D One Restaurant v Anuar Sadad Bin Mohamed Mustafa (BA-12B-101-09/2025)

1.0

This is an appeal against the decision of the learned Sessions Court Judge dated 18 September 2025, whereby the Defendant’s counterclaim was dismissed after full consideration of the pleadings, the evidence adduced at trial, the contemporaneous documents, and the submissions of counsel.

It is necessary at the outset to delineate, with precision, the confines of the present appeal. The appeal before this Court is directed solely at the dismissal of the Defendant’s counterclaim. The Plaintiff’s claim for vacant possession, and the broader question of whether there exists a valid and subsisting tenancy binding on the Plaintiff as registered proprietor, have been the subject of separate proceedings before courts of coordinate jurisdiction. Those decisions, whilst forming part of the surrounding litigation landscape, do not govern the present inquiry.

The present appeal concerns a narrower question. It is not whether there are disputes warranting a full trial in the broader action. The issue here is whether the Defendant’s counterclaim, as pleaded and supported by the evidence placed before the Sessions Court, discloses a legally sustainable basis for the reliefs sought.

Having considered the Record of Appeal, the Notes of Evidence, the documentary exhibits, and the written and oral submissions of learned counsel, this Court dismissed the appeal. These are the full grounds.

2.0

The sole issue for determination is whether the learned Sessions Court Judge erred in dismissing the Defendant’s counterclaim.

3.0

The principles governing appellate intervention are settled and require no restatement at length. The Federal Court in Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1 makes clear that an appellate court will not interfere with findings of fact unless they are plainly wrong, against the weight of the evidence, or tainted by a misdirection in law.

The appellate function is supervisory, not substitutive. It is not sufficient that another conclusion may be possible. Intervention is warranted only where the conclusion reached cannot be supported on the evidence as a whole.

It is also trite that where findings turn on primary facts and credibility, an appellate court must be slow to interfere unless the conclusion is unsupported by the evidence. The appellate court does not retry the case.

This framework is critical. The Defendant’s appeal must therefore demonstrate not merely that another view is possible, but that the findings reached below cannot stand.

This framework governs the present appeal.

4.0

The Defendant’s occupation of the premises originates from a tenancy agreement dated 1 January 2013 entered into with the previous landlord. That agreement provided for a fixed term together with a structured mechanism for renewal.

The Defendant relies on subsequent arrangements, including a letter dated 29 October 2021, which it contends extended the tenancy until 31 December 2026.

The Plaintiff subsequently acquired the premises pursuant to a Sale and Purchase Agreement dated 17 July 2024 and became the registered proprietor.

Following the acquisition, the Plaintiff issued a notice requiring the Defendant to deliver vacant possession. The Defendant resisted, asserting a continuing tenancy, and advanced a counterclaim alleging fraud, misrepresentation, economic duress, unlawful interference with business, and substantial financial losses.

The Sessions Court dismissed that counterclaim. The present appeal challenges that dismissal.

5.0

FINDINGS OF THE COURT 1

The Defendant’s counterclaim is anchored on the assertion that there exists a valid a tenancy.

The Defendant’s case rests on the assertion that the tenancy subsists until 31 December 2026 and binds the Plaintiff as subsequent purchaser.

The statutory framework under the National Land Code is clear. Section 213(1) provides: “Any tenancy or sub-tenancy for a term not exceeding three years… may be created without registration.” Section 221(2) provides: “Every lease granted pursuant to this section shall be for a term exceeding three years.”

The distinction is therefore clear. A tenancy exceeding three years constitutes a registrable interest.

The Defendant’s counterclaim stands or falls on the assertion that there exists a binding tenancy extending to 31 December 2026.

The Tenancy Agreement dated 1 January 2013 contains a structured renewal mechanism under Section 5.09: “If the tenant shall be desirous of taking a Tenancy… shall not less than three (3) months… give to the Landlord notice in writing…”

This is not permissive language. It is prescriptive. It defines the contractual mode of renewal.

The absence of compliance is not merely inferred — it is confirmed by the Defendant’s own evidence.

From the Notes of Evidence, DW1 accepted under cross-examination: “Saya tidak hantar notis bertulis tiga bulan sebelum tamat tempoh.” and further: “Tiada surat rasmi untuk exercise option renewal seperti dalam perjanjian.”

This admission is direct and unequivocal. It goes to the heart of the Defendant’s case. It establishes, from the Defendant’s own mouth, that the contractual machinery for renewal was not invoked.

