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2023 MarsdenLR 2893
HIGH COURT MALAYA GEORGETOWN
ELANG WAH SDN BHD – Appellant
Versus
PERBADANAN PEMBANGUNAN PULAU PINANG – Respondent
[Civil Appeal No: PA-12ANCVC-66-11/2022]
Important Points
Subject
Civil Law - Contract Law
Act Referred
Contracts Act 1950: S.24
Rules Of Court 2012: Order 14, Order 18
Headnote
(B) Tenancy Agreements - The principle that a party who signs a contract is bound by its terms, absent fraud or misrepresentation - The tenancy agreement remains valid despite not being registered under the National Land Code, as it is exempt from registration. (Paras 35-52)
(C) Appeals - The court found the tenant's appeal against the summary judgment and the striking out of the counterclaim to be without merit, affirming the lower court's decision. (Paras 66-69)
Key Points: - A party who signs a contract is bound by its terms unless fraud or misrepresentation is proven (!) (!) . - A tenancy agreement for under three years is exempt from registration and remains valid even if not registered (!) (!) . - A party cannot simultaneously pursue summary judgment and an alternative application to strike out the defence (!) (!) . - Summary judgment is appropriate when there is no genuine dispute and no reasonable defence (!) (!) (!) . - An amended counterclaim must disclose a reasonable cause of action; otherwise it is unsustainable and an abuse of process (!) (!) (!) . - Mere disagreement or allegations of sharp practices do not, without more, establish a triable issue (!) (!) . - Alleged illegality of consideration must be pleaded and supported; unpleaded arguments are not entertained (!) (!) . - The court may strike out pleadings that are obviously unsustainable or an abuse of the court’s process (!) (!) . - A tenancy agreement for three years with an option to renew is not a registrable lease under the National Land Code (!) (!) . - The decision to enter summary judgment and to strike out an amended counterclaim was upheld on appeal (!) (!) .
What is the principle regarding the enforceability of a signed contract absent fraud or misrepresentation?
What are the criteria for a court to grant summary judgment on a contractual claim?
What is the threshold for striking out a party’s amended counterclaim?
| Table of Content |
|---|
| 1. summary judgment application and counterclaim. (Para 1 , 2 , 5) |
| 2. defendant's resistance and arguments. (Para 3 , 4 , 6) |
| 3. chronology of relevant facts and filings. (Para 7 , 8 , 9 , 10 , 11) |
| 4. appeal process and applicable rules. (Para 12 , 14 , 15 , 16) |
| 5. criteria for entering summary judgment. (Para 18 , 19 , 20) |
| 6. defendant's burden to show triable issues. (Para 21 , 22 , 24 , 25) |
| 7. binding nature of signed contracts. (Para 35 , 36 , 37) |
| 8. principles for striking out pleadings. (Para 40 , 41) |
| 9. defendant's counterarguments on contract validity. (Para 42 , 43 , 44) |
| 10. illegality of contract considerations. (Para 59 , 60 , 62) |
| 11. final judgment and order. (Para 66 , 68 , 69) |
(Dismissing Appeal Against Summary Judgment And Striking Out The Counterclaim)
Prelusion
[1] The Plaintiff (P) sued the Defendant (D) for unpaid rent under a Tenancy Agreement between them. D filed a Defence And Counterclaim, which was later amended. The Amended Counterclaim sought the return of the moneys paid by D to P, including the rent that was paid earlier, the cost of repairing the air conditioner, and the performance bond.
[2] P applied for summary judgment against D, or alternatively to strike out D's Defence (and if the Defence is struck out, for judgment to be entered accordingly). But P also applied, in the same application, for D's Amended Counterclaim to be struck out, to dispose of the Counterclaim too.
[3] D resisted the applications. D submits that P cannot apply to enter summary judgment and concurrently also apply to strike out the Defence so that judgment can be entered. D submits that P must choose only one mode to enter judgment.
[4] D argues that there was unconscionable conduct and sharp practices on the part of P; that the Tenancy Agreement was void; that the Movement Control Order affected D's performance of their obligations under the Tenancy Agreement; and that the consideration in the Tenancy Agreement was unlawful.
[5] The Sessions Court granted the order to enter summary judgment and struck out the Amended Counterclaim. D appeals to the High Court.
[6] Should summary judgment be entered against D, and should D's Amended Counterclaim be struck out?
Chronology Of Pertinent Facts And Filings
[7] It is helpful to set out a chronology of the pertinent facts and the filing of the pleadings:
(1) 7 October 2015-P and D entered into the Tenancy Agreement. P was the landlord. D was the tenant.
(2) 2 December 2015- D (for their own reasons) asked P to increase the rent.
(3) 19 August 2016-D paid P the additional increased rent of RM42,400.00.
(4) Between January 2016 and May 2019 (for three years and five months)-D paid the increased rent without objection.
(5) June 2019-D defaulted. D stopped paying the rent.
(6) 22 July 2020-P issued the Notice Of Termination (of the Tenancy Agreement), Notice For Vacant Possession (of the premises), and Notice Of Demand (for the arrears in rent).
(7) 23 September 2020-Meeting between P and D. D accepted the termination of the Tenancy Agreement, and admitted that there was outstanding rent to be paid.
(8) 19 October 2020-P's letter to D confirming the facts that arose from the meeting.
(9) April 2021-P filed Writ and Statement Of Claim.
(10) June 2021-D filed Defence And Counterclaim.
(11) November 2021-D filed Defence And Amended Counterclaim (Amended Counterclaim).
(12) February 2022-P filed the Application to enter summary judgment against D and to strike out D's Amended Counterclaim.
(13) 21 October 2022-The Sessions Court entered summary judgment and struck out the Amended Counterclaim.
(14) 4 November 2022-D appealed to the High Court against the Sessions Court's decision.
The Amended Counterclaim
[8] D's Amended Counterclaim includes these remedies:
(1) P to pay back the increased rent to D. The applicable period was from January 2016 to August 2016;
(2) P to pay back all the rent that D had paid to P. The applicable period was from September 2016 to May 2019;
(3) P to pay D for the
