Perkhidmatan Alam Indah Sdn Bhd v Majlis Bandaraya Pulau Pinang (PA-21NCvC-2-01/2018)

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Page 1 of 43 DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG DALAM NEGERI PULAU PINANG DI MALAYSIA GUAMAN SIVIL NO: PA-21NCvC-2-01/2018 ANTARA PERKHIDMATAN ALAM INDAH SDN BHD (NO. SYARIKAT 806955-H) …PLAINTIF DAN MAJLIS BANDARAYA PULAU PINANG …DEFENDAN GROUNDS OF JUDGMENT PRELUSION [1] This suit is about whether a contract was validly terminated. And if it was, what quantum of damages should be awarded? The outcome of this suit largely depends on the evidence. 18/05/2026 16:02:18 PA-21NCvC-2-01/2018 Kand. 527 S/N QgqxB018FUent3aEgB51fg Page 2 of 43 [2] The Defendant, Majlis Bandaraya Pulau Pinang ("Council"), is the city council and the statutory authority responsible for the parking management in Penang. [3] The Council appointed the Plaintif, Perkhidmatan Alam Indah Sdn Bhd ("PAI"), under a Parking System Management Agreement dated 13.10.2014 (Agreement), to manage the Council's parking system. [4] The bargain was a simple concession: PAI got the right to manage and collect revenue from the Council's parking infrastructure, in exchange for paying the Council a fixed monthly concession fee. [5] PAI fell into arrears in its monthly payments. In October 2017, the Council issued a Notice to Remedy, demanding that PAI settle an outstanding sum of over RM4.14 million within 14 days. PAI failed to comply. [6] In January 2018, the Council terminated the Agreement with immediate effect. As at the date of termination, accumulated arrears stood at over RM5.7 million. [7] PAI filed this suit: (i) to challenge the validity of the termination, and

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(ii) to claim special damages of over RM2.98 million, as well as (iii) general damages arising from the termination, amounting to over RM28.64 million, across eight heads of damage. S/N QgqxB018FUent3aEgB51fg Page 3 of 43 [8] The Council counterclaims: (i) for the outstanding monthly fees of over RM5.7 million, (ii) for refunds given to the public for the unused money in the Smart Parking Gadgets (SPG) amounting to over RM64K, and (iii) for unpaid parking summonses (PTK) arising from PAI's failure to return the Enforcement Application System to the Council on termination, in the sum of over RM36.26 million. (PTK stands for “Pemberitahuan Tentang Kesalahan”.) [9] Who should succeed? Was the termination valid? PRELIMINARIES [10] There are a few aspects of this suit that are exceptional. One—the trial of this suit had 279 volumes of the Common Bundle of Documents, containing approximately 123,000 pages. [11] Two—the trial spanned multiple tranches, spread over seven years. It started in February 2019 (on 11.2.2019) and finished with oral submissions in February 2026 (on 25.2.2026). [12] Three—the trial ran for 38 days. I took over the conduct of the trial from the previous presiding Judge on the 17th day. The parties took another 21 days to finish the trial. [13] Anyone would have thought that in a 38-day trial, many witnesses would have testified. But that was not so. Only six witnesses were called. PAI called three witnesses. And the Council called three witnesses. S/N QgqxB018FUent3aEgB51fg Page 4 of 43 PERTINENT PLEADED AND ASSERTED FACTS [14] This is the chronology of facts emerging from the pleadings, the agreed facts, and the evidence produced—

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(1)

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(2)

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(3)

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(4) 2014–2016—On two occasions only, the Council made payments to PAI, in relation to enforcement issues, purely as goodwill. The Council's Tender Board (Mesyuarat Lembaga Perolehan) met on 13.4.2016 and resolved to reject all PAI's S/N QgqxB018FUent3aEgB51fg Page 5 of 43 claims on enforcement issues, as there was no such entitlement (right) under the Agreement.

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(5)

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(6)

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(7)

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(8) December 2016—Dr Saravanan passed away. His successor, PW1 (Abdul Malik Kader), took over the task of dealing with the Council.

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(9) July 2017—The Council implemented new parking control hours (Monday to Saturday, 8.00 a.m. to 6.00 p.m.; Sundays free), as a matter of public policy approved by the State S/N QgqxB018FUent3aEgB51fg Page 6 of 43 Authority. The Council revised the monthly fee down to RM580,928.00 plus GST from 1.7.2017.

