Bandar Utama City Assets Sdn. Bhd. v Rotol Food-Chain (M) Sdn. Bhd. (BA-12A-27-05/2025)

ROTOL FOOD-CHAIN (M) SDN. BHD. [COMPANY NO: 199801012450 (468578-D)] [FORMERLY KNOWN AS EXPANDSUN SDN. BHD.]

CHUA KAH SENG [NRIC: 580101-08-5853]

CALEEN CHUA YEN KENG [NRIC: 880828-43-5740] ...RESPONDENTS [IN THE MATTER OF SESSIONS COURT AT SHAH ALAM IN THE STATE OF SELANGOR DARUL EHSAN, MALAYSIA SUIT NO.: BA-A52-8-01/2025 BETWEEN BANDAR UTAMA CITY ASSETS SDN. BHD. [COMPANY NO: 199401036697 (322379-T)] ... PLAINTIFF

ROTOL FOOD-CHAIN (M) SDN. BHD. [COMPANY NO: 199801012450 (468578-D)] [FORMERLY KNOWN AS EXPANDSUN SDN. BHD.]

CHUA KAH SENG [NRIC: 580101-08-5853]

CALEEN CHUA YEN KENG [NRIC: 880828-43-5740] ... DEFENDANTS] GROUNDS OF JUDGMENT

This is an appeal against the decision of the learned Sessions Court Judge dated 24 April 2025 granting an interlocutory injunction in favour of the 1st Respondent, Rotol Food-Chain

(M) Sdn. Bhd. (“the Tenant”).

The order restrains the Appellant, Bandar Utama City Assets Sdn. Bhd. (“the Landlord”), from taking vacant possession of the premises known as SkyDeck @ Avante Hotel pending the disposal of the Sessions Court action.

The Landlord maintains that the tenancy expired by effluxion of time on 19 December 2024 and that the Tenant has no lawful basis to remain. The Tenant contends that it had validly exercised its contractual option to renew and that the termination is disputed.

After hearing full submissions and examining the record carefully, I dismissed the appeal. I now set out my reasons.

The Tenancy Agreement dated 3 January 2022 governs the relationship between the parties. The tenancy commencement date is stated to be 20 December 2021. The agreement provides for a total duration of nine years divided into three consecutive terms of three years each, with the First Term expiring on 19 December 2024. The structure of the agreement makes clear that the parties contemplated a long-term commercial arrangement and provided for renewal through an express contractual mechanism.

Section 2.02A of the agreement confers upon the Tenant an option to renew, subject to written notice and subject to compliance with stipulated conditions. The clause requires that, at the time of giving notice, the Tenant must have paid all rentals and monies due and must have observed and performed all obligations under the agreement. Renewal is therefore conditional and its validity depends on factual compliance.

The monthly rental is RM46,467.00, comprising base rent and licence fee, with an alternative calculation based on percentage of gross sales, whichever is higher. The agreement further provides for interest at 1.5% per month on unpaid sums and sets out consequences in the event of holding over. The contractual framework is detailed and anticipates disputes regarding arrears, performance and continued occupation.

On 2 April 2024, the Tenant issued a written notice expressing its intention to renew the tenancy for the Second Term. The Landlord disputes the validity of that notice on the basis that the Tenant was allegedly in arrears at the time and therefore failed to satisfy the renewal conditions. The Tenant denies the existence of arrears and pleads that it had complied with its obligations. The Tenant further asserts that the Landlord did not comply with any contractual notice or cure requirements before treating the tenancy as terminated.

On 18 November 2024, the Landlord issued a Notice of Termination asserting that the tenancy would expire on 19 December 2024 and demanding vacant possession. The Tenant did not vacate. The Landlord thereafter commenced proceedings in the Sessions Court seeking declaratory relief, vacant possession, double rental from 20 December 2024 and interest.

In January 2025, the Petaling Jaya City Council [Majlis Bandaraya Petaling Jaya,“MBPJ”] sealed the premises following inspection. The premises were subsequently reopened in late February 2025. On 24 February 2025, the Landlord’s solicitors asserted that MBPJ required vacant possession to be returned to the Landlord and indicated that possession would be taken by 1 March 2025.

The Tenant requested documentary proof of that alleged requirement. No such documentary proof was produced before the Sessions Court. Faced with imminent dispossession prior to trial, the Tenant applied for interlocutory injunction.

The learned Sessions Court Judge granted the injunction after concluding that there exists a serious issue to be tried regarding renewal and termination, that the alleged municipal requirement was unsupported by documentary evidence, and that the balance of justice favoured preserving possession pending trial.

