Era Usahasama Sdn Bhd v Perbadanan Kemajuan Ekonomi Negeri Johor (JA-22NCvC-99-06/2022)

This is an application by the Plaintiff for an inter parte interim injunction (Enclosure 55) pending the disposal of the main suit. Earlier, an ad interim injunction was granted by this Court on 16.10.2023, prayers of which are identical to Enclosure 55 as follows (in Bahasa Melayu):- “a. suatu injunksi interim mencegah Defendan sama ada secara sendirinya ataupun melalui kakitangan-kakitangannya, pekerja-pekerjanya dan/atau agen-agennya untuk masuk campur dengan posesi Plaintif dan kenikmatan senyap Hartanah yang dikenali 18/06/2024 11:38:15 JA-22NCvC-99-06/2022 Kand. 141 2 sebagai PTD 110756 HS(D) 212973, Mukim Plentong, Pasir Gudang Industrial Area, Daerah Johor Bahru, Negeri Johor (“Hartanah tersebut”) termasuk fasiliti-fasiliti sehingga perintah lanjutan Mahkamah Mulia ini; b. suatu injunksi interim mencegah Defendan melalui kakitangan-kakitangannya, pekerja-pekerjanya dan/atau agen-agennya untuk melarang Defendan daripada memasuki Hartanah tersebut yang dipajak oleh Plaintif sehingga 9.12.2023 dan dengan apa-apa cara yang menghalang Plaintif dari menggunakan dan/atau menikmati premis yang dipajak oleh Plaintif; c. suatu injunksi interim mencegah Defendan; d. bahawa kos kepada dan sampingan kepada permohonan ini adalah kos di dalam kausa; dan e. apa-apa perintah lanjutan ataupun sesuai diberikan oleh Mahkamah Yang Mulia ini.”

Upon hearing counsel for the parties, this Court on 9.11. 2023 dismissed Enclosure 55 and consequently discharged the ad interim injunction granted earlier. These are the Court’s reason for such decision.

The Plaintiff’s action against the Defendant in the main suit is for certain specific performance over a dispute relating to a lease of a piece of land known as ‘No. Hakmilik HS(D) 212973, PTD 110756, Mukim Plentong, Daerah Johor Bahru, Negeri Johor’ (“the Land”) where the Plaintiff was the lessee and the Defendant, the lessor. The reliefs prayed for as pleaded in the Amended Statement of Claim (Enclosure 48) are couched as follows (in Bahasa Melayu): - “Oleh yang demikian, Plaintiff menuntut relif-relif yang berikut terhadap

Defendan:- Bahawa Defendan memperbaharui Perjanjian tersebut untuk tempoh selama 30 tahun lagi;

Bahawa kadar pajakan baru ditetapkan sebanyak RM20.00 bagi satu kaki persegi atau secara alternatifnya, pada kadar yang ditetapkan oleh Mahkamah Yang Mulia ini;

Apa-apa perjanjian lain yang dimasuki oleh Defendan dengan pihak lain berkenaan Hartanah tersebut yang bercanggah dengan hak Plaintif adalah terbatal dan tidak sah.

Dalam keadaan Mahkamah mendapati Tempoh Pajakan hartanah tersebut bermula pada 10.12.1993 sehingga 9.12.2023, bahawa Pejabat Tanah & Galian Johor Bahru diperintahkan untuk meminda dan/atau memperbetulkan tempoh pajakan dalam Borang 15A dan semua dokumen rasmi lain.