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(10) 21.9.2017—The Council issued a further Notice of Action for the then-arrears of RM3,688,252.93.

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(11) 23.10.2017—The Council issued the formal Notice to Remedy breach under Clause 26.1.6 of the Agreement, requiring PAI to settle RM4,148,644.31 within 14 days.

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(12) 3.11.2017—PAI's letter to the Council, which admitted to the existence of a debt—referring expressly to the content of Dr Saravanan's 29.11.2016 letter—and requested 30 days to sort out the payment. PAI also tendered a cheque for RM402,800.00 for the monthly fee arrears for September 2017. The Council declined the cheque, as it was not the full amount demanded.

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(13) 15.1.2018—The Council terminated the Agreement with immediate effect under Clause 26.1.6. As at the date of termination, accumulated arrears stood at RM5,702,626.75. The Council required PAI to hand over the parking system and to terminate the appointments of all PAI's agents. PAI declined to return the Enforcement Application System.

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(14) On the next day: 16.1.2018—PAI filed this suit. S/N QgqxB018FUent3aEgB51fg Page 7 of 43 ISSUES TO BE TRIED [15] Parties agree that the issues to be tried can be summarised as follows:

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(1) Whether the Council's termination of the Agreement by its letter dated 15.1.2018 is valid and lawful; and, if it is valid and lawful, whether the Council is entitled to its Counterclaim for RM5,702,626.75 (for special damages), RM64,698.80 (for refunds given to the public for unused money left in the SPGs), and RM36,261,990.00 (for unpaid PTKs—outstanding parking summonses—arising from PAI's failure to return the Enforcement Application System to the Council; without the Enforcement Application System, the Council could not prosecute defaulters for outstanding parking summonses).

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(2) If the termination is invalid and unlawful, whether PAI is entitled to special damages of RM2,989,660.20 and general damages of RM28,647,744.13. [16] From these two overarching issues, the following sub-issues arise for determination:

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(ii) Whether PAI was entitled to make adjustments to, i.e. change the monthly fixed fee payable;

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(iii) Whether the amount of RM4,148,644.31 claimed in the Council’s Notice to Remedy was contradictory and inconsistent with the Council's own accounting records;

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(iv) Whether PAI is excused from partial non-performance by virtue of section 68 of the Contracts Act 1950 (CA 1950);

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(vi) Whether PAI should be compensated for the non-enforcement, lack of enforcement, and Halangan Claims; and

