the "business efficacy' test [2 Cumulative Tests (Implied Term)]. Our Federal Court has applied the 2 Cumulative Tests (Implied Term) in Sababumi, at p. 169 to 170, as follows: "Reverting to the first type of implied term which is dependent on a court drawing an inference as explained above, there are two tests to fix the parties with such an intention, ie that the parties must have intended to include such an implied term in the contract. The first test is a subjective test, as stated by MacKinnon LJ in Shirlaw v. Southern Foundries (1926) Ltd [1939] 2 KB 206 at p 227, that such a term to be implied by a court is 'something so obvious that it goes without saying, so that if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress his with a common "Oh, of course". The second test is that the implied term should be of a kind that will give business efficacy to the transaction of the contract of both parties. The test was described by Lord Wright in Luxor (Eastbourne) Ltd & Ors v. Cooper [1941] AC 108 at p 137, that in regard to an implied term, '... it can be predicated that "It goes without saying", some term not expressed but necessary to give the transaction such business efficacy as the parties must have intended.' Business efficacy in my opinion, simply means the desired result of the business in question. Both tests in my opinion must be satisfied before a court infers an implied term. Thus, Lord Wilberforce in Liverpool City Council v. Irwin & Anor [1977] AC 239 at p 254 spoke of an implied term as a matter of necessity, so that the element of 'business efficacy is inseparable'. Lord Simon of Glaisdale in BP Refinery (Westernport) Pty Ltd v. Hastings Shire Council (1977) 16 ALR 363 described both tests as conditions the compliance of which the court must be satisfied, in addition to what I may describe as other requirements, of existing law. Closer to home, Chong Siew Fai J (as he then was) in Yap Nyo Nyok v. Bath Pharmacy Sdn Bhd [1993] 3 CLJ 188; [1993] 2 MLJ 250 held that both tests must be satisfied. If the implied term was not necessary to give business efficacy, the answer to the officious bystander, would have been a testy answer of 'Oh, don't talk rubbish'. The two tests referred to earlier are to enable the court to decide as to whether it should or should not infer that the implied term contended for is a term which parties to a contract must have intended to include in the contract." (emphasis added). The above judgment of Sababumi regarding the 2 Cumulative Tests (Implied Term) had been affirmed by the Federal Court in a judgment delivered by Zulkefli Ahmad Makinudin PCA in See Leong Chye @ Sze Leong Chye & Anor v. United Overseas Bank Bhd & another appeal [2018] 10 CLJ 1; [2019] 1 MLJ 25, at [74] to [76]. In this regard, when the Court of Appeal in KAB Corporation implied, among others, a duty to act "honestly and in good faith" with regard to the exercise of a contractual discretion, regrettably, the 2 Cumulative Tests (Implied Term) had not been applied in that case;