Shell Malaysia Trading Sdn Bhd v 1. ) Abdul Latiff Bin Halim (AA-24NCC-34-12/2024)

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1 IN THE MATTER OF THE HIGH COURT IN MALAYA AT IPOH 5 IN THE STATE OF PERAK DARUL RIDZUAN ORIGINATING SUMMONS NO.: AA-24NCC-34-12/2024 Dalam Perkara Tanah di bawah Pajakan Negeri No. Hakmilik 10 329285, Lot No. 210613, Mukim Teja, Tempat Teja, Daerah Kampar dan Negeri Perak Darul Ridzuan. 15 Dan Dalam Perkara

Lampiran

Lampiran Lampiran Pajakan yang bermula dari tarikh 30-12- 20 1994 antara Shell Malaysia Trading Sdn Bhd (No. Syarikat: 196501000279 (6087-M)) dan Mohd Tajudin Bin Mohd Saat dan Mahayun binti Abd Rahim; 25 Dan Dalam Perkara pindahmilik dan kepentingan Tanah melalui 30 No.Peserahan: 00SC50062/2016 daripada Mohd Tajudin Bin Mohd Saat kepada Abdul Latiff Bin Halim; 35 Dan Dalam Perkara Seksyen-Seksyen 11(1), 18 dan/atau 51 Akta Relief Spesifik 1950; 40 Dan Dalam Perkara Seksyen-Seksyen-Seksyen 214, 221 45 dan/atau 228 Kanun Tanah Negara (Disemak 2020); Dan 50 Dalam Perkara Aturan 7, 28, 29 dan/atau Aturan 92 Kaedah 4 Kaedah-Kaedah Mahkamah 2012. 55 BETWEEN SHELL MALAYSIA TRADING SDN BHD [COMPANY NO.: 196501000279 (6087-M)] F 60 AND 1. ABDUL LATIFF BIN HALIM [NRIC NO.: 591010-08-5595] 65 2. MAHAYUN BINTI ABDUL RAHIM [NRIC NO.: 550427-08-5442] TS GROUNDS OF JUDGMENT 70 Introduction [1]. The dispute before the court, at its heart, concerns the sanctity of a written commercial lease agreement and the enforceability of a contractual option to renew. The plaintiff (Shell Malaysia Trading Sdn Bhd) seeks to uphold its right, under the Lease 75 Annexure executed in 1994, to renew the lease for a further 29-year term upon expiry of the initial 30-year period. Though the factual setting is straightforward, the dispute engages important principles of commercial certainty, good faith performance of contractual obligations, and the extent to which 80 equity may intervene to preserve the integrity of a freely negotiated lease arrangement. Background facts [2]. On 12 January 1994, the Subject Land, situated in Mukim Teja, Kampar, Perak, was jointly acquired under leasehold title by 85 Mohd Tajudin bin Mohd Saat and the second defendant, Mahayun binti Abdul Rahim, for a 60-year term ending 11 January 2054. The land was expressly designated for use as a petrol station. On 30 December 1994, Shell Malaysia Trading the plaintiff 90 both joint owners for a 30-year term expiring 29 December 2024, with an express option to renew for a further 29 years pursuant to Clause 3.6. The lease was registered with the land office pursuant to Section 221 of the National Land Code (Revised 2020). The lease permitted the plaintiff to appoint 95 any operator under Clause 2.4, and a third-party dealer was appointed accordingly. [3]. Beginning in 2004, the original lessor, Mohd Tajudin, issued letters alleging a verbal promise of dealership rights, but admitted such terms were not reflected in the lease. He later 100 transferred his share to the first defendant, Abdul Latiff, on 29 December 2016. In 2022, nearing the lease expiry, the plaintiff served its First Notice of renewal dated 5 April 2022 and appointed Messrs Savills KL Sdn Bhd to negotiate renewal terms. Between April and November 2022, the plaintiff 105 proposed three offers, with the final offer of RM2 million accepted via email by a representative of the second defendant on 3 March 2023. Despite this, the plaintiff had re-issued formal renewal notices on 30 April 2024 and again on 15 November 2024, enclosing an independent market 110 valuation of RM1.2 million and draft renewal agreements. [4]. However, the defendants retracted their agreement and imposed new conditions, including a demand for dealership rights and rental between RM4 million and RM5 million over 29 years. These were not contemplated in the original lease. The 115 plaintiff then lodged a caveat on the land and initiated proceedings via an originating summons on 24 December 2024, seeking, inter alia specific performance and a declaration to renew the lease. [5]. The defendants responded by alleging fraudulent 120 misrepresentation during the 1994 negotiations and sought to void the lease ab initio. The defendant also makes a counterclaim for damages. They also applied via enclosure 23 to convert the matter to a writ, citing that the issues are disputes over facts and oral agreements, which require trial by 125 viva voce evidence to determine the issues. Issues in dispute a) Whether the plaintiff validly exercised the option to renew under Clause 3.6. b) Whether the Lease Annexure is binding on the 130 defendants, including the 1st defendant as transferee. c) Whether the plaintiff lease expiry. d) Whether renewal notices were clear, timely, and whether dealership representation affects the enforceability