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(vii) Whether the Council is entitled to its counterclaim of RM5,702,626.75 (for special damages), RM64,698.80 (for refunds given to the public for unused money in the SPGs), and RM36,261,990.00 (for unpaid PTKs). THE APPLICABLE CASE LAW [17] I summarise below a brief review of the case law pertinent to the analysis of the issues in this suit. S/N QgqxB018FUent3aEgB51fg Page 9 of 43 Express contractual right to terminate [18] One—where a party relies on an express contractual right to terminate, the court must interpret and apply that clause as written. The court should not rewrite the bargain agreed between the parties—Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374 (FC); [2021] 2 AMR 1; [2021] 3 CLJ 159; [2021] 2 MLRA 46 (Catajaya), at paragraphs [63], [64]; Godell Parking Sdn Bhd v Majlis Bandaraya Petaling Jaya [2020] 6 MLJ 43 (CA); [2020] 3 CLJ 455; [2020] 3 MLRA 267 (Godell Parking), at paragraph [95]. [19] Two—another pertinent case law authority is the Court of Appeal decision in Majlis Bandaraya Pulau Pinang v Mohd Noor Sirajajudeen & Anor [2018] 5 MLJ 349 (CA); [2019] 3 CLJ 770; [2019] 1 MLRA 665 (Noor Sirajajudeen), at paragraphs [51], [68]—where the Court of Appeal held that a termination for non-payment is valid where the defaulting party had actual prior notice, through prior correspondence, that non-payment was the reason for the termination. Implied terms [20] Three—the law on implied terms requires that the proposed term must satisfy either the business efficacy test: that the term is necessary to give the contract the commercial efficacy the parties must have intended, or the officious bystander test: that if the proposed term had been suggested at the time the contract was struck, both parties would have unequivocally agreed to the term—Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pak S/N QgqxB018FUent3aEgB51fg Page 10 of 43 Leong [1998] 3 MLJ 151 (FC); [1998] 3 AMR 2160; [1998] 3 CLJ 503; [1998] 1 MLRA 332 (Sababumi). [21] Four—a term will not be implied merely because it would be reasonable or convenient to have it present. Critically, where the subject-matter of the alleged implied term is of substantial commercial and financial significance—such that it involves potential liability of millions of ringgit—a court will be slow to imply it into a detailed commercial contract, on the basis that the parties would not have omitted it, had they truly intended it— Highceed Corp Sdn Bhd v Warisan Harta Sabah Sdn Bhd & Anor [2000] 5 MLJ 337 (HC); [2000] 6 MLRH 586; [2004] CLJU 4 (Highceed), at MLJ pages 349 at B-C, and page 350 at D. Special damages [22] Five—the law on special damages is settled. Special damages are those losses that do not directly and naturally flow from the defendant's breach. But they must be reasonably foreseeable when the contract was made, i.e. they must not be remote. Very importantly, they must be specifically pleaded and strictly proved—Ong Ah Long v Dr S Underwood [1983] 2 MLJ 324 (FC); [1983] 2 CLJ 198; [1983] 1 MLRA 154. Parties are bound by their pleadings [23] Six—parties are bound by their pleadings and are not permitted to adduce evidence of, or to argue for, facts and issues which are not pleaded. The Federal Court in Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 S/N QgqxB018FUent3aEgB51fg Page 11 of 43 MLJ 1 (FC); [2015] 8 CLJ 944; [2015] 5 MLRA 665, affirmed this fundamental principle. [24] This rule is not merely technical: its purpose is to give the opposing party proper notice of the case to be met. And to ensure that the trial is conducted within the boundaries of the parties' pleaded cases. ANALYSIS AND FINDINGS Sub-Issue (i): Whether PAI's failure to comply with the Notice to Remedy entitles the Council to terminate under Clause 26.1.6 [25] This issue is the express contractual right to terminate issue. PAI's admissions: by letter and in cross-examination [26] Before addressing the legal arguments, I set out PAI's admissions of non-payment—both written and oral—because they are decisive to the determination of the main issues, and sub-issue (i) in particular. [27] The first written admission came on 29.11.2016, when Dr Saravanan (then PAI’s CEO and director/authorised representative) wrote to the Council in response to the Council's Notice of Action for RM3,096,801.55. Dr Saravanan's letter admitted to the debt unconditionally, and proposed repayment by monthly instalments of RM100,000.00. S/N QgqxB018FUent3aEgB51fg Page 12 of 43 [28] Even though the 29.11.2016 letter was marked “without prejudice”, it was included in the Common Bundle of Documents. PAI agreed to have it produced as evidence at trial. More importantly, PAI refers to this 29.11.2016 letter in its Statement of Claim. PAI itself relies on the content of this letter. [29] The second written admission came on 3.11.2017, when PAI—under new management—wrote to the Council requesting 30 days to settle the arrears. This letter is significant for two reasons. First, it constitutes an unqualified acknowledgement of an outstanding obligation to pay. Second, paragraph 5 of that letter stated that PAI "has found some irregularities in the financials and operations under the management of Dr Saravanan which has [sic] led to the current financial predicament". This is an admission that the arrears are real, and they arise from PAI's own internal disorder, not from any failure on the Council's part. [30] These written admissions are reinforced, and in some respects exceeded, by the oral admissions of PAI's witnesses during cross-examination, which I now address by category. PW1’s admission that the RM3,096,801.55 was never cleared [31] PW1 admitted in cross-examination that the sum admitted by Dr Saravanan was never paid. His answer was unequivocal—the sum was "never cleared or paid”. This is a direct admission by the incoming director