kos; dan

relif selanjutnya dan/atau yang yang dianggap wajar oleh Mahkamah Yang Mulia ini.” [4] The Plaintiff is a company registered in Malaysia, whereas the Defendant is a Johor State statutory body. [5] Prior to the issuance of the document of title in 1993, the Land was known as PLO 459 Pasir Gudang Industrial Area in Plentong District, Johor Bahru. The Land was conferred to the Plaintiff by the State Government of Johor vide an agreement between the Defendant and the State Government of Johore dated 11.10.1989 [refer: exhibit “D-1” in Defendant’s Afidavit Jawapan dated 28.8.2023 (“Enclosure 67”)]. [6] In 1991, the Defendant offered International Paint (Malaysia) Sdn Bhd ("IPM") to lease the Land for 30 years at the rate of RM8.00 per square foot inclusive of all other costs totaling to RM3,599.724.00 (“the lease”). The offer was made vide a letter from the Defendant to IPM dated 18.12.1991 (“Offer Letter”) [refer: exhibit “C-2” in Plaintiff’s Afidavit Sokongan dated 3.8.2023 (“Enclosure 56”)]. [7] Among the terms of the lease in the Offer Letter is that IPM shall pay 10% deposit from the total lease sum within 14 days from the date of the said letter and the balance 90% thereof within six (6) months also to be calculated from the date of the said letter. [8] IPM accepted the offer through its letter dated 2.1.1992. IPM had in the same letter enclosed a cheque for the 10% deposit with a request that the lease shall be given to another entity known as Ultra View Sdn Bhd ("Ultra View"). The cheque in respect of the deposit was cleared / cashed by the Dfendant on or about 7.1.1992. [9] On 19.6.1992, Ultra View changed its name to Courtaulds (Malaysia) Sdn Bhd ("Courtaulds"). The Defendant consented for the transfer of rights and interests in the lease from IPM to Courtaulds vide its letter dated 25. 6. 1992. [10] Thereafter, the Defendant received balance payment for the lease sum on 1. 07. 1992. [11] On 15.10.1992, both the Defendant and Courtaulds entered into a Lease Agreement ("Lease Agreement") (refer: exhibit D-4 in Enclosure 67) which further detailed out the terms and conditions of the lease as an addition to the Offer Letter. [12] The material terms of the Lease Agreement are, inter alia, as follows: -

The lease shall be for a period of 30 years effective from the date the lessee (Courtalds) takes vacant possession of the Land from the lessor (Defendant) with the option to renew the said lease for a further period of 30 years on the existing terms and conditions, except in respect of the consideration for the new lease which is to be determined by the lessor. The option to renew the lease ought to be exercised by the lessee no later than one (1) year before the existing option lapses (clause 3 of the Lease Agreement).

(ii) The vacant possession of the Land shall be given upon receipt by the lessor of payment of 10% deposit made by the lessee.

(iii) Other terms are as contained in the Offer Letter and Lease Agreement (Part 5 of the First Schedule of the Lease Agreement). [13] Upon issuance of the document of title to the Land on 11.8.1993, the lease between Courtalds and Defendant was registered at the land office on 10.12.1993. The registration was effected vide Borang 15A of the National Land Code 1965 (“NLC”) together with a Lease Annexure executed between same parties on even date ("Lease Annexure") (refer: exhibit “D-6” in Enclosure 67). [14] The period of the lease as stated in the said Borang 15A is for 30 years commencing from 1. 7. 1992 until 30.6.2021. [15] Further, under clause 3.6 of the Lease Annexure, it is also stipulated that the lessee ought to make a written request of not less than one

year before the expiry of the said lease, subject to:

there being no breach on the part of the lessee in respect of the terms of the lease; and

