JUDGMENT

George Seah SCJ:

[1] The only question raised in this appeal was whether the High Court was right to apply the principle of equitable estoppel to the facts of this case.

[2] The relevant facts are that on 31 March 1962 an agreement in writing was entered into between Tan Kwan, the landlord (since deceased) of the one part and Hong Bee & Co the tenants (respondents herein) of the other part, whereby the tenants were let into possession of the whole of the ground floor of the shop premises known as No 171-D, Jalan Rahang, Seremban, at the monthly rental of RM170 as from 1 April 1962. Clause 2 provides that "so long as the tenants shall pay the monthly rental of the demised premises punctually and promptly on the first day for every month and in any event not later than the fourteenth day of any month, and strictly adhere and abide by the terms and conditions contained herein, the tenants shall enjoy uninterrupted occupation of the demised premises, and the landlord shall not hinder, obstruct or determine the tenants' right to such enjoyment under circumstances". This agreement shall be binding on the heirs, executors, administrators and assigns of the landlord and also on the successors, administrators and executors of the tenants [see cl 7]. The respondents went into occupation of the shop premises and paid the monthly rent of RM170 to the landlord, Tan Kwan. After the death of Tan Kwan, the appellants became the registered co-owners of the shop premises and accepted the rent tendered by the respondents. As a result, the legal relationship of landlords and tenants was created between the parties. It was conceded that the written agreement of 31 March 1962 was never registered at the Land Registry office.

[3] The appellants claimed that the respondents were monthly tenants and on 19 May 1978 they instructed solicitors to send a notice to quit to the respondents terminating their tenancy on 31 July 1978. When the respondents refused to vacate from the shop premises the appellants took action in the Magistrate'a Court at Seremban for an order for possession and other incidental reliefs.

[4] The crux of the defence of the respondents was that by reason of they having paid RM9,000 as premium to the late Tan Kwan they were given a tenancy in term of cl 7 aforesaid. Even though the agreement of 31 March 1962 was not registered they contended that they were induced by the late Tan Kwan to pay the money over in the expectation of being allowed to stay there indefinitely so long as they paid the rental regularly. They therefore invoke the principle of equity to protect them so that an injustice might not be perpetuated by the appellants who are the successors-in- title of the shop premises. In support of this proposition the learned Counsel for the respondents cited the cases of Siew Soon Wah & Ors v. Yong Tong Hong, [1973] 1 MLJ 133 and Tan Swee Hoe Co Ltd v. Ali Hussain Bros. 16. In Siew Soon Wah case the tenant (Yong Tong Hong) was requested by the then landlord (Siew Kim Chong, deceased) to pay RM8,000 on his behalf to the building contractor. The tenant was then let into occupation of the ground floor at the rent of RM150 per month; later raised to RM200 each month. An agreement was entered into whereby the landlord agreed to give a permanent tenancy or a tenancy as long as the tenant wishes to occupy the ground floor. It was also agreed that the landlord should not increase the rent as he liked or eject the tenant. The shophouse was subsequently transferred by the first landlord to the present landlords, Siew Soon Wah and others without notice of the unregistered agreement. The new landlords demanded an increase of the rent and on the tenant's refusal to agree, gave notice terminating the tenancy. The new landlords then brought an action for possession and the High Court gave judgment in their favour holding that the tenancy was for an infinite period and was void under s 30 of the Contracts (Malay States) Ordinance 1950. On ap