The court affirmed that security for costs cannot be ordered against a non-party to the proceedings, emphasizing the necessity of exceptional circumstances for imposing such costs.

(Enclosure 27)

A. Introduction

[1] This is the application of the 1st and 9th Defendants for security for costs against Dato' Seri Timor Shah Rafiq ("Timor").

[2] Timor had initiated an application for leave to institute a derivative action on behalf of the Plaintiff against the Defendants, inter alia, for alleged breaches of the Defendants' duties to the Plaintiff. This application was heard by Justice Atan and, on 23 May 2024, was given leave to institute these proceedings in the civil suit no: WA-24NCC-629-11/2023. Justice Atan had made the following, inter alia, orders:

"(3) The Plaintiff be authorised to control the conduct of the derivative proceedings;

(4) The management fee payable by the Defendant to Azimuth Marine Sdn Bhd be reduced to USD 8,000 per month pending final resolution of the derivative proceedings initiated by the Defendant against Dato' Sri Suresh Emmanuel Abishegam, Dato' Ahmad Johari bin Abdul Razak, Ajaib Hari Dass, Dato' Abd Latiff bin Ahmad, Jaya Sudhir A/L Jayaram, Mak Lin Kum, Ahmad Lutfi bin Abd Latiff, Dato' Sri Abd Rahim bin Jaafar and Azimuth Marine Sdn Bhd;

(5) The Defendant pays all reasonable legal fees and disbursements incurred by the Plaintiff in connection with this application or pending the grant of leave or any other interim relief on a full indemnity basis;

(6) The Defendant pays the costs incurred by the Plaintiff for the derivative proceedings to be initiated on behalf of the Defendant against Dato' Sri Suresh Emmanuel Abishegam, Dato' Ahmad Johari bin Abdul Razak, Ajaib Hari Dass, Dato' Abd Latiff bin Ahmad, Jaya Sudhir A/L Jayaram, Mak Lin Kum, Ahmad Lutfi bin Abd Latiff, Dato' Sri Abd Rahim bin Jaafar and Azimuth Marine Sdn Bhd on a full indemnity basis;"

[3] The grounds relied on by the said Defendants in seeking this application are summarised as follows:

(i) That Timor is ordinarily out of jurisdiction of this Court. He is a resident of California, United States.

(ii) That Timor does not have assets within the jurisdiction of this Court.

(iii) That Timor is not within a jurisdiction where the First Schedule of the Reciprocal Enforcement of Judgments Act .

(iv) That Timor is financially impecunious and is unable to pay the award of costs, if any, is granted against him.

(v) That the High Court in the Civil Suit No: WA-22NCC-151-03/2023 had granted security for costs against him to the sum of RM120,000.00 for each application filed by the Defendants in those proceedings.

(vi) That this suit is malicious and is an abuse of process. The suit is initiated for a collateral purpose.

(vii) That Timor is usually resident in Malaysia in a Hotel.

(viii) Timor does not hold any executive positions in other Malaysian companies and has no interest in any companies in Malaysia or any business entity.

(ix) Indemnity orders entered by Atan J do not preclude the application for security for costs against Timor.

(x) Timor is only a nominee for Nautical Supreme Sdn Bhd and has started various proceedings since 2016.

(xi) Timor did not pay any of the costs of these previous proceedings initiated in the name of the company.

[4] The Defendants seek the sum of RM1,500,000.00 as security for costs.

B. Decision Of This Court

[5] After hearing the parties, this Court decided to dismiss the application with no order as to costs. This Court finds that the Defendants have failed to show that the facts of this case, as disclosed in the affidavits before this Court, fall within the circumstances laid down under O 23 of the Rules of Court 2012. My reasons for this decision are as st