The principles governing interlocutory injunctions are well settled as per Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193. The Court must determine whether there is a serious issue to be tried and, if so, consider where the balance of justice lies. The Court does not determine the merits conclusively at this stage but considers whether interim preservation is necessary to prevent injustice pending trial.

Section 7(2) of the Specific Relief Act 1950 [Act 137] provides that where immovable property has been let under a tenancy and the tenancy has ended but the occupier remains in occupation, the person entitled to possession shall not enforce the right to recover it otherwise than by proceedings in court. The provision reflects a legislative policy that disputes over possession are to be resolved through judicial process rather than unilateral action.

It is equally established that the grant of an interlocutory injunction is discretionary. An appellate court will interfere only where the lower court applied wrong principles, failed to consider relevant matters, considered irrelevant matters, or reached a decision that is plainly outside the range of reasonable outcomes.

The first question is whether there exists a serious issue to be tried. In my judgment, there plainly is. The renewal clause is conditional and its operation depends on whether the Tenant satisfied the requirement of having paid all rentals and performed all obligations at the time of renewal.

The existence or non-existence of arrears is disputed. Whether any alleged breaches were properly notified and whether the Landlord complied with contractual mechanisms before asserting termination are also disputed. These issues go directly to whether the Tenant has a continuing contractual right to remain in possession and require evidential determination at trial.

It would be inappropriate at an interlocutory stage to decide whether renewal was validly exercised. That question depends on accounting evidence, interpretation of the contractual provisions and examination of the parties’ conduct. The learned Sessions Court Judge was therefore correct in finding that the dispute is genuine and substantive.

The next consideration is whether damages would be an adequate remedy. The Landlord argues that this is a commercial tenancy and that any loss suffered by the Tenant can be quantified. While commercial losses are capable of assessment in monetary terms, the adequacy inquiry must consider whether damages would sufficiently restore the position if eviction occurs before trial. If the Landlord retakes possession and re-lets the premises, and the Tenant later succeeds on renewal, restoration of possession may not be practicable. The Tenant’s asserted contractual right would effectively have been extinguished before adjudication.

Conversely, if the Tenant remains pending trial and the Landlord ultimately succeeds, the Landlord has contractual remedies including rental, double rental and interest. The Tenancy Agreement itself anticipates holding over and provides financial consequences. The interim prejudice to the Landlord is therefore capable of monetary redress. In these circumstances, the learned Sessions Court Judge was entitled to conclude that damages were not clearly adequate from the Tenant’s perspective if possession were lost prematurely.

The balance of convenience must favour the course that carries the lower risk of injustice. Eviction prior to trial would fundamentally alter the position and could render the action academic. The Landlord’s prejudice during the interim period is financial and compensable. The Tenant’s prejudice from eviction is structural and potentially irreversible, particularly in the context of an ongoing commercial operation.

The learned Sessions Court Judge also considered that the Landlord had not produced documentary proof supporting the alleged strict MBPJ condition requiring vacant possession. While municipal issues do not determine contractual entitlement, they were relevant to assessing the urgency and propriety of immediate repossession. It was reasonable to treat the threatened dispossession as premature in light of the unresolved renewal dispute.

The injunction preserves the status quo. It does not determine whether renewal was valid or whether termination was lawful. It ensures that the Court’s eventual decision is meaningful and capable of implementation.

Section 7 of Act 137 reinforces the need for judicial determination before recovery of possession where entitlement is contested. Where renewal is arguable and termination is disputed, possession should not be altered until the Court determines the rights of the parties. Permitting repossession at this stage would undermine orderly adjudication and risk rendering the trial nugatory.

The learned Sessions Court Judge applied the correct legal principles and evaluated the relevant considerations. The Landlord’s appeal essentially invites this Court to reweigh the balance and substitute its own assessment. Appellate restraint requires that this Court interfere only where the decision is clearly wrong. I find no such error.

For the reasons set out above, the appeal is dismissed. The order of the Sessions Court dated 24 April 2025 granting interlocutory injunction is affirmed.

Costs follow the event. The Sessions Court shall proceed to trial expeditiously so that the substantive dispute regarding renewal and termination may be determined without further delay. Dated 31 March 2026 -sgd-DATO’ ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Appellant : Pearly Chua Li May (Messrs Josephine, L K Chow & Co.) For the Respondents : Aw Kai Xiang (Messrs Lee & Poh Partnership)