Ue E&C Sanjia (M) Sdn. Bhd. v Toh Jit Seng (JA-12BNCvC-13-07/2024)

This is an appeal by the Plaintiff against the dismissal of the Plaintiff’s claim for repair and cost work for reinstatement of the rented property unit G-01,1-01 and 2-01 of Block B to its original state, at the sum of RM326,845.00. The cross-appeal by the Defendant is against the decision of the learned Session Court Judge in allowing Plaintiff partial claim for loss of rental for the period of 8 months beginning from 15.11.2019 to 14.7.2020 at the rate of RM16,000.00 per month. The water bill for the sum of RM948.35 was also allowed.

This Court upon hearing submissions by both parties, maintained the dismissal of the Plaintiff@ appellant’s claim for repair and cost work. The decision by the learned Session Court Judge in allowing S/N 2e917mnYxkaf6b97NwYTCA the Plaintiff @ appellant’s claim for loss of rental for 8 months and the claim for the water bill, was preserved. Unsatisfied, a Notice of Appeal to the Court of Appeal was filed by the appellant @ Plaintiff against this Court’s decision. There was no appeal filed by the Respondent @ Defendant.

The claim was partially allowed as there was a tenancy agreement entered into between the Plaintiff being the landlord and the Defendant on 15.7.2013 for a period of 2 years ending on 14.7.2015. The tenancy was extended twice ending till 14.7.2018 and 14.7.2020 (see : tenancy agreement and the extension in Record of Appeal “ROA” enclosure 9 at pages 13, 23 and 24).

There was non-payment of the rent amounting to RM68,368.40 by the defendant that moved the Plaintiff to file for the recovery of the said rental by way of a civil action in civil suit number JA-A52-40- 05/2019. The Defendant had failed to enter appearance that moved a Judgment of Default entered against the Defendant for the said sum. This prompted the Defendant to negotiate for settlement of the said outstanding sum that saw the Plaintiff’s filing a Notice of Discontinuance dated 18.7.2019 with liberty to file afresh the said claim.

The Defendant continued to occupy the said premises. However, by way of a Notice of Intent to Vacate dated 30.9.2019 (see : enclosure 9 at page 41 pdf.), notified the Plaintiff of the Defendant’s intention to end the tenancy by vacating the said unit on 15.11.2019. This, as found by the learned Session Court Judge and agreed by this Court, to be 8 months earlier than the original extension agreed S/N 2e917mnYxkaf6b97NwYTCA between parties 14.7.2020. It is on this finding that the loss of rental for 8 months was allowed.

The Defendant raised the issue before the trial Judge and in the appeal before this Court that the extension of the tenancy was on a monthly basis. The learned trial Judge rejected this stand. This Court, having perused the documentary exhibits produced in the Common Bundle of Documents “CBOD”, came to the same finding that although there was a provision on “Revised Monthly Rent” which states “Any increase shall not exceed 20% of the Monthly Rent for the immediate preceding term”, the intention of parties was to revive the original tenancy by way of a yearly term.

This can be seen in both the extension of the tenancy agreement letters (see : enclosure 9 at page 23 and 24) that having agreed with the extension term from 15.7.2018 to 14.7.2020, it stipulates further “Option to renew” that provides “one year only”. This clearly exhibited the intention of both parties to extend the tenancy on annual terms for a period of 2 years commencing from 15.7.2018 and ending on 14.7.2020. The rental sum remains the same RM16,000.00 per month. There is nothing to indicate the renewal was on a month to month basis, as contended by the Defendant.

To formalize the said extension, the 2 months security deposit of RM2,000.00 arising from the said renewal of the tenancy, as required in the original tenancy agreement by way of an increment in the rent from RM15,000.00 to RM16,000.00 to be deposited by S/N 2e917mnYxkaf6b97NwYTCA the Defendant by the 15.5.2018. This clearly shows the revival of the original tenancy agreement by adding the increased figure of rental of RM1,000.00 a month for 2 months to the original security deposit of 2 months rental of RM30,000.00, already paid by the Defendant to the Plaintiff.

In addition, reference to the original tenancy agreement was made in the schedule to the said extension letter (see : page 25 pdf enclosure 9) stating “all other terms and conditions in the tenancy agreement dated 15.7.2013 shall remain unchanged”. Acting on these agreed terms by both parties at the time of signing the extension of tenancy, moved this Court to invoke clause 4.3 of the tenancy agreement.

Clause 4.3 provides as follows: “Premature Determination of Tenancy” In the event the Tenant or the Landlord determines or abandons the tenancy of the Demised Premises at any time prior to the expiry of the Term hereby created, then in such event in addition to and without prejudice to the rights, powers and remedies herein or by law conferred on the Landlord against the Tenant for breach of covenant by the Tenant, the Landlord shall be entitled to forfeit the whole Deposit paid under Clause 2.2 and section 7 of the Schedule and to recover the loss of Rent for the remaining unexpired Term if the Demised Premises could subsequent be let out to a third party”. S/N 2e917mnYxkaf6b97NwYTCA

Acting on this clause, the learned Session Court Judge rightly so concluded that the Plaintiff is entitled to the 8 months rental, as the expiry date of the rental ought to be 14.7.2020 but for the early termination of the tenancy by notice of intent to vacate by the Defendant dated 30.9.2019. Except for clause 4.3, the tenancy agreement that parties have agreed to be bound contained no clauses on early termination of the rental.

