REN BIOMED SDN BHD v EUMAXCO HOLDING SDN BHD

Case Significance

Illustrates the summary nature of the distress remedy under the Distress Act 1951 and the principle that a writ of distress cannot stand where there are genuine triable issues about the existence and enforceability of the underlying tenancy.

This High Court decision at Kuala Lumpur concerns an appeal against a Sessions Court's refusal to set aside a writ of distress issued ex parte under the Distress Act 1951, in a landlord and tenant dispute. A writ of distress is a summary remedy that allows a landlord to seize a tenant's goods to recover arrears of rent, and here it had been issued against the tenant on the landlord's ex parte application. The tenant applied to the Sessions Court to set the writ aside, and when that application was dismissed, appealed to the High Court on both liability and the underlying validity of the tenancy. The central question on appeal was whether the tenant had raised triable issues going to the very foundation of the landlord-tenant relationship such that the writ of distress ought not to have been allowed to stand. On perusing the appeal record, the High Court found that the tenant had adduced credible affidavit evidence that the tenancy agreement was not intended to be legally binding but had been executed only to support an application for a business licence. The court held that this evidence raised genuine triable issues as to whether an enforceable tenancy, and therefore any recoverable rent to found a distress, existed at all, and that the Sessions Court had failed to consider or address that evidence in its grounds of decision. That failure amounted to a material misdirection warranting appellate intervention. The court concluded that the proper course was to set aside the writ and leave the parties to pursue their respective rights through ordinary proceedings where the disputed issues could be tried. Accordingly, the court allowed the appeal, set aside the Sessions Court's order and the writ of distress, and awarded the appellant costs of the appeal of RM2,000.00. The judgment is a useful illustration of the summary nature of the distress remedy and of the principle that a writ of distress cannot stand where there are genuine triable issues about the existence and enforceability of the tenancy on which it depends.