FEDERAL COURT OF AUSTRALIA Ninan v St George Bank Ltd [2012] FCA 905 Citation: Ninan v St George Bank Ltd [2012] FCA 905 Parties: GEORGE NINAN and MOLLY GEORGE v ST GEORGE BANK LTD ABN 92 055 513 070 , VALUER GENERAL WESTERN AUSTRALIA, GODINILAND DEVELOPMENTS PTY LTD ACN 100 701 148 & RICHARD AH BOEY TAY, DEBORAH ANDREWS, COLIN DYMOND, WANNAUNUP DEVELOPMENT NOMINEES PTY LTD ACN 008 853 807 & PORT BOUVARD LTD, SIMON WROTH, GREG PENN, NATIONAL AUSTRALIA BANK ABN 12 004 044 937 and WESTPAC BANKING CORPORATION ABN 33 007 457 141 File number: NSD 700 of 2012 Judge: GRIFFITHS J Date of judgment: 23 August 2012 Catchwords: SECURITY FOR COSTS – impecunious natural persons – applicants resident outside the jurisdiction – deficiencies in applicants' pleadings – whether applicants' impecuniosity caused by the respondents' conduct Legislation: Federal Court of Australia Act 1976 (Cth) s 56 Foreign Judgments Act 1991 (Cth) Cases cited: Aussie Protection Inc v Hy-Way Sunvisors (Sales) Pty Ltd, unreported decision of Gummow J, 23 December 1987 Austin, Nichols & Co Inc v Lodestar Anstalt [2009] FCA 1228 Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No. 5) [2011] FCA 1041 Appleglen Pty Ltd v Mainzeal Corporation Pty Limited (1988) 79 ALR 634 Barton v Minister for Foreign Affairs (1984) 2 FCR 463 Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1 Cameron's Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46 Cashflow Finance Solutions Pty Limited v Compagnie Francaise D'assurance Pour Le Commerce Exterieur [2012] FCA 203 Cowell v Taylor (1885) 31 ChD 34 Goodman v Thomson Maloney & Partners Pty Ltd trading as Charter Keck Cramer [2010] FCA 1264 High Tower Pty Limited v Island Motel Pty Limited, unreported decision of von Doussa J, 12 April 1989 Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276 Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 Knight v Beyond Properties Pty Ltd [2005] FCA 764 K P Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 Logue v Hansen Technologies Ltd (2003) 125 FCR 590 Mbuzi v Hall [2010] QSC 359 Pearson v Naydler [1977] 3 All ER 531 P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 Date of hearing: 21 August 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 54 Counsel for the Applicants: The First Applicant appeared in person Solicitor for the Second Respondent: Mr M Danger of State Solicitor's Office Counsel for the Fourth and Fifth Respondents: Mr M S White Solicitor for the Fourth and Fifth Respondents: Lander & Rogers Lawyers Counsel for the Sixth Respondent: Mr P W Arblaster Solicitor for the Sixth Respondent: Lavan Legal Counsel for the Seventh and Eighth Respondents: Ms J M Sandford Solicitor for the Seventh and Eighth Respondents: Colin Biggers & Paisley Counsel for the Ninth Respondent: Mr R I Bellamy Solicitor for the Ninth Respondent: Gadens Lawyers Counsel for the Tenth Respondent: Mr P Newton Solicitor for the Tenth Respondent: Kemp Strang IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 700 of 2012 BETWEEN: GEORGE NINAN First Applicant MOLLY GEORGE Second Applicant AND: ST GEORGE BANK LTD ABN 92 055 513 070 First Respondent VALUER GENERAL WESTERN AUSTRALIA Second Respondent GODINILAND DEVELOPMENTS PTY LTD ACN 100 701 148 & RICHARD AH BOEY TAY Third Respondent DEBORAH ANDREWS Fourth Respondent COLIN DYMOND Fifth Respondent WANNAUNUP DEVELOPMENT NOMINEES PTY LTD ACN 008 853 807 & PORT BOUVARD LTD Sixth Respondent SIMON WROTH Seventh Respondent GREG PENN Eighth Respondent NATIONAL AUSTRALIA BANK ABN 12 004 044 937 Ninth Respondent WESTPAC BANKING CORPORATION ABN 33 007 457 141 Tenth Respondent JUDGE: GRIFFITHS J DATE OF ORDER: 23 AUGUST 2012 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicants are to provide security for the costs of and incidental to the proceedings in respect of each of the following respondents and in the sum set out below in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar) to be lodged with the District Registrar and a copy of which is to be served on the solicitor for each of the relevant respondents: (a) in the case of the second respondent, an amount of $16,600; (b) in the case of the fourth and fifth respondents, an amount of $21,500; (c) in the case of the sixth respondent, an amount of $23,500; (d) in the case of the seventh and eighth respondents, an amount of $22,500; (e) in the case of the ninth respondent, an amount of $29,000; and (f) in the case of the tenth respondent, an amount of $35,730. 2. Each of the bank guarantees required by order 1 be lodged with the District Registrar by 31 December 2012. 3. The proceedings be stayed as against any of the affected respondents until the relevant security for costs has been provided in respect of that respondent in accordance with the order of the Court. 4. Each of the respondents referred to in order 1 above have liberty to apply, on seven days notice, to vary the amount of security for costs required to be provided in accordance with the order of the Court. 5. The applicants are to pay the costs of each of the respondents who have been successful in their interlocutory applications for security for costs (including the second respondent), save that, in the case of the second respondent, the second respondent is to pay the costs of providing the video conferencing facility for that part of the hearing held on 21 August 2012 in respect of its interlocutory application for security for costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 700 of 2012 BETWEEN: GEORGE NINAN First Applicant MOLLY GEORGE Second Applicant AND: ST GEORGE BANK LTD ABN 92 055 513 070 First Respondent VALUER GENERAL WESTERN AUSTRALIA Second Respondent GODINILAND DEVELOPMENTS PTY LTD ACN 100 701 148 & RICHARD AH BOEY TAY Third Respondent DEBORAH ANDREWS Fourth Respondent COLIN DYMOND Fifth Respondent WANNAUNUP DEVELOPMENT NOMINEES PTY LTD ACN 008 853 807 & PORT BOUVARD LTD Sixth Respondent SIMON WROTH Seventh Respondent GREG PENN Eighth Respondent NATIONAL AUSTRALIA BANK ABN 12 004 044 937 Ninth Respondent WESTPAC BANKING CORPORATION ABN 33 007 457 141 Tenth Respondent