Clause 4.3 addresses “Premature Determination of Tenancy”, hence is the crucial terms and conditions towards determining if a breach had occurred by the act of the Defendant giving Notice of Intent to Vacate earlier than the agreed expiry date of rental 14.7.2020. Clause 4.3 clearly make reference to “the term hereby created” being the agreed extension period from 15.7.2018 to 14.7.2020. Any determination before 14.7.2020 would amount to premature determination.

It is also important to note that the Defendant @ tenant did not appeal further on the decision arrived at by this Court, in maintaining the Session Court decision that the Defendant is liable to pay the Plaintiff the 8 months rental. Therefore, it can further be concluded that the concurrent decision remains safe and final.

On the point of appeal by the Plaintiff @ appellant for the sum of RM326,845.00 for reinstatement claim to restore the premise to its original position, the learned Session Court Judge concluded that although SP3 a contractor who prepared the quotation for cost of work that would be incurred by the Plaintiff, the reinstatement work S/N 2e917mnYxkaf6b97NwYTCA was not proceeded with as the premise was in fact rented to a new tenant early January 2023.

The Plaintiff SP1 said reinstatement work was not carried out due to Covid19. However, to this Court’s mind the main issue is what is the actual cost that the Defendant must pay the Plaintiff as SP1 in his witness statement said the cost of reinstatement is RM292,367.50 (see : witness statement of SP1 enclosure 4 at page 49 of Civil Appeal JA-12BNCVC-25-10/2023) whilst SP3 the contractor had prepared a quotation dated 28.10.2022 for RM326,845.00 (see : enclosure 5 at page 67 pdf of suit Civil Appeal No. JA12BNCVC-25-10/2023).

Furthermore, the premise was rented out without reinstatement work done. Hence, whether the reinstatement work is actually required is questionable and goes against SP1’s statement that the condition of the premise was damaged and/or ruined badly and in a terrible condition. The learned trial Judge was of the view the recovery cost for the reinstatement work contained in the reinstatement clause in the tenancy agreement could only be triggered if actual work was done and actual cost incurred, resulting in loss of money by the Plaintiff. This did not happen here. For this reason, the learned trial Judge dismissed this claim.

This Court, having perused the said reinstatement clause, agreed with the finding arrived at by the trial Judge. Clause 2.17 provides as follows: S/N 2e917mnYxkaf6b97NwYTCA “Reinstatement” On the expiration or sooner determination of this Agreement the Tenant shall if so required by the Landlord, dismantle, remove, demolish or take down all installations, equipment[s] or additions which have been permitted to be erected thereon the Demised Premises unless otherwise agreed by the Landlord in writing and shall peaceably to yield up to the Landlord the Demised Premises in a good clean and tenable state of repair condition (fair wear and tear and damage by termite, fire, flood, storm, tempest, riot, civil commotion and Act of God excepted) to the original state but not limited to the Inventory List (if any). If the Tenant shall fail to reinstate the Demised Premises as required by the Landlord within one (1) week after the expiry of this Agreement, the Landlord reserves the right to proceed with the works and the Tenant shall be liable for all any expenses thereto. The Tenant shall at all times be fully responsible for any illegalities and liabilities arising out of such installations or additions and shall and do hereby covenant to keep the Landlord fully indemnified in respect of the same”.

The clause suggests that the Landlord would need to give notice to the Defendant to reinstate. Once this is done, the Defendant has one week to do and complete it. SP1 in cross-examination, said he did not give the said notice to reinstate to the Defendant but left it to his lawyer. No such letter was found in the Bundle of Documents. S/N 2e917mnYxkaf6b97NwYTCA

Interestingly, the premise was rented to another tenant before the Defendant and partition was done by this first tenant without the partition being dismantled prior to it being rented to the Defendant. In fact, it continued to exist in the said premise. Thus, it is unreasonable to impose the liability and the cost to remove the said partition on the Defendant.

Based on these answers and added by the contents of clause 2.17, this Court is of the view that the liability on the Defendant to reinstatement only arises when notice is given. No such notice given. In addition, the quotation on the removal or demolition of the partition or erection that can be imposed on the Defendant only to the extent those set up by the Defendant and not the 1st tenant. No clear demarcation or distinction made to spilt these additions or erections found on the said premises.

For all these reasons, the decision by the learned trial Judge is not plainly wrong to move this Court to disturb the decision arrived at by the Session Court Judge. The appeal and cross-appeal are hereby dismissed. The decision by the learned trial Judge is maintained. S/N 2e917mnYxkaf6b97NwYTCA Bertarikh : 29 Ogos 2025 (Nurulhuda Nur’Aini Binti Mohamad Nor) Hakim Mahkamah Tinggi Malaya Johor Bahru Johor Darul Ta’zim Peguamcara Perayu : Maithily Manoher Tetuan C. Sankaran & Co. No. 43-02 Susur Larkin Perdana 1 Jalan Persiaran Taman Larkin Perdana 80350 Larkin Perdana Johor Bahru Johor Peguamcara Responden : T S Goh Tetuan S K Song No. 44A Jalan Dedap 4 Taman Johor Jaya 81100 Johor Bahru Johor S/N 2e917mnYxkaf6b97NwYTCA