The burden of proof rests on the claimant, and failure to substantiate claims can result in dismissal of the case.

Introduction

[1] The 1st and 2nd defendants' appeal herein relates to the decision of the High Court allowing the plaintiff's claim on liability for breach of a tenancy agreement and for the tort of conversion and for damages to be assessed before the Registrar.

[2] In this judgment, the parties shall be referred to as they were in the Court below.

The Salient Facts

[3] The plaintiff is the owner of a hotel known as Hotel Alamanda in Kuala Terengganu.

[4] Pursuant to various meetings between the plaintiff, one Gurcharan Singh, the 1st defendant and the 1st defendant's general manager one Sugumaran a/l Rajaram, the parties reached an oral agreement in February 2000 whereby the plaintiff would lease the hotel to the 1st defendant and/or his company for a monthly rental of RM6,000.00. The rental was substantially lower than the market rate of RM12,000.00 to facilitate the 1st defendant's agreement to renovate and refurbish the hotel and restore and improve the facilities therein at the 1st defendant's own costs.

[5] Subsequently, on 16 March 2000 the plaintiff and Matri Properties Sdn Bhd (the 2nd defendant) entered into a tenancy agreement whereby the 2nd defendant agreed at its own costs to carry out all alterations on the hotel according to a schedule known as "Renovation and Refurbishment Exercise". A copy of the schedule was forwarded to the plaintiff by the 1st defendant on 3 March 2000. There are other clauses not relevant to the present appeal, usual in tenancy agreements.

[6] The tenancy came to an end and the 1st defendant delivered vacant possession of the hotel to the plaintiff on 1 April 2007.

[7] During the subsistence of the tenancy, the defendants proposed that RM55,000.00 be set-off from the rentals due to the plaintiff for the costs of replacing or repairing the centralized air-conditioning unit in the hotel which was faulty.

[8] The 1st defendant proceeded to set-off the agreed sum of RM55,000.00 from the rentals. However, instead of replacing or repairing the centralized air-conditioning unit the 1st defendant installed individual split-unit air conditioners in each of the rooms.

Plaintiff's Claim

[9] The plaintiff's claim for damages is predicated on three main breaches:

i. The 1st defendant undertook to renovate and refurbish the hotel and restore the hotel and improve the facilities at his own cost;

ii. The defendants failed to keep the interior of the hotel including all fixtures and fitting therein in good and tenantable repair and condition; and

iii. The defendants had caused to be removed and/or converted for the defendants' own use several fittings in the hotel.

Defendants' Reply

[10] In summary, the defendants' pleaded defence is as follows:

i. At all material times, the 1st defendant was acting in his capacity as a director and agent for the 2nd defendant;

ii. The tenancy agreement was entered between the plaintiff and the 2nd defendant and not with the 1st defendant;

iii. The 1st defendant did not give any personal undertaking to the plaintiff in his personal capacity to renovate and refurbish the hotel;

iv. The split-unit air conditioners were installed in the hotel by the 2nd defendant with the consent of the plaintiff;

v. The plaintiff did not complain about the state and condition of the hotel when vacant possession of the hotel was delivered to the plaintiff;

vi. The defendants deny to having caused to be removed and/or converted for the defendants' own use several fittings in the hotel.

Findings Of The High Court

[11] According to the judgment of the learned judge, the plaintiff's claim was allowed on the following grounds:

a) The defendants were in breach of their obligation to carry