JUDGE: GRIFFITHS J DATE: 23 AUGUST 2012 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 18 May 2012, the applicants (who are a married couple) commenced proceedings in the Court against ten respondents. At this stage the Court has been asked to determine various interlocutory applications for security for costs. As will emerge below, the relevant respondents complain that there are numerous deficiencies and shortcomings in the applicants' originating application and statement of claim. The applicants make numerous serious allegations against the respondents. They include claims that one or more of the respondents engaged in fraud, misleading and deceptive conduct, bad faith, collusion and falsified documents. The allegations relate to purchases made by the applicants of various properties in Western Australia in the period 2006 to 2007. The relevant properties are located in two different areas, Kalbarri and Port Bouvard. Not all the respondents are subject to the same allegations because some were not involved in all of the transactions about which the applicants complain. 2 Eight of the ten respondents have sought interlocutory orders seeking security for costs against the applicants. The first respondent (St George Bank) has elected not to seek security for costs in its own name. In early 2010 the first respondent was deregistered and thus no longer exists as a corporate entity. Its business was transferred in full to the tenth respondent, Westpac Banking Corporation ("Westpac") effective from 1 March 2010. Westpac seeks security for costs. As to the third respondent, it has not sought security for costs and, indeed, has not participated in the proceedings in any way at this stage. I gather that the third respondent is in administration. 3 It is convenient if I briefly identify the respondents who have sought security for costs. 4 The second respondent is the Valuer General for Western Australia. By interlocutory application filed on 31 July 2012, the Valuer General seeks security in the amount of $49,600, relying on an affidavit by Martin Bartholomew Danger sworn on 31 July 2012. The second respondent's interlocutory application was filed on or about 1 August 2012. 5 The fourth and fifth respondents are jointly represented. They seek security in the total sum of $54,000. They rely on two affidavits of Jonathan Gregson Melville Hunt dated 28 June 2012 and 31 July 2012 respectively. The fifth respondent originally sought security for costs on 6 July 2012 (at which time the fourth respondent had not been served). After the directions hearing before me on 24 July 2012, the fourth respondent became involved in the proceedings and, as noted above, instructed the same solicitors as those acting for the fifth respondent. On 31 July 2012 an amended interlocutory application was filed on behalf of both the fourth and fifth respondents seeking security for costs in the total sum of $54,000. 6 On 20 July 2012, the sixth respondent filed an interlocutory application seeking security for costs in the amount of $54,000. It relies on an affidavit of Mark Alan MacLennan dated 19 July 2012 and filed on 20 July 2012. 7 The seventh and eighth respondents filed an interlocutory application on 12 July 2012 in which they seek security for costs in the total sum of $51,000. In support of that application, they rely on an affidavit by Roland Everingham filed on 12 July 2012. 8 On 31 July 2012 the ninth respondent (National Australia Bank Limited) filed an interlocutory application seeking security for costs in the sum of $71,000. It relies on an affidavit in support by Kevin Pringle, also filed on 31 July 2012. 9 Finally, the tenth respondent (Westpac) filed an interlocutory application on 31 July 2012 seeking security for costs in the amount of $41,930. It relies on an affidavit of Scott Geoffrey Hedge, also filed on 31 July 2012. 10 The matter came before me for directions on 24 July 2012. Directions were then made with a view to all applications for security for costs being heard on 21 August 2012. It was noted at the directions hearing that the applicants had filed an interlocutory application for summary judgment against each of the respondents and that the respondents had also indicated that they intended to file applications to strike out the applicants' statement of claim and/or seek summary dismissal. The Court deferred the listing of all those applications until the security of costs applications had been heard and determined. 11 It might also be noted that, as matters stand at present, defences have been filed on behalf of the sixth respondent (filed 25 June 2012), and the seventh and eighth respondents (filed 10 July 2012). None of the other respondents has yet filed their defences. Summary of applicants' proceedings 12 As noted above, the substantive proceedings were commenced on 18 May 2012 by way of originating application, statement of claim and an affidavit in support by the first applicant. The relief they seek includes various declarations as well as exemplary damages exceeding 33 billion dollars. 13 The form of the statement of claim is, to say the least, unusual. It reads more as a narrative than as a proper pleading. Large parts of the statement of claim involve submissions rather than pleadings, including observations as to the future conduct of the proceedings. A flavour of the statement of claim is evident from the following passages in [33] and [34]: What respondents collectively did can only be compared as "PROMISE HEAVEN & GIVE HELL". They promised an orderly & lawful regime of property market while they were doing the exact opposite behind the scenes in not only a clandestine way but a virtual way. A virtual way because the scheme was never understood or exposed by anyone so far. We also plead that the respondents are "ACTING AS GOD & SATAN AT THE SAME TIME". They act "god" as custodians and professionals to look after my interests but they act "Satan" at the same time to destroy me benefitting them enormously (original emphasis). 