OO TIN FUAN v 1. ) LIM LEE CHING Guru Besar Sekolah Jenis Kebangsaan (Cina) Chin Woo Kuala Lumpur merangkap Setiausaha Lembaga Pengurus 2. ) CHEONG KAM YIN (Bekas Guru Besar Sekolah Jenis Kebangsaan (Cina) Chin Woo Kuala Lumpur merangkap Setiausaha Lembaga Pengurus) 3. ) Jabatan Pendidikan Wilayah Persekutuan Kuala Lumpur

Case Significance

Illustrates the exercise of the security-for-costs discretion under Order 23 of the Rules of Court 2012 against an undischarged bankrupt plaintiff, the court holding that bankruptcy alone is not enough but ordering security where, given the plaintiff's financial incapacity, a conditional insolvency sanction and repeated identical claims, it was just to do so.

This High Court decision concerns an application by the defendants for security for costs against a plaintiff who was an undischarged bankrupt, brought under Order 23 of the Rules of Court 2012 and the court's inherent jurisdiction. The plaintiff, who sued in a dispute connected with the management board of a school, had been made a bankrupt and remained undischarged, and the sanction issued by the Director General of Insolvency permitting him to continue the suit was conditional: the trustee in bankruptcy would not be liable for the defendants' costs if the claim failed, so the plaintiff himself would have to bear those costs. The defendants pointed to the plaintiff's financial incapacity and his failure to show any ability to pay costs, to an earlier unsatisfied costs order that had been imposed as a pre-condition to the plaintiff filing any new action, and to the fact that the present suit was a third attempt to bring an identical claim after earlier ones had been withdrawn or struck out in other High Courts. The court reaffirmed that impecuniosity or bankruptcy alone is not a sufficient ground for security, but that under Order 23 rule 1 the court may order security if, having regard to all the circumstances, it considers it just to do so, taking care that the order is based on the merits and does not become a collateral means of stifling a genuine claim through an excessive sum. Finding a real risk of prejudice to the defendants, the court allowed the application: it ordered the plaintiff to pay the outstanding RM6,000 costs as a pre-condition to the new action and to furnish RM20,000 as security for costs into court within 30 days, with the writ and statement of claim to be struck out on default. The judgment illustrates the exercise of the security-for-costs discretion against an undischarged bankrupt plaintiff.