The doctrine of frustration does not apply where a party is able to fulfill its contractual obligations despite changes in circumstances.

The Appeal

[1] After a full trial, the Session Court ruled in favour of the Respondents and ordered for the Appellant to pay the following:

(a) RM875,949.04 for the outstanding rental, service charges and promotional charges);

(b) RM39,709.98 for the Respondent's legal costs pursuant to the Tenancy Agreement;

(d) Costs of RM15,000; and

(e) Costs of RM10,000 for the dismissal of the Appellant's counterclaim

There were also orders as to the interests to be calculated on each sum.

[2] This suit concerned a landlord's claim on the rental due and owing by its tenant, the Appellant. The Appellant had rented lot 1.10.00 on level one at Pavilion Kuala Lumpur shopping complex in the capital's city centre. The Appellant was in the retail business of light food such as Taiwanese snacks, mochis, jellies and titbits, dried and preserved fruits.

[3] The tenancy agreement was executed on 24 March 2017 which expired on 29 February 2020. It was renewed for the period of 1 March 2020 to 28 February 2023. The Appellant had filed its counterclaim for the return of the deposit on the contention that the tenancy had been frustrated.

This Court's Finding

[4] Having read all the Appeal Records and considered the submissions of both parties, written and oral, it is the finding of this Court that the Appellant's grouses had been adequately dealt with by the Session Court Judge whose decision is quite comprehensive.

[5] The appeal is dismissed and the order or the Session Court is upheld. The following is this Court's reasoned decision.

This Court's Consideration

Rental With Rebates

[6] According to the tenancy agreement, the monthly rental was divided into three parts:

(a) Base rental = RM41,189.82 monthly (net rental)

(b) Service charges = RM4,078.20

(c) Promotion charges = RM388.40

[7] It was agreed that the Appellant was to pay the Respondent the gross rental of RM45,656.42 monthly or 15% of the tenant's monthly gross sales, or whichever was the highest.

[8] By mid-March 2020, our nation was blanketed with the COVID-19 pandemic and there were restrictions and curfews legally imposed by the government to help curb the spread of the virus and keep the society safe. The Movement Control Order was implemented on 18 March 2020, followed by the Conditional Movement Order and Recovery Movement Control Order. All these had affected retail businesses.

[9] The Respondent carried out promotional activities to help its tenants that included the Appellant. Stimulus packages were also awarded on rental rebates to assist the Appellant and preserve the relationship:

(a) from 18 March 2020 to 31 March 2020 - the Respondent allowed the Appellant to occupy the property rent-free. There was no need for the Appellant to pay rent except for the utility bill;

(b) from 1 April 2020 to 30 April 2020 - a rebate of 50% on base rental which meant the Appellant only paid half of the amount of rent for the month of April 2020;

(c) from 1 May 2020 to 30 June 2020 - rebate of 20% on the base rental, out of which 10% from the said rental rebate was in the form of promotional allowance.

[10] All the rebates were stipulated in the Respondent's letter dated 29 May 2021 which was agreed to by the Appellant. Both parties placed their signature as confirmation. The Appellant had assured that all outstanding payments with respect to the rental, service and promotional charges and utilities would be settled promptly.

[11] The Appellant had failed to do so. In breach of the tenancy agreement, it had also not paid the utility charges. Following