14 It is difficult to see how the statement of claim as currently drafted complies with relevant parts of the Federal Court Rules 2011 ("2011 FCRs"), including in particular the requirements set out in Part 16 dealing with pleadings. For example, Rule 16.02 provides that a pleading must not contain scandalous material or be likely to cause prejudice, embarrassment or delay in the proceeding or fail to disclose a reasonable cause of action. These are matters which the respondents have foreshadowed will be raised in their proposed strike-out applications. That is understandable having regard to the contents of the statement of claim. 15 Among the many serious allegations made by the applicants, is a claim that the Valuer General has "engaged in a highly clandestine scheme colluding with developers, valuers, and significant elements in WA government sponsored by the banks to artificially manipulate land values". There are various other allegations of fraud, bad faith and collusion, including claims that two banks have made "a series of illegal transactions transferring funds" from the first applicant's bank account without his authorisation. The applicants claim that another bank was sponsoring and supporting a pyramid marketing scheme, which scheme it is claimed was effectively managed by several of the other respondents. A fundamental and basic requirement of pleading is that serious allegations of fraud, collusion and unlawful conduct must be properly particularised. Suffice it to say at this point that the existing pleading appears on its face not to comply with that requirement. 16 Nor is any clear cause of action expressly pleaded in the statement of claim, a point which may well arise when the respondents' prospective applications for strike-out/summary dismissal are heard. 17 It should also be noted that some of the respondents wrote to the applicants drawing attention to deficiencies in their pleadings and inviting them to replead their case. The applicants declined to do so. 18 I will return below to discuss the implications of the patent deficiencies in the applicants' pleadings in applying the relevant principles as to whether they should be ordered to pay security for costs. 19 Because of the unorthodox nature of the applicants' pleading, I have had some difficulty in fully understanding their substantive claims. It is sufficient for current purposes if I set out immediately below verbatim how the applicants describe their case "in a nutshell" in their outline of written submissions opposing security for costs: Developers set unduly high selling prices of land in new developments or town planning schemes. Value General & licenced valuers endorsed such heavily inflated prices. That was the main illegal gift to the developers. Such valuation was directly against the provisions of s 23/s 24 of VLA 1978 [Valuation of Land Act 1978 (WA)]. VLA 1978 was the main Act which set the policies of land valuations. Developers engaged in highly deceptive conduct of falsifying land values & land demand by falsifying facts on sale of land. They promised a "rosy future" for the buyers without a basis. Valuer General engaged in further deceptive schemes of special gifts to the developers to cushion the heavy burden of inflated land values when such heavy burden was on the developers. They were the smaller yet illegal gifts for them. Banks knowing these facts also endorsed the developer prices and lent money to enable the prospective land buyers to buy the land at such inflated & deceptive prices. Most land buyers did not know these facts. We did not either at those times (2002-2009) (sic) Such land value inflation directly benefitted all the Respondents; developers, banks, real estates agents, licensed Valuers & WA state Treasury. Such land value inflation would cause eventual deflation of unpredictable proportions. All the Respondents acted knowing this fact. All Respondents were experts with special knowledge of land valuations. All these deceptions executed in premeditated collusion by all ten Respondents were against various provisions of C & C Act, 2010 and other Acts. Summary of the parties' respective arguments 20 The relevant respondents filed outlines of written submissions in support of their applications for security for costs and supplemented those written submissions with oral argument. The applicants filed written submissions opposing the applications. The applicants also relied on a letter dated 20 August 2012 which they said served as a substitute for "verbal submission" in the hearing on 21 August 2012. I should mention at this point that the applicants, while representing themselves, did not appear in person either at the directions hearing on 24 July 2012 or at the hearing of the interlocutory application for security for costs on 21 August 2012. In both instances the applicants participated by way of telephone from Dubai, saying that they could not afford to travel to Australia. They also indicated that they did not propose to attend in person at the final hearing. Mr Ninan appeared by telephone on behalf of both himself and his wife. 21 It might also be noted that apparently the applicants have on foot other proceedings in the State Administrative Tribunal in Western Australia ("SAT"), in which the Valuer General is the only respondent. The precise scope of those proceedings is not entirely clear from the material currently before the Court. I was told from the Bar Table by the second respondent's representative that the proceedings are in the nature of a challenge to the correctness of some valuations affecting the applicants' land. The applicants state in their letter dated 20 August 2012 that their pleadings in the SAT are in the same language as their proceedings in this Court. I also gather that the applicants' participation in the SAT proceedings has invariably been by way of telephone from Dubai. I was told that the SAT has reserved its judgment in those proceedings. 