Hashim Yeop Sani FJ:

The appellant as plaintiff in the High Court sought for a declaration that the tenancy agreement (the terms of which are expressed in a letter dated 9 November 1978 - p. 81-82 of the Appeal Record) had not been validly terminated. The appellant also sought for an injunction to compel the respondent to restore the air-conditioning supply, damages for breach of contract and costs. At the conclusion of the trial the High Court dismissed the claim and allowed instead the counter-claim of the landlord (respondent now) for vacant possession and mesne profits. The appeal before us is against that order.

It is not disputed that the terms of the tenancy agreement are as expressed in the said letter dated 9 November 1978 from the respondent company which confirmed a verbal agreement reached earlier between the Managing Director of the appellant company (PW1) and the Chief Executive of the Low Yat Group of companies, one Dato Low Yow Chuan (not a witness). The terms of the lease are quite straight forward with rentals for the first three years agreed to at RM1,300 per mensem, the second three years at RM1,500 per mensem and the third three years at RM1,700 per mensem. the rental was inclusive of air conditioning supply for "the period of operation of the bowling alley" of the respondent company.

Quite early in the proceeding it must have been realised by both Counsel and the trial Judge that the real issue before the Court was the interpretation of para. 6 of the said letter dated 9 November 1978 and its application to the facts of the case. Paragraph 6 of the letter reads as follows:

Others

In the event of redevelopment of our property whereby the premises is required to be demolished, or our Bowling Alley is closed for reasons beyond our control, we reserve the right to terminate the tenancy agreement by giving 3 (three) months' notice in advance, with no claim for compensation by you except for the period of the first 3 (three) years.

In the middle of the proceeding the learned Judge noted and the parties conceded that the first limb of para. 6 could not apply. The real issue was thus further reduced to whether on a proper interpretation of the second limb of para. 6 of the tenancy agreement the respondent company had the right to terminate the tenancy agreement in the way it did. The second limb reads "or our Bowling Alley is closed for reasons beyond our control".

Purporting to act under the said para. 6 the respondent company wrote to the appellant a letter on 2 July 1982 the gist of which reads as follows:

We refer to the above matter and wish to inform you that our Sem Siong Bowl Centre will be closed down very shortly. Accordingly, as in accordance with our Agreement we hereby give you 3 months' notice of our intention to terminate your Tenancy Agreement in respect of the above premise.

We will be grateful if you would vacate the premise and hand over the same to us on the 1 October 1982.

The appellant promptly replied on 9 July 1982 (p. 119) to the effect that since a great deal of money had been expended on the Kentucky Fried Chicken Restaurant in the premises, the appellant wanted further information on the reason the respondent proposed to close down the bowling alley. The rest of the letter dealt with the alleged "systematic attempt" by the respondent to terminate the tenancy for the previous one year for failure to increase the rental, which is not relevant for our present purpose. The respondent replied to this letter on 17 July 1982 (p. 121) the gist of which reads as follows:

We, on our part, can do nothing more but to assure you that our action is merely a result of our need to achieve a reasonable business income from the premises concerned instead of incurring a substantial loss at the present moment.

As stated in our letter dated 2 July 1982 it is our intention to close down our Sem Siong Bowl in view of the heavy loss we are incurring every month. We feel it to be premature at the mome