1. ) YEW SZE SZE 2. ) YEAK MEE LENG v Chu Pang Kiong

Case Significance

Illustrates the court's power to set aside a third-party notice granted on a misrepresentation of material facts at the leave stage, and the difficulty of fixing tenants with liability for a sub-tenant's admitted wrongdoing where the sub-tenant has accepted sole responsibility.

This High Court decision at Ipoh, on appeal from the Sessions Court, concerns whether tenants may be held liable, by way of third-party proceedings, for the theft of electricity committed by their sub-tenant. The national electricity utility had sued the landlord, as the registered consumer for the premises, over unauthorised electricity use. The landlord in turn issued a third-party claim against the tenants under the terms of the tenancy agreement, seeking to pass on any liability to them. The tenants challenged the third-party notice, contending that the subletting had been lawful, that they had no knowledge of the offence, and — significantly — that the sub-tenant had admitted sole responsibility for the wrongdoing in a statutory declaration, so that the landlord had misled the court in obtaining leave to issue the third-party notice by misrepresenting the material facts. The Sessions Court had allowed the third-party proceedings against the tenants, and the tenants appealed. The High Court considered whether the court retained a discretion to set aside a third-party notice after leave to issue it had been granted, and whether a prima facie case against the tenants had been shown. It held that where the party seeking leave has misrepresented material facts — here, by not disclosing that the sub-tenant had admitted sole responsibility — the court retains the power to set the notice aside, and that on the true facts no sustainable claim lay against the tenants, whose sub-tenant had accepted the blame. Allowing the appeal, the court set aside the third-party proceedings against the tenants and ordered costs of RM1,500 in their favour. The court's reasoning underscores that leave to issue a third-party notice, often granted at an early stage on the applicant's own account of the facts, does not immunise the notice from later scrutiny once the full picture emerges. The judgment illustrates the court's power to set aside a third-party notice obtained on a misrepresentation of material facts, and the difficulty of fixing tenants with liability for a sub-tenant's admitted wrongdoing.