Segi Astana Sdn Bhd v 1. ) Mesra Indah Jaya Sdn Bhd (WA-22NCvC-836-12/2021)

Content

1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN FEDERAL TERRITORY OF WILAYAH PERSEKUTUAN, MALAYSIA CIVIL SUIT NO: WA-22NCVC-836-12/2021 BETWEEN SEGI ASTANA SDN BHD PLAINTIFF (Company No: 814564-D)

Subparagraph

(ii) A striking out is not a trial on affidavits and the Court should not conduct a minute examination of the documents through the affidavit. As long as there is a valid claim on the face of the pleadings or raises some questions fit to be tried it should not be struck out.

Subparagraph

(iii) A striking out order should not be entered if there is an issue of law that requires lengthy argument and mature consideration especially when the issue requires deliberation after taking evidence at trial.

Subparagraph

(II) Law for Summary Judgement.

Subparagraph

(ii) This Court should not enter judgment against the Defendant if it finds that the defence or issue or question in dispute between parties that ought to be tried or that there ought for some other reason to be a trial of the claim or part of the claim. This Court must analyse the affidavit evidence of both parties.

Subparagraph

(iii) Generally, in the normal way, it is not appropriate for me to resolve conflicts of evidence on affidavit alone but where such statement or assertion, denial or dispute is unequivocal or lacking in precision or is inconsistent with undisputed contemporary documents or statements then I am duty-bound to reject them and enter judgment.

Subparagraph

(iv) This power should be exercised by me in a very clear case where the defence and affidavit filed in opposition do not show any bona fide defence and there are no real issues to be tried.

Schedule

Schedule 1 and for the purpose of Identification outlined in RED on the Floor Plan which is annexed hereto as Schedule 3 for the Fixed Term as stated in Clause 3.2 subject to the terms and conditions hereinafter contained. Clause 3.2 Duration of Licence The duration for the Licence is for the Fixed Term as stated in Section 4 of

