Dato' Richard Dilaan Morais v Raam Kumar A/L M. Suppiah (AA-22NCvC-34-04/2024)

RAAM KUMAR A/L M. SUPPIAH (No. K/P: 690425-05-5201/A1282168)

TETUAN K.B. TAN KUMAR & PARTNERS 20 (didakwa sebagai sebuah firma)

3.

CHARLES SURESH MORAIS A/L FRANCIS ALBERT MORAIS 25 (NRIC NO: 620427-10-5707/PASSPORT: 36446620) …DEFENDANTS GROUNDS OF JUDGMENT 30 Introduction [1]. This is the defendants' application for security for costs under Order 23 Rule 1 and Order 92 Rule 4 of the Rules of Court 2012. The defendants seek an order for the plaintiff to provide security for costs 17/12/2024 09:55:13 AA-22NCvC-34-04/2024 Kand. 74 in the sum of RM50,000. This application is based on the plaintiff’s 35 status as an undischarged bankrupt and the potential financial prejudice that the defendants may face if they successfully defend this suit but are unable to recover their costs. The central issue for determination is whether the court can order security for costs against a bankrupt plaintiff, bearing in mind that being in the status 40 of bankruptcy alone does not warrant such an order. The court must evaluate the specific circumstances of the case to reach its decision. Background facts [2]. The plaintiff filed a claim alleging fraudulent and negligent acts by the defendants in probating a will and administering the estate of the 45 plaintiff’s late brother, Anthony Kevin Morais. The allegations centre on the defendants purportedly concocting a scheme to deceive the court into granting probate for a will that the plaintiff claims are questionable. It is further alleged that the defendants coerced the plaintiff into affirming a false affidavit to support their actions, 50 including a dispensation application to substitute the original will and the grant of probate. The plaintiff contends that the defendants misrepresented material facts and acted recklessly in administering the estate, causing harm to the plaintiff and the interests of other beneficiaries. The claim challenges the validity and integrity of the 55 defendants’ actions and raises concerns about their accountability as executors and administrators. The defendants deny the allegations, submitting that the claim is baseless and unsupported by evidence. [3]. The plaintiff’s filing of the present suit, while outwardly appearing to 60 be brought in the interest of the estate of the late Anthony Kevin Morais, is, in reality, self-serving. The plaintiff has objected to the intervener application by Charles Suresh Morais, a sibling of the deceased and a legitimate beneficiary of the estate, who has a direct legal interest in these proceedings. By objecting to Charles Suresh 65 Morais' participation, the plaintiff’s action appears not to be genuine and intended for the benefit of the deceased’s estate but rather for his own personal interest. It must be noted that other beneficiaries of the deceased’s estate, including those who have intervened in this proceeding, are defending/supporting the defendants in 70 administrating the estate, not merely taking a neutral stance. [4]. The plaintiff’s objection to a legitimate beneficiary's interest to intervene tells otherwise of his argument that this suit is being pursued for the rightful administration of the estate. This raises serious concerns about the plaintiff’s true intentions in the 75 proceedings. The defendants submit that the plaintiff's motives are not in line with the equitable distribution of the estate but are instead driven by personal interest. This contention is the subject matter under enclosure 1, which will be heard and disposed of later. Security for Costs 80 [5]. Under Order 23 Rule 1 of the Rules of Court 2012 (ROC), the court has the discretion to order security for costs when there is reason to believe that the plaintiff may be unable to pay the defendants' costs if the action fails. The purpose of this rule is to protect defendants from suffering undue financial prejudice if they are drawn into 85 litigation by a plaintiff who lacks the means to pay legal costs that may be incurred. Order 23 Rule 1 ROC provides as follows: “Security for costs of action (O 23, r 1)

