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

RAAM KUMAR A/L M. SUPPIAH [NO. KAD PENGENALAN: 690425-05-5201]

CHARLES SURESH MORAIS A/L FRANCIS ALBERT MORAIS (NO. KAD PENGENALAN: 620427-10-5707 / NO. PASPORT: 36446620) ..DEFENDANT GROUNDS OF JUDGMENT INTRODUCTION [1] This is the 4th defendant's application in Enclosure 99, seeking an order that the plaintiff furnish security for costs pursuant to Order 23 Rules 1 and Order 92 Rules 4 of the Rules of Court 2012. The application is premised on the fact that the plaintiff has been an undischarged bankrupt since 16 April 2013, creating a real risk that the defendants would be unable to recover their costs should the plaintiff's action ultimately fail. Although such applications are common, this case raises an unusual and significant question: where security for costs is ordered in favour of only one defendant, can the plaintiff's entire action against all defendants be struck out for non-compliance? BACKGROUND FACTS [2] The plaintiff commenced this action challenging the administration and distribution of the deceased's estate, including the validity of the Will, the Grant of Probate, and the distribution of the estate. Since the commencement of the proceedings, the parties have filed numerous interlocutory applications and appeals arising therefrom. One such application is the 4th defendant's application in enclosure 99 for security for costs. On 28 April 2026, this Court allowed Enclosure 99 and ordered the plaintiff to furnish security for costs in the sum of RM50,000.00. Subsequently, on 14 May 2026, the Court determined the appropriate consequence of the plaintiff's failure to furnish the ordered security. These Grounds of Judgment set out the reasons for both decisions. THE DECISION ON SECURITY FOR COSTS (DELIVERED on 28th APRIL 2026) [3] Order 23 Rules 1 confers wide discretionary power on the Court to order security for costs where, having regard to all the circumstances, the Court considers it just to do so. This jurisdiction is supplemented by the Court's inherent jurisdiction under Order 92 Rules 4, to prevent injustice. The primary purpose is to protect a defendant from being compelled to defend litigation where a plaintiff may be unable to satisfy an adverse costs order. [4] It is undisputed that the plaintiff has been an undischarged bankrupt since 2013. While bankruptcy alone does not automatically entitle a defendant to security for costs, it is a significant factor in determining the risk of non-recovery. In this case, the risk is not merely theoretical; as of the date of the decision, the plaintiff had failed to pay a total of RM16,100.00 in costs to the 4th defendant arising from various interlocutory orders and appeal therefrom in these proceedings. This continued failure demonstrates a real and present risk that any future costs awarded at trial would remain unsatisfied. [5] The plaintiff contends that the 4th defendant voluntarily elected to intervene in the proceedings and therefore should not be entitled to seek security for costs. I am unable to accept this contention. The plaintiff had, in fact, objected to the 4th defendant's application to intervene, but this Court allowed the 4th defendant to be joined as a party as his interests as a beneficiary of the estate are directly affected by the plaintiff's claim. Once joined as a party, the 4th defendant stands on the same footing as any other defendant and is entitled to rely on the procedural safeguards available under the Rules of Court, including the right to apply for security for costs. [6] In assessing the present application, the Court also takes into account its earlier decision in Dato' Richard Dilaan Morais v Raam Kumar a/l M Suppiah [2024] MLJU 3801; [2024] MLRHU 2809, where security for costs was ordered against the plaintiff in favour of the 1st and 2nd defendants in this same action. The Court of Appeal subsequently affirmed that decision. The central factual premise has remained unchanged from the earlier decision to the present application, namely that the Plaintiff continues to be an undischarged bankrupt with no verified or proven financial capacity to satisfy adverse costs orders. [7] While each application for security for costs must ultimately be determined on its own facts, the earlier decision of this Court and its affirmation by the Court of Appeal provide important binding guidance in evaluating the present application. The same risk of unrecoverable costs persists. [8] The Court is also entitled to consider subsequent developments occurring after the filing of the application. This principle was recognised in Badrul Zaman bin P.S. Md. Zakariah v Mohd Aris bin Chonin & Ors [2006] 7 CLJ 397; [2006] MLJU 340; [2006] 2 MLRH 868, the Court is empowered to vary or set aside an order for security for costs where there are material changes of circumstances, reflecting that such changes remain relevant to the exercise of the Court's discretion. The Court derived that principle from the English Court of Appeal decision in Gordano Building Contractors Ltd v Burgess (1988) 1 WLR 890. His Lordship Abdul Malik Ishak J in Badrul Zaman (supra) observed: "The Court is also empowered to vary or set aside an order for security for costs if the plaintiff can show that there are material changes of circumstances (Gordano Building Contractors Ltd v Burgess (1988) 1 WLR 890, C.A.)