of the 135 lease renewal clause. e) Whether new terms in the proposed lease alter the original f) Whether the matter should be determined by originating summons or converted to writ. 140 g) Whether the plaintiff trespass after lease expiry. h) Whether the defendant breached the contract of lease annexure. i) Whether the plaintiff is entitled to specific performance 145 and injunctive relief. a) Whether the plaintiff validly exercised the option to renew under Clause 3.6 [6]. The court is satisfied that the plaintiff, has validly exercised the contractual option to renew the lease pursuant to Clause 3.6 150 of the Lease Annexure dated 30 December 1994. [7]. Clause 3.6 of the Lease Annexure provides for the plaintiff's option to renew its lease for a further 29 years. Clause 3.6 states: of Lease 155 If the Lessee shall desire to renew the term hereby granted upon the expiry thereof for a further term of twenty-nine (29) years the Lessee shall within three (3) months of the expiry of the term hereby granted give the Lessor not less than seven (7) days' notice in writing of 160 its intention to renew the Lease and the Lessor shall grant to the Lessee a further lease of the said Land for a further term of twenty-nine (29) years at the current market rental rate as determined by an independent valuer. 165 [8]. The clause clearly stipulates that plaintiff must issue a written notice of its intention to renew within the window period of not less than 7 days and not more than 3 months prior to the 170 this requirement, the plaintiff issued multiple renewal notices: the first dated 5 April 2022, followed by a second notice dated 30 April 2024, and finally a formal third notice issued on 15 November 2024. Each of these notices evidences clear and unequivocal intention to renew within the stipulated 175 time frame. [9]. Furthermore, Clause 3.6 requires that the rental for the renewed lease be based on the current market rate, to be determined by an independent valuer. The plaintiff had procured a professional valuation from Raine & Horne 180 International Zaki + Partners Sdn Bhd, which assessed the market rental at RM1,200,000 for the renewal period. This demonstrates the good faith on the part of the plaintiff, as it has offered a lease rental for RM2,000,000, exceeding the valued market rental. The court finds this conduct consistent with the 185 commercial reasonableness under contractual renewal terms. As affirmed by the Federal Court in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331; [1995] 1 MLRA 738, [1995] 4 CLJ 283; [1995] 3 AMR 2871, the parties must be held to their contractually 190 agreed terms and the court should not rewrite or modify the bargain struck between the parties unless fraud or unconscionability is proven, neither of which has been established here. His Lordship Gopal Sri Ram (FCJ) in Boustead Trading (supra) states: 195 In the present case, there are contemporaneous documents to suggest that the appellant, Chemitrade and the respondent proceeded upon the assumption - an erroneous assumption of law - that the Factoring Agreement was indeed a good and valid assignment. 200 The respondent's letter to the appellant of 14 February 1990, which we have earlier reproduced, is a document in point. The letter says that there has been an assignment under the Factoring Agreement. It was open at that stage for the appellant to dispute the construction 205 which the respondent placed upon that Agreement. But it did not do so. Instead it chose to go along with the respondent's interpretation of the document. Can it now say otherwise? We do not think it can. It would be unjust and unconscionable to permit the appellant to now 210 challenge the meaning which the parties gave to the [10]. The plaintiff by Clause 3.10 of the Lease, which expressly provides that the 215 lease shall be binding upon the successors-in-title of the lessors. Abdul Latiff, the first defendant, who became a co-owner in 2016, is accordingly bound by the plaintiff rights. The defendants , namely a demand for dealership rights and a rental rate 220 inflated to RM4 to 5 million, is not supported by any term of the lease and is contrary to the requirements under Clause 3.6. The first d outlined in his letter dated 1 December 2024, which were rejected by the plaintiff as they are terms imposed unilaterally without a contractual 225 foundation. [11]. Furthermore, the d the plaintiff attempted to vary or create a new agreement by issuing a draft renewal lease is misconceived. The plaintiff had expressly reserved its rights in its correspondence and made it clear that 230 its proposals did not waive or prejudice its legal position. [12]. Accordingly, based on the express terms of the lease, the timely and proper notices issued within the parameters of the