Premium Park Development Sdn Bhd v Rightbase Trading Sdn. Bhd

Case Significance

A Court of Appeal illustration that a landlord's rent and trespass claims can fail where the demised land is undergoing compulsory acquisition, and that the court will not make consequential orders binding the Land Office or State Authority where they are not parties.

This Court of Appeal decision disposes of two cross-appeals arising out of a landlord-and-tenant dispute that unfolded while the very land being let was in the course of compulsory acquisition by the State Authority. The plaintiff, Premium Park Development Sdn Bhd, was the registered proprietor of two adjacent plots at Muar, Johor, part of which comprised a demarcated access road and an unidentified three-acre portion (together, the Rented Lots). It sued its tenant, Rightbase Trading Sdn Bhd, in the High Court at Muar for arrears of rent under a tenancy agreement and, in the alternative, for trespass. The learned Judicial Commissioner (Pesuruhjaya Kehakiman — a High Court judge of commissioner rank) only partly allowed the claim, prompting both sides to appeal. Appeal 313, the subject of this record, was the plaintiff-proprietor's appeal against the dismissal of its claim for rent arrears over both Rented Lots and against the dismissal of its alternative trespass claim over the Unidentifiable Land. The panel of S. Nantha Balan, Azimah binti Omar and Ahmad Kamal bin Md Shahid JJCA examined whether the proprietor retained any cause of action for rent under the tenancy agreement once acquisition had commenced, and whether trespass could still be maintained over land whose title was passing to the State. The court found no merit in the proprietor's appeal, holding that the Judicial Commissioner had been right to dismiss the rent claim under the tenancy agreement. Appeal 313 was accordingly dismissed and that dismissal maintained. The court observed that neither the Land Office nor the State Authority was a party, so it could make no consequential orders about the incomplete acquisition; it instead directed the parties to engage the Land Office so that the acquired lands could finally vest under sections 23 and 66 of the Land Acquisition Act 1960. The judgment illustrates how contractual rent and trespass claims are affected when the subject land is caught mid-way through compulsory acquisition.