KW KEAT WEI MOTOR SDN. BHD. v HCS REALTY SDN. BHD.

Case Significance

Illustrates the strict-compliance approach to leave to amend under Order 20 and the intitulement rule under Order 7 rule 2(1A) of the Rules of Court 2012, and the construction of conflicting renewal and termination clauses in a commercial tenancy by objective intention and the contra proferentem rule.

This High Court decision, disposing of two appeals heard together, concerns the mandatory requirement of leave to amend an originating process and the construction of conflicting renewal and termination clauses in a commercial tenancy. The dispute arose from a tenancy of commercial premises in Guar Chempedak, Kedah, granted by the respondent landlord to the appellant tenant. A first tenancy agreement ran for three years at a fixed monthly rental, and a second tenancy agreement extended the lease for a further three years at a higher rental. When the landlord terminated the tenancy, the tenant sued, and the disputes reached the High Court on appeal. On procedure, the court addressed the mandatory requirement of leave to amend under Order 20 rules 5 and 7 of the Rules of Court 2012 and the intitulement rule under Order 7 rule 2(1A), holding that a defect in the intitulement of an originating process, and an amendment made without the required leave, are matters of strict compliance; it treated the amendment made without mandatory leave as liable to be set aside and, being no longer relevant, as academic. On the substantive dispute, the court construed the interaction between a mandatory renewal clause and a termination clause in the tenancy, applying the objective intention of the parties, commercial common sense and the contra proferentem rule where the terms were ambiguous, and considered a schedule entry marked "Nil" and an allegation that a later transaction was a sham. It also weighed the suitability of proceeding by originating summons, and characterised the amendment made without leave as a substantive procedural flaw and a tactical manoeuvre lacking bona fides rather than a mere technicality. Concluding in the tenant's favour, the court allowed both of the tenant's appeals with costs of RM10,000.00 to be paid by the landlord. The judgment is a useful illustration of the strict approach to amendment and intitulement of originating process, and of the construction of conflicting renewal and termination clauses in a commercial lease.