Gopal Sri Ram JCA:

Introduction

This is the judgment of the court. For convenience we will refer to the parties according to the title assigned to them in the court below. The facts of this case are not in dispute.

Facts And Background

The defendant manufactures cement in Pulau Langkawi. It had to get its cement from its factory and onto ships that called at the jetty at Telok Ewa for onward carriage. In 1984 it engaged the plaintiff to transport the cement. It was an informal arrangement. In 1985, the arrangement was formalised. The defendant entered into three written contracts with the plaintiff. These are dated 2 October 1985, 16 November 1985 and 9 January 1986. Save for the rate of the charges, all three contracts contain almost the same terms. For the present, nothing turns on any difference between their contents. But there are some significant features about the contractual relations as well as the surrounding circumstances that require mention.

First, the plaintiff undertook the principal obligation of packing, stacking and transporting the manufactured cement from the defendant's factory to the loading main and jetty at Telok Ewa and to load it onto vessels. Second, the plaintiff was to provide qualified and experienced workers to perform its primary obligation. Third, the plaintiff was to provide 8 lorries to transport the defendant's cement from the factory to the jetty. Fourth, the contracts did not provide the period during which they were to remain in force. Fifth, none of the contracts contained any provision for their termination. Sixth, the contracts did not provide the mechanism by which they were to be performed. However, the learned judge found as a fact - a finding which we accept as entirely accurate - that although there was no term to that effect, a practice was established whereby the defendant would inform the plaintiff each time a ship called at Telok Ewa. The plaintiff would then send its lorries and its workers to the defendant's factory to carry out its task of packing, stacking and transporting the cement to the jetty. Seventh, there is evidence that from time to time the defendant complained to the plaintiff about the quality of the latter's service. But nothing came out of it. Despite making complaints, the defendant entered into each of the successive three contracts. The last written complaint was made in January 1986, despite which the defendant entered into the third contract dated 9 January 1986. Eighth, during the three years that the plaintiff provided service to the defendant under the contracts, the defendant did not appoint, or assert a right to appoint, any other transporter to perform the service that the plaintiff was performing. Ninth, although the defendant in September 1986 gave notices to terminate the contracts, it withdrew these when challenged by the plaintiff. Tenth, the contractual relationship continued until late December 1986. At that point in time, when a vessel called at the jetty, the defendant failed to inform the plaintiff in the usual way. Instead, it engaged another transporter to provide it the identical service that it had engaged the plaintiff to perform. The defendant took the position that it had opened to tender the services it required and that some other transporter had successfully bid for that tender.

The plaintiff treated the defendant's act as a wrongful repudiation and brought an action for breach of contract. The main - and indeed the only - plank of the plaintiff's case was that it was a term of the contracts that it had the exclusive right to pack, stack and transport the defendant's cement. It was therefore not lawfully open to the defendant to engage another transporter. The contracts did not contain an express term to that effect. But the plaintiff's argued that such a term ought to be implied. The plaintiff also argued that the contracts were permanent and could not be terminated save by mutual consent. The learned judge rejected bo