Raja Azlan Shah J:

This is an appeal against an order allowing the appellants to defend the action on condition of paying $24,000 into Court and against a further order directing the counterclaim to be disposed of in an independent action.

The respondents are the chief tenant of a six-story building, which I will refer to as the said premises, situated in the heart of Kuala Lumpur. They claim that the appellants are carrying on business on the first floor of the said premises and that they had failed to pay rent for three months in 1965 and that they subsequently through their solicitors gave the appellants notice to quit but the appellants still remain in possession. The respondents therefore claim vacant possession, arrears of rent, double rent, and other consequential reliefs.

The appellants by their defence contend that they are carrying on the business of a first-class restaurant and night club on the first floor of the said premises; they admit that they had received the said letter from the respondents' solicitors but contend that the notice is invalid and bad in law. They allege that in pursuance of an oral agreement of August 1964 they became a sub-tenant of the respondents of the first floor of the said premises in consideration of a premium of $7,000 and rent on an ascending scale of $3,000 per month with effect from 21 August 1965. They also claim that there is provision for termination of their sub-tenancy by giving one year's notice in writing, and that there is a covenant

That the plaintiff (respondents) shall not use or permit or suffer the use of any part of the said premises for the purpose of carrying on the business of a restaurant and/or night club." The appellants contend that since 1 September 1965 the respondents in breach of the said covenant are using and/or have permitted the use of the mezzanine floor of the said premises for the purpose of carrying on the business of a restaurant under the name and style of Lok Kok Restaurant Ltd. They therefore allege that they had thereby suffered heavy loss of profits and they counterclaim for damages in the sum of $39,000, an injunction restraining the respondents from using or permitting the use of the mezzanine floor for the purpose of carrying on the Lok Kok Restaurant and other consequential reliefs. The respondents filed a reply and defence to the counterclaim in which they joined issue with the appellants on their defence. The respondents denied that the first floor was ever sub-let to the appellants for they contend that the original sub-tenant of the said first floor was one Chong Mun Foo who became a director of the appellants and has since retired. They therefore contend that since there was no agreement between the respondents and the appellants the latter are not entitled to restrain the respondents from the lawful use of the mezzanine floor or any other floor as a restaurant.

The respondents filed a notice of motion for final judgment. The motion was supported by the affidavit of the managing director who deposed that the appellants had made default in payment of rent for three months in 1965, they had also failed to pay double rent, and that the appellants are still in possession. The appellants did not file any affidavit. Pausing here for a moment, I agree with the learned Judge that omission to file an affidavit in reply was not fatal to the appellants' case as they were not obliged to do that. The learned Judge found that there was a triable issue with regard to the relationship of the parties and that in its turn determined the length of notice required to be given to terminate the sub-tenancy. But the learned Judge took the view that there was no dispute that rent was in arrears since September 1965 until to-date, that it was a continuing breach, and that there was a long and heavy list of case spending in these Courts, and in the circumstances he ordered the appellants to provide security in the sum of $24,000 as a condition for