GROUNDS OF JUDGMENT

The Appellant/Plaintiff appeals against the decision of the learned Sessions Court Judge delivered on 16-8-2002 wherein the Appellant/Plaintiff's application for summary judgment was dismissed with costs.

The Appellant/Plaintiff's action is for:-

a) vacant possession;

b) unpaid arrears of rental for the 6 month period from December

2001 to May 2002 amounting to RM24,540.00 and

c) double-rental for holding over from May 2002 to 18th April 2003

of a retail-unit located in a shopping-center, namely Unit J1-18, Level 1, Johor Bahru City Square (hereinafter called the premises).

It is not in dispute that the Plaintiff is the Chief Tenant of the premises pursuant to tenancy agreement dated 28.9.99 entered into with the landlord Johdaya Karya Sdn. Bhd. (hereinafter called the principal agreement). It is also not in dispute that the parties herein had entered into a Sub-Tenancy Agreement

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dated 24.2.2000 wherein the Appellant/Plaintiff (as Chief Tenant) had granted a sub-tenancy to the Respondent/Defendant for the said premises, for a period of 2 years commencing from 1.3.2000 to 30.4.2002 at an agreed monthly rental of RM4,417.20 and RM490.80 as monthly service charge.

It is not denied by the Respondent/Defendant that since December 2001, no rental whatsoever has been paid and upon expiry of the said Sub-Tenancy on 1.5.2002, the Respondent/Defendant had failed to deliver vacant-possession of the said premises and has continued in occupation thereof without paying any rental.

There is a clause in the principal agreement allowing assignment only with the prior written consent of the landlord.

There is a clause in the Sub-Tenancy agreement giving the Respondent/Defendant an option to renew for a further period of 3 years, at a rental to be mutually agreed upon. It is not denied that the Respondent/Defendant has not exercised this option to renew.

In view of the Respondent/Defendant's breaches of the said Sub-Tenancy agreement by:-

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a) not paying any rental for the months December 2001 till April

2002;

b) not surrendering vacant-possession of the demised premises upon

expiry of the said Sub-Tenancy; and

c) holding over the said demised premises,

a notice of demand for rentals due was issued on 2.4.2002 and a notice of forfeiture was then subsequently issued on 27.6.2002 and the Respondent/Defendant continued in occupation of the premises until 18th April 2003 when they delivered vacant possession.

The landlord had pursuant to letter dated 11.3.2003 terminated the principal tenancy agreement on the ground that the Plaintiff had in letter dated 27.7.2002 misrepresented that the Defendant was the Plaintiff's 50% owned associate company. Since the Plaintiff had issued distress proceedings against Defendant claiming unpaid rentals they took the position that there has been a breach of the clause against assignment aforesaid.

The Respondent/Defendant's case is as follows:-

a) that due to the fact that the parties hereto have entered into a Franchise Agreement dated 24.2.2000, in relation to the operation

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of a "Wah Chan" jewellery outlet at the demised premises for a period of 5 years; and

b) based upon a letter from the Appellant/Plaintiff to the Respondent dated 24.4.2000

the Respondent/Defendant contends that the misrepresentation by the Plaintiff that it is 50% associate owner of Defendant has tainted the principal agreement with illegality and hence the Sub-Tenancy agreement is also consequently tainted which absolves the Defendant from paying rental.

By reason thereof the Defendant submits that there are triable issues which merits the issues to be ventilated through the medium of a full trial.

Having perused the documentary evidence herein and in particular to the Sub-Tenancy agreement and the Franchise Agreement I am of the considered view that the Sub-Tenancy is an entirely distinct agreement from the Franchise Agreement, and the determination of the issue of liability for payment of rental has to be ascertained

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