Zhou Jianmei v Org Vs Sdn Bhd (WA-A72-26-02/2024)

Section 140 defines an agent as a person employed to do any act for another or to represent another in dealings with third persons, while section 141 provides that ostensible authority arises where a principal, by words or conduct, induces a third party to believe that the agent is authorised to act in a particular manner. In this case, the Plaintiff’s delegation of tenancy management to Alan, combined with her consistent silence in the face of discounted rental payments, would have reasonably led the Defendant to believe that Alan was authorised to address or negotiate rental matters on her behalf, including adjustments to the monthly amount. This Court is further guided by the decision in Sri Kelangkota-Rakan Engineering JV v Arab-Malaysian Prima Realty Sdn Bhd [2003] 3 MLJ 257, wherein the Court of Appeal observed that the post-agreement conduct of parties may serve as evidence of mutual understanding and practical acceptance of altered obligations. While such conduct cannot override express contractual terms, it may be relied upon to support a finding of implied authority, particularly in instances where the principal remains passive for a prolonged period. In light of the evidence and relevant legal principles, the Court finds that Alan Siow Chuan Bun’s authority was not confined to mere administrative functions. The Plaintiff’s continued reliance on him as the exclusive channel for all tenancy-related dealings, including the acceptance of rental payments over an extended duration without objection, gives rise to a strong and reasonable inference that Alan was clothed with implied and ostensible authority to act on her behalf. While the Court is satisfied that Alan’s authority extended to general tenancy management, the more specific question of whether such authority encompassed the power to negotiate or approve rental reductions will be further examined in the subsequent issue concerning estoppel. Issue 2: Whether the Plaintiff is estopped from claiming the rental shortfall. The Plaintiff contends that she was unaware of any underpayment of rent by the Defendant during the course of the tenancy. She denies having waived her right to claim the full contractual rental and maintains that her appointed agent, Alan Siow (SD1), was never authorised to permit any discount or variation. On that basis, she argues that the doctrine of estoppel does not arise, as there was no express or implied representation made by her to induce reliance on the part of the Defendant. Conversely, the Defendant asserts that the Plaintiff’s prolonged silence and continued acceptance of reduced rental payments over a period exceeding three years gives rise to estoppel by conduct. All communications pertaining to the tenancy, including rental matters, were handled through Alan with the Plaintiff’s knowledge and apparent approval. According to the Defendant, this course of conduct amounted to a clear and sustained representation upon which it relied in good faith to its detriment. To now permit the Plaintiff to resile from that position, it is argued, would be unconscionable. The Court notes that the doctrine of estoppel by conduct is codified in section 115 of the Evidence Act 1950, which provides: “When one person has by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed, in any suit or proceeding between himself and such person or his representative, to deny the truth of that thing.” In the present case, it is undisputed that the Plaintiff received all rental payments directly into her HSBC bank account, even where such payments were below the stipulated monthly sum. No query, demand, or reservation was raised by her during the entirety of the tenancy period. In fact, SD1 confirmed in his oral evidence that: “...the rental is directly banked into the owner's account at HSBC bank.” (NOE, Day 2, SD1, cross-examination) The position was further clarified during trial when it was acknowledged by the Plaintiff’s side that the amount received was not disputed: “Whatever money is received is actually in the witness statement and agreed... The amount that she received is not in dispute.” (NOE, summary, p.25–26) When questioned about the specific transactions, the Plaintiff’s only explanation was: “I don’t know because I can’t check my bank statement at all.” (NOE, Day 1, SP1, cross-examination) The Court finds this explanation to be insufficient. As the account holder, the Plaintiff bore the duty to monitor payments or to ensure that her agent did so on her behalf. Her complete inaction, taken together with her consistent acceptance of reduced rent over a significant period, amounts in law to acquiescence and a clear representation by omission. The principle that a party cannot approbate and reprobate was affirmed in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331, where the Supreme Court stated: “A party who accepts a position for a considerable length of time cannot later turn around and challenge it. One cannot approbate and reprobate.” Similarly, in Cheah Theam Kheng v City Centre Sdn Bhd (in liquidation) [2012] 1 MLJ 761 at para 118, the Court of Appeal reiterated: “A party cannot blow hot and cold in the same breath. A party cannot be allowed to approve and take benefit under an agreement and subsequently disapprove or deny the same agreement.” The same reasoning was recently reaffirmed in Public Bank Bhd & Anor v Fung Shaw Yiew @ Jellfer & Ors [2024] 2 MLJ 21 at para 43, where the Court of Appeal held: “It would be a