Back
2025 MarsdenLR 3129
HIGH COURT MALAYA KUALA LUMPUR
THE TREE PROPERTY MANAGEMENT SDN BHD – Appellant
Versus
CHERENGIN HILLS SDN BHD – Respondent
[Civil Suit No: WA-22NCvC-702-10/2020]
Court emphasizes the necessity of adhering to dispute resolution clauses before pursuing legal claims; force majeure must meet contractual definitions.
Headnote:(A) Tenancy Agreement - Clause 7 (Force Majeure) - Clause 8 (Dispute Resolution) - COVID-19 MCO impact on tenancy agreements - Plaintiff terminated tenancy citing force majeure due to MCO - Court found no national emergency declared, thus no valid force majeure event occurred - Both parties failed mediation obligation prior to filing claim - Dismissed Plaintiff's claim and Defendant's counterclaim. (Paras 15, 28, 50)
(B) Force Majeure - Definition and applicability - A force majeure event must be defined within the contract, requiring proof of prevention from performance due to circumstances beyond control. (Para 18)
(C) Dispute Resolution - Parties must adhere to contractual dispute resolution mechanisms prior to court action, recognition that disputes exist does not negate the obligation to mediate first. (Paras 30, 41, 50) Facts of the Case: Dispute arose from a tenancy agreement for a resort; Plaintiff claimed termination due to MCO. Plaintiff sought refunds of deposits while Defendant counterclaimed for remaining rent. (Paras 1-10)
Findings of Court:
Court found that the claims from both parties were premature as they did not engage in the required mediation per the tenancy agreement. (Paras 28, 50)
Issues: Whether a force majeure event occurred; validity of termination under tenancy terms; requirement for mediation before legal recourse. (Paras 12, 30)
Ratio Decidendi: Force majeure must be clearly established within contract definitions; disputes must follow mediation steps before litigation; non-compliance leads to premature claims dismissal. (Paras 18, 41, 50)
Result: Plaintiff's claim and Defendant's counterclaim dismissed, with no costs awarded.
| Table of Content |
|---|
| 1. facts of tenancy agreement and mco (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. court's observations on contract interpretation (Para 14 , 19 , 21 , 24 , 26) |
| 3. arguments regarding force majeure and claims (Para 16 , 18 , 20 , 22 , 23) |
| 4. dispute resolution clause applicability (Para 28 , 36 , 37 , 41) |
| 5. final judgment dismissal (Para 50 , 51) |
[After Full Trial]
A. Introduction
i. Background Facts
[1] The Plaintiff and the Defendant entered into a Tenancy Agreement dated 19 November 2019 ("the Tenancy Agreement"). Pursuant to the Tenancy Agreement, the Defendant as the owner of a resort known as Cherangin Hills Convention & Spa Resort ("the Resort") which is erected on 2 parcels of land known as No Hakmilik 1664, Lot 5440 and No. Hakmilik 197, Lot 5936, Mukim Bentong, Tempat Sungai Cherangin, Daerah Bentong, Pahang Darul Makmur, agreed to rent the Resort for a term of two (2) years commencing between 2 December 2019 and 1 December 2021 and subject to other terms and conditions stated in the Tenancy Agreement.
[2] In accordance with the terms of the Tenancy Agreement, the Plaintiff, as tenant, had duly paid to the Defendant as landlord the following:
(i) The sum of RM300,000.00 as advance rental;
(ii) The sum of RM900,000.00 as security deposit; and
(iii) The sum of RM40,000.00 as utilities deposit.
[3] It is undisputed that the Government of Malaysia implemented the Movement Control Order ("MCO") under the Prevention and Control of Infectious Diseases Act 1998 and the Police Act 1967 from 18 March 2020 until 31 March 2020 (Phase 1).
[4] Under the MCO, the following restrictions, inter alia, were put in place:
(i) General prohibition of mass movements and gatherings across the country, including religious, sports, social and cultural activities. All houses of worship and business premises were closed except for supermarkets, public markets, grocery stores, and convenience stores selling everyday necessities;
(ii) Sanctions on all Malaysian from travelling abroad;
(iii) Interstate borders were closed and interstate travelling was prohibited, except with permission; and
(iv) Closure of all government and private premises except those in essential services.
[5] On 18 March 2020, the National Security Council of the Prime Minister's Office issued a list of essential services allowed to operate during the MCO, which included the continuation of the operation of paid hotels/homestays/accommodations to continue subject to the condition that guests are to stay in their respective rooms during quarantine period and dining services at these premises are only for their in-house guests through room service.
[6] The MCO was extended for the following periods:
(i) 1 April 2020 until 14 April 2020 (Phase 2);
(ii) 15 April 2020 until 28 April 2020 (Phase 3); and
(iii) 29 April 2020 until 12 May 2020 (Phase 4).
[7] The Plaintiff through its solicitors, Mesrs HL Tan Lim & Partners issued a letter dated 6 April 2020 ("the Letter") to the Defendant purporting to exercise its right under cl 7.0 of the Tenancy Agreement to terminate the Tenancy Agreement and to request for the refund of Security Deposit and Utility Deposit.
[8] The Defendant then, through its solicitor, Messrs Shahriza Shukor & Co., sent an email on 9 April 2020 to the Plaintiff's Solicitors denying the allegation and/or claims made by the Plaintiff in the Letter and also wrote a letter dated 20 April 2020 in reply to the Letter.
[9] Thereafter, the Plaintiff's solicitors issued another letter dated 23 April 2020 to demand for the refund of the Security Deposit and Utilities Deposit.
[10] Since the Defendant had failed to comply with the demand, the Plaintiff filed this action in Court. Subsequently, the Defendant filed a counterclaim against the Plaintiff claiming for the rental for the remainder term of the tenancy due to the termination of the Tenancy Agreement by the Plaintiff.
ii. The Trial
[11] During the Trial, the Plaintiff called two (2) witnesses an
