources. Nevertheless s 64(a) is a statutory acknowledgement that although a claim has no real prospect of success (such that the hearing and determination of the claim may not entail an efficient use of judicial resources), a claim should not necessarily be summarily dismissed.

36 The particular circumstances of a case inform the determination of whether it is in the interests of justice to refrain from summarily dismissing the claim. In the present case, relevant circumstances include the unchallenged evidence of the respondents' directors that they had no knowledge of the Abuse Allegations. Further, the appellant has not pleaded any fact or circumstance by which knowledge of the Abuse Allegations can be attributed to the respondents. I agree with Gobbo AsJ's conclusion that, having regard to the cause of action pleaded, the facts said to give rise to the appellant's claim, and the defence and unchallenged evidence filed on behalf of the respondents, there is not a real question of fact or law to be decided at trial. I also agree with her Honour's conclusion that there is no basis for concluding that the appellant's ability to establish that the respondents did have knowledge of the Abuse Allegations would be improved by discovery, subpoenas or interrogatories. In the present case there are no serious issues which remain unanswered. In this regard, the present case can be contrasted with Stubbings and Ormond Supermarket Pty Ltd v Sarar Australia and New Zealand Pty Ltd ('Ormond Supermarket')[66].

37 Stubbings concerned a borrower defaulting on a loan secured over properties owned by the borrower. Upon default, the lenders sought summary judgment for possession of the properties. The borrower in his proposed further amended defence pleaded unconscionability under section 21 of the Australian Consumer Law, which provides that a person must not, in trade or commerce, engage in conduct that is, in all the circumstances, unconscionable.

38 At first instance, Lansdowne AsJ gave summary judgment in favour of the lenders for possession of the properties. On appeal, Elliot J held that Lansdowne AsJ had erred in finding that there was no real prospect of success with respect to the borrower's defence. Elliot J considered that there was a real prospect of the borrower successfully defending the claim on the basis of unconscionability on the part of the lenders, for reasons including:

(a) the lenders had made no enquiries with respect to any capacity of the borrower or his company to repay the loan;

(b) there was no written loan application; and

(c) there was no evidence of the relationship between the lenders and the loan broker who dealt with the borrower.[67]

39 Elliott J considered that if he was incorrect in concluding that there was a real prospect of success of a defence based on unconscionability, 'this is a (presumably quite rare) case where the Court's discretion ought to be exercised under s 64'.[68] Elliot J referred to the reasons Lansdowne AsJ gave in her judgment for exercising the discretion:

There are, however, serious questions raised by some aspects of the evidence in this application as follows:

• No authority is in evidence to pay [the solicitor] the fees he requests for himself and [the accountant];

• No authority is in evidence in relation to the second procuration fee;

• No explanation is given as to the basis on which these fees were charged or whether they were appropriate;

• The circumstances in which the "mandate" was created and how it came to be in the position of the plaintiffs are not explained.

When coupled with the nature of the transaction itself, and the absence of financial information provided to the plaintiffs as to the capacity of the defendant or his company to make repayments, I consider that these matters raise real concerns as to the probity of the transaction. In my view, these concerns can only be satisfactorily put to rest by a trial on oral evidence and after interlocutory processes such as discovery and interrogatories if sought have been utilised.[69]

40 Elliott J further stated '[a] court ought to act with particular caution when it is required, under the relevant statutory provisions, to consider "all the circumstances", and where, despite a substantial body of affidavit evidence filed by the [lenders], there are serious issues that have remained unexplained, and where the application was made at a time when there had been no discovery in the proceeding.'[70]

41 Ormond Supermarket also concerned the situation of borrowers defaulting on a loan and the lender seeking to recover possession of the borrowers' property. The borrowers in their proposed amended defence and counterclaim alleged, among other things, that the lender had engaged in unconscionable conduct. At first instance, Matthews JR held that the borrowers had no real prospects of defending the lender's claim. On appeal, Attiwill J held that the borrowers had real prospects of establishing a defence based on unconscionable conduct. This was for reasons including:

(a) the borrowers had no substantial income and no assets;

(b) the borrowers were unsophisticated and had little financial knowledge; and

(c) the lender knew that the loan was risky.[71]

42 Attiwill J considered that if he was incorrect in finding the borrowers had real prospects of success in the defence based upon unconscionability, then 'I am satisfied that this is a rare case in which the Court should exercise its discretion under s 64 of the Civil Procedure Act.'[72] Attiwill J noted that there had been no discovery, and serious issues remained unanswered, including:

(a) why the lender did not request any financial information from the borrowers concerning their capacity to make repayments;

(b) the assessment of the risks made by the lender; and

(c) whether the lender was satisfied that the borrowers could service the loan.[73]

43 In Stubbings and Ormond Supermarket both Elliott and Attiwill JJ considered that there were real issues for determination when the application for summary judgment was heard. This is not the position in the present proceeding.

44 Second, counsel for the appellant submitted that the dispute between the parties is of such a nature that, under s 64(b), only a full hearing of the merits is appropriate.[74] The central issue in the present proceeding is whether the respondents had knowledge of the Abuse Allegations. I agree with Gobbo AsJ's conclusion that there is nothing that sensibly suggests that the appellant's ability to establish that the respondents had knowledge of the Abuse Allegations would be improved by discovery, subpoenas or interrogatories. Further, the appellant has not identified by way of his pleading or submissions any fact or circumstance which could provide a basis to challenge the evidence of the respondents' directors that they did not have knowledge of the Abuse Allegations. I reject the appellant's submission that the dispute between the parties is of such a nature that only a full hearing on the merits is appropriate.

