The court has discretion to order security for costs based on the plaintiff's financial standing and potential inability to pay if the claim fails, balancing interests of both parties.

This is an application by the defendant in Enclosure [106] for the following orders:-

[1] The Plaintiff and/or the Joint Liquidators, Tee Guan Pian and Wong Shan Ty, and/or such other parties the Court may order, do within seven (7) days from the date of this Court Order furnish security for the Defendant's costs in the sum of RM500,000.00 and/or such other sum to the satisfaction of the Court, such security to be furnished by payment into Court, or such other form as this Honourable Court may direct AND that until such security being given the Plaintiff's action against the Defendant be stayed AND that in default of such security being furnished within the aforesaid time the Plaintiff's action do stand dismissed without further order;

[2] The costs of this application be paid by the Plaintiff to the Defendant; and

[3] The application was premised on s 25 of the of Judicature Act 1964, O 23, O 92 r 4 of the Rules of 2012.

[4] After hearing the parties, this Court allowed the defendant's application in the following terms:-

a) The Plaintiff and/or the Joint Liquidators, Tee Guan Pian and Wong Shan Ty, do furnish security for the Defendant's costs in the sum of RM100, 000.00 and such security be furnished by payment into Court before 19 June 2017 AND that until such security being given the 40 Plaintiff's action against the Defendant be stayed AND that in default of such security being furnished within the aforesaid time the Plaintiff's action do stand dismissed without further order;

b) Costs of RM1, 000.00 be paid by the Plaintiff to the Defendant.

[5] I will now give my reasons for the ruling. Briefly, the trial of this case commenced on 13 June 2016 and while the trial was progressing the plaintiff was wound up by the Government of Malaysia in a winding up petition. The trial then had to be postponed to enable the plaintiff to obtain leave from the winding up Court before the plaintiff could proceed with the trial. Apart from the plaintiff's claim, the defendant also had a counterclaim against the plaintiff in the action.

[6] After the plaintiff had obtained the leave and before the Court resumed with the continuation of the trial, the defendant filed the present application seeking the order for the plaintiff / liquidators to pay into Court the security for costs. Before the filing of the present application, the defendant had written to the liquidators seeking for the security for costs to be paid but failed. In view of that the defendant filed the present application. In the present application the defendant relied on the 60 ground that since the plaintiff had been wound up, there is a very high likelihood that it would not be able to recover costs of the present action in the event the plaintiff's claim is dismissed.

[7] In the affidavit in support the defendant had listed a list of creditors that 65 have submitted their proof of debt to show the extent of the debts incurred by the plaintiff.

[8] Based on the amount of debts it was contended that in the event the action is dismissed, the defendant would be placed in a difficult situation to recover the costs. It was contended that since the amount claimed by the plaintiff against the defendant was in the tune of more than RM 50 million and expert evidence would be required during the trial which involves complex and technical matters, the defendant run the risks of not being able to recover the costs of the action.

[9] To further strengthen its argument the defendant have also referred to two instances where the defendant had yet to receive the costs of the day awarded by the Court to be paid forthwith in the sum of RM 5000 and RM500 respectively. It was submitted that t