A Sub Tenancy Agreement induced by fraudulent misrepresentation and lacking landlord consent is void ab initio, establishing liability for damages directly linked to the misrepresentation.

Amarjeet Singh Serjit Singh J:

Introduction

[1] The parties are referred to as they were in the court below. The matter came before me as an appeal, after a full trial, by Big Junkyard Sdn Bhd and Chong Kok Sing ("the 1st defendant" and "2nd defendant" respectively) against the decision of the learned Sessions court Judge who had allowed Chan Kah Wai's ("the plaintiff') claim and granted the following reliefs:

(i) a declaration that the Sub Tenancy Agreement dated 24 September 2019 executed by the plaintiff and the 1st defendant is invalid and rescinded ab initio;

(ii) an order for restitution by the defendants, jointly or severally, to the plaintiff for the sum of RM89,371.50;

(iii) the defendants jointly and severally pay the plaintiff RM50,000.00 globally as general damages,. aggravated damages and exemplary damaged; and

(iv) the defendants jointly and severally pay the plaintiff RM10,000.00 as costs.

[2] On 19 August 2022, I allowed the defendants' appeal in part as follows: (a) reducing the order of restitution to RM69,371.50; (b) setting aside the RM50,000.00 ordered to be paid to the plaintiff as global damages for genera! damages, aggravated damages and exemplary damaged; (c) the costs to be paid to the plaintiff at the Sessions court is reduced to RMS,000.00. Costs of RM8,000.00 for the present appeal to be paid by the plaintiff to the defendants subject to allocator fees.

[3] The reasons for my decision are stated below.

Background

[4] At the court below the plaintiff (PW1) gave evidence on his own behalf while the 2nd defendant (DW2) gave evidence on his own behalf and also as witness for the 1st defendant. The only other witness was Leong Yee Chuan (DW1), a freelance interpreter who was called as witness for the defendants.

Plaintiff's Pleaded Case

[5] The plaintiff was a sole proprietorship trading as YTwo Coffee House while the 1st defendant was in the restaurant and bar business located at No 20 (Ground Floor), Jalan Radin Bagus 1, Bandar Baru Sri Petaling, Kuala Lumpur ("the R & B business"). The 2nd defendant was the managing director of the 1st defendant and majority shareholder. It was claimed that, in a meeting arranged by a realty agent, an offer was made to purchase the R & B business including its furniture, fixtures, fittings and equipment at a sum of RM31,500.00 and to rent the said premises at RM10,000.00. It was alleged that the 2nd defendant had represented then that the 1st defendant was the landlord of the premises.

[6] The plaintiff accepted the offer and on 1 September 2019 paid RM10,000.00 to the said agent as rental deposit pending the Tenancy Agreement being executed. On 24 September 2019, the plaintiff realised that the 1st defendant was not the landlord as the Tenancy Agreement prepared by the agent was actually a sub Tenancy Agreement . It was claimed that as a result of the 2nd defendant's representation that the consent of the landlord had been obtained to sublet the premises the plaintiff said that he was induced to execute the Sub Tenancy Agreement .

[7] The plaintiff claimed that sometime in October 2019 he paid a sum of RM61,500.00 into the account of the 1st defendant at CIMB Bank. The money was payment for the furniture, fittings and equipment (RM31.500.00), two months' advance rental (RM20,000.00) and security and utilities deposits (RM10,000.00). Apart from the above, the plaintiff claimed to have spent RM55,598.50 to improve and renovate the said premises, purchase furniture and equipment for the R & B business.

[8] However, sometime in November 2019, the plaintiff alleged that he was informed by one Terence Ng, the representative of the landlord of the said premises, Idea Stream Media Sdn Bhd ("the landlord") that the 1st defendant did not obtain any consent to sublet the said premises to the Respondent. The plaintiff was given a copy of the Tenancy Agreement dated 1 October 2018 between the landlord and the 1st defendant which was produced by the plaintiff in evidence ("