The provisions of the Covid-19 Act do not negate rental obligations if the action was commenced before the Act came into effect, and the appellants failed to raise triable issues justifying appellate interference.

JUDGMENT

Mohd Arief Emran Arifin JC:

Introduction

[1] This is the appeal filed by the Appellants against the decision of the learned Sessions Court Judge that had entered summary judgment under O 14 r 1 Rules of 2012 on 2 April 2021.

Background Facts

[2] At all material times, the Respondent carries out the business of, inter alia owning and managing a shopping centre named 'Suria KLCC' and provides management services of the said retain centre. At all material times, the Respondent is the landlord of the 1st Appellant.

[3] 1st Appellant and Respondent had entered into a Lease Agreement on 26 July 2018 ('Lease Agreement'), the Respondent agreed to grant and the 1st Defendant agree to accept the lease of the premises located at Lot 418-419, 4th Floor, Suria KLCC Shopping Complex ("the Premises)' for a term of 5 years from 1 September 2017 until 31 August 2022 ("Lease Term"). The 1st Appellant was carrying on business in the Premises under the trade name of "Koryo-Won".

[4] The amount of rent payable and/or method of computing the rent payable has been agreed between the Respondent and the 1st Appellant as borne out by the terms of the Lease Agreement as stated in item 11 Schedule 1 as follows:

Base rent: Year 3 (1 September 2019 - 31 August 2020)

"The base rent shall be increased based on the prevailing market value."

Year 4 (1 September 2020 - 31 August 2020)

"Base rent to be increased by 5% of Year 3 Base Rent"

[5] By the way of the Rent Review Letter, the Respondent and the 1st Appellant had inter alia agreed that the rent for Year 3 and Year 4 of the Lease Agreement be reviewed and revised to the following:

Base rent: Year 3 (1 September 2019 - 31 August 2020)

"At RM37.00 psf per month or 10% of annual gross sales; whichever is the greater."

Year 4 (1 September 2020 - 31 August 2020)

"At RM38.85 psf per month or 10% of annual gross sales; whichever is the greater."

[6] The Respondent contends that it was inter alia agreed that save for the changes contained in the Rent Review Letter, all other terms and conditions shall remain unchanged as per the Lease Agreement.

[7] A Guarantee was executed by the 2nd and 3rd Appellants in favour of the Respondent in consideration of the lease granted by the Respondent.

[8] At all material times, parties had carried out the respective contractual obligations under the Lease Agreement read with Rent Review Letter and the Guarantee.

Plaintiff's Claim For Breach Of The Lease Agreement

[9] However, the Respondent alleges in or around January 2020, the 1st Appellant started defaulting in its payment obligations as agreed in the Lease Agreement read with the Rent Review Letter.

[10] Due to that failure, the Respondent claimed that the Appellants are jointly and severally liable to pay the total outstanding sum of RM248,755.21 calculated as of 14 September 2020 and the 1st Appellant shall pay the security deposit in the sum of RM309,421.88 ("Security Deposit') to the Respondent for the costs of the reinstatement under cl 4.1 (c) of the Lease Agreement.

Defence And Counterclaim

[11] The Appellant's alleged in their Defence and Counterclaim that the Plaintiff did not comply with the terms of the Lease Agreement.

[12] They allege that the Plaintiff had failed to provide to the 1st Defendant quiet enjoyment over the property. The gist of the Defence is that the 1st Defendant was informed via email dated 17 March 2020 to close the restaurant ran at the KLCC premises as directed by the Government of Malaysia to prevent the Covid-19 pandemic.

[13] As a result of the said direction, the Defendants allege the 1st Defendant could not utilise the said premises.

[14] The Defendants also allege that the Plaintiff had issued letters dated 26 June 2020 offering to reduce the rentals by half for the said premises from 18 March 2020 to 31 May 2020. This offer was however refused by the Defendants.

[15] A demand for the full sums rental outstanding was issued by the Plaintiff via letter dated 27 August 2020.

[16] The Appellants contend that