租约: 续约必须给续约通知 [2021] MLJU 102

租户以生意伙伴模式和业主租下一家店面以经营咖啡店。双方签署了为期3年的租约，直至31-8-2021。租约说明，如果租户在租约期满前至少3个月提出书面要求，则可再续租2年。业主之后在18-8-2020发出终止租约通知。
其中一个合伙人起诉业主。他指业主在租约到期后仍继续出租并收取租金；而且2020年冠病临时法案禁止他人终止租约。业主则指由于租户是以合伙方式经营咖啡店，因此全部的合伙人必须是原告或者必须以合伙人的名誉告他。业主也表示租客并没有如租约条款里，至少3个月预先通知要续约。
法庭必须决定：业主是否没有权利取消租约，是否必须续约。业主继续接受租金，是否意味已经同意续约。
法庭发现，租客并没有在租约期满前的3个月提出续约的要求；而且即使业主继续收取租金，并不代表一个新的租约就此产生。 RHB Bank Berhad v Hiap Leong Trading Sdn. Bhd. [2011] 5 MLJ 326
原告提出，2020年冠病临时法案第7条文指出，即使一方没有办法在新冠肺炎疫情期间履行租约条款里的责任(如原告没有提前3个月前提出续约通知)，业主仍然不能采取合约下的权利(终止租约) 。但是法庭不以为然，法庭指出，业主是在18-8-2020发出终止租约的通知，有关法案第10条文提及任何在18-03-2020-23-10-2020被终止的合约，将被视为已有效的终止。
另外法庭也申明，如果企业是合伙企业，你想起诉对方，你必须以合伙企业的名誉(partnership)或者以全部的合伙人的名誉去起诉对方，原告是不能以一个合伙人的名誉去起诉对方的。
法庭裁定业主有权终止租约，驳回了原告的申请。

*详细的案情和判决，请阅读以下英文版的文章

Introduction

Enclosure 1 is the application by the 1st Plaintiff (Ang) in his own name and by the 2nd Plaintiff, who is also Ang but in his capacity as the partner of a partnership known as Wu Pang Kopitiam (Partnership). By this enclosure, the Plaintiffs essentially seek a declaration that the Defendants are not entitled to terminate the tenancy agreement dated 23-6-2017 between the Partnership and the Defendants (Tenancy); the Tenancy be extended for 2 years from 1-9-2020 until 31-8-2022 and an injunction to essentially prohibit the Defendants from interfering with the business and activities at the tenanted premises.

Background facts

The Partnership consists of 3 persons namely Mok Chuang Kiang (Mok), Loo Sin Chiang (Loo) and Ang. The Defendants are the registered proprietors of premises at Taman Bukit Indah, 79000 Nusajaya, Johor (premises) which was let out to the Partnership pursuant to the Tenancy. The premises were used to operate a coffee shop wherein there are 16 stalls selling food and drinks.

Basis of application

In its affidavit in support, it was stated that:

Mok and Loo had filed an Originating Summons JA-24- NcVc-136-02/2020 against the 1st Plaintiff, Ang in his capacity as the chairman of Persatuan Kebudayaan Qiong Min Khek Chow Yek Johor Bahru and 1 other (“OS 136”) seeking inter alia that the Partnership be dissolved and that the proceedings have yet to be concluded;
despite Mok and Loo knowing OS 136 had yet to be concluded they nevertheless through their lawyer issued a letter dated 18-8-2020 to the Defendants that they were the majority partners and were not desirous of extending the Tenancy to which the Plaintiffs have replied;
reference was made to a letter dated 4-8-2020 by the Defendants and the reply by the Plaintiffs’ lawyer dated 7-8-2020. The 2 partners ought not to have taken any action while OS 136 was pending and it was an attempt to pre determine OS 136;
Ang had given notice of extension to the Defendants; and
he had ensured all rentals were paid. Ang undertook to comply with the Tenancy and the payment of rental.

