LEE WAH BANK LTD V. CHI LIUNG HOLDINGS SDN BHD
HIGH COURT [KUALA LUMPUR]
ORIGINATING SUMMONS NO F1871 OF 1985
SITI NORMA YAAKOB, J
9 MAY 1986
CONTRACT: Sale and purchase agreement of business premises -
Whether sale inclusive of exterior wall - Installation of ATM through
exterior wall - Whether consent of vendor necessary - Whether installation
within meaning of "alteration" and "improvement" - Proprietorship of
exterior wall - Whether with purchaser - Installation of signboards and
logo - Whether purchaser entitled to install without consent of vendor -
Meaning of "competent authorities".
Judgment
Siti Norma Yaakob J
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The
issue raised in these proceedings is whether the defendants had
unreasonably withheld their consent to the plaintiffs installing an
automated teller machine (ATM) at the plaintiffs’ business premises
situated in a shopping and office complex belonging to the defendants.
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On
17 November 1980, the plaintiffs had purchased a parcel of business
premises measuring 500 sq feet on the ground floor and 1,500 sq feet on
the first floor of the defendants’ building complex known as Chi Liung
Plaza. The plaintiffs had, since the purchase, been using the premises
for their businesss of banking and for the purpose of extending their
facilities to their customers, they propose to install an ATM at the
premises. On 18 June 1985, they wrote to the defendants seeking the
latter’s consent to the proposed installation but the defendants
withheld their consent on the ground that the matter of installing such
a machine had already been adjudicated before. This is a direct
reference to proceedings in OSF 836/82 brought by the plaintiffs against
the defendants, also for the purpose of installing an ATM at the same
premises.[a] As the plaintiffs consider that the previous proceedings
have no bearing to their letter of request and that the defendants have
been unreasonable in withholding their consent, they filed these present
proceedings seeking a declaration that the refusal of the defendants to
consent to the plaintiffs request to install an ATM at their business
premises is unreasonable and that the plaintiffs be allowed to install
the machine in the manner described in their letter dated 18 June 1985.
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The
defendants raised two objections to the plaintiffs’ application.
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That the installation of the ATM in the
manner described by the plaintiff would involve a deviation from the
approved plans of the Plaza which can only be done at the time of
construction and not after the whole building had been completed.
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Res judicata
applies so as to prevent the plaintiffs making the same application as
they had done previously in OSF 836/82.
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To
install the ATM, the plaintiffs propose to remove two glass panels
fronting the southern section of the Plaza, replacing the same with a
brick wall which will be erected within the boundaries of their premises
and emplacing the ATM in the brick wall. This is clearly shown in the
plans and photographs that are exhibited as LWB 9–12 attached to the
plaintiffs’ affidavit dated 25 February 1986. The plaintiffs maintain
that the manner of installation amounts to nothing more than altering
and improving their premises which is allowed under s 5.14 of the sale
and purchase agreement dated 17 November 1980, entered into between
them, subject of course to consent being obtained from both the local
authority and the defendants. They stress that such alteration and
improvement do not amount to a deviation from the approved plans of the
Plaza which under s 6.06 of the sale and purchase agreement can only be
executed in the course of the construction of the Plaza and not after
its completion. This was so confirmed by the Federal Court in its
judgment dated 16 June 1984 delivered in OSF 836/82.
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The
defendants contend that the removal of the two glass panels and the
construction of the brick wall not only amount to altering and improving
the premises, but also a deviation from the approved plans of the Plaza
which cannot now be effected as the building had already been completed
since 22 February 1985. Hence, the only issue before me on the
defendants’ first objection is whether the manner of the proposed
installation amounts to an alteration or a deviation.
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From
the exhibited plans and photographs, all that will be done to the
frontage of the plaintiffs’ premises is the removal of two glass panels
and substituting or replacing them with a brick wall which will be built
well within the plaintiffs’ premises. I consider this to be nothing more
than an alteration or an improvement as it involves substituting or
replacing the original material with another. This has become necessary
in view of the plaintiffs’ nature of business to provide facilities to
their customers to withdraw money, particularly well after the normal
banking hours. Even if the works amount to a deviation, I still consider
that s 6.06 has no application as the Plaza has already been completed.