Schedule

Schedule 1 and has commenced on the Licence Commencement Date as stated in Section 5 of Schedule 1. Clause 4.1.1 License Fee and Other Charges 4.1 Payment of Monthly Licence Fee/Revised Monthly Licence Fee 4.1.1 The Licensee shall pay the Monthly Licence Fee as stated in Section 8 of Schedule 1 with effect from the Licence Commencement Date as stated in Section 5 of Schedule 1 to the Licensor or its duly authorised agent without any deductions counter-claims and set-off and whether or not formally or legally demanded. The Monthly Licence Fee shall be paid in the following manner: Licence Agreement (a) the Minimum Fee as stated in Section 10 of Schedule 1 shall be paid in advance on or before the 7th day of each and every calendar month; and (b) where the Percentage Fee is higher than the Minimum Fee, the Licensee shall pay the difference between the Percentage Fee and the Minimum Fee together with the duly tabulated and certified sales transaction records referred to in Clause 4.1.3 below. Clause 5.2 Security Deposit The Licensee shall pay to the Licensor the Security Deposit in the amount and at the rate and at the time as stated in Section 14 of Schedule 1 as security for the dua observance and performance by the Licensee of all the covenants undertakings terms conditions obligations restrictions agreements and stipulations on part of the Licensee to be observed and performed herein. Provided Aays that the Security Deposit shall be maintained throughout the Fixed Term in the aggregate amount as may from time to time be equivalent to the number of months' of Minimum Fees or Revised Minimum Fee, as the case may be, as stated In the sald Section 14 of Schedule 1 and the Licensee shall forthwith pay to the Licensor on demand such additional sum of monies as may be required to maintain the amount of the Security Deposit as such. Clause 5.3 Utilities Deposit 5.3.1 In addition to the Security Deposit payable under Clause 5.2, the Licensee shall also pay to the Licensor the Utiltias Deposit in the sum and at the time as stated in Section 15 of Schedule 1 as deposit for the due payment of utilities charges Incurred and payable by the Licensee for the usage and consumption of water, sewerage, liquefied petroleum gas (LPG) (where applicable) and other utilities in respect the Demised Premises. Clause 5. 8 Interchangeability of Deposits 5.8.1 Notwithstanding anything to the contrary herein contained, It is hereby agreed that the Deposits paid or to be paid by the Licensee to the Licensor may be forfelted to the Licensor and/or appropriated interchangeably at its absolute discretion against any and all moneys as may be due from the Licensee pursuant to the terms and conditions herein and without prejudice to the right of the Licensor to seek additional recovery or remedy against the Licensea for any and all outstanding licence fees, late payment interest charges, losses, damages, costs or expenses whatsoever as may be incurred or sustained by the Licensor not sufficiently covered or reimbursed by such application or forfeiture of the Deposits or any part(s) thereof. Clause 8.25 Licenses and Approvals for Business 8.25.1 To apply for, obtain and maintain at the Licensee's own costs and expenses and to submit to the Licensor copies of all licencor's permits approvals registration and other consents required by the Appropriate Authority for the carrying on or conduct of the Licensed Operations in the Demised Premises for the Fixed Term. 8.25.2 The Licensor does not warrant or undertake to the Licensee that the Licensee shall be able to use the Demised Premises for the Licensed Operations and the failure of the Licensee to obtain permission from the Appropriate Authority, if required, for such use of the Demised Premises as is intended or contemplated by the Licensee shall not be a ground to villate impair or frustrate the licensee herein or obligations on part of the licensee herein contained. Clause 11.2 Late Payment Interest In addition to and without limiting or prejudicing other rights powers and remedies conferred upon or accruing to the Licensor, if the Licensee shall for any reasons whatsoever default in the payment on the respective due date of any sum covenanted to be paid by the Licensee herein, the Licensee shall pay to the Licensor interest charged on such sum at the rate of ten percent (10%) per annum on a daily basis as from the expiry of seven (7) days from the due date to the date of actual payment thereof together with the late payment Interest accruing thereon as aforesaid, or at such other rate and/or on such other rest as may be stipulated from time to time by the Licensor at its absolute discretion by giving written notice thereof la the Licensee, as well after as before any judgment and the Licensor shall be entitled to recover such interest from the Licensee as if such interest were licence fees in arrears. Clause 12.1.1 Force Majeure Events 12 Reservation Of Rights By The Licensor 12.1 Force Majeure Events 12.1.1 In case the Demised Premises or any part(s) thereof shall at any time during the term of the Licence herein be destroyed or damaged by any Force Majeure Event so as to become unfit for occupation and use or if the Licensed Operations could not possibly be carried out at the Demised Premises by the Licensee as a result of any Force Majeure Event: (a) the Monthly Licence Fee or the Revised Monthly Licence Fee, as the case may be, or a fair proportion thereof according to the nature and extent of the Force Majeure Event affecting the Demised Premises and/or the Licensed Operations shall be suspended and shall cease to be payable from the occurrence of such Force Majeure Event until the Licensed Operations can be carried out or the Demised Premises shall again be rendered fit for occupation and use; (b) the Licensor shall not be liable howsoever to the Licensee for any loss or damage occasioned to the Licensee as a result of such Force Majeure Event or the destruction or damage as aforesaid to the Demised Premises; (c) the Licensor shall also not be bound or compelled to rebuild or reinstate the Demised Premises (if it is destroyed or damaged by any Force