2011 MarsdenLR 1428

HASNAH MOHAMMED HASHIM
RHB BANK BHD – Appellant
Versus
BACTRA PROPERTIES SDN BHD & ORS (NO 2) – Respondent

The court has discretion to order security for costs, which must balance the risks of injustice to both parties based on the plaintiff's ability to pay and the merits of the case.

Headnote:(A) Companies Act 1965 - Section 351 - Application for security for costs - Plaintiff requested the 1st defendant to pay RM250,000 as security for costs, stayed proceedings pending payment, with dismissal upon non-payment - The 1st defendant was wound up, had liabilities exceeding assets, and sought to challenge the plaintiff’s claims. (Paras 1-3, 4, 19)

(B) Judicial Discretion - The court has discretion to order security for costs based on credible evidence and the financial standing of the plaintiff company. In a previous case, it was determined that the court must balance the potential injustice to both parties. (Paras 15, 21)

(C) Reasonableness of Security Amount - Security for costs set at RM50,000 deemed fair, reduced from RM250,000 due to the 1st defendant's financial situation. (Para 22)