grave injustice to allow the plaintiffs to blow hot and cold and negate their prior admission...” In the present case, the Plaintiff’s conduct, or more aptly, her prolonged silence, clearly induced the Defendant to believe that the reduced payments were accepted. That reliance, formed and sustained in good faith, cannot now be displaced without causing injustice. Accordingly, the Court finds that the Plaintiff is estopped from asserting that the full contractual rental remained payable, and this issue is resolved against her. Issue 3: Whether the Plaintiff is entitled to RM5,560.00 for repairs and cleaning. The Plaintiff claims that when the premises were returned to her on 15 October 2023, the unit was in a poor state and required substantial cleaning and repair. To substantiate her claim, she tendered an invoice issued by Holma Management Sdn Bhd dated 28 October 2023 for RM5,560.00, which itemised various repair and maintenance works including repainting of ceilings, replacement of bathroom fittings, upholstery cleaning, and minor furniture repairs (Exhibit P7). Supporting photographs and WhatsApp messages relating to the condition of the premises and the repairs were also produced at trial. It is the Plaintiff’s position that the Defendant, as tenant, had a contractual duty under the tenancy agreement to maintain the premises in a good and tenantable condition and to return them accordingly upon the expiry of the tenancy. The claim for RM5,560.00 is therefore said to flow from a breach of that duty. The Defendant, in response, denies liability for the claimed repairs. It asserts that the premises were returned in substantially the same condition as at the commencement of the tenancy, subject to fair wear and tear. The Defendant also points out that no complaint was made immediately upon handover, no joint inspection was conducted, and no receipt was produced to confirm that payment had been made to the contractor. Furthermore, no representative from Holma Management Sdn Bhd or other independent witness was called to verify that the works were actually carried out. Having reviewed the invoice (P7), the accompanying photographs, and the Plaintiff’s testimony, the Court is satisfied that some remedial works were indeed necessary, particularly those relating to general cleaning, repainting, and basic lock replacements. However, the Court is equally mindful of the Plaintiff’s failure to adduce any receipt or proof of payment for the works, as well as the absence of corroborative testimony from the contractor or an independent assessor. The Court also notes that several items in the invoice appear to be discretionary or cosmetic in nature, such as the replacement of mirror glass, bath accessories, and soft-close drawers, which are not clearly attributable to damage caused by the Defendant. In assessing the Plaintiff’s entitlement, the Court is guided by section 74 of the Contracts Act 1950. Subsection (1) provides that a party who suffers from a contractual breach is entitled to compensation for loss or damage that arises in the usual course of things or that was foreseeable at the time the contract was made. Subsection (2), however, limits such compensation by excluding remote or indirect losses. Applying the statutory principles above, the Court finds that while some losses were reasonably foreseeable and attributable to the tenancy, not all items claimed by the Plaintiff meet the legal threshold of necessity, reasonableness, and proof. The Court therefore allows the claim only in part and awards a reasonable sum of RM3,000.00 as compensable damages, reflecting essential and proven repair works while excluding unverified or excessive claims. Issue 4: Whether Document D1 is admissible under section 90A of the Evidence Act 1950 The Defendant sought to rely on Document D1, a rental payment summary purportedly prepared by Mr Alan Siow Chuan Bun (DW1), the Plaintiff’s appointed property agent. The document was marked and tendered during trial as Exhibit D1. The Plaintiff objected to its admissibility on the grounds that it was unsigned, unsupported by any receipts or primary source documents, and not an original copy. The Plaintiff further contended that there was no evidence to establish the integrity or origin of the document. In response, the Defendant argued that D1 was a computer-generated document and therefore admissible under section 90A of the Evidence Act 1950. No affidavit evidence was filed to support this assertion. Section 90A(6) of the Evidence Act 1950 provides that: “A statement contained in a document produced by a computer shall not be admissible unless the party tendering it adduces oral or affidavit evidence to describe the manner in which the document was produced and to satisfy the court of the reliability of the system.” In the present case, no oral or affidavit evidence was adduced to explain how Document D1 was generated, nor was any attempt made to establish the reliability of the computer system used in its creation. The document was not accompanied by supporting documents such as bank statements or receipts, and the original version was not produced. During cross-examination, DW1 admitted that he did not maintain any formal records of rental transactions and that the contents of D1 were compiled based solely on his personal recollection. In the absence of foundational evidence as required under section 90A, the Court finds that the document fails to meet the necessary statutory threshold for admissibility. Accordingly, Document D1 is