The Defendant attempts to rely on the letter dated 29 October

However, DW1 further accepted: “Surat itu bukan notis di bawah klausa 5.09.”

That concession is fatal to the Defendant’s position. The Court is not left to interpret the document in abstraction. The maker himself disavows it as compliance with the contractual clause. The reliance on Section 6.05 similarly fails. As DW1 agreed: “Klausa itu hanya terpakai kalau tenancy masih berjalan.”

This reinforces the legal position that the clause cannot create a tenancy where none exists.

The learned Sessions Court Judge’s conclusion that no enforceable tenancy existed was therefore not speculative. It was grounded in:

the express contractual terms; and

the Defendant’s own admissions in evidence.

There is no misdirection here. There is no omission of material evidence. There is no conclusion that can be said to be against the weight of the evidence.

On the material before the Court, the alleged tenancy exceeds three years. There is, however, no evidence that such tenancy was registered, nor any evidence that steps were taken to protect the tenancy interest.

In these circumstances, and without making any final determination for the purposes of the trial, this Court is satisfied that the learned Sessions Court Judge was entitled to conclude that the Defendant had not established a tenancy binding on the Plaintiff as registered proprietor.

5.2 The Tenancy

The Defendant’s counterclaim is premised on the assertion that there exists a valid and binding tenancy extending until 31 December 2026 at a rental of RM9,100.00 per month.

That assertion must be examined against the tenancy agreement dated 1 January 2013, which constitutes the primary contractual foundation relied upon by the Defendant.

The agreement provides in clear terms: “The Landlord hereby lets and the Tenant hereby takes the Demised Premises for a term of three (3) years commencing from 1 January 2013 and expiring on 31 December 2015…”

The legal effect of this clause is immediate and unambiguous. The tenancy is one for a fixed term, expiring by effluxion of time unless renewed in accordance with the contractual machinery expressly provided.

The renewal provision is contained in Clause 5.09, which provides: “If the Tenant shall be desirous of taking a further tenancy… the Tenant shall not less than three (3) months before the expiration… give to the Landlord notice in writing…”

The structure of the clause admits of no flexibility. The giving of written notice within the stipulated period is not a matter of formality; it is a condition precedent to the existence of any renewed tenancy.

The evidential position on this issue is not disputed and does not rest on inference. It is established directly from the Defendant’s own witness.

From the Notes of Evidence, DW1 accepted under cross-examination: “Saya tidak hantar notis bertulis tiga bulan sebelum tamat tempoh.” “Tiada surat rasmi untuk exercise option renewal seperti dalam perjanjian.”

These answers are clear, direct, and dispositive. They engage precisely with the contractual requirement imposed by Clause 5.09. There is no ambiguity in the language used, and no attempt to suggest partial compliance.

The Defendant sought to rely on a letter dated 29 October 2021 as constituting or evidencing renewal. However, this position is equally foreclosed by DW1’s own admission: “Surat itu bukan notis di bawah klausa 5.09.”

This admission is critical. It removes from the Court the need to undertake any strained construction of the letter. The maker himself disavows the document as compliance with the contractual mechanism.

In these circumstances, the factual and legal position is aligned. The contractual requirement is clear, and the evidence establishes non-compliance.

The consequence is equally clear. No renewed tenancy came into existence.

5.3 Change of Ownership and Its Legal Effect

It is not disputed that the property was subsequently transferred to the Plaintiff pursuant to the Sale and Purchase Agreement dated 17 July 2024.

DW1 accepted in evidence: “Plaintif adalah pemilik berdaftar premis.”

The Defendant’s position appears to suggest that the change in ownership affects or preserves the tenancy.

The legal position, however, must be stated with precision. A valid and subsisting tenancy binds a transferee. That principle is not in dispute.

However, that principle operates only where there exists a tenancy in law at the material time.

The present case does not concern the extinguishment of a tenancy by transfer. It concerns the anterior question of whether any tenancy existed beyond the original term.

As already established, no renewal was effected under Clause 5.09. Accordingly, at the time the Plaintiff became the registered proprietor, there was no subsisting tenancy capable of binding the Plaintiff.

The Defendant’s continued occupation cannot be transmuted into a contractual tenancy merely by reason of continued possession or payment.

5.4 The Sale and Purchase Agreement (SPA) and the Alleged

The Defendant places significant reliance on the Sale and Purchase Agreement dated 17 July 2024, contending that it recognises and preserves a tenancy subsisting until 31 December 2026.

