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1981 MarsdenLR 414

FEDERAL COURT (KUALA LUMPUR)

RAJA AZLAN SHAH AG, LP, LEE HUN HOE, CJ (BORNEO) & MOHAMED AZMI, J


YAP PHOOI YIN
versus
CM BOYD

CIVIL APPEAL NO 135 OF 1978

Decided On : 11-03-81

Advocates:
Wong Chong Wah for the appellants.
M Shankar for the respondent, Goh Eng Wah.
C Das for the respondent — arbitrator.
Solicitors: Skrine & Co; Shearn & Delamore; Shook Lin & Bok.

Raja Azlan Shah Ag LP

(delivering the judgment of the Court): In this appeal the question arises as to the construction of a lease executed on August 16, 1957 and it turns upon the relative importance of a recital and the operative part of the said lease in clause 1(iv) infra. The recital states that the registered proprietor of land held under C.T. No. 15741 for lot No. 573, section 62, in the town of Kuala Lumpur, in area 0 acres 2 roods 27.9 poles (hereinafter referred to as "the said land") do hereby lease to Makhanlall (Properties) Ltd. the said land together with the buildings erected thereon and known as Star Theatre as tenant for 30 years at a monthly rental as stated hereinafter, subject to the agreement and powers implied in the Land Code and subject to the stipulations, modifications, terms and conditions hereinafter contained. Then the lease continues with the operative parts. Clause 1 contains the provisions for rent. It reads:

"The rent of the said land shall be as follows:—

(iv) From the beginning of the 21st year to the end of the 25th year such sum exceeding $700 as shall be agreed to by the parties hereto or as shall be fixed by an arbitrator."

Clause 2 says that the rent shall be payable in advance.

Clause 3 contains the lessee's usual covenants for the maintenance of the Star Theatre, insurance of the said building in the joint names of the lessor or lessee, entry of the premises to view the state of repairs and provisions against assignment, sub-letting or part with possession without consent, and delivery of vacant possession with all fixtures fittings and additions. Clause 4 contains the lessor's covenants for quiet and peaceful enjoyment and option for renewal. Clause 5 provides for determination of the lease and taking possession of the said cinema and all other buildings erected by the lessee on the said land when rent is unpaid in certain circumstances. Clause 6 provides for the suspension of rent when the lessee is unable to operate or use the said cinema by reason of war, riot, civil commotion or fire. Clause 7 provides for arbitration in case of dispute or difference between the parties.

It is common ground that the said cinema was erected by the lessee at his own expense some time before the execution of the said lease. Both the signatories are now dead. There is now a dispute as to the amount of rent payable in the light of clause 1(iv). The matter went to arbitration. The arbitrator gave his final award (see Larrinaga & Co v Societe France-Americaine (1923) 92 LJKB 455; 125 LT 65). He then referred it to the High Court in the form of a special case, which is as follows:

"(1) In the event of the court deciding that the rental under Clause 1(iv) of the said lease should relate to the land only the fair rental under Clause 1(iv) of the said lease is $5,000 per month.

(2) In the event of the court deciding that the rental under Clause 1(iv) of the said lease should relate to the land together with the buildings erected thereon the fair rental under Clause 1(iv) of the said lease is $21,000 per month."

Harun J. in what must surely be the shortest judgment on record, answered it with the words 'on the land only'.

The question which we have to decide is whether the operative part of the said lease, that is clause 1(iv) stands unaffected by the recital or whether the recital governs the terms of clause 1(iv). We do not pretend to speculate whether the parties really intended to include the said cinema building in assessing rent, except so far as we can gather their intention from the recital and the operative part of the said lease. We feel that the said lease must be construed as it stands, by what appears on the face of it, and nothing else. We are not now considering any question of rectification. If that is so, we should have to admit evidence which is not admissible on the question of construction. In the circumstances neither the Ponsford type of situation (see Ponsford & Ors v HMS Aerosols Ltd [

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