22 The applicants relied on three further affidavits in opposing security for costs. Two were sworn by the first applicant on 22 April 2012 and 13 August 2012. The second applicant also swore an affidavit on 13 August 2012. In his second affidavit, Mr Ninan said that he and his wife have very little money or assets. Mr Ninan estimates their current total liabilities as being approximately $1.9 million. He claims that that entire liability is due to the "deceptions" of the ten respondents. He claims further that the respondents "have colluded once again to stifle our genuine & valid claim". Mr Ninan also gave evidence regarding the modest balances in various bank accounts in various countries operated in the names of either of the two applicants or their son, Philip George. Mr Ninan said that most of his and his wife's living expenses were being met by their son, Philip. Ms George gave evidence to the effect that Philip supported his parents financially in respect of food, accommodation, medicine etc. Ms George stated that she earns between $550 and $1,100 per month for about eights months of the year, teaching English as a second language. She said that that money is spent on daily expenses and is insufficient to meet her own monthly expenses. There was no contest that the applicants were impecunious. 23 Both the applicants are citizens of Singapore. They have lived in Dubai since 2001, together with their son. The applicants did not contest the respondents' claim that they were ordinarily resident outside Australia. 24 The arguments advanced by each of the respondents seeking security for costs were generally similar, although some gave more or less emphasis to particular matters. It is convenient to deal with them collectively. Their arguments may be summarised as follows: (a) the source of the Court's power to order security for costs is to be found in both s 56 of the Federal Court of Australia 1976 (Cth) ("the FCA Act") and Part 19 of the 2011 FCRs; and (b) the Court's discretion to order security for costs should be exercised in favour of the relevant respondents because: the applications were brought promptly; the applicants are impecunious and will be unable to meet an adverse costs order; both the applicants are ordinarily resident overseas and are not possessed of any material assets within Australia; there is no arrangement between Australia and the United Arab Emirates for the reciprocal enforcement of foreign judgments; the applicants' originating application and statement of claim are embarrassing, frivolous and vexatious, and contain material that is offensive and scandalous (reference was made to the observations of Heydon J in Jeffery & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009) 239 CLR 75 at [91]); the applicants' claims that their impecuniosity was caused by the respondents' conduct which is the subject of the proceedings is unsubstantiated and deserves little or no weight having regard to the deficient pleadings and the absence of detailed evidence concerning the first applicant's financial position prior to the matters which are said to have caused his impecuniosity; the applicants' argument that the proceedings will be stultified if they are asked to provide security for costs needs to be assessed in the context of the numerous alleged deficiencies in the applicants' currently pleaded case and the applicants' refusal to replead despite being invited to do so. It was also submitted that the applicants carry the onus of establishing any stultifying effect (reference was made to the observations of Jacobson J in Cashflow Finance Solutions Pty Limited v Compagnie Francaise D'assurance Pour Le Commerce Exterieur [2012] FCA 203 at [14]); the applicants' conduct in the SAT proceedings was described as being "argumentative" and indicative of how they were likely to conduct these proceedings. The applicants were also self-represented in the SAT proceedings and, it was claimed, they had not acted upon the SAT's suggestion that they would benefit from expert advice on both law and land valuation. There was evidence before me indicating that the applicants' written submissions in the SAT proceedings were almost 2000 pages in length; and some of the respondents contended that the applicants had either no or poor prospects of success against them. 25 The basis upon which the applicants opposed having to give security for costs may be summarised as follows: (a) the respondents had no prospects of successfully defending the proceedings and it was their "duty" to indicate their chances of success; (b) the Court should infer from the fact that many of the respondents had not yet filed defences that those parties had no chance of success; (c) the applicants' allegations of collusion between the Valuer General and developers and banks raised matters of public interest which should proceed to trial; (d) the fact that the applicants were now impecunious was "solely and totally caused by the actions of Respondents (sic)", but that it "does not matter as (sic) this time who is responsible for it"; (e) if the proceedings cannot proceed because the applicants are unable to provide security for costs, the applicants would be denied justice; (f) the applicants are natural persons and it was submitted that courts do not order security for costs against natural persons, where impecunious or not, but the position is even stronger if the individual is impecunious; (g) the applicants claim that their pleadings are in compliance with the 2011 FCRs, even if they did not meet the "preconceived ideas" of lawyers. The applicants argued that their status as litigants in person needed to be taken into account and given significant weight; (h) a different approach should be taken where security for costs is sought by a corporation against a natural person (although no legal authority was cited in support of that proposition); and (i) in an endeavour to explain their case by reference to what was described as an "analogy", the applicants made the following written submission: Let us say that I was a slave to a bad master in Egypt in BC 3000. The master beat me every day as his taxes on me was (sic) more than my earnings from him. So he