parties agreeing on the value of consideration for the extension of the lease. [16] On or about February 1999, Courtaulds changed its name to Akzo Nobel (Malaysia) Sdn Bhd ("Akzo Nobel"). [17] On 20.11.2009, Akzo Nobel entered into an Agreement for Sale of Lease with the Plaintiff (refer: exhibit D-7 in Enclosure 67). The said agreement, which was consented to by the Defendant, had the effect of Akzo Nobel assigning all its rights, interests and/or liabilities in respect of the lease and/or the Land to the Plaintiff. [18] The transfer of the lease from Akzo Nobel to the Plaintiff was subsequently registered at the land office on 29.10. 2010. [19] On 10.10.2021, the Defendant issued a notice to the Plaintiff stating that due to the Plaintiff's failure to exercise the option to renew the lease within the stipulated period has resulted in the lease been determined by the Defendant on 30.6.2022. [20] The Plaintiff, through its solicitor’s letter to the Defendant dated 12.4.2022, objected to the Defendant’s aforesaid letter and claimed that the Plaintiff had held numerous discussions relating to the extension of the lease with the Defendant but to no avail since the consideration for the new lease fixed by the Defendant could not be agreed to by the Plaintiff. [21] The Plaintiff then proceeded to lodge a private caveat over the Land on 2.6.2022. [22] In the meantime, the Defendant had created a new lease over the Land to a third-party company through the Defendant’s Letter of Offer dated 7.02.2022 and a lease agreement was subsequently entered into between the Defendant and the said third-party company on 7.9.2022. [23] It is the contention of the Plaintiff that the third-party company has since 6.4.2023 begun clearing the said land, upon which the Plaintiff claimed to have suffered losses including its 50,000 metric tons of iron ore stored on that Land that have been destroyed either by the Defendant or the third party as a consequence thereof. The Plaintiff lodged a police report dated 6.04.2023 in this regard (refer: exhibit C-3 in Enclosure 56). [24] Hence, the filing of the instant action via Writ and Statement of Claim by the Plaintiff against the Defendant on 30.6.2023. Analysis and decision [25] At the outset, it is necessary to state firstly that the Court's jurisdiction to grant an interim injunction, being preventive relief, is provided for in Section 51(1) of the Specific Relief Act 1950, reads as follows: - ''51(1) Temporary injunctions are such as are to continue until a specified time, or until the further order of the court. They may be granted at any period of a suit, and are regulated by the law relating to civil procedure." [26] The relevant civil procedure for such an application for injunction can be found in Order 29 Rule 1(1) of the Rules of Court 2012 which provides as follows: - "(1) An application for the grant of an injunction may be made by any party to a cause or matter before or after trial of the cause or matter, whether or not a claim for the injunction was included in that party's originating process, counterclaim or thirty party notice, as the case may be." [27] The principles upon which an interim injunction may be granted or otherwise can be distilled from the guidelines laid down by the English House of Lords in American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 ("American Cyanamid"), where it was held that the applicant for an application of such must satisfy the court that: -

there are serious issues to be tried;

damages would not be an adequate remedy if the plaintiff succeeds at trial; and

the balance of convenience lies in granting the injunction sought. [28] The aforementioned principles have been applied in our courts in numerous cases, suffice to restate what the Court of Appeal had summed up in Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193 (pages 206-207) as follows: - "To summarize, a judge hearing an application for an interlocutory injunction should undertake an inquiry along the following lines:

he must ask himself whether the totality of the facts presented before him discloses a bona fide serious issue to be tried. He must, when considering this question, bear in mind that the pleadings and evidence are incomplete at that stage. Above all, he must refrain from making any determination on the merits of the claim or any defence to it. It is sufficient if he identifies with precision the issues raised on the joinder and decides whether these are serious enough to merit a trial. If he finds, upon a consideration of all the relevant material before him, including submissions of counsel, that no serious question is disclosed, that is an end of the matter and the relief is refused. On the other hand if he does find that there are serious questions to be tried, he should move on to the next step of his inquiry;

having found that an issue has been disclosed that requires further investigation, he must consider where the justice of the case lies. In making his assessment, he must take into account all relevant matters, including the practical realities of the case before him. He must weigh the harm that the injunction would produce by its grant against the harm that would result from its refusal. He is entitled to take into account, inter alia, the relative financial standing of the litigants before him. If after weighing all matters, he comes to the conclusion that the plaintiff would suffer greater injustice if relief is withheld, then he would be entitled to grant the injunction especially if he is satisfied that the plaintiff is in a financial position to meet his undertaking in damages. Similarly, if he concludes that the defendant would suffer the greater injustice by the grant of an injunction, he would be entitled to refuse relief. Of course, cases may arise where the injustice to the plaintiff is so manifest that the judge would be entitled to dispense with the usual undertaking as to damages (see Cheng Hang Guan & Ors v Perumahan Farlim (Penang) Sdn Bhd & Ors [1988] 3 MLJ 90). Apart from such cases, the judge is entitled to take into account the plaintiff's ability to meet his undertaking in damages should the suit fail, and, in appropriate cases, may require the plaintiff to secure his undertaking, for example, by providing a bank guarantee; and