This contention must be examined against the actual clauses of the SPA.

Clause 1A(c) of the Third Schedule provides: “the Purchaser shall continue to be bound by the terms of the existing tenancies… provided that the existing tenancies shall remain subsisting…”

Clause 5.1(b) further provides: “all subsisting tenancies… shall be assigned to the Purchaser…”

The repeated use of the words “existing” and “subsisting” is not incidental. It is central.

These clauses do not create tenancies. They do not extend tenancies. They operate only upon tenancies that already exist in law.

The Defendant further relies on Schedule 5 of the SPA (Enclosure 4, page 46), which states: “Renewed until 31 December 2024 with option to further renew for 2 more years subject to revised monthly rental to be agreed.”

A careful reading of this document reveals several points.

First, the phrase “option to further renew” reflects the very mechanism contained in Clause 5.09 of the tenancy agreement. It confirms that renewal is conditional, not automatic.

Second, the words “subject to revised monthly rental to be agreed” demonstrate that any further term is contingent upon agreement between the parties. It is not a concluded extension.

Third, and most significantly, the SPA does not contain any clause stating that the tenancy shall continue until 31 December 2026 at RM9,100.00 per month.

This is reinforced by the Respondent’s submissions (Enclosure 14, paragraph 14.5), which state: “nowhere it is stated that the tenancy… is to continue until 31.12.2026 at the rate of RM9,100.00 per month.”

The Court has examined the SPA and accepts that submission as accurate.

The Defendant’s reliance on the SPA is therefore not supported by the contractual text.

The evidential position must then be considered.

The WhatsApp communications at pages 231–234 of Enclosure 4 (Rekod Rayuan Mahkamah Sesyen) record the Defendant’s response to the revised rental. The Defendant stated: “sewa RM25 ribu itu amatlah tinggi…” “masa yg diberi sangat suntuk untuk kami mencari premis lain…”

These communications are not consistent with a party asserting a right to remain until 2026. They are consistent with a party seeking time to vacate.

Further, at pages 278–293 of Enclosure 4, there is no assertion of any legal entitlement to remain under a tenancy until 2026.

This contemporaneous conduct is wholly inconsistent with the Defendant’s pleaded case. The Defendant also relies on the Sessions Court’s observation regarding sections 213 and 221 of the National Land Code. Even if the Defendant is correct that a tenancy exceeding three years requires registration, that does not assist the Defendant.

The issue before this Court is not the validity of a long tenancy, but whether any tenancy has been established at all.

The Defendant cannot rely on statutory provisions to overcome its failure to comply with Clause 5.09.

The conclusion is therefore inevitable:

no tenancy subsisted at the material time;

the SPA did not create or extend any tenancy;

the Defendant’s reliance on the SPA is misconceived both in fact and in law.

5.5 Contemporaneous Conduct and Admissions

The WhatsApp communications were admitted without dispute.

DW1 confirmed: “Ya, ini WhatsApp antara saya dan Plaintif.”

The content of these communications is telling.

The Defendant requested: “Boleh bagi masa sedikit untuk pindah?” “Kami perlukan extension sikit…”

When pressed, DW1 accepted: “Saya tidak kata saya ada hak undang-undang untuk kekal sampai 2026.”

This is not a neutral omission. It is an admission inconsistent with the pleaded case.

The Defendant’s explanation of duress is unsupported: “Tiada ugutan bertulis…” “Tiada laporan polis…”

The learned Sessions Court Judge was entitled to rely on these admissions.

5.6 Contemporaneous Conduct

The contemporaneous WhatsApp communications are of considerable significance. Those communications show that the Defendant requested time to vacate the premises, proposed timelines for relocation, and sought extensions of time. The tenor of those communications reflects a position of negotiation and accommodation rather than the assertion of a subsisting legal entitlement.

At no material time did the Defendant assert, in clear and unequivocal terms, a fixed right to remain in occupation until 31 December 2026.

In the present case, the Defendant’s own conduct is inconsistent with the position now advanced in the counterclaim. The learned Sessions Court Judge was therefore entitled to rely on such contemporaneous conduct in concluding that the counterclaim lacked a factual foundation.

5.7 Fraud and Misrepresentation

The Defendant alleges fraud and misrepresentation.

Under Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn. Bhd. [2015] 5 MLJ 1, such allegations require cogent evidence and the Federal Court held that although the standard of proof is on a balance of probabilities, a higher degree of probability is required in cases involving allegations of fraud.

Here, the evidential deficiency is not peripheral. It is fundamental. DW1 accepted: “Saya tidak boleh nyatakan dengan tepat siapa yang buat representasi itu.” and further: “Tiada dokumen bertulis yang menyatakan representasi tersebut.” When pressed on reliance: “Saya andaikan sahaja berdasarkan perbincangan.”

These answers demonstrate that the essential elements of misrepresentation — representation, reliance, and causation — are not established with the degree of clarity required.

There is similarly no evidence of fraudulent intent. The WhatsApp exchanges do not disclose deceit. They disclose negotiation.

The learned Sessions Court Judge’s rejection of this claim was therefore inevitable on the evidence. Section 18 of the Contracts Act 1950 defines misrepresentation, while Section 19 provides that a contract induced by misrepresentation is voidable.

On the evidence before the Court, the Defendant has not identified any specific representation with precision, nor has it established reliance or causation of loss. The allegations remain general and unsupported.

The learned Sessions Court Judge did not err in dismissing this claim.

5.8 Unlawful Interference with Business

The Defendant further alleges unlawful interference with business.

The essential elements of the tort include the use of unlawful means, intention to injure, and resulting damage.

On the material before the Court, there is no evidence that the Plaintiff employed unlawful means. The Plaintiff, as registered proprietor, was entitled to deal with the property. There is likewise no evidence of intention to injure, nor is there credible evidence of loss.

The evidential burden here is exacting. It requires proof of unlawful means and intention.

DW1 accepted: “Plaintif adalah pemilik berdaftar premis.” and further: “Permintaan untuk kosongkan premis datang daripada pemilik.”

This establishes that the Plaintiff was acting within proprietary rights.

On the allegation of leasing to a competitor, DW1 conceded: “Tiada dokumen rasmi yang menunjukkan premis disewa kepada pesaing.”

This reduces the allegation to speculation.

There is no evidential basis to infer unlawful means or intention to injure. The learned Sessions Court Judge’s finding is therefore unassailable.

5.9 Damages

The Defendant claims substantial sums for business losses, employee expenses and projected profits.

These are claims for special damages and must be strictly proved.

Section 74 of the Contracts Act 1950 provides: “When a contract has been broken, the party who suffers… is entitled to receive compensation… for any loss… which naturally arose…”

In the present case, the Defendant relies on self-prepared tables and unverified figures. There are no audited accounts or independent financial records. The claims are therefore speculative and unsubstantiated.

The learned Sessions Court Judge was correct in finding that the damages were not proven.

5.10 Jurisdiction

The Defendant contends that the Sessions Court exceeded its jurisdiction.

This argument is without merit.

The Sessions Court had jurisdiction to hear and determine the counterclaim. The fact that the quantum claimed is substantial does not compel the Court to preserve a claim which is unsupported by evidence.

There is no jurisdictional error.

6.0

When the counterclaim is considered as a whole, the deficiencies are fundamental and pervasive.

The Defendant has failed to establish a tenancy binding on the Plaintiff, has failed to demonstrate a consistent factual basis for its claim, has failed to prove the elements of fraud or unlawful interference, and has failed to provide a credible evidential basis for damages.

The learned Sessions Court Judge concluded that the counterclaim was unsupported and amounted to general assertions. This Court finds that such conclusion is fully supported by the record.

7.0

Having considered the evidence and submissions in full, this Court is satisfied that the learned Sessions Court Judge did not err in dismissing the Defendant’s counterclaim.

The decision is not shown to be plainly wrong or against the weight of the evidence. There is therefore no basis for appellate intervention.

8.0

The appeal is dismissed. The decision of the learned Sessions Court Judge dismissing the Defendant’s counterclaim is affirmed.

Costs are awarded to the Plaintiff in the sum of RM5000.

For completeness, the substantive issues relating to tenancy and vacant possession remain to be determined at trial before the Sessions Court in accordance with the earlier High Court direction. Dated 12 May 2026 -sgd-DATO’ ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Appellant : Syamsul Azhar bin Ab. Aziz & Sasha Nameera binti Sabtu, Siti Nurdiyana Hamim binti Abdul Halim (PDK) (Messrs Azhar Aziz & Associates) For the Respondent : Arvind Dhanesha a/l K Bargavan (Messrs Fawwaz & Co.)