Raja Azlan Shah CJ (Malaya)

(delivering the judgment of the Court): On September 6, 1980 the respondent company ("the company"), the registered proprietor of a nine-storey building in Jalan Syed Putra, Kuala Lumpur, let to the appellant the third floor for purposes of running a recreation centre for a term of three years commencing November 1, 1980 at a monthly rental of $12,000 payable in advance together with a further charge of $2,000 per month for electricity and water rates. There is a provision for renewal at the end of the term. The demised premises forms part of the said building where the company is operating a hotel business under the name of Abad Century Hotel. The recreation centre is one of the amenities provided in the hotel. The appellant commenced business on November 1, 1980. Because the hotel business was running at a loss the company decided to close the hotel business. That decision was widely reported in the national newspapers. On August 10, 1981 it sent a letter to the appellant informing him of the formal closure of the hotel with effect from August 30, 1981 and of the fact that there would no longer be any guests of the hotel requiring the services provided by the appellant in the demised premises. The appellant felt aggrieved and issued a writ on August 26, 1981 claiming wrongful repudiation of the written agreement and damages in the sum of $5,000,000. The company filed their statement of defence and counterclaim alleging breach of the provisions of the written agreement viz. failing to pay the rent in time, arrears of rent and parting with the actual possession and or use of the demised premises to one Tai Woon Oon and failing to obtain a valid licence to carry on the recreation centre. The appellant filed a reply and defence to the counterclaim on September 16, 1981.

On September 4, 1981 the appellant filed a notice of motion to restrain the company from selling, transferring or in any manner whatsoever disposing the said land and the said building thereon until the hearing and disposal of the suit or until further order. He filed an affidavit stating that he has carried out extensive renovations amounting to approximately $108,136.25, that the company was in breach of the terms, contents and covenants contained in the said agreement and that the land and the said building are the only substantial assets owned by the company, that the said land has been charged to Bank Bumiputra Malaysia Berhad for a principal sum of $2.4 million, that they have caused to be declared in at least two newspapers their intentions to close down the hotel business making admissions of losses of about $500,000 per annum from 1974 to 1980 and that he believed that the company intends to dispose of the said land and building. He therefore contends that in the event of such a sale there is a serious probability or a real likelihood that the surplus moneys, if any, would be appropriated by Paremba Berhad, the holding company of the company, leaving the appellant to resort to a worthless shell and thereby deprive him of the fruits of any judgment that he may obtain against the company. He therefore says that there is a grave danger that any final judgment that he may obtain would be rendered futile and ineffective if the company is left free to dispose of the said land and building. There was the usual undertaking as to damages.

The company filed an affidavit in reply stating that as a result of their intention to close the hotel business there would therefore no longer be any guests of the hotel requiring the services provided by the appellant in the demised premises. They contend that the letter of August 10, 1981 does not constitute a notice to quit and cannot be considered as evincing an intention to terminate the agreement or to repudiate it. They further say that the appellant is not entitled to the injunction since the building does not form the subject matter of the action and as such the need to preserve the building