Summary Judgment and Strike Out Applications

The notion of issuing a claim and going to court to recover a debt is often problematic for creditors. It is well established that legal costs in litigation and other dispute resolution processes can be significant. Legal costs can be a real cause for concern for creditors and, in many cases, cause them to question the proportionality of even commencing a business debt recovery claim. However, creditors should note that it is rare that debt recovery matters will ever proceed to court.

Furthermore, specific procedures and courses of action can be considered and implemented before trial to facilitate the best possibility of recovering the debt. Two courses of action which may be available are applying to the court for summary judgment and strike out. Those seeking to recover business debts can apply for both summary judgment and strike out if appropriate, which can maximise a creditor’s chances of avoiding a case progressing to trial.

Summary judgment is a course of action that creditors may wish to consider. Suppose a creditor has a strong case, and the case for the party defending the claim is particularly weak. In that case, there is the option to apply to the court for summary judgment at an early stage in proceedings, without the delays, stress and costs that will likely be incurred for the matter to reach trial. Effectively, the court will decide on the dispute without a trial.

There are a few factors that the court will consider when granting summary judgment. However, for the court to grant summary judgment, the court must be convinced that:

1. The claim or issue (or defence to the claim or issue) has no real prospect of success; and
2. There is no other compelling reason for the claim to proceed to trial.

Successful parties in obtaining summary judgement can expect to receive judgement much sooner than awaiting a trial decision. They can also expect to incur fewer costs as summary judgment applications are normally made before the parties exchange disclosure documents, witness evidence and expert evidence.  

If a summary judgment application is unsuccessful, the claim will proceed to trial unless it can be settled before trial.