RK Nathan JC:

The Claim

This is an appeal against the decision of the learned Deputy Registrar granting summary judgment for the whole of the plaintiff's claim as set out in the reamended statement of claim. In essence the plaintiff's claim is for the difference in rental reviewed on 13 premises all situated in a building known as MUI Plaza, after the defendant terminated these tenancies before their expiry and moved to its own building. The plaintiff who is the owner of MUI Plaza was then forced to find new tenants for each of the 13 premises but the rental obtainable was lower than that paid by the defendant previously. Accordingly the plaintiff claims for the shortfall in rental for the entire unexpired term of each tenancy in question. The claim in total is for RM3,298,067.25. However, the plaintiff has forfeited rental and utility deposits amounting to RM810,709.66 and the balance claimed therefore is RM2,487,357.59. In addition, the plaintiff is also claiming the cost of re-instatement works amounting to RM6,494.55.

The Common Facts

At all material times, the owners of MUI Plaza have been the plaintiff. 13 premises within the MUI Plaza were rented by the plaintiff to MUI Bank Berhad, a registered bank that was previously owned by Malayan United Industries Berhad (MUIB). On 11 November 1993, MUIB sold all its shares in MUI Bank Berhad to Hong Leong Credit Berhad. Thereafter MUI Bank Berhad changed its name to Hong Leong Bank Berhad, the defendant. As a result thereof, the tenant of the 13 premises in question became by change of name, Hong Leong Bank Berhad. In June 1994, whilst all 13 tenancies were in force, the defendant indicated an intention to terminate each of the 13 tenancies before the expiry of their respective terms. This termination was accepted by the plaintiff subject to payment by the defendant of rentals for the full unexpired term. This was confirmed by the minutes of a meeting held on 23 June 1994 kept by Jones Lang Wootton who were the real estate agents appointed by the defendant to find replacement tenants for the 13 premises. The defendant remained in occupation of the various premises and continued to pay rent up until January 1995 although the change in its management and ownership took place in January 1994. There is in any case no dispute over 7 of the 13 tenancies.

Issues Raised By The Defence

The defendant contends that the tenancies were voidable and have been avoided by the defendant under s. 132E of the Companies Act 1965 (the Act) and that therefore the plaintiff cannot recover. The defendant also argues that there was a conspiracy by the plaintiff and the then management of the defendant to injure the defendant. It is also the contention of the defence that the plaintiff must prove its damage by showing that the rental it obtained from the substitute tenants was a fair market rental.

The Law Relating To O. 14

An O. 14 application is an application for summary judgment and in this context I can do no better than to make a mediocre copy of another man's genius by repeating the words of Gopal Sri Ram JCA in Ng Hee Thoong & Anor v. Public Bank Bhd [1995] 1 MLRA 48, [1995] 1 MLJ 281 wherein his Lordship said at p. 289:

It is important to bear in mind that O. 14 is a summary judgment procedure and not a summary trial procedure.

The S. 132E Issue

I am told that there is no decided case in Malaysia on this issue.

Section 132E of the Act reads:

(1) Subject to s. 132F , a company shall not enter into any arrangement or transaction with a director of the company or its holding company or with a person connected with such a director to acquire from or dispose to such a director or person any non-cash assets of the requisite value unless the arrangement or transaction is first approved by a resolution of the company in general meeting and also, if the director or connected person is a director of its holding company or person connected with such a director, by a resolution of the holding company in