FEDERAL COURT OF AUSTRALIA

Ninan v Valuer-General of Western Australia [2013] FCA 789

THE COURT ORDERS THAT:

1.    The applicants are to provide security for the costs of, and incidental to, the proceedings in the sum of $20,000 in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar).

2.    Security for costs is to be lodged by 4 pm AEST, Friday 30 August 2013.

3.    If security for costs is not lodged by the time specified, the proceedings stand dismissed without further order.

4.    If the proceedings are dismissed for failure to provide security for costs, no further originating application which names the respondent as a party is to be filed by the applicants or accepted by any Registry of the Court without leave of the Court.

5.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT ORDERS THAT:

1.    The applicants are to provide security for the costs of, and incidental to, the proceedings in the sum of $20,000 in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar).

2.    Security for costs is to be lodged by 4 pm AEST, Friday 30 August 2013.

3.    If security for costs is not lodged by the time specified, the proceedings stand dismissed without further order.

4.    If the proceedings are dismissed for failure to provide security for costs, no further originating application which names the respondent as a party is to be filed by the applicants or accepted by any Registry of the Court without leave of the Court.

5.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT ORDERS THAT:

1.    The applicants are to provide security for the costs of, and incidental to, the proceedings in the sum of $20,000 in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar).

2.    Security for costs is to be lodged by 4 pm AEST, Friday 30 August 2013.

3.    If security for costs is not lodged by the time specified, the proceedings stand dismissed without further order.

4.    If the proceedings are dismissed for failure to provide security for costs, no further originating application which names any respondent as a party is to be filed by the applicants or accepted by any Registry of the Court without leave of the Court.

5.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT ORDERS THAT:

1.    The applicants are to provide security for the costs of, and incidental to, the proceedings in the sum of $20,000 in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar).

2.    Security for costs is to be lodged by 4 pm AEST, Friday 30 August 2013.

3.    If security for costs is not lodged by the time specified, the proceedings stand dismissed without further order.

4.    If the proceedings are dismissed for failure to provide security for costs, no further originating application which names any respondent as a party is to be filed by the applicants or accepted by any Registry of the Court without leave of the Court.

5.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

THE COURT ORDERS THAT:

1.    The applicants are to provide security for the costs of, and incidental to, the proceedings in the sum of $20,000 in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar).

2.    Security for costs is to be lodged by 4 pm AEST, Friday 30 August 2013.

3.    If security for costs is not lodged by the time specified, the proceedings stand dismissed without further order.

4.    If the proceedings are dismissed for failure to provide security for costs, no further originating application which names the respondent as a party is to be filed by the applicants or accepted by any Registry of the Court without leave of the Court.

5.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

The 2012 proceedings

1    On 18 May 2012, the applicants commenced proceedings (“the 2012 proceedings”) against the Valuer-General of Western Australia and nine other respondents including National Australia Bank Ltd (“NAB”), Westpac Banking Corporation (“Westpac”) and St George Bank (now associated with Westpac) (“St George”). The respondents also included a real estate agency and officers connected with that agency. The claims made were confusingly expressed, but related to purchases of properties by the applicants in Western Australia in the coastal town of Kalbarri and the suburb of Dawesville in the City of Mandurah. At the heart of the allegations appeared to be the suggestion that land prices had been manipulated and that the Valuer-General, real estate agents and banks had colluded in practices leading to the sale of land at inflated prices. These allegations provided the foundation for claims that the applicants had suffered significant financial loss associated with their purchase of properties in the two areas.

2    For reasons which are not apparent to me, the proceedings were commenced in the Sydney Registry of this Court, even though they related to transactions in Western Australia and the respondents (apart from the banks) are located in Western Australia. The applicants for their part are not residents of Australia. They live in Dubai and are citizens of Singapore.

3    The applicants claimed to be impecunious. A number of the respondents in the 2012 proceedings sought orders for security for costs. The only two respondents who did not make such an application were St George Bank (whose business had been transferred in full to Westpac effective from 1 March 2010) and the third respondent who did not participate in the proceedings at all and was in administration. In a judgment given on 23 August 2012 (Ninan v St George Bank Ltd [2012] FCA 905; (2012) 294 ALR 190), Griffiths J decided that it was appropriate to order security for costs. Although there were a number of matters set out in the judgment which contributed to that conclusion, there were, as his Honour explained, two particular features which weighed heavily in favour of orders of that kind which his Honour explained as follows:

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.