Where, on the application of a defendant to an action or 90 other proceedings in the Court, it appears to the court—

that the plaintiff is ordinarily resident out of the jurisdiction;

that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to 95 believe that he will be unable to pay the costs of the defendant if ordered to do so;

subject to paragraph (2), that the plaintiff’s address is not stated in the writ or originating summons or is incorrectly stated therein; or 100

that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation, then, if, having regard to all the circumstances of the case, the court thinks it just to do, it may order the plaintiff to give 105 such security for the defendant’s costs of the action or other proceedings as it thinks just.” [6]. The exercise of discretion is further complimented by Order 92 rule 110 4 of ROC which generally vests the court with inherent power to do justice or prevent injustice to the parties. In Kosma Palm Oil Mill Sdn Bhd v Koperasi Serbausaha Makmur Bhd [2004] 1 MLJ 271; [2003] 2 MLRH 797; [2003] 7 CLJ 457; [2003] 5 AMR 758, the court clarified that it has broader power under its inherent 115 jurisdiction, as provided under previous Order 92 Rule 4 ROC to make decisions in certain cases, even if there are specific rules that generally apply. [7]. In Chen Siew Lee v Tan Bak Lee & Anor [2018] 11 MLJ 34; [2018] CLJU 754; [2018] AMEJ 0542, it was held that the court retains 120 discretion to order security for costs in appropriate cases, even if the facts do not meet the criteria under Order 23 Rule 1(1)(a)-(d). This is so because this power is grounded in the court's inherent jurisdiction. However, in Ling Khee Ming v Ling Shew Kue @ Ling Chai Yuen & Anor [2018] 6 AMR 550; [2018] MLJU 1059, [2018] 125 1 LNS 1139, the Court of Appeal decided the strict application of Order 23 Rule 1, requiring applicants to satisfy one of its conditions for a valid exercise of jurisdiction. [8]. Order 23 Rule 1 ROC is not a mandatory requirement to be satisfied before a court can order security for costs. The provision in Order 130 23 Rule 1, provides several grounds under which a court may consider ordering security for costs, but it is not an obligatory threshold that one of the grounds must be met. In Wei Her Pte Ltd v. Ooi Teik Seng & Anor [2021] CLJU 101; [2021] MLJU 147; [2021] AMEJ 0127, His Lordship Justice Mohd Radzi Harun had the 135 opportunity to consider this point, where he said: “[5] It is not disputable that whilst O 23 r 1 sets out the situations under which Court would consider the grant of an application for security for costs, the key phraseology in that provision is "then, if having regard to all the circumstances of 140 the case, the Court thinks it just to do". By that phrase, this Court is granted with unperturbed discretionary power to allow an application for security for costs, having regard to all the circumstances of the case as the Court thinks just. ……… Lord Dening MR in Sir Lindsay Parkinson & Co Ltd v. 145 Triplan Ltd [1973] 2 All ER 273 where His Lordship held: "The Court has a discretion which it will exercise considering all the circumstances of the particular case. …….Lord Denning went on to enumerate the circumstances that Courts might take into account in determining an application 150 for security for costs, which are: "... (a) whether the company's claim is bona fide and not a sham;

whether the company has a reasonably good prospect of success;

whether there is an admission by the defendants on the pleadings or elsewhere that money is due;

if there was payment into Court of a substantial sum of money (not merely a payment into Court to get rid of a nuisance claim);

whether the application for security was being used oppressively - so as to try and stifle a genuine claim;