Majeure Event) unless in its absolute discretion it shall think fit to do so and the Licensee shall not hold the Licensor liable for any reason whatsoever. Clause 12.1.4 12.1.4 In the event there is no damage or destruction of the Demised Premises but the Licensed Operations could not possibly be carried out at the Demised Premises as a result of any Force Majeure Event and such Force Majeure Event continues to persist for a period of 60 days, other party may terminate this Agreement forthwith without payment of any compensation or damages to the Licensee except the Licensor shall refund to the Licensee the Deposits free of interest after deducting all sum which may be due and owing from the Licenses under this Agreement and the Licensee shall peacefully vacate the Demised Premises in accordance with the manner provided herein and thereupon neither party shall have any claims against each other save and except for antecedent breach. Clause 15.5 Entirety Of Agreement And Amendment 15.5.1 This Agreement together with the Schedules and Appendices, if any, hereto constitutes the entire agreement between the parties hereto and supersedes and cancels any prior agreements, negotiations and understandings with respect to the subject matter hereof, whether written or oral (including without limitation, the Letter of Offer). Clause 15.15 Relationship between the parties 15.15.1 The Licence does not create any relationship of landlord and tenant between the Licensor and the Licensee nor does it confer on the Licensee any other estate or interest (proprietary) or otherwise in the Demised Premises, 15.15.2 The parties hereby agree that nothing in this Agreement is intended or shall be construed as m any way creating or establishing a partnership between the parties or as constituting the Licensee as an agent or representative of the Licensor for any purpose or in any manner whatsoever 15.15.3 The Licensee shall, at all times, be an independent corrector and not a servant or employee of the Licensor 13. The terms of the letters of guarantee executed by the 2nd and 3rd Defendants are as follows: - 13.1 In consideration of the Plaintiff entering into the License Agreement with the First Defendant, the Second and Third Defendants agree to guarantee and undertake to pay on demand all monies and liabilities that are due from the First Defendant to the Plaintiff. 13.2 The Second and Third Defendants may be considered to be the principal debtor of the sums due from the First Defendant to the Plaintiff. 13.3 The Second and Third Defendants shall be jointly and severally liable for the sums outstanding from the First Defendant to the Plaintiff. 13.4 The obligations by the Second and Third Defendants to guarantee and indemnify 13.5 The guarantee and indemnity by the Second and Third Defendants shall be in addition and not in substitution for any other guarantee for the First Defendant’s obligation to the Plaintiff. 13.6 The guarantee and indemnity shall subsist for long as the Plaintiff has a claim against the First Defendant pursuant to the terms of the earlier referred License Agreements. 14. The First Defendant had allegedly failed to pay the Plaintiff the sum of RM 2, 347, 718.38 that is due and payable as of 2-11-2021. Demands for payments were made by the Plaintiff’s solicitors dated 6-11-2020 and 2-11-2021 to the First Defendant. The Plaintiff’s solicitors had also issued letters of demand to the Second and Third Defendants dated 7-12-2021. A Statement of Account as 22-12-2021 was also issued by the Plaintiff. There was no denial by the Defendants as to the receipt of these demands. 15. The First Defendant on the other hand issued a notice dated 25-11- 2020 seeking to unilaterally terminate the said agreements on the grounds of Force Majeure under clause 12.1.1 and clause 12.1.4 with effect from 31-12-2021. At the same time, the First Defendant also contends that as there was a Force Majeure event, the Defendants are entitled to a reduction of the previous sums due to be paid it. They seek a reduction of the sums allegedly due based on the Force Majeure event as stated in clause 12.1.1. (II) Defendants’ arguments justifying a trial of the action 16. The Defendants have raised 4 issues in their Defence and in their affidavits in response to the application by the Plaintiff. They are summarized as follows: - 16.1 That the First Defendant is entitled to rely on section 7 of the Temporary Measures for Reducing the Impact of Coronavirus Disease (Covid 19) Act 2020 as it allegedly could not perform its obligations. (Covid-19 Measure Act) 16.2 That the License Agreements are illegal under sections 2, 6 and 6 of the Land Public Transport Act 2010. (Illegality) 16.3 The Guarantee is void as they are not bound by the Contracts of Indemnity due to lack of consideration (past consideration) and that the final letter of guarantee was executed together with the main agreement. (Void Guarantees) 16.4 That there was misrepresentation by the Plaintiff which led to the execution of the agreements. (Misrepresentation) 16.5 The Defendants are allegedly entitled to rely on Force Majeure due to the Covid-19 measures put in place by the Government of Malaysia. (Force Majeure) 17. I will deal with the above issues raised by the Defendants in the following paragraphs and explain why I do not believe that there are any triable issues and that the Defendants have failed to show any valid bona defence to the Plaintiff’s claim. Alleged Illegality 18. The first issue raised by the Defendants concerns the alleged illegality of the License Agreement. The Defendants rely on section 6 of the Land Public Transport Act 2010. 19. The Defendants contend that as the Plaintiff does not have any valid license or has failed to show any valid license for the operation of the transportation hub that was licensed to the First Defendant, the above agreements are void and cannot be enforced by the Plaintiff. 20. The Defendants rely on section 6 (1) of the Land Public Transport Act 2010 which is reproduced herein: - (1) Subject to sections 194 and 195, no person shall operate any terminal unless he holds a licence issued under this section. 