ORIGINAL OZE SDN. BHD vs SAGAJUTA PROPERTIES (SABAH) SDN. BHD (MJLR 2009a7), Clement Skinner SS
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[CAK.12-28-2009-II]
5
MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK
AT KOTA KINABALU
CIVIL APPEAL NO. K12-28 OF 2009-II
BETWEEN
10 ORIGINAL OZE SDN. BHD. - APPELLANT (Company No.: 744541-T)
AND
SAGAJUTA PROPERTIES (SABAH) SDN. BHD. - RESPONDENT (Company No.: 591674-H)
15
BEFORE THE HONOURABLE JUSTICE DATUK CLEMENT SKINNER IN CHAMBERS
JUDGMENT
20
This appeal is brought by the defendant in the court below against the decision of the learned Sessions Court Judge who, on 13.07.2009, granted summary judgment to the plaintiff on its application. For convenience, I will continue to refer to the parties in this appeal as the plaintiff and defendant respectively.
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On 24.09.2007, the plaintiff and defendant entered into a Tenancy Agreement in respect of a ‘Kiosk’ described as Unit No. B-P-01a, Block B, Ground Floor, Warisan Square, Kota Kinabalu, Sabah (‘the Kiosk’). The tenancy was for a fixed term
30
of one (1) year from 12.09.2007 and expiring on11.09.2008.
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5
By letter dated 21.04.2008 the defendant wrote to the plaintiff, purporting to terminate the tenancy. Thereafter on or around the end of April 2008, the defendant vacated the Kiosk.
By letter dated 01.08.2008, the plaintiff wrote to the defendant rejecting the plaintiff’s purported termination of the
10
tenancy and demanded that the defendant should pay the following sums to the plaintiff:
(1) outstanding arrears of rent from 01.02.2008 to 30.04.2008 amounting to RM11,250.00;
(2) rental for the unexpired term of the tenancy from 15 01.05.2008 to 11.09.2008 amounting to RM16,375.00.
When the defendant failed to pay the sums demanded, the plaintiff commenced this action and included a claim for interest as well.
20
On being served the Summons, the defendant entered appearance to the action and also filed a defence and counter-claim. The plaintiff then filed its application for summary judgment which was fixed for hearing on 13.07.2009.
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The defendant’s solicitors did not attend court on that day as a result of what they claim to be a miscommunication with the plaintiff’s solicitors. As the defendant was absent on 13.07.2009, the learned Sessions Judge granted judgment against the defendant.
Hence this appeal.
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As the judgment entered against the defendant was not irregular in any way, the defendant will have to show that they have a defence on the merits to the plaintiff’s claim. They need not show a complete defence, it will be sufficient if they can show that there are bona fide triable issues that should go to trial.
10
The defendant contends that the following matters it relies on by way of defence to the plaintiff’s claim give rise to bona fide triable issues:
(1) That the respondent had verbally agreed to allow the defendant
15
to terminate the tenancy. According to the defendant, it operated a juice bar at the Kiosk and installed water pipes which were necessary for the operation of a juice bar. The defendant alleges that the plaintiff’s representative
20
verbally confirmed that it would not be a problem to install the water pipes, but when the defendant applied for a trading licence, it could not obtain a trading licence because of the water pipes it installed. According to the defendant, differences arose between the parties regarding the legality of the tenancy agreement entered into because
25
on checking with the Dewan Bandaraya Kota Kinabalu (DBKK) the defendant discovered that the plaintiff had obtained approval in its Development Plan for the common corridors at Warisan Square to be used as “Kiosk” which the DBKK defined as a space for “sundry, books, magazines and newspapers” with no mention of “food and
30
beverage”. According to the defendant, because it raised these
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5 issues with the plaintiff, the plaintiff agreed to allow the defendant to terminate its tenancy earlier.
I find that the defendant’s assertion does not give rise to any triable issue. In its Reply the plaintiff denied the defendant’s
10
allegation about there being any such agreement to allow the defendant to earlier terminate the tenancy. I find the defendant’s assertion about there being such a “verbal agreement” vague and imprecise. The defendant does not mention between who in the plaintiff and defendant company the verbal agreement was allegedly
15
reached and on what date. Without these particulars the allegation remains a bare one. Even further still, the alleged agreement, if true, amounted to a variation of the tenancy agreement. By Clause 25.7 of the tenancy agreement the defendant had agreed that: “This Agreement may be amended or varied only by
20
instruments in writing executed by the Landlord and Tenant”. The defendant has not shown that the alleged agreement was reduced to writing.