4    The orders for security for costs were made in varying amounts, responding to the circumstances of particular respondents.

5    The orders to provide security for costs were not complied with and, pursuant to other orders made at the same time, the proceedings were stayed on the expiry of the time allowed. The applicants did not seek leave to appeal the orders which were made on 23 August 2012. Instead, shortly before the time by which they were to provide security by bank guarantee, the applicants sought to vary the orders. After the date by which the applicants were to provide security had passed, the respondents which had applied for security for costs sought orders dismissing the proceedings against each of them. Those various applications were all dealt with by Griffiths J in a further judgment on 28 March 2013 (Ninan v St George Bank Ltd (No 2) [2013] FCA 273). His Honour declined to vary the orders for security for costs made by him on 23 August 2012. His Honour recorded:

16    In reaching this conclusion, I have also taken into account some further matters. The first is that the applicants have adduced no evidence to suggest that, given more time, they would be able to arrange the security previously ordered. Indeed, the applicants’ evidence suggests that their impecuniousity continues.

17    Secondly, it is evident that the applicants are in substance seeking to appeal the orders made on 23 August 2012 without having to obtain leave to appeal within the prescribed time. That is an impermissible course.

…

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.

…

28    … 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.

…

6    His Honour also concluded that not only were the applicants seriously in default but the case commenced by the applicants, and their attempts to plead their case, were fundamentally deficient. His Honour recorded:

…

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.

…

36    … 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.

7    The applicants have sought leave to appeal the judgment and orders made on 28 March 2013. No decision has yet been made on that application. It is important to note, however, as Griffiths J recorded, that there was no appeal against the order for security for costs.

The 2013 proceedings

8    The applicants then commenced a further series of proceedings in the Sydney Registry of this Court against some of the persons or entities who were respondents to the 2012 proceedings, and some others. On 30 April 2013, the applicants commenced further proceedings against the Valuer-General of Western Australia. On 20 May 2013, the applicants commenced further proceedings against NAB. On 4 June 2013, the applicants commenced further proceedings against St George and Westpac. On 17 June 2013, the applicants commenced further proceedings against the real estate agents (or their associated companies) in Port Bouvard who had been respondents to the 2012 proceedings. On 21 June 2013, the applicants commenced proceedings against a new respondent – the City of Mandurah.

9    The proceedings against the respondents who had been parties to the 2012 proceedings (or associated with those parties) appear to arise from the same claims and grievances upon which the 2012 proceedings were based. I shall explain why shortly. Like the earlier statement of claim in the 2012 proceedings, the pleadings in each of the new matters are obscure and difficult to follow, but they appear to relate in substance to the same allegations as were made in the 2012 proceedings.

10    The claims against the City of Mandurah also refer to many of those same allegations. Although those claims have not earlier been made against the City of Mandurah in proceedings in this Court, they were raised as a defence against the City of Mandurah in proceedings commenced by it against the applicants in the Magistrates Court of Western Australia to recover unpaid rates. The claims by the City of Mandurah succeeded; the defence was rejected; the applicants have not appealed. Instead, they chose to commence collateral proceedings in this Court.

The applicants’ claims in the 2012 proceedings

11    The allegations made by the applicants in the statement of claim in the 2012 proceedings included the following contentions:

    The Valuer-General of Western Australia acted in bad faith by overvaluing properties to enable developers to sell land at unconscionably high prices.

    The Valuer-General engaged in a clandestine scheme, colluding with developers, valuers and others who were sponsored by banks to artificially manipulate land values. St George sponsored and supported a “pyramid marketing scheme” which set false prices for properties and kept increasing them by 50% or more each year, which equated to a pyramid selling scheme. The licensee of Port Bouvard Real Estate Pty Ltd and its director managed the scheme. The scheme was actively supported by the Valuer-General.

    NAB and Westpac participated in the scheme by offering high loans based on the false valuations.

    The fraudulent and false nature of the prices set may be seen by comparing the valuations made by the Valuer-General with the valuations which were said by the applicants to be required by ss 23 and 24 of the Valuation of Land Act 1978 (WA) (“the Valuation Act”).