The Defendants’ affidavit in reply

In the Defendants’ affidavit in reply:

the Defendants raised Preliminary Objections (PO) on the locus of the Plaintiffs to bring this current Originating Summons (OS) where the 1st Plaintiff was not party to the Tenancy and the 2nd Plaintiff as a partner ought to bring the OS in the name of the firm or the name of all partners; 如果是合伙人，全部的合伙人必须是原告或者必须以合伙人的名誉告对方。
with regard to the matters raised on OS 136 and action taken by Mok and Loo, it was stated the Defendants were not parties in that OS and it was not relevant in this current OS and any action by Mok and Loo did not involve them;
the Defendants had issued various letters to the Partnership. By letter dated 4-8-2020, it stated its intention not to extend the Tenancy due to the failure to give the requisite written notice to extend and for vacant possession to be delivered on 31-8- 2020. There was a reply dated 5-8-2020 that the Partnership would not be extending the Tenancy. There followed a letter dated 17-8-2020 confirming the termination and a reminder to vacate and a further notice of termination dated 18-9-2020 and notice until 31-10-2020 to vacate;
there was no notice to extend 3 months prior to the expiry received from the Partnership or even that Ang had given such notice. 租客没有给预先续约通知。
at all material time, the rental under the Tenancy was paid by the Partnership and not by Ang acting in his personal capacity.

Plaintiffs’ affidavit in reply

In the Plaintiffs’ affidavit in reply, it was stated it had 2 months before 31-8-2020 informed of its intention to extend the Tenancy and any need for a written request is an afterthought. The Defendants were still receiving rental. The action of the Defendants was to decide on the legal status of the Partnership and to be involved in the partnership issues between Ang, Mok and Loo.

Issue

The prayers being sought was in terms of the Defendants not being entitled to terminate the Tenancy which requires this Court to consider the option to extend as per the Tenancy and the sub issue is whether acceptance of rental for September and October 2020 can give rise to estoppel. 业主是否没有权利取消租约，是否必须续约。业主继续接受租金是否意味接受租客可以续约。

The parties to the Tenancy were the Defendants as the Landlord and Wu Pang Kopitiam (which has thus far been referred to as the Partnership) as the Tenant.
Thus if any party has the locus to bring an action against the Defendants to essentially enforce the Tenancy, it would have to be the Partnership or by all the 3 partners. However this was not done so as this OS was instituted by Ang in his private capacity and his capacity as a partner in the Partnership. 如果是你的企业是合伙企业，你是想起诉对方，你必须以合伙企业的名誉(partnership)或者以全部的合伙人的名誉去起诉对方，你是不能以一个合伙人的名誉去起诉对方的。
In this regard Order 77 Rule 1 of Rules of Court 2012 provides as follows-

“Action by and against firms within jurisdiction (O. 77,r.1)

1. Subject to the provisions of any written law, any two or more in respect of a cause of action and carrying on business within the jurisdiction may sue or be sued, in the name of the firm, if any, of which they were partners at the time when the cause of action accured.”
2. In Amir Shariffuddin Abd Raub & Anor v. Affin Bank Berhad [2020] 2 MLRH which in turn referred to 2 other cases which all concluded that any action on behalf of a partnership must be in the name of the partnership or in the names of all its partners:-

“[18] It is trite law that if a claim is made on behalf of a partnership, the action must be brought in the names of the firm or in the names of all its partners. This has been stipulated in several cases including ST VR Veerappan & Ors v. Arunachalam Venkatachalam & Ors [2014] MLRHU 1558, in the words of S Nantha Balan JC (now JCA):

But it is clear that as a matter of law, when an action is made on behalf of a partnership, the action should be in the name of the firm or failing that in the names of all the partners of that partnership. Otherwise the action is fatally defective and ought to be struck off.

The application to strike out stands or falls on that sole issue. In my view, the objection to the plaintiffs’ locus standi has been validly taken. As this action had all the trappings of an action on behalf of a partnership, and as not all the persons who formed the partnership of Muthiah Brothers are before the court, I am of the view that the action is defective and ought to be struck out accordingly.”

[19] I also find instructive the cases of MK Varma & Anor v. KM Oli Mohamed [1950] 1 MLRH 236 and Khan Kam Chee v. Loke Wan Yat Realty Sdn Bhd [1984] 1 MLRA 92, where, in the latter case, it was stated by Wan Suleiman FCJ:

The vital issue is whether appellant could still sue on the option agreement or whether he had by entering into the partnership agreement divested himself of the right to litigate in favour of the partnership arising out of the latter agreement

…

… The appellant, suing on his own, would be in much weaker position because having divested himself of the right to sue in his own capacity, he could not hope to succeed in any action which in effect is on behalf of the partnership and on the strength of the champertous partnership agreement.

… Having divested himself of the right to sue in his personal capacity he was the wrong plaintiff.”.