that the debt pre-dating his tenure was never discharged. S/N QgqxB018FUent3aEgB51fg Page 13 of 43 Admission of persistent failure to pay punctually [32] PW1, again in cross-examination, admitted that PAI never paid the monthly fees punctually as required under the Agreement. This is an admission that goes to the entirety of the payment history, not merely a single month's default. Admission that late payment entitled the Council to terminate [33] PW1, still in cross-examination, agreed that because the monthly payments were not paid timeously, the Council was entitled to terminate the Agreement. This is an unambiguous concession, by PAI's own witness, of the very right the Council exercised by its termination letter. PW2's admission of the payment obligation and the right to terminate [34] PW2 (Junid Abdussalam) accepted in cross-examination that there was an obligation to pay punctually, and that if PAI failed to do so, the Council was entitled to terminate. This admission is particularly noteworthy because PW2 is the principal witness on PAI's claim. Admission that the Notice to Remedy was not complied with [35] PW1 admitted that PAI did not remedy the breach stipulated in the Notice to Remedy and that "the full amount owing was never paid”. PW1 S/N QgqxB018FUent3aEgB51fg Page 14 of 43 further agreed that because PAI had not remedied the breach, the Council was entitled to terminate the Agreement. Admission that non-payment arose from PAI's own financial difficulties [36] PW1 admitted further that PAI was facing financial problems at the time, and that PAI's own correspondence verified this. The passage in PAI's 3.11.2017 letter at paragraph 5—quoted to PW2 in cross-examination— makes the position plain: the arrears arose from the financial and operational problems under Dr Saravanan’s management, causing PAI’s financial shortcomings. This was a concession that the breach was entirely self-caused. Analysis on sub-issue (i) [37] On sub-issue (i), I first set out the arguments on the law, particularly the arguments that PAI puts forward. [38] Section 40 of the CA 1950 provides that “where a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the promisee may put an end to the contract, unless he has signified by words or conduct his acquiescence in its continuance”. [39] PAI submits that section 40 codifies the common law doctrine of repudiation. Repudiation occurs when the defaulting party explicitly shows to the other contracting party that it no longer intends to perform its S/N QgqxB018FUent3aEgB51fg Page 15 of 43 obligations under the contract, i.e. that it no longer intends to be bound by the contract. PAI argues that the Council’s right to terminate the Agreement cannot be triggered by just any of PAI’s breaches of the Agreement. Termination can only be done when PAI’s conduct plainly demonstrates that it no longer intends to be bound by the Agreement. [40] PAI relies on the case law authority of Lim Swee Choo v Ong Koh Hou @ Won Kok Fong [2025] 6 MLJ 327 (FC); [2025] 8 AMR 229; [2025] 10 CLJ 341; [2026] 1 MLRA 1 ("Lim Swee Choo"), where the Federal Court, at paragraph [74], held that the right to terminate a contract for repudiation under section 40 depends not on whether there is a total failure of consideration, but rather on “whether the actions of the party in default would lead a reasonable person to conclude that he no longer intends to be bound by the contract”. [41] The Federal Court elaborated on this principle by saying that one of the conditions that entitles the innocent party to terminate a contract for breach, is where the breach by the defaulting party amounts to a repudiation of the contract—paragraph [175](c). [42] Based on this principle, PAI presents two arguments. The first argument is this—the Council terminates the Agreement under Clause 26.1.6. Clause 26.1.6 provides that one of the several events of default that “shall determine” the Agreement, is PAI breaching any of the terms of the Agreement and failing to remedy the breach within 14 days of receiving the Council’s Notice to Remedy the breach. S/N QgqxB018FUent3aEgB51fg Page 16 of 43 [43] PAI argues that Clause 26.1.6 does not dispense with the section 40 requirement that the breach (PAI’s non-payment)—which the Council relies on to justify termination—must be serious enough to amount to repudiation. In other words, Clause 26.1.6 does not automatically elevate every breach above the section 40 requirement that the breach that permits termination must amount to repudiation. [44] PAI relies on three English case law authorities to support this argument. One—Rice v Great Yarmouth Borough Council [2000] All ER (D) 902 (UKCA) (Rice), where the English Court of Appeal held that when a contract is intended to last several years, involves substantial investment by one party, and contains a myriad of obligations of differing importance— the innocent party is not entitled to terminate the contract based on “any breach" for defaults which are not repudiatory in nature. [45] Two—Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 (UKCA) (Decro-Wall), where the English Court of Appeal held that failure to make punctual payments, even where admitted, does not necessarily amount to repudiation, unless time for payment is of the essence, or non-payment goes to the root of the contract. It was held in that case that "there is nothing expressed in or to be implied from the contract to suggest that a failure punctually to pay the bills goes to the root of the contract and thereby amounts to a repudiation". [46] Three—Olympic Council of Asia v Novans Jets LLP [2022] EWHC 88 (Comm) (UKHC) (Olympic Council), where the English High Court held that even where there is a breach for non-payment of a disputed invoice, such breach does not necessarily constitute repudiation—the test being S/N QgqxB018FUent3aEgB51fg Page 17 of 43 "whether, looking at all the circumstances objectively, that is from the perspective of a reasonable person in the position of the innocent party, the contract breaker has clearly shown an intention to abandon and to refuse to perform the contract". [47] PAI’s second argument is the affirmation argument. PAI’s affirmation argument is that, by charging contractual late-payment interest (under Clause 5.1 of the Agreement), the Council had effectively affirmed that the Agreement remained in force. In other words, the Council was treating non-payment as a mere delay, rather than a fundamental breach that justified termination. Findings on sub-issue (i) [48] The Council relies on Clause 26.1.6 as an express contractual right to terminate for failure to comply with the Notice to Remedy. Catajaya and Godell Parking require the court to interpret termination clauses strictly, and to give them effect, as written. The court should not improve upon or rewrite the terms agreed by the parties. [49] Clause 26.1.6 is clear: any breach left unremedied within 14 days of notice constitutes an event of default that "shall determine [the] Agreement immediately." The breach relied on is PAI's failure to pay the outstanding monthly fees—a payment obligation expressly stated to be due and payable under Clause 5.1 within the first ten days of each month. The evidence of non-payment is overwhelming and, critically, admitted by PAI. S/N QgqxB018FUent3aEgB51fg Page 18 of 43 [50] The admissions set out above are determinative. PAI admitted the debt in writing on two occasions. Two of its witnesses admitted at trial that the arrears were never cleared, that PAI failed to pay punctually, and that the Council was entitled to terminate. These are not equivocal concessions—they are categorical admissions at the top management level. [51] In the face of these admissions, PAI's submission that Clause 26.1.6 required a "repudiatory breach" in the section 40 sense before the Council could terminate—is difficult to sustain. [52] The Council relies on Clause 26.1.6 as an express contractual right. Termination clauses, as contracted by the parties, are stringently applied. In any event, even if the Lim Swee Choo repudiation test were to be applied—whether PAI's conduct would lead a reasonable person to conclude it no longer intended to be bound—the answer would be the same. Arrears exceeding RM5.7 million, accumulated over more than a year, admitted by two successive directors in writing, and unpaid despite repeated demands and a formal notice—objectively demonstrate that PAI was no longer willing or able to perform its fundamental financial obligation under the Agreement. [53] Noor Sirajajudeen & Anor is directly on point. Termination for non-payment is valid where the defaulting party had actual knowledge through prior correspondence that non-payment was the reason for termination. PAI had that knowledge fully. S/N QgqxB018FUent3aEgB51fg Page 19 of 43 [54] As for PAI's three English case law authorities, I decline to follow them. First, as the Council correctly submits—they are all post-1956 English decisions and are not binding under section 3 of the Civil Law Act 1956, as confirmed in Chung Khiaw Bank Ltd v Hotel Rasa Sayang Sdn Bhd & Anor [1990] 1 MLJ 356 (SC); [1990] 1 CLJ 57; [1990] 1 MLRA 348. [55] Our courts should apply the common law of England only as the circumstances permit, and where no provision has been made by statute. “The development of the common law after 7 April 1956 (for the States of Malaya) is entirely in the hands of the courts of this country.” Malaysia already has its own statutory framework under the CA 1950 and established local jurisprudence, including the Federal Court decision in Catajaya. Reliance on post-1956 English authorities in this suit is unnecessary. [56] Second, they are distinguishable on their facts. Rice is concerned with trivial and qualitative service failures in a performance-oriented contract, not persistent non-payment of a core financial obligation admitted to in writing. Decro-Wall concerned an oral distributorship agreement with only an implied term for termination, and no express provision rendering late payment a ground for termination. Olympic Council is concerned with the non-payment of a single disputed invoice, not arrears of RM5.7 million accumulated over a period. [57] None of these cases assists PAI in the face of: (1) an express termination clause, (2) admitted and persistent non-payment, and (3) its own witnesses' admissions. S/N QgqxB018FUent3aEgB51fg Page 20 of 43 [58] PAI's affirmation argument also fails. I find that charging contractual interest for delay in payment under Clause 5.1 is a remedy for delay; it is not an election to accept indefinite non-payment as consistent with the Agreement. The two rights—to charge interest and to terminate for persistent default—are concurrent and independent contractual remedies. [59] Put differently, the Council did not waive its right to end the Agreement, simply because it followed the contract’s term to charge interest for late payment of fees. [60] I find that the Council's termination of the Agreement was valid and lawful, and that the Council is entitled to its Counterclaim. Sub-Issue (ii): Whether PAI was entitled to make adjustments to the monthly fixed fee [61] This issue is the implied term issue. [62] PAI contends that the Agreement contains an implied term requiring the monthly fee to vary when the number of parking bays changes, or when PAI’s parking revenue changes. As evidence of these changes, PAI points to the 2014 Light Street reduction in parking bays, and the repeated course of accepted contra adjustments (between fees regularly due and payments eventually made). [63] The Council submits that the monthly fee is fixed under Clause 5.1 and can only be varied through the specific mechanism in Clauses 5.2 and S/N QgqxB018FUent3aEgB51fg Page 21 of 43

