The court has discretion to order security for costs against a foreign plaintiff if it is just to do so, based on the circumstances of the case and the plaintiff's residency and financial capacity.

Introduction

[1] The Defendants filed encl 67, which is an application pursuant to O 23 r 1(1)(a) of Rules of Court 2012 ( ROC 2012), for an order that the Plaintiff be required to provide security for costs amounting to RM100,000.00 or such other sum as is deemed fit.?

[2] The current legal action initiated by the Plaintiff is premised on allegations of oppressive conduct of the 2nd and 3rd Defendants against the Plaintiff in their management of the 1st Defendant and its subsidiaries.

[3] The Plaintiff seeks remedies and relief for purported losses incurred as a minority shareholder in the 1st Defendant and its subsidiaries due to the alleged oppressive conduct of the 2nd and 3rd Defendants in their management of these entities. These remedies include orders for declarations, transfer of shares in various companies, and claims for damages.

[4] It is important to note that the issues raised by the Plaintiff involve not only the Defendants but also extend to other companies not explicitly named in this action, namely Bumi Segar Indah Sdn Bhd and Salam Murni Holdings Sdn Bhd.

The Law

[5] The Court holds the absolute discretion to determine whether to order security for costs, having regard to all the circumstances of the case. Order 23 r 1 of the ROC 2012 grants this Court the power to order security for costs against the Plaintiff and the said Order states as follows:

"(1) Where, on the application of a defendant to an action or other proceedings in the Court, it appears to the Court-

(a) that the plaintiff is ordinarily resident out of the jurisdiction;

(b) that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so;

(c) subject to paragraph (2), that the plaintiff's address is not stated in the writ or originating summons or is incorrectly stated therein; or

(d) that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation,

then, if, having regard to all the circumstances of the case, the Court thinks it just to do, it may order the plaintiff to give such security for the defendant's costs of the action or other proceedings as it thinks just."

[6] In the case of Adarsh Pandit v. Viking Engineering Sdn Bhd ; , Zainun Ali J (as Her Ladyship then was) referred to an illustration from renowned Judge, Lord Denning M.R., in the case of Aeronave S P A & Westland Charters [1971] 1 WLR 1146 where it was expressed:

"It is the usual practice of the Courts to make a foreign plaintiff give security for costs. But it does so, as a matter of discretion, because it is just to do so. After all, if the defendant succeeds and gets an order for his costs, it is not right that he should have to go to a foreign country to enforce the order."

Even assuming the plaintiff has property within jurisdiction, it is not sufficient ground for this Court to disallow security. Moreover, the mere fact of Plaintiff owning property in a country which has reciprocal enforcement of judgment agreement with Malaysia, is not also a ground for the Court refusing to order security, since the enforcement is not automatic."

[Emphasis Added]

[7] The legal principles in this particular area of the law align with and have remained in accordance with those in other jurisdictions, as evidenced by the English House of Lords case of Porzel