." [9] As of the date of delivering this decision, the plaintiff is liable to pay a total of RM16,100 in costs to the 4th defendant arising from various interlocutory orders and appeals made in these proceedings, and those costs remain unpaid [10] The plaintiff's continued failure to satisfy these costs orders proves not merely a theoretical concern but a real and present risk that the defendant's costs may not be recoverable should the action ultimately fail. [11] The plaintiff has also raised the issue of delay. I find no merit in that contention. Order 23 of the Rules of Court 2012 does not prescribe any strict time limit for making an application for security for costs. The application must be made with reasonable promptitude. In Stone Master Corporation Berhad v Ong Kow Ee @ Ong Chiow Chuen & Yang Lain [2023] MLRHU 2319; [2023] MLJU 3212; [2023] CLJU 2852, the High Court, adopting the principle laid down by the Court of Appeal in Haidakota (M) Sdn Bhd v Tan Tiam Chai [2009] 1 CLJ 699; [2008] 2 MLRA 754; [2008] MLJU 654, stated: "Firstly, the application for security for costs must be made with reasonable promptitude after the issue of the writ. Delay is a good reason for the court to exercise discretion against the parties applying for security." [12] Even assuming there had been some delay in bringing the present application, I am satisfied that the subsequent developments in this action fully justify such delay. As of the date of this decision, the plaintiff is liable to pay costs amounting to RM16,100 to the 4th defendant, yet not a single cent has been paid. Coupled with the plaintiff's undisputed status as an undischarged bankrupt and the absence of any demonstrated financial capacity to satisfy adverse costs orders, these material changes of circumstances significantly reinforce the risk of non-recovery. Taking into account all the circumstances and the earlier decision on security for costs by the first and second defendant of this Court affirmed by the Court of Appeal, I find that any delay, if any is adequately explained and that it is just to order the plaintiff to furnish security for costs. [13] In determining the appropriate quantum, the Court must strike a balance between protecting the defendant and ensuring that the order does not unnecessarily stifle a genuine claim. Having regard to the complexity of the proceedings, the number of interlocutory applications already filed, and the likelihood that the matter will proceed to trial, the Court considers that the sum of RM50,000 represents a reasonable and proportionate amount for security for costs. [14] Accordingly, the Court orders that the plaintiff furnish security for costs in the sum of RM50,000. THE DECISION ON THE CONSEQUENCE OF NON-COMPLIANCE (DELIVERED ON 14 MAY 2026) [16] Following the order to furnish security, the Court had to determine the appropriate consequence if the plaintiff failed to furnish the said security within the stipulated period. [17] Having considered the parties' further submissions, this Court is satisfied that the plaintiff's failure to furnish the ordered security would justify the dismissal of the plaintiff's action in its entirety. Under Order 23 Rules 1 and Order 92 Rules 4 of the Rules of Court 2012, the Court possesses a wide discretion to determine the appropriate terms and consequences of a security for costs order to give effect to the order and prevent injustice. [18] In Nalli's Silk Saris Traders Sdn Bhd V. Nalli Sdn Bhd [2022] MLRHU 2943; [2022] MLJU 3294, the High Court emphasized that court orders must be strictly obeyed. The court struck out the plaintiff's action for failure to provide security, noting that the merits of the underlying claim are not a primary consideration once a peremptory order has been defaulted. [19] In Badrul Zaman bin P.S. Md. Zakariah v Mohd Aris bin Chonin & Ors (supra), the Court recognised that, in exercising its discretion under Order 23, it must have regard to all the circumstances of the case and determine what is just in the particular circumstances. It is therefore necessary for this Court to consider whether, having regard to the unique facts of the present case, justice requires that the consequence of non-compliance be the striking out of the plaintiff's entire action against all the defendants. The reasons for reaching that conclusion are set out below. [20] The present action is not a case where the 4th defendant is a stranger to the proceedings. The 4th defendant was allowed by this Court to intervene and be joined as a defendant despite the plaintiff's objections. Once joined, the 4th defendant stands on the same footing as the other defendants, with rights and interests directly affected by the plaintiff's claims. In those circumstances, the Court accepts the 4th defendant's submission that he is entitled to seek such protection against the risk of unrecoverable costs. [21] To strike out only the action against the 4th defendant would effectively revert the proceedings to the position the plaintiff originally sought, namely the exclusion of the 4th defendant, despite the Court having already ruled that the 4th defendant's participation is necessary to protect his interests. Furthermore, if the action continued against the remaining defendants, the plaintiff would have little or no