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COURT OF APPEAL PUTRAJAYA
JOO SENG TRADING CO – Appellant
Versus
COMMERCIAL IMPORTERS AND DISTRIBUTORS SDN BHD – Respondent
[Civil Appeal No: W-02-55-2001]
(Oral)
[1] This is the Judgment of the court.
[2] This appeal is directed against the Judgment of High court dismissing Plaintiff's claim for damages for breach of contract. The subject matter of the claim is a distribution agreement entered into between Appellant and Respondent and dated 1 November 1988. By that agreement, the appellant was appointed as the respondent's distributor of cigarettes manufactured by the respondent. cl 19 of that agreement, which lies at the heart of the dispute, between the parties reads as follows:-
19(a) your distributorship shall be terminated forthwith on the occurrence of the following events:-
(i) if you fail to perform or commit a breach of any of the terms and conditions of this agreement or other terms and conditions that may be implemented in the future.
(ii) if disagreement of any nature shall arise between the partners or the board of directors of your Company whereby we deem our interest may be imperiled.
(iii) If you or any of your partner shall be incapacitated, die or retire from the partnership.
(iv) if an application is made or threatened to be made, to have you declared a bankrupt or to wind up your Company or put under receivership.
(v) if there is any change in the control, management and composition of your partnership or your board of directors, or voting power or shareholding in the partnership of Company.
19(b) Not withstanding cl 19(a) above, your distributorship may be terminated at any time by either party by giving one month's notice in writing to the other without assigning any reason whatsoever therefore and neither party shall have any claim whatsoever against each other in respect of such termination.
[3] Disputes arose between the appellant and the respondent on the performance of this contract. Following an exchange of correspondence, the respondent by a letter dated 9 March 1992 terminated the agreement in question. Basically, the respondent's case in court below and before us is that the appellant acted in breach of contract. At the trial, the respondent drew the attention of the court to several instances which it said constituted breaches of the distributorship agreement. The learned Judge after hearing the evidence of both sides held that the appellant had failed to prove its case and that the respondent had justified its termination. She accordingly dismissed the appellant's claim.
[4] In arguing this appeal, learned counsel raised three issues. First, he submitted the learned Judge had erred in accepting as admissible, documents in a bundle that were in fact in serious dispute. When we put to counsel whether this formed a ground of appeal, he frankly conceded that it did not. Thereupon, learned counsel for the respondent rose to object to the ground being argued as she was disadvantaged. After considering the objection, we ruled that it was not open to the appellant to argue the point as it had not been pleaded in its memorandum of appeal. This is a question not of mere procedure but of essential justice. The point had not been taken in the court below to afford the learned Judge the opportunity to comment upon it. In any event, it would be grossly unfair to counsel for the respondent to have to defend the Judgment of the High court on an unpleaded ground of appeal.
[5] The next point that was taken by the appellant was this. The notice of termination, the appellant says, does not give any reason for terminating the contract. But it is settled law that where a contract breaker gives no reason or gives a bad reason for terminating a contract, he or she is entitled at the trial to justify the termination on good grounds. So, in Boston Deep Sea Fishing & Ice Co v. Ansell [1888] LR 39 Ch D 339, a master dismissed a servant on alleged acts of misconduct which they were not able to substantiate at the material time. The servant had in fact received a secret commission, a fact which only came to light after the dismissal. the
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