Low Wee Heng v My US Food Sdn Bhd (BA-22NCvC-255-06/2024)

This suit involves a tenancy of a factory and office premises (“Premises”) under a Tenancy Agreement between the parties dated 21- 6-2021 (“Tenancy Agreement”). It was commenced at the Sessions Court in January 2024 and was transferred to High Court in May 2024.

The Plaintiff (landlord), sued the Defendant (tenant) for vacant possession of the Premises and recovery of damages. The prayer for vacant possession was not pursued as the Defendant vacated the Premises in April 2024. The Defendant counterclaimed for a declaration that the termination of the tenancy was unlawful and sought damages for breach of two option clauses in the Tenancy Agreement. 31/01/2025 11:13:26 BA-22NCvC-255-06/2024 Kand. 40

The Plaintiff moved the court for summary judgment of its claim vide Enclosure 11 and to strike out the counterclaim vide Enclosure 13. I heard both applications together and on 17-12-2024, I allowed Enclosure 11 with costs of RM5,000.00 and Enclosure 13 (in part) with no order as to costs. The following are my reasons.

The Tenancy Agreement provided for a 2-year term which expired on 30-9-2023. There was an option to renew the tenancy under Clause 4.13 which, according to its terms, was exercisable by the Defendant not later than 30-7-2023.

The Defendant gave the Plaintiff a notice to renew the tenancy on 16-9-2023. This was promptly rejected by the Plaintiff via WhatsApp on the same day. However, the Plaintiff offered the Defendant a monthly tenancy at a rental rate of RM24,000.00 per month until 31-12-2023 (“WhatsApp Exchange”). This was later communicated formally by letter dated 20-9-2023 (“Letter”)

It is not disputed that the Plaintiff had sought vacant possession of the Premises from January 2024 as it had entered into a Sale and Purchase Agreement dated 15-9-2023 (“SPA”) to sell the Premises to a third party. The SPA was concluded before the tenancy with the Defendant expired.

After the expiration of the original 2-year term on 30-9-2023, the Defendant remained on the Premises and paid rental to the Plaintiff at a revised rental of RM24,000.00 until December 2023 in an apparent acceptance of the terms of the monthly tenancy offered by the Plaintiff. However, the Defendant did not vacate the Premises on 31-12-2023, but continued in occupation until April 2024.

The Plaintiff contended the period from January 2024 until April 2024 was a period when the Defendant was holding over on an expired tenancy, while the Defendant contended that the occupation was part of the period of a renewed tenancy.

To oppose summary judgment, the Defendant raised the following as triable issues:

Notice was given in July 2023 for the renewal of the Tenancy Agreement for a second term;

The special damages claimed in summary judgment was not pleaded;

The Plaintiff had breached the option to purchase clause in the Tenancy Agreement; and

The Plaintiff has no locus standi to sue as it had sold the Premises to a third party before the suit was filed. Notice given to renew the tenancy [10] The Defendant alleged that it had given the Plaintiff notice that it wished to renew the tenancy back in July 2023 and that the tenancy was in fact renewed until Sept 2025. [11] This Court found no evidence of such a notice to renew the tenancy in July 2023 which was required to be given according to the following terms of the Tenancy Agreement:

Clause 4.13 The option to renew was exercisable by the Defendant giving to the Plaintiff, a “notice in writing” of such desire not less than 60 days before the expiration of the tenancy.

Clause 9.1 The notice provision required all notices to be given under the Tenancy Agreement to be in writing, in English and sent in a particular way. [12] Further and more crucially, the Defendant’s bare averment of the alleged notice to renew the tenancy in July 2023 was contradicted by its own notice to renew the tenancy dated 15-9-2023 and attached to the WhatsApp Exchange on 16-9-2023. [13] The Defendant is estopped by its silence on the alleged July 2023 renewal of the tenancy in the WhatsApp Exchange and the failure to challenge the position set out in the Plaintiff’s solicitors’ letter dated 18- 12-2023. [14] For the above reasons, this Court determined that the Defendant’s bare assertion of a renewal of the tenancy completely lacked credibility and therefore failed to raise a bona fide triable issue. [15] In relation to the Defendant’s counterclaim for a declaration that the termination of the Tenancy Agreement was wrongful and damages for breach of clause 4.13 of the Tenancy Agreement, it follows from the findings in this section that the said counterclaim is obviously unsustainable. Special damages not pleaded [16] In Enclosure 11, the Plaintiff had sought summary judgment for RM192,000.00 as double rental for January to April 2024 and “special damages” in the sum RM109,683.30 comprising the cost of lift repair, restoration costs and unpaid utility bills (TNB, Water and IWK). [17] The Defendant argued that the damages sought in the Plaintiff’s summary judgment application were not pleaded in the Statement of Claim and therefore cannot be recovered. [18] This Court finds that although described as “special damages,” the particulars of loss claimed had not been incurred nor were they quantifiable as at the date of the writ. The purpose of pleadings is to prevent surprise and it could not have come as a surprise that the Plaintiff was claiming for damages to restore the Premises and settle outstanding utility charges. [19] By the Plaintiff’s solicitors’ letter of 18-12-2023, the Plaintiff had highlighted the Defendant’s obligation to ensure that the Premises are in working, good and tenantable condition and that outstanding utility charges are paid. The Plaintiff also reserved the right to impose double rental if vacant possession is delayed. [20] In the Writ and Statement of Claim which was filed prior to the delivery up of vacant possession of the Premises by the Defendant in April 2024, the Plaintiff prayed for general damages, exemplary damages and aggravated damages and any damage to the Premises to be assessed. [21] Further, notice was given by the Plaintiff’s solicitors on 30-4-2023 that the Premises had been left unlocked and particulars of the outstanding utility charges and damage to the Premises were also furnished to the Defendant’s solicitors. There was no response to this letter, nor for that matter, any response to the Plaintiff’s affidavit evidence on the same. [22] The alleged triable issue concerning the particulars and evidence of the damage caused to the Premises by the Defendant was nowhere averred in the Defendant’s affidavits. In other words, the evidence adduced by the Plaintiff comprising before and after photos, videos and receipts of work done on repairs were not challenged or responded to in any way. [23] This Court was satisfied that where general damages are readily proven on affidavit evidence in a summary judgment application, the prayer for damages to be assessed does not preclude the court ordering final summary judgment with the damages as assessed based on such affidavit evidence. [24] Notably, this Court also noted that submissions made by counsel for the Defendant on this point is a pure pleading point – the case argued was not that assessment of damages was a triable issue. [25] For the above reasons, this Court finds that the quantification of damages was satisfactorily proven on the affidavit evidence on a balance of probabilities and that this issue also failed to pass muster as a triable issue. [26] As there was also no dispute that the Plaintiff had retained a deposit of RM74,000.00 from the tenancy, the sum recoverable by the Plaintiff is RM192,000.00 and RM35,683.30 (RM109,683.30 less RM74,000.00) Breach of option to purchase [27] The Defendant also raised as a triable issue, the allegation that the Plaintiff had breached clause 4.18 of the Tenancy Agreement that gave the Defendant first right of refusal to purchase the Premises: The Defendant complained that it was denied the right to exercise its option to purchase, claiming that was the reason it had entered into the Tenancy Agreement. [28] The Plaintiff argued that it had not breached the Tenancy Agreement because:

the Defendant knew that the Premises was being sold by reference to messages exchanged with the Defendant on arrangements for appointments to view the Premises since 12-4-2023; and

clause 4.18 of the Tenancy Agreement was not applicable since the tenancy lapsed on 30-9-2023 and it was not averred anywhere that the Defendant ever wanted to exercise option to purchase. [29] The Defendant claimed to have discovered the sale of the Premises after receiving the Plaintiff’s solicitors’ letter of 18-12-2023 which made reference to the sale, and did not know that the viewing appointments since April 2023 were for potential buyers. [30] This Court found that the arguments about whether the Defendant was aware of the potential sale of the Premises or not are irrelevant as it is not disputed that the Property was sold to a third party on 15-9-2023, and that the Plaintiff did not:

“notify the [Defendant] of any offers accepted by the [Plaintiff] to purchase the [Premises];” and

“give the [Defendant] a minimum of sixty (60) days to exercise its right to purchase” as required under clause 4.18 of the Tenancy Agreement. [31] Pertinently, this Court also found that the sale took place while the Tenancy Agreement was still afoot, constituting a prima facie breach of clause 4.18 of the Tenancy Agreement on a plain reading of its terms. If an offer came in from the third party buyer to the Plaintiff before 30-9- 2023, which must have been the case here, the Plaintiff was obliged to notify and give the Defendant the right of first refusal. It is irrelevant that the Tenancy Agreement was due to expire as non-renewal of the tenancy, did not necessarily mean that the Defendant had no interest in purchasing the Premises. [32] Having said that, any breach of clause 4.18 of the Tenancy Agreement could only be pleaded by the Defendant as a defence of set-off and the question must still be asked, whether it is a bona fide triable issue of the Plaintiff’s claim. There is no plea of set off in this case and therefore, not a valid defence to the holding over on the expired tenancy. [33] In this regard also, this Court found that the Defendant, having been notified that they were to vacate premises as early as 16-9-2023, did not give indication that they wanted to purchase the Premises at any material time or ever. There is no averment to that effect even in the Defendant’s pleading and affidavits. Accordingly, there is no evidence of any damage even remotely connected to the breach of clause 4.18 of the Tenancy Agreement. [34] In relation to the Defendant’s counterclaim for breach of clause 4.18 of the Tenancy Agreement, this Court had accordingly dismissed that part of the Plaintiff’s striking out application. However, as it was noted that the Defendant’s pleading and evidence of conduct were all contrary to any harboured intention to purchase the Premises, the only outcome of a trial of the counterclaim would be nominal damages, which the Defendant could still pursue if it wished to. No locus standi to sue [35] Lastly, the Defendant contended that the Plaintiff had no locus standi to sue the Defendant in this action as the SPA had completed. This Court finds it a non-issue as the Plaintiff’s claim is for an antecedent contractual breach giving rise to a claim for damages. Conclusion [36] Enclosure 11 (summary judgment) was allowed in terms of prayers

(a), (b), (c) [for RM192,000.00], (d), (e) [for RM35,683.30],(f) and costs of RM5,000.00. [37] Enclosure 13 (striking out) was allowed in part with no order as to costs, in that the Defendant’s counterclaim on the alleged renewal of the tenancy was found to be obviously unsustainable and struck out, but the Defendant may proceed to trial on its counterclaim for alleged breach of the Defendant’s option to purchase the Premises. Bertarikh : 28 Januari 2025 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Plaintif : Tan Yee Chian, Messrs KS Chew & Associates Untuk Defendan : Meera A/P Krishnar Ragupathy,