incentive to comply with the security for costs order. [22] This Court is satisfied that a mere stay or striking out confined only to the claim against the 4th defendant would not address the prejudice arising from the plaintiff's non-compliance. [23] The Court arrives at this conclusion having regard to the unique procedural history of the present case and the position occupied by the 4th defendant in these proceedings as mentioned in above. [24] Therefore, a mere stay or striking out of the action against the 4th defendant due to the plaintiff's failure to furnish the said security for costs within the stipulated period would substantially prejudice the 4th defendant. This is because the plaintiff's claims against all defendants arise from the same factual matrix concerning the validity of the Will, the Grant of Probate, and the distribution of the estate, including the 23.33% distribution received by the 4th defendant. If, in the absence of the 4th defendant, the plaintiff succeeds against the remaining defendants, the Court may make findings that the distribution to the 4th defendant was unlawful, fraudulent, or improperly procured, even though the 4th defendant had no opportunity to be heard or to defend his interests. The 4th defendant's rights and interests as a beneficiary of the estate may therefore be adversely affected by the findings reached in proceedings from which he had effectively been excluded due to the plaintiff's refusal to furnish the ordered security for costs. This would achieve the plaintiff's original objective of refusing or strenuously objecting to the 4th defendant's intervention in the proceedings. [25] In effect, the plaintiff would obtain indirectly what he was unable to obtain directly through his earlier objection to the 4th defendant's intervention in the proceeding. This Court cannot permit the order for security for costs to be rendered illusory in that manner. The Court's earlier order permitting the 4th defendant to intervene was made precisely because his participation was necessary to protect his rights and interests in the subject matter of the action. [26] There is yet another matter which this Court must address. Although, strictly speaking, the plaintiff's failure to furnish security for costs ordered in favour of the 4th defendant does not directly or indirectly concern the other defendants, the striking out of the plaintiff's entire action against all the defendants may therefore appear disproportionate. However, the Court cannot ignore the natural and inevitable consequence of striking out only the claim against the 4th defendant. Such an order would afford no meaningful protection to the 4th defendant. Instead, it would expose him to certain prejudice for the reasons already stated above. Therefore, this Court cannot remain passive and allow such injustice to unfold. Accordingly, the following order is made. [27] This Court is also satisfied that the only effective and just consequence for non-compliance with the order for security for costs is that the plaintiff's entire action against all defendants be struck out in the event the plaintiff fails to furnish the ordered security within the stipulated time. OTHER ORDERS NOT JUSTICIABLE [28] This Court is mindful that striking out the plaintiff's entire action for failure to furnish security for costs ordered in favour of only one defendant is a drastic consequence and should not be ordered lightly. However, before reaching this decision, the Court has carefully considered whether a stay of proceedings pending payment of the security for costs would adequately protect the 4th defendant's interests. [29] In Standard Confectionery Sdn Bhd & Anor v. Amanah Raya Berhad & Ors [2015] 5 MLRH 757; [2015] MLJU 901; [2015] CLJU 573, the High Court exercised its inherent jurisdiction under Order 92 rule 4 of the Rules of Court 2012 and ordered that the plaintiffs' action be dismissed upon their failure to furnish the ordered security for costs. The decision affirms the principle that, although the Court possesses the power to stay proceedings pending the furnishing of security, it may, in an appropriate case, dismiss the action where an indefinite stay would cause grave injustice to the defendant and permit the plaintiff to abuse the process of the Court by keeping the litigation alive without complying with the security for costs order. Her Ladyship Yeoh Wee Siam J aptly expressed the rationale in the following passage: "Notwithstanding the court's discretionary power to stay all proceedings under s 351(1) of the Companies Act 1965, I exercised the court's inherent powers under O 92 r 4 of the ROC and ordered that the plaintiffs' action be dismissed if the plaintiffs fail to give the security for costs within seven days from the date of the Order. This is for the reason that it would cause grave injustice to the two defendants if the court allows the plaintiffs' proceedings to be stayed indefinitely when the plaintiffs fail to give the security for costs. It tantamounts to allowing the plaintiffs to abuse the process of the court in that the plaintiffs can decide to commence its action, and yet not be able to give security for costs, but still expect the court to stay all proceedings until such time as is convenient for the plaintiffs to give the security for costs." The learned Judge