1. ) Ong Yeong v Manhattan Management Sdn Bhd (AA-12ANCvC-3-03/2022)

ONG YEONG

LIM WEI CHET 15 (NRIC NO.: 901104-07-5567) … APPELLANTS/ PLAINTIFFS AND 20 MANHATTAN MANAGEMENT SDN BHD (COMPANY NO. 58179-U) …RESPONDENT/FIRST DEFENDANT 25 [IN SESSIONS COURT AT IPOH IN THE STATE OF PERAK DARUL RIDZUAN CIVIL NO.: AA-A52NCVC-206-12/2019 CIVIL NO.: AA-A52NCVC-210-12/2019 30

ONG YEONG

LIM WEI CHET (NO K/P: 901104-07-5567) ...PLAINTIFFS AND 40 29/09/2023 16:40:30

MANHATTAN MANAGEMENT SDN BHD

NORHAYATI BINTI NGAH AHMAD 45 (NRIC NO.: 680611-08-5464) (Berniaga sebagai rakan kongsi di bawah nama dan gaya FARTISHA ENTERPRISE (IP0211095-M)

MOHAMMAD IZZUL SHAFIQ BIN MAT JAAFOR 50 (NO K/P: 911014-01-5607) (Berniaga sebagai rakan kongsi di bawah nama dan gaya FARTISHA ENTERPRISE (IP0211095-M) ...DEFENDANTS] 55 GROUNDS OF JUDGMENT [1] There are two appeals filed by the plaintiffs from the decision of the Sessions Court Judge (“SCJ”) on two interlocutory applications, one 60 was the plaintiffs’ application for amendment under O. 20 r. 5(1) and the other was application by the first defendant under O. 14A r. and/ or O. 33 r. 2 of the Rules of Court 2012, for preliminary determination on questions of law and issues. The learned SCJ dismissed the amendment application with costs of RM4,000.00 and 65 allowed the application on preliminary determination on questions of law and issues with costs of RM4,000.00. Both applications were heard together in the sessions court and likewise the appeals were also heard together. The appeal no: AA-12ANCVC-3-03/2022, is on amendment application and the appeal no. AA-12ANCVC-2- 70 03/2022, is application on preliminary determination on questions of law and issues. Facts of the Case [2] The plaintiffs entered in the Tenancy Agreement with the first 75 defendant dated 16 May 2016 for a three-storey shop (ground-no. 42, 1st Floor - 42A and 2nd Floor - 42B). The tenancy was for the period of 2 years between 1 February 2017 until 31 January 2019. The first defendant has sub-let Ground Floor - 42 to "Fartisha Enterprise" and 2st Floor - 42B to “Vapor-Bro”. It is not in dispute that 80 the initial sub-tenancy between the first defendant and “Fartisha Enterprise" and “Vapor-Bro” were not exceeding the period of the tenancy between the plaintiffs and the first defendant. Subsequently, there are correspondences between the sub-tenants and the first defendant in respect of extension of the sub-tenancy. 85 [3] The second and third defendants are the partners of Fartisha Enterprise, business. [4] The plaintiffs contend that the first defendant had extended the sub- 90 tenancy with the sub-tenant when in fact the first defendant’s tenancy had expired. The first defendant on the other hand contends that there are correspondences between the plaintiffs and the first defendant and continuous payment of rental to the plaintiffs throughout the period which the plaintiffs claim that the first 95 defendant was holding over the premises, after the expiry of the tenancy. Thus, resulting in this suit by the plaintiffs claiming for vacant possession and double rental as damages. Proceeding in the Sessions Court 100 [5] At first, after the close of pleadings the first defendant filed an application for striking out of the Writ and Statement of Claim, which was allowed but on appeal to the High Court, it was overturned and sent back to Sessions Court for trial. 105 [6] The case had reached the full trial stage where the parties were in the process of preparing and completing pre-trial documents. When the parties could not agree on the settling of the pre-trial documents, this matter was referred to the Learned SCJ. 110 [7] The parties have disputed on the classification of the first defendant's documents, especially copies of cheques which the first defendant contends are payment of rent for the premises ie no. 42 and 42B by the second and third defendants. The plaintiffs deny 115 these payments. [8] Upon insistence by the Learned SCJ to verify cheque clearance from the bank, the plaintiffs did and confirmed the payments were received from the clearance of the cheques for the rental of the 120 premises from February 2019 until the end of December 2020 in the amount of RM58,200.00. [9] Upon the confirmation by the plaintiffs on the receipt of rentals, the first defendant informed the court of its intention to file an application 125 to dispose the matter pursuant to O. 14A r. 1 and/or O. 33 r. 2 of the Rules of Court 2012. [10] The plaintiffs followed suit to file an application to amend the Writ and Statement of Claim. 130 [11] The Learned SCJ proceeded to hear the application together and allowed the first defendant’s application with costs of RM4000.00 and dismissed the plaintiffs’ application for amendment with costs of RM4000.00. 135 Preliminary observation [12] It is obvious that the plaintiffs did not take any initiative to check with the bank, if the alleged payments by cheque issued by the first 140 defendant had cleared. There is certainly an obligation on the plaintiffs to conduct a reasonable investigation and verify the facts before instituting a legal action. This obligation is often referred to as the duty of due diligence or the duty to investigate. Further, bringing a lawsuit without a reasonable basis may also expose the 145 plaintiffs to a counterclaim by the defendants for malicious prosecution or abuse of process. [13] In December of 2019, the plaintiffs filed the lawsuit, and in January of 2020, the defendants filed their statement of defence, in which 150 they stated that the rent was paid up until the month of December