whether the company's want of means has been brought about by any conduct of the defendants, such as delay in payment or delay in doing their part of the work. " 165 ….. [9] Lord Denning's proposition was followed by Mohamed Dzaiddin J (as His Lordship then was) in Kasturi Palm Products v. Palmex Industries Sdn Bhd, [1986] 2 MLJ 310 where His Lordship went on to state that the numerous 170 circumstances showed that there is no rigid single requirement that must be shown to Court before a security for costs could be ordered. [9]. As established in the case above and supported by precedents such 175 as in Sir Lindsay Parkinson & Co Ltd v. Triplan Ltd [1973] All ER 273, [1973] QB 609, the court's power to order security for costs is discretionary. It must be exercised "having regard to all the circumstances of the case." [10]. This means the court is not strictly confined to the situations set out 180 in Order 23 Rule 1(1)(a)-(d). Instead, it must consider a range of factors, such as whether the plaintiff's claim is bona fide, the prospects of success, potential oppression to the plaintiff, and whether ordering security would stifle a genuine claim. The primary principle is whether it is just to order security for costs in the 185 particular circumstances. [11]. Therefore, even if the specific condition in Order 23 Rule 1 is not met, the court still retains the discretion to order security for costs based on other relevant considerations. The key is to balance the interests of both parties to ensure fairness and justice rather than 190 rigidly adhering to a mandatory requirement [12]. In this case, the plaintiff is an undischarged bankrupt since 2013, a fact he does not dispute. His impecuniosity poses a significant risk to the defendants, as it is highly unlikely that they would be able to recover costs from him if they prevail in the suit. The plaintiff has not 195 provided any evidence to establish that he has the financial means to cover such costs, nor has he shown any improvement in his financial situation. In Tay Eng Tian & Anor v Koh Koh Kian [2021] MLJU 1981; [2021] 1 LNS 1594; [2021] AMEJ 1726; [2021] MLRHU 680, the court held that the mere fact that a plaintiff is an 200 undischarged bankrupt is not, by itself, sufficient grounds to order security for costs. Similarly, in the case of Rodwin V Bahadur v Cimb Bank Bhd & Anor [2018] 6 AMR 803; [2018] MLJU 1159; [2019] 1 CLJ 541; [2018] MLRHU 1182, the High Court held that it would not be a correct exercise of the court’s discretion to make an 205 order for security for costs just because the plaintiff is impecunious Defendants' Submissions [13]. The defendants argue that the plaintiff’s impecuniosity alone is sufficient to grant the application for security for costs. In Faridah Begum Bte Abdullah v Dato’ Michael Chong [1995] 2 MLJ 404; 210 [1995] 2 CLJ 951; [1995] 2 AMR 1191; [1995] 2 MLRH 72, the court held that while bankruptcy alone does not justify security for costs, the Bankruptcy Act 1967 does not limit the court's discretion under Order 23 of the Rules or High Court (predecessor to ROC), which applies equally to all litigants, including bankrupt, it is still a 215 relevant factor to be considered. Without going into the merits of the plaintiff’s claim, the current situation presents a risk that the defendants, as executors, would be severely prejudiced by engaging in protracted litigation without any assurance of recovering their costs. Furthermore, the plaintiff has admitted to being an 220 undischarged bankrupt since 2013 and to financial incapacity. The plaintiff’s failure to show any ability to pay costs reinforces the need for security for costs. [14]. The defendants also submitted that the plaintiff had acted in bad faith by attempting to stop one of his brothers, Charles Suresh 225 Morais, from intervening in the case, despite Charles’ clear interest as a beneficiary of the estate. This further strengthens the argument that the plaintiff's litigation is self-serving and not genuinely for the benefit of the estate or its beneficiaries. Finding of the Court 230 [15]. I disagree with the plaintiff’s contention that his action benefits the estate and that any costs awarded against him should be treated as testamentary expenses payable from the deceased's estate. This argument is legally flawed, as estate funds cannot be used to cover personal litigation costs incurred by an individual beneficiary. The 235 plaintiff’s attempt to shift the burden of his potential costs to the estate is unfounded and cannot be permitted. [16]. The plaintiff’s claim that the defendants’ application for security for costs is intended to stifle his claim lacks merit. The defendants have clarified that their application aims to secure their right to recover 240 costs in the event they succeed in defending the suit. There is no evidence to suggest