The court may order security for costs if there is credible evidence suggesting the plaintiff's inability to pay costs, regardless of the merits of the case.

JUDGMENT

(Security For Costs)

Kenneth St James JC:

Prelusion

[1] This Judgment covers two applications for security for costs. Both Defendants filed their respective applications.

[2] Enclosure 86 is the 1st Defendant's (D1's) application for an Order for the Plaintiff (P) to pay a security for the costs in this suit (Suit 158). D1 applies for an Order that P pays RM150K as security for costs, to be kept by D1's solicitors as stakeholders. D1 prays that P pays the money within 14 days from the date of this Order.

[3] D1 also prays that if P does not pay the security for costs amount within the time given to pay it, then this suit and its entire proceeding be stayed until the amount is paid.

[4] Enclosure 88 is the 2nd Defendant's (D2's) application for security for costs. D2 applies for an Order that P pays RM75K as security for costs, to be kept by D2's solicitors as stakeholders. D2 similarly prays that P pays the money within 14 days from the date of this Order.

[5] D2 also prays that if P does not pay the security for costs amount within the time given to pay it, then this suit be struck out (as distinct from D1's prayer that the proceedings in this suit be stayed until the amount is paid).

[6] Should the security for costs Orders, and the consequential Orders, be made against P?

The Pertinent Pleaded Facts And Chronology Of Proceedings

[7] P was the property developer. In 2014, P appointed D2 as its main contractor. D2 in turn appointed D1 as its subcontractor. D1 (the subcontractor) brought their equipment into the project worksite.

[8] In 2015, P terminated D2's main contractor's contract. As a result, D1's subcontractor's contract was also terminated. Instead of allowing D1 to remove their equipment from the worksite, P used the equipment to complete the project. P would return the equipment (only some, but not all, as some were missing and some were damaged) in 2016, only after the project was completed.

[9] D1 filed suit against P for conversion (wrongful interference) and detinue (wrongful detention) of the equipment. That suit was Penang High Court Suit No PA-22C-1-07/2016 (Suit 1). In Suit 1, P (who was the defendant there) took a third party action against D2: the main contractor.

[10] In Suit 1, the High Court allowed D1's claim against P, and dismissed P's third party suit against D2. P was ordered to pay RM90K costs to D1, and RM35K costs to D2. P appealed to the Court Of Appeal.

[11] The Court Of Appeal dismissed P's appeal and ordered P to pay RM10K costs to D1 and RM10K costs to D2. P applied for leave to appeal to the Federal Court.

[12] The Federal Court refused leave and ordered P to pay RM30K costs to D1 and RM30K costs to D2.

[13] I will refer to these High Court, Court Of Appeal and Federal Court costs in or stemming from Suit 1 as the "costs relating to Suit 1".

This Suit 158

[14] This Suit 158 is P's claim against D1 and D2 to impeach the High Court's Judgment granted in Suit 1 in favour of D1 and D2, on grounds of fraud. In other words, P claims that the High Court Judgment in Suit 1 was obtained by fraud.

[15] As such, this Suit 158 stems from Suit 1. This Suit 158 is therefore related to Suit 1. Although I am mindful that the issue of the costs relating to Suit 1 is about the costs in Suit 1 and the resultant Court Of Appeal and Federal Court proceedings, I am compelled to acknowledge that the issue of the non-payment of the costs relating to Suit 1 is actually an issue about the payment of costs between the very same parties.

The Defendants' Grounds For Security For Costs

[16] D1's grounds for a security for costs include:

(1) P failed to pay the Judgment sum in favour of D1 in Suit 1, and the costs relating to Suit 1;

(2) P is insolvent and hence will not be able to satisfy an Order for costs if P loses this Suit 158; and

(3) this Suit 158 is an abuse of the process of the Court.

[17] D2's grounds for a security for costs are the same as D1's grounds, namely:

(1) this Suit 158 is an abuse of the process of the Court; and