25
With regard to the defendant’s contention that it had difficulty in obtaining its trading licence as its Kiosk was a food and beverage outlet, there can be no substance in this allegation as the plaintiff has exhibited the trading licences issued by the DBKK to several Kiosk
30
owners who operate food and beverage business along its common corridors at Warisan Square.
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(2) Whether the tenancy agreement was tainted with illegality?
The defendant contends that it is arguable that the plaintiff could not grant create a tenancy for a “Kiosk” because the definition of a Kiosk in the DBKK’s Code only mentions “sundry, books, 10 magazines and newspapers”, with not mention of “food and beverage”. The defendant contends that it was not issued a trading licence because its business did not fall within the ambit of the meaning of a Kiosk in DBKK’s books.
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I find not merit in this contention. It cannot give rise to any triable issue. Under the terms of the tenancy agreement, it was the defendant’s duty to obtain all the required licences for its business and the defendant also agreed that it had satisfied itself as to the suitability of the premises for the purpose for which it was let.
20
Thus Clause 10.2 states: “The Tenant shall obtain and maintain at the Tenant’s own expense all licences, permits registration, authorities and approvals for the conduct of the permitted use of the premises……….”.
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And Clause 25.7 (c) states that: “This Agreement may be amended and varied only by instrument in willing………. The Tenant acknowledges that it has entered into this
30
Agreement………. after satisfying itself as to the suitability of the Premises for the purpose for which the Premises are let”. Accordingly, the defendant only has itself to blame if it did not find out
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for itself, before entering into the tenancy agreement whether the
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5 Kiosk was suitable for its food and beverage business or whether it would be permitted to install water pipes thereto.
(3) Misrepresentation by the plaintiff’s representative.
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The defendant alleged that due to the plaintiff’s misrepresentation that the defendant would not have any problems in applying for a trading licence for its business of a juice bar at the common corridor, the appellant has been unable to successfully apply for a trading licence to operate at the common corridor.
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I find no merit in this contention. It does not give rise to any triable issue. By Clause 25.7 (a) of the tenancy agreement the defendant agreed that any representation collateral or otherwise whether oral express or implied concerning the tenancy were
20
cancelled. The Clause reads: “This document embodies the whole transaction of letting made by this Agreement and all warranties conditions and representation collateral or otherwise concerning the tenancy whether oral express or
25
implied and whether consistent with this Agreement or not are cancelled except in so far as they are contained in this Agreement or listed in Item 20 of the Schedule I”.
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(4) Whether there was non-fulfillment of the conditions in Clause 6.1 of Schedule 4. According to the defendant, Clause 6.1 of Schedule 4 to the tenancy agreement states that the tenancy is conditional to the
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5
defendant entering into an agreement to rent a retail lot at 1 Borneo Hypermall which was also owned or managed by the plaintiff. However, since the defendant did not enter into such an agreement, the defendant says the tenancy agreement is null and void as the condition stated in Clause 6.1 of Schedule 4 was not fulfilled.
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I find no merit in this contention. It does not give rise to any triable issue. A reading of the second paragraph of Clause 6.1 of Schedule 4 shows that the defendant was only obliged to rent a retail lot at 1 Borneo if the plaintiff forwards such an agreement to the
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defendant to sign, but the plaintiff has not done so. Further, it is only when the defendant refuses to sign such a contract within 14 days of it being sent to the defendant, that the plaintiff’s right to terminate the tenancy agreement arise. Since the plaintiff never sent a 1 Borneo retail lot agreement for the defendant to sign, the provisions of Clause
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6.1 of Schedule 4 have not become operational. In the result for all the reasons given above, I dismiss the defendant’s appeal with costs.