agreement, court concludes that the plaintiff has validly and effectively exercised its contractual option to renew the lease 235 under Clause 3.6 of the Lease Annexture. While this does not create a legal interest in land, it creates a contractual or equitable right in personam against the defendants, which the court can enforce via specific performance. b) Whether the Lease Annexure is binding on the defendants, 240 including the 1st Defendant as transferee. [13]. The court finds that the Lease Annexure dated 30 December 1994 is legally binding on both defendants, including the first defendant, who became a registered proprietor of the Subject Land on 29 December 2016, pursuant to a transfer from Mohd 245 Tajudin bin Mohd Saat. This finding is grounded on both the express terms of the lease and the legal effect of Sections 215(3) and , as well as the principle of privity of estate. The provision of the NLC in Sections 215(3) and 216 is append below: 250 Section 215 (3) of the National Land Code (Revised 2020) The transferee of any alienated land shall hold the same (title of the transferor) subject to:- Any lease, charge or other registered interest subsisting 255 in respect thereof at the time the transfer is registered; Section 216 of the National Land Code (Revised 2020) Where, by virtue of sub-section (3) of section 215, any land is transferred subject to any lease, charge or 260 tenancy exempt from registration:- (a) every provision, express or implied, of the lease, charge or tenancy shall, so long as the land continues vested in the transferee, be enforceable by or against him as if he were a party 265 [14]. Clause 3.10 of the Lease Annexure explicitly states that the Lease and all its terms are binding upon the successors-in-title of the original Lessors. This includes the 1st defendant, who stepped into the shoes of Mohd Tajudin. The transfer of 270 ownership recorded on the title did not cancel or change the existing lease rights created under the Lease Annexure. The transfer was made expressly subject to all prior encumbrances and dealings, which would, by operation of law, include the plaintiff lease. 275 [15]. Section 215 of the NLC provides that a registered lease binds all successors-in-title to the lessor, unless otherwise stated. Section 216 further reinforces that once a lease is duly registered, it creates an interest in land which is indefeasible and enforceable against all subsequent proprietors. These 280 statutory provisions reflect the Torrens system, which ensures certainty and protects duly registered interests. The pl lease was registered and endorsed on the land title, and as such, it runs with the land and binds any subsequent transferee, including the 1st defendant. 285 [16]. This principle was affirmed in OCBC Bank (Malaysia) Bhd v Equal Ace Sdn Bhd [2010] 9 MLJ 29; [2010] 6 MLRH 523, where the High Court reiterated that a transferee who acquires land subject to a registered interest cannot evade its terms. Umi Kalthum JC (as Her Ladyship then was) observed: 290 In view of ss 215(3)(a) and 216 of the NLC, it was submitted that the second defendant is bound by the charges in favour of the plaintiff and the charges are enforceable against the second defendant. This is so even though prior to the Court of order there 295 was no relationship between the plaintiff and the second defendant. However, the second defendant had, subsequent to the Court of order and registration thereof, held the 1/2 share in the said land subject to the charges and the charges are enforceable 300 against him as if he is a party thereto. [17]. Similarly, any subsequent purchaser or transferee of land takes the land subject to existing tenancies and leasehold interests that were registered prior to the transfer. The 305 rationale is that registration provides notice and preserves contractual continuity in land dealings. The plaintiff, having registered its lease and preserved its interest through notices against the defendants. 310 [18]. Further, the 1st d and acquiescence of the Lease terms. His letter dated 26 October 2016 acknowledged the lease, expressed dissatisfaction with past dealership arrangements, and he conceded that the promise of dealership was not incorporated 315 into the written lease. This admission negates any claim that the lease was entered into without the 1st knowledge or that he was not bound by it. It also extinguishes any equitable defence of non-disclosure. [19]. Accordingly, the court holds that the Lease Annexure is valid, 320 binding, and enforceable against both defendants. The first defendant, as transferee and successor-in-title, is expressly and statutorily bound by the lease and cannot now impose new conditions or seek to repudiate terms that are already binding and registered. The p 325 and continue