Where Order 77 Rule 1 RC 2012 had not been complied with, Ang in his private capacity as the 1st Plaintiff or Ang as a partner in the Partnership, clearly lacked the locus to institute this OS.
With leave of the Court, the Plaintiffs were allowed to further refer to an authority for the proposition that one partner can represent the partnership and/or sue in its own name. The 1st case was Dubois and Others, Assignees of Schroeder v Ludert 5 Taunt 609 and at page 829-

“If a Plaintiff sues a Defendant, with whom alone he believes he has contracted but who in truth has a dormant partner, the Defendant may plead in abatement that his partner ought to be joined, in order to compel a new action against the two, in which they may set off a debt contracted by the Plaintiff, as the Plaintiff believed, to the other partner alone, but which both partners are, in truth equally interested.”.

The Court was of the considered opinion that Dubois was not an authority to say that one partner can bring an action. What it said was that if a person dealt with another and it turned out that the person had a partner then that partner may be brought in without the necessity of a new action. This was made clear in the very beginning where “If a Plaintiff sues a Defendant with whom alone he believes he has contracted, but who in truth has a dormant partner, the Defendant may plead in abatement that his partner ought to be joined” and the last 2 lines “we ought to relieve the Plaintiff from the necessity of bringing such new action”.
The 2nd case referenced was the Court of Appeal case of Venu Nair & Anor v Public Bank Bhd. [2017] 6 CLJ 211:

“Order 77 of the Rules of Court 2012 contain specific rules on actions against and by partners and their firms. These procedural rules provide that claimants are at liberty to sue the partnership as a firm or the several partners of the firm. Where the partners are sued as partners in the name of their firm, or where the writ is served personally on the partners, these affected partners are obliged to enter appearances in their own names and not that of the firm.”.

It was stated although that passage was from a dissent it was but an explanation to Order 77 RC 2012.
The Court found that the above passage did not lay down the proposition that 1 partner can sue in its own name without naming either the firm or the other partners. That was a case where liability had been established against the firm and the partners and as the partners had not been sued personally, the respondent had to apply to enforce the judgment against the partners personally.
The PO was thus allowed on the basis that the Plaintiffs lacked the locus to institute this OS such that the OS can be dismissed on this ground alone.

Merits of OS

If the Court was wrong to allow the PO, it now considers the merits of the OS.
To recapitulate, the main issue was whether the Defendants could exercise its option not to extend and/or terminate the Tenancy.
Clause 2(a) read with sections 5 and 6 of the First Schedule to the Tenancy provided that duration of the Tenancy was for 3 years from 1-9- 2017 to 31-8-2020. Clause 6.1 provided that the Landlord shall upon written request being made by the Tenant at least 3 months prior to the expiry of the term and subject to due compliance by the Tenant, grant a further term as stated in section 10 of the First Schedule. This further term is 2 years from 1- 9-2020 until 31-8-2022, which is what the Plaintiffs are seeking in this OS.
From the affidavits, it was clear the Partnership as the Tenant had not given any 3 months notice of its intention for an extension prior to the expiry on 31-8-2020. If as alleged by Ang he had given notice, that notice would in all probability be oral as no such written notice was produced before the Court and by its allegation that the requirement for a written notice was an afterthought. Such an allegation flies in the light of the clear provisions of the Tenancy.
It was therefore under the circumstances of no notice for extension that the Defendants were entitled not to extend the Tenancy. This is clear from its letter dated 4-8-2020 that it had not received such a notification and “In this view we decided not to continue the above premises tenancy agreement” and “the last day of tenancy shall be 31 Aug 2020”.
The Defendants then received a letter dated 5-8-2020 from the Partnership that it agreed not to renew the Tenancy and for the deposit to be refunded and that its partner Ang had occupied the premises without the consent of the Partnership. As such, it was well within the Defendants’ right to send a letter dated 17-8-2020 that both parties would terminate the Tenancy after 31-8-2020 with immediate effect and the premises to be vacated on or before that date. As this was not done, a letter dated 18-9-2020 was sent that as monthly rent had been paid a monthly periodic tenancy had been created; and it was terminated and the premises was to be vacated on/before 31-10-2020.
The letters dated 4-8-2020, 17-8-2020 and 18-9-2020 were such that on there being no 3 months written notice prior to the expiry of the Tenancy, the Defendants were acting in accordance with the terms of the Tenancy in not extending upon expiry and ultimately terminating the monthly tenancy. Refer to RHB Bank Berhad v Hiap Leong Trading Sdn. Bhd. [2011] 5 MLJ 326, for the principle on whether a new as opposed to or monthly tenancy has been created.