21. It is to be noted that contravention of the said proviso attracts the following penalties under section 6 (8) of the Land Public Transport Act 2010: - (8) A person who operates a terminal in contravention of subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding five years or to both. 22. A contract that is either (a) forbidden by statute, (b) if permitted, would defeat any law, (c) fraudulent, (d) may involve or cause injury to a person or the property of another or (e) immoral or opposed to public policy, is void under section 24 of the Contracts Act. 23. It is the Defendants’ contention that the License Agreements between the First Defendant and the Plaintiff violates section 6 (1) of the Land Public Transport Act 2010. As a result, the Defendants suggest that the said agreements fall under sections 24(a), (b) or (e) of the Contracts Act. 24. In support of its contention, the Defendants refer to the letter dated 17-7-2019 issued by the Land Transport Authority (APAD) to the Plaintiff seeking clarification as to the status of the premises as a transportation hub for KLIA2 and the requirements laid down by APAD to improve the said terminal. The Defendants contend that since the said letter was issued by APAD to the Plaintiff, it is therefore for the said Plaintiff to obtain such license from the authority. As a result of the failure by the Plaintiff to obtain such a license, the aforesaid agreements are therefore allegedly unlawful and void. 25. However, I note that parties had agreed that the obligation to obtain any licenses for the operations of the said terminal lies with the First Defendant. This is provided for in clause 8.25 of the said License Agreements. Clause 8.25.2 also provides that the failure by the First Defendant to obtain such licenses and / or approvals from the authorities for the said terminal, will not vitiate, impair, or frustrate the obligations by the First Defendant to the Plaintiff. 26. Therefore, I find that even if the Plaintiff did not hold the license from APAD under section 6 of the Land Public Transport Act 2010, it will not render the relevant agreements void under section 24 of the Contracts Act. 27. It is also wrong for the Defendants to rely on their own failure to comply with the obligations required by APAD. The Plaintiff had informed the First Defendant of APAD’s requirements as seen in the letters dated 10-7-2019 and 31-7-2019. It is for the First Defendant to then take steps to comply and obtain such licenses. 28. I also find that section 6 of the Land Public Transport Act 2010 does not prohibit the License Agreements entered between the Plaintiff and the First Defendant. The said proviso only makes it mandatory for the First Defendant, who will be undertaking the said transportation hub, to obtain the appropriate license from APAD before it operates the transportation hub. The keywords appearing in section 6 of the Land are “no person shall operate any terminal unless he holds a licence issued under this section”. 29. The said Act does not prohibit the contract entered between the Plaintiff and the First Defendant. The failure, if any, to obtain such license will attract a penalty as provided for under section 6(8) of the Land Public Transport Act 2010. This will then be imposed against the First Defendant if its contention is correct and will not render the agreements void. 30. I am guided by the decision of the Federal Court in Maple Amalgamated Sdn Bhd & Anor v Bank Pertanian Malaysia Bhd [2021] 8 CLJ 409, where Tengku Maimun Tuan Mat CJ held: - “[80] The approach all this while has largely been that when courts interpret ss. 24(a) and 24(b) of the Contracts Act 1950, they do so on the premise that the agreement has contravened some provision of the law. The only thing to do then is to determine the effect of the contravention on the validity of the agreement. Case law has not otherwise been as direct to explain how it ought to be determined in the first place whether the law has been contravened. As such, the approach taken in Goulis (supra) and the general theory of interpreting criminal law in favour of the accused commends itself to us as regards the determination of whether an agreement in the first place breaches any law. [81] In our assessment of paras. (a) and (b) of s. 24, the interpretive approach to be taken is much the same. It is often difficult and technical to make a distinction between those two paragraphs because what is "forbidden by law" is also something which is "of such a nature that, if permitted, it would defeat any law". Further, if something is "of such nature that, if permitted, it would defeat any law", it would mean that the agreement would have been void for it being "forbidden by law". In this regard, learned author Visu Sinnadurai notes in his acclaimed treatise Law of Contract (3rd edn, vol. I, LexisNexis Butterworths, 2004), at p. 395, that the courts have more often than not relied upon s. 24 without indicating which of those two sub-section ((a) or (b)) they are invoking. [82] Suffice to say, the law in this country has always recognised and more so now with the growing advent of commercial transactions, that the courts should move slowly to strike down agreements for illegality. This approach must necessarily be factored into the initial assessment as to whether the agreement in question in the first place contravenes the statute in question. And, even if the agreement is illegal, the courts must be slow to conclude that the agreement is automatically void. In avoiding this result, Parliament may or may not intervene. [83] In cases where Parliament intervenes, it may provide for savings provisions such that even if the law has been breached, the agreement will not be void for illegality unless the law says so very clearly either explicitly or implicitly (see for example Coramas Sdn Bhd v. Rakyat First Merchant Bankers Bhd & Anor [1994] 2 CLJ 143; [1994] 1 MLJ 369; Tekun Nasional v. Plenitude Drive (M) Sdn Bhd & Other Appeals [2018] 8 CLJ 686; [2018] 4 MLJ 567; and Yango Pastoral Pty Ltd v. First Chicago Australia Ltd (1978) 21 ALR 585). [84] Even in PJD Regency (supra), at para. 76, this court most recently endorsed the principle that even if an agreement was formed on the basis of an illegal act (in that case the collection of booking fees), it would be against sound policy to declare so readily that the agreement is void as that would defeat the purpose of the social legislation in question. In making those observations, this court relied on the judgment of the Privy Council in Kiriri Cotton Co Ltd v. Dewani [1960] 1 All ER 177. [85] The overall tenor of the judgments above-cited and the development of the law suggests that in determining whether an agreement in the first place contravenes the law, primacy and due regard must be given to the object and purpose of the law which is said to have been breached. And, where two possible constructions are possible on the law or the facts, that is, one which results in contravention and one that does not, the interpretation which favours commercial sense (the one that avoids the finding of illegality) is to be preferred. The overarching theory behind this thought process, as seen from Lord Devlin's dictum in St John Shipping (supra) for example is that the public and reasonable commercial people will have organised their affairs on the assumption that what they are doing or have done is not prohibited by law. It is only when the force of the law is abundantly manifest (whether expressly or impliedly) that such a commercial transaction is in breach of the law and an illegality. And, even then, the armoury of the law is wide enough to not immediately render the agreement void for illegality even in the face of such contravention. In all situations, this illegality assessment depends on the facts of every case and the policy as well as language of the law said to have been contravened. 31. I also refer to the decision of the Court of Appeal in Tekun Nasional v Plenitude Drive (M) Sdn Bhd & other appeals [2018] 8 CLJ 686. In that case, Tekun Nasional was an agency that approves, disburses loans and collects loans. It appointed the Plaintiff, Plenitude Drive, to develop the entire infrastructure system for the Defendant which consisted of upgrading loan repayment facilities through mobile gadgets and other IT systems. 32. The Defendant failed to pay the contract sum claimed by the Plaintiff which led to the suit. One of the issues raised by the Defendant to defeat the claim was the alleged illegality of the services and agreement. The Court of Appeal found in favour of the Plaintiff. In delivering the judgment of the Court of Appeal, Tengku Maimun Tuan Mat JCA (as her Ladyship then was) held: - “[65] Be that as it may, on the issue of illegality, we find guidance from the Federal Court decisions in The Co-operative Central Bank Ltd (In receivership) v. Feyen Development Sdn Bhd [1995] 4 CLJ 300; [1995] 3 MLJ 313 and Lori (M) Bhd v. Arab-Malaysian Finance Bhd [1999] 2 CLJ 997; [1999] 3 MLJ 81. In Lori (M) Bhd, Edgar Joseph Jr FCJ said at p. 1016 (CLJ); p. 104 (MLJ): It is well settled that at Common Law, a contract or transaction in breach of a statutory prohibition and an associated contract is, in general, void for illegality even though the statute is silent as to its consequences and merely inflicts a penalty on the wrongdoers (see Menaka v. Lum Kum Chum (ibid), at pg 94, Phoenix General Insurance Co of Greece SA v. Administratia Asigurarilor de Stat (ibid) but this is subject only to any contrary intention manifested by the statute (see Yango Pastoral Co Pty Ltd v. First Chicago Australia Ltd(ibid) ). [66] In Yango Pastoral Co Pty Ltd & Ors v. First Chicago Australia Ltd & Ors [1978] 139 CLR 410, the respondent granted a loan to the first appellant, repayment of which was secured by mortgage which incorporated a guarantee given by the other appellants. The first appellant defaulted in repayment. The respondent sued the appellants on the personal covenants in the mortgage. The appellants pleaded illegality. Their case was that the mortgage (including the guarantee) was rendered illegal and void by the provisions of s. 8 of the Banking Act 1959, as amended or alternatively that by reason of the provisions of s. 8 a court would not assist the respondent to give effect to the transaction. [67] In holding that judgment was rightly given to the respondent, Gibbs ACJ said at pp. 413-414: It is often said that a contract expressly or impliedly prohibited by statute is void and unenforceable. That statement is true as a general rule, but for complete accuracy, it needs qualification, because it is possible for a statute in terms to prohibit a contract and yet to provide, expressly or impliedly, that the contract will be valid and enforceable.... Where a statute imposes a penalty upon the making or performance of a contract, it is a question of construction whether the statute intends to prohibit the contract in this sense, that is, to render it void and unenforceable, or whether it intends only that the penalty for which it provides shall be inflicted if the contract is made or performed. The question whether a statute, on its proper construction intends to vitiate a contract made in breach of its provisions, is one which must be determined in accordance with the ordinary principles that govern the construction of statutes.... There is no doubt that Pt. II of the Banking Act, in which s. 8 appears, was enacted partly at least for the protection of depositors, or that one object of s. is the protection of the public. Section 8 of course does not expressly prohibit the making or performance of contracts, but the argument advanced on behalf of the appellants was that the prohibition which it imposes on an unauthorised body corporate from carrying on any banking business extends to all activities which go to make up the business of banking... The language of s. 8 indicates that it is directed, not at the making or performance of particular contracts, but at the carrying on of any banking business. ... Having regard to the language of s. 8 and to the matters to which I have referred, I conclude that s. 8, on its proper construction does not vitiate contracts made by a body corporate in the course of carrying on a banking business in breach of the section. [68] Likewise in the instant case, s. 8 of the FSA did not provide that a contract which purports to render services to an approved business without first securing the approval from Bank Negara is void and unenforceable. ….. [70] In the instant case, collecting repayment from its customers had been the business of the defendant for a long time albeit done manually without the mobile gadget and standing instruction system developed by the plaintiff. The defendant had the requisite approval from Bank Negara to do so. As such, it was at all material times carrying on approved or licensed business. Such approval was for the giving out of loans and collection of the same. The present contract merely serves to facilitate the collection of the repayment of loans using information technology to replace manual collection. Surely the business of collection of the repayment of its loans cannot be an illegal business. If at all there is any element of illegality by the implementation of the new improved system of collecting repayment, the defendant, a Government agency cannot rely on its own illegality to defeat the agreement. We are thus unable to sustain the defendant's argument on illegality and we hold that the agreement is valid.” 33. Guided by the decisions of our Superior Courts, I opine that the defence of illegality relied on by the Defendants is not sustainable. The agreements are not void even if there is a contravention of section 6 of the aforesaid Act. The license agreements only gave the First Defendant the right to use the KLIA-2 integrated complex that was built by the Plaintiff subject to the payment of the sums due under the said agreements. It is for the First Defendant to obtain any required license or approvals from the authorities. The relevant Act also does not prohibit these types of contracts but requires those who intend to operate such transportation hubs to obtain a license from APAD. 34. For the above reasons, I reject the issue of illegality as alleged by the Defendants. The Defendants are allegedly entitled to rely on section 7 of the Covid Act 35. The second issue put forward by the Defendants concerns the right of the First Defendant to rely on section 7 of the Covid Act. 36. I reproduce section 7 of the Covid Act and the relevant schedule for ease of convenience: - Section 7 of the Covid Act The inability of any party or parties to perform any contractual obligation arising from any of the categories of contracts specified in the Schedule to this Part due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 [Act 342] to control or prevent the spread of COVID-19 shall not give rise to the other party or parties exercising his or their rights under the contract. 4. Schedule to Section 7 Lease or tenancy of non-residential immovable property. 37. The said License Agreement does not create a lease under the National Land Code and does not create a tenancy. I refer to clause 15.15.1 where parties agreed that “the license does not create any relationship of landlord and tenant between the Licensor and the Licensee, nor does it confer on the Licensee any other estate or interest (proprietary) or otherwise in the demised premises.” 38. On this ground alone, the First Defendant does not have any valid reason to rely on section 7 of the Covid Act. The said act is only applicable to any lease or tenancy of non-residential immovable property. As parties had expressly agreed that none of the License Agreement create any tenancy and does not create any proprietary interest, the said reliance on section 7 of the Act is misplaced. 39. Even if I am wrong on the above, I am of the view that the conduct of the First Defendant indicate that the said Act do not apply. The important factor that attracts the operation of section 7 of the Covid Act, even if it was to apply, is that the Defendants must show not only that the contract fall within the Schedule to Section 7 but also that they were unable to perform the contract due to the measures undertaken by the Government of Malaysia. 40. In this case, the First Defendant had agreed and accepted to renew the License Agreement for a third term from 1-5-2020 to 30-4-2022. This was at the height of the MCO and chose to continue to operate the hub under the terms of the License Agreement. The Malaysian Government had chosen to declare the Movement Control Order on 18-3-2020. Despite the said event, the First Defendant agreed and executed the third License Agreement on 18-7-2020. If it was unable to undertake the said operations and pay the sums due to the Plaintiff, it should not have then renewed the contract for the said period. 41. The First Defendant continued to operate the hub and had even requested to reduce the operating hours of the said hub. This is seen in the letter dated 31-3-2020 to the Plaintiff. 42. Therefore, I do not find that section 7 of the Covid Act applicable to the facts of this case. The terms appearing in the contract show that the parties agreed that it was not a lease or a tenancy and that the Defendants’ own conduct in renewing the term indicates that their obligations would not have been affected by the introduction of the Movement Control Orders by the Government of Malaysia. Alleged Misrepresentation 43. The next issue that I will deal with concerns the alleged misrepresentation defence put forward by the Defendants. 44. I do not find any merit in the Defendants’ argument on this issue. Clause 15.5.1 and clause 15.5.2 precludes the First Defendant from relying on any alleged representations made before the execution of the said agreements. Parties agreed that the contract executed constitutes the entire agreement between them, supersedes and cancels any prior understanding and negotiations. 45. I refer to the leading case on this area, Master Strike Sdn Bhd v Sterling Heights Sdn Bhd [2005] 2 CLJ 596, where Nik Hashim CJA (as he then was) held: - "The purpose of an entire agreement clause is to preclude a party to a written agreement from threshing through the undergrowth and finding, in the course of negotiations, some (chance) remark or statement (often long forgotten or difficult to recall or explain) upon which to found a claim, such as the present, to the existence of a collateral warranty. The entire agreement clause obviates the occasion for any such search and the peril to the contracting parties posed by the need that may arise in its absence to conduct such a search. For such a clause constitutes a binding agreement between the parties that the full contractual terms are to be found in the document containing the clause and not elsewhere, and that, accordingly, any promises or assurances made in the course of the negotiations (which, in the absence of such a clause, might have effect as a collateral warranty) shall have no contractual force, save in so far as they are reflected and given effect in that document. In that case, the learned judge ruled that evidence of a collateral contract was inadmissible. He further added at p. 33 D left: the formula used is abbreviated to an acknowledgment by the parties that the agreement constitutes the entire agreement between them. That formula is, in my judgment, amply sufficient to constitute an agreement that the full contractual terms to which the parties agreed to bind themselves are to be found in the agreement and nowhere else. That can be the only purpose of the provision. The principle on the entire agreement clause in Innterpreneur Pub was followed by Abdul Aziz J (as he then was) in Macronet Sdn Bhd v. RHB Bank Sdn Bhd [2002] 4 CLJ 729 HC (refd). There he ruled that the entire agreement clause precluded variation by oral agreement. At p. 740 the learned judge said: My opinion is simply this. The entire agreement clause was an agreement between the plaintiffs and the defendants. In agreeing to the clause, the parties must be presumed to have known of the existence of s. 92 and of the exceptions in it and to have intended what the clause intended, that is to exclude any attempt to vary the agreement by an oral agreement or statement, which attempt can only be made through the exceptions in s. 92. By agreeing, therefore, to the entire agreement clause, the plaintiffs agreed not to resort to any of the exceptions in s. 92. They cannot, therefore, be allowed to prove the second precontractual representation or the oral agreement and to rely on them." 46. I also refer to the decision of Rohana Yusof JCA (as she then was) in Hairin Corporation Sdn Bhd v. Rimbun Tekad Premix (Terengganu) Sdn Bhd [2016] 1 LNS 424 where it is stated: - "[22] There is no dearth of authority to support the legal proposition that a written agreement must be interpreted within its four corners. It is trite law that interpretation of a contract is a question of law to be decided by the court and not by witnesses through their oral evidence (see NVJ Menon v. The Great Eastern Life Assurance Company Ltd [2004] 3 CLJ 96; [2004] 3 MLJ 38). In Master Strike Sdn Bhd v. Sterling Heights Sdn Bhd [2005] 1 LNS 99; [2005] 3 MLJ 585 the Court of Appeal held, in applying the dictum of Abdul Aziz Mohammad J in Macronet Sdn Bhd v. RHB Bank Sdn Bhd [2002] 4 CLJ 729; [2002] 3 MLJ II on the effect of an entire agreement clause, held that the entire agreement clause is an agreement between parties and in adhering to such a clause they must have been presumed to know the existence of s. 92 of the Evidence Act 1950 and its exception. And by doing so the parties are in fact agreeing not to resort to the exception. [23] Adhering to that principle of legal interpretation in our view the commission of 13.50% had been agreed by parties as stated in clause 1 (b) and the commission shall be paid in accordance with the First Schedule attached to the Sub-Contract. The First Schedule however do not state that the RM4,000,000.00 out of the total commission is to be paid upfront as what has stated in the Letter of Award. Falling back to the terms of the Sub-Contract the right of the Respondent had been provided under clause 5 which allowed deduction been made from the progressive claim due under the Sub-Contract. [24] Furthermore, the Sub-Contract contains an entirety clause. In agreeing to the entirety clause, the parties must be presumed to have known of the existence of s. 92 and its exceptions and to have intended what the clause intended, that is to exclude any attempt to vary the agreement by an oral agreement or statement. Such attempt can only be made through the exceptions to s. 92 of the Evidence Act 1950. By agreeing, to the entire agreement clause also, the Respondent in this case is therefore precluded from relying on the Letter of Award or evidence of any witness to give a different meaning to the Sub-Contract which contains the entire agreement clause." 47. Given the above, I reject the defence of alleged misrepresentation put forth by the Defendants. Alleged Force Majeure 48. The Defendants also rely on the Covid-19 event, and the Movement Control Order issued by the Government as Force Majeure event and invoked clause 12.1.1 of the License Agreements. The Defendants allege that the movement control order falls under one of the events recognized under clause 2 of the said agreements and that this event had caused them unable to undertake the operations at the said premises. 49. I am of the opinion that the First Defendant’s own conduct precludes the Defendants from relying on the defence of Force Majeure. 50. As I have found earlier, despite the issuance of the Movement Control Order by the Government of Malaysia on 18-3-2020, the First Defendant chose to execute the final License Agreements on 18-7-2020. The issue of Force Majeure would no longer apply as it is not an unforeseen event. Parties would have been aware of the continuation of the Movement Control Order on the said date but chose to continue with the relationship and agreed to execute the License Agreement for the period between 1-5-2020 to 30-4-2022. 51. Clause 12.1.1 also requires evidence that the said operations could not be carried out during the said movement control order. Since the First Defendant had agreed to the said License Agreement despite the existence of the Movement Control Order, then the Defendants would agree that the said operations could continue. If indeed this had caused a disruption to its operations, the First Defendant should have either negotiated for changes to the terms or even not executed the said agreement pending the resolution of the Movement Control Order. 