45 Third, counsel for the appellant submitted that notwithstanding the summary dismissal of the claims contained in the statement of claim, the allegations of fact which form the basis for the appellant's claims are also relied upon by the appellant as a defence to the respondents' counterclaim.[75] In effect, the appellant submits that the summary dismissal of the claims in the statement of claim is inutile because the claims will still have to be agitated by way of defence to the respondents' counterclaim.

46 By their defence and counterclaim the respondents claim damages for breach of contract.[76] In his reply and defence to counterclaim the appellant refers to and repeats the matters set out in the statement of claim.[77] Contrary to the appellant's submission, Gobbo AsJ's order summarily dismissing the statement of claim does not permit the appellant to agitate the matters alleged in the statement of claim by way of defence to the respondents' counterclaim. Rather, as the claims in the statement of claim have been summarily dismissed, those claims cannot be reagitated by way of defence to the respondents' counterclaim.

47 The three matters relied upon by the appellant in support of his submission that the Court should exercise the s 64 discretion in his favour do not provide a proper basis for the Court to refrain from disposing of the appellant's claim summarily.

48 The appellant has established that Gobbo AsJ erred in failing to consider whether, in the exercise of the residual discretion under s 64, the appellant's claim should not be disposed of summarily. Having considered afresh the application of s 64 I am not satisfied that the Court should refrain from summarily dismissing the appellant's claim because:

(a) it is not in the interests of justice to do so; or

(b) that the dispute is of such a nature that only a full hearing on the merits is appropriate.

49 It follows that the appeal against Gobbo AsJ's order on 28 June 2024 granting the respondents summary judgment in respect of the claims contained in the statement of claim must be dismissed. My provisional view is that the appellant should pay the costs of the appeal, including any reserved costs, on a standard basis to be taxed in default of agreement. However, if the parties do not agree with this provisional view, I shall provide the parties with an opportunity to make submissions in respect of the costs of the appeal.

[1] Court Book dated 23 July 2024 at 813 ('CB').

[3] Affidavit of Jared Paul Hoover dated 20 October 2023 at [7.1] ('Hoover affidavit').

[7] Statement of Claim dated 5 May 2023 at [4(a)]-[4(b)] ('Statement of claim').

[13] Hoover affidavit at [27], [29].

[24] Statement of claim at [5]-[6].

[29] Affidavit of John Mark Silas Brokenshire dated 19 October 2023 ('Brokenshire affidavit'); Affidavit of Stephen Martin Aherne dated 20 October 2023 ('Aherne affidavit'); Hoover affidavit; Affidavit of Jennifer May Rentsch dated 20 October 2023 ('Rentsch affidavit'); Affidavit of Kenneth Neil Mulligan dated 20 October 2023 ('Mulligan affidavit'); Affidavit of Thomas Charles Hallas dated 20 October 2023 ('Hallas affidavit'); Affidavit of Nicholas John Matthews dated 20 October 2023 ('Matthews affidavit').

[30] Brokenshire affidavit at [7.10]; Aherne affidavit at [7.10]; Hoover affidavit at [35.10]; Rentsch affidavit at [7.10]; Mulligan affidavit at [7.10]; Hallas affidavit at [7.10]; Matthews affidavit at [7.10].

[31] Attala v YWAM Surrey Hills Ltd & Ors [2024] VSC 268 ('Primary judgment').

[34] Oswal v Carson [2013] VSC 355 at [11].

[35] Civil Procedure Act 2010 (Vic) s 64.

[36] (2023) 73 VR 21.

[38] Transcript of proceedings before McDonald J dated 6 February 2025 ('T') 46 Line ('L') 28 - T 47 L 2.

[40] (2017) 53 VR 420 ('Stubbings').

[42] Transcript of proceedings before Gobbo AsJ dated 22 February 2024 T 46 L 10-25.

[43] Plaintiff's Outline of Submissions dated 16 February 2024 at [40].

[46] [2012] VSC 490.

[48] (1936) 55 CLR 499 at 504-505.

[49] Ibid; see also Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at 205 [21].

[61] Appellant's Outline of Submissions dated 6 November 2024 at [21].

[62] Commonwealth Director of Public Prosecutions v Knopp (2023) 73 VR 73 at 81 [32] ('Knopp'), quoting Beazley P in Landsman v The Queen [2014] NSWCCA 328; (2014) 88 NSWLR 534 at 550 [69] (Hidden and Fullerton JJ agreeing).

[64] Deputy Commissioner of Taxation v Shi [2021] HCA 22; (2021) 273 CLR 235 at 258 [41] per Kiefel CJ, Gageler and Gleeson JJ; see also Australian Federal Police v McGlone [2016] NSWCA 103 at [95].

[65] Bogan v Estate of Smeldley (2023) 72 VR 394 at 419 [104].

[66] [2022] VSC 278 ('Ormond Supermarket').

[67] Stubbings at 435-437 [41]-[42].

[69] Jams 2 Pty Ltd v Stubbings [2016] VSC 711 at [110]-[111].

[71] Ormond Supermarket at [112]-[113].

[74] Appellant's Outline of Submissions dated 6 November 2024 at [22].

[76] Defence and Counterclaim dated 22 August 2023 at [52].

[77] Reply and Defence to Counterclaim dated 22 November 2023 at [48(b)], [49(b)], [50(b)], [51(b)], [54], [56],[57(b)], [58]-[59].