against the defendants. c) Whether the plaintiff lease expiry. [20]. The court is satisfied that the p Clause 3.6 of the Lease Annexure survives the expiry of the 330 initial lease. The plaintiff had, prior to expiry, served valid notices of renewal which fell squarely within the contractual notice period. The plaintiff also enclosed an independent market valuation and proposed a new lease at RM2 million, exceeding the RM1.2 million valuation. Despite these efforts, 335 the defendants unilaterally refused to proceed, triggering the p [21]. Having exercised the renewal option in accordance with the terms of the existing lease, the plaintiff crystallised in equity. The renewal thus remains binding even 340 though the formal lease instrument has not yet been executed or registered, and the plaintiff is entitled to specific performance to give effect to that right. [22]. The plaintiff 2024 further preserved this equitable interest and prevented 345 any adverse dealing with the property. Accordingly, the plaintiff retains an enforceable right to renewal notwithstanding the formal expiry of the initial lease. d) Whether renewal notices were clear, timely, and whether dealership representation affects the enforceability of the 350 lease renewal clause. [23]. The court finds that the plaintiff timely, and fully compliant with Clause 3.6 of the Lease Annexure. The clause required the plaintiff to provide written notice of renewal at least seven days and not more than three 355 months before the lease expiry on 29 December 2024. In accordance with this requirement, the plaintiff issued multiple written notices. Each notice clearly expressed the plaintiff intention to exercise its contractual right of renewal and with relevant supporting documents, including a draft renewal lease 360 and an independent valuation report from Raine & Horne, as required under Clause 3.6. [24]. An option to renew, once exercised in strict conformity with the lease, gives rise to a binding contractual right. The plaintiff notices met the contractual requirements both in timing and 365 substance. No ambiguity or procedural defect arises to invalidate them, and the plaintiff treated as validly effected. [25]. The defendants rights does not affect the enforceability of Clause 3.6. The 370 Lease Annexure is a comprehensive written contract, silent on any dealership entitlement and expressly granting the plaintiff discretion to appoint operators under Clause 2.4. The attempt to introduce an oral representation as a condition for renewal is untenable. 375 [26]. It is trite that the parol evidence rule prohibits the admission of oral statements to vary or contradict a written agreement. This is provided in Sections 91 and 92 of the Evidence Act 1950. The application of the provision is such that, where a written contract is intended to be the final embodiment of the 380 intentions, extrinsic evidence is inadmissible to add, vary, or contradict its terms. [27]. Furthermore, pursuant to Section 38(1) of the Contracts Act 1950, both parties are bound to perform their respective obligations unless they are excused by law. The defendants, 385 having accepted rent and acknowledged the lease terms, cannot now evade their duty to perform. Their refusal to execute the renewed lease constitutes a clear breach of contract. The section provides-Section 38 (1) of the Contracts Act 1950 390 "The parties to a contract must either perform, or offer to perform, their respective promises, unless the performance is dispensed with or excused under this Act, or of any other law." 395 [28]. Further, in CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1; [2019] 1 MLRA 599; [2019] 2 CLJ 1 (refd), the Federal Court reaffirmed the principle of sanctity of contract, emphasising that parties are bound by the terms they have freely and voluntarily agreed to, and that courts must give 400 effect to those terms. His Lordship Balia Yusof FCJ observed: [26] We agree with the defendant that parties are bound by the terms of the contract which they entered into and that it is the duty to give effect to the clear and plain meaning of the words in the said clause. 405 That is quite trite. [27] The law recognises the principle of freedom of contract. Parties to a contract are free to determine for themselves what their obligations are. As Sir George Jassel MR said in Printing and Numerical Registering 410 Company v Sampson (1875) LR 19 Eq 462 at p 465: men of full age and competent understanding shall have the utmost liberty of contracting, and that their contracts when entered into freely and voluntarily shall be held sacred and shall be 415 enforced by Courts of Justice. Therefore you have this paramount public policy to consider that you are not lightly to interfere with this freedom of contract. 