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DATUK CLEMENT SKINNER
Judge
Date : 13th 30 November 2009
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Counsel For Plaintiff : Cik Noor Asikin Binti Ag. Anak Messrs. Jayasuriya Kah & Co. Advocates and Solicitors
10 KOTA KINABALU
For Defendant : Mr. Terrance Lee Ket Vui Messrs. Lam & Co. Advocates and Solicitors
15
KOTA KINABALU
[CAK.12-28-2009-II]
5
MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK
AT KOTA KINABALU
CIVIL APPEAL NO. K12-28 OF 2009-II
BETWEEN
10 ORIGINAL OZE SDN. BHD. - APPELLANT (Company No.: 744541-T)
AND
SAGAJUTA PROPERTIES (SABAH) SDN. BHD. - RESPONDENT (Company No.: 591674-H)
15
BEFORE THE HONOURABLE JUSTICE DATUK CLEMENT SKINNER IN CHAMBERS
JUDGMENT
20
This appeal is brought by the defendant in the court below against the decision of the learned Sessions Court Judge who, on 13.07.2009, granted summary judgment to the plaintiff on its application. For convenience, I will continue to refer to the parties in this appeal as the plaintiff and defendant respectively.
25
On 24.09.2007, the plaintiff and defendant entered into a Tenancy Agreement in respect of a ‘Kiosk’ described as Unit No. B-P-01a, Block B, Ground Floor, Warisan Square, Kota Kinabalu, Sabah (‘the Kiosk’). The tenancy was for a fixed term
30
of one (1) year from 12.09.2007 and expiring on11.09.2008.
-2- [CAK.12-28-2009-II]
5
By letter dated 21.04.2008 the defendant wrote to the plaintiff, purporting to terminate the tenancy. Thereafter on or around the end of April 2008, the defendant vacated the Kiosk.
By letter dated 01.08.2008, the plaintiff wrote to the defendant rejecting the plaintiff’s purported termination of the
10
tenancy and demanded that the defendant should pay the following sums to the plaintiff:
(1) outstanding arrears of rent from 01.02.2008 to 30.04.2008 amounting to RM11,250.00;
(2) rental for the unexpired term of the tenancy from 15 01.05.2008 to 11.09.2008 amounting to RM16,375.00.
When the defendant failed to pay the sums demanded, the plaintiff commenced this action and included a claim for interest as well.
20
On being served the Summons, the defendant entered appearance to the action and also filed a defence and counter-claim. The plaintiff then filed its application for summary judgment which was fixed for hearing on 13.07.2009.
25
The defendant’s solicitors did not attend court on that day as a result of what they claim to be a miscommunication with the plaintiff’s solicitors. As the defendant was absent on 13.07.2009, the learned Sessions Judge granted judgment against the defendant.
Hence this appeal.
30
-3- [CAK.12-28-2009-II]
5
As the judgment entered against the defendant was not irregular in any way, the defendant will have to show that they have a defence on the merits to the plaintiff’s claim. They need not show a complete defence, it will be sufficient if they can show that there are bona fide triable issues that should go to trial.
10
The defendant contends that the following matters it relies on by way of defence to the plaintiff’s claim give rise to bona fide triable issues:
(1) That the respondent had verbally agreed to allow the defendant
15
to terminate the tenancy. According to the defendant, it operated a juice bar at the Kiosk and installed water pipes which were necessary for the operation of a juice bar. The defendant alleges that the plaintiff’s representative
20
verbally confirmed that it would not be a problem to install the water pipes, but when the defendant applied for a trading licence, it could not obtain a trading licence because of the water pipes it installed. According to the defendant, differences arose between the parties regarding the legality of the tenancy agreement entered into because
25
on checking with the Dewan Bandaraya Kota Kinabalu (DBKK) the defendant discovered that the plaintiff had obtained approval in its Development Plan for the common corridors at Warisan Square to be used as “Kiosk” which the DBKK defined as a space for “sundry, books, magazines and newspapers” with no mention of “food and
30
beverage”. According to the defendant, because it raised these
-4- [CAK.12-28-2009-II]
5 issues with the plaintiff, the plaintiff agreed to allow the defendant to terminate its tenancy earlier.
I find that the defendant’s assertion does not give rise to any triable issue. In its Reply the plaintiff denied the defendant’s
10
allegation about there being any such agreement to allow the defendant to earlier terminate the tenancy. I find the defendant’s assertion about there being such a “verbal agreement” vague and imprecise. The defendant does not mention between who in the plaintiff and defendant company the verbal agreement was allegedly
15
reached and on what date. Without these particulars the allegation remains a bare one. Even further still, the alleged agreement, if true, amounted to a variation of the tenancy agreement. By Clause 25.7 of the tenancy agreement the defendant had agreed that: “This Agreement may be amended or varied only by
20
instruments in writing executed by the Landlord and Tenant”. The defendant has not shown that the alleged agreement was reduced to writing.