reduced my pay and increased his taxes and beat me more. He used a foreman to accuse me and beat me. I was unable to work as my body was weak with all his beatings. I got courage and made a complaint to the Pharaoh. The master said to the Pharaoh "Please throw him into the jail as he is not capable to work & pay my taxes. Ask him to undress and see it for yourself, Pharaoh". This is what Valuer General (Foreman) enabled the banks (master) to do to me; beat me daily and make me undress to show my disfigured body in front of the Pharaoh. Consideration 26 Section 56 of the FCA Act provides: 56 Security (1) The Court or a Judge may order an applicant in a proceeding in the Court, or an appellant in an appeal under Division 2 of Part III, to give security for the payment of costs that may be awarded against him or her. (2) The security shall be of such amount, and given at such time and in such manner and form, as the Court or Judge directs. (3) The Court or a Judge may reduce or increase the amount of security ordered to be given and may vary the time at which, or manner or form in which, the security is to be given. (4) If security, or further security, is not given in accordance with an order under this section, the Court or a Judge may order that the proceeding or appeal be dismissed. (5) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for or in relation to the furnishing of security. 27 Rules 19.01 and 19.02 of the 2011 FCRs provide: 19.01 Application for an order for security for costs (1) A respondent may apply to the Court for an order: (a) that an applicant give security for costs and for the manner, time and terms for the giving of the security; and (b) that the applicant's proceedings be stayed until security is given; and (c) that if the applicant fails to comply with the order to provide security within the time specified in the order, the proceeding be stayed or dismissed. (2) An application under subrule (1) must be accompanied by an affidavit stating the facts on which the order for security for costs is sought. 19.02 Matters to be addressed by the respondent The respondent's affidavit should state the following: (a) whether there is reason to believe that the applicant will be unable to pay the respondent's costs if so ordered; (b) whether the applicant is ordinarily resident outside Australia; (c) whether the applicant is suing for someone else's benefit; (d) whether the applicant is impecunious; and (e) any other relevant matter. 28 The Court's power to order security for costs under s 56 of the FCA Act is a broad discretion which must be exercised judicially (Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1). Part 19 of the 2011 FCRs supplements the primary power conferred by s 56. It does not limit the exercise of the broad discretion which arises under s 56 of the FCA Act. 29 The relevant principles guiding the exercise of the discretion whether or not to order security for costs in this case may be summarised as follows. 30 First, there can be no doubt that the decision whether or not to order security for costs involves the exercise of a discretionary judgment. As McHugh J said in P S Chellaram & Co Ltd v China Ocean Shipping Co (1991) 102 ALR 321 at 323: To make or refuse to make an order for security for costs involves the exercise of a discretionary judgment. That means that the court exercising the discretion must weigh all the circumstances of the case. The weight to be given to any circumstance depends not only upon its intrinsic persuasiveness but upon the impact of the other circumstances which have to be weighed. A circumstance which may have very great weight when only two or three circumstances have to be weighed may be of minor significance when many circumstances have to be weighed. 31 Secondly, it is relevant to consider whether the parties against whom security for costs is sought is a natural person or a corporation. The traditional view has been that there is a "basic rule" to the effect that "a natural person who sues will not be ordered to give security for costs however poor he is" (see Pearson v Naydler [1977] 3 All ER 531 at 533 per Megarry V-C citing Lord Justice Bowen in Cowell v Taylor (1885) 31 ChD 34 at 38). There has been some debate as to whether that "basic rule" applies in this Court (see, for example, the discussion by Jessup J in Goodman v Thomson Maloney & Partners Pty Ltd trading as Charter Keck Cramer [2010] FCA 1264). It is evident, however, that merely because the applicant is a natural person and is impecunious is not determinative of the question. Other relevant considerations may, when considered individually or collectively, outweigh the disinclination of the Court to order a natural person to pay security for costs where the outcome may be to jeopardise the substantive matter ever coming to a final hearing. 32 In Knight v Beyond Properties Pty Ltd [2005] FCA 764 at [32] and [33] Lindgren J helpfully described the historical disinclination of courts to order natural persons to provide security and also identified the kind of circumstances in which security for costs has been ordered against natural persons (of course merely because one or more of those kind of circumstances is present is not necessarily determinative): Many cases can be cited for the proposition that there is a disinclination to order an applicant who is a natural person to provide security, at least, in the absence of some factor in addition to impecuniosity. Cases which can be cited against the ordering of security and in favour of allowing natural persons, even impecunious ones, free access to the courts, include Hinde v Haskew (1884) 1 TLR 94; Pearson v Naydler [1977] 1 WLR 899 (Megarry VC) at 902; Orr v Lusute Pty Ltd (1987) 72 ALR 617 (Sheppard J) at 622: Morris v Hanley [2000] NSWSC 957 at [15]; The Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 1400 (Branson J) at [22]; Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [25]; James v Australia and New Zealand Banking Group Ltd (No. 1) (1985) 9 FCR 442 (Toohey J) at 445; Weston v Beaufils (1993) 43 FCR 292 (Burchett J) at 298; Famel Pty Ltd v Burswood Management Ltd (1989) 11 ATPR 40-962 (French J) at 50,514; Cameron's Unit Services Pty Ltd v Kevin R Whelpton and Associates (Australia) Pty Ltd (1986) 13 FCR 46 (Burchett J) at 53; Gartner v Ernst & Young (No. 3) [2003] FCA 1437 (Mansfield J) at [36]. In the cases in which natural persons have been ordered to provide security, some factor in addition to impecuniosity has been present; cf Barton v Minister for Foreign Affairs (1984) 2 FCR 463 (Morling J) at 594 (impecuniosity and residence outside Australia); Cunningham v Olliver (unreported, Burchett J, 21 November 1994) (but for delay, security would have been ordered on ground of impecuniosity and bringing of claim to a significant extent for benefit of others); Chang v Comcare Australia [1999] FCA 1677 (Moore J) at [32] (impecuniosity and lack of prospects of success); Loque v Hansen Technologies Ltd [2003] FCA 81 (Weinberg J) (impecuniosity and residence outside Australia); Morris v Hanley [2000] NSWSC 957 (Young J) at [21], [38] and [39] (but for delay, Young J would have ordered security on grounds of impecuniosity and lack of prospects of success and large costs involved to defendants. Young J's decision was reversed on appeal on the ground that defendants had not adequately explained their delay in moving for security, but the Court of Appeal did not consider other aspects of his Honour's reasons: see Morris v Hanley & Ors [2001] NSWCA 374 at [30]- [31]); Melville v Craig Nowlan & Associates Pty Ltd [2002] NSWCA 32; (2002) 54 NSWLR 82 (CA) at [132] (per Heydon JA) (impecuniosity and applicant's failure to show that order would stultify proceeding and sum ordered by primary Judge not oppressive) (original emphasis). 33 It is to be noted that one of the examples cited by Lindgren J where security for costs has been ordered against a natural person involved the combined circumstances of impecuniosity and residence outside Australia. The relevant examples given by his Honour were Morling J's decision in Barton v Minister for Foreign Affairs (1984) 2 FCR 463 at 594 and Weinberg J's decision in Logue v Hansen Technologies Ltd (2003) 125 FCR 590. Those are matters of some relevance here given the applicants' circumstances. 34 Thirdly, I do not consider that the approach reflected in the cases referred to by Lindgren J requires modification in the light of the current 2011 FCRs. Many of the earlier cases were concerned with s 56 of the FCA Act and the predecessor rule (Order 28, r 3), which conferred a discretion on the Court to order security for costs in specified circumstances, including where "an applicant is ordinarily resident outside Australia". It is to be noted that under the 2011 FCRs, the matter is dealt with less directly. Rule 19.01 supplements the general and unfettered power under s 56 of the FCA Act to order security for costs and does so without direct and express reference to the circumstance of an applicant being ordinarily resident outside Australia. The current approach is to require the respondent's supporting affidavit to state various matters, including whether the applicant is ordinarily resident outside Australia. Accordingly, that circumstance arises indirectly. Despite that change, however, I consider that the earlier principles still apply. The respondents generally relied on Part 19 of the 2011 FCRs in advancing their applications for security for costs and only passing reference was made to s 56 of the FCA Act. 35 Fourthly, as Weinberg J observed in Logue at [18], the purpose of ordering security for costs against an applicant who is ordinarily resident outside Australia "is to create a fund within this country against which a successful respondent may enforce a judgment for costs thereby enabling the avoiding of the risks, uncertainties and delays of attempting to enforce such a judgment in the applicant's claimed country of residence". McHugh J had the following to say about such a circumstance in Chellaram at 323: However, for over 200 years, the fact that a party, bringing proceedings, is resident out of the jurisdiction and has no assets within the jurisdiction has been seen as a circumstance of great weight in determining whether an order for security for costs should be made. Indeed, for many years the practice has been to order such a party to provide security for costs unless that party can point to other circumstances which overcome the weight of the circumstance that that person is resident out of and has no assets within the jurisdiction. (It might be noted that McHugh J was not dealing there with a natural person). 36 Given that the historical basis for requiring a foreign-based applicant to give security for costs is to recognise that the respondent who succeeds in proceedings and obtains a judgment has to enforce that judgment in the applicant's foreign country of residence, it is also relevant to take into account whether or not that foreign country is covered by the Foreign Judgments Act 1991 (Cth). The list of countries to which the Foreign Judgments Act 1991 applies are set out in the Schedule to the Foreign Judgments Regulations 1992 (Cth). The United Arab Emirates is not included in that list, with the consequence that the Foreign Judgments Act 1991 is inapplicable. If, unlike the circumstances here, a particular country is covered by that legislation, security for costs might still be ordered, but, the quantum may simply reflect the costs of enforcement under such a statutory scheme (as was the case in Barton). But if the foreign country is not covered by such legislation, that is a factor weighing in favour of ordering an applicant (even a natural person) to pay security for costs commensurate with the reasonable costs of preparing and conducting the proceedings, at least up until an appropriate point which might, in some cases, be the commencement of the trial (see, for example, Aussie Protection Inc v Hy-Way Sunvisors (Sales) Pty Ltd, unreported decision of Gummow J, 23 December 1987, pp 7-8 and Austin, Nichols & Co Inc v Lodestar Anstalt [2009] FCA 1228). 