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REASONS FOR JUDGMENT 1 The first and second applicants commenced this proceeding in the Court on 17 March 2010. They are a married couple. The second applicant, Mrs Goodman, is, as the first applicant has informed the Court, seriously ill and unable to participate in the proceeding. The first applicant, Mr Goodman, has filed a notice of motion asking that he be appointed as the tutor of Mrs Goodman for the purposes of the proceeding. I have not dealt with that notice of motion, but have been content to treat the submissions made to me by Mr Goodman as being made also on behalf of Mrs Goodman. 2 By order made on 25 August 2010, a corporation entitled Worldwide Enterprises Limited was added as the third applicant in the proceeding. Subsequently, that corporation has been the subject of a Court order placing it in liquidation. It is therefore appropriate to amend the title to the proceeding by adding the words "(In Liquidation)" after the description of the third applicant. Because any cause of action the third applicant might have is now vested in its liquidator, and Mr Goodman, as a director of the corporation has been deprived of any right to control the activities of the corporation, it is also appropriate to stay any claim by the third applicant in the proceeding until further order of the Court. By order made on 21 September 2010, I also granted leave to Mr Goodman to represent the third applicant, in the absence of a solicitor on the record for that party. It is now appropriate that that leave be revoked. 3 Before the Court today are motions the subject of a notice of motion filed by the respondent on 15 September 2010, and adjourned from 21 September 2010. In the first place, the respondent seeks an order that the statement of claim be struck out. The second order sought is that the applicants provide security for the payment of the respondent's costs. There is also before the Court today a notice of motion filed on 15 October 2010 by Mr Goodman, seeking judgment in default of compliance with an order of the Court. 4 On 21 September 2010, when the respondent's notice of motion was first before the Court, Mr Goodman informed the Court that he was in something of a bind in relation to documents. In a separate proceeding in the Victorian Civil and Administrative Tribunal ("the Tribunal"), the Tribunal had issued a subpoena directed to the respondent in this proceeding, requiring it to produce certain documents to the Tribunal. Mr Goodman was aware that there is attached to his knowledge of those documents, an implied undertaking to the Tribunal that he would not use those documents for any purpose other than the proceeding in which they were produced on subpoena. Mr Goodman had applied to the Tribunal to be released from that implied undertaking, so that he could use the documents in this proceeding. The Tribunal has apparently adjourned that application to await the outcome of any discovery process in this proceeding. In order to resolve the problem, on 21 September 2010, I ordered that the respondent make discovery of the documents it produced to the Tribunal in response to that subpoena. The result was that a list of documents has been filed in this Court, verified by an affidavit. 5 Mr Goodman disputed today that the documents that had been discovered matched those produced on subpoena to the Tribunal. He first made the allegation that the number of pages discovered differed from that produced to the Tribunal. Second, he made the allegation that some documents that were produced on subpoena had not been discovered and some other documents that had not been produced on subpoena had been substituted. In order to attempt to check the allegations, I stood the case down this morning and asked my associate to contact the Tribunal to see if information could be obtained as to the number of pages that were produced on subpoena by the respondent. The result was that my associate was invited to visit the registrar of the Tribunal and to engage in a count of the number of pages of documents that had been produced in response to the subpoena. The result of my associate's count is not entirely clear, because the exact number depends upon the manner in which documents have been copied, and on the resolution of questions as to whether different parts of documents are regarded as separate pages. It is clear, however, that the count undertaken by my associate matches, with a high degree of closeness, the number of pages in the documents discovered by the respondent in this Court. 6 Mr Goodman then said that he wished to have the proceeding adjourned, so that he could return to the Tribunal and again request that he be released from the implied undertaking, for the purpose of demonstrating to me that there had been a substitution of documents. I declined to grant that adjournment. It seemed to me that the probabilities were heavily on the side of the proposition that a solicitor, who is an officer of the Court, would ensure that discovery was correct, and that the documents that were discovered matched those that were produced on subpoena. Already, in the seven months that it has been in this Court, this proceeding has been the subject of an inordinate number of directions hearings, and little has been accomplished in the way of the necessary interlocutory steps to prepare the case for trial. It seemed to me inappropriate that I should prolong that process. I therefore refused the adjournment. 7 This means that I must now deal with the motions that are before me. In the first place, it is necessary to summarise, as best I can, the allegations that are made by the first and second applicant. Mr Goodman alleges that the respondent, a valuer, gave three valuations, one in 2001 and two more in 2004, of the home that was registered in the sole name of Mrs Goodman, but occupied by both Mr and Mrs Goodman. Those valuations were supplied to the Westpac Bank, which used a mortgage on the home as security for moneys advanced to Mr Goodman's company. The substance of the allegations is that the valuations were too low, and that this caused the Westpac Bank to lend less money to the company than it would have otherwise, with the result that the company's business suffered to the point where it ceased to trade, and Mrs Goodman was forced to sell the house in order to satisfy the consequent debts. The allegation is that the house was sold at a substantial undervalue, and Mr Goodman and Mrs Goodman seek to recover the losses associated with this process. 8 As a result of the assistance of pro bono counsel, to whom I referred the applicants under O 80 of the Federal Court Rules ("the Federal Court Rules"), there is a statement of claim that expresses these allegations in the form of two causes of action. One is misleading and deceptive conduct, pursuant to s 52 of the Trade Practices Act 1974 (Cth). The other is, in substance, a fraudulent conspiracy. It is clear that there is a stark inconsistency between these two causes of action, and both could not be substantiated. If Westpac Bank was misled and deceived by the respondent's valuations, then it was hardly likely to have been in fraudulent conspiracy with the valuer to produce those valuations. If, on the other hand, Westpac Bank was in a fraudulent conspiracy with the valuer to produce low valuations, as Mr Goodman alleges, so that it would not have to lend further money to the company, then it could hardly be said that Westpac Bank was misled and deceived by those valuations. 9 The motion to strike out the statement of claim appears to me to be one that I ought not to consider in detail. I would not be in a position to say that the allegations were such that none of the applicants could ever succeed on any of them. If it were the case that the statement of claim were to be struck out, it would be necessary to permit the applicants to have a further opportunity to see if they could plead their claim. In my view, it would be pointless to engage in such an exercise at this stage of the proceeding. I therefore propose to dismiss the application to strike out the statement of claim. Similarly, I propose to dismiss the motion in the applicants' notice of motion filed on 15 October 2010. As far as I can see it, there has been no default in compliance with an order of the Court, in that, as I have said, on the probabilities, proper discovery in accordance with my order has been made. To the extent to which there may have been some minor default in relation to precise dates, that is not something that would justify depriving the respondent of the right to defend the proceeding. 10 The remaining motion is the one relating to security for costs. This is not necessarily easy to determine. It is clear that the first and second applicants lack any ability to pay the costs of the respondent in the event that they are unsuccessful in the pleading. Mr Goodman has said so on more than one occasion in this Court. His impecuniosity, and that of Mrs Goodman, were among the reasons for my decision to grant a certificate pursuant to O 80 of the Federal Court Rules, referring the applicants to pro bono counsel. Significantly, there has been no affidavit material filed by Mr Goodman to suggest that he and Mrs Goodman have any ability to pay the respondent's costs, if the respondent should be successful. 11 A powerful factor in any application for security for costs is whether the applicants who are being asked to provide security are natural persons or corporations. Courts are reluctant to shut out natural persons from their access to the Court by means of orders that they provide security for costs. This is in contrast with corporations which, whilst they are often worth nothing, often have natural persons standing behind them who might be well able to provide security to safeguard a respondent if an application should fail. There is no universal rule, however, that a natural person should not be the subject of an order for security for costs. It should also be pointed out that there is no affidavit evidence from the applicants that the first and second applicant would be shut out entirely if an order for security for costs were made. It may well be that they have some sympathetic person able to provide them with sufficient funds to put up the security for costs in order to enable them to proceed with their claim. If I order security for costs, and that occurs, the respondent will have the comfort of the security, if it should be successful in the proceeding. 12 It is also a fundamental principle that a respondent to a proceeding ought not to be allowed to engage in conduct that brings about the impecuniosity of an applicant, and then rely upon that very impecuniosity to prevent the applicant from continuing to sue it. In the present case, the first and second applicants assert that their impecuniosity has been caused by the respondent's actions. For reasons given below, I can only regard that claim as being a weak one. 13 Mr Goodman also relied on the proposition that a party defending itself against another party ought not to be ordered to give security for costs. He has endeavoured to depict the applicants as being the victims of the respondent, as having been attacked by the respondent, and as defending themselves against the respondent. That attempt involves a misunderstanding of the principle on which Mr Goodman relies. So far as the proceeding is concerned, the first and second applicants are the initiators. So far as this proceeding is concerned, they are the attackers. They are making claims, including claims of fraud, against the respondent, and the respondent is defending itself against those claims. The principle that a party defending ought not be made to provide security for costs is of no relevance to the present proceeding. 