Therefore, the action of the plaintiffs, to continue to maintain the suit for claims to which they are not entitled while making no effort to verify the facts, would be a claim to unjustly enriching the plaintiffs. 155 [14] In such a case, should this Court turn a blind eye to the plaintiffs’ injudicious conduct, who from the very beginning did not take any effort but when the defendants took steps to summarily determine the case, which they fear the possible outcome would be against 160 them, they then filed the amendment application and contended that the Rules of Court 2012 allows for amendment to the pleading can be made at any stage of the proceeding. What should the Court make out of such conduct of the plaintiffs? This Court finds the such action of the plaintiffs to be in bad faith. If the plaintiffs had on their 165 own accord made the verification with the bank without the Learned SCJ’s direction, I would have considered the plaintiffs’ action to file for the amendment in good faith. [15] Regarding the tenancy between the plaintiffs and the first defendant, 170 this tenancy had mutually terminated on 31 January 2019, vide the first defendant’s letter dated 3 January 2019. [16] The first defendant sublet premises no. 42 and no. 42B to "Fartisha Enterprise" and "Vapor-Bro" without the plaintiffs' consent, as 175 consent is not required under the plaintiffs' and first defendant's principle tenancy. The sub-tenancy with “Fartisha Enterprise" and “Vapor-Bro" was for a shorter period than the main tenancy, expiring on December 6, 2018. However, prior to the expiration, "Fartisha Enterprise" and “Vapor-Bro" requested an extension of their tenancy 180 until December 31, 2020, which was granted with the plaintiffs' knowledge. [17] The plaintiffs’ issue is that the vacant possession of the premises has not been handed over to the plaintiffs since the mutual 185 termination of the tenancy with the first defendant. As a result, the plaintiffs filed a claim for vacant possession as well as damages or mesne profit. However, following verification with the bank at the direction of the Learned SCJ, the plaintiffs admit to receiving rental payments from February 2019 to December 2019. 190 [18] The plaintiffs were aware of that "Fartisha Enterprise" and "Vapor-Bro" are the sub tenants of the premises in question at all material time. The plaintiffs did not dispute the letter dated 3 January 2019, where the first defendant confirmed that the plaintiffs would continue 195 to rent the premises to the sub-tenants as verbally agreed over several telephone conversations. The plaintiffs contended that their letter dated 29 January 2019 was a letter in reply to the first defendant’s letter. If it is so, then the plaintiffs ought to have placed on record their disagreement and deny any verbal agreement. 200 Contrary to all this the evidence before this court shows that the plaintiffs continued to accept monthly rental for the sub-tenancy from the first defendant. [19] The issue before this court in appeal no. AA-12ANCvC-2-03/2022 205 is whether the first defendant continued to hold over the tenancy after its termination, giving rise to the plaintiffs' claim for vacant possession and damages or mesne profit. The issue in appeal no. AA-12ANCvC-3-03/2022 is whether the amendment to the statement of claim satisfies the requirement in Hong Leong 210 Finance v Low Thiam Heo and another appeal [2015] 8 CLJ 1; [2016] 1 MLJ 301, which replaces Yamaha Motor Co. Ltd v

