Respondents' interlocutory applications seeking dismissal
20 The applicants do not dispute that they have failed to comply with the relevant orders made on 23 August 2012 concerning security for costs.
21 In seeking to have the proceedings dismissed in respect of each individual affected respondents, the respondents generally rely upon the Court's powers under s 56(4) of the FCA Act and r 5.23(1)(b)(i) of the 2011 FCRs. That rule relevantly provides: "If an applicant is in default, a respondent may apply to the Court for an order that… (b) the proceeding be stayed or dismissed for the whole or any part of the relief claimed by the applicant: (i) immediately...".
22 The issue is whether, having refused to vary the orders made in August 2012, those orders should continue to operate to stay the proceedings or whether the proceedings should be dismissed in relation to each of the affected respondents.
23 Some guidance concerning the exercise of the discretion to dismiss the proceedings where there is non-compliance with orders for security for costs is provided in the following statement of the Full Court in Microbio Resources Inc v Betatene Ltd (unreported, Black CJ, Sheppard and Einfeld JJ, 8 October 1993):
The Court is careful to see that orders for security for costs do not work injustice to parties against whom such orders are made, but if those parties do not comply with the orders and give no evidence or explanation as to why they have not complied with them, they cannot be heard to complain of injustice if, after a considerable length of time, and extensions of time, the ultimate sanction of dismissal is applied. It is incumbent upon parties in such circumstances to provide evidence of their position.
24 The considerations which may be relevant to the question whether the proceedings should be dismissed were also helpfully summarised by the Court of Appeal of New South Wales in Idoport Pty Ltd v National Australia Bank [2002] NSWCA 271 at [28]. They include the following five non-exhaustive factors:
(a) the period that has elapsed since security was ordered;
(b) the fact that the affected party has been on notice of the application for dismissal;
(c) the seeming inability of the affected party to further fund the primary proceeding;
(d) the prejudice to the respondents in the litigation; and
(e) the position of the Court.
25 Dealing with each of those matters in turn, I make the following observations and findings.
26 First, the applicants have had since 23 August 2012 to arrange the relevant security to be provided and have failed to do so over that seven month period. There is no reason to believe that they would be able to do so if they were given more time.
27 Secondly, the applicants have been on notice for some time that the proceedings could be dismissed if they did not comply with the security for costs orders. Two of the interlocutory applications for dismissal were served on the applicants in early February 2013, and the balance were served around 20 February 2013. Furthermore, the possibility of the proceedings being dismissed for non-compliance was brought to the applicants' attention in [53] of my earlier reasons for judgment dated 23 August 2012.
28 Thirdly, there is no contest between the parties that the applicants do not have the funds to provide the required security and there is no evidence to suggest that that is likely to change.
29 Fourthly, each of the affected respondents is prejudiced by the maintenance of the litigation not the least in terms of the costs and resources needed to deal with the applicants' interlocutory applications and, at times, voluminous and embarrassing supporting materials, some of which have been put forward by the applicants otherwise than in accordance with the Court's orders made on 5 February 2013. The point is well illustrated by the tranches of proposed amendments which the applicants have provided after the 5 February 2013 hearing. One tranche was supplied within the specified three days, but two further tranches have also been put forward outside that timetable, including the latest tranche of proposed amendments which were filed and served only two days before the hearing. The applicants have also failed to provide the respondents (or the Court) with tracked versions of their proposed amendments notwithstanding that this difficulty was specifically raised at the directions hearing held on 5 February 2013. That omission has necessarily created costs and considerable inconvenience to the other parties. In the overall scheme of things, the applicants' failure to abide by the orders for serving electronic copies of their proposed amendments does not loom large in my judgment. Of greater concern is the fact that despite the applicants numerous attempts to produce a pleaded case which complies with basic pleading rules and requirements they have failed conspicuously.
30 Fifthly, as some of the respondents point out, the proceedings involve serious allegations of fraud and conspiracy (substantially unparticularised), which has an ongoing deleterious effect on their business and personal reputations.
31 Sixthly, although the applicants have taken steps in the proposed amended pleadings to remove some of the scandalous allegations, it is readily apparent that the foreshadowed amendments suffer from many of the pleading deficiencies highlighted in the previous judgment. The applicants have had an ample opportunity to comply with basic pleading requirements. They have failed to do so.
32 The serious pleading deficiencies in the applicants' foreshadowed amended pleadings as contained in the document titled "Essential Submission prior to the Hearing on 5 February 2013" are illustrated by the following examples involving allegations against the second respondent (the Valuer General of Western Australia), the fourth and fifth respondents (who are both licensed valuers) and the ninth respondent (National Australia Bank).
33 As to the Valuer General, the following extracts from pages 10 and 11 of the foreshadowed amended pleading are reasonably representative of the applicants' pleadings generally:
Valuer General violates his Code of Conduct in every UV & GRV sets
This dispute essentially originates for only one singular reason. Valuer General (Second Respondent) did not make a studied & detailed report on every valuation (UV or GRV) he makes as & when he makes it (after visiting the land & confirming that he had visited the land in the report), as demanded of him by his Code of Conduct with no excuse whatsoever.