14 This brings me to the final major consideration, which is the prospect of success of the proceeding. To the extent to which any loss claimed is loss suffered by the corporation, it cannot be recovered by the individual applicants, even though Mr Goodman is a director of the corporation, and even though Mrs Goodman owned the house used to provide security. If the loss is that of the corporation, they cannot claim it separately. 15 To the extent to which they claim to have suffered loss in their personal capacities, the first and second applicants would have to make good a significant number of links in a chain of causation. Not only would they have to establish the actual wrongdoing of the respondent by giving low valuations, they would have to establish that it was the giving of such valuations that caused the Westpac Bank to lend less money than it otherwise would. They would be faced with the obvious proposition that a bank not wishing to lend money to a customer does not need to enter into elaborate fraudulent conspiracies with a valuer of a house in order to decline to lend money. A bank has the power simply to decline to lend money, if it thinks that the risk might be too great, or for any other reason. 16 If the first and second applicants can prove that the bank lent less because of low valuations, they will still have to prove that loss and damage flowed from that cause, and not from some other cause, such as the manner in which the corporation was managed, or decisions made by those to whom it supplied goods in the course of its business. To the extent to which loss is said to derive from the sale of the house at an undervalue, this, of course, would have to be established. 17 All of these factors make it seem to me that it will be very difficult for the applicants to succeed in making good their claim. As I have said, I would not be prepared to shut them out by striking out a pleading and not giving them leave to deliver a further pleading. I am prepared, however, to entertain the application for an order that they provide security for costs. It seems to me that the respondent ought not to be compelled to face claims of this nature, which it has a good chance of winning, when a win would be, to some extent, illusory because of the impecuniosity of the first and second applicants and their consequent inability to satisfy an order for costs. 18 In my view, justice will be done in the situation by ordering the first and second applicant to provide security for costs. If they are able to do so, they will be able to continue their proceeding, but the respondent will have the comfort of knowing that the security is there, and it will not be entirely out-of-pocket in the event that it succeeds in defending the proceeding. 19 The source of the power of this Court to order security for costs is s 56 of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). That provision gives the Court discretion as to whether to order security and as to the manner, time and form of such security. It is customary in such orders to leave the form of security flexible and to provide for a party providing security to satisfy the registrar as to the form of security. As to the fixing of an amount, I am assisted by an affidavit of the solicitor for the respondent, who estimates that, if the matter were to proceed to trial, the respondent's costs would be at least $40,000. In my view, that is a conservative estimate, having regard to the difficulties already experienced in getting the case ready for trial, and to the likely length of any trial that should occur. That estimate, having been given, I am of the view that it is appropriate that I adopt it in the order. 20 The remaining issue is as to the consequence of the failure to provide security. There are cases in which the Court has ordered that a proceeding be stayed if security is not provided. Section 56(4) of the Federal Court Act specifically empowers the Court to order that the proceeding be dismissed in the event that security is not provided. In my view, that is the appropriate order in a case of this nature. The result will be that the first and second applicants will have 14 days in which to provide security. If they can do so, they will be able to proceed with the case. If they are unable to do so, it will be dismissed with costs. 21 For these reasons, I make the following orders: 1. The title to the proceeding be amended by adding the words "(In Liquidation)" after "(ACN 083 154 741)" in the designation of the third applicant. 2. The order made in paragraph 6 of the order made on 21 September 2010 be revoked. 3. The claims of the third applicant in this proceeding be stayed until further order of the Court. 4. Unless within 14 days the first and second applicants provide security for the respondent's costs of the proceeding in the sum of $40,000, in a form to the satisfaction of the registrar, the proceeding be dismissed with costs. 5. The motion the subject of paragraph 1 of the respondent's notice of motion filed on 15 September 2010 be dismissed. 6. The motions the subject of the applicants' notice of motion filed on 15 October 2010 be dismissed. 7. The first and second applicants pay the respondent's costs of the notice of motion filed on 15 September 2010, and the notice of motion filed on 15 October 2010, including the costs reserved on 21 September 2010 and the costs of today. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the reasons for judgment herein of the Honourable Justice Gray.