further reinforced the reasoning in the following paragraph: "The plaintiffs cannot be allowed to have their cake and eat it. If they wish to maintain the action, they would have to give the security for costs as ordered by the court. Otherwise, it is only right and fair that the plaintiffs' action be dismissed. The plaintiffs owe a duty to the court to assist the court in the due administration of justice so that the backlog of cases can be cleared timeously and efficiently." [30] To that end, when delivering the substantive decision on 28 April 2026, the Court ordered the plaintiff to furnish security for costs in the sum of RM50,000.00. It adjourned the matter to 14 May 2026 to hear the parties specifically on the appropriate consequence of any non-compliance. In effect, the plaintiff had approximately one (1) month, from 28 April 2026 until the plaintiff's suit was struck out on 29 May 2026, within which to furnish the security. If additional time had genuinely been required, the plaintiff could have applied for an extension. No such application, or even an informal request, was made. As a matter of fact, when the parties appeared before this Court on 22 June 2026 to seek clarification of the order made on 14 May 2026, namely that, in the event of the plaintiff's failure to furnish the security for costs, the plaintiff's entire suit against all defendants would be automatically struck out, the Court was informed that the ordered security for costs had not been paid. The Court is therefore entitled to draw the inference that the plaintiff had no genuine intention of complying with the order. In the peculiar circumstances of this case, where the rights of the 4th defendant are inextricably intertwined with the claims against the remaining defendants, a stay of proceedings or a partial striking out would afford no meaningful protection to the 4th defendant. It would render the order for security for costs largely ineffective. The Court is therefore fortified in its conclusion that the only effective and just consequence is to strike out the plaintiff's entire action. I should add that, had a genuine application for an extension of time been made and supported by proper reasons, this Court would have been prepared to consider such an application on its merits. FINAL ANALYSIS [31] In deciding this case, the distinct principle that can be distilled from above is: while striking out an entire action for a default against one defendant may seem draconian, it is considered proportionate if the claims are so intertwined that a partial strike-out would afford "no meaningful protection" to the applicant via-a-via the $ 4^{th} $ defendant. CONCLUSION [32] For the foregoing reasons, this Court is satisfied that the 4th defendant has established sufficient grounds for the grant of security for costs and that the sum of RM50,000 is reasonable and proportionate in the circumstances. The Court is further satisfied that, having regard to the unique facts of this case and to prevent injustice, the only effective consequence of non-compliance is for the plaintiff's entire action against all defendants to be struck out. [33] Accordingly, Enclosure 99 is allowed. The plaintiff shall furnish security for costs in the sum of RM50,000.00 within fourteen (14) days from the date of this order to the defendants' solicitors, failing which the plaintiff's entire suit against all defendants shall be automatically struck out on the fifteenth (15th) day without further reference to the Court. Consequently, all previous directions and case management orders made in respect of this action shall become inoperative and of no further effect, and Enclosure 1 together with Enclosure 131 (Amended Statement of Claim) shall be deemed struck out. Costs of this application are fixed at RM5,000.00, to be paid by the plaintiff to the 4th defendant forthwith. Dated : 15th July 2026 Moses Susayan [MOSES SUSAYAN] JUDGE HIGH COURT IN MALAYA AT IPOH, PERAK Counsel : For the Plaintiff Dheenish Advocates and Solicitors [Messrs S. Ravichandaran & Anuar] Kuala Lumpur For the $ 1^{\mathrm{s t}} $ and $ 2^{\mathrm{n d}} $ Defendant : Steven Pung Advocates and Solicitors [Messrs Satish Alli & Associates] Kuala Lumpur For the 3rd Defendant : Dato' Dominic Pragasam [Messrs Domnic Pragasam Tan & Co] Kuala Lumpur For the $ 4^{\mathrm{th}} $ defendant : Dato' Joshua Sambanthan (together with Angeline Nga Wen) [Messrs Joshua Sambanthan & Assoc] Petaling Jaya (Notice: This Grounds of Decision is subject to official editorial revision) Headnotes: CIVIL PROCEDURE: Security for costs - Application under Order 23 rule 1 and Order 92 rule 4 of the Rules of Court 2012 - Plaintiff an undischarged bankrupt - Whether real and present risk of non-recovery of costs established - Whether unpaid costs orders and material changes of circumstances justified security for costs - Whether earlier security for costs order affirmed by the Court of Appeal supported subsequent application - Whether delay defeated the application - Whether intervening defendant entitled to seek security for costs - Whether partial striking out afforded no meaningful protection - Whether plaintiff's entire action should be struck out upon failure to furnish security for costs - Whether striking out the entire action was the only effective and just consequence to prevent injustice.