This matter has arisen (brought to our attention only recently) after the proceedings have started. As per rule # 16.51(4) FC Rules, we are entitled to make this amendment to our pleadings without leave or consent from anybody.
This is an important issue leading to the fact that Valuer General (Second Respondent) has no defence against our claims of causes of action against him. As earlier pleaded, he had made the Interim Valuations on our lots & subdivisions disregarding s 24 of VLA 1978. He has set two values at Interim Valuations on our lots & subdivisions instead of setting one value (UV) disregarding s 23 of VLA 1978. Further he had determined the valuations deceptively as he based them on evidences not available to him at the time he valued them (Deceptive per FCAFC 31-2012). To top them all, he had violated his Code of Conduct in a significant way by not preparing a report. He did that only to circumvent the rules & enable him to deceive us.
Even after all our obligations to the valuations, he had refused to make any report against UV $380,000 (DR 477 in SAT) on our lot 124 Lawrencia Loop, Kalbarri & against UV $480,000 on our lot 276 in Surf View until to-day. He had refused to do his solemn duty & obligation even ignoring SAT orders to him (ordered many times) to do so on these two valuations in particular. He knew that it was impossible for him to defend his deceptions on these two valuations without resorting to even more deceptions by his power to amend valuations retrospectively.
34 As to applicants' allegations against the fourth and fifth respondents, the following matters set out on pages 12, 18, 20 and 34 of the proposed amended statement of claim are typical of the foreshadowed proposed amendments:
On the same day, 1 August, 2006 Ms. Deborah Andrews & Mr. Colin Dymond issued a valuation report certifying that this land was valued $567,500, an amount exactly equal to our purchase price. They did so knowing that if they valued any amount less than that, the sale might not go through due to a purchase condition.
…
These were causes of action for us to claim damages under the various provisions including TPA 1974, s 236 of C & C Act, 2010, FTA 2010, VLA 1978 among others.
These causes of action fall under deceptive & misleading conducts; deceptive & misleading representations; misleading promises of future; violations of code of conduct, etc coming under these Acts.
…
Collusion of all parties is essential
In order to manage property sales at inflated values, it is essential that all parties involved in the sale should act in collusion.
No single party, in isolation, individually can manage to sell land at significantly above true market price (above 15%-20%) without the active participation of all other parties involved in that sale. This is a significant aspect which compels the Applicants to claim damages from all parties instead of claiming them from one party in isolation.
…
The falsifications of valuation of this lot by Valuer General & Ms. Andrews/ Mr. Dymond as an amount very close to or the same as the false price set by the developers in August 2006 is to be noted. It is like claiming that price of a kg of tomatoes is $20 certified by valuer, master valuer and trader when the true price is only $1. We should assume that they deliberated together & agreed on the value of $567,500.
35 As to the applicants' allegations against the ninth respondent (NAB), the following extracts from pages 49 and 50 exemplify the applicants' approach to pleading:
I should state my position on these matters & why these matters are related to the rest of the claims. In short, it is part of the "Cheat & Win" scheme because:
A) Colluding with Valuer General & developers, Port Bouvard, NAB was part of inflating land values at Port Bouvard by extending these loans to us based on wrong prices.
B) They knew that property prices would decline as prices were artificially inflated.
C) So any fall in price in property market in future is attributable to NAB & the Respondents.
D) In 2009, they knew that I lacked funds to service the loans other than the remaining loan amount.
E) They prematurely terminated my loan to starve me & use any remaining funds to recover the premiums in advance. This is an important point. The unpaid $6,570 amount was sucked into NAB accounts as May end/future premiums instead of paying the contractors on 5 May 2009.
F) So the strategy of the banks is this "Heat up the property market illegally, extend big loans & when prices collapse, choke the loan holders".
G) By offering three loans, they/NAB were heating up the property market in collusion.
H) NAB, Westpac & St George banks knew or ought to have known that rural land just converted to residential land in rural Dawesville did not command land values of $795,000 and $895,000. They knew that Valuer General was disregarding the limitations placed on him by the Western Australian Parliament by decreeing s 23/s 24 of VLA 1978.
I) But they knew that it was of enormous benefits to them and all the Respondents. All these matters are further causes of action for us to claim damages against NAB (Ninth Respondents).
36 These examples which are typical of the applicants' general pleadings, serve to highlight the fundamental deficiencies in the applicants' pleaded case, even in circumstances where the applicants have sought to address some of the difficulties presented by the original pleadings. The examples set out above also appear in substantially the same form in the latest tranche of proposed amendments filed and served by the applicants on 25 March 2013. In all the circumstances, there is no reason to believe that the applicants could overcome the numerous serious flaws in their case either as presently pleaded or as proposed by them in any of the tranches of the foreshadowed amendments.
37 I am mindful of the fact that it is a serious step to terminate proceedings without a hearing on the merits but in my view the history of this matter, together with the other considerations set out above, serve to underline the importance of proceedings being conducted in conformity with both the Court's orders and basic pleading requirements.
38 Accordingly, for all these reasons, I consider that orders should be made dismissing the applicants' proceedings against each of the affected respondents and the applicants ordered to pay the affected respondents' costs of their unsuccessful interlocutory application, the affected respondents' successful interlocutory applications and the proceedings generally.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths.