You are on page 1of 10

Lease and Tenancy

Woo Yew Chee v. Yong Yong Hoo [1979] SC


Held:
- On whether the transaction is a licence or a tenancy, the law will always look beyond
the terminology of the agreement to the actual facts of the situation. It is no longer a
question of words, but substance. It is no longer a question whether the occupation is
permanent or temporary. All these are factors which may be relevant in arriving at a
decision whether a particular transaction is a licence or a tenancy but none of them is
conclusive.
- The ultimate test is the nature and quality of the occupancy: whether it is intended that
the occupier should have a stake in the premises sub-let or whether he should have
only a personal privilege to personally occupy the room, under contract or not.
- Here: in the agreement the appellant was described as ‘the chief tenant’ and the
respondent as ‘the subtenant’ although there was no clear evidence to show that
appellant was such as that described in the document.
- There were provisions that seem to the court to point to a tenancy. Looking the terms
in agreement as a whole, the court found that in fact that a relationship of landlord and
tenant was intended.
- There was a clause which expressly permitted the chief tenant to enter on the premises
to inspect its condition, which would have been unnecessary had they had a right to
enter on the premises apart from the agreement.
- There was a covenant for quiet and uninterrupted enjoyment by the grantee, a
covenant appropriate to a lease but not appropriate to a licence.
- There was also a term for re-entry upon breach of covenant, which is a term
appropriate only to a tenancy.
- There was, further, a term permitted the sub tenant to assign, sub-let or part with
possession of the demised premises with written consent of chief tenant. That is an
element which may be taken into account when determining whether any particular
agreement is a licence or a tenancy, because a tenancy involves an interest in land,
and it is normally characteristic of that interest that it is assignable
- whether or not an arrangement constitutes tenancy or licence is no longer a matter of
exclusive possession, or even any of the traditional indicators of tenancy, but simply
that of the intention of the parties.
- A purported sub-lease not in statutory form was good as an agreement for a sub-lease
and specifically enforced it.
- Here, the purported sub-lease would be treated as an agreement for a sub-lease and
since it had been partly executed by possession having been taken under it, the
equitable remedy of specific performance would be peculiarly appropriate
Kandasami v. Mohamed Mustafa [1983] PC
Facts: The plaintiff in the action is in occupation of restaurant premises at No. 43 Penang
Street, Penang. He claims to be in possession as tenant, and therefore to be within the
protection afforded by the Control of Rent Act 1966. The defendant claims that the plaintiff is
only a licensee, whose licence has been determined. The High Court judge decided that there
was a tenancy while the Federal Court decided that there was a licence. The plaintiff now
appeals.
Held:
- The court found that based on the credibility of the witness, the plaintiff pursuant to
an oral agreement made in March 1970 went into occupation of the ground floor of
No. 43 Penang Road in April, and thereafter carried on the business of an eating shop
on his own account.
- In the agreement, Clause I then contains the grant of a term of one year in language
which is wholly appropriate to a demise and wholly inappropriate to the grant of a
licence.
- Intention can be construed from the agreement or conduct of the parties.
- In their Lordships' view it is the habendum and not clause 5 which is decisive. Except
for clause 5, every recital and every clause of the July Document is either inconsistent
with the grant of a licence or is neutral. Clause 5 is out of step with the rest of the
document. It seeks to attach a label of "licence" to a document which plainly is not a
licence. It fails in that objective. The label does not attach.
- In March 1971, when a dispute arose as to arrears of rent, the defendant applied to the
magistrate's court for a warrant of distress for rent, a procedure which would not have
been available to a licensor.
- On May 26, 1972 the defendant's former solicitors wrote to the plaintiff to give notice
to quit and deliver up possession of the said premises.
- On July 18, 1972, which was 10 months after the issue of the writ in this action, the
defendant issued a summons in the Sessions Court to recover possession of the
premises
- In the light of these later events, it is difficult to suppose that the defendant then
thought that he had grant-ed to the plaintiff a mere licence to occupy the ground floor
of No. 43.

Siew Soon Wah v. Yong Tong Hong [1973] PC


Note: A definte period – capable of being ascertained – a lease in perpetuity cannot be
granted – for a maximum 99 years for the whole land. (30 years for lease of a part of land)
Facts: The respondent had occupied certain premises and alleged that it was agreed with the
landlords that the tenancy should stay for as long as the respondent wished to occupy and that
the landlord should not increase the rent as he liked or eject the tenant by force. The
respondent had paid the sum of $8000 to the landlord as consideration. It was held by the
Federal Court that the agreement was one for the grant of as long a lease as the law allowed,
that is thirty years. The appellants appealed.
The appellants sought inter alia an order that the respondent should vacate the ground floor of
No. 61 Jalan Pasar Bharu, Pudu, Kuala Lumpur and should pay the appellants double rental
from 1st December 1966 until vacant possession was given. They contended that the
respondent's tenancy had been determined by notice to quit.
The respondent alleged that there had been no increase in the assessment on the premises
since that date and that it was entitled to continue in possession of the ground floor at a
monthly rent of $200 if there was no increase in the assessment, for as long as it wished. The
respondent sought specific performance of this agreement.
Held: dismissed the appeal
- the agreement was not so vague and uncertain as to be void for uncertainty.
- The meaning of the words ‘to rent so long as they wished’ was the same as ‘the
tenancy shall be permanent’
- The intention clearly was that the landlord should let the premises to the respondent
for as long a period as it was within his power to do so and that he should not be able
to eject the respondent so long as he paid the stipulated rent and that the respondent
should be entitled to occupy the property so long as he wished and so long as he paid
the rent.
- Section 47 of the Land Code (Chapter 138) of 1928 provided that no lease executed
after the Code came into force should be for a longer period than thirty years and
section 221(3) of Act No. 56 of 1965 provides that the maximum period for which
land can be let which does not consist wholly of alienated land - and the premises here
did not consist of such land - is thirty years. So it was not in the landlord's power to
grant the respondent a lease for more than thirty years.
- Is the respondent entitled to specific performance of that agreement?
- In this case the respondent occupied the ground floor since February 1958 and paid
rent therefor. In Febru-ary 1958 he paid the sum of $8,000 to his landlord. He cannot
have done that for a tenancy of short duration. It must have been paid in consideration
of the tenancy described in the agreement of 1st June 1964.
- In these circumstances there arose in the respondent's favour an equity or equitable
estoppel protecting his occupation of the ground floor for the period of thirty years,
that is to say, until the 28th February 1988.
Restrictions
- In favour of whom? – s.43 and s.433(b)
- Cannot be granted to 2 or more persons other than as trustees or representatives – s.25
- If the land subject to charge, written consent of charge must be obtained before the
lease or tenancy may be granted – s.225 & s.226
Effect of Registration of Lease
- s.227(a)
- a lease will have legal effect upon registration – becomes a registered interest –
indefeasible
- upon registration, the lessee will obtain an interest in the land/property [not title]
- the right of the lessee can be enforced against the whole world, granted priority
- land search-public notice [the importance of registration]
Effect of Non – Registration of Lease
S206(1)- the general rule is it must be registered.
S206(3)- exception:
Good and valid as an agreement for a lease
Rights ad rem (personal rights) v rights in rem (real rights)
Specific performance or damages may be granted
Margaret Chua v. Ho Swee Kiew [1961]
Facts:
- appellant was the registered proprietor of 2 pieces of land
- Respondents – carried out the business of coffee shop on the appellant’s alnd
- Appellant entered into an agreement with the respondents- in writing – where the
respondents were to borrow 30k to the appellant for the building of two shophouses
and in return, a lease of the shophouse and the first floor of the second shophouse was
to be granted to the respondents for 25 years
- Appellant charged the land by way of security for a sum 40k borrowed from OCBC
- Respondents went into occupation and remained in occupation for a number of years
– money were regularly paid and deduction from rent for repayment of loan.
- No steps, however, were taken by the appellant to execute a registrable lease in
accordance with the provisions of the Kedah Land Enactment or to obtain the
necessary consent of the Bank as chargees to the granting of any such lease, although
the respondents claimed that they made frequent verbal requests for this to be done.
- On 22nd December, 1959, the appellant paid off her loan of $40,000 from the
Oversea-Chinese Banking Corporation and on the following day the Bank granted a
discharge of the charge dated 11th March, 1952.
- On 23rd December, 1959, the appellant executed a registrable transfer in respect of
the land comprised in Surat Putus No: 61830 in favour of one Teoh Kim Im for a
consideration of $45,000 and the following day, 24th December, 1959, the purchaser
gave the respondents notice to quit.
Held:
- The agreement was clearly incapable of registration as a lease as it contradicts s 53 of
the Kedah Enactment that all such land cannot be leased or otherwise dealt with
except in accordance with provisions under the act, i.e. that any lease for a term
exceeding one year must be in the statutory form and must be presented for regis-
tration together with the issue document of title.
- However, the statutory form is in the Malay language written in the Jawi script and
bears no resemblance to the agreement of 22nd December, 1951. The section also
provides that no lease of land which has been charged shall, if presented, be registered
until the chargee has signified in writing his consent to such a lease.
- Therefore, it was incapable of conferring upon the purported lessees any real interest
in the land and so as a lease it was a nullity.
- However, the court is of the view that that although the agreement might be a
nullity as a lease, it could be a good enforceable agreement for a lease under
which the appellant as registered proprietor had undertaken the obligation to
grant a lease, and it may be enforced in equity by a decree of specific
performance.
- Again in the Perak case of Bachan Singh v Mahinder Kaur [1956] MLJ 97 I myself
made the following observations from which, on reflection, I see no reason to depart:-

"To my mind, many of the difficulties which appear to arise in these cases would not
arise if we were to bear in mind throughout the distinction between rights ad rem or
personal rights and rights in rem or real rights. Where there is a valid binding
contract for the sale of land, the purchaser, when he has performed his side of the
contract, acquires a right ad rem which is also a right in personam. In other words,
he acquires a right to the land as against the vendor personally but not good against
the world as a whole and, in due course, that right can become a real right good
against the world as a whole on registration in accordance with the Land Code."

That was a case where it was said that a registrable transfer in the statutory form must
be treated as prima facie evidence of an antecedent oral contract to sell the land.
- In the present case, there is no question of a registrable instrument in the statutory
form and of course there is no question of an oral contract. There is, however, a
written contract and in my view it is a binding contract. It is a contract with which the
appellant has failed to comply and of which she is clearly in breach. In the
circumstances, in my view, the respondents are entitled to their remedy.
- The respondents would have been entitled to an order of specific performance but that
such an order could not be made by reason of the registered interest which Teoh Kim
Im had acquired in part of the land.
- The court affirmed the judgment of the court below to give judgment in favour of the
respondents for $21,900 being the unpaid balance of the debt and for damages for
breach of contract.
Ho Ying Chye v. The Cheong Huat [1965]
Notes: an unregistered lease confers no legal estate in the demised premises and does
not bind a subsequent registered proprietor.
Facts: The plaintiff [the new registered proprietor] claimed possession of premises which
were occupied by the defendant. The premises were originally purported to be let by the then
landlord for a period of two years from September 1, 1957. The premises were subsequently
assigned to the defendant. The lease agreement was not in the form of Schedule XXII to the
Land Code and therefore could not and was not registered under the Land Code. The plaintiff
who had become owners of the property gave notice to quit and on the expiry thereof claimed
possession. The defence relied on by the defendant was that in view of the valuable
consideration given to the previous owner it was agreed that the tenancy would not be
disturbed.
Held:
(1) the agreement in this case was an attempt to pass an interest in the premises and as it
was not registered under the Land Code it was unenforceable;
(2) the agreement in this case would not be construed as an enforceable contract as on the
proper construction of the agreement it was an attempt to pass an interest in the premises;
in the circumstances the defendant was a tenant at will and as such his tenancy could be
determined by a demand for possession
- The said agreement (the purported lease) was not in the form of Sch XXII and
therefore could not be and was not registered under s 116 of the Land Code. As such
it was ineffectual to vest the interest in the said premises to the def under s 96 of the
Land Code. It is therefore clear that it conferred no legal right in the said premises
which remained, after the transfer to the plaintiff duly registered, as the unburdened
property of the pf.
- Be that as it may, the court when on to the issue whether there is a contract subsisting
between the pf and the def.
- There are other cases which have held that although the transfer of land or any interest
therein would be ineffectual to pass the legal estate, the question arises as to whether
there would be an enforceable contract. (If yes, then the contract might be enforced)
- And that turned on to the question whether on the proper construction of the said
agreement it was an attempt to pass the interest in the said premises to the defendant.
If that was so, it would still be caught by the provisions of the Land Code requiring
registration.
- Reading the agreement as a whole, the court concluded that the said agreement was
indeed an attempt to pass such interest in the said premises to the defendant and is
therefore not enforceable because of non registration under some provisions which
say such agreement must be registered to be enforceable.
- The court distinguished the PC cases of Haji Abdul Rahman and the CoA case of
Margaret Chua. In both of these cases the agreements were held to be enforceable on
the ground that they were not construed as attempts to pass the lands or interests
therein but were mere conveyances for loans on the security of the lands
- Accordingly, the agreement cannot be regarded as an agreement for a lease carrying
with it an equitable interest in the said premises.
- the defendant has merely a tenancy at will and such tenancy can be determined by a
demand for possession and that the notice to quit dated 20th December, 1963 is a
sufficient demand for possession so as to terminate the defendant's tenancy.
- it may be observed that the defendant has admitted that he was a monthly tenant and
therefore the plain-tiff's notice to quit dated 20th December, 1963, terminating the
tenancy on 31st January, 1964, would be an adequate notice.

S&M Jewellery Trading Sdn Bhd v Fui Lian-Kwong Sdn Bhd [2015] MLJU 518
FC: a lease or sub-lease is not rendered void by reason of non-registration but is imperfect
without registration. Unless perfected, it will not operate to transfer interest to the lessee or
sub-lessee. Where appropriate, equity may treat agreement for lease as an equitable lease.
Endorsement of tenancy
S 213(3)
Than Kok Leong v. Low Kim Hai
Facts: The pf is the current registered proprietor of the premises. At the time of the purchase,
the df was a tenant of the former registered proprietor paying a rental of 950 per month. The
pf gave notice to quit for vacant possession to the df but the df refused to quit. The df
contended that the tenancy is a lease pursuant to an oral agreement made between him and
the former landlord who had granted him an oral lease for a period of three years with an
option to renew for the same period of three years to be exercised by him. The counsel for the
defendant also contended that a purchaser is bound by all equities enforced against the
previous landlord. Actual notice of occupation or possession amounts to constructive notice
of the extent and interest of the person in possession.
The issues before the court is whether the df is a lessee of the said premises pursuant to an
oral lease alleged to have been granted to him by the formal landlord. If so, what is the effect
of an oral and unregistered lease? Further, if there was such an oral agreement, then the
next question is whether the pf is bound by such an agreement.
Held: Taking the evidence as a whole and in particular that the df had spent 8,000 to renovate
the premises after several meetings he has had with the former landlord and the son, on the
balance of probability there was an oral agreement for lease for a period of three years with
an option to renew made between the defendant and the former landlord.
As to whether the pf is bound by the agreement, the court held that the defendant has failed
to endorse the tenancy, although such endorsement by itself is not to be taken as
‘confirming the validity in respect’ of the claim, hence under s.213(3) this oral
agreement is not binding on the pf. Likewise, s.282(2) provides that any option
conferred by any oral tenancy shall be unenforceable.
Notice, whether actual or otherwise, on the part of the purchaser of the tenancy agreement
would appear to be immaterial in the absence of any such endorsement. The doctrine of
equitable notice as found in English law has no application in land dealings in Malaysia (s.6
Civil Law Ordinance)
The law governing this particular case is NLC and s.213(3) does seem to me to impliedly
exclude the question of knowledge or notice actual or constructive, because it says that
‘unless, prior to the date on which the dealing referred to, the tenancy had become
protected by an endorsement on the register document of title’.

Hotel Ambassador SB v. Seapower SB


Facts: The appellants, the hotel proprietors, entered into possession of a 11-storey building
pursuant to a lease and annexure executed between the appellants and the proprietors of the
said property. The lease was for ten years with an option for renewal. At the expiry of the
lease, the option for extension was never exercised but the appellants continued occupation of
the said property. Subsequently, the property was sold to the respondents by public auction
after a foreclosure action by the chargee of the property. The certificate of sale was duly
issued by the senior assistant registrar of the High Court. The respondents thereupon applied
for possession of the property but was dismissed by the High Court. Appeal to the decision
was abandoned.
The appellants later applied for a declaration that they were the lawful tenants of the said
property and for a restraining order against the respondents. The restraining order was
granted. The respondents then applied to set aside the restraining order and after a hearing
inter partes, the learned judge of the High Court discharged the order and also made an order
for vacant possession of the property to be given to the respondents. The appellant appealed.
The appellant content that the claim for vacant possession was barred by res judicata estoppel
because of the earlier decision of High Court and the subsequent withdrawal of the appeal
against that decision.
Held: There can be no estoppel as against statutory provisions. It is not disputed that the
application for renewal according to the renewal clause under the annexure to the lease in
question was never exercised by the appellants. Under the lease they had six months before
the expiry of their tenancy to give notice in writing of their desire to renew. It is not disputed
that the appellants continued to be in occupation after the expiry of the initial term of ten
years without ever exercising the option either in the manner or within the time specified in
the lease or at all.
They continued to occupy the said property on a monthly tenancy since the rental payable
with reference to the month. However, it must be understand that in the first claim, the
ownership of the said property had already passed to the respondents. It is not correct to say
that the abandoning by the previous owners of the claim for possession should be construed
so as to create a further tenancy for they were then no longer the registered owners of or have
any interest in the said property.
Section 267(2) further provides that notwithstanding that it was granted with the consent in
writing of the chargee, no tenancy exempt from registration granted by the chargor after the
date of registration of the charge shall be binding on the purchaser unless prior to the date of
registration of the certificate of sale, the tenancy had become protected by an endorsement on
the register document of title. This statutory provision is crucial in this case because it is not
disputed here that there was no endorsement of any tenancy.
Since the appellants' lease expired on 21 June 1976 after which they held over as monthly
tenants and the charge which resulted in the sale was registered on 15 May 1982, the tenancy
would not bind the respondents until the tenancy has become protected by endorsement prior
to the date of registration of the certificate of sale.
Section 267(2) of the Code is an explicit statutory provision and its language clearly requires
it to be strictly enforced.
' ... unless so protected, a tenancy exempt from registration, granted after the commencement
of the pre-sent Code will be defeated not only by a subsequent registered dealing but also by
a subsequent statutory lien and even a subsequent tenancy both the later being non-
registrable'.
Formality of endorsement
S316- application for endorsement
S317- procedure for endorsement

RIGHTS AND OBLIGATIONS OF PARTIES


Expressly provided by agreement, or implied by law
S229(1)- lease may include the provisions in 6th Schedule
2 types of implied agreements:
1. S230- which must be read into every lease/sublease
2. S231&232- which are to be implied only in the absence of any express provision to the
contrary
S230(1) payment of the rent by the lessee or sublease regardless got express condition or not
S230(2) payment of all rent by the lessor that is due to the State Authority
S231(1) lessee/sublessee
a) to pay all rates and taxes and outgoings except for the rent due to State Authority
b) to keep the demised property in repair
c) to permit the lessor/his agent to enter the demised property
d) not to transfer/ charge the lease/sublease without prior written consent of the lessor
(meaning lease/sublease can be transferred)
2 ways lease or sublease can be transferred
1. agreement
2. operation by law
i) upon the death of lessee/tenant (representative)
ii) lessee/tenant declared bankrupt (official assignee)
s232(1) lessor
(a) must allow the lessee to peaceably and quietly possess and enjoy the demised property
(b) to keep, if the lease relates to part of the building, in repair the roof, main walls and main
drains and any common passages etc
(c) to able the rent if the demised property is rendered wholly/partially unfit for occupation
Inwards v. Baker [1965] 2 WLR 212
- Where a person expended money on the land of another in the expectation, induced or
encouraged by the owner of the land, that he would be allowed to remain in
occupation, an equity was created such that the court would protect his occupation of
the land, and the court had power to determine in what way the equity so arising could
be satisfied.