In a recent Canberra case, local firm Aspen Medical Pty Ltd (Aspen), was awarded a summary judgment of $3.7 million in respect of N-95 face masks that were not provided or replaced from Canadian supplier BA Capital Inc (BA Capital). This case highlights the role that a summary judgment can play in obtaining a favourable outcome in a dispute, without the need for a full hearing.
A summary judgment is typically granted where the plaintiff, in this case Aspen, can satisfy the Court there is no merit to defence of their claim. If granted, a summary judgment has the benefit of the parties not incurring the costs of a full hearing as well as speedy resolution.
Shortly after the global outbreak of COVID-19, Aspen, a Canberra headquartered company that provides health services in Australia and overseas, entered a contract with BA Capital to supply 20 million N-95 masks at a cost of $140.4 million.
The contract required delivery in stages, with a strict timetable. If the strict delivery timetable and other contractual obligations were not met, Aspen was permitted to reduce the quantity of facemasks to be supplied, with a corresponding reduction in consideration.
Aspen had paid $35.1 million in initial instalments, however it commenced proceedings in the ACT Supreme Court to recover $3.5 million in respect of defective masks after it was only supplied with 5 million masks, of which it claimed $0.5 million were defective.
Aspen applied for summary judgment after BA Capital filed its defence, however BA Capital did not participate in the hearing, after withdrawing their legal representative’s instructions.
The Court may give judgment for a plaintiff against a defendant after a defence is filed unless it is satisfied the defendant has a good defence or sufficient facts are disclosed to entitle the defendant to defend the claim generally. Summary judgments are given sparingly, and the task for a plaintiff to obtain summary judgment is a difficult one.
In determining the claim for Aspen’s summary judgment, the Court applied the following principles:
- Lost opportunity – It should proceed with caution, appreciating that a summary judgment could deprive the defendant of a fully contested hearing;
- No “mini-trial” – The plaintiff must adduce reliable evidence establishing the facts in the claim;
- Evidence – The plaintiff must adduce reliable evidence establishing the facts asserted in the claim;
- Onus – Once the plaintiff has done so, the onus is on the defendant to demonstrate a good or arguable defence; and
- Court Assessment – The Court must then make a careful assessment of whether the defence does it in fact raise issues which should be determined at a full hearing. If it is satisfied the defence does not raise such issues, it should generally enter judgment in favour of the plaintiff.
The Court found Aspen’s evidence was convincing and its task was made easier by the failure of BA Capital to present evidence to the contrary. The issues raised by BA Capital were contrary to the contract, unsustainable and without substance.
The Court granted Aspen’s substantive claim of $3.5 million plus storage costs and interest, for a final judgment of $3.7 million.
The supply of defective goods can have significant consequences. Although summary judgments are granted by the Courts sparingly, the case of Aspen demonstrates the Courts will not shy away from granting summary judgment in appropriate cases. Plaintiffs with strong cases ought to consider applying for summary judgment at an early stage of proceedings. A successful summary application will save time and expense in conducting litigation to a full a hearing. This should be balanced with the risk of an adverse costs order if the application is not successful.
At Griffin Legal, our litigation experts can help guide you through this process if you are considering making or defending a summary judgment application. Please reach out to the team on (02) 6198 3100 or enquiries@griffinlegal.com.au.
The full case can be read here: Aspen Medical Pty Ltd v BA Capital Inc [2021] ACTSC 321