215 [20] Now I shall consider the merits on the appeal respectively. APPEAL NO.: AA-12ANCvC-2-03/2022 [21] The first defendant in the lower court moved the court for disposal of the matter by determination of questions of law or 220 construction under O. 14A r. 1 and/or issues under O. 33 r. 2. [22] Order 14A rule 1 for determination of questions of law or construction states that: “(1) The Court may, upon the application of a party or of its 225 own motion, determine any question of law or construction of any document arising in any cause or matter at any stage of the proceedings where it appears to the Court that-

such question is suitable for determination without 230 the full trial of the action; and

such determination will finally determine the entire cause or matter or any claim on issue therein.” [23] Under O. 33 r. 2, Rules of the Court 2012 provides for the 235 determination of any question or issue arising from the cause of action. O. 33 r. 2 states: “(2) The Court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or 240 otherwise, to be tried before, at or after the trial of the cause or matter, and may give directions as to the manner in which the question or issue shall be stated.” [24] In this regard, O. 33 r. 2 has a far wider scope than the one 245 envisaged by its close counterpart, being O. 14A r. 1 of the ROC 2012, the latter which envisages the final determination of an action purely on a question of law and without the use of oral testimonies. 250 [25] In the determination of the question of law or construction this Court may dismiss the cause or matter or make such order or judgment as it thinks just. The Court shall not determine any question under this Order unless the parties have had an opportunity of being heard on the question. 255 [26] The distinction between the scope and efficacy of O.14A r.1 and O. 33 r. 2. The former does not require that the entire cause or matter be determined, and it also permits any claim or issue to be determined, but the question must be a pure 260 question of law or interpretation of the document. And the latter is applicable not only to a question or issue of law arising in a cause or matter to be tried, but also to a question or issue of fact or partly of fact and partly of law, and the entire cause or matter does not need to be definitively determined; 265 Petroleum Nasional Bhd v Kerajaan Negeri Terengganu [2004] 1 MLJ 8; [2003] 5 AMR 696; [2003] 4 CLJ 337. [27] It is not an issue between the parties that the matter cannot or suitably to be disposed of by way of O. 14A r. 1 and/or O. 270 33 r. 2. Hence, I will not be addressing on the case laws relating to O. 14A r. 1 and/or O. 33 r. 2 but suffices to only state the following from the decision of the Court of Appeal in Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2008] 2 MLJ 812; [2007] 6 CLJ 741. 275 “Order 14A r 1(1) enables the High Court to determine any question of law or construction of document where it appears to the court that such question is suitable for determination without the full trial of the action and such 280 determination will finally determine the entire cause or matter or any claim or issue therein. Where the construction of document will finally determine an issue under O 14A and that issue is a dominant feature of a case, the High Court ought to proceed to so determine 285 such issue. In this case the plaintiff's application came within the ambit of the 'construction of document' which is expressly provided in O 14A r 1(1).” [28] There were 3 issues referred to the Learned SCJ for 290 determination and disposal of the cause or matter before him: Question 1: Whether the plaintiffs claim to return vacant possession of the premises against the first defendant is legally wrong when the first defendant has given the vacant possession to the plaintiffs 295 expressly and/or implicitly through the letter dated 3/1/2019 and when the lease of the premises to the second defendant and the third defendant is expressly and/or impliedly within the knowledge of the plaintiffs? 300 Question 2: Whether there is a situation of 'tenant holding over' by the first defendant regarding premises no. 42 and no. 42B and whether the claim for double payment claimed by the plaintiffs under 305 s. 28(4) of the Civil Law Act 1956 is appropriate? Question 3: Whether the claim for mesne profit claimed by the plaintiffs is valid as against the first defendant when all the money paid to the plaintiffs 310 for the rental for the said premises was accepted without objection? [29] In Wee Tiang Kheng & Ors v Ngu Nii Soon & Ors [1989] 1 MLJ 252 it was stated: 315 “Mesne profits are in the nature of damages for trespass. A tenant is liable to pay it if he remains in occupation or otherwise keeps the landlord out of the premises after his tenancy has been lawfully terminated or forfeited”. [30] In Midlink Development Pte Ltd v. The Stansfield Group 320 Pte Ltd [2004] 4 SLR (R) 258, the plaintiff landlord leased several properties to the defendant. These tenancies were terminated in June 2002. After discussions, the plaintiff issued the defendant a credit note with revised rental rates. On 5 July 2002, the plaintiff also sent the defendant new, signed lease 325 agreements. The defendant did not sign these documents. However, the defendant continued to pay the revised rent at the beginning of each month, as per the practice established in the prior leases. The defendant tried to return the units and denied a lease. The plaintiff sued for unpaid rent. The court 330 allowed the plaintiff's claim. The court cited Walsh v. Lonsdale (1882) 21Ch D 9 (CA) and Golden Village Multiplex Pte Ltd v. Marina Centre Holdings Pte Ltd [2002] 1 SLR (R) 39, to rule that "mere failure to execute a tenancy agreement does not per se undermine its enforceability." The 335 fact that a purported lease fails to comply with the necessary formalities should not prevent the court from recognising it in equity, provided that the parties have relied on their agreement and acted accordingly. The court held: “(1) There was an oral agreement between the parties 340 that the defendant would lease the premises for a further term of two years commencing 1 July 2002 at the adjusted rental of $3.05 psf. This agreement was reached at the meeting on 2 May 2002. The parties' conduct subsequent to the meeting on 2 May 2002, 345 including the reduction of the rental deposit and the payment of the adjusted rent, was wholly consistent with the existence of such an agreement. While the plaintiff did not press for the return of the signed agreements, this was consistent with the plaintiff's belief that this was 350 purely a formality in light of the cordial relationship between the plaintiff and the defendant.