37 Fifthly, impecuniosity on the part of the applicants needs to be established by the respondents because it relates to the question whether the respondent parties will be at risk as to costs should they succeed in defending the proceedings. But even where impecuniosity is established (or effectively conceded, which is the position here), another relevant consideration is whether such impecuniosity has been caused by the conduct of the respondents which is the subject of the substantive proceedings (see, for example, Aussie Protection at p 8 and Cameron's Unit Services Pty Ltd v Kevin R Whelpton & Associates (Australia) Pty Ltd (1986) 13 FCR 46 at 52). An applicant wishing to resist security for costs on the basis that there is a cause or connection between their impecuniosity and the respondent's conduct needs to substantiate that claim by appropriate evidentiary material, not mere assertion or submissions (see, for example, Aussie Protection at p 9 per Gummow J and Australian Equity Investors, An Arizona Ltd Partnership v Colliers International (NSW) Pty Ltd (No. 5) [2011] FCA 1041 at [31]-[34] per Cowdroy J). 38 Sixthly, consideration needs to be given to whether the effect of making an order for security for costs will, or will be likely to, bring the proceedings to a premature end, because of the applicants' lack of means to comply with the order. That is a matter of particular concern where public interest issues arise in the proceedings (see, for example, Aussie Protection at p 9). 39 Seventhly, although the parties' respective prospects of success may be a relevant consideration, as a general rule there should not be a major hearing on that issue in the context of an interlocutory application for security for costs (see, for example, Appleglen Pty Ltd v Mainzeal Corporation Pty Limited (1988) 79 ALR 634 at 635 and High Tower Pty Limited v Island Motel Pty Limited, unreported decision of von Doussa J, 12 April 1989 at p 14). That is particularly so in a case such as the present, where the respondents have highlighted so many deficiencies and shortcomings in the applicants' statement of claim and to date only two of the six defences have been filed. 40 Eighthly, while it is appropriate to give some weight to the fact that the applicants are self-represented and have not had the advantage of legal advice and assistance in drafting their pleadings, I respectfully agree with the following observations of Applegarth J in Mbuzi v Hall [2010] QSC 359 at [27]: A court is entitled to extend some latitude to a self-represented litigant who is not familiar with the forms and procedure, providing in doing so injustice and prejudice is not occasioned to other parties, and also provided the court is able to achieve a just and expeditious resolution of the real issues of the proceeding at a minimum of expense. A self-represented litigant should not be permitted to disregard rules and to conduct litigation in a manner which is unjust to other parties and contrary to the interests of justice. As Keane JA (as his Honour then was) observed in Robertson v Hollings [2009] QCS 303 at [11]: … litigation is not a learning experience. The Courts do not permit litigants, even unrepresented litigants, to prosecute claims which cannot proceed fairly to the other parties. 41 Finally, it is well established that an application for security for costs must be made promptly (see, for example, K P Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197 per Beazley J). 42 I do not mean to suggest that the principles summarised above will arise in every case in which security for costs is sought. Rather, those appear to be the primary relevant principles to be applied in the particular circumstances here. With those relevant principles in mind, I turn now to consider them in the context of those circumstances. 43 First, it was common ground that the applicants were both impecunious and also ordinarily resident outside Australia. It was not disputed that the applicants would be unable to pay the respondents' costs if they were successful in defending the proceedings. 44 Secondly, the applicants placed great weight on the fact that they were natural persons. I accept that this is an important consideration to be borne in mind in considering the proper exercise of the discretionary judgment whether or not to order security for costs. I have referred above to the historical disinclination of courts to order security for costs against natural persons. However, that disinclination needs to be kept in a proper perspective. As Justice Heydon observed in Jeffery & Katauskas at [91]: Mere impecuniosity is not an absolute barrier to ordering security for costs against a natural person, although it is a factor against doing so. (It is also to be noted that French CJ, Gummow, Hayne and Crennan JJ acknowledged in that case at [39] that security for costs will sometimes be ordered against an impecunious plaintiff). 45 There are two particular features here which I believe weigh heavily in favour of making orders that the applicants pay security for costs even though they are natural persons. The first is that the applicants accept that they are not ordinarily resident in Australia. That is one of the matters which has been recognised as justifying a departure in an appropriate case from the traditional disinclination (see Barton). This consideration assumes even greater significance in these proceedings here because the applicants' country of residence is not covered by the Foreign Judgments Act 1991 (see the authorities referred to in [32] above). 