inadmissible and no weight is attributed to its contents. Issue 5: Whether the Defendant has fully discharged its rental obligations The Defendant maintains that it had fully discharged all rental obligations throughout the tenancy. It submits that all payments were made consistently, and in accordance with arrangements made with Alan Siow, the Plaintiff’s appointed agent. The Defendant further contends that the Plaintiff accepted the payments without raising any protest or demand at the material time, and should therefore be precluded from later alleging any rental shortfall. The Plaintiff, however, disputes this. She asserts that the Defendant had consistently underpaid rent in breach of the tenancy agreement, and that the shortfalls were highlighted on several occasions through messages and follow-up demands for either backdated adjustment or full settlement. The Plaintiff argues that any reliance by the Defendant on Alan’s informal agreements was misplaced, as Alan had no authority to alter the contractual rental terms. In support of her claim, the Plaintiff relied on a spreadsheet of payments received (Exhibit P4), corroborated by bank-in slips and WhatsApp communications, showing a cumulative arrears of RM38,585.66. Upon consideration of the evidence, the Court finds that although the Defendant made regular payments during the tenancy, those payments were not always in compliance with the monthly rental amount expressly agreed in the tenancy agreement. The Defendant admitted that in several months, it paid less than the stipulated RM4,150.00, relying on Alan’s representations or instructions. However, as found under Issue 1, Alan’s authority to manage the tenancy did not extend to permanently varying the contractual rental rate. Moreover, there is insufficient evidence to suggest that the Plaintiff had ever expressly or impliedly waived her right to claim the balance. Notably, the Defendant did not tender a complete or reconciled payment record of its own. The only document relied upon, the payment summary marked as D1, has been rejected by the Court under Issue 4 due to non-compliance with section 90A of the Evidence Act 1950. In contrast, the Plaintiff’s records, which include specific figures supported by bank-in documentation and contemporaneous messages, remain unchallenged in material respects. In the circumstances, the Court concludes that the Defendant has not fully discharged its rental obligations. The arrears claimed by the Plaintiff are sufficiently supported by the documentary and testimonial evidence adduced at trial, and the Defendant’s reliance on informal adjustments through Alan cannot operate to absolve liability for the outstanding balance. VI. CONCLUSION AND ORDER Upon careful consideration of the totality of the evidence, both oral and documentary, as well as the parties’ written submissions, the Court finds that the Plaintiff has succeeded in establishing her claim on a balance of probabilities, albeit not in full. The Court is satisfied that the Defendant had, over the course of the tenancy, made payments that were consistently below the rental sum stipulated in the tenancy agreement. Such underpayments were neither expressly nor impliedly authorised by the Plaintiff. While it is acknowledged that the Plaintiff had appointed Alan Siow as her managing agent, his authority did not extend to permanently varying the contractual terms, and there is no credible evidence that the Plaintiff had waived her right to enforce the agreed rental. The Plaintiff’s claim in respect of RM408.30 for unpaid utility charges is disallowed, as it was expressly abandoned during the course of trial. In relation to the repair and cleaning costs, the Court finds that although certain remedial works were warranted, the total amount claimed is not fully supported by admissible or persuasive evidence. A reduced sum, assessed as reasonable and proportionate, is accordingly awarded. The Defendant’s reliance on exhibit D1 is rejected, as the document does not satisfy the statutory requirements of section 90A of the Evidence Act 1950 and is inadmissible. Based on the findings above, the Court hereby orders as follows:

The Plaintiff’s claim is allowed in part.

The Defendant shall pay the Plaintiff the following sums: i. RM37,435.66 as rental arrears; ii. RM3,000.00 as damages for repairs and cleaning;

The total judgment sum is RM40,435.66;

Interest is awarded at the rate of 5% per annum on the judgment sum from the date of filing until full and final settlement

Costs of RM3,000.00 are awarded to the Plaintiff. VII. REFLECTION: INFORMAL CONDUCT, FORMAL LIABILITY This case illustrates the legal consequences that may flow from informal or relaxed commercial practices, particularly where parties operate over an extended period without clear oversight or documented variations. While practical understandings may evolve, they do not, in themselves, override written contractual terms or diminish legal obligations that have been formally agreed. Tenants who rely on intermediaries must ensure such persons are expressly authorised to act on matters affecting payment terms, and landlords who delegate management responsibilities must remain engaged and communicate limits of authority with precision. The law does not penalise commercial flexibility, but it does demand clarity, evidence, and accountability. When relationships are governed by silence and assumption rather than record and instruction, the liability that arises remains legal, enforceable, and real. 23 May 2025