Even if no concluded agreement was reached on 2 May 2002, the defendant's contention that the 355 unsigned tenancy agreements were not binding as it had not accepted the contract was without merit. A contract could be concluded on the terms of a draft agreement if the parties were perceived by their conduct to have acted on it. While the defendant remained "silent" by not 360 signing the tenancy agreements, it was always a question of fact whether silent inactivity following an offer was tantamount to acceptance. On the present facts, the defendant's omission to sign the tenancy agreements was a calculated attempt to exploit the 365 unsigned agreements grounded on the defendant's belief that leaving the agreements unsigned would allow it to walk away from the tenancy when new premises were found.” 370 [31] In light of the decision in Midlink Development Pte Ltd (supra), the plaintiffs cannot claim that they did not execute any agreement with the subtenants, since they have been receiving rent from them month after month and have not seen fit to write to the first defendant to disagree, dispute, or deny 375 its intention to rent the premises to the subtenants. [32] Therefore, I hold that there was no tenancy holding over by the first defendant after the mutual termination of the tenancy with the plaintiffs. It follows that there is no trespass, as the 380 subtenants were lawfully occupying the premises as tenants of the plaintiffs until they vacated the premises at the end of December 2019, during which time they paid their rents. [33] The Learned SCJ was correct in his findings when he said as 385 follows: “Similarly, in this present case, although 1st defendant had written to plaintiff to collect the keys, plaintiffs did not respond. Instead plaintiffs continue to collect rental for premises no. 42 and 42B. Thus 390 plaintiffs is now estopped from claiming double rental. Plaintiffs did not show intention either expressed or implied to terminate the tenancy. As for the 1st defendant, they had paid the full rental amount of RM193,200 for the principle rental 395 agreement. Thus, this court found that 1st defendant is not a tenant holding over.” [34] It was also stated in Midlink Development Pte Ltd (supra), that silence on the part of the Plaintiffs as Landlord but 400 accepting rents landlord-tenant relationship is constituted. “[54] It is therefore axiomatic that "silence" in the context of the formation of a landlord and tenant relationship can be pregnant with legal implications. A tenant can simply 405 accept an offer of tenancy or create a new tenancy merely by remaining in possession and paying rent. Upon the characterisation of the payment for the right to occupy the premises as "rent" the landlord-tenant relationship is constituted” 410 [35] With the above determination, the plaintiffs' case against the first defendant collapsed as the plaintiffs were unable to maintain their claim because the legal question of whether the first defendant continued to occupy the premises after the 415 tenancy ended was answered in the negative. In addition, the plaintiffs had received rent from the subtenant (Fartisha Enterprise and Vapor-Bro). Therefore, a claim for double rental or mesne profits is automatically denied. APPEAL NO.: AA-12ANCVC-3-03/2022 420 [36] In light of this court's judgment to reject the plaintiffs’ appeal against the lower court's decision allowing the first defendant's application O. 14A r. 1 and/or issues under O. r. 2, under appeal no. AA-12ANCvC-2-03/2022, as a result, 425 hearing and deciding the plaintiffs’ appeal on the amendment application is academic. [37] In any case, in deciding on the amendment appeal, this court relies on the following cases: 430 i) Hong Leong Finance Bhd v Low Thiam Heo & Anor Appeal [2016] 1 MLJ 301: The Federal Court emphasised the importance of the intention behind an amendment application. The court considered whether 435 the amendment was a "tactical manoeuvre" and highlighted that courts should determine if the amendment application was made with genuine intent. The principle derived from this case is that courts should be wary of amendments that appear to be tactical moves 440 rather than genuine attempts to present the true facts of a case. ii) Yamaha Motor Co Ltd v Yamaha (M) Sdn Bhd [1983] 1 MLJ 213: The Federal Court sets out the general 445 principle that courts will allow amendments that do not cause injustice to other parties. Three basic questions should be considered: a. whether the application is made in good faith (bona fide). 450 b. whether any prejudice caused to the other side can be compensated by costs. c. whether the amendments would change the character of the suit. The key point from this case is that a party seeking an 455 amendment must satisfy all three conditions to succeed in their application. iii) Taisho Co Sdn Bhd v Pan Global Equities Bhd & Anor [1999] 1 MLJ 359; [1999] 1 CLJ 703 : In this case from the Court of Appeal, the court emphasized two 460 main requirements for a plaintiff seeking an order for amendment: a. The facts of the case must remain the same or substantially the same. 465 b. It would be just to grant leave to amend. If the plaintiff fails to satisfy even one of these conditions, the entire application fails. The court also considered the bona fides of the application, especially when there's a significant delay in filing. 470 [38] In any case, the amendment appeal would still fail for two (2) reasons: i) the plaintiffs’ amendment application was not submitted 475 in good faith and was intended to defeat the first defendant's application under O. 14A r. 1 and/or O. r. 2. The Sessions Court agreed in its conclusion, implying that the plaintiffs’ motives were not genuine and that their implementation would result in an injustice to 480 the first defendant. The plaintiffs’ amendment application was not made in good faith and was tactically designed to overcome the first defendant's application. The Sessions Court, in its judgment, concurred with this view, suggesting that the plaintiffs’ intentions were not 485 genuine and that their application would result in an injustice to the first defendant. ii) since the amendment should not have any effect on the nature or character of the plaintiffs’ cause of action. It 490 would imply that the Sessions Court may continue to hear the first defendant's application under O. 14A r. and/or Order 33 r. 2. If, on the other hand, the plaintiffs maintain that the amendment application must be heard and resolved before the application for O. 14A r. 1 and/or 495 O. 33 r. 2, this would suggest that the plaintiffs want to change the nature and character of the case from the original. Be that as it may, the plaintiffs only filed the amendment application after it was confirmed that all rental payments were received in full. This move came 500 after the first defendant had already filed an application under O. 14A r. 1 and/or O. 33 r. 2. The plaintiffs’ purported lack of knowledge about rental payments, is merely an excuse. The plaintiffs’ claim that the application was to present the true facts is an attempt to 505 rectify their shortcomings in making a successful claim against the first defendant. The plaintiffs could have filed for amendment very much earlier but neglected to do so. Conclusion [39] For the foregoing reasons, I dismiss both the appeals with cost 510 of RM6,000.00 subject to the usual allocator. Date: 11th September 2023 515 Moses Susayan MOSES SUSAYAN Judicial Commissioner 520 High Court in Malaya at Ipoh, Perak 525 Parties: Appellants/Plaintiffs : Khaw Yit Hao Advocates and Solicitors 530 [Messrs Lee Law Office] Bukit Mertajam, Penang Respondent/first : Vivekanandan a/l AMS Periasamy 535 defendant : Advocates and Solicitors [Messrs Selvam, Nanda & Partners] Ipoh, Perak 540 (Notice: This Grounds of Decision is subject to official editorial revision)