The court upheld the enforceability of a Tenancy Agreement despite claims of illegality due to lack of compliance with building regulations.

Introduction

[1] This is an appeal against the decision of the Shah Alam Sessions Court handed down on 16 December 2022 after a full trial.

[2] The Sessions Court judge (SCJ) had allowed the Respondent's claim (the Plaintiff/ HK Capital Sdn Bhd) against the Appellants for outstanding rents and utilities charges, double rents, repair costs and forfeiture of security deposits as a result of breach of the Tenancy Agreement dated 16 January 2019 ("the Tenancy Agreement").

Facts Of The Case

The Appellants'/Defendants' Version:

[3] The Respondent/Plaintiff is the owner of the premises located at Lot 2772-F, Jalan Industri 12, Seksyen U19, Kg. Baru Sungai Buloh, 47000 Selangor ("the Premises").

[4] By virtue of the Tenancy Agreement entered into by the Respondent and the 1st Appellant/Defendant, the Respondent/Plaintiff agreed to let the Premises to the 1st Appellant/Defendant for a period of 2 years that is from 1 February 2019 to 31 January 2021 at the monthly rent of RM6,600.00 which was payable in advance within the 7th day of each calendar month and interest at the rate of 8% per annum calculated on a daily basis was also payable in the event of default by the 1st Appellant/Defendant to pay for the monthly rent.

[5] At all material times, the 2nd Appellant/Defendant is the director of the 1st Appellant's/Defendant's company who signed the Tenancy Agreement on behalf of the company. These facts are not disputed by the parties in the Sessions Court.

[6] It was the Respondent's/Plaintiff's case that the Appellants/Defendants had breached the Tenancy Agreement by failing to pay for the rents of the Premises since May 2019 until 21 -12-2020 and to settle the outstanding utilities charges during the term of the tenancy. It was also the Respondent's/Plaintiff's contention that the Appellants/Defendants had failed to deliver vacant possession of the Premises to the Respondent/Plaintiff despite the termination notice in the form of notice of demand dated 26 June 2019 issued by the Respondent's/Plaintiff's former solicitors, ie Messrs Gary Lee & Partners ("the Notice of Demand").

[7] It was however not in dispute that the 1st Appellant/Defendant on 21 December 2020 vide the letter from its solicitors dated 18 December 2020 surrendered vacant possession of the Premises to the Respondent/Plaintiff.

[8] Based on the purported termination notice, the Respondent/Plaintiff claimed for double rents against the Appellants/Defendants for holding over the Premises from August 2019 until 21 December 2020.

[9] It was further contended by the Respondent/Plaintiff in its Reآ-amended Statement of Claim that after the delivery of vacant possession of the Premises by the 1st Appellant/Defendant, the Respondent/Plaintiff had to spend the sum of RM17,000.00 to repair the Premises which had been badly damaged.

[10] The 2nd Appellant/Defendant was brought into the arena of conflict between the Respondent/Plaintiff and the 1st Appellant/Defendant for the sole reason that he had signed the Tenancy Agreement that contains cl 7(o) which specifically stipulates that the he agrees to personally undertake to settle all outstanding rents or utilities owed to the Respondent/Plaintiff and other loss or damage suffered by it in the event of the 1st Appellant's/Defendant's failure to pay the Respondent/Plaintiff.

[11] Both the Appellants/Defendants denied their liabilities in respect of the Respondent's/Plaintiff's claim and pleaded the defence of illegality of the Tenancy Agreement due to the fact that the Tenancy Agreement was premised on unla