Siti Norma Yaakob J:

In this suit, the plaintiff, a company dealing in the business of printing press and the sale of stationeries seeks 2 declaratory orders namely

1. upon the true construction of Clause 6(e) of an agreement dated 5 July 1984, it is entitled to occupy No. 20, Jalan Station, Kelang (the premises) as a tenant of the defendants at a monthly rental of RM300, until such tenancy has been lawfully terminated and that the defendants are estopped from contending otherwise.

2. for so long as the tenancy is in existence, the defendants have no right to re-enter or repossess the premises other than in proceedings under the Control of Rent Act 1966 as the premises is rent-controlled.

The undisputed facts show that the plaintiff had been in occupation and conducting its business at the premises long befor 5 July 1984. At that time, all the shareholdings in the plaintiff were owned by the defendants and their parents but the freehold title of the premises were and are still registered in the joint names of the defendants. However, on 5 July 1984, all the 4 shareholders of the plaintiff sold their equitable interests to 2 persons namely, Joseph De Silva and Tan Boon Lai, who are also directors of the plaintiff and following this takeover, both De Silva and Tan took over absolute control and management of the plaintiff. The sale of the shares were also subject to a specific covenant on the part of the 4 vendors to allow the plaintiff to occupy the premises for an indefinite period at a normal rental of RM300 per month. (Clause 6(e)).

At the time of executing the sale and purchase agreement, the defendants as the registered owners of the freehold title of the premises granted both De Silva & Tan an option to purchase the property, to be exercised by them within a month from 20 November to 30 November 1984. Both De Silva and Tan did not exercise the option and by effluxion of time, it expired on 30 November 1984.

However, on 14 December 1984, the defendants entered into a sale and purchase agreement with De Silva and Tan whereby De Silva & Tan agreed to purchase the freehold title of the premises from the defendants for a consideration of RM285,000. As part paymnent, the 2 purchasers made a 10% down payment, the balance to be settled within 3 months from the date of the agreement. However, despite extensions given by the defendants, the sale was aborted as the purchasers were not able to meet payment of the balance of the purchase price. It is the defendants' contention that the failure on the part of the 2 purchasers to complete the purchase of the freehold title disentitles the plaintiff to claim a tenancy under Clause 6(e) of the first agreement as both the agreements were executed concurrently.

Perusing both agreements, they are easily distinguishable. The first agreement dated 5 July 1984 is for the sale of shares made between the defendants and their parents on one part and De Silva and Tan on the other. The second agreement dated 14 December 1984 is for the sale of the freehold title of the premises and made between the defendants as the registered owners on one part and De Silva & Tan on the other. In both agreements, both De Silva and Tan are acting in their personal capacities and not as representatives of the plaintiff, a separate legal entity altogether and neither is the plaintiff a party to either agreement. There is also no mention in the second agreement that the plaintiff's tenancy as expressly declared in Clause 6(e) of the first agreement is any way to be determined in the event of the non performance of the second agreement. To that extent, I would hardly consider the 2 agreements to be in any way concurrent to each other but that they exist quite independent of each other.

If it was contemplated that the parties had intended that Clause 6(e) was inserted as an incentive for De Silva & Tan to purchase the freehold title and when the sale fell through, Clause 6(e) ceased to have any legal effect, the