1. ) SHANGHAI NATURE GOODNESS DURIO VENTURE CO LTD 2. ) GUO XU 3. ) ROBERT HENRI OLIVER BATREAU 4. ) ONG CHEE KEONG v 1. ) NATURE GOODNESS FOOD INDUSTRY SDN BHD 2. ) NATURE GOODNESS DURIO SDN BHD 3. ) CHUAH POH KHIANG 4. ) LIM SIANG SIN 5. ) Lim Seang Aik (Ditarik Balik Secara Lisan Semasa Case Management) 6. ) SUN BOON TECK 7. ) CHOO GUAT ENG

Case Significance

Applies the discretionary balancing test for security for costs, confirming that a plaintiff's ordinary residence outside the jurisdiction, established as fact, can justify an order, though security is never an entitlement as of right.

This High Court decision at Shah Alam concerns applications for security for costs (jaminan kos) brought by the defendants in a shareholder dispute. The claim was advanced by a group of plaintiffs including a company incorporated in China and individual shareholders, among them a French national and another plaintiff shown to be ordinarily resident outside the jurisdiction of the court. The underlying dispute arose out of a shareholders' agreement and a subsequent 2018 agreement pleaded as a Global Settlement Agreement governing the parties' respective shareholdings in the corporate defendants. During case management the plaintiffs orally withdrew their claim against one defendant who had been made bankrupt.

The court set out the established approach to security for costs, under which the power is discretionary and the court must take into account all the circumstances and facts of the case. The recognised factors include whether the plaintiff's claim is bona fide, whether the plaintiff has a reasonably good prospect of success, and, significantly, whether the plaintiff is ordinarily resident out of the jurisdiction so that a costs order might be difficult to enforce. The court emphasised, drawing on authority including P T Karya Sumiden Indonesia v Oceanmasters Marine Services Sdn Bhd, that security for costs is not an entitlement as of right, and that the court balances the stipulated factors against the particular factual matrix to determine whether an order would be just. It also acknowledged the countervailing constitutional concern, noted in the authorities, that the courts exist to give a right of hearing and should not create obstacles by way of security for costs, particularly against the poor or oppressed.

On the facts the court found that several plaintiffs were plainly and genuinely resident outside the jurisdiction, that this was a fact rather than an assumption, and that there was justification to order security. It accordingly allowed the applications by the first and second corporate defendants and by several of the individual defendants. The judgment is a careful application of the discretionary balancing exercise governing security for costs against foreign-resident plaintiffs.