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(ii) the Notice to Remedy sum of RM4,148,644.31 was inconsistent with the Council's own statement of arrears (Penyata Tunggakan Sewa Pajakan), which recorded RM4,106,541.91;

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(iii) the sums could not be reconciled even after adjustments; and

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(iv) DW3 was uncertain whether the termination notice sum or the monthly statement sum was the correct sum. [73] The Council submits that:

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(ii) DW2's (Suhaida Kamalul Ariffin’s) evidence established that the accounts were reconcilable. [74] I can see the accounting or recording imperfections. But I find that these discrepancies do not defeat either the termination or the counterclaim for the following reasons. [75] One—the decisive point is that PAI did not raise any accounting inconsistency as a reason for withholding payment at the time that it mattered—before the Notice to Remedy. And it is a fact that PAI did not remedy the breach. [76] Instead, PAI's letter of 3.11.2017 admitted to a debt. A party that admits to a substantial debt in writing and whose witnesses acknowledge at trial that the arrears were never paid—should not be allowed to challenge the quantum by reference to alleged accounting discrepancies subsequently. S/N QgqxB018FUent3aEgB51fg Page 24 of 43 [77] Two—the contract law principle reinforced by the Court of Appeal in Pentadbir Tanah Daerah Petaling v Swee Lin Sdn Bhd [1999] 3 MLJ 489 (CA); [1999] 3 AMR 3074; [1999] 3 CLJ 577; [1998] 2 MLRA 438 (Pentadbir Tanah Daerah Petaling), applies: a party in breach cannot benefit from its own wrongdoing. PAI's financial difficulties—which PW1 admitted were the true cause of the arrears and their non-payment—cannot be transformed into an attack on the accuracy of the Council's demands. [78] PAI’s accounting objections appeared for the first time only when litigation commenced. And I do not hesitate to find that they were deployed just as a forensic shield. They do not amount to a plausible or reasonable defence for PAI’s breach of the Agreement. [79] I find that the Notice to Remedy sum was not contradictory nor inconsistent with the Council’s own records, such as to provide PAI a defence to the Council’s counterclaim. Sub-Issue (iv): Whether section 68 of the CA 1950 excused PAI's non-payment [80] Section 68 of the CA 1950 excuses a promisor from partial non-performance when the promisee does not give the promisor “reasonable facilities” for the promisor to perform the promise. [81] PAI argues:

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(ii) that officers left before control hours ended; and

