M&C PRECISION SDN BHD v PENGANGKUTAN TEY SELATAN SDN BHD PENCELAH MCLEAN PLASTIC ENGINEERING SDN. BHD.

Case Significance

Illustrates the threshold for leave to intervene in pending proceedings — a real and direct legal interest and necessity for the effective disposal of the dispute — and that a party who contracts with knowledge of an existing dispute assumes the commercial risk.

This High Court decision at Johor Bahru concerns an application for leave to intervene (permohonan kebenaran mencelah) in an originating summons arising out of a tenancy dispute. The plaintiff, M&C Precision Sdn Bhd, was the existing tenant of factory premises under a tenancy agreement dated 27 September 2022 for a three-year term at a monthly rent of RM35,000.00, with an option to renew for a further three years. As the term neared its end the plaintiff sought to exercise the renewal option, but no final agreement was reached with the defendant, Pengangkutan Tey Selatan Sdn Bhd, giving rise to a dispute over the plaintiff's contractual and equitable right to renew. The proposed intervener, a company that had taken occupation of part of the same premises under a fresh tenancy, applied to be added as a party.

The court framed the question as whether the proposed intervener met the legal requirements to be joined. Applying the established principles, it held that the proposed intervener did not have a real and direct legal interest (kepentingan undang-undang yang sebenar dan langsung — a genuine and direct legal interest), that its presence was not necessary for the effective and complete disposal of the dispute between the existing parties, and that refusing intervention caused no procedural unfairness. As an alternative test, the court found that even if the asserted interest were accepted at its lowest, joining the intervener was neither necessary nor appropriate for a fair and effective resolution, particularly because the intervener had entered into its new tenancy with knowledge of the existing dispute and had thereby taken a commercial risk with its eyes open.

Weighing the issues cumulatively, the court concluded that the application lacked merit and ordered that it be DITOLAK dengan kos (dismissed with costs) of RM3,000.00, payable by the proposed intervener to the plaintiff. The judgment illustrates the threshold a would-be intervener must cross to be added to pending proceedings.