Rohasassets Sdn Bhd (formerly known as Wisma Perkasa Sdn Bhd) v Weatherford (M) Sdn Bhd & Anor  [2020] 1 MLJ 557

Federal Court (Putrajaya)

Claim for double rent from tenants 

1. The Appellant had leased three floors of its commercial building to the Respondents under separate tenancy agreements. These tenancies expired on 31 March 2009, 30 April 2009 and 31 January 2011 respectively. Prior to the expiry of the tenancies, the parties entered into negotiations for renewal. The negotiations continued even after the tenancies had lapsed, during which time the Respondents remained in occupation of the premises and continued to pay rent, which the Appellant accepted.
2. When the negotiations eventually broke down, the Appellant formally terminated the tenancies and issued notices requiring the Respondents to quit and deliver vacant possession of the premises by 1 October 2011. However, the Respondents vacated the premises only on 31 October 2011.
3. The Appellant commenced proceedings claiming double rent under paragraph 28(4)(a) of the Civil Law Act 1956 for the period from the respective dates of expiry of the tenancies until 31 October 2011. The High Court dismissed the claim. On appeal, the Court of Appeal allowed the Appellant’s claim for double rent but only for the period from 1 October 2011 to 31 October 2011. The Court of Appeal did not disturb the High Court’s finding that the Respondents’ continued occupation was not wilful or contumacious.
4. In the present appeal, the central issue was whether a landlord claiming double rent under paragraph 28(4)(a) of the Civil Law Act 1956 must prove that the tenant’s holding over after expiry of the tenancy was wilful or contumacious. The Appellant contended that proof of such conduct was unnecessary and that liability for double rent arose simply upon holding over after expiry. The Respondents, however, argued that double rent is penal in nature and that the term “holding over” implies wrongful, wilful or contumacious conduct. They further submitted that, since the Appellant had permitted them to remain in occupation during the renewal negotiations and had accepted rental payments without objection, the claim for double rent ought not to succeed.

1. The Federal Court clarified the proper interpretation of paragraph 28(4)(a) of the Civil Law Act 1956 in relation to claims for double rent. In regard to the central issue, the Federal Court held that there is no such requirement.  The wording of paragraph 28(4)(a) merely refers to a tenant “holding over after the determination of his tenancy” and does not incorporate the word “wilfully”, unlike section 1 of the English Landlord and Tenant Act 1730.  The Federal Court observed that the English position, as interpreted in Crook v Whitbread (1919) 88 LJKB 959, required proof of “wilfully and contumaciously” holding over because the statute expressly used the word “wilfully”.  In contrast, the Malaysian legislature deliberately omitted such language indicating a stricter and clearer statutory scheme.
2. In addressing the earlier Malaysian authorities, the Federal Court analysed Krishna Sreedhara Panicka v Chiam Soh Yong Realty Co Ltd [1983] 1 MLJ 65, Wee Tiang Yap v Chan Chan Brothers [1986] 1 MLJ 47 and Soong Ah Chow & Anor v Lai Kok Cheng [1986] 1 MLJ 42.  While Panicka (by majority) appeared to adopt the reasoning in Crook v Whitbread and suggested that contumacious conduct was required, the Federal Court in this case clarified that the decision in Panicka ultimately turned on its particular facts, especially the finding that it would have been unconscionable to award double rent from the earlier date.  The dissent of Wan Suleiman FJ in Panicka, which rejected the need to import the English requirement of wilfulness into paragraph 28(4)(a), was noted with approval. Furthermore, in Wee Tiang Yap and Soong Ah Chow, the former Federal Court did not treat proof of contumacious conduct as a prerequisite for double rent. Instead, liability arose once the tenancy had expired and the tenant remained without right.
3. The Federal Court therefore held that liability under paragraph 28(4)(a) does not depend on proof of stubborn, wilful or contumacious behaviour. Rather, the operative consideration is whether the tenant remained in possession without the landlord’s consent after the determination of the tenancy. Paragraph 28(4)(a) confers upon the landlord a statutory option to charge double rent and the Court’s function is limited to determining whether that option has been properly and lawfully exercised.  If the landlord clearly does not consent to continued occupation and requires the tenant to vacate, double rent becomes chargeable until possession is delivered.
4. However, the Federal Court emphasised that “holding over” simpliciter is not sufficient if the landlord has, by express agreement or by conduct, consented to the continued occupation.  Where the landlord engages in negotiations for renewal and continues to accept rent without requiring vacant possession, such conduct may amount to implied consent, rendering the tenant a tenant at will, rather than a tenant at sufferance.  In such circumstances, double rent is not chargeable during the period of consent. Applying this principle, the Federal Court held that the Respondents were holding over with the Appellant’s tacit approval during negotiations and only became trespassers upon expiry of the notices to quit.  Accordingly, double rent was only chargeable for the period after the notices expired.
5. Therefore, paragraph 28(4)(a) of the Civil Law Act 1956 does not require proof of wilful or contumacious conduct. Instead, liability for double rent arises where a tenant remains in possession after the determination of the tenancy without the landlord’s consent and after being required to vacate. The focus is on absence of consent, not on the moral quality of the tenant’s conduct.

The Federal Court dismissed the appeal and affirmed the decision of the Court of Appeal with costs.

A landlord who intends to rely on paragraph 28(4)(a) of the Civil Law Act 1956 must clearly communicate refusal to allow the tenant to remain and must avoid conduct that may amount to implied consent such as continued acceptance of rent without protest. Conversely, where negotiations for renewal are ongoing and rent is accepted, the tenant may be regarded as lawfully in possession as a tenant at will until consent is withdrawn