25
With regard to the defendant’s contention that it had difficulty in obtaining its trading licence as its Kiosk was a food and beverage outlet, there can be no substance in this allegation as the plaintiff has exhibited the trading licences issued by the DBKK to several Kiosk
30
owners who operate food and beverage business along its common corridors at Warisan Square.
-5- [CAK.12-28-2009-II]
5
(2) Whether the tenancy agreement was tainted with illegality?
The defendant contends that it is arguable that the plaintiff could not grant create a tenancy for a “Kiosk” because the definition of a Kiosk in the DBKK’s Code only mentions “sundry, books, 10 magazines and newspapers”, with not mention of “food and beverage”. The defendant contends that it was not issued a trading licence because its business did not fall within the ambit of the meaning of a Kiosk in DBKK’s books.
15
I find not merit in this contention. It cannot give rise to any triable issue. Under the terms of the tenancy agreement, it was the defendant’s duty to obtain all the required licences for its business and the defendant also agreed that it had satisfied itself as to the suitability of the premises for the purpose for which it was let.
20
Thus Clause 10.2 states: “The Tenant shall obtain and maintain at the Tenant’s own expense all licences, permits registration, authorities and approvals for the conduct of the permitted use of the premises……….”.
25
And Clause 25.7 (c) states that: “This Agreement may be amended and varied only by instrument in willing………. The Tenant acknowledges that it has entered into this
30
Agreement………. after satisfying itself as to the suitability of the Premises for the purpose for which the Premises are let”. Accordingly, the defendant only has itself to blame if it did not find out
35
for itself, before entering into the tenancy agreement whether the
-6- [CAK.12-28-2009-II]
5 Kiosk was suitable for its food and beverage business or whether it would be permitted to install water pipes thereto.
(3) Misrepresentation by the plaintiff’s representative.
10
The defendant alleged that due to the plaintiff’s misrepresentation that the defendant would not have any problems in applying for a trading licence for its business of a juice bar at the common corridor, the appellant has been unable to successfully apply for a trading licence to operate at the common corridor.
15
I find no merit in this contention. It does not give rise to any triable issue. By Clause 25.7 (a) of the tenancy agreement the defendant agreed that any representation collateral or otherwise whether oral express or implied concerning the tenancy were
20
cancelled. The Clause reads: “This document embodies the whole transaction of letting made by this Agreement and all warranties conditions and representation collateral or otherwise concerning the tenancy whether oral express or
25
implied and whether consistent with this Agreement or not are cancelled except in so far as they are contained in this Agreement or listed in Item 20 of the Schedule I”.
30
(4) Whether there was non-fulfillment of the conditions in Clause 6.1 of Schedule 4. According to the defendant, Clause 6.1 of Schedule 4 to the tenancy agreement states that the tenancy is conditional to the
-7- [CAK.12-28-2009-II]
5
defendant entering into an agreement to rent a retail lot at 1 Borneo Hypermall which was also owned or managed by the plaintiff. However, since the defendant did not enter into such an agreement, the defendant says the tenancy agreement is null and void as the condition stated in Clause 6.1 of Schedule 4 was not fulfilled.
10
I find no merit in this contention. It does not give rise to any triable issue. A reading of the second paragraph of Clause 6.1 of Schedule 4 shows that the defendant was only obliged to rent a retail lot at 1 Borneo if the plaintiff forwards such an agreement to the
15
defendant to sign, but the plaintiff has not done so. Further, it is only when the defendant refuses to sign such a contract within 14 days of it being sent to the defendant, that the plaintiff’s right to terminate the tenancy agreement arise. Since the plaintiff never sent a 1 Borneo retail lot agreement for the defendant to sign, the provisions of Clause
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6.1 of Schedule 4 have not become operational. In the result for all the reasons given above, I dismiss the defendant’s appeal with costs.
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DATUK CLEMENT SKINNER
Judge
Date : 13th 30 November 2009
-8- [CAK.12-28-2009-II]
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Counsel For Plaintiff : Cik Noor Asikin Binti Ag. Anak Messrs. Jayasuriya Kah & Co. Advocates and Solicitors
10 KOTA KINABALU
For Defendant : Mr. Terrance Lee Ket Vui Messrs. Lam & Co. Advocates and Solicitors
15
KOTA KINABALU