Moreover, the premises where the proposed installation is to be built no
longer belong to the defendants and as owners of the premises, the
plaintiffs have every right to install such a machine in the course of
providing better and up-to-date facilities to their customers provided
of course they obtain the necessary consent from both the local
authorities and the defendants under s 5.14 of the sale and purchase
agreement.
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On the issue of res
judicata, the defendants invoke that defence in its wider
sense that the plaintiffs should be shut out from raising in a
subsequent action an issue which they could and should have raised in
OSF 836/82. See the cases of Yat Tung Investment
Co Ltd v Dao Heng Bank Ltd
[1975] AC 581 and Loh Holdings Sdn Bhd v
Peglin Development Sdn Bhd [1984]
2 MLJ 105.
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In
that earlier proceedings, the defendants had intended to install the ATM
in the wall of their premises facing the corridor of the main entrance
to the Plaza. For such an installation, a rectangular hole had to be
made through the wall separating the plaintiffs’ premises from the
corridor which is the main common area of the Plaza. In consideration of
their consent to such installation, the defendants had demanded that the
plaintiffs pay them a yearly rental of $20,000 and a deposit of $5,000.
Dissatisfied with this pre-condition, the plaintiffs had applied for a
declaration that they be entitled to install the ATM without any
approval and without payment of any rental to the defendants.
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On
the right of the plaintiffs to install the ATM in the first place, the
Federal Court had held that installing the ATM in the manner proposed by
the plaintiffs would go beyond the common boundary and since the
defendants had retained ownership of the exterior wall, the plaintiffs
required, the consent of the defendants for the use of the wall. The
Federal Court also held that on the issue before them, they were not
concerned with the proviso to s 5.14 and as such, the question of
whether the defendants had withheld their consent unreasonably by
imposing an annual rental was not even raised or determined in the
previous proceedings.
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The facts relied by both parties, the issues
raised and the reliefs sought in the earlier proceedings do not, I
consider, give the plaintiffs an opportunity to raise the issue of
whether the defendants had been unreasonable in withholding the consent
of the installation of the ATM as the plaintiffs had not then sought the
defendants’ consent based on different facts as disclosed in the later
proceedings before me. In the later proceedings, the plaintiffs seek to
install an ATM by removing two glass panels and replacing them with the
brick wall which will be built well within the plaintiffs’ premises and
will not, in any way, encroach into the defendants’ Plaza as would have
happened had the proposal to build the ATM in the earlier proceedings
being carried out. To that extent, I consider that
res judicata does not arise as the facts
now relied upon by the plaintiffs and the relief sought are very
different from those raised in the previous proceedings.
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The
defendants have also pleaded that once installed, the use of the ATM
along the narrow corridor which is in common use by the other occupiers
of the Plaza would hinder and obstruct the corridor and since this would
adversely effect their rights under the sale agreement, they had the
right to impose conditions under s 5.11 to safeguard their own
interests. This may well be so but this right does not extend to
withholding their consent to’ the installation of the ATM in the first
place. This is even so as the area on which the ATM will be installed
will in no way jut out into the defendants’ area and however narrow the
corridor may be, the fact still remains that the plaintiffs have an
absolute right over it as it is within the sphere of their ownership.
Strangely enough, this objection was never raised in the earlier
proceedings and I doubt whether the payment of a yearly levy of $20,000
as rental would have lessened the annoyance or hindrance that would
occur to the other users of the corridor.
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For
the very reason that the ATM is to be installed within their own
premises and will not encroach into any part of the Plaza, I consider
that the defendants have been most unreasonable in withholding their
consent especially so when they are fully aware that as bankers, the
plaintiffs require the ATM to provide the latest and a most necessary
facility to their customers. On that finding, I had accordingly made a
declaratory order in terms of the plaintiffs’ prayers at (a), (b) and
(d) of this originating summons.
Cases
Yat Tung Investment Co
Ltd v Dao Heng Bank Ltd [1975] AC 581;
Loh Holdings Sdn Bhd v
Peglin Development Sdn Bhd [1984] 2 MLJ 105
Representation
P
Royan for the plaintiffs.
Rahim
Nor (G T Rajan with him) for the defendants
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