46 The second factor which has weighed heavily with me relates to the patent deficiencies in the applicants' statement of claim. Some of those deficiencies have been highlighted above. This is not the time to embark upon a detailed assessment of the parties' respective prospects of success, but I consider that the stark deficiencies in the applicants' existing pleadings cannot be ignored in the context of the respondents' applications that they be ordered to pay security for costs. The statement of claim contains extensive scandalous and embarrassing material, is drafted in a way which makes it difficult for defences to be drawn (although it is to be noted that two defences have in fact been filed), and in both form and substance appears not to comply with relevant requirements of the 2011 FCRs. The applicants have declined to address the many deficiencies in their pleadings. The significance of these matters lies in the fact that the Court cannot properly proceed on the basis of the general rule that, where a claim is prima facie regular on its face and discloses a cause of action, it is appropriate (in the absence of evidence to the contrary) to proceed on the basis that the claim is bona fide and has reasonable prospects of success (see Jazabas Pty Ltd v Haddad (2007) 65 ACSR 276 at [74] and Cashflow Finance at [8] per Jacobson J). The applicants cannot have the benefit of that approach here. I do not doubt the genuineness of the applicants' subjective belief that they have genuine grievances, but that is not the relevant test in the context of the interlocutory applications before me. 47 Thirdly, and related to the views I have expressed immediately above, I do not consider that any significant weight should attach to the applicants' claim that their case will be stultified if they are ordered to pay security for costs. As several of the respondents pointed out in argument, the Court should not be influenced in the exercise of its discretionary judgement by the risk of stultification of proceedings which are currently based on such seriously deficient pleadings. 48 Fourthly, I attach no weight to the applicants' assertion that their impecuniosity is totally attributable to the conduct of the respondents which is the subject of these proceedings. The applicants carry the onus of making good that proposition by way of admissible evidence. No evidence was placed before me by the applicants establishing their financial circumstances at the time the relevant events occurred. There is simply no proper evidentiary material before me which substantiates their assertion. The assertion is no more than that. 49 Fifthly, and despite the applicants' submissions to the contrary, I cannot accept that this is a case which, as currently pleaded, raises matters of sufficient public interest to tilt the balance in the applicants' favour. The defective pleadings do not allow any such conclusion to be safely drawn. 50 Finally, and for completeness, it should be noted that the applicants did not raise any issue concerning any delay on the part of any of the relevant respondents in bringing the applications for security for costs. 51 For all these reasons, I consider that the applicants should be ordered to pay security for costs in favour of the relevant respondents. 52 The question then arises as to what the quantum should be. Each of the relevant respondents asks that orders be made based upon their affidavits in support setting out their estimates as to their legal costs up to the commencement of the trial of the substantive proceedings. The applicants took no issue with the reasonableness of those estimates. But, as I pointed out in argument, in circumstances where each of those respondents has indicated that they propose to seek to have the applicants' pleadings struck out or summarily dismissed, it would be more appropriate to order the applicants to pay an amount which represents the relevant respondents' legal costs only up until that point. Liberty could be given for any affected respondent to apply on notice to vary the amount of security for costs. That is what I propose to do. 53 Each of the respondents who sought security for costs also applied for a guillotine order to be made in their favour in the event that applicants fail to comply. In other words, they sought an order at this stage that in the event of non-compliance the proceedings would be dismissed. I do not think it appropriate to make such an order at this time. In the event that there is non-compliance the affected respondent can make an application at that time to have the proceedings dismissed insofar as they are affected. 54 According, for all these reasons I make the following orders: 1. The applicants are to provide security for the costs of and incidental to the proceedings in respect of each of the following respondents and in the sum set out below in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar) to be lodged with the District Registrar and a copy of which is to be served on the solicitor for each of the relevant respondents: (a) in the case of the second respondent, an amount of $16,600; (b) in the case of the fourth and fifth respondents, an amount of $21,500; (c) in the case of the sixth respondent, an amount of $23,500; (d) in the case of the seventh and eighth respondents, an amount of $22,500; (e) in the case of the ninth respondent, an amount of $29,000; and (f) in the case of the tenth respondent, an amount of $35,730. 2. Each of the bank guarantees required by order 1 be lodged with the District Registrar by 31 December 2012. 3. The proceedings be stayed as against any of the affected respondents until the relevant security for costs has been provided in respect of that respondent in accordance with the order of the Court. 4. Each of the respondents referred to in order 1 above have liberty to apply, on seven days notice, to vary the amount of security for costs required to be provided in accordance with the order of the Court. 5. The applicants are to pay the costs of each of the respondents who have been successful in their interlocutory applications for security for costs (including the second respondent), save that, in the case of the second respondent, the second respondent is to pay the costs of providing the video conferencing facility for that part of the hearing held on 21 August 2012 in respect of its interlocutory application for security for costs. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Griffiths. Associate: Dated: 23 August 2012