Can Rental Payments Alone Prove a Tenancy? High Court Says No
On 4 August 2026, the High Court in Shah Alam dismissed the landlord’s appeal in its entirety and upheld the Sessions Court’s judgment after a full trial. The High Court also awarded RM5,000 in costs against the Appellant, affirming the dismissal of the landlord’s claims against the Second to Fourth Respondents.
This decision relates to legal principles relating to the burden of proof, tenancy disputes, and the limited circumstances in which an appellate court will interfere with findings of fact made by a trial court.
Background of the Case
The dispute originated from a claim by Tenaga Nasional Berhad (TNB) against the landlord for approximately RM192,665.45, representing alleged losses arising from unrecorded electricity consumption at an industrial premises.
The landlord subsequently commenced third-party proceedings against our clients, alleging that they were the tenants who occupied the premises during the relevant period and should therefore indemnify him for any liability.
Following a full trial, the Sessions Court allowed TNB’s claim against the landlord but dismissed the landlord’s third-party claim against our clients. Dissatisfied with the outcome, the landlord appealed to the High Court.
The Issues Before the High Court
The appeal centred on whether the Sessions Court had erred in dismissing the landlord’s claim against the Second to Fourth Respondents.
The Appellant landlord argued that:
- the payments made by our clients constituted evidence that they were tenants of the premises;
- the Sessions Court wrongly accepted our clients’ explanation regarding those payments;
- our clients failed to produce sufficient evidence to support their version of events; and
- the trial judge ought to have drawn an adverse inference against our clients.
Our Clients’ Position
Acting for the Second to Fourth Respondents, we, JY Ko Advocates & Solicitors maintained throughout the proceedings that:
- our clients never entered into any tenancy agreement with the landlord;
- they never occupied or operated the premises;
- the actual occupier was another individual; and
- the payments relied upon by the landlord were merely financial assistance made on behalf of that individual and did not create any tenancy relationship.
Independent evidence was also adduced to support our clients’ explanation and to demonstrate that the landlord’s allegations were unsupported by the evidence.
Important Legal Principles
1. Payment Does Not Automatically Create a Tenancy
One of the central issues was whether the mere fact that a person makes rental payments automatically means that person is the tenant.
The High Court’s decision affirms that payment alone is not conclusive evidence of a tenancy. Courts must consider the entire factual matrix, including the parties’ intentions, surrounding circumstances, documentary evidence, and witness testimony before determining whether a tenancy exists.
Simply transferring money does not, by itself, establish a contractual landlord-tenant relationship.
2. The Burden of Proof Remains on the Party Making the Allegation
The case highlights a fundamental principle of civil litigation: he who alleges must prove.
Where a party alleges that another person is the tenant or is legally responsible for certain liabilities, the burden rests on that party to prove the existence of the tenancy through credible evidence.
The court will not infer a legal relationship merely because certain payments were made.
3. Appeals Are Not Opportunities to Re-Argue the Facts
Another significant principle reaffirmed by the High Court is that appellate courts are generally reluctant to interfere with findings of fact made by a trial judge.
The trial judge has the advantage of observing witnesses, assessing their credibility, and evaluating the evidence firsthand.
Unless those findings are plainly wrong or unsupported by the evidence, an appellate court will ordinarily respect the conclusions reached after a full trial.
4. Independent Corroborative Evidence Carries Significant Weight
Our clients’ defence was supported not only by their own testimony but also by independent evidence explaining why the payments were made and identifying the actual occupier of the premises.
This demonstrates the importance of presenting consistent and corroborated evidence when defending civil claims.
High Court Decision
After considering the submissions of all parties, the High Court dismissed the landlord’s appeal in its entirety.
The Court upheld the Sessions Court’s findings that the landlord had failed to establish liability against the Second to Fourth Respondents and ordered the Appellant to pay RM5,000 in costs.
The decision confirms that the Sessions Court correctly evaluated the evidence and that there was no basis for appellate intervention.
How JY Ko Advocates & Solicitors Assisted
JY Ko Advocates & Solicitors acted for the Second to Fourth Respondents throughout the appellate proceedings.
Our legal team successfully defended the appeal by:
- analysing the complete trial record and identifying the strengths of the factual findings;
- demonstrating that the landlord had failed to discharge the burden of proving a tenancy;
- addressing each ground of appeal raised by the Appellant;
- highlighting the independent evidence supporting our clients’ defence; and
- persuading the High Court that there was no reason to disturb the Sessions Court’s decision after a full trial.
This successful appeal defence reflects our firm’s commitment to delivering practical, strategic, and effective advocacy in complex civil disputes.
Need Representation in a Civil Appeal or Tenancy Dispute?
Appeals require far more than simply disagreeing with the trial court’s decision. They demand a careful understanding of appellate principles, procedural rules, and the ability to identify genuine errors of law or fact.
Whether you are involved in a landlord-tenant dispute, contractual claim, commercial litigation, third-party proceedings, or an appeal before the High Court or appellate courts, obtaining experienced legal representation can make a significant difference to the outcome.
At JY Ko Advocates & Solicitors, we regularly represent individuals, companies, landlords, tenants, and business owners in complex civil litigation and appellate matters throughout Malaysia.
Written on: 5th August 2026
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!