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(iii) that this constituted the Council’s failure to afford PAI reasonable facilities for performance within section 68, excusing PAI from full monthly payments. [82] This argument is untenable. Section 68 requires a causal nexus between the promisee's failure to provide facilities and the promisor's non-performance. That causal nexus is absent here. [83] The monthly fee under Clause 5.1 is fixed and unconditional—it does not vary by reference to the quantum of revenue PAI collects. PAI bore the commercial risk of revenue shortfalls. PAI submitted revenue projections in its initial Request for Proposal to the Council, and accepted the parking management concession under the Agreement on that basis. [84] I do not see how the Council had failed to provide PAI the reasonable facilities for PAI to perform its promise to pay the monthly concession fee. [85] Critically, PW1 admitted in cross-examination that PAI's non-payment arose from its own financial difficulties arising from mismanagement under previous management. Non-payment arising from an internal financial predicament is not a section 68 excuse. [86] Instead, it is a confession that the breach was self-inflicted. The new parking control hours from July 2017 constituted public policy approved by the State Authority, addressed by Clause 15.2 of the Agreement. Section 68 does not assist PAI. S/N QgqxB018FUent3aEgB51fg Page 26 of 43 [87] I find that section 68 of the CA 1950 does not excuse PAI’s non-payment. Sub-Issue (v): Whether the Council's payments constituted accord and satisfaction under section 64 of the CA 1950 [88] Section 64 of the CA 1950 provides that a promisee can completely or partially waive the promisor’s obligation (for example, here: a promise to pay a sum of money within a specified time), or accept another form of satisfaction instead (such as another sum of money within another specified time). [89] PAI submits that the contra and set-off adjustments over the course of the Agreement—involving dedicated Council personnel, extensive documentation, payments exceeding RM3.5 million, and a structured accounting mechanism accepted by both parties—constituted accord and satisfaction under section 64, discharging PAI's monthly payment obligations. PAI argues that such a prolonged and documented practice cannot be characterised as mere goodwill. [90] This argument is untenable as well. Section 64 requires a concluded bilateral agreement to accept a different or lesser performance in discharge of the original obligation. The evidence does not support any such agreement. [91] DW3's evidence is that the contra arrangements were reactive—when PAI's payments were irregular, the Council could not process offsets in the S/N QgqxB018FUent3aEgB51fg Page 27 of 43 ordinary way, and was compelled to apply halangan refund amounts against the accumulating arrears. This was administrative accounting management driven by PAI's defaults, not a bilateral agreement to modify the payment obligation. [92] A unilateral course of conduct by PAI (non-payment of monthly fees), however prolonged, does not constitute the Council’s accord and satisfaction under section 64, when there is no genuine meeting of the minds. PAI cannot, by failing to pay its contractual dues, transmute the resulting accounting adjustments into a legal discharge of those dues. The Pentadbir Tanah Daerah Petaling v Swee Lin Sdn Bhd [1999] 3 MLJ 489 (CA); [1999] 3 AMR 3074; [1999] 3 CLJ 577; [1998] 2 MLRA 438 principle again applies: PAI may not benefit from a circumstance of its own creation. [93] I find that the Council's payments do not constitute accord and satisfaction under section 64 of the CA 1950. Sub-Issue (vi): Whether PAI is entitled to compensation for non-enforcement, lack of enforcement, and halangan claims—PAI's eight Heads of Damage [94] PAI claims special damages of RM2,989,660.20 and, in the event the termination is found unlawful, general damages of RM28,647,744.13 across eight heads of damage. [95] Two threshold points govern all eight heads. S/N QgqxB018FUent3aEgB51fg Page 28 of 43 [96] First, and critically, since I have found the termination valid and lawful under sub-issue (i) above, the special damages and general damages claims premised on unlawful termination no longer arise. [97] Second, all eight heads of damage fail independently because there is no contractual foundation for them. In other words, the Agreement does not provide PAI the right to make these claims. On the contrary, Clause 15.1 of the Agreement expressly provides that PAI does not have the right to claim, i.e., is prohibited from claiming from the Council for parking charges that are unrecoverable, or for losses suffered. [98] Crucially, PW1 admitted in cross-examination that there is no specific clause in the Agreement entitling PAI to claim against the Council for non-enforcement, or the lack of enforcement. [99] With those threshold points stated, I address each head individually. Head 1—Lack of enforcement for early and late hours in 2016: RM858,072.00 [100] This head of damage is pleaded in paragraph 11 of PAI’s Statement of Claim (SOC), and in paragraphs 5 and 11 of PAI’s Reply and Defence to Counterclaim (RADTCC). [101] This claim was formally rejected by the Council on 9.5.2016 following the Tender Board's resolution of 13.4.2016. PAI knew about this rejection S/N QgqxB018FUent3aEgB51fg Page 29 of 43 by May 2016. But PAI did not challenge it for over 18 months, until November 2017. [102] At trial, PW1 and PW2 were shown their own documents and admitted that enforcement activities were in fact carried out during the claimed early and late hours. Critically, there is no contractual entitlement for PAI to make this claim. [103] The claim for damages under this head is dismissed. Head 2—Insufficient enforcement during normal hours (December 2015–August 2016): RM1,991,108.00 [104] This head of damage is also pleaded in paragraph 11 of PAI’s SOC, and in paragraphs 5 and 11 of PAI’s RADTCC. [105] This claim was formally rejected by the Council by its letter of 31.10.2016. I note additionally that the Tender Board's resolution of 13.4.2016 predated PAI's letter making this claim (dated 27.9.2016). The Council had resolved its policy position (in April 2016) before the claim was even submitted (in September 2016). The same conclusions apply as to Head

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(1) the Notice of Termination dated 15.1.2018 required the surrender of the prepaid application only, and made no demand for the return of the Enforcement Application System—DW2 admitted this;

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(2) the claim is not pleaded in the Council’s Defence and Counterclaim (DACC); and

