A termination notice must clearly state the grounds for termination to be valid; failure to do so renders it void.

[1] This is the appellant's/defendant's appeal against the decision of the High Court in allowing the respondents'/plaintiffs' claim and in dismissing the appellant's/defendant's counterclaim. The claim and counterclaim are premised on a breach of contract.

[2] For convenience, in this judgment, parties will be referred to as they were in the High Court.

The Background Facts

[3] The plaintiffs are partners of a firm known as Aspirasi Utara Engineering. The defendant is the local authority established under the Local Government Act 1976 . The defendant is the proprietor of the Sungai Nibong Bus Terminal ("the Bus Terminal"), a major bus transportation hub serving the Penang Island.

[4] The Bus Terminal commenced operations on 17 April 2005. Between 1 March 2006 to 31 October 2010, the Bus Terminal was managed by a company known as Janji Cemerlang Sdn Bhd.

[5] In 2010, the defendant sought to replace Janji Cemerlang as its property manager. For that purpose, a tender/quotation exercise was undertaken, where the defendant invited interested and qualified parties to participate in a quotation exercise for the services as the Property Manager of the Bus Terminal. Vide a Kenyataan sebut harga (Quotation Statement), the defendant fixed the reserve price for the quotation to manage the Bus Terminal at RM10,000.00 per month.

[6] In its bid to be appointed as the Property Manager of the Bus Terminal, the plaintiffs submitted a quotation dated 29 May 2010 where the plaintiffs offered to pay a monthly appointment fee of RM22,500.00 per month. The sum of RM22,500.00 was offered by the plaintiffs based on their own estimate of income and expenditure as set out in their Quotation Statement.

[7] The plaintiffs were successful in their bid. The plaintiffs' appointment as the Property Manager of the Bus Terminal was approved by the defendant in its Mesyuarat Perolehan. The tenure was for three years commencing from 16 October 2010 to 15 September 2013 with an option to extend the same for two (2) years at the payment rate of RM22,500.00 per month as the monthly appointment fee. The plaintiffs accepted the defendant's offer.

[8] Pursuant to the plaintiffs' acceptance and vide the defendant's letter dated 7 September 2010, the plaintiffs were required to inter alia:

(i) take over the management of the Bus Terminal commencing 16 October 2010;

(ii) pay the monthly appointment fee of RM22,500.00, upon the plaintiffs taking over the management of the Bus Terminal;

(iii) within one month from 7 September 2010:

(a) pay the defendant RM67,500.00 being the three months deposit in respect of the monthly appointment fee;

(b) pay the defendant RM60,000.00 being the utilities deposit;

(c) forward the Public Liability Insurance Policy for RM2,500,000.00 and Fire/Destruction Insurance Policy for RM1,200,000.00 in the joint name of the defendant and the plaintiffs and to obtain Employees Compensation Protection Policy.

[9] The plaintiffs took over the management of the Bus Terminal on 1 November 2010. They discovered the operation of illegal touts and unauthorised ticket agents at the Bus Terminal. By a letter dated 8 November 2010, the plaintiffs complained to the defendant about the illegal touts and unauthorised ticket agents. On 22 November 2010, the plaintiffs wrote to the defendant about defects at the Bus Terminal. Due to the foregoing problems and after a series of correspondence and upon several requests by the plaintiffs, the management period of the Bus Terminal was finally deferred until 31 July 2011.

[10] Vide a letter dated 22 August 2011, the defendant informed the plaintiffs that the plaintiffs are required to pay the monthly appointment fee of RM22,500.00 commencing 1 August 2011. The plaintiffs were furt