A nominal plaintiff may be ordered to provide security for costs if acting on behalf of a non-party who has a financial interest, especially in champertous arrangements.

Atan Mustaffa Yussof Ahmad J:

Introduction

[1] Before the court is the 1st, 2nd, 3rd, 6th, 7th and 8th Defendants' application for security for costs vide encl 153 and the 4th and 5th Defendants' application for security for costs vide encl 155. Both applications seek security for costs against the Plaintiff and/or a non-party, one Khoo Kiam Chong (NRIC No: 560731-06-5189) ("KKC"), pursuant to O 23 rr 1(1) and 1(2A) of the Rules of court 2012.

Background Facts

[2] The Plaintiff is suing in his capacity as the executor of the estate of his late father, Syed Hamzah bin Syed Abu Bakar ("the Deceased'), who passed away on 18 July 2021. The Deceased was, at the material times, allegedly a shareholder of the 1st Defendant, Puncak Kenangan (M) Sdn Bhd.

[3] The Plaintiff's claim exceeds RM21 million and is essentially for dividends allegedly due to the Deceased from the 1st Defendant. The claim involves disputes relating to the shareholding of the Deceased in the 1st Defendant and/or entitlements flowing from such shareholding.

[4] There exists three significant documents bearing on this application:

a) Power of Attorney dated 19 May 2016 ("POA") executed between the Deceased, KKC and KKC's son, Ruben Khoo Sheng Luen;

b) Declaration of Trust dated 13 May 2016 ("Declaration of Trust'); and

c) Agreement for Shares dated 26 February 2021 ("Agreement for Shares').

[5] These documents, collectively referred to as "the Instruments", form the basis of the Defendants' applications. The POA granted KKC powers to prosecute actions on behalf of the Deceased, while the Declaration of Trust indicated that the Deceased would hold 47.5% of his interest in the 1st Defendant for KKC. The Agreement for Shares similarly reflected the Deceased's agreement to grant 47.5% of his 50% shareholding in the 1st Defendant to KKC in consideration of KKC's assistance and financial services.

[6] The dispute has prompted extensive litigation, including Kuala Lumpur Suit No WA-22NCC-221-05/2022 ("Suit 221") and Kuala Lumpur Suit No WA-22NCC-319-07/2022 ("Suit 319"), which are partly heard but have yet to be concluded.

[7] It is also pertinent to note that there have been costs and damages orders against the Plaintiff in a separate proceeding, Kuala Lumpur Suit No WA-22NCC-623-11/2019 ("Suit 623"), amounting to RM375,041.56, which remain unpaid to date.

The Applications

Enclosure 153 — The 1st, 2nd, 3rd, 6th, 7th And 8th Defendants' Application

[8] By Notice of Application dated 15 November 2024 filed as encl 153, the 1st, 2nd, 3rd, 6th, 7th and 8th Defendants seek an order that the Plaintiff and/or KKC provide security for costs in the sum of RM720,000.00 or any other amount deemed just and reasonable by the court.

[9] The application is supported by an Affidavit in Support affirmed by Sharifah Shaheera Shahab binti Syed Mustaffa on 15 November 2024 (Enclosure 154), which annexes, among other documents, the three Instruments and an estimated bill of costs.

[10] The primary grounds for the application, as stated in the Notice of Application and Affidavit in Support, are:

a) That the Plaintiff is a nominal plaintiff suing on behalf of KKC;

b) That KKC had financed all the Deceased's litigation and is driving this action;

c) That KKC has a