420 [29]. The Lease Annexure contains clear and unequivocal provisions granting the plaintiff a contractual right to renew the lease over the subject land for a further 29 years, which the defendants are bound to honour irrespective of the alleged promise of dealership rights, which does not affect the 425 enforceability of Clause 3.6. The c to the express terms of the contract without alteration or qualification. [30]. The Federal Court in SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 CLJ 177; [2016] 1 MLJ 430 464; [2016] 1 MLRA 1, emphasised that when interpreting contracts, the court must ascertain and give effect to the them. [31]. Similarly, in Trollope and Colls Ltd v North West 435 Metropolitan Regional Hospital Board [1973] 2 All ER 260, the House of Lords held that: function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from 440 ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been more 445 [32]. Applying this principle, the plaintiff's exercise of its option to renew the lease was valid and enforceable, independent of any alleged dealership promises. [33]. Accordingly, the defendants are irrelevant to the plaintiff 450 Clause 3.6, and no such extraneous condition can impair the enforceability of a contractual clause that is complete and unambiguous. e) Whether new terms in the proposed lease alter the original 455 [34]. The court finds that the plaintiff renewal term does not alter or contradict the substratum of the original Lease Annexure. Clause 3.6 of the Lease grants the plaintiff the right to renew the lease. In compliance, the plaintiff issued its formal renewal notice, accompanied by a 460 professional market valuation from Raine & Horne and a draft lease based on the updated standard template. The plaintiff expressly stated in its covering letter that the proposed draft was without prejudice to its rights and was merely to facilitate negotiation and documentation of the renewed term. 465 [35]. The plaintiff rightly submitted that variations proposed in commercial lease templates do not amount to novation or abandonment of the original lease unless both parties expressly agree. I am of the view that the exercise of a renewal option gives rise to an enforceable equitable lease, pending 470 execution. Here, the plaintiff had validly exercised the renewal and tendered a draft in good faith. [36]. In any event, negotiations on proposed additional terms before finalisation do not absolve the defendants of their contractual duty to grant the renewed lease before the expiry of the initial 475 term. There was no concluded agreement altering the renewal terms as of 29 December 2024. A similar situation arose in Khaleeg Marketing Sdn Bhd v Hardeep Singh a/l Kaka Singh Harbajan Singh (sebagai wasi bagi Harta Pusaka Harbajan Singh a/l Havela Singh, Si Mati) & Ors [2024] 480 MLJU 1850; [2024] MLRHU 1372; [2024] CLJU 1664, where the court held that pending negotiations did not come to fruition, as such that had already been validly exercised in accordance with the original lease. 485 [37]. There was no evidence that the new terms undermined the remains intact. f) Whether the matter should be determined by Originating Summons or converted to Writ. 490 [38]. The court is of the view that the matter is appropriately commenced by way of Originating Summons (OS) and need not be converted to a writ. The dispute revolves around the construction and enforcement of Clause 3.6 of the Lease Annexure dated 30 December 1994, and whether the plaintiff 495 has validly exercised its contractual option to renew the lease. These issues are of a legal nature and do not raise any serious or bona fide disputes of material fact that warrant trial. The plaintiff documents, including the renewal notices as well as the 500 professional valuation, all of which are undisputed. [39]. In Saraswathy Devi a/p Nadchatiram v Vijayalakshmi Devi a/p Nadchatiram [1998] 1 MLJ 89; [1998] 1 CLJ 1035; [1998] 1 AMR 975, (CA), His Lordship Gopal Sri Ram JCA explained that originating summons procedure is suitable where the 505 issues are purely legal or documentary and the reliefs sought are declaratory in nature. In Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 1 MLJ 77; [1996] 2 MLRA 491; [1997] 2 CLJ 36; [1997] 1 AMR 1036, where declaratory relief on contract interpretation was permitted under Originating 510 Summons. The plaintiff also relied on the Federal Court decision in National Land Finance Co-Operative Society Ltd v Sharidal Sdn Bhd [1983] 2 MLJ 211; [1983] CLJ (Rep) 282 (refd); [1983] 1 MLRA 127, and the High Court case of Shankar a/l Ram Pohumall @ Shankar RP Asnani & Anor 515 v Jeffrey Law Siew Su & Ors [2010] 4 MLJ 788; [2010] 17 MLRH 442, in support of this proposition. [40]. The defendants extraneous and unsupported and inadmissible by virtue of sections 91 and 92 of the Evidence Act 1950. Accordingly, 520 the matter should proceed via Originating Summons. g) Whether the plaintiff trespass after lease expiry [41]. The court holds that the plaintiff Subject Land beyond 29 December 2024 does not amount to 525 trespass. Having validly exercised its renewal option under Clause 3.6 within the contractual period, the plaintiff is entitled in equity to remain in occupation pending execution of the renewed lease. Therefore, the plaintiff's continued occupation is lawful. 530 h) Whether the Defendant breached the contract of Lease Annexure [42]. The court finds that the defendants have breached Clause 3.6 of the Lease Annexure dated 30 December 1994. The clause imposes a mandatory obligation on the defendants (lessors) to 535 grant the plaintiff a renewed lease for a further term of 29 years at the prevailing market rental as determined by an independent valuer, upon receipt of a timely notice of renewal. [43]. Despite the plaintiff accompanied by an independent valuation and formal notice, 540 the defendants refused to execute the renewal. Instead, they sought to impose extraneous and non-contractual conditions namely; demanding dealership rights over the petrol station, and insisting on an inflated rental unsupported by valuation. Such unilateral conditions were never contemplated under the 545 lease and constitute a repudiation of their contractual obligations. [44]. The second d further compounds this breach by accepting the plaintiff proposal for renewal at a rental of RM2 million via email dated 550 3 March 2023, which she later retracted and expressed an intention to dispose of her interest in the subject land. This constitutes a clear refusal to perform the binding obligation under Clause 3.6. [45]. Similarly, the first d 555 and inflated rent directly contradicts the express terms of the lease, which provides for renewal at market valuation and gives the plaintiff the discretion to appoint its operator under Clause 2.4. Such conduct is inconsistent with the contractual terms and constitutes deliberate non-performance. 560 [46]. In Shell (M) Trading Sdn Bhd v Tan Bee Leh @ Tan Yue Khoen & Ors [2013] 8 MLJ 533; [2012] MLRHU 1295; [2012] CLJU 1071, the defendant had leased land to Shell for 15 years for a petrol station. Upon expiry, Shell exercised its contractual option to renew for another 15 years in accordance 565 with the lease. However, the defendant refused to renew, demanded the to third parties who continued operating the station. The High 570 lease. [47]. This mirrors the present case, where the plaintiff similarly exercised its renewal option within the contractual terms. Still the defendants refused renewal and attempted to impose new conditions, thereby breaching Clause 3.6 of the Lease 575 Annexure. [48]. The same principle was applied in Riders Lodge Sdn Bhd v Tropik Sentosa Sdn Bhd & Anor [2020] CLJU 1960; [2020] MLJU 1598; [2020] MLRHU 1312 (distd), where the court held that once an option to renew was properly exercised 580 within the stipulated period, the lessor was under a binding obligation to renew and could not impose new conditions or refuse renewal. Failure to do so amounted to a breach of contract. Justice Ahmad Kamal Shahid in Riders Lodge (supra) expresses: 585 Further, I find from the wording used in Clause 4.1(m)(i) of the said Second Lease Agreement, it gives the Defendants with no choice but to renew the said Second Lease Agreement for a further 5 years upon the Plaintiff given a written request to the Defendants not 590 less that 3 months before the expiration of the said Lease. [50] Clause 4.1(m)(i) of the said Second Lease Agreement states as follows:- Tropik and/or the Landowner shall at the 595 written request of the Lessee made not less than three (3) months before the expiration of the term herby created and at the expense grant to the Lessee a further term for the lease of the said Premises and the renewed 600 term shall be for the period of another five (5) years subject to the like covenants and provisions as are herein contained and upon the same rental as stated 605 [73] Therefore, I am of the view that the Plaintiff has validly exercised its option to renew the said Lease in accordance with Clause 4.1(m)(i) of the said Second Lease Agreement by way of the first renewal notice on 6.1.2009, which is already a notice given less than 610 3 months before the expiration of the term hereby under Clause 4.1(m)(i) of the said Second Lease Agreement. [74] As a result, I find that the Defendants have breached Clause 4.1(m) of the said Second Lease 615 Agreement for their failure to renew the said Lease for at least an extended term of 5 years from 21.5.2014 until 20.5.2019 upon the material time when the Plaintiff has validly exercised its option to renew the said lease for the remaining years. 