    Some specific claims related to particular properties were:

1.    15 Lawrencia Loop, Kalbarri – St George loaned $454,000 on asset value of $567,000 – true value $7,378.

2.    104 Sanctuary Circuit, Dawesville – Westpac loan $300,000 – selling price $300,000 – true value $38,375.

3.    26 Surf View, Dawesville – sold for $895,000 – true value $30,224.

4.    78 Channel View, Dawesville – sold for $795,000 – true value $31,335.

5.    Lot 721, Sandpiper Island Retreat – Westpac loan $640,000 – Westpac valuation $800,000 – true value less than $400,000 (in 2013 said to be less than $240,000).

12    Reduced to their most basic simplicity, the allegations were that the values to which all of the allegedly colluding parties subscribed were far removed from the true or “legal” value. The thesis depends upon the effect attributed to ss 23 and 24 of the Valuation Act. Section 23 of the Valuation Act deals with “interim valuations” made by the Valuer-General in between “general valuations” for a valuation district, which are to be made generally each year. Section 24 of the Valuation Act gives some valuation directions concerning valuation of strata title properties, improvements and machinery. It appears to me probable that the applicants have completely misunderstood the intention and legal effect of ss 23 and 24 of the Valuation Act, and that all the proceedings commenced by them are based on a fundamentally false premise. However, in light of the course which I propose to take, it is not necessary at the moment to give further attention to that issue.

The applicants’ claims in the 2013 proceedings

13    The claims against the Valuer-General in the 2013 proceedings also relate to alleged loss and damages concerning 15 Lawrencia Loop, Kalbarri, 104 Sanctuary Circuit, Dawesville, 26 Surf View, Dawesville and 78 Channel View, Dawesville. The claims are based upon the same propositions as in the 2012 proceedings, namely that the Valuer-General failed to comply with ss 23 and 24 of the Valuation Act. Those proceedings therefore seem to depend upon the same foundation, factual and legal, as the 2012 proceedings.

14    The claims against NAB filed in the new proceedings relate to the purchase of land at 26 Surf View, Dawesville and 78 Channel View, Dawesville and construction of a house at 26 Surf View, Dawesville. Some of the complaints against NAB concern a suggestion of misleading conduct in relation to the fixation of interest rates. The applicants claim an entitlement to the lowest published interest rates for home loans on any day. They also claim mismanagement of the loans because the bank categorised loans as “fully drawn” when in fact they were not (this allegation was also made in the 2012 proceedings). However, the action against NAB is substantially based on the proposition that NAB falsely valued the properties. That raises the same issues as in the 2012 proceedings.

15    The actions against St George and Westpac which were commenced on 4 June 2013 concern the purchase of 15 Lawrencia Loop, Kalbarri, 104 Sanctuary Circuit, Dawesville and Lot 721, Sandpiper Island Retreat. The allegations depend upon the earlier allegations of fraudulent valuation and the alleged participation of St George in that process. Those appear also to be the same matters that were raised in the 2012 proceedings.

16    The allegations against Port Bouvard Ltd and related interests in the proceedings commenced in June 2013 are also based on allegations of false valuation of the three Dawesville properties. Those are the same allegations based on the same facts and legal propositions as arose in the 2012 proceedings.

17    The allegations against the City of Mandurah concern rates and charges issued in relation to three lots purchased in Dawesville. The allegations of overcharging in rates is based upon the same facts and propositions as are raised in the 2012 proceedings against the Valuer-General. It is now pleaded that the City of Mandurah is also a party to the deception and collusion so that it could profit from the false valuations. As I indicated earlier, the same allegations have been raised and rejected in the Magistrates Court of Western Australia, but there has been no appeal. The right of the City of Mandurah to collect the rates has been upheld. The proceedings in this Court are a collateral challenge to that decision.

The respondents’ applications for summary dismissal

18    In each of the proceedings commenced in 2013, interlocutory applications were filed by the respondents seeking that the proceedings be summarily dismissed, or that security for costs be ordered. The grounds for summary dismissal relied on by most of the respondents allege either an abuse of process or that the proceedings are vexatious because they are without any apparent substance.

19    Directions were made for evidence to be filed in support of, or in opposition to, each of the interlocutory applications. Written submissions were also filed by a number of parties, including the applicants. On 25 July 2013, I listed all of the new proceedings and heard additional submissions where necessary in support of, or in opposition to, the interlocutory applications.