Effect of receipt of rental

As to the receipt of rental for September and October 2020, the position of the Defendants was that it only had the effect of creating a monthly tenancy. This was accepted by the Court as it was consistent with the letter dated 18-9-2020 stating that upon expiry during the period of holding over, the Partnership’s agreement to pay rental created a monthly tenancy which was terminated and notice to vacate on/before 31-10-2020 was given. There was no estoppel created or that Section 42 of Contracts Act 1950
With leave of the Court, the Plaintiffs referred to Inter-Sports Marketing Sdn Bhd v Ng Chin Chai & Anor [2015] 10 CLJ 29 for the proposition that the acceptance of rent meant the Defendants could not resile from such an arrangement and that the Tenancy has been novated.
That case concerned the Badminton Association of Malaysia suing through Ng Chin Cai for a sum due under a marketing agreement with the defendant/appellant. It was not disputed the defendant had sub licensed its rights under the marketing agreement to Sports Media Production (SMP) and that a sponsorship agreement was entered into between Proton and First Events Promotions Sdn Bhd (FEP). The evidence showed that the plaintiff had received sums of money from FEP. The Court of Appeal found it inconceivable that the plaintiff did not know that the rights previously contracted to the defendant had been taken over by FEP and that the plaintiff had agreed to the rights and obligations under the marketing agreement being taken over by FEP. It was in that context that the Court of Appeal held:

“(4) The plaintiff had agreed to the rights and obligations under the marketing agreement to be taken over by FEP. As such, Section 42 of the Contracts Act 1950 applied. The plaintiff, being the promisee under the marketing agreement, had accepted the performance of the promise from FEP. The plaintiff could not thereafter enforce that promise against the defendant.”

In our present case there is a clear letter from the Defendants that the payment of rent had created a monthly tenancy which was terminated and a notice to vacate was on/before 31-10-2020. Under the circumstances this Court refers to RHB Bank Berhad (supra) where the Court of Appeal held that by accepting the rent after the expiry of a tenancy without protest didn’t mean that a new fixed term tenancy is created from the option clause. The Court held that it was only a monthly periodic tenancy as the monthly rent and the proposed new term had yet been agreed by the parties.
Clause 4.14 read with clause 18 of the Tenancy provided that the Tenant was not to assign without the prior written consent of the Landlord. It could not therefore be said the Tenancy had been assigned by the receipt of rentals.
Section 42 of the Contracts Act which provides that when a promisee accepts performance of the promise from a third party he cannot afterwards enforce it against the promisor, does not apply where there was no acceptance of any promise.

OS pre determing OS 136

It was the contention of the Plaintiffs that the Defendants in terminating the Tenancy were inter meddling in the affairs of the Partnership and pre determining the outcome of OS 136. Such a contention holds no merit as the Defendants are not parties in OS 136 and are not involved in the actions of Mok and Loo. OS 136 will have to run its own course.
The Plaintiffs did send a letter dated 7-8-2020 in response to the Defendants letter dated 4-8-2020 not to renew. That letter stated that Ang was in active operation of the Partnership and the issues of the Partnership was for the Court to resolve. On the other hand, the Defendants also received a letter dated 5-8-2020 from the majority partners not to renew. Hence the Defendants could proceed and can further rely on its latter dated 18-9-2020.

Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (Act 829)

It was submitted that Act 829 does not allow for termination wherein Section 7 provides that the inability to perform contractual obligations shall not give rise to the other party exercising its rights under the contract. Read together with Section 29, it was to apply from 18-3-2020 until 31-12-2020.
The finding of the Court as set out earlier was that the Tenancy had expired on 31-8-2020 due to no 3 months prior notice to renew followed by a monthly tenancy being terminated by letter dated 18-9- 2020.
Taking the Plaintiffs’ argument and either date to be the date of termination, Section 7 and section 29 of Act 829 will still not apply. This is due to the saving provision of Section 10 where any contract terminated for the period of 18-3-2020 until the date of publication of the Act, which is 23-10-2020, shall be deemed to have been validly terminated. The dates of 31-8-2020 and 18-9-2020 are within the period stated in the saving provision.
Section 29 which states for the operation of Part X to be from 18-3-2020 until 31-12-2020 when read together with Sections 30 and 31, does not apply. This is because that Part X deals with modification to the Distress Act 1951, which is not the situation here. It may well be that no writ of distress can be issued, but it does not negate the actions of the Defendants.

Other prayers on injunction

As the OS was found lacking in merits where prayer 1 and 2 was not allowed, it followed the other prayers on injunction would not be allowed.

Conclusion

For the above reasons, the PO of the Defendants was allowed where the Plaintiffs lacked locus and in any event there was no basis to the OS. Enclosure 1 was thus dismissed with costs.

Source: Ang Pi Kui & Anor v Lee Wee Teck & Anor [2021] MLJU 102. High Court Johor Bahru. See Mee Chun J.

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