620 [49]. Guided by these authorities, the court holds that the defendants lease on the agreed-upon terms and their attempt to introduce extraneous conditions amount to a clear breach of Clause 3.6 of the Lease 625 Annexure. The plaintiff is therefore entitled to seek specific performance compelling the defendants to execute the renewal in accordance with the contract. i) Whether the plaintiff is entitled to specific performance and injunctive relief 630 [50]. The court holds that the plaintiff is entitled to both specific performance and injunctive relief in respect of the renewal of the Lease Annexure dated 30 December 1994. The plaintiff has demonstrated compliance with Clause 3.6 of the Lease by issuing valid renewal notices within the prescribed time 635 frame. The plaintiff went further to offer a rental of RM2 million, which was well above market value, showing good faith. [51]. This court is of the view that where a contractual option to renew has been validly exercised, the tenant is entitled to enforce that right through a claim for specific performance. In 640 the present case, the defendants' refusal to execute the renewed lease, despite the plaintiff as discussed in above paragraphs, unjustly frustrates the contractual intention and gives rise to an equitable claim. [52]. The plaintiff has also shown that damages would not be an 645 adequate remedy. The petrol station is a strategic commercial site operated under a long-term business model, and abrupt dispossession would not only disrupt operations but also expose plaintiff to claims from its appointed dealer. This was highlighted in the plaintiff 650 the Zoom hearing on 30 May 2025, where the court was informed that the plaintiff agreement and would suffer consequential loss if the plaintiff were to terminate without valid justification. [53]. Furthermore, the defendants 655 conditions such as the demand for dealership rights and inflated rental between RM4 and RM5 million, amounts to an anticipatory repudiation of their contractual obligations. The court is entitled to intervene to restrain such conduct that threatens to defeat the equitable 660 rights. As such, an injunctive order to restrain interference pending complete execution of the renewal lease is appropriate and necessary. [54]. In the circumstances, the plaintiff is entitled to an order of specific performance compelling the defendants to execute the 665 lease renewal on the agreed terms under Clause 3.6, and an injunction preserving the status quo, restraining the defendants from dispossessing the plaintiff or granting rights to any third party. The plaintiff and proportionate. 670 Conclusion [55]. Having considered the pleadings, affidavits, submissions, and authorities cited, the court finds in favour of the plaintiff. The plaintiff has clearly and validly exercised its contractual right to renew the Lease Annexure under Clause 3.6. The lease 675 remains binding upon both defendants, including the 1st defendant as successor-in-title, and the p beyond the lease expiry. The alleged dealership representations and misrepresentation claims are not supported by admissible evidence and do not impair the 680 renewal right. The matter is rightly commenced by an originating summons. Specific performance and injunctive relief are accordingly granted, and the counterclaim by the defendant is dismissed with costs. [56]. Enclosure 16 (Amended Originating Summons), prayers (1), 685 (2), (4), and (5) are allowed with costs of RM5,000, subject to the usual allocator. Enclosure 3 is rendered academic in light of the disposal of Enclosure 16. Enclosure 23 is dismissed with no order as to costs. 690 Dated : 11 November 2025 [MOSES SUSAYAN] 695 JUDGE HIGH COURT IN MALAYA AT IPOH, PERAK 700 705 For the plaintiff : Nimisha Jaya Gobi (together with Jaden Teo) Advocates and Solicitors [Messrs LAW Parthership] 710 Bangsar, Kuala Lumpur For the defendants : Aron Ganapathy Advocates and Solicitors [Messrs Amin Petra & Partners] 715 Batu Caves, Selangor Headnotes LAND LAW: Lease Option to renew Whether lessee validly exercised renewal right Whether lessors bound to grant renewed 720 lease Whether new terms or dealership conditions affected enforceability Whether renewal right survived expiry Whether continued possession constituted trespass National Land Code ss 215(3), 216 Contracts Act 1950 s 38 CONTRACT: Specific performance Valid exercise of option to 725 renew Refusal to perform and imposition of extraneous conditions Whether breach of contract Equitable right to renewal Adequacy of damages Availability of injunction Principle of sanctity of contract reaffirmed PROCEDURE: Originating summons Appropriateness of mode of 730 commencement Whether issues purely legal and documentary