On a previous occasion, I discussed the position that a tenant may take in the face of an incoming notice to terminate a tenancy agreement and the commencement of the eviction process. On the other hand, it begs the question as to what can the landlord do if a tenant overstays beyond the notice period and “holds out” on the property.
What are the likely remedies that are available to a landlord in the face of a defaulting tenant who is adamant on staying beyond the notice period?
As mentioned earlier, a landlord may only seek to repossess the property and evict a tenant by way of civil writ action pursuant to section 7(2) of the Specific Relief Act 1950.
That’s not the end of it.
A landlord is also entitled to recover double rent for the time the tenant continues to hold out until delivery of vacant possession of the property. The starting point for this is found in section 28(4)(a) of the Civil Law Act 1956 (“CLA 1956“) wherein it states that:
28(4)(a) “Every tenant holding over after the determination of his tenancy shall be chargeable, at the option of his landlord, with double the amount of his rent until possession is given up by him or with double the value during the period of detention of the land or premises so detained, whether notice to that effect has been given or not.”
The issue of double rent under s.28(4)(a) of the CLA 1956 was recently in the spotlight in the Federal Court case of Rohasassets Sdn Bhd v Weatherford (M) Sdn Bhd & Anor [2020] 1 CLJ 638 (“Rohasassets”). This case has had the benefit of clarifying many conflicting issues on double rent and has brought about some welcome clarity to the subject matter.
To briefly explain the nature of double rent under section 28(4)(a) of the Civil Law Act 1956, it was held by Abdul Rahman Sebli FCJ sitting in Rohasassets that:
[87] “On expiry of the tenancy, s.28(4)(a) kicks in to give the landlord the right, at his option, to charge double rent and the double rent continues to be chargeable until possession is given up by the tenant who holds over without the landlord’s consent. The landlord may decide not to charge double rent at all or even allow the tenant to hold over for free after the expiry of the tenancy but that is entirely a matter for the landlord to decide.”
…
[89] “But that said, it does not mean that holding over simpliciter is all that the landlord needs to prove in a claim for double rent under s.28(4)(a) of the Civil Law Act. To entitle the landlord to charge double rent, there must be failure or refusal by the tenant to give up possession after being told to do so by the landlord. This has to be so because the landlord’s claim is actually not rent but a penal sum which the former tenant has to pay for the inconvenience and loss the tenant causes the landlord in refusing to give up possession: Panicka (supra).” [Emphasis added]
The Federal Court further clarified that there is no requirement to prove any contumacious conduct on the part of the tenant who holds over and therefore, the tenant will still be liable to pay double rent if the landlord has decided that double rent should be charged.
This is a position that is noticeably different from other common law regimes as our Civil Law Act chose to omit the words “wilfully” as opposed to the legislation governing the double profits regime in jurisdictions such as England, Australia and Canada.
The term “Willfully” in this context is based on the phrase “willfully and contumaciously” within the meaning of the case of Crook v Whitbread 88 LJKB 959 and is to be equated with stubbornness.
In other words, the Federal Court takes the position that due to the drafting of our Civil Law Act, there is no requirement for a landlord to furnish evidence that a tenant is “stubbornly” holding out. All that needs to be satisfied is the plain and simple fact that the notice has expired and that the tenant has refused to leave by way of remaining in occupation of the property.
In determining how much double rent a landlord may obtain, the Court must look at the market value of the rented premises at the relevant time, subject to the limited monetary jurisdiction of the court in which the claim was filed in. This was illustrated in the High Court case of Mohamed Abu Bakar s/o Yusof v PA Syed Aboothahir s/or P Ahmed [1990] 1 MLJ 26 where Edgar Joseph Jr J (as His Lordship then was) at page 32 held that:
“As to quantum, mesne profits are in the nature of damages for trespass (Bramwell v Bramwell [1942] 1 KB 370) and they are assessed on the basis of the value of the premises at the relevant time, that is to say, at the time judgment is pronounced in the court below. In my opinion, regard being had to the provisions of s 28(4)(a), the appropriate order to make is that the defendant be chargeable with double the market rental value of the premises, which in this case would be $109 pm, from the date of expiry of the notice to quit, which would be 1 July 1979 to the date when possession is handed over to the plaintiff. However, as this sum would be well in excess of the jurisdiction of the magistrates’ court, I would add a rider that the damages payable be limited to the jurisdiction of that court.” [Emphasis added]
The Federal Court in Rohasassets also makes it clear that if a landlord agrees to negotiate for a renewal of the tenancy but fails to make it clear to the tenant that double rent will still be chargeable in the event that negotiations fail, this will be a waiver of any right to charge double rent during the holding out period.
Further, if a landlord and a tenant agrees to renew the tenancy even after the expiry of a notice to quit, this will be seen as a creation of a new tenancy to which a brand new notice to quit will have to be issued in order to terminate a tenancy (see Taylor v Wildin (1868 LR 3 Exch 303).
In view of the contrasting positions of the landlord and tenant in regards to eviction and repossession of property, the Malaysian regime has managed to strike a delicate balance between the two competing positions. It is clear that neither side has a greater advantage over the other. It is therefore submitted that when a tenancy dispute arises, the scales are inevitably tipped in favour of one party by way of their external conduct outside of the legal positions. It is under these circumstances that parties are always encouraged to try and resolve their tenancy disputes amicably without resorting to litigation.
Curious and inquisitive. Iyas is the kind of person who constantly has something on his mind. Ever wondering why the law works the way it does, Iyas constantly pushes the limits of his curiosity to find the ever elusive “Answer” to all of his questions.
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