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(3) enforcement of unpaid PTKs without the Enforcement Application System was not impossible; it was administratively inconvenient at most. [153] I do not allow this head of the Council’s counterclaim. The Notice of Termination made no demand for the Enforcement Application System—a matter admitted by DW2. The Council cannot claim over RM36.261 million in lost summons revenue for the failure to return a system it did not demand in its own termination notice. S/N QgqxB018FUent3aEgB51fg Page 39 of 43 [154] Furthermore, as PAI correctly points out, this head of claim is not specifically pleaded in the Council’s DACC. It is, on the Council's own argument against PAI, a claim for damages that must be specifically pleaded and strictly proved. The same principle that defeats PAI's unpleaded special damages claims equally defeats the Council’s unpleaded claim for damages in its counterclaim. [155] The RM36,261,990.00 claim is dismissed. The weight of the witnesses' evidence [156] A final observation on evidence is appropriate. The Council's Preliminary Written Submissions raised the fact that PW1 and PW2 both admitted that they had no personal knowledge of matters arising during the tenure of Dr Saravanan, who passed away in December 2016. Concerning PW2, he had joined PAI only in July 2017. PW3 (Ahmad Azmeer Meerasa), whose evidence went principally to damages quantification, likewise lacked direct involvement in operational matters for the material period. [157] The proposition in Kho Tian Boo v Tengku Ibrahim Petra bin Tengku Indra Petra [2013] 10 MLJ 584 (HC); [2013] AMCR 541; [2011] CLJU 1603; [2013] MLRHU 920 applies—where documentary evidence is introduced through a witness who lacks personal knowledge of its contents, the weight to be accorded to that evidence is limited. I have treated the evidence of PW1, PW2, and PW3 with appropriate caution in relation to matters predating their respective periods of direct involvement within PAI. S/N QgqxB018FUent3aEgB51fg Page 40 of 43 CONCLUSION AND JUDGMENT [158] For the reasons above, I find in favour of the Council and against PAI. And I make the following orders in my Judgment:

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(1) PAI's claim is dismissed with costs of RM250K to be paid by PAI to the Council;

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(2) The Council's counterclaim is allowed in part. Prayer 51(I) of the counterclaim is for a declaration that the Council’s Notice of Termination dated 15.1.2018 is valid and in accordance with the law. Prayer 51(I) is allowed;

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(3) No Order is made on prayers 51(II), 51(III) and 51(IV). These prayers concern an injunctive Order, an Order to deliver up the system application, with the equipment and data related to it, and an Order to deliver up the Enforcement Application System, with the data and records related to it;

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(4) As to prayers 51(V), 51(VI), 51(VII) and 51(VIII) for damages and interest: Judgment is entered for the Council against PAI in the sum of RM5,767,325.55, comprising RM5,702,626.75 (outstanding monthly fees) and RM64,698.80 (SPG refunds to the public), together with interest at 3% per annum from the date of the Writ to the date of judgment, and then 5% per annum from the date of Judgment to the date of full payment; S/N QgqxB018FUent3aEgB51fg Page 41 of 43

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(3) The Council's counterclaim in prayers 51(IX) and 51(X) for damages to be assessed, for RM36,261,990.00 concerning unpaid PTKs, with interest on it, is dismissed.

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(4) Costs for the counterclaim of RM200K are to be paid by PAI to the Council. [159] Although the trial of this suit took so many days, and the trial was burdened by the extremely voluminous documents parties sought to produce, the result in this case is not difficult. PAI accepted a concession to manage the Council's parking infrastructure for profit, in exchange for paying a fixed monthly fee. That obligation was unconditional. PAI failed to honour it—persistently, substantially, and admittedly. The Council gave PAI the opportunity to remedy the default and did not terminate hastily. When PAI still failed to pay, the Council was entitled to bring the Agreement to an end, and it exercised that right lawfully. [160] PAI's claims for RM28.6 million across eight heads of damage—most of them unpleaded, and all of them without contractual foundation—are dismissed. The Council’s counterclaim for proven arrears and SPG refunds is allowed. Dated: 18 May 2026 KENNETH ST JAMES HAKIM MAHKAMAH TINGGI MALAYA PULAU PINANG S/N QgqxB018FUent3aEgB51fg Page 42 of 43 Solicitors for the Plaintiff : Dato’ Surinder Singh, CY Teh, Lee Kok Hao Messrs. Ong and Manecksha Solicitors for the Defendant : Karin Lim Ai Ching, Murgan a/l D.Maniam, Terry Lim, Clifford Ong Messrs. Presgrave & Matthews Legislation referred to: