Back
2021 MarsdenLR 1658
HIGH COURT MALAYA KUALA LUMPUR
PUCHONG SPORT ARENA SDN BHD – Appellant
Versus
CALIUM CARBHONATE MANUFACTURER SDN BHD & ANOR – Respondent
[Suit No: 22NCvC-176-04/2017]
The tenant bears the responsibility of ensuring the legality of the structure and obtaining necessary approvals as stipulated in the Tenancy Agreement.
Headnote:(A) Tenancy Agreement – Clauses regarding responsibilities of tenant and landlord – The plaintiff failed to prove its claims that the Tenancy Agreement was unlawful due to the structure being illegal, citing provisions in the Tenancy Agreement that emphasize obtaining necessary approvals from authorities – Both parties had representation during the drafting of the agreement, which was based on an 'as is where is' basis – Court found that the tenant breached clauses regarding renovations without approval and commenced operations illegally before obtaining the required licenses – Claims of fraudulent misrepresentation were not substantiated – The court dismissed the suit and ordered costs against the plaintiff. (Paras 1-99)
Facts of the case: The plaintiff entered into a tenancy agreement with the first defendant and sought to terminate it due to alleged illegal status of the structure without obtaining approvals, despite agreeing to take the land in its existing condition.
Findings of Court: The plaintiff had failed to provide sufficient evidence to support its claims, and it bore the responsibility for obtaining all necessary approvals.
Issues: The core issues included the legality of the structure, the tenant’s obligations regarding obtaining approvals, and claims of misrepresentation.
Ratio Decidendi: The court emphasized that the tenant assumed the risk and responsibility for the legality of the structure as per the tenancy agreement's terms, and the claims of misrepresentation were not proven.
Result: The plaintiff's suit was dismissed, and costs were awarded to the defendants.
JUDGMENT
Introduction
[1] The plaintiff's ("P") claim against the defendants arises from a tenancy agreement (undated) ("Tenancy Agreement"). The Tenancy Agreement was entered into between P (as tenant) and the 1st defendant ("D1") (as landlord). The 2nd defendant ("D2") is a director of D1.
[2] After a full trial, I held that P had not proven its claim on a balance of probabilities. I therefore dismissed P's claim. These are the grounds of my judgment.
Background
[3] The Tenancy Agreement contained the following description:
(a) Description of the Land: the lands held under Geran 52964, Lot 3384, Bandar Petaling Jaya, Daerah Petaling, Negeri Selangor measuring approximately 720.8452 square meters and GM 622, Lot 3386, Tempat Batu 10% Puchong, Mukim Petaling, Daerah Petaling, Negeri Selangor measuring 0.7167 hectares (collectively the "Land"), together with a double storey structure built thereon ("Structure"), on an 'as is where is' basis;
(b) The Rent: RM85,000 per month ("Rent");
(c) Use of the Land: For the sole purpose of using the Land as a sport centre only;
(d) Term of Tenancy: 3 years ("Term");
(e) Commencement Date of Tenancy: 1 September 2015.
[4] The Third Schedule of the Tenancy Agreement ("Third Schedule") contained certain 'Special Terms and Conditions' as follows:
"1. The Tenant [ie P] hereby warrants and undertakes with the Landlord [ie D1] that the Term commencing from 1 September 2015 and expiring on 31 August 2018 shall be a fixed term and the Tenant shall not be entitled to any early termination of the said Term failing which the Tenant shall compensate the Landlord based on the Term's Rent for the balance duration of the Term...
2. The Tenant hereby agrees to take a tenancy of the Land together with all structures erected thereon on an as is where is basis and the Tenant hereby undertakes that the Tenant shall not remove any of the existing structures on the Land.
3. The Tenant shall rent the Land on an as is where is basis as at the date of this Tenancy. The Tenant hereby agrees that upon the expiry or sooner determination of this Agreement, the Tenant shall not be entitled to claim against the Landlord for any renovations and/or improvements undertaken by the Landlord on the Land.
...
4. The Tenant hereby further warrants and undertakes that the Tenant has obtained all approvals of the relevant authorities for the business operations of the Tenant's business and this Tenancy Agreement shall not be subject to any condition precedent."
[5] Under cls 2(f) and (g) of the Tenancy Agreement, P covenanted as follows:
"(f) Not to make any renovations, structural or other alterations or additions to the Land without the previous consent in writing of the Landlord (which consent shall not be unreasonably withheld) subject to the Tenant providing to the Landlord the renovation plans of the Tenant and if necessary, the Tenant shall obtain the written approval of the Local Authority and such other relevant authorities in respect of the same.
(g) Not to do or permit to be done on the Land anything which may infringe any of the laws byelaws or regulations affecting the Land made by the Government Municipality and such other relevant authorities."
[6] Clause 4(e) of the Tenancy Agreement reads:
"(e) Notwithstanding anything in this Agreement, in the event of the expiry or termination of this Tenancy Agreement for any reason whatsoever, the Tenant shall not be entitled to claim against the Landlord for any costs, expenses, losses, compensation and/or damages whatsoever for any improvements, renovations and/or extensions to the Land and/or for any loss of business or profits whatsoever."
[7] In accordance with Special Term and Condition no 5 of the Third Schedule, a joint and several guarantee ("Guarantee") was provided by the directors of P (ie Er Leong Hui ("PW3") and Chan Chok Fee ("PW4")) for the due performance of the Tenancy Agreement.
Defendants' Case
[8] The defendants aver that P was in breach of the Tenancy Agreement