that the application is oppressive or made in bad faith. [17]. Given the fact that the probate has already been issued, and the defendants, as executors, are entitled to administer the deceased’s 245 estate. The documentary evidence supports their prima facie sustainable defence, while the plaintiff’s allegations of fraud and negligence remain unproven. Although the court will not examine the merits of the substantive claim at this stage, the plaintiff’s financial position as an undischarged bankrupt and the self-serving 250 nature of his actions justify the defendants’ request for security for costs to safeguard against incurring unrecoverable expenses if the Plaintiff’s claim is baseless. [18]. Considering the plaintiff’s financial incapacity and undischarged bankruptcy status, there is a real risk of prejudice to the defendants 255 if security for costs is not ordered. The plaintiff’s objections to a legitimate intervenor application by a beneficiary further indicate that his actions are self-serving and not genuinely for the estate’s benefit. On the other hand, the defendants' application for security for costs is made in good faith, not as a means to stifle the plaintiff’s 260 legal recourse but as a legitimate procedure provided by law to protect their interests [19]. Under the circumstances, I order for security of costs in the amount of RM30,000 within 30 days from the date of this order. In determining this amount, I have considered the plaintiff's bankrupt 265 status and am mindful not to impose a sum so large that it would effectively result in the suit being struck out. However, given that this is a writ action, which anticipates disposal by way of trial, such sum is an appropriate award. This court must ensure that the order for security for costs is based purely on the merits of the application and 270 avoids the perception of being used as a collateral means to stifle the plaintiff’s right to legal recourse through an excessively high sum. I was aptly put by His Lordship Hamid Sultan JCA in Ling Khee Ming v. Ling Shew Kue @ Ling Chai Yuen & Anor (supra), which was quoted with approval by Justice Evrol Mariette Peters in 275 Tan Bon Kiat v. Lau Kok Guan @ Low Kok Guan & Ors [2020] CLJU 1444; [2020] AMEJ 1122; [2021] MLJU 1057; [2021] 2 MLRH 236: “It has been said that 'when dealing with security for costs, courts and counsel must not forget that access to justice is a 280 fundamental guarantee under the Federal Constitution. The courts under the Federal Constitution are in place to give a right of hearing at all stages and not to create obstacles by reason of security for costs, in particular to the poor, needy and oppressed': per Hamid Sultan JCA in Ling Khee Ming v. 285 Ling Shew Kue @ Ling Chai Yuen & Anor” Conclusion [20]. In the upshot of what has been discussed above, this court, in the exercise of its discretion under Order 23 Rule 1 and Order 94, Rule 4 of the ROC, accordingly holds that the RM30,000 ordered here is 290 deemed reasonable. This amount is appropriate, particularly given that this is a writ action, which anticipates disposal by way of trial. I further direct that if the plaintiff fails to comply with the order for payment of security for costs, the defendants may seek further relief, including the dismissal of the plaintiff’s claim. Costs of this 295 application, amounting to RM1,000, are to be paid by the plaintiff to the defendants. Date : 16 December 2024 300 Moses Susayan MOSES SUSAYAN Judicial Commissioner 305 High Court in Malaya at Ipoh, Perak 310 Counsel : For the Plaintiff : Dheenish Thevandran 315 Advocates and Solicitors [Messrs S Ravichandaran & Anuar] Kuala Lumpur For the Defendant 1 & 2 : Satish Nair 320 Advocates and Solicitors [Messrs Satish Alli & Associates] Kuala Lumpur For the Intervener : Dato’ Joshua Sambanthan 325 [Charles Suresh Morais A/L Advocates and Solicitors Francis Albert Morais] [Messrs Joshua Sambanthan & Associates] Petaling Jaya, Selangor 330 (Notice: This Grounds of Decision is subject to official editorial revision) 335 Headnotes Civil Procedure – Security for Costs – Order 23 Rule 1, Rules of Court 2012 – Whether the Plaintiff's status as an undischarged bankrupt, impecuniosity, failure to show financial capability, and underlying self- 340 serving intentions in pursuing the action warrant the Court's exercise of discretion to order security-for-costs – Whether the Defendants' prima facie sustainable defence justifies the order for security-for-costs, ensuring fairness without obstructing access to justice or the Defendants’ bona fide defence. 345 Courts Discretionary Power – Order 23 Rule 1 and Order 92 rule 4 – The Court exercise of its power to grant security-for-costs is discretionary and should consider all circumstances collectively rather than rigidly adhering to predefined criteria in Order 23 Rule 1. 350