20    It is well established that it is an abuse of process to simply seek to relitigate a case which has already been disposed of by earlier proceedings (Reichel v Magrath (1889) 14 App Cas 665 at 668; Walton v Gardiner (1993) 177 CLR 378 at 393; Plaintiff S3/2013 v Minister for Immigration and Citizenship (2013) 87 ALJR 676). Apart from the claims against the City of Mandurah, it appears to me to be incontestable as a matter of substance that the applicants are seeking, in large part, to repeat allegations which have been dealt with to finality in the 2012 proceedings in this Court. To the extent that the proceedings now commenced proceed in that way, they seem clearly to be an abuse of process. The applicants have argued that there is no real overlap between the two sets of proceedings, but that is a conclusion which cannot be accepted. Even though the allegations are, in some respects, expressed in different language, the factual assertions are essentially the same. Like the 2012 proceedings, it is a difficult task to get behind the obscure language and structure used by the applicants in their pleadings, but when that is attempted it is clear that the present cases represent an attempt to revive the 2012 litigation.

21    In the case of the proceedings against the City of Mandurah, they seem to represent an attempt to avoid the binding effect of the judgment of the Magistrates Court of Western Australia, which the applicants elected not to appeal.

22    However, there may be some areas in which the applicants might have some argument that new matters are raised, or that they have commenced proceedings against respondents who were not parties to the 2012 proceedings. Furthermore, the position taken by the respondents in the current proceedings was not uniform. Some alleged abuse of process. Some argued the proceedings against them could not succeed because they were devoid of substance. I do not propose at the moment to individually evaluate the various strands of arguments.

23    At the moment it is not necessary to express a final and firm view about every aspect of the matters which arise from the applications for summary dismissal. Although I accept the fundamental premise advanced by the respondents (namely, that the applicants have repeated claims made in the 2012 proceedings), I express no final view on whether some parts of the proceedings might survive, might survive against particular respondents or whether the proceedings against the City of Mandurah might do so.

The respondents’ applications for security for costs

24    Apart from the applications for summary dismissal, the respondents were united in their alternative contention that the applicants should provide security for costs. The respondents sought orders for security for costs ranging from $34,500 to $87,454.20. Owing to the complicated and obscure way that the applicants have attempted to plead their alleged causes of action, I have decided that, in the first instance, the applicants should be required to provide some limited security for costs. In my view, there is a clear case for such an order. The reasons why security for costs should be ordered are those already expressed by Griffiths J in his judgment of 23 August 2012. The “patent deficiencies” in the pleadings to which his Honour referred are reflected in the new proceedings. The applicants remain impecunious.

Conclusion

25    In my view, the most efficient course to take at the moment is to direct that the applicants provide security for costs for the new proceedings which they have commenced. If security is provided then a closer examination of the proceedings, with a view to assessing the applicants’ attempts to justify them procedurally, may be justified. No further examination of that question is, in my view, necessary or justified at the moment.

26    I do not propose to attempt any individual assessment of likely future costs in any of the particular proceedings at the moment. In the circumstances which are now presented by the procedural course chosen by the applicants, the best course is to fix an amount for security for costs of a fairly uniform nature which will provide a fund in respect of each proceedings out of which, if necessary, the respondents’ costs may be paid if the proceedings are later summarily dismissed. If the proceedings remain on foot, the fund will be available to provide an amount of security if the proceedings fail later for any reason. The amount of the fund in each proceeding may always be adjusted in the light of the circumstances prevailing. For the moment, security for costs in the amount of $20,000 in each proceeding will be ordered.

Orders

27    Security is to be provided in the form of a bank guarantee from an Australian trading bank (or in such other form as is acceptable to the District Registrar). Security for costs is to be lodged by 4 pm AEST, Friday 30 August 2013. In the event that security for costs is not lodged, the proceeding in question is to stand dismissed without further order. If the proceedings are dismissed as a consequence of a failure to provide security for costs, no further originating application is to be filed by the applicants or accepted by any Registry of the Court from the applicants or any one of them which names a respondent to any of the proceedings as a party, without the leave of the Court being given. There will be orders accordingly. There will, at present, be no order as to costs.

Associate:

Dated:        9 August 2013