52. I also find that the conduct by the said Defendants is also inconsistent with the allegation of the existence of a Force Majeure event. I note that the First Defendant had issued a notice to terminate dated 25- 11-2020 and in the said letter attempted to rely on clause 12.1.1 to terminate and to seek a reduction of the sums due to the Plaintiff. 53. Firstly, I find that this letter was only issued after the demand for payment was made by the Plaintiff as seen in the letter dated 10-12-2020. Secondly, even if I were to disregard the said letter of demand and accept that the First Defendant is genuinely relying on clause 12.1.1, the attempt to rely on the Movement Control Order made on 18-3-2020 and the alleged continuation of the said event of about 60 days since the aforesaid date is inconsistent. This would mean that the Defendants complaint lies on the fact that the Movement Control Order had continued even up to 18- 5-2020. 54. However, as indicated earlier, they chose to execute the said License Agreement and the guarantees on 18-7-2020. I find that the Defendants are blowing hot and cold at the same time. They cannot on the one hand complaint and rely on clause 12.1.1 and allege that the movement control order which went on beyond 60 days is a Force Majeure Event but at the same time, having been aware of the said event agreed to continue with the contract and renew it. This inconsistent position taken by the Defendants renders any reliance on clause 12.1.1 invalid. 55. In the circumstances, I find that the Defendants are not entitled to rely on clause 12.1.1 and reject the said defence. Alleged Void Guarantees 56. On this issue, the Second and Third Defendants complaint that (i) that the guarantees are invalid as they were for pass consideration and (ii) that the final letter of guarantee and indemnity was not executed separately but form part and parcel of the License Agreement. 57. I opine that the said guarantees issued by the aforesaid Defendants as being valid. I agree with the Plaintiff’s argument that these are continuing guarantees issued by the said Defendants for the obligations of the First Defendant to the Plaintiff as seen in clause 1 and clause 24 of the said Letter of Guarantee and Indemnity. I also refer to the decision of the Court of Appeal in Chong Hin Trading Co Sdn Bhd & Ors v Malayan Banking Bhd [2004] 4 MLJ 453. 58. The Defendants in this case do not challenge that they had executed the said Letters of Guarantees and Indemnity. The only issue they have concerns the fact that these documents were executed together with the main agreement and were not signed separately as undertaken previously. This does not mean that the said agreement is invalid. The Defendants do not deny that their signature appears in the said instrument and there is no authority or any legal requirement that supports the Defendants’ arguments. 59. Therefore, I reject the said Defence. (III) Decision on Summary Judgment in Enclosure 5 and the Defendants’ application to strike out in Enclosure 14 60. For the above reasons, I find that summary judgment should be entered against the Defendants. I do not find that they have shown any valid reason for this matter to be referred to trial. The Defendants do not have any valid bona fide defence to the Plaintiff’s claim. 61. I also find that the Defendants have failed to show any reason why the claim against them should be struck out. As I have said earlier, their defence to the Plaintiff’s claim is baseless. Therefore, I dismiss the Defendants’ application in Enclosure 14. (IV) Enclosure 15 – Plaintiff’s application to strike out the Defendants’ Counterclaim 62. The Defendants’ counterclaim is premised on their reliance on the alleged Force Majeure event. This was put forward by the Defendants’ counsel during the oral hearing before me. 63. Therefore, since the Defendants’ reliance on the Force Majeure clause is misplaced, the First Defendant is not entitled to terminate the said agreement. To be clear, I reject the arguments concerning Force Majeure and I repeat my opinion stated earlier. 64. In the circumstances, the Plaintiff is entitled to forfeit the deposit paid under clauses 11.1 and 11.5 of the License Agreement. 65. I also could not find any valid basis for the Defendants’ claim for loss of income and the borrowings obligations undertaken by the said Defendants. There is no clause in the agreements referred to earlier indicating that the Plaintiff had either promised or represented that the income from the said operations would reach a specified amount or that they would be sufficient to pay the sums borrowed by the Defendants. I find that there is no obligation on the part of the Plaintiff for any of the alleged losses suffered by the Defendants or any of the claims put forward by the Defendants. 66. Therefore, the Counterclaim by the Defendants is misconceived and should be struck out. It is plain and obvious to me that the Counterclaim is baseless based on the facts and evidence presented to me in the affidavits and submissions filed. D. Orders of this Court 67. Based on the above, I make the following orders: - (i) Order in Terms of Enclosure 5 subject to costs of RM 5000.00 to be paid by the Defendants jointly and severally to the Plaintiff subject to allocator. (ii) Order in Terms of Enclosure 15 subject to costs of RM 5000.00 to be paid by the Defendants jointly and severally to the Plaintiff subject to allocator. (iii) Enclosure 14 is dismissed with costs of RM 5000.00 to be paid by the Defendants jointly and severally to the Plaintiff subject to allocator. Dated 10th June 2022 Dato’ Indera Mohd Arief Emran bin Arifin Judicial Commissioner High Court Malaya Kuala Lumpur NCvC 8 f Ng Sai Yeang & Angeline Leow Suk Huei for the Plaintiff Messrs. Raja, Darryl & Loh (Kuala Lumpur) Advocates and Solicitors Mohamed Fadly Bin Zakariya for the Defendants Messrs. Fadly Zakariya (Kuala Lumpur) Advocates and Solicitors