the judge must have in the forefront of his mind that the remedy that he is asked to administer is discretionary, intended to produce a just result for the period between the date of the application and the trial proper and intended to maintain the status quo, an expression explained by Lord Diplock in Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130; [1983] 2 All ER 770; [1983] 3 WLR 143 and applied in Cheng Hang Guan. It is a judicial discretion capable of correction on appeal. Accordingly, the judge would be entitled to take into account all discretionary considerations, such as delay in the making of the application or any adequate alternative remedy that would satisfy the plaintiff's equity, such as an award of monetary compensation in the event that he succeeds in establishing his claim at the trial. Any question going to the public interest may, and in appropriate cases should, be taken into account. A judge should briefly set out in his judgement the several factors that weighed in his mind when arriving at his conclusion." [29] From the affidavits filed by the Plaintiff for the use in the hearing of Enclosure 55, it is quite apparent that the Plaintiff is taking the position that the lease period that the Plaintiff had acquired through the assignment of the Offer Letter, Lease Agreement and Lease Annexure actually commenced from the date 10.12.1993, i.e. the date of registration of the lease at the land office, as opposed to the position taken by the Defendant that is from 1.7.1992, i.e. the date as stated in the Borang 15A and as can be inferred from the relevant clauses in the Offer Letter, Lease Agreement and Lease Annexure. [30] In this regard, the Plaintiff’s counsel submits that there cannot be a lease without title to the Land, citing s.206 of the NLC which provides the need for proper instrument of dealings to be registered, in order for it to be legally effected. The said s.206 NLC is reproduced below as follows: - “206. Need for proper instrument of dealing, duly registered

Subject to the following provisions of this section:

every dealing under this Act shall be effected by an instrument complying with the requirements of sections 207 to 212; and

no instrument effecting any such dealing shall operate to transfer the title to any alienated land or, as the case may be, to create, transfer or otherwise affect any interest therein, until it has been registered under Part Eighteen.” [31] Hence, since the lease was only registered on 10.12.1993, the Plaintiff’s counsel submits that the 30-year lease shall only come to the end on 10.12.2023, making the last date for the Plaintiff to exercise its option to renew the lease only to fall on 10.12.2022 and not 30.6.2021 as contended by the Defendant. [32] Whereas, the Defendant’s counsel submits that the date of the commencement of the lease shall be from 1.7.2019, i.e. the date the Defendant received the deposit from IBM as stated in clause 6 of the Lease Agreement which is to be read together with Part 5 of the First Schedule of the same agreement. To support the Defendant’s position, counsel cited the case of S & M Jewellery Trading Sdn Bhd & Ors. v Fui Lian-Kwong Hing Sdn Bhd [2015] 5 MLJ 717 where the Federal Court highlighted the legal principle that even if the sub-lease is yet to be registered, parties are governed and regulated by the terms of the unregistered sub-lease, in the following words: - "[51] The finding by the courts below that it was a tenancy at will would also have to be put right. The first appellant had long been in occupation of the demised premises and paid the rent reserved which were accepted by the respondent. There was a relationship of landlord and tenant between the parties that was apparently regulated, for both parties conducted themselves as so bound, by the terms of the unregistered sublease ... ... [55] We now answer the leave question as follows. A lease or sublease (exceeding three years) is not rendered void by reason of non-registration. A lease or sublease (exceeding three years) is imperfect without registration. Unless perfected, it will not operate to transfer title to the lessee or sublessee. It is nonetheless an agreement for a lease. An agreement for a lease does not create a relationship of landlord and tenant. But if the tenant is let into possession under the imperfect lease or sublease, he becomes a tenant at will (for further reading on the creation of a tenancy at will, see Megarry & Wade, at paras 17-102). A tenancy at will, is determinable at the will of either party, and being such it cannot co-exist with a periodic tenancy or an equitable lease. When the tenant pays or expressly agrees to pay rent, the tenancy at will changes into a periodic tenancy upon the terms of the intended lease or sublease, that is, from year to year or for other periodic period, according to the computation of the rent. Where appropriate, equity may treat an agreement for lease as an equitable lease, that is, treat the unregistered lease as registered, and compel specific performance against the proprietor." [33] In my view, the issue as raised by the Plaintiff is a serious issue to be tried no doubt. Thus far, the Plaintiff only relied on the provisions of the NLC to justify its ground with no decided case on point, whereas the Defendant’s reliance on S&M Jewellery is easily distinguishable since the issue of registration of the sub-lease or otherwise in that case did not concern with the title document duly issued by the land office; hence further investigation especially on the facts, law and equity are wanting. For this, I find the Plaintiff has successfully met the first requirement under the principles for injunction that such issue merits trial. [34] However, I also have to agree with the Defendant counsel’s submissions that the Plaintiff’s right to renew the 30-year lease is not absolute under the Offer Letter, Lease Agreement and Lease Annexure. First, the exercise of the option to renew must be communicated by the Plaintiff to the Defendant not later than 1 year before the expiry of the 30-year lease, and secondly the parties must agree to a new consideration amount for the renewal of the lease. [35] Now, assuming if I must that the position taken by the Plaintiff is correct, i.e. the 30-year lease only expired on 10.12.2023, it is my finding that there is nothing in evidence to suggest that the Plaintiff and Defendant had agreed on the consideration or value for the renewal of the lease for a further 30 years. From my reading of the Offer Letter, Lease Agreement and Lease Annexure, the need for both parties to agree on the new consideration amount is a condition precedent which must be met before the lease can be said to have been extended. [36] Further, it is also pertinent to note that in a letter from the Plaintiff’s former solicitor to the Defendant dated 12.4.2022, the Plaintiff appears to have acknowledged that the lease expiry date is on 30.6.2022 (refer: exhibit D-10 in Enclosure 67). [37] At this juncture, I find that it is not a disputed fact that the Defendant had entered into a new 30-year lease with a third party on 7.9.2022. And by that, the third party would certainly to be in control over the land and not the Defendant at least until year 2052. [38] Thus, on the scale for weighing balance, I am of the view that the harm that the injunction would produce by its grant would surely overweight against the harm that would result from its refusal. If at all the Plaintiff suffers any loss and/or damage, such purported losses can be quantified in monetary compensation since the lease between the Plaintiff and Defendant was only effective for a limited period of time that is up until 30.6.2023. Any losses thereafter, upon proof, will be subject to the court’s determination and assessment after full trial. In so far as the facts as presented are concerned, there is nothing for the Court to say that compensation by way of damages would not be an adequate remedy to the Plaintiff. In this regard, the Defendant, being a creature of statute would certainly be in a position to compensate the Plaintiff in the form of the said damages should the Plaintiff succeed at the end of trial. [39] However, the same could not be said to the Plaintiff should the trial resulted in favour of the Defendant. I say this because if the interim injunction is granted it would automatically allow the Plaintiff to have access and possession over the Land, thereby a clash with the third party as the new lessee is foreseeable and certainly inevitable. Should this happen, the Court will certainly be put in a difficult position to adjudge the whole matter since the third party is not even in the equation under this action. [40] I hasten to add here that although I am mindful that an interim injunction may be granted even if it may affect a third party not named in the action, but on the foreseeability and inevitability elements that I mentioned earlier, I am of the view that the Plaintiff is under duty to provide to this Court of its financial standing to enable the Court to gauge its ability to give its undertaking as to damages in the event the Plaintiff fails in its action against the Defendant. [41] Thus, on the facts and circumstances, I find that such failure on the part of the Plaintiff is fatal since the Court will be left with no materials relating to the undertaking of damages for the purpose of exercising the Court’s discretion whether to grant the interim injunction or otherwise. [42] On that score, I find the Plaintiff fails to surpass the balance of convenience and adequacy of damages test for the Plaintiff to be eligible for the interim injunction as sought in Enclosure 55. Conclusion [43] Based on the foregoing reasons, I dismissed Enclosure 55 and discharged the Ad Interim Injunction granted earlier on 16.10.2023, with costs of RM10,000.00 subject to allocator fee. Dated: 12th JUNE 2024 …………………………………………. (NOOR HISHAM BIN ISMAIL) Judicial Commissioner High Court, Johor Bahru Counsels for Plaintiff: Ms Bhavanash Sharma together with Ms Chetna Brijmohan Messrs Bhavanash Sharma Kuala Lumpur Counsels for Defendant: Mr Norazmi bin Norazam together with Mr Ahmad Fadzly bin Abdul Gani and Ms Jasneeta Bhullar Messrs Azmi Fadzly Maha & Sim Kuala Lumpur Cases referred to:

American Cyanamid Co v Ethicon Ltd [1975] 1 All ER 504 2. Keet Gerald Francis Noel John v Mohd Noor bin Abdullah & Ors [1995] 1 MLJ 193 3. S & M Jewellery Trading Sdn Bhd & Ors. v Fui Lian-Kwong Hing Sdn Bhd [2015] 5 MLJ 717 Legislation referred to:

Section 51(1) of the Specific Relief